December 4, 1995
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 10, 1996 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
John A. Halbrook
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 10, 1996
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 10, 1996, 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;
2. To adopt the 1996 Long-Term Incentive Compensation Plan;
and
3. 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 13,
1995 are entitled to vote at the meeting.
By Order of the Board of
Directors
WOODWARD GOVERNOR COMPANY
Carol J. Manning
Corporate Secretary
December 4, 1995
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 10, 1996
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 10, 1996
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, 1995, including audited financial statements, is
included with this Proxy Statement. This Proxy Statement was
mailed to shareholder members on or about December 4, 1995.
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. A majority of the votes cast by holders of Common Stock
is required to adopt the 1996 Long-Term Incentive Compensation
Plan.
The shares represented by proxies will be voted as directed or,
if no specification is made, "FOR" the election of the Board's
nominees to the Board of Directors, "FOR" the adoption of the
1996 Long-Term Incentive Compensation Plan and, in the discretion
of the named proxies, on other matters properly before the
meeting.
The Board of Directors has fixed November 13, 1995 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 13, 1995, the Company had
outstanding 2,901,578 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 13, 1995
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:
<TABLE>
<CAPTION>
Shares of Common Stock Percent of
Beneficially Owned Common Stock
Name November 13, 1995 Outstanding
<S> <C> <C>
Principal Holders
Woodward Governor Company
Profit Sharing Trust
5001 North Second Street
Rockford, Illinois 61125-7001 719,072 (1) 24.78%
AMCORE Bank N.A., Rockford
501 Seventh Street
Rockford, Illinois 61110-0037 280,018 (2) 9.65%
Mary B. Bittle
111 Emerson Street, # 643
Denver, Colorado 80218 194,075 (3) 6.69%
Quest Advisory Corp.
Quest Management Company
Charles M. Royce
1414 Avenue of the Americas
New York, New York 10019 190,539 (4) 6.57%
Non-Director Executive Officers
C. Phillip Turner
Vice President 5,974 (5) .21%
Duane L. Miller
Vice President 2,238 (5) .08%
Peter A. Gomm
Vice President 3,339 (5) .12%
All directors and executive
officers as a group - 14 persons 45,215 (5)(6) 1.56%
</TABLE>
(1) Shares owned by the Woodward Governor Company Deferred
Profit Sharing Plan are held by Vanguard Fiduciary Trust as
Trustee. The Woodward Stock Plan portion of the Plan holds
719,072 shares of Common Stock. 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) The Bank has advised the Company 280,018 shares are owned by
the Bank as trustee. Included are 153,659 shares in which Mary
B. Bittle has a beneficial interest.
(3) Private investor and retired Director. Includes 58,315
shares held by the Irl 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, 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.
(4) Based on Schedule 13G as filed by Quest Advisory Corp. and
Quest Management Company with the Securities and Exchange
Commission on February 10, 1995.
(5) Includes shares (does not include fractional shares)
allocated to participant accounts of executive officers under
the Woodward Governor Company Deferred Profit Sharing Plan.
Plan participants direct the Trustee to vote the shares
allocated to participant accounts under the Woodward Stock
Plan portion of the Plan.
(6) See table under "ELECTION OF DIRECTORS."
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, 1995 have been timely made except that a Form 4 was
inadvertently filed 17 days late for John A. Halbrook.
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. John A. Halbrook, Mark
Leum and Michael T. Yonker 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. Halbrook, Mr.
Leum and Mr. Yonker are directors of the Company 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 10, 1996 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.
The Board of Directors recommends a vote "FOR" the election of
the Board's nominees to the Board of Directors.
<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 13, 1995 (1) Outstanding
<S> <C> <C> <C>
Nominees for Election/Class III/
Term Expiring 1999
John A. Halbrook,
50, is Chairman and
Chief Executive
Officer of the Company 1991 2,181 0.08%
Mark Leum, 68, is
retired Vice
Chairman
of the Board of the Company (2) 1972 4,001 0.14%
Michael T. Yonker,
53, is President
and Chief Executive
Officer of Portec,
Inc., which has
operations in the
construction
equipment,
materials handling and
railroad products industries (3) 1993 1,509 0.05%
Incumbent Directors/Class II/
Term Expiring 1998
Vern H. Cassens, 63,
is Senior Vice
President and
Treasurer and Chief Financial Officer
of the Company 1977 10,758 0.37%
Carl J. Dargene, 65,
is Chairman,
President and Chief
Executive Officer
of AMCORE
Financial, Inc.,
Rockford, Illinois (4) 1990 2,109 0.07%
Thomas W. Heenan,
64, is a partner in
the law firm
of Chapman and Cutler,
Chicago, Illinois 1986 4,709 0.16%
Incumbent Directors/Class I/
Term Expiring 1997
J. Grant Beadle, 62,
is retired Chairman
and Chief Executive
Officer of Union
Special Corporation, a
manufacturer of industrial
sewing machines (5) 1988 1,489 0.05%
Lawrence E. Gloyd,
63, is Chairman and
Chief Executive
Officer of CLARCOR
Inc., Rockford,
Illinois, a
manufacturer of
filtration and
consumer
packaging products (6) 1994 1,523 0.05%
J. Peter Jeffrey,
62, is Vice
President of
Development at
Father Flanagan's
Boys' Home
in Boys Town, Nebraska 1981 1,631 0.06%
</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 (does not include fractional 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 Rochelle Bancorp, Inc.
(3) Serves as a director of Portec, Inc., Crown Anderson, Inc.
and Modine Manufacturing Company, Inc.
(4) Serves as a director of AMCORE Financial, Inc. and CLARCOR
Inc.
(5) Serves as a director of Portec, Inc.
(6) Serves as a director of CLARCOR Inc., AMCORE Financial,
Inc., Thomas Industries, Inc. and G.U.D. Holdings Ltd.
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 six 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 the following committees,
among others: 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 three
times during the year ended September 30, 1995.
The Compensation Committee consists of Mr. Dargene (Chairman),
Mr. Beadle, 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 twice during the year ended
September 30, 1995.
The Executive Committee consists of Mr. Halbrook (Chairman), Mr.
Beadle, Mr. Dargene and Mr. Gloyd. 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 once during the year
ended September 30, 1995.
The Selection Committee consists of Mr. Beadle (Chairman), 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 did not hold
any formal meetings during the year ended September 30, 1995.
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, Chairman 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 the year
ended September 30, 1995 exceeded $100,000.
