Fansteel
Number One Tantalum Place
North Chicago, Illinois 60064
Notice of Annual Meeting of Stockholders
April 26, 2000
March 22, 2000
To the Stockholders
of Fansteel Inc.:
Notice hereby is given that the Annual Meeting of Stockholders of Fansteel
Inc. will be held at The Hyatt Regency Greenwich, 1800 East Putnam Avenue, Old
Greenwich, Connecticut, on April 26, 2000, at 10:00 a.m., for the purposes of:
(1) Electing six Directors to serve until the next Annual
Meeting of Stockholders or until their successors are
elected;
(2) Ratifying the appointment of Ernst & Young LLP, Certified
Public Accountants, as auditors of the Company for the year
ending December 31, 2000; and
(3) Transacting such other business as may be brought before the
meeting.
The Board of Directors has fixed the close of business on February 21, 2000 as
the record date for the determination of stockholders entitled to notice of and
to vote at said meeting.
A list of the stockholders entitled to vote at the Annual Meeting will be open
to the examination of any stockholder for at least ten days prior to the Annual
Meeting at Number One Tantalum Place, North Chicago, Illinois 60064 for any
purpose germane to such meeting, during ordinary business hours.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
By order of the Board of Directors,
Michael J. Mocniak
Secretary
Fansteel
Number One Tantalum Place
North Chicago, Illinois 60064
Proxy Statement
SOLICITATION OF PROXIES
This Statement is furnished in connection with the solicitation of Proxies on
behalf of the Board of Directors (the "Board") of Fansteel Inc. (the "Company")
to be voted at the Annual Meeting of Stockholders, including any and all
adjournments thereof, to be held on April 26, 2000.
If the enclosed Proxy is executed and returned it will be voted in accordance
with the specifications thereon, and if there are no specifications thereon, it
will be voted in accordance with the proposals recommended by the Board. The
only business which the Board intends to present, or knows that others will
present, at the Annual Meeting is specified in the accompanying notice of the
meeting. If, however, any other matters properly come before the meeting for
action, it is intended that the persons named in the enclosed form of Proxy will
vote the same in accordance with their best judgment on such matters.
The enclosed Proxy may be revoked at any time insofar as it has not been
exercised.
The enclosed proxy material is being mailed to stockholders on or before March
24, 2000. The cost of preparing, assembling and mailing the enclosed proxy
material will be paid by the Company.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On February 21, 2000, the record date for determination of stockholders
entitled to notice of and to vote at said Annual Meeting, the Company had
outstanding 8,698,858 shares of Common Stock, each of which is entitled to one
vote.
The persons owning beneficially 5% or more of the Company's outstanding Common
Stock as of February 21, 2000, and the stock ownership of all the Officers and
Directors of the Company as a group as of that date are as follows:
Amount
Name and Address of Beneficially Percent
Beneficial Owner Owned of Class
E. P. Evans 1,339,595 15.40%
c/o Fansteel Inc.
Number One Tantalum Place
North Chicago, IL 60064
R. S. Evans 1,339,596 15.40%
c/o Crane Co.
100 First Stamford Place
Stamford, CT 06902
T. M. Evans, Jr. 1,371,595 (1) 15.77%
c/o Fansteel Inc.
Number One Tantalum Place
North Chicago, IL 60064
FMR Corp. 671,400 7.72%
82 Devonshire
Boston, MA 02109
Dimensional Fund Advisors Inc. 612,951 7.05%
1299 Ocean Avenue,
11th Floor
Santa Monica, CA 90401
All Officers and Directors as 4,158,786 47.78%
a group (7 persons)
(1) Includes 32,000 shares held as co-executor with Putnam Trust, a division of
the Bank of New York, of the Estate of T. M. Evans; Mr. Evans is the brother of
E. P. Evans and R. S. Evans.
NOMINEES FOR ELECTION AS DIRECTORS
Unless the stockholder has exercised the right to withhold such vote for any
nominee, the persons named in the enclosed Proxy will vote in favor of the
election of all of the six nominees named below as Directors to serve until the
next Annual Meeting of Stockholders or until their successors are elected. If,
as a result of circumstances not known or unforeseen, any nominee shall be
unavailable to serve as a Director, Proxies will be voted for the election of
such other person or persons as the Board may select. The following table sets
forth pertinent information with respect to such nominees, including their
principal business experience and shares of the Company's Common Stock
beneficially owned by them, directly or indirectly, on February 21, 2000.
Year in
Which
First Shares of
Became Common
Principal Business Director Stock Owned Percent
Experience of the Benefic- of
Name Age and Other Information Company ially Class
E. P. Evans 58 Mr. Evans manages 1976 1,339,595 15.40%
personal business
interests and
investments. He was
elected a director of
the Company in
September 1997.
Mr. Evans served as
director and Chairman
of the Board of
Directors of the
Company from 1976 to
1983. He also served
as a director of the
Company from 1992 to
1995. He is a
director of HBD
Industries, Inc.
R. S. Evans 55 Mr. Evans is the 1992 1,339,596 15.40%
Chairman and Chief
Executive Officer of
Crane Co. Until 1998
he was Chairman and
Chief Executive
Officer and a
director of Medusa
Corporation.
Mr. Evans is also a
director of Crane
Co., HBD Industries,
Inc., Southdown
Corporation, and
Huttig Building
Products, Inc.
T. M. Evans, 62 Mr. Evans manages 1986 1,371,595 15.77%
Jr. personal business (1)
interests and
investments. He is
a director of HBD
Industries, Inc.
Year in
Which
First Shares of
Became Common
Principal Business Director Stock Owned Percent
Experience of the Benefic- of
Name Age and Other Information Company ially Class
P. J. Kalis 50 Mr. Kalis is a 1996 0 0%
partner and Chairman
of the Management
Committee of the law
firm Kirkpatrick &
Lockhart, LLP.
J. S. Petrik 70 Mr. Petrik is a 1985 2,000 (2) less
retired Vice than
President and 0.1%
Director of Turner
Broadcasting System,
Inc. From 1992 to
1996 he was
Consultant, New
Technologies, Turner
Broadcasting System,
Inc. He is a
director of HBD
Industries, Inc.
G. L. 55 Mr. Tessitore has 1999 104,500 (3) 1.20%
Tessitore been Chairman of the
Board, President and
Chief Executive
Officer of the
Company since January
26, 1999. From May
1998 until January
1999, he was
President and a
director of Claricom,
Inc., a privately
held telecom-
munications supplier.
From April 1996 until
December 1997, he
served as President
and Chief Executive
Officer and a
director of Yale
International, Inc.
From March 1993 until
February 1995, he was
President of Breed
Technologies, Inc.
Each of the above-named persons has continuously served as a Director of the
Company since the year shown in the table except that E. P. Evans' most recent
term as a Director commenced in September 1997.
(1) Mr. T. M. Evans, Jr. is co-executor, along with Putnam Trust, a division of
the Bank of New York, of the Estate of his father, T. M. Evans, Sr., deceased,
which holds 32,000 shares of common stock of the Company formerly owned by the
decedent; he is the brother of E. P. Evans and R. S. Evans.
(2) Does not include 5,000 shares of common stock held by Diana J. Petrik, wife
of J. S. Petrik. Mr. Petrik disclaims any beneficial interest in the shares
held by his wife.
(3) Includes 100,000 restricted shares awarded by the Board of Directors
pursuant to the Company's Long Term Incentive Plan on January 26, 1999; 33,334
of these shares are no longer subject to restrictions.
During 1999 there were six Board meetings. Each Director attended at least
75% of the meetings of the Board. In addition, all members of the Audit
Committee and the Compensation and Nominating Committee attended all of the
meetings held.
Messrs. P. J. Kalis (Chairman), T. M. Evans, Jr., and J. S. Petrik were
members of the Audit Committee from January 1, 1999 through December 31, 1999.
The Committee held two meetings during the calendar year 1999. The Committee
reviews the scope and results of the audit and proposes appointment of the
auditors subject to the approval of the Board and ratification of the
stockholders. The Committee also reviews the Company's system of internal
controls and procedures with the auditors and the rendering of non-audit
services by the auditors.
Messrs. R. S. Evans (Chairman), E. P. Evans, P. J. Kalis and J. S. Petrik were
members of the Compensation and Nominating Committee from January 1, 1999
through December 31, 1999. The Committee held two meetings in 1999 and reviewed
all matters relating to executive compensation.
During 1999 the Company retained the law firm of Kirkpatrick & Lockhart, LLP
of which Mr. Kalis is a partner.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
All
Other
Comp-
Long-Term ensa-
Compensation tion
Annual Compensation Awards (3)
Restric-
-ted
Stock Stock
Name & Principal Awarded Options
Position Year Salary Bonus Other (1) (2)
Gary L. Tessitore 1999 $321,742 $100,000 $39,254 $575,000 300,000 $ 0
Chairman of the Board, 1998 0 0 0 0 0 0
President and Chief 1997 0 0 0 0 0 0
Executive Officer
Michael J. Mocniak 1999 192,510 15,134 3,318 0 0 4,800
Vice President, 1998 189,956 24,619 942 0 20,000 4,800
General Counsel 1997 184,108 0 1,399 0 0 4,800
and Secretary
R. Michael McEntee 1999 187,425 15,134 9,072 0 0 4,800
Vice President & Chief 1998 183,924 24,619 1,912 0 20,000 4,800
Financial Officer 1997 175,819 0 1,912 0 0 4,800
Jack W. Stawski 1999 138,750 24,052 0 0 20,000 0
Vice President 1998 0 0 0 0 0 0
Operational and 1997 0 0 0 0 0 0
Process Improvement
William D. Jarosz (4) 1999 265,397 70,594 2,222 0 0 0
1998 243,062 35,375 24,137 0 32,000 4,000
1997 235,477 0 22,689 0 0 4,000
(1) Reported as dollar value of the closing market price of the Company's common
stock ($5.75) on January 26, 1999, the date of grant, multiplied by 100,000,
which is the number of restricted shares awarded on that date.
(2) Reported in number of shares.
(3) Amounts of All Other Compensation are amounts contributed or accrued for
fiscal years 1999, 1998 and 1997 under the Company's Savings and Profit Sharing
Plan.
(4) Mr. Jarosz served as Chairman of the Board, President and Chief Executive
Officer until his resignation on January 26, 1999. The compensation reported in
this table for 1999 subsequent to his date of resignation was paid pursuant to a
letter agreement providing salary and benefit continuation as described in the
Report of the Compensation and Nomination Committee contained in this Proxy
Statement. All stock options were forfeited upon resignation in accordance with
the terms of the Company's Long-Term Incentive Plan.
AGGREGATED OPTIONS IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
Number of Value of
Securities Unexercised
Underlying In-the-
Unexercised Money
Options at Options at
Shares FY-End (#) FY-End ($)
Acquired on Value Exercisable/ Exercisable
Exercise Realized Unexercis- /Unexercis-
Name (#) ($) able able
Gary L. 0 $0 0/300,000 $0/$0
Tessitore
Michael J. 0 0 6,667/13,333 0/0
Mocniak
R. Michael 0 0 6,667/13,333 0/0
McEntee
Jack W. 0 0 0/20,000 0/0
Stawski
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realized
Number of % of Total Value at Assumed
Securities Options Annual Rates of
Underlying Granted to Stock Price
Options Employees Exercise Expira- Appreciation for
Granted in Fiscal Price tion Option Term
Name (#) Year ($/Share) Date 5% 10%
Gary L. 300,000 93% $5.66 01/26/09 1,067,863 2,706,175
Tessitore
(1)
Jack W. 20,000 6% $5.44 03/29/09 68,424 173,399
Stawski
(2)
(1) The stock options were granted on January 26, 1999 and are exercisable in
one-fourth increments on January 26, 2000, 2001, 2002 and 2003.
(2) The stock options were granted on March 29, 1999 and are exercisable in one-
fourth increments on March 29, 2000, 2001, 2002 and 2003.
PENSION PLAN TABLE
Years of Service
Remuner-
ation 15 20 25 30 35
$125,000 $32,039 $37,719 $43,398 $49,078 $54,757
150,000 38,789 45,719 52,648 59,578 66,507
175,000 44,189 52,119 60,048 67,978 75,907
200,000 44,189 52,119 60,048 67,978 75,907
225,000 44,189 52,119 60,048 67,978 75,907
250,000 44,189 52,119 60,048 67,978 75,907
300,000 44,189 52,119 60,048 67,978 75,907
400,000 44,189 52,119 60,048 67,978 75,907
500,000 44,189 52,119 60,048 67,978 75,907
The Fansteel Consolidated Employee Pension (the "Plan") provides benefits to
the executive officers of the Company as well as salaried and hourly employees.
The annual benefit is calculated using the employee's salary, overtime pay,
commissions and bonus payments as covered compensation. This covered
compensation is essentially identical to the compensation reported in the
Summary Compensation Table.
The Plan provides benefits upon retirement at age 65 based upon years of
service and compensation. Messrs. G. L. Tessitore, M.J. Mocniak, R.M. McEntee
and J. W. Stawski have 1, 17, 20 and 1 year(s) of credited service,
respectively, under the Plan.
Annual pension benefits payable under the Plan, at age 65, based on an annuity
for ten years certain and for life thereafter, are equal to 1.8% of the
employee's average annual compensation for each of his first 15 years of
credited service, plus 1.0% of his average annual compensation for each year of
credited service after the 15th year less .325% of the lesser of the employee's
average compensation for the three years prior to retirement or the average of
the taxable wage basis under the Social Security Act for each calendar year
during the 35-year period ending with the year the employee attains Social
Security retirement age multiplied by the lesser of the employee's actual years
of credited service or 35. The amounts in the table have been reduced by the
offset.
The standard arrangement with the Directors provides for Directors' fees in
the amount of $20,000 per year, $500 per board meeting attended, $1,000 per
committee meeting attended, and $3,000 per year for serving as a committee
chairman.
All decisions regarding executive compensation are made by the entire Board.
Any officer and employee of the Company who was a member of the Board
participated in deliberations of the Board during the last completed fiscal year
concerning executive officer compensation.
REPORT OF THE COMPENSATION AND NOMINATING COMMITTEE ON
EXECUTIVE COMPENSATION
The Compensation and Nominating Committee of the Company reviews all matters
relating to executive compensation and reports its actions and recommendations
to the Board of Directors.
The Company's policy on executive officer compensation is to provide
compensation which enables the Company to attract and retain a highly qualified
complement of executive officers who will enhance shareholder value by
optimizing the profitability of the Company's manufacturing operations and
maintaining sound, conservative fiscal policies. The Company's compensation
package for 1999 consisted of three parts: base salary, a potential annual
bonus and equity-related compensation.
Base Salary. Base salaries are set near the median for similarly-sized
businesses competing in the same or similar industries as the Company. The
sources of comparisons are publications dealing with executive compensation.
The information reported in those publications does not usually reveal the
identity of the companies which are the subject of the reports. The companies
which are the basis of that information, accordingly, are not necessarily those
which comprise the peer group for comparison of shareholder returns. By setting
salaries at a median level, the Company believes that it can attract and retain
the caliber of executive officer desired.
Incentive Compensation. On January 23, 1996, the Committee approved a bonus
plan in which the executive officers participate. This plan was designed to
strengthen the performance-related nature of the Company's incentive
compensation program by providing a more formal and objective plan structure and
tying incentive pay more closely to performance measures that closely reflect
stockholders' interests. The plan is based upon improvement in economic value
added (EVA*). EVA is the difference between the return on capital and the cost
of that capital multiplied by the amount of capital invested. The key factors
utilized in calculating bonuses under the plan are the Company's cost of
capital, return on capital, capital employed, and net operating profit after
tax.
Under the plan, the Committee determines the portion of an available bonus
pool which would be paid to executive officers. The total amount of the
available pool is calculated by comparing the current year's EVA with the prior
year's EVA. If the prior year's EVA was negative, the bonus pool will be 15% of
the difference. If the prior year's EVA was positive, the bonus pool will be
10% of the difference plus 6% of any positive EVA. The portion of the bonus
pool awarded by the Committee to an executive officer will be added to an
accrual account for such executive officer and one-third of the account balance
will be paid to him in cash. The accrual account balance can be reduced for
years in which there is a decline in EVA. The Committee will determine each
executive officer's award from the bonus pool based upon his relative
performance for the year as well as his relative performance compared to the
other officers.
Equity-Related Compensation. The Company established the Long-Term Incentive
Plan in 1998. The plan is designed to enable the Company to offer competitive
equity-based compensation packages to executives, provide the Company
flexibility in designing equity-based compensation programs to suit current
needs and offer a vehicle for other compensation programs. Upon ratification of
the Long-Term Incentive Plan the Committee recommended and the Board granted the
initial awards of Incentive Stock Options made in accordance with Section 422 of
the Internal Revenue Code. In determining the number of options to award each
executive officer, the Committee considered compensation data compiled by Ernst
& Young, LLP relating to stock option grants for a peer group of organizations
as reported in proxy and other SEC filings. This peer group was engaged in
metal fabrication and tool and machinery manufacturing and are not necessarily
the same peer group used in the comparison of shareholder returns. The
Black-Schole option pricing model was used to calculate the present value of a
stock option on the grant date. That value in May, 1998 was calculated to be
$3.90 per option. As a percentage of base salary, the number of options was
less than the average awarded by the peer group for similar executive officer
positions. One officer subsequently employed by the Company, other than the
Chief Executive Officer, was granted a number of options comparable to other
officers with a similar salary level.
Chief Executive Officer Compensation. G. L. Tessitore was elected as the
Company's Chairman of the Board, President and Chief Executive Officer on
January 26, 1999. Mr. Tessitore's compensation for 1999 was established by the
Company at a level determined to be necessary, after considering various
candidates, to attract an individual with the requisite background and
capabilities to serve as Chief Executive Officer. A significant portion of Mr.
Tessitore's compensation is related to the Company's performance as evidenced by
the large component of equity compensation. Since 1999 was the first year Mr.
Tessitore served as Chief Executive Officer his compensation in the preceding
fiscal year was not based on any particular measure of the Company's
performance. Mr. Tessitore's first year compensation consisted of a $350,000
annual base salary, a $100,000 cash signing bonus, 100,000 shares of restricted
stock vesting in three equal annual increments and 300,000 non-qualified options
for the Company's common stock vesting in four equal annual installments.
Mr. Jarosz served as Chief Executive Officer of the Company until his
resignation on January 26, 1999. In 1999 compensation was paid to Mr. Jarosz
pursuant to a letter agreement with the Company providing salary continuation
and continued benefit plan participation through June 30, 2000 as well as
payment of the amount credited to his account under the Company's incentive
compensation (EVA) plan. The accompanying tables reflect the compensation paid
pursuant to that agreement.
Other Matters. The Company does not anticipate that it will be affected in
the future by Section 162(m) of the Code, which imposes an annual limit of
$1,000,000 per person on the federal income tax deduction for executive
compensation. If the Company should determine that this limitation might impact
the Company, the Company would likely take the necessary steps to bring its
compensation programs into compliance with Section 162(m) so that
non-deductibility would be avoided.
R. S. Evans, Chairman of the Committee
E. P. Evans
P. J. Kalis
J. S. Petrik
The Company compares its total shareholder return in the following performance
graph with the MG Industry Group 611 - Aerospace Components, formerly identified
as MG Industry Group 012, as well as the MG Industry Group 626 - Metals
Fabrication, formerly identified as MG Industry group 301. The Company began
comparing its shareholder returns in 1994 with MG Industry Group 626 - Metals
Fabrication as a better measure of the overall business of the Company and
because of the reduced concentration of the Company's sales in the aerospace
components market in 1994 as compared to previous years.
Note: Performance graph submitted in paper format under cover of Form SE.
AGREEMENT CONCERNING SIGNIFICANT OWNERSHIP EVENT
On April 19, 1999, the Board of Directors approved an Agreement (the
"Agreement" or "Agreements") with each of the four current officers named in the
summary compensation table providing severance protection following a
Significant Ownership Event. The purpose of the Agreement is to reenforce and
encourage the officers to maintain objectivity and a high level of attention to
their duties without distraction from the possibility of a change in control.
These Agreements provide that each officer is entitled to certain benefits (the
"Severance Benefits") in the event that a Significant Ownership Event, as the
term is defined in the Agreement and summarized below, shall occur and within
two years after the Significant Ownership Event either of the following shall
occur: (i) an involuntary termination of the officer's employment with the
Company without Cause as that term is defined in the Agreements and summarized
below; or (ii) a voluntary termination of the officer's employment with the
Company for Good Reason, as that term is defined in the Agreements and
summarized below.
The Severance Benefits include: (i) a lump sum severance payment within
thirty days of the effective date of termination equal to 2.99 times the sum of
his annual salary and average bonus; (ii) a payment equal to the officer's
unpaid salary, accrued but unused vacation pay and earned but unpaid bonuses,
all other cash entitlements through the effective date of termination and (iii)
an amount equal to the aggregate amount of matching contributions that would be
credited to the officer under the Fansteel Savings and Profit Sharing Plan for
the three years following the effective date of termination. In addition, for a
period of eighteen months, the Company must continue to provide all welfare
benefits, including medical, dental, vision, life and disability benefits
pursuant to plans under which the officer and/or his family were entitled to
participate at the same levels and same costs to the officer as existed at the
date of the Significant Ownership Event.
The Agreements between the Company and Messrs. Mocniak, McEntee and Stawski
(individually the "Vice President") provide for certain limitations on payments
by the Company. If tax counsel selected by the Company and reasonably
acceptable to the Vice President determines that any portion of any payment
under the Agreement would constitute an "excess parachute payment" as defined in
the Internal Revenue Code, then the payments to be made to the Vice President
shall be reduced (but not below zero) such that the value of the aggregate
payments that the Vice President is entitled to receive under the Agreement and
any other agreement, plan or program of the Company, shall be one dollar ($1.00)
less than the maximum amount of payments which the Vice President may receive
without becoming subject to the tax imposed by Section 4999 of the Internal
Revenue Code.
The Agreement between the Company and Mr. Tessitore provides that if any
economic benefit or payment or distribution by the Company to or for the benefit
of Mr. Tessitore whether paid or payable or distributable pursuant to the terms
of the Agreement or otherwise (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code or by any special tax of
any state or municipality or subdivision thereof which is in addition to the
generally applicable income tax of such entity, together with interest and
penalties thereon (collectively the "Excise Tax"), then Mr. Tessitore shall be
entitled to an additional payment (a "Gross-Up-Payment") in an amount such that
after payment by Mr. Tessitore of the Excise Tax, including any Excise Tax
imposed upon the Gross-Up-Payment, Mr. Tessitore retains an amount of the
Gross-Up-Payment equal to the Excise Tax imposed on the Payments.
Under the Agreements, certain terms are defined which are summarized as
follows. A Significant Ownership Event is deemed to occur upon (i) the
acquisition (other than from the Company) by any person or group of 30% or more
of the outstanding common stock or voting securities of the Company, other than
by a Company benefit plan or where the acquiror has substantially similar
ownership as the Company; (ii) a significant change in the Company's Board of
Directors not approved by the incumbent Board; (iii) shareholder approval of
certain significant reorganizations, mergers and similar transactions involving
the Company; or (iv) shareholder approval of a complete liquidation or
dissolution of the Company or the sale of all or substantially all of the
Company's assets. A Significant Ownership Event shall not be deemed to occur
solely as a result of: (i) distribution of shares of the Company's common stock
from the Estate of T. M. Evans (the "Estate") to the beneficiaries of the Estate
(the "Beneficiaries"); (ii) transfers among the Beneficiaries or the members of
their families or their affiliated estate planning vehicles (the "Beneficiary
Interests); or (iii) any transaction described in clause (i), (iii) or (iv) in
the preceding sentence following which the Estate and the Beneficiary Interests
retain beneficial ownership of 25% of the combined voting power of the
outstanding voting securities of the Company or surviving entity unless, as a
result of such transaction, individuals who are or are affiliated with
non-Beneficiary Interests constitute at least one-third of the directors then in
office.
Cause includes: (i) conviction or plea of no contest to a felony or a
misdemeanor involving moral turpitude; (ii) dishonesty or breach of trust by
the officer which is injurious to the Company; or (iii) wilful misconduct by
the officer in the performance of his duties. The term Good Reason includes:
(i) a material reduction in the officer's duties, authorities and
responsibilities; (ii) a relocation of the officer's place of work by more than
35 miles; (iii) a material reduction of the officer's compensation or benefits;
or (iv) failure to obtain a successor's assumption of the Company's obligations
under the Agreement or a purported termination of the officer not in accordance
with the Agreement.
SELECTION OF AUDITORS
The Board, upon recommendation of the Audit Committee, favors ratification of
the appointment of Ernst & Young LLP, Certified Public Accountants, as auditors
for the Company for the year ending December 31, 2000. Representatives of Ernst
& Young LLP are expected to attend the meeting; they will be given the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
STOCKHOLDER PROPOSALS
In the event a stockholder desires to make a proposal for the Company's Annual
Meeting scheduled for April 18, 2001, the proposal must be submitted to the
Secretary of the Company by November 17, 2000.
FORM 10-K ANNUAL REPORTS
The Company will furnish to any stockholder upon request and without charge a
copy of the Company's Annual Report on Form 10-K for the year 1999. Requests
for said Report must be in writing and directed to the attention of the
Secretary of the Company at the address set forth in the Notice of Meeting
immediately preceding this Proxy Statement, and must contain a representation by
the person requesting said Report that such person was the beneficial owner of
securities of the Company on February 21, 2000.
Stockholders who do not expect to attend the meeting in person are urged to
vote, date, sign and return the enclosed Proxy in the enclosed self-addressed
envelope, which requires no postage if mailed in the United States.
By order of the Board of Directors,
G. L. Tessitore
Chairman of the Board, President
and Chief Executive Officer
March 22, 2000
