<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
ZIMMERMAN SIGN COMPANY
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
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</TABLE>
<PAGE>
ZIMMERMAN SIGN COMPANY
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 2000
------------------------
To the Shareholders of
Zimmerman Sign Company:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Zimmerman
Sign Company (the "Company") will be held on May 19, 2000 at 10:00 A.M., central
time, at the Sheraton Hotel, 5701 South Broadway Avenue, Tyler, Texas for the
following purposes:
1. To elect five directors of the Company;
2. To vote upon a proposal to ratify the selection of independent auditors;
and
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
Only shareholders of record at the close of business on April 12, 2000 are
entitled to notice of, and to vote at, the Annual Meeting of Shareholders.
Your attention is directed to the Proxy Statement submitted with this
notice. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
IN THE EVENT YOU DECIDE TO ATTEND THE MEETING, YOU MAY REVOKE SUCH PROXY AND
VOTE YOUR SHARES IN PERSON. No postage need be affixed to the enclosed envelope
if mailed in the United States.
By Order of the Board of Directors
[/S/ JEFFREY P. JOHNSON]
Jeffrey P. Johnson
SECRETARY
<PAGE>
ZIMMERMAN SIGN COMPANY
9846 HIGHWAY 31 EAST
TYLER, TEXAS 75705
903-535-7400
------------------------
PROXY STATEMENT
---------------------
Your Proxy is being solicited by the Board of Directors of Zimmerman Sign
Company (the "Company" or "Zimmerman") for use at the Annual Meeting of
Shareholders to be held at the Sheraton Hotel, 5701 South Broadway Avenue,
Tyler, Texas on May 19, 2000 at 10:00 A.M., central time and at any reconvened
meeting following adjournment thereof. In addition to solicitation of Proxies by
mail, the directors, officers and employees of the Company may solicit Proxies
personally, by telephone, telefax or telegram. The expense of all such
solicitation, including the cost of preparing, printing and mailing this Proxy
Statement, will be borne by the Company. The Company will, upon request,
reimburse brokers, banks or other persons for their reasonable out-of-pocket
expenses in forwarding proxy material to beneficial owners of the Company's
shares. This Proxy Statement, the accompanying Proxy and the Company's Annual
Report to Shareholders, which contains financial statements for the year ended
December 31, 1999, will first be mailed to shareholders of the Company on or
about April 19, 2000.
A shareholder who has submitted a Proxy pursuant to this solicitation may
revoke it at any time before it is voted at the Annual Meeting of Shareholders.
A Proxy may be revoked by delivery to the Secretary of the Company, at the
Company's address set forth above, a written revocation of such Proxy or a duly
executed Proxy bearing a later date that is prior to the date of the Annual
Meeting, or by voting in person at the Annual Meeting.
Only shareholders of record as of the close of business on April 12, 2000
will be entitled to vote at the meeting. On that date, the Company had
outstanding and entitled to one vote per share, 1,269,549 shares of Common
Stock, par value $0.01 per share ("Common Stock"). A majority of the outstanding
shares will constitute a quorum at the meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
If no contrary instruction is indicated, shares represented by properly
executed Proxies in the accompanying form of proxy will be voted by the persons
designated in the printed portion thereof FOR the election of the nominees named
below to serve as directors for a one-year term and FOR the ratification of the
selection of KPMG LLP ("KPMG") as independent auditors for the calendar year
2000. Each director must be elected by the affirmative vote of a plurality of
the votes cast at the meeting by the holders of shares of Common Stock
represented in person or by Proxy. Approval of KPMG as independent auditors
requires the affirmative vote of a majority of the shares of Common Stock
present or represented at the meeting.
Management does not know of any other matters to be brought before the
meeting at this time; however, if any other matters are brought before the
meeting, the proxy holder shall vote in his discretion with respect to the
matter. In the event a shareholder specifies a different choice on the Proxy,
such shareholder's shares will be voted or withheld in accordance with the
specifications so made. Should any nominee for director named herein become
unable or unwilling to accept nomination or election, it is intended that the
persons acting under proxy will vote for the election of such other person as
the Board of Directors of the Company may recommend unless the number of
directors is reduced by the Board of Directors. The Company has no reason to
believe that any nominee will be unable or unwilling to serve if elected to
office.
<PAGE>
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information with respect to beneficial
ownership of Common Stock as of March 16, 2000 by (i) all persons known to the
Company to be the beneficial owner of 5% or more of the Common Stock, (ii) each
director of the Company, (iii) the chief executive officer and each of the
Company's four other most highly compensated executive officers whose total
annual compensation for 1999 based on salary and bonus earned during 1999
exceeded $100,000, and (iv) all the Company directors and executive officers as
a group. To the best knowledge of the Company, all persons listed have sole
voting and investment power with respect to their shares unless otherwise
indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS(11)
- ------------------------ ----------------- ------------
<S> <C> <C>
Continental Illinois Venture Corporation and MIG Partners
VIII...................................................... 730,335(1) 36.52%
231 South LaSalle Street
Chicago, IL 60697
Athena Capital Management................................... 135,927(2) 10.71%
621 Germantown Pike Ste: 105
Plymouth Valley, PA 19401
David E. Anderson........................................... 505,987(3) 38.24%
8150 N. Central Expressway
Suite 1801
Dallas, TX 75206
Tom E. Boner................................................ 143,161(4) 10.60%
9846 Highway 31 East
Tyler, TX 75705
Michael W. Coppinger........................................ 59,035(5) 4.53%
Carl A. Goldman............................................. 16,000(6) 1.25%
John T. Griggs.............................................. 34,781(7) 2.70%
Jeffrey P. Johnson.......................................... 38,659(8) 2.99%
Andrea P. Joselit........................................... 730,335(9) 36.52%
Robert F. Perille........................................... 730,335(10) 36.52%
All directors and executive officers as a group (9
persons).................................................. 812,042 53.74%
</TABLE>
- ------------------------
(1) Consists entirely of currently exercisable warrants to purchase Common
Stock. Based on a statement on Schedule 13D filed with the Securities and
Exchange Commission on October 9, 1998, Continental Illinois Venture
Corporation ("CIVC") was the direct beneficial owner of warrants to purchase
819,310 shares of Common Stock, and MIG Partners, VIII ("MIG") was the
direct beneficial owner of warrants to purchase 204,827 shares of Common
Stock. On January 11, 1999, CIVC surrendered to the Company, and the Company
canceled, warrants to purchase 235,042 shares of Common Stock, and MIG
surrendered to the Company, and the Company canceled, warrants to purchase
58,760 shares of Common Stock. Thus, as of March 16, 2000, to the best
knowledge of the Company, CIVC was the direct beneficial owner of warrants
to purchase 584,268 shares of Common Stock, and MIG was the direct
beneficial owner of warrants to purchase 146,067 shares of Common Stock. In
the Schedule 13D, CIVC and MIG affirmed that they are a group for purposes
of Section 13(d)(3) of the Exchange Act, and they share voting and
dispositive power of all shares held by each of them. Therefore, each may be
deemed to own beneficially warrants currently exercisable into 730,335
shares of Common Stock, which, when exercised would result in ownership of
approximately 36.52% of the Issuer's Common Stock as computed under
Rule 13d-3. The 13D filing was also made jointly by the following: (i) Bank
of America National Trust and Savings Association, a national trust and
savings
2
<PAGE>
association, ("BA Bank"), by virtue of its ownership of all of the
outstanding common stock of CIVC; (ii) BankAmerica Corporation, a Delaware
corporation, by virtue of its ownership of all of the outstanding common
stock of BA Bank; and (iii) Sheryl E. Bartol, Matthew W. Clary, Andrea P.
Joselit (a director of the Company), Jeffrey M. Mann, Dennis P. McCrary,
Jason A. Mehring and Robert F. Perille (a director of the Company), by
virtue of their each being a general partner of MIG.
(2) Based on a statement on Schedule 13G filed with the Securities and Exchange
Commission dated January 8, 2000, Athena Capital Management, Inc. was the
beneficial owner at December 31, 1999 of 135,927 shares of which it has
shared voting and dispositive power.
(3) Includes 53,564 shares of Common Stock subject to presently exercisable
warrants.
(4) Includes 43,639 shares of Common Stock subject to presently exercisable
options and 37,699 shares of Common Stock subject to presently exercisable
warrants.
(5) Includes 19,206 shares of Common Stock subject to presently exercisable
options and 15,546 shares of Common Stock subject to presently exercisable
warrants.
(6) Includes 15,000 shares of Common Stock subject to presently exercisable
options.
(7) Includes 15,478 shares of Common Stock subject to presently exercisable
options and 3,848 shares of Common Stock subject to presently exercisable
warrants.
(8) Includes 19,356 shares of Common Stock subject to presently exercisable
options and 3,848 shares of Common Stock subject to presently exercisable
warrants.
(9) To the Company's best knowledge Ms. Joselit does not directly own shares of
Common Stock. Ms. Joselit is a general partner of MIG, which is a beneficial
owner of warrants currently exercisable into 730,335 shares of Common Stock.
Ms. Joselit disclaims beneficial ownership of such shares.
(10) To the Company's best knowledge Mr. Perille does not directly own shares of
Common Stock. Mr. Perille is a general partner of MIG, which is a beneficial
owner of warrants currently exercisable into 730,335 shares of Common Stock.
Mr. Perille disclaims beneficial ownership of such shares.
(11) Percent of Class calculation includes all beneficially owned shares
including presently exercisable options and warrants for each beneficial
owner. The calculation assumes that all beneficially owned shares are
exercised by only that beneficial owner for his or her individual
calculation and that no other options or warrants are exercised by any other
beneficial owner.
PROPOSAL 1
ELECTION OF DIRECTORS
Five directors will be elected at the meeting, each to hold office until the
next Annual Meeting of Shareholders and until such director's successor shall be
elected and shall qualify or until his earlier resignation, removal from office
or death.
It is intended that shares represented by Proxies will be voted for the
election of the nominees named below. If at the time of the meeting any of the
nominees should be unwilling or unable to serve, the discretionary authority
provided in the Proxy will be exercised to vote for a substitute or substitutes,
as the Board of Directors recommends. The Board has no reason to believe that
any of the nominees will be unwilling or unable to serve as a director.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE ELECTION OF ALL OF THE NOMINEES.
The persons named below have been nominated for election as directors. All
of such nominees presently serve as directors of the Company.
3
<PAGE>
David E. Anderson, age 55
Chairman
David E. Anderson has been Chairman of Zimmerman since November 1996 and a
Director since 1982. Mr. Anderson was Chairman of Zimmerman Holdings, Inc.
(formerly the immediate parent company of Zimmerman) for more than five years
prior to November 1996. From 1981 until 1986, he was Executive Vice President
and a Director of Independence Holding Company. Previously, Mr. Anderson was a
Vice President of The Dyson-Kissner-Moran Corporation and a Vice President of
Continental Illinois National Bank and Trust Company of Chicago.
Tom E. Boner, age 61
President
Tom E. Boner has been President, Treasurer and a Director of Zimmerman since
1984, having joined Zimmerman in 1981 as Director of Sales and Marketing. From
1970 to 1975, he was in sales with American Sign and Indicator, and from 1976
until 1981, was with American Bank Equipment Company. Mr. Boner served as a
Director of the International Sign Association from 1986 until 1995 and was
Chairman thereof in 1993.
Carl A. Goldman, age 66
Director
Carl A. Goldman is co-founder and has been President and Chief Executive Officer
of Corporate Capital Consultants, Inc. since its inception in 1974. Prior
thereto, he spent ten years in the investment banking department of three Wall
Street firms and five years as Treasurer of The Franklin Corporation, a small
business investment company. Mr. Goldman has been a consultant to Zimmerman and
IHC since February 1996. Mr. Goldman became a director of Zimmerman as of
December 31, 1996.
Andrea P. Joselit, age 33
Andrea P. Joselit has been a Director of Zimmerman since September 1998. She has
been a Principal of Bank of America Capital Investors in Chicago (formerly known
as Mezzanine Investments Group) since October 1997 and for 4 years prior to that
was an Associate in that group. Prior thereto, she spent two years as a
Financial Analyst in the Energy & Minerals Corporate Lending Group of
Continental Bank, and two years as an Accounting Analyst in the Capital Markets
Operations Group.
Robert F. Perille, age 41
Robert F. Perille has been a Director of Zimmerman since September 1998. He has
been a Managing Director of Bank of America Capital Investors in Chicago
(formerly known as the Mezzanine Investments Group) since 1992. Prior thereto,
Mr. Perille spent four years in Continental Bank's New York Structured Finance
Group, one year in the Capital Markets group in New York, and six years in the
New England regional office. Mr. Perille also serves as a director of Engineered
Glass Products LLC; ELF Machinery, LLC; Innovative Manufacturing Solutions,
Inc.; Woodcraft Industries, Inc.; and Claire-Sprayway, Inc.
The Board of Directors met five times in 1999. Each member of the Board
participated in at least 75% of all Board of Directors meetings and applicable
committee meetings held during the period for which he or she was a director.
The Audit Committee of the Board, which is responsible for the recommendation of
the Company's independent public auditors, the review of such auditor's audit
and recommendations concerning internal controls, met twice in 1999 and has met
once thus far in 2000. The Audit Committee currently consists of Mr. Goldman and
Ms. Joselit.
The Company also has a Compensation Committee, which is responsible for
reviewing and approving the compensation of executive officers, reviewing and
recommending for approval the compensation of directors, advising management
regarding employee benefits, and administering the Company's 1996 Stock
4
<PAGE>
Option Plan. The Compensation Committee currently consists of Messrs. Anderson,
Goldman and Perille. The committee met twice in 1999 and has met once thus far
in 2000.
Directors of the Company who are not also employees of the Company or
employees of an affiliate of the Company receive an annual fee of $7,000 plus
$1,000 for each Board meeting and $500 for each Committee meeting attended.
Directors who are officers of the Company do not receive compensation for
serving as directors of the Company.
Pursuant to the Company's 1996 Stock Option Plan, directors of the Company
who are not also employees of the Company or employees of an affiliate of the
Company ("Independent Directors") are eligible to participate in the Company's
Stock Option Plan under terms and conditions approved by the Compensation
Committee.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation paid by Zimmerman to its chief
executive officer and the four other most highly compensated executive officers
(collectively the "Named Executive Officers") for the years ended December 31,
1999, 1998 and 1997.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------
AWARDS
ANNUAL COMPENSATION --------- PAYOUTS
--------------------------------------- RESTR. SECURITIES ----------
OTHER ANNUAL STOCK UNDERLYING LTIP
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) OPTIONS(1) PAYOUTS($)
- --------------------------- -------- --------- -------- ---------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
David E. Anderson.................. 1999 125,000 0 -- -- -- --
Chairman 1998 125,000 23,150 -- -- -- --
1997 125,000 0 -- -- -- --
Tom E. Boner....................... 1999 185,000 20,040 -- -- -- --
President and Treasurer 1998 200,500 37,332 -- -- 10,000 --
1997 200,500 0 -- -- 38,639 --
Michael W. Coppinger............... 1999 127,500 11,510 -- -- -- --
Vice President, Sales 1998 127,500 25,882 -- -- 7,500 --
1997 121,300 0 -- -- 15,456 --
John T. Griggs..................... 1999 125,500 11,330 -- -- -- --
Vice President, 1998 122,000 21,892 -- -- 15,500 --
Manufacturing 1997 115,800 0 -- -- 7,728 --
Jeffrey P. Johnson................. 1999 125,500 11,330 -- -- -- --
Vice President and Chief 1998 122,000 23,972 -- -- 7,800 --
Financial Officer 1997 115,800 0 -- -- 15,456 --
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION($)(2)
- --------------------------- ------------------
<S> <C>
David E. Anderson.................. 1,113
Chairman 1,104
1,104
Tom E. Boner....................... 5,238
President and Treasurer 5,254
5,004
Michael W. Coppinger............... 4,229
Vice President, Sales 4,840
4,806
John T. Griggs..................... 4,062
Vice President, 4,701
Manufacturing 4,642
Jeffrey P. Johnson................. 5,035
Vice President and Chief 4,778
Financial Officer 4,642
</TABLE>
- ----------------------------------
(1) Reflects options to purchase shares of Common Stock.
(2) Represents dollar value of premiums paid for term life insurance,
contributions made under Zimmerman's 401(k) savings plan instituted in 1995,
and other compensation. The amounts for 1999, 1998 and 1997 term life
insurance for all executive officers were $488, $504 and $504 respectively.
The balance of 1999, 1998 and 1997 All Other Compensation for each executive
officer represents 401(k) contributions.
OPTION GRANTS IN 1999
No options to purchase Common Stock were granted to the Named Executive
Officers during 1999. The Company has not granted stock appreciation rights.
5
<PAGE>
OPTION EXERCISES IN 1999 AND YEAR END OPTION VALUES
The following table provides information related to options to purchase
Common Stock exercised by the Named Executive Officers during 1999 and the
number and value of such options held at December 31, 1999. The Company does not
have any outstanding appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
ACQUIRED ON VALUE ------------------------------- -------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David E. Anderson..... 0 $0 0 0 $0 $0
Tom E. Boner.......... 0 0 43,639 5,000 0 0
Michael W. Coppinger.. 0 0 19,206 3,750 0 0
John T. Griggs........ 0 0 15,478 7,750 0 0
Jeffrey P. Johnson.... 0 0 19,356 3,900 0 0
</TABLE>
- ------------------------------
(1) The closing price of the Common Stock as reported by Nasdaq Trading and
Market Services on December 30, 1999, the last trade completed in 1999, was
$3.3125. In accordance with SEC regulations, value is calculated based on
the difference between the option exercise price and $3.3125 multiplied by
the number of shares of Common Stock underlying the options.
EMPLOYMENT AGREEMENTS
The Company and Mr. Anderson agreed to cancel his employment agreement
effective December 31, 1999. In addition, the Company elected not to renew the
employment agreements of Messrs. Boner, Coppinger, Johnson and Griggs and
allowed those agreements to expire on December 31, 1999. The Company's Board of
Directors has authorized new employment agreements with these executives which
are expected to contain the terms set forth below. The Company anticipates
entering into these agreements during the second quarter of 2000.
Mr. Anderson's agreement will be for a term of one year, which, at the end
of its initial one-year term, will be automatically renewable for continuous
one-year periods unless earlier terminated in accordance with the terms of the
agreement. Pursuant to such agreement, Mr. Anderson's annual base salary is to
be not less than $125,000, as fixed by Zimmerman's Board of Directors from time
to time. Mr. Anderson will also be eligible for a bonus of up to 60% of his base
salary, the amount of such bonus earned to be based upon quantitative and
qualitative benchmarks.
Mr. Boner's agreement will be for a term of one year which, at the end of
such initial term, will be automatically renewable for continuous one-year
periods unless earlier terminated in accordance with the agreement. Pursuant to
such agreement, Mr. Boner's annual base salary is to be not less than $185,000,
as fixed by Zimmerman's Board of Directors from time to time. Additionally,
Mr. Boner will be eligible to receive a bonus of up to 60% of his base salary,
the amount of such bonus earned to be based upon quantitative and qualitative
benchmarks. Upon a change of control of Zimmerman, Mr. Boner will be entitled to
a bonus payment equal to $200,000 if he is still employed with Zimmerman at the
time of the change.
Each of Messrs. Coppinger, Johnson and Griggs' agreements will be for a term
of one year which, at the end of its initial term, will be automatically
renewable for continuous one-year periods unless earlier terminated in
accordance with the agreement. Pursuant to such agreements, Messrs. Coppinger,
Johnson and Griggs each will receive an annual base salary to be not less than
$129,000 as fixed by Zimmerman's Board of Directors from time to time.
Additionally, each of these officers will be eligible to receive a bonus of up
to 50% of his base salary, the amount of such bonus earned to be based upon
quantitative and qualitative benchmarks. Upon a change of control of Zimmerman,
each of these officers will be entitled to a bonus payment equal to $100,000 if
he is still employed with Zimmerman at the time of the change.
6
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No directors have interlocking or other relationships with other boards or
Zimmerman that require disclosure under Item 402(j) or Item 404 of Regulation
S-K, except as disclosed herein under "Certain Relationships and Related
Transactions."
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
Prior to December 31, 1996, Zimmerman did not have a Compensation Committee,
and executive compensation was set by the Board of Directors. Under the guidance
of the Board, compensation policies have been designed which align executive
compensation to performance in areas key to Zimmerman's long-term success.
Zimmerman's compensation objective is to maximize shareholder value by
attracting, rewarding, and retaining highly qualified and productive individuals
and by motivating executives and key employees toward achieving Zimmerman's
strategic goals and plans. The key components of Zimmerman's executive
compensation are base salary and annual incentive awards.
The Board annually reviews and establishes base salaries, which are at
levels that the Board believes are competitive with industry and regional pay
practices and economic conditions. In determining appropriate salary levels, the
Board considers criteria including the individual's level and scope of
responsibility and performance contributions, as well as internal and market
comparisons. Zimmerman awards annual cash incentive bonuses to reward executive
officers and other key employees based upon individual performance and the
achievement of specific financial and operational goals determined for the year.
Payments of incentive bonus awards are also contingent upon the Company
attaining certain levels of annual operating profitability.
In regard to Mr. Anderson, in 1999, he participated in Zimmerman's profit
incentive plan under which he was entitled to earn a cash incentive bonus of up
to 60% of base salary. The plan had an escalating schedule under which profit
incentive awards were linked to year-to-year improvement in Zimmerman's earnings
before interest expense, taxes, depreciation and amortization. Through this
mechanism, approximately 100% of Mr. Anderson's achievable bonus in 1999 was
directly tied to profit improvement.
Messrs. Boner, Coppinger, Griggs and Johnson also participate in Zimmerman's
profit incentive plan. As in the case of Mr. Anderson, the bonus awards listed
in the Summary Compensation Table for Messrs. Boner, Coppinger, Griggs and
Johnson reflect cash incentive awards under such plan.
Under the Stock Option Plan, Zimmerman's executive officers will be eligible
to receive stock option grants at the discretion of the Compensation Committee.
This report submitted by the 1999 Compensation Committee:
David E. Anderson Carl A. Goldman Robert F. Perille
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors, executive officers, and any person holding more
than ten percent of Zimmerman's Common Stock are required under the federal
securities laws to report their initial ownership of Zimmerman's Common Stock
and any subsequent changes in that ownership to the Securities and Exchange
Commission ("SEC"). Zimmerman is required to disclose in this proxy statement
any late filings of those reports. During the fiscal year ended December 31,
1999, the Company believes that no directors, executive officers or greater than
ten percent beneficial owners failed to timely file reports required by Section
16(a) of the Securities Exchange Act of 1934. In making this disclosure, the
Company has relied solely on the representations of its directors, executive
officers and its ten percent holders and copies of the reports furnished to the
Company.
7
<PAGE>
STOCK PERFORMANCE CHART
COMPARE CUMULATIVE TOTAL RETURN AMONG
ZIMMERMAN SIGN COMPANY, NASDAQ
NON-FINANCIAL INDEX AND RUSSELL 2000 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ZIMMERMAN SIGN CO. NASDAQ NON-FINANCIALS RUSSELL 2000 INDEX
<S> <C> <C> <C>
1/22/97 $100.00 $100.00 $100.00
12/31/97 $150.00 $108.92 $119.94
12/31/98 $142.50 $159.48 $116.58
12/31/99 $132.50 $306.74 $139.42
</TABLE>
ASSUMES $100 INVESTED ON JAN 22, 1997
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC 31, 1999
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 30, 1998, the Company, Continental Illinois Venture
Corporation, a Delaware corporation ("CIVC"), MIG Partners VIII, a Delaware
partnership ("MIG"), and David E. Anderson, Tom E. Boner, Michael W. Coppinger,
John T. Griggs, Jeffrey P. Johnson and Michael St. Onge (all of whom are
executive officers and/or directors of the Company) (the "Management
Purchasers"), entered into that certain Senior Subordinated Note, Preferred
Stock and Warrant Purchase Agreement (the "Securities Purchase Agreement"). Two
of the Company's directors, Mr. Perille and Ms. Joselit, are general partners of
MIG, and Mr. Perille is an officer of CIVC.
Under the Securities Purchase Agreement, the Company issued to CIVC, MIG and
the Management Purchasers 12% Senior Subordinated Notes (the "Notes") in the
aggregate principal amount of $4 million and issued to CIVC, MIG and certain of
the Management Purchasers an aggregate of 52,500 shares of the Company's Series
A Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"),
which has a liquidation and redemption value of $5.25 million and is mandatorily
redeemable on September 30, 2006. The Series A Preferred Stock is also
redeemable at the option of the Company and if redeemed prior to September 30,
2003, the redemption value would increase between 1% and 5%. In connection with
the issuance of the Notes and Series A Preferred Stock under the Securities
Purchase Agreement, the
8
<PAGE>
Company issued immediately exercisable warrants representing the right to
purchase shares of the Company's Common Stock (161,880 warrants related to the
Notes and 1,036,034 warrants related to the Preferred Stock) at an exercise
price of $3.79 per share, the approximate market price of the Common Stock at
the transaction date (the "Warrants").
The table below sets forth the name of each purchaser and the specific
amounts of Notes, Series A Preferred Stock and Warrants purchased pursuant to
the Securities Purchase Agreement:
<TABLE>
<CAPTION>
WARRANTS(1)
NOTE FACE AMOUNT ------------------------
PRINCIPAL SERIES A OF SERIES A PRIOR TO AFTER
PURCHASERS AMOUNT PREFERRED STOCK PREFERRED STOCK SURRENDER SURRENDER
- ---------- ---------- --------------- --------------- --------- ---------
<S> <C> <C> <C> <C> <C>
CIVC............................ $2,898,700 40,763 $4,076,300 819,310 584,268
MIG............................. $ 322,100 4,529 $ 452,900 204,827 146,067
David Anderson.................. $ 236,133 3,322 $ 332,200 75,113 53,564
Tom Boner....................... $ 166,200 2,338 $ 233,800 52,864 37,699
Mike Coppinger.................. $ 68,600 964 $ 96,400 21,800 15,546
Mike St. Onge................... $ 41,600 584 $ 58,400 13,208 9,419
Jeff Johnson.................... $ 133,333 0 $ 0 5,396 3,848
John Griggs..................... $ 133,333 0 $ 0 5,396 3,848
---------- ------ ---------- --------- -------
Total........................... $4,000,000 52,500 $5,250,000 1,197,914 854,259
</TABLE>
- ------------------------
(1) Purchasers surrendered without consideration 343,655 warrants on January 8,
1999 as described below.
On September 30, 1998, Mr. Anderson entered into a Share Option Purchase
Agreement with the Company and certain of the Company's shareholders that are
affiliates of Geneve Holdings, Inc. (collectively, the "Geneve Affiliates")
pursuant to which, in consideration of $0.25 cash per share, the Geneve
Affiliates granted to (i) the Company an option to purchase an aggregate of
357,143 shares of Common Stock at a price per share equal to (a) $1.50 in cash
and (b) .0175 shares of Series C Preferred Stock, par value $0.01 per share, of
the Company; and (ii) Anderson an option to purchase an aggregate of 428,000
shares of Common Stock at a price per share equal to $3.25 in cash. The options
were exercisable only between the open of business on January 4, 1999 and the
close of business on January 8, 1999. Mr. Anderson and the Company entered into
a Purchase Agreement (the "Anderson Purchase Agreement") on September 30, 1998,
pursuant to which, promptly upon consummation of the transactions contemplated
by the Share Option Purchase Agreement, Mr. Anderson agreed to sell and the
Company agreed to buy 228,000 shares of Common Stock in exchange for $98,000 in
cash and 7,000 shares of the Company's Series B Preferred Stock, par value $0.01
per share.
On September 30, 1998, the Company, CIVC, MIG, the Geneve Affiliates and the
Management Purchasers entered into a letter agreement pursuant to which CIVC,
MIG and the Management Purchasers agreed to surrender, without consideration, to
the Company a portion of the Warrants issued under the Securities Purchase
Agreement upon consummation of the transactions contemplated by the Share Option
Purchase Agreement and the Anderson Purchase Agreement.
On January 8, 1999, the Company and Mr. Anderson exercised the purchase
options granted by the Geneve Affiliates under the Share Option Purchase
Agreement as described above. On January 11, 1999, in accordance with the
Anderson Purchase Agreement, the Company purchased 228,000 shares of Common
Stock from Mr. Anderson, and in accordance with the letter agreement, CIVC, MIG
and the Management Purchasers surrendered to the Company a portion of their
Warrants without consideration as follows: CIVC surrendered Warrants for 235,042
shares of Common Stock, MIG surrendered Warrants for 58,760 shares of Common
Stock, Mr. Anderson surrendered Warrants for 21,549 shares of Common Stock,
Mr. Boner surrendered Warrants for 15,165 shares of Common Stock, Mr. Coppinger
surrendered Warrants for 6,254 shares of Common Stock, Mr. St. Onge surrendered
Warrants for 3,789 shares of
9
<PAGE>
Common Stock, Mr. Johnson surrendered Warrants for 1,548 shares of Common Stock,
and Mr. Griggs surrendered Warrants for 1,548 shares of Common Stock.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG LLP ("KPMG") as the independent
auditors of the Company for the year ended December 31, 2000. It is anticipated
that representatives of KPMG, who also served as the Company's independent
auditors for the year ended December 31, 1999, will be present at the Annual
Meeting of Shareholders and will have an opportunity to make a statement if they
so desire and to answer any appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2
SHAREHOLDER PROPOSALS
Any proposal which a stockholder intends to present at next year's Annual
Meeting of Shareholders must be received at the Company's principal executive
office not later than December 18, 2000 in order to be included in the proxy
material for such meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no other
business to be presented for action at the meeting. As to any business which
would properly come before the meeting, the Proxies confer discretionary
authority in the persons named therein and those persons will vote or act in
accordance with their best judgment with respect thereto.
By Order of the Board of Directors
[/S/ JEFFREY P. JOHNSON]
Jeffrey P. Johnson
SECRETARY
April 12, 2000
10
<PAGE>
FZSCM-PS-00
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ----------------------------------------- 1. Election of Directors.
ZIMMERMAN SIGN COMPANY Nominees:
- ----------------------------------------- For All With- For All
Nominees held Except
(01) David E. Anderson / / / / / /
(02) Tom E. Boner
(03) Carl A. Goldman
(04) Andrea P. Joselit
(05) Robert F. Perille
NOTE: If you do not wish your shares voted "For" a particular nominee,
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
RECORD DATE SHARES:
For Against Abstain
2. Ratification of the selection of KPMG LLP as / / / / / /
independent public accountants to audit the
Company's financial statements for the 2000
fiscal year.
3. In their discretion, on any other matter that may properly come before the
meeting or any adjournment thereof.
Mark box at right if an address change or comment has been / /
noted on the reverse side of this card.
------------
Please be sure to sign and date this Proxy. Date
- -----------------------------------------------------------------------
Shareholder sign here Co-owner sign here
- ------ -------- -----
DETACH CARD DETACH CARD
</TABLE>
<PAGE>
ZIMMERMAN SIGN COMPANY
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David E. Anderson and Jeffrey P. Johnson,
each with power to act without the other and with full power of substitution,
as Proxies to represent and to vote, as designated on the reverse, all Common
Stock of Zimmerman Sign Company owned by the undersigned, at the Annual
Meeting of Shareholders to be held at the Sheraton Hotel, 5701 S. Broadway
Avenue, Tyler, TX 75703 on May 19, 2000 at 10:00 a.m. central time.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no specific direction is given, this
proxy will be voted (i) for the election of the nominees for director, (ii) for
the ratification of the selection of KPMG LLP as independent public
accountants to audit the Company's financial statements for the 2000 fiscal
year and (iii) at the discretion of the proxy holders with regard to any other
matter that may properly come before the meeting or any adjournment thereof.
- --------------------------------------------------------------------------------
THIS PROXY MAY BE REVOKED PRIOR TO THE EXERCISE OF THE POWERS CONFERRED BY
THE PROXY.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Note: When there is more than one owner, each should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your title
as such. If executed by a corporation, the proxy should be signed by a duly
authorized officer. If executed by a partnership, please sign in the
partnership name by an authorized person.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
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- ---------------------------------- -----------------------------------------
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