<PAGE> 1
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 Rule 14a-11(c)
or Rule 14a-12
VISKASE COMPANIES, INC.
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(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 appropriate box):
[ x ] No fee required
[ ] 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:
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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:
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5) Total fee paid:
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[ ] 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 of Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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VISKASE COMPANIES, INC.
6855 W. 65th Street
Chicago, Illinois 60638
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 29, 1999
To the Stockholders of Viskase Companies, Inc.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of
Stockholders (the "Annual Meeting") of Viskase Companies, Inc.
(formerly Envirodyne Industries, Inc.), a Delaware corporation
("Viskase" or the "Company"), will be held on Thursday, July 29,
1999, at 10:00 a.m. local time, at the Hyatt Regency Oak Brook,
1909 Spring Road, Oak Brook, Illinois, for the following purposes:
(1) To elect five (5) directors to serve until the 2000
Annual Meeting of Stockholders or until their respective successors
are duly elected and qualified;
(2) To vote upon an amendment to the Viskase Companies, Inc.
Parallel Non-Qualified Savings Plan; and
(3) To transact such other business as may properly come
before the Annual Meeting or any adjournment or postponement
thereof.
The Board of Directors of the Company has set the close of
business on June 11, 1999 as the record date (the "Record Date")
for the Annual Meeting. Only holders of Viskase's common stock,
$.01 par value, at the close of business on the Record Date are
entitled to notice of, and to vote at, the Annual Meeting. The
stock transfer books of the Company will not be closed following
the Record Date. For a period of ten (10) days prior to the Annual
Meeting, a complete list of stockholders entitled to vote at the
Annual Meeting will be available for examination at the Company's
offices, during normal business hours, by any Viskase stockholder
for any purpose germane to the Annual Meeting.
It is important that your shares be voted at the Annual
Meeting. Whether or not you plan to attend the Annual Meeting in
person, you are urged to complete, date and sign the accompanying
proxy card and return it promptly in the enclosed postage-paid
envelope to ensure that your shares are represented and voted in
accordance with your wishes. You may revoke your proxy by
following the procedures set forth in the accompanying Proxy
Statement. If you so choose, you may still vote in person at the
Annual Meeting even though you previously submitted your proxy.
By order of the Board of Directors
Stephen M. Schuster
Vice President, General Counsel
and Secretary
Chicago, Illinois
July 1, 1999
<PAGE>
VISKASE COMPANIES, INC.
6855 W. 65th Street
Chicago, Illinois 60638
____________________________
PROXY STATEMENT
_____________________________
This Proxy Statement and the accompanying proxy card are being
furnished in connection with the solicitation of proxies by and on
behalf of the Board of Directors (the "Board of Directors") of
Viskase Companies, Inc. (formerly Envirodyne Industries, Inc.), a
Delaware corporation (the "Company"), for use at the 1999 Annual
Meeting of Stockholders of the Company (the "Annual Meeting"). The
Annual Meeting will be held on Thursday, July 29, 1999, at 10:00
a.m. local time, at the Hyatt Regency Oak Brook, 1909 Spring Road,
Oak Brook, Illinois. This Proxy Statement and the accompanying
proxy card will be mailed to the holders of Viskase's common stock,
$.01 par value (the "Common Stock"), on or about July 1, 1999.
Stockholders of the Company represented at the Annual Meeting
will consider and vote upon (i) the election of five (5) directors
to serve until the 2000 Annual Meeting of Stockholders of the
Company or until their respective successors are duly elected and
qualified, (ii) an amendment to the Viskase Companies, Inc.
Parallel Non-Qualified Savings Plan, and (iii) such other business
as may properly come before the Annual Meeting.
VOTING RIGHTS AND QUORUM
The record date set by the Board of Directors for the
determination of stockholders entitled to notice of, and to vote
at, the Annual Meeting was the close of business on June 11, 1999
(the "Record Date"). Only holders of record of Common Stock at the
close of business on the Record Date are entitled to notice of, and
to vote at, the Annual Meeting. As of the Record Date, there were
14,879,707 shares of Common Stock issued and outstanding. The
presence, in person or by proxy, of the holders of a majority of
the shares of Common Stock entitled to vote at the Annual Meeting
is necessary to constitute a quorum for the conduct of business at
the Annual Meeting.
In the election of directors, each share of Common Stock is
entitled to cast one vote for each director to be elected;
cumulative voting is not permitted. Nominees for director
receiving the affirmative vote of a plurality of shares of Common
Stock present in person or by proxy and entitled to vote at the
Annual Meeting will be elected as directors. For all matters
except the election of directors, each share of Common Stock is
entitled to one vote. The affirmative vote of a majority of Common
Stock present in person or by proxy and entitled to vote at the
Annual Meeting is required for each of the other matters submitted
to the stockholders for approval or ratification. A "broker
non-vote" is a vote withheld by a broker on a particular matter in
accordance with stock exchange rules because the broker has not
received instructions from the customer for whose account the
shares are held. Abstentions, directions to withhold authority and
broker non-votes will be treated as present for determining a
quorum. Abstentions, directions to withhold authority and broker
non-votes will have no effect on the election of directors. On all
other matters, abstentions will have the effect of a negative vote,
and broker non-votes will have no effect.
PROXY SOLICITATION
This proxy solicitation is being made by and on behalf of the
Board of Directors. The cost of soliciting proxies and preparing
the proxy materials will be borne by the Company. The Company has
retained the services of Morrow & Co., Inc. ("Morrow") to assist it
in soliciting proxies for a fee of approximately $3,500 plus
reimbursement of out-of-pocket expenses. The Company will also
request securities brokers, custodians, nominees and fiduciaries to
forward solicitation material to the beneficial owners of Common
Stock held of record by them and will reimburse them for their
reasonable out-of-pocket expenses in forwarding such solicitation
material.
The Board of Directors has selected F. Edward Gustafson and
Stephen M. Schuster to act as proxies, with full power of
substitution. Unless otherwise directed in the accompanying proxy,
the persons named therein will vote FOR the election of the five
(5) director nominees listed below and FOR the approval of the
amendment to the Viskase Parallel Non-Qualified Savings Plan. As
to any other business which may properly come before the Annual
Meeting, the persons designated as proxies on the enclosed proxy
card will vote in accordance with their judgment on such matters.
Any stockholder executing a proxy may revoke the proxy at any time
before it is voted by filing with the Secretary of the Company a
revoking instrument or a duly executed proxy bearing a later date.
Any stockholder may attend the Annual Meeting and vote in person
whether or not the stockholder has previously given a proxy.
ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting. The
persons named below have been designated by the Board of Directors
as nominees for election as directors for a term expiring at the
Annual Meeting of Stockholders in 2000. If any nominee is not
available for election at the Annual Meeting, the proxies will be
voted for an alternate selected by the Board of Directors (unless
authority is withheld), or the Board of Directors may elect not to
fill the vacancy and reduce the number of directors. The Board of
Directors believes that all of its present nominees will be
available for election at the Annual Meeting and will serve if
elected.
Nominees for Directors. The following sets forth information with
----------------------
respect to nominees for election as directors at the Annual Meeting.
<TABLE>
<CAPTION>
Name Age Principal Occupation
- ------------------------- ----- -----------------------------------------------------------------------------------
<S> <C> <C>
Robert N. Dangremond 56 Mr. Dangremond has been a principal with Jay Alix & Associates, a consulting and
accounting firm specializing in corporate restructurings and turnaround activities,
since August 1989. Since June 1998, Mr. Dangremond has served as Restructuring Officer
of Zenith Electronics Corporation, a manufacturer of televisions ("Zenith"). From
December 1997 to June 1998, Mr. Dangremond held the position of Chief Financial Officer
of Zenith. Previously beginning in August 1995, Mr. Dangremond has held the positions
of interim Chief Executive Officer and President of Forstmann & Company, Inc.
("Forstmann"), a producer of clothing fabrics. Mr. Dangremond was Chairman of the Board,
President and Chief Executive Officer of Multigraphics, Inc. (formerly AM International,
Inc.), a provider of graphics arts equipment, supplies and services ("Multigraphics"),
from February 1993 to September 1994. Mr. Dangremond is also a director of
Multigraphics. Mr. Dangremond has served as a director of the Company since 1993.
Mr. Dangremond's appointments as Restructuring Officer and Chief Financial Officer of
Zenith, as interim Chief Executive Officer and President of Forstmann and as Chairman
of the Board, President and Chief Executive Officer of Multigraphics, were made in
connection with turnaround consulting services provided by Jay Alix & Associates. On
September 22, 1995, Forstmann filed a petition under Chapter 11 of the United States
Bankruptcy Code. In July 1997, Forstmann consummated a plan of reorganization and
emerged from bankruptcy.
Avram A. Glazer 38 Mr. Glazer has served as the President and Chief Executive Officer of Zapata Corporation
since March 1995. Prior to that time, Mr. Glazer was employed by, and worked on behalf
of, Malcolm I. Glazer and a number of entities owned and controlled by Malcolm I.
Glazer. Mr. Glazer served as Vice President of First Allied Corporation ("First
Allied"), an investment company, from 1985 to 1995. He is a director of Zapata
Corporation and Specialty Equipment Companies, Inc. ("Specialty"), a food services
equipment manufacturer. He is also a director and Chairman of the Board of Omega Protein
Corp. ("Omega"), a marine protein company. Avram A. Glazer is the son of Malcolm I.
Glazer. Mr. Glazer has served as a director of the Company since 1998.
Malcolm I. Glazer 70 Mr. Glazer has been a self-employed private investor, whose diversified portfolio
consists of investments in television broadcasting, food services
equipment, health care, banking, real estate, stocks, government securities and
corporate bonds, for more than the past five (5) years. He is also the owner of the
Tampa Bay Buccaneers, a National Football League franchise. Mr. Glazer has been
President and Chief Executive Officer of First Allied since 1984. He is the Chairman
of the Board of Directors of Zapata Corporation. He is also a director of Specialty and
Omega. Malcolm I. Glazer is the father of Avram A. Glazer. Mr. Glazer has served as
a director of the Company since 1998.
F. Edward Gustafson 57 Mr. Gustafson has been Chairman of the Board, President and Chief Executive Officer of
the Company since March 1996 and a director of the Company since 1993. Mr. Gustafson
has also been the President and Chief Executive Officer of Viskase Corporation, a wholly
owned subsidiary of the Company, since June 1998. Mr. Gustafson was Executive Vice
President and Chief Operating Officer of the Company from May 1989 to March 1996 and
President of Viskase Corporation from February 1990 to August 1994. Mr. Gustafson has
also served as Executive Vice President and Chief Operating Officer of D.P. Kelly &
Associates, L.P., a management services and private investment firm, since November
1988.
Gregory R. Page 47 Mr. Page has been Corporate Vice President and Sector President of Cargill, Inc.
("Cargill"), a multinational trader and processor of foodstuffs and other commodities,
since May 1998. From August 1995 to May 1998, Mr. Page served as President of the Red
Meat Group of Cargill. From 1994 to August 1995, Mr. Page was President of Cargill's
Worldwide Beef Operations. From 1992 to 1994, Mr. Page was President of Cargill's North
American Beef Operations. Mr. Page has served as a director of the Company since 1993.
</TABLE>
Pursuant to a letter agreement, dated July 9, 1998, between
the Company, Zapata Corporation and Messrs. Glazer and Glazer, the
Board of Directors of the Company agreed to use its reasonable
efforts to elect Messrs. Glazer and Glazer to the Board of
Directors at the 1998 Annual Meeting of Stockholders and Zapata
Corporation and Messrs. Glazer and Glazer each agreed, until the
earlier of one (1) year from the date of the letter agreement or
the date on which Zapata Corporation owns more than 50% of the then
outstanding shares of Common Stock, (i) to cause all shares of
Common Stock beneficially owned by it or them to be voted for the
director candidates nominated by the Board of Directors (assuming
such candidates include Messrs. Glazer and Glazer) and (ii) not to
take any action to change the membership of the Board of Directors.
The Board of Directors recommends a vote FOR the election of
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each of the nominees listed above, and each proxy will be voted FOR
- -------------------------------------------------------------------
such nominees (unless the stockholder executing such proxy has
- --------------------------------------------------------------
withheld authority).
- -------------------
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
In fiscal year 1998, the Board of Directors met ten (10)
times. Also during fiscal year 1998, the Audit Committee met one
(1) time and the Compensation and Nominating Committee met four (4)
times. Each director participated in at least 75% of the total
number of such meetings of the Board of Directors and meetings of
committees of the Board of Directors on which he served.
The Board of Directors has established the following standing
committees:
Audit Committee. The principal responsibilities of the Audit
---------------
Committee are to review and recommend to the Board of Directors the
selection of the Company's independent accountants; to review with
the independent accountants the scope and results of the annual
audit engagement and the system of internal accounting controls;
and to direct and supervise special audit inquiries. The current
members of the Audit Committee are Avram A. Glazer, Chairman, and
Robert N. Dangremond.
Compensation and Nominating Committee. The principal
-------------------------------------
responsibilities and authority of the Compensation and Nominating
Committee are to review and approve certain matters involving
executive compensation; to review and approve grants of stock
options and stock appreciation rights under the Company's stock
option plan; to review and recommend adoption of or revisions to
compensation plans and policies; and to review and make
recommendations to the Board of Directors regarding such matters as
the size and composition of the Board of Directors, criteria for
director nominations, director candidates, including stockholder
nominations, and such other related matters as the Board of
Directors may request from time to time. The Compensation and
Nominating Committee will consider nominees recommended by the
Company's stockholders. Any such recommendation should be addressed
to: Corporate Secretary, Viskase Companies, Inc., 6855 W. 65th
Street, Chicago, Illinois 60638. See "Stockholder Proposals for
1999 Annual Meeting" for procedures with respect to nominations by
stockholders. The current members of the Compensation and
Nominating Committee are Robert N. Dangremond, Chairman, and
Gregory R. Page.
Interested Person Transaction Committee. The principal
---------------------------------------
responsibilities of the Interested Person Transaction Committee are
to review and evaluate any transaction with an "Interested Person"
(as defined in the Company's Amended and Restated By-Laws) and make
a recommendation as to what action, if any, should be taken by the
Board of Directors with respect to such transaction. The current
members of the Interested Person Transaction Committee are Robert
N. Dangremond, Chairman, and Gregory R. Page.
The Board of Directors may from time to time establish other
committees to assist it in the discharge of its responsibilities.
SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of
Common Stock as of May 21, 1999 of (a) each person or group of
persons known to the Company to beneficially own more than 5% of
the outstanding shares of Common Stock, (b) each director and
nominee for director of the Company, (c) each executive officer of
the Company listed in the Summary Compensation Table below, and (d)
all executive officers and directors of the Company as a group.
All information is taken from or based upon ownership filings made
by such persons with the Securities and Exchange Commission or upon
information provided by such persons to the Company.
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class (1)
- ------------------------- ---------------------- ------------
<S> <C> <C>
Malcolm I. Glazer 5,893,834 (2) 39.61%
100 Meridian Centre
Suite 350
Rochester, New York 14618
Zapata Corporation 5,877,304 39.50%
100 Meridian Centre
Suite 350
Rochester, New York 14618
Donald P. Kelly 2,070,287 (3) 13.91%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
F. Edward Gustafson 1,719,177 (3)(4)(5) 11.51%
6855 W. 65th Street
Chicago, Illinois 60638
Volk Enterprises, Inc. 1,300,000 8.74%
1230-1232 South Avenue
Turlock, California 95380
Elliott Associates, L.P. 1,136,950 7.64%
Martley International, Inc.
Westgate International, L.P.
712 Fifth Avenue, 36th Floor
New York, New York 10019
Peritus Asset Management, Inc. 857,399 5.76%
315 East Canon Perdido
Santa Barbara, California 93101
Robert N. Dangremond 29,063 (6) *
Gordon S. Donovan 63,763 (7) *
Avram A. Glazer 16,530 (8) *
Gregory R. Page 25,914 (6) *
Stephen M. Schuster 126,791 (5)(9) *
All directors and
executive officers of
the Company as a group
(7 persons) 7,875,072 (10) 52.38%
_________________________
* Less than 1%.
<FN>
(1) Beneficial ownership is calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder. Accordingly, the "Number of Shares
Beneficially Owned" and the "Percent of Class" shown for each
person listed in the table are based on the assumption that
stock options which are exercisable currently or within 60
days of May 21, 1999, held by such person, have been
exercised. Unless otherwise indicated, the persons listed in
the table have sole voting and investment power over those
securities listed for such person.
(2) The ownership indicated includes 1,000 shares subject to stock
options owned by Mr. Glazer. The ownership indicated also
includes 5,877,304 shares owned by Zapata Corporation
("Zapata"), which shares may be deemed to be beneficially
owned by Mr. Glazer because Mr. Glazer is the Chairman of the
Board of Zapata and may be deemed to be a controlling
stockholder of Zapata. Mr. Glazer disclaims beneficial
ownership of such shares.
(3) The ownership indicated includes 70,287 shares owned by D.P.
Kelly & Associates, L.P. ("DPK"), of which Mr. Kelly and Mr.
Gustafson are principals and officers. The general partner of
DPK is C&G Management Company, Inc. ("C&G Management"), which
is owned by Mr. Kelly and Mr. Gustafson. The ownership
indicated also includes 1,300,000 shares owned by Volk
Enterprises, Inc. ("Volk"). Volk is controlled by Volk
Holdings L.P., whose general partner is Wexford Partners I
L.P. ("Wexford Partners"). The general partner of Wexford
Partners is Wexford Corporation, which is owned by Mr. Kelly
and Mr. Gustafson. Mr. Kelly and Mr. Gustafson share voting
and investment power over the shares owned by DPK and Volk.
However, Mr. Kelly and Mr. Gustafson each disclaim beneficial
ownership of shares owned by DPK and Volk except to the extent
of their respective pecuniary interest in such entities.
(4) The ownership indicated includes 58,334 shares subject to
stock options owned by Mr. Gustafson. The ownership indicated
also includes 70,619 shares owned by Mr. Gustafson's spouse.
Mr. Gustafson does not have or share voting or investment
power over the shares owned by his spouse and disclaims
beneficial ownership of such shares.
(5) The ownership indicated also includes 100,000 and 3,358 shares
acquired by Messrs. Gustafson and Schuster, respectively,
pursuant to the Viskase Companies, Inc. Parallel Non-Qualified
Savings Plan (the "Plan"). The acquisition of these shares
are subject to certain amendments to the Plan being approved
by stockholders at the 1999 Annual Meeting of Stockholders.
(6) The ownership indicated includes 5,000 shares subject to stock
options owned by each of Messrs. Dangremond and Page.
(7) The ownership indicated includes 39,000 shares subject to
stock options owned by Mr. Donovan, 8,000 shares held by
Mr. Donovan as trustee for the benefit of his spouse, with
whom Mr. Donovan shares voting and investment power over
such shares, and 1,000 shares owned by Mr. Donovan's
spouse. Mr. Donovan does not have or share voting power
over the 1,000 shares owned by his spouse. Mr. Donovan
disclaims beneficial ownership of the shares held by him as
trustee and the shares owned by his spouse.
(8) The ownership indicated includes 1,000 shares subject to stock
options owned by Mr. Glazer.
(9) The ownership indicated includes 45,750 shares subject to
stock options owned by Mr. Schuster and 20,104 shares owned by
Mr. Schuster's spouse. Mr. Schuster does not have or share
voting or investment power over the shares owned by his spouse
and disclaims beneficial ownership of such shares.
(10) See Footnotes (2), (3), (4), (5), (6), (7), (8) and (9).
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's
officers, directors and persons who beneficially own more than 10%
of the Company's outstanding Common Stock to file reports of
ownership and changes in ownership of Common Stock with the
Securities and Exchange Commission, NASDAQ and the Company. Based
upon a review of relevant filings and written representations from
the Company's officers, directors, and persons who own more than
10% of the Company's Common Stock, the Company believes that all
required filings by such persons with respect to the year ended
December 31, 1998 have been made on a timely basis except that
Gregory R. Page failed to file two reports with respect to two
transactions.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Directors. Each director who is not an
-------------------------
officer of the Company received an annual retainer of $20,000 in
1998 and a fee of $1,000 for each attended meeting of the Board of
Directors. Chairmen of committees (other than the Interested Person
Transaction Committee) of the Board of Directors received an annual
retainer of $1,500 in 1998. Directors also received a fee for each
attended meeting of a committee of the Board of Directors (other
than the Interested Person Transaction Committee) of $1,000 ($500
in the case of committee meetings occurring immediately before or
after meetings of the full Board of Directors). Members of the
Interested Person Transaction Committee did not receive a fee in
1998. Directors who are officers of the Company do not receive
compensation in their capacity as directors. Pursuant to Viskase
Companies, Inc. 1993 Stock Option Plan, as amended and restated, on
the date of the 1998 Annual Meeting of Stockholders, non-employee
directors were granted a stock option to purchase 1,000 shares of
Common Stock at an option exercise price equal to the fair market
value of the Common Stock on the date of grant. Pursuant to the
Non-Employee Directors' Compensation Plan, non-employee directors
may elect to receive their director fees in the form of shares of
Common Stock. The number of shares received is based on the average
of the closing bid and asked price of the Common Stock on the
business day preceding the date the Common Stock is issued. All of
the non-employee directors have elected to receive their director
fees in the form of shares of Common Stock.
Compensation Committee Interlocks and Insider Participation.
-----------------------------------------------------------
The Compensation and Nominating Committee of the Board of Directors
consists of Messrs. Dangremond and Page, each of whom is a
non-employee director of the Company. Mr. Page is the Corporate
Vice President and Sector President of Cargill, Inc. In fiscal year
1998, Viskase Corporation, a wholly owned subsidiary of the
Company, had sales of $21,804,000 made in the ordinary course to
Cargill, Inc. and its affiliates.
Summary of Cash and Certain Other Compensation of Executive
-----------------------------------------------------------
Officers. The Summary Compensation Table below provides certain
- --------
summary information concerning compensation by the Company for
1998, 1997 and 1996 for services rendered by the Company's Chief
Executive Officer and each of the other executive officers of the
Company whose total annual salary and bonus exceeded $100,000 in
1998.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
-------------------------------- ----------------------
Other Annual Restricted All Other
Name and Salary Bonus Compensation Stock Award Options Compensation
Principal Position Year ($) (1) ($) ($) ($) (#) ($)
- ---------------------- ---- --------- -------- ------------ ----------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
F. Edward Gustafson 1998 470,000 117,500 - - 350,000 (2) 18,570 (3)
Chairman of the Board, 1997 465,231 - 48,786 (4) - - 18,517
President and Chief 1996 435,692 - 69,662 126,875 (5) 145,000 (6) 16,108
Executive Officer
Stephen M. Schuster 1998 123,500 36,705 20,655 (7) - 41,000 (8) 473,304 (9)
Vice President, General 1997 170,150 35,200 4,669 - - 7,350
Counsel and Secretary 1996 163,325 43,894 6,259 - 22,900 7,096
Gordon S. Donovan 1998 157,000 32,742 4,483 - 36,000 (8) 9,567 (10)
Vice President, Chief 1997 150,542 31,400 4,804 - - 7,254
Financial Officer, 1996 134,042 31,776 3,035 - 19,500 5,664
Treasurer and Assistant
Secretary
____________________
<FN>
(1) The salary set forth above for Mr. Gustafson for 1996 does not
include $193,000 paid to D.P. Kelly & Associates, L.P. under
the Amended and Restated Management Services Agreement dated
December 31, 1993 that was terminated in 1996.
(2) In March 1998, Mr. Gustafson was granted an option to purchase
up to 175,000 shares of Common Stock depending on the
financial performance of the Company based on EBITDA for
fiscal year 1998. In November 1998, this stock option was
replaced with a stock option to purchase up to 175,000 shares
of Common Stock upon the same terms and conditions of the
original grant other than the exercise price and a revised
EBITDA performance level in part to reflect the divestiture of
certain business operations. Based on the Company's EBITDA
for fiscal year 1998, a portion (i.e., 50,000 shares of Common
Stock) of this stock option will vest in three equal annual
installments commencing March 27, 2000. See the "Option/SAR
Grants in Last Fiscal Year" Table.
(3) Includes $4,050 paid for group life insurance, $4,706
contributed to the Viskase Retirement Income Plan and $9,814
contributed to the Viskase Companies, Inc. Parallel
Non-Qualified Savings Plan.
(4) Pursuant to his Amended and Restated Employment Agreement,
effective March 27, 1996 (the "Employment Agreement"), in
1997, Mr. Gustafson received a cash payment of $30,000 in lieu
of a Company automobile. In 1996, Mr. Gustafson had personal
use of a Company automobile for a portion of the year and,
pursuant to his Employment Agreement, was paid cash in lieu of
a Company automobile for the remainder of the year, which use
and cash payment was valued at $24,604.
(5) Pursuant to his Employment Agreement, in 1996, Mr. Gustafson
was granted 35,000 restricted shares of the Company's Common
Stock. The value of these shares as of December 31, 1998 was
$148,750. Such shares were nontransferable and were subject to
forfeiture until March 27, 1999. See "Employment Agreements
and Change-in-Control Arrangements." The Company does not
currently, and does not expect in the near future to, pay
dividends on shares of its Common Stock. Neither Mr. Gustafson
nor any of the other persons named in the Summary Compensation
Table holds any other restricted shares of Common Stock.
(6) Includes three (3) stock options granted to Mr. Gustafson to
purchase 35,000 shares, 35,000 shares and up to 75,000 shares
of Common Stock, respectively. The stock option to purchase
up to 75,000 shares of Common Stock was contingent upon the
financial performance of the Company for fiscal year 1996. No
portion of this stock option became exercisable and the stock
option terminated by its terms.
(7) Includes an automobile allowance of $6,600 and country club
dues of $5,297 paid by the Company.
(8) In January 1998, Messrs. Schuster and Donovan were granted
stock options to purchase 20,500 and 18,000 shares of Common
Stock, respectively, contingent upon the Company's financial
performance based on the Company's EBITDA for fiscal year
1998. In November 1998, these stock options were replaced with
new options to purchase the same number of shares upon the
same terms and conditions other than the exercise price. In
addition, the new options granted were not contingent upon the
financial performance of the Company.
(9) Includes $4,286 contributed to the Viskase Retirement Income
Plan and $27,077 vacation payout, $13,200 severance automobile
allowance and $6,341 automobile allowance grossup paid to Mr.
Schuster in connection with his termination of employment.
Also includes $422,400 payable to Mr. Schuster under a letter
agreement, dated July 14, 1998, between the Company and Mr.
Schuster. See "Employment Agreements and Change-in-Control
Arrangements."
(10) Includes $646 paid for group life insurance, $6,045
contributed to the Viskase Retirement Income Plan and $2,877
contributed to the Viskase Companies, Inc. Parallel
Non-Qualified Savings Plan.
</TABLE>
Stock Option Grants. The following table provides information
--------------------
concerning stock options granted to the persons named in the
Summary Compensation Table during the fiscal year ended December
31, 1998. No stock appreciation rights have been granted.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Percent of Potential Realizable
Number of Total Value at Assumed Annual
Securities Options Rates of Stock Price
Underlying Granted to Exercise Appreciation for Option
Options Employees or Base Term (2)
Granted in Fiscal Price Expiration --------------------------
Name (#)(1) Year ($/Share) Date 5% ($) 10% ($)
- ----------------------- -------- ---------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
F. Edward Gustafson (3) 175,000 21.82% $ 6.8750 3/27/08 $756,639 $1,917,471
175,000 21.82% $ 3.5625 11/18/08 $392,076 $ 993,599
Stephen M. Schuster 20,500 2.56% $ 6.8750 3/31/08 $ 88,635 $ 224,618
20,500 2.56% $ 3.5625 11/18/08 $ 45,929 $ 116,393
Gordon S. Donovan 18,000 2.24% $ 6.8750 3/31/08 $ 77,826 $ 197,226
18,000 2.24% $ 3.5625 11/18/08 $ 40,328 $ 102,199
<FN>
(1) Stock options are granted under the Viskase Companies, Inc.
1993 Stock Option Plan, as amended and restated (the "Stock
Option Plan"). Stock options generally become exercisable on
a cumulative basis in annual increments of one-third of the
optioned shares, commencing on the first anniversary of the
grant date. Upon a "Change of Control" of the Company, as
defined in the Stock Option Plan, all outstanding stock
options become immediately exercisable. The first grant
reported for each named executive officer was canceled and
replaced with a new stock option which is the second reported
grant for each named executive officer. See footnotes 2 and
8 to the "Summary Compensation Table" for more detail
regarding the grants to the named executive officers and the
repricing. Also see "Ten Year Option/SAR Repricings" Table.
(2) The potential realizable value is based on the term of the
stock option at the date of grant (ten (10) years). It is
calculated by assuming that the stock price on the date of
grant appreciates at the indicated annual rate, compounded
annually for the entire term, and that the stock option is
exercised and sold on the last day of the stock option term
for the appreciated stock price. These amounts represent
certain assumed rates of appreciation only. Actual gains, if
any, on stock option exercises and on the sale of shares of
Common Stock acquired upon exercise are dependent on the
future performance the Common Stock and overall stock market
conditions. There can be no assurance that the amounts
reflected in this table will be achieved.
(3) Mr. Gustafson's stock options were granted pursuant to his
Employment Agreement. See "Employment Agreements and
Change-in-Control Arrangements." Mr. Gustafson's stock
options are subject to and governed by the Stock Option Plan.
The grant with an exercise price of $6.8750 reported for Mr.
Gustafson was replaced by the grant with an exercise price of
$3.5625 reported for Mr. Gustafson. Mr. Gustafson was granted
both stock options to purchase up to 175,000 shares of Common
Stock depending on the financial performance of the Company
based on EBITDA for fiscal year 1998. Based on the Company's
EBITDA for fiscal year 1998, under the second grant, Mr.
Gustafson will only be able to purchase 50,000 shares of
Common Stock. Accordingly, the potential realizable value for
50,000 shares based on an assumed rate of 5% and 10%
appreciation over the term of the stock option would be
$112,022 and $283,885, respectively. See footnote 2 to the
"Summary Compensation Table" for more detail.
Stock Option Exercises and Holdings. The following table provides
- -----------------------------------
information concerning the exercise of stock options during the
fiscal year ended December 31, 1998 and the fiscal year-end value
of stock options with respect to each of the persons named in the
Summary Compensation Table.
</TABLE>
<TABLE>
Aggregated Option/SAR Exercises in 1998 and December 31, 1998 Option Values
---------------------------------------------------------------------------
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Value 12/31/98 (#) 12/31/98 ($)
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ---------------------- ----------- --------- --------------- --------------
<S> <C> <C> <C> <C>
F. Edward Gustafson - - 35,000/85,000 26,250/60,625
Stephen M. Schuster - - 38,116/28,134 0/14,094
Gordon S. Donovan - - 32,500/24,500 0/12,375
</TABLE>
Pension Plan Table. The following table sets forth estimated
------------------
annual benefits payable upon retirement under the Retirement
Program for Employees of Viskase Corporation (the "Retirement
Plan") to employees of the Company and its wholly owned subsidiary,
Viskase Corporation, in specified remuneration and years of service
classifications.
<TABLE>
Pension Plan Table
<CAPTION>
Assumed Final
Average Annual Annual Benefits for Years of Service Indicated (2)
Salary (1) 15 20 25 30 35
- ---------------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
100,000 18,000 24,000 30,000 36,000 42,000
150,000 27,000 36,000 45,000 54,000 63,000
200,000 36,000 48,000 60,000 72,000 84,000
250,000 45,000 60,000 75,000 90,000 105,000
300,000 54,000 72,000 90,000 108,000 126,000
350,000 63,000 84,000 105,000 126,000 147,000
400,000 72,000 96,000 120,000 144,000 168,000
450,000 81,000 108,000 135,000 162,000 189,000
500,000 90,000 120,000 150,000 180,000 210,000
<FN>
(1) Annual benefits payable under the Retirement Program are
calculated based on the participant's average base salary for
the consecutive thirty-six (36) month period immediately prior
to retirement.
(2) The annual benefits payable are based on straight-life annuity
basis at normal retirement age. The benefits reported in this
table are not subject to any reduction for benefits paid by
other sources, including Social Security. As of December 31,
1998, Messrs. Gustafson, Schuster and Donovan are credited
with 9, 9 and 11 years of service, respectively.
</TABLE>
Repricing. The following table provides information concerning the
- ---------
grant of replacement stock options during the prior ten fiscal
years with respect to executive officers of the Company:
<TABLE>
<CAPTION>
Ten Year Option/SAR Repricings
Securities Length of
Underlying Original Option
Number of Market Price of Exercise Price Term Remaining
Options/SARs Stock at Time of at Time of New at Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended (#) Amendment ($) Amendment ($) Price ($) Amendment
- ------------------------- ---------- -------------- ---------------- -------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
F. Edward Gustafson 11/18/98 175,000 $3.5625 $6.875 $3.5625 9 years
Chairman of the Board,
President and Chief
Executive Officer
Stephen M. Schuster 11/18/98 20,500 $3.5625 $6.875 $3.5625 9 years
Vice President, General
Counsel and Secretary
Gordon S. Donovan 11/18/98 18,000 $3.5625 $6.875 $3.5625 9 years
Vice President, Chief
Financial Officer,
Treasurer and Assistant
Secretary
</TABLE>
Employment Agreements and Change-in-Control Arrangements
--------------------------------------------------------
Employment Agreement with F. Edward Gustafson. On March 27,
---------------------------------------------
1996, the Company entered into an Employment Agreement with Mr. F.
Edward Gustafson. The Employment Agreement was amended and restated
during 1997 (the "Employment Agreement"). Pursuant to the
Employment Agreement, Mr. Gustafson has agreed to serve as Chairman
of the Board, President and Chief Executive Officer of the Company,
and the Company has agreed to use its best efforts to cause Mr.
Gustafson to be elected as a director of the Company, during the
term of the Agreement. The initial term of the Employment Agreement
is three (3) years, provided, however, that on March 26, 1997 and
each subsequent anniversary thereof, the term of the Employment
Agreement will be automatically extended for a period of one (1)
year unless the Company or Mr. Gustafson gives written notice to
the other at least thirty (30) days prior to the anniversary date
that the term shall not be so extended.
Under the Employment Agreement, Mr. Gustafson will receive an
initial annual base salary of at least $450,000 and $30,000 per
year in lieu of a Company-provided automobile. Mr. Gustafson's base
salary will be increased by the Compensation and Nominating
Committee of the Board of Directors each year in a manner
consistent with increases in base salary for other senior officers
of the Company. In addition, the Employment Agreement provides that
with respect to the fiscal year ended December 25, 1997, Mr.
Gustafson would be eligible to receive a bonus based on a
percentage of his base salary depending on the Company's
performance based on earnings before interest, taxes and
depreciation and amortization ("EBITDA"). Mr. Gustafson will be
eligible to receive an annual bonus for future fiscal years of the
Company based on such financial performance or other
performance-related criteria as established by the Compensation and
Nominating Committee after consultation with Mr. Gustafson. For
information concerning actual bonuses earned by Mr. Gustafson, see
the "Summary Compensation Table." Mr. Gustafson is also entitled
to participate in any employee benefit plans in effect for, and to
receive other fringe benefits provided to, other executive
officers.
Pursuant to and upon execution of the Employment Agreement,
Mr. Gustafson was granted two (2) stock options, each to purchase
35,000 shares of Common Stock. One (1) stock option becomes
exercisable in cumulative annual increments of one-third commencing
on the first anniversary of the date of grant. The other stock
option becomes exercisable in cumulative annual increments of
one-third commencing on the second anniversary of the date of
grant. In addition, Mr. Gustafson was granted a stock option to
purchase up to 75,000 shares of Common Stock depending on the
financial performance of the Company based on EBITDA for fiscal
year 1996. The Company did not achieve the minimum goal for EBITDA.
Therefore, no portion of this stock option became exercisable or
will become exercisable in the future. Lastly, Mr. Gustafson was
granted 35,000 restricted shares of Common Stock which could not be
transferred, and were subject to forfeiture, until March 27, 1999.
If Mr. Gustafson's employment is terminated by the Company for
Cause, as defined in the Employment Agreement, or by Mr. Gustafson
other than for Good Reason or Disability, as defined in the
Employment Agreement, Mr. Gustafson will be paid all Accrued
Compensation, as defined in the Employment Agreement, through the
date of termination of employment. If Mr. Gustafson's employment
with the Company is terminated by the Company for any reason other
than for Cause, death or Disability, or by Mr. Gustafson for Good
Reason, (i) Mr. Gustafson will be paid all Accrued Compensation
plus 300% of his base salary (or 200% in the event that D.P. Kelly
& Associates, L.P., or a company in which D.P. Kelly & Associates,
L.P. has a substantial interest, is the beneficial owner of the
Company following a Change of Control) and the prorated amount of
annual bonus that would have been payable to Mr. Gustafson with
respect to the fiscal year in which Mr. Gustafson's employment is
terminated, provided that the performance targets have been
actually achieved as of the date of termination (unless such
termination of employment follows a Change in Control, as defined
in the Agreement, in which case Mr. Gustafson will receive a bonus
equal to 50% of his base salary regardless of the Company's
performance), (ii) Mr. Gustafson will continue to receive life
insurance, medical, dental and hospitalization benefits for a
period of twenty-four (24) months following termination of
employment, and (iii) all outstanding stock options and restricted
shares of Common Stock will become immediately exercisable, vested
and nonforfeitable.
Pursuant to the Employment Agreement, Mr. Gustafson is
generally prohibited during the term of the Agreement, and for a
period of two (2) years thereafter, from competing with the
Company, soliciting any customer of the Company or inducing or
attempting to persuade any employee of the Company to terminate his
or her employment with the Company in order to enter into
competitive employment. For purposes of the Employment Agreement,
the Company includes Viskase Companies, Inc. and any of its
subsidiaries over which Mr. Gustafson exercised, directly or
indirectly, any supervisory, management, fiscal or operating
control during the term of the Employment Agreement.
Letter Agreement with Stephen M. Schuster. On July 14, 1998,
-----------------------------------------
in connection with the worldwide restructuring of the Company, the
Company and its wholly owned operating subsidiary, Viskase
Corporation, entered into a letter agreement with Mr. Stephen M.
Schuster pursuant to which Mr. Schuster's employment with the
Company was terminated and he was engaged to continue to serve on
an independent contractor basis as Vice President, Secretary and
General Counsel of the Company and its subsidiaries. Pursuant to
this letter agreement, Mr. Schuster is paid an annual retainer fee
of $50,000 in twelve (12) equal monthly installments and is
reimbursed for any reasonable out-of-pocket expenses. The letter
agreement may be terminated by the Company at any time after
January 31, 2000 upon at least ninety (90) days prior written
notice to Mr. Schuster or by Mr. Schuster at any time upon ninety
(90) days prior written notice to the Company. In the event of a
Change of Control, as defined in the Company's Corporate Office
Severance Pay Policy (the "Policy"), the letter agreement will be
immediately terminated.
Pursuant to the letter agreement, Mr. Schuster agreed to defer
payment of certain benefits payable to him under the Policy in
connection with his termination of employment until the first of
the following to occur: (i) July 31, 2000, (ii) a Change of Control
(as defined in the Policy), (iii) his death or permanent
disability, (iv) termination of the letter agreement by either
party, or (v) the Company's or Viskase Corporation's default or
failure to perform any of their respective obligations under the
letter agreement. Upon occurrence of one of the foregoing events,
Mr. Schuster will receive a lump sum payment equal to $422,400
which represents twenty-four (24) months salary and a target bonus
under the Company's Management Incentive Plan that he would have
been entitled to receive under the Policy upon his termination of
employment. In addition, pursuant to the letter agreement, stock
options owned by Mr. Schuster as of the date of his termination of
employment remain exercisable and continue to vest during the term
of the letter agreement. Such stock options remain subject to the
terms and conditions of the Company's 1993 Stock Option Plan, as
amended and restated.
The letter agreement provides that Mr. Schuster's rights to
indemnification and advancement of expenses currently provided for
in the Company's By-Laws for the period during which Mr. Schuster
serves as an officer of the Company remains in effect and that Mr.
Schuster will continue to be covered under the Company's Directors
and Officers liability insurance policy. In addition, the Company
has agreed to indemnify and hold Mr. Schuster harmless from and
against all claims, liabilities, losses, costs, damages or expenses
(including attorneys' fees) arising out of or in connection with
(i) the Company's or Viskase Corporation's failure to perform any
of their respective obligations under the letter agreement, (ii)
any action taken by Mr. Schuster at the request of the Company or
Viskase Corporation, (iii) any other claim relating to Mr.
Schuster's services under the letter agreement which claim is not
based upon any act or omission adjudicated to constitute willful
misconduct, fraud or dishonesty. Neither the Company nor Viskase
Corporation, however, will be required to indemnify Mr. Schuster
for any act or omission performed by Mr. Schuster which has been
adjudicated to constitute willful misconduct, fraud or dishonesty.
Corporate Office Severance Pay Policy. In May 1996, the
-------------------------------------
Compensation and Nominating Committee of the Board of Directors
approved the Policy and in March 1997 amendments to the Policy.
The Policy covers all permanent, full-time, salaried executives and
administrative personnel employed by the Company at its corporate
office, including Mr. Gordon S. Donovan. Mr. Donovan is eligible
for severance benefits as set forth in the Policy upon the
occurrence of one of the following events (an "Event"): (i)
involuntary separation of employment from the Company for any
reason other than death, disability or willful misconduct, (ii)
voluntary separation of employment from the Company (a) following
a reduction in base compensation or incentive bonus opportunity
from that in effect on the day immediately before the effective
date of a Change in Control, as defined in the Policy, or office
consolidation or elimination, or (b) following a reduction in the
person's principal responsibilities from those in effect on the day
immediately before the effective date of a Change in Control, as
defined in the Policy, or office consolidation or elimination. Upon
the occurrence of an Event and subject to the Company obtaining a
general release, Mr. Donovan would receive severance pay equal to
the equivalent to twenty-four (24) months' salary (at the highest
annual rate in effect during the three-year period prior to
separation of employment) plus a target bonus under the Management
Incentive Plan in effect at the time of separation. In addition,
Mr. Donovan would continue to receive medical, life and dental
insurance benefits in effect at the time of separation of
employment for a period of time following such separation depending
on form of payment of the severance pay elected (e.g., lump sum or
installment) and whether he is covered by another employer's plan.
The Policy may be amended or terminated at any time by the Company
except that in the event that a Change in Control or elimination or
consolidation of all or part of the corporate office occurs during
the term of the Policy, the Policy will be automatically extended
for a period of twenty-four (24) months following the effective
date of the Change in Control or office consolidation or
elimination.
REPORT OF THE COMPENSATION AND NOMINATING
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation and Nominating Committee (the "Committee") of
the Board of Directors of the Company is composed of two (2)
directors, neither of whom is an officer or employee of the
Company, its subsidiaries or affiliates.
General Policy
The Company's compensation program is intended to promote the
interests of the Company by attracting and retaining highly
qualified key employees and providing such key employees with
incentives and rewards to encourage superior performance and
continued employment with the Company. During fiscal year 1998,
the Company's compensation program consisted of three (3)
components: base salary, annual bonus and stock options.
Base Salary
The base salaries of the Company's executive officers are
reviewed and, if appropriate, adjusted on an annual basis. The
base salaries of executive officers, other than the Chief Executive
Officer, are determined by the Chief Executive Officer after
consultation with the Vice President, Human Resources. In
connection with the worldwide restructuring of the Company, the
corporate office was eliminated and employees at the corporate
office were relocated to the offices of Viskase Corporation, the
Company's remaining operating subsidiary. In connection with such
move, annual salary increases for corporate office employees,
including Mr. Donovan, were postponed from October 1998 to January
1999 to conform to the date of annual salary increases of employees
of Viskase Corporation. Accordingly, Mr. Donovan did not receive
a salary increase in 1998. Similarly, Mr. Schuster did not receive
a salary increase since his employment terminated prior to January
1, 1999. Mr. Schuster is no longer an employee of the Company and
therefore does not receive a base salary. Pursuant to a letter
agreement, dated July 14, 1998, Mr. Schuster continues to serve as
Vice President, Secretary and General Counsel and receives an
annual retainer fee of $50,000 in twelve (12) equal monthly
installments. For a description of Mr. Schuster's letter
agreement, see "Employment Agreements and Change-in-Control
Arrangements."
Annual Bonus
In 1998 executive officers of the Company (other than Mr.
Gustafson) participated in the Management Incentive Plan ("MIP")
pursuant to which they were granted an annual bonus based primarily
on the financial performance of the Company and secondarily on
personal performance. At the beginning of the 1998 fiscal year,
the Committee, based on the recommendation of the Chief Executive
Officer and the Vice President, Human Resources, of the Company,
established target and maximum financial performance goals with
respect to the Company's Operating Income, Operating Cash Flow and
Return on Net Managed Assets and the bonus opportunity, stated as
a percentage of base salary, that each executive could earn under
the MIP. In addition, personal performance goals were jointly
established by the executive officer and the Chief Executive
Officer and a bonus opportunity, stated as a percentage of base
salary was established. In October 1998, the targets under the MIP
were revised to be based on EBITDA for the second six months of the
fiscal year. This revision was in part to reflect the divestiture
of certain business operations. In addition, the bonus
opportunity, stated as a percentage of base salary, was revised so
that the 1998 annual bonus would be based on six months' salary
rather than twelve months' salary.
The Company slightly exceeded its target goal for EBITDA for
fiscal year 1998. In addition, the Committee determined that each
of the executive officers substantially achieved his primary
personal performance goals. The amount of bonuses earned by
Messrs. Donovan and Schuster for fiscal year 1998 are reported in
the "Summary Compensation Table."
Stock Options
In January 1998, Messrs. Donovan and Schuster were granted
stock options to purchase 19,500 and 20,500 shares of Common Stock,
respectively. Pursuant to the terms of these grants, the stock
options would only become exercisable if certain EBITDA targets for
fiscal year 1998 were met. In November 1998, the Committee
approved the grant of new stock options to replace the stock
options granted in January 1998, including the stock options
granted to Messrs. Donovan and Schuster. The replacement stock
options were granted on the same terms and conditions as the
January 1998 stock options other than the exercise price. In
addition, the replacement options were not contingent upon the
Company's financial performance.
Chief Executive Officer Compensation
Mr. Gustafson serves as President, Chief Executive Officer and
Chairman of the Board of the Company pursuant to his Employment
Agreement with the Company. For a description of the terms and
conditions of the Employment Agreement, see "Employment Agreements
and Change-in-Control Arrangements." Mr. Gustafson did not receive
a salary increase in 1998. At the beginning of fiscal year 1998,
the Committee established financial performance goals with respect
to the Company's EBITDA for fiscal year 1998 and Mr. Gustafson's
bonus opportunity, stated as a percentage of his base salary for
each of such goals. These goals were revised in October 1998 at
the same time the goals under the MIP were revised, in part to
reflect the divestiture of certain business operations. The amount
of the bonus earned by Mr. Gustafson for fiscal year 1998 is
reported in the "Summary Compensation Table." In March 1998, Mr.
Gustafson was granted a stock option to purchase up to 175,000
shares of Common Stock depending on the financial performance of
the Company based on EBITDA. In November 1998, the Committee
approved the grant of a stock option to purchase up to 175,000
shares of Common Stock to replace the March 1998 grant. The
November 1998 stock option was granted upon the same terms and
conditions as the March 1998 grant other than the exercise price
and a revised EBITDA performance target in part also to reflect the
divestiture of certain business operations. Based upon the
Company's EBITDA for fiscal year 1998, a portion (i.e., 50,000
shares of Common Stock) of the stock option became exercisable.
Policy Regarding Section 162(m)
The Company has not adopted a policy regarding the $1 million
limitation on the deductibility of certain executive compensation
under Section 162(m) of the Internal Revenue Code of 1986, as
amended. The current compensation of the Company's executive
officers falls significantly below the $1 million deduction limit.
Compensation and Nominating Committee
Robert N. Dangremond (Chairman)
Gregory R. Page
<PAGE>
APPROVAL OF AMENDMENT TO THE
VISKASE COMPANIES, INC. PARALLEL NON-QUALIFIED SAVINGS PLAN
The Board has adopted, subject to stockholder approval, an
amendment (the "Amendment") to the Viskase Companies, Inc. Parallel
Non-Qualified Savings Plan (the "Plan"). The Amendment, if approved
by Stockholders, will result in (i) the creation of a Viskase Stock
Fund through which participants in the Plan could elect to invest
amounts credited to their Supplemental Benefit Account or Employee
Contribution Account under the Plan (the "Accounts") in Common
Stock, and (ii) the reservation of a total of up to 1,000,000
shares of Common Stock for issuance in connection with the Plan.
If stockholders approve the Amendment, a participant in the Plan
may elect to invest all or a portion of his balances in his
Accounts in the Viskase Stock Fund.
If the Stockholders do not approve the Amendment, the Board
has approved an amendment to the Plan providing for the creation of
a phantom stock fund in which participants in the Plan may invest
amounts credited to their Accounts. If the Amendment is not
approved, balances in the Accounts of participants who so elect
will be automatically invested in the phantom stock fund.
The Plan was created to provide certain executives with
contributions comparable to the contributions they would have been
able to make and/or receive if the federal tax laws did not impose
limitations and nondiscrimination requirements with respect to
qualified plans. The Plan allows executives designated by the
Board to elect to defer a portion of their compensation and/or to
receive Company contributions. Approximately five (5) persons are
eligible to participate in the Plan. The Company designates
whether an employee is eligible to be credited with Company
contributions or to make employee contributions, or both. The
Company maintains a Supplemental Benefit Account on its books on
behalf of participants receiving Company contributions, and credits
this account each year with such Company contribution. This
contribution is equal to: (i) the amount the Company would have
contributed as a matching contribution to the Company's qualified
plan based on the participant's years of participation if
the IRS limits and nondiscrimination requirements did not apply and
if compensation exceeding $200,000 and amounts deferred had been
included as compensation under the Company's qualified plan, minus
(ii) the amount actually contributed by the Company on behalf of
the participant to the Company's qualified plan.
The Company also maintains an Employee Contribution Account on
behalf of each participant in the Plan who is eligible to defer
compensation. Each eligible participant may elect to defer
compensation under the Plan by authorizing, in a Participation
Agreement, regular payroll deductions equal to between one percent
(1%) and fifteen percent (15%) of his compensation. The Plan
permits a participant to change the rate of his deferral once each
calendar year effective as of the first day of the next payroll
period. Also, the Plan allows participants to discontinue or
temporarily suspend deferral of compensation as of the first day of
the next payroll period by giving written notice to the Company.
After discontinuance, a participant may make additional deferrals
by filing a new Participation Agreement with the Company at least
thirty (30) days prior to the next Enrollment Date (January 1).
If the Amendment is approved, the amounts designated by a
participant to be invested in the Viskase Stock Fund will be deemed
to have been invested in the number of shares of Common Stock equal
to the amount invested divided by the fair market value per share
of the Common Stock on the date of such designation (in the case of
a designation made prior to approval of the Amendment) or
contribution (in the case of designations or contributions made
after such approval), and such shares will be issued upon approval
of the Amendment. Dividends received on such shares, if any, will
be automatically reinvested in shares of Common Stock. Upon
termination of employment, the stock so acquired and credited to a
participant's Accounts will be distributed to such participant. If
the Amendment is not approved, amounts designated previously for
investment in the Viskase Stock Fund will be invested in the
phantom stock fund (as described above). Upon termination of
employment, participants will receive from the phantom stock fund
an amount equal to the then fair market value of such number of
shares as are then credited to the participants' Accounts in the
phantom stock fund, including the fair market value of shares
credited to the Accounts from the automatic reinvestment of
dividends such shares would have received.
Amounts not invested in the Viskase Stock Fund (or phantom
stock fund) are treated as follows: the Company adjusts each
Supplemental Benefit Account to reflect the earnings, gains and
losses that would have been credited or debited to the amounts
contributed had they been contributed to the fixed income fund in
the Company's qualified plan. As of the last day of each calendar
quarter, each Employee Contribution Account is credited with
interest based on the prime interest rate as published in The Wall
--------
Street Journal on the first business day of the calendar quarter.
- --------------
The amounts in the Supplemental Benefit Account of each
Participant become nonforfeitable when and to the extent they would
have vested under the Company's qualified Plan. The amounts
contributed to the Employee Contribution Accounts are
nonforfeitable at all times.
As soon as practicable after termination of employment,
retirement, or total or permanent disability, the Company will pay
a participant the vested portion of his Supplemental Benefit
Account together with the full amount of his Employee Contribution
Account as a lump sum (in each case including the shares held in
the Viskase Stock Fund, if the Amendment is approved).
Upon the death of a participant, amounts credited to his
Supplemental Benefit Account become nonforfeitable, and any unpaid
amount in his Supplemental Benefit Account and Employee
Contribution Account will be paid to his designated beneficiary.
Under the Plan, the Company shall appoint a committee,
consisting of not less than three persons, to administer the Plan
(the "Committee"). The Committee has the authority to decide
questions of eligibility, the amount, manner and time of payment of
any benefit payable, and certain duties relating to claims and
claim appeals. A decision of the Committee is conclusive and
binding on all persons having or claiming to have any interest
under the Plan.
The Board may at any time and from time to time amend or
terminate the Plan, except that no amendment or termination may
reduce or cancel the Company's obligation to pay (i) a benefit a
participant or his beneficiary is receiving or entitled to receive
on the day immediately preceding the later of the date of adoption
of the amendment or termination or its effective date, or (ii) a
benefit to, or with respect to, any employee of the Company who is
a participant on the day immediately preceding the later of the
date of adoption of the amendment or termination or its effective
date, which the participant or beneficiary would be entitled to
receive under the Plan upon retirement or other termination of
employment, or death.
The following table shows the amounts of Company Contributions
credited to participants under the Plan in the last fiscal year.
<TABLE>
<CAPTION>
Amount of
Company Contributions
Name and Position ($)
- --------------------- ----------------------
<S> <C>
F. Edward Gustafson 9,814
Chairman of the Board, President and
Chief Executive Officer
Stephen M. Schuster 0
Vice President, General Counsel
and Secretary
Gordon S. Donovan 2,877
Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary
All executive officers as a group 12,691
All directors who are not executive 0
officers as a group
All employees and consultants (other 15,698
than executive officers) as a group
</TABLE>
The Board of Directors recommends a vote FOR approval of the Amendment.
PERFORMANCE GRAPH
Set forth below is a graph comparing the annual change in the
cumulative total stockholder return of the Common Stock against the
cumulative total return of the NASDAQ Non-Financial Services Index
and a peer group of plastic film manufacturing or food packaging
companies consisting of A.E.P. Industries, Inc., Atlantis Group,
Inc., Ball Corporation, Bemis Company, Inc., Carlisle Plastics Inc.
(through September 9, 1996), Liqui-Box Corp., Sealed Air Corp. and
Sealright Co., Inc. for the period commencing January 4, 1994, the
first trading date of the Common Stock which was distributed to the
stockholders pursuant to the Company's Plan of Reorganization on
December 31, 1993, and ending December 31, 1998. The graph assumes
an investment of $100 on January 4, 1994 and the reinvestment of
dividends and other distributions to stockholders.
<TABLE>
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF $100 BEGINNING JANUARY 4, 1994
<CAPTION>
Jan. 4, '94 Dec. '94 Dec. '95 Dec. '96 Dec. '97 Dec. '98
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Viskase Companies, Inc. $100 $ 39 $ 33 $ 53 $ 66 $ 40
NASDAQ Non-Financial
Companies Index $100 $ 97 $137 $167 $204 $282
Peer Group Index $100 $109 $120 $166 $211 $194
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 1998, the Company purchased products in the
ordinary course and on arm's-length terms from affiliates of D.P.
Kelly & Associates, L.P. ("DPK") in the amount of $200,000. In
addition, during fiscal 1998, the Company sublet office space from
DPK for which it paid $77,000 in rent. The rent is comparable to
that which would be charged to a nonaffiliated company for use of
this office space. Donald P. Kelly, a beneficial owner of greater
than 5% of the outstanding shares of Common Stock, and Mr.
Gustafson, a beneficial owner of greater than 5% of the outstanding
shares of Common Stock and the Chairman, Chief Executive Officer
and President of the Company, are executive officers and limited
partners of DPK.
In fiscal year 1998, Viskase Corporation, a wholly owned
subsidiary of the Company, had sales of $21,804,000 to Cargill,
Inc. and its affiliates, which sales were made in the ordinary
course of business. Gregory R. Page, Corporate Vice President and
Sector President of Cargill, Inc., is a director of the Company.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
The Company intends to hold its 2000 Annual Meeting of
Stockholders in May 2000. Stockholders may submit proposals on
matters appropriate for stockholder action at the Company's annual
stockholder meetings, consistent with rules adopted by the
Securities and Exchange Commission. Stockholders are encouraged to
submit such proposals to the Company not later than December 9,
1999 to be considered for inclusion in the proxy statement and form
of proxy relating to the 2000 Annual Meeting of Stockholders. Any
such proposals should be addressed to: Corporate Secretary,
Viskase Companies, Inc., 6855 W. 65th Street, Chicago, Illinois
60638.
In addition, the Amended and Restated By-Laws of the Company
(the "By-Laws") provide that any stockholder of record wishing to
nominate a person for election as director or to bring any other
business before an annual meeting of stockholders must provide to
the Secretary of Viskase notice of such nomination or other
business to be brought, in the proper written form specified in the
By-Laws, not less than ninety (90) days nor more than one hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders, provided, however, that
in the event that the annual meeting of stockholders is called for
a date that is not within thirty (30) days before or after such
anniversary date, notice by the stockholder in order to be timely
must be received not later than the close of business on the tenth
(10th) day following the day on which such notice of the date of
the annual meeting was mailed or public disclosure of the date of
the annual meeting was made, whichever first occurs. Any
stockholder desiring a copy of the By-Laws will be furnished one
without charge upon request to the Corporate Secretary.
1998 ANNUAL REPORT ON FORM 10-K
A copy of the Company's 1998 Annual Report on Form 10-K (the
"Form 10-K"), as filed with the Securities and Exchange Commission,
is included as part of the Company's 1998 Annual Report which
accompanies this Proxy Statement. Additional copies of the Form
10-K are available to stockholders without charge on request in
writing to the following address: Viskase Companies, Inc., 6855 W.
65th Street, Chicago, Illinois 60638, Attention: Corporate
Secretary.
VISKASE COMPANIES, INC.
Chicago, Illinois
July 1, 1999
<PAGE>
<PAGE>
PROXY
VISKASE COMPANIES, INC.
6855 W. 65th Street
Chicago, Illinois 60638
Proxy Solicited by the Board of Directors
for the Annual Meeting of Stockholders
July 29, 1999
F. Edward Gustafson and Stephen M. Schuster, or either of them
individually, and each of them with power of substitution, are
hereby appointed Proxies of the undersigned to vote all shares of
Common Stock of Viskase Companies, Inc. owned on the record date by
the undersigned at the Annual Meeting of Stockholders to be held on
July 29, 1999, or any adjournments or postponements thereof, upon
such business as may properly come before the meeting, including
the items on the reverse side of this form as set forth in the
Notice of Annual Meeting of Stockholders and Proxy Statement, dated
July 1, 1999. THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE
SIDE. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR"
PROPOSALS 1 AND 2.
(Shares cannot be voted unless this Proxy Card is signed and
returned, or other specific arrangements are made to have the
shares represented at the meeting.)
/SEE REVERSE/ CONTINUED AND TO BE SIGNED ON /SEE REVERSE/
/ SIDE / REVERSE SIDE / SIDE /
<PAGE>
<PAGE>
/X/ Please mark your
votes as in this
example.
<TABLE>
<CAPTION>
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED AND FOR PROPOSAL 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
<S> <C>
1. Election of Directors. FOR AGAINST ABSTAIN
Nominees: Robert N. Dangremond, Avram A. Glazer, 2. Approval of Amendment to Viskase / / / / / /
Malcolm I. Glazer, F. Edward Gustafson, Companies, Inc. Parallel
Gregory R. Page Non-Qualified Savings Plan
/ / FOR / / WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
----------------------------------------
For, except vote WITHHELD for the nominee(s)
noted on the line above. MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
PLEASE SIGN AND DATE AND RETURN IN ENCLOSED ENVELOPE.
Please sign exactly as your name appears. If acting as
attorney, executor, trustee or in representative capacity,
sign name and indicate title. Joint owners should each
sign personally.
Signature: Date: Signature: Date:
------------------------------ -------- ----------------------- ------------
</TABLE>
