<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant / /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THE DURIRON COMPANY, INC.
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
[LOGO]
THE DURIRON COMPANY, INC.
3100 RESEARCH BOULEVARD
DAYTON, OHIO 45420
NOTICE OF 1994 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1994
The 1994 Annual Meeting of Shareholders of The Duriron Company, Inc. (the
"Company") will be held at 3100 Research Boulevard, Dayton, Ohio at 1:30 p.m. on
Thursday, April 21, 1994 for the following purposes:
1. To elect three directors to each serve for a term of three years.
2. To approve the appointment of Ernst & Young as independent auditors for
1994.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only holders of Common Stock whose names appeared of record on the books of
the Company at the close of business on March 3, 1994 are entitled to notice of
and to vote at this meeting.
By order of the Board of Directors
Ronald F. Shuff
SECRETARY
Dayton, Ohio
March 11, 1994
VOTING YOUR PROXY IS IMPORTANT
PLEASE SIGN AND DATE YOUR PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
<PAGE> 3
THE DURIRON COMPANY, INC.
-------------------------
PROXY STATEMENT
-------------------------
Mailing Date
March 11, 1994
GENERAL INFORMATION
PERSONS MAKING THE SOLICITATION
The accompanying Proxy is solicited by the Board of Directors of The
Duriron Company, Inc. (the "Company") and relates to the Company's 1994 Annual
Meeting of Shareholders (the "Annual Meeting") to be held at the Company's
executive headquarters at 3100 Research Boulevard, Dayton, Ohio at 1:30 p.m. on
Thursday, April 21, 1994.
VOTING SECURITIES
The Company has one class of stock outstanding, namely Common Stock, $1.25
par value, of which there were 12,644,957 shares outstanding as of March 3,
1994. Only holders of Common Stock whose names appeared of record on the books
of the Company at the close of business on March 3, 1994 are entitled to notice
of and to vote at the Annual Meeting. Each share entitles the holder thereof to
one vote.
The Company has announced that shareholders of record on February 25, 1994
will receive a distribution of Common Stock on March 25, 1994, which will have
the impact of a three-for-two stock split. All numbers of shares of Common Stock
noted in this Proxy Statement reflect numbers calculated on a "pre-split" basis,
except as otherwise specifically stated to the contrary herein.
ACTIONS TO BE TAKEN UNDER THE PROXY
Unless otherwise directed by the giver of the Proxy, all properly executed
Proxies will be voted for the election of Robert E. Frazer, Diane C. Harris and
William M. Jordan for three year terms as directors of the Company; in favor of
the appointment of Ernst & Young as independent auditors for the Company for
1994; and, at the discretion of the persons acting under the Proxy, in the
transaction of such other business as may properly come before the meeting or
any adjournment thereof.
Should any nominee named herein for the office of director become unable or
unwilling to accept nomination or election, it is intended that the persons
acting under the Proxy will vote for the election in his stead of such other
person as the Board of Directors (the "Board") may designate. The Board has no
reason to believe that any of the nominees will be unable or unwilling to serve
if elected to office.
<PAGE> 4
The giving of a Proxy does not preclude the right to vote in person, should
the person giving the Proxy so desire. A person giving a Proxy has the power to
revoke the same at any time before it has been exercised by giving the Company
written notice bearing a later date than the Proxy, by submission of a later
dated Proxy, or by voting in person at the Annual Meeting (although attendance
at the Annual Meeting will not in and of itself constitute revocation of a
Proxy). All properly executed Proxies will be voted. The proxy voting will be
tabulated by the Company's transfer agent, Bank One, Indianapolis NA, which will
also serve as inspector of election at the Annual Meeting. If the holder of
shares expressly abstains from voting on a properly executed Proxy, then such
shares will count towards the determination of the quorum at the Annual Meeting.
Such abstention will have neither the effect of voting for nor against any
applicable proposal. Broker nonvotes of Common Stock held in nominee name for
beneficial owners will not be treated as being present at the meeting, and such
nonvoting will thus not be counted towards the quorum determination nor for or
against any proposal.
ELECTION OF DIRECTORS
The Board currently consists of thirteen directors (two of whom will retire
effective at the 1994 Annual Meeting) who are divided into three classes, with
one full class being elected at each Annual Meeting of Shareholders. At the 1994
Annual Meeting, the term of the directors serving in the Class of 1994 expires,
and three directors will be elected to hold office until the 1997 Annual Meeting
of Shareholders and until their successors are elected and qualified. Under New
York law, directors are elected by a plurality of the votes cast at a meeting of
shareholders by the holders of shares entitled to vote in the election.
Set forth below is information with respect to each nominee for election as
a director and each director whose term of office continues after the 1994
Annual Meeting.
CLASS OF 1997
NOMINEES TO BE ELECTED FOR TERM EXPIRING IN 1997:
ROBERT E. FRAZER, 65, has been a director of the Company since 1976. He was
Chairman of the Board of The Dayton Power and Light Company from 1982 to 1987
and served as its Chief Executive Officer from 1978 through 1984. Mr. Frazer was
also Chairman of the Board of DPL Inc., the parent company of the Dayton Power
and Light Company, from its formation in 1986 until 1988. He is Vice Chairman of
the Center for Creative Leadership, an educational institution.
DIANE C. HARRIS, 51, was elected to the Board effective December, 1993. She
has been Vice President, Corporate Development, of Bausch & Lomb, an optics and
health care products concern, since 1981. She is a director and Vice President
of the Association for Corporate Growth.
WILLIAM M. JORDAN, 50, has been a director since 1991. He has been
President and Chief Executive Officer since February, 1993. He was elected
Executive Vice President in 1990 and promoted to President in 1991. He served as
Chief Operating Officer from 1990 to February, 1993. He became a Group Vice
President in 1984 and joined the Company in 1972. He is a director of National
City Bank, Dayton.
2
<PAGE> 5
CLASS OF 1996
DIRECTORS WHOSE TERM IN OFFICE CONTINUES UNTIL 1996:
STEVEN C. MASON, 58, has been a director of the Company since 1985. Mr.
Mason is Chairman, Chief Executive Officer and a director of The Mead
Corporation, a forest products and information company. He was President, Chief
Operating Officer and a director of The Mead Corporation from 1982 to 1991 and
the Vice Chairman and a director from 1991 to 1992. He is a director of PPG
Industries, a glass/coatings and chemicals company.
JOHN S. HADDICK, 64, has been Chairman of the Board since 1990. He resigned
as Chief Executive Officer in February, 1993 after approximately eight years of
service in this capacity. He was President from 1983 to 1991 and became a
director of the Company in 1983. He served as President and Chief Operating
Officer during 1984 and as Executive Vice President and Chief Operating Officer
during 1983. He joined the Company in 1953. He is also a director of Bank One,
Dayton, NA and Shopsmith, Inc., a manufacturer and retailer of woodworking
equipment.
KEVIN E. SHEEHAN, 48, was elected to the Board in 1990. He is a general
partner of the CID Equity Partners, a venture capital firm that concentrates on
entrepreneurial midwestern companies. He was a Vice President with Cummins
Engine Company, a manufacturer of diesel engines and related components, from
1980 until 1993.
R. ELTON WHITE, 51, was elected to the Board in 1993. He retired in
February 1994 as President and a director of NCR Corporation, a computer
equipment manufacturer and a wholly owned subsidiary of AT&T, after over 25
years of service to NCR in various management capacities. He is a director of
Keithley Instruments, an electronics test and measurement concern.
CLASS OF 1995
DIRECTORS WHOSE TERM IN OFFICE CONTINUES UNTIL 1995:
CHARLES L. BATES, JR., 69, has been a director of the Company since 1987.
Mr. Bates was Chairman of the Board of Valtek Incorporated, a wholly-owned
subsidiary of the Company, from 1984 to 1990 and served as Valtek's Chief
Executive Officer from 1966 to 1987. He is a director of Dow Technologies, Inc.,
a manufacturer of "clean rooms" and related components for the semiconductor
industry.
ERNEST GREEN, 55, was elected to the Board in 1991. He is the founder and
President of EGI, a supplier of automotive components. He is a director of Bank
One, Dayton, NA, DPL Inc., the parent company of The Dayton Power and Light
Company, a public utility, and Green Tokai Company, an automotive supplier.
JAMES F. SCHORR, 61, has been a director of the Company since 1986. Mr.
Schorr is Vice Chairman and a director of Osterman & Company, a plastics resins
broker and distributor. He was President of USI Chemicals Division and Corporate
Vice President of Quantum Chemical Corporation from 1987 to 1989. He was also
Vice Chairman of Old World Trading Company, a distributor of automotive products
and industrial chemicals, in 1990. He also serves as a director of Petrolane,
Inc., a retailer of propane products.
HARRY A. SHAW, III, 56, has been a director of the Company since 1988. Mr.
Shaw has been Chairman of Huffy Corporation, a consumer products and retail
services company, since 1986. He retired as
3
<PAGE> 6
Chief Executive Officer of Huffy Corporation in April, 1993. He is a director of
Society Corporation, a financial institution, GenCorp, an automotive and
aerospace concern, Outboard Marine, Inc., a manufacturer of consumer
recreational products and Baldwin Piano and Organ, a consumer products firm.
Any shareholder who intends to nominate a director must, pursuant to
Article III, Section 2 of the By-Laws of the Company as approved by the
Shareholders at the 1986 Annual Meeting, give written notice of such intention
to the Secretary of the Company. The notice must be received at the principal
executive offices of the Company not less than 50 days prior to the meeting (or
if fewer than 60 days' notice or prior public disclosure of the meeting date is
given or made to shareholders, not later than the tenth day following the day on
which the notice of the date of the meeting was mailed or such public disclosure
was made) and must include specified information about the nominee and the
shareholder. No shareholder has to date notified the Company of any intention to
nominate a director.
MR. HAROLD J. GAZELEY and MR. B. LYLE SHAFER, having reached their normal
retirement age under Board policy, will step down from the Board effective at
the 1994 Annual Meeting and not stand for re-election. Mr. Gazeley is a former
Chairman of the Board and Chief Executive Officer of the Company, and he began
Board service in 1967. Mr. Shafer joined the Board in 1981, and he served as
Compensation Committee Chairman for many years. Both Mr. Gazeley and Mr. Shafer
made significant contributions to the Company and will be missed.
BOARD COMMITTEES: MEMBERSHIP AND FUNCTIONS
Six meetings of the Board of Directors were held in 1993. The number of
meetings held by each of the three standing committees of the Board in 1993 was
as follows: Audit/Finance Committee -- five; Compensation Committee -- four;
Executive Committee -- one.
The Audit/Finance Committee, of which Mr. Frazer is chairman and Messrs.
Bates, Gazeley, Green and White are members, recommends annually the appointment
of independent auditors for the Company. The Committee also advises the Board on
strategic financial matters, including making recommendations to the Board on
acquisitions, divestitures, major financings, capital structure and dividend
policy. The Committee meets with the independent auditors, internal auditors and
management personnel to review the scope and results of the annual audit of the
financial statements of the Company and the recommendations of the independent
auditors pertaining to accounting practices, policies and procedures and overall
internal controls. The Committee also reviews the Company's procedures for
assuring compliance with the Company's Code of Business Conduct. The Committee
has authority to approve the yearly capital expenditure budget and major
expenditures made in the ordinary course of business.
The Compensation Committee, of which Mr. Shafer is chairman and Messrs.
Mason, Schorr, Shaw and Sheehan are members, has the responsibility of assuring
that officers and key management personnel are compensated in a manner which is
internally equitable, externally competitive and an incentive for effective
performance in the best interest of shareholders. The Committee has the
authority of the Board of Directors to fix the compensation of officers (except
the Chief Executive Officer who is reviewed by the Board) of the Company who are
elected by the Board. The Committee also administers the Company's stock option,
restricted stock and management incentive plans. It is responsible for approving
an appropriate management succession plan and for recommending changes in
director compensation to the Board. The report of the Committee on the Company's
executive compensation practices is located on page 12 of this Proxy Statement.
4
<PAGE> 7
The Executive Committee, of which Mr. Gazeley is chairman and Messrs.
Frazer, Haddick, Mason and Shaw are members, is empowered to exercise the full
authority of the Board of Directors except as to matters not delegable to a
committee under the New York Business Corporation Law. The Executive Committee
also makes recommendations to the Board for the positions of Chairman of the
Board, President, Chief Executive Officer and candidates for director.
Each of the directors attended, in the aggregate, 75% or more of the 1993
meetings of the Board and of the standing committees on which he or she served,
except for Mr. Mason.
DIRECTOR COMPENSATION
Each non-employee director receives an annual stipend of $12,600 for
services as a director, plus $750 for each meeting of the Board of Directors and
$600 for each meeting of a committee of the Board which he attends as a
committee member. Committee chairmen receive an additional $500 per committee
meeting. In addition, the Chairman of the Executive Committee receives an
additional $5,000 per year for service in this capacity. Furthermore, Mr.
Haddick will receive, effective April, 1994, an additional $40,000 per year for
service as Chairman of the Board. A director who attends a meeting of a
committee on which he or she does not serve receives one-half of the regular
meeting fee. Any director may elect to defer with interest receipt of the
stipend and other fees payable to him or her as a director until he or she
ceases to be a director.
Under the Company's 1989 Restricted Stock Plan, each non-employee director
receives 200 shares of Restricted Stock per year of the term for which he or she
is elected to the Board at an Annual Meeting. Dividend and voting rights attach
upon receipt of the Restricted Stock, and the Restricted Stock vests at the rate
of 200 shares per year, unless the Restricted Stock is forfeited back to the
Company due to earlier termination of Board service.
Each non-employee director, under the Company's Retirement Compensation
Plan for Directors, receives an annual amount of $1,500 which is placed into a
trust and deferred with interest until the director terminates service on the
Board of Directors. The director may elect to receive such deferred payments
either in a lump sum or in certain installments after leaving the Board.
Finally, non-employee directors may also elect to receive discounted stock
options, under the Company's 1989 Stock Option Plan, which are in lieu of and
have a fair market value at time of grant equal to the elected portion of the
annual stipend otherwise payable to the director.
The Company maintains a liability insurance policy with the Chubb Group of
Insurance Companies covering part of the Company's statutory rights and
obligations to indemnify directors and officers and partially covering directors
and officers in some instances in which they might not otherwise be indemnified
by the Company. The current policy is for a one year term (expiring July 29,
1994) at a cost of $96,794.
5
<PAGE> 8
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth in the table below is information as of February 11, 1994 with
respect to the number of shares of Common Stock of the Company beneficially
owned by each director and certain executive officers of the Company and by all
directors and officers as a group. For purposes of this table, an individual is
considered to "beneficially own" any shares of Common Stock (i) over which he or
she exercises sole or shared voting or investment power or (ii) over which he or
she has the right to acquire beneficial ownership at any time within 60 days
after February 11, 1994.
<TABLE>
<CAPTION>
(B)
(A) ------------------------------
--------------------- NUMBER OF SHARES, INCLUDING
OPTION SHARES OPTION SHARES SHOWN IN
WHICH MAY BE ACQUIRED COLUMN (A), BENEFICIALLY OWNED
WITHIN 60 DAYS AS OF FEBRUARY 11, 1994(A)(B)
--------------------- ------------------------------
<S> <C> <C>
Charles L. Bates, Jr.......................... -- 4,000
Curtis E. Daily............................... 22,265 39,347(d)
Robert E. Frazer.............................. -- 2,205
Harold J. Gazeley............................. -- 48,047(c)
Ernest Green.................................. 546 2,040
John S. Haddick............................... 54,703 111,806(c)
Diane C. Harris............................... 0 200
Bruce E. Hines................................ 16,400 31,166(c)(d)
William M. Jordan............................. 15,720 46,546(c)(d)
Steven C. Mason............................... -- 1,366
James F. Schorr............................... -- 1,890
B. Lyle Shafer................................ 1,162 2,438
Harry A. Shaw, III............................ 1,162 2,328
Kevin E. Sheehan.............................. -- 1,408
George A. Shedlarski.......................... 13,400 38,819(c)(d)
Mark E. Vernon................................ 1,975 12,143(d)
R. Elton White................................ -- 600
20 Directors and Officers as a Group.......... 145,680 387,828(b)(c)(d)
<FN>
- ---------------
(a) Unless otherwise indicated, voting power and investment power are exercised
solely by the named individual or are shared by such individual and his or
her immediate family members.
(b) No director or executive officer owns in excess of 1% of the outstanding
shares of Common Stock of the Company. All directors and executive officers
as a group own 3.07% of the outstanding shares of Common Stock of the
Company. Percentages are calculated on the basis of the number of shares
outstanding at February 11, 1994 plus the number of shares subject to
outstanding options held by the individual or group which are exercisable
within 60 days thereafter.
(c) Includes the following shares held as of December 31, 1993 by The Duriron
Company, Inc. Savings and Thrift Plan Trust for the following individuals:
Mr. Gazeley -- 1,457; Mr. Haddick -- 3,008; Mr. Jordan -- 2,502; Mr.
Hines -- 791; Mr. Shedlarski -- 2,391; Mr. Daily -- 719; and all directors
and executive officers as a group -- 13,384. Also includes the following
shares held by The Duriron Company Employee Stock Ownership Plan Trust as of
December 31, 1993 for the following individuals: Mr. Haddick -- 79; Mr.
Jordan -- 79; Mr. Shedlarski -- 61; and all directors and executive officers
as a group -- 319. Each plan's participants have the right to vote shares
held for their accounts in these plans, but disposition of the shares is
restricted and may be made only in accordance with the terms of the plans.
(d) Includes 10,000 shares each held by Mr. Jordan, Mr. Hines, Mr. Shedlarski,
Mr. Daily and Mr. Vernon, and 64,000 shares held by all directors and
executive officers as a group, which are subject to restrictions on resale
and forfeiture back to the Company, but which have full voting and dividend
rights.
</TABLE>
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning the
compensation provided by the Company to the two individuals who each served as
Chief Executive Officer during different periods during 1993 and its highest
compensated other four officers in place at the end of 1993.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------------------- -------
---------------------------------------
(E) (F) (G) (H) (I)
OTHER RESTRICTED SECURITIES
(C) (D) ANNUAL STOCK UNDERLYING LTIP ALL OTHER
(A) (B) SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
NAME OF PRINCIPAL POSITION YEAR ($) ($)(1) (2) ($)(3) (#) ($)(4) ($)(5)
- ----------------------------- ----- -------- -------- ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John S. Haddick.............. 1993 186,817 0 0 0 0 112,680 5,605
Chairman Chief Executive 1992 332,461 0 0 0 7,800 140,140 6,866
Officer (until 2/15/93) 1991 309,538 148,143 0 0 7,800 143,200 6,667
William M. Jordan............ 1993 265,980 101,120 1,467 0 8,000 69,120 2,208
President, Chief Executive 1992 206,154 0 0 0 7,600 75,790 4,715
Officer (2/16/93 forward) 1991 189,346 101,747 0 223,500 10,000 74,200 5,680
Chief Operating Officer
(until 2/15/93)
Bruce E. Hines............... 1993 180,861 64,228 0 0 4,500 57,960 5,426
Senior Vice President and 1992 172,057 0 0 0 4,600 50,050 5,162
Chief Administrative 1991 158,807 89,292 0 223,500 10,000 0 4,764
Officer
George A. Shedlarski......... 1993 177,631 50,783 0 0 4,500 43,680 2,664
Group Vice President 1992 167,500 0 0 0 3,500 52,030 5,025
1991 154,500 69,025 0 223,500 10,000 50,900 4,635
Mark E. Vernon............... 1993 154,195 61,746 0 225,000 10,000 36,666 13,112
Group Vice President 1992 139,841 56,302 0 0 1,800 0 12,304
1991 129,449 49,112 0 0 1,800 0 13,127
Curtis E. Daily.............. 1993 137,677 35,105 0 0 4,500 29,280 4,130
Group Vice President 1992 130,404 0 0 0 2,700 32,450 3,912
1991 120,846 36,105 0 223,500 10,000 35,400 3,625
<FN>
- ---------------
(1) Reflects annual bonus earned but actually paid in following calendar year.
(2) Does not include value of certain perquisites which are less than 10% of
annual salary but includes certain interest credited to deferred
compensation.
(3) Messrs. Jordan, Hines, Shedlarski and Daily received a special grant of
10,000 shares of restricted stock in 1991 at the then current market value
of $22.35 per share, and Mr. Vernon received a counterpart grant in 1993 at
then current market value of $22.50 per share. At the market price on
December 31, 1993, the restricted shares have an aggregate value of $235,000
per individual. These restricted shares represent the only such restricted
holdings of such officers. Regular dividends are payable and voting rights
apply on all such restricted shares.
(4) Based on three year performance plan ending in December of noted year but
actually paid in following year. Cash payment to Mr. Haddick; payment to all
other above named officers is one half cash and one half shares of Common
Stock of the Company at then equal fair market value. Special changes to
1992 corporate earnings from early adoption of SFAS 106 were excluded from
applicable payment computation.
(5) Reflects Company contributions to officer accounts in defined contribution
benefit plans which are generally available to applicable salaried employees
of the Company. In addition, Mr. Vernon's compensation reflects a profit
sharing contribution to such a plan maintained by a Company subsidiary in
which no other officers participate.
</TABLE>
7
<PAGE> 10
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table contains information concerning the granting of Stock
Options under the Company's 1989 Stock Option Plan to its executives shown on
the Summary Compensation Table. No Stock Appreciation Rights were granted in
1993 either in tandem with such Stock Options or otherwise, and no previously
outstanding Stock Options were amended in 1993 to change the exercise price.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
<CAPTION> APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM
--------------------------------------------------------------- -----------------------
(B) (C)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS (D)
UNDERLYING GRANTED TO EXERCISE OR (E)
(A) OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION (F) (G)
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---------------------------------- ------------- ------------ ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
John S. Haddick................... 0 0% N/A N/A N/A N/A
William M. Jordan................. 8,000 9.02 $22.50 10/20/03 $113,201 $286,874
Bruce E. Hines.................... 4,500 5.07 22.50 10/20/03 63,676 161,366
George A. Shedlarski.............. 4,500 5.07 22.50 10/20/03 63,676 161,366
Mark E. Vernon.................... 10,000 11.28 22.50 10/20/03 141,501 358,592
Curtis E. Daily................... 4,500 5.07 22.50 10/20/03 63,676 161,366
<FN>
- ---------------
(1) Except for Mr. Vernon, all Stock Options granted were ten year term
incentive Stock Options, with the exercise price equal to the fair market
value on the date of grant, and with pro rata vesting occurring on each grant
anniversary until fully vested on the third anniversary of grant. Mr. Vernon
received a ten year term nonqualified Stock Option which is not exercisable
for one year and only then to the extent that he has otherwise acquired
shares of Company Common Stock subsequent to his grant. All Stock Options
have tandem limited rights which, in general, allow the optionee to receive
the value of the Stock Option in the event of a change of control of the
Company.
</TABLE>
8
<PAGE> 11
OPTION/SAR EXERCISES AND HOLDINGS
For the executives named in the Summary Compensation Table, the following
table sets forth information concerning the exercise of Stock Options and/or
SARs during 1993 and the unexercised Stock Options and SARs held by such
executives as of the end of 1993.
<TABLE>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
(D)
(E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S OPTIONS/SAR'S
(B) AT FY-END(#) AT FY-END($)
SHARES (C) ---------------- ----------------
(A) ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#)(1) REALIZED($) UNEXERCISABLE(2) UNEXERCISABLE(3)
- -------------------------------- -------------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
John S. Haddick................. 11,996 $221,539 57,887/14,880 $691,549/45,909
William M. Jordan............... 1,824 21,268 18,094/19,127 84,534/40,933
Bruce E. Hines.................. 0 0 8,435/18,465 48,683/37,296
George A. Shedlarski............ 3,000 32,379 16,400/ 9,100 59,767/22,938
Mark E. Vernon.................. 1,405 13,504 1,975/13,120 8,607/17,867
Curtis E. Daily................. 1,267 21,591 17,262/13,063 144,059/24,451
<FN>
- ---------------
(1) Mr. Haddick, Mr. Jordan, Mr. Shedlarski, Mr. Vernon and Mr. Daily primarily
paid the exercise price through the exchange of previously owned shares so
that Mr. Haddick, Mr. Jordan, Mr. Shedlarski, Mr. Vernon and Mr. Daily
realized a net increase in share holdings of 8,697, 827, 1,246, 805 and 864,
respectively, as the result of these exercises.
(2) Mr. Haddick holds 47,267 Stock Options with tandem Stock Appreciation Rights
which are limited to the excess of $18.63 over the Stock Option price. No
other officer holds any Stock Appreciation Rights.
(3) Based upon the excess, where applicable, of the market value of $23.50 per
share at December 31, 1993 over the applicable exercise prices. Valuation
presumes exercise of Stock Option (and corresponding required cancellation
of tandem Stock Appreciation Rights, where applicable for Mr. Haddick).
</TABLE>
9
<PAGE> 12
LONG-TERM INCENTIVE PLAN
The following table provides information concerning awards made during 1993
under the Company's Long-Term Incentive Plan to the executives shown on the
Summary Compensation Table.
<TABLE>
LONG-TERM INCENTIVE PLANS
AWARDS IN LAST FISCAL YEAR
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
-------------------------------------------
(B) (C)
NUMBER OF SHARES, PERFORMANCE OR OTHER (D) (E) (F)
(A) UNITS OR OTHER PERIOD UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#)(1) OR PAYOUT(2) ($ OR #)(3) ($ OR #)(4) ($ OR #)(5)
- --------------------------- ----------------- ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
John S. Haddick............ None Not Applicable N/A N/A N/A
William M. Jordan(6)....... 1,414 Units February 1996 Payout 707 Units 1,414 Units 2,828 Units
Bruce E. Hines(6).......... 898 Units February 1996 Payout 449 Units 898 Units 1,796 Units
George A. Shedlarski(7).... 675 Units February 1996 Payout 338 Units 675 Units 1,350 Units
Mark E. Vernon(7).......... 472 Units February 1996 Payout 236 Units 472 Units 944 Units
Curtis E. Daily(8)......... 450 Units February 1996 Payout 225 Units 450 Units 900 Units
<FN>
- ---------------
(1) Each unit valued at $100.00.
(2) Performance measured against preestablished performance goal (fixed premium
over three year net asset return goal as determined by published independent
index of capital spending by Company's primary markets) for all awardees for
the three year period of January 1, 1993 through December 31, 1995. Any
payment to above named officers who received a 1993 award will be one-half
cash and one-half in shares of Common Stock of the Company at then
equivalent fair market value.
(3) Payout at threshold (80% of "net asset return" performance target) is 50% of
grant.
(4) Payout at target is 100% of grant.
(5) Maximum payout (125% of "net asset return" performance target and 10% over
capital spending rate of such index) is 200% of grant.
(6) Target unit award is 45% of position's salary midpoint.
(7) Target unit award is 35% of position's salary midpoint.
(8) Target unit award is 30% of position's salary midpoint.
</TABLE>
10
<PAGE> 13
PENSION PLANS
The following table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age under the Company's qualified
defined benefit pension plan, as well as a nonqualified supplemental pension
plan that provides certain additional retirement benefits that would otherwise
be denied participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits, based on remuneration that is covered under the plans
and years of service with the Company. All executive officers except Mr. Vernon
are covered by these plans.
<TABLE>
PENSION PLAN TABLE (1)
<CAPTION>
YEARS OF SERVICE(2)
-------------------------------------------------------------
REMUNERATION(3) 15 20 25 30 35
- --------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 29,456 $ 39,274 $ 49,093 $ 58,911 $ 68,730
200,000 39,956 53,274 66,593 79,911 93,230
250,000 50,456 67,274 84,093 100,911 117,730
300,000 60,956 81,274 101,593 121,911 142,230
350,000 71,456 95,274 119,093 142,911 166,730
400,000 81,956 109,274 136,593 163,911 191,230
500,000 102,956 137,274 171,593 205,911 240,230
<FN>
- ---------------
(1) Benefits are calculated as annual straight life annuity amounts beginning at
age 65 and are not reduced by any federal Social Security benefits. Optional
payment forms of actuarial equivalence are also available.
(2) Current credited years of service for pension benefit calculation:
Haddick -- 40; Jordan -- 21; Shedlarski -- 21; Hines -- 22; Daily -- 29;
Vernon -- Not Applicable.
(3) Covered compensation for pension benefit calculation includes (i) only base
salary and annual bonus shown on Summary Compensation Table and (ii) average
annual earnings for the three highest consecutive years during the
participant's last ten years preceding retirement.
</TABLE>
11
<PAGE> 14
REPORT OF COMPENSATION COMMITTEE
CONCERNING EXECUTIVE COMPENSATION
The Compensation Committee of the Board consists of five directors, none of
whom is a present or former officer or employee of the Company. The
Board-adopted statement of purposes and responsibilities of the Compensation
Committee recites that the Committee is charged with the broad responsibility of
seeing that officers and key management personnel are effectively compensated in
terms of salaries, supplemental compensation and benefits which are internally
equitable and externally competitive. Within that framework, and in order to tie
compensation directly to performance, the Committee has adopted an "incentive-
leveraged" compensation policy which offers the opportunity to supplement
conservative base salaries with substantial cash and stock-based incentives, all
as more fully described below.
As applicable to executive officer personnel, including the Chief Executive
Officer, the Committee has established a base salary structure which places
officers' salaries (after approximately 3 to 5 years' proven performance in the
position) at approximately ten percent below the Hay Management Consultants'
national salary survey median in relation to salaries paid to similar executive
positions at bonus paying industrial corporations. (This survey analysis
involves a comparison to a broader group of companies than shown in the
performance graph on page 14 in order to consider overall executive compensation
trends.) If no incentive awards are paid, officer salaries are paid in the
lowest quartile of total compensation of counterpart executive positions under
this survey.
Annual and Long-Term Incentive Plans allow opportunities, through effective
performance against goals, for significant additional cash and stock
compensation for the Chief Executive Officer and other officers. Performance
goals which must be met in order to earn payment of incentive compensation
target awards are set to reward superior performance, and incentive awards are
payable only if the Company achieves or exceeds predetermined results against
quantitative financial performance measures, including return on shareholders'
equity and/or return on net assets. During 1993, for the Company's two most
senior executives, annual and long-term incentives were set, when combined, to
be 100% of their individual salary range midpoint if all goals were met, and the
combined incentive could have exceeded that amount if the 1993 goals were
exceeded.
The specific performance goals under the incentive plans are established by
the Compensation Committee. In the case of the Annual Plan, the goals for a year
are set at or before the beginning of the year and, for the Long-Term Plan, the
goals for a "performance cycle" (customarily three years) are set at or before
the beginning of the cycle. Return on net assets (RONA) was selected by the
Committee as the predominant measure of performance for both the year 1993 under
the Annual Plan (as applicable to executive officers) and for the 1991-93
performance cycle under the Long-Term Plan. In the case of the 1993 Annual Plan,
the 1993 RONA goal for all officers in place at the beginning of the year was
based on aggressive (but deemed attainable) performance improvements which would
have resulted in near record results for the Company. In the case of the
Long-Term Plan, the RONA goal was indexed (within a predetermined range) to a
fixed premium over an independently calculated and published rate of growth in
capital spending in the primary industries which the Company's principal
products serve.
Long-Term incentive compensation paid to Mr. Jordan and the other officers
with respect to 1993 was the result of exceeding the 1991-93 Plan RONA
performance threshold for partial awards under this Plan. Mr. Jordan's award
under the Long-Term Plan was favorably affected by the Company's higher net
earnings during the initial year of the three year cycle ending on December 31,
1993, with this earlier result helping
12
<PAGE> 15
offset the Company's less favorable 1993 results. In approving this Long-Term
Plan award, the Committee disregarded the 1992 financial impact of the Company's
early adoption of SFAS 106 (governing accounting for post-retirement health
benefits), since the special 1992 charges arising from this adoption resulted
from a material change in accounting principles. However, SFAS 106 charges for
1993 were included in this Long-Term Plan award computation and in the 1993
Annual Plan award computation. Mr. Jordan and the other officers received
partial awards under the 1993 Annual Plan since the Company's financial
performance was below the pre-established target but above the threshold for
payment. Charges arising from the Company's early adoption of SFAS 112
(governing accounting for certain post-employment benefits) were excluded in the
1993 Annual Plan award calculations.
Stock-based forms of incentive compensation utilized by the Company include
stock options and restricted stock awards. As well as providing incentives,
these programs enhance the identity of interests between shareholders and
management by encouraging increased share ownership by management. With regard
to stock options, the Committee has adopted a stock option plan administration
policy where options are granted annually to officers and selected other key
managers.
The Compensation Committee has adopted an Equity Incentive Plan, the
purposes of which include requiring current officers to make an investment in
the Common Stock of the Company and providing participants with substantial
incentives to increase share value. Participants in the Plan include all
individuals noted in the Cash Compensation Table except Mr. Haddick. Features of
the Plan include a one-time grant of both 10,000 shares of Restricted Stock and
a 10,000 share Stock Option to each participant. The Plan also requires
participants, in order to receive full Plan benefits, not to sell any of their
Common Stock acquired from any source during the ten year term following their
grant without Committee consent. Plan participants may only exercise Stock
Options granted under the Plan to the extent that they have otherwise acquired
Common Stock during this term. All of this Restricted Stock is forfeited if the
participant's employment with the Company terminates (for any reason other than
death, disability or retirement) prior to the fifth anniversary of his grant,
and one-half of the award is forfeited if the participant's employment
terminates prior to the tenth anniversary of his grant. Mr. Vernon received a
grant under this Plan in 1993, while the other current officers received their
counterpart grants in 1991.
The Committee has not formally considered nor adopted a policy with regard
to qualifying executive compensation plans for tax deductibility under recently
enacted Internal Revenue Code Section 162(m), which generally limits the
corporate tax deduction for compensation paid to certain executive officers
named in the Proxy Statement to $1 million per year. The Committee has not yet
seen any need to address this issue, since current Company executive
compensation is below the level at which this new tax limitation would apply.
B.L. Shafer, Chairman
S.C. Mason
J.F. Schorr
H.A. Shaw, III
K.E. Sheehan
13
<PAGE> 16
COMPANY STOCK
PERFORMANCE GRAPH
The following chart compares the cumulative total return, assuming monthly
reinvestment of dividends, of the Company's Common Stock for the five year
period beginning December 31, 1988 against (i) the Standard & Poor's
Machinery-Diversified Index (which is comprised of companies also in the heavy
duty capital equipment industry) and (ii) the Standard & Poor's 500 Index (which
is a broad equity market index).
<TABLE>
TOTAL RETURN TO SHAREHOLDERS
REINVESTED DIVIDENDS
<CAPTION>
MEASUREMENT PERIOD MACHINERY-
(FISCAL YEAR COVERED) THE COMPANY S&P 500 DIVERSIFIED
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 117.46 131.69 119.00
1990 131.53 127.60 102.65
1991 167.96 166.47 122.03
1992 183.19 179.15 124.51
1993 178.27 197.21 184.37
</TABLE>
EMPLOYMENT AGREEMENTS
The Company is subject to contracts with Messrs. Jordan, Hines, Shedlarski,
Vernon and Daily and certain other officers and key employees of the Company
providing for, among other things, the payment of severance benefits in the
event that the individual's employment with the Company is terminated under
specified circumstances within two years after a change in control of the
Company.
The severance benefits under each contract include, among other things,
payment of the following: (i) twice the sum of the individual's base annual
salary plus the average amount awarded to the individual under any incentive
compensation plan or arrangement for the two preceding years; (ii) the value of
any outstanding Stock Options held by the individual under any Stock Option plan
of the Company, determined in accordance with a formula set forth in the
contract; (iii) a supplemental pension payment equivalent to the additional
benefit which would be earned for two additional years of service; and (iv) all
legal fees and
14
<PAGE> 17
expenses incurred by the individual as a result of his termination of
employment. The term of each such contract continues until December 31, 1996,
subject to extension beyond that date by agreement of the parties.
The Company maintains an employment agreement with Mr. Haddick covering the
period from his resignation as Chief Executive Officer effective February 15,
1993 until his normal retirement date on March 21, 1994. Mr. Haddick provides
services thereunder on an "as needed" basis at the direction of either the Board
or Mr. Jordan. This contract provides him with compensation at the rate of
$13,958 per month with standard employee benefits until his retirement.
In connection with the Company's acquisition of Valtek Incorporated
("Valtek") in 1987, the Company caused Valtek to enter into a personal services
agreement with Charles L. Bates, Jr., then Chairman of the Board of Valtek. In
1987, Mr. Bates was elected to the Board of Directors of the Company. The
agreement with Mr. Bates expires on July 11, 1994 and provides for cash
compensation of $27,083 per month and certain life insurance benefits.
The Company has also entered into a supplemental pension agreement with Mr.
Jordan under which Mr. Jordan is entitled to a nonqualified pension supplement
upon retirement. The supplement is computed by calculating the amount necessary
for Mr. Jordan to receive the same total pension benefit at attainment of age 60
that he would receive under the Company's existing qualified and nonqualified
pension plans at age 65.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth in the following table is information about the only party known
by the Company to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock of the Company. This information is based
upon filings made with the Securities and Exchange Commission and the Company by
such party.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OWNED OF THE CLASS
- ---------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
RCM Capital Management
Four Embarcadero Center, Suite 2900
San Francisco, California 94111(a).................................. 987,500 7.8%
<FN>
- ---------------
(a) The Company has been advised by RCM Capital Management ("RCM") that RCM has
sole voting power over 837,500 shares, no shared voting power, sole
dispositive power over 987,500 shares and aggregate beneficial ownership of
987,500 shares.
</TABLE>
RCM has represented that such shares were acquired in the ordinary course
of its investment business and were not acquired for the purpose of and do not
have the effect of changing or influencing the control of the Company. RCM has
also represented that RCM is a registered Investment Advisor.
APPOINTMENT OF INDEPENDENT AUDITORS
At the recommendation of the Audit/Finance Committee, the Board has
appointed Ernst & Young as independent auditors for the Company for the year
1994, subject to approval by the shareholders. It is
15
<PAGE> 18
intended that the persons acting under the accompanying Proxy vote the shares
represented thereby in favor of approval of such appointment.
Ernst & Young has performed an audit of the Company's financial statements
annually since 1956. It is anticipated that representatives of Ernst & Young
will be present at the Annual Meeting of Shareholders to respond to appropriate
questions and to make a statement if such representatives so desire.
Under New York law, this approval of the appointment requires a majority of
votes cast at the 1994 Annual Meeting.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPOINTMENT OF ERNST & YOUNG AS
INDEPENDENT AUDITORS FOR THE COMPANY FOR 1994.
OTHER BUSINESS
The Board of Directors does not know of any other matters of business which
may be brought before the meeting. However, it is intended that, as to any such
other matters or business, a vote may be cast pursuant to the accompanying Proxy
in accordance with the judgment of the person or persons voting such Proxy.
SHAREHOLDERS' PROPOSALS
A proposal by a shareholder intended for inclusion in the Company's Proxy
Statement and form of Proxy for the 1995 Annual Meeting of Shareholders must be
received by the Company at 3100 Research Boulevard, Dayton, Ohio 45420,
Attention: Secretary, on or before November 10, 1994 in order to be eligible for
such inclusion. The 1995 Annual Meeting of Shareholders is tentatively scheduled
to be held on April 21, 1995, with such date being subject to change.
SOLICITATION OF PROXIES
The cost of preparing, assembling and mailing this Proxy Statement and the
accompanying form of Proxy will be borne by the Company. Banks, brokerage houses
and other custodians, nominees and fiduciaries will be requested to forward
Proxy materials to their principals and to obtain authorization for the
execution of Proxies. Directors, officers and regular employees of the Company
may solicit Proxies personally from some shareholders if Proxies are not
received promptly. The Company will reimburse banks, brokerage houses and other
custodians, nominees and fiduciaries for their out-of-pocket expenses in
handling Proxy materials.
THE DURIRON COMPANY, INC.
By RONALD F. SHUFF
Secretary
16
<PAGE> 19
THE DURIRON COMPANY, INC.
PROXY FOR ANNUAL SHAREHOLDERS' MEETING - APRIL 21, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints JOHN S. HADDICK and WILLIAM M. JORDAN, or
either of them, attorneys and proxies, with power of substitution and with all
the powers the undersigned would possess if personally present, to vote all of
the shares of Common Stock of the undersigned in The Duriron Company, Inc. at
its Annual Meeting of its Shareholders to be held at 1:30 P.M. on Thursday,
April 21, 1994 at 3100 Research Boulevard, Dayton, Ohio, and at any adjournment
thereof, as follows:
<TABLE>
<S> <C>
1. Election of directors for three year term:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below) nominees listed below
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through the nominee's name below:
THREE YEAR TERM: Robert E. Frazer Diane C. Harris William M. Jordan
2. Approval of the appointment of Ernst & Young as independent auditors for the Company for 1994.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion the proxies are authorized to vote upon such other business as may properly come before the meeting.
</TABLE>
<PAGE> 20
THE DURIRON COMPANY, INC.
PROXY FOR ANNUAL SHAREHOLDERS' MEETING - APRIL 21, 1994
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
Date ______________________, 1994
_________________________________
_________________________________
Signature(s) of Shareholder(s)
Please sign as name(s) appear at
left. Executors, administrators,
trustees, etc., should indicate
the capacity in which they sign.
