<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
HARDINGE INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
HARDINGE INC.
------------------
NOTICE OF 2000 ANNUAL MEETING AND PROXY STATEMENT
---------------------
Dear Stockholder:
The directors and officers of Hardinge Inc. are pleased to invite you to
attend the 2000 annual meeting of our stockholders, which will be held at the
Company's corporate headquarters, One Hardinge Drive, Elmira, New York, on
Tuesday, April 25, 2000, at 9:00 A.M.
At the meeting, we will (1) elect two Class III directors and (2) vote on a
proposal to ratify the appointment of Ernst & Young LLP as Hardinge's
independent public accountants, each as described in the formal notice of the
meeting and Proxy Statement appearing on the following pages. We also will
report on the progress of Hardinge and comment on matters of current interest.
Stockholders will have an opportunity to comment or ask questions.
Your vote is important. Whether or not you expect to attend the meeting and
regardless of the number of shares you own, please be sure to fill in, sign and
return the enclosed proxy. A prompt return of your proxy will be appreciated.
Sincerely,
/s/ Robert E. Agan
Robert E. Agan
Chairman of the Board, President
and Chief Executive Officer
Corporate Headquarters -- One Hardinge Drive, Elmira, NY 14902-1507
Telephone: (607) 734-2281
<PAGE>
HARDINGE INC.
ONE HARDINGE DRIVE, ELMIRA, NY 14902
------------------------
TO THE STOCKHOLDERS OF
HARDINGE INC.
------------------------
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of the Stockholders of
HARDINGE INC. will be held at the Company's corporate headquarters, One Hardinge
Drive, Elmira, New York, on Tuesday, April 25, 2000, at 9:00 A.M., for the
following purposes:
(1) To elect to the Board of Directors two Class III directors;
(2) To consider ratification of the appointment of Ernst & Young LLP as
Hardinge's independent public accountants for the fiscal year ending
December 31, 2000; and
(3) To consider and transact such other business as may properly come before
the meeting or any adjournment thereof.
The close of business on March 7, 2000 has been fixed as the record date for
the determination of the stockholders entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
J. PHILIP HUNTER
Secretary
Dated: March 13, 2000
Elmira, New York
<PAGE>
HARDINGE INC.
ONE HARDINGE DRIVE, ELMIRA, NY 14902
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors for use at the Annual Meeting of Stockholders
(the "Annual Meeting") of Hardinge Inc. (the "Company") to be held on Tuesday,
April 25, 2000, at 9:00 A.M., at the Company's corporate headquarters, One
Hardinge Drive, Elmira, New York. This Proxy Statement and the accompanying
Proxy and Notice of Annual Meeting of Stockholders are being mailed to
stockholders on or about March 13, 2000. A stockholder granting a proxy has the
right to revoke it by filing with the Secretary of the Company prior to the time
such proxy is voted a duly executed proxy bearing a later date, by attending the
Annual Meeting and voting in person, or by otherwise notifying the Secretary of
the Company in writing of such stockholder's intention to revoke such proxy
prior to the time such proxy is voted.
If the enclosed proxy card is returned properly signed, the shares
represented will be voted in accordance with your directions. You can specify
your choices by marking the appropriate boxes. If your proxy card is signed and
returned without specifying choices, the shares will be voted as recommended by
the directors. Abstentions are voted neither "for" nor "against," but are
counted in the determination of a quorum. If you wish to give your proxy to
someone other than those individuals designated on the enclosed proxy card, all
three names appearing on the proxy card must be crossed out and the name of
another person or persons inserted. The signed card must be presented at the
meeting by the person or persons representing you.
As a matter of policy, proxies, ballots and voting tabulations that identify
individual shareholders are kept private by the Company. Such documents are
available for examination only by the inspectors of election and certain
personnel associated with processing proxy cards and tabulating the vote. The
vote of any shareholder is not disclosed except as may be necessary to meet
legal requirements.
Shares allocated to the accounts of participants in the Hardinge Inc.
Savings Plan may be voted through separate participant direction cards that have
been mailed to participants in the Plan along with this Proxy Statement. If a
participant also owns shares outside this plan, the participant must return both
the proxy card and the participant direction card. The trustee of this Plan will
vote the number of shares allocated to a participant's account or accounts under
such plan in accordance with the directions on the participant direction card.
Shares for which the trustee receives no instructions will be voted by the
trustee in the same proportion as shares for which voting instructions have been
received.
Only stockholders of record at the close of business on March 7, 2000 are
entitled to receive notice of and to vote at the Annual Meeting. As of March 7,
2000, there were 9,016,151 shares of Common Stock outstanding and entitled to
vote. Each share of Common Stock is entitled to one vote. There are no
cumulative voting rights. Nominees for director will be elected by a plurality
of votes cast at the Annual Meeting by holders of Common Stock present in person
or by proxy and entitled to vote on such election. Any other matter requires the
affirmative vote of a majority of the votes cast at the meeting, except as
otherwise provided in the Certificate or By-laws. Only shares affirmatively
voted in favor of a nominee will be counted toward the achievement of a
plurality. Votes withheld (including broker non-votes) and abstentions are
counted as present for the purpose of determining a quorum but are not counted
as votes cast.
1
<PAGE>
ACTION TO BE TAKEN UNDER THE PROXY
It is proposed that at the Annual Meeting action will be taken on the
matters set forth in the accompanying Notice of Annual Meeting of Stockholders
and described in this Proxy Statement. The Board of Directors does not know of
any other business to be brought before the Annual Meeting, but it is intended
that, as to any such other business, a vote may be cast pursuant to the proxies
granted in the form of the enclosed proxy card in accordance with the judgment
of the person or persons acting thereunder; and should any herein-named nominee
for the office of director become unable to accept nomination or election, which
is not anticipated, it is intended that the persons acting under such proxies
will vote for the election in the stead of such nominee of such other person as
the Board of Directors may recommend.
NOMINEES FOR ELECTION AS DIRECTORS
The Company's Board of Directors is divided into three classes. Nominees
James L. Flynn and Douglas A. Greenlee are Class III directors and if elected at
the Annual Meeting will serve a term of three years expiring at the 2003 Annual
Meeting or when their respective successors have been duly elected and
qualified. John W. Bennett, whose term also expires at the 2000 Annual Meeting,
has retired and chosen not to stand for re-election.
The following table sets forth with respect to each nominee for director and
each director continuing in office such person's length of service as a
director, age, principal occupation during the past five years, other positions
such person holds with the Company, if any, and any other directorships such
person holds in companies with securities registered pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS; LENGTH OF SERVICE
OTHER POSITIONS HELD WITH THE COMPANY; AS DIRECTOR AND
NAME AND AGE OTHER DIRECTORSHIPS OF PUBLICLY TRADED COMPANIES EXPIRATION OF TERM
- ------------ ------------------------------------------------- ------------------
<S> <C> <C>
NOMINEES FOR CLASS III DIRECTORS:
James L. Flynn........... Retired since March 1994. Prior to that date, Since 1984
(Age 65) Senior Vice President -- Investment Services, Expires 2000
Corning Incorporated; Member and Chairman of the
Company's Executive and Investment Committees;
Member of the Company's Audit and Nominating
Committees.
Douglas A. Greenlee...... Owner, Harpers Ferry Wood Products; Vice Since 1979
(Age 52) President of the Company from 1993-April, 1999; Expires 2000
Member of the Company's Investment Committee.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS; LENGTH OF SERVICE
OTHER POSITIONS HELD WITH THE COMPANY; AS DIRECTOR AND
NAME AND AGE OTHER DIRECTORSHIPS OF PUBLICLY TRADED COMPANIES EXPIRATION OF TERM
- ------------ ------------------------------------------------- ------------------
<S> <C> <C>
CONTINUING IN SERVICE:
CLASS I DIRECTORS:
Robert E. Agan........... Chairman of the Board, President and Chief Since 1980
(Age 61) Executive Officer of the Company; Director, Expires 2001
Chemung Financial Corporation; Member of the
Company's Executive and Nominating Committees.
Richard J. Cole.......... President and Chief Operating Officer, Meritus Since 1991
(Age 68) Consulting Services, LLC, a management consulting Expires 2001
firm; formerly Division Vice President, IBM
Corporation, a manufacturer of information
equipment; Member and Chairman of the Company's
Audit Committee; Member of the Company's
Executive, Compensation, Incentive Compensation
and Investment Committees.
E. Martin Gibson......... Retired December 1994 as Chairman and Chief Since 1981
(Age 62) Executive Officer, Corning Lab Services, Inc., Expires 2001
provider of clinical and pharmaceutical
laboratory services, formerly a subsidiary of
Corning Incorporated, and as a Director, Corning
Incorporated, a specialty materials manufacturer.
Currently Director, International Technology
Corp., a provider of environmental services;
Member and Chairman of the Company's
Compensation, Incentive Compensation and
Nominating Committees; Member of the Company's
Executive Committee.
CLASS II DIRECTORS:
Daniel J. Burke.......... President and Chief Executive Officer, Swift Since 1998
(Age 59) Glass Co., Inc., a fabricator of glass component Expires 2002
parts; Member of the Company's Audit and
Investment Committees.
J. Philip Hunter......... Partner, Sayles, Evans, Brayton, Palmer & Tifft, Since 1992
(Age 57) a law firm; Secretary of the Company; Member of Expires 2002
the Company's Executive, Compensation, Audit and
Investment Committees.
Albert W. Moore.......... Retired since January 1998. Prior to that date, Since 1998
(Age 65) President, Association for Manufacturing Expires 2002
Technology, a trade association representing the
machine tool and related equipment manufacturers
of the United States; Member of the Company's
Executive and Investment Committees.
</TABLE>
3
<PAGE>
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors is seeking stockholder ratification of the
appointment of Ernst & Young LLP as its independent auditors for 2000.
The Audit Committee of the Board of Directors has reviewed and evaluated all
criteria it considered relevant in assessing the performance of Ernst & Young
LLP, such as the quality of its audit work, its knowledge of the industry and
the Company's affairs, the availability of its professional advice on a timely
basis and the reasonableness of its fees. Based upon such review and evaluation,
the engagement of Ernst & Young LLP as independent auditors has been approved by
the Board of Directors upon the recommendation of the Audit Committee. If
stockholders do not ratify the appointment of Ernst & Young LLP, the appointment
of independent auditors will be reconsidered by the Audit Committee and the
Board of Directors. Even if the appointment is ratified, the Audit Committee in
its discretion may nevertheless recommend to the Board of Directors another firm
of independent auditors at any time during the year if the Audit Committee
determines such a change would be in the best interests of the stockholders and
the Company.
Ernst & Young LLP has audited the Company's financial statements annually
since 1984. A representative of Ernst & Young LLP is expected to attend the
Annual Meeting, and will have the opportunity to make a statement if such
representative desires to do so and will be able to respond to appropriate
questions from stockholders.
VOTE REQUIRED
The affirmative vote of a majority of the votes cast at the Annual Meeting
is required for ratification of the appointment of Ernst & Young LLP.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The only persons who, to the knowledge of the management of the Company,
owned beneficially on February 1, 2000 more than 5% of the Common Stock of the
Company are set forth below. Unless otherwise indicated, each of the persons
named below has sole voting and investment power with respect to the shares
listed.
<TABLE>
<CAPTION>
SHARES OWNED AND
NAME AND ADDRESS NATURE OF BENEFICIAL
OF BENEFICIAL OWNER OWNERSHIP %
------------------- -------------------- --------
<S> <C> <C>
Chemung Canal Trust Company................................. 780,700(1) 8.45%
1 Chemung Canal Plaza
Elmira, NY 14902
Hardinge Inc. Savings Plan.................................. 701,475(2) 7.59%
c/o State Street Bank and Trust Company, Trustee
One International Place
Boston, MA 02110
Dimensional Fund Advisors, Inc.............................. 570,100 6.17%
1299 Ocean Avenue 11(th) Floor
Santa Monica, CA 90401
Robert E. Agan.............................................. 542,203(3) 5.87%
One Hardinge Drive
Elmira, NY 14902
Franklin Resources, Inc. and associated parties to said 481,500 5.21%
corporation...............................................
777 Mariners Island Boulevard
San Mateo, CA 94404
Douglas A. Greenlee......................................... 465,334(4) 5.03%
352 Carriage Drive
Harpers Ferry, WV 25425
</TABLE>
- ------------------------
(1) Chemung Canal Trust Company ("CCTC") held 780,700 shares of Common Stock for
various parties in personal trusts, agency and custodial accounts, pension
accounts, estates and guardianships, with respect to which shares CCTC had
sole voting power as to 631,064 shares, shared voting power with respect to
149,636 shares, sole investment power with respect to 417,732 shares and
shared investment power with respect to 149,636 shares.
(2) Includes all shares of Common Stock held by State Street Bank and Trust
Company as the Trustee of the Hardinge Inc. Savings Plan. The participants
in said Plan may instruct the Trustee as to the voting of 531,084 of such
shares. If no instructions are received, the Trustee votes the shares in the
same proportion as it votes all of the shares for which instructions are
received. The power to dispose of said shares is restricted by the
provisions of the Plan. With respect to 170,391 shares held by State Street
Bank and Trust Company as trustee of said Savings Plan, the trustee has the
power to vote and dispose of said shares, except that it is required in the
event of a tender offer or of any corporate action requiring a greater than
majority vote of stockholders to act in accordance with instructions
received from Plan participants.
(3) See footnote (2) under Security Ownership of Management.
(4) Sole beneficial owner of 4,072 shares of Common Stock, shares with two
others, as co-trustee of a trust for the benefit of himself and seven
others, voting and dispositive powers as to 407,949 shares of Common Stock,
and 53,313 shares are held with two others as attorneys-in-fact for another.
5
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is the number of shares of Common Stock of the Company
beneficially owned on February 1, 2000 by the directors and nominees for
directors, by the Executive Officers listed in the Summary Compensation Table
and by all directors and Executive Officers of the Company as a group. Unless
otherwise indicated, each of the persons named below, and directors and officers
as a group, has sole voting and investment power with respect to the shares
listed.
<TABLE>
<CAPTION>
SHARES OWNED AND
NATURE
NAME OF OF BENEFICIAL
BENEFICIAL OWNER OWNERSHIP(1) %
---------------- ------------------- --------
<S> <C> <C>
Robert E. Agan.............................................. 542,203(2) 5.87%
John W. Bennett............................................. 11,398 *
Daniel J. Burke............................................. 2,340(3) *
Richard J. Cole............................................. 12,095 *
Joseph T. Colvin............................................ 27,880(4) *
J. Patrick Ervin............................................ 60,058 *
James L. Flynn.............................................. 10,619(5) *
E. Martin Gibson............................................ 18,222 *
Douglas A. Greenlee......................................... 465,334(6) 5.03%
J. Philip Hunter............................................ 13,407 *
Albert W. Moore............................................. 4,530(7) *
Richard L. Simons........................................... 409,359(8) 4.43%
Daniel P. Soroka............................................ 49,513 *
All Executive Officers and Directors as a Group (16 persons
including the above)...................................... 1,452,154(9) 15.71%
</TABLE>
*Less than one percent of the Company's outstanding shares of Common Stock.
- ------------------------
(1) Includes shares which may be purchased pursuant to stock options held by
directors that were exercisable within 60 days as of February 1, 2000.
Messrs. Bennett, Cole, Flynn, Gibson and Hunter each held 3,000, Mr. Moore
1,500 and Mr. Burke 750, of such options to purchase shares of Common Stock.
Also includes all shares held by the Trustee of the Hardinge Inc. Savings
Plan allocated to members of the group who have sole voting power with
respect to said shares. The Trustee holds for the benefit of Messrs. Agan,
Colvin, Ervin, Simons and Soroka and all Executive Officers as a group
13,573, 1,820, 944, 864, 860 and 25,650 shares, respectively. Also includes
shares subject to forfeiture and restrictions on transfer granted pursuant
to the Company's 1993 and 1996 Incentive Stock Plans.
(2) Sole beneficial owner of 184,047 shares of Common Stock and sole trustee of
trusts for the benefit of his children holding 24,270 shares of Common Stock
with sole voting and dispositive powers; shares as co-trustee of a trust
under the Company's Pension Plan voting and dispositive powers with respect
to 333,886 shares.
(3) Includes 150 shares held by Mr. Burke's spouse, as to which Mr. Burke
disclaims beneficial ownership.
(4) Includes 2,190 shares held by Mr. Colvin's spouse, as to which shares
Mr. Colvin disclaims beneficial ownership.
(5) Includes 1,875 shares held by Mr. Flynn's spouse, as to which shares
Mr. Flynn disclaims beneficial ownership.
(6) Sole beneficial owner of 4,072 shares of Common Stock, shares with two
others, as co-trustee of a trust for the benefit of himself and seven
others, voting and dispositive powers as to 407,949 shares of Common Stock,
and 53,313 shares are held with two others as attorneys-in-fact for another.
6
<PAGE>
(7) Includes 450 shares held by Mr. Moore's spouse, as to which shares Mr.Moore
disclaims beneficial ownership.
(8) Sole beneficial owner of 75,473 shares of Common Stock and shares as trustee
with Robert E. Agan (see footnote 2 above) voting and dispositive powers as
to 333,886 shares of Common Stock as trustees under the Company's Pension
Plan.
(9) Includes 333,886 shares of Common Stock owned by the Company's Pension Plan
as to which Messrs. Agan and Simons share, as trustees, voting and
dispositive powers.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of the Company's
Common Stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Certain officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company and its representatives and certain representations that no other
reports were required, all persons subject to these reporting requirements filed
the required reports on a timely basis.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION COMMITTEES ON EXECUTIVE COMPENSATION:
The Company's annual compensation policies applicable to executive officers
are administered by the Compensation Committee (the "Committee") of the Board of
Directors, all of which Committee members are non-employee directors. The
compensation policies are designed to attract, motivate and retain qualified
individuals required to manage the Company to meet its short- and long-term
objectives and thereby increase stockholder value. Significant emphasis is also
placed on encouraging executive officers to build their holdings of the
Company's stock to align their goals with those of the stockholders. The
Company's program on executive compensation consists of three primary
components--base salary, annual incentive bonuses and long-term incentives under
incentive stock plans. The Committee recommends to the Board of Directors the
salaries and incentive bonuses of executive officers and the Incentive
Compensation Committee administers the incentive stock plans. The Committees
consider total individual performance and the overall financial and other
significant conditions of the Company in making their compensation
recommendations. Each of the three components of executive compensation is
reviewed for competitiveness and reasonableness in relation to a group of
companies the Committee deems comparable.
BASE SALARY:
In November 1998, the Committee determined the 1999 base salaries set forth
in this proxy statement. At that time the Committee considered the financial
performance of the Company as a whole and the contribution of each of the
executive officers. The Committee reviewed salaries recommended by Mr. Robert E.
Agan for executive officers other than himself, together with a survey of
executive salaries for other domestic machine tool manufacturers. Mr. Agan's
salary and other compensation were determined out of his presence. Consistent
with the Committee's emphasis on incentive-based compensation, modest percentage
increases in base salaries were granted, together with promotional increases for
Messrs. Ervin and Simons to reflect the assumption of significantly increased
responsibilities.
7
<PAGE>
INCENTIVE BONUSES:
The Committee administers the Company's incentive cash bonus program which
provides flexibility to the Committee from year to year to meet the
ever-changing business environment, provides competitive profit-focused cash
incentives for the corporate officers and allows the Chief Executive Officer to
establish specific individual objectives for all officers other than himself,
the achievement of which is rewarded by year-end cash bonuses if the Company is
sufficiently profitable. The Committee's determination of 1999 cash bonuses was
subjective and not subject to specific criteria. The Committee awarded no cash
bonuses to the executive officers for the year 1999 even though the Committee
generally believed the executives performed well but during a very significant
industry-wide downturn.
During 1999 the Compensation Committee had not yet developed a policy in
order to qualify any compensation to the five highest-paid executive officers in
excess of $1 Million per year for federal tax deductibility pursuant to
Section 162(m) of the Internal Revenue Code of 1986, as amended. The
Compensation Committee intends to balance the interests of the Company in
maintaining flexible incentive plans and the manner and extent to which the
Company benefits from the compensation package paid to any executive officer
against the possible loss of a tax deduction when taxable compensation for any
of the five highest-paid executive officers exceeds $1 Million per year.
E. Martin Gibson, Chairman J. Philip Hunter
Richard J. Cole
REPORT OF THE INCENTIVE COMPENSATION COMMITTEE:
Under the 1996 Incentive Stock Plan (the "Plan") shares of Common Stock had
been set aside for grants to key employees of restricted stock, stock options
and performance share awards. Under the Plan, restricted stock grants were
selected by the Committee for award to key executives with a view to increasing
executive ownership of Company stock to encourage their focus on long-term
corporate results and to link a substantial portion of executive pay and
financial incentive to increases in stockholder value. Individual grant awards
are based upon an executive's responsibilities and role in increasing
stockholder value and the Committee's evaluation of individual performance based
upon qualitative and quantitative measurements. No consideration is given to the
number of shares currently directly or indirectly owned. Restrictions on shares
awarded lapse upon passage of time as established by the Committee on the date
of the award, if said shares are not earlier forfeited. Under this Plan for the
year 1999, Messrs. Agan, Ervin, Simons, Colvin and Soroka were awarded 37,000,
10,000, 8,000, 5,000 and 5,000, respectively, restricted shares of Common Stock
to be earned over a three to eight year period subject to forfeiture and
restrictions on transfer. Total unconditional vesting will occur only upon the
completion of from three to eight years of continuous service (as specified at
the time of grant) or, if earlier, upon death, retirement after age 55,
retirement prior to age 55 for reasons of total and permanent disability or
retirement for other medical or health reasons which render an employee unable
to perform his duties and responsibilities or termination in other limited
circumstances. Partial vesting will occur if the employee is terminated during a
period from one to eight years (as specified at the time of grant) for reasons
other than gross deviation from duties and responsibilities. The Plan provides
that the possibility of forfeiture shall lapse in its entirety and the Company
shall deliver to the employee or his personal representative, free of any
restrictions, certificates representing the shares of Restricted Stock in the
event of a termination of the employee's employment with the Company or a
subsidiary within four years following a change of control as defined in the
agreements entered into pursuant to the Plan.
E. Martin Gibson, Chairman Richard J. Cole
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Gibson, Cole and Hunter served as members of the Compensation
Committee during 1999. Mr. Hunter is the Secretary of the Company and
Mr. Hunter and Mr. Agan's son, Steven E. Agan, are partners with the law firm of
Sayles, Evans, Brayton, Palmer & Tifft ("Sayles & Evans"). Sayles & Evans has
acted as regular outside legal counsel to the Company since 1956 and the Company
expects to continue to use such services in 2000. During 1999 the Company paid
Sayles & Evans $222,675 for legal services. Robert E. Agan participates in the
deliberations of the Compensation and Incentive Compensation Committees for the
purpose of providing evaluations and recommendations with respect to the
compensation paid to officers other than himself. However, Mr. Agan neither
participates nor is otherwise involved in the deliberations of the Compensation
and Incentive Compensation Committees with respect to his own compensation, and
those deliberations are conducted by the Compensation and Incentive Compensation
Committees in executive session without Mr. Agan present.
EXECUTIVE COMPENSATION:
The following table sets forth information with respect to compensation paid
by the Company for periods during the last three years to the Chairman of the
Board, President and Chief Executive Officer and the four other most highly
compensated executive officers as measured by salary and bonus.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION(1) ----------------
NAME AND ------------------------------ RESTRICTED STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(2) COMPENSATION(3)
------------------ -------- -------- -------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Robert E. Agan......................... 1999 $294,000 $ -0- $ 666,000 $17,823
Chairman of the Board, 1998 280,000 330,000 1,144,250 16,230
President and Chief 1997 267,000 315,000 540,000 3,336
Executive Officer
J. Patrick Ervin....................... 1999 155,000 -0- 180,000 2,089
Executive Vice President -- 1998 133,636 90,000 362,000 1,671
Operations 1997 122,000 63,000 -0- 1,525
Richard L. Simons...................... 1999 126,000 -0- 144,000 1,619
Senior Vice President-- 1998 114,000 83,000 186,250 1,425
Chief Financial Officer 1997 107,000 69,000 -0- 1,200
and Assistant Secretary
Daniel P. Soroka....................... 1999 128,500 -0- 90,000 1,739
Vice President -- 1998 123,500 55,000 149,000 1,544
Engineering 1997 118,500 50,000 -0- 1,481
Joseph T. Colvin....................... 1999 126,000 -0- 90,000 1,708
Vice President-- 1998 121,000 45,000 111,750 1,512
Manufacturing 1997 118,400 40,000 -0- 1,480
</TABLE>
- ------------------------
(1) Any perquisites or other personal benefits received from the Company by any
of the named executives were substantially less than the reporting
thresholds for "other annual compensation" established by the Securities and
Exchange Commission (the lesser of $50,000 or 10% of the individual's cash
compensation).
(2) Reflects grants made in January of each of the respective years, other than
one grant which was made in August of 1998. As of December 31, 1999,
Messrs. Agan, Ervin, Simons, Soroka and Colvin held
9
<PAGE>
112,500, 50,400, 50,300, 37,400 and 18,875, respectively, restricted shares
of Common Stock having an aggregate value on that date of $1,469,531,
$658,350, $657,044, $488,538, and $246,555, respectively, based upon the
closing price of the Company's Common Stock on December 31, 1999. The
restrictions on these shares lapse on a scheduled time basis, or earlier,
upon death and other conditions as provided in restricted stock agreements
with said persons. The officers are entitled to vote said shares and to
receive any and all dividends paid on the stock.
(3) Represents Company contributions to the Hardinge Inc. Savings Plan for each
named executive officer and for Mr. Agan for the years 1999, 1998 and 1997,
$15,521, $14,105 and $1,120, respectively, reimbursement for taxes paid by
Mr. Agan with respect to certain perquisites provided to him.
PERFORMANCE GRAPH:
The graph below compares the five-year cumulative total return for
Hardinge Inc. Common Stock with the comparable returns for the Nasdaq National
Market Composite Index and a group of six peer issuers selected for their
presence in the machine tool industry. Said peer group includes Bridgeport
Machines, Inc., Milacron, Inc., Giddings & Lewis, Inc., Gleason Corporation,
Hurco Companies Inc., and Genesis Worldwide, Inc. Cumulative total return
represents the change in stock price and the amount of dividends received during
the indicated period, assuming reinvestment of dividends. The graph assumes an
investment of $100 on December 31, 1994. The stock performance shown in the
graph is included in response to SEC requirements and is not intended to
forecast or to be indicative of future performance.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
HARDINGE INC., NASDAQ COMPOSITE, PEER GROUP
(PERFORMANCE RESULTS FROM 12/31/94 THROUGH 12/31/99)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VALUES
<S> <C> <C> <C>
Hardinge Inc. NASDAQ-Composite Peer Group
1994 $100 100 100
1995 186 141 123
1996 195 174 101
1997 279 213 137
1998 213 300 100
1999 158 543 91
December 31
</TABLE>
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Hardinge Inc................................................ $100 186 195 279 213 158
NASDAQ-Composite............................................ 100 141 174 213 300 543
Peer Group.................................................. 100 123 101 137 100 91
</TABLE>
10
<PAGE>
PENSION PLAN:
The Company maintains a non-contributory defined benefit Pension Plan for
all employees. Normal retirement is at age 65; however, retirement before age 65
can be selected under certain conditions. Annual pensions are computed on the
basis of adjusted career average compensation, excluding bonuses. The adjusted
career average compensation formula is the sum of (a) for service prior to
December 1, 1993, 1.25% of the annual compensation rate as of December 1, 1993,
times the number of years of service prior to December 1, 1993, plus (b) 1.5% of
compensation on or after December 1, 1993. Pension amounts are not subject to
reductions for Social Security benefits or offset amounts but are subject to
federal law limitations on pensions payable under tax qualified plans.
The Company also maintains a non-qualified, unfunded benefit plan called the
Executive Supplemental Pension Plan ("Supplemental Plan") currently covering
only Mr. Agan. The annual benefits under the Supplemental Plan are determined on
the basis of the average of the three highest years' base salary of the final
five years of employment plus cash bonuses (limited each year to 50% of said
year's base salary) times 1.25% for each year of service. A minimum benefit is
provided under the Supplemental Plan for all covered executives equal to 1.2
times the benefit earned under the qualified Pension Plan. Benefits under the
Supplemental Plan are reduced by benefits payable under the Pension Plan.
If the Executive Officers remain continuously employed at current
compensation levels until retirement at the normal retirement age of 65, the
estimated annual pension amounts payable under the Pension and Supplemental
Plans for Messrs. Agan, Ervin, Simons, Colvin and Soroka would be $195,649,
$77,275, $62,228, $24,488 and $42,272, respectively. Pensions described are
straight-life annuity amounts not reduced by joint and survivorship provisions
which are available to all retirees through reductions in pensions otherwise
payable.
EMPLOYMENT AGREEMENTS:
The Company has entered into written employment contracts with
Messrs. Agan, Ervin, Simons, Colvin and Soroka (the "officers"). The term of
each employment agreement is two years, with automatic, successive one-year
extensions unless either party provides the other with 60 days' prior notice of
termination. In the case of a change of control (as such term is defined in the
employment agreements), the term of each officer's employment agreement will be
automatically extended for a period of two years following the date of the
change of control. Officers' bonuses shall be determined in accordance with an
annual bonus policy.
If an officer is terminated without cause, or resigns for good reason (as
such term is defined in the employment agreements), such officer will be
entitled to continued payment of his base salary for the greater of six months
or the remainder of the current term with the exception of Mr. Agan's agreement,
which provides for a minimum of twelve months of base salary in this situation.
If an officer is terminated without cause or resigns for good reason (as such
term is defined in the employment agreements) on or after a change of control,
or resigns for any reason at any time six months or more following a change of
control, such officer will be entitled (i) to receive a lump sum cash payment
equal to one and one-half times the sum of his base salary in effect immediately
prior to his termination or resignation (or as in effect immediately prior to
the change of control, if higher) and his average annual bonus for the three
years preceding the change of control, and (ii) to participate, at the Company's
expense, in the Company's welfare benefit plans for a period of three years
following his resignation or termination. Such lump sum cash payments shall be
subject to reduction to the extent necessary to prevent any amounts or benefits
due from being deemed "excess parachute payments" within the meaning of
Section 280G of the Code.
11
<PAGE>
COMPENSATION OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors held five regularly scheduled meetings during the
year ended December 31, 1999. The Board has standing Executive, Audit,
Nominating, Compensation, Incentive Compensation and Investment Committees.
The Chairman of the Executive Committee is Mr. Flynn. Other members are
Messrs. Agan, Bennett, Cole, Gibson, Hunter and Moore. During the interim
between regular Board meetings, the Executive Committee possesses and may
exercise certain powers of the Board in the management and direction of the
Company. The Executive Committee did not meet during the year.
The Chairman of the Audit Committee is Mr. Cole. Other members are
Messrs. Bennett, Burke, Flynn and Hunter. The functions of the Audit Committee
are to recommend engagement of independent accountants, review the arrangement
and scope of the audit, review the activities and consider any comments made by
the independent auditors with respect to any weaknesses in internal controls and
consideration given, or the corrective action taken, by management. During the
year, there was one Audit Committee meeting.
The Chairman of the Nominating Committee is Mr. Gibson. Other members are
Messrs. Agan, Bennett and Flynn. The Committee selects and recommends to the
Board nominees for election to the Board and also selects and recommends to the
Board nominees for election as officers of the Company. The Committee will
consider written recommendations by stockholders for election to the Board, if
such recommendations are received by the Chairman of the Nominating Committee or
to the Chairman of the Board of Directors, at its main office, One Hardinge
Drive, Elmira, NY 14902. The Committee held one meeting during 1999.
The Chairman of the Compensation and Incentive Compensation Committees is
Mr. Gibson. Other members of the Compensation Committee include Messrs. Cole and
Hunter and the Incentive Compensation Committee has one other member, Mr. Cole.
The Compensation Committee reviews and recommends to the Board bonuses paid to
employees, and salaries and bonuses of officers. The Incentive Compensation
Committee administers the Company's 1996 Incentive Stock Plan and grants stock
options and restricted stock awards thereunder. There was one meeting of the
Compensation Committee and one meeting of the Incentive Compensation Committee
during 1999.
The Chairman of the Investment Committee is Mr. Flynn. Other members include
Messrs. Burke, Cole, Greenlee, Hunter and Moore. The Committee reviews the
investments and performance of the Trustees of the Pension and Savings Plans,
fixes desirable goals and consults with the Trustees thereon. There were four
meetings of the Committee during 1999.
All members of the Board attended at least 75% of the aggregate number of
Board meetings and meetings of committees of which they are members held during
1999.
During 1999, the members of the Board who are not full-time employees of the
Company were paid an annual fee of $5,000 and $800 for each Board and Committee
meeting attended. In addition, each director received 1,290 shares of Common
Stock and pursuant to the Company's 1996 Incentive Stock Plan, an option to
purchase 750 shares of Common Stock effective on the date of the Company's
Annual Meeting at its then fair market value. There is a Deferred Directors Fee
Plan that allows a director at his election to defer receiving up to 100% of his
fees payable in cash until the later of separation or age 70.
CERTAIN TRANSACTIONS
The Company in the normal course of business has retained the Chemung Canal
Trust Company for various banking services and as Trustee of the Company's
Pension and Savings Plans. The Company expects to do so during the current year.
Mr. Agan is a director of said trust company and Mr. Bennett was Chairman of the
Board/Chief Executive Officer of said trust company until his retirement
effective June 30, 1998, and a director until his resignation effective
August 1, 1999.
See "Compensation Committee Interlocks and Insider Participation."
12
<PAGE>
STOCKHOLDERS' PROPOSALS
Any stockholder proposal intended to be presented at the 2001 Annual Meeting
and included in the Company's Proxy Statement and Proxy relating to that meeting
must be received by the Company at One Hardinge Drive, Elmira, NY 14902,
Attention: The Secretary, not later than November 14, 2000.
OTHER MATTERS
The Board of Directors knows of no business other than that set forth above
to be transacted at the meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
common stock represented by the proxies in accordance with their judgment on
such matters. The cost of soliciting proxies will be borne by the Company. In
addition to solicitations by mail, some of the directors, officers and regular
employees of the Company may conduct additional solicitations by telephone and
personal interviews without remuneration. The Company may also request nominees,
brokerage houses, custodians and fiduciaries to forward soliciting material to
beneficial owners of stock held of record and will reimburse such persons for
any reasonable expense.
The Company has purchased insurance from Federal Insurance Company providing
for reimbursement of directors and officers of the Company and its subsidiary
companies for costs and expenses incurred by them in actions brought against
them in connection with their actions as directors or officers, including
actions as fiduciaries under the Employee Retirement Income Security Act of
1974. The insurance coverage, which expires on January 27, 2002, costs $102,606
on an annual basis, which will be paid by the Company.
Financial statements for the Company and its consolidated subsidiaries are
included in Hardinge Inc.'s Annual Report to stockholders for the year 1999
which was mailed to the stockholders beginning March 13, 2000.
A COPY OF HARDINGE INC.'S 1999 ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO THOSE
STOCKHOLDERS WHO WOULD LIKE MORE DETAILED INFORMATION CONCERNING HARDINGE. TO
OBTAIN A COPY, PLEASE WRITE TO: RICHARD L. SIMONS, SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER, HARDINGE INC., ONE HARDINGE DRIVE, ELMIRA, NY 14902.
By Order of the Board of Directors,
J. PHILIP HUNTER
SECRETARY
Dated: March 13, 2000.
13
<PAGE>
HARDINGE
THIS IS YOUR PROXY BALLOT FOR THE ANNUAL MEETING
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE AND RETURN THIS BALLOT
HARDINGE INC.
Proxy Solicited on Behalf of the Board of Directors
of Hardinge Inc. for the Annual Meeting
April 25, 2000
The undersigned hereby constitutes and appoints Robert E. Agan, James L.
Flynn and E. Martin Gibson, and each of them, his or her true and lawful
agents and proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Stockholders of Hardinge Inc. (the
"Company") to be held at the Company's corporate headquarters, One Hardinge
Drive, Elmira, New York, on Tuesday, April 25, 2000 at 9:00 a.m., local time,
and at any adjournments or postponements thereof, with all powers the
undersigned would possess, if then and there personally present, on all
matters properly coming before said Annual Meeting, including but not limited
to the matters set forth below.
You are encouraged to specify your choices by marking the appropriate
boxes, but you need not mark any boxes if you wish to vote in accordance with
the Board of Directors' recommendations. Your proxy cannot by voted unless you
sign, date and return this card.
This Proxy when properly executed will be voted in the manner directed
herein and will be voted in the discretion of the proxies upon such other
matters as may properly come before the Annual Meeting. If no direction is made,
this proxy will be voted FOR proposals 1 and 2.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
|X| Please mark your votes as in this example.
1. Proposal for election of two Class III Directors.
NOMINEES: James L. Flynn and Douglas A. Greenlee
|_| FOR ALL NOMINEES |_| WITHHELD FROM ALL NOMINEES
|_| ____________________________________________________________________________
FOR, except authority to vote WITHHELD from the above nominee(s)(write
name(s) on line)
2. Proposal to ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for 2000.
|_| FOR |_| AGAINST |_| ABSTAIN
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
HARDINGE INC.
C/O CORPORATE TRUST SERVICES
MAIL DROP 10AT66--4129
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45263-8855
----------------------------------------
NAME APPEARS
----------------------------------------
FOLD AND DETACH HERE
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PLEASE DATE, SIGN, AND MAIL THIS PROXY TODAY IN THE ENCLOSED ENVELOPE TO:
Corporate Election Services, P.O. Box 535800, Pittsburgh, PA 15253.
IF NO BOXES ARE MARKED, THIS PROXY WILL BE VOTED IN THE MANNER DESCRIBED ON
THE REVERSE SIDE.
|_| MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW.
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREIN. JOINT
OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH.
-------------------------------------
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---------------------------------------- ------------------
Signature Date
---------------------------------------- ------------------
Signature Date
- ----------------------------------------
NAME APPEARS
- ----------------------------------------
