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.
------------------------------------------------
(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:
----------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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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 November 15, 2000
To the Stockholders of Viskase Companies, Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the
"Annual Meeting") of Viskase Companies, Inc., a Delaware corporation
("Viskase" or the "Company"), will be held on Wednesday, November 15, 2000,
at 10:00 a.m. local time, at Sidley & Austin, Bank One Plaza, 55th Floor
Conference Center, Chicago, Illinois, for the following purposes:
(1) To elect five (5) directors to serve until the 2001 Annual Meeting
of Stockholders or until their respective successors are duly elected and
qualified; and
(2) 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
September 22, 2000 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
Kimberly K. Duttlinger
Vice President, General Counsel
and Secretary
Chicago, Illinois
October 6, 2000
<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., a
Delaware corporation (the "Company"), for use at the 2000 Annual Meeting of
Stockholders of the Company (the "Annual Meeting"). The Annual Meeting will
be held on Wednesday, November 15, 2000, at 10:00 a.m. local time, at Sidley
& Austin, Bank One Plaza, 55th Floor Conference Center, Chicago, 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 October 6, 2000.
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 2001 Annual Meeting of Stockholders of the Company or until their
respective successors are duly elected and qualified, and (ii) 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 September 22, 2000 (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 15,111,456 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 Kimberly K.
Duttlinger 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. 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 2001. 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.
Name Age Principal Occupation
---- --- --------------------
Robert N. Dangremond 57 Mr. Dangremond has been a managing
principal with Jay Alix & Associates, a
consulting and accounting firm
specializing in corporate
restructurings and turnaround
activities, since August 1989. From
June 1998 to December 31, 1999, Mr.
Dangremond 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, Mr. Dangremond
held the positions of interim Chief
Executive Officer and President of
Forstmann & Company, Inc.
("Forstmann"), a producer of clothing
fabrics. Mr. Dangremond is also a
director of Multigraphics, Inc.
(formerly AM International, Inc.), a
provider of graphics arts and services
("Multigraphics"). Mr. Dangremond has
served as a director of the Company
since 1993.
Mr. Dangremond's appointments at
Zenith, Forstmann and Multigraphics,
all of which successfully confirmed
plans of reorganization under Chapter
11 of the United States Bankruptcy
Code, were made in connection with
turnaround consulting services provided
by Jay Alix & Associates.
Avram A. Glazer 39 Mr. Glazer has served as the President and
Chief Executive Officer of Zapata
Corporation since March 1995. From 1985 to
1995, Mr. Glazer served as Vice President of
First Allied Corporation ("First Allied"),
an investment company. 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.
Name Age Principal Occupation
---- --- --------------------
Malcolm I. Glazer 72 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. 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 58 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.
Mr. Gustafson is Executive Vice President of
Emerald Acquisition Corporation ("Emerald"),
the former parent company of Viskase. On
August 20, 1993, Emerald filed a petition
under Chapter 11 of the United States
Bankruptcy Code. In March 1998, the
bankruptcy petition was dismissed by the
Bankruptcy Court.
Gregory R. Page 49 Mr. Page has been President and Chief
Operating Officer of Cargill, Inc.
("Cargill"), a multinational trader and
processor of foodstuffs and other
commodities, since June 2000. From May 1998
to June 2000, Mr. Page served as Corporate
Vice President and Sector President of
Cargill. From August 1995 to May 1998, Mr.
Page served as President of the Red Meat
Group of Cargill. Mr. Page has served as a
director of the Company since 1993.
The Board of Directors recommends a vote FOR the election of 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 1999, the Board of Directors met six times. Also during
fiscal year 1999, the Audit Committee met one time and the Compensation and
Nominating Committee met one time. 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 2001 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 September 15, 2000 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.
Name and Address of Number of Shares Percent
Beneficial Owner Beneficially Owned (1) of Class (1)
------------------- ---------------------- ------------
Malcolm I. Glazer............... 5,907,737 (2) 39.09%
1482 South Ocean Boulevard
Palm Beach, Florida 33480
Zapata Corporation.............. 5,877,304 38.89%
100 Meridian Centre, Suite 350
Rochester, New York 14618
Donald P. Kelly................. 2,070,287 (3) 13.70%
701 Harger Road, Suite 190
Oak Brook, Illinois 60523
Katana Fund LLC................. 1,996,052 (4) 13.21%
Katana Capital Advisors LLC
1859 San Leandro Lane
Santa Barbara, California 93108
F. Edward Gustafson............. 1,857,897 (3)(5)(6) 12.22%
6855 W. 65th Street
Chicago, Illinois 60638
Volk Enterprises, Inc........... 1,300,000 8.60%
618 S. Kilroy
Turlock, California 95380
Robert N. Dangremond............ 43,606 (7) *
Gordon S. Donovan............... 74,260 (6)(8) *
Avram A. Glazer................. 31,244 (9) *
Gregory R. Page................. 33,150 (7) *
All directors and executive
officers of the Company as a
group (7 persons)............... 7,967,200 (10) 52.15%
--------------------------------
* Less than 1%.
(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 September 15, 2000, 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 2,000 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) Katana Capital Advisors LLC manages the Katana Fund LLC and therefore
is deemed to indirectly own the shares owned by the Katana Fund LLC.
(5) The ownership indicated includes 86,667 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.
(6) The ownership indicated also includes 193,000 and 2,998 shares acquired
by Messrs. Gustafson and Donovan, respectively, pursuant to the Viskase
Companies, Inc. Parallel Non-Qualified Savings Plan (the "Non-Qualified
Plan").
(7) The ownership indicated includes 6,000 shares subject to stock options
owned by each of Messrs. Dangremond and Page.
(8) The ownership indicated includes 45,000 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.
(9) The ownership indicated includes 2,000 shares subject to stock options
owned by Mr. Glazer.
(10) See Footnotes (2), (3), (5), (6), (7), (8) and (9).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 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, 1999 have been made on a timely basis.
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 1999 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 1999. 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 1999. 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 1999 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.
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 President and Chief Operating Officer of Cargill,
Inc. In fiscal year 1999, Viskase Corporation, a wholly owned subsidiary of
the Company, had sales of $32,577,000 made in the ordinary course to Cargill,
Inc. and its affiliates.
<PAGE>
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 1999, 1998 and 1997 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 $100,000 in 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
----------------------- --------------------
Other Annual Restricted All Other
Name and Salary Bonus Compensation Stock Award Options Compensation
Principal Position Year ($) ($) ($) ($) (#) ($)
------------------ ---- ------ ----- ------------ ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
F. Edward Gustafson 1999 492,000 -- -- -- 175,000 (1) 18,479 (2)
Chairman of the Board, 1998 470,000 117,500 -- -- 350,000 (3) 18,570
President and Chief 1997 465,231 -- 48,786 (4) -- -- 18,517
Executive Officer
Gordon S. Donovan 1999 167,044 -- 19,302 (5) -- -- 7,535 (6)
Vice President, Chief 1998 157,000 32,742 4,483 -- 36,000 (7) 9,567
Financial Officer, 1997 150,542 31,400 4,804 -- -- 7,254
Treasurer and Assistant
Secretary
</TABLE>
-----------------------
(1) In 1999, 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 earnings before interest, taxes, depreciation
and amortization ("EBITDA") for fiscal year 1999. No part of this
stock option became exercisable and it expired by its terms. See the
"Option/SAR Grants in Last Fiscal Year" Table.
(2) Includes $194 paid for group life insurance, $4,385 contributed to the
Viskase SAVE Plan and $13,900 contributed to the Viskase Companies, Inc.
Parallel Non-Qualified Savings Plan.
(3) 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 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.
(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.
(5) Includes an automobile allowance of $6,600.
(6) Includes $43 paid for group life insurance, $5,494 contributed to the
Viskase SAVE Plan and $1,998 contributed to the Viskase Companies, Inc.
Parallel Non-Qualified Savings Plan.
(7) In January 1998, Mr. Donovan was granted a stock option to purchase
18,000 shares of Common Stock contingent upon the Company's financial
performance based on the Company's EBITDA for fiscal year 1998. In
November 1998, this stock option was replaced with a new stock option
to purchase the same number of shares upon the same terms and conditions
other than the exercise price. In addition, the new stock option
granted was not contingent upon the financial performance of the Company.
Stock Option Grants. The following table provides information concerning
stock options granted to the persons named in the Summary Compensation Table
during the fiscal year ended December 31, 1999. No stock appreciation rights
have been granted.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Percent of
Number of Total Potential Realizable
Securities Options Value at Assumed Annual
Underlying Granted to Exercise Rates of Stock Price
Options Employees or Base Appreciation for Option
Granted in Fiscal Price Expiration Term (2)
-----------------------
Name (#)(1) Year ($/Share) Date 5% ($) 10% ($)
----------------------- ---------- ---------- --------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
F. Edward Gustafson (3) 175,000 100% $3.625 2/03/09 $398,955 $1,011,030
</TABLE>
(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.
(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 option was granted pursuant to his Employment
Agreement. See "Employment Agreements and Change-in-Control
Arrangements." Mr. Gustafson's stock option is subject to and governed
by the Stock Option Plan. 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 for fiscal year 1999.
No portion of this stock option became exercisable and it expired
pursuant to its terms.
Stock Option Exercises and Holdings. The following table provides
information concerning the exercise of stock options during the fiscal year
ended December 31, 1999 and the fiscal year-end value of stock options with
respect to each of the persons named in the Summary Compensation Table.
Aggregated Option/SAR Exercises in 1999 and December 31, 1999 Option Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Value 12/31/99 (#) 12/31/99 ($)
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
------------------------ ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
F. Edward Gustafson..... -- -- 79,334 / 61,666 0 / 0
Gordon S. Donovan....... -- -- 45,000 / 12,000 0 / 0
</TABLE>
<PAGE>
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.
Pension Plan Table
Assumed Final
Average Annual Annual Benefits for Years of Service Indicated (2)
Salary (1) 15 20 25 30 35
----------------- ------ ------- ------- ------- -------
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
(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, 1999, Messrs. Gustafson and Donovan
are credited with 10 and 12 years of service, respectively.
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 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.
Severance Pay Policies. Mr. Donovan is eligible for severance benefits as
set forth in the Corporate Office Severance Pay Policy (the "Corporate Pay
Policy") upon a Change of Control (as defined in the Corporate Pay Policy) or
corporate office consolidation or elimination and 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, 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, 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
Corporate Pay 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 of part of the corporate office occurs during the term of
the Corporate Pay Policy, the Corporate Pay 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.
In addition, Mr. Donovan is eligible for severance benefits as set forth
in the Viskase Corporation Severance Pay Policy (the "Viskase Pay Policy").
The Viskase Pay Policy is substantially similar to the Corporate Pay Policy
except that it applies only to a Change of Control (as defined in the Viskase
Pay Policy) and not an office consolidation or elimination. Any benefits
received by Mr. Donovan under either policy would be credited against benefits
payable under the other policy.
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
1999, the Company's compensation program consisted of two (2) components:
base salary and annual bonus.
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, Administration
of Viskase Corporation, a wholly owned subsidiary of the Company. In
connection with the worldwide restructuring of the Company in 1998, the
corporate office was eliminated and employees at the corporate office were
relocated to the offices of Viskase Corporation. 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 received a salary increase on January 1, 1999, which
consisted of a merit increase generally comparable to other management
employees of the Company and Viskase Corporation and an increase to compensate
Mr. Donovan for the delay in his salary increase.
Annual Bonus
In 1999 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
1999 fiscal year, the Committee, based on the recommendation of the Chief
Executive Officer of the Company, established minimum, target and maximum
financial performance goals with respect to the Company's EBITDA and bonus
opportunity, stated as a percentage of base salary, that each executive could
earn under the MIP. The Company did not achieve its minimum goal for fiscal
year 1999. In addition, the Committee determined that no portion of any
participants' personal performance goals had been met. Accordingly, none of
the participants (other than Brazilian participants) in the MIP, including Mr.
Donovan, received a bonus for fiscal year 1999.
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 received a salary increase in 1999 generally comparable to other
management employees of the Company and Viskase Corporation. At the beginning
of fiscal year 1999, pursuant to Mr. Gustafson's Employment Agreement, the
Committee established financial performance goals with respect to the
Company's EBITDA for fiscal year 1999 and Mr. Gustafson's bonus opportunity,
stated as a percentage of his base salary for each of such goals. Based upon
the Company's EBITDA for fiscal year 1999, Mr. Gustafson did not receive any
bonus. Lastly, pursuant to his Employment Contract, the Compensation
Committee granted to Mr. Gustafson under the Stock Option Plan, a stock 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 1999. No portion
of this stock option became exercisable and it expired pursuant to its terms.
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
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 indicated. The graph assumes
an investment of $100 on December 31, 1994 and the reinvestment of dividends
and other distributions to stockholders.
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF $100 BEGINNING DECEMBER 31, 1994
Dec. '94 Dec. '95 Dec. '96 Dec. '97 Dec. '98 Dec. '99
Viskase Companies, Inc. $ 100 $ 85 $ 136 $ 170 $ 103 $ 68
NASDAQ Non-Financial
Companies Index $ 100 $ 139 $ 169 $ 198 $ 290 $ 559
Peer Group Index $ 100 $ 110 $ 152 $ 198 $ 182 $ 179
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal year 1999, Viskase Corporation, a wholly owned subsidiary of
the Company, had sales of $32,577,000 to Cargill, Inc. and its affiliates,
which sales were made in the ordinary course of business. Gregory R. Page,
President and Chief Operating Officer of Cargill, Inc., is a director of the
Company.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending December 31,
2000. A representative of PricewaterhouseCoopers LLP is expected to attend
the meeting and will have an opportunity to make a statement and respond to
appropriate questions from stockholders.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The Company intends to hold its 2001 Annual Meeting of Stockholders in
May 2001. 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 31,
2000 to be considered for inclusion in the proxy statement and form of proxy
relating to the 2001 Annual Meeting of Stockholders. Any such proposals
should be addressed to: Viskase Companies, Inc., 6855 W. 65th Street,
Chicago, Illinois 60638, Attn: Corporate Secretary.
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.
1999 ANNUAL REPORT ON FORM 10-K
A copy of the Company's 1999 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 1999 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
October 6, 2000
PROXY
VISKASE COMPANIES, INC.
6855 W. 65th Street
Chicago, Illinois 60638
Proxy Solicited by the Board of Directors
for the Annual Meeting of Stockholders
November 15, 2000
F. Edward Gustafson and Kimberly K. Duttlinger, 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 November 15, 2000, 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
October 6, 2000. THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE.
IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.
(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 /
/X/ Please mark your
votes as in this
example.
<PAGE>
<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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
<S> <C>
1. Election of Directors.
Nominees: Robert N. Dangremond, Avram A. Glazer,
Malcolm I. Glazer, F. Edward Gustafson,
Gregory R. Page
/ / 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>
