<PAGE>
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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
United Industrial Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
UNITED
INDUSTRIAL CORPORATION
----------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS MAY 8, 1995
--------------------------------------------------------------------------------
TO THE STOCKHOLDERS OF
UNITED INDUSTRIAL CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of United
Industrial Corporation will be held at the Park Lane Hotel (Ballroom Suite, 2nd
floor) located at 36 Central Park South, New York, New York on the 8th day of
May, 1995 at 10:00 A.M., for the following purposes:
1. To elect two (2) directors to serve until the Annual Meeting of
Stockholders in 1998 and one (1) director to serve until the Annual Meeting
of Stockholders in 1997.
2. To consider and act upon a proposal to ratify the appointment of
Ernst & Young LLP as independent auditors of the Company for 1995.
3. To consider and act upon a proposal by a certain stockholder, as set
forth under "Proposal of a Certain Stockholder" in the accompanying Proxy
Statement, if brought before the meeting.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record on the books of the Company at the close of
business on March 17, 1995 will be entitled to notice of, and to vote at, the
meeting. The stock transfer books will not be closed. See the "Miscellaneous"
section of the accompanying Proxy Statement as to the place where the list of
stockholders may be examined.
Stockholders are cordially invited to attend the meeting in person. Whether
or not you plan to be present at the Annual Meeting, please sign, date and
return the enclosed Proxy to ensure that your shares are voted. A return
envelope which requires no postage if mailed in the United States, is enclosed
for your convenience.
By Order of the Board of Directors
Susan Fein Zawel
SECRETARY
March 30, 1995
PLEASE MAIL YOUR PROXY . . . NOW!
IMPORTANT
WE HOPE THAT YOU CAN ATTEND THIS MEETING
IN PERSON, BUT IF YOU CANNOT DO SO PLEASE
MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY.
<PAGE>
UNITED INDUSTRIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 8, 1995
This statement is furnished to stockholders of United Industrial Corporation
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be voted at the Annual Meeting of Stockholders of
the Company to be held at the Park Lane Hotel (Ballroom Suite, 2nd floor)
located at 36 Central Park South, New York, New York on May 8, 1995, at 10:00
A.M. Stockholders of record at the close of business on March 17, 1995 will be
entitled to notice of and to vote at such meeting and at all adjournments
thereof.
Stockholders who execute proxies may revoke them at any time before they are
voted by giving written notice of such revocation to the Secretary of the
Company. When a proxy is received, properly executed, prior to the meeting, the
shares represented thereby will be voted at the meeting in accordance with the
terms thereof.
The complete mailing address of the Company's principal executive offices is
18 East 48th Street, New York, New York 10017. The approximate date on which
this Proxy Statement and the form of Proxy were first sent or given to the
stockholders of the Company was March 30, 1995. The Annual Report of the Company
for the year ended December 31, 1994, including audited financial statements,
has been sent to each stockholder.
VOTING RIGHTS
On March 30, 1995, there were outstanding and entitled to vote 12,167,493
shares of Common Stock. Stockholders are entitled to one vote, exercisable in
person or by proxy, for each share of Common Stock held on the record date of
March 17, 1995. The holders of a majority of the outstanding shares of Common
Stock entitled to vote at the meeting shall constitute a quorum.
At the record date, more than 5% of the Company's outstanding voting
securities was beneficially owned by each of the persons named in the following
table, except that the information as to Sanford C. Bernstein & Co., Inc. and
Dimensional Fund Advisors Inc. is as of December 31, 1994 and is based upon
information furnished to the Company by such entities in Schedules 13G.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
----------------------- -------------------------------------------- --------------------- -----------
<S> <C> <C> <C>
Common Stock Bernard Fein 2,594,414(1) 21.32%
18 East 48th Street
New York, New York 10017
Common Stock Sanford C. Bernstein & Co., Inc. 707,957(2) 5.82
One State Street Plaza
New York, New York 10004
Common Stock Dimensional Fund Advisors Inc. 617,234(3) 5.07
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
<FN>
------------------------
(1) Includes shares of Common Stock owned directly as follows: Mr.
Fein--1,108,451 shares, Slake Investments, Ltd., as nominee for members of
Mr. Fein's family--579,021 shares, Mr. Fein's children and custodianships
for Mr. Fein's minor grandchildren--240,301 shares, Fein Investing
Properties Inc.--565,445 shares, and The Fein Foundation, of which Mr. Fein
is a trustee-- 101,196 shares.
1
<PAGE>
(2) Sanford C. Bernstein & Co., Inc. has sole voting power as to 377,600 of
such shares, but has sole dispositive power as to all such shares.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 617,234 shares of Common
Stock as of December 31, 1994, all of which shares are held in portfolios
of DFA Investment Dimensions Group Inc., a registered open-end investment
company ("DFA"), or in series of the DFA Investment Trust Company, a Dela-
ware business trust (the "DFA Trust"), or the DFA Group Trust and DFA
Participation Group Trust investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares. Dimensional
has sole voting power as to 471,934 shares, but officers of Dimensional who
also serve as officers of DFA and the DFA Trust have sole voting power as
to an additional 97,100 shares owned by DFA and 48,200 shares owned by the
DFA Trust, in their capacities as officers of DFA and the DFA Trust,
respectively.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1995, the number of shares of
Common Stock of the Company beneficially owned by each director of the Company,
each nominee for director, each executive officer named in the Summary
Compensation Table below, and by all directors and executive officers of the
Company as a group. Except as otherwise indicated all shares are owned directly.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OR GROUP OWNERSHIP (1) OF CLASS
------------------------------------------------------------ ------------------ -----------
<S> <C> <C>
Rick S. Bierman............................................. 9,030(2) (3)
Howard M. Bloch............................................. 44,758 (3)
P. David Bocksch............................................ -- --
Bernard Fein................................................ 2,594,414(4) 21.32%
Maurice L. Rosenthal........................................ -- (5) --
Myron Simons................................................ 7,510 (6) (3)
Richard R. Erkeneff......................................... -- --
All directors and executive officers as a
group consisting of 9 persons.............................. 2,646,682 (7) 21.75%
<FN>
------------------------
(1) The information as to securities owned by directors, nominees and executive
officers was furnished to the Company by such directors, nominees and
executive officers.
(2) These 9,030 shares of Common Stock are owned by Mr. Bierman's daughter.
Does not include 42,537 shares of Common Stock owned by Mr. Bierman's wife,
as to which he disclaims beneficial ownership. Such shares of Common Stock,
and the 9,030 shares of Common Stock owned by Mr. Bierman's daughter, are
included within Mr. Fein's beneficial ownership.
(3) Less than 1%.
(4) See the table above under "Voting Rights".
(5) Does not include 10,027 shares of Common Stock owned by Mr. Rosenthal's
wife, as to which he disclaims beneficial ownership.
(6) Does not include 14,141 shares of Common Stock owned by Mr. Simons' wife,
as to which he disclaims beneficial ownership.
(7) See footnotes above and footnote (1) to the table under "Voting Rights".
</TABLE>
2
<PAGE>
I. ELECTION OF DIRECTORS
Two directors are to be elected at the meeting to hold office until the
annual meeting in 1998 and one director until the annual meeting in 1997 and
until their successors are elected and qualified. The nominees recommended by
the Board of Directors of the Company are Rick S. Bierman and Howard M. Bloch to
hold office until the annual meeting in 1998 and P. David Bocksch to hold office
until the annual meeting in 1997. Should the nominees become unable to serve or
otherwise be unavailable for election, it is intended that persons named in the
Proxy will vote for the election of such persons as the Board of Directors may
recommend in the place of such nominee. The Board of Directors knows of no
reason why the nominees might be unable to serve or otherwise be unavailable for
election. Messrs. Bierman and Bloch are presently members of the Board of
Directors. Mr. Bocksch was hired as President and Chief Executive Officer of the
Company as of March 27, 1995 and, if elected, will fill the vacancy on the Board
of Directors for the term expiring in May 1997.
Directors are elected by a plurality of the shares present in person or
represented by proxy at the Annual Meeting. Stockholders have cumulative voting
rights with respect to the election of directors. Under cumulative voting, each
stockholder is entitled to the same number of votes per share as the number of
directors to be elected (or, for purposes of this election, two votes per
share). A stockholder may cast all of such votes for a single nominee or
distribute them between the nominees, as he wishes, either by so marking his
ballot at the meeting or by specific voting instructions sent to the Company
with a signed Proxy. Unless authority to vote for the nominees for director is
withheld, it is the intention of the persons named in the accompanying Proxy to
vote the Proxies in such manner as will elect as directors the persons who have
been nominated by the Board of Directors.
The following table sets forth certain information with respect to the
nominees and each director whose term does not expire in 1995. Except as
otherwise indicated, each nominee and director has held his present principal
occupation for the past five years.
<TABLE>
<CAPTION>
AGE (AT DECEMBER BECAME
NAME 31, 1994) PRINCIPAL OCCUPATION DIRECTOR
----------------------------------------- ------------------ ----------------------------------------- ---------
NOMINEES FOR ELECTION TO SERVE UNTIL THE ANNUAL MEETING OF STOCKHOLDERS IN 1998
<S> <C> <C> <C>
Rick S. Bierman.......................... 45 Attorney 1989
Howard M. Bloch*......................... 67 Vice President of the Company 1975
NOMINEE FOR ELECTION TO SERVE UNTIL THE ANNUAL MEETING OF STOCKHOLDERS IN 1997
<S> <C> <C> <C>
P. David Bocksch......................... 51 President and Chief Executive Officer of
the Company since March 27, 1995;
Managing Partner of Dalexis Partners,
Inc., a management consulting firm,
since 1989; President and Chief
Executive Officer of MicroFrame, Inc., a
data communications security firm, from
October 1993 to December 1994; President
and Chief Executive Officer of Monroe
System for Business, Inc., an office
equipment and contract services company,
from June 1991 to September 1993; Senior
Vice President of Alliance Capital
Management, L.P., a pension fund manager
and investment advisor, from September
1989 to May 1991.
</TABLE>
3
<PAGE>
<TABLE>
INCUMBENT DIRECTORS WHOSE TERM OF OFFICE EXPIRES IN 1996
<S> <C> <C> <C>
Maurice L. Rosenthal..................... 72 President of Robeco Inc., an importer and 1991
distributor of specialty chemicals
Myron Simons............................. 74 Financial Consultant 1978
INCUMBENT DIRECTOR WHOSE TERM OF OFFICE EXPIRES IN 1997
<S> <C> <C> <C>
Bernard Fein............................. 86 Chairman of the Board and, until March 1959
27, 1995, President of the Company
<FN>
------------------------
*Mr. Bloch intends to retire from the Company on or about May 31, 1995.
</TABLE>
None of the directors or nominees is a director of any other company with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or subject to the requirements of Section 15(d) of such Act or any
company registered as an investment company under the Investment Company Act of
1940, except Mr. Bocksch is a director of MicroFrame, Inc.
4
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1994, 1993 and 1992 of the chief executive officer and each
other executive officer of the Company whose annual compensation exceeded
$100,000.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
---------------------------------------------------- SECURITIES
SALARY OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) COMPENSATION ($)(1) OPTIONS COMPENSATION ($)
------------------------------------ --------- --------- --------- ------------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Bernard Fein........................ 1994 321,538 55,000
Chairman of the Board and 1993 321,538 55,000
President of the Company 1992 321,538 72,000
Howard M. Bloch.....................
Vice President of the 1994 279,231 75,000
Company and Vice 1993 248,000 50,000
President of AAI Corporation (a 1992 239,163 70,400
subsidiary of the Company)
Richard R. Erkeneff(2).............. 1994 265,182 85,000 12,000
President of AAI Corporation 1993 30,000 100,000
Daniel E. McCoy(3).................. 1994 174,470 5,000
President of Detroit Stoker 1993 163,833 81,916
Corporation (a subsidiary of the 1992 101,250 52,500
Company)
<FN>
------------------------
(1) The aggregate amount of other compensation represents perquisites that do
not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus reported for such executive officer.
(2) Mr. Erkeneff has an employment agreement with AAI Corporation which is
described under Executive Compensation--Employment Agreements. He commenced
employment with AAI Corporation in November 1993.
(3) Mr. McCoy died in February 1995.
</TABLE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth certain information concerning options
granted during 1994 to the named executives:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS(1) VALUE AT ASSUMED
------------------------------------------------------------ ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE --------------------
NAME GRANTED FISCAL YEAR ($/SHARE) EXPIRATION DATE 5% ($) 10% ($)
---------------------------------- ----------- ------------- ------------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard R. Erkeneff............... 12,000 12.77% 4.75 June 21, 2004 35,880 90,840
Daniel E. McCoy................... 5,000 5.32% 4.75 June 21, 2004 14,950 37,850
<FN>
------------------------
(1) One-third of the options are exercisable upon the first anniversary of the
date of grant, which was June 21, 1994, an additional one-third of the
options are exercisable upon the second anniversary of the date of grant
and the balance of the options are exercisable upon the third anniversary
of the date of grant.
</TABLE>
5
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END
SHARES ACQUIRED VALUE REALIZED (#) EXERCISABLE (E)/ ($)(1) EXERCISABLE
NAME ON EXERCISE (#) ($) UNEXERCISABLE (U) (E)/ UNEXERCISABLE (U)
------------------------------------------ ----------------- ----------------- -------------------- ----------------------
<S> <C> <C> <C> <C>
Richard R. Erkeneff....................... 0 0 12,000(U) 1,500(U)
0(E) 0(E)
Daniel E. McCoy........................... 0 0 5,000(U) 625(U)
0(E) 0(E)
<FN>
------------------------
(1) Assumes, for all unexercised in-the-money options, the difference between
fair market value and the exercise price is 12.5 cents.
</TABLE>
EMPLOYMENT AGREEMENTS
Mr. Erkeneff is employed by AAI Corporation, a subsidiary of the Company
("AAI") pursuant to an employment agreement that provides he be paid a salary at
the annual rate of $260,000 and participate in all life insurance, medical,
retirement, pension or profit sharing, disability or other employee benefit
plans generally made available to other executive officers of AAI. The
employment agreement terminates on November 14, 1996, unless Mr. Erkeneff's
employment is terminated prior thereto by AAI for cause. Pursuant to the
employment agreement, Mr. Erkeneff was entitled to a signing bonus of $100,000,
one half of which was paid in November 1993, and the balance of which was paid
in November 1994.
Effective March 27, 1995, P. David Bocksch is employed as President and
Chief Executive Officer of the Company pursuant to an employment agreement that
provides he be paid a salary at the annual rate of $300,000 and participate in
all life insurance, medical, retirement, pension or profit sharing, disability
or other employee benefit plans generally made available to other executive
officers of the Company. The employment agreement terminates on March 27, 1998,
unless Mr. Bocksch's employment is terminated prior thereto by the Company for
cause. Pursuant to the employment agreement, Mr. Bocksch is entitled to a
guaranteed minimum bonus of $50,000 for 1995, payable no later than April 1,
1996, and is also eligible to receive annual discretionary bonuses as may be
granted by the Company's Board of Directors, not to exceed 50% of his then
annual salary. Pursuant to the employment agreement, Mr. Bocksch also received
options to acquire 100,000 shares of the Company's common stock pursuant to the
terms of the Company's 1994 Stock Option Plan at an exercise price equal to the
fair market value of the common stock as of the grant date.
RETIREMENT BENEFITS
Pursuant to agreements with AAI, at retirement Mr. Bloch is entitled to
retirement payments from AAI of $12,000 per year payable to him or his estate
for a period of 15 years. Mr. Bloch and Mr. Erkeneff also participate in AAI's
defined benefit pension plan. Mr. Bloch received payments from the AAI defined
benefit pension plan in the amount of $14,544 during 1994.
Until December 31, 1994, the defined benefit plan provided for monthly
pension benefits for life, commencing at the normal retirement age of 65 based
upon various salary levels and years of service. Effective January 1, 1995 (the
"Effective Date") AAI merged its existing defined benefit plans into the Cash
Balance Pension Plan for the Employees of AAI Corporation ("Cash Balance Plan")
thereby modifying the benefit formula. The provisions of the Cash Balance Plan
apply only to active employees at January 1, 1995 and individuals who become
employees after January 1, 1995. The benefit formula for a participant in any of
the predecessor defined benefit plans who was not an active employee at the
Effective Date has not changed. In accordance with the Cash Balance Plan, a
participant's accrued benefit includes the actuarial equivalent of the
participant's accrued benefit under the applicable predecessor defined benefit
plan as of December 31, 1994 plus annual allocations based upon a
6
<PAGE>
percentage of salary and interest earned on such participant's account
thereafter. The Cash Balance Plan also has options for early retirement and
alternative forms of payment, including lump sum benefits and benefits for
surviving spouses. All employees of AAI are eligible to participate in the Cash
Balance Plan upon commencement of employment. The estimated annual benefit to be
provided by the Cash Balance Plan and payable to Mr. Bloch and, commencing at
the normal retirement age, Mr. Erkeneff, are $14,544 and $5,300, respectively.
In addition, pursuant to a Supplemental Employee Retirement Plan Agreement,
Mr. Bloch is entitled to supplemental retirement payments from the Company in
the form of a monthly annuity for life with a guaranteed period of ten years.
The amount of the monthly payment will be equal to $6,042.68 plus $83.33 for
each completed calendar month worked after December 31, 1994.
COMPENSATION COMMITTEE REPORT
It is the policy of the Compensation Committee to establish and maintain
executive compensation at competitive levels which will enable the Company to
attract and retain highly qualified key management employees. The base salaries
for executive officers being recruited by the Company are determined by
reference to the responsibilities of the position, the experience of the
individual and competitive conditions within the industry. Salary increases, if
any, are determined with reference to the performance of the executive officer,
the assignment of any increased level of responsibility (including promotions),
the performance of the Company and the compensation paid to executive employees
of other companies in the defense industry or other comparable industry.
Bonuses, if any, are determined with reference to the performance of the
executive officer and the anticipated earnings of the Company in the particular
year.
The Company grants stock options to employees, including the Company's
principal executive officers, as a key part of its total program for motivating
and rewarding executives and managers. Through these stock options, the Company
encourages its executives to obtain and hold the Company's stock.
The Company's executive employees receive no form of compensation other than
salary, bonuses, stock options, and customary benefits.
The compensation of Mr. Fein, as the Company's chief executive officer, is
described above in the Summary Compensation Table. His compensation consists
primarily of his base salary which has remained at an annual rate of $321,538
since 1985, and a cash bonus of $55,000 in 1994. This bonus amount was
established by the Compensation Committee on December 7, 1994 with Mr. Fein
abstaining. The Compensation Committee maintained Mr. Fein's 1994 bonus at the
amount paid to him as a bonus in 1993, because of a stabilization in the
Company's earnings from 1993 to 1994.
Section 162(m) of the Internal Revenue Code of 1986 limits a company's
deduction for compensation paid to executive officers in excess of $1 million in
any one year. So long as Bernard Fein serves as a member of the Compensation
Committee or Option Committee, the Company would not qualify for certain
exceptions provided by such section.
COMPENSATION COMMITTEE
BERNARD FEIN
MYRON SIMONS
RICK S. BIERMAN
7
<PAGE>
PERFORMANCE GRAPH
The graph below compares the total returns which an investor would have
earned assuming the investment of $100 on December 31, 1989 in the Common Stock,
the Standard & Poor's 500 Composite Stock Index ("S&P 500") and a constructed
peer group index of the common stock of six corporations of substantially the
same size (by revenues) as the Company, all of which are involved in the defense
industry. Those corporations are: Watkins Johnson Company, EDO Corporation,
Whitehall Corporation, Tech Sym Corporation, Sparton Corporation and Moog
Incorporated. The constructed peer group index has been weighted in accordance
with the stock market capitalization of each of the component corporations.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
UNITED INDUSTRIAL CORP. S&P 500 PEER GROUP
<S> <C> <C> <C>
1989 100 100 100
1990 80 98 76
1991 97 126 92
1992 108 138 98
1993 62 145 122
1994 62 147 142
</TABLE>
OTHER COMPENSATION
Directors' Fees. During 1994, Directors who were not employees received
compensation of $2,000 per meeting, and a fee of $500 for each committee meeting
attended.
ADDITIONAL INFORMATION
The Board of Directors of the Company had a total of eleven meetings during
1994.
Among its standing committees, the Company has an Audit Committee, a
Nominating Committee and a Compensation Committee. The Audit Committee
recommends to the Board the engagement and discharge of the independent auditors
for the Company, analyzes the reports of such auditors, and makes such
recommendations to the Board with respect thereto as such committee may deem
advisable. There were two Audit Committee meetings held in 1994. The members are
Maurice L. Rosenthal and Myron Simons.
The Nominating Committee acts primarily as a selection committee to
recommend candidates for election to the Board of Directors. The committee met
once in 1994. The members are Bernard Fein, Howard M. Bloch and Myron Simons.
The Nominating Committee will consider nominees for directors recommended by
stockholders. Any stockholder may make such a recommendation by writing to:
Secretary, United Industrial Corporation, 18 East 48th Street, New York, New
York 10017.
8
<PAGE>
The Compensation Committee makes recommendations to the Board of Directors
regarding the compensation structure of the Company as applied to executive
personnel. There were two Compensation Committee meetings held in 1994. The
members are Bernard Fein, Myron Simons and Rick S. Bierman.
There are no family relationships between any nominee, director or executive
officer of the Company, except that Mr. Bierman is a son-in-law of Mr. Fein and
Susan Fein Zawel, Secretary of the Company, is the daughter of Mr. Fein.
II. APPOINTMENT OF AUDITORS
It is proposed that the stockholders ratify the appointment of Ernst & Young
LLP as independent auditors of the Company for the year ending December 31,
1995. Ernst & Young LLP have been the independent auditors of the Company since
1962. It is expected that a representative of Ernst & Young LLP will be present
at the Annual Meeting with the opportunity to make a statement if he desires to
do so and will be available to respond to appropriate questions.
The Board of Directors recommends that the accompanying Proxy be voted in
favor of such appointment. A favorable vote of a majority of the shares present
at the meeting in person or by proxy is required for approval.
III. PROPOSAL OF A CERTAIN STOCKHOLDER
William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, a stockholder
of the Company, who is the owner of record of 520 shares of Common Stock has
advised the Company that at the forthcoming Annual Meeting of Stockholders he
intends to introduce a proposal from the floor. The proposal and the reasons of
the proposing stockholder in support thereof, are set forth below:
(NO. 3 ON PROXY CARD)
STOCKHOLDER PROPOSAL CONCERNING ELIMINATION OF A CLASSIFIED
BOARD OF DIRECTORS
"RESOLVED, that the stockholders of the Company request that the Board of
Directors take the necessary steps, in accordance with state law, to declassify
the Board of Directors so that all directors are elected annually, such
declassification to be effected in a manner that does not affect the unexpired
terms of directors previously elected."
STOCKHOLDER'S SUPPORTING STATEMENT
The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
its implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the Board being elected
annually, is not in the best interests of the Company and its stockholders.
The Board of Directors of the Company is divided into three classes serving
staggered three-year terms. I believe that the Company's classified Board of
Directors maintains the incumbency of the current Board and therefore of current
management, which in turn limits management's accountability to stockholders.
The elimination of the Company's classified Board would require each new
director to stand for election annually and allow stockholders an opportunity to
register their views on the performance of the Board collectively and each
director individually. I believe this is one of the best methods available to
stockholders to insure that the Company will be managed in a manner that is in
the best interests of the stockholders.
As a founding member of the Investors Rights Association of America I
believe that concerns expressed by companies with classified boards that the
annual election of all directors could leave
9
<PAGE>
companies without experienced directors in the event that all incumbents are
voted out by stockholders, are unfounded. In my view, in the unlikely event that
stockholders vote to replace all directors, this decision would express
stockholder dissatisfaction with the incumbent directors and reflect the need
for change.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL
The Board of Directors believes that classification of the Board, which was
originally approved at the Company's 1970 Annual Meeting, helps to assure
continuity and stability in leadership and policy since approximately two-thirds
of the directors at any time will have had prior experience on the Board. Board
classification is also intended to encourage any person seeking to acquire
control of the Company to initiate such action through arms-length negotiations
with management and the Board of Directors, who are in a position to negotiate a
transaction which is fair to all stockholders. When a similar proposal to
eliminate the classified Board was last submitted to the Company in 1989,
holders of 7,745,552 shares (80%) voted against the proposal, holders of
1,676,000 share (17.3%) voted for the proposal and holders of 254,552 shares
(2.7%) abstained.
The Board of Directors recommends that you vote against the proposal.
Proxies solicited by the Board of Directors will be voted against the adoption
of this proposal unless the stockholders specifically indicate in their Proxies
their desire to have their shares voted in favor of the proposal or to abstain.
Approval of the proposal will require the favorable vote of the majority of
votes cast.
IV. MISCELLANEOUS
The Board of Directors knows of no business to come before the meeting other
than as stated in the Notice of the Annual Meeting of Stockholders. Should any
business other than that set forth in said Notice properly come before the
meeting, it is the intention of the persons named in the accompanying Proxy to
vote said Proxy in accordance with their judgment on such matters.
A list of the Company's stockholders as of the record date for the meeting
will be available for examination by any stockholder, for purposes germane to
the meeting, during ordinary business hours, for ten days prior to the date of
the meeting at the offices of the Company.
All shares represented by the accompanying proxy given prior to the meeting
will be voted in the manner specified therein. Proxy cards returned without
specification will be voted in accordance with the recommendation of the Board
of Directors. The shares of stockholders who have properly withheld authority to
vote for the nominee proposed by the Board of Directors (including broker
non-votes) will not be counted toward achieving a plurality. As to any matters
which may come before the meeting other than those specified above, the proxy
holders will be entitled to exercise discretionary authority. A majority of the
Common Stock present in person or represented by proxy will constitute a quorum
at the Annual Meeting.
For purposes of this meeting, except for the election of directors, which
requires a plurality vote, the affirmative vote of the majority of shares
present in person or represented by proxy at the meeting for a particular matter
is required for the matter to be deemed an act of the stockholders. With respect
to abstentions, the shares are considered present at the meeting for the
particular matter, but since they are not affirmative votes for the matter, they
will have the same effect as votes against the matter. With respect to broker
non-votes, the shares are not considered present at the meeting for the
particular matter as to which the broker withheld its vote. Consequently, broker
non-votes are not counted in respect of the matter, but they do have the
practical effect of reducing the number of affirmative votes required to achieve
a majority for such matter by reducing the total number of shares from which the
majority is calculated.
10
<PAGE>
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next Annual
Meeting of Stockholders must be received by the Company no later than November
28, 1995 to be considered for inclusion in the Company's Proxy Statement and
form of Proxy relating to that meeting. Such proposals should be addressed to
Susan Fein Zawel, Secretary, United Industrial Corporation, 18 East 48th Street,
New York, New York 10017.
EXPENSES OF SOLICITATION
The Company will bear the cost of the solicitation of Proxies. In addition
to the use of the mails, proxies may be solicited by the executive employees and
directors of the Company personally, by telephone or by telegram. Brokers,
nominees, fiduciaries and other custodians will be requested to forward
soliciting material to the beneficial owners of shares and will be reimbursed
for their expenses.
UNITED INDUSTRIAL CORPORATION WILL FURNISH A COPY OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994, WITHOUT EXHIBITS, WITHOUT CHARGE
TO EACH PERSON WHO FORWARDS A WRITTEN REQUEST THEREFOR, INCLUDING A
REPRESENTATION THAT HE WAS A BENEFICIAL HOLDER OF COMMON STOCK OF UNITED
INDUSTRIAL CORPORATION ON MARCH 17, 1995, TO SUSAN FEIN ZAWEL, SECRETARY, UNITED
INDUSTRIAL CORPORATION, 18 EAST 48TH STREET, NEW YORK, NEW YORK 10017.
Dated March 30, 1995 By Order of the Board of Directors
Susan Fein Zawel
SECRETARY
11
<PAGE>
UNITED INDUSTRIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 8, 1995
The undersigned hereby appoints Bernard Fein, Howard M. Bloch and Myron
Simons or any of them, attorneys and proxies with full power of substitution in
each of them, in the name, place and stead of the undersigned to vote as proxy
all the stock of the undersigned in the United Industrial Corporation.
The shares represented by this proxy will be voted for proposals 1 through 4 if
no instruction to the contrary is indicated, or if no instruction is given.
1. Election of the following nominees as set forth in the proxy statement
/ / FOR the nominees listed below (except as marked to the contrary below)
/ / WITHHELD AUTHORITY to vote for ALL nominees listed below
Rick S. Bierman, Howard M. Bloch and P. David Bocksch
For, except vote withheld from the following nominee(s):
--------------------------------------------------------------------------------
2. To consider and act upon a proposal to ratify the appointment of Ernst &
Young LLP as Independent Auditors of the Company for 1995.
/ / FOR / / AGAINST / / ABSTAIN
3. To consider and act upon a proposal by a certain stockholder, as set forth
under "Proposal of a Certain Stockholder" in the accompanying Proxy
statement, if brought before the meeting.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, to act upon such other matters as may properly come
before the meeting or any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
Please mark, sign, date and return this proxy in the enclosed envelope.
(Note: Please sign exactly as your
name appears hereon. Executors,
Administrators, Trustees, etc.
should so indicate when signing,
giving full title as such. If
signer is a corporation, execute in
full corporate name by authorized
officer. If shares held in the name
of two or more persons, all should
sign.)
___________________________________
Dated Signature
___________________________________
Dated Signature if
held jointly
