<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________
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 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
____________________
BMC INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
____________________
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(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 14a6(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:
............................................................
[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] 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:
............................................................
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<PAGE>
BMC
INDUSTRIES, INC.
TWO APPLETREE SQUARE
MINNEAPOLIS, MINNESOTA 55425
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1996
------------------------
TO THE STOCKHOLDERS OF BMC INDUSTRIES, INC.:
The Annual Meeting of Stockholders of BMC Industries, Inc. will be held at
the Atrium Center, 3105 East 80th Street, Bloomington, Minnesota on Thursday,
April 25, 1996 at 10:00 a.m. local time, for the following purposes:
1. To elect three directors for a term of two years;
2. To transact such other business as properly may be brought before the
meeting or any adjournments thereof.
The close of business of March 1, 1996 has been fixed as the record date for
the determination of stockholders who are entitled to notice of and to vote at
the meeting or any adjournments thereof.
By Order of the Board of Directors
Michael P. Hawks
SECRETARY
March 22, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. NO ADMISSION TICKET OR
OTHER CREDENTIALS WILL BE NECESSARY. IF YOU DO NOT PLAN TO ATTEND THE MEETING,
PLEASE BE SURE YOU ARE REPRESENTED AT THE MEETING BY MARKING, SIGNING, DATING,
AND MAILING YOUR PROXY IN THE REPLY ENVELOPE PROVIDED.
<PAGE>
BMC
INDUSTRIES, INC.
TWO APPLETREE SQUARE
MINNEAPOLIS, MINNESOTA 55425
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
------------------------
INTRODUCTION
This proxy statement, which is first being mailed to stockholders on March
22, 1996, is furnished in connection with the solicitation by the Board of
Directors of BMC Industries, Inc. (the "Company") of proxies to be voted at the
Annual Meeting of Stockholders to be held at the Atrium Center, 3105 East 80th
Street, Bloomington, Minnesota on Thursday, April 25, 1996, at 10:00 a.m., local
time, for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders, and at any adjournments thereof (the "Meeting"). The Company's
1995 Annual Report to Stockholders has been mailed to the stockholders but is
not to be considered a part of the proxy soliciting materials.
The accompanying proxy is enclosed for your use. You are solicited on behalf
of the Board of Directors of the Company (the "Board") to MARK, SIGN, DATE AND
RETURN THE PROXY IN THE ACCOMPANYING SELF-ADDRESSED ENVELOPE. The proxy is
revocable at any time before it is used at the Meeting. A proxy may be revoked
by filing a revoking instrument or a duly executed proxy bearing a later date
with the Secretary of the Company or by attending the Meeting and voting in
person. The shares represented by proxies received by the Board will be voted at
the Meeting.
The cost of soliciting proxies will be borne by the Company. Officers,
directors and regular employees of the Company may, but without compensation
other than their regular compensation, solicit proxies by mail, personal
conversation, telephone or otherwise. The Company may reimburse brokerage firms
and others for expenses incurred in forwarding solicitation material to the
beneficial owners of the Company's common stock ("Common Stock").
VOTING OF SHARES
Only holders of Common Stock of record at the close of business on March 1,
1996 (the "Record Date") will be entitled to vote at the Meeting. On March 1,
1996, the Company had 27,253,294 outstanding shares of Common Stock, each such
share entitling the holder thereof to one vote on each matter to be voted on at
the Meeting. Holders of shares of Common Stock are not entitled to cumulative
voting rights.
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
Meeting (13,626,648 shares as of March 1, 1996) is required for a quorum for the
transaction of business. In general, shares of Common Stock represented by a
properly signed and returned proxy card will be counted as shares present and
entitled to vote at the Meeting for purposes of determining a quorum, without
regard to whether the card reflects votes against director nominees or
abstentions (or is left blank) or reflects a "broker non-vote" on a matter
(i.e., a card returned by a broker on behalf of its beneficial owner customer
that is not voted on a particular matter because voting instructions have not
been received and the broker has no discretionary authority to vote).
The election of a nominee for director requires the affirmative vote of a
majority of the shares of Common Stock present and entitled to vote in person or
by proxy on that matter (and at least a majority of the minimum number of votes
necessary for a quorum to transact business at the Meeting). Shares represented
by a proxy card voted as abstaining on any of the proposals will be
1
<PAGE>
treated as shares present and entitled to vote that were not cast in favor of a
particular matter, and thus will be counted as votes against that matter. Shares
represented by a proxy card that includes broker non-votes on a matter will be
treated as shares not entitled to vote on that matter, and thus will not be
counted in determining whether that matter has been approved.
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINATION
The Company's Articles provide that the Board shall consist of not less than
three nor more than 17 members, as determined from time to time by the Board of
Directors, divided into two classes of as nearly equal size as possible. The
term of each class of directors is two years, and the term of one class expires
each year in rotation. The Board currently consists of seven (7) directors, with
the terms of four present members of the Board expiring as of the Meeting. The
terms of the remaining three members of the Board will not expire this year, but
rather will expire as indicated below.
During 1995, the Board welcomed one new member to the Board of Directors.
The Board elected Harry A. Hammerly as a director effective November 8, 1995,
with a term expiring as of the Meeting. Mr. Richey is not running for
re-election to the Board. The Company wishes to extend to Mr. Richey its sincere
gratitude for his many years of service. As a result of Mr. Richey's decision
not to stand for re-election at the meeting, the Board has determined that there
will be six (6) directors of the Company for the ensuing year. The Board has
nominated Lyle D. Altman, Paul B. Burke and Harry A. Hammerly to serve as
directors of the Company for terms of two years, expiring at the 1998 Annual
Meeting of Stockholders, or until their successors are elected and qualified.
The Board recommends a vote FOR the election of Messrs. Altman, Burke and
Hammerly. Election requires the affirmative vote of a majority of the shares of
Common Stock represented in person or by proxy at the Meeting (and at least a
majority of the minimum number of votes necessary for a quorum to transact
business at the Meeting). In the absence of other instructions, the proxies will
be voted FOR the election of the nominees. If the Board should learn prior to
the Meeting that any of the nominees will be unable to serve by reason of death,
incapacity or other unexpected occurrence, the proxies that otherwise would have
been voted for that nominee will be voted for such substitute nominee as may be
selected by the Board. Alternatively, the proxies, at the Board's discretion,
may be voted for such fewer number of nominees as results from such death,
incapacity or other unexpected occurrence. The Board has no reason to believe
that any of the nominees will be unable to serve.
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INFORMATION ABOUT DIRECTORS AND NOMINEES
The following table gives certain information concerning the Company's
directors, including this year's nominees.
<TABLE>
<CAPTION>
NAMES OF DIRECTORS DIRECTOR
AND NOMINEES PRINCIPAL OCCUPATION AGE SINCE
- -------------------------- ---------------------------------------------------------------------- --- -----------
<S> <C> <C> <C>
NOMINEES FOR A TWO-YEAR TERM EXPIRING IN 1998:
Lyle D. Altman Former Chairman of the Board of Network Systems Corporation (data 65 1983
communications equipment)
Paul B. Burke Chairman of the Board, President and Chief Executive Officer of BMC 40 1991
Industries, Inc.
Harry A. Hammerly Retired Executive Vice President of 3M Company 62 1995
DIRECTORS NOT STANDING FOR ELECTION THIS YEAR WHOSE TERMS EXPIRE IN 1997:
John W. Castro President and Chief Executive Officer of Merrill Corporation 47 1994
(financial printing)
Joe E. Davis Private Investor; former President and Chief Executive Officer of 61 1982
National Health Enterprises, Inc.; former Chairman of the Board,
Linear Corporation
Dr. Richard A. Swalin Professor Emeritus of Materials Science & Technology Management, 67 1993
University of Arizona; Retired Vice President of Research and
Development, Allied-Signal Corp.
</TABLE>
Except as indicated below, there has been no change in the principal
occupations or employment during the past five years for the directors or
nominees for election as directors.
On March 7, 1995, Mr. Altman resigned as Chairman of the Board of Network
Systems Corporation ("NSC") in connection with Storage Technology Corporation's
acquisition of NSC. From September 1, 1993 to March 7, 1995, Mr. Altman served
as interim Chief Executive Officer of NSC. Mr. Altman previously served as
President and Chief Executive Officer of NSC until October, 1991, and as its
Chief Executive Officer until April, 1992.
Mr. Burke has been President of the Company since May, 1991, and he has
served as its President and Chief Executive Officer since July, 1991. Mr. Burke
has also served as Chairman of the Board since May, 1995. Mr. Burke joined the
Company as Associate General Counsel in June, 1983 and became Vice President,
Secretary and General Counsel in August, 1985. In November, 1987, he was
appointed Vice President, Ft. Lauderdale Operations of the Company's Vision-Ease
Lens division and in May, 1989 he was appointed President of Vision-Ease Lens.
Mr. Hammerly retired from 3M Company in July, 1995. He served in various
positions with 3M Company from June, 1955 to July, 1995, most recently as
Executive Vice President, International Operations.
Since 1984, Dr. Swalin has served in various positions with the University
of Arizona. Dr. Swalin was a member of the Company's Board of Directors from
1973-1977 and from 1983-1991.
The following Board members also serve as directors of the designated public
companies: Mr. Burke, Apogee Enterprises, Inc.; Mr. Castro, Merrill Corporation;
Mr. Davis, Wilshire Technologies, Inc. and American Variable Insurance Series;
Mr. Hammerly, 3M Company, Apogee Enterprises, Inc., Cincinnati Milacron, Inc.
and The Geon Company; and Dr. Swalin, Medtronic, Inc.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
COMMITTEES. The business and affairs of the Company are managed by the
Board, which met seven (7) times in 1995. The Board maintains several standing
committees, including Audit, Compensation, Finance and Nominating Committees.
The Audit Committee oversees the Company's Internal Audit Department and the
provision of outside audit services. It met two (2) times in 1995. The
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Compensation Committee recommends the compensation of the Chief Executive
Officer; reviews and approves compensation for all elected executive officers;
reviews, approves and modifies all general compensation matters; and, sets the
terms of, and grants awards under, the Company's 1994 Stock Incentive Plan and
any other incentive plans. The Compensation Committee met three (3) times during
1995. The Finance Committee approves the Company's dividends payable to
stockholders and reviews the Company's long-range financing plan. The Finance
Committee met five (5) times during 1995. The Nominating Committee is authorized
to identify, evaluate and nominate persons for election to the Board and to make
recommendations to the Board with respect to such persons. The Nominating
Committee will consider nominees recommended by stockholders if submitted in
writing to the Committee Chair. The Company's Restated Bylaws also permit any
stockholder entitled to vote for the election of directors to make nominations
directly, without first recommending the nominee to the Nominating Committee.
Under the Restated Bylaws, any such nomination made by a stockholder must be
made by written notice to the Company's Secretary not less than 120 days prior
to the Annual Meeting of Stockholders or special meeting called for the election
of directors (as the case may be). The motion must include each nominee's name,
age, business address and residence address, principal occupation, and
beneficial share ownership, together with the class of directors to which the
nominee is being nominated and such other information as would be required in a
proxy solicitation concerning the nominee under the Securities and Exchange
Commission's proxy rules. The Nominating Committee met two (2) times in 1995.
The Audit, Compensation, Finance and Nominating Committees are presently
comprised of the following incumbent directors of the Company:
<TABLE>
<CAPTION>
AUDIT COMPENSATION FINANCE NOMINATING
COMMITTEE COMMITTEE COMMITTEE COMMITTEE
- --------------------------- ----------------------------- ------------------------ --------------------------
<S> <C> <C> <C>
Lyle D. Altman (Chair) S. Walter Richey (Chair) Joe E. Davis (Chair) Dr. Richard A. Swalin
Joe E. Davis John W. Castro Lyle D. Altman (Chair)
Harry A. Hammerly Dr. Richard A. Swalin S. Walter Richey John W. Castro
Harry A. Hammerly
</TABLE>
DIRECTORS' FEES. As an employee of the Company, Mr. Burke is not paid a
director's fee. Non-employee directors are paid an annual retainer of $12,000,
$800 per Board meeting attended and $800 ($850 in the case of the committee
Chair) per committee meeting attended.
DIRECTORS' DEFERRED COMPENSATION PLAN. On December 7, 1984, the Board of
Directors adopted the Directors' Deferred Compensation Plan (the "Deferred
Plan"), which is administered by the Secretary of the Company in conjunction
with the Human Resources Department. Each non-employee member of the Board of
Directors may elect to participate and defer his or her receipt of the fees
described above. The amount of each participating director's compensation
deferred under the Deferred Plan is credited to a separate bookkeeping account
in the director's name. Participants may elect to have compensation credited to
the "BMC Stock Performance" account ("Stock Account") or the "Interest Income"
account ("Interest Account"). Compensation credited to the Stock Account is
converted into share equivalents of Common Stock ("Phantom Stock") and each
participant is entitled to additional Stock Account credits for dividends (if
any) paid with respect to corresponding shares of BMC Common Stock during the
year. The value of Phantom Stock credited to the Stock Account, and,
consequently, the value of a participating director's account, increases or
decreases depending on the market performance of the Common Stock. Compensation
credited to the Interest Account earns interest computed on the beginning
balance each quarter at an annual rate equal to the effective cost of borrowing
under the Company's revolving credit agreements in effect during the quarter.
Amounts credited to participating directors' accounts are payable in cash in a
lump sum or in two to ten annual installments, at the option of the participant,
upon termination from the Board of Directors. During the past three years,
$74,232 was deferred under the Deferred Plan by all current directors who are
not executive officers, as a group (6 persons).
NON-EMPLOYEE DIRECTOR STOCK OPTIONS. On December 10, 1993, the Board
adopted the 1994 Stock Incentive Plan (the "1994 Plan") and the stockholders
approved the 1994 Plan on May 5, 1994. The 1994 Plan provides for automatic
non-qualified option grants to the Company's non-employee directors. In
accordance with the terms of the 1994 Plan, new non-employee directors of the
Company
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who are first elected or appointed to the Board of Directors to fill new
directorships or vacancies will be automatically granted on a one-time basis on
the date of their election or appointment, non-qualified options to purchase
20,000 shares of Common Stock, at an exercise price equal to the fair market
value of the Common Stock on the date of grant. The 1994 Plan further provides
that on the date of each subsequent Annual Meeting of Stockholders, each
non-employee director will automatically be granted additional options to
purchase 4,000 shares of Common Stock at the fair market value of the Common
Stock on the date of grant. Each option becomes excercisable in full three years
after the date of grant and terminates five years after its date of grant. If a
non-employee director ceases to serve as a director for any reason, all options
held by such director will continue to become exercisable and expire in
accordance with their original terms.
In 1995, all of the incumbent directors attended 75% or more of the
aggregate meetings of the Board and all such committees on which they served.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Set forth in the following table is information, as of March 1, 1996 (unless
otherwise indicated), pertaining to persons who, to the best of the Company's
knowledge, owned beneficially more than five percent (5%) of the outstanding
Common Stock of the Company. Also set forth below is information with respect to
shares of the Common Stock beneficially held by the Company's directors and the
Company's executive officers named in the "Summary Compensation Table", which
appears below under the heading "Executive Compensation", and for all directors
and executive officers as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
------------------------------
PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT OF CLASS
- ---------------------------------------------------- ---------------- ------------
<S> <C> <C>
Neuberger & Berman L.P. 1,635,080(2) 6.07%
605 Third Avenue
New York, NY 10158-3698
FMR Corp. 1,361,400(3) 5.05
82 Devonshire Street
Boston, MA 02109-3614
Lyle D. Altman 28,000(4) *
Paul B. Burke 846,352(5) 3.06
John W. Castro 8,000 *
Joe E. Davis 136,000(6) *
John L. Gburek 36,555(7) *
Harry A. Hammerly 1,000 *
Michael P. Hawks 111,296(8) *
Merle D. Kerr 282,595(9) 1.03
Terry R. Nygaard 45,735(10) *
S. Walter Richey 28,000(4) *
Richard A. Swalin 6,000 *
All Directors and Executive Officers as a group (11 1,529,533(11) 5.48
persons)
</TABLE>
- ------------------------
* = less than 1%.
(1) Unless otherwise noted, all of the shares shown are held by individuals or
entities possessing sole voting and investment power with respect to such
shares. Unless otherwise noted, share amounts and percentages are as of
March 1, 1996. Shares not outstanding but deemed beneficially owned
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<PAGE>
by an individual or by members of the group (as the case may be) by virtue
of a right to acquire them within 60 days upon the exercise of options are
treated as outstanding for purposes of determining the percent beneficially
owned by the individual or the group.
(2) As set forth in a Schedule 13G filed with the Securities and Exchange
Commission on February 12, 1996, Neuberger & Berman L.P. (Neuberger), a
registered investment adviser, is deemed to have beneficial ownership as of
December 31, 1995 of 1,635,080 shares. As reported in the Schedule 13G,
Neuberger possesses sole voting power with respect to 837,500 of such
shares, shared voting power with respect to 368,400 of such shares and
shared dispositive power with respect to all 1,635,080 shares.
(3) As set forth in a Schedule 13G, dated February 14, 1996, filed with the
Securities and Exchange Commission and reflecting such entity's beneficial
ownership as of December 31, 1995, 1,361,400 shares are beneficially owned
by Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. ("FMR"), and an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940 and adviser to several
investment companies registered under the Investment Company Act of 1940
(the "Funds"). Edward C. Johnson 3d, the Chairman of FMR, owns 12.0%, and
Abigail P. Johnson owns 24.5%, of the outstanding voting common stock of
FMR. Various Johnson family members, through their ownership of voting
common stock and the execution of a family stockholders' voting agreement,
form a controlling group with respect to FMR. Edward C. Johnson 3d, FMR and
the Funds each have sole power to dispose of the 1,361,400 shares owned by
the Funds. The power to vote and direct the voting of the shares owned by
the Funds is held by the Funds, through guidelines established by the Funds'
Boards of Trustees.
(4) Includes 8,000 shares that the director has the right to acquire within 60
days upon the exercise of options.
(5) Includes 439,600 shares that Mr. Burke has the right to acquire within 60
days upon the exercise of options; 400 shares held indirectly as custodian
for Mr. Burke's minor son; and 14,247 shares allocable to Mr. Burke as of
December 31, 1995 in connection with his participation in the Company's
401(k) savings plan.
(6) Includes 4,000 shares that Mr. Davis has the right to acquire within 60
days upon the exercise of options.
(7) Includes 555 shares allocable to Mr. Gburek as of December 31, 1995 in
connection with his participation in the Company's 401(k) savings plan.
(8) Includes 22,000 shares that Mr. Hawks has the right to acquire within 60
days upon the exercise of options and 12,816 shares allocable to Mr. Hawks
as of December 31, 1995 in connection with his participation in the
Company's 401(k) savings plan.
(9) Includes 163,000 shares that Mr. Kerr has the right to acquire within 60
days upon the exercise of options and 15,595 shares allocable to Mr. Kerr as
of December 31, 1995 in connection with his participation in the Company's
401(k) savings plan.
(10) Includes 11,795 shares allocable to Mr. Nygaard as of December 31, 1995 in
connection with his participation in the Company's 401(k) savings plan.
(11) Includes 400 shares held indirectly by an officer as custodian for a minor
child. Includes 636,600 shares not outstanding but deemed beneficially owned
by members of the group by virtue of a right to acquire them within 60 days
upon the exercise of options. Includes 55,008 shares allocable as of
December 31, 1995 to executive officers (5 persons) in connection with their
participation in the Company's 401(k) savings plan.
6
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EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMMITTEE. The Compensation Committee of the Company's Board of
Directors (the "Committee") is comprised entirely of non-employee directors and
administers the Company's executive compensation program. See "Information About
the Board and its Committees" for a more complete description of the functions
of the Compensation Committee.
COMPENSATION PHILOSOPHY. The Company's executive compensation policy is
intended to support the achievement of the Company's desired economic
performance by:
- Providing compensation that will attract and retain superior talent and
reward performance; and
- Aligning executive officers' interests with the Company's success by
linking both annual incentive compensation and long-term incentive
compensation with the Company's success in achieving performance goals.
The executive compensation policy adopted by the Company, as approved by the
Committee, provides for an overall level of potential compensation that is at a
median level of competitiveness with manufacturing companies of comparable size.
The Committee, in reviewing compensation matters, consults with the Company's
Director of Compensation and Benefits and, as appropriate, independent
compensation consultants. The Committee makes use of a variety of independently
available compensation surveys, each of which provide compensation data for well
over 100 companies, including many of the companies in the S&P 500 and S&P
Manufacturing (Diversified Industries) indices used in the Company's performance
graph. See "Executive Compensation -- Comparative Stock Performance". The
compensation surveys used by the Committee report compensation data for
like-sized manufacturing companies and provide statistical analyses that predict
median compensation rates at profit and revenue levels comparable to the
Company. Actual individual compensation levels for officers of the Company may
be greater or less than median competitive levels, based upon annual and
long-term Company performance as well as individual performance. The
Compensation Committee, at its discretion, sets executive compensation at levels
which it judges are justified by external, internal, or other circumstances.
COMPLIANCE WITH FEDERAL TAX LEGISLATION. The Omnibus Reconciliation Act of
1993 added Section 162(m) to the Internal Revenue Code of 1986, as amended (the
"Code"), which generally precludes the Company and other public companies from
taking a tax deduction for compensation over $1 million which is not
"performance-based" and is paid, or otherwise taxable, to executives named in
the Summary Compensation Table and employed by the Company at the end of the
applicable tax year. No named executive is likely to earn over $1 million in
1996 as defined in the Code. The Company does not have a policy at this time
regarding qualifying compensation paid to its executive officers for
deductibility under Section 162(m), but continues to monitor the situation.
ELEMENTS OF EXECUTIVE OFFICER COMPENSATION POLICY. The Company's executive
officer compensation policy is comprised of base salary, annual management
incentive compensation in the form of cash, long-term incentive compensation in
the form of stock options and/or restricted stock awards, and various other
benefits, including both medical, retirement and other benefit plans generally
available to employees of the Company and also certain perquisites available
only to executive officers (as described more fully below).
BASE SALARY. Base salary levels for the Company's executive officers,
including the Chief Executive Officer, are generally set at or below median
levels of competitiveness compared to manufacturing companies of similar size
and profitability. In determining individual salaries, in addition to the
comparison with similar companies, the Committee also takes into consideration
individual experience and performance, as well as competitive and comparable
data related to the executive officer's specific areas of expertise. As a matter
of philosophy, the Company does not emphasize base salaries in an executive's
total compensation package.
7
<PAGE>
ANNUAL INCENTIVE COMPENSATION. Under the Company's management incentive
bonus plan (the "Bonus Plan"), executive officers and key employees of the
Company, designated by the Chief Executive Officer, may receive cash bonus
awards after the close of the fiscal year if the Company achieves financial
performance goals set by the Board for that year. Target bonus rates of a
percentage of base salary are established for each executive officer, depending
upon the individual's level of responsibility and the median level of incentive
compensation opportunity offered by like-sized manufacturing companies as
reported in salary surveys. In 1995, the Company achieved performance beyond
established financial performance goals. Accordingly, executive officers were
eligible to receive the maximum bonus under the Bonus Plan for 1995.
LONG-TERM INCENTIVE COMPENSATION. On December 10, 1993, the Company's Board
of Directors approved the 1994 Plan which subsequently was approved by the
Company's stockholders at the 1994 Annual Meeting of Stockholders. The 1994 Plan
provides for grants to eligible employees of the Company of stock options,
restricted stock awards, performance units, stock bonuses and stock appreciation
rights. The Committee has the discretion to select participants, the type of
award and the terms and conditions for each award, to the extent not otherwise
fixed by the terms of the 1994 Plan. Awards under the 1994 Plan are intended to
align management and stockholder long-term interests by creating a direct link
between executive compensation and stockholder return, and to enable executives
to develop and maintain an equity position in the Company.
The Committee does not rely on any single formula in determining the size of
grants or selecting recipients, but considers relevant median level competitive
data, the potential and performance of the recipient, grants made in prior years
and options which remain outstanding.
OTHER BENEFITS. The Company provides medical and retirement benefits to
executive officers that are generally available to Company employees, including
participation in medical and dental benefit plans, a qualified 401(k) employee
savings plan and a qualified defined contribution profit-sharing plan. In
addition, the Company offers executive officers and other key management
employees a nonqualified benefit equalization plan which is designed to restore
benefits that would otherwise be lost due to limits imposed by IRS code Sections
401(a)(17), 401(k)(3), 401(m), 402(g) and 415 of the Code. The Company also
offers executive officers certain executive perquisites which may be deemed to
be a personal benefit or constitute compensation to such executive officers,
including (for example) the use of leased automobiles, reimbursement for club
membership dues, tax preparation services, annual physical examinations and
supplemental health insurance. The Company provides an interest rate supplement
to executive officers who obtain commercial loans to pay the cost of exercising
stock options or of acquiring shares of the Company's stock in the open market.
In addition, the Company offers interest-free loans to employees to facilitate
the exercise of stock options. See "Certain Transactions."
CHIEF EXECUTIVE OFFICER COMPENSATION. Base salary, incentive compensation
awards, and other compensation paid to Mr. Burke, as well as stock option awards
made to Mr. Burke during his tenure as an executive officer, are consistent with
the design of the overall program described above, and are shown in the tables
below. The potential value of Mr. Burke's compensation package is designed to
"pay for results" by placing a high degree of pay at risk and by providing
significant emphasis on stockholder value through the granting of stock options.
Annual incentive compensation is targeted at 50% of his base salary with a
maximum of 75%. Benefits and perquisites are not emphasized and are set at or
below median levels of competitiveness. Mr. Burke's base salary and his stock
option awards are determined after a review of competitive compensation compiled
by independent consultants and after taking into account the Company's
performance under his leadership. The Company's performance is measured against
financial goals for earnings, earnings per share and cash flow. Other
measurements used to evaluate Mr. Burke are stock price performance and
soundness of strategic
8
<PAGE>
operating plans. Mr. Burke's 1995 base salary remains the same as his 1994 base
salary. Because the Company significantly exceeded its financial goals for 1995
as defined by the Company's Bonus Plan, Mr. Burke received a bonus equal to 75%
of his 1995 base salary.
Members of the Compensation Committee
S. Walter Richey, Chairman
John W. Castro
Dr. Richard A. Swalin
9
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total stockholder return on the
Company's Common Stock for the last five fiscal years to the total cumulative
return on the S&P 500 Index and the S&P Manufacturing (Diversified Industries)
Index over the same period, assuming a $100 investment in Common Stock and each
such index on December 31, 1990 and reinvestment of all dividends (if any).
<TABLE>
<CAPTION>
S & P MANUFACTURING
BMC INDUSTRIES, INC. S & P 500 (DIVERS. INDUSTRIES)
-------------------- -------------------- --------------------
<S> <C> <C> <C>
Dec-90 100.00 100.00 100.00
Dec-91 783.37 122.78 154.30
Dec-92 865.84 121.36 148.49
Dec-93 1262.12 122.63 149.13
Dec-94 1941.28 223.59 156.43
Dec-95 2338.33 234.93 156.39
</TABLE>
10
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table describes the cash and non-cash compensation for each of
the last three fiscal years of the Company's Chief Executive Officer and its
four other executive officers whose annual salary and bonus for 1995 exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
AWARDS
ANNUAL COMPENSATION(1) -------------
------------------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUS(2) COMPENSATION(3) OPTIONS(4) COMPENSATION(5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- --------------------------------- --------- ----------- ----------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Paul B. Burke 1995 $ 250,000 $ 187,500 $ 73,357 0 $ 67,012
Chairman of the Board, 1994 250,000 187,500 78,055 0 67,046
President and CEO 1993 220,000 165,000 48,250 400,000 58,757
Merle D. Kerr, 1995 155,000 81,375 73,528 40,000 38,130
Former Senior Vice 1994 155,000 81,133 46,253 0 38,164
President of Finance 1993 143,000 75,075 34,075 40,000 35,113
and Administration and Chief
Financial Officer (6)
Michael P. Hawks 1995 109,538 45,369 26,043 40,000 25,194
Vice President of 1994 100,000 37,438 24,000 0 22,399
Finance & 1993 95,700 35,888 18,267 20,000 21,241
Administration, Chief Financial
Officer and Secretary (7)
John L. Gburek, 1995 114,789 36,879 5,768 0 27,333
Vice President of 1994 -- -- -- -- --
Corporate Development (8) 1993 -- -- -- -- --
Terry R. Nygaard, 1995 93,000 34,875 20,796 0 20,607
Vice President of Taxes (9) 1994 91,269 34,226 22,073 0 19,845
1993 85,231 27,808 10,715 40,000 17,857
</TABLE>
- ------------------------
(1) Annual compensation (including compensation deferred at the election of the
named executive officer pursuant to qualified benefit plans) is included in
the appropriate category in the year earned.
(2) Bonuses are included in the year earned. Under the Company's management
incentive bonus plan, bonuses earned during any given fiscal year are paid
to participants by April of the following year.
(3) Includes the value of all perquisites and personal benefits provided by the
Company to the named individuals, including the use of leased automobiles,
reimbursement of club membership dues, tax preparation services, physical
examinations, supplemental health insurance and an interest rate supplement
related to the exercise of stock options or the acquisition of shares in the
open market. For the purposes of this table, the above mentioned perquisites
and benefits were valued at their incremental cost to the Company, not on
the taxable benefit derived by the named individuals. In addition, the
Company permits executive officers to exercise stock options and pay any
related income taxes due through interest-free loans from the Company. See
"Certain Transactions" below. The value of such interest-free loans was
determined by calculating the interest
11
<PAGE>
imputed on such loans for the applicable year at the applicable federal rate
provided by the Code. Specific perquisites or personal benefits exceeding
25% of the total reported for each of the named individuals were as follows:
(a) Mr. Burke: Leased auto, $15,681, $31,581 and $20,887 for fiscal 1995,
1994 and 1993, respectively; imputed interest on interest free loans,
$44,143 and $32,805 for fiscal 1995 and 1994, respectively.
(b) Mr. Kerr: Moving expenses, $31,756 for fiscal 1995; leased auto,
$12,271, $13,305 and $12,022 for fiscal 1995, 1994 and 1993,
respectively; imputed interest on interest free loans, $13,107 and
$17,973 for fiscal 1995 and 1994, respectively.
(c) Mr. Hawks: Leased auto, $12,166, $12,544 and $11,730 for fiscal 1995,
1994 and 1993, respectively; imputed interest on interest free loans,
$8,362 for fiscal 1995.
(d) Mr. Gburek: Leased auto, $3,965 for fiscal 1995; imputed interest on
interest free loans, $4,518 for fiscal 1995.
(e) Mr. Nygaard: Leased auto, $11,638, $12,089 and $7,364 for fiscal 1995,
1994 and 1993, respectively.
(4) The number of shares have been adjusted, where appropriate, for a
two-for-one stock split in both 1994 and 1995.
(5) Includes contributions made and to be made by the Company to the Company's
qualified 401(k) savings plan, qualified profit sharing plan and
nonqualified benefit equalization plan on behalf of the named individuals
for services performed in fiscal 1995, as follows:
(a) Mr. Burke: Savings plan, $3,000; profit sharing plan, $18,000; benefit
equalization plan, $46,012.
(b) Mr. Kerr: Savings plan, $3,000; profit sharing plan, $18,000; benefit
equalization plan, $17,130.
(c) Mr. Hawks: Savings plan, $5,278; profit sharing plan, $15,900; benefit
equalization plan, $4,016.
(d) Mr. Gburek: Savings plan, $4,170; profit sharing plan; $16,830; benefit
equalization plan, $6,333.
(e) Mr. Nygaard: Savings plan, $7,634; profit sharing plan, $12,973.
(6) Mr. Kerr resigned from his position as Senior Vice President of Finance and
Administration and Chief Financial Officer on August 3, 1995 to become
General Manager of Buckbee-Mears Europe GmbH, the Company's wholly-owned
German subsidiary.
(7) Mr. Hawks became Vice President of Finance and Administration, Chief
Financial Officer and Secretary on August 7, 1995, prior to which he was
Treasurer and Secretary.
(8) Mr. Gburek became Vice President of Corporate Development on August 2, 1995,
prior to which he was General Manager of Buckbee-Mears St. Paul.
(9) Mr. Nygaard became Corporate Controller on May 6, 1993. He resigned from
that position on January 29, 1996 to become Vice President of Taxes.
12
<PAGE>
OPTION GRANTS AND EXERCISES
The following tables summarize options granted to and exercised by the
executive officers named in the Summary Compensation Table above during fiscal
1995 and the potential realizable value of the options held by those individuals
at year-end 1995.
OPTION GRANTS IN FISCAL 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------
% OF TOTAL GRANT DATE
NUMBER OF OPTIONS VALUE (1)
SECURITIES GRANTED TO -------------
UNDERLYING EMPLOYEES IN EXERCISE OR GRANT DATE
OPTIONS FISCAL BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#) 1995(2) ($/SH)(3) DATE ($)
- --------------------- ----------- ------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Paul B. Burke 0 0 -- -- --
Merle D. Kerr 40,000(4) 13.3% $ 12.4375 7/11/00 $ 262,000
Michael P. Hawks 40,000(5) 13.3 12.4375 7/11/05 356,400
John L. Gburek 0 0 -- -- --
Terry R. Nygaard 0 0 -- -- --
</TABLE>
- ------------------------
(1) Present value determinations were made using the Black-Scholes option
pricing model. The assumptions used in the model are dependent on the date
of option grant. The assumptions used included expected volatility of .54,
risk-free rate of return of 5.52% - 6.16%, dividend yield of .000625% and
time to exercise of five years for Mr. Kerr and ten years for Mr. Hawks.
These determinations are not intended to forecast future appreciation, if
any, of the Common Stock. Actual gains (if any) on stock option exercises
are dependent upon the Company's future performance and the performance of
its Common Stock, overall market conditions, and the executives continued
employment with the Company through the vesting dates of the respective
option grants.
(2) All option grants were under the Company's 1994 Plan.
(3) Fair market value of the Company's Common Stock on the date of grant.
(4) Options were granted on July 11, 1995 and become exercisable in three equal
annual installments commencing on July 11, 1996. Reflects a two-for-one
stock split in 1995.
(5) Options were granted on July 11, 1995 and become exercisable in five equal
annual installments commencing on July 11, 1997. Reflects a two-for-one
stock split in 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
EXERCISE REALIZED YEAR-END(#) AT FISCAL YEAR-END($)
NAME (#)(1)(2) ($)(3) EXERCISABLE/UNEXERCISABLE(2) EXERCISABLE/UNEXERCISABLE(4)
- --------------------- ----------- ------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Paul B. Burke 105,000 $ 1,435,000 519,600/475,000 $10,804,302/$9,176,383
Merle D. Kerr 10,000 138,125 158,000/127,000 3,344,007/2,188,807
Michael P. Hawks 16,000 112,500 26,000/64,000 536,310/894,624
John L. Gburek 20,000 117,500 6,000/114,000 110,344/1,965,428
Terry R. Nygaard 5,000 30,781 4,000/26,000 73,562/495,186
</TABLE>
- ------------------------
(1) Under the 1994 Plan, the exercise price of options may be paid in cash or,
at the Compensation Committee's discretion, in shares of Common Stock valued
at fair market value on the date of exercise, or pursuant to a cashless
exercise procedure under which the executive provides irrevocable
instructions to a brokerage firm to sell the purchased shares and to remit
to the Company, out of the sale proceeds, an amount equal to the exercise
price plus all applicable withholding
13
<PAGE>
taxes. The exercise price may also be paid with an interest free loan from
the Company pursuant to the BMC Stock Option Exercise Loan Program (the "BMC
Loan Program"). See "Certain Transactions" for a more detailed description
of the BMC Loan Program.
(2) The number of shares have been adjusted, where appropriate, for a
two-for-one stock split in both 1994 and 1995.
(3) Market value of underlying securities on date of exercise, minus the
exercise price.
(4) Based on the closing price of the Common Stock on the New York Stock
Exchange -- Composite Transactions at December 31, 1995 ($23.25), minus the
exercise price.
OFFICER AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
Each of Messrs. Burke, Kerr, Hawks, Gburek and Nygaard have entered into
change of control agreements (the "Agreements") with the Company in the form
described immediately below.
Under the Agreements, termination of an individual executive officer's
employment with the Company in connection with any change of control triggers
severance benefits. A "change of control" includes the sale, lease or other
transfer of substantially all of the assets of the Company; a stockholder
approved dissolution or liquidation; a change of control reportable to the
Securities and Exchange Commission on Form 8-K; acquisition by any person of 50%
or more of the Company's voting stock; or, a change in composition of the
Company's Board of Directors, such that current directors cease to constitute a
majority (but only if the nominations of the newly elected members were not
approved by the current directors). With the exception of payments to Mr.
Gburek, severance benefits payable under the Agreements consist of three years'
base salary, payable in the form of a lump sum payment of one year's base salary
and a payout of the remainder over 24 months. Mr. Gburek's severance benefits
payable under his Agreement consist of one year's base salary payable in 12
monthly payments. The monthly payments under all of the Agreements are reduced
to the extent of any base salary received as a result of subsequent employment,
but the terminated executive officer has no duty to seek subsequent employment.
In the event the standard severance benefits constitute an excess parachute
payment under the rules of the Internal Revenue Service, severance benefits will
be reduced to an amount equal to the severance payment amount less the amount
required to avoid any excise tax. Under the Agreements, each executive officer
remains employed by the Company for a six-month period following any change of
control. During that period, he or she may resign for "good reason" and receive
contractual severance benefits. "Good reason" includes adverse changes in
compensation and/or duties, forced relocation to a new locale, or the Company's
failure to continue to provide benefit plans equivalent to those offered by the
Company prior to the change of control. At the end of the six-month period, the
executive has a 30-day period in which to decide whether to remain employed by
the successor; during that period, the executive may elect to terminate
employment, with or without good reason, and receive contractual severance
benefits. Any termination by the successor during the above periods without good
cause, or by the Company prior to a change in control at the insistence of an
acquiror, also triggers severance benefits. "Good cause" includes (i) willful
and continued failure to perform duties or (ii) conviction of a felony or gross
misdemeanor materially injurious to the Company. Death or attainment of age 65
prior to the end of the period during which monthly payments are made ends all
further obligations of the Company.
To the extent not already exercisable, options also become immediately
exercisable under the 1994 Plan in the event of any "change in control." For
purposes of the 1994 Plan, a "change in control" of the Company means the
following (a) the sale or other transfer of substantially all of the assets of
the Company; (b) the liquidation or dissolution of the Company; (c) a merger or
consolidation involving the Company if (i) less than 50% of the voting stock of
the surviving company is held by persons who were stockholders of the Company
immediately before the merger or consolidation, or (ii) less than 80% of the
voting stock of the surviving company is held by persons who were stockholders
of the Company immediately prior to the merger or consolidation without the
prior approval of the continuity directors of the Company (directors as of
December 10, 1993 and additional directors nominated or elected by a majority of
the "continuity directors"); (d) ownership by any person or
14
<PAGE>
group of 50% or more of the Company's voting stock, or 20% or more of the
Company's voting stock without the prior approval of the continuity directors;
(e) the continuity directors ceasing to constitute a majority of the Board; or
(f) any change of control that is required to be reported on Form 8-K.
Under the Company's 1984 Omnibus Stock Program, which terminated pursuant to
its terms on January 10, 1994, if any person makes a successful tender or
exchange offer for the Common Stock of the Company that the Board opposes or
does not affirmatively recommend, then (i) all incentive stock options, and
non-qualified options with respect to which no stock appreciation rights have
been granted, will become immediately exercisable, (ii) all non-qualified
options with respect to which stock appreciation rights have been granted and
which have been outstanding for at least six months, will become immediately
exercisable, provided that exercise may only take place during certain periods
following the public release of certain financial reports by the Company, and
(iii) all restrictions on any outstanding restricted stock awards will
immediately lapse.
To the extent not already vested, all benefits under the Company's Profit
Sharing Plan 1994 Revision (the "Profit Sharing Plan") and Savings Plan 1994
Revision (the "Savings Plan") become fully vested in the event of any "change in
control." For purposes of the Profit Sharing Plan and Savings Plan, a change in
control of the Company means the following: (a) the sale or other transfer of
substantially all of the assets of the Company; (b) the liquidation or
dissolution of the Company; (c) a person becomes the beneficial owner of 50
percent or more of the voting power of the outstanding securities of the
Company; (d) individuals who constitute "incumbent directors" (directors as of
January 1, 1994 and additional directors nominated or elected by a majority of
the "incumbent directors") cease to constitute at least a majority of the Board;
or (e) any change in control that is required to be reported under Section 13 or
15(d) of the Securities Exchange Act of 1934.
CERTAIN TRANSACTIONS
Effective April 22, 1993 (and as amended on December 14, 1994), the Company
adopted the BMC Loan Program pursuant to which employees can borrow money from
the Company, generally on an interest-free basis, to exercise the Company's
stock options and to pay any related income taxes due. The shares obtained upon
exercise of the underlying stock options are held by the Company as collateral
for the loan. The purpose of the BMC Loan Program is to facilitate the exercise
of stock options, to encourage share ownership by employees, to minimize tax
consequences to key employees, and to minimize the need to sell shares in the
open market to pay income taxes due upon the exercise of options. Approval of
the loans are subject to the sole and absolute discretion of the Committee.
The total amount that any employee may borrow under the program is
determined by the Committee but may not exceed the following: (i) for the first
loan request, 100% of the exercise price of the option, plus 100% of the state
and federal income taxes actually paid within 15 months of such exercise on any
income recognized by reason of such exercise and (ii) for any subsequent loan,
the lesser of (a) 100% of the exercise price of the option, plus 100% of the
state and federal income taxes actually paid within 15 months of such exercise
on any income recognized by reason of such exercise or (b) the amount that, when
added to the principal amount of all outstanding loans under the BMC Loan
Program, will not exceed 60% of the market value of all of the Company's stock
pledged as collateral by the employee immediately following the loan or (c)
eight times the employee's then current base salary. Notwithstanding the
foregoing criteria, no loan may be made which would cause the aggregate amount
of principal and accrued interest outstanding under all loans to an employee
exceed 100% of the market value of all of the Company's stock pledged as
collateral by that employee under the BMC Loan Program.
The loans made to employees under the BMC Loan Program are made on an
interest-free basis with respect to all amounts advanced to pay the option
exercise price. The loans are also interest-free with respect to the amounts
advanced to pay income taxes, but only to the extent that the aggregate
principal amount attributable to tax payments is not greater than two times the
employee's base annual compensation plus target bonus (the "Interest Free Loan
Amount"). The applicable interest rate for the amounts in excess of the Interest
Free Loan Amount is the rate applicable under any short-term borrowings by the
Company or, if the Company has no such borrowings, the interest rate payable to
the Company under its short-term money market investments. Upon termination of
the
15
<PAGE>
employee's employment, the loan must be repaid within 45 days or such longer
period as the Committee may determine. Upon the death or long term disability of
the employee, the Committee may extend the term of the repayment of the loan up
to six months. Notwithstanding the above, the Committee may demand repayment of
the notes at any time.
Each individual borrowing arrangement is evidenced by a written demand
promissory note executed by the employee at the time of borrowing. The note
provides that thirty percent (30%) of the employee's bonus compensation received
under the Bonus Plan (net of applicable estimated taxes and other withholdings)
will be applied to repay the principal under the note. In addition, a portion of
the proceeds from any sale of the Company's stock pledged under the BMC Loan
Program must be applied to the repayment of amounts outstanding under the BMC
Loan Program. All dividends received by an employee for BMC stock pledged for a
loan, net of applicable estimated taxes and other withholdings on such
dividends, are also applied to the loan.
The amount outstanding under the BMC Loan Program for Messrs. Burke, Hawks,
Gburek and Nygaard as of March 1, 1996 was $1,417,475, $222,875, $292,000 and
$116,172, respectively. The largest loan amount outstanding for Messrs. Burke,
Kerr, Hawks, Gburek and Nygaard during 1995 was $1,453,460, $345,952, $152,759,
$103,991 and $76,248, respectively.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who beneficially own
more than 10% of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and greater than 10% stockholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) reports
they file. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company with respect to the period ended December
31, 1995, all Section 16(a) filing requirements applicable to its directors,
executive officers and greater than 10% stockholders were complied with, except
that: Merle D. Kerr failed to timely file a Form 5, which was subsequently
filed.
INDEPENDENT AUDITORS
During 1995, in addition to auditing the Company's financial statements,
Ernst & Young, LLP performed services in connection with preparation of the
Company's tax returns and related tax planning, audits of employee benefit plans
of the Company and its operating units and provision of general accounting
advice.
Ernst & Young, LLP, or its predecessor, has been the Company's independent
auditors since 1980 and has been selected by the Board to continue as such for
the current fiscal year. The Company has requested and expects a representative
of Ernst & Young, LLP to be present at the Meeting, to make a statement if he or
she so desires and to respond to appropriate questions.
1997 STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented in the proxy materials
relating to the 1997 Annual Meeting of Stockholders must be received by the
Company on or before November 25, 1996.
16
<PAGE>
OTHER BUSINESS
The Company knows of no business which will be presented for consideration
at the Meeting other than that described in this proxy statement. As to other
business, if any, that may properly come before the Meeting, it is intended that
proxies solicited by the Board will be voted in accordance with the judgment of
the person or persons voting the proxies.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-K (EXCLUSIVE OF EXHIBITS) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 TO
EACH PERSON WHO IS A STOCKHOLDER OF THE COMPANY AS OF MARCH 1, 1996, UPON
RECEIPT FROM ANY SUCH PERSON OF A WRITTEN REQUEST FOR SUCH AN ANNUAL REPORT.
SUCH REQUESTS SHOULD BE SENT TO: INVESTOR RELATIONS DEPARTMENT, BMC INDUSTRIES,
INC., TWO APPLETREE SQUARE, MINNEAPOLIS, MN 55425.
Dated: March 22, 1996
BMC Industries, Inc.
Two Appletree Square
Minneapolis, Minnesota 55425
17
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
The undersigned hereby appoint(s) Michael P.
Hawks, and Jeffrey L. Wright, and each of them,
as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to
represent and to vote, as designated below, all
the shares of common stock of BMC Industries,
[LOGO] Inc. held of record by the undersigned on March
1, 1996, at the Annual Meeting of Stockholders to
Two Appletree Square be held on April 25, 1996, or any adjournment
Minneapolis, Minnesota 55425 thereof.
- ----------------------------
1. ELECTION OF DIRECTORS FOR all nominees listed AGAINST all nominees
below / / listed below / /
(except as marked to the
contrary below)
(INSTRUCTION: TO VOTE AGAINST ANY INDIVIDUAL NOMINEE(S), STRIKE A LINE THROUGH
HIS NAME ON THE LIST)
Lyle D. Altman Paul B. Burke Harry A. Hammerly
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
The Board of Directors Recommends a Vote FOR Proposal 1 Above.
(PLEASE SIGN ON REVERSE SIDE.)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES NAMED IN PROPOSAL 1 ABOVE.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
- --------------------------------------------------------------------------------
Dated: ______________, 1996.
____________________________
Print name(s) of
stockholder(s)
____________________________
Signature
____________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE
UNITED STATES.