<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ZENITH ELECTRONICS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ZENITH ELECTRONICS CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[ZENITH ELECTRONICS CORP LETTERHEAD]
ANNUAL MEETING--APRIL 25, 1995
March 24, 1995
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 25, 1995, 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 adopt an amendment to the Restated Certificate of Incorporation,
to ratify the selection of Arthur Andersen LLP as independent auditors for 1995,
and to act on two stockholder proposals 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.
Sincerely,
[SIG]
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, 1995
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 25,
1995 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 act upon a proposal of the Board of Directors to amend the
Company's Restated Certificate of Incorporation to increase the authorized
common stock of the Company from 100,000,000 shares to 150,000,000 shares,
$1 par value.
(3) To ratify the selection by the Board of Directors of Arthur
Andersen LLP as independent auditors for the Company for the year ending
December 31, 1995.
(4) To act on two stockholder proposals which are set forth and
described in the attached proxy statement, if such proposals are properly
presented at the meeting.
(5) 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 March 1, 1995, at the close of business.
A copy of the Company's annual report containing financial statements for
the fiscal year ended December 31, 1994, 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 March 1, 1995, who do
not attend the annual meeting of stockholders to be held April 25, 1995, 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, 1995.
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. 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. 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 approval of the proposed amendment of the
Company's Restated Certificate of Incorporation, for the ratification of the
selection of the Company's independent auditors and against the stockholder
proposals if such proposals are 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.)
Directors are elected by a plurality of the shares of common stock present
in person or by proxy at the Annual Meeting and entitled to vote in the election
of directors. Accordingly, if a quorum is present at the Annual Meeting, the ten
persons receiving the greatest number of votes will be elected to serve as
directors. Withholding authority to vote for a director nominee and non-voted
shares in the election of directors will not affect the outcome of the election
of directors. Approval of each other matter specified in the notice of the
meeting (other than the proposal to amend the Company's Restated Certificate of
Incorporation) 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. A vote to abstain from voting on such a
matter will have the legal effect of a vote against such matter, although,
non-voted shares with respect to any such matter will not affect the
determination of whether such matter is approved. Approval of the proposal to
amend the Company's Restated Certificate of Incorporation requires the
affirmative vote of a majority of the outstanding shares of common stock of the
Company entitled to vote on the amendment. Thus, both abstentions and
<PAGE> 5
non-voted shares with respect to the proposal to amend the Company's Restated
Certificate of Incorporation will have the legal effect of a vote against such
proposal.
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.
ELECTION OF DIRECTORS
The terms of all of the directors expire at the 1995 Annual Meeting.
At its January 24, 1995 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, Ilene S. Gordon, Charles Marshall, Gerald M.
McCarthy, Andrew McNally IV, Albin F. Moschner, Jerry K. Pearlman and Peter S.
Willmott. Seven of the ten nominees for election as directors are independent
(neither current nor former employees of the Company). Mr. Pearlman has
indicated that he will retire from the Board at December 31, 1995. The Board
plans to elect Albin F. Moschner as Chief Executive Officer immediately
following the 1995 Annual Meeting. For a discussion of Mr. Pearlman's retirement
arrangements see Executive Compensation and Other Information--Employment
Agreements.
The affirmative vote of a plurality of the votes cast by the holders of the
common stock present in person or represented by proxy and entitled to vote
thereon is necessary to elect a director.
NOMINEES FOR ELECTION AS DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BACKGROUND INFORMATION
- --------------------------------- --- -------- ---------------------------------------------
<S> <C> <C> <C>
Harry G. Beckner................. 66 1973 Management Consultant since 1984. Also
Director of H.E. Butt Grocery Company, Giant
Food, Inc. and J. Sainsbury's USA, Inc.
T. Kimball Brooker............... 55 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 Cutler Oil & Gas Corporation,
Arthur J. Gallagher & Co. and Miami
Corporation.
David H. Cohen................... 56 1990 Provost, Northwestern University since 1992;
Vice President for Research and Dean of the
Graduate School, Northwestern University,
1986-1991.
Ilene S. Gordon.................. 41 1994 Vice President of Operations, Tenneco Inc.
since 1994, Senior Vice President-Total
Quality Management/Corporate Development,
1992-1994; 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................. 65 1990 Retired; Vice Chairman of the Board, AT&T
Corp., 1985-1989. Also Director of Ceridian
Corporation, GATX Corporation, Hartmarx
Corporation, Sonat, Inc. and Sunstrand
Corporation.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE BACKGROUND INFORMATION
- --------------------------------- --- -------- ---------------------------------------------
<S> <C> <C> <C>
Gerald M. McCarthy............... 53 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.
Andrew McNally IV................ 55 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., Mercury Finance Co. and Morgan
Stanley Asia-Pacific Fund.
Albin F. Moschner................ 42 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. Also
Director of Pella Corporation and Polaroid
Corp.
Jerry K. Pearlman................ 55 1983 Chairman and Chief Executive Officer since
1993, Chairman, President and Chief Executive
Officer, 1983-1993, Zenith Electronics
Corporation. Also Director of Central
Asian-American Enterprise Fund, First Chicago
Corporation and its subsidiary The First
National Bank of Chicago, and Stone Container
Corporation.
Peter S. Willmott................ 57 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 Executive Committee;
the Audit Committee; the Organization and Compensation 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 Executive Committee, which currently consists of Messrs. Brooker
(Chairman), McNally and Willmott, met eight times in 1994. When the Board is not
in session, the Executive Committee has all of the
3
<PAGE> 7
authority of the Board except with respect to certain matters such as amendments
of the Restated Certificate 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 addition to the aforesaid authority,
the functions of the Executive Committee are 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 during the
period between regular board meetings.
The Audit Committee of the Board of Directors, which currently consists of
Messrs. McNally (Chairman), Beckner, Marshall and Ms. Gordon, met three times in
1994. 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 Brooker, met three times in 1994. 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.
The Nominating Committee, which currently consists of Messrs. Cohen
(Chairman), Willmott and Ms. Gordon, met once in 1994. 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 eight times during 1994. All of the
incumbent directors attended 100% of the meetings of the Board and of the
committees of which they were members except Mr. Beckner who attended fewer than
75% of the meetings due to illness.
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 common stock per year to be issued annually on the first Tuesday of
December, plus an option to purchase 2,000 shares of Company common 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 common 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 common 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
4
<PAGE> 8
purposes of the Directors' Retirement 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
Directors' Retirement Plan are entitled to receive, in a lump sum, the
discounted present value of those benefits.
Directors who are not employees also have change in control 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 aforesaid
agreements and the Directors' Retirement 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 March 1, 1995, 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>
FMR Corp....................................................... 4,180,655(2) 9.2%
82 Devonshire Street
Boston, Massachusetts 02109
Reliance Financial Services Corporation........................ 3,688,524(3) 7.5%
55 East 52nd Street
New York, New York 10055
The Zenith Profit Sharing Trust................................ 3,056,426(4) 6.7%
The Bank of New York, Trustee
101 Barclay Street
New York, New York 10286
</TABLE>
- ------------
(1) Percentages based on shares issued and outstanding on March 1, 1995.
(2) The Company has received from FMR Corp. (an affiliate of Fidelity Management
& Research Company) a Schedule 13G which states that as of December 31, 1994
it had sole voting power with respect to 6,125 shares and sole dispositive
power with respect to all 4,180,655 shares.
(3) The Company has been informed that Reliance Financial Services Corporation,
as of December 31, 1994, 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 Bank of New York that as of March 1,
1995 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 1.5% 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 March 1, 1995.
<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....... 4,300 6,000
T. Kimball Brooker..... 9,000 6,000
David H. Cohen......... 4,500 6,000
Ilene S. Gordon........ 2,000 2,000
Charles Marshall....... 9,000 6,000
Gerald M. McCarthy..... 38,734(3) 79,500
Andrew McNally IV...... 6,000 6,000
Albin F. Moschner...... 59,810(3) 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...... 108,455(3) 187,500
Peter S. Willmott...... 24,000 6,000
Kell B. Benson......... 3,957 26,000
John Borst, Jr......... 4,705 33,596
Michael J. Kaplan...... 6,863 43,500
Directors and All
Executive Officers as
a Group (14
persons)............. 279,619 427,000
</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 March 1, 1995, 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, 1994, the chief executive officer of the
Company and the other four most highly compensated executive officers of the
Company. The table also includes a former executive officer of the Company, John
Borst, Jr., whose compensation would have placed him in the group of the four
other most highly compensated officers of the Company had he been an executive
officer at December 31, 1994. Those listed in the table are hereinafter referred
to as 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. 1994 $ 458,333 $ 0 $ 0 $403,124 35,000 $ 27,500
Pearlman......... 1993 450,000 0 0 0 35,000 27,000
Chairman and Chief 1992 450,000 0 0 0 35,000 27,000
Executive Officer
Albin F. 1994 276,667 0 0 525,002 25,000 16,600
Moschner......... 1993 231,667 0 0 0 15,000 13,900
President and Chief 1992 202,500 96,000(4) 53,342(5) 0 15,000 2,650
Operating Officer
Gerald M. 1994 212,000 0 0 207,496 17,000 12,720
McCarthy......... 1993 191,333 0 0 0 15,000 11,480
Executive Vice 1992 178,333 0 0 0 15,000 10,700
President-
Sales and Marketing
and
President, Zenith
Sales
Company
Kell B. Benson..... 1994 157,833 0 0 0 12,000 9,470
Senior Vice 1993 154,485 0 0 0 10,000 9,269
President- 1992 150,125 0 0 0 10,000 9,008
Finance and Chief
Financial Officer
John Borst, Jr..... 1994 154,988 0 0 0 8,000 9,299
Former Vice 1993 156,000 0 0 0 8,000 9,360
President- 1992 152,500 0 0 0 8,000 9,150
General Counsel
Michael J. 1994 137,167 0 0 0 8,000 8,230
Kaplan........... 1993 134,500 0 0 0 8,000 8,070
Vice President- 1992 130,708 0 0 0 8,000 7,842
Human Resources
</TABLE>
- ------------
(1) Except as disclosed in note 5, 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 is based on the closing price
of the Company's common stock on the date of grant. As of December 31, 1994,
Mr. Pearlman held an aggregate 81,081 shares of restricted stock valued at
$942,567, Mr. Moschner held an aggregate 56,757 shares of restricted stock
valued at $659,800 and Mr. McCarthy held an aggregate 32,432 shares of
restricted stock valued at $377,022. All of the restricted stock held by Mr.
Pearlman, Mr. Moschner 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
Messrs. Pearlman, Moschner, McCarthy, Benson and Borst, contractual excess
retirement benefits, as described in the Employment Agreements section
below, in the amount of $18,500, $7,600, $3,720, $470 and $299 respectively
for the year 1994.
(4) Pursuant to a separate agreement with Mr. Moschner relating to his initial
employment, the bonus in the amount shown for 1992 was guaranteed.
(5) 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
In connection with Mr. Pearlman's retirement as Chief Executive Officer on
April 25, 1995, the Company and Mr. Pearlman have agreed to enter into a
consulting agreement pursuant to which Mr. Pearlman will perform consulting
services for the Company and agree not to compete with the Company during the
period commencing on May 1, 1995, the day following his ceasing to be an
employee of the Company, and ending on March 31, 2004. Pursuant to this
agreement, Mr. Pearlman will continue as Chairman and a director of the Company
and will be available to the Company on a full-time basis until December 31,
1995. Thereafter, he will be available to the Company for up to 10 days during
any calendar quarter. Mr. Pearlman's noncompetition agreement will be on a
worldwide basis and extend to all consumer home entertainment electronic
hardware industries in which the Company currently competes. In the event that
the Company does not utilize Mr. Pearlman's consulting services for more than 10
days during any 12-month period after May 1, 1998, his noncompetition agreement
will terminate. As compensation for his consulting services, Mr. Pearlman will
receive $18,000 per month, less the cost of certain medical and dental insurance
premiums, during the term of the agreement and such payments would be
accelerated in the event of Mr. Pearlman's death prior to the expiration of the
agreement. An amount equal to the present value of the unpaid consulting
compensation will be deposited into a grantor trust in three installments on
January 2 and May 1, 1996 and on May 1, 1997 and the monthly payments of such
consulting compensation will be made to Mr. Pearlman as they become due. In
addition, Mr. Pearlman's stock options will be amended so that his unexercisable
options will become fully exercisable upon his retirement and the exercise
period of all of his unexercised options will be extended from two years to
three years following retirement, as permitted by the 1987 Zenith Stock
Incentive Plan. Mr. Pearlman's restricted stock will be forfeited upon his
retirement. The amount of approximately $4,600 per month payable to Mr. Pearlman
pursuant to the Company's Supplemental Executive Retirement Income Plan over a
15-year period commencing May 1, 1995 will be increased so that he will be paid
during such period at the rate of $6,480 per month. Under the agreement, Mr.
Pearlman will be eligible to receive a pro rata share of his incentive
compensation for 1995, provided that the Company achieves its earnings target
for such year, and, in the discretion of the Board of Directors, he may be
awarded a special bonus in connection with projects in which he participates
during the consulting period in 1995. In addition, the Company automobile
currently used by Mr. Pearlman will be transferred to him on January 1, 1996 and
he will be provided certain life insurance coverage during the consulting
period.
Mr. Pearlman and Mr. McCarthy entered into employment agreements with the
Company in 1987 pursuant to which 37,500 shares of restricted stock were issued
to Mr. Pearlman and 10,000 shares of restricted stock were issued to Mr.
McCarthy. The 1987 employment agreements with Messrs. Pearlman and McCarthy were
amended in 1994 to conform to the provisions of the 1994 restricted stock award
agreements described below and to eliminate any obligation of the Company to
repurchase such shares or to pay the executive any difference between fair
market value of such shares and any agreed value which were provided in the 1987
agreements.
7
<PAGE> 11
In 1994 Messrs. Pearlman, Moschner and McCarthy entered into restricted
stock award agreements pursuant to which the following additional shares of
restricted stock were issued: Mr. Pearlman--43,581, Mr. Moschner--56,757, Mr.
McCarthy--22,432. The shares of restricted stock issued in 1994 are subject to
forfeiture in the event of termination of employment prior to age 65, other than
by reason of death, disability or 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 under Termination and Change of Control Agreements
below. The restrictions will lapse as to one fifteenth of such shares per year
over a 15 year post employment period. Upon death or disability or termination
following a change of control as previously defined or certain other
circumstances, 100% of the restricted shares would become free of any
restrictions. The agreements impose consulting duties on the executive during
the 15 year post employment period of no more than one day per month and a duty
to refrain from competitive activities for a two year period following
termination of employment.
All of the Named Executive Officers have employment agreements which
provide, during the period of employment and for a period of ten years
thereafter, a death benefit in the amount of one and one-half times the
individual's salary. 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. This
latter benefit is now incorporated into the Zenith Electronics Corporation
Supplemental Salaried Profit Sharing Retirement Plan.
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. 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
8
<PAGE> 12
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, 1994, they would be entitled to
receive the following amounts as severance pay and in consideration of stock
option rights: Mr. Pearlman--$2,839,000; Mr. Moschner--$1,613,750; Mr.
McCarthy--$1,206,000; Mr. Benson--$814,000; Mr. Borst--$790,187, Mr.
Kaplan--$728,875.
OPTION/SAR GRANTS IN 1994
Shown below is information on grants of options to purchase common stock to
the Named Executive Officers made in 1994. No stock appreciation rights (SARs)
were granted to the Named Executive Officers during 1994.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES PERCENT OF TOTAL EXERCISE OR GRANT DATE
UNDERLYING OPTIONS/SARS OPTIONS/SARS GRANTED BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) TO EMPLOYEES IN 1994 ($/SH)(2) DATE VALUE($)(3)
- ------------------------ ----------------------- -------------------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Jerry K. Pearlman....... 35,000 5.7% $ 9.625 4/07/2004 $ 234,605
Albin F. Moschner....... 25,000 4.1 9.625 4/07/2004 167,575
Gerald M. McCarthy...... 17,000 2.8 9.625 4/07/2004 113,951
Kell B. Benson.......... 12,000 2.0 9.625 4/07/2004 80,436
John Borst, Jr.......... 8,000 1.3 9.625 4/07/2004(4) 53,624
Michael J. Kaplan....... 8,000 1.3 9.625 4/07/2004 53,624
</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 48% 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 6.86%, the rate for a ten year U.S. Treasury Note on the date of grant,
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.
(4) As of March 1, 1995, Mr. Borst's options will expire on February 2, 1997.
AGGREGATED OPTION/SAR EXERCISES IN 1994 AND YEAR-END OPTION/SAR VALUES
Shown below is information concerning the exercise in 1994 of options to
purchase Company common stock by the Named Executive Officers and the
unexercised options to purchase Company common stock held
9
<PAGE> 13
by the Named Executive Officers at December 31, 1994. No Named Executive
Officers exercised SARs in 1994 and no such Officer currently holds any SARs.
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
EXERCISE REALIZED YEAR-END(#) YEAR-END($)(2)
NAME (#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------------------- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jerry K. Pearlman............... 30,000 $146,250 152,500/52,500 $467,188/$146,562
Albin F. Moschner............... 20,000 107,500 32,500/32,500 113,438/82,812
Gerald M. McCarthy.............. 0 0 63,500/24,500 209,188/66,812
Kell B. Benson.................. 24,400 65,550 15,000/17,000 40,625/45,875
John Borst, Jr.................. 0 0 33,596/12,000 102,687/33,500
Michael J. Kaplan............... 0 0 35,500/12,000 120,875/33,500
</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
$11.625 (the closing price of the Company's common stock on December 31,
1994) over the applicable exercise price.
PENSION PLAN TABLE
The following table reflects the annual benefits which would be received
under the Zenith Electronics Corporation Supplemental Executive Retirement
Income Plan (the "SERP") by a participant who retires at age 65 with at least
ten years of service.
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------------------------
FINAL AVERAGE PAY 10 15 20 25 30 35
- ----------------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$250,000....................... $ 2,459 $18,967 $ 34,582 $ 49,191 $ 39,037 $ 27,608
300,000....................... 5,787 25,597 44,335 61,866 49,680 35,966
350,000....................... 9,114 32,227 54,087 74,540 60,324 44,323
400,000....................... 12,442 38,856 63,840 87,214 70,967 52,681
450,000....................... 15,770 45,486 73,593 99,889 81,611 61,039
500,000....................... 19,098 52,115 83,345 112,563 92,254 69,397
550,000....................... 22,426 58,745 93,098 125,238 102,897 77,754
600,000....................... 25,754 65,374 102,850 137,912 113,541 86,112
650,000....................... 29,081 72,004 112,603 150,586 124,184 94,469
700,000....................... 32,409 78,634 122,353 163,261 134,828 102,827
750,000....................... 35,737 85,263 132,108 175,935 145,471 111,185
800,000....................... 39,065 91,893 141,860 188,609 156,115 119,543
850,000....................... 42,393 98,522 151,613 201,284 166,758 127,900
</TABLE>
The SERP has been designed to provide the actuarial equivalent value of a
straight life annuity, where each annual payment equals 50 percent of the
participant's "final average pay" (where "final average pay" equals the average
of the participant's last five years of base salary plus annual bonus, as
reflected in the Summary Compensation Table). The "final average pay" of Messrs.
Pearlman, Moschner and McCarthy (currently the only participants in the SERP) as
of December 31, 1994 is $466,414, $268,945, and $190,483, respectively.
The amounts appearing in the table reflect the reduction in the SERP amount
attributable to the following SERP offsets: (1) benefits provided under the
Zenith Salaried Profit Sharing Retirement Plan; (2) benefits provided under the
Zenith Electronics Corporation Supplemental Salaried Profit Sharing Retirement
Plan; (3) the July 26, 1994 fair market value of restricted stock held by
participants as part of their retirement program; and (4) primary social
security benefits.
10
<PAGE> 14
The SERP benefits are reduced for all participants who, as of the date of
retirement, have less than 25 years of credited service (participants who have
less than ten years of credited service at retirement are not eligible to
receive any SERP benefits). As of December 31, 1994, Messrs. Pearlman, Moschner,
and McCarthy had 23, 3 and 24 years of credited service, respectively. The SERP
benefits also are reduced in the event a participant retires prior to age 65 (a
participant who retires prior to age 55 is not eligible to receive SERP
benefits).
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is the report of the Organization and Compensation Committee
on 1994 executive compensation:
BASE SALARIES
Base salaries for Company 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 four of the six companies used in the peer group in the performance
graph below.
The executive officers' base salaries and salary range midpoints, including
those of the Chief Executive Officer, were targeted below the relevant median
salary of comparison group companies.
In July 1994, the Committee met to review the executive officers' salaries
for base salary increases. Due to a salary freeze, most executives did not
receive an increase in 1993, and salaries had fallen considerably below targeted
levels. Base salary increases are determined based on individual performance and
the economic conditions of the Company. The Committee approved increases for all
executive officers including an increase of $25,000, effective September 1,
1994, for the Chief Executive Officer. Resulting salaries remain below median
salary levels of comparison group companies.
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 Company executives
are defined as a percent of their salary range midpoint. The percent of midpoint
targets were set at median levels to the comparator group.
The 1994 plan for the executive officers was based entirely on overall
corporate profit before taxes. The Organization and Compensation Committee
established threshold, target and maximum goals based on budgeted profit
objectives for the year. Payout opportunities ranged from 0% to 200% of target
opportunities. Actual incentive payouts are based on the performance level
attained and the executive's target incentive percent.
The annual incentive plan for the Chief Executive Officer was the same as
that for the other 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 from stock options that are based entirely on common
stock performance, thus linking the interests of the Company's employees with
those of its stockholders. The Organization and Compensation Committee
administers and authorizes stock option grants under the plan. All stock options
are non-qualified options, granted at the market price on the date of
11
<PAGE> 15
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 which included some but not all of the companies
used in the peer group in the performance graph. Guidelines were implemented
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 1994, options were granted to Company's executive
officers based on the share award guidelines established in 1991, including
35,000 options for Mr. Pearlman.
Restricted stock was granted to the Messrs. Pearlman, Moschner and McCarthy
in 1994, which included 43,581 shares to Mr. Pearlman. Share awards were
determined in order to provide a targeted offset amount to the defined benefit
retirement plan described in the Pension Plan Table. Shares vest only upon
retirement at age 65. The Committee believes that including restricted stock in
the retirement benefit provides an alignment to the long term performance of the
Company which is not possible in pension plans which are not based on stock
price performance.
POLICY REGARDING--IRS CODE, SECTION 162(M)
The Company will retain its current mix of compensation elements for the
executive officers (base salary, short-term and long-term incentives) and
continue to utilize long term incentives (stock options). Under the transition
rules provided in the 1993 regulations, as amended, 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. Zenith's current
stock incentive plan which expires in 1997 meets the SEC Rule 16b-3 criteria. 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
T. Kimball Brooker
David H. Cohen
12
<PAGE> 16
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,
1989 to December 31, 1994) 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(1)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) S&P 500 PEER GROUP ZENITH
<S> <C> <C> <C>
1989 100 100 100
1990 96.89 68.77 51.96
1991 126.42 69.82 57.84
1992 136.05 59.05 46.08
1993 149.76 88.62 54.90
1994 151.74 106.80 91.18
</TABLE>
- ------------
(1) Assumes that the value of the investment in Zenith common stock and each
index was $100 on December 31, 1989 and that all dividends are reinvested.
PROPOSAL TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
On December 13, 1994, the Board of Directors unanimously adopted a
resolution approving an amendment to Article Four of the Company's Restated
Certificate of Incorporation which would increase the number of authorized
shares of common stock of the Company, $1.00 par value per share, from
100,000,000 shares to 150,000,000 shares. The Board further resolved that the
amendment be submitted to stockholders for their approval. The proposed
amendment to the Restated Certificate of Incorporation is set forth in Exhibit A
to this proxy statement. The Board of Directors believes that the authorization
of the additional shares of capital stock will enable the Company to continue
the permanent equity financing necessary to improve the Company's capital
structure and sustain its current capital investment programs and future growth.
In March 1995, the Company commenced sales of common stock under a shelf
registration covering up to 6,500,000 shares of authorized but unissued shares
(of which 346,100 shares have been sold through March 10, 1995). The Company is
considering conducting one or more additional offerings of common stock, or of
debt or preferred stock convertible into common stock during 1995. Whether it
proceeds with any such offerings will depend upon a number of factors, including
market conditions and alternative financing
13
<PAGE> 17
arrangements. The Company, will also continue to issue shares of common stock
under its employee benefit plans. The authorization of additional shares will
also permit the Company to be in a position to take advantage of other
opportunities for which issuance of Company common stock might be appropriate,
although no such other opportunities are currently under consideration. No
further action by the Company's stockholders is required for issuance of the
additional shares of common stock except to the extent required by the rules of
the New York Stock Exchange or applicable law.
As of March 1, 1995, 45,675,723 shares of common stock were issued and
outstanding. In addition, 10,515,246 shares of common stock have been reserved
for issuance for conversion of the Company's 6 1/4% Convertible Subordinated
Debentures Due 2011, and the Company's 8.5% Senior Subordinated Convertible
Debentures Due 2000 and 2001. An additional 2,921,605 shares of common stock are
reserved for issuance pursuant to the Company's 1987 Stock Incentive Plan. As of
such date, 29,556,287 shares of common stock were required to be reserved for
issuance in connection with the exercise of rights to purchase the Company's
common stock (the "Rights") upon the terms and subject to the conditions set
forth in the Rights Agreement dated as of October 3, 1986, as amended, between
the Company and The Bank of New York as Rights Agent (the "Rights Agreement").
Accordingly, as of March 1, 1995, an aggregate of approximately 88,668,861
shares of common stock were outstanding or required to be reserved for issuance,
and there remained an aggregate of approximately 11,331,139 shares of common
stock available for issuance. The number of available shares, however, may be
effectively reduced by one third after giving effect to the requirement of the
Rights Agreement that, under certain circumstances, upon issuance of any shares
of common stock the Company must issue one right for each share issued and must
reserve for issuance one half additional shares of common stock in connection
with the exercise of each Right.
The purposes of the Board of Directors in proposing this amendment are as
stated above, although the availability for issuance of additional shares of
common stock could enable the Board of Directors to render more difficult or
discourage an attempt to obtain control of the Company. For example, the
issuance of shares of common stock in a public or private sale, merger or
similar transaction would increase the number of outstanding shares, thereby
possibly diluting the interest of a party attempting to obtain control of the
Company. The Company is not aware of any pending or threatened efforts to obtain
control of the Company.
The additional shares for which authorization is sought would be part of
the existing class of common stock and, if and when issued, would have the same
rights and privileges as the shares of common stock presently outstanding.
Authorized but unissued shares of common stock are generally available for
future issuance at the discretion of the Board of Directors. Holders of common
stock have no preemptive rights.
If approved, the Proposed Amendment would become effective upon filing with
the Secretary of State of Delaware a Certificate of Amendment to the Company's
Restated Certificate of Incorporation, which filing is expected to take place
shortly after such approval. Under the provisions of the General Corporation Law
of Delaware, a favorable vote of a majority of the outstanding shares of common
stock of the Company entitled to vote on the Proposed Amendment is required for
adoption of the Proposed Amendment. Abstentions and non-voted shares with
respect to the Proposed Amendment will have the legal effect of a vote against
the Proposed Amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSED
INCREASE IN THE AUTHORIZED SHARES OF COMMON STOCK.
SELECTION OF AUDITORS
The Board of Directors of the Company has selected Arthur Andersen LLP as
independent public accountants to examine the consolidated financial statements
of the Company for the year 1995 and to perform other accounting services. The
firm of Arthur Andersen LLP, 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 ratifying the selection of Arthur Andersen LLP 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.
14
<PAGE> 18
THE 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 LLP as independent
auditors, the Board of Directors will consider the selection of another
accounting firm.
STOCKHOLDER PROPOSAL REGARDING CUMULATIVE VOTING
The Company has been advised by Mr. John J. Gilbert, Ms. Margaret R.
Gilbert, 29 East 64th Street, New York, NY 10021-7043 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. John J.
Gilbert and/or Margaret R. Gilbert, as co-trustees under the will of Minnie D.
Gilbert, hold 245 shares of the Company's stock and as co-trustees under the
will of Samuel Rosenthal, hold 245 shares of the company's stock and also
represent additional family interests of 200 shares of the Company's stock. Mr.
Gilbert and Mr. Glotzer each hold 200 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 26%, 1,363 owners of 4,837,768 shares, were
cast in favor of this proposal. The vote against included 962 unmarked
proxies.
"A law enacted in California provides that all state pension holdings,
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.
"The National Bank Act has provides for cumulative voting.
Unfortunately, in many cases companies get around it by forming holding
companies without cumulative voting. Banking authorities have the right to
question the capability of directors to be on banking boards.
Unfortunately, in many cases authorities come in after and say the director
or directors were not qualified. We were delighted to see that the SEC has
finally taken action to prevent bad directors from being on the boards of
public companies.
"We think cumulative voting is the answer to find new directors for
various committees. Additionally, some recommendations have been made to
carry out the Valdez 10 points. The 11th should be having cumulative voting
and ending stagger systems of electing directors, in our opinion.
"When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. Also, the huge derivative
losses might have been prevented with cumulative voting.
"Many successful corporations have cumulative voting. For example,
Pennzoil having cumulative voting defeated Texaco in that famous case.
Another example is Ingersoll-Rand, which has cumulative voting and won two
awards. In FORTUNE magazine it was ranked second in its industry as
"America's Most Admired Corporations" and the WALL STREET TRANSCRIPT noted
"on almost any criteria used to evaluate management, Ingersoll-Rand
excels." In 1994 they raised their dividend. We believe Zenith should
follow these examples.
"If you agree, please mark your proxy for this resolution; otherwise
it is automatically cast against it, unless you have marked to abstain."
15
<PAGE> 19
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
plurality 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
plurality 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 Board recommends that stockholders
vote AGAINST this proposal.
STOCKHOLDER PROPOSAL REGARDING MEXICAN OPERATIONS
The following proposal was submitted by three organizations, which
generally refer to themselves as "religious shareholders," and whose names and
addresses and the number of shares owned by each will be furnished orally or in
writing as requested, promptly upon receipt of any oral or written request
therefor. The text of their resolution and statement in support thereof is as
follows:
"WHEREAS, we believe Zenith Electronics operations in Mexico should respect
fundamental principals of safe environmental practices, adequate health and
safety standards for workers, and compensation which would provide for a
dignified quality of life for workers.
"RESOLVED that shareholders request the Board of Directors to provide a
comprehensive report describing our company's maquiladora operations as
well as a forecast of operations under NAFTA, the North American Free Trade
Agreement. This report should be available to shareholders on request
within six months of the 1995 annual shareholder meeting, may omit
confidential information and be prepared at reasonable cost.
"SUPPORTING STATEMENT
"Our company was one of the first to see that competitive pressures in its
main business, consumer video products, required it to cut costs by
manufacturing these products in a low wage country. The majority of our
workers are in Mexico. Only picture tubes are finally assembled in the
United States.
"Our Company operates in different regions of Mexico and pays substantially
different compensation for the same work, yet the cost of living is
approximately the same in all border regions. Rather than increasing cash
salaries to meet the rising cost of living, our Company extensively uses
another method of compensation (called Social Provisions) by issuing food
coupons. These can only be redeemed in selective stores, not necessarily
close to where workers live.
"Supervisory personnel are almost exclusively male while the line workers
are mostly female leading to worker complaints of harassment. Annual worker
turnover is very high adding to the cost of operations.
"Visits by concerned shareholders to company plants in Matamoros and
Reynosa in early 1992 resulted in management's adopting a seven point
action plan to improve health and safety conditions in these plants. The
proponents of this resolution last met with management in March, 1993. At
that time they learned of management's review of health and safety issues
and corrections which would benefit workers and the environment, such as a
commitment to phase out CFCs and to initiate a new work process for
soldering in enclosed ovens rather than on the open line. The March meeting
also reinforced shareholder's opinion that these kinds of reports MUST be
made to shareholders on an annual basis.
16
<PAGE> 20
"A report, such as the one requested, will demonstrate our Company's
commitment for the welfare of all its employees and the protection of the
environment. Numerous companies, including Allied Signal, Ford, ATT,
General Motors, Illinois Tool, ITT, Johnson & Johnson, RR Donnelley, and
WMX Technologies, have published such reports."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "AGAINST" THE STOCKHOLDER
PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors believes that the development of such a report would
be unnecessary and burdensome and could precipitate requests for numerous
specialized reports, the principal objectives of which, in the opinion of the
Company, would be to focus public attention on broad social and economic
concerns rather than to advance the interests of the Company and its
stockholders. The Board of Directors 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, telecopy, 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 $20,000, plus reasonable
out-of-pocket costs and expenses.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
In order to be considered for inclusion in the Company's 1996 proxy
statement, stockholder proposals must be received on or before November 19,
1995.
NUMBER OF SHARES OUTSTANDING AND VOTING RIGHTS
The Company has 100,000,000 shares of common stock of $1 par value
authorized of which 45,675,723 are outstanding and entitled to vote as of March
1, 1995. 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, 1995
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!
17
<PAGE> 21
EXHIBIT A
RESOLVED that the first sentence of Article Four of the Restated Certificate of
Incorporation of Zenith Electronics Corporation be and the same is hereby
amended to read as follows:
ARTICLE FOUR
The aggregate number of shares of all classes of stock which the
Corporation shall have the authority to issue shall be one hundred fifty eight
million (158,000,000) shares which shall be divided into two classes of stock as
follows:
Eight million (8,000,000) shares of preferred stock having a par value of
One Dollar ($1) per share, and
One hundred fifty million (150,000,000) shares of common stock having a par
value of One Dollar ($1) per share.
18
<PAGE> 22
STOCKHOLDER PROXY
ZENITH ELECTRONICS CORPORATION
1000 MILWAUKEE AVENUE, GLENVIEW, IL 60025
The undersigned hereby directs The Bank of New York, as trustee of the
Zenith Profit-Sharing Retirement Trust (the "Trustee"), to represent and vote,
as designated on the reverse side hereof, 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, to represent
and vote all the shares of common stock held of record on March 1, 1995 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 25, 1995 at 9:00 A.M., or any
adjournment thereof on the election of directors, the adoption of an amendment
to the Restated Certificate of Incorporation, the ratification of the
selection of independent auditors, the two stockholder proposals 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, THE ADOPTION OF AN
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION AND THE RATIFICATION OF
THE SELECTION OF INDEPENDENT AUDITORS, BUT AGAINST THE TWO STOCKHOLDER
PROPOSALS, 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.
ZENITH ELECTRONICS CORPORATION
P.O. BOX 11528
NEW YORK, N.Y. 10203-0528
(Continued, and to be signed and dated, on the reverse side).
<PAGE> 23
ZENITH ELECTRONICS CORPORATION NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
1000 Milwaukee Avenue TO BE HELD APRIL 25, 1995
Glenview, IL 60025
Dear Fellow Zenith Employee:
Enclosed is your copy of Zenith's 1994 Annual Report. As Al Moschner
and I say in our message to stockholders, we are proud of our progress as
Zenith people work together to reinvent our company.
The proxy statement for stockholders also is enclosed. As a member of
the Zenith Profit-Sharing Retirement Plan with an investment in the Zenith
Stock Fund, you can decide how the shares in the Stock will be voted, to adopt
an amendment to the Restated Certificate of Incorporation, to ratify the
selection of our independent auditors, to vote on two stockholder proposals and
to select your Board of Directors.
By signing and returning the attached proxy card in the accompanying
envelope, you tell the plan's trustee, The Bank of New York, how to vote shares
representing your portion of the Zenith Stock Fund. Only the trustee will know
how you voted. If you don't vote, the trustee will automatically vote shares in
the Stock Fund in the same proportion as votes received from other
profit-sharing plan members.
Zenith's future depends on the efforts and support of everybody in the
Zenith family. Because of your important role in carrying out our strategy, I
urge you to read the annual report to understand our progress and future plans.
ON BEHALF OF YOUR BOARD OF DIRECTORS
JERRY K. PEARLMAN
Chairman and Chief Executive Officer
<TABLE>
<S> <C>
DETACH PROXY CARD HERE
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3
1. Election of Directors FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below
Nominees: Harry G. Beckner, T. Kimball Brooker, David H. Cohen, Ilene S. Gordon, Charles Marshall, Gerald M. McCarthy,
Andrew NcNally IV, Albin F. Moschner, Jerry K. Pearlman and Peter S. Willmott.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and strike a line through
that nominee's name
2. Adoption of an Amendment to the Restated Certificate of Incorporation authorizing additional Common Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Selection of Arthur Andersen LLP as independent auditors of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 4 AND 5
4. Stockholder proposal regarding cumulative voting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Stockholder proposal regarding report on Mexican operations.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address or
Comments Mark Here [ ]
Please sign exactly as name appears hereon.
DATED:_____________________________, 1995
_________________________________________
Signature of Stockholder
VOTES MUST BE INDICATED
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. (X) IN BLACK OR BLUE INK. [ ]
</TABLE>
<PAGE> 24
STOCKHOLDER 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 March 1, 1995, by the undersigned, at the annual meeting of stockholders of
Zenith Electronics Corporation to be held at 1000 Milwaukee Avenue, Glenview,
Illinois on April 25, 1995 at 9:00 A.M., or any adjournment thereof on the
election of directors, the adoption of an amendment to the Restated Certificate
of Incorporation, the ratification of the selection of independent auditors,
the two stockholder proposals 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, THE ADOPTION OF AN
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION AND THE RATIFICATION OF
THE SELECTION OF INDEPENDENT AUDITORS, BUT AGAINST THE TWO STOCKHOLDER
PROPOSALS, 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 the reverse side)
ZENITH ELECTRONICS CORPORATION
P.O. BOX 11528
NEW YORK, N.Y. 10203-0528
<PAGE> 25
ZENITH ELECTRONICS CORPORATION NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
1000 Milwaukee Avenue TO BE HELD APRIL 25, 1995
Glenview, IL 60025
Dear Stockholder:
The annual meeting of stockholders of Zenith Electronics Corporation
(the "Company") will be held on Tuesday, April 25, 1995 at 9:00 a.m. at 1000
Milwaukee Avenue, Glenview, Illinois, for the following purposes:
1. To elect ten directors.
2. To amend the Company's Restated Certificate of Incorporation to
increase the authorized common stock of the Company from
100,000,000 to 150,000,000 shares, $1 par value.
3. To approve the selection of independent auditors.
4. To act on two stockholder proposals.
Only holders of Common Stock of Zenith Electronics Corporation of
record at the close of business on March 1, 1995 will be entitled to vote at
the meeting or any adjournment thereof.
To be sure that your vote is counted, we urge you to complete and sign
the proxy card below, detach it from this letter and return it in the postage
paid envelope enclosed in this package. The giving of such proxy does not
affect your right to vote in person if you attend the meeting. The prompt
return of your signed proxy will aid the company in reducing the expense of
additional proxy solicitation.
ON BEHALF OF YOUR BOARD OF DIRECTORS
DAVID S. LEVIN
Secretary
<TABLE>
<S> <C>
DETACH PROXY CARD HERE
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3
1. Election of Directors FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below
Nominees: Harry G. Beckner, T. Kimball Brooker, David H. Cohen, Ilene S. Gordon, Charles Marshall, Gerald M. McCarthy,
Andrew NcNally IV, Albin F. Moschner, Jerry K. Pearlman and Peter S. Willmott.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and strike a line through
that nominee's name
2. Adoption of an Amendment to the Restated Certificate of Incorporation authorizing additional Common Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Selection of Arthur Andersen LLP as independent auditors of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 4 AND 5
4. Stockholder proposal regarding cumulative voting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Stockholder proposal regarding report on Mexican operations.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address or
Comments Mark Here [ ]
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:_____________________________, 1995
_________________________________________
Signature of Stockholder
_________________________________________
Signature of Stockholder
VOTES MUST BE INDICATED
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. (X) IN BLACK OR BLUE INK. [ ]
</TABLE>
