<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CTB INTERNATIONAL
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
CTB INTERNATIONAL
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
- --------------------------------------------------------------------------------
<PAGE> 2
March 31, 1999
To the Stockholders of CTB International Corp.:
You are cordially invited to attend the Annual Meeting of Stockholders of
CTB International Corp (the "Company") to be held on Tuesday, May 4, 1999, at
10:00 a.m. E.S.T./C.D.T., at the CTB Conference Center, State Road 15 North,
Milford, Indiana.
At the meeting, Stockholders will vote on the election of nine persons to
the Board of Directors; approval of a long-term stock incentive plan; and the
ratification of the selection of Deloitte & Touche LLP, as independent
accountants for the coming year. Details can be found in the accompanying Notice
and Proxy Statement.
We hope you are planning to attend the Annual Meeting personally, and we
look forward to meeting with you. However, because the vote of each Stockholder
is of utmost importance, we kindly request that you complete, date and sign your
proxy card and return it to us promptly in the enclosed envelope, whether or not
you currently plan to attend the Annual Meeting. You may revoke your proxy at
any time before it is voted by giving written notice to the Secretary of the
Company, by filing a properly executed proxy bearing a later date, or by voting
in person at the Annual Meeting.
On behalf of the Board of Directors and management of CTB International
Corp. I would like to extend our appreciation for your continued support and
confidence.
Truly yours,
CTB INTERNATIONAL CORP.
J. Christopher Chocola
President and
Chief Executive Officer
<PAGE> 3
CTB INTERNATIONAL CORP.
STATE ROAD 15 NORTH
MILFORD, IN 46542-2000
219-658-4191
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF CTB INTERNATIONAL CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CTB
International Corp. (the "Company"), will be held at the CTB Conference Center,
State Road 15 North, Milford, Indiana, on Tuesday, May 4, 1999, at 10:00 a.m.
E.S.T./C.D.T. for the following purposes:
1. To elect directors for designated terms of one (1) year.
2. To approve the adoption of the 1999 CTB International Corp. Stock
Incentive Plan.
3. To ratify the selection by the Audit Committee of the Board of Directors
of Deloitte & Touche LLP as independent accountants for the Company for
the year ending December 31, 1999.
4. To transact any other business that may properly be brought before the
meeting or any adjournment thereof.
The Stockholders of record, as of the close of business on March 24, 1999,
of the Company's common stock, are entitled to notice of, and to vote at, the
Annual Meeting and all adjournments thereof.
By Order of the Board of Directors,
Michael J. Kissane
Secretary
March 31, 1999
Milford, Indiana
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWNED ON THE RECORD DATE.
PLEASE COMPLETE, SIGN, DATE, AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING.
<PAGE> 4
CTB INTERNATIONAL CORP.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 1999
The enclosed proxy accompanying this Proxy Statement is solicited by and on
behalf of the Board of Directors of CTB International Corp. (the "Company") for
use at the 1999 Annual Meeting of Stockholders to be held on May 4, 1999 at
10:00 a.m. at the Company's Conference Center in Milford, Indiana, or any
adjournment thereof. This Proxy Statement and accompanying form of proxy were
first mailed on or about April 6, 1999 to stockholders of record (the
"Stockholders" or, individually, "Stockholder") as of March 24, 1999 (the
"Record Date").
The only outstanding class of voting securities of the Company is its
common stock, par value $0.01 per share (the "Common Stock"). There were
12,014,921 shares of the Company's Common Stock outstanding as of the close of
business on the Record Date. Stockholders shall be entitled to cast one vote per
share for election of Directors and one vote per share on all other matters.
A Stockholder who gives a proxy may revoke it at any time prior to its
exercise by filing with the Secretary of the Company a written revocation or a
duly executed proxy bearing a later date. The proxy may also be revoked if the
Stockholder attends the meeting and elects to vote in person. Proxies that are
signed but unmarked will be voted as recommended by the Board of Directors. A
majority of the outstanding shares of Common Stock, present in person or by
proxy and entitled to vote, will constitute a quorum for the transaction of
business at the Annual Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of March 24, 1999, except as
otherwise noted, for (i) each person known by the Company to beneficially own
more than 5% of the Common Stock, (ii) each of the Company's directors, (iii)
the Company's Chief Executive Officer, (iv) each of the Company's four other
most highly compensated executive officers for 1998, and (v) all current
directors and executive officers as a group. Unless otherwise noted, the address
of each of the Stockholders named below is the Company's principal executive
office.
<TABLE>
<CAPTION>
NUMBER PERCENT
OF OF
NAME OF BENEFICIAL OWNER SHARES SHARES
------------------------ ------ -------
<S> <C> <C>
Prudential Insurance Company of America................. 1,124,000(1) 9.4%
751 Broad Street
Newark, NJ 07102-3777
State of Wisconsin Investment Board..................... 770,000(2) 6.4%
P.O. Box 7842
Madison, WI 53707
American Securities Partners............................ 4,127,189 34.4%
G.P. (Management) Corp.(3)
24th Floor
122 East 42nd Street
New York, NY 10168-0002
ASP/CTB G.P. Corp(4).................................... 454,706 3.8%
24th Floor
122 East 42nd Street
New York, NY 10168-0002
Michael G. Fisch(3)(4).................................. 4,581,895 38.1%
</TABLE>
1
<PAGE> 5
<TABLE>
<CAPTION>
NUMBER PERCENT
OF OF
NAME OF BENEFICIAL OWNER SHARES SHARES
------------------------ ------ -------
<S> <C> <C>
Charles D. Klein(3)(4).................................. 4,581,895 38.1%
Caryl M. Chocola(5)..................................... 1,470,501 12.2%
J. Christopher Chocola.................................. 704,587 5.9%
Frank S. Hermance....................................... 2,000 --
Larry D. Greene......................................... 300 --
David L. Horing......................................... -- --
Roger W. Townsend....................................... 75,437 0.6%
Don J. Steinhilber...................................... 60,171 0.5%
Mark A. Lantz........................................... 29,062 .2%
George W. Murdoch....................................... 600 --
All directors and executive officers as a group......... 7,096,517 59.1%
</TABLE>
- -------------------------
(1) Based on Schedule 13G dated February 1, 1999 which indicates as of December
31, 1998, Prudential Insurance Company of America had sole voting power over
294,200 shares, shared voting power over 829,800 shares, sole dispositive
power over 294,200 shares and shared dispositive power over 829,800 shares.
(2) Based on Schedule 13G dated February 1, 1999 which indicates as of December
31, 1998, State of Wisconsin Investment Board had sole voting power over
770,000 shares, shared voting power over no shares, sole dispositive power
over 770,000 shares and shared dispositive power over no shares.
(3) Shares of Common Stock shown as beneficially owned by American Securities
Partners GP (Management) Corp. are owned of record by American Securities
Partners, L.P., of which American Securities Associates, L.P., ("ASALP") is
the sole general partner and possesses sole voting and investment power.
American Securities Partners GP (Management) Corp. is the sole general
partner of ASALP and possesses sole voting and investment power. Messrs.
Klein and Fisch as stockholders of American Securities Partners GP
(Management) Corp., may be deemed to have beneficial ownership of the shares
shown as beneficially owned by American Securities Partners GP (Management)
Corp. Such persons disclaim beneficial ownership of such shares.
(4) Shares of Common Stock shown as beneficially owned by ASP/CTB G.P. Corp. are
owned of record by ASP/CTB L.P. of which ASP/CTB G.P. Corp. is the sole
general partner and as to which it possesses sole voting and investment
power. Messrs. Klein and Fisch, as stockholders of ASP/CTB G.P. Corp., may
be deemed to have beneficial ownership of the shares shown as beneficially
owned by ASP/CTB G.P. Corp. Such persons disclaim beneficial ownership of
such shares.
(5) Shares of Common Stock shown as beneficially owned by Caryl M. Chocola are
owned of record by the "Caryl M. Chocola Michigan Trust," of which Caryl M.
Chocola is the sole beneficiary.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The Company's Bylaws currently provide for a Board of nine (9) members. In
the past, Directors have been elected annually by a plurality of votes by the
Stockholders present or represented at the annual meeting and entitled to vote.
Each director holds office for a term of one year or until his/her successor is
elected or qualified. The Board of Directors has nominated and recommends the
election of the nine nominees listed below. All current directors are being
re-nominated for election to another term as a director. Two new individuals are
also being nominated. The name, age, business background and tenure as a
director of the Company, if applicable, of each nominee are set forth below. The
nine nominees will be elected to serve until the next annual meeting of
Stockholders and until their respective successors are elected and qualified.
If, at the time of the meeting, any of such nominees should be unable to or
decline to serve, the discretionary authority provided in the proxy will be
exercised to vote for a substitute or substitutes chosen by the Board.
2
<PAGE> 6
The nominees for director have consented to serve, if elected, and the Company
has no reason to believe that any substitute nominee or nominees will be
required. Unless authority to vote for a nominee is expressly withheld, the
accompanying Proxy will be voted FOR the nominees named below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DIRECTOR
NOMINEES DURING THE PAST FIVE YEARS AGE SINCE
-------- -------------------------------------------- --- --------
<S> <C> <C> <C>
Caryl M. Chocola............... Private investor. President of K.C. Equine Systems 60 1976
Inc., a provider of fencing and horse feeder
equipment since 1993. Director of the Company and
its predecessor since 1976.
J. Christopher Chocola......... President of the Company since 1996 and CEO of the 37 1991(1)
Company and its predecessor since March 1994.
Executive Vice President of the Company from
November 1993 to July 1996. General Manager of the
Chore-Time division from October 1991 to November
1993.
Michael G. Fisch............... President of American Securities Capital Partners, 36 1995(1)(3)
L.P., ("ASCP") since 1994 and a Managing Director of
American Securities, L.P., since 1993. Chairman of
the Board of Caribbean Restaurants Holdings, Inc., a
Burger King franchisee, and Director of MVE
Holdings, Inc., a manufacturer of cryogenic storage
vessels, Anthony Holdings, Inc., a manufacturer of
glass doors, and Healthcare Direct, Inc., a catalog
retailer.
Larry D. Greene................ President and Director of Complex Tooling & Molding, 41 1997(2)(3)
Inc., an injection molder of plastic components
since 1998. Senior Vice President of Tauber
Enterprises, a private investment company from 1992
until 1998.
Frank S. Hermance.............. President and Chief Operating Officer of AMETEK, 50 1997(2)(3)
Inc., (NYSE) a diversified industrial company, since
November 1996, Executive Vice President and Chief
Operating Officer from January 1996 until November
1996. President of Precision Instruments Group from
1994 until November 1996, and Group Vice President
from 1990 until 1994 of AMETEK, Inc.
David L. Horing................ A Managing Director of ASCP since 1995. Manager of 36 1995(1)(2)
The Dyson-Kissner-Moran Corporation, a private
investment firm from 1988 until 1995. Chairman of
the Board of Anthony Holdings, Inc. and Director of
Caribbean Restaurants Holdings, Inc.
Charles D. Klein............... A financial advisor to the William Rosenwald family 60 1995
and a Managing Director of American Securities,
L.P., and its affiliates since 1978. Director of
AMETEK, Inc., and Caribbean Restaurants Holdings,
Inc.
Victor A. Mancinelli........... Executive Vice President and Chief Operating Officer 55 New
of Gehl Company (NASDAQ) from November 1992 to April
1999. Mr. Mancinelli has accepted a position with
CTB as President and Chief Executive Officer
effective April 12, 1999.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DIRECTOR
NOMINEES DURING THE PAST FIVE YEARS AGE SINCE
-------- -------------------------------------------- --- --------
<S> <C> <C> <C>
Gerard van Rooijen............. Managing Director of Roxell N.V., Maldegem, Belgium 57 New
since 1971 and Managing Director of Stevens Plastics
Technology since 1989. Member of the Board of
Directors of Fedagrim (Belgian trade organization of
manufacturers and importers of agricultural
machinery) since 1992.
</TABLE>
- -------------------------
NOTES
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
ELECTION OF THESE NOMINEES AS DIRECTORS.
PROPOSAL NO. 2 -- APPROVAL OF THE CORPORATION'S 1999 STOCK INCENTIVE PLAN
The Board of Directors adopted the 1999 CTB International, Inc. Stock
Incentive Plan (the "Stock Plan") on March 26, 1999, subject to approval by the
Company's stockholders. The Board of Directors believes that in order to
recruit, retain and reward key Participants, directors or consultants more
directly for improvement in the Common Stock price, it is critical for the
Company to adopt a flexible stock incentive plan, which is both responsive to
the Company's growth and competitive with other stock incentive plans in the
industry. The Stock Plan is designed to permit the Company to take a deduction
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") with respect to performance-based awards. The Stock Plan is to be
administered by the Compensation Committee (the "Compensation Committee") of the
Board of Directors, members of which must consist solely of at least two
individuals who are "outside directors" for purposes of Section 162(m) of the
Code.
SUMMARY OF THE STOCK PLAN
Purpose. The Stock Plan is designed to encourage selected individuals to
acquire proprietary interests in the Company and to motivate such individuals to
exert their best efforts on behalf of the Company and its affiliates by
providing incentives through the granting of awards under the Stock Plan.
Participants. All Participants and directors of, and consultants to, the
Company and its affiliates of outstanding ability may be selected by the
Compensation Committee to become participants in the Stock Plan.
Number of Shares. The Stock Plan provides that 500,000 of the authorized
shares of the Common Stock (including treasury shares) are available for
issuance as awards under the Stock Plan and that the maximum number of shares
that may be granted in a calendar year to any Participant shall be 300,000.
In the event that an award of a stock option expires or is not exercised or
any other award is forfeited, the shares of Common Stock allocated to such award
are again available for grant under the Stock Plan.
The Stock Plan restricts the number of shares that can be awarded as
Performance-Based Awards (as described below) to 300,000 shares to any
participant in any calendar year and restricts the maximum amount that can be
awarded as Performance-Based Awards to $200,000 in any calendar year.
Term. No awards may be made after the tenth anniversary of the date the
Board of Directors approves the Stock Plan (March 26, 1999).
Awards. Unless otherwise determined by the Compensation Committee, an award
shall not be transferable or assignable by a Participant otherwise than by will
or by the laws of descent and distribution. An award exercisable after the death
of a Participant may be exercised by the legatees, personal representatives or
distributees of the Participant.
4
<PAGE> 8
In addition, the Stock Plan provides for individual maximum limits on the
number of shares available for issuance in the form of stock options and Other
Stock-Based Awards. These annual limits per participant are 300,000 shares. The
Stock Plan also provides that the Compensation Committee may specify performance
targets in connection with awards. Such performance targets would be with
respect to the following criteria: (i) consolidated earnings before or after
taxes (including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv) earnings per share;
(v) book value per share; (vi) return on stockholders' equity; (vii) expense
management; (viii) return on investment; (ix) improvements in capital structure;
(x) profitability of an identifiable business unit or product; (xi) maintenance
or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv)
revenues or sales; (xv) costs; (xvi) cash flow; (xvii) working capital and
(xviii) return on assets. These performance targets further ensure that the
incentive goals are aligned with stockholder interests.
The forms of the awards that may be granted under the Stock Plan are:
Stock options. The Compensation Committee may award a stock option in
the form of an "incentive" stock option (as defined in Section 422 of the
Code) or a non-qualified stock option. Such awards expire no more than ten
years after the date they are granted. The exercise price per share of
Common Stock, which may be purchased pursuant to an option, is determined
by the Compensation Committee, but shall not be less than 100% of the fair
market value of a share of Common Stock on the date the option is granted.
The exercise price is payable, as a Participant may elect, in cash, by
tendering shares of already owned Common Stock (which shares have been held
by the Participant for no less than six months (or such other period as
established by the Compensation Committee), or any combination thereof, or
by delivery of irrevocable instruments to a broker to deliver to the
Company.
Other Stock-Based Awards. The Compensation Committee may grant other
types of awards of Common Stock, or awards based in whole or in part by
reference to the fair market value of Common Stock. Such Other Stock-Based
Awards shall be in such form, and dependent on such conditions, as the
Compensation Committee shall determine (including, without limitation, the
right to receive one or more shares of Common Stock (or the equivalent cash
value of such shares) upon the completion of a specified period of service,
the occurrence of an event and/or the attainment of performance
objectives). Other Stock-Based Awards may be granted alone or in addition
to any other awards granted under the Plan. The Compensation Committee
shall determine whether Other Stock-Based Awards shall be settled in cash,
Common Stock or any combination thereof.
Adjustments. In the event of any change in the outstanding shares by reason
of any share dividend or split, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or any other
corporate exchange, combination or transaction, or any distribution to
stockholders of shares other than regular cash dividends, the Compensation
Committee may make an equitable adjustment in (i) the number or kind of shares
or other securities issued or reserved for issuance pursuant to the Plan or
pursuant to outstanding awards, (ii) the option exercise price and/or (iii) any
other affected terms of such awards.
In addition, except as otherwise provided in an award agreement, in the
event of a Change in Control (as defined in the Stock Plan attached hereto), the
Compensation Committee in its sole discretion and without liability to any
person may take such actions, if any, as it deems necessary or desirable with
respect to any award (including, without limitation, (i) the acceleration of an
award, (ii) the payment of an amount, made in cash or stock, in exchange for the
cancellation of an award, (iii) the termination of an award after a Participant
has been afforded a certain period of time to exercise such award following the
Change in Control, and/or (iv) the requiring of the issuance of substitute
awards that will substantially preserve the value, rights and benefits of any
affected awards previously granted hereunder) as of the date of the consummation
of the Change in Control.
Amendment and Termination. The Board of Directors may amend, alter or
discontinue the Plan at any time, without stockholder approval, unless such
amendment would increase the total number of shares reserved for issuance under
the Stock Plan or change the maximum number of shares for which awards may
granted to any Participant. In addition, the Board of Directors may not amend
the Plan in such a manner that would impair the rights or obligations under any
award previously granted to any Participant without such
5
<PAGE> 9
Participant's approval and may not amend, alter or discontinue the adjustment
provision of the Stock Plan pertaining to a Change in Control after the
occurrence of a Change in Control.
FEDERAL INCOME TAX CONSEQUENCES
The following describes the general federal income tax consequences of the
various awards. Participants who receive awards under the Stock Plan should
consult their own tax advisors regarding the federal, state and local income tax
consequences of receipt and/or exercise of such awards or the distribution of
shares acquired as a result of an award.
A Participant will not realize any income at the time an incentive stock
option is granted nor upon the exercise of an incentive stock option. Upon the
disposition of shares of Common Stock acquired by the exercise of an incentive
stock option more than (i) two years after the incentive stock option is granted
and (ii) one year after the transfer of shares of Common Stock upon the exercise
of such option, the Participant's basis for determining the mid-term or
long-term capital gain or loss, as the case may be, depending on the holding
period, realized upon such disposition will be the option price. However, if the
disposition occurs before these special holding requirements are met (a
"disqualifying disposition"), the Participant will recognize ordinary income
upon such disposition equal to the excess of the fair market value of the shares
on the date either the option was exercised or the shares were disposed of,
whichever is less, over the optionee's basis in the shares. The Company will
receive no deduction with respect to incentive stock options unless a
disqualifying disposition occurs, in which case the Company may deduct the
amount included in an Participant's income in the year includible.
A Participant will not realize any income at the time a non-qualified stock
option is granted. Upon the Participant's exercise of a non-qualified stock
option, the excess of the fair market value of the Common Stock at the time of
exercise over the option price will be ordinary income to the employee and can
be deducted at such time by the Company.
The amount of cash and the fair market value of the Common Stock received
in payment of Other Stock-Based Awards, including Performance-Based Awards or
otherwise, will be ordinary income to the Participant at the time of payment.
However, any Participant who receives restricted stock, either as an award or
upon exercise of an option or in payment of a Stock-Based Award, will realize as
ordinary income at the time of the lapse of the restrictions an amount equal to
the fair market value of the Common Stock at the time of such lapse (less the
option price for such shares if purchased by exercising an option) unless an
appropriate election pursuant to Section 83(b) of the Code is made. In such
case, the Participant will recognize ordinary income as if the Common Stock had
not been restricted. Unrestricted stock will be ordinary income to the
Participant at the time it is granted. At the time the Participant realizes
ordinary income under any of the circumstances described in this paragraph, the
Company will, generally, subject to certain limitations imposed by the Code, be
entitled to a deduction in the same amount as the ordinary income realized by
the Participant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO APPROVE THE STOCK PLAN.
PROPOSAL NO. 3 -- RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
Subject to ratifications by the Stockholders, the Board of Directors has
selected Deloitte & Touche LLP as independent accountants for the Company for
the year ending December 31,1999. The Company has been advised by such firm that
neither it nor any of its associates has any direct or material indirect
financial interest in the Company. Deloitte & Touche LLP were the independent
accountants for the Company for the year ending December 31, 1998.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS.
6
<PAGE> 10
INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
Board of Directors: The Board of Directors held five regular meetings
during the last year. The Board has three standing committees: the Executive
Committee, the Audit Committee and the Compensation Committee. Each Director has
attended at least 75% of all committee and Board meetings.
(1) Executive Committee: The Executive Committee is responsible for meeting
when required on short notice during intervals between meetings of the Board of
Directors and has authority to exercise all of the powers of the Board of
Directors in the management and direction of the affairs of the Company subject
to specific directions of the Board of Directors and to the limitations of the
Delaware General Corporation Law. The Executive Committee met seven times during
the last year.
(2) Audit Committee: The Audit Committee is responsible for making
recommendations to the Board of Directors regarding the selection of independent
accountants to audit the Company's annual financial statements, conferring with
the independent accountants and reviewing the scope and the fees of the annual
audit, reviewing the Company's audited financial statements, accounting and
financial procedures, monitoring the Company's internal controls procedures and
approving the nature and scope of non-audit services performed by the
independent accountants. The Audit Committee met two times during the past year.
(3) Compensation Committee: The Compensation Committee is responsible for
reviewing and making recommendations to the Board of Directors on matters
concerning compensation of management, executive officers and employees. The
Compensation Committee met one time during the past year.
Each director of the Company who is not an employee of the Company or an
employee of American Securities, L.P. or its affiliates (hereafter collectively
"American Securities") receives an annual fee of $10,000 plus a fee of $2,500
for each Board of Directors meeting attended and $2,500 for each committee
meeting attended if not held concurrently with a meeting of the Board of
Directors. Directors who are also employees of the Company or who are officers
or employees of American Securities receive no remuneration for serving as
directors. Each director who was entitled to compensation in 1997 also was
granted an option to purchase 18,140 shares of the Company's Common Stock at a
price equal to the fair market value of the shares at the time of the grant, and
subject to vesting in seven (7) years with a five (5) year accelerated vesting
schedule based on the Company achieving certain financial targets.
J. Christopher Chocola is the son of Caryl M. Chocola.
7
<PAGE> 11
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth, for 1996, 1997 and
1998, certain information with respect to the compensation of the Company's
President and Chief Executive Officer and the four other most highly compensated
executive officers who served in such capacities for 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- ------------
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION OPTIONS COMPENSATION(2)
------------------ ---- ------ -------- ------------ ---------- ---------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
J. Christopher Chocola...... 1998 148,500 7,525 -- -- 7,658
President, Chief Executive 1997 148,500 101,155 -- -- 10,795
Officer and Director 1996 144,200 123,170 -- 72,560 11,091
Roger W. Townsend........... 1998 120,000 5,986 -- -- 6,227
Executive Vice President 1997 116,700 79,894 -- -- 8,573
and General Manager -- 1996 113,300 96,766 -- 108,840 8,764
Brock Grain and Feed
Systems of CTB
George W. Murdoch........... 1998 125,000 6,064 44,818(3) 88,000 6,386
Executive Vice President 1997 80,300 29,351 -- 12,093 6,825
Chore-Time International 1996 78,000 34,793 -- -- 5,488
of CTB
Don J. Steinhilber.......... 1998 115,000 5,729 -- 20,000 5,964
Vice President, Chief 1997 106,500 55,708 -- -- 7,733
Financial Officer 1996 90,492 64,762 -- 72,560 6,940
Mark A. Lantz............... 1998 103,000 55,138 -- -- 5,292
Vice President and 1997 95,000 49,661 -- -- 6,841
General Manager -- Cage 1996 78,000 34,793 -- 72,560 5,488
Systems of CTB
</TABLE>
- -------------------------
(1) Includes amounts paid pursuant to the Management Incentive Compensation Plan
and includes a holiday bonus of 5% of base salary payable to all employees
in December with 1,000 hours of service for the twelve months ended November
30.
(2) Includes amounts (i) contributed under the Profit Sharing Plan that are
determined based on the Company's results of operations, (ii) contributed as
matching contributions under the 401(k) Plan and (iii) determined to be
imputed income on term life insurance policies. At the beginning of each
year, the Board of Directors determines the rate, if any, that the Company
will contribute to the Profit Sharing Plan for that year based on the
achievement of certain financial targets for that year. The Company is not
required to make any contribution to the Profit Sharing Plan if minimum
levels of financial performance are not met. The contributions are allocated
among eligible employees in proportion to their total qualified
compensation. The Profit Sharing Plan also provides for the making of
cash-or-deferred contributions pursuant to Section 401(k) of the Internal
Revenue Code. Each year, the Company has the discretion to elect to make a
matching contribution with respect to each employee. In recent years, the
Company has made contributions equal to 50% of the amount contributed by
such employee up to a total matching contribution of 2% of base
compensation. The Company maintains a group-term life insurance plan for
substantially all salaried employees. The Company makes the premium payments
on the group-term life insurance policies which vary according to age and
insurance coverage. The amount included as compensation for each named
executive officer represents the value of coverage in excess of $50,000.00,
8
<PAGE> 12
in accordance with Internal Revenue Code Section 79, during the covered
year. The 1998 amounts of all other compensation follow:
<TABLE>
<CAPTION>
CONTRIBUTIONS CONTRIBUTIONS
TO THE TO THE GROUP-TERM
NAME PROFIT SHARING PLAN 401(K) PLAN LIFE INSURANCE
---- ------------------- ------------- --------------
($) ($) ($)
<S> <C> <C> <C>
J. Christopher Chocola...................... 4,559 2,970 129
Roger W. Townsend........................... 3,684 2,400 143
George W. Murdoch........................... 3,838 2,500 48
Don J. Steinhilber.......................... 3,531 2,300 133
Mark A. Lantz............................... 3,162 2,060 70
</TABLE>
(3) Includes amounts paid related to company-requested geographic relocation.
STOCK OPTIONS
Stock options were granted in 1998 to the following executive officers
named on the Summary Compensation Table:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR
UNDERLYING OPTIONS/SARS OPTION TERM
OPTIONS/SARS GRANTED TO EXERCISE -----------------------
NAME GRANTED EMPLOYEES IN 1998 PRICE EXPIRATION DATE 5% 10%
---- ------------ ----------------- -------- --------------- -- ---
(#) ($/SH) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
George W. Murdoch.... 88,000 25.1% 14.25 December 31, 2007 788,634 1,998,553
Don J. Steinhilber... 20,000 5.7% 14.25 December 31, 2007 179,235 454,217
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS/SARS AT OPTIONS/SARS AT
NAME ON EXERCISE REALIZED FISCAL YEAR-END FISCAL YEAR-END
---- ----------- -------- --------------------------- ---------------------------
# $ # # $ $
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
J. Christopher Chocola........ -- -- 43,536 29,024 298,548 199,032
Roger W. Townsend............. 43,536 225,081 21,768 43,536 149,274 298,548
George W. Murdoch............. -- -- 1,209 98,884 -- --
Don J. Steinhilber............ 14,512 75,027 29,024 49,024 199,032 199,032
Mark A. Lantz................. 14,512 75,027 29,024 29,024 199,032 199,032
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
POLICIES AND OBJECTIVES
The Compensation Committee of the Board of Directors (referred to herein as
the "Committee") is responsible for administering the compensation and benefit
programs for the Company's employees, including the executive officers. The
Committee annually reviews and evaluates cash compensation and stock option
grant recommendations made by the President and Chief Executive Officer for the
executive officers (other than for himself) along with the rationale for such
recommendations. The Committee examines these recommendations in relation to the
Company's overall objectives and makes compensation recommendations
9
<PAGE> 13
to the Board of Directors for final approval. The Committee also sends to the
Board of Directors for approval its recommendations on compensation for the
President and Chief Executive Officer, who does not participate in the
Committee's decisions as to his compensation package.
GENERAL
The Company has developed and implemented compensation policies, plans and
practices that seek to attract and retain qualified and talented employees and
enhance the profitability of the Company. The Company is committed to maximizing
stockholder value through performance and the Committee believes that superior
performance by the Company's executive and management team is an essential
element to reaching that goal. The policies, plans and practices are designed to
help achieve this objective by relating compensation to both Company and
individual performance.
Based on these objectives, the compensation package of the executive
officers consists of four primary elements: (1) base salary; (2) incentive
bonuses; (3) stock options; and (4) participation in employee benefit plans.
BASE SALARY
A base salary is set for each executive officer at the beginning of each
calendar year by the Board of Directors after receiving a recommendation from
the Committee. The Committee recommends to the Board of Directors what it
believes to be an appropriate base salary for each executive officer based on
the Company's performance, the executive officer's performance, the Company's
future objectives and challenges and the current competitive environment. Base
salaries are intended to be relatively moderate, but competitive.
INCENTIVE BONUSES
The Company's policy is to base a significant portion of each executive
officer's annual compensation on the financial performance of the Company. A
significant portion of each executive officer's potential annual cash
compensation, ranging from approximately 25% to 60%, is based upon the incentive
bonus which is accrued during the year and paid following the conclusion of each
year. The bonus is determined on the basis of a formula which compares actual
performance against an earnings measurement. Financial performance in 1998 was
significantly below targeted levels resulting in (with one exception) no
incentive bonuses being awarded to executive officers. In 1996, 1997 and 1998,
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")
targets were established by the Board of Directors at the beginning of each
year. For measurement of the 1999 bonus, the Board of Directors established
Diluted Earnings per Share targets. The target bonus level for each executive
officer is determined by the Committee based upon the goals, objectives and
responsibilities of each officer. The Committee may exercise some discretion in
making bonus awards.
STOCK OPTIONS
Stock options are a key element in the Company's long-term compensation
program. The primary purpose of stock options is to provide executive officers
and other employees with a personal and financial interest in the success of the
Company through stock ownership, thereby aligning the interests of such persons
with those of the Company's Stockholders. The executive officers were previously
granted stock options which have a seven year vesting period, but which also
have accelerated vesting in increments over 5 years or 6 years if the Company
achieves certain financial targets.
BENEFIT PLANS
The executive officers also participate in the Company's Profit Sharing
Plan and 401(k) Plan described in note 2 under the Summary Compensation Table.
All executive officers and employees who are at least 18 years of age and have
at least 1,000 hours of service are eligible to participate in the Profit
Sharing Plan. Participation in the 401(k) Plan is immediately available to all
employees (other than temporary employees)
10
<PAGE> 14
at least 18 years of age. All contributions to the Profit Sharing and 401(k)
Plans are allocated to various investment alternatives, at the employee's
discretion, within an account maintained on behalf of each participating
employee and, to the extent vested, are distributed to the employee upon
retirement, death, disability or termination of service.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
The compensation for the Company's President and Chief Executive Officer,
J. Christopher Chocola, is established by the Committee and approved by the
Board of Directors. The Committee considers the Company's success in achieving
its performance goals as well as the Committee's and Board's assessments of Mr.
Chocola's individual performance. In past years, Mr. Chocola has received modest
increases in his cash compensation, notwithstanding the strong financial results
of the Company. Mr. Chocola has been granted stock options which are tied to
Company financial performance targets for accelerated vesting purposes, the same
as those for certain other executive officers and other employees. Mr. Chocola's
incentive bonus is also tied to the same financial goals for the Company as
applied to the other executive officers and other employees eligible for such
bonuses.
The Committee believes that the executive compensation programs and
practices described above are conservative and fair to the Company's
Stockholders. The Committee further believes that these programs and practices
serve the best interests of the Company and its Stockholders.
Respectfully submitted,
Michael G. Fisch
Larry D. Greene
Frank S. Hermance
11
<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the cumulative total return of CTB
International Corp., the S&P Small Cap 600 Index, and a composite Peer Group
Index constructed by the Company and weighted by market capitalization, which
includes the following companies, but from which the Company has been excluded:
Cal-Maine Foods, Inc.; Gehl Company; Lindsay Manufacturing Co.; Pilgrim's Pride
Corp.; RDO Equipment Co.; Sanderson Farms, Inc.; Thorn Apple Valley, Inc.;
Valmont Industries, Inc.; WLR Foods, Inc.
The total return assumes $100 invested in the Company's common stock, the
S&P Small Cap Index and Peer Group Index on August 21, 1997. It includes
reinvestment of dividends and is based on the closing stock price on the last
trading day of December for the Company, the S&P Small Cap Index and the Peer
Group Index.
The comparative performance of the Company's common stock against the
indexes as depicted in this graph is dependent on the price of stock at a
particular measurement point in time. Since individual stocks are more volatile
than broader stock indexes, the perceived comparative performance of the
Company's common stock may vary based on the strength or weakness of the stock
price at the new measurement point used in each future proxy statement graph.
For this reason, the Company does not believe that this graph should be
considered as the sole indicator of Company performance.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
CTB INTL PEER GROUP S & P SMALLCAP 600 ($)
-------- ---------- ----------------------
<S> <C> <C> <C>
August 1997 100.00 100.00 100.00
December 1997 101.79 104.42 105.91
December 1998 54.91 82.59 108.80
</TABLE>
12
<PAGE> 16
CERTAIN TRANSACTIONS
Under the terms of the purchase agreement, the Company is required to pay
annual management fees of $300,000 plus expenses to ASCP. Additionally, other
fees paid by the Company to ASCP include $750,000 in connection with the
Acquisition on January 4, 1996; $503,000 in connection with the acquisitions of
Fancom and the Kansas City Grain Systems Division; and $350,000 in connection
with the Offering.
The Earn-Out Amount of $7,040,000 (see note 11 to the 1998 Annual Report)
recorded as of December 31, 1998 under the terms of the Purchase Agreement will
be paid to the Predecessor Company shareholders, certain of whom are current
directors and officers of the Company.
In conjunction with the Offering, certain Stockholders (including American
Securities Partners, LP, ASP/CTB, LP, J. Christopher Chocola and Caryl Chocola)
redeemed 15,000 shares of preferred stock and exchanged 9,069 shares of
preferred stock for 647,786 shares of common stock.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and officers, and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock, and to furnish the Company with copies of all such
reports they file. To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations that
no other reports were required, during the year ended December 31, 1998, all
Section 16(a) filing requirements applicable to its officers, Directors, and
greater than 10 percent beneficial owners were complied with.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
consideration at the meeting by the Board of Directors or by Stockholders who
have requested inclusion of proposals in the Proxy Statement. If any other
matter shall properly come before the meeting, the persons named in the
accompanying form of proxy intend to vote on such matters in accordance with
their judgment.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and to be available to respond to appropriate questions
concerning the audit for the year ended December 31, 1998.
STOCKHOLDER PROPOSALS
Any Stockholder proposals intended to be presented at the 2000 Annual
Meeting must be received by the Company at its principal executive offices no
later than November 15, 1999 in order to be considered for inclusion in the
proxy materials.
10-K REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER
31, 1998 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K IS
AVAILABLE, WITHOUT CHARGE, UPON WRITTEN REQUEST TO DON J. STEINHILBER, VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER, CTB INTERNATIONAL CORP., P.O. BOX 2000,
MILFORD, INDIANA 46542-2000, U.S.A.
MARCH 31, 1999
13
<PAGE> 17
- --------------------------------------------------------------------------------
CTB INTERNATIONAL CORP.
PROXY CARD
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 1999
The undersigned hereby appoints each of J. Christopher Chocola and Michael G.
Fisch, with full power of substitution, to represent the undersigned at the
annual meeting of stockholders of CTB International Corp. to be held on May 4,
1999, and at any adjournments or postponements thereof, and to cast at such
meeting the votes that the undersigned would be entitled to cast if present at
such meeting, in accordance with the following instructions IF NO
INSTRUCTIONS ARE INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR ITEMS 1, 2 AND 3 ON THE REVERSE SIDE HEREOF.
The election of the following persons as directors:
Caryl M. Chocola, J. Christopher Chocola, Michael G. Fisch, Larry D. Greene,
Frank S. Hermance, David L. Horing, Charles D. Klein, Victor A. Mancinelli,
Gerard van Rooijen.
The undersigned acknowledges receipt of the Notice of Annual Meeting and the
Proxy Statement together with this Proxy.
(CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
|
|
[X] PLEASE MARK YOUR | 2329
VOTE AS IN THIS -----
EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1,2,3 AND 4
FOR WITHHOLD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] 2. The adoption of the [ ] [ ] [ ] 3. The ratification of [ ] [ ] [ ]
Directors (See 1999 CTB International the appointment of
Reverse Side) Corp. Stock Incentive Deloitte & Touche,
Plan. LLP as independent
accountants for 1999.
For, except vote withheld from the following nominee(s):
4. To vote upon any other matters that may
properly be presented at the meeting
- ----------------------------------------------------------- according to their best judgment and in their
discretion.
Please sign exactly as name appears hereon. If
shares are held jointly, each joint tenant
should sign. If signing as attorney, executor,
administrator, trustee or guardian or as officer
of a corporation or other entity, please give
full title.
Please sign, date and return this proxy card
promptly using the enclosed envelope.
------------------------------------------------
------------------------------------------------
SIGNATURE(S) DATE
</TABLE>
