<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FARR COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which 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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
FARR COMPANY
2221 PARK PLACE
EL SEGUNDO, CALIFORNIA 90245
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1996
The Annual Meeting of the Stockholders of Farr Company, a Delaware
corporation, will be held in the Company's offices located at 2221 Park Place,
El Segundo, California, on Tuesday, April 30, 1996, at 11:00 a.m. for the
following purposes:
1. To elect two directors to serve for three years and until their
successors are elected and have qualified. The Board of Directors'
nominees are named in the accompanying Proxy Statement which is part of
this Notice.
2. To consider and vote upon a proposal to amend the Company's 1991
Stock Option Plan for Non-Employee Directors of Farr Company.
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on March 8, 1996 as
the record date for the determination of stockholders entitled to vote at this
meeting.
All stockholders are cordially invited to attend the meeting.
Kenneth W. Gerstner
Secretary
El Segundo, California
March 27, 1996
- --------------------------------------------------------------------------------
In order to ensure your representation at the meeting, you are requested to
sign and date the enclosed proxy as promptly as possible and return it in
the enclosed envelope (to which no postage need be affixed if mailed in the
United States). If you attend the meeting and file with the Secretary of the
Company an instrument revoking your proxy or a duly executed proxy bearing a
later date, your proxy will not be used.
- --------------------------------------------------------------------------------
<PAGE>
FARR COMPANY
-------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies for use at the Annual Meeting of Stockholders of Farr Company (the
"Company") to be held at 11:00 a.m. on Tuesday, April 30, 1996. This
solicitation is made by the Board of Directors of the Company, and the costs
thereof, which will be borne by the Company, are expected to be nominal.
Brokerage houses, custodians, nominees and others who hold stock in their names
will be reimbursed for expenses in sending proxy material to their principals.
The Company intends to send this Proxy Statement and form of proxy to
its stockholders on or about March 27, 1996. The principal executive offices of
the Company are located at 2221 Park Place, El Segundo, California 90245,
telephone (310) 536-6300.
The stockholders of record at the close of business on March 8, 1996
are entitled to one vote for each share of stock held by them. On March 8, 1996
there were outstanding 3,625,524 shares of the Company's common stock, par value
$.10 per share (the "Common Stock"). A majority of the outstanding shares of
Common Stock will constitute a quorum for the transaction of business. Any
proxy may be revoked at any time before it is exercised by filing with the
Secretary of the Company an instrument revoking it or a duly executed proxy
bearing a later date. Proxies will be voted as directed.
Shares represented by proxies that reflect abstentions or "broker non-
votes" (i.e., shares held by a broker or nominee which are represented at the
meeting, but with respect to which such broker or nominee is not empowered to
vote on a particular proposal or proposals) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum.
In voting for the election of directors, each share has one vote for
each position to be filled, and there is no cumulative voting. Directors will
be elected by a plurality of the shares voting, which means that abstentions or
broker non-votes will not affect the election of the candidates receiving the
plurality of votes. All other proposals to come before the Annual Meeting
require the approval of a majority of the shares of Common Stock present and
entitled to vote at the meeting. Therefore, as to any such particular proposal,
abstentions will have the same effect as a vote against that proposal and broker
non-votes will not be counted as votes for or against the proposal, and will not
be included in counting the number of votes necessary for approval of the
proposal.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of February 28, 1996
with respect to shares of the Common Stock which are held by persons known to
the Company to be beneficial owners of more than 5% of such stock and by all
officers and directors as a group based upon information received from such
persons. For purposes of this Proxy Statement, beneficial ownership of
securities is defined in accordance with the rules of the Securities and
Exchange Commission and means generally the power to vote or dispose of
securities, regardless of any economic interest therein.
<PAGE>
COMMON STOCK BENEFICIALLY OWNED BY PRINCIPAL STOCKHOLDERS
---------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- --------------------------------------- ----------------------- -----------------
<S> <C> <C>
Trust for M.S. Farr Family 394,332(1) 10.9%
26561 Campesino
Mission Viejo, California 92691
Wellington Management Company 352,800(2) 9.7%
75 State Street
Boston, Massachusetts 02109
Capital Technology Inc. 186,925(3) 5.2%
P.O. Box 472428
Charlotte, North Carolina 28247
</TABLE>
- ----------------
(1) In March 1996, David J. Farr was appointed trustee, and as such has sole
power to vote and dispose of all of such shares.
(2) Based on the information contained in a Schedule 13G filed with the
Securities and Exchange Commission reflecting beneficial ownership as of
December 31, 1995.
(3) Based on information contained in Vickers Corporation Reports (Form 13F) at
February 26, 1996 reporting certain institutional ownership.
OWNERSHIP OF VOTING STOCK BY MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of the Common Stock by the Company's directors, its Chief Executive
Officer, each of the other persons named in the Summary Compensation Table and
all directors and executive officers as a group as of February 28, 1996.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER POSITION OWNED(1)(2) CLASS(1)
- ------------------------ -------- ------------ --------
<S> <C> <C> <C>
Robert Batinovich Director 73,315 2.0%
Richard P. Bermingham Director 10,500 *
David J. Farr Director 49,000(3) 1.4%
Richard L. Farr Director and Senior Vice President 105,696 2.9%
Kenneth W. Gerstner Senior Vice President and 19,908 *
Chief Financial Officer
John C. Johnston President and Chief Operating Officer 977 *
John J. Kimes Director 2,000 *
H.J. Meany Chairman and Chief Executive Officer 90,500 2.5%
Myron G. Rasmussen Vice President 21,819 *
Directors and Executive 373,715(3) 10.0%
Officers as a group (9
persons)
</TABLE>
* Less than 1%
(1) For purposes of computing the percentages, the number of shares of Common
Stock outstanding includes shares purchasable by such individual or group
within 60 days upon exercise of outstanding stock options.
(footnotes continued)
2
<PAGE>
(footnotes continued)
(2) Includes shares purchasable within 60 days upon exercise of outstanding
stock options as follows: R. Batinovich, 4,000; R.P. Bermingham, 8,000; D.
Farr, 4,000; R.L. Farr, 25,656; K.W. Gerstner, 17,500 J.J. Kimes, 2,000;
H.J. Meany, 8,000; M.G. Rasmussen 14,281; all directors and executive
officers as a group, 83,437.
(3) Does not include 394,332 shares held by the M.S. Farr Family Trust as to
which David J. Farr was appointed trustee in March 1996. As trustee, Mr.
Farr has sole power to vote and dispose of shares held by such trust but has
no economic interest in such shares.
PROPOSAL 1:
ELECTION OF DIRECTORS
Pursuant to the Company's Bylaws the Company has six directors, divided into
three classes. Two directors are to be elected at the Annual Meeting, each of
whom will serve until the 1999 Annual Meeting and until his respective successor
shall have been elected or appointed.
In the absence of instructions to the contrary, votes will be cast for the
election of the following as directors pursuant to the proxies solicited hereby.
Although the Board of Directors expects that each of the nominees will be
available to serve as a director, in the event any of them should become
unavailable prior to the Annual Meeting, the proxy will be voted for a nominee
or nominees designated by the Board of Directors, or the number of directors may
be reduced accordingly. However, the proxy cannot be voted for a greater number
of persons than the number of nominees designated by the Board of Directors.
1995 NOMINEES
-------------
<TABLE>
<CAPTION>
PRINCIPAL BUSINESS EXPERIENCE DURING PAST DIRECTOR
NAME AGE 5 YEARS AND CERTAIN OTHER DIRECTORSHIPS SINCE
- ------------------ --- ------------------------------------------------ --------
<S> <C> <C> <C>
Richard P. 56 Vice Chairman of American Golf Corporation 1990
Bermingham (since July 1994), golf course management
company; President and Chief Executive Officer
(from May 1987 to June 1994) of Sizzler
International, Inc., operator and franchisor of
restaurants.
Richard L. Farr 52 Senior Vice President (since January 1995), 1988
Vice President (from November 1987 to
December 1994) of the Company; first cousin of
David J. Farr.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CONTINUING DIRECTORS
--------------------
PRINCIPAL BUSINESS EXPERIENCE DURING PAST DIRECTOR TERM
NAME AGE 5 YEARS AND CERTAIN OTHER DIRECTORSHIPS SINCE EXPIRES
- -------------------- --- ------------------------------------------------- -------- -------
<S> <C> <C> <C> <C>
Robert Batinovich 59 Chairman and President of Glenborough Realty 1994 1998
Trust Incorporated (since 1996), a real estate
investment company; President and majority
owner of Glenborough Corporation (since
1978); Commissioner and past President (from
1975 to 1980) of the California Public Utilities
Commission.
David J. Farr 58 Owner (since 1965) of David J. Farr Insurance 1994 1998
Services, financial consultant and life
underwriter; first cousin of Richard L. Farr
John J. Kimes 53 President and Chief Executive Officer of 1995 1997
Computerized Security Systems (since 1988),
manufacturer of electronic and mechanical lock
hardware and systems; Vice President
Administration and Controller (from 1981 to
1988) of NI Industries, Inc., manufacturer of
building, industrial and defense products.
H.J. Meany 73 Chairman and Chief Executive Office (since 1976 1997
February 1996); Chairman, President and Chief
Executive Officer (from April 1994 to February
1996), Director (from June 1976 to March
1994) of the Company; Retired, Chairman of
the Board and Chief Executive Officer (from
October 1975 to March 1988) of NI Industries,
Inc., manufacturer of building, industrial and
defense products; Director, APS Inc.; Director,
BWIP, Inc.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held eight meetings during 1995. During 1995, no
director attended fewer than 75% of the meetings of the Board of Directors and
committees on which he served and which were held while such director was a
director.
Directors who are not employees of the Company are paid an annual retainer of
$9,000 and $600 for each Board of Directors and committee meeting attended.
Committee chairmen are paid $800 for each committee meeting attended. Directors
who are employees of the Company are not paid for attending Board of Directors
meetings.
On January 22, 1991, the Board of Directors adopted the 1991 Stock Option
Plan for Non-Employee Directors (the "Director Plan"). Pursuant to the Director
Plan, each non-employee director of the Company is automatically granted in each
calendar year, for four years, an option to purchase 2,000 shares of Common
Stock. The price for each option granted under the Director Plan will be the
greater of (a) the fair market value of the Common Stock on the date of grant
and (b) the minimum legal consideration necessary for the issuance of such
shares. As of March 1, 1996, options to purchase 8,000 shares of Common Stock
have been granted under the Director Plan to Mr. Meany, options to purchase
10,000 shares of Common Stock have
4
<PAGE>
been granted under the Director Plan to Mr. Bermingham and options to purchase
4,000 shares of Common Stock have been granted under the Director Plan to each
of Messrs. Batinovich, D.J. Farr and Kimes, none of which has been exercised.
The Board adopted the Second Amendment to the Director Plan on September 12,
1995, which Second Amendment is being submitted for stockholder approval at the
Annual Meeting (see Proposal 2).
In 1980, the Board of Directors adopted a deferred compensation plan pursuant
to which directors may elect to defer all or a portion of their directors' fees.
Among the committees of the Board of Directors are an Executive Committee, an
Audit Committee and a Compensation Committee. The Board of Directors does not
have a standing Nominating Committee.
The Executive Committee is comprised of Messrs. Meany (Chairman), R.L. Farr
and Bermingham. The purpose of the Executive Committee is to expedite the
decision making process of the Board of Directors. The Executive Committee held
no meetings in 1995.
The Audit Committee is comprised of Messrs. Bermingham (Chairman) and Kimes.
The Committee held two meetings in 1995. The functions performed by the Audit
Committee include: recommending to the Board of Directors independent
accountants to serve the Company for the ensuing year; reviewing with the
independent accountants and management the scope and results of the audit;
assuring that the independent accountants act independently; reviewing and
approving any substantial change in the Company's accounting policies and
practices; reviewing with management and the independent accountants the
adequacy of the Company's system of internal controls; reviewing the Company's
annual proxy statement; and reviewing non-audit professional services provided
by the independent accountants and the range of audit and non-audit fees. To
ensure independence of the audit, the Committee consults separately and jointly
with the independent accountants and management.
The Compensation Committee is comprised of Messrs. Batinovich (Chairman) and
D.J. Farr. The Committee held two meetings in 1995. The functions performed by
the Compensation Committee include reviewing and approving management's
recommendations as to executive compensation and grants of stock options to key
employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE DIRECTORS NOMINATED
IN PROPOSAL 1. Unless otherwise instructed, proxies will be voted FOR the
election of management's two nominees as directors.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership (Forms 3, 4
and 5) with the Securities and Exchange Commission. Officers, directors and
greater-than-ten-percent holders are required to furnish the Company with copies
of all such forms which they file.
To the Company's knowledge, based solely on the Company's review of such
reports or written representations from certain reporting persons, the Company
believes that during the fiscal year ended December 31, 1995 all filing
requirements applicable to its officers, directors, greater-than-ten-percent
beneficial owners and other persons subject to Section 16(a) of the Exchange Act
were complied with.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table shows the compensation paid by the Company to the Chief
Executive Officer and its four other most highly compensated executive officers
whose cash compensation for the fiscal year ended December 31, 1995 for services
rendered in all capacities to the Company exceeded $100,000.
SUMMARY COMPENSATION TABLE(1)
--------------------------
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
----------------
ANNUAL COMPENSATION AWARDS
----------------
SECURITIES ALL OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) ($)(2)
- ---------------------------------------- ---- --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Richard L. Farr, 1995 140,000 60,668 17,000 12,202
Senior Vice President 1994 114,193 0 4,000 6,319
1993 110,925 5,000 0 6,360
Kenneth W. Gerstner, 1995 140,000 61,928 18,000 10,739
Senior Vice President and 1994 114,457 0 16,000 4,877
Chief Financial Officer 1993 64,510 10,000 10,000 1,478
John C. Johnston (3), 1995 170,000 75,198 44,000 2,678
President and Chief Operating Officer 1994 -- -- -- --
1993 -- -- -- --
H.J. Meany (4), 1995 1 0 0 0
Chairman and Chief Executive Officer 1994 1 0 2,000 5,850
1993 -- -- 2,000 10,950
Myron G. Rasmussen, 1995 116,749 38,533 2,000 12,110
Vice President 1994 113,654 0 4,000 7,786
1993 108,943 5,000 0 7,689
</TABLE>
- -------------
(1) Amounts cover the Company's fiscal year which were 52-week periods for 1993,
1994 and 1995.
(2) The amounts reported in this column include for fiscal 1995:
(a) payment of 1995 premiums for term life insurance on behalf of each of
the named executive officers as follows: R.L. Farr -- $2,678; K.W.
Gerstner -- $2,678; J.C. Johnston -- $2,678; and M.G. Rasmussen --
$4,173.
(b) contributions under the Company's 401(k) Retirement Plan for 1995 as
follows: R.L. Farr -- $8,185; K.W. Gerstner -- $6,684; and M.G.
Rasmussen -- $6,827. Amounts contributed by the Company under this Plan
vest 33 1/3% after three years of service and continue to vest annually
in 33 1/3% increments, until they are fully vested after five years of
service.
(c) 1995 allocations of shares in the Company's Employee Stock Ownership
Plans in the following amounts: R.L. Farr -- $1,339 (167 shares); K.W.
Gerstner -- $1,377 (172 shares); and M.G. Rasmussen -- $1,110 (139
shares). Distributions from the Employee Stock Ownership Plan are made
upon the participant's termination of employment or reaching the age of
seventy and one-half.
(d) payments of director compensation to Mr. Meany earned while serving as
a non-employee director of the Company.
(3) Mr. Johnston became Senior Vice President of the Company effective January
10, 1995. In February 1996, Mr. Johnston was appointed President and Chief
Operating Officer of the Company.
(4) Mr. Meany assumed the role of Chairman, President and Chief Executive
Officer in April 1994 for a nominal annual compensation of $1.00. Prior to
that time he served the Company as a non-employee director. All of Mr.
Meany's options were granted pursuant to the Director Plan.
6
<PAGE>
In the event Mr. Johnston's employment is terminated, for reasons other than
cause, at a time that he is reporting to someone other that the current
Chairman, the Company has agreed to pay Mr. Johnston his current salary through
December 31, 1996.
STOCK OPTION GRANTS
The following table presents information regarding grants made during fiscal
1995 under the Company's stock option plans to all of the persons named in the
Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(2)
----------------------------------------- POTENTIAL
% OF REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL
SECURITIES OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION
OPTIONS EMPLOYEES OR BASE FOR OPTION TERM(4)
GRANTED IN FISCAL PRICE EXPIRATION ---------------------------
NAME (#)(1) YEAR ($/SHARE)(3) DATE 5% ($) 10% ($)
----- --------- ---------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Farr 17,000 17.3 5.000 1/12/05 60,378 157,514
Kenneth W. Gerstner 18,000 18.4 5.000 1/12/05 63,930 166,780
John C. Johnston 44,000 44.9 5.000 1/12/05 156,274 407,685
H.J. Meany 0 -- -- -- -- --
Myron G. Rasmussen 2,000 2.0 6.875 3/28/05 9,767 25,480
</TABLE>
- -------------
(1) Mr. Johnston's options granted in 1995 will become exercisable on the fourth
anniversary date of the grant. Other employee options granted in 1995 will
become exercisable in cumulative 25% installments commencing one year from
the date of grant, with full vesting occurring on the fourth anniversary
date of the grant.
(2) Under the terms of the 1993 Stock Option Plan for Key Employees, the
Compensation Committee retains discretion, subject to plan limits, to modify
the terms of outstanding employee options and to reprice employee options,
including accelerating the exercisability of options in the event of a
merger or consolidation of the Company or the acquisition of all or
substantially all of the Company's assets or 80% or more of the Company's
outstanding voting stock, or the liquidation or dissolution of the Company.
(3) Mr. Rasmussen's options were granted at market value (as defined in the
Company's Stock Option Plan) at the date of grant. All other employee
options were granted at a special incentive award price of $5.00 per share.
(4) The assumed annual rates of appreciation in the table are shown for
illustrative purposes only pursuant to applicable Securities and Exchange
Commission requirements. Actual values realized on stock options are
dependent on actual future performance of the Company's stock, among other
factors. Accordingly, the amounts shown may not necessarily be realized.
7
<PAGE>
STOCK OPTION EXERCISES
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
-----------------------------------------------
AND FISCAL YEAR END OPTION VALUES
---------------------------------
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES VALUE FY-END (#) FY-END ($)(1)
ACQUIRED ON REALIZED ------------------------------ ---------------------------
NAME EXERCISE (#) ($)(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ----------- ------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Farr 3,125 4,969 25,656 14,750 20,500 41,500
Kenneth W. Gerstner 0 -- 17,500 26,500 30,250 57,250
John C. Johnston 0 -- 0 44,000 0 132,000
H.J. Meany(2) 0 -- 8,000 0 9,250 0
Myron G. Rasmussen 1,015 1,233 14,281 3,500 4,013 4,938
</TABLE>
- --------------
(1) Calculated based on the closing price of the Company's Common Stock ($8.00
per share) as reported on the NASDAQ National Market System at the end of
the 1995 fiscal year.
(2) Mr. Meany holds total options to purchase 8,000 shares of Common Stock
received pursuant to the Director Plan for his services to the Company as a
non-employee director.
(3) Calculated based on the closing price of the Company's Common Stock on the
date of exercise.
8
<PAGE>
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee at the fiscal year ended December
31, 1995 were Messrs. Batinovich (Chairman) and D.J. Farr. Both are non-
employee directors and neither has any direct or indirect material interest in
or relationship with the Company outside of his position as director. To the
Company's knowledge, there were no interrelationships involving members of the
committee or other directors of the Company requiring disclosure in this Proxy
Statement.
REPORT ON ANNUAL COMPENSATION OF EXECUTIVE OFFICERS
The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the Exchange
Act, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
* * * *
The Compensation Committee's policy is to establish compensation levels for
the Chief Executive Officer (the "CEO") and other executive officers which
reflects the Company's overall performance and the individual executive's
contributions to the growth and profitability of the Company. The committee's
job is to determine the appropriate executive compensation levels which will
allow the Company to attract and retain qualified executives.
The committee, with the assistance of the CEO, determines the compensation of
the executive officers. This level of reward is based on the Company's overall
performance. The Company's performance is measured by looking at the comparison
of the Company's operating plan versus the achievement primarily in sales and
earnings. The committee also considers qualitative factors such as new product
development, organizational improvements and other factors the committee
considers vital to the Company's success in meeting its long term sales growth
and profit objectives. The committee focuses on each executive's area of
responsibility and his contribution in helping to reach Company objectives.
Except for the present CEO, the principal part of the compensation of each
executive officer is his base pay. The committee meets during the first quarter
of the year. Based upon its review of Company performance measured against the
operating plan, the committee establishes salary levels for the executives and
awards bonuses. In determining compensation, the committee also considers the
practices of various industry groups. It will also consider data from outside
compensation consultants. These industry groups generally have included
companies in the same industry as the Company as well as other companies of
similar size. Such companies are not included in the peer group of companies
referred to below in the Stock Price Performance Graph. The committee believes
that the Company's overall executive compensation levels generally are lower
than the compensation levels at other companies considered by the committee.
During 1995, the committee approved increases in the base salaries for two
Senior Vice Presidents in conjunction with their promotions.
In April 1994, Mr. Meany was appointed as Chairman, President and Chief
Executive Officer of the Company. Mr. Meany had been on the Board of Directors.
Mr. Meany requested that he receive an annual base salary of $1. The committee
approved this. The committee has determined that Mr. Meany be rewarded for his
services in a lump sum payment or other alternative payment deemed appropriate.
This payment would be subject to approval by the Board of Directors. To measure
the appropriate amount of compensation the committee will focus on Mr. Meany's
success at achieving significant improvement in the Company's operations,
performance and resulting success. The committee will be sensitive to the
balance between short term performance and long term improvement. The committee
will also evaluate Mr. Meany's ability to build
9
<PAGE>
and maintain a strong management team capable of meeting Company plans on a
consistent basis. Since improvement may not be apparent in increased stock
value, the committee will also consider other measurements. These measurements
might include decreased losses, enhanced efficiency and change in core business
momentum. The committee may consider the salary, benefits and bonuses that
normally would have been paid to a person in a similar position. The committee
believes this arrangement to be appropriate as Mr. Meany's compensation will be
entirely dependent upon his performance in leading the Company to achieve its
operating plans.
Executive officers are eligible to receive bonuses under the Company's
Management Incentive Plan. Under this plan, bonuses are based on the Company
achieving a targeted return on assets. The return is calculated as income
before taxes, certain profit sharing provisions and extraordinary items as a
percentage of the assets. Based on the 1995 operating results, corporate
performance exceeded the targeted return on assets allowing bonuses to be
awarded to management. The committee also retains the discretion to award
bonuses based on corporate or individual performance.
The committee annually considers grants of stock options for each of the
executive officers. The purpose of the stock option program is to provide
incentives to the Company's management to maximize stockholder value. The
option program also utilizes vesting periods to encourage key employees to
continue in the employ of the Company. The committee determines the number of
options for the executives. This number is based on the responsibility of the
executive, the historic levels of option awards granted to other executives and
the appropriate incentive level for purposes of achieving the objectives set for
the option plan. Individual and corporate performance are carefully considered.
In 1995, the committee approved option grants to the Company's President in
conjunction with the Company's offer of employment and to two Senior Vice
Presidents in conjunction with their promotions.
The Internal Revenue Code of 1986 was amended in 1993 to include Section
162(m). Section 162 denies a deduction to a public corporation for compensation
exceeding $1,000,000 to "covered employee." A "covered employee" is defined as
the Chief Executive Officer and the Company's four most highly compensated
officers at the end of any taxable year beginning in 1993. Compensation which
is payable pursuant to written binding agreements entered into before February
18, 1993 and compensation which includes performance based compensation is
excludable from the $1,000,000 limit. It is the Company's policy to qualify all
compensation paid to its top executives for deductibility under Section 162(m)
in order to maximize the Company's income tax deductions. However, this policy
does not rule out the possibility that the Committee may approve compensation
that may not qualify for the compensation deduction. This may be done if in
light of all applicable circumstances it would be in the best interest of the
Company for such compensation to be paid.
Robert Batinovich
David J. Farr
10
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Exchange Act, except to the extent the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
The following table compares total stockholder returns over the last
five fiscal years to the Standard & Poor's 500 Stock Index ("S&P 500") and the
Standard & Poor's Pollution Control Index. Total return values for the S&P 500
and the Company were calculated based on cumulative total return values assuming
reinvestment of dividends.
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
FARR COMPANY $100.00 $ 89.94 $ 61.09 $ 61.09 $ 59.87 $ 78.20
POLLUTION CONTROL INDEX $100.00 $144.78 $168.37 $217.46 $208.04 $240.85
S&P 500 INDEX $100.00 $130.48 $140.46 $154.62 $156.66 $215.54
======================================================================================
</TABLE>
11
<PAGE>
PROPOSAL 2:
PROPOSAL TO AMEND THE 1991 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS OF FARR COMPANY
At the Annual Meeting, stockholders are being asked to approve the
adoption of an amendment to the 1991 Stock Option Plan for Non-Employee
Directors (as amended, the "Director Plan") as adopted by the Board of Directors
on September 12, 1995. The amendment to the Director Plan (i) increases the
number of shares of Common Stock available to be issued under the Director Plan
from 48,000 to 100,000, (ii) eliminates the aggregate limit on the number of
stock options which may be granted to Directors under the Director Plan and
(iii) extends the term of the Director Plan for an additional six years. The
Board of Directors has determined that this amendment is necessary because the
Director Plan expired last year and continuance of the Director Plan is
desirable (1) to further the growth, development and financial success of the
Company by providing additional incentives to its non-employee directors, by
assisting them to become owners of capital stock of the Company and thus to
benefit directly from its growth, development and financial success and (2) to
enable the Company to obtain and retain the services of the type of directors
considered essential to the long-range success of the Company by providing and
offering them an opportunity to become owners of capital stock of the Company
through exercise of the options.
The table below sets forth information with respect to stock options
granted, subject to stockholder approval of adoption of the amendment, under the
Director Plan to the directors eligible to participate the Director Plan.
NEW PLAN BENEFITS
-----------------
<TABLE>
<CAPTION>
NAME DOLLAR VALUE ($)(1) NUMBER OF UNITS(#)
- ---- ------------------- ------------------
<S> <C> <C>
Richard L. Farr -- --
Kenneth W. Gerstner -- --
John C. Johnston -- --
H.J. Meany -- --
Myron G. Rasmussen -- --
All Executive Officers as a group -- --
Non-Executive Directors 250 2,000
Non-Executive Officer Employees -- --
</TABLE>
- -------------
(1) Based on the closing price per share of the Company's Common Stock of $9.25
as quoted on the NASDAQ National Market System on March 12, 1996. Options
having an exercise price of $9.125 per share were granted on September 12,
1995, at which time the closing sale price of the Common Stock on the NASDAQ
National Market System was $9.125 per share.
The principal features of the Director Plan are summarized below, but the
summary is qualified in its entirety by reference to the Director Plan itself,
copies of which will be available at the Annual Meeting and may also be obtained
by making written request to the Company's Secretary.
STOCK SUBJECT TO THE DIRECTOR PLAN
There are reserved for issuance upon the exercise of options granted under
the Director Plan, as amended, an aggregate of 100,000 shares of Common Stock.
On March 12, 1996 the closing sale price of the Common Stock on the NASDAQ
National Market System was $9.25 per share. If any option granted
12
<PAGE>
under the Director Plan expires or terminates without having been exercised in
full, the shares subject to such option will again be available for issuance
upon the exercise of options granted under the Director Plan.
OPTION GRANTS AND EXERCISABILITY UNDER THE DIRECTOR PLAN
Under the Director Plan each non-employee director of the Company is
automatically granted once in each calendar year an option to purchase 2,000
shares of Common Stock. The initial grant of options under the Director Plan
was effective on January 22, 1991. In subsequent calendar years, the options
are automatically granted on the date of the regular meeting of the Board of
Directors which next precedes the annual meeting of the Company's stockholders.
No options may be granted under the Director Plan, as amended, after May 7,
2001. Appropriate adjustments in the number of shares subject to the Director
Plan and the number of shares and the price per share of stock subject to
outstanding options will be made in the event of any merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares. Only non-qualified stock options may be granted under
the Director Plan. Should Mr. Bermingham, who has been nominated for election
as a director, be approved by the stockholders, he will be eligible to be
granted options under the Director Plan. In addition, Messrs. Batinovich, D.J.
Farr, and Kimes, the Company's continuing non-employee directors, are eligible
to be granted options under the Director Plan. The option price for each option
granted under the Director Plan will be the greater of (a) the fair market value
of the Common Stock on the date of grant and (b) the minimum legal consideration
necessary for the issuance of such shares.
Options granted pursuant to the proposed amendment to the Director Plan prior
to the Annual Meeting may not be exercised unless such amendment and such
options granted thereunder are approved by the stockholders at the Annual
Meeting. At any time, and from time to time, prior to the time any exercisable
option becomes unexercisable under the terms of the Director Plan, such option
or portion thereof may be exercised in whole or in part.
Options will have a term of ten years and will be exercisable on the first
anniversary of the date of grant, except that all unexpired options owned by a
director which are unexercisable on the date the director reaches the age of 70
will become fully exercisable on that date. No portion of an option which is
unexercisable at termination of directorship may thereafter become exercisable.
If an optionee terminates as a director for any reason, including death,
disability or retirement, the optionee may exercise an option (unless it has
previously expired) for a period of one year after such termination to the
extent the option was exercisable at the age of termination. Notwithstanding
the foregoing, no options may be exercised after the effective date of either
the merger or consolidation of the Company with or into another corporation in
which the Company is not the surviving entity, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company. In addition, in the event of a
merger or consolidation in which the Company is not the surviving entity, the
acquisition by another company or person of all or substantially all of the
Company's assets or eighty percent (80%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company, the
Board of Directors may allow all previously unexercisable options to become
immediately exercisable for a period of up to thirty (30) days prior to such
event.
No option granted under the Director Plan may be assigned or transferred by
its holder except by will or by the laws of descent and distribution. During
the lifetime of the holder, an option may be exercised only by the holder, or
his personal representative, or by any person empowered to do so under the
deceased optionee's will or under the then applicable laws of descent and
distribution.
13
<PAGE>
ADMINISTRATION OF THE DIRECTOR PLAN
The Stock Option Committee of the Board of Directors, consisting of the
members of the Compensation Committee of the Board of Directors (but in no event
less than two directors) will administer the Director Plan. The Stock Option
Committee has the power to interpret the Director Plan, to adopt rules for the
administration, interpretation and application of the Director Plan and to
interpret, amend or revoke any such rule. The Board of Directors at any time in
its discretion may exercise any and all rights and duties of the Committee.
AMENDMENT, SUSPENSION OR TERMINATION OF THE DIRECTOR PLAN
The Director Plan may be wholly or partially terminated, suspended, modified
or amended by the Board of Directors of the Company. No action of the Board of
Directors may, however, without the approval of the Company's stockholders
within 12 months before or after the action by the Board of Directors, (a)
increase the maximum number of shares to be issued upon exercise of options
unless otherwise permitted under the terms of the Director Plan, (b) materially
modify the eligibility requirements, (c) extend the limit on the period during
which options may be granted or (d) otherwise alter the Director Plan to
materially increase the benefits accruing to the directors under the Director
Plan.
TAX CONSEQUENCES UNDER THE DIRECTOR PLAN
Options granted under the Director Plan are nonqualified stock options for
federal income tax purposes. No taxable income is realized by the optionee upon
the grant of a nonqualified option. However, upon exercise the optionee
realizes ordinary income in the amount by which the fair market value of the
purchased shares on the date of exercise exceeds the exercise price and the
Company is entitled to a deduction in the same amount. In the case of an
optionee subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended, the optionee will recognize ordinary income after exercise only upon
the expiration of six months following the date of grant (or on such earlier
date as the optionee is no longer subject to Section 16(b)), and the Company
shall not have a deduction until such date, unless the optionee elects pursuant
to Section 83(b) of the Internal Revenue Code of 1986, as amended, to use the
exercise date for purposes of such calculation. The Company is required to
withhold taxes on the ordinary income realized by an optionee upon exercise of a
nonqualified option.
The initial tax basis of the Common Stock received by an optionee will be the
fair market value of the Common Stock taken into account in determining the
amount of ordinary income to the optionee. Any appreciation in the value of the
Common Stock may qualify for capital gains treatment depending upon the
applicable holding period.
REQUIRED VOTE FOR APPROVAL AND RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Annual Meeting is required to approve adoption of the
amendment to the Director Plan and the options granted thereunder.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR STOCKHOLDER APPROVAL OF THE
AMENDMENT TO THE DIRECTOR PLAN. Unless otherwise instructed, proxies will be
voted FOR approval of the amendment.
14
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen & Co. audited the Company's financial statements for the year
ended December 30, 1995, and have been the Company's auditors since 1970. In
connection with its audit of the Company's financial statements for the year
ended December 30, 1995, Arthur Andersen & Co. reviewed the Company's Annual
Report to Stockholders, its filings with the Securities and Exchange Commission
and its unaudited quarterly financial information.
Representatives of Arthur Andersen & Co. are expected to be present at the
meeting and will be given the opportunity to make a statement if they desire to
do so. It is expected that they will be available to respond to appropriate
questions from the stockholders at the meeting.
The Board of Directors has selected Arthur Andersen & Co. as auditors for the
Company for the year ending December 28, 1996.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
FOR NEXT YEAR'S ANNUAL MEETING
The proxy rules adopted by the Securities and Exchange Commission provide
that certain stockholder proposals must be included in the proxy statement for
the Company's annual meeting. In order for a proposal to be considered for
inclusion in next year's proxy statement, it must be received by the Company no
later than November 25, 1996.
OTHER MATTERS
Should any matter not described in the Proxy Statement properly come before
the meeting, the persons named in the accompanying proxy form will vote in
accordance with their best judgment.
The Company's Annual Report to Stockholders containing audited financial
statements for the year ended December 30, 1995 is being mailed herewith to all
stockholders of record.
By Order of the Board of Directors
Kenneth W. Gerstner
Secretary
El Segundo, California
March 27, 1996
STOCKHOLDERS OF RECORD ON MARCH 8, 1996 MAY OBTAIN COPIES OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY
WRITING TO KENNETH W. GERSTNER, 2221 PARK PLACE, EL SEGUNDO, CALIFORNIA 90245.
15
<PAGE>
SECOND AMENDMENT TO
THE 1991 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS OF FARR COMPANY
The Second Amendment (the "Amendment") to The 1991 Stock Option Plan for
Non-Employee Directors of Farr Company (the "Plan") is hereby adopted as of the
______ day of September, 1995.
Section 2.1 of the Plan is hereby amended and restated in its entirety as
follows:
"The shares subject to Options shall be shares of the Company's $.10 par
value Common Stock. The aggregate number of such shares which may be issued
upon exercise of Options shall not exceed 100,000."
The last sentence of Section 3.1 of the Plan is hereby amended and restated
in its entirely as follows:
"No Director shall, however, be granted Options with respect to more than
2,000 shares of the Company's Common Stock per calendar year during the
term of this Plan subject to adjustment provided in Section 2.3."
Sections 7.2(a) and 7.2(b) are hereby amended and restated in their
entirety as follows:
"(a) The expiration of ten years from the date the Plan is adopted by the
Board; or
"(b) The expiration of ten years from the date the Plan is approved by the
Company's stockholders under Section 7.3."
This Amendment has been authorized and approved as of the date first above
written by the Board of Directors.
FARR COMPANY
By:
--------------------------------
Name:
Title:
I hereby certify that the foregoing Amendment was duly approved by the
stockholders of Farr Company on __________________, 1995. Executed on this
______ day of _____________, 1996.
--------------------------------
Secretary
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
PROXY FARR COMPANY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 30, 1996
TO: FIRST INTERSTATE BANK OF CALIFORNIA AS TRUSTEE UNDER THE
EMPLOYEE STOCK OWNERSHIP PLAN FOR OFFICE EMPLOYEES OF FARR COMPANY
I hereby instruct the Trustee to vote (in person or by proxy) all the shares
of Farr Company Common Stock which are credited to my account at the Annual
Meeting of Stockholders of Farr Company to be held at the offices of the
corporation, 2221 Park Place, El Segundo, California, on April 30, 1996 or at
any adjournment thereof, on the following matters, as provided in the proxy
statement, and upon any other matter which may properly come before the meeting.
PLEASE MARK YOUR CHOICE LIKE THIS [X] IN DARK INK AND
SIGN AND DATE ON THE REVERSE SIDE
(1) ELECTION OF TWO DIRECTORS [_] Vote FOR ALL (except as marked to the
contrary below) [_] WITHHELD for ALL
Richard P. Bermingham and Richard L. Farr
(Instruction: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
(2) PROPOSAL TO AMEND THE 1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS OF
FARR COMPANY:
FOR [_] AGAINST [_] ABSTAIN [_]
(Continued and to be signed on other side.)
- --------------------------------------------------------------------------------
----------------------
Shares of Common Stock
PLEASE DATE AND SIGN EXACTLY AS YOUR NAME APPEARS BELOW AND RETURN IN THE
ENCLOSED ENVELOPE. YOUR SHARES WILL BE VOTED ACCORDING TO YOUR INSTRUCTIONS. IF
THIS CARD IS RETURNED SIGNED WITH NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE
VOTED FOR THE ELECTION OF THE TWO DIRECTORS NAMED ABOVE AND FOR ITEM 2 ABOVE.
Unless you sign and return this card so that it is received by the Trustee
before April 23, 1996 your shares will be voted as provided by the Plan.
Date: ........., 1996
.....................
.....................
(Please sign EXACTLY
as your
name appears hereon)
When signing as
attorney, executor,
administrator,
trustee or guardian,
please give full title.
If more than one
trustee, all should
sign. All joint owners
should sign.
<PAGE>
- --------------------------------------------------------------------------------
CONFIDENTIAL VOTING INSTRUCTIONS
PROXY FARR COMPANY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 30, 1996
TO: FIRST INTERSTATE BANK OF CALIFORNIA AS TRUSTEE UNDER THE
EMPLOYEE STOCK OWNERSHIP PLAN FOR SHOP EMPLOYEES OF FARR COMPANY
I hereby instruct the Trustee to vote (in person or by proxy) all the shares
of Farr Company Common Stock which are credited to my account at the Annual
Meeting of Stockholders of Farr Company to be held at the offices of the
corporation, 2221 Park Place, El Segundo, California, on April 30, 1996 or at
any adjournment thereof, on the following matters, as provided in the proxy
statement, and upon any other matter which may properly come before the
meeting.
PLEASE MARK YOUR CHOICE LIKE THIS [X] IN DARK INK AND SIGN AND DATE ON THE
REVERSE SIDE
(1) ELECTION OF TWO DIRECTORS [_] Vote FOR ALL (except as marked to the
contrary below) [_] WITHHELD for ALL
Richard P. Bermingham and Richard L. Farr
(Instruction: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
(2) PROPOSAL TO AMEND THE 1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS OF
FARR COMPANY:
FOR [_] AGAINST [_] ABSTAIN [_]
(Continued and to be signed on other side.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-----------------
Shares of Common
Stock
PLEASE DATE AND SIGN EXACTLY AS YOUR NAME APPEARS BELOW AND RETURN IN THE
ENCLOSED ENVELOPE. YOUR SHARES WILL BE VOTED ACCORDING TO YOUR INSTRUCTIONS. IF
THIS CARD IS RETURNED SIGNED WITH NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE
VOTED FOR THE ELECTION OF THE TWO DIRECTORS NAMED ABOVE AND FOR ITEM 2 ABOVE.
Unless you sign and return this card so that it is received by the Trustee
before April 23, 1996 your shares will be voted as provided by the Plan.
Date: ........., 1996
.....................
.....................
(Please sign EXACTLY
as your
name appears hereon)
When signing as at-
torney, executor,
administrator,
trustee or guardian,
please give full ti-
tle. If more than
one trustee, all
should sign. All
joint owners should
sign.
- --------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
PROXY FARR COMPANY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 30, 1996
TO: FIRST INTERSTATE BANK OF CALIFORNIA AS TRUSTEE UNDER THE
FARR COMPANY TRASOP
I hereby instruct the Trustee to vote (in person or by proxy) all the shares
of Farr Company Common Stock which are credited to my account at the Annual
Meeting of Stockholders of Farr Company to be held at the offices of the
corporation, 2221 Park Place, El Segundo, California, on April 30, 1996 or at
any adjournment thereof, on the following matters, as provided in the proxy
statement, and upon any other matter which may properly come before the meeting.
PLEASE MARK YOUR CHOICE LIKE THIS [ ] IN DARK INK AND
SIGN AND DATE ON THE REVERSE SIDE
(1) ELECTION OF TWO DIRECTORS [_] Vote FOR ALL (except as marked to the
contrary below) [_] WITHHELD for ALL
Richard P. Bermingham and Richard L. Farr
(Instruction: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
(2) PROPOSAL TO AMEND THE 1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
OF FARR COMPANY:
FOR [_] AGAINST [_] ABSTAIN [_]
(Continued and to be signed on other side.)
- --------------------------------------------------------------------------------
----------------------
Shares of Common Stock
PLEASE DATE AND SIGN EXACTLY AS YOUR NAME APPEARS BELOW AND RETURN IN THE
ENCLOSED ENVELOPE. YOUR SHARES WILL BE VOTED ACCORDING TO YOUR INSTRUCTIONS. IF
THIS CARD IS RETURNED SIGNED WITH NO VOTING INSTRUCTIONS, YOUR SHARES WILL BE
VOTED FOR THE ELECTION OF THE TWO DIRECTORS NAMED ABOVE AND FOR ITEM 2 ABOVE.
Unless you sign and return this card so that it is received by the Trustee
before April 23, 1996 your shares will be voted as provided by the Plan.
Date: ........., 1995
.....................
.....................
(Please sign EXACTLY
as your
name appears hereon)
When signing as
attorney, executor,
administrator,
trustee or guardian,
please give full title.
If more than one
trustee, all should
sign. All joint owners
should sign.
<PAGE>
FARR COMPANY
ANNUAL MEETING OF STOCKHOLDERS--APRIL 30, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Farr Company does hereby nominate,
constitute and appoint H. J. Meany and Kenneth W. Gerstner, or either of
them, the true and lawful proxies, agents and attorneys of the
P undersigned, with full power of substitution, to vote for the undersigned
all of the common stock of said corporation standing in the name of the
R undersigned on its books at the close of business on March 8, 1996 at the
Annual Meeting of Stockholders to be held at the offices of the
O corporation, 2221 Park Place, El Segundo, California, on April 30, 1996 or
at any adjournment thereof, with all of the powers which would be
X possessed by the undersigned if personally present, as follows:
Y IF NO CONTRARY INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF MANAGEMENT'S TWO NOMINEES AS DIRECTORS AND FOR THE PROPOSAL TO
AMEND THE 1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS OF FARR
COMPANY.
(Continued and to be signed on other side)
<PAGE>
IF NO CONTRARY INSTRUCTION IS INDICATED, THIS PROXY Please mark [ X ]
WILL BE VOTED FOR THE ELECTION OF MANAGEMENT'S TWO your votes
NOMINEES AS DIRECTORS AND FOR PROPOSAL 2. as this
WITHHELD
FOR FOR ALL
1. Election of Directors [ ] [ ]
Robert Batinovich and
David J. Farr
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- --------------------------------------
FOR AGAINST ABSTAIN
2. Proposal to Amend the 1991 [ ] [ ] [ ]
Stock Option Plan for
Non-Employee Directors of
Farr Company:
3. In their discretion, the Proxies
are authorized to vote upon such
other business as may properly
come before the meeting.
The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders dated April 3,
1996 and the Proxy Statement of the same date
furnished therewith.
Signature(s) ___________________________ Date _______________________________
NOTE: Please sign name exactly as your name (or names) appear on the stock
certificate. When signing as attorney, executor, administrator, trustee or
guardian please give full title. If more than one trustee, all should
sign. All joint owners must sign.
