December 1, 1994
Dear Shareholder Member:
You are cordially invited to attend the Company's annual meeting at
10:00 A.M. in the morning on Wednesday, January 11, 1995 in the Auditorium of
the Rockford, Illinois, plant. Registration for the meeting will be in the
Cafeteria Atrium located at the rear of the plant. While the formal meeting
begins at 10:00 A.M., we will have an informal social period from 9:00 to
9:45 A.M. in the Cafeteria Atrium.
Parking is available directly behind the plant. A map is enclosed with this
notice.
We will be most pleased to greet you in advance of the meeting. Please
complete and return your proxy card now whether or not you plan to attend.
Sincerely yours,
WOODWARD GOVERNOR COMPANY
Calvin C. Covert
Chairman, Board of Directors
<PAGE>
WOODWARD GOVERNOR COMPANY
Serving Prime Mover Control and Accessory Markets
5001 North Second Street, P.O. Box 7001, Rockford, Illinois 61125-7001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January 11, 1995
The annual meeting of the shareholder members of Woodward Governor Company,
a Delaware corporation, will be held in the Company's Auditorium,
5001 North Second Street, Rockford, Illinois, on Wednesday, January 11, 1995,
at 10:00 A.M., local time, for the following purposes:
1. To elect three directors to serve for a term of three years each;
and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on November 14, 1994 are
entitled to vote at the meeting.
By Order of the Board of Directors
WOODWARD GOVERNOR COMPANY
Carol J. Manning
Corporate Secretary
December 1, 1994
YOUR VOTE IS IMPORTANT
Even if you plan to attend the meeting in person, please date,
sign and return your proxy in the enclosed envelope. Prompt
response is helpful and your cooperation will be appreciated.
<PAGE>
WOODWARD GOVERNOR COMPANY
Serving Prime Mover Control and Accessory Markets
5001 North Second Street, P.O. Box 7001, Rockford, Illinois 61125-7001
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
Wednesday, January 11, 1995
TO THE SHAREHOLDER MEMBERS:
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of proxies for use at the annual meeting of
shareholder members of Woodward Governor Company (the "Company") to be held
in the Company's Auditorium, 5001 North Second Street, Rockford, Illinois, on
January 11, 1995 at 10:00 A.M., local time, and at any adjournment thereof.
A copy of the Company's Annual Report for the fiscal year ended
September 30, 1994, including audited financial statements, is included with
this Proxy Statement. This Proxy Statement was mailed to shareholder members
on or about December 1, 1994.
A form of proxy is enclosed for use at the meeting or any adjournment
thereof. If the proxy is executed and returned, it may nevertheless be
revoked at any time, insofar as it has not been exercised, by notice to the
Secretary of the Company, by submission of a proxy bearing a later date or by
voting in person at the meeting. Unless revoked, the shares represented by
validly executed proxies will be voted at the meeting in accordance with the
directions noted thereon. Absent such directions, the enclosed proxy gives
discretionary authority to the attorneys named therein, or their substitutes.
Each outstanding share is entitled to one vote on each matter submitted to a
vote, except that in the election of directors each shareholder is entitled
to cast as many votes as the number of shares held by such shareholder
multiplied by the number of directors to be elected and may cast all such
votes for the election of one nominee or distribute such votes among either
two or three nominees as such shareholder chooses. Shares represented by
validly executed proxies will be cumulatively voted so as to elect all or as
many as possible of such director nominees in such order as the attorneys
named therein shall determine unless the shareholder has otherwise indicated
on the proxy. For the election of directors, the three nominees who receive
the most votes will be elected.
The Board of Directors has fixed November 14, 1994 as the record date
for the determination of shareholder members entitled to vote at the meeting.
Accordingly, only shareholder members of record at the close of business on
said date will be entitled to vote at the meeting. As of November 14, 1994,
the Company had outstanding 2,924,218 shares of Common Stock, $0.0625 par
value.
Votes cast by proxy or in person at the meeting will be tabulated by the
inspectors of election appointed for the meeting and will determine whether
or not a quorum is present. The inspectors will treat abstentions as shares
that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval
of any matter submitted to the shareholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND EXECUTIVE OFFICERS
The following table sets forth as of November 14, 1994 information
provided to the Company concerning ownership of the Company's outstanding
Common Stock by beneficial holders of more than 5% of the Common Stock,
certain executive officers and all directors and executive officers as a
group:
Shares of Common Stock Percent of
Beneficially Owned Common Stock
Name November 14, 1994 Outstanding
Principal Holders
Woodward Governor Company
Profit Sharing Trust
5001 North Second Street
Rockford, Illinois 61125-7001 739,231 25.28%
AMCORE Bank N.A., Rockford
501 Seventh Street
Rockford, Illinois 61110-0037 1,037,276 (1) 35.47%
Mary B. Bittle
250 South Fairfax
Denver, Colorado 80222-6110 223,232 (2) 7.63%
Quest Advisory Corp.
Quest Management Company
Charles M. Royce
1414 Avenue of the Americas
New York, New York 10019 153,304 5.24%
Non-Director Executive Officers
C. Phillip Turner
Vice President 5,577 (4) .19%
Garin M. VanDeMark
Vice President 1,651 (4) .06%
All directors and executive
officers as a group - 16 persons 134,457 (3) (4) 4.60%
(1) The Bank has advised the Company that 15,869 shares are owned by the
Bank in nominee name as custodian, and 1,021,407 shares are owned by the
Bank as trustee. Included are 95,344 shares in which Mary B. Bittle has
a beneficial interest and 87,472 shares in which each of Mary B. Bittle
and Calvin C. Covert, Chairman of the Board, has a beneficial interest.
The Bank, as Trustee for the Woodward Governor Company Deferred Profit
Sharing Plan, holds 739,231 shares of Common Stock, of which 703,404
shares are held under the Woodward Stock Plan portion of the Plan and
35,827 shares are held in the rest of the Plan. Some of the shares held
in the Woodward Stock Plan portion of the Plan are allocated to
participant accounts and the rest of the shares will be allocated to
participants as the principal and interest on the current outstanding
loan to the Plan are repaid. The Plan directs the Trustee to vote the
shares allocated to participant accounts under the Woodward Stock Plan
portion of the Plan as directed by such participants and to vote all
allocated shares for which no timely instructions are received in the
same proportion as the allocated shares for which instructions are
received. The remaining shares in the Plan are voted by the Trustee as
directed by the Plan's Administrative Committee. In the event of a
tender or exchange offer, participants have the right individually to
decide whether to tender or exchange shares in their account. The Plan
directs the Trustee to tender or exchange all allocated shares for which
no timely instructions are received in the same proportion as the
allocated shares with respect to which it does receive directions. The
remaining unallocated shares are tendered or exchanged by the Trustee as
directed by the Plan's Administrative Committee.
(2) Private investor and retired Director. Includes 87,472 shares held by
the Irl C. Martin Trust in which Mrs. Bittle is one of four trustees and
an income beneficiary with power of appointment as to one-third of the
assets, 95,344 shares held by the Dorothy C. Martin Trust in which Mrs.
Bittle is one of three trustees and an income beneficiary with power of
appointment as to one-half of the assets, 7,583 shares held by the
Billie Bittle Marital Trust Number One in which Mrs. Bittle is the
trustee and the income beneficiary, 1,727 shares held by Billie Bittle
Family Trust in which Mrs. Bittle is the trustee, is the income
beneficiary, and has a power of appointment, and 31,106 shares held by
Mary Barbara Bittle Trust, a revocable living trust in which Mrs. Bittle
is a co-trustee.
(3) See table under "ELECTION OF DIRECTORS."
(4) Includes shares allocated to participant accounts of executive officers
under the Woodward Governor Company Deferred Profit Sharing Plan. Plan
participants direct the Trustees to vote the shares allocated to
participant accounts under the Woodward Stock Plan portion of the Plan.
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
certain officers and beneficial owners of the Company's Common Stock to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of common stock. So far as the
Company is aware, based solely upon a review of the reports known by it to
have been filed with the SEC, its compensation programs involving its equity
securities, and representations of its directors and officers, all of the
required filings for the fiscal year ended September 30, 1994 have been
timely made.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD
Three directors are to be elected at the annual meeting. Proxies will be
voted for the election of Messrs. Vern H. Cassens, Carl J. Dargene and Thomas
W. Heenan unless the shareholder signing such proxy withholds authority to
vote for one or more of these nominees in the manner described on the proxy.
Mr. Cassens, Mr. Dargene and Mr. Heenan are directors of the Company
previously elected by the shareholder members whose terms in office expire
this year. If elected, subject to provisions of the Company's Bylaws
summarized under "DIRECTORS' QUALIFICATIONS," each of the nominees will hold
office for a term ending on the date of the third annual meeting of
shareholders following the January 11, 1995 meeting. The Company does not
expect that any of the nominees will be unavailable for election, but if that
should occur, proxies may be voted for a substitute nominee or nominees
selected by the Board.
<TABLE>
INFORMATION CONCERNING NOMINEES AND INCUMBENT DIRECTORS
<CAPTION>
Name, Age, Principal Year First Shares of Common Stock Percent of
Occupation and Other Elected a Beneficially Owned Common Stock
Information Director November 14, 1994 (1) Outstanding
<S> <C> <C> <C> <C> <C>
Nominees for Election/Class II/
Term Expiring 1998
Vern H. Cassens, 62, is Senior
Vice President and Treasurer
and Chief Financial Officer
of the Company 1977 10,270 0.35%
Carl J. Dargene, 64, is President
and Chief Executive Officer of
AMCORE Financial, Inc., Rockford,
Illinois (2) 1990 800 0.03%
Thomas W. Heenan, 63, is a
partner in the law firm of
Chapman and Cutler, Chicago,
Illinois 1986 3,400 0.12%
Incumbent Directors/Class I/
Term Expiring 1997
J. Grant Beadle, 61, is
retired Chairman and Chief
Executive Officer of Union
Special Corporation, a
manufacturer of industrial
sewing machines (3) 1988 200 0.01%
Lawrence E. Gloyd, 62, is
Chairman, President and
Chief Executive Officer of
CLARCOR, Rockford, Illinois, a
manufacturer of filtration and
consumer packaging products (4)(5) 1994 214 0.01%
J. Peter Jeffrey, 61, is
Vice President of Development
at Father Flanagan's Boys Home
in Boys Town, Nebraska 1981 322 0.01%
Mark Leum, 67, is
retired Vice Chairman of the
Board of the Company 1972 4,001 0.14%
Incumbent Directors/Class III/
Term Expiring 1996
Calvin C. Covert, 69, is
Chairman of the Board
of the Company (6) 1973 98,031 (7) 3.35%
John A. Halbrook, 49, is President
and Chief Executive Officer
of the Company 1991 1,356 0.05%
Michael T. Yonker, 52, is President
and Chief Executive Officer of
Portec, Inc., which has operations
in the construction equipment,
materials handling, and railroad
products industries (8) 1993 200 0.01%
</TABLE>
(1) Includes the maximum number of shares which might be deemed to be
beneficially owned under rules of the Securities and Exchange Commission,
including some duplication. Includes shares allocated to participant
accounts of executive officers under the Woodward Governor Company
Deferred Profit Sharing Plan. The Plan directs the Trustee to vote the
shares allocated to participant accounts under the Woodward Stock Plan
portion of the Plan as directed by such participants and to vote all
allocated shares for which no timely instructions are received in the
same proportion as the allocated shares for which instructions are
received.
(2) Serves as a director of AMCORE Financial, Inc., CLARCOR Inc. and Elco
Industries, Inc.
(3) Serves as a director of Portec, Inc.
(4) Elected as a director at the June 22, 1994 meeting of the Board of
Directors.
(5) Serves as a director of CLARCOR, AMCORE Financial, Inc., Thomas
Industries, Inc. and G.U.D. Holdings Ltd.
(6) Serves as a director of AMCORE Financial, Inc.
(7) Includes 87,472 shares held by the Irl C. Martin Trust in which Mr.
Covert is one of four trustees and an income beneficiary with power of
appointment as to one-third of the assets.
(8) Serves as a director of Portec, Inc., Crown Anderson, Inc. and Modine
Manufacturing Company, Inc.
All nominees and incumbent directors except Mr. Beadle and Mr. Jeffrey have
been engaged in their principal occupation, or in other responsible positions
with the same organizations, for at least the last five years. Mr. Beadle
retired as Chairman and Chief Executive Officer of Union Special Corporation
in May 1991, a position he had held for seven years. Mr. Jeffrey retired as
Vice Chairman and Chief Executive Officer of AMCORE Bank N.A., Rockford in
December 1991, a position he had held for six years.
The Board of Directors met eight times during the last fiscal year; all
directors attended more than 75% of the aggregate of the total meetings of
the Board of Directors and all committees of the Board on which they served.
DIRECTORS' COMMITTEES
The Board of Directors has established four standing committees. They are
the Audit Committee, the Compensation Committee, the Executive Committee and
the Selection Committee.
The Audit Committee consists of Mr. Jeffrey (Chairman), Mr. Beadle,
Mr. Heenan, Mr. Leum and Mr. Yonker. The Audit Committee is responsible for
recommending to the Board the engagement of independent accountants to audit
the Company's books. The Committee reviews the scope and approach of both
the annual independent audit and internal audits and reviews the Company's
system of internal accounting controls. The Committee met twice during the
year ended September 30, 1994.
The Compensation Committee consists of Mr. Dargene (Chairman),
Mr. Beadle, Mr. Covert (Chairman of the Board of Directors of the Company),
Mr. Gloyd, Mr. Heenan and Mr. Yonker. The Compensation Committee is
responsible for recommending to the Board the base compensation of the
Company's officers and key personnel. The Committee evaluates the
performance of and reviews the results of the annual member evaluation for
those individuals. The Committee met once during the year ended September
30, 1994.
The Executive Committee consists of Mr. Covert (Chairman), Mr. Beadle,
Mr. Dargene and Mr. Halbrook. The Executive Committee is responsible for
exercising all the powers and authority of the Board of Directors in the
management of the business when the Board is not in session and when in the
opinion of the Chairman the matter should not be postponed until the next
scheduled meeting of the Board. The Committee may declare cash dividends.
The Committee may not authorize certain major corporate actions such as
amending the Certificate of Incorporation, amending the Bylaws, adopting an
agreement of merger or consolidation or recommending the sale, lease or
exchange of substantially all of the Company's assets. The Committee met
four times during the year ended September 30, 1994.
The Selection Committee consists of Mr. Beadle (Chairman), Mr. Covert, Mr.
Dargene, Mr. Halbrook and Mr. Heenan. The Selection Committee is responsible
for recommending to the Board qualified individuals to fill any vacancies on
the Board. The Committee met twice during the year ended September 30, 1994.
No procedures have been established for the consideration by the Selection
Committee of nominees recommended by shareholder members of the Company.
All actions by committees are reported to the Board at the next scheduled
meeting and are subject to approval and revision by the Board. No legal
rights of third parties may be affected by Board revisions.
DIRECTORS' QUALIFICATIONS
The Company's Bylaws provide that the term of any director shall end on the
September 30th next following the director's seventieth birthday, unless
otherwise determined by the Board, and that no person may serve as a director
unless such person agrees in connection with such service to be guided by the
philosophy and concepts of human and industrial association of the Company as
expressed in its Constitution. Directors need not be shareholders. Section
2.8 of the Company's Bylaws requires adequate notice to the Company with
respect to nominees for directors other than those nominated by the Board.
A copy of Section 2.8 is attached to this Proxy Statement as Exhibit A.
EXECUTIVE COMPENSATION
The following table sets forth a summary for the last three fiscal years of the
cash and non-cash compensation paid to John A. Halbrook, President and Chief
Executive Officer of the Company, and to each of the other four most highly
compensated executive officers of the Company whose total compensation in
1994 exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual All
Compensation Other
Name and Principal Position Year Salary (A) Compensation (B)
<S> <C>
Calvin C. Covert 1994 $373,623 $ 36,776
Chairman of the 1993 378,976* 36,741
Board of Directors 1992 428,768 39,964
John A. Halbrook 1994 254,833 20,401
President and Chief 1993 194,461* 15,721
Executive Officer 1992 147,350 11,846
Vern H. Cassens 1994 185,550 17,541
Senior Vice President 1993 171,637* 16,271
and Treasurer and 1992 181,454 16,974
Chief Financial Officer
C. Phillip Turner 1994 144,150 13,624
Vice President 1993 135,181* 12,747
1992 134,125 12,541
Garin M. VanDeMark 1994 134,250 12,023
Vice President 1993 129,518 11,619
1992 129,322 11,507
</TABLE>
*As a reflection of the fact that earnings for both of the Company's main
product lines had been declining due to difficulties in the general
economy as a whole and, in particular, in the aircraft industry, Mr.
Covert, Mr. Halbrook, Mr. Cassens and Mr. Turner voluntarily took a 5%
reduction in salary in June, 1993.
(A) No executive officer received personal benefits in excess of the lesser
of 10% of cash compensation or $50,000.
(B) Includes Company contributions to the Deferred Profit Sharing Plan,
Retirement Income Plan and Unqualified Deferred Compensation Plan.
Company contributions to the Deferred Profit Sharing Plan for the
account of each of the executive officers listed included the following
amounts for the years ended: September 30, 1994, Mr. Covert $9,980; Mr.
Halbrook $9,558; Mr. Cassens $6,551; Mr. Turner $5,088; and Mr.
VanDeMark $4,831; September 30, 1993, Mr. Covert $9,631; Mr. Halbrook
$7,929; Mr. Cassens $6,604; Mr. Turner $5,174; and Mr. VanDeMark $5,060;
September 30, 1992, Mr. Covert $10,445; Mr. Halbrook $6,342; Mr. Cassens
$7,374; Mr. Turner $5,448; and Mr. VanDeMark $5,350.
Company contributions to the Retirement Income Plan for the account of
each of the executive officers listed included the following amounts for
the years ended: September 30, 1994, Mr. Covert $21,226; Mr. Halbrook
$10,842; Mr. Cassens $10,991; Mr. Turner $8,536; and Mr. VanDeMark
$7,192; September 30, 1993, Mr. Covert $20,369; Mr. Halbrook $7,792; Mr.
Cassens $9,667; Mr. Turner $7,573; and Mr. VanDeMark $6,559; September
30, 1992, Mr. Covert $19,555; Mr. Halbrook $5,504; Mr. Cassens $9,600;
Mr. Turner $7,093; and Mr. VanDeMark $6,157.
The only Company contributions made to the Unfunded Deferred
Compensation Plan were to Mr. Covert's account as follows for the years
ended: September 30, 1994, $5,570; September 30, 1993, $6,741; September
30, 1992, $9,964.
The Company's pension plan was terminated as to future contributions on
September 30, 1971 with all benefits fully vested. The plan when terminated
provided for payments of $2.00 per month for each year of service beyond two
years, payable at age 65; however, accumulated reserves are sufficient to
enable the insurance contract holder to provide an additional 31% benefit to
all participants. Annual benefits will remain constant at normal retirement
and are as follows: Mr. Covert $880; Mr. Halbrook $0; Mr. Cassens $283, Mr.
Turner $283; and Mr. VanDeMark $31.
Directors who are not worker members are paid a monthly retainer plus a
meeting fee. On June 23, 1993 the Directors voted to reduce their monthly
retainer fee 12.7% to $1,200 per month. Beginning calendar year 1994 the
monthly retainer was returned to the previous level of $1,375 per month plus
$850 for each Board meeting attended. Committee members are also compensated
at the rate of $1,250 for committee chairmen and $850 for committee members
for each meeting attended. Directors are also reimbursed for travel expenses
incurred in attending meetings.
In addition to the regular retainer, Mr. Beadle received compensation of
$2,000 and Mr. Yonker received compensation of $1,200 for consultation
services beyond the scope of their duties related to Board of Directors
activity.
Mr. Dargene is President and Chief Executive Officer of AMCORE Financial,
Inc. and Chairman of its wholly-owned subsidiary, AMCORE Bank N.A., Rockford.
In the ordinary course of its business the Company maintains a normal
commercial banking relationship with AMCORE Bank N.A., Rockford. The maximum
amount of borrowings outstanding at any time during the year ended September
30, 1994 aggregated $6,800,000. Interest has been charged at the bank's
prime rate. AMCORE Bank, N.A., Rockford also serves as Trustee under the
Woodward Governor Company Profit Sharing Trust. Mr. Heenan is a partner of
the law firm of Chapman and Cutler, which firm the Company retained as
Corporate Counsel during the year ended September 30, 1994. No other
director or officer of the Company, or any associate or affiliate of any such
person, had any material interest, direct or indirect, in any material
transaction to which the Company was a party.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee administers the base compensation program for the
Company's executive officers while the Board of Directors administers the
Company's profit sharing program. The discussion of the Compensation
Committee's determination of the base compensation of each executive officer,
including Mr. Covert, the Chairman of the Board , and Mr. Halbrook, the
President and Chief Executive Officer, constitutes the Report of the
Compensation Committee. The discussion of the profit sharing program is
included because amounts distributed under this program to executive officers
constitute executive compensation. All of the Company's eligible worker
members, including executive officers, participate in this program
proportionately based on each worker member's compensation as determined in
the program. Mr. Covert, the Chairman of the Board of the Company, is a
member of the Compensation Committee but does not participate in discussions
or decisions relating to his base compensation.
The goals of the Company's base compensation program and the Company's profit
sharing program are defined in the following narrative.
Base Compensation
The Compensation Committee's determination of each executive officer's base
compensation is designed to accomplish two goals. The first goal is to pay
executive officers competitively to attract, retain and motivate a high-
quality senior management team. The second goal is to link annual increases
in base compensation to the individual performance of each executive officer.
The Company's stock performance is not specifically considered by the
Compensation Committee in determining base compensation for the Company's
executive officers. In general, the base compensation of each executive
officer is targeted to be within a range of 85% to 90% of the average base
compensation received by executive officers in similar positions with
manufacturing companies as measured by sales volume attributable to such
executive officers' group or business unit within the company.
The Compensation Committee, in determining the base compensation to be paid
to each executive officer, other than the Company's Chairman and the
President (the "Other Executive Officers"), reviews recommendations prepared
by the Company's Chairman of the Board and the President and Chief Executive
Officer. These recommendations are based, in part, on executive compensation
reviews prepared by outside compensation consultants. These recommendations
are also based on the executive officer's individual performance. An
executive officer's individual performance evaluation is based on such
individual's experience, responsibilities, management and leadership
abilities, and job performance, with more weight being given to current
responsibilities and job performance. After consultation with the Chairman
of the Board and the President and Chief Executive Officer, the Compensation
Committee reviews the recommendations and the supporting executive
compensation reviews. The Compensation Committee then determines the annual
base compensation of each of the Other Executive Officers subject to approval
by the Company's Board of Directors. The determinations of the Chairman of
the Board's and the President and Chief Executive Officer's annual base
compensation is specifically discussed below.
Profit Sharing Program
The profit sharing program is designed to accomplish the goal of tying
incentive cash compensation and deferred profit sharing to Company
performance for all worker members, including its executive officers. All of
the Company's worker members who have completed two years of service
participate in the profit sharing program. The amount to be distributed to
worker members under this program, either as cash and/or deferred profit
sharing, is determined annually by the Company's Board of Directors. In
determining the profit sharing amount, normal costs before cumulative effect
of accounting changes plus a charge for a base return to the shareholders are
deducted from gross revenues. The profit sharing amount is then divided
between the Company's shareholders and its worker members. Such division is
annually determined by the Board of Directors. The shareholders' portion of
the profit sharing amount becomes a part of the overall earnings for the
year. Such earnings are paid out as dividends and/or retained for
reinvestment by the Company as determined by the Board of Directors. The
worker members' portion of the profit sharing amount is distributed as cash
and/or deferred profit sharing as determined by the Board of Directors. Each
worker member's portion of the profit sharing amount is proportionately based
on such worker member's compensation. The rules relating to deferred profit
sharing are set forth in the Woodward Governor Company Deferred Profit
Sharing Plan. Because the profit sharing program is approved by the
Company's Board of Directors and because all eligible worker members,
including executive officers, participate proportionately based on each
worker member's compensation, the Compensation Committee is not involved in
the administration of this program.
Compensation of the President and Chief Executive Officer and
the Chairman of the Board
On November 16, 1993 Calvin C. Covert, Chairman of the Board and Chief
Executive Officer of the Company, announced his retirement from the position
of Chief Executive Officer of the Company. Mr. Covert continues to serve as
the Chairman of the Board and an officer of the Company. In recognition of
the accompanying reduction in responsibilities, Mr. Covert's base
compensation was decreased by 17%, from $300,040 for the fiscal year ended
September 30, 1994 to $250,000 for fiscal year 1995.
Also on November 16, 1993 Mr. John A. Halbrook, President and Chief Operating
Officer, was elected to the position of President and Chief Executive
Officer. In connection with this promotion, Mr. Halbrook's base compensation
was increased by 22%, to $277,630 for fiscal year 1995. This increase was
commensurate with the additional responsibilities of the position of Chief
Executive Officer and recognized Mr. Halbrook's overall performance during a
very difficult period for the Company. Mr. Halbrook's base compensation for
1995 was set at a level somewhat lower than the median range for chief
executive officers in similar positions with manufacturing companies having
annual sales of approximately $331 million.
As discussed above, the Compensation Committee's determination of the base
compensation of the Company's executive officers, including Mr. Covert and
Mr. Halbrook, does not specifically consider the Company's stock performance.
<PAGE>
In determining the base salary for the Chief Executive Officer, the
Compensation Committee also considers the fact that the Company, unlike most
of the manufacturing companies reviewed, has determined not to use bonuses,
stock options, stock appreciation rights, long term incentive programs or
pension benefits to increase the compensation of its chief executive officer.
As also discussed above, the amount of cash and deferred profit sharing
distributed to Mr. Covert and to Mr. Halbrook under the Company's profit
sharing program was determined proportionately based on their respective base
compensation. The amount of cash and deferred profit sharing distributed to
each of the Company's other eligible worker members was also determined
proportionately based on compensation.
Compensation Committee: Carl J. Dargene, Chairman
J. Grant Beadle
Calvin C. Covert
Lawrence E. Gloyd
Thomas W. Heenan
Michael T. Yonker
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dargene, President and Chief Executive Officer of AMCORE Financial, Inc.
and Chairman of its wholly-owned subsidiary, AMCORE Bank N.A., Rockford,
serves as a member of the Company's Board and chairman of the Company's
Compensation Committee. Mr. Heenan, a partner of the law firm of Chapman and
Cutler, which firm the Company retained as Corporate Counsel during the year
ended September 30, 1994, serves as a member of the Company's Compensation
Committee. Mr. Covert, Chairman of the Board of the Company, serves as a
member of the Board and serves as a member of the Board of Directors of
AMCORE Financial, Inc.
COMMON STOCK PERFORMANCE
The following Performance Graph compares the Company's cumulative total
return on its Common Stock for a five year period (September 30, 1989 to
September 30, 1994) with the cumulative total return of the S&P Composite 500
Stock Index and the S&P Machinery Diversified Index.
TOTAL RETURN TO SHAREHOLDERS
( GRAPH INSERTED HERE )
Assumes that the value of the investment in the Company's Common
Stock and each index was $100 on September 30, 1989 and that all
dividends were reinvested.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 199
<S> <C> <C> <C> <C> <C> <C> <C>
Woodward Governor Company ($) $100.00 $ 81.18 $ 87.90 $ 62.60 $ 59.49 $ 76.16
S&P 500 ($) $100.00 $ 90.76 $119.04 $132.20 $149.39 $153.78
S&P Machinery - Diversified ($) $100.00 $ 82.46 $102.85 $107.67 $148.72 $161.98
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand L.L.P. have served as the independent public accountants of
the Company for the year ended September 30, 1994, and it is the present
intention of the Board to reappoint them for the fiscal year ending September
30, 1995. A representative from Coopers & Lybrand L.L.P. is expected to be
present at the shareholders' meeting with the opportunity to make a statement
if he so desires and to answer appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders to be included in the Company's proxy statement for
the 1996 annual meeting must be received by the Company no later than August
3, 1995.
OTHER MATTERS
The cost of solicitation of proxies including preparing, assembling and
mailing this proxy statement and accompanying papers will be borne by the
Company. Solicitation will be made by mail but in some cases may also be
made by letter, telephone, telegraph or personal call of officers, directors
or members of the Company who will not be specially compensated for such
solicitation. The Company has employed Morrow & Company to solicit proxies
for the annual meeting from brokers, bank nominees, other institutional
holders and certain individual shareholders. The Company has agreed to pay
$4,000, plus the out-of-pocket expenses of Morrow & Company for these
services. The Company will also pay the regular charge of brokers and other
nominees who hold shares of record for forwarding proxy material to the
beneficial owners of such shares.
The Board of Directors knows of no other business to be presented at the
annual meeting. Should any other business properly come before the meeting,
however, action may be taken thereon pursuant to the enclosed form of proxy,
which confers discretionary authority upon the attorneys named therein, or
their substitutes.
By Order of the Board of Directors
WOODWARD GOVERNOR COMPANY
Carol J. Manning
Corporate Secretary
December 1, 1994
<PAGE> Exhibit A
SECTION 2.8 OF THE BY-LAWS REQUIRING WRITTEN NOTICE
SECTION 2.8 NOMINATIONS FOR DIRECTOR. Nominations for election to the Board
of Directors may be made by the Board of Directors or by any stockholder
entitled to vote for the election of directors. Nominations other than those
made by the Board of Directors shall be made by notice in writing, delivered
or mailed by registered or certified United States mail, return receipt
requested, postage prepaid, to the Secretary of the Corporation, not less
than 20 days nor more than 50 days prior to any meeting of stockholders
called for the election of directors; provided, however, if less than 21
days' notice of the meeting is given to stockholders, such written notice
shall be delivered or mailed, as prescribed, not later than the close of
business on the seventh day following the day on which the notice of meeting
was mailed to the stockholders. Each such written notice shall contain the
following information:
(a) The name and residence address of the stockholder making the
nomination;
(b) Such information regarding each nominee as would have been required
to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had the nominees
been nominated by the Board of Directors; and
(c) The signed consent of each nominee to serve as a member of the Board
of Directors if elected, and the signed agreement of each nominee
that if elected he or she will be guided by the philosophy and
concepts of human and industrial association of the Corporation as
expressed in its Constitution in connection with the nominee's
service as a member of the Board of Directors.
Unless otherwise determined by the Chairman of the Board of Directors or by
a majority of the directors then in office, any nomination which is not made
in accordance with the foregoing procedure shall be defective, and any votes
which may be cast for the defective nominee shall be disregarded.
<PAGE>
APPENDIX
FOR PERFORMANCE GRAPH
A description of the performance graph material appears on Page 12 of the proxy
statement.
<PAGE>
WOODWARD GOVERNOR COMPANY
Proxy for Annual Meeting of the Shareholders - January 11, 1995
Solicited by the Board of Directors
The undersigned shareholder member of Woodward Governor Company, a Delaware
corporation, hereby appoints and constitutes Calvin C. Covert, J. Grant
Beadle, and John A. Halbrook, and each of them, the true and lawful attorneys
and proxies of the undersigned with several power of substitution, for and in
the name of the undersigned, to vote as designated below, including the right
to cumulate votes in the election of directors for such of the nominees as
the attorneys and proxies in their discretion may deem appropriate, all the
shares of stock of the corporation standing in the name of the undersigned on
November 14, 1994, at the annual meeting of the shareholders of the
corporation to be held at Rockford, Illinois, on January 11, 1995 at 10:00
A.M., local time, with authority to vote at said meeting or at any
adjournment thereof.
1. ELECTION OF DIRECTORS:
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below) below
Vern H. Cassens, Carl J. Dargene, and Thomas W. Heenan
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in the
space provided below.)
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
A majority of said attorneys or proxies who are present at the meeting shall
have, and may exercise, all of the powers of all said attorneys or proxies
hereunder.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO SPECIFICATION IS MADE, FOR THE
ELECTION OF THE BOARD'S NOMINEES TO THE BOARD OF DIRECTORS AND IN THE
DISCRETION OF THE NAMED PROXIES ON OTHER MATTERS PROPERLY BEFORE THE MEETING.
(continued, and to be signed, on other side)
<PAGE>
Dated
Signature
Print Name of Shareholder
Signature
Print Name of Shareholder
Please sign exactly as name appears at the left. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
