<PAGE>
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 Section 240.14a-11(c) or Section
240.14a-12
CONTINENTAL MATERIALS CORPORATION
- - --------------------------------------------------------------------------------
(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), 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 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:
------------------------------------------------------------------------
/ / 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>
CONTINENTAL MATERIALS CORPORATION
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1995 annual meeting of stockholders of Continental Materials Corporation
(the "Company") will be held at 225 West Wacker Drive, Chicago, Illinois, on
Wednesday, May 24, 1995, at 10:00 a.m., to consider and act upon the following
matters:
(a) The election of three directors to serve until the 1998 annual
meeting or until their successors are elected and qualified.
(b) The ratification of the appointment of independent certified public
accountants to the Company for the fiscal year ending December 30, 1995.
(c) The transaction of such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 31, 1995, are
entitled to notice of and to vote at the annual meeting or any adjournment
thereof.
Accompanying this notice are the Annual Report for the fiscal year ended
December 31, 1994, a proxy statement, a form of proxy, and an envelope for
returning the executed proxy to the Company. Stockholders unable to attend the
annual meeting in person are requested to date, sign and return the enclosed
proxy at once.
By Order of the Board of Directors,
Mark S. Nichter
Secretary
Chicago, Illinois
April 13, 1995
<PAGE>
CONTINENTAL MATERIALS CORPORATION
225 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60606
PROXY STATEMENT
--------------
GENERAL INFORMATION
The enclosed proxy is solicited by and on behalf of the Board of Directors
(the "Board") of Continental Materials Corporation, a Delaware corporation (the
"Company"), for use at the annual meeting of the Company's stockholders to be
held on May 24, 1995, and is revocable at any time before it is exercised. Such
revocation may be effected by written notice to the Secretary of the Company, by
executing a subsequent proxy or by voting at the meeting in person. All proxies
duly executed and received will be voted on all matters presented at the
meeting. Where a specification as to any matter is indicated, the proxy will be
voted in accordance with such specification. Where, however, no such
specification is indicated, the proxy will be voted for the named nominees and
in favor of all proposals. The approximate date on which this proxy statement
and the enclosed proxy are first sent or given to stockholders is April 13,
1995.
The holders of record on March 31, 1995, of the 1,139,278 outstanding shares
of common stock of the Company are entitled to notice of and to vote at the
annual meeting. Each such share is entitled to one vote for each Director.
The three nominees for election as directors at the 1995 annual meeting of
stockholders who receive the greatest number of votes cast for the election of
directors at that meeting by the holders of the Company's common stock entitled
to vote at that meeting, a quorum being present, shall become directors at the
conclusion of the tabulation of votes. An affirmative vote of the holders of a
majority of the voting power of the Company's common stock, present in person or
represented by proxy and entitled to vote at the meeting, a quorum being
present, is necessary to approve the ratification of the appointment of
independent certified public accountants for the fiscal year ending December 30,
1995. Under Delaware law and the Company's Restated Certificate of Incorporation
and By-Laws, the aggregate number of votes entitled to be cast by all
stockholders present in person or represented by proxy at the meeting, whether
those stockholders vote FOR, AGAINST or abstain from voting, will be counted for
purposes of determining the presence of a quorum, and the total number of votes
cast FOR each of these matters will be counted for purposes of determining
whether sufficient affirmative votes have been cast. An abstention from voting
on a matter by a stockholder present in person or represented by proxy at the
meeting has the same legal effect as a vote AGAINST the matter even though the
stockholder or interested parties analyzing the results of the voting may
interpret such a vote differently.
<PAGE>
ELECTION OF DIRECTORS
The Company has a Board of Directors consisting of nine persons, divided
into three classes. At this year's annual meeting three directors will be
elected to serve for a term of three years or until their successors are elected
and qualified. It is the intention of the persons named in the accompanying form
of proxy to vote for the nominees named below. Management has no reason to
believe that any nominee will be unable to serve. If any nominee should not be
available, the persons named in the proxy will vote for the election of such
persons as will continue as nearly as possible the existing management goals of
the Company.
<TABLE>
<CAPTION>
NAME, AGE AND OTHER SERVED AS CURRENT TERM
POSITIONS, IF ANY, DIRECTOR AS DIRECTOR
WITH COMPANY SINCE BUSINESS EXPERIENCE EXPIRES
- - ------------------------------------------ --------- ---------------------------------------------- -------------
<S> <C> <C> <C>
NOMINEE DIRECTORS
James G. Gidwitz, 48, Chairman of the
Board and Chief Executive Officer....... 1978 Chairman of the Board and Chief Executive
Officer of the Company since 1983. 1995
Joseph L. Gidwitz, 90, Vice Chairman...... 1954 Vice Chairman of the Company since 1954. Vice
Chairman of the Board of Helene Curtis
Industries, Inc. since 1968.(1) 1995
Joseph J. Sum, 47, Vice President and
Treasurer............................... 1989 Elected Assistant Treasurer of the Company in
1978. Served as Controller of the Company
from 1979 through January 1989 and Secretary
from 1983 through February 1993. Elected Vice
President and Treasurer on August 8, 1988. 1995
CONTINUING DIRECTORS
Ralph W. Gidwitz, 59...................... 1984 President, Chief Executive Officer and
Director of RKG Corporation, a company
engaged in mergers and acquisitions since
1991; President, Chief Executive Officer and
Director of Terlin Corporation, a holding
company and parent company of Monreco USA,
Inc., from 1978 to 1991. President, Chief
Executive Officer and Director, Monreco USA,
Inc., 1986 to 1991. 1996
William G. Shoemaker, 78.................. 1968 Independent business consultant since January,
1991. Consultant to Consolidated Packaging
Corporation, a manufacturer of paperboard and
packaging materials, from 1977 through 1990. 1996
Theodore R. Tetzlaff, 50.................. 1981 Partner in the Chicago law firm of Jenner &
Block since 1982. 1996
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND OTHER SERVED AS CURRENT TERM
POSITIONS, IF ANY, DIRECTOR AS DIRECTOR
WITH COMPANY SINCE BUSINESS EXPERIENCE EXPIRES
- - ------------------------------------------ --------- ---------------------------------------------- -------------
<S> <C> <C> <C>
Thomas H. Carmody, 48..................... 1994 Vice President, U.S. Operations of Reebok,
International, Ltd. since December 15, 1993.
From April, 1992 to December 15, 1993 Mr.
Carmody was Vice President, Sports Division
of Reebok and prior to that, he was President
of Brooks Shoes, Inc. 1997
Ronald J. Gidwitz, 50..................... 1974 President of Helene Curtis Industries, Inc. a
producer of personal care products, since
July 1, 1979 and Chief Executive Officer
since 1985. Director of Helene Curtis
Industries, Inc.(1) 1997
William A. Ryan, 68, President and
Chief Operating Officer................. 1974 President of the Company since 1974; Director
of Team, Inc., a diversified services
company. 1997
<FN>
- - ---------
(1) Helene Curtis Industries, Inc. is a publicly-held company in which the
Gidwitz Family (hereinafter defined) is deemed to beneficially own, directly
or indirectly, approximately 31.7% of the outstanding stock.
</TABLE>
FAMILY RELATIONSHIPS
James G. Gidwitz and Ronald J. Gidwitz are sons of Gerald S. Gidwitz. Joseph
L. Gidwitz is Gerald S. Gidwitz's brother and Ralph W. Gidwitz is Joseph L.
Gidwitz's son. Gerald S. Gidwitz, together with his wife, his brother Joseph,
and their descendants are herein referred to as the "Gidwitz Family." See
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
COMMITTEES OF THE BOARD
The Company's Board of Directors has established an Audit Committee and a
Compensation Committee. There is no standing nominating committee or other
committee performing similar functions.
In 1994 the Audit Committee was composed of Theodore R. Tetzlaff, William G.
Shoemaker and Ralph W. Gidwitz. The function of the Audit Committee is to review
and make recommendations regarding: the hiring or retention of an independent
accounting firm to audit the Company's financial statements; the Company's
policies with respect to maintaining its books and records and furnishing
information to its independent auditors; the scope and effectiveness of the
independent auditor's audit procedures; the implementation of recommendations
made by the independent auditors in their annual management letter; the adequacy
and competency of Company personnel engaged in such activities; the procedures
of the Company in furnishing the public financial information, in accordance
with generally accepted accounting principles and practices; and such other
matters relating to the Company's financial affairs and accounts as the Audit
Committee deems desirable or in the best interest of the Company. There were two
committee meetings in 1994.
The Compensation Committee was composed of Ronald J. Gidwitz and Theodore R.
Tetzlaff in 1994. The Committee held two meetings in 1994.
BOARD MEETINGS
The Board of Directors held five meetings in fiscal 1994. All directors,
except Joseph L. Gidwitz, and Ralph W. Gidwitz attended 75% or more of the
aggregate number of meetings of the Board of Directors and the Committees of the
Board of Directors during the time when they served.
3
<PAGE>
DIRECTOR'S COMPENSATION
Each director who is not an officer or employee of the Company receives a
set fee of $10,000 per year, plus additional fees of $500 for each board meeting
or board committee meeting which he attends, with a $5,000 cap on the aggregate
meeting fee.
EXECUTIVE COMPENSATION
The following table summarizes the compensation of the Company's chief
executive officer and its three other executive officers for the years 1992
through 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
PAYOUTS
AWARDS ----------
ANNUAL COMPENSATION -------------------- LONG-TERM
---------------------------------------- RESTRICTED INCENTIVE
NAME AND PRINCIPAL OTHER ANNUAL STOCK STOCK PLAN ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION (1) AWARDS OPTIONS PAYOUTS COMPENSATION (2)
- - ------------------------ --------- --------- --------- ------------------ --------- --------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James G. Gidwitz -- 1994 $ 315,350 $ 236,550 -- None None None $ 57,734
Chairman and Chief 1993 304,350 88,020 -- None None None 44,708
Executive Officer 1992 290,934 79,350 -- None None None 27,604
William A. Ryan -- 1994 278,600 167,100 -- None None None 55,973
President and Chief 1993 268,850 62,200 -- None None None 45,141
Operating Officer 1992 256,933 56,000 -- None None None 24,551
Joseph J. Sum -- 1994 130,000 50,000 -- None None None 21,089
Vice President and 1993 127,558 23,500 -- None None None 14,870
Chief Financial 1992 113,344 25,000 14,106 None None None 11,406
Officer
Mark S. Nichter -- 1994 80,000 25,000 -- None None None 11,349
Secretary 1993 77,825 10,000 -- None None None 7,779
<FN>
- - ------------------------------
(1) Other Annual Compensation, except where indicated, does not exceed the
reporting thresholds.
(2) For 1994, the amounts shown include employer matching contributions to the
Company's 401(k) Plan of $56,168, $44,633, $19,645 and $10,859 for Messrs.
Gidwitz, Ryan, Sum and Nichter, respectively. For Messrs. Gidwitz, Ryan and
Sum, these amounts include amounts deferred under a Supplemental Profit
Sharing Plan. The amounts shown also include group term life insurance
premiums paid by the Company in the amount of $1,566, $11,340, $1,444 and
$490 for Messrs. Gidwitz, Ryan, Sum and Nichter, respectively.
</TABLE>
STOCK OPTIONS
The Company's Amended and Restated 1994 Stock Option Plan provides for the
granting of stock options to attract, retain and reward key managerial employees
of the Company or its subsidiaries. During 1994 there were no stock options
granted, no employee (including officers) exercised any stock option, and no
options were outstanding as of December 31, 1994.
PENSION PLAN FOR MR. RYAN
Certain additional contractual benefits have been extended to Mr. William A.
Ryan pursuant to a Deferred Compensation Agreement. Under this program, Mr. Ryan
will receive upon retirement an annual payment equal to 60% of his final average
compensation (i) less the amount of an annual annuity that could be purchased
with the amount then credited to his Profit Sharing Plan account that is
attributable to contributions by the Company or a participating subsidiary, (ii)
less his annual Social Security benefit at age 65, and (iii) less the amount of
annual annuity that will be provided from his account under the Company's
Supplemental Profit Sharing Plan. In effect, the Deferred Compensation Agreement
augments Mr. Ryan's other retirement benefits to provide an aggregate pension
amount equal to 60% of his final average salary. Mr. Ryan's projected annual
retirement benefit payment from the Company, assuming retirement at age 68,
would be approximately $85,000.
4
<PAGE>
Under the Deferred Compensation Agreement, if Mr. Ryan dies while in the
employ of the Company or one of its subsidiaries after age 65, a survivorship
retirement benefit will be paid to a designated beneficiary, as though Mr. Ryan
had retired immediately preceding his death.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation.
The Executive Compensation Program is administered by the Compensation
Committee of the Board of Directors (the "Committee"). The Committee's major
responsibilities are:
1. Reviewing the Company's major compensation and benefit practices,
policies and programs with respect to executive officers; and
2. Reviewing executive officers' salaries and bonuses.
COMPENSATION PHILOSOPHY
It is the philosophy of the Company to insure that executive compensation is
linked to corporate performance. Accordingly, in years in which performance
goals are achieved or exceeded, executive compensation should be higher than in
years in which the performance is below expectation. At the same time, the
Committee is cognizant of its need to offer compensation that is competitive. By
providing the opportunity for compensation that is comparable to the levels
offered by other similarly situated companies, the Company is able to attract
and retain key executives. The Committee regularly reviews the Company's
compensation programs to insure that pay levels and incentive opportunities are
competitive and reflect the performance of the Company. In conducting this
review the Committee retains independent compensation consultants.
COMPENSATION PROGRAM COMPONENTS
To achieve its compensation goals, the compensation program consists
primarily of two components -- base salary and bonuses. Both components are
adjusted based upon corporate performance and individual initiative and
performance. Total pay levels, that is the aggregate of base salary and annual
bonus, are largely determined through comparisons with companies of similar size
and complexity. In addition, one officer, William Ryan, President, participates
in the Company's Deferred Compensation Plan which is discussed above under the
heading "Pension Plan for Mr. Ryan." Total pay levels for the executive officers
are competitive within a range that the Committee considers to be reasonable and
necessary.
PERFORMANCE MEASURES
The Committee uses various performance measures in evaluating annual
executive compensation. The Committee examined earnings, adjusted for certain
unusual or nonrecurring items, as an important measure of performance. The
Committee also considered return on net investment and cash flows. In its
consideration, the Committee did not assign quantitative relative weights to
these factors or follow mathematical formulae. Rather, the factors discussed
above are compared by the Committee with the Company's annual business plan, the
Company's prior year's performance and the performance of other companies in the
industry segments in which the Company competes. The Committee then made
judgments after considering the various factors. The Committee believes that
these performance measures serve to align the interests of executives with the
interests of stockholders.
1994 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In evaluating the compensation of the Company's chief executive officer (the
"CEO"), the Committee reviewed the CEO's existing compensation arrangements, the
performance of the Company (taking into account the performance measures
discussed above) and the CEO and compensation of chief executive officers in
similarly situated companies. Based on this review, the Committee increased the
CEO's salary by 3.6% in 1994 as compared with 4.6% in 1993 and 10% in 1992
(after no increase in 1991). In setting the 1994 increase, the Committee
considered, among other things, the level of
5
<PAGE>
compensation of executives in similarly situated companies. In granting the
CEO's bonus in 1994, the Committee likewise considered the incentive
compensation paid to CEOs of similar companies and the Company's performance in
1994. The Company's performance in 1994 exceeded all goals set forth in the
Company's annual business plan. Income from continuing operations grew 56% to
$1,187,000, while net income grew to $1,385,000 compared to $40,000 in 1993.
Accordingly, the Committee granted the CEO a bonus of $236,550 for 1994 compared
to $88,020 last year.
STOCK OPTION AND LONG-TERM PLANS
The Company maintains the Continental Materials Corporation Amended and
Restated 1994 Stock Option Plan. There are presently no options or other awards
outstanding under the Plan. The Company has no other long term compensation
plans.
SUMMARY
After reviewing all of its existing compensation programs, the Committee
continues to believe that the total compensation program for executives of the
Company is competitive with the compensation programs provided by other
corporations of similar size and complexity. Moreover, the Committee believes
that it has set compensation at levels that reflect each executive officer's
contribution towards the Company's objectives.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Ronald J. Gidwitz and Theodore R. Tetzlaff
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Theodore R. Tetzlaff, a member of the Compensation Committee, is a partner
in the Chicago law firm of Jenner & Block. From time to time, the Company
retains Jenner & Block to provide it with legal services. The dollar amount of
fees paid to Jenner & Block by the Company in 1994 did not exceed 5% of that
firm's annual gross revenues.
Ronald J. Gidwitz, a member of the Compensation Committee, is the President
of Helene Curtis Industries, Inc. ("HCI"). Through May 1994, the Company leased
6,886 square feet of space at 325 North Wells Street, Chicago, Illinois for its
corporate offices from HCI. The Company has paid HCI total rent of $67,849 in
the year ending December 31, 1994. Management believes that the effective rent
per square foot at the time of execution of the lease was competitive with that
of similar premises in the area as determined by an independent third party. The
Company currently leases new office space from an independent third party.
In addition, the Company engaged in various transactions in which members of
the Gidwitz Family, including Ronald Gidwitz, had an interest.
L.O.M. Holdings, Inc. ("L.O.M."), a company whose subsidiaries are engaged
in the travel agency business, is owned by members of the Gidwitz Family. The
Company purchased a total of approximately $40,844 in airline tickets and other
travel services from subsidiaries of L.O.M. during its last fiscal year.
Management believes that these purchases were on terms that were as favorable as
might be obtained from an unrelated third party.
The Company is currently serving as the sponsoring corporation in an
Insurance Purchasing Group (the "Group"), which consists of the Company and its
subsidiaries and other companies in which the Gidwitz Family are the principal
owners. The cost of such insurance is allocated among all members of the Group
based on such factors as, but not limited to, nature of the risk, loss history
and size of operations. From time to time, the Company will advance payments to
the insurance carriers on behalf of the individual members of the Group. The
Company invoices each member of the Group for their respective share of each
payment. Interest at the rate of prime plus one percent is charged on all
amounts not paid by a member after 30 days from receipt of an invoice sent by
the Company. During fiscal year 1994, certain members of the Group were indebted
to the Company with respect to advances made by the Company under the insurance
purchasing program. The largest aggregate amount of indebtedness outstanding at
any time during fiscal year 1994 with respect to these companies equalled
approximately $202,000. As of the date of this proxy statement, no past due
amounts are
6
<PAGE>
owing to the Company from any member of the Group. The Company's participation
in the Group has, in management's opinion, resulted in significant savings to
the Company in terms of the cost of insurance premiums and other insurance
charges.
COMPARISON OF TOTAL SHAREHOLDER RETURN
The following graph compares 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 American Stock Exchange
Market Value Index ("ASEMVI"), and a peer group of companies selected by the
Company. The "Peer Group" is more fully described below. Dividend reinvestment
has been assumed with respect to the ASEMVI and the Peer Group. The companies in
the peer group are weighted by market capitalization as of the beginning of the
measurement period. The Company has never paid a dividend.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CONTINENTAL MATERIALS CP BROAD MARKET INDEX PEER GROUP INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 38.64 84.8 79.02
1991 41.22 104.45 59.02
1992 48.58 105.88 51.49
1993 48.88 125.79 61.72
1994 70.99 111.12 61.08
</TABLE>
The Company manufactures and markets products in two separate industries.
These industries are (i) heating and air conditioning and (ii) construction
materials, primarily ready-mix concrete. The Company's principal activities have
occurred exclusively in these two industries for over 15 years. The Peer Group
selected by the Company for the above graph is a combination of companies from
these two industries. The companies included in the Peer Group are: American
Business Computer Corporation; Danaher Corporation; Fedders Corporation; Florida
Rock Industries Inc.; ICC Technologies; Kysor Industrial Corporation; Lancer
Corporation; LSB Industries, Inc.; Mesteck Inc.; Tecumseh Products Inc.;
Westinghouse Electric Corporation; and Wynn's International, Inc.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following information is furnished as to the Common Stock of the Company
owned beneficially as of March 25, 1995 by (i) each director, (ii) the executive
officers named in the summary compensation table, (iii) directors and executive
officers as a group, and (iv) persons that have reported beneficial ownership of
more than 5% of the Company's Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENT
OF BENEFICIAL OWNER NO. OF SHARES OF CLASS (1)
- - ---------------------------------------- ---------------- ------------
<S> <C> <C>
Gidwitz Family
325 North Wells Street
Chicago, Illinois 60610 392,809(2) 34.5%
Continental Materials Corporation
Employees Profit Sharing Retirement
Plan 68,465 6.0%
Thomas H. Carmody 100
James G. Gidwitz --(2)(3)
Joseph L. Gidwitz --(2)(3)
Ralph W. Gidwitz --(3)
Ronald J. Gidwitz --(3)
Mark S. Nichter 100
William A. Ryan 600(2)
William G. Shoemaker 160
Joseph J. Sum 200(2)
Theodore R. Tetzlaff 0
All directors and officers as a
group (includes ten persons) 462,434 40.6%
<FN>
- - ---------
(1) The shares owned in each case except as otherwise indicated, constitute
less than 1% of the outstanding shares of the Company's common stock.
(2) Excludes 68,465 shares held by the Company's Employee Profit Sharing
Retirement Plan as to which James L. Gidwitz, Joseph L. Gidwitz, William A.
Ryan and Joseph J. Sum share voting power as trustees of such Plan.
(3) Excludes shares held indirectly as follows:
(a) 363,563 shares owned by a partnership whose managing partners are
Joseph L. Gidwitz, Gerald S. Gidwitz, Ronald J. Gidwitz, James G. Gidwitz
and Ralph W. Gidwitz.
(b) 23,117 shares owned by L.O.M. whose beneficial owners include
members of the Gidwitz Family.
(c) 6,129 shares held directly by family members of Joseph L. Gidwitz
other than those family members included in the security ownership of
management table above.
With respect to the shares referenced in this Note, the beneficial
owners indicated in (c) have sole voting and investment power and the
beneficial owners indicated in (a) and (b) have shared voting and investment
power.
</TABLE>
8
<PAGE>
PROPOSAL FOR RATIFICATION OF
EMPLOYMENT OF INDEPENDENT AUDITORS
The Board of Directors and the Audit Committee recommend ratification of the
continued employment of Coopers & Lybrand, Certified Public Accountants, to
audit the Company's books for the fiscal year ending December 30, 1995. An
appropriate resolution ratifying such employment will be submitted to the
stockholders at the annual meeting. If such resolution is not adopted,
management will reconsider such appointment.
A representative of Coopers & Lybrand is expected to be present at the
stockholders' annual meeting. The representative will have an opportunity to
make a statement if he/she desires to do so, and he/she will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
STOCKHOLDER PROPOSALS AND OTHER MATTERS
The deadline for receipt of stockholder proposals for inclusion in the
Company's proxy statement for its 1995 fiscal year is December 22, 1995.
The management does not know of any matters to be presented at the annual
meeting other than those set forth in this proxy statement. If any other matters
not now known come before the annual meeting, it is intended that the persons
named in the proxies will act according to their best judgment.
EXPENSES
The entire expense of preparing, printing and mailing the form of proxy and
the material used for the solicitation thereof will be borne by the Company. In
addition, the Company has retained the services of Beacon Hill Partners, Inc. to
solicit proxies from nominees and brokers' accounts at a cost of approximately
$3,500. Solicitation of proxies will be made by mail but also may be made
through oral communications by directors, officers or employees of the Company
who will receive no additional compensation for such efforts.
By Order of the Board of Directors,
James G. Gidwitz
Chairman of the Board
9
<PAGE>
PROXY CONTINENTAL MATERIALS CORPORATION
PROXY CARD FOR ANNUAL MEETING ON MAY 24, 1995
The undersigned hereby appoints Ronald J. Gidwitz and William A. Ryan as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote as designated below, all the shares of common
stock of Continental Materials Corporation held on record by the undersigned on
March 31, 1995, at the annual meeting of stockholders to be held on May 24, 1995
or any adjournment thereof.
The Board of Directors unanimously recommends a vote FOR the following:
<TABLE>
<S> <C> <C> <C>
(1) Election of three nominees to the Board of Directors.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed
below) below
</TABLE>
James G. Gidwitz, Joseph L. Gidwitz and Joseph J.Sum
<TABLE>
<S> <C> <C> <C>
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through that nominee's name.)
(2) Approval and ratification of the Directors' appointment of Coopers & Lybrand as the Company's
independent auditors for the year ending December 30, 1995.
</TABLE>
/ / FOR / / AGAINST / / ABSTAIN
<TABLE>
<S> <C> <C> <C>
(3) In their discretion, the Proxies are authorized to vote upon such other business as may properly
come before the meeting.
</TABLE>
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
(Continued, and to be signed on the other side)
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO INSTRUCTIONS ARE GIVEN, IT
WILL BE VOTED "FOR" ELECTION OF ALL NOMINEES AS DIRECTORS OF THE COMPANY, AND
"FOR" APPROVAL AND RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
DATED: ___________________ , 1995
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Signature
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Signature if held jointly
Please vote, sign, date and
return this proxy promptly.
Please sign exactly as name appears above. Executors, administrators, trustees,
guardians, attorneys-in-fact, etc. should give their full titles. If signer is a
corporation, please give full corporate name and have a duly authorized officer
sign, stating title. If a partnership, please sign in partnership name by
authorized person. If stock is registered in two names, both should sign.
