<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section
240.142-12
VARLEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
VARLEN CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $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 pursu-
ant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
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,
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>
VARLEN CORPORATION
55 SHUMAN BOULEVARD
P.O. BOX 3089
NAPERVILLE, ILLINOIS 60566-7089
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 23, 1995
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Varlen
Corporation, a Delaware corporation (the "Company"), will be held at the Hyatt
Lisle, 1400 Corporetum Drive, Lisle, Illinois 60532 on Tuesday, May 23, 1995, at
10:00 A.M. (local time), for the following purposes:
1. To elect a Board of Directors.
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the current fiscal year.
3. To consider a stockholder proposal regarding executive compensation.
4. To transact such other and further business as may properly come before
the meeting or any adjournment or adjournments thereof.
Common stockholders of record at the close of business on March 31, 1995 are
entitled to notice of and to vote at the meeting. A complete list of such
stockholders is open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, at the offices of the
Company at 55 Shuman Boulevard, Naperville, Illinois 60566-7089.
A copy of the Company's Annual Report for the fiscal year ended January 31,
1995 is enclosed herewith.
By Order of the Board of Directors,
STEPHEN A. MAGIDA,
SECRETARY
Dated: April 17, 1995
STOCKHOLDERS ARE URGED TO FILL IN, SIGN, DATE AND MAIL THE ENCLOSED PROXY. IF
YOU ATTEND THE MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE USED. IF MAILED
IN THE UNITED STATES IN THE ENCLOSED ENVELOPE, NO POSTAGE IS REQUIRED. THE
PROMPT RETURN OF YOUR PROXY WILL SAVE THE EXPENSE INVOLVED IN FURTHER
COMMUNICATION.
<PAGE>
VARLEN CORPORATION
55 SHUMAN BOULEVARD
P.O. BOX 3089
NAPERVILLE, ILLINOIS 60566-7089
----------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 1995
----------------
April 17, 1995
To the Stockholders:
This Proxy Statement is furnished to you in connection with the solicitation
by the Board of Directors of Varlen Corporation, a Delaware corporation (the
"Company"), of Proxies in the accompanying form to be used at the Annual Meeting
of Stockholders to be held at the Hyatt Lisle, 1400 Corporetum Drive, Lisle,
Illinois 60532 on Tuesday, May 23, 1995, at 10:00 A.M. (local time) and at any
subsequent time which may be necessary by the adjournment thereof.
If you were a holder of record of Common Stock of the Company at the close
of business on March 31, 1995, you are entitled to vote at the meeting and your
presence is desired. If, however, you cannot be present in person, a form of
Proxy is enclosed which the Board of Directors of the Company requests you to
execute and return as soon as possible. You can, of course, revoke your Proxy at
any time before it is voted, if you so desire, either in person at the meeting
or by delivery of a duly executed written statement to that effect to the
Secretary of the Company.
The Company is paying all costs of the solicitation of Proxies, including
the expenses of printing and mailing to its stockholders this Proxy Statement
and the accompanying Notice of Annual Meeting of Stockholders and form of Proxy.
In addition, the Company has retained Georgeson & Company, Inc. to assist in
soliciting proxies for a fee of not more than $10,000, plus reasonable
out-of-pocket expenses, which will be paid by the Company. Officers or employees
of the Company may solicit Proxies in person, or by mail, telegram or telephone,
but such persons will receive no compensation for such work, other than their
normal compensation as such officers or employees.
At the close of business on March 31, 1995, 4,870,557 shares of Common Stock
were outstanding and are entitled to vote at the Annual Meeting. Each
outstanding share is entitled to one vote. This Proxy Statement and the enclosed
Proxy are first being mailed to the stockholders of the Company on or about
April 17, 1995.
PROXIES AND VOTING
The persons named in the accompanying form of Proxy intend to vote Proxies
for the election of the nominees for director described herein unless authority
to vote for directors is withheld. In the event that any nominee at the time of
election shall be unable or unwilling to serve or is otherwise unavailable for
election (which contingency is not now contemplated or foreseen), and in
consequence other nominees shall be nominated, the persons named in the form of
Proxy shall have the discretion and authority to vote or to refrain from voting
in accordance with their judgment on such other nominations.
<PAGE>
The presence in person or by proxy of a majority of the shares of Common
Stock outstanding and entitled to vote at the meeting is required for a quorum.
If a quorum is present, those nominees receiving a plurality of the votes cast
will be elected. Accordingly, neither shares withheld in the election of
directors nor abstentions will count as negative votes. The other matters being
submitted to stockholders at the meeting require the affirmative vote of a
majority of the shares voted (including abstention votes) for approval.
Shares held by brokers and other stockholder nominees sometimes are voted on
certain matters but not others. This can occur, for example, when the broker
does not have the discretionary authority to vote shares of Common Stock and is
instructed by the beneficial owner thereof to vote on a particular matter but is
not instructed on one or more others. These are known as "non-voted" shares.
With respect to the matters as to which shares are "non-voted," they will not be
counted as a vote.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Directors are to be elected to hold office until the next Annual Meeting of
Stockholders and until their respective successors shall have been elected and
qualified or until resignation, removal, disqualification or death as provided
in the By-laws of the Company. The nominees for director, together with certain
information furnished to the Company by each nominee (see also "Certain
Relationships and Related Transactions" and "Security Ownership of Certain
Beneficial Owners and Management" herein), are set forth below:
<TABLE>
<CAPTION>
COMMON STOCK OF THE
COMPANY BENEFICIALLY
OWNED AS OF
MARCH 31, 1995(1)
---------------------------
NAME, AGE AND DIRECTOR NUMBER PERCENT
POSITION WITH COMPANY SINCE OF SHARES OF CLASS
- ---------------------------------------------------------------------- -------- ---------------- --------
<S> <C> <C> <C>
Ernest H. Lorch, 62 .................................................. 1984 3,129shares(2) 0.1%
Chairman
Richard L. Wellek, 56 ................................................ 1983 91,421shares(3) 1.8%
President and Chief Executive Officer
Rudolph Grua, 66 ..................................................... 1993 600shares(4) *
L. William Miles, 61 ................................................. 1993 600shares(4) *
Greg A. Rosenbaum, 42 ................................................ 1985 4,962shares(4) 0.1%
Joseph J. Ross, 49 ................................................... 1994 1,300shares(4) *
Theodore A. Ruppert, 64 .............................................. 1971 444,363shares(5) 9.1%
<FN>
- ----------
* The number of shares of Common Stock beneficially owned is less than .1% of
class.
(1) As of March 31, 1995, all directors, nominees and officers of the Company
as a group (11 persons) owned beneficially 593,552 shares of the Company's
Common Stock (12.0% of class), 152,961 of which were held directly
(including shares which are deemed to be beneficially owned solely because
of the existence of currently exercisable options to acquire such shares,
debentures convertible into shares of the Company's Common Stock and shares
held by a sole trustee) and 440,591 of which were held subject to shared
voting and dispositive power.
(2) Of such shares, 1,300 are held directly and 1,829 are deemed to be
beneficially owned because of the ownership of debentures convertible into
shares of the Company's Common Stock.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(3) Of such shares, 9,646 are held directly, 30,825 are deemed to be
beneficially owned by Mr. Wellek because he is the sole trustee of a trust
of which he is the sole beneficiary and 50,950 shares are deemed to be
beneficially owned solely because of the existence of currently exercisable
options to acquire such shares.
(4) Held directly.
(5) Of such shares, 3,772 are held directly and 440,591 are deemed to be
beneficially owned by Mr. Ruppert solely because he is one of three
trustees of each of two trusts in which he and members of his family have
an interest.
</TABLE>
Mr. Lorch is Of Counsel to Whitman Breed Abbott & Morgan, attorneys, a
position he has held since January 1993. He retired as Chairman and Chief
Executive Officer of The Dyson-Kissner-Moran Corporation ("DKM"), a private
investment company, in December 1992, a position he held since January 1992. DKM
owned approximately 30% of the Common Stock of the Company prior to the
Company's purchase of all of the Company's shares owned by DKM in January 1993.
Mr. Lorch was President of DKM from June 1984 to January 1992. Mr. Lorch is also
a director of Tyler Corporation, a manufacturer of cast iron pipe and fittings
that also provides products for fundraising programs and is a retail supplier of
automotive parts.
Mr. Wellek was elected President and Chief Executive Officer of the Company
in December 1983. From December 1980 to May 1984 he was President of National
Metalwares, Inc., a wholly owned subsidiary of the Company.
Mr. Grua has been Vice Chairman of General Binding Corporation, a
manufacturer of business machines and related supplies, since January 1995 and a
director since May 1984. Prior to January 1995, Mr. Grua was President and Chief
Executive Officer of General Binding Corporation, positions he had held since
May 1984.
Mr. Miles is Vice President for Administration at Fairfield University,
Connecticut, a position he has held since July 1992. From February 1988 to June
1992 he was Senior Vice President of Call Interactive, a provider of interactive
telephone services.
Mr. Rosenbaum has been President of Palisades Associates, Inc., a merchant
banking and consulting company, since August 1989. Mr. Rosenbaum is also a
director of Richey Electronics, Inc., a distributor of electronic components, a
position he has held since April 1993.
Mr. Ross is Chairman, President and Chief Executive Officer of Federal
Signal Corporation, a manufacturer of public safety, signaling and
communications equipment. He has been Chairman of Federal Signal since February
1990 and has served as its President and Chief Executive Officer since December
1987.
Mr. Ruppert is, and has been for more than the last five years, a general
partner in the Village Development Partnership, a real estate, manufacturing and
oil development holding company; Chairman, Chief Executive Officer and director
of Glaize Development Corporation, a real estate developer; and a director of
Pioneer Bank & Trust Company. (See "Security Ownership of Certain Beneficial
Owners and Management" herein.)
During the fiscal year ended January 31, 1995 ("1994"), the Board of
Directors held eight meetings. The Board does not have a nominating committee;
it does have an Audit Committee consisting of Messrs. Grua, Ross and Ruppert and
a Compensation Committee consisting of Messrs. Lorch, Miles and Rosenbaum. The
primary function of the Audit Committee, which during 1994 held three meetings,
is to review the scope and results of each year's annual audit, as well as the
Company's internal control procedures. The primary functions of the Compensation
Committee, which during 1994 held two meetings, are to review and approve the
compensation of the
3
<PAGE>
Company's executive officers and operating unit Presidents and to administer the
Company's stock option and purchase plans. Each director attended more than 75%
of the meetings of the Board of Directors and committees on which he served
during 1994.
EXECUTIVE COMPENSATION
REPORT OF COMPENSATION COMMITTEE
COMPENSATION PHILOSOPHY
The Executive Compensation program is administered by the Compensation
Committee of the Board of Directors, which is composed entirely of outside
directors, and is designed to attract, retain and motivate executive personnel
whose sustained performance will increase stockholder value through successful
achievement of short-term corporate goals and long-term company objectives. The
compensation program is directly integrated with the achievement of the
Company's strategic business plans. The following program components have been
designed to meet these objectives:
BASE SALARY
The base salary program is designed to pay for individual performance within
a structure that is internally equitable and externally competitive with
comparable companies. Base salaries are a function of:
(1) The relative value and potential impact of each position on the
performance of the Company. Value is measured by responsibilities,
complexity and scope of markets, sales volume, technological requirements,
business strategy, etc. The evaluation process results in the assignment of
a position grade;
(2) Salary ranges, assigned to each pay grade, which establish a
competitive position with median salary compensation levels at comparable
companies;
(3) Individual performance, within established base salary ranges.
The program is designed to provide executives who continue to meet
performance expectations with base compensation that is competitive with median
market rates at comparable companies. Each year the company compares base
salary, bonus, and salary ranges of its executives to those of similar positions
in comparable companies as reported in a salary survey conducted by an
independent consulting firm. Approximately 125 companies with sales of $50 -
$500 million participate in this survey. Additional independent surveys are used
to develop a merit increase budget. Within this budget, executives may or may
not receive a base salary increase dependent upon performance in the prior year
and their position in their respective salary ranges. The amount of increase
will vary with individual performance against established performance
objectives.
ANNUAL INCENTIVE -- a target bonus is paid when both financial performance
(E.G., consolidated return on invested capital/return on net assets employed)
and individual performance objectives are met. Financial goals are directly
related to the strategic business plan. Individual performance goals are value
added, representing achievements of annually agreed upon objectives within the
control of the executive beyond normal position expectations.
If both objectives are not met, the bonus will be reduced. If performance is
below the minimum threshold for both objectives, there will be no bonus.
Similarly, if performance exceeds the objectives, a higher bonus will be paid,
subject to a cap.
4
<PAGE>
LONG-TERM CONSISTENCY BONUS -- provides direct correlation of additional
compensation opportunity with consistent achievement of annual incentive goals
over a multi-year period. This bonus is contingent upon achievement of financial
and individual performance objectives for more than one year of a three-year
period. If minimum objectives are not met, no consistency bonus is paid.
STOCK OPTIONS -- rewards executives for long-term strategic management and
enhancement of stockholder value. Promotes recruitment and retention of key
executive personnel by providing meaningful incentives dependent upon successful
corporate performance. Stock options are awarded based upon an overall
evaluation of each executive. Outstanding options held are not considered in the
award of new options.
1993 DEFERRED INCENTIVE STOCK PURCHASE PLAN
The Purchase Plan was adopted by the Board of Directors of the Company on
March 29, 1993, and became effective when it was approved by stockholders on May
25, 1993. The Purchase Plan provides for the offer to selected officers and
other key employees of rights to purchase Common Stock of the Company. Within
thirty days after receipt of an offer, each offeree seeking to participate in
the Purchase Plan must execute a deferred purchase right agreement evidencing
the offeree's commitment to purchase a specified number of shares of Common
Stock of the Company at a specified price at the expiration of five years. A
purchase right shall also entitle the offeree to receive a cash bonus equivalent
to the amount of dividends which would have been payable on the number of shares
the offeree committed to purchase under the purchase right, when and as
dividends are paid on the Common Stock.
COMPANY PERFORMANCE AND CHIEF EXECUTIVE OFFICER ("CEO") COMPENSATION
As discussed previously, the Company's executive compensation program,
including that of the CEO, is based on business performance, both short-term
(base salary and annual incentive bonus) and long-term (long-term consistency
bonus, stock purchase plan and stock options). The compensation of the CEO
serves as a model for this pay-for-performance program. Sales and earnings for
the fiscal year reached record levels for the second year in a row. Net earnings
per share increased 22% to $2.32 per share on a fully diluted basis. This was up
from $1.90 per share on a fully diluted basis for 1993 and $1.15 per share for
1992, before a first quarter charge of $1,351,000 ($.20 per share) for a change
in accounting principle. Sales rose 17% to a record of $341,521,000 from
$291,908,000 in 1993.
Mr. Wellek's strategic direction played a key role in the achievement of
this record performance. Of his annual incentive, 65% was objectively determined
based upon Return on Invested Capital, which increased significantly in 1994 and
reached a record level of 12.4%. The balance, 35%, was based upon non-financial
goals. Non-financial achievements included developing a global growth strategy
and a strategic business unit analysis, and promoting and implementing operating
plans that contributed to higher efficiency and cost reduction. Also, several
actions were successfully taken to strengthen the balance sheet and improve the
capitalization of the Company, supporting the strategic objective of growing
core businesses through internal expansion and complementary acquisitions.
Compensation adjustments for Mr. Wellek were consistent with this outstanding
performance.
5
<PAGE>
OTHER MATTERS
The Revenue Reconciliation Act of 1993 limits the annual deduction a
publicly held corporation may take for certain types of compensation paid or
accrued with respect to certain executives to $1 million per year per executive
for taxable years beginning after December 31, 1993. The Company does not
believe that compensation currently paid to its executives is affected by the
limitation on tax deductibility. However, the Company intends to annually review
its compensation plans in the context of the requirements for tax deductibility
under the new rules, and to determine whether, and to what extent, revisions of
such plans are necessary or desirable.
Respectfully submitted,
Greg A. Rosenbaum (Chairman)
Ernest H. Lorch
L. William Miles
April 3, 1995
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to the Company's Chief
Executive Officer and each of the Company's remaining three executive officers,
based on salary and bonus earned during 1994.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------
SECURITIES LONG-
ANNUAL COMPENSATION UNDERLYING TERM
FISCAL ---------------------- STOCK INCENTIVE ALL OTHER
NAME PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2) PAYOUTS COMP.
- -------------------- -------------------- ------ ----------- -------- --------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard L. Wellek President, CEO and 1994 $364,596 $275,625 8,000 $181,333(7) $90,209(3)
Director 1993 345,848 246,750 9,000 83,336(7) 77,202(3)
1992 314,140 180,000 18,750(10) 20,000 62,621(3)
Raymond A. Jean Exec. VP and COO(11) 1994 231,667 145,722 6,000 94,043(8) 44,087(4)
1993 209,499 111,314 6,750 42,882(8) 35,884(4)
1992 172,143 73,365 11,250(10) 12,235 23,733(4)
George W. Hoffman Group Vice President 1994 182,862 37,500 4,000 26,510(9) 28,409(5)
1993 166,308 40,000 4,500 15,464(9) 26,082(5)
1992 151,242 55,120 9,750(10) 8,880 23,859(5)
Richard A. Nunemaker VP Finance, CFO 1994 160,333 97,222 4,000 66,788(9) 26,579(6)
1993 150,000 87,248 4,500 31,039(9) 26,119(6)
1992 131,927 59,800 7,500(10) 8,700 17,864(6)
<FN>
- ----------
(1) Reflects bonus earned during the fiscal year. All bonuses were paid during
the following fiscal year, except for a portion of the 1993 bonus which was
paid in 1993.
(2) Number of shares of Common Stock subject to options granted in 1994, 1993
and 1992, respectively.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(3) Consists of $13,560, $18,757 and $15,944 in Company contributions to the
Company's Profit Sharing and Retirement Savings Plan; $37,933, $29,670 and
$23,309 to the Company's Shadow 401(k) Plan; $12,000, $13,000 and $15,000
for services as a director of the Company and $11,716, $8,275 and $8,368 in
other miscellaneous non-cash benefits in 1994, 1993 and 1992, respectively;
and $15,000 and $7,500 of cash payments in lieu of dividends with respect
to Company Common Stock being purchased through the Deferred Incentive
Stock Purchase Plan in 1994 and 1993, respectively.
(4) Consists of $13,560, $18,757 and $14,758 in Company contributions to the
Company's Profit Sharing and Retirement Savings Plan; $11,655, $3,969 and
$1,118 to the Company's Shadow 401(k) Plan and $9,872, $8,658 and $7,857 in
other miscellaneous non-cash benefits in 1994, 1993 and 1992, respectively;
and $9,000 and $4,500 of cash payments in lieu of dividends with respect to
Company Common Stock being purchased through the Deferred Incentive Stock
Purchase Plan in 1994 and 1993, respectively.
(5) Consists of $13,560, $12,861 and $12,476 in Company contributions to the
Company's Profit Sharing and Retirement Savings Plan; $2,051, $2,672 and
$1,275 to the Company's Shadow 401(k) Plan and $6,798, $7,549 and $10,108
in other miscellaneous non-cash benefits in 1994, 1993 and 1992,
respectively; and $6,000 and $3,000 of cash payments in lieu of dividends
with respect to Company Common Stock being purchased through the Deferred
Incentive Stock Purchase Plan in 1994 and 1993, respectively.
(6) Consists of $13,560, $17,474 and $11,977 in Company contributions to the
Company's Profit Sharing and Retirement Savings Plan; $1,686, $1,108 and
$314 to the Company's Shadow 401(k) Plan and $5,333, $4,537 and $5,573 in
other miscellaneous non-cash benefits in 1994, 1993 and 1992, respectively;
and $6,000 and $3,000 of cash payments in lieu of dividends with respect to
Company Common Stock being purchased through the Deferred Incentive Stock
Purchase Plan in 1994 and 1993, respectively.
(7) Includes $66,275 and $38,661 in non-cash compensation earned under the
Deferred Incentive Stock Purchase Plan in 1994 and 1993, respectively.
(8) Includes $39,765 and $23,196 in non-cash compensation earned under the
Deferred Incentive Stock Purchase Plan in 1994 and 1993, respectively.
(9) Includes $26,510 and $15,464 in non-cash compensation earned under the
Deferred Incentive Stock Purchase Plan in 1994 and 1993, respectively.
(10) Restated for a 3 for 2 stock split in the form of a stock dividend in 1993.
(11) Raymond A. Jean was promoted to Executive Vice President and Chief
Operating Officer on February 1, 1993, prior to which he served as Group
Vice President.
</TABLE>
7
<PAGE>
SUMMARY OF LONG-TERM INCENTIVE PLANS
The following table presents information concerning compensation earned
under long-term incentive plans during the most recent fiscal year for the
Company's Chief Executive Officer and each of the Company's remaining three
executive officers.
<TABLE>
<CAPTION>
NUMBER OF ESTIMATED FUTURE PAYOUTS UNDER
SHARES, PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
UNITS OR OTHER PERIOD -------------------------------
OTHER UNTIL MATURATION DOLLAR VALUE
NAME RIGHTS(1) OR PAYOUT(2) OF ESTIMATED PAYOUT
- ---------------------------------------------------------------- ------------ ---------------- -------------------------------
<S> <C> <C> <C>
Richard L. Wellek
Deferred Incentive Stock Plan(3)(4).......................1994 37,500 April 30, 1998
Long-Term Consistency Bonus(7)............................1994 $115,058
Raymond A. Jean
Deferred Incentive Stock Plan(3)(5).......................1994 22,500 April 30, 1998
Long-Term Consistency Bonus(7)............................1994 54,278
George W. Hoffman
Deferred Incentive Stock Plan(3)(6).......................1994 15,000 April 30, 1998
Long-Term Consistency Bonus(7)............................1994 0
Richard A. Nunemaker
Deferred Incentive Stock Plan(3)(6).......................1994 15,000 April 30, 1998
Long-Term Consistency Bonus(7)............................1994 40,278
<FN>
- ---------
(1) These are Deferred Incentive Stock Purchase Plan rights which were granted
in 1993.
(2) The final payment to acquire the Common Stock under the Deferred Incentive
Stock Purchase Plan is due April 30, 1998. Payments to acquire the shares
are made ratably over a five year period from the date of grant.
(3) This compensation represents the amortization of the difference between the
option price and fair market value of stock at the date of grant which is
amortized over five years. See discussion of the 1993 Deferred Incentive
Stock Purchase Plan in the Executive Compensation section of this Proxy
Statement.
(4) Compensation earned under the Deferred Incentive Stock Purchase Plan was
$66,275 in 1994 and is included in Long-Term Compensation in the Summary
Compensation Table above.
(5) Compensation earned under the Deferred Incentive Stock Purchase Plan was
$39,765 in 1994 and is included in Long-Term Compensation in the Summary
Compensation Table above.
(6) Compensation earned under the Deferred Incentive Stock Purchase Plan was
$26,510 in 1994 and is included in Long-Term Compensation in the Summary
Compensation Table above.
(7) Represents compensation under the Long-Term Consistency Bonus which was
earned in 1994 and paid in 1995 and is included in Long-Term Compensation
in the Summary Compensation Table above. See additional discussion in the
Executive Compensation section of this Proxy Statement.
</TABLE>
DIRECTOR COMPENSATION
During 1994, directors were paid $12,000 per year for their services with
the Chairman of the Board receiving an additional $5,000 per year and each
committee chairman receiving an additional $2,500 per year for serving in such
capacity. In addition, directors who are not employees of the Company ("Outside
Directors") receive $750 per board of directors meeting attended ($250 per board
of directors meeting by
8
<PAGE>
telephone) and $750 per committee meeting attended ($500 if the committee
meeting is in conjunction with a board of directors meeting). Outside Directors
also receive an annual award of 300 shares of the Company's Common Stock.
STOCK PERFORMANCE CHART
The following chart compares the change in the value of $100 invested in the
Company's Common Stock with $100 invested in the S&P 500 Index and the S&P
Diversified Industry Group Index during the five fiscal years ended January 31,
1995. The comparison assumes $100 was invested on January 31, 1990 in the
Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL VALUE
(VARLEN CORPORATION, S&P 500, S&P MANUFACTURING AND DIVERSIFIED INDUSTRY GROUP)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VARLEN CORPORATION S&P MANUFACTURING INDEX S&P 500 INDEX
<S> <C> <C> <C>
1/31/90 100 100 100
1/31/91 75.59 108.26 108.29
1/31/92 107.05 126.46 132.51
1/31/93 194.78 133.14 147.79
1/31/94 265.5 161.57 164.9
1/31/95 244.66 160.15 165.69
</TABLE>
OPTION GRANTS DURING 1994
The following table provides information related to options granted to the
named executive officers during 1994:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES OF
----------------------------------------------------------------------- STOCK PRICE APPRECIATION
NUMBER OF % OF TOTAL MARKET FOR
SECURITIES OPTIONS GRANTED PRICE OPTION TERM(1)
UNDERLYING OPTIONS TO EMPLOYEES EXERCISE ON DATE EXPIRATION ---------------------------
NAME GRANTED(2) IN 1994 PRICE(3) OF GRANT DATE 0% 5% 10%
- ------------------------------ ------------------ --------------- -------- -------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard L. Wellek............. 8,000 15.1% $ 19.94 $ 23.50 04/11/04 $28,480 $146,712 $328,104
Raymond A. Jean............... 6,000 11.3 19.94 23.50 04/11/04 21,360 110,034 246,078
George W. Hoffman ............ 4,000 7.5 20.13 23.50 04/11/04 13,480 72,596 163,292
Richard A. Nunemaker.......... 4,000 7.5 20.13 23.50 04/11/04 13,480 72,596 163,292
<FN>
- ---------
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
9
<PAGE>
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options.
These numbers do not take into account provisions providing for termination
of the option following termination of employment, nontransferability or
vesting periods.
(2) Options become exercisable 20% after each of the first four years since
their issuance with all options exercisable after 4 1/2 years.
(3) The option exercise price may be paid in cash or by delivery of shares of
Common Stock owned either by the optionee prior to the exercise of the
option or, for certain options with the consent of the Compensation
Committee, by the optionee as a result of the exercise of the option.
</TABLE>
OPTION EXERCISES DURING 1994 AND FISCAL YEAR END OPTION VALUES
The following table provides information related to options exercised by the
named executive officers during 1994 and the number and value of options held at
fiscal year end. The Company does not have any stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Wellek......................... 0 $ 0 40,800 32,450 $523,446 $312,177
Raymond A. Jean........................... 0 0 13,950 21,150 178,692 189,596
George W. Hoffman......................... 2,500 23,018 11,300 16,450 150,565 158,283
Richard A. Nunemaker...................... 6,600 102,732 5,100 16,300 56,424 160,441
<FN>
- ----------
(1) The closing price for the Company's Common Stock as reported by the NASDAQ
National Market on January 31, 1995 was $24.25. Value is calculated on the
basis of the difference between the option exercise prices and $24.25
multiplied by the number of shares of Common Stock underlying the option.
(2) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of related shares.
</TABLE>
SEVERANCE AND CHANGE IN CONTROL AGREEMENTS
In April 1993, the Company entered into severance agreements with Messrs.
Wellek, Hoffman, Jean and Nunemaker, which provide for payments to such
executive officers in the event their employment by the Company is terminated
without cause (as defined) after a "Change in Control" of the Company. Subject
to the terms and conditions of these agreements, such payments are to be made at
the rate of the terminated executive officer's base salary (including the
average of annual cash bonuses for the prior three years), on a monthly basis
and for a period of three years in the case of Mr. Wellek, or two years in the
case of Messrs. Hoffman, Jean and Nunemaker, commencing on the date of
termination. For purposes of this agreement, "Change in Control" means a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, or
any successor provision thereto, whether or not the Company is then subject to
such reporting requirement; provided, however, without limiting the generality
of the foregoing, a Change in Control shall be deemed to have occurred if: (i)
any Person or Group (as those terms are defined in Section 13(d) and 14(d) of
the Exchange Act) is or becomes the record or "Beneficial Owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly of 20% or more of the
securities of the Company entitled to vote generally in the election of
directors of the Company; or (ii) a reorganization, merger, consolidation,
complete liquidation or dissolution of the Company or the sale or disposition of
all or substantially all of the assets of the Company or other similar
transaction (in each case, other than pursuant to any bankruptcy, insolvency or
similar law) occurs; or (iii) a change occurs in the composition of a majority
of the board of
10
<PAGE>
directors of the Company as constituted on January 1, 1993, excluding any change
where nomination of a successor director was approved by at least a majority of
those members who are members of the board on January 1, 1993, or their
successors if so approved for nomination by a majority of the board. In
addition, if Mr. Wellek receives "Change in Control" payments in excess of
certain limitations set forth in the Internal Revenue Code of 1986, as amended
(the "Code"), and is therefore subject to a 20% excise tax on such payments, the
Company will reimburse Mr. Wellek for such excise tax plus the income and excise
taxes thereon.
PENSION PLANS
Effective January 1, 1986, the Company instituted the Varlen Profit Sharing
& Retirement Savings Plan (the "401(k) Plan"), a defined contribution plan, in
which Mr. Wellek, Mr. Jean, Mr. Hoffman and Mr. Nunemaker are participants. The
Company also maintains the Supplemental Executive Retirement Plan of Varlen
Corporation and its Participating Subsidiaries (the "SERP Plan") and the Varlen
Corporation Excess Benefits Plan (the "Shadow 401(k) Plan") in which Mr. Wellek,
Mr. Jean, Mr. Hoffman and Mr. Nunemaker participate.
The following table sets forth, where applicable, the current covered
compensation under each plan and the total number of years of credited service
for benefit plan purposes for Mr. Wellek, Mr. Jean, Mr. Hoffman and Mr.
Nunemaker. Covered compensation under the plans consists of total cash
compensation, except that the 401(k) Plan is limited by law to $150,000 in
calendar 1994 ($150,000 also in calendar 1995). Under the SERP Plan, bonuses are
attributed to the year they are earned instead of the year they are paid.
Amounts paid in lieu of dividends under the Deferred Incentive Stock Purchase
Plan are excluded from compensation under the SERP and Shadow 401(k) plans.
<TABLE>
<CAPTION>
COVERED COMPENSATION
---------------------------- CREDITED
SERP SHADOW SERVICE
NAME 401(K) PLAN 401(K) TO DATE
- ------------------------------------------------------------------------------------------ -------- -------- -------- ---------
<S> <C> <C> <C> <C>
Richard L. Wellek......................................................................... $150,000 $778,995 $679,737 27 years
Raymond A. Jean........................................................................... 150,000 441,539 372,539 7 years
George W. Hoffman......................................................................... 150,000 227,160 229,660 15 years
Richard A. Nunemaker...................................................................... 150,000 303,166 268,489 9 years
</TABLE>
The 401(k) Plan is maintained for the benefit of all eligible salaried and
hourly employees of the Company and its participating subsidiaries, including
the officers mentioned above. The eligibility requirement of the 401(k) Plan is
six months of continuous service. The Employee Retirement Income Security Act of
1974 places certain limitations on amounts contributed under the 401(k) plan.
The 401(k) Plan provides for both employee and employer contributions.
Employees may contribute up to 14% of total cash compensation during the
calendar year, subject to certain limitations under Federal income tax law
($8,994 in calendar 1993 and $9,240 in calendar 1994 and 1995). Amounts
contributed by an employee are not subject to income tax until the funds are
withdrawn from the plan. Employer contributions are divided into two parts.
First, the Company pays 25% of the amount contributed by the employee, up to 6%
of total compensation. Second, there is a profit sharing contribution made to
the account of each participant regardless of whether any employee contributions
are made. The profit sharing contribution cannot be less than 2% of compensation
per year and may be higher, based on the financial performance of the Company
and established guidelines.
Participants are immediately 100% vested with respect to their own
contributions and any matching contributions. Profit sharing contributions are
subject to a vesting schedule under which the participant becomes 40% vested
after two years of service. An additional 20% vests after each additional year
of service
11
<PAGE>
thereafter until the participant becomes 100% vested after 5 years of service.
The vested portion of the participant's account balance becomes payable in a
lump sum or in installments upon the earliest to occur of retirement,
disability, death or termination of employment.
Effective January 1, 1988, the Shadow 401(k) Plan was instituted to provide
additional benefits to certain executives, as determined by the Board of
Directors. In this funded plan, benefits are earned based on the application of
any or all three IRS limitations with respect to the 401(k) Plan. Participants'
Shadow 401(k) Plan accounts are credited with matching contributions or
discretionary profit sharing contributions which are disallowed from the 401(k)
Plan because of the limit on individual contributions ($9,240 in calendar 1994),
the limit on covered compensation ($150,000 in calendar 1994), or the limit on
total contributions of $30,000 or 25% of compensation from all sources. Account
balances are adjusted for investment earnings or losses quarterly and all
benefits earned are subject to the same vesting and payment schedule as is
applied to the 401(k) Plan.
The SERP Plan is an unfunded plan designed to provide supplemental
retirement benefits to certain executives selected by the Board of Directors.
Any such executive is entitled upon retirement to a supplemental retirement
benefit, which, when added to the executive's total annual retirement benefit,
equals 50% of the average of the five highest years of the final ten years
covered compensation for those retiring at age 62 or after 15 years of service.
The 50% factor is reduced by 3.3% for each year of service less than the
required 15 years at age 62.
The following table sets forth the annual retirement benefit payable under
the SERP Plan to participants retiring at age 62 in 1993. These benefits will be
reduced by any profit sharing benefits from the 401(k) Plan or the Shadow 401(k)
Plan, company funded retirement benefits from prior pension plans and 50% of
primary Social Security benefits. Benefits are unreduced for retirement starting
at age 62, with 15 years of credited service.
<TABLE>
<CAPTION>
ANNUAL BENEFITS FOR GIVEN YEARS OF
SERVICE
--------------------------------------
COVERED COMPENSATION 15 20 25 30
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$150,000................................................................................ $ 75,000 $ 75,000 $ 75,000 $ 75,000
200,000................................................................................ 100,000 100,000 100,000 100,000
250,000................................................................................ 125,000 125,000 125,000 125,000
300,000................................................................................ 150,000 150,000 150,000 150,000
350,000................................................................................ 175,000 175,000 175,000 175,000
400,000................................................................................ 200,000 200,000 200,000 200,000
450,000................................................................................ 225,000 225,000 225,000 225,000
500,000................................................................................ 250,000 250,000 250,000 250,000
550,000................................................................................ 275,000 275,000 275,000 275,000
600,000................................................................................ 300,000 300,000 300,000 300,000
650,000................................................................................ 325,000 325,000 325,000 325,000
700,000................................................................................ 350,000 350,000 350,000 350,000
750,000................................................................................ 375,000 375,000 375,000 375,000
800,000................................................................................ 400,000 400,000 400,000 400,000
</TABLE>
The SERP Plan also contains provisions for early retirement benefits,
optional methods of benefit payment, payments to the surviving beneficiary of an
employee and other qualifications to the foregoing.
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Lorch, Miles and Rosenbaum, all independent directors, comprise the
Company's Compensation Committee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
ownership of shares of the Company's Common Stock by (i) persons who were the
beneficial owners, as of March 31, 1995, of more than 5% of the outstanding
shares of the Company's Common Stock and (ii) the Company's four most highly
compensated executive officers.
<TABLE>
<CAPTION>
NUMBER
OF SHARES
NAME AND ADDRESS OF 5% BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED OF CLASS
- -------------------------------------------------------------------------------------------------------- ----------- --------
<S> <C> <C>
Berenice T. Ruppert, Richard W. Ruppert and Theodore A. Ruppert, as trustees ........................... 440,591(1) 9.0%
One Barclay Woods Drive
St. Louis, Missouri 63124
The Guardian Life Insurance Company of America ......................................................... 436,235 8.7%
201 Park Avenue South
New York, New York 10003
The Prudential Insurance Company of America ............................................................ 428,460 8.6%
Prudential Plaza
Newark, New Jersey 07102
<CAPTION>
NUMBER
OF SHARES
BENEFICIALLY PERCENT
NAME OF EXECUTIVE OFFICER OWNED OF CLASS
- -------------------------------------------------------------------------------------------------------- ----------- --------
<S> <C> <C>
Richard L. Wellek....................................................................................... 91,421(2) 1.8%
Raymond A. Jean......................................................................................... 20,250(3) 0.4%
George W. Hoffman....................................................................................... 17,232(4) 0.4%
Richard A. Nunemaker.................................................................................... 9,695(5) 0.2%
<FN>
- ----------
(1) Such shares are held by two trusts, each of which has three trustees. The
trusts are for the benefit of Berenice T. Ruppert and members of her
family. Excludes 3,772 shares held directly by Theodore A. Ruppert.
(2) Of such shares, 9,646 are held directly, 30,825 are deemed to be
beneficially owned by Mr. Wellek because he is the sole trustee of a trust
of which he is the sole beneficiary and 50,950 shares are deemed to be
beneficially owned solely because of the existence of currently exercisable
options to acquire such shares.
(3) All of the shares are deemed to be beneficially owned solely because of the
existence of currently exercisable options to acquire such shares.
(4) Of such shares, 2,782 are held directly and 14,450 are deemed to be
beneficially owned solely because of the existence of currently exercisable
options to acquire such shares.
(5) Of such shares, 795 are held directly and 8,900 are deemed to be
beneficially owned solely because of the existence of currently exercisable
options to acquire such shares.
</TABLE>
13
<PAGE>
PROPOSAL NO. 2--RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of Deloitte &
Touche LLP as its independent auditors for the fiscal year ending January 31,
1996. Deloitte & Touche LLP served in such capacity for the Company's preceding
fiscal year. The Company has been advised by Deloitte & Touche LLP that neither
it nor any member thereof has any financial interest, direct or indirect, in the
Company in any capacity. A representative of Deloitte & Touche LLP is expected
to be present at the Annual Meeting of Stockholders, will be given an
opportunity to make a statement if he desires to do so and is expected to be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL. IT IS THE
INTENTION OF THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY TO VOTE THE
SHARES REPRESENTED THEREBY IN FAVOR OF RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT
FISCAL YEAR UNLESS OTHERWISE INSTRUCTED IN THE PROXY.
PROPOSAL NO. 3--STOCKHOLDER PROPOSAL
The following proposal was submitted by a stockholder of the Company. The
stockholder's name and address and the number of shares of the Company's Common
Stock held by such stockholder will be furnished by the Company to any person
promptly upon the receipt of any oral or written request therefor.
RESOLUTION - EXECUTIVE COMPENSATION
"WHEREAS, it is believed that a direct relationship should exist between
executive compensation and the actual financial performance of the corporation,
including the payment of dividends, earnings per share and the market price of
Varlen Corporation's common stock;
"WHEREAS, it is believed that directors independent of management are best
qualified to establish management performance standards, evaluate the
performance of executives and establish appropriate base and incentive
compensation;
"RESOLVED, that the stockholders of Varlen Corporation request the Board of
Directors establish an executive compensation program that is determined by a
committee of the Board of Directors comprised solely of independent directors
and such committee establish executive compensation programs based primarily on
the actual financial performance of Varlen Corporation, including the payment of
dividends, earnings per share and the market price of its common stock."
The following statement has been submitted in support of this proposal:
"On August 17, 1994, the Chairman and Chief Executive Officer of Unocal
Corporation sent a letter to their stockholders which began as follows:
'As you know, Unocal's primary mission is to maximize -- ethically
and responsibly -- total long-term returns to the owners of the company,
our stockholders.'
"I believe Varlen's mission should be the same - to maximize ethically and
responsibly total long-term returns to its stockholders. As the Unocal
Corporation and other managements have recognized, this requires a system of
corporate governance which includes and is based upon the existence of an
effective
14
<PAGE>
board of directors with significant independence and with the ability and
resources to evaluate corporate and management performance. In short, there must
be a high level of management accountability. This paragraph is in support of my
proposal.
"Managements of public corporations are recognizing the appropriateness of
linking executive compensation with the financial performance of the
corporation. The Federal National Mortgage Association (Fannie May), as an
example, has a compensation program structured to reward performance as it ties
a large portion of each officer's total compensation to growth in annual
earnings, earnings per share and its stock price over time. As it is structured,
Fannie Mae's approach of paying for performance over time, as well as on a basis
of the corporation's annual performance, balances short- and long-term goals. It
is believed that Varlen should have a similar program.
"It is believed that only directors who have not been employees of or
provided services to the corporation during the past five years, such as a
consultant or attorney, should be on the Committee establishing executive
compensation."
THE COMPANY'S RESPONSE TO THE STOCKHOLDER PROPOSAL
The Company's Board of Directors opposes this proposal as not in the best
interests of the Company and its stockholders. The proposal attempts to unduly
restrict the discretion and business judgment of the Company's independent
Compensation Committee and to unduly tie executive compensation to factors that
are not properly within the control of such executives, thereby hindering the
maximization of stockholder value and long-term return to our stockholders.
Under the Company's current executive compensation program, compensation is
tied to performance measures such as consolidated return on invested capital and
return on net assets employed, as well as specific non-financial objectives that
the Compensation Committee has determined will assist the Company in achieving
its strategic business plans. In 1993 and 1994, approximately 2/3 of the annual
bonus of the Company's chief executive officer was based solely upon the
Company's return on invested capital, and the balance was based upon the
achievement of specific objectives determined in advance by the Company's
Compensation Committee. In addition, a significant portion of executive
compensation, comprised of stock options and participation in the Company's
stock purchase plan, is directly tied to the market price of the Company's
Common Stock. In accordance with the Company's stock purchase plan approved by
the stockholders of the Company in 1993, the Company's executive officers have
committed an aggregate of $1,550,000 of their personal funds to the purchase of
shares of the Company's Common Stock, of which $542,500 has already been paid to
the Company.
The Company believes that the compensation of its executive officers should
(i) be market driven, (ii) reward performance, (iii) reward the achievement of
objectives primarily within the control of the executive and (iv) be designed to
further the realization of the Company's annual and long-term goals. The Board
does not believe that executive compensation should be tied to the payment of
dividends, which is determined by the Board of Directors and is outside the
control of executive officers, or earnings per share, as contrasted to corporate
earnings, since earnings per share is partially a function of the number of
shares outstanding, a factor also beyond the control of executive officers. The
Board also believes that executive compensation should not be unduly tied to the
market price of the Company's Common Stock, which is to a large extent a
function of general economic, market and political conditions, factors obviously
beyond the control of executive officers, and may not even be indicative of the
Company's performance. The Board believes that the Company's current
compensation program, as described in the Report of the Compensation Committee
set forth above, already ties the compensation of the executives of the Company
to the
15
<PAGE>
actual financial performance of the Company, and best serves the interests of
the Company and its stockholders. The Board believes that such compensation
program provides the Company's independent Compensation Committee with the
flexibility to develop an appropriate and competitive mix of both objectively
measurable and subjective incentives that directly impact the Company's
financial performance.
The Company's Compensation Committee is composed of independent directors,
none of whom currently receives any compensation from the Company other than for
serving as a director of the Company, and all of whom are "disinterested"
persons as defined in Rule 16b-3 of the Securities Exchange Act of 1934, as
amended.
ACCORDINGLY, FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS URGES
STOCKHOLDERS TO VOTE AGAINST THIS STOCKHOLDER PROPOSAL. IT IS THE INTENTION OF
THE PERSONS NAME IN THE ACCOMPANYING FORM OF PROXY TO VOTE THE SHARES
REPRESENTED THEREBY AGAINST THIS STOCKHOLDER PROPOSAL UNLESS OTHERWISE
INSTRUCTED IN THE PROXY.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which are to
be brought before the meeting. If any other matters should be presented for
proper action, it is the intention of the persons named in the Proxy to vote in
accordance with their discretion pursuant to the terms of the Proxy.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1996 Annual
Meeting of Stockholders must be received at the Company's executive offices on
or before December 15, 1995 for inclusion in the Company's Proxy Statement with
respect to such meeting.
VARLEN CORPORATION
BY RICHARD L. WELLEK
PRESIDENT AND
CHIEF
EXECUTIVE OFFICER
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO FILL IN, SIGN,
DATE AND RETURN THE ENCLOSED PROXY.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
JANUARY 31, 1995, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE
OBTAINED WITHOUT CHARGE BY ANY STOCKHOLDER OF THE COMPANY OF RECORD AS OF MARCH
31, 1995 BY WRITING TO: VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER,
VARLEN CORPORATION, 55 SHUMAN BOULEVARD, P.O. BOX 3089, NAPERVILLE, ILLINOIS
60566-7089.
16
<PAGE>
VARLEN CORPORATION
BOARD OF DIRECTORS PROXY--ANNUAL MEETING OF STOCKHOLDERS--MAY 23, 1995
The Undersigned hereby appoints RICHARD L. WELLEK, THEODORE A. RUPPERT and
RICHARD A. NUNEMAKER, with full power of substitution and revocation, as
proxies to vote all the stock outstanding in the name of the undersigned
entitled to vote at the Annual Meeting of Stockholders of Varlen
Corporation to be held at the Hyatt Lisle, 1400 Corporetum Drive, Lisle,
Illinois 60532, on Tuesday, May 23, 1995, at 10:00 A.M. (local time) and
at any adjournment or adjournments thereof, with the same powers as the
undersigned would possess if personally present, as specified herein:
(Continued and to be DATED AND SIGNED on REVERSE SIDE)
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
For all
nominees
Withheld except
DIRECTORS For all from all as noted
RECOMMEND nominees nominees below
1. Election of Directors for a One
Year Term: FOR ALL
Nominees: Ernest H. Lorch, NOMINEES / / / / / /
Richard L. Wellek,
Greg A. Rosenbaum,
Theodore A.Ruppert,
Rudolph Grua,
L. William Miles and
Joseph J. Ross.
* Withhold my vote for the following nominees:
--------------------------------
DIRECTORS
RECOMMEND For Against Abstain
2. Ratification of the
appointment of Deloitte & FOR / / / / / /
Touche LLP as the Company's
independent auditors for the
current fiscal year.
3. Stockholder proposal
regarding executive compensation. AGAINST / / / / / /
4. In their discretion, upon any other matter
which may properly come before the Annual
Meeting or any adjournment or adjournments
thereof.
A majority of such proxies as shall be present at the meeting (or if only
one shall be present then that one) may exercise all the power of the
proxies hereunder. The undersigned hereby revokes all proxies heretofore
given with respect to the voting of such stock at such Annual Meeting. The
undersigned hereby acknowledges receipt of the Company's Proxy Statement
dated April 17, 1995, and of its Annual Report for the fiscal year ended
January 31, 1995.
THE PROXIES WILL VOTE AS INSTRUCTED HEREIN. IF NO CHOICE IS SPECIFIED,
PROXIES WILL VOTE FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE AND AGAINST THE
STOCKHOLDER PROPOSAL REGARDING EXECUTIVE COMPENSATION.
Comments:
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Signature(s)
Dated_____________________, 1995
Signature of Stockholder should correspond exactly with name as stenciled
hereon. When signing as an agent, attorney, executor, administrator,
trustee, guardian or corporate official, please give your full title as
such. Each joint owner or trustee should sign the proxy.
Please date, sign and return this Proxy in the enclosed envelope.
