<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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ZENITH ELECTRONICS CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ZENITH ELECTRONICS CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
- --------------------------
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[COPYWHITE]
ANNUAL MEETING--APRIL 26, 1994
March 24, 1994
Dear Fellow Stockholder:
Your Board of Directors and management cordially invite you to attend the
Annual Meeting of Stockholders of Zenith Electronics Corporation to be held on
Tuesday, April 26, 1994, at 9:00 a.m. at Zenith's corporate headquarters, 1000
Milwaukee Avenue, Glenview, Illinois.
At this meeting, as set forth in the accompanying Notice of Annual Meeting
and Proxy Statement, stockholders are being asked to elect a Board of ten
directors to serve for the coming year, to ratify the selection of Arthur
Andersen & Co. as independent auditors for 1994, and to act on a stockholder
proposal if properly presented at the meeting.
It is very important that your shares are represented and voted at the
meeting. Accordingly, please sign, date and mail promptly the enclosed proxy in
the envelope provided for your convenience.
On behalf of your Board of Directors.
Sincerely,
/S/ JERRY K. PEARLMAN
Jerry K. Pearlman
PLEASE SIGN, DATE AND MAIL PROMPTLY
THE ENCLOSED PROXY CARD.
<PAGE> 3
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AND VOTED AT THIS MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND MAIL YOUR
PROXY CARD IN THE ENCLOSED ENVELOPE. THE IMMEDIATE RETURN OF YOUR PROXY WILL BE
APPRECIATED.
ZENITH ELECTRONICS CORPORATION
1000 MILWAUKEE AVENUE / / GLENVIEW, ILLINOIS 60025-2493
NOTICE OF ANNUAL MEETING
Glenview, Illinois, March 24, 1994
To the Stockholders of ZENITH ELECTRONICS CORPORATION:
The annual meeting of stockholders of ZENITH ELECTRONICS CORPORATION (the
"Company"), a Delaware corporation, will be held at the principal executive
offices of the Company, 1000 Milwaukee Avenue, Glenview, Illinois on April 26,
1994 at 9:00 A.M. for the following purposes:
(1) To elect ten directors to hold office for a term of one year and
thereafter until their successors shall have been duly elected and
qualified.
(2) To ratify the selection by the Board of Directors of Arthur
Andersen & Co. as independent auditors for the Company for the year ending
December 31, 1994.
(3) To act on a stockholder proposal which is set forth and described
in the attached proxy statement, if such proposal is properly presented at
the meeting.
(4) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The record date for stockholders entitled to notice of and to vote at the
meeting is February 28, 1994, at the close of business. The transfer books will
not be closed.
A copy of the Company's annual report containing financial statements for
the fiscal year ended December 31, 1993, was mailed to stockholders. That report
is not incorporated herein and does not constitute a part of the proxy
soliciting material.
It is desirable that as many stockholders as possible be represented at the
meeting, in person or by proxy. Whether or not you expect to attend the meeting
in person, please sign, date and mail the enclosed proxy card, which is being
solicited by the Board of Directors of the Company. Please act today! If you
later wish to attend the meeting, you may then withdraw your proxy and vote your
stock in person if you care to do so.
Please sign, date and mail your proxy card in the enclosed postage-paid
envelope.
ZENITH ELECTRONICS CORPORATION
David S. Levin, Secretary
<PAGE> 4
ZENITH ELECTRONICS CORPORATION
PRINCIPAL EXECUTIVE OFFICES
1000 MILWAUKEE AVENUE / / GLENVIEW, ILLINOIS 60025-2493
PROXY STATEMENT
The Board of Directors of ZENITH ELECTRONICS CORPORATION (the "Company")
has designated the persons named in the enclosed proxy as a proxy committee to
represent the stockholders of the Company of record as of February 28, 1994, who
do not attend the annual meeting of stockholders to be held April 26, 1994, but
who desire to have their stock represented and voted. The proxy and this proxy
statement were first mailed to stockholders on or about March 24, 1994.
The enclosed proxy is being solicited by and on behalf of the Board of
Directors of the Company. The proxy will be voted by the proxy committee named
therein, but may be revoked at any time before it is exercised. A stockholder
executing and returning a proxy has the power to revoke it at any time before it
is voted. A stockholder who wishes to revoke a proxy can do so by executing a
later-dated proxy relating to the same shares and delivering it to the Secretary
of the Company prior to the Annual Meeting, by giving written notice of
revocation to the Secretary prior to the Annual Meeting or by appearing in
person at the Annual Meeting and voting in person the shares to which the proxy
relates. Any written notice revoking a proxy should be sent to the Company, 1000
Milwaukee Avenue, Glenview, Illinois 60025-2493, Attention: David S. Levin,
Secretary.
A stockholder may, with respect to the election of directors (i) vote for
the election of all ten nominees named herein as directors, (ii) withhold
authority to vote for all such director nominees or (iii) vote for the election
of all such director nominees other than any nominee with respect to whom the
stockholder withholds authority to vote by so indicating on the proxy.
Withholding authority to vote for a director nominee has the legal effect of a
vote against such director nominee. A stockholder may, with respect to each
other matter specified in the notice of the meeting (i) vote "FOR" the matter,
(ii) vote "AGAINST" the matter or (iii) "ABSTAIN" from voting on the matter. A
vote to abstain from voting on a matter has the legal effect of a vote against
such matter. Shares will be voted as instructed in the proxy on each matter
submitted to stockholders. If no instructions are given, the proxy committee
will vote the shares for the election of all ten nominees named herein as
directors, for the ratification of the selection of the Company's independent
auditors and against the stockholder proposal if it is properly presented at the
Annual Meeting.
A proxy submitted by a stockholder may indicate that all or a portion of
the shares represented by such proxy are not being voted by such stockholder
with respect to a particular matter. This could occur, for example, when a
broker is not permitted to vote stock held in street name on certain matters in
the absence of instructions from the beneficial owner of the stock. The shares
subject to any such proxy which are not being voted with respect to a particular
matter (the "non-voted shares") will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. (Shares voted to abstain as to a
particular matter will not be considered non-voted shares.) Approval of each
matter specified in the notice of the meeting requires the affirmative vote of a
majority of the shares of common stock of the Company present in person or by
proxy at the Annual Meeting and entitled to vote on such matter. Accordingly,
non-voted shares with respect to such matters will not affect the determination
of whether such matters are approved or the outcome of the election of
directors.
If any person named in this proxy statement as a nominee for election as a
member of the Board of Directors of the Company shall become unavailable for
election for any reason, the proxy committee will vote the shares of stock
represented by the proxies received by it for the election of such person as the
Board of Directors of the Company shall approve in substitution for such nominee
or the Board of Directors may elect not to fill the vacancy and reduce the
number of directors.
<PAGE> 5
ELECTION OF DIRECTORS
The terms of all of the directors expire at the 1994 Annual Meeting. Mr. G.
Ralph Guthrie, a director since 1984, died in July 1993 and his position on the
board remained open.
At its January 24, 1994 meeting, the Board nominated the following current
directors for election to the Board for a one year term: Harry G. Beckner, T.
Kimball Brooker, David H. Cohen, Charles Marshall, Gerald M. McCarthy, Andrew
McNally IV, Albin F. Moschner, Jerry K. Pearlman and Peter S. Willmott. The
Board also nominated Ilene S. Gordon, Senior Vice President-Total Quality
Management/Corporate Development, Packaging Corporation of America, a Tenneco
company, for election to the Board for a one year term. Seven of the ten
nominees for election as directors are independent (neither current nor former
employees of the Company).
The affirmative vote of the holders of a majority of the shares of common
stock of the Company present in person or represented by proxy at the Annual
Meeting and entitled to vote on the election of directors is required to elect
the nominees.
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BACKGROUND INFORMATION
- --------------------------------- --- -------- ---------------------------------------------
<S> <C> <C> <C>
Harry G. Beckner................. 65 1973 Management Consultant since 1984. Also
Director of H.E. Butt Grocery Company and J.
Sainsbury's USA, Inc.
T. Kimball Brooker............... 54 1989 President, Barbara Oil Company (investments
and oil and gas exploration) since 1989;
Managing Director, Chicago Office, Morgan
Stanley & Co. Incorporated, 1978-1988. Also
Director of Boulevard Bancorp, Inc., Cutler
Oil & Gas Corporation, Arthur J. Gallagher &
Co. and Miami Corporation.
David H. Cohen................... 55 1990 Provost, Northwestern University since 1992;
Vice President for Research and Dean of the
Graduate School, Northwestern University
1986-1991.
Ilene S. Gordon.................. 40 -- Senior Vice President-Total Quality Manage-
ment/Corporate Development since 1992; Vice
President and Area General Manager,
Containerboard Products, 1990-1992; Vice
President and General Manager, Specialty
Business, 1988-1990, Packaging Corporation of
America, a Tenneco company (manufacturer of
packaging materials).
Charles Marshall................. 64 1990 Retired; Vice Chairman of the Board, American
Telephone and Telegraph Company, 1985-1989.
Also Director of Ceridian Corporation, GATX
Corporation, Grumman Corp., Hartmarx
Corporation, Sonat, Inc. and Sunstrand
Corporation.
Gerald M. McCarthy............... 52 1992 Executive Vice President, Sales and Marketing
and member of the Office of the Chairman
since 1993, Senior Vice President, Sales and
Marketing, and member of the Office of the
President 1991-1993, Zenith Electronics
Corporation; President, Zenith Sales Company
Division of Zenith since 1983.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BACKGROUND INFORMATION
- --------------------------------- --- -------- ---------------------------------------------
<S> <C> <C> <C>
Andrew McNally IV................ 54 1990 Chairman and Chief Executive Officer since
1993, President and Chief Executive Officer
1978-1993, Rand McNally & Company (printing,
publishing and map making). Also Director of
Allendale Mutual Insurance Company, Hubbell
Incorporated, The Latin American Discovery
Fund, Inc. and Mercury Finance Co.
Albin F. Moschner................ 41 1992 President and Chief Operating Officer and
member of the Office of the Chairman since
1993, Senior Vice President, Operations and
member of the Office of the President
1991-1993, Zenith Electronics Corporation;
Chief Operating Officer, Tricord Systems
Inc., (computer manufacturer) 1990-1991;
Chief Operating Officer, ETA Systems, Inc.,
(computer manufacturer) 1988-1989; Assistant
General Manager, Rochester site,
International Business Machines Corp.
1984-1988. Also Director of Pella
Corporation.
Jerry K. Pearlman................ 54 1983 Chairman and Chief Executive Officer since
1993, Chairman, President and Chief Executive
Officer 1983-1993, Zenith Electronics
Corporation. Also Director of First Chicago
Corporation and its subsidiary The First
National Bank of Chicago, and Stone Container
Corporation.
Peter S. Willmott................ 56 1990 Chairman of the Board, MacFrugal's Bargains
-Close-outs Inc. (retailing) since 1990;
Chairman and Chief Executive Officer,
Willmott Services, Inc. (retailing,
consulting and investing) since 1989;
Chairman, President and Chief Executive
Officer, Carson Pirie Scott & Company (retail
and food service industries), 1983-1989. Also
Director of Browning-Ferris Industries, Inc.,
Federal Express Corporation, International
Multifoods Corporation, Maytag Corporation
and Morgan Keegan & Company, Inc.
</TABLE>
BOARD OF DIRECTORS, COMMITTEES AND DIRECTORS' COMPENSATION
To permit the Board of the Company to more efficiently discharge its
duties, the Company has four standing Board Committees: the Audit Committee; the
Organization and Compensation Committee; the Executive Committee; and the
Nominating Committee. The entire membership of each of these committees,
including the Chairman, consists of independent directors. Committee membership
and functions are set out below.
The Audit Committee of the Board of Directors, which currently consists of
Messrs. McNally (Chairman), Beckner and Brooker, met four times in 1993. The
Committee nominates the Company's independent auditors and reviews the auditing
engagement, the fees charged by the independent auditors and the Company's
internal auditing program.
The Organization and Compensation Committee, which currently consists of
Messrs. Willmott (Chairman), Cohen and Marshall, met three times in 1993. The
Committee establishes compensation policies, as well as salary ranges, salaries
and incentive awards for executives. In addition, the Committee approves
employment contracts and authorizes grants of stock and stock options under
Zenith stock incentive plans.
3
<PAGE> 7
The Executive Committee, which currently consists of Messrs. Brooker
(Chairman), McNally and Willmott, met eleven times in 1993. When the Board is
not in session, the Executive Committee has all of the authority of the Board
except with respect to amendments of the articles of incorporation or by-laws,
mergers, dispositions of substantially all of the assets of the Company,
dissolution of the Company, declaration of dividends or the election,
compensation or removal of officers of the Company or members of the Committee.
In October, 1992, the Board changed its regular meeting schedule from quarterly
to monthly and established a Finance Committee comprised exclusively of
independent directors. In August 1993, the Finance Committee was established as
the Executive Committee and, in addition to the aforesaid authority, carried on
the functions formerly assigned to the Finance Committee. The functions of the
Finance Committee were to review and provide advice on financial issues, review
forecasts, budgets and financing plans, approve terms and conditions of any
debt, equity or other financing, review proposed agendas for meetings of the
Board and determine the form and scope of historical and forward-looking
financial data and the frequency with which such data is supplied to the Board.
The Executive Committee meets with management at least once during the period
between regular monthly board meetings. During 1993, it met eight times as the
Finance Committee and three times as the Executive Committee.
The Nominating Committee, which currently consists of Messrs. Willmott
(Chairman), Cohen and McNally, met once in 1993. The duties of the Nominating
Committee are to review Board membership requirements, review potential
candidates and propose nominees for the Board. The Committee will consider
nominees recommended by stockholders if such recommendations are submitted in
writing, on a timely basis as provided in the Company's by-laws, accompanied by
a description of the proposed nominees' qualifications and other relevant
biographical information and an indication of the consent of the proposed
nominee.
The Company's Board of Directors met twelve times during 1993. All of the
incumbent directors attended 93% or more of the meetings of the Board and of the
committees of which they were members.
Directors of the Company who are also employees receive no remuneration for
serving on the Board. Directors who are not employees are compensated at the
rate of $18,000 per year, payable in quarterly installments, plus 1,000 shares
of Company stock per year to be issued annually on the first Tuesday of
December, plus an option to purchase 2,000 shares of Company stock per year to
be issued annually on the day following the annual meeting of stockholders at
the market price on such date. The issuance of shares and options are provided
for in the Non-Employee Directors' Stock Plan approved by stockholders in 1992.
The Chairman of the Audit Committee and the Organization and Compensation
Committee each receives $2,000 annually for serving in those capacities and the
Chairman of the Executive Committee receives $25,000 annually. In addition,
non-employee directors receive $1,000 for each Board meeting and for each
Committee meeting attended, plus reimbursement of expenses. In 1987 the Company
adopted a Contingent Compensation Plan for non-employee directors which was
replaced by the Non-Employee Directors' Stock Plan in 1992. The number of
phantom stock appreciation units granted to each named non-employee director in
previous years under the Contingent Compensation Plan (all of which are vested)
are as follows: Mr. Beckner, 5,000; Mr. Brooker, 3,000; Messrs. Cohen, Marshall,
McNally and Willmott, 2,000. The units are valued at the closing price of the
Company's stock on the date of grant. Participants are paid for each unit the
amount by which the average price of a share of the Company's stock over the 20
trading days immediately preceding the distribution date exceeds the grant
price. Distributions may be, at the election of the participant, in a lump sum,
in five annual installments or ten annual installments commencing on the
distribution date. Participants may elect a distribution date which is two years
from the date of grant, or 30 days after the participant ceases to be a
director, or a specified date not earlier than the participant's 65th birthday.
No amounts have been distributed to current directors pursuant to the Contingent
Compensation Plan.
Directors also participate in the Directors' Retirement Plan which provides
for an annual retirement benefit of $11,000, for directors who have served on
the Board for five years who retire after the age of 62. For purposes of the
Plan, years of service on the Board do not include periods during which the
director is a salaried officer of the Company or a subsidiary. The benefit is
payable in equal quarterly installments during the director's lifetime for a
period equal to but not in excess of the number of years of service on the
Board. In the event of a change in control of the Company, directors otherwise
entitled to retirement benefits under the Plan are entitled to receive, in a
lump sum, the discounted present value of those benefits.
4
<PAGE> 8
Directors who are not employees also have agreements with the Company which
provide that in the event of a change in control of the Company, the directors
will be paid a lump sum amount equal to the quarterly installments of their
annual fee from the date of the change in control to the next scheduled annual
meeting. "Change in control" for purposes of the agreements, the Directors'
Retirement Plan and the Contingent Compensation Plan is defined as the
acquisition by a third party of shares entitled to cast 25% or more of the votes
that may be cast for directors, or a tender offer or other transaction resulting
in the persons who were directors prior to the transaction ceasing to constitute
a majority of the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following lists the beneficial ownership of the Company's common stock,
of all persons who are known by the Company, as of February 28, 1994, to
beneficially own more than five percent of the outstanding shares of the common
stock of the Company:
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS(1)
- --------------------------------------------------------------- ----------------------- ---------
<S> <C> <C>
The Crabbe Huson Company....................................... 2,010,200(2) 5.1%
121 S.W. Morrison
Portland, Oregon 97204
Reliance Financial Services Corporation........................ 3,688,524(3) 8.5%
55 East 52nd Street
New York, New York 10055
The Zenith Profit Sharing Trust................................ 3,161,137(4) 7.8%
First National Bank of Chicago, Trustee
One First National Plaza
Chicago, Illinois 60670
</TABLE>
- ------------
(1) Percentages based on shares issued and outstanding on February 28, 1994.
(2) The Company has been informed by The Crabbe Huson Company that as of
December 31, 1993 it had sole voting power and sole dispositive power with
respect to all 2,010,200 shares.
(3) The Company has received from Reliance Financial Services Corporation a
Schedule 13G which states that as of December 31, 1993 it had sole voting
and dispositive power with respect to all shares based on the assumed
conversion of 8.5% Senior Subordinated Convertible Debentures due 2000 (the
Debentures). The percent of class is calculated assuming that Reliance
Financial Services Corporation is the only holder of the Debentures that
converts such Debentures.
(4) The Company has been informed by The First National Bank of Chicago that as
of February 28, 1994 it shares voting and investment power with respect to
all shares held as Trustee of The Zenith Profit Sharing Trust.
SECURITY OWNERSHIP OF MANAGEMENT
The directors and executive officers of the Company as a group beneficially
own 1.4% of the Company's common stock. No director or nominee for election as a
director or executive officer owns in excess of 1% of the Company's common
stock. Included in the following table is the number of shares of the Company's
common stock beneficially owned by each director of the Company and each nominee
for election as a
5
<PAGE> 9
director of the Company, each of the executive officers named in the Summary
Compensation Table below and the directors and all executive officers of the
Company as a group as of February 28, 1994.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
-------------------------
OBTAINABLE
THROUGH STOCK
NAME OF BENEFICIAL OPTION
OWNER OWNED(1) EXERCISE(2)
- ----------------------- -------- -------------
<S> <C> <C>
Harry G. Beckner....... 3,300 4,000
T. Kimball Brooker..... 8,000 4,000
David H. Cohen......... 3,500 4,000
Ilene S. Gordon........ 0 0
Charles Marshall....... 8,000 4,000
Gerald M. McCarthy..... 18,453 (3) 63,500
Andrew McNally IV...... 5,000 4,000
Albin F. Moschner...... 1,408 52,500
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
-------------------------
OBTAINABLE
THROUGH STOCK
NAME OF BENEFICIAL OPTION
OWNER OWNED(1) EXERCISE(2)
- ----------------------- -------- -------------
<S> <C> <C>
Jerry K. Pearlman...... 66,368 (3) 182,500
Peter S. Willmott...... 23,000 4,000
Kell B. Benson......... 5,077 15,000
John Borst, Jr......... 5,000 33,596
Directors and All
Executive Officers as
a Group (13
persons)............. 153,067 406,596
</TABLE>
- ------------
(1) The persons named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them except for the
restricted shares referred to in note 3.
(2) Includes shares of common stock which, as of February 28, 1994, were subject
to outstanding stock options exercisable within 60 days.
(3) Includes restricted shares issued as described in Employment Agreements
section below.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table sets forth, for the periods
indicated, the cash compensation and certain other components of compensation of
those persons who were, at December 31, 1993, the chief executive officer of the
Company and the other four most highly compensated executive officers of the
Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------------------------------- -------------------------------
OTHER RESTRICTED SECURITIES
NAME AND PRINCIPAL ANNUAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($)(2) OPTIONS/SARS(#) COMPENSATION($)(3)
- ------------------- ---- --------- -------- ------------------ ------------ --------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jerry K. 1993 $ 450,000 $ 0 $ 0 $ 0 35,000 $ 27,000
Pearlman.........
Chairman and 1992 450,000 0 0 0 35,000 27,000
Chief Executive 1991 449,985 0 0 97,500 30,000 26,999
Officer
Albin F. 1993 231,667 0 0 0 15,000 13,900
Moschner(4)......
President and 1992 202,500 96,000 (5) 53,342(6) 0 15,000 2,650
Chief Operating 1991 40,256 24,000 (5) 0 0 40,000 0
Officer
Gerald M. 1993 191,333 0 0 0 15,000 11,480
McCarthy.........
Executive Vice 1992 178,333 0 0 0 15,000 10,700
President-
Sales and Marketing 1991 169,750 35,000 0 0 10,000 10,185
and
President, Zenith
Sales Company
John Borst Jr...... 1993 156,000 0 0 0 8,000 9,360
Vice President- 1992 152,500 0 0 0 8,000 9,150
General Counsel 1991 147,083 23,200 0 0 8,000 8,825
Kell B. Benson..... 1993 154,485 0 0 0 10,000 9,269
Vice 1992 150,125 0 0 0 10,000 9,008
President-Finance
and
Chief Financial 1991 142,917 30,900 0 0 10,000 8,575
Officer
</TABLE>
- ------------
(1) Except as disclosed in note 6, Other Annual Compensation does not reflect
the value of perquisites and other personal benefits since such compensation
does not exceed minimum disclosure thresholds.
6
<PAGE> 10
(2) The restricted stock value shown in the table for Mr. Pearlman is based on
the closing price of the Company's common stock on the date of grant for
10,000 shares issued for performance under the 1991 management incentive
plan. These shares vested on March 1, 1993. As of December 31, 1993, Mr.
Pearlman held an aggregate 37,500 shares of restricted stock valued at
$262,500, and Mr. McCarthy held an aggregate 10,000 shares of restricted
stock valued at $70,000. All of the restricted stock held by Mr. Pearlman
and Mr. McCarthy vest as described under "Employment Agreements."
(3) The amounts included in this column reflect the annual contribution to the
Company's defined contribution plan for each Named Executive Officer and for
Mr. Pearlman, contractual excess retirement benefits, as described in the
Employment Agreements section below, in the amount of $12,850 for the year
1993.
(4) Mr. Moschner began his employment with the Company on October 21, 1991.
(5) Pursuant to a separate agreement with Mr. Moschner relating to his initial
employment, bonuses in the amounts shown for 1991 and 1992 were guaranteed.
(6) Includes certain perquisites and personal benefits of which $47,277 is
reimbursement of moving, housing and relocation costs incurred in connection
with acceptance of employment with the Company.
EMPLOYMENT AGREEMENTS
Mr. Pearlman has an employment agreement with the Company pursuant to which
37,500 shares of restricted stock were issued to him in 1987. The shares are
subject to forfeiture upon occurrence of conditions described below. The
restrictions will lapse as to one-fifteenth of such shares per year over a 15
year post-employment period. If Mr. Pearlman dies before the restrictions have
lapsed as to all of the shares, then, as to those shares which remain subject to
the restrictions, the Company may, at its option, either (a) repurchase such
shares at the higher of the then market price or $20 per share with the purchase
price being paid in installments over 15 years or such lesser number of years
remaining in the post-employment period, or (b) waive all restrictions on the
sale of such shares and pay to Mr. Pearlman's estate a lump sum equal to the
excess, if any, of $20 per share over the market value of such shares on the
date of death. If the shares with respect to which the restrictions lapse in a
single year have a fair market value of less than $50,000, the Company will pay
to Mr. Pearlman the difference between the fair market value of such shares and
$50,000.
Mr. McCarthy has an employment agreement with the Company pursuant to which
10,000 shares of restricted stock were issued to him in 1987. The shares are
subject to forfeiture upon occurrence of the conditions described below. The
restrictions will lapse as to one-fifteenth of such shares per year over a 15
year post-employment period. If Mr. McCarthy dies before the restrictions have
lapsed as to all of the shares, then, as to those shares which remain subject to
restrictions, the Company may, at its option, either (a) repurchase the shares
at the higher of the then market price or $23.125 per share with the purchase
price being paid in installments over 15 years or such lesser number of years
remaining in the post-employment period, or (b) waive all restrictions on the
sale of such shares and pay to Mr. McCarthy's estate a lump sum equal to the
excess, if any, of $23.125 per share over the market value of such shares on the
date of death.
The agreements with Mr. Pearlman and Mr. McCarthy impose upon the employee
an obligation to consult with and to refrain from competition with the Company
during the post-employment period. If the employee violates his consulting
agreement, engages in certain competitive activities without the consent of the
Company, or is terminated by the Company for a violation of law which adversely
affects the economic interests of the Company, then all stock which remains
subject to restrictions will be forfeited. The agreements provide that there
will be no forfeiture upon termination of employment for good reason (change in
status, pay or benefits) after a change in control of the Company. Change in
control is defined by reference to the termination and change of control
agreements described below. The agreements limit the obligation to provide
assistance and information to the Company to one business day per month and
limit the obligation to refrain from competitive activities to a two-year period
following termination of employment.
All of the Named Executive Officers have employment agreements which
provide a death benefit in the amount of one and one-half times the individual's
salary during the period of employment and for a period of
7
<PAGE> 11
ten years thereafter. At the end of each of the ten years following the
cessation of employment, the amount of death benefit decreases by ten percent of
the original amount. The agreements also provide supplemental long-term
disability benefits in the amount of two-thirds of the amount by which the
individual's base salary exceeds the maximum insured salary under the Company's
long-term disability program. The supplemental long-term disability benefits are
currently limited to $52,000 per year. All of the employment contracts also
provide that the Company will pay to the employee, pursuant to the contract, the
amount by which the benefits payable under the Company's retirement plan
("Zenith Salaried Profit Sharing Retirement Plan") exceed the benefit
limitations imposed by the Employee Retirement Income Security Act or the
Internal Revenue Code.
TERMINATION AND CHANGE OF CONTROL AGREEMENTS
The Company has recognized that corporate takeovers have a widespread
distracting effect on management personnel of many corporations. Accordingly, in
order to ensure the retention of key executive personnel and to alleviate the
distracting effects of any change in corporate control, the Company, in common
with many other corporations, has entered into agreements with selected key
members of management.
The agreements, which are outstanding with the Named Executive Officers,
provide for severance pay and benefits in the event of termination of employment
within two years after a change in control of the Company. The agreements define
a change in control as either the acquisition by a third party of 25% or more of
the voting power to elect directors or a change in majority of the Board of
Directors resulting from a tender or exchange offer, merger or other business
combination, sale of assets, contested election or any combination of such
causes. The agreements define severance pay as the highest monthly salary in the
three years preceding termination plus one-twelfth of the annual incentive award
which the employee would have received in the year of termination assuming
performance at the target award level.
Under the agreements, severance pay and benefits will not be paid if
employment is terminated because of death, retirement or disability, or by the
Company for cause, or by the employee other than for good reason. The agreements
provide for a lump sum payment equal to 36 months severance pay (reduced from 48
months in the Chief Executive Officer's agreement effective in December 1993).
The agreements also provide that upon termination within 24 months after a
change in control of the Company, the employee will receive: (1) an amount equal
to the excess of the highest per share price paid pursuant to the tender or
exchange offer or other change of control over the closing price of the
Company's shares on the day such employee receives or issues a notice of
termination times the number of shares owned by the employee; and (2) upon the
extinguishment of the employee's stock option rights, an amount equal to the
aggregate spread between the exercise price of all the employee's options
(whether or not exercisable) and the higher of the closing price of the
Company's shares on the date of the employee's termination or the highest per
share price paid pursuant to the tender offer, exchange offer or other change in
control. Other provisions of the agreements require the Company to maintain for
the benefit of the employee, for a period of two years after his termination,
all employee benefits including group medical and dental, health and accident,
long term disability and group life insurance as well as any executive insurance
program in which the employee was participating at the time of his termination.
The agreements also provide that if, by reason of the federal income tax
provisions imposing an excise tax on "excess parachute payments," the net
after-tax proceeds to be realized by the individual would be increased by
reducing the payments so that there were no excess parachute payments subject to
the excise tax, then the payments shall be reduced so as to maximize the net
after-tax proceeds to the individual. The Company is obligated under the
agreements to reimburse the employee for legal fees and expenses incurred in
successfully enforcing the agreement. If the Named Executive Officers had been
terminated following a change in control on December 31, 1993, they would be
entitled to receive the following amounts as severance pay and in consideration
of stock option rights: Mr. Pearlman--$2,058,750; Mr. Moschner--$1,239,000; Mr.
McCarthy--$888,500; Mr. Benson--$686,750; Mr. Borst--$633,900.
8
<PAGE> 12
OPTION/SAR GRANTS IN 1993
Shown below is information on grants of options to purchase common stock to
the Named Executive Officers made in 1993. No stock appreciation rights (SARs)
were granted to the Named Executive Officers during 1993.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES PERCENT OF TOTAL EXERCISE OR GRANT DATE
UNDERLYING OPTIONS/SARS OPTIONS/SARS GRANTED TO BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) EMPLOYEES IN 1993 ($/SH)(2) DATE VALUE($)(3)
- --------------------- ----------------------- ----------------------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Jerry K. Pearlman.... 35,000 8.3% $7.25 2/23/2003 $ 169,881
Albin F. Moschner.... 15,000 3.6 7.25 2/23/2003 72,806
Gerald M. McCarthy... 15,000 3.6 7.25 2/23/2003 72,806
John Borst Jr........ 8,000 1.9 7.25 2/23/2003 38,830
Kell B. Benson....... 10,000 2.4 7.25 2/23/2003 48,537
</TABLE>
- ------------
(1) All options granted and reported in this table have the following terms:
each option vests over a two-year period, with 50% of the shares becoming
exercisable at the beginning of the second year after the date of grant and
with the entire option becoming exercisable at the end of the second year.
(2) Exercise price is the fair market value of the common stock on the date of
grant.
(3) Based on the Black-Scholes option pricing model adapted for use in valuing
executive stock options. In calculating the grant date present values set
forth in the table, a factor of 47% has been assigned to the volatility of
the common stock based on the rolling 60 day daily stock market quotations
for the two years preceding the date of grant, no dividend yield on the
common stock has been assumed, the risk-free rate of return has been fixed
at 5.92%, the rate for a ten year U.S. Treasury Note on the date of grant as
reported in the New York Times, and the exercise of the options has been
assumed to occur at the end of the actual option term of ten years. There is
no assurance that these assumptions will prove to be true in the future.
Consequently, the actual value, if any, an executive may realize will depend
on the common stock price on the date the option is exercised, so that there
is no assurance the value realized by an executive will be at or near the
value estimated by the Black-Scholes model.
AGGREGATED OPTION/SAR EXERCISES IN 1993 AND YEAR-END OPTION/SAR VALUES
Shown below is information concerning the exercise in 1993 of options to
purchase Company common stock by the Named Executive Officers and the
unexercised options to purchase Company common stock held by the Named Executive
Officers at December 31, 1993.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
ON VALUE YEAR-END(#) YEAR-END($)(2)
EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jerry K. Pearlman............ 0 $ 0 147,500 52,500 $ 3,750 $ 0
Albin F. Moschner............ 10,000 21,250 37,500 22,500 18,750 0
Gerald M. McCarthy........... 0 0 48,500 22,500 1,250 0
John Borst Jr................ 8,000 20,000 25,596 12,000 0 0
Kell B. Benson............... 0 0 29,400 15,000 1,250 0
</TABLE>
- ------------
(1) The value realized equals the aggregate amount of the excess of the closing
price of the Company's common stock on the date of exercise over the
exercise price.
(2) The value is calculated based on the aggregate amount of the excess of $7.00
(the closing price of the Company's common stock on December 31, 1993) over
the applicable exercise prices.
9
<PAGE> 13
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is the report of the Organization and Compensation Committee
on 1993 executive compensation:
BASE SALARIES
Base salaries for Zenith executives represent compensation for the
execution of defined job accountabilities. Using market data from several
nationally recognized executive compensation surveys, base salaries and salary
range midpoints are annually compared to peer level positions in companies of
similar size in the electrical/electronics and consumer durables industries
including some, but not all, of the companies used in the peer group in the
performance graph below.
The 1993 salary and range midpoint of each executive officer, including the
Chief Executive Officer, were targeted below the relevant median salary of
comparison group companies. In 1993, base salaries for all executives were
frozen at 1992 levels. In August 1993, Messrs. Moschner and McCarthy were
promoted to President and Chief Operating Officer and Executive Vice
President-Sales and Marketing, respectively. Both individuals received
promotional increases at that time.
ANNUAL INCENTIVES
Annual incentives are the vehicle to recognize and reward accomplishments
in a given year. Using the same survey sources as consulted for base salaries,
annual incentive target awards are compared with peer level positions' awards in
companies of similar size and industry. Target payouts for Zenith executives are
defined as a percent of the relevant salary range midpoint. The percent of
midpoint targets were set at median levels to the comparator group.
The 1993 plan for the Named Executive Officers was based entirely on
overall corporate performance versus targeted profit before taxes. The
Organization and Compensation Committee established threshold, target and
maximum goals for which there were payment opportunities. The 1993 threshold
goal represented a significant performance improvement over 1992 results.
The annual incentive plan for the Chief Executive Officer was the same as
that for the other Named Executive Officers.
This fiscal year's financial performance failed to meet the corporate
financial threshold. Therefore, no bonus payments were made to any executives
under this plan.
LONG TERM INCENTIVES
The Zenith Stock Incentive Plan allows executives and key employees the
opportunity to participate in the long term growth and financial success of the
Company through earnings based entirely on common stock performance, thus
linking the interests of the Company's employees with those of its shareholders.
The Organization and Compensation Committee administers and authorizes grants
under the plan. All stock options are non-qualified options, granted at the
market price on the date of grant for a ten-year term. In 1991, the Committee
reviewed data on the option grant practices of other large companies derived
from a nationally recognized executive compensation survey and implemented
guidelines calling for share awards designed to achieve long-term earnings of a
targeted multiple of 2 to 2.5 times base pay over a 5 year period based on
future stock price appreciation. In 1993, options were granted to the Chief
Executive Officer and other Named Executive Officers based on the share award
guidelines established in 1991.
1993 TAX LAW--IRS CODE, SECTION 162(M)
The Omnibus Budget Reconciliation Act of 1993 limits the allowable
deduction for compensation paid by a publicly-held corporation effective January
1, 1994. The limit which applies to up to 5 executives is $1 million per
executive, per year, subject to certain defined exceptions.
10
<PAGE> 14
The Committee has considered the requirements of the law based on the
information available through conference committee reports and proposed
regulations. Under the transition rules provided in the regulations, stock
option plans that meet the requirements under SEC Rule 16b-3 are deemed to meet
the performance-based compensation exception and need not be amended until 1997.
Pending further guidance from the Internal Revenue Service, the Company
will retain its current mix of compensation elements for the Named Executive
Officers (base salary, short-term and long-term incentives) and continue to
utilize long term incentives (stock options) under the current stock incentive
plan which meets the SEC Rule 16b-3 criteria and which expires in 1997. To
ensure continued deductibility of future long-term grants, the Company intends
to submit a new plan for shareholder approval at that time.
This foregoing report was furnished by the members of the Organization and
Compensation Committee.
Peter S. Willmott, Chairman
David H. Cohen
Charles Marshall
PERFORMANCE GRAPH
Set forth below is a line graph comparing the Company's cumulative total
stockholder return on its common stock, for a five-year period (December 31,
1988 to December 31, 1993) with the cumulative total return of the Standard &
Poor's 500 Stock Index (which includes the Company), and a peer group of
companies selected by the Company for purposes of the comparison. The Company
developed a group of peer issuers (whose stock is traded on the New York Stock
Exchange) due to lack of an appropriate published industry peer group index. The
peer group includes companies involved extensively in consumer electronics
(Matsushita Electric Industrial Co. Ltd.; Sony Corp.; Philips Electronics N.V.;
Emerson Radio Corp.) and consumer durables manufacturers operating primarily in
North America (Maytag Corp.; Fedders Corp.).
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG S&P 500, PEER GROUP AND ZENITH
FISCAL YEAR ENDING DECEMBER 31 (1)
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) S&P 500 PEER GROUP ZENITH
<S> <C> <C> <C>
1988 100 100 100
1989 131.69 94.47 67.11
1990 127.60 64.97 34.87
1991 166.47 65.96 38.82
1992 179.15 55.78 30.92
1993 197.21 83.32 36.84
</TABLE>
11
<PAGE> 15
At the end of 1989, the Company sold its computer business, which in 1988
and 1989 accounted for approximately 50 percent of consolidated sales. Set forth
below is a line graph comparing the Company's cumulative total stockholder
return on its common stock for a four-year period (December 31, 1989 to December
31, 1993) with the cumulative return of the Standard & Poor's 500 Stock Index
and the peer group.
COMPARISON OF FOUR-YEAR CUMULATIVE TOTAL RETURN
AMONG S&P 500, PEER GROUP AND ZENITH
FISCAL YEAR ENDING DECEMBER 31 (1)
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) S&P 500 Peer Group Zenith
<S> <C> <C> <C>
1989 100 100 100
1990 96.90 68.77 51.96
1991 126.42 69.82 57.84
1992 136.05 59.09 46.08
1993 149.76 88.62 54.90
</TABLE>
- ------------
(1) Assumes that the value of the investment in Zenith common stock and each
index was $100 on December 31, 1988 on the five-year stock performance
comparison graph and December 31, 1989 on the four-year stock performance
comparison graph, and that all dividends were reinvested.
SELECTION OF AUDITORS
The Board of Directors of the Company has selected Arthur Andersen & Co. as
independent public accountants to examine the consolidated financial statements
of the Company for the year 1994 and to perform other accounting services. The
firm of Arthur Andersen & Co., an international firm of public accountants, has
performed such services for the Company since 1948. The Board of Directors
considers this firm well qualified. If not otherwise specified, the proxies will
be voted in favor of the selection of Arthur Andersen & Co. by the Board of
Directors. Representatives of that firm will be present at the meeting with the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE SELECTION OF
AUDITORS.
If the holders of a majority of the outstanding shares of common stock of
the Company present at the meeting in person or by proxy and entitled to vote on
the matter fail to ratify the selection of Arthur Andersen & Co. as independent
auditors, the Board of Directors will consider the selection of another
accounting firm.
12
<PAGE> 16
STOCKHOLDER PROPOSAL REGARDING CUMULATIVE VOTING
The Company has been advised by Messrs. Lewis D. and John J. Gilbert, 1165
Park Avenue, New York, New York 10128-1210 and Mr. Martin Glotzer, 7061 N.
Kedzie Avenue, Chicago, Illinois 60645, that they will cause a resolution to be
introduced at the Annual Meeting of Stockholders. Juliet G. Snyder and John J.
Gilbert, as trustees under the will of Minnie D. Gilbert, hold of record 245
shares of the Company's stock and also represent additional family interests of
200 shares of the Company's stock. Mr. Glotzer holds of record 100 shares of the
Company's stock. The text of their resolution and statement in support thereof
is as follows:
"RESOLVED: That the stockholders of Zenith Electronics Corporation,
assembled in annual meeting in person and by proxy, hereby request the
Board of Directors to take the steps necessary to provide for cumulative
voting in the election of directors, which means each stockholder shall be
entitled to as many votes as shall equal the number of shares he or she
owns multiplied by the number of directors to be elected, and he or she may
cast all of such votes for a single candidate, or any two or more of them
as he or she see fit.
"REASONS
"Continued very strong support along the lines we suggest was shown at
the last annual meeting when 29%, 1,650 owners of 4,945,580 shares, were
cast in favor of this proposal. The vote against included 1,620 unmarked
proxies.
"A law enacted in California provides that all state pension holding,
as well as state college funds, invested in shares, must be voted in favor
of cumulative voting proposals, showing increasing recognition of the
importance of this democratic means of electing directors.
"Also, the National Bank Act has provided for cumulative voting.
Unfortunately, in so many cases companies get around it by forming holding
companies without cumulative voting. Thus with so many banking failures the
result is that tax payers have to make up the losses. Banking authorities
have the rights to question the capability of directors to be on banking
boards. Unfortunately, in so many cases authorities come in after and say
the director or directors were not qualified. So there is no reason why
this could not be done for corporations under the SEC and banking
authorities.
"It has increasingly been recognized that fair and equitable
distribution of voting power is best secured when all the stockholders have
the right of cumulative voting. This is the purpose of cumulative voting,
it protects everyone, in our opinion.
"Because of the normal need to find new directors to help end the
continued losses of the company and the need for directors on the
compensation committee, we think cumulative voting is the answer. In
addition, some recommendations have been made to carry out the Valdez 10
points. The 11th should be to have cumulative voting and to end stagger
systems of electing directors, in our opinion.
"Alaska took away cumulative voting, over our objections, when it
became a state. Perhaps, if the citizens had insisted on proper
representation the disastrous Valdez oil spill may have been prevented if
environmental directors were elected through cumulative voting.
"Many successful corporations have cumulative voting. For example,
Pennzoil having cumulative voting defeated Texaco in that famous case.
Another example, in spite of still having a stagger system of electing
directors, Ingersoll-Rand, which has cumulative voting, won two awards. In
FORTUNE magazine it was ranked second as "America's Most Admired
Corporations" and the WALL STREET TRANSCRIPT noted "on almost any criteria
used to evaluate management, Ingersoll-Rand excels." We believe Zenith
should follow their example.
"If you agree, please mark your proxy for this resolution; otherwise
it is automatically cast against it, unless you have marked to abstain."
13
<PAGE> 17
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "AGAINST" THE STOCKHOLDER
PROPOSAL FOR THE FOLLOWING REASONS:
Each director of the Company currently is elected by the holders of a
majority of the shares of common stock of the Company present at the annual
meeting. Cumulative voting, however, could allow a small group of stockholders
to elect one or more directors. A director elected in this way would be the
choice of and could represent the special interests of the stockholder group
responsible for electing the director. The partisanship among directors and the
voting on behalf of special interests that might result could interfere with the
effective functioning of the Board and could be contrary to the interests of the
Company and its stockholders as a whole.
The Board of Directors continues to believe that directors should serve the
best interests of the Company and all of its stockholders rather than the
special interests of a small group of stockholders. The Board believes that the
present system of voting, whereby directors are elected by the holders of a
majority of the shares present at the annual meeting, provides the most
effective management and the best assurance that the directors' decisions will
be in the interests of all stockholders. The affirmative vote of a majority of
the shares of common stock of the Company present or represented at the meeting
and entitled to vote on this proposal is required to approve this proposal. The
Board recommends that stockholders vote AGAINST this proposal.
OTHER MATTERS
As of the date of this proxy statement, the management does not know of any
business other than that mentioned above which will be presented for
consideration. However, if any other matters should properly come before the
meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxies in accordance with their best judgment on such
matters.
The solicitation of proxies for the meeting is being made by mail, although
the Company may also use its officers and regular employees to solicit proxies
from stockholders, personally or by telephone, telegraph or letter. Such persons
will receive no additional compensation for such services. The cost of
preparing, assembling and mailing this and any supplemental proxy material, and
all other costs of this solicitation will be borne by the Company. Arrangements
will be made with certain brokerage firms and certain other custodians, nominees
and fiduciaries for the forwarding of solicitation materials to the beneficial
owners of Common Stock held of record by such persons, and such brokers,
custodians, nominees and fiduciaries will be reimbursed by the Company for
reasonable out-of-pocket expenses incurred by them in connection therewith. In
addition, the Company has engaged D. F. King & Co., Inc. ("D.F. King") to
provide advisory services, to assist in soliciting proxies and to provide
materials to custodians, nominees and fiduciaries and has agreed to indemnify D.
F. King against certain liabilities. For such services, the Company will pay D.
F. King approximately $7,500, plus reasonable out-of-pocket costs and expenses.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
In order to be considered for inclusion in the Company's 1995 proxy
statement, stockholder proposals must be received on or before November 19,
1994.
14
<PAGE> 18
NUMBER OF SHARES OUTSTANDING AND VOTING RIGHTS
The Company has 100,000,000 shares of common stock of $1 par value
authorized of which 39,683,592 are outstanding and entitled to vote as of
February 28, 1994. The holders of the common stock are entitled to one vote for
each share held and may not cumulate votes for directors.
By order of the Board of Directors
David S. Levin, Secretary
March 24, 1994
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AND VOTED AT THE MEETING.
STOCKHOLDERS ARE URGED TO PROMPTLY SIGN, DATE AND MAIL THE PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. PLEASE ACT TODAY!
15
<PAGE> 19
SHAREHOLDERS' PROXY
ZENITH ELECTRONICS CORPORATION
1000 MILWAUKEE AVENUE, GLENVIEW, IL 60025
The undersigned hereby directs The First National Bank of Chicago, as
trustee of the Zenith Profit-Sharing Retirement Trust (the "Trustee"), to
represent and vote, as designated below, either in person or by proxy
appointing Michael J. Kaplan, David S. Levin and Stephen K. Weber or any of
them, as proxies with full power of substitution or revocation, all the shares
of common stock held of record on February 28, 1994 in the Zenith Stock Fund
representing the undersigned's interest in such Fund, at the annual meeting of
stockholders of Zenith Electronics Corporation to be held at 1000 Milwaukee
Avenue, Glenview, Illinois on April 26, 1994 at 9:00 A.M., or any adjournment
thereof on the election of directors, ratification of the selection of
independent auditors, the shareholder proposal and on such other business as
may properly come before the meeting.
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS AS MAY
BE GIVEN ON THE REVERSE SIDE OF THIS PROXY CARD. IT IS UNDERSTOOD, HOWEVER,
THAT THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS, AND THE
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS, BUT AGAINST THE
SHAREHOLDER PROPOSAL, UNLESS CONTRARY INSTRUCTIONS ARE SPECIFIED. THE SPACES
FOR YOUR VOTES AND SIGNATURE ARE SET FORTH ON THE REVERSE SIDE. PLEASE VOTE,
SIGN AND RETURN PROMPTLY. THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
(Continued and to be signed and dated, on reverse side)
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2 THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3
1. Election of directors - Nominees: Harry G. Beckner, 3. Stockholder proposal regarding cumulative voting.
T. Kimball Brooker, David H. Cohen, ILene S. Gordon,
Charles Marshall, Gerald M. McCarthy, Andrew McNally FOR /X/ AGAINST /X/ ABSTAIN /X/
IV, Albin F. Moschner, Jerry K. Pearlman and Peter S.
Willmott.
FOR all nominees /X/ WITHHOLD /X/
(except as indicated) AUTHORITY
(To withhold authority to vote for any nominee, strike out
that nominee's name)
2. Selection of Arthur Andersen & Co. as independent auditors
of the Company.
FOR /X/ AGAINST /X/ ABSTAIN /X/
- ---------------------------------------------------------------------------------------------------------------------------
Please sign exactly as name appears hereon.
DATED: ____________________________________, 1994
_________________________________________________
Signature of Stockholder
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED VOTES MUST BE INDICATED /X/
POSTAGE-PAID ENVELOPE. (X) IN BLACK OR BLUE INK.
</TABLE>
<PAGE> 20
SHAREHOLDERS' PROXY
ZENITH ELECTRONICS CORPORATION
1000 MILWAUKEE AVENUE, GLENVIEW, IL 60025
The undersigned hereby appoints Michael J. Kaplan, David S. Levin and
Stephen K. Weber or any of them, as proxies with full power of substitution or
revocation, to represent and vote all the shares of common stock held of record
on February 28, 1994, by the undersigned, at the annual meeting of stockholders
of Zenith Electronics Corporation to be held at 1000 Milwaukee Avenue,
Glenview, Illinois on April 26, 1994 at 9:00 A.M., or any adjournment thereof
on the election of directors, the ratification of the selection of independent
auditors, the shareholder proposal and on such other business as may properly
come before the meeting.
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS AS MAY
BE GIVEN ON THE REVERSE SIDE OF THIS PROXY CARD. IT IS UNDERSTOOD, HOWEVER,
THAT THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS, AND THE
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS, BUT AGAINST THE
SHAREHOLDER PROPOSAL, UNLESS CONTRARY INSTRUCTIONS ARE SPECIFIED. THE SPACES
FOR YOUR VOTES AND SIGNATURE ARE SET FORTH ON THE REVERSE SIDE. PLEASE VOTE,
SIGN AND RETURN PROMPTLY. THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
(Continued and to be signed and dated, on reverse side)
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2 THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3
1. Election of directors - Nominees: Harry G. Beckner, T. Kimball 3. Stockholder proposal regarding cumulative voting.
Brooker, David H. Cohen, Ilene S. Gordon, Charles Marshall, Gerald M.
McCarthy, Andrew McNally IV, Albin F. Moschner, Jerry K. Pearlman and
Peter S. Willmott.
FOR all nominees /X/ WITHHOLD /X/ For /X/ Against /X/ Abstain /X/
(except as indicated) AUTHORITY
(To withhold authority to vote for any nominee, strike out that
nominee's name)
2. Selection of Arthur Andersen & Co. as independent auditors of the
Company.
For /X/ Against /X/ Abstain /X/
- ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as name appears hereon. Persons
signing in a representative capacity should indicate
their capacity. A proxy for shares held in a joint
ownership should be signed by each owner. If a
Corporation, please sign in full corporate name by
President or other authorized officer.
DATED: ____________________________________, 1994
_________________________________________________
Signature of Stockholder
_________________________________________________
Signature of Stockholder
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED VOTES MUST BE INDICATED /X/
POSTAGE-PAID ENVELOPE. (X) IN BLACK OR BLUE INK.
</TABLE>
