SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Northwestern Steel and Wire Company
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(Name of Registrant as Specified In Its Charter)
Northwestern Steel and Wire Company
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
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(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- - --------
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was determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
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Notes:
NORTHWESTERN STEEL AND WIRE COMPANY
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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Notice is hereby given that the Annual Meeting of Shareholders of
Northwestern Steel and Wire Company (the "Company") will be held at St. Mary's
Parish Center, 600 Avenue B, Sterling, Illinois, on Thursday, January 19,
1995, at 10:00 o'clock a.m., central time, for the following purposes:
1. To elect nine Directors to hold office for initial terms of one or two
years;
2. To approve an amendment to the Company's 1994 Director Stock Option
Plan to increase the duration of options awarded under the plan to 10
years;
3. To elect an Auditor for the Company for the ensuing year; the Board of
Directors of the Company has recommended Coopers & Lybrand L.L.P., the
present Auditor, for election as Auditor; and
4. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
In accordance with the provisions of the Bylaws, the Board of Directors has
fixed the close of business on December 9, 1994, as the record date for the
determination of the holders of Common Stock entitled to notice of and to vote
at the Annual Meeting.
By order of the Board of Directors
Edward G. Maris
Secretary
Sterling, Illinois
December 16, 1994
December 16, 1994
NORTHWESTERN STEEL AND WIRE COMPANY
121 WALLACE STREET
STERLING, ILLINOIS 61081
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
JANUARY 19, 1995
Any shareholder giving the enclosed Proxy has the power to revoke such Proxy
prior to its exercise either by revoking the Proxy in person at the meeting, by
executing a later-dated proxy or by delivering a signed written notice of the
revocation to the office of the Secretary of the Company before the meeting
begins. The Proxy will be voted at the Annual Meeting of Shareholders if the
signer of the Proxy was a shareholder of record on December 9, 1994 (the
"Record Date").
The Proxy is solicited by the Board of Directors of the Company. Solicitation
of the Proxy may be made through officers and regular employees of the Company
by telephone or by oral communications with some Shareholders following the
original solicitation period. No additional compensation will be paid to such
officers and regular employees for Proxy solicitation. Expenses incurred in the
solicitation of Proxies will be borne by the Company.
On the Record Date, there were outstanding and entitled to vote at the
meeting 24,349,912 shares of the Company's Common Stock (the "Common Stock").
Each outstanding share of Common Stock is entitled to one vote. This proxy
statement is first being sent to the shareholders on or about December 16,
1994. A list of the shareholders entitled to vote at the meeting will be
available for inspection at the meeting for purposes relating to the meeting.
MATTERS TO BE ACTED UPON
1. ELECTION OF DIRECTORS
Pursuant to the By-Laws of the Company, the Board of Directors has determined
that the number of directors constituting the full Board of Directors shall be
nine. At a meeting of the Board of Directors held on December 7, 1994, the
Board of Directors approved an amendment to the Company's Bylaws to provide for
the election of directors to staggered terms of two years as permitted under
Section 5/8.14(e) of the Illinois Business Corporation Act. Under this statute,
the Board of Directors may be divided into two or more classes who may then be
elected to initial terms of one or two years if there are two classes or one,
two and three-year terms if there are three classes. Thereafter, the directors
are elected to two or three-year terms depending on the number of classes.
Initially, the Board of Directors has provided that Warner C. Frazier, James A.
Kohlberg, Christopher Lacovara, Albert G. Pastino and George W. Peck IV would
be elected to a one year term and William F. Andrews, Darius W. Gaskins, Jr.,
Robert N. Gurnitz and Richard F. Williams would be elected to two year terms.
Messrs. Kohlberg, Lacovara, Pastino and Peck are affiliates or employees of
Kohlberg & Co., L.P. ("Kohlberg").
The Board of Directors amended the Bylaws to provide for staggered terms for
the election of directors because staggered terms provide additional continuity
to its management by having persons serve on the Company's Board of Directors
for a longer period of time without standing for reelection. The Board of
Directors believes that longer terms will make it easier to attract potential
director candidates and thus will
1
make available to the Company more candidates. However, staggered terms will
make it more difficult for shareholders to change control of the Company as it
will take at least two meetings of shareholders to replace the entire Board of
Directors.
Proxies are solicited in favor of the nominees named on the following pages
and it is intended that the proxies will be voted for the nine nominees. In the
event that any of the nominees should become unable or unwilling to serve as a
director, it is intended that the proxies will be voted for the election of
such other person, if any, as shall be designated by the Board of Directors. It
is not anticipated that any of the nominees will be unable or unwilling to
serve as a director. Each director to be elected will serve until a successor
is elected and qualified.
INFORMATION REGARDING NOMINEES FOR ELECTION OF DIRECTORS
A brief statement of the business experience and positions with the Company
for the past five years, a listing of certain other directorships and the ages
(as of November 30, 1994) of each person nominated to become a director of the
Company are set forth on the following pages. There are no family relationships
between any of the directors, nominees and executive officers of the Company
nor any arrangement or understanding between any director or nominee and any
other person pursuant to which he or she was or is to be selected as a director
or nominee.
NOMINEES FOR DIRECTORS TO SERVE A ONE-YEAR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - ---- ------------------------------------------
Warner C. Frazier.......... Mr. Frazier has been Chairman, President and Chief
Executive Officer of Simplicity Manufacturing, Inc.,
a manufacturer of outdoor power equipment, since
1988. He is also a director of ABT Building Products
Corporation, a specialty building products manufac-
turer ("ABT"), and Rexworks, Inc., a manufacturer of
landfill compactors. Age 62.
James A. Kohlberg.......... Mr. Kohlberg has been a principal of Kohlberg & Co.,
L.P. ("Kohlberg") since 1987. Mr. Kohlberg is also a
director of ABC Rail Products Corporation, a manu-
facturer of replacement parts and original equipment
for the freight railroad and transit industries
("ABC"), ABT and Welbilt Corporation, a manufacturer
of commercial and consumer food service equipment
("Welbilt"). Age 36. Director since 1992.
Christopher Lacovara....... Mr. Lacovara has been an associate of Kohlberg since
1988. From 1987 through 1988, Mr. Lacovara was an
associate at Lazard Freres & Co. Age 30. Mr. Laco-
vara is also a director of ABC and Welbilt. Director
since 1992.
Albert G. Pastino.......... Mr. Pastino has been associated with Kohlberg since
1993, and currently serves as a principal of
Kohlberg. From 1989 to 1992, Mr. Pastino was Senior
Vice President of Fortis Private Capital, Inc., a
private equity investment company. Mr. Pastino is
also a former senior partner of Deloitte, Haskins &
Sells. Age 52.
George W. Peck IV.......... Mr. Peck has been a principal of Kohlberg since
1987. From 1963 to 1987, he was a director and Vice
President of Canny, Bowen Inc., an executive re-
cruiting firm. Mr. Peck is also a director of ABC,
ABT and Welbilt. Age 62. Director since 1992.
2
NOMINEES FOR DIRECTORS TO SERVE A TWO-YEAR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
- - ---- ------------------------------------------
William F. Andrews......... Mr. Andrews is Chairman and Chief Executive Officer
of Amdura Corp., a specialty manufacturer of prod-
ucts for the overhead lifting and waste recycling
and disposal markets, and Chairman of Utica Corpora-
tion, a manufacturer of precision-forged turbine
airfoils for both aircraft and land-based engines.
Mr. Andrews is also a consultant with the investment
banking firm Investor (USA) International (formerly
known as Providentia, Inc.). From 1990 to 1992, Mr.
Andrews was President and Chief Executive Officer of
UNR Industries, Inc., a diversified manufacturer of
steel products ("UNR"). Prior to 1990, Mr. Andrews
was President of Massey Investment Company. Mr. An-
drews is also a director of Harley-Davidson, Inc.,
Navistar, Inc, Southern New England Telephone Compa-
ny, Corrections Corporation of America, Johnson Con-
trols, Inc., Katy Industries and MB Communications.
Age 63. Director since 1994.
Darius W. Gaskins, Jr. .... Mr. Gaskins has been a partner of Carlisle, Fauth &
Gaskins, Inc., a management and economics consulting
firm, since 1993, and a partner of High Street Asso-
ciates, Inc., an investment partnership, since 1991.
From 1989 through 1991, Mr. Gaskins was visiting
professor at the John F. Kennedy School of Govern-
ment at Harvard University. Mr. Gaskins is also the
former Chairman of the Interstate Commerce Commis-
sion and President and Chief Executive Officer of
the Burlington National Railroad. Mr. Gaskins is
also a director of UNR and Leasway Corp. Age 55. Di-
rector since 1994.
Robert N. Gurnitz.......... Mr. Gurnitz has been President and Chief Executive
Officer of the Company since 1991 and Chairman of
the Board of Directors since 1994. From 1988 through
1990, Mr. Gurnitz was President and Chief Operating
Officer of Webcraft Technologies, Inc. From 1985
through 1988, Mr. Gurnitz was President of Bethlehem
Steel's Shape and Rail Products Division. Prior to
that position, Mr. Gurnitz spent 19 years with
Rockwell International, where he headed a number of
their worldwide transportation components business-
es. Age 56. Director since 1991.
Richard F. Williams........ Mr. Williams retired as an electrician from the Com-
pany in December 1992 after more than 30 years of
service. Currently, Mr. Williams manages OMNI In-
vestment Company. Age 53. Director since 1994.
2. APPROVAL OF AMENDMENT OF THE 1994 DIRECTOR STOCK OPTION PLAN
The Board of Directors recommends that the shareholders vote FOR the
amendment to the 1994 Director Stock Option Plan (the "1994 Director Plan").
The 1994 Director Plan was adopted to enable the Company to provide incentive
compensation to Directors who are not employees of the Company or affiliates of
Kohlberg. The 1994 Director Stock Option Plan currently provides that awards
made thereunder generally expire five years from the date of grant. The Company
desires to amend the plan so that future awards would generally expire ten
years from the date of grant. The Company believes that this amendment would
better enable the Company to attract Directors who are not employees of the
Company or affiliates of Kohlberg.
3
The 1994 Director Plan was adopted by the Board of Directors on October 8,
1993. The following is a description of the 1994 Director Plan, a copy of which
is attached as Exhibit A to this Proxy Statement, assuming approval of the
amendment by the shareholders. The description which follows is qualified in
its entirety by Exhibit A.
The 1994 Director Plan provides solely for the award of nonqualified stock
options to certain directors. 2,500 stock options will be awarded to each
participating director upon such director's election or reelection to the Board
of Directors. Each such award is at fair market value on the date of grant.
Options become exercisable six months after the date of grant and generally
expire ten years following the date of grant.
An aggregate of 50,000 shares of Common Stock of the Company are reserved for
issuance under the 1994 Director Stock Option Plan. Except for any other
adjustments made by the Board of Directors relating to a stock split or certain
other changes in the number of shares of Common Stock, or to reflect
extraordinary corporate transactions, further increases in the number of shares
authorized for issuance under the 1994 Director Plan must be approved by the
shareholders of the Company.
The following table sets forth the benefits to be received by each of the
named group on January 19, 1994, under the 1994 Director Plan.
NEW BENEFITS PLANS
1994 DIRECTOR STOCK OPTION PLAN
NUMBER OF UNITS
---------------
Non-Executive Director Group............................... 10,000
3. ELECTION OF AUDITORS
The Board of Directors recommends that the shareholders vote FOR the election
of the firm of Coopers & Lybrand L.L.P. as the auditors to audit the financial
statements of the Company and certain of its subsidiaries for the fiscal year
ending July 31, 1995. It is intended that the proxies in the form enclosed with
this proxy statement will be voted for such firm unless shareholders specify to
the contrary in their proxies or specifically abstain from voting on this
matter.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
Annual Meeting of Shareholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
4. OTHER BUSINESS
The Board of Directors does not know of any other business to be presented at
the Annual Meeting of Shareholders. If any other matters properly come before
the meeting, however, it is intended that the persons named in the enclosed
form of proxy will vote said proxy in accordance with their best judgment.
DIRECTORS MEETINGS AND COMPENSATION
The Board of Directors held four meetings during the fiscal year ended July
31, 1994. Other than Jerome Kohlberg Jr., each of the Company's current
directors participated in excess of 75% of the meetings. Pursuant to the
Company's Director Stock Option Plan, directors who are not employees of the
Company or affiliates of KNSW Acquisition Co., L.P., receive 2,500 Options upon
their election as a director. The Board of Directors has established an
Executive Committee, an Audit Committee, a Compensation Committee and a Pension
Committee. The Executive Committee, which currently consists of Kim G. Davis,
Robert N. Gurnitz and Christopher Lacovara, oversees the Company's operations
and reports to the Board of Directors.
4
The Audit Committee, which currently consists of Darius W. Gaskins, Jr.,
William F. Andrews and George W. Peck IV, oversees actions taken by the
Company's independent auditors, recommends the engagement of auditors and
reviews the Company's internal audits. The Compensation Committee, which
currently consists of William F. Andrews, Darius W. Gaskins, Jr. and George W.
Peck IV, approves the compensation of executives of the Company, makes
recommendations to the Board of Directors with respect to standards for setting
compensation levels and administers the Company's incentive plans. The Pension
Committee, which currently consists of Christopher Lacovara, Darius W. Gaskins,
Jr. and Richard F. Williams, administers the Company's pension plans. During
the fiscal year July 31, 1994, the Compensation Committee and Executive
Committee each met once and the Audit Committee and Pension Committee each met
twice. During the fiscal year ended July 31, 1994, Messrs. Andrews, Gaskins and
Williams each received 2,500 options to purchase shares of Common Stock at
$11.25 per share for serving as members of the Board of Directors.
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information on Mr. Gurnitz and the four
other most highly compensated executive officers in fiscal 1994 who were
serving as executive officers at the end of fiscal 1994.
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------- ----------------
AWARDS PAYOUTS
-------- -------
OPTIONS/ LTIP
FISCAL BONUS OTHER ANNUAL SARS PAYOUTS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($)(1) COMPENSATION (#)(2) ($)(3)
- - --------------------------- ------ ---------- ------- ------------ -------- -------
Robert N. Gurnitz....... 1994 289,997 0 32,619(4) 50,000 0
Chairman of the Board, 1993 273,332 344,109 39,372(4) 375,000 580,000
President and Chief 1992 250,000 0 61,595(4) 0 0
Executive Officer
Edward G. Maris......... 1994 130,000 0 5,200(5) 5,000 0
Senior Vice President, 1993 130,000 79,595 2,600(5) 15,000 439,496
Chief Financial Officer 1992 130,000 43,200 0 0 55,230
Kenneth J. Burnett...... 1994 105,430 0 25,272(6) 6,000 0
Vice President
Operations-- 1993 105,111 79,595 2,603(5) 75,000 0
Houston 1992 99,010 0 0 0 0
John C. Meyer(7)........ 1994 130,000 0 13,421(8) 5,000 0
Vice President--Human
Resources 1993 130,000 79,595 53,871(8) 20,000 200,000
1992 61,389 19,231 5,697(9) 50,000 0
David C. Oberbillig..... 1994 110,000 0 5,500(5) 5,000 0
Vice President, Sales-- 1993 110,000 65,123 2,750(5) 5,000 299,184
Wire Products Division 1992 110,000 37,440 0(5) 0 81,032
- - --------
(1) All of the fiscal 1993 bonus was accrued in fiscal 1993 and paid in fiscal
1994. 25% of the fiscal 1992 bonus was accrued in fiscal 1992 and paid in
fiscal 1993, except for Mr. Meyer of which $10,769 was paid in fiscal 1992
and $8,462 of which was paid in fiscal 1993.
(2) The closing price of the Common Stock on July 29, 1994 (the last business
day of fiscal 1994) was $9.25. The number and fair market value of the
restricted Common Stock held by each of the named executives on July 29,
1994 was: Mr. Gurnitz 109,091 shares, $1,009,092; Mr. Maris 78,505 shares,
$726,171; Mr. Burnett 3,750 shares, $34,688; and Mr. Meyer 33,649 shares,
$311,253; and Mr. Oberbillig 54,859 shares, $507,446.
(3) Represents the value of cash and stock distributed on a deferred basis
under the Northwestern Steel and Wire Company Stock Appreciation Rights
Plan.
5
(4) Includes reimbursement of moving expenses, retirement annuity, life
insurance, 401(k) contributions made by the Company and car allowance.
Moving expenses accounted for $5,682, $12,564 and $42,595 of the amount
shown for fiscal years ended July 31, 1994, 1993 and 1992, respectively.
Retirement annuity expenses accounted for $15,000 of the amount shown for
each of the fiscal years ended July 31, 1994, 1993 and 1992, respectively.
(5) Entire amount represents 401(k) contributions made by the Company.
(6) Includes reimbursement of moving expenses and 401(k) contributions made by
the Company. Moving expenses accounted for $20,000 for fiscal year ended
July 31, 1994.
(7) Mr. Meyer was hired effective February 10, 1992.
(8) Includes reimbursement of moving expenses and 401(k) contributions made by
the Company. Moving expenses accounted for $8,871 and $51,273 of the amount
shown for fiscal years ended July 31, 1994 and 1993, respectively.
(9) Entire amount represents reimbursement of moving expenses.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
The following table discloses, for Mr. Gurnitz and the other named
executives, information regarding stock options and warrants granted during
fiscal 1994 pursuant to the Company's 1994 Long-Term Incentive Plan.
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
---------------------------------------------------------- -----------------
NUMBER OF % OF TOTAL OPTIONS EXERCISE OR
OPTIONS GRANTED TO EMPLOYEES BASE PRICE (PER EXPIRATION
NAME GRANTED(1) IN FISCAL YEAR SHARE) DATE 5% 10%
---- ---------- -------------------- --------------- ---------- -------- --------
Robert N. Gurnitz....... 50,000 36.4% $9.00 4/25/2004 $283,000 $717,000
Edward G. Maris......... 5,000 3.6 9.00 4/25/2004 28,300 71,700
Kenneth J. Burnett...... 6,000 4.4 9.00 4/25/2004 33,960 86,040
John C. Meyer........... 5,000 3.6 9.00 4/25/2004 28,300 71,700
David C. Oberbillig..... 5,000 3.6 9.00 4/25/2004 28,300 71,700
- - --------
(1) One-third of each option grant becomes exercisable on each of April 25,
1995, April 25, 1996 and April 25, 1997.
(2) Amounts reflect certain assumed rates of appreciation set forth in the
Securities and Exchange Commission's executive compensation disclosure
rules. Actual gains, if any, on stock option exercises depend on future
performance of the Common Stock and overall market conditions. Fair market
value per share on the date of grant was $9.00 per share.
OPTION EXERCISES AND FISCAL YEAR END VALUES FOR THE FISCAL YEAR ENDING JULY 31,
1994(1)
The following table shows information regarding the exercise of stock options
during fiscal 1994 by Mr. Gurnitz and the other named executives and the number
and value of any unexercised stock options held by them as of July 31, 1994:
SHARES VALUE NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
ACQUIRED ON REALIZED OPTIONS/SARS AT FY-END (#) MONEY OPTIONS/SARS AT FY-END
NAME EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE ($) EXERCISABLE/UNEXERCISABLE
---- ------------ -------- -------------------------- -----------------------------
Robert N. Gurnitz....... 0 0 262,500/162,500 $1,378,125/$603,125
Edward G. Maris......... 0 0 10,500/9,500 55,125/24,875
Kenneth J. Burnett...... 0 0 52,500/28,500 275,625/119,625
John C. Meyer........... 0 0 14,000/11,000 73,500/32,750
David C. Oberbillig..... 0 0 3,500/6,500 18,375/9,125
- - --------
(1) The closing price of the Common Stock on July 29, 1994 (the last business
day of fiscal 1994) was $9.25.
6
EMPLOYMENT AGREEMENTS
The Company has entered into an amended and restated employment agreement
(the "Gurnitz Agreement") with Robert N. Gurnitz for a term through January 1,
1996, and indefinitely thereafter on the terms set out therein. The Gurnitz
Agreement establishes an annual base salary of not less than $305,000 per year
plus an annual target bonus of not less than $195,700 per year. The amount of
the bonus actually earned each year, if any, will be based on the Company's
performance. The Gurnitz Agreement provides for the establishment of a
nonqualified supplemental executive retirement plan which provides the
additional benefits which would have been payable to Mr. Gurnitz under the
Northwestern Steel and Wire Company's Pension Plan B and 401(k) Salary Deferral
Plan if not for the limits imposed by the Internal Revenue Code (subject to
certain limitations set out in the Internal Revenue Code and the plans
themselves) and credits Mr. Gurnitz with an additional 1.5 years of service
(reflective of his prior industrial service) up to age 65 for each year of
service, beginning July 22, 1994. In addition, the Gurnitz Agreement requires
the Company to continue to purchase a standard disability income policy for Mr.
Gurnitz and to continue to pay Mr. Gurnitz in cash such amounts as are required
to pay the annual premiums on a life insurance policy on the life of Mr.
Gurnitz in the amount of $1,000,000 and to continue to provide for certain
other fringe benefits commensurate with Mr. Gurnitz's position as Chairman,
President and Chief Executive Officer of the Company. The Gurnitz Agreement
further provides that in the event Mr. Gurnitz's employment is terminated by
the Company other than for cause or disability, or by Mr. Gurnitz for good
reason (as such terms are defined in the Gurnitz Agreement), Mr. Gurnitz will
be entitled to receive a single lump sum cash payment and to continue to
participate in the employee benefit arrangements of the Company as are in
effect at the time of his termination. The lump sum payment would equal the sum
of (i) Mr. Gurnitz's annual base salary as then in effect and (ii) Mr.
Gurnitz's annual target bonus as then in effect, and his participation in
Company benefit arrangements would continue through the first anniversary of
the date of his termination. If Mr. Gurnitz's employment is terminated by the
Company for any reason or by Mr. Gurnitz for good cause, in either case within
two years of a change in control (as defined in the Gurnitz Agreement), Mr.
Gurnitz will be entitled to receive a single lump sum cash payment equal to
twice the aggregate of Mr. Gurnitz's annual base salary and target bonus as
then in effect. The Gurnitz Agreement also provides that Mr. Gurnitz is subject
to a two year covenant not to compete upon termination of Mr. Gurnitz's
employment unless such termination is by the Company without cause or within
two years of a change in control or by the resignation of Mr. Gurnitz with good
reason.
The Company entered into an employment arrangement (the "Meyer Arrangement")
with John C. Meyer on an at will basis commencing on February 10, 1992 at an
annual base salary of $130,000 per year. The Meyer Arrangement provides that,
in the event the Company terminates Mr. Meyer's employment other than for cause
or disability, Mr. Meyer will continue to receive his base salary and benefits
for a period of 12 months following such termination. The Meyer Arrangement
also provides that Mr. Meyer may participate in the benefit plans offered by
the Company from time to time during such period. The Meyer Arrangement also
provides that Mr. Meyer is subject to a one year covenant not to compete upon
termination of Mr. Meyer's employment except if his employment is terminated by
the Company without cause.
PENSION PLAN
The Company maintains a pension plan for all eligible employees. A
participant who retires on or after turning 65 and has completed at least five
years of service will qualify for an annual pension equal to 1.1% of the
participant's average earnings for each year of service not in excess of 30
years and 1.2% of the participant's final average earnings for each year of
service in excess of 30 years. Final average earnings are based on total
compensation (exclusive of certain cost-of-living adjustments) during the
participant's highest five consecutive years in the participant's last 15 years
of service. A deferred vested pension benefit normally commencing at age 65 is
provided for any employee who does not qualify for retirement under the plan
but has completed at least five years of service.
7
Years of service for purposes of the plan with respect to the officers named
in the Summary Compensation Table are as follows: Mr. Gurnitz, 3 years; Mr.
Maris, 8 years; Mr. Burnett, 31 years; Mr. Meyer, 2 years; and Mr. Oberbillig,
27 years.
The following table shows the projected annual pension benefits payable,
under the pension plan at the normal retirement age of 65:
ANNUAL NORMAL PENSION BENEFITS
FOR YEARS OF SERVICE SHOWN (1)
AVERAGE ANNUAL
PENSION EARNINGS 5 YEARS 10 YEARS 20 YEARS 30 YEARS 40 YEARS 50 YEARS
---------------- ------- -------- -------- -------- -------- --------
$ 50,000.................. $2,750 $5,500 $11,000 $16,500 $22,500 $28,500
100,000.................. 5,500 11,000 22,000 33,000 45,000 57,000
150,000.................. 8,250 16,500 33,000 49,500 67,500 85,500
200,000.................. 8,250 16,500 33,000 49,500 67,500 85,500
250,000.................. 8,250 16,500 33,000 49,500 67,500 85,500
300,000.................. 8,250 16,500 33,000 49,500 67,500 85,500
350,000.................. 8,250 16,500 33,000 49,500 67,500 85,500
400,000.................. 8,250 16,500 33,000 49,500 67,500 85,500
- - --------
(1) Normal pension benefits are formula based and are not subject to a social
security offset. With exceptions not applicable to any of the officers
named in the above compensation table, Sections 401(a)(17) and 415 of the
Internal Revenue Code limit the annual pension earnings that can be
considered under the plan to $150,000 and the annual benefits to $118,800
for retirement after December 31, 1993.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1994, the Compensation Committee of the Board of Directors was
composed of William F. Andrews, Darius W. Gaskins, Jr. and George W. Peck IV.
REPORT OF COMPENSATION COMMITTEE
This Report outlines the Company's management compensation philosophy and
reviews the compensation decisions made in fiscal 1994 regarding Mr. Gurnitz
and the other named executives.
MANAGEMENT COMPENSATION PHILOSOPHY
To advance the interests of its shareholders, the Company has based its
management compensation decisions on three principles.
First, base salaries should be sufficient to attract and retain qualified
management talent, without exceeding competitive practice at similar
companies in the steelmaking and related industries.
Second, annual incentive programs should provide opportunity for
significant increases in compensation, based on meeting or exceeding pre-
determined performance targets.
Third, a substantial portion of total compensation opportunity should
reflect performance on behalf of the Company's shareholders, as measured by
increases in the Company's stock price.
CRITERIA USED FOR MAKING COMPENSATION DECISIONS IN FISCAL 1994
This section describes the criteria used by the Compensation Committee
regarding compensation decisions affecting Mr. Gurnitz and the named
executives.
Base Salary
In April 1994, an independent compensation consulting firm conducted a study
of competitive compensation levels for the Company's key executives. Following
this study, the Compensation Committee approved salary midpoints for each
executive position, which were based on the executive positions' size
8
adjusted median competitive base salaries. The Compensation Committee then
approved adjustments for selected executives. As part of these actions, the
Compensation Committee increased Mr. Gurnitz's annual salary from $285,000 to
$305,000, which reduced the gap between it and the salary midpoint, and thus
brought it closer to size adjusted median competitive practice for the
industry.
Annual Incentive Program
In December 1993, the Compensation Committee approved the fiscal 1994
incentive program for Mr. Gurnitz and other key executives (including the named
executives). Target awards ranged from 20% of base salary midpoint to 50% of
base salary midpoint (for Mr. Gurnitz). Awards were calculated by formula,
based exclusively on the Company's adjusted operating income performance as
compared to the Company's business plan. The chart below summarizes the payout
formula:
% OF ADJUSTED % OF
OPERATING TARGET
PLAN ACHIEVED AWARD EARNED
------------- ------------
85%....................................................... 0%
100%....................................................... 100%
125%....................................................... 150%
150%....................................................... 200%
Despite an increase in fiscal 1994 of 38% in operating profit, the Company
achieved less than 85% of its adjusted operating income plan. As a result, Mr.
Gurnitz and the other named executives earned no annual incentive award for
fiscal 1994.
Long Term Incentive Program
In an effort to further increase the alignment of interests between key
employees and shareholders, the 1994 Long Term Incentive Program was approved
at the Annual Meeting of the Shareholders on January 20, 1994. On April 25,
1994, 50,000 stock options were awarded to Mr. Gurnitz and an aggregate of
21,000 stock options were awarded to the other named executives. All of these
options were granted at an exercise price of $9.00 per share which was
determined to be the fair market value of the Common Stock on the date of the
grant. In determining the size of the grants to Mr. Gurnitz and the other named
executives, the Compensation Committee considered median competitive practice
and each executive's contribution to the Company's financial performance, as
well as the motivational impact of the award on each individual's future
efforts to increase shareholder value. In addition, in the case of Mr.
Gurnitz's grant, the Compensation Committee provided an award below median
competitive practice in order to make more options available to other grantees.
Retirement Arrangements for Mr. Gurnitz
At its meeting on July 22, 1994, the Compensation Committee approved the
retirement compensation arrangement for Mr. Gurnitz as described in the
employment agreement. In approving this arrangement, the Compensation Committee
had three objectives--first, to enable Mr. Gurnitz, upon reaching normal
retirement age of 65, to receive a full pension from all sources, including
retirement programs of previous employers; second, to provide Mr. Gurnitz with
a pension benefit at age 65 that would be consistent with competitive practice
for other Chief Executive Officers in the industry; and third, to safeguard
shareholders' interests by providing such benefits only if Mr. Gurnitz
continued to serve as the Company's Chief Executive Officer for the next
several years.
Compensation Committee Members as of July 31, 1994
William F. Andrews Darius W. Gaskins, Jr. George W. Peck IV
9
PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested on
June 11, 1993 (the first day of public trading of the Common Stock) in the
Common Stock of the Company, the S&P 400 Index and the S&P Steel Index. The
return of the Standard & Poor's indices is calculated assuming reinvestment of
dividends during the period presented. The Company has not paid any dividends.
The stock price performance shown on the graph below is not necessarily
indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG NORTHWESTERN
STEEL AND WIRE COMPANY, S&P 400 INDEX AND S&P STEEL INDEX
[GRAPH APPEARS HERE]
Northwestern S&P Steel S&P 400
Date Steel & Wire Index Industrials
--------------- --------------- ---------------
[Representation [Representation [Representation
of of of
Square] Triangle] Plus Sign]
--------------- --------------- ---------------
6/11/93 100.000 100.000 100.000
7/30/93 103.125 88.652 98.387
12/31/93 125.000 109.128 104.649
7/29/94 115.625 119.490 103.513
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial ownership
of Common Stock as of December 1, 1994, by each person or entity known to the
Company who owns of record or beneficially five percent or more of the Common
Stock, by each named executive officer and director nominee and all executive
officers and director nominees as a group.
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING
NAME OF COMMON STOCK COMMON STOCK
---- ---------------- -------------
KNSW Acquisition Company, L.P. (1)............... 8,687,000 34.2%
United National Bank, as Trustee (2)............. 3,998,587 15.8
William F. Andrews (3)........................... 4,500 *
Kenneth J. Burnett (3)........................... 63,750 *
Warner C. Frazier................................ -- *
Darius W. Gaskins, Jr. (3)....................... 17,500 *
Robert N. Gurnitz (3)............................ 409,091 1.6
James A. Kohlberg (4)............................ 8,687,000 34.2
Jerome Kohlberg Jr. (4).......................... 8,687,000 34.2
Christopher Lacovara............................. 0 0
Edward G. Maris.................................. 90,505 *
John C. Meyer (3)................................ 49,649 *
David C. Oberbillig (3).......................... 58,859 *
W. Dexter Paine III (4).......................... 8,687,000 34.2
Albert G. Pastino................................ -- *
George W. Peck IV (4)............................ 8,687,000 34.2
Robert Svikhart (4).............................. 8,687,000 34.2
Richard F. Williams (3).......................... 2,840 *
All executive officers and director
nominees as a group (16 persons) (4)............ 9,493,392 37.4
- - --------
* Less than 1%.
(1) KNSW Acquisition Company, L.P. ("KNSW") owns directly 8,687,000 shares of
Common Stock. Kohlberg Associates, L.P., a Delaware limited partnership
("Associates"), is the general partner of KNSW. Kohlberg & Kohlberg, George
W. Peck IV, W. Dexter Paine III and Robert Svikhart are the general
partners of Associates. Jerome Kohlberg Jr. and James A. Kohlberg are
general partners of Kohlberg & Kohlberg. KNSW has agreed to use its
reasonable best efforts to cause at least one designee of the ESOP to be
nominated to the Board of Directors. Messrs. Kohlberg, Kohlberg, Peck,
Paine and Svikhart may be deemed to share voting and dispositive power as
to all shares of Common Stock owned by KNSW. Messrs. Kohlberg, Kohlberg,
Peck, Paine and Svikhart disclaim beneficial ownership will respect to such
shares. The address for KNSW is c/o Kohlberg & Co., 111 Radio Circle, Mt.
Kisco, NY 10549.
(2) United National Bank is the trustee of the ESOP.
(3) Includes shares issuable pursuant to options which may be exercised within
60 days after December 9, 1994.
(4) Includes the 8,687,000 shares of Common Stock owned by KNSW. See Note 1.
The Company's executive officers, directors and 10% stockholders are required
under the Securities Exchange Act of 1934, as amended, to file reports of
ownership with the Securities and Exchange Commission. Copies of these reports
must also be furnished to the Company. Based solely upon a review of copies of
such reports, or written representations that no reports were required, the
Company believes that during fiscal 1994 all filing requirements applicable to
its executive officers, directors and 10% stockholders were complied with other
than the filing of a Form 3 by W. Dexter Paine III and Robert Svikhart upon
their election as general partners of Associates, which Form 3s were filed in
October 1994 and December 1994, respectively.
11
CERTAIN TRANSACTIONS
In August 1992, the Company sold to KNSW 8,687,000 shares of Common Stock at
$4.00 per share (the "1992 Investment"), which represented at such time
approximately 52% of the outstanding Common Stock, giving KNSW effective voting
control of the Company and control of the Board of Directors. As a result of
the Company's initial public offering of Common Stock in June 1993, KNSW's
interest has been diluted to approximately 34.3%. KNSW is an affiliate of
Kohlberg. At the time of the 1992 Investment, the Company and Kohlberg entered
into a fee agreement (the "Fee Agreement") pursuant to which Kohlberg was
reimbursed for certain costs in connection with placing the investment and
agreed to provide such advisory and management services to the Company and its
subsidiaries as the Board of Directors reasonably requests. Deferred at the
time of the 1992 Investment, a fee of $2.0 million related to the 1992
Investment was paid by the Company to Kohlberg on August 12, 1993. In addition,
beginning on August 12, 1992, in consideration for ongoing advisory and
management services, the Company pays Kohlberg a fee of $43,435 per fiscal
quarter at the beginning of each quarter. The Fee Agreement provides that
Kohlberg, but not the Company, may terminate the Fee Agreement at any time. The
Fee Agreement will terminate automatically on the earlier of the end of the
fiscal year in which KNSW's percentage interest in the outstanding Common Stock
is less than 25% and the tenth anniversary of the Fee Agreement. The Fee
Agreement provides that, without the consent of a majority of the Company's
directors not nominated by affiliates of Kohlberg, Kohlberg will not be paid
any other fees by the Company. The Fee Agreement also provides that the Company
will indemnify Kohlberg and its affiliates and their respective partners,
officers, directors, stockholders, agents and employees against any third party
claims arising from the Fee Agreement and the services provided thereunder, the
1992 Investment or their equity interest in the Company.
Pursuant to the terms of the ESOP, the Company is obligated to pay certain
fees and expenses of the ESOP, which for the year ended July 31, 1994
aggregated $81,844.
KNSW has agreed to use its reasonable best efforts to cause at least one
designee of the ESOP to be nominated for election to the Board of Directors for
so long as the ESOP holds 5% or more of the outstanding Common Stock on a
fully-diluted basis. The nominee for the 1994 Annual Meeting of Shareholders is
Richard F. Williams.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of Shareholders intended to be presented by such Shareholders at
next year's Annual Meeting must be received by the Company at its principal
office no later than September 19, 1995 and must satisfy the conditions
established by the Securities and Exchange Commission for shareholder proposals
to be included in the Company's proxy statement for that meeting.
12
EXHIBIT A
NORTHWESTERN STEEL AND WIRE COMPANY
1994 DIRECTOR STOCK OPTION PLAN
1. PURPOSE. The purpose of the 1994 Director Stock Option Plan of
Northwestern Steel and Wire Company is to promote the interests of the Company
by providing an inducement to obtain and retain the services of qualified
persons, who are not employees of the Company or any Subsidiary or affiliate of
the Company, to serve as members of the Board.
2. DEFINITIONS. As used herein, the following terms shall have the following
meanings:
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean Northwestern Steel and Wire Company, an Illinois
corporation.
"Director" shall mean a member of the Company's board of directors.
"Disability" shall mean the condition of an Optionee which renders such
Optionee unable to engage in any substantial gainful activities by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than twelve (12) months or which
prevents such Optionee from serving as a Director.
"Eligible Directors" shall mean all Directors except for those which are
employees of the Company or any Subsidiary or affiliate of the Company or
(2) who are employees or affiliates of Kohlberg & Co., L.P., a Delaware
limited partnership.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Fair Market Value" shall mean the arithmetic mean of the highest and
lowest sale prices of the shares of the Company's Stock as reported on
NASDAQ National Market System on (i) the relevant date for valuation or
(ii) if there are no such sales on such date, the nearest preceding date
upon which such sales took place.
"Ineligible Directors" shall mean those Directors who are not Eligible
Directors.
"Option" shall mean an option to purchase shares of Stock, granted
pursuant to the Plan and subject to the terms and conditions described in
the Plan, which is not an "incentive stock option" within the meaning of
Section 422A of the Code.
"Optionee" shall mean a Director who is designated to receive Options
pursuant to the Plan.
"Plan" shall mean the Northwestern Steel and Wire Company 1994 Director
Stock Option Plan, as amended from time to time pursuant to Section 7.
"Stock" shall mean the Company's common stock, par value $.01 per share.
"Subsidiary" shall mean a subsidiary of the Company as defined in Section
425(f) of the Code.
3. ADMINISTRATION. The Plan shall be administered by the Ineligible
Directors. Grants of Options under the Plan and the amount and nature of the
awards to be granted shall be automatic as described in Section 5. The
Ineligible Directors have the power to interpret the Plan, to determine all
questions thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as they may deem desirable. Any interpretation,
determination, or other action made or taken by the Ineligible Directors shall
be final, binding and conclusive. Any action reduced to writing and signed by
all of the Ineligible Directors shall be as fully effective as if it had been
taken by a vote at a meeting duly called and held. None of the Ineligible
Directors shall be personally liable for any interpretation, determination or
other action made in good faith with respect to the Plan or the Options.
4. SHARES SUBJECT TO THE PLAN.
(a) Class. The shares which are to be made the subject of awards granted
under the Plan shall be the Company's authorized but unissued Stock. In
connection with the issuance of Stock under the Plan, the Company may
repurchase Stock in the open market or otherwise.
(b) Aggregate Amount. The total number of shares of Stock authorized for
issuance pursuant to Options granted under the Plan shall not exceed 50,000
shares (subject to adjustment under Section 8(c)). If any outstanding
Option expires or terminates prior to exercise for any reason, then the
Stock allocable to the unexercised portion of such Option shall not be
charged against the limitation of this Section 4(b) and may again become
the subject of an Option granted under the Plan.
5. TERMS, CONDITIONS AND FORM OF OPTIONS. Each Option granted under the Plan
shall be evidenced by a written agreement (the "Agreement") in such form as the
Ineligible Directors shall from time to time approve, which agreements shall
comply with and be subject to the following terms and conditions:
(a) Option Grants. On the date of the first meeting of the Board
following the Annual Meeting of Shareholders in each year, each Eligible
Director will automatically be granted an Option to purchase 2,500 shares
of Stock, without further action by the Board.
(b) Exercise Period. Options become exercisable no sooner than six months
after the grant date of the Option; provided, however, that any Option
granted pursuant to the Plan shall become exercisable in full upon the
director's death or Disability. Options shall terminate ten years from the
date of grant. In the event any Eligible Director voluntarily resigns from
the Board during any year of service, Options granted to such Eligible
Director with respect to such year shall terminate upon the later of six
months from the grant date and 90 days following such resignation.
(c) Exercise Price. The price per share of Stock at which an Option may
be exercised shall be equal to the Fair Market Value on the date the Option
is granted.
(d) Exercise Procedure. Options may be exercised (in full or in part) by
written notice to the Company at its principal office specifying the number
of shares of Stock with respect to which the Option is being exercised and
accompanied by payment, in cash, Stock or the surrender of outstanding
Options, of the exercise price for the shares with respect to which the
Option is being exercised.
(e) Options Non-Transferable. No option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
No interest of any Optionee under the Plan shall be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other
legal or equitable process. During the lifetime of the Optionee, Options
shall be exercisable only by the Optionee who received them or the
Optionee's guardian or legal representative.
(f) Death or Disability of Optionee. In the case of death, Options may be
exercised by the person or persons to whom the Optionee's rights under the
Option pass by will or applicable law or, if no person has such rights, by
the Optionee's executors or administrators; provided that such person(s)
consent in writing to abide by and be subject to the terms of the Plan and
the Agreement and such written consent is delivered to an officer of the
Company. In the case of Disability such that an Optionee is incapable of
exercising an Option, Options may be exercised by the Optionee's legal
guardian, or, if no such person exists, by the person or persons to whom
the Optionee's rights under the Option pass by will or applicable law or,
if no person has such rights, by the Optionee's executors or
administrators; provided that such person(s) consent in writing to abide by
and be subject to the terms of the Plan and the Agreement and such written
consent is delivered to an officer of the Company.
(g) Termination of Services as Director. If an Optionee ceases to be a
Director for any reason, he, or such person's representative as provided in
Section 5(f), may exercise such person's Option at any time or from time to
time, but in no event later than the expiration date specified pursuant to
Section 5(b).
A-2
(h) No Rights as Shareholder. No Optionee shall have any rights as a
shareholder with respect to any shares subject to Options prior to the date
of issuance to such person of a certificate or certificates for such
shares.
6. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options under the Plan, and the obligation of the Company to
transfer shares under such Options shall be subject to all applicable federal
and state laws, rules and regulations, including those related to disclosure of
financial and other information to Optionees, and to any approvals by any
government or regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for shares of Stock prior to (a)
the listing of such shares on any stock exchange or the NASDAQ National Market
System on which the Stock may then be listed, where such listing is required
under the rules or regulations of such exchange or system, and (b) the
compliance with applicable federal and state securities laws and regulations
relating to the issuance and delivery of such certificates; provided, however,
that the Company shall make all reasonable efforts to so list such shares and
to comply with such laws and regulations.
7. AMENDMENT AND DISCONTINUANCE. The Board may from time to time amend,
suspend or discontinue the Plan; provided, however, that, subject to the
provisions of Section 8(c), no action of the Board without approval of the
shareholders of the Company may be taken if such action would cause the Plan to
fail to comply with Rule 16b-3 of the Securities Exchange Act of 1934, as
amended, as then in effect without the consent of each Option holder.
Notwithstanding the foregoing, Section 5 shall not be amended more than once
every six months, other than to comport with changes in the Code, ERISA or the
rules thereunder.
8. GENERAL PROVISIONS.
(a) Assignability. The rights and benefits under the Plan shall not be
assignable or transferable by an Eligible Director other than by will or by
the laws of descent and distribution, and during the lifetime of the
director, Options granted under the Plan shall be exercisable only by him.
(b) Termination of Plan. No Options may be granted under this Plan after
the date which is five years after the effective date of the Plan (or if
such date is not a business day, on the next succeeding business day). The
Plan shall automatically terminate after all Options granted thereunder
have terminated or expired.
(c) Adjustments in Event of Change in Stock. In the event of any change
in the Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, stock split, combination, or
exchange of shares, or of any similar change affecting the Stock, the
number and class of shares subject to outstanding Agreements, the exercise
price per share thereof, and any other terms of the Plan or the Agreements
which in the Ineligible Directors' sole discretion require adjustment shall
be appropriately adjusted consistent with such change in such manner as the
Ineligible Directors may deem appropriate.
(d) No Right to Continue as a Director. None of the Plan, the granting of
an Option or any other action taken pursuant to the Plan shall constitute
or be evidence of any agreement or understanding, express or implied, that
the Company will retain a director for any period of time or at any
particular rate of compensation.
(e) ERISA. The Plan is not an employee benefit plan which is subject to
the provisions of ERISA and the provisions of Section 401(a) of the Code
are not applicable to the Plan.
(f) Non-Statutory Stock Options. All Options granted under the Plan shall
be non-statutory options not entitled to special tax treatment under
Section 422A of the Code.
(g) Effective Date of the Plan. The Plan shall take effect upon adoption
by the shareholders of the Company.
(h) Governing Law. The Plan and all interpretations and determinations
made and actions taken pursuant hereto shall be governed by the laws of the
State of Illinois without regard to the choice of law provisions thereof.
(i) Variation of Pronouns. All pronouns and any variations thereof
contained herein shall be deemed to refer to masculine, feminine, neuter,
singular or plural, as the identity of the person or persons may require.
A-3
REVOCABLE PROXY NORTHWESTERN STEEL AND WIRE COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1 The holder of shares of Common Stock (the "Common Stock") of Northwestern
Steel and Wire Company (the "Company") whose signature appears on the reverse
side hereof hereby constitutes and appoints each of Robert N. Gurnitz and
Edward G. Maris, with full power of substitution, as proxies to vote all of the
shares of Common Stock held of record by such holder on December 9, 1994, at
the 1994 Annual Meeting of Shareholders of the Company to be held at St. Mary's
Parish Center, 600 Avenue B, Sterling, Illinois, on Thursday, January 19, 1995,
at 10:00 o'clock a.m., central time, and any adjournments thereof, as directed
on the following matters proposed by the Company:
1. Election of Directors
Nominees for a one-year term: Warner C. Frazier, James A. Kohlberg,
Christopher Lacovara, Albert G. Pastino and George W. Peck IV
Nominees for a two-year term: William F. Andrews, Darius W. Gaskins, Jr.,
Robert N. Gurnitz and Richard F. Williams
[_] FOR [_] WITHHELD
[_] FOR ALL EXCEPT _____________________________________________________________
2. To approve the amendment to the 1994 Director Stock Option Plan
[_] FOR [_] AGAINST [_] ABSTAIN
3. To elect Coopers & Lybrand L.L.P. as Auditor for the Company for the ensuing
year
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjourment thereof
[_] FOR [_] AGAINST [_] ABSTAIN
PLEASE SIGN ON REVERSE SIDE
This Proxy, when properly completed and returned, will be voted in the manner
directed herein by the undersigned shareholder.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ABOVE ITEMS.
Please date and sign exactly as your name appears below. All joint owners
should sign. When signing as a fiduciary, representative or corporate officer,
give full title as such. If you receive more than one proxy card, please sign
and return all cards received.
Dated: ______________ , 199__ Signature __________________________
Signature __________________________
(if held jointly)
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE