UNIVERSAL FOREST PRODUCTS, INC.
2801 East Beltline NE
Grand Rapids, MI 49525
NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareholders of Universal Forest Products, Inc. will
be held in the Imperial Ballroom at the Amway Grand Plaza Hotel, 187 Monroe NW,
Grand Rapids, Michigan, on Wednesday, April 17, 2002, at 8:30 a.m. local time
(registration begins at 8:00 a.m.) for the following purposes:
(1) Election of two directors for three-year terms expiring in 2005.
(2) Consider and act upon a proposal to approve and adopt the Company's 2002
Employee Stock Purchase Plan.
(3) The transaction of such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 1, 2002, are
entitled to notice of and to vote at the meeting.
To vote by telephone, shareholders of record (shareholders who possess a
certificate representing their shares) may call toll free on a touch-tone
telephone 1-800-PROXIES (1-800-776-9437), enter the control number located on
the proxy card and follow the recorded instructions. To vote on the Internet, go
to the site http://www.voteproxy.com, enter the control number located on the
proxy card and follow the instructions provided.
If your shares are held through a bank or broker (referred to as "street
name"), you may also be eligible to vote your shares electronically. Follow the
instructions on your voting form, using either the toll free telephone number or
the Internet address that is listed.
A copy of the Annual Report to Shareholders for the year ended December 29,
2001, is being mailed to you concurrently with this Notice.
BY ORDER OF THE BOARD OF DIRECTORS
Matthew J. Missad, Secretary
March 18, 2002
Universal Forest Products, Inc.
2801 East Beltline NE
Grand Rapids, Michigan 49525
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY.
UNIVERSAL FOREST PRODUCTS, INC.
2801 East Beltline NE
Grand Rapids, Michigan 49525
ANNUAL MEETING OF SHAREHOLDERS
April 17, 2002
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement and the enclosed Proxy are being furnished to holders
of Common Stock, no par value, of Universal Forest Products, Inc. (the
"Company"). The Board of Directors is soliciting proxies for use at the Annual
Meeting of Shareholders to be held on April 17, 2002, and at any adjournment of
that meeting. The Annual Meeting will be held in the Imperial Ballroom of the
Amway Grand Plaza Hotel, 187 Monroe NW, Grand Rapids, Michigan, at 8:30 a.m.
local time. Registration for the meeting begins at 8:00 a.m.
If the enclosed Proxy is properly executed and returned to the Company, the
shares represented by the Proxy will be voted at the Annual Meeting and at any
adjournment thereof. If a shareholder specifies a choice, the Proxy will be
voted as specified. If no choice is specified, the shares represented by the
Proxy will be voted for the election of all nominees named in the Proxy
Statement, for the proposal to approve the 2002 Employee Stock Purchase Plan,
and in accordance with the judgment of the persons named as proxies with respect
to any other matter which may come before the meeting.
Returning your completed Proxy will not prevent you from voting in person at
the Annual Meeting should you be present and wish to do so. In addition, you may
revoke your Proxy at any time before it is voted, by written notice to the
secretary of the Company prior to the Annual Meeting, or by submission of a
later-dated Proxy, or by the withdrawal of your Proxy and voting in person at
the Annual Meeting.
The cost of the solicitation of proxies will be paid by the Company. In
addition to the use of the mail, proxies may be solicited personally, by
telephone, by facsimile, or by electronic mail by regular employees of the
Company who will not receive additional compensation for soliciting proxies. The
Company does not intend to pay any compensation for the solicitation of proxies,
except that brokers, nominees, custodians, and other fiduciaries will be
reimbursed by the Company for their expenses in connection with sending proxy
materials to beneficial owners and obtaining their proxies.
VOTING SECURITIES
Holders of record of Common Stock at the close of business on March 1, 2002,
will be entitled to vote at the Annual Meeting. As of March 1, 2002, there were
17,792,961 shares of Common Stock outstanding. The presence in person or by
Proxy of at least 51% of such shares constitutes a quorum. A shareholder is
entitled to one vote for each share of Common Stock registered in the
shareholder's name at the close of business on March 1, 2002. Under Michigan
law, abstentions are treated as present and entitled to vote and therefore have
the effect of a vote against the matter. A broker non-vote on a matter is
considered not entitled to vote on that matter and, therefore, is not counted in
determining whether a matter requiring approval of a majority of the shares
present and entitled to vote has been approved. Votes cast at the meeting or
submitted by Proxy will be counted by inspectors of the meeting who will be
appointed by the Company. There is no right to cumulative voting on any matter.
1
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of Directors,
which consists of seven members unless otherwise specified by two-thirds of the
Board, shall be divided into three classes, as equal in number as possible, with
the classes to hold office for staggered terms of three years each. At the
recommendation of the Nominating Committee, the Board of Directors has nominated
incumbent director Louis A. Smith and incumbent director John C. Canepa for
re-election as directors for three-year terms expiring at the 2005 Annual
Meeting. However, due to the Company's retirement policy, Mr. Canepa will only
be allowed to serve until December 31, 2002, the end of the year in which he
reaches age 72. In addition, incumbent director Carroll Shoffner is not seeking
re-election to the board. Accordingly, upon Mr. Canepa's retirement, the Board
of Directors will have the authority to reduce the size of the Board or to
appoint a successor to serve until the next Annual Meeting of Shareholders.
The persons named as proxy holders in the accompanying Proxy will vote for
the above-named nominees, unless the shareholder directs them differently on the
proxy card. If a nominee is not available for election as a director at the time
of the Annual Meeting (a situation which is not now anticipated), the Board of
Directors may designate a substitute nominee, and the accompanying Proxy will be
voted for the substituted nominee.
A vote of the shareholders holding a plurality of the shares present in
person or represented by proxy is required to elect directors. Accordingly, the
two individuals who receive the greatest number of votes cast at the meeting
will be elected as directors.
The Board of Directors recommends a vote FOR the election of each person
nominated by the Board.
The following table provides certain biographical information for each
person who is nominated for election as a director at the Annual Meeting and for
each person who is continuing as an incumbent director.
NAMES, (AGES), POSITIONS AND BACKGROUNDS OF DIRECTORS AND NOMINEES SERVICE AS A DIRECTOR
-------------------------------------------------------------------------------------------------
NOMINEE FOR TERM EXPIRING IN 2005
LOUIS A. SMITH (62) is President of the law firm of Smith and Director since 1993.
Johnson, Attorneys, P.C., of Traverse City, Michigan. Mr. Smith Member of Audit Committee.
also serves on the Advisory Board of the Huntington National Bank
of Traverse City, is a Trustee for the Interlochen Center for the
Arts and serves as a member of the Advisory Council to the
University of Notre Dame Law School.
JOHN C. CANEPA (71) is a Consulting Principal for Crowe Chizek and Director since 1996.
Company, LLP, of Grand Rapids, Michigan. Chairman of Audit Committee.
Member of Personnel and
Compensation Committee.
INCUMBENT DIRECTORS - TERMS EXPIRING IN 2003
JOHN W. GARSIDE (62) is the President and Treasurer of Woodruff Director since 1993.
Coal Company of Kalamazoo, Michigan. Mr. Garside serves as a Chairman of Personnel and
commissioner for the Michigan Department of Transportation, and is Compensation Committee.
also a director and member of the compensation committee of PRAB,
Inc.
PETER F. SECCHIA (64) joined the Company in 1962, and has been the Director since 1967.
Chairman of the Board since March of 1971. From 1989 until January Chairman of Nominating
of 1993, Mr. Secchia served as U.S. Ambassador to Italy. Mr. Committee.
Secchia also serves on the board of John Cabot University of Rome.
INCUMBENT DIRECTORS - TERMS EXPIRING IN 2004
WILLIAM G. CURRIE (54) is the Vice Chairman of the Board and Chief Director since 1978.
Executive Officer of the Company. He joined the Company in 1971,
serving as a salesman, general manager, vice president, and
executive vice president. Since 1989, he has been the Chief
Executive Officer of the Company, and on January 1, 2000, also
became Vice Chairman of the Board.
2
NAMES, (AGES), POSITIONS AND BACKGROUNDS OF DIRECTORS AND NOMINEES SERVICE AS A DIRECTOR
-------------------------------------------------------------------------------------------------
PHILIP M. NOVELL (64) is a consultant with the Compass Group of Director since 1993.
Birmingham, Michigan. Mr. Novell retired as General Sales Manager Member of Audit Committee.
for the Ford Division of Ford Motor Company on December 31, 1998,
with whom he had been affiliated since 1961. Mr. Novell is also a
member of the Michigan Exposition and Fairgrounds Advisory
Council.
The Board of Directors has appointed an Audit Committee. The Audit Committee
recommends the selection of independent accountants; approves the nature and
scope of services to be performed by the independent accountants and reviews the
range of fees for such services; confers with the independent accountants and
reviews the results of the annual audit; reviews the Company's internal
auditing, accounting and financial controls; and reviews policies and practices
regarding compliance with laws and conflicts of interest. During 2001, the Audit
Committee held three formal meetings.
The Board of Directors has a Nominating Committee that is responsible for
recommending to the Board suitable candidates for nomination for positions on
the Board of Directors and committees of the Board of Directors. During 2001,
the Nominating Committee held one meeting. The Nominating Committee will
consider nominees recommended by shareholders, provided that a recommendation is
submitted in writing to the Chairman of the Nominating Committee at the address
of the Company, on or before the 30th day preceding the date of the Annual
Meeting, and includes a description of the proposed nominee, his or her consent
to serve as a director and other information regarding the proposed nominee as
would be required to be included in a proxy statement filed under the Securities
Exchange Act.
The Board of Directors has a Personnel and Compensation Committee,
consisting entirely of outside directors, that is responsible for reviewing and
recommending to the Board of Directors the timing and amount of compensation for
key employees, including salaries, bonuses and other benefits. The Personnel and
Compensation Committee is also responsible for administering the Company's stock
option and other equity-based incentive plans, recommending retainer and
attendance fees for non-employee directors, and reviewing compensation plans and
awards as they relate to key employees. During 2001, the Personnel and
Compensation Committee held one meeting.
During the Company's last fiscal year, there were four regular meetings of
the Board of Directors and one special meeting, and the Board took action by
unanimous written consent on four occasions. Each of the incumbent directors
attended 75% or more of the aggregate number of meetings of the Board of
Directors and meetings of committees on which they were eligible to attend.
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company receive no annual retainer
and are not compensated for attendance at Board or committee meetings. Directors
who are not employees of the Company receive a $10,000.00 annual retainer fee,
plus $500.00 for attendance at each regular and special meeting of the Board of
Directors. In addition, each outside Director is granted 100 shares of stock for
each Board meeting attended, up to a maximum of 400 shares per year. Directors
receive no compensation for attendance at a committee meeting held on the day of
a Board meeting. However, a Director does receive a $500.00 meeting fee for a
committee meeting held on a day other than the day of a Board meeting.
Each Director who is not an employee of the Company may participate in the
Director Retainer Stock Plan. The Director Retainer Stock Plan, approved by
shareholders in April 1994, provides that each Director may elect to receive
Company stock, on a deferred basis, in lieu of cash compensation for the
Director's retainer and meeting fees.
Directors receive reimbursement of ordinary and necessary expenses to attend
meetings. The Chairmen of the Audit, Personnel and Compensation, and Nominating
Committees do not receive additional compensation for serving as a Chairman.
3
PROPOSAL TO APPROVE AND ADOPT THE
UNIVERSAL FOREST PRODUCTS, INC.
2002 EMPLOYEE STOCK PURCHASE PLAN
On January 16, 2002, the Board of Directors adopted the Universal Forest
Products, Inc. 2002 Employee Stock Purchase Plan (the "Plan"), subject to
approval by the Company's shareholders. The Plan is intended to replace and
succeed the Company's existing Employee Stock Purchase Plan. Under that plan,
adopted in 1994, employees of the Company purchased a total of 81,045 shares of
Common Stock. As of March 1, 2002, only 18,955 shares remain available for
future purchase under that plan. Any unused shares under the 1994 plan will be
transferred to the Plan, to be added to the 100,000 new shares which are
available for purchase under the Plan. The following summary of the Plan is
subject to the specific provisions contained in the complete text of the Plan, a
copy of which is attached as Appendix A.
The Board of Directors believes that the opportunity to purchase shares of
the Company's Common Stock under the Plan at a discount from market price is
important to attract and retain qualified employees who are essential to the
success of the Company, and that stock ownership is an important incentive to
perform in the best interests of the Company.
At the Annual Meeting, the Company's shareholders are being asked to
consider and approve the adoption of this Plan.
DESCRIPTION OF THE PLAN. All active employees, except certain part-time
employees, are eligible to participate in the Plan after completing one year of
continuous employment as of the beginning of an Option Period. An Option Period
begins on the first day of each fiscal quarter and ends on the last day of the
quarter.
The Plan provides an opportunity for eligible employees to purchase shares
of the Company's Common Stock at a price equal to eighty five percent (85%) of
the fair market value of the shares as of the last business day of the Option
Period. As long as the Company shares are traded in the over-the-counter market,
the fair market value per share will equal the closing sale price of the
Company's Common Stock as reported by the National Association of Securities
Dealers Automated Quotation System ("Nasdaq") on the applicable purchase date.
As of the close of business on March 1, 2002, the closing sale price of the
Company's Common Stock was $23.14 per share.
Eligible employees who have elected to participate may contribute cash (up
to 10% of the employee's gross earnings for the prior fiscal quarter) to the
Plan through payroll deductions, by lump sum contributions, or both. Purchases
of shares are made as of the last business day of each fiscal quarter with funds
contributed by participating employees during that quarter. An employee may not
purchase stock under the Plan having a fair market value, at the time of
purchase, aggregating more than Twenty Five Thousand Dollars ($25,000.00) in any
one calendar year.
A participant may terminate his or her participation at any time prior to
the Participant's last pay date in an Option Period by written notice to the
Company. Upon termination, a participant may not reenter the Plan until three
(3) full fiscal quarters have elapsed. As a condition to participation in the
Plan, participants are required to agree not to sell or otherwise dispose of
shares purchased under the Plan for a period of at least one (1) year following
the date of purchase, unless the sale results from termination of employment
with the Company.
Rights under the Plan are not transferable. Any termination of employment,
including death and retirement, terminates participation. In addition, the Plan
automatically terminates on January 16, 2012, unless terminated earlier by the
Board of Directors. The Board of Directors may amend the Plan at any time,
except that it cannot be amended without shareholder approval if the amendment
would (a) increase the maximum number of shares that may be issued under the
Plan, (b) withdraw the administration of the Plan from the Committee, (c) change
the class of employees eligible to participate under the Plan, or (d) render
options granted under the Plan unqualified for special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Code").
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES. The Plan is intended to be a
qualified "Employee Stock Purchase Plan," as defined in Section 423 of the Code.
The following paragraphs summarize the consequences
4
of the acquisition and disposition of shares of the Company's common stock for
federal income tax purposes, based on management's understanding of existing
federal income tax laws.
Funds contributed by employees through payroll deductions are a part of
current compensation taxable as ordinary income, although the funds are not
actually received by employees. As of the last business day of each fiscal
quarter (a "Purchase Date"), a participating employee will be considered to have
been granted an option to purchase shares and to have simultaneously exercised
the option on that date.
If the employee does not dispose of those shares for a period of two (2)
years after the date of the grant (the "Holding Period"), upon subsequent
disposition of the shares, or upon death, the employee will realize
compensation, taxable as ordinary income, equal to the lesser of (a) the amount
by which the fair market value of the shares at the time of sale or death
exceeds the option exercise price, or (b) the amount by which the fair market
value of the shares at the time the option was granted exceeded the option
exercise price. If (b) is the lesser amount, the difference between the fair
market value of the shares at the time of disposition or death and the fair
market value of the shares at the time the option was granted will be taxed as a
capital gain.
If the Holding Period requirement described above is not met, the amount to
be treated as compensation on disposition of the shares is the difference
between the option exercise price and the fair market value of the shares at the
time the option is exercised (i.e. the discount amount). If the Holding Period
requirement is not met, the Company will be entitled to a deduction for federal
income tax purposes equal to the amount recognized as compensation by the
employee. In all other events, the Company will not be entitled to any deduction
for federal income tax purposes with respect to shares purchased by employees
under the Plan.
The affirmative vote of a majority of the outstanding shares of Common Stock
voted at the Annual Meeting is required to adopt the Plan. While broker nonvotes
will not be treated as votes cast on adoption of the Plan, shares voted as
abstentions will be counted as votes cast. Since a majority of the votes cast is
required for approval, the sum of any negative votes and abstentions will
necessitate offsetting affirmative votes to approve and adopt the Plan. The
Board of Directors recommends a vote FOR the approval and adoption of the Plan.
Unless otherwise directed by marking on the accompanying Proxy, the proxy
holder's named therein shall vote FOR the approval and adoption of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND ADOPTION OF
THE PROPOSED PLAN.
5
OWNERSHIP OF COMMON STOCK
The following table sets forth information as to each shareholder known to
the Company to have been the beneficial owner of more than five percent (5%) of
the Company's outstanding shares of Common Stock as of March 1, 2002:
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(2)
------------------------------------------------------------------------------------------------------
Peter F. Secchia 1,772,431(3) 9.8%
2801 East Beltline NE
Grand Rapids, MI 49525
Carroll M. Shoffner 1,134,811(4) 6.3%
5631 S. NC 62
Burlington, NC 27215
Jacqueline Smithey Shoffner 1,094,319 6.1%
3063 Huffman Mill Road
Burlington, NC 27215
-------------------------
(1) Except as otherwise indicated by footnote, each named person has sole voting
and investment power with respect to the shares indicated.
(2) Shares outstanding for this calculation include 140,000 shares which are
subject to options exercisable in 60 days, 24,620 shares which are subject
to issuance under the Director Retainer Stock Plan, and 100,617 shares which
are subject to issuance under a Deferred Compensation Plan.
(3) Includes 50,000 shares owned by Mr. Secchia's wife; 502,318 shares held by
limited liability companies of which Mr. Secchia is a member; 833,029 shares
held by a family limited partnership of which Mr. Secchia is a partner;
101,800 shares held by a family foundation; and 1,738 shares which are
subject to issuance under a Deferred Compensation Plan.
(4) Includes 431,400 shares held by a charitable remainder unitrust of which
Carroll Shoffner and Jacqueline Smithey Shoffner are lifetime beneficiaries.
6
SECURITIES OWNERSHIP OF MANAGEMENT
The following table contains information with respect to ownership of the
Company's Common Stock by all directors, nominees for election as director,
executive officers named in the tables under the caption "Executive
Compensation," and all executive officers and directors as a group. The
information in this table was furnished by the Company's officers, directors and
nominees for election of directors, and represents the Company's understanding
of circumstances in existence as of March 1, 2002.
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(2)
--------------------------------------------------------------------------------------------------------
Peter F. Secchia 1,772,431(3) 9.8%
Carroll M. Shoffner 1,134,811(4) 6.3%
William G. Currie 602,233(5) 3.3%
Michael B. Glenn 243,667(6)(7) 1.3%
Robert K. Hill 138,809(6)(8) *
Gary A. Wright 40,000 *
John C. Canepa 14,235(9) *
John W. Garside 28,679(9) *
Philip M. Novell 11,752(9) *
Louis A. Smith 23,604(9) *
All directors and executive officers as a group (17
persons) 4,336,089(6)(9) 24.0%
-------------------------
* Less than one percent (1%).
(1) Except as otherwise indicated by footnote, each named person has sole voting
and investment power with respect to the shares indicated.
(2) Shares outstanding for this calculation include 140,000 shares which are
subject to options exercisable in 60 days, 24,620 shares which are subject
to issuance under the Director Retainer Stock Plan, and 100,617 shares which
are subject to issuance under a Deferred Compensation Plan.
(3) Includes 50,000 shares owned by Mr. Secchia's wife; 502,318 shares held by
limited liability companies of which Mr. Secchia is a member; 833,029 shares
held by a family limited partnership of which Mr. Secchia is a partner;
101,800 shares held by a family foundation; and 1,738 shares which are
subject to issuance under a Deferred Compensation Plan.
(4) Includes 431,400 shares held by a charitable remainder unitrust of which
Carroll Shoffner and Jacqueline Smithey Shoffner are lifetime beneficiaries.
(5) Includes 1,083 shares subject to issuance under a Deferred Compensation
Plan.
(6) Nine current and former employees of the Company, including Mr. Glenn and
Mr. Hill, along with other executive officers of the Company, are partners
of a general partnership that owns 23,815 shares of the Company's Common
Stock. The terms of this Partnership Agreement provide that Mr. Glenn has
the authority to vote all the shares held by the partnership. Each partner
is deemed to have beneficial ownership of all the shares held by this
partnership.
(7) Includes 15,000 shares which may be acquired by Mr. Glenn pursuant to
options exercisable in 60 days. Also includes 212 shares which are subject
to issuance under a Deferred Compensation Plan.
(8) Includes 15,000 shares which may be acquired by Mr. Hill pursuant to options
exercisable in 60 days. Also includes 18,597 shares which are subject to
issuance under a Deferred Compensation Plan.
(9) Includes shares obtained through the Company's Director Retainer Stock Plan
for Mr. Canepa, Mr. Garside, Mr. Smith, and Mr. Novell who hold 5,335
shares, 529 shares, 9,052 shares, and 9,704 shares, respectively, through
such plan.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table shows certain information
concerning the compensation for the Chief Executive Officer and the Company's
four most highly compensated executive officers for fiscal 2001 (the "Named
Executives"), and their compensation for 2000 and 1999:
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -------------
--------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(1)(2) COMPENSATION OPTIONS/SAR'S COMPENSATION(3)
-------------------------------------------------------------------------------------------------------------
William G. Currie 2001 $439,250 $777,000 0 5,000 $7,684
Vice Chairman of the 2000 418,333 740,000 0 0 7,258
Board and Chief Executive 1999 397,229 768,000 0 0 8,734
Officer
Peter F. Secchia 2001 300,000 240,000 0 0 7,684
Chairman of the Board 2000 300,000 240,000 0 0 7,258
1999 300,000 250,000 0 0 8,734
Michael B. Glenn 2001 313,750 625,000 0 5,000 7,684
President and Chief 2000 295,563 510,000 0 18,000 7,258
Operating Officer 1999 245,770 507,000 0 0 8,734
Robert K. Hill 2001 248,496 524,000 0 5,000 7,684
President 2000 230,330 500,000 0 12,000 7,258
Universal Forest Products 1999 211,000 415,000 50,000(4) 0 8,734
Western Division
Gary A. Wright 2001 261,000 261,660(5) 0 5,000 5,000
Executive Vice President 2000 250,000 320,781(5) 0 0 5,100
Eastern Division Site-Built 1999 250,520 412,382(5) 0 0 4,800
-------------------------
(1) Includes amounts deferred by Named Executives under the Company's 401(k)
Plan and the Deferred Compensation Plan.
(2) Includes annual bonus payments under performance-based bonus plans tied to
the Company's operating profit and return on investment, which covers
substantially all salaried employees. The bonus amounts include the amounts
earned in each respective year, which are paid in the subsequent year.
(3) The amounts set forth in this column represent Company contributions to the
Company's Profit Sharing and 401(k) Plan. Subject to certain requirements,
including age and service requirements, all employees of the Company and its
subsidiaries are eligible to participate in the Plan. A subsidiary acquired
during 1998 has a separate retirement plan.
(4) Represents amounts paid in 1999 as a result of Mr. Hill's relocation to
Colorado.
(5) Includes production bonuses paid pursuant to Universal Forest Products
Shoffner LLC's production bonus plan.
8
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding stock options granted
to the Named Executives during the preceding fiscal year:
INDIVIDUAL GRANTS
--------------------------------------------------------------------
NUMBER OF SECURITIES PERCENT OF OPTIONS EXERCISE
UNDERLYING OPTIONS GRANTED TO ALL PRICE GRANT DATE
GRANTED EMPLOYEES IN ($/SH) EXPIRATION PRESENT VALUE
EXECUTIVE (#)(1) FISCAL YEAR (2) DATE (3)
-----------------------------------------------------------------------------------------------------------------
William G. Currie 5,000 1.2% $14.125 01/31/2011 $16,485
Peter F. Secchia 0 0.0%
Michael B. Glenn 5,000 1.2% $14.125 01/31/2011 $16,485
Robert K. Hill 5,000 1.2% $14.125 01/31/2011 $16,485
Gary A. Wright 5,000 1.2% $14.125 01/31/2011 $16,485
-------------------------
(1) The options granted under this plan may be exercised beginning in 2004.
(2) The exercise price equals or exceeds the fair market value of the Company
stock as of the grant date of January 31, 2001.
(3) Based on the Black-Scholes option valuation model assuming volatility is
26.62%, risk-free rate of return is 4.6%, dividend yield is 0.40%, and time
of exercise is 30 days prior to expiration of option. The Black-Scholes
option valuation model is an alternative suggested by the Securities and
Exchange Commission, and the Company neither endorses this particular model,
nor necessarily agrees with this method for valuing options. The actual
value of the options, if any, will depend on the market value of the
Company's Common Stock subsequent to the date the options become
exercisable.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information regarding the exercise of options
in the last fiscal year by the Named Executives:
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY OPTIONS
SHARES UNEXERCISED OPTIONS AT AT DECEMBER 29,
ACQUIRED ON VALUE DECEMBER 29, 2001(#) 2001($)(2)
EXECUTIVE EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------------------------
William G. Currie 33,825 681,750 0 5,000 0 33,125
Peter F. Secchia 0 0 0 0 0 0
Michael B. Glenn 0 0 0 58,000 0 717,875
Robert K. Hill 0 0 0 52,000 0 668,375
Gary A. Wright 0 0 0 50,000 0 38,825
-------------------------
(1) Represents the aggregate market value of shares at the time of exercise less
the aggregate exercise price paid by the Named Executives.
(2) Values based on the difference between the closing market price of the
Company's stock as of December 29, 2001 ($20.75) and the exercise price of
the options.
9
AUDIT COMMITTEE REPORT
The Audit Committee (the "Committee"), composed entirely of independent
directors, oversees the Company's financial reporting process on behalf of the
Board of Directors. The full responsibilities of the Committee are set forth in
its Audit Committee Charter, which was approved by the Board of Directors on
January 17, 2001.
The Committee has reviewed and discussed with management the Company's
audited financial statements as of and for the year ended December 29, 2001.
The Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
The Committee has received and reviewed the written disclosures and the
letter from the independent auditors required by Independence Standard No. 1,
Independence Discussions with Audit Committees, as amended, by the Independence
Standards Board, and has discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, the Committee
recommends to the Board of Directors that the financial statements referred to
above be included in the Company's Annual Report on Form 10-K for the year ended
December 29, 2001.
In issuing this report, we note that management is responsible for the
Company's financial reporting process, including its systems of internal
control, and for the preparation of financial statements in accordance with
generally accepted accounting principles. The Company's independent auditors are
responsible for auditing those financial statements in accordance with generally
accepted auditing standards. Our responsibility is to monitor and review these
processes. It is not our duty or our responsibility to conduct auditing or
accounting reviews or procedures. We have relied, without independent
verification, on management's representation that the financial statements have
been prepared in conformity with U.S. generally accepted accounting principles
and on the representations of the independent auditors included in their report
on the Company's financial statements. Our discussions with management and the
independent auditors do not assure that the financial statements are presented
in accordance with generally accepted accounting principles, that the audit of
our Company's financial statements has been carried out in accordance with
generally accepted auditing standards, nor that the Company's independent
accountants are in fact "independent."
John C. Canepa, Audit Committee Chair
Louis A. Smith, Audit Committee Member
Philip M. Novell, Audit Committee
Member
PERSONNEL AND COMPENSATION COMMITTEE REPORT
The Personnel and Compensation Committee (the "Committee") of the Board of
Directors has furnished the following report on executive compensation:
During 2001, the Company maintained its compensation program in accordance
with the following Committee goals:
A. Reasonable and appropriate base salaries, based upon job duties.
B. Incentive compensation tied to return on investment with appropriate
adjustments for achievement of specified Company goals.
C. Stock options for executives which align interests of employees with
interests of shareholders.
10
The Committee has determined that the following categories will best
motivate Company executives to achieve the Company goals:
BASE SALARIES. Annual base salaries are based on past and present corporate
and individual performance, with reference to base salary data of similar-sized
corporations and industry competitors so such salaries are generally competitive
in the market place. Salary comparisons with peer group companies are reviewed
and analyzed to account for differences in size and business complexity among
peer companies.
The Committee has complete discretion in determining base salary amounts
(including the grant and amount of any annual discretionary incentive payments
or stock option awards), regardless of whether corporate or individual
performance goals are achieved. The Committee exercised its complete discretion
in setting base salaries for 2001.
Each year the Committee reviews, with the Chief Executive Officer, and
approves, with such modifications as it may deem appropriate, an annual salary
adjustment target for executives for the ensuing February 1 to January 31, based
on current available survey data, cost of living factors, and performance
judgments as to the past and expected future contributions of the individual
officers.
INCENTIVE COMPENSATION. The Company relies heavily on annual discretionary
incentive compensation to attract and retain Company officers and other key
employees of outstanding abilities, and to motivate them to perform to the full
extent of their abilities. The Company's incentive compensation system in 2001
focused on Return on Investment (ROI). For Mr. Hill, his 2001 bonus is based on
the ROI of his operations, with adjustments to the bonus based on attainment of
certain Company and Divisional goals. For Mr. Wright, bonus is based on the
pretax operating profit of Universal Forest Products Shoffner LLC which was the
method utilized by Shoffner Industries prior to its acquisition by the Company
in March of 1998. For Messrs. Currie, Secchia, and Glenn, incentive compensation
is based entirely on the ROI of the Company as a whole.
CHIEF EXECUTIVE. The Committee annually reviews and establishes the
discretionary component of the base salary of the Chief Executive Officer. His
salary is based on comparable compensation data, the Committee's assessment of
his past performance and its expectation as to his future contributions in
leading the Company and its businesses. The Chief Executive Officer's base
salary fell within the middle-range of the salaries of comparable executives.
When compared with the peer group of the Company (as discussed under "Stock
Performance Graph"), the Chief Executive Officer's base salary fell in the upper
quartile of the peer group. The Committee has complete discretion in setting
base salary for Mr. Currie (who does not have an employment agreement with the
Company).
The Chief Executive Officer's incentive bonus amount for 2001 was based upon
performance determined under the Company's Performance Bonus Plan. The Chief
Executive Officer's bonus for 2001 reflects the Company's overall performance,
including record net sales and net earnings achieved in 2001 as compared to
2000.
INCENTIVE BONUS PROGRAM. For fiscal 2002, the Company will continue to use
the ROI based Performance Bonus Plan described above. By basing the individual's
incentive compensation on the ROI generated by the profit center, the individual
is rewarded for properly managing assets, increasing cash flow, and obtaining
higher net margins. A discretionary bonus component is available for salaried
personnel at operations which have not yet hit the ROI target, but which
demonstrate improvement over the previous year.
For the Chief Executive and the other Named Executives, incentive
compensation will be paid as provided in the Performance Bonus Plan, as approved
by the Committee. For 2002, bonus compensation as determined under the
Performance Bonus Plan may be adjusted depending on the Named Executive's
achievement.
The Company's policy is to pay all earned compensation regardless of whether
it exceeds the One Million Dollar ($1,000,000.00) limitation on compensation
deductions set forth in Section 162(m) of the Internal Revenue Code. To ensure
the maximum tax deductibility for the Company, the Company received shareholder
approval of its Performance Bonus Plan at its 1999 Annual Meeting of
Shareholders.
11
The Committee recognizes that as the strategic objectives of the Company are
modified and refined, the compensation formulas must also be refined to maintain
the direct correlation between individual compensation and Company performance.
This report has been furnished by the members of the Board of Directors'
Personnel and Compensation Committee.
John W. Garside, Chairman
John C. Canepa
The reports of the Audit Committee and the Personnel and Compensation
Committee shall not be deemed incorporated by reference in any general statement
incorporating by reference in this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
STOCK PERFORMANCE GRAPHS
The following graph depicts the cumulative total return on the Company's
Common Stock compared to the cumulative total return on the indices for The
NASDAQ Stock Market(sm) (all U.S. companies) and an industry peer group selected
by the Company. The graph assumes an investment of $100.00 on December 27, 1996
and reinvestment of dividends in all cases.
[PERFORMANCE GRAPH]
12/1996 12/1997 12/1998 12/1999 12/2000 12/2001
# Universal Forest Products, Inc. 100.0 98.6 152.2 100.3 101.9 160.3
* Nasdaq Stock Market (US Companies) 100.0 117.7 170.2 312.7 192.8 155.9
- Self-Determined Peer Group 100.0 110.3 103.1 125.6 76.3 70.4
The companies included in the Company's self-determined industry peer group
are as follows:
Armstrong World Industries, Inc. Louisiana Pacific Corp.
Building Materials Holding Co. Patrick Industries
Georgia Pacific Corp.
The returns of each company included in the self-determined peer group are
weighted according to each respective company's stock market capitalization at
the beginning of each period presented in the graph above.
12
Kevco, Inc., which was formerly considered a peer group company, filed a
petition for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code on February
5, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires directors, executive officers,
and greater than 10% beneficial owners to file reports of ownership and changes
in ownership of shares of Common Stock with the Securities and Exchange
Commission, and applicable regulations require them to furnish the Company with
copies of all Section 16(a) reports they file. Based solely upon review of the
copies of such reports furnished to the Company, or written representations that
no such reports were required, all Section 16(a) filing requirements applicable
to the reporting persons were complied with.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP ("Andersen") as
independent public accountants for the Company for the fiscal year ending
December 28, 2002. Representatives of Andersen will be present at the Annual
Meeting of Shareholders and available to respond to appropriate questions. The
Andersen representatives will have the opportunity to make a statement if they
so desire.
On June 14, 2001, the Company's Board of Directors approved of a change in
its independent accountant from Deloitte & Touche LLP ("Deloitte") to Andersen
based upon the recommendation of the Audit Committee. Deloitte's report on the
Company's financial statements for the past two fiscal years did not contain an
adverse opinion or a disclaimer of opinion and was not qualified or modified as
to uncertainty, audit scope, or accounting principles. During 1999, 2000, and a
portion of 2001, preceding the Board's decision to change independent
accountants, there were no disagreements with Deloitte on any matter of
accounting principles or practices, financial statement disclosure, auditing
scope or procedure, which disagreement(s), if not resolved, would have caused
Deloitte to refer to the matter of the disagreement(s) in connection with its
reports. During that same period of time, there were no reportable events as
described in item 304(a)(1)(b) of the Securities and Exchange Commission's
Regulation S-K.
Audit Fees. The aggregate fees billed by Andersen for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 29, 2001 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
fiscal year were $177,000.00.
Financial Information Systems Design and Implementation Fees. Andersen did
not perform any information technology services relating to financial
information systems design and implementation in fiscal year 2001.
All Other Fees.(1) The aggregate fees billed by Andersen for services
rendered to the Company, other than the services described above for the fiscal
year ended December 29, 2001, were $884,000.00, which primarily included
internal audit and tax services.
The Audit Committee of the Board of Directors does not believe "other fees"
referenced above have an adverse effect on Andersen's independence.
AVAILABILITY OF FORM 10-K
Shares of the Company's stock are traded under the symbol UFPI on The NASDAQ
Stock Market(sm). The Company's 10-K Report filed with the Securities and
Exchange Commission will be provided free of charge to any shareholder upon
written request. Significant financial information is available on the Company's
web site at
---------------
(1) Includes $718,000.00 of fees for consulting services rendered by Andersen
prior to June 14, 2001. On February 19, 2002, the Audit Committee decided to
reevaluate the services provided by Andersen.
13
http://www.ufpi.com. For more information, contact the Investor Relations
Department, 2801 East Beltline NE, Grand Rapids, Michigan 49525.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2003 Annual Meeting of
Shareholders must be received by the Company no later than November 22, 2002, to
be considered for inclusion in the proxy materials relating to that meeting.
Proposals of shareholders should be addressed to the attention of Secretary,
2801 East Beltline NE, Grand Rapids, Michigan 49525. If the Company receives
notice of a shareholder proposal after February 5, 2003, the persons named as
proxies for the 2003 Annual Meeting of Shareholders will have discretionary
voting authority to vote on that proposal at the meeting.
HOUSEHOLDING OF PROXY MATERIALS
Effective with the 2002 Annual Meeting of Shareholders, only one annual
report and proxy statement will be sent to multiple shareholders sharing a
single address, unless the Company has received instructions to the contrary
from one or more of such shareholders. If you prefer to receive individual
copies of the proxy materials, send your request in writing to the attention of
Investor Relations, 2801 East Beltline NE, Grand Rapids, MI 49525, or call
888-BUY-UFPI.
FUTURE PROXY SOLICITATION
The Company has expanded its use of the Internet to solicit proxies from its
shareholders. As stated on the Notice of Annual Meeting, the Company will also
accept voting by telephone or via electronic mail. If, in the future, you are
interested in accepting proxy solicitations via the Internet, visit the
Company's web site at http://www.ufpi.com, and request to be put on the e-mail
list by clicking on the "Information Request" icon and follow the instructions
to have the proxy notification sent to you via e-mail.
March 18, 2002
By Order of the Board of Directors,
/s/ Matthew J. Missad
Matthew J. Missad, Secretary
14
APPENDIX A
UNIVERSAL FOREST PRODUCTS, INC.
2002 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Universal Forest Products, Inc. 2002 Employee
Stock Purchase Plan (the "Plan") is to provide employees of Universal Forest
Products, Inc. (the "Company") and its "Participating Subsidiaries" (as herein
defined) with a further inducement to continue their employment with the Company
or the Participating Subsidiaries and to encourage such employees to increase
their efforts to promote the best interests of the Company. The Plan allows
Eligible Employees to purchase shares of common stock of the Company (the
"Stock"), at a price less than the market price pursuant to Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The Plan succeeds the
Company's existing Employee Stock Purchase Plan that was adopted by its
shareholders in 1994 (the "1994 Plan").
2. COMMITTEE TO ADMINISTER PLAN. The Plan shall be administered by a
committee appointed by the Board of Directors of the Company (the "Committee").
The Committee shall consist of not less than two members. The Board of Directors
may from time to time remove members from, or add members to, the Committee.
Vacancies on the Committee shall be filled by the Board of Directors. The
Committee may establish from time to time such regulations, provisions and
procedures, within the terms of the Plan, as in the opinion of its members may
be advisable in the administration of the Plan. A majority of the Committee
shall constitute a quorum, and the acts of a majority of the members present at
any meeting at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee. The interpretation and construction by the Committee of any
provisions of the Plan shall be final unless otherwise determined by the Board
of Directors. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan.
3. PARTICIPATION.
(a) Eligible Employees. Participation under the Plan shall be open to all
active employees (the "Eligible Employees") of the Company or its Participating
Subsidiaries except (a) employees who have been continuously employed by the
Company or a Participating Subsidiary for less than twelve (12) months at the
beginning of an Option Period (as hereinafter defined); (b) employees whose
customary employment by the Company or a Participating Subsidiary is less than
twenty (20) hours per week; and (c) employees whose customary employment by the
Company or a Participating Subsidiary is for not more than five (5) months in a
calendar year. No option rights shall be granted under the Plan to any person
who is not an Eligible Employee, and no Eligible Employee shall be granted
option rights under the Plan (a) if such employee, immediately after receiving
the grant of such option rights under the Plan, owns (under the rules of
Sections 423(b)(3) and 424(d) of the Code) stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of the
Company or any of its subsidiary corporations (as defined by Section 425(f) of
the Code); or (b) which permit such employee to purchase stock under this Plan
and any other employee stock purchase plan of the Company and its subsidiary
corporations (as defined by Section 424(f) of the Code) aggregating more than
Twenty Five Thousand Dollars ($25,000.00) of the fair market value of such stock
("Maximum Value") (determined at the time the respective options are granted) in
any one calendar year, and in no event may such option rights accrue at a rate
which exceeds that permitted by Section 423(b)(8) of the Code.
(b) Participating Subsidiaries. This Plan may be adopted by the board of
directors of any corporation which is a member of a controlled group of
corporations, within the meaning of Section 1563(a) of the Code, of which the
Company is also a member, and upon such adoption and with the approval of the
Committee, such corporation shall be deemed to be one of the "Participating
Subsidiaries." The Committee, in its discretion, is authorized to approve
participation in the Plan by any foreign entity which is a controlled foreign
corporation of the Company, within the meaning of Section 957(a) of the Code.
Upon adoption by the board of directors of any such controlled foreign
corporation and with the approval of the Committee, such corporation shall be
deemed to be one of the "Participating Subsidiaries."
15
4. STOCK AVAILABLE FOR PLAN. Purchase of Stock pursuant to and on behalf of
the Plan for delivery under the Plan may be made out of the Company's presently
or hereafter authorized but unissued Stock or from outstanding shares of Stock,
or partly out of each, as determined by the Committee. The maximum number of
shares of Stock which may be purchased under the Plan is one hundred thousand
(100,000) shares, plus that number of shares authorized for sale but not
purchased under the 1994 Plan; subject, however, to adjustment as set forth in
the Plan. If the Company shall, at any time after the Effective Date, change its
issued Stock into an increased number of shares of Stock, with or without par
value, through a stock dividend or split of shares, or into a decreased number
of shares, with or without par value, through a combination of shares, then
effective with the record date for such change, the maximum number of shares of
Stock which thereafter may be purchased under the Plan shall be the maximum
number of shares which, immediately prior to such record date, remained
available for purchase under the Plan, proportionately increased, in the case of
such stock dividend or split of shares, or proportionately decreased in the case
of such combination of shares. In the event of any other change affecting Stock,
such adjustment shall be made as may be deemed equitable by the Board of
Directors to give proper effect to such event.
5. EFFECTIVE DATES. Subject to shareholder approval, this Plan shall become
effective on June 30, 2002 (the "Effective Date"). The first Option Period under
the Plan shall commence on June 30, 2002, and end on September 28, 2002. As long
as the Plan remains in effect, a new Option Period shall commence on the first
day of each fiscal quarter of the Company and end on the last day of each such
fiscal quarter.
6. EMPLOYEE PARTICIPATION.
(a) Eligibility. An employee of the Company or a Participating Subsidiary
who is an Eligible Employee at or prior to the first day of any Option Period
may become a participant (a "Participant") as of such date by (a) at least ten
(10) days prior to such date, completing and forwarding a payroll deduction
authorization form (the "Authorization") to the Eligible Employee's appropriate
payroll location; and/or (b) at least thirty (30) days prior to the last day of
the Option Period, completing and forwarding a lump sum payment form furnished
by the Company, accompanied by payment to the Company in the amount of the lump
sum, to be credited to the Participant's Purchase Account. The Authorization
will direct a regular payroll deduction from the Participant's compensation to
be made on each of the Participant's pay dates occurring during each Option
Period in which he or she is a Participant.
(b) Holding Period. As a condition to participation in the Plan, each
Participant agrees not to sell or otherwise dispose of such shares for a period
of at least one (1) year following the Purchase Date, as defined below, for such
shares without the prior written consent of the Committee, unless the sale or
disposition is pursuant to termination of employment under Section 12 of the
Plan below.
7. PAYROLL DEDUCTIONS AND LUMP SUM PAYMENTS.
(a) Payroll Deductions. The Company and its Participating Subsidiaries will
maintain payroll deduction accounts for their respective employees who are
Participants and who have filed an Authorization. Payments made by Participants,
whether by payroll deduction or lump sum payment, shall be credited to the
Participant's Stock Purchase Account (the "Purchase Account"). No amounts other
than payroll deductions and lump sum payments authorized under this Plan may be
credited to a Participant's Purchase Account. A Participant may authorize a
payroll deduction in any amount not less than Ten Dollars ($10.00) per week,
Twenty Dollars ($20.00) bi-weekly or Fifty Dollars ($50.00) per month. The
amount may not be more than ten percent (10%) of the Participant's gross
earnings payable as wages, salary, and bonus compensation, before withholding or
other deductions ("Gross Earnings") for the immediately preceding Option Period.
(b) Lump Sum Payments. A Participant may make one lump sum payment in any
Option Period in an amount not less than Two Hundred Dollars ($200.00) but not
more than a maximum of ten percent (10%) of the Participant's Gross Earnings for
the immediately preceding Option Period.
(c) General. If a Participant makes payments for credit to his or her
Purchase Account through both lump sum payments and payroll deductions, the
total of all such payments during any Option Period shall not exceed ten percent
(10%) of the Participant's Gross Earnings during the immediately preceding
Option Period. In no event shall payments of any kind for credit to a Purchase
Account by or on behalf of any Participant in any
16
calendar year exceed the amount that would result in the purchase of Stock
having an aggregate value greater than the Maximum Value (as defined in Section
3(a) above). The Committee, in its discretion, may vary the Option Period and
the payroll deduction period of Eligible Employees of any Participating
Subsidiary which is a foreign controlled corporation of the Company, within the
meaning of Section 957(a) of the Code ("Foreign Participating Subsidiary"), in a
manner necessary or convenient for participation in the Plan by Eligible
Employees of a Participating Subsidiary, and the Committee shall have the
authority to establish the terms and conditions of participation in the Plan by
Eligible Employees of a Foreign Participating Subsidiary, provided that such
terms and conditions are not materially inconsistent with the Plan.
8. CHANGES IN PAYROLL DEDUCTION. Payroll deductions shall be made for each
Participant in accordance with the Participant's Authorization and shall
continue until the Participant's participation terminates, the Authorization is
revised, or the Plan terminates. A Participant may, as of the beginning of any
Option Period, increase or decrease the Participant's payroll deduction, within
the limits specified in Section 7, by filing a new Authorization at least ten
(10) days prior to the beginning of that Option Period.
9. TERMINATION OF PARTICIPATION; WITHDRAWAL OF FUNDS. A Participant may for
any reason at any time on written notice given to the Company prior to the
Participant's last pay date in any Option Period elect to terminate
participation in the Plan and permanently draw out the balance accumulated in
the Participant's Purchase Account. An Eligible Employee who elects to terminate
participation will cease to be a Participant and revoke the Authorization for
subsequent payroll deductions. The amount, if any, in the former Participant's
Purchase Account which is not payable in respect of the exercise of any option
to purchase Stock theretofore granted under the Plan, as well as any
unauthorized payroll deductions made after such revocation, shall be promptly
refunded to the former Participant. An Eligible Employee who has terminated
participation in the Plan may thereafter begin participation in the Plan again
only after the expiration of three (3) full fiscal quarters of the Company after
the fiscal quarter in which such termination and withdrawal of funds occurred.
Partial withdrawals of funds will not be permitted.
10. PURCHASE OF SHARES. Each Participant during each Option Period under
this Plan will be granted an option as of the "Purchase Date" (as herein
defined) for the purchase of as many whole shares of Stock as may be purchased
with the funds in his or her Purchase Account. This election shall be
automatically made as provided in this Section unless the Participant terminates
participation as provided in Section 9. The purchase price for each share of
Stock purchased shall be eighty five percent (85%) of the fair market value of a
share of Stock on the "Purchase Date." If such percentage results in a fraction
of a cent, the purchase price shall be increased to the next higher full cent.
The term "Purchase Date" shall be the last business day of the Option Period.
If, as of each Purchase Date, the Participant's Purchase Account contains funds,
the Participant shall be deemed to have exercised an option to purchase shares
at the purchase price, the Participant's Purchase Account shall be charged for
the amount of the purchase, and an entry shall be made to the Participant's
account maintained by the Company's transfer agent. The Company, at its option,
may choose to issue share certificates at the end of each Option Period. As of
each subsequent Purchase Date when funds have again accrued in the Participant's
Purchase Account, shares will be purchased in the same manner.
If the Stock continues to be traded in the NASDAQ National Market System
market or if the Stock becomes listed upon an established stock exchange, the
fair market value per share shall be the closing sale price reported by NASDAQ
on the Purchase Date.
11. ISSUANCE OF SHARE CERTIFICATES. Except as otherwise provided in the Plan
or as determined by the Company, shares of Stock acquired by Participants under
the Plan shall be recorded and held in book entry only. Stock certificates for
any whole shares in a Participant's Purchase Account may be issued to such
Participant only upon receipt by the Committee of the Participant's written
request, which request shall indicate the number of shares (up to the maximum of
the number of full Shares in the Participant's Purchase Account) for which the
Participant wishes to receive stock certificates. Certificates will be issue to
Participants if (a) the Participant has held the shares for a minimum of one (1)
year from the Purchase Date, and (b) the Participant owns at least one hundred
(100) shares of Stock as a result of purchases under this Plan, unless such
certificate is being issued upon termination of employment. The appropriate
share certificates shall be issued to a Participant as soon as practical after
the end of an Option Period for which the qualifying request is timely
17
made. Fractional share interests shall be paid in cash to the Participant.
Certificates may be registered only in the name of the Participant or the names
of the Participant and his or her spouse.
12. RIGHTS ON RETIREMENT, DEATH, OR TERMINATION OF EMPLOYMENT. In the event
of a Participant's retirement, death, or termination of employment, no payroll
deduction shall be taken from any pay due and owing to a Participant at such
time, and the balance in the Participant's Purchase Account shall be paid to the
Participant or, in the event of the Participant's death, to the Participant's
estate.
13. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable by
a Participant and are exercisable only by the Participant during his or her
lifetime.
14. APPLICATION OF FUNDS. All funds received or held by the Company or a
Participating Subsidiary under this Plan may be used by the Company or such
Participating Subsidiary for any corporate purpose.
15. AMENDMENT OF THE PLAN. The Board of Directors of the Company may at any
time, or from time to time, amend this Plan in any respect, except that, without
the approval of a majority of the shares of Stock of the Company then issued and
outstanding and entitled to vote, no amendment shall be made (a) increasing the
number of shares approved for this Plan (other than as provided in Section 4),
(b) decreasing the Purchase Price per share, (c) withdrawing the administration
of this Plan from the Committee, (d) changing the designation of the class of
employees eligible to receive options under the Plan, or (e) which would render
options granted under the Plan unqualified for special tax treatment under the
Code.
16. TERMINATION OF THE PLAN. Unless sooner terminated as hereinafter
provided, this Plan shall terminate on January 16, 2012. The Company may, by
action of its Board of Directors, terminate the Plan at any time. Notice of
termination shall be given to all then Participants, but any failure to give
such notice shall not impair the termination. Upon termination of the Plan, all
amounts in Purchase Accounts of Participants shall be promptly refunded.
17. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Stock under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance, or sale of such Stock.
If at any time shares of Stock deliverable hereunder are required to be
registered or qualified under any applicable law, or delivery of such shares is
required to be accompanied or preceded by a prospectus or similar circular,
delivery of certificates for such shares may be deferred for a reasonable time
until such registrations or qualifications are effected or such prospectus or
similar circular is available.
CERTIFICATION
The foregoing Plan was duly adopted by the Board of Directors on the 16th
day of January 2002, subject to approval by the Company's shareholders.
--------------------------------------
SECRETARY
UNIVERSAL FOREST PRODUCTS, INC.
18
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
UNIVERSAL FOREST PRODUCTS, INC.
APRIL 17, 2002
\/ Please Detach and Mail in the Envelope Provided \/
-------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example.
FOR the nominees WITHHOLD
listed at right AUTHORITY
(except as marked to to vote for all nominees
the contrary below) listed at right
1. DIRECTORS TO [ ] [ ] NOMINEES: Louis A. Smith
BE
ELECTED BY John C. Canepa
HOLDERS OF COMMON STOCK
(Instruction: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list at right.)
FOR AGAINST ABSTAIN
2. Proposal to approve and adopt the 2002 Employee Stock [ ] [ ] [ ]
Purchase Plan.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
PLEASE DATE, SIGN AND RETURN PROMPTLY.
SIGNATURE(S)__________________________________________ DATE: ___________________
NOTE: Please sign exactly as name appears hereon. When shares are given by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
-------------------------------------------------------------------------------
UNIVERSAL FOREST PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William G. Currie and Matthew J. Missad as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side, all the shares
of Common Stock of Universal Forest Products, Inc. held of record by the
undersigned on March 1, 2002 at the Annual Meeting of Shareholders to be held
April 17, 2002, and at any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
ANNUAL MEETING OF SHAREHOLDERS OF
UNIVERSAL FOREST PRODUCTS, INC.
APRIL 17, 2002
CO. # _____________ ACCT. # __________________
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
PLEASE CALL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
TO VOTE BY INTERNET
PLEASE ACCESS THE WEB PAGE AT "WWW.VOTEPROXY.COM" AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER AVAILABLE WHEN YOU ACCESS THE WEB PAGE.
YOUR CONTROL NUMBER IS ______________________
\/ Please Detach and Mail in the Envelope Provided \/
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A [X] Please mark your
votes as in this
example.
FOR the nominees WITHHOLD
listed at right AUTHORITY
(except as marked to to vote for all nominees
the contrary below) listed at right
1. DIRECTORS TO [ ] [ ] NOMINEES: Louis A. Smith
BE
ELECTED BY John C. Canepa
HOLDERS OF COMMON STOCK
(Instruction: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list at right.)
FOR AGAINST ABSTAIN
2. Proposal to approve and adopt the 2002 Employee Stock [ ] [ ] [ ]
Purchase Plan.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
PLEASE DATE, SIGN AND RETURN PROMPTLY.
SIGNATURE(S)__________________________________________ DATE: ___________________
NOTE: Please sign exactly as name appears hereon. When shares are given by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
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