[C&K Logo] CROMPTON & KNOWLES
CORPORATION
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders of Crompton & Knowles Corporation to be held at
11:15 a.m. on Tuesday, April 29, 1997, at the Tara Stamford
Hotel, 2701 Summer Street, Stamford, Connecticut.
Information about the business of the meeting and the nominees
for election as members of the Board of Directors is set forth
in the formal meeting notice and Proxy Statement on the
following pages. This year you are asked to elect directors,
to approve the material terms of the performance goals under
which annual incentive compensation is to be determined under
the 1997 Management Incentive Plan and to ratify the Board of
Directors' selection of an independent auditor for the fiscal
year ending December 27, 1997.
It is important that your shares be represented at the meeting.
Whether or not you plan to attend the session in person, we
hope that you will vote on the matters to be considered and
sign, date and return your proxy in the enclosed envelope as
promptly as possible.
The Company's fiscal year 1996 Annual Report is being mailed to
stockholders herewith, but it is not part of the proxy
solicitation material.
Respectfully yours,
/s/ Vincent A. Calarco
Vincent A. Calarco
Chairman, President &
Chief Executive Officer
March 28, 1997
___________________________________________________________
Notice of 1997 Annual Meeting of the Stockholders
___________________________________________________________
To the Stockholders:
The 1997 annual meeting of the stockholders of Crompton &
Knowles Corporation will be held at the Tara Stamford Hotel,
2701 Summer Street, Stamford, Connecticut, on Tuesday, April
29, 1997, at 11:15 A.M. in the morning, local time, to consider
and act upon the following matters:
1. The election of three directors to serve for a term
expiring in 2000, described beginning at page 1 of the
Proxy Statement which follows;
2. A proposal to ratify the selection by the Board of
Directors of an independent auditor for 1997,
described beginning at page 14;
3. A proposal to approve the material terms of the
performance goals under which annual
incentive compensation is determined under the 1997
Management Incentive Plan, described beginning at
page 14; and
4. Such other business as may properly come before the
meeting.
Your attention is directed to the accompanying Proxy
Statement for additional information with respect to the
matters to be considered at the meeting.
Stockholders of record at the close of business on
February 28, 1997, are entitled to notice of the annual meeting
and may vote at the meeting and any adjournment thereof. We
urge you to date, sign and return the enclosed proxy promptly
whether or not you plan to attend the annual meeting. If you
attend the meeting, you may still vote your shares in person,
if you wish.
By Order of the Board of Directors,
/s/ John T. Ferguson II
JOHN T. FERGUSON II
Secretary
March 28, 1997
Crompton & Knowles Corporation, One Station Place, Metro
Center, Stamford, CT 06902
PROXY STATEMENT
This statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Crompton &
Knowles Corporation (the "Corporation") for use at the annual
meeting of the stockholders of the Corporation to be held on
April 29, 1997, at the Tara Stamford Hotel, 2701 Summer Street,
Stamford, Connecticut, and at any adjournment thereof.
Holders of Common Stock of the Corporation of record at
the close of business on February 28, 1997, the record date,
are entitled to notice of and to vote at the meeting and any
adjournment thereof. On the record date, there were
outstanding and entitled to vote 72,961,866 shares of Common
Stock, each of which is entitled to one vote. The Corporation
has no other voting securities issued and outstanding.
If a stockholder is participating in the Corporation's
Dividend Reinvestment Plan, the shares held in a person's
account under the Plan will be voted automatically in the same
way that such person's shares held of record are voted.
Any stockholder giving a proxy may revoke it by executing
another proxy bearing a later date or by notifying the
Secretary in writing at any time prior to the voting of the
proxy. Mere attendance at the annual meeting does not revoke a
proxy.
The Corporation's annual report for the fiscal year ended
December 28, 1996, accompanies this Proxy Statement. It is not
proxy soliciting material, nor is it incorporated herein by
reference.
This Proxy Statement and the enclosed form of proxy are
first being sent to stockholders on or about March 28, 1997.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following persons were known to the Board of Directors
to be the beneficial owner of more than 5% of the Corporation's
outstanding voting securities as of February 28, 1997:
Common Loomis Sayles & Company L.P. 6,981,450 9.6%
One Financial Center
Boston, MA 02111
Common Mellon Bank Corporation 6,041,000 8.3%
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258-0001
Common The Equitable Companies Incorporated 5,275,901 7.2%
787 Seventh Avenue
New York, NY 10019
Common FMR Corp. 3,944,082 5.4%
82 Devonshire Street
Boston, MA 02109
ELECTION OF THREE DIRECTORS
The By-Laws of the Corporation provide for a Board of
Directors of not less than six nor more than fifteen members,
as determined from time to time by resolution of the Board,
divided into three classes. Directors of one class are elected
each year for a term of three years. There are presently nine
directors in office, three of whom are standing for election at
this year's meeting as Class III directors whose term will
expire at the 2000 annual meeting, three of whom are Class I
directors whose term expires at the 1998 annual meeting and
three of whom are Class II directors whose term expires at the
1999 annual meeting. The Board has nominated the three persons
named below to serve as Class III directors for a three-year
term expiring at the 2000 annual meeting and until their
respective successors are elected and have qualified. Shares
represented by the accompanying proxy are intended to be voted,
unless authority so to vote is withheld, for such nominees.
The Class III nominees include members of the present Board who
have served as directors since the dates set forth after their
names. All of the nominees and all of the incumbent directors
have previously been elected by the stockholders. If any of
the nominees is not available, an event not anticipated, the
proxies will be voted for the other nominees and for a
substitute if any is designated by the Board of Directors.
Nominees For Director
CLASS III (to serve until the annual meeting of
stockholders in 2000):
Robert A. Fox, 59, is President and Chief Executive
Officer of Foster Poultry Farms, a privately held, integrated
poultry company, Livingston, CA. He is former Executive Vice
President of Revlon, Inc., a cosmetics, fragrances and
toiletries manufacturer, New York, NY; and former Chairman and
Chief Executive Officer of Clarke Hooper America, an
international marketing services firm, Irvine, CA. Mr. Fox has
been a director of the Corporation since 1990 and is the
Chairman of the Nominating Committee and a member of the
Executive Compensation Committee. He is also a director of the
American Balanced Fund, the Growth Fund of America, Inc., the
New Perspective Fund and the Income Fund of America, Inc., and
a trustee of the Euro-Pacific Growth Fund.
Roger L. Headrick, 60, is President and Chief Executive
Officer of the Minnesota Vikings Football Club, Eden Prairie,
MN, and President and Chief Executive Officer of ProtaTek
International, Inc., a biotechnology animal vaccine company,
St. Paul, MN. Mr. Headrick is former Executive Vice President
and Chief Financial Officer of The Pillsbury Company, a food
processing and restaurant company, Minneapolis, MN. He has
been a director of the Corporation since 1988 and is the
Chairman of the Finance Committee and a member of the Executive
Compensation Committee. He also serves as a member of the
Board of Directors of MedPartners Inc.
Leo I. Higdon, Jr., 50, is the Dean of the Darden Graduate
School of Business Administration at the University of
Virginia, Charlottesville, VA, and a former Managing Director
and member of the Executive Committee of Salomon Brothers, an
investment banking firm, New York, NY. Mr. Higdon became a
director of the Corporation in 1993 and is Chairman of the
Audit Committee and a member of the Finance Committee. He is a
director of CPC International Corporation and Newmont Mining
Corp.
Incumbent Directors
CLASS I (to serve until the annual meeting of stockholders
in 1998):
James A. Bitonti, 66, is President and Chief Executive
Officer of TCOM, L.P., an aerostat systems manufacturer,
integrator and operator, Columbia, MD. He is a retired Vice
President of International Business Machines Corporation, where
he held the positions of Assistant Group Executive of the
Asia/Pacific Group and President of the Communication Products
Division. Mr. Bitonti has been a director of the Corporation
since 1983 and is Chairman of the Executive Compensation
Committee. He also serves as a member of the Board of
Directors of Raytheon E-Systems, Inc. and KFX, Inc.
Michael W. Huber, 69, is a director and the retired
Chairman of the Board of J.M. Huber Corporation, a diversified
manufacturing and natural resource development company, Edison,
NJ. He has been a director of the Corporation since 1983 and
is a member of the Executive Compensation Committee and the
Audit Committee. He also serves as a director of Norland
Medical Systems, Inc.
Patricia K. Woolf, Ph.D., 62, is a private investor, and
lecturer in the Department of Molecular Biology, Princeton
University. She has been a director of the Corporation since
1994 and is a member of the Audit Committee and the Nominating
Committee. Dr. Woolf is also a director of the American
Balanced Fund, the Income Fund of America, Inc., the Growth
Fund of America, Inc., Smallcap World Fund, Inc., the New
Economy Fund, the National Life Insurance Co. of Vermont, and
General Public Utilities Corporation.
CLASS II (to serve until the annual meeting of
stockholders in 1999):
Vincent A. Calarco, 54, Chairman of the Board, President
and Chief Executive Officer of the Corporation. Mr. Calarco
has been a director since 1985 and is a member of the Finance
Committee.
Charles J. Marsden, 56, Senior Vice President and Chief
Financial Officer of the Corporation. Mr. Marsden has been a
director of the Corporation since 1985.
C.A. (Lance) Piccolo, 56, is President and Chief Executive
Officer of HealthPIC Consultants, Inc., a strategic health-care
consulting firm in Lincolnshire, IL. Prior to the merger of
Caremark International Inc. and MedPartners/Mullikin, Inc., he
was the Chairman and Chief Executive Officer of Caremark
International Inc., a provider of alternate-site health-care
services. He is former Executive Vice President of Baxter
International Inc., a supplier of health-care products,
Deerfield, IL. He has been a director of the Corporation since
1988 and is a member of the Audit Committee and the Nominating
Committee. Mr. Piccolo also serves as a director and Vice
Chairman of the Board of MedPartners, Inc.
Board Meetings and Committees
The Board of Directors held six regular and two special
meetings during 1996. All of the directors attended at least
75% of the aggregate of the meetings of the Board and of the
committees on which they served in 1996.
The Board has established four committees to assist it in
the discharge of its responsibilities. The Audit Committee, no
member of which is an employee of the Corporation, meets
periodically with the Corporation's independent auditor to
review the scope of the annual audit and the policies relating
to internal auditing procedures and controls, provides general
oversight with respect to the accounting principles employed in
the Corporation's financial reporting, and reviews the
Corporation's annual report on Form 10-K prior to its filing
each year. The Audit Committee also recommends to the Board
each year the selection of the auditor, has responsibility for
approving professional non-audit services provided by the
independent auditor, considers the possible effect of providing
such non-audit services on the auditor's independence, and
reviews the range of fees of the auditor for both audit and
non-audit services. The Audit Committee held two meetings
during 1996.
The Committee on Executive Compensation is composed of
directors who are not employees of the Corporation. Its
functions include approval of the level of compensation for
executive officers serving on the Board, adoption of bonus and
deferred compensation plans and arrangements for executive
officers, and administration of the Crompton & Knowles
Corporation 1993 Stock Option Plan for Non-Employee Directors,
the Crompton & Knowles Corporation Restricted Stock Plan for
Directors and the Corporation's 1988 Long-Term Incentive Plan
(the "1988 Plan"). The Executive Compensation Committee held
three meetings during 1996.
The Board established a Finance Committee in 1996,
composed of directors a majority of whom are not employees of
the Corporation. The Committee has the authority, which it may
exercise when the Board is not in session, to approve certain
debt financings and reviews and makes recommendations to the
Board regarding the issuance or reacquisition of securities,
major debt financings, capital expenditures, acquisitions,
divestitures and other expenditures, dividend policy,
management of pension assets, and risk management policy and
strategy. The Finance Committee did not meet in 1996.
The Nominating Committee is composed of directors who are
not employees of the Corporation. The Committee makes
recommendations with respect to the organization, size, and
composition of the Board, identifies suitable candidates for
Board membership and reviews their qualifications, proposes a
slate of directors for election by the stockholders at each
annual meeting, and assists the Board in providing for orderly
succession in the top management of the Corporation. The
Nominating Committee met once in 1996.
Compensation of Directors
Directors who are employees of the Corporation receive no
additional compensation for services on the Board of Directors.
Members of the Board who are not employees receive an annual
retainer of $25,000 (committee chairmen receive an additional
retainer of $2,500) and a fee of $8,500 for meeting service,
and are reimbursed for expenses incurred in attending meetings.
The Corporation provides accidental death and travel insurance
coverage for each non-employee director.
Under the Crompton & Knowles Corporation Restricted Stock
Plan for Directors, one quarter of each director's retainer and
fees is paid in shares of the Corporation's Common Stock. A
director may elect to receive any portion or all of the
remainder of the retainer and fees in Common Stock under the
plan. All shares issued under the plan are held by the
Corporation until the recipient of the shares leaves the Board,
however the directors receive all dividends on the shares and
may vote the shares.
The Crompton & Knowles Corporation 1993 Stock Option Plan
for Non-Employee Directors provides for the issuance to non-employee
directors on the date of the first meeting of the
Board each year of an option to purchase that number of full
shares of the Corporation's Common Stock determined by dividing
an amount equal to twice the annual retainer payable to non-employee
directors for service on the Board by the fair market
value of the stock on the date of the grant. The exercise
price of the options is to be equal to such fair market value
on the date of grant. The options are to vest over a two-year
period and are to be exercisable over a ten-year period from
the date of grant. Options to be granted under the plan are
nonstatutory options not intended to qualify as incentive stock
options under the Internal Revenue Code of 1986.
Stockholder Nominations
The Nominating Committee will consider qualified
candidates proposed by stockholders for Board membership in
accordance with the procedure set forth in the By-Laws. Any
stockholder entitled to vote in the election of directors may
nominate one or more persons for election as directors at a
meeting if written notice of such stockholder's intent to make
such nomination or nominations has been given, either by
personal delivery or by mail, postage prepaid, to the Secretary
of the Corporation not later than (a) with respect to an
election to be held at an annual meeting of stockholders, 90
days prior to the anniversary date of the immediately preceding
annual meeting, and (b) with respect to an election to be held
at a special meeting of stockholders for the election of
directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to
stockholders. Each such notice shall set forth (i) the name and
address of the stockholder who intends to make the nomination
and of the person or persons to be nominated; (ii) a
representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (iii) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder;
(iv) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities
and Exchange Commission; and (v) the consent of each nominee to
serve as a director of the Corporation, if so elected. The
presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the
foregoing procedure.
SECURITY OWNERSHIP OF MANAGEMENT
The nominees and incumbent directors and the executive
officers of the Corporation have advised that they were
directly or indirectly the beneficial owners of outstanding
Common Stock of the Corporation at the close of business on
February 28, 1997, as set forth below, in each case
representing less than one percent of such shares outstanding
except as otherwise indicated.
Amount and
Nature of
Title Name of Beneficial Beneficial Percent of
of Class Owner Ownership(1) Class
Common Vincent A. Calarco...... 1,864,938(2) 2.5%
Common James A. Bitonti........ 32,828(3)
Common Robert A. Fox........... 34,109(4)
Common Roger L. Headrick....... 60,471(5)
Common Leo I. Higdon, Jr....... 4,770(6)
Common Michael W. Huber........ 23,038(7)
Common Charles J. Marsden...... 490,585(8)
Common C.A. (Lance) Piccolo.... 17,600(9)
Common Patricia K. Woolf....... 5,683(10)
Common Joseph B. Eisenberg..... 195,195(11)
Common Alfred F. Ingulli....... 359,587(12)
Common William A. Stephenson... 119,342(13)
Common Directors and Executive
Officers as a Group
(18 persons)............ 4,774,422(14) 6.4%
___________
(1) Except as noted below, the officers and directors have
both sole voting and sole investment power over the shares
reflected in this table.
(2) Includes 868,496 shares which Mr. Calarco had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; 522,263 shares held under the 1988
Plan and the Employee Stock Ownership Plan, as to which he
has voting but no investment power; and 58,872 shares
owned by his wife and 23,187 shares held by him or his
wife as custodian for their children, as to which he
disclaims beneficial ownership.
(3) Includes 3,789 shares which Mr. Bitonti had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; 11,200 shares owned jointly by Mr.
Bitonti with his wife; 12,383 shares held under the
Restricted Stock Plan for Directors; and 4,800 shares
owned by his wife as to which he disclaims beneficial
ownership.
(4) Includes 3,789 shares which Mr. Fox had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; and 10,337 shares held under the
Restricted Stock Plan for Directors.
(5) Includes 3,789 shares which Mr. Headrick had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; and 12,062 shares held under the
Restricted Stock Plan for Directors.
(6) Includes 2,947 shares which Mr. Higdon had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; and 1,823 shares held under the
Restricted Stock Plan for Directors.
(7) Includes 3,789 shares which Mr. Huber had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; and 9,249 shares held under the
Restricted Stock Plan for Directors.
(8) Includes 262,626 shares which Mr. Marsden had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; 88,440 shares held under the 1988
Plan and the Employee Stock Ownership Plan, as to which he
has voting but no investment power; and 19,000 shares
owned by his wife as to which he disclaims beneficial
ownership.
(9) Includes 3,789 shares which Mr. Piccolo had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; and 10,872 shares held under the
Restricted Stock Plan for Directors.
(10) Includes 2,014 shares which Dr. Woolf had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997; and 3,624 shares held under the
Restricted Stock Plan for Directors.
(11) Includes 122,485 shares which Mr. Eisenberg had the right
to acquire through stock options exercisable within 60
days of February 28, 1997; 25,000 shares owned by his wife
as to which he disclaims beneficial ownership.
(12) Includes 236,230 shares which Mr. Ingulli had the right to
acquire through stock options exercisable within 60 days
of February 28, 1997.
(13) Includes 76,293 shares which Mr. Stephenson had the right
to acquire through stock options exercisable within 60
days of February 28, 1997.
(14) Includes 2,244,771 shares which the officers and directors
in the group had the right to acquire through stock
options exercisable within 60 days of February 28, 1997.
REPORT OF THE COMMITTEE ON EXECUTIVE COMPENSATION
Executive Compensation Philosophy
The compensation program for the Corporation's executive
officers is administered in accordance with a pay for
performance philosophy to link executive compensation with the
values, objectives, business strategy, management initiatives
and financial performance of the Corporation. In addition, a
significant portion of each executive officer's compensation is
contingent upon the creation of shareholder value.
The Committee on Executive Compensation of the Board (the
"Committee") believes that stock ownership by management and
restricted stock-based performance compensation plans serve to
align the interests of management and other stockholders in the
enhancement of shareholder value. The Committee further
maintains that long-term strategic leadership commitment is
promoted through vesting a significant portion of restricted
stock performance awards at retirement.
The compensation of the Corporation's executive officers
is comprised of cash and equity components and is designed to
be competitive and highly leveraged based upon corporate
financial performance and shareholder returns. The
compensation program provides an opportunity to earn
compensation in the third quartile within the chemical industry
as well as within a broader group of companies of comparable
size and complexity. Actual compensation levels may be greater
or less than average competitive levels in surveyed companies
based upon annual and long-term performance of the Corporation
as well as individual performance. The measures of performance
utilized under the Corporation's compensation plans are as
follows:
. Annual actual earnings performance versus targeted
performance.
. Annual actual sales performance versus targeted
performance.
. Annual actual working capital performance versus
targeted performance.
. Annual actual cash flow performance versus targeted
performance.
. Three-year average annual return on capital and
after-tax earnings per share growth.
Base Salaries
Base salaries and salary ranges for the executive officers
are based upon competitive norms gathered from several national
and highly recognized compensation services. The Committee on
Executive Compensation reviews and approves the salary ranges
for the executive officers.
Management Incentive Plan
The Corporation's Management Incentive Plan is an annual
incentive program for executive officers and other key
managers. The purpose of the plan is to provide a direct
financial incentive in the form of an annual cash award to
executives who achieve the annual goals for their business unit
and the Corporation.
Stock Options and Restricted Stock
The stock option and restricted stock program is a long-term
incentive plan for the Corporation's executive officers
and other key managers. The objectives of the program are to
align executive and shareholder long-term interests by creating
a strong and direct link between executive pay and shareholder
return, and to enable executives to develop and maintain a
significant, long-term stock ownership position in the
Corporation's Common Stock.
The executive officers listed in the compensation table
below receive a major portion of their compensation in the form
of shares of the Corporation's Common Stock. They receive
annual grants of stock options, priced at fair market value on
the date of grant. The number of options granted in 1996,
exclusive of the options granted in connection with the merger
with the Corporation of Uniroyal Chemical Corporation
("Uniroyal"), was in the second quartile of all companies
included in industrial company survey data available to the
Committee. The factors used to award options include overall
corporate performance, percentile rankings, base salary, and
total compensation. To recognize the extraordinary efforts of
certain key managers, including the executive officers listed
in the table on page 10, and to secure a motivated management
team for the future, the Committee made a special one-time
grant of options in connection with the Uniroyal merger.
In addition, the Corporation's executive officers have
received the opportunity under the 1988 Plan to earn shares of
restricted stock based upon the Corporation's cumulative after-
tax earnings growth and return on capital over a three-year
period, the current period being 1996 - 1998. These grants
have the potential to deliver above-average compensation if the
goals are met. If the employment of an individual terminates
after an award is earned for any reason other than death,
disability, retirement, or a change in control of the
Corporation, any shares that have not vested will be forfeited.
Compensation of Chief Executive Officer
In recognition of Mr. Calarco's significantly increased
responsibilities following the merger with Uniroyal, the
Committee increased Mr. Calarco's base salary to $700,000
during fiscal year 1996. The Committee believes Mr. Calarco
has continued to manage the Corporation extremely well in a
particularly challenging business climate and has achieved
above average long-term results in comparison to others in the
chemical industry. The annual stock option and restricted
stock awards granted to Mr. Calarco during 1996 are consistent
with the design of the Corporation's executive compensation
program as described above, and the options and restricted
stock included in those grants, together with the stock options
granted Mr. Calarco in connection with the merger with
Uniroyal, are shown in the compensation table below. Following
the Uniroyal merger, the Committee undertook the revision and
integration of the two companies' incentive compensation plans,
and, in that connection, terminated the Annual Incentive
Compensation Plan for "A" Group of Senior Executives in which
Mr. Calarco participated. In recognition of the increase in
shareholder value resulting from the merger with Uniroyal
consummated in 1996 and of Mr. Calarco's pivotal role in the
transaction, the Committee in its discretion awarded Mr.
Calarco a cash bonus for 1996 of $650,000.
Tax Deductibility of Executive Compensation
The Committee's policy on the tax deductibility of
compensation paid to the Corporation's CEO and other executive
officers is to maximize deductibility to the extent possible
without abdicating all of its discretionary power. To this
end, the Committee has reviewed all of the Corporation's plans
and has taken several actions as follows. First, the Committee
has assured that the gains on non-qualified stock option grants
will be deductible by amending the 1988 Plan to place a limit
on the number of option shares that one individual may receive.
The limit is 25% of the total share authorization. Secondly,
the Committee resolved to continue the practice of not
repricing options. Finally, at the 1997 annual meeting of
stockholders, the stockholders are being asked to approve the
material terms of the performance goals for the 1997 Management
Incentive Plan which is "performance-based" under section
162(m) of the Internal Revenue Code. Amounts paid under the
plan will be fully deductible.
Committee on Executive Compensation
Decisions on compensation of the Corporation's executive
officers are made by the four member Committee on Executive
Compensation, a committee of the Board of Directors composed of
the persons listed below, all of whom are non-employee
directors. The Committee has retained an independent executive
compensation consultant which has access to independent
compensation data to evaluate the Corporation's executive
compensation program.
The Committee on Executive Compensation:
James A. Bitonti, Chairman
Robert A. Fox
Roger L. Headrick
Michael W. Huber
Notwithstanding anything to the contrary set forth in any
of the Corporation's previous filings under the Securities Act
of 1933 or the Securities Exchange Act of 1934 that might
incorporate future filings, including this Proxy Statement, in
whole or in part, the foregoing Report of the Committee on
Executive Compensation and the following Performance Graph
shall not be deemed incorporated by reference into any such
filings.
PERFORMANCE GRAPHS
The following graph compares the cumulative total return
on the Common Stock of the Corporation for the last five fiscal
years with the returns on the Standard & Poor's 500 Stock
Index, the Standard & Poor's Specialty Chemicals Index and a
peer group of 22 specialty chemical companies, assuming the
investment of $100 in the Corporation's Common Stock, the S&P
500 Index, the S&P Specialty Chemicals Index and the peer group
companies on December 31, 1991, and the reinvestment of all
dividends. The peer group investment is weighted based on
total market capitalization at the beginning of each fiscal
year.
Graph
Comparison of Five-Year Cumulative Return
Crompton & Knowles Corporation, S&P 500, S&P Specialty
Chemicals, and Peer Group
$250
$200 S&P 500
S&P Specialty
$150 Chemicals
Peer Group
$100 C & K
$50
$0
1991 1992 1993 1994 1995 1996
C&K $100 $104 $105 $80 $67 $99
S&P 500 $100 $108 $116 $120 $165 $203
Peer Group $100 $110 $113 $109 $128 $135
S&P Specialty$100 $106 $121 $106 $139 $142
Chemicals
The graph below shows the cumulative total return to the
Corporation's stockholders since December 31, 1984, shortly
before Mr. Calarco became President and CEO, compared with the
same indices shown on the previous graph, thus illustrating the
relative performance of the Corporation's Common Stock during
Mr. Calarco's entire tenure with the Corporation.
Graph
Comparison of Twelve-Year Cumulative Return
Crompton & Knowles Corporation, S&P 500,
S&P Specialty Chemicals, and Peer Group
$2,500
$2,000 C&K
S&P 500
$1,500 Peer Group
$1,000 S&P Specialty
Chemicals
$500
$0
1984 1985 1986 1987 1988 1989
C&K $100 $132 $188 $216 $337 $695
S&P 500 $100 $132 $156 $164 $191 $252
Peer Gr. $100 $132 $159 $178 $197 $258
S&P Spec.$100 $137 $156 $162 $177 $216
1990 1991 1992 1993 1994 1995 1996
C&K $792 $2,032 $2,122 $2,135 $1,620 $1,366 $2,020
S&P 500 $244 $318 $342 $376 $382 $524 $645
Peer Gr. $276 $417 $457 $473 $455 $533 $533
S&P Spec.$207 $292 $310 $353 $308 $404 $414
The specialty chemical peer group comprises the following
22 companies: Betz Laboratories, Inc., The Dexter Corporation,
Ecolab Inc., Engelhard Corporation, Ethyl Corporation, Ferro
Corporation, H.B. Fuller Company, Great Lakes Chemical
Corporation, M. A. Hanna Company, International Flavors &
Fragrances Inc., Lawter International, Inc., Loctite
Corporation, The Lubrizol Corporation, Nalco Chemical Company,
Pall Corporation, Petrolite Corporation, Quaker Chemical
Corporation, RPM, Inc., A. Schulman, Inc., Sigma-Aldrich
Corporation, Valspar Corporation, and Witco Corporation.
The S&P Specialty Chemicals Index companies are W.R. Grace
& Co., Great Lakes Chemical Corporation, Morton International
Inc. and Nalco Chemical Company.
EXECUTIVE COMPENSATION
The following tables set forth information concerning
compensation paid or to be paid to the chief executive officer
of the Corporation and each of the four most highly compensated
executive officers of the Corporation other than the chief
executive officer, for services to the Corporation in all
capacities during 1994, 1995 and 1996, except as noted, and
options granted to and exercised by the same individuals during
the period indicated. Messrs. Ingulli, Eisenberg and
Stephenson were not executive officers of the Corporation prior
to the merger with Uniroyal in 1996, and the compensation paid
to those individuals for 1994 and 1995 was not for services to
the Corporation.
Summary Compensation Table
Long Term Compensation
Awards
Annual Compensation
Restricted Securities All Other
Name and Stock Underlying Compen-
Principal Salary Bonus Awards Options sation
Position Year ($) ($) ($)(1) (#) ($)(2)
Vincent A.
Calarco 1996 607,916 650,000 2,752,000 620,000 134,213
Chairman
of the
Board 1995 495,000 415,000 -- 110,000 89,687
President
and CEO 1994 493,000 300,000 -- 78,000 111,870
Charles J.
Marsden 1996 268,331 160,000 608,250 130,000 56,656
Senior
Vice
President 1995 250,000 55,000 -- 28,000 39,512
Chief
Financial
Officer 1994 240,000 56,000 -- 22,000 42,121
Alfred F.
Ingulli 1996 253,333 120,000 354,000 120,000 29,114
Executive
Vice Pres., 1995 243,000 165,000 -- -- 30,013
Crop
Protection 1994 232,083 70,000 -- 28,349 27,030
Uniroyal Chemical Company, Inc.
Joseph B.
Eisenberg 1996 233,500 119,000 354,000 120,000 22,881
Executive
Vice Pres.,1995 212,500 95,000 -- -- 21,920
Chemicals
& Polymers 1994 190,000 -- -- 16,709 17,295
Uniroyal Chemical Company, Inc.
William A.
Stephenson 1996 235,000 110,000 354,000 120,000 45,867
Executive
Vice Pres.,1995 225,833 90,000 -- -- 18,431
Specialty
Chemicals 1994 183,750 80,000 -- 9,894 28,408
Uniroyal Chemical Company, Inc.
__________
(1) The entire restricted stock grant in 1996 for each of the
persons shown in the table must be earned during the
1996-1998 performance cycle by achievement of targeted
returns on capital and after-tax earnings growth during
the period. If an award is earned, it will be
distributed in common stock of the Corporation in four
equal installments, one at the end of each of the three
years 1998-2000 and a final one upon retirement. Should
the employment of an individual terminate after an award
is earned for any reason other than death, disability,
retirement or a change in control of the Corporation, any
unvested shares will be forfeited. Total restricted
stock outstanding for the persons shown in the table at
the end of fiscal year 1996: Vincent A. Calarco, 626,033
shares valued at $12,051,135, of which 482,033 shares
valued at $9,279,135 are forfeitable; Charles J.
Marsden, 158,982 shares valued at $3,060,404, of which
114,982 shares valued at $2,213,404 are forfeitable;
Alfred F. Ingulli, 42,000 shares valued at $808,500, all
of which shares are forfeitable; Joseph B. Eisenberg,
42,000 shares valued at $808,500, all of which shares are
forfeitable; and William A. Stephenson, 42,000
shares valued at $808,500, all of which shares are
forfeitable. Dividends are paid on restricted shares
from the date of grant but do not vest and are not
distributed until the underlying shares are distributed.
(2) Includes the following amounts paid during 1996 under the
Corporation's Supplemental Medical and Dental
Reimbursement Plans (SMD), the Uniroyal Chemical
Retirement Reserve Fund Plan (RFP), and the Uniroyal
Chemical split dollar life insurance plan (SDP), or as
employer contributions under the Corporation's Employee
Stock Ownership Plan (ESOP) and Individual Account
Retirement Plan (IARP) (with that portion of the ESOP and
IARP contributions in excess of the Section 401(k) and
Section 415 limitations having been paid into the
Corporation's Benefit Equalization Plan): Mr. Calarco,
$3,228 (SMD), $40,919 (ESOP), $51,971 (IARP); Mr.
Marsden, $4,355 (SMD), $12,932 (ESOP), $16,140 (IARP);
Mr. Ingulli, $13,012 (SDP), $16,102 (RFP); Mr. Eisenberg,
$222 (SMD), $7,034 (SDP), $15,625 (RFP); and Mr.
Stephenson, $16,106 (SMD), $17,813 (SDP), $11,948 (RFP).
Option Grants In Last Fiscal Year(1)
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
Percent
Number of Total
of Options
Securities Granted to
Underlying Employees Exercise Expir-
Options in Fiscal Price ation
Name Granted(#) Year ($/Sh) Date 5% ($) 10%($)
V.A.
Calarco 472,416 (2) 22.6% 14.5000 09/20/06 4,352,783 11,056,917
27,584 (3) 1.3% 14.5000 08/20/06 251,451 637,175
120,000 (4) 5.7% 16.8750 11/15/06 1,286,766 3,268,635
C.J.
Marsden 72,416 (2) 3.5% 14.5000 09/20/06 667,232 1,694,900
27,584 (3) 1.3% 14.5000 08/20/06 251,451 637,175
30,000 (4) 1.4% 16.8750 11/15/06 321,691 817,159
A.F.
Ingulli 65,520 (2) 3.1% 14.5000 09/20/06 603,693 1,533,498
34,480 (3) 1.7% 14.5000 08/20/06 314,313 796,469
20,000 (4) 1.0% 16.8750 11/15/06 214,461 544,773
J.B.
Eisenberg 65,520 (2) 3.1% 14.5000 09/20/06 603,693 1,533,498
34,480 (3) 1.7% 14.5000 08/20/06 314,313 796,469
20,000 (4) 1.0% 16.8750 11/15/06 214,461 544,773
W.A.
Stephenson 65,520 (2)3.1% 14.5000 09/20/06 603,693 1,533,498
34,480 (3)1.7% 14.5000 08/20/06 314,313 796,469
20,000 (4)1.0% 16.8750 11/15/06 214,461 544,773
(1) An option entitles the holder to purchase one share of the
Common Stock of the Corporation at a purchase price equal
to the fair market value of the Corporation's Common Stock
on the date of grant of all of the options shown in the
table. All options are subject to expiration prior to the
dates shown in the table in case of death or termination of
employment. The purchase price for stock on the exercise of
options may be paid in cash or in shares of the
Corporation's Common Stock already owned by the option
holder, or by a combination thereof. In the event of a
change in control of the Corporation, all of the options
shown in the table will immediately become exercisable.
(2) Non-qualified options. Twenty percent of the options become
exercisable on the first through the fifth anniversary of
the date of grant.
(3) Incentive options. Twenty percent of the options become
exercisable on the first through the fifth anniversary of
the date of grant.
(4) Non-qualified options. Fifty percent of the options become
exercisable beginning on the first anniversary of the date
of grant, and fifty percent are exercisable beginning on the
second anniversary of the date of grant.
Aggregated Option Exercises In Last Fiscal Year
And Fiscal Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexer- In-the-Money Options
cised Options at FY-End($)
FY-End(#) 12/28/96 - FMV
$19.1875
Shares Value
Acquired on Realized Exercis- Unexer- Exercis- Unexer-
Name Exercise (#) ($) able cisable able cisable
Vincent A.
Calarco
(1) - - 988,160 675,000 10,362,481.72 2,961,562.50
Charles J.
Marsden
(1) - - 262,626 144,250 2,449,949.55 626,296.88
Alfred F.
Ingulli - - 236,230 120,000 2,025,624.52 515,000.00
Joseph B.
Eisenberg - - 122,485 120,000 999,332.01 515,000.00
William A.
Stephenson - - 76,293 120,000 636,385.09 515,000.00
___________
(1) All numbers reflect the 2-for-1 stock split on May 22, 1992.
Compensation Committee Interlocks and Insider Participation
Messrs. Fox, Headrick and Huber served as members and Mr.
Bitonti served as Chairman of the Executive Compensation
Committee of the Board during the last completed fiscal year.
No member of the Executive Compensation Committee is a current
or former officer or employee of the Corporation or any of its
subsidiaries.
Retirement Plans
Each of the persons shown in the Summary Compensation
Table on page 10 is covered by a supplemental retirement
agreement with the Corporation. Under each supplemental
agreement, the aggregate benefit payable on an annualized basis
from employer contributions under the Corporation's Individual
Account Retirement Plan (in the case of Messrs. Calarco and
Marsden) or Uniroyal Chemical Company, Inc.'s ("Uniroyal
Chemical") defined benefit pension plan (in the case of Messrs.
Ingulli, Stephenson and Eisenberg) to each officer at normal
retirement age will be supplemented by the Corporation (or
Uniroyal Chemical, as the case may be) so that the total annual
benefit payable to him for life will be 50%, 55% or 60% of the
average total compensation (including salary and bonus) paid to
him during the highest five years of the last ten years prior
to his normal retirement age, or, in the case of Mr. Ingulli,
an alternate benefit determined under a previous supplemental
retirement agreement with Uniroyal. A supplemental benefit in
a reduced amount may be payable in the event of termination of
employment prior to normal retirement age. At any time after
the date on which benefit payments commence, the officer may
elect to receive a single lump sum equal to 90% of the
actuarial equivalent of the benefit otherwise payable to the
officer. An officer may elect to have his supplemental benefit
under the agreement paid in a form which will provide for the
continuation of benefits, to a beneficiary selected by him,
upon his death after retirement. Each agreement also provides
for the payment of a reduced benefit to the officer's
beneficiary in the event of his death prior to normal
retirement age and for the payment of disability benefits in
addition to those available under the Corporation's regular
disability insurance program. Benefits under each agreement
are payable only if the officer has completed at least five
years of service after entering into the agreement (except in
the case of Messrs. Ingulli, Eisenberg and Stephenson), does
not voluntarily terminate his employment unless such
termination is the result of his retirement under a retirement
plan or is with approval of the Board, and meets certain other
conditions set forth in the agreement.
Each of the supplemental retirement agreements also
provides that if, after a change in control of the Corporation
(as defined in the agreement) has occurred, the officer's
employment is terminated by the Corporation other than for
cause, disability, or death or the officer resigns for good
reason (as defined in the agreement), the officer will be
vested in an unreduced benefit equal to 50%, 55% or 60%
(whichever level is applicable to him under the agreement) of
his average total compensation over the highest five of the
last ten years of his employment. In the event the officer is
under age 55 when terminated, the benefit would be based on his
final average total compensation projected to age 55 in
accordance with certain assumptions set forth in the agreement.
The benefit would be paid annually for life commencing at age
65 (or, in the case of Messrs. Ingulli, Eisenberg and
Stephenson, on their retirement date), with provision made for
payment to the officer's beneficiary of the value of the
expected benefit in the event of his death prior to attaining
that age.
The following table sets forth the estimated aggregate
annual benefit payable to each of the officers named in the
table under his supplemental retirement agreement, from
employer contributions to the IARP or Uniroyal's defined
benefit pension plan, upon retirement at or after normal
retirement age based on each officer's compensation history to
date and assuming payment of such benefit in the form of a life
annuity:
Estimated Annual
Name of Individual Retirement Benefit
Vincent A. Calarco.............. $ 579,000
Charles J. Marsden.............. 170,025
Alfred F. Ingulli............... 197,496
Joseph B. Eisenberg............. 145,995
William A. Stephenson........... 150,000
Employment Agreements
Mr. Calarco is employed pursuant to an employment
agreement which was amended and restated in February 1988. The
amended agreement provides for Mr. Calarco's employment as
Chairman of the Board, President and Chief Executive Officer
for a term of three years, with automatic annual one year
extensions of the term unless the Corporation gives notice at
least 60 days prior to the anniversary of the date of the
agreement that the term will not be extended. The amended
agreement calls for a base salary of not less than $310,000 and
for Mr. Calarco's continued participation in employee benefit
plans and other fringe benefit arrangements substantially as in
the past. In the event Mr. Calarco's employment is terminated
by the Corporation other than for cause, disability, or death
or by Mr. Calarco for good reason (as defined in the
agreement), the Corporation is obligated to pay Mr. Calarco his
salary to the date of termination, incentive compensation in an
amount no less than the bonus paid to him for the prior year
pro-rated to that date, and a lump sum termination payment
equal to three times the sum of his then current salary and the
highest bonus paid to him during the three years preceding his
termination, to continue other employee benefits provided under
the agreement for a period of three years or until he obtains
other employment, and to make certain additional payments to
cover any excise tax imposed under the Internal Revenue Code of
1986 on the amounts payable as a result of his termination and
any legal fees incurred by Mr. Calarco in enforcing the
Corporation's obligations under the agreement.
The Corporation has entered into employment agreements
with certain other key management employees, including Messrs.
Marsden, Ingulli, Eisenberg, and Stephenson. Each agreement is
operative upon the occurrence of a change in control (as
defined in the agreement) and is intended to encourage the
executive to remain in the employ of the Corporation by
providing him with greater security. Absent a change in
control, the agreement does not require the Corporation to
retain the executive or to pay him any specified level of
compensation or benefits except that Messrs. Ingulli,
Stephenson and Eisenberg have agreements which require that
they be paid severance payments in the event that they are
terminated without cause or they resign for good reason (as
defined in the agreements) during an annually renewable two-year
period. In the event of a change in control, the agreement
provides that there will be no change, without the executive's
consent, in the salary, bonus opportunity, benefits, duties,
and location of employment of the executive for a period of one
or two years after the change in control. If, during such
period, the executive's employment is terminated by the
Corporation other than for cause, disability, or death or the
executive resigns for good reason (as defined in the
agreement), the Corporation will pay the executive his salary
to the date of termination, incentive compensation in an amount
no less than the bonus paid to him for the prior year pro-rated
to that date, and a lump sum severance payment equal to two or
three times (depending on the executive) the sum of his base
salary and the highest or average (depending on the executive)
bonus paid to him during the three years preceding his
termination and will continue other employee benefits similar
to those provided to the executive prior to his termination for
a period of two or three years or until his earlier employment
with another employer.
APPROVAL OF SELECTION OF INDEPENDENT AUDITOR
The Board of Directors has, subject to approval by the
stockholders, selected the firm of KPMG Peat Marwick LLP, which
has been the auditor of the Corporation for many years, to act
as auditor for the fiscal year 1997 and to perform other
appropriate accounting services. The Board of Directors
recommends a vote for approval, and unless otherwise directed,
proxies will be voted in favor of this selection. The
affirmative vote of the holders of a majority of the shares of
the Corporation represented and entitled to vote at the meeting
is required for such approval.
The Corporation has been advised that representatives of
KPMG Peat Marwick LLP will be present at the annual meeting,
with the opportunity to make a statement if they desire to do
so and to respond to appropriate questions raised at the
meeting.
APPROVAL OF THE MATERIAL TERMS FOR PAYMENT
OF ANNUAL INCENTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code prohibits the
deduction by publicly held corporations of certain performance-based
employee compensation exceeding one million dollars per
year unless specified conditions are satisfied. To be
deductible, such compensation must be paid solely on account of
the attainment of one or more performance goals established by,
and the achievement of which is certified by, a compensation
committee consisting of two or more outside directors. In
addition, the material terms of the performance goals used to
determine the maximum compensation for covered executives under
section 162(m) of the Internal Revenue Code must be disclosed
to and approved by the shareholders of the corporation paying
the compensation prior to payment.
The Board of Directors seeks stockholder approval of the
material terms for the payment of annual incentive compensation
under the 1997 Management Incentive Plan so that any such
compensation paid to covered executives will be fully
deductible by the Corporation under section 162(m) of the
Internal Revenue Code. The approval of the stockholders will
be a condition of the payment of incentive compensation under
the plan.
The Committee on Executive Compensation administers the
1997 Management Incentive Plan. Senior managers of the
Corporation, including the Chief Executive Officer, are
eligible to receive compensation under the plan. Each year,
the Committee on Executive Compensation will determine who will
be covered executives under applicable provisions of the
Internal Revenue Code and will set goals for maximum payments
under the plan using one or more of the following: earnings
before interest and tax, net income after tax, return on
capital, cash flow or market share(s). These goals may be set
on a corporate or business unit basis, on a pre- or post-tax
basis and on an aggregate or per share basis.
The maximum amount of annual incentive compensation which
may be paid to any participant under the plan will be the
lesser of 160% of the participant's fiscal year end salary or
$2 million. The amount actually paid to a participant in any
year may be less than the maximum if the Committee on Executive
Compensation determines that other applicable measures of
performance, if any, have not been met.
The Board of Directors recommends a vote for approval of
the material terms, as described above, for determination of
annual incentive compensation under the 1997 Management
Incentive Plan. The affirmative vote of the holders of a
majority of the shares of the Corporation represented and
entitled to vote at the meeting is required for such approval.
STOCKHOLDER PROPOSALS
Under rules of the Securities and Exchange Commission, any
proposal of a stockholder which is intended to be presented for
action at the annual meeting of the stockholders to be held in
1998 must be received by the Corporation at its principal
executive offices by November 16, 1997, in order to be
considered for inclusion in the Proxy Statement and form of
proxy relating to the 1998 meeting.
AMENDMENT OF BY-LAWS
At its regular meeting on January 20, 1997, the Board of
Directors voted unanimously to amend Article I, Section 1 of
the By-Laws of the Corporation to provide that the annual
meeting of the stockholders shall be held on the last Tuesday
of April each year. Prior to the amendment, the By-Laws
required that such a meeting be called on the second Tuesday of
April each year.
OTHER MATTERS
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's officers and directors and persons
who own more than ten percent of a registered class of the
Corporation's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Officers,
directors and greater than ten percent stockholders are
required by SEC regulations to furnish the Corporation with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms
received by it, or written representations from certain
reporting persons that no forms 5 were required for those
persons, the Corporation believes that during fiscal year 1996,
all filing requirements applicable to its officers, directors
and greater than ten percent beneficial owners were complied
with.
As of the date of this statement, the Board of Directors
does not know of any matter other than those referred to in
this Proxy Statement as to which action is expected to be taken
at the annual meeting of stockholders.
The affirmative vote of the holders of a plurality of the
shares which are present in person or represented by proxy at
the meeting is required to elect directors, and the affirmative
vote of the holders of a majority of the shares which are
present in person or represented by proxy is required to
approve all other matters listed in the notice of meeting.
Proxies which are marked "abstain" on the proposals to be voted
upon at the meeting will be counted for the purpose of
determining the number of shares represented in person and by
proxy at the meeting. Such proxies will thus have the same
effect as if the shares represented thereby were voted against
the matters to be considered at the meeting. Shares not voted
on any such matter on proxies returned by brokers will be
treated as not represented at the meeting as to such matter.
The shares represented by proxies in the form solicited by
the Board of Directors will be voted at the meeting. Where a
choice is specified on the proxy with respect to a matter to be
voted upon, the shares represented by the proxy will be voted
in accordance with the specification so made. If no choice is
specified, such shares will be voted for (i) the election as
directors of the three nominees for Class III directorships
named herein, (ii) in favor of the selection of KPMG Peat
Marwick LLP as auditor for fiscal year 1997, and (iii) in favor
of the material terms for payment of annual incentive
compensation.
If any business not referred to in this Proxy Statement
shall properly come before the meeting, it is intended that
those persons named as proxies will vote the proxies in
accordance with their judgment of the best interests of the
Corporation and its stockholders.
The cost of solicitation will be borne by the Corporation.
In addition to solicitation by mail, the management of the
Corporation may solicit proxies personally or by telephone and
has retained the firm of D. F. King & Co., Inc. to assist in
such solicitation at a fee of $4,000. The Corporation may also
request brokerage firms and other nominees or fiduciaries to
forward copies of its proxy material to beneficial owners of
stock held in their names, and the Corporation may also
reimburse such persons for reasonable out-of-pocket expenses
incurred by them in connection therewith.
By Order of the Board of Directors,
/s/ John T. Ferguson II
JOHN T. FERGUSON II
Secretary
Dated: March 28, 1997
[PROXY CARD]
CROMPTON & KNOWLES CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
For Annual Meeting on April 29, 1997, at Tara Stamford Hotel
2701 Summer Street, Stamford, Connecticut, 11:15 A.M.
The undersigned appoints VINCENT A. CALARCO, CHARLES J.
MARSDEN, and JOHN T. FERGUSON, II or any of them, with power of
substitution, proxy and attorney for the undersigned to vote
all shares of stock of Crompton & Knowles Corporation which the
undersigned is entitled to vote at the Annual Meeting of the
Stockholders of said Corporation to be held on Tuesday, April
29, 1997, and any adjournments thereof, with all powers the
undersigned would have if present, upon the proposals set forth
on the reverse side and in their discretion on all matters
properly coming before the meeting, including those described
in the Notice and Proxy Statement therefor, receipt of which is
acknowledged.
This Proxy will be voted as directed, or where no
direction is given, will be voted "FOR" Proposals Nos. 1, 2 and 3. If
any nominee for the Board of Directors named in the Proxy
Statement is unavailable to serve, this Proxy will be voted for
such substitute nominee as may be recommended by the Board of
Directors. The Board of Directors is not aware of other
matters to come before the meeting.
CONTINUED, AND TO BE VOTED, SIGNED, AND DATED ON THE REVERSE
SIDE
CROMPTON & KNOWLES CORPORATION
The Board of Directors recommends a vote FOR Proposals 1,2 and
3.
1. Election of Robert A. Fox, Roger L. Headrick, Leo I.
Higdon, Jr. to serve for a term expiring in 2000.
FOR ALL NOMINEES WITHHOLD AUTHORITY
with exceptions noted FOR ALL NOMINEES
(To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below)
2. Approval of the selection by the Board of KPMG Peat Marwick
LLP as independent auditors for 1997.
FOR AGAINST ABSTAIN
3. A proposal to approve the material terms of the performance
goals under which annual incentive compensation is determined
under the 1997 Management Incentive Plan.
FOR AGAINST ABSTAIN
PROXY
PLEASE MARK YOUR VOTES or X
Dated: , 1997
SIGNATURE(S) OF STOCKHOLDER(S)
Note: Signature should agree with name stenciled hereon.
When signing as executor, administrator, trustee, or attorney,
please give full title as such. For joint accounts or co-fiduciaries,
all joint owners or co-fiduciaries should sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
