<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
ALLIED PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ALLIED PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $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:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
------------------------------------------------------------------------
<PAGE>
[LOGO]
10 SOUTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606
Telephone: (312) 454-1020
TO OUR STOCKHOLDERS:
This letter affords me the opportunity to extend a cordial invitation to all our
stockholders to attend the 1994 Annual Meeting on Friday, May 27, 1994. At this
meeting there will be ample time to answer your questions and thoroughly discuss
our Company's affairs.
Enclosed you will find the Notice of our Annual Meeting, together with a Proxy
Statement and a Proxy card, and a copy of our 1993 Annual Report. The Proxy
Statement describes the matters to be considered at the meeting. If you are
unable to attend the meeting in person, please complete and return the enclosed
Proxy so that your shares are represented and voted. We would appreciate your
prompt attention to this matter.
Very truly yours,
RICHARD A. DREXLER
PRESIDENT
Chicago, Illinois
April 15, 1994
<PAGE>
[LOGO]
10 SOUTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606
Telephone: (312) 454-1020
- ------------------------------------------
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD
ON May 27, 1994
- ---------------------------------
Notice is hereby given that the Annual Meeting of Stockholders of ALLIED
PRODUCTS CORPORATION (herein referred to as "Allied" or the "Company") will be
held on Friday, May 27, 1994 at 9:30 o'clock A.M. (Chicago Time) in the
Shareholders Room, 21st Floor, Continental Bank N.A., 231 South La Salle Street,
Chicago, Illinois 60697, for the following purposes:
1. To elect 6 directors in accordance with the Company's By-Laws.
2. To act upon a proposal to approve an amendment to the Company's 1977
Incentive Stock Plan.
3. To act upon a proposal to approve a new 1993 Directors' Stock Plan.
4. To act upon any other business as may properly come before the meeting or
any adjournment or adjournments thereof.
Only stockholders of record as shown by the transfer books of Allied at the
close of business on April 8, 1994, are entitled to notice of, and to vote at,
this Annual Meeting.
All stockholders are invited to attend this Annual Meeting in person. Those
stockholders who are unable to attend in person are respectfully urged to
execute and return the enclosed Proxy at their earliest convenience. SINCE
ATTENDANCE IN PERSON OR BY PROXY OF A MAJORITY OF THE OUTSTANDING SHARES IS
REQUIRED AT THE MEETING IN ORDER TO TRANSACT BUSINESS, PROMPTNESS IN RETURNING
THE EXECUTED PROXY WILL BE APPRECIATED. Stockholders who execute a Proxy may
nevertheless attend the meeting and vote their shares in person.
By Order of the Board of Directors
ALLIED PRODUCTS CORPORATION
Kenneth B. Light
EXECUTIVE VICE PRESIDENT AND SECRETARY
April 15, 1994
<PAGE>
- ---------------------------------
PROXY STATEMENT
- ------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OF ALLIED PRODUCTS CORPORATION
May 27, 1994
SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of ALLIED PRODUCTS
CORPORATION (herein referred to as "Allied" or the "Company") for use at the
Annual Meeting of Stockholders, to be held on Friday, May 27, 1994, and at any
and all adjournments thereof. Any Proxy given may be revoked with respect to any
matter by notice in writing to the Secretary of Allied at any time prior to its
use, by delivering another later dated proxy or by voting in person at the
Annual Meeting. Pursuant to Delaware General Corporation Law, only votes cast
"For" a matter constitute affirmative votes. Votes "Withheld" or abstaining from
voting are counted for quorum purposes, but since they are not voted "For" a
particular matter they have the same effect as negative votes or votes "Against"
a particular matter. Broker non-voters, if any, while counted for general quorum
purposes, are not deemed to be present with respect to any matter for which a
broker does not have authority to vote. Accordingly, broker non-votes will not
have an effect on the outcome of the election of directors or any other matters
which are presented at the meeting.
The cost of preparing, assembling and mailing this Proxy Statement and the
material enclosed herewith is being borne by the Company. The Company has
engaged Georgeson & Company, Inc. to assist in the solicitation of proxies from
stockholders at an estimated fee of $7,500. Upon request, the Company will
reimburse brokerage houses and other custodians and fiduciaries holding stock of
record for reasonable out-of-pocket expenses incurred in forwarding proxy
solicitation material to the beneficial owners of such stock. Directors,
officers, and certain regular employees of the Company, without additional
compensation, may solicit Proxies personally or by telephone or telegraph. This
Proxy Statement and the enclosed proxy card were first mailed to the
stockholders on or about April 22, 1994.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on April 8, 1994, as the
record date for the determination of stockholders entitled to notice of this
Annual Meeting, and only stockholders of record on that date will be entitled to
vote thereat.
As of April 8, 1994, 9,100,165 shares of Common Stock (par value $.01 per
share), were issued and outstanding. In addition, 180,000 shares of Series B
Variable Rate Cumulative Preferred Stock (without par value), and 129,000 shares
of $10.81 Series C Cumulative Preferred Stock (without par value) were issued
and outstanding on such date, each of which shares is entitled to one vote,
voting together, on the election of directors, the proposed amendment of the
Company's 1977 Incentive Stock Plan and the approval of a 1993 Directors
Incentive Stock Plan.
2
<PAGE>
Allied's SMART Plan (an employee benefit plan formed pursuant to Section 401(k)
of the Internal Revenue Code) holds 633,271 shares of Common Stock representing
6.96% of the outstanding shares of Allied Common Stock. Lloyd Drexler, Richard
A. Drexler and S. S. Sherman act as trustees for the SMART Plan. Of the total
number of shares held in the SMART Plan, 608,621 shares of Common Stock,
representing 6.68% of the outstanding shares of Allied Common Stock, have been
credited to the individual accounts of the participants in the SMART Plan and
will be voted in accordance with instructions of such participants. Shares in
the SMART Plan with respect to which participants fail to return voting
instructions (other than in the PAYSOP accounts) will be voted on each issue by
an advisory committee composed of three members, Lloyd Drexler, S. S. Sherman
and Richard A. Drexler, in the same proportion as all other outstanding shares
are voted. All PAYSOP account shares (approximately 18,414 shares) with respect
to which participants fail to return voting instructions will not be voted.
Those shares held in the SMART Plan which have not been credited to
participants' accounts will be voted by the advisory committee in its
discretion.
The Verson Master Trust, which is the trust for the pension plans of the Verson
division of Allied, holds 408,396 shares of Common Stock representing 4.5% of
the outstanding shares of Allied Common Stock. Lloyd Drexler, Richard A. Drexler
and S. S. Sherman act as trustees for the trust.
BENEFICIAL OWNERS
Mr. S. S. Sherman and Messrs. Lloyd Drexler and Richard A. Drexler combined,
directors of the Company, beneficially own more than 5% of Allied Common Stock.
See the table set forth in "Election of Directors" and the notes thereto for
information concerning their ownership.
The Company has been informed that Dimensional Fund Advisors, Inc., whose
address is 1299 Ocean Avenue, Santa Monica, California 90401, beneficially owns
642,178 shares of Common Stock, representing approximately 7.07% of the
outstanding shares of Allied Common Stock. It has voting power over only 398,384
of those shares.
The Company has been informed that FMR Corp., whose address is 82 Devonshire
Street, Boston, Massachusetts 02109 beneficially owns 512,500 shares of common
stock, representing 5.64% of the outstanding shares of Allied Common Stock. It
has voting power over only 44,000 of such shares.
Transamerica Commercial Finance Corporation, whose address is 225 North Michigan
Avenue, Chicago, Illinois 60601 owns 180,800 shares of Allied's Series B
Variable Rate Preferred Stock, which constitutes all of the issued and
outstanding shares of Series B Preferred Stock.
Chrysler Financial Corporation, whose address is c/o Chrysler Capital
Corporation, Greenwich Office Park I, Greenwich, Connecticut 06836-6900, owns
86,000 shares and Ford Motor Credit Company, whose address is The American Road,
Dearborn, Michigan 48121, owns 43,000 shares, representing 66 2/3% and 33 1/3%,
respectively, of Allied's $10.81 Series C Cumulative Preferred Stock.
3
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors, pursuant to the Company's By-laws, has set the number of
directors at nine. Six directors are to be elected at the Annual Meeting to hold
office for the terms of their respective classes as hereinafter described.
On January 14, 1994 the Board of Directors of Allied nominated the following
individuals to run for election as Directors. THE FOLLOWING SETS FORTH CERTAIN
BIOGRAPHICAL INFORMATION, PRESENT OCCUPATION AND BUSINESS EXPERIENCE FOR THE
PAST FIVE YEARS FOR EACH OF THE NOMINEES AS WELL AS THE TERM OF OFFICE FOR WHICH
EACH IS BEING NOMINATED:
CLASS A DIRECTOR (TERM EXPIRES IN 1997)
RICHARD A. DREXLER, age 46, has been Chairman of the Board since August 18,
1993, President since 1982 and Chief Executive Officer since 1986. Member of the
Board of Directors since 1982.
JOHN W. PUTH, age 65, has been President of J.W. Puth Associates, a
consulting/investment firm since 1987. From 1983 until 1987 he served as
Chairman, President and Chief Executive Officer of Clevite Industries, Inc., a
multi-national manufacturer of valves, hydraulics, bearings and other parts. Mr.
Puth is a member of the boards of L.B. Foster Co., manufacturer of rail
products, Lindberg Corporation, a commercial heat treating company, TNT
Freightways, a trucking company and System Software Associates, an applications
software company. He is also a director of several private companies.
CLASS B DIRECTOR (TERM EXPIRES IN 1995)
JAMES J. HAYDEN, age 58, has been Executive Vice President of Allied since 1993
and Chief Financial Officer since 1992. He also held those two posts from 1987
to 1989 before leaving to pursue private interests. He has been a member of the
Board of Directors since August 18, 1993. Prior to joining Allied in 1987 Mr.
Hayden was with Rexnord, Inc., serving as Vice President and Treasurer of the
corporation and later as President of its Rexnord Automation subsidiary.
STANLEY J. GOLDRING, age 48, is Managing Partner of the KG Securities Division
of Ladenburg, Thalmann & Company, Inc., an investment banking company. Mr.
Goldring has been involved in various aspects of analytical research, money
management and investment banking over the course of his 25-year career on Wall
Street. He has been a member of the Board of Directors since August 18, 1993.
CLASS C DIRECTOR (TERM EXPIRES IN 1996)
KENNETH B. LIGHT, age 61, has been Executive Vice President and Chief
Administrative Officer of Allied Products since 1982 and has served as Secretary
since 1972. Mr. Light joined the Company in 1961 and served as its General
Counsel for more than a decade. He has been a member of the Board of Directors
since August 18, 1993.
WILLIAM D. FISCHER, age 65, was President and Chief Operating Officer and a
Director of Chicago-based Dean Foods Company from 1989 until December, 1993 when
he retired. Prior to that he was Vice President, Finance, a post he held since
1971. He remains a director of Dean Foods which processes and distributes dairy
and other foods. He is also a director of John P. Sanfilippo & Son, Inc., a food
processor and marketer. He has been a member of the Board of Directors since
August 18, 1993.
4
<PAGE>
All of the above individuals are currently directors of the Company. Any
director may resign or may be removed as provided in the By-Laws. It is intended
that proxies received in response to this solicitation will be voted in favor of
the nominees unless otherwise specified in the proxy.
If for any reason any of such nominees should be unable to serve (a situation
which is not presently contemplated), it is intended that the proxies will be
voted for such other person or persons as the Board of Directors shall
designate.
THE FOLLOWING SETS FORTH CERTAIN BIOGRAPHICAL INFORMATION, PRESENT OCCUPATION
AND BUSINESS EXPERIENCE FOR THE PAST FIVE YEARS FOR EACH OF THE OTHER MEMBERS OF
THE BOARD OF DIRECTORS:
LLOYD A. DREXLER, age 76, was the former Co-Chairman of the Board from June 2,
1992 until August 18, 1993 and he has been a member of the Board of Directors
since 1963. Previously, he was Chairman of the Executive Committee from 1986
until June 2, 1992. Mr. Drexler is a Class B Director whose term expires in
1995. Mr. Drexler is the father of Mr. Richard A. Drexler.
JOHN E. JONES, age 59, has been a member of the Board of Directors since 1974.
Mr. Jones is a Class B Director whose term expires in 1995. Mr. Jones is
Chairman of the Board, President and Chief Executive Officer of CBI Industries,
Inc. which is engaged in contracting services and the manufacture of industrial
gases since 1989; previously, Vice Chairman, President and Chief Operating
Officer of CBI Industries, Inc. Mr. Jones is also a director of NICOR Inc.,
Amsted Industries Incorporated, Valmont Industries, Inc. and The Interlake
Corporation.
S. S. SHERMAN, age 76, was the former Co-Chairman of the Board, from June 2,
1992 until August 18, 1993. He was Chairman of the Board from 1973 until June 2,
1992 and has been a member of the Board of Directors since 1963. He is a Class C
director whose term expires in 1996. Mr. Sherman has also been Vice Chairman of
the Board of Directors and a member of the Executive Committee of '21'
International Holdings, Inc. since October 1, 1990. He has been Vice Chairman of
the Board of Directors and a Member of the Executive Committee of Knoll
International Holdings, Inc. since March, 1987 and a director of that company
since 1981.
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information as of March 31, 1994, regarding the
beneficial ownership of capital stock of the Company by each director of the
Company, the Company's Chief Executive Officer, each of the Company's four other
most highly compensated executive officers for fiscal 1993 and the
5
<PAGE>
directors and executive officers of the Company as a group. Except as otherwise
indicated, the shareholders listed in the table have sole voting and investing
powers with respect to the capital stock owned by them.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OR GROUP CLASS OWNERSHIP CLASS
- -------------------------------------------------- ------ ----------- -------
<S> <C> <C> <C>
S. S. Sherman..................................... Common 560,760(1) 6.17%
Lloyd A. Drexler.................................. Common 355,748(2) 3.91%
Richard A. Drexler................................ Common 437,718(3) 4.81%
William D. Fischer................................ Common 1,000 --
Stanley J. Goldring............................... Common 1,000 --
James J. Hayden................................... Common 21,372(4) .24%
John E. Jones..................................... Common 34,958 .38%
Kenneth B. Light.................................. Common 131,001(5) 1.44%
John W. Puth...................................... Common 8,000 --
Bobby Middlebrooks................................ Common 30,965(6) .34%
Martin A. German.................................. Common 26,825(7) .30%
All Executive officers and directors as a group
(13 persons)..................................... Common 1,658,069(8) 18.27%
<FN>
- ---------
(1) Includes 41,977 shares of restricted stock; 374,917 shares owned by a
family corporation of which Mr. Sherman, his wife and children are
stockholders; 45,600 shares which Mr. Sherman has the right to acquire by
exercise of stock options within sixty days of the date of this proxy
statement.
(2) Includes 80,297 shares of restricted stock; 168,708 shares owned by a
partnership of which Mr. Lloyd Drexler is a partner; 42,000 shares owned
by Mr. Drexler's wife and by a family trust of which Mr. Drexler's wife is
the trustee; and 6,400 shares owned by a non-profit corporation of which
Mr. Drexler is an officer. Also includes 55,600 shares which Mr. Drexler
has the right to acquire by exercise of stock options within sixty days of
the date of this proxy statement.
(3) Includes 35,951 shares of restricted stock; 70,000 shares held by a trust
of which Mr. Richard Drexler is trustee; 100,000 shares owned by a family
corporation, of which Mr. Drexler is President; 35,186 shares credited to
Mr. Drexler's account in the Company's 401(k) Plan and 122,360 shares
which Mr. Drexler has the right to acquire by exercise of stock options
within sixty days of the date of this proxy statement.
(4) Includes 1,372 shares credited to Mr. Hayden's account in the Company's
401(k) Plan and 20,000 shares which Mr. Hayden has the right to acquire by
exercise of stock options within sixty days of the date of this proxy
statement.
(5) Includes 8,792 shares of restricted stock; 99,030 shares which Mr. Light
has the right to acquire by exercise of stock options within sixty days of
this proxy statement; and 23,123 shares credited to Mr. Light's account in
the Company's 401(k) Plan.
(6) Includes 2,067 shares of restricted stock; 29,940 shares which Mr.
Middlebrooks has the right to acquire by exercise of stock options within
sixty days of the date of this proxy statement; and 3,958 shares credited
to Mr. Middlebrooks' account in the Company's 401(k) Plan.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(7) Includes 12,825 shares credited to Mr. German's account in the Company's
401(k) Plan and 14,000 shares which Mr. German has the right to acquire by
exercise of stock options within sixty days of the date of this proxy
statement.
(8) Includes 407,545 shares which the group has the right to acquire by
exercise of stock options within sixty days of the date of this proxy;
98,052 shares credited to the accounts of members of the group in the
Company's 401(k) Plan; and 170,838 shares of restricted stock.
</TABLE>
MANAGEMENT COMPENSATION
REPORT OF STOCK OPTION AND COMPENSATION COMMITTEE
The Stock Option and Compensation Committee of the Board of Directors was
comprised during fiscal 1993 of John W. Puth, William D. Fischer Stanley J.
Goldring and John E. Jones all outside directors of the Company. On March 3,
1994, Mr. Goldring resigned from this Committee. The Committee oversees the
administration of the Company's employee benefit plans and establishes policies
relating to compensation of employees. All decisions by the Stock Option and
Compensation Committee relating to the compensation of the Company's executive
officers are reviewed by the full Board, except for decisions about awards under
certain of the Company's stock-based compensation plans, which must be made
solely by the Committee in order for the grants or awards under such plans to
satisfy Exchange Act Rule 16b-3.
From January, 1990 through January, 1993, the Company was subjected to strict
limitations with respect to compensation of the Company's executive officers.
Such limitations had been imposed by agreement between the Company and its
lenders under the Company's Credit and Debt Restructuring Agreement. As a result
the compensation of the executive officers during such period remained basically
static and, by 1993, was generally lower than salaries paid to executive
officers in similar companies. A primary goal of the executive officers for
1992, which was set by the Board of Directors and was endorsed by the Committee,
was the restructuring and lowering of the Company's debt. In 1992 the Company
underwent extensive and comprehensive negotiations with many lenders which, in
January, 1993, culminated in a comprehensive restructuring of the Company's
debt, including a relaxation of the limitation on the compensation of the
Company's executive officers. In determining the 1993 compensation levels and
stock option awards for certain executive officers and other employees of the
Company, the Compensation Committee took into consideration the three year
hiatus in salary increases as well as the successful completion of the Company's
refinancing under very arduous and burdensome conditions. These decisions were
deemed by the Committee to be in keeping with its policy.
COMPENSATION POLICY
The objectives of the Company's executive compensation program are to:
- Support the achievement of desired Company performance.
- Provide compensation that will attract and retain superior talent and
reward performance.
- Align the Executive officers' interests with the success of the Company.
The executive compensation program provides an overall level of compensation
opportunity that is competitive with the manufacturing businesses in which the
Company is engaged as well as with a broader group of companies of comparable
size and complexity. Actual compensation levels may be
7
<PAGE>
greater or less than average competitive levels in surveyed companies based upon
annual and long-term Company performance as well as individual performance.
Subject to the limitations described above, The Stock Option and Compensation
Committee uses its discretion to set executive compensation at levels warranted
in its judgment by external, internal or an individual's circumstances.
The Company's executive officer compensation program is comprised of base
salary, annual cash incentive compensation, long-term incentive compensation in
the form of stock options, and various benefits, including medical and life
insurance generally available to employees of the Company.
CEO COMPENSATION
During 1993, the Company's most highly compensated officer was Richard A.
Drexler, Chairman of the Board, President and Chief Executive Officer. The
Committee reviewed the performance of Mr. Drexler and made recommendations to
the Board concerning annual compensation (salary plus bonus) and long-term
compensation in the form of stock options. The key measurement during the year
involved the successful management of the Company which was under severe
financial constraints and difficulties. Through Mr. Drexler's efforts, the
Company was able to complete a restructuring of the Company's debt and turn
around its performance from very large losses into excellent profits for 1993.
John W. Puth, Chairman
William D. Fischer
Stanley J. Goldring
John E. Jones
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From August 18, 1993 to March 3, 1994 Mr. Stanley Goldring was a member of the
Stock Option and Compensation Committee of the Board of Directors. Mr. Goldring
is a Managing Partner of KG Securities Division of Ladenburg, Thalmann &
Company, Inc. which, as an investment adviser to the Verson Master Trust
(through which the pension plans covering the employees of the Company's
subsidiary, Verson Corporation, are administered), earned fees in the sum of
$118,025 in 1993. Ladenburg, Thalmann has acted as investment adviser to the
Verson Trust for at least five years prior to Mr. Goldring's participation on
the Allied Board. Mr. John Jones is Chairman, President and Chief Executive
Officer of CBI Industries, Inc. In 1993, the Company's Verson subsidiary paid to
CBI Industries, Inc. a final installment of $211,000 on a fabrication contract
entered into in 1991, on a price-competitive basis, for material required by
Verson in the manufacture of its products.
8
<PAGE>
SUMMARY COMPENSATION TABLE
The table below sets forth certain information regarding compensation paid
during each of the Company's last three fiscal years to the Company's Chief
Executive Officer and each of the Company's four other most highly compensated
executive officers, and for one additional individual who did not serve as an
executive officer at the end of the fiscal year, based on salary and bonus
earned during fiscal 1993.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION -------------------- -------
--------------------------------- RESTRICTED LTIP
OTHER ANNUAL STOCK OPTIONS/ PAYOUTS ALL OTHER
NAMES AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION AWARDS($) SARS(#) $ COMPENSATION
- ---------------------------------------- ---- --------- -------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard A. Drexler 1993 315,000 74,000 35,000
Chairman, President and CEO 1992 280,254 13,000
1991 279,046 20,000
Lloyd A. Drexler 1993 214,500 10,083 (1)
Co-Chairman through 11/30/93 1992 234,000
1991 277,805
Martin A. German 1993 176,004 110,000 5,000
Senior Vice President 1992 165,804 33,000
1991 164,470 30,000
James J. Hayden 1993 180,700 42,000 10,000
Executive V.P. and CFO 1992 66,000
1991
Bobby Middlebrooks 1993 181,000 30,000 5,000
Senior Vice President 1992 175,808 19,250
1991 174,508 26,250
Kenneth B. Light 1993 169,008 42,000 10,000
Executive V.P. and Secretary 1992 151,254 13,000
1991 150,892 20,000
<FN>
- ------------
(1) Of such amount, $8,333 represents payment under Mr. Drexler's retirement
plan and $1,750 for Director's fee earned after retirement.
</TABLE>
9
<PAGE>
OPTION GRANTS DURING 1993 FISCAL YEAR
The following table provides information relating to options granted to the
named executive officers during fiscal 1993:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
------------------------------------------------------ STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS OPTIONS EXERCISE OPTION TERM
GRANTED GRANTED IN PRICE EXPIRATION --------------------
NAME (#)(1) FISCAL YR. ($/SH) DATE 5% ($) 10% ($)
- ------------------------------------- ----------- --------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Drexler 35,000 34 4.625 2/15/2003 89,075 219,800
Lloyd A. Drexler 10,000 10 10.625 6/1/2003 58,500 144,200
Martin A. German 5,000 5 4.625 2/15/2003 12,725 31,400
James J. Hayden 10,000 10 4.625 2/15/2003 25,450 62,800
Bobby Middlebrooks 5,000 5 4.625 2/15/2003 12,725 31,400
Kenneth B. Light 10,000 10 4.625 2/15/2003 25,450 62,800
<FN>
- ---------
(1) All of these options, except those for Mr. Lloyd Drexler were granted on
2/16/93. Fifty percent are exercisable on 2/15/94 and the remainder on
2/15/94 and thereafter during the term of the option. The options for Mr.
Lloyd Drexler were granted on 6/2/93 and are all exercisable.
</TABLE>
OPTION EXERCISES DURING 1993 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The Company does not have any outstanding stock appreciation rights. The
following table provides information relating to the options exercised by the
named executive officers during fiscal 1993 and the value of options held at the
end of 1993:
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
END OF 1993(#) END OF 1993 ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- ----------------------------------- ----------------- ------------ ---------------- -------------------
<S> <C> <C> <C> <C>
Richard A. Drexler 6,000 27,750 92,360/52,500 280,288/275,625
Lloyd A. Drexler 55,600/0 120,000/0
Martin A. German 15,500 99,000 4,000/12,500 0/113,438
James J. Hayden 7,000/17,500 76,875/155,625
Bobby Middlebrooks 15,500 147,438 15,940/12,500 1,255/113,438
Kenneth B. Light 4,000 18,500 41,530/20,000 181,950/177,500
<FN>
- ---------
(1) The closing price for the Company's Common Stock as reported by the New
York Stock Exchange on 12/31/93 was $12.50 per share. Value is calculated
on the basis of the difference between the option exercise price and
$12.50 multiplied by the number of shares of Common Stock underlying the
option.
</TABLE>
RETIREMENT PLANS
Mr. Bobby Middlebrooks is a participant in the Bush Hog Division Salaried
Pension Plan, a defined benefit plan. As such, Upon retirement he will be
entitled to the following monthly benefits: One percent of his final monthly
salary multiplied by the number of years of service to the Company. Assuming
10
<PAGE>
Mr. Middlebrooks' retirement at age 65 (he is now 58 years old) at his current
salary, Mr. Middlebrooks would be entitled to a pension of $7,003 per month.
Assuming Mr. Middlebrooks' salary is increased by 5% per year until retirement,
he would be entitled to a pension of $9,855 per month.
As of December 1, 1993, the Company entered into agreements with Messrs Lloyd A.
Drexler and S.S. Sherman whereby each is to receive compensation on the
following basis: The sum of $8.333 per month for 120 consecutive months. Upon
death, any unpaid amounts would be payable to a surviving spouse or, if there is
no surviving spouse, the discounted present value of the remaining unpaid
amounts will be paid to the respective estates. During the term of the
agreement, the Company will maintain a $500,000 life insurance policy for Mr.
Drexler, the death benefits of which shall be payable to his designated
beneficiary or estate.
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total stockholder return on the Common
Stock of the Company for the last five fiscal years with the cumulative total
return on the S&P 500 Index and the S&P Machinery-Diversified Index over the
same period (assuming the investment of $100 in the Company's Common Stock, the
S&P 500 Index and the S&P Machinery-Diversified Index at the end of 1988, and
reinvestment of all dividends).
COMPARISON OF 5 YEAR TOTAL RETURN
AMONG ALLIED PRODUCTS, S&P 500 INDEX & S&P MACHINERY DIVERSIFIED INDEX
[Filed separately under cover of Form SE]
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PROPOSAL 2: AMEND THE COMPANY'S 1977 INCENTIVE STOCK PLAN
The Company's Board of Directors adopted on December 9, 1993 an amendment to
certain provisions of the 1977 Incentive Stock Plan (the "1977 Plan") under
which certain options remain outstanding. The amendment, which is subject to the
approval of stockholders, would have the effect of extending the period of time
during which an option holder may exercise the option following retirement from
the Company. The Board believes the proposed amendment to the 1977 Plan is in
the Company's best interest and recommends its approval.
The 1977 Incentive Stock Plan (the "1977 Plan") was approved by the stockholders
of the Company in 1978. Under the terms of the 1977 Plan, if the employment of a
holder of an option shall have terminated FOR ANY REASON OTHER THAN DEATH, the
Board of Directors may permit the exercise of the option within three months
after such termination.
In 1990, a new Long Term Incentive Stock Plan was approved by the Board (the
"1990 Plan") and by the stockholders of the Company in 1991. Under the terms of
the 1990 Plan, if the employment of a holder of an option shall terminate by
reason of retirement after age sixty-five, a stock option held by such retiree
may thereafter be exercised by such retiree for a period of three years from the
date of retirement, provided the option has not expired by its terms.
Several employees and recent retirees of the Company currently hold options
under both the 1977 and the 1990 Plans. The Board of Directors believes the
three-year time period during which the exercise of options is permitted
following retirement, as currently provided under the 1990 Plan, is a more
reasonable and equitable approach. In addition, the Board believes that the
provisions relating to exercises following retirement should be consistent under
both the 1977 and the 1990 Plans.
There are currently options for 192,237 shares outstanding under the 1977 Plan
and no further grants may be made under that Plan. All of these options will be
affected if the amendment is approved. The following persons currently hold
options under the 1977 Plan for the number of shares indicated: Mr. Lloyd A.
Drexler (30,600 shares); Mr. Richard A. Drexler (54,860 shares); Mr. Bobby
Middlebrooks (14,910 shares); Mr. Kenneth B. Light (17,030 shares); Mr. S.S.
Sherman (30,600 shares); all current executives as a group (158,295 shares) and
all employees including officers who are not executive officers (33,942 shares).
AMENDMENT TO 1977 PLAN
The amendment to the 1977 Plan would provide that if an optionee's employment
shall have terminated by reason of retirement from the Company after age
sixty-five, the Board of Directors may permit the exercise of options held by
him within three years after such retirement, but not after the term of the
option. In the event the optionee shall die during such three year period, the
Optionee's estate would be permitted to exercise the option for a period of
three years following death, the end of the three year period provided above or
the expiration of the option, whichever occurs first.
The affirmative vote of the holders of a majority of the shares of the
outstanding Stock of the Company present at the annual meeting, in person or by
proxy, is required for approval of the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE 1977 LONG TERM
INCENTIVE STOCK PLAN.
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PROPOSAL 3: ADOPTION OF 1993 DIRECTORS INCENTIVE STOCK PLAN
The 1993 Directors Incentive Stock Plan, (the "Plan" or the "1993 Plan") was
adopted by the Board of Directors of the Company on December 9, 1993, which
adoption is subject to the approval of the stockholders of the Company at the
next regularly scheduled Annual Meeting. The purpose of the Plan is to assist
the Company in attracting to and retaining on the Board of Directors individuals
of significant personal qualifications and experience.
The 1993 Plan authorizes the distribution of up to 120,000 shares of Common
Stock to members of the Board of Directors WHO ARE NOT EMPLOYEES OF THE COMPANY
(the "Non-Employee Director") to provide additional incentives to such
individuals and to promote the success of the Company's business. Shares subject
to options that are terminated or shares that are otherwise forfeited will again
be available for issuance under the Plan. Such shares may consist in whole or in
part, of authorized and unissued shares or treasury shares.
A description of the Plan is as follows:
STOCK OPTIONS
The Plan provides that each Non-Employee Director be granted an initial
non-statutory stock option to purchase 10,000 shares of Common Stock on the day
of the Director's initial election or appointment to the Board or, in the case
of existing Non-Employee Directors, on January 3, 1994. In addition, on the date
of the Company's Annual Meeting of stockholders in each year commencing in 1995,
each Non-Employee Director will be granted a non-statutory stock option to
purchase 500 shares of common stock.
The exercise price of options granted under the 1993 Plan will be equal to the
fair market value of the Company's Common Stock on the date the option is
granted and the exercise price may be paid in cash or shares of Common Stock.
Each option granted under the Plan will have a term of ten years and will be
exercisable to the extent of 50% of the shares on the first anniversary date and
will be fully exercisable on the second anniversary date. Options are
non-transferable except by will, the laws of descent and distribution or
pursuant to qualified domestic relations orders.
The Plan provides that upon a change of control of Allied, as defined in the
Plan, all options outstanding under the Plan become exercisable. In addition, if
a person ceases to be a director one year or more after his initial election or
appointment to the Board, any options held by that person will be exercisable
for a period of two years or until the option expires, whichever is shorter;
provided that if the person dies within this period the option may be exercised
for the longer of a one year period or the remaining period specified above. If
a person terminates as a director within one year of the grant of an option the
option will be canceled if such termination is due to a reason other than death.
In the event of death of a director during this period, the option will be
exercisable for a period of two years or until the option expires, whichever is
shorter.
The Board of Directors may amend the Plan from time to time but may not amend
the Plan to increase the number of shares available for issuance or make any
other material modification to the Plan, as defined in Rule 16b-3 under the
Securities Exchange Act of 1934 without stockholder approval.
The grant of a stock option does not create taxable income to the holder or a
tax deduction to Allied. Upon the exercise of a non-statutory stock option, the
holder will generally recognize ordinary income to the extent that the fair
market value of the stock on that date exceeds the option price. If the shares
13
<PAGE>
obtained upon exercise are subject to a risk of forfeiture, the realization of
ordinary income may be deferred. The Company will be entitled to a tax deduction
for the amount of ordinary income realized by the holder.
OPTIONS GRANTED IN 1994
Contingent upon stockholder approval of the Plan, on January 3, 1994, Allied
granted options for 10,000 shares to each of the following directors: Lloyd A.
Drexler, William D. Fischer, Stanley J. Goldring, John E. Jones, John W. Puth
and S.S. Sherman. The options have an exercise price of $12.50. The closing
sales price of the Company's Common Stock on March 31, 1994 was $14.00.
GENERAL
No preemptive rights are applicable to any of the shares to be issued or
transferred under the Plan. The proceeds to be received by the Company upon the
exercise of stock options will be used for general corporate purposes.
If the 1993 Plan is not approved by the stockholders, it will not be implemented
and grants and awards made under the 1993 Plan will be canceled. The affirmative
vote of the holders of a majority of the shares of the outstanding Stock of the
Company present at the annual meeting, in person or by proxy, is required for
approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1993 DIRECTORS
INCENTIVE STOCK PLAN.
FUNCTIONING OF THE BOARD AND COMMITTEES
Allied's Board of Directors presently has an Executive Committee, an Audit
Committee, a Stock Option and Compensation Committee and a Nominating Committee.
Each of the outside directors receives the sum of $15,000 annually for his
services as a director and the chairman of each committee (if a non-employee of
the Company) receives the additional sum of $3,000 annually. Each non-employee
director of the Company also receives $500 for each meeting of the Board and for
each committee meeting which he attends.
Members of the Executive Committee are Messrs. R. Drexler (Chmn.), L. Drexler
and Sherman. During 1993, the Committee met on 12 occasions to exercise the
powers of the Board of Directors in the management of the business and affairs
of the Corporation.
Members of the Audit Committee are Messrs. Jones (Chmn.), Fischer, Goldring and
Puth. During 1993, the Committee met on 2 occasions to review and make
recommendations to the full Board with respect to the scope and results of the
annual audit.
Members of the Stock Option and Compensation Committee are Messrs. Puth (Chmn.),
Jones, Fischer and Goldring. During 1993, the Committee met on 2 occasions to
review and make recommendations to the full Board with respect to officers'
salaries and corporate incentive compensation plans.
Members of the Nominating Committee are Messrs. Fischer (Chmn.), Jones,
Goldring, Puth, R. Drexler, L. Drexler and Sherman. The Committee did not meet
in 1993.
Allied's Board of Directors met on 8 occasions during 1993. All of the current
directors attended at least 75% of the meetings of the Board and the respective
committees to which they belong.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
During 1993, upon the recommendation of Allied's Audit Committee and approval by
its Board of Directors, Allied engaged Coopers & Lybrand as its independent
public accountants to perform the following audit services: examination of
Allied's annual consolidated financial statements, assistance and consultation
in connection with various accounting matters and other non-audit professional
services.
The appointment of auditors is approved annually by the Board of Directors. The
decision of the Board of Directors is based on the recommendations of the Audit
Committee. In making its recommendations, the Audit Committee reviews both the
audit scope and estimated audit fees for the coming year. At its December 9,
1993 meeting, the Audit Committee reviewed and approved the services described
above as well as the service to be performed in 1994 and concluded that they do
not impair the independence of the accountants.
Representatives of Coopers & Lybrand will be present at the Annual Meeting, will
be given an opportunity to make any comments they wish, and will be available to
respond to any questions.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who own more than 10% of a registered class of
the Company's Securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission.
Based solely on its review of such reports received by it, the Company believes
that during fiscal year 1993 all filing requirements applicable to its officers
and directors were complied with.
STOCKHOLDER PROPOSAL
A stockholder proposal must be received by the Secretary of Allied on or before
December 24, 1994 for inclusion in the Proxy Statement and form of proxy
relating to Allied's 1995 Annual Stockholders' meeting.
GENERAL
A quorum at this Annual Meeting is a majority of the outstanding shares entitled
to vote thereat.
Allied has no knowledge of any matters, other than those set forth in this Proxy
Statement or referred to in the accompanying Notice of Annual Meeting of
Stockholders, which will be presented at the Annual Meeting.
By Order of the Board of Directors
ALLIED PRODUCTS CORPORATION
KENNETH B. LIGHT
EXECUTIVE VICE PRESIDENT AND SECRETARY
April 15, 1994
15
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PROXY ALLIED PRODUCTS CORPORATION PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS--
FOR ANNUAL MEETING OF STOCKHOLDERS MAY 27, 1994
The undersigned hereby appoints S. S. Sherman, Lloyd A. Drexler and Richard
A. Drexler, and each of them, Proxies, with the powers the undersigned would
possess if personally present, to vote all shares of the undersigned in Allied
Products Corporation at the annual meeting of the stockholders to be held on May
27, 1994, at 9:30 A.M., Chicago Time, and at any adjournment thereof, for the
purpose of acting upon the proposals referred to herein in accordance with the
designations below, and of acting in their discretion upon such other matters as
may properly come before the meeting.
1. ELECTION OF DIRECTORS:
/ / FOR all nominees / / WITHHOLD AUTHORITY
listed below (except as to vote for all
marked to the contrary nominees listed below
below)
RICHARD A. DREXLER JAMES J. HAYDEN KENNETH B. LIGHT
JOHN W. PUTH STANLEY J. GOLDRING WILLIAM D. FISCHER
INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through that nominee's name.
2. APPROVAL OF AMENDMENT TO 1977 INCENTIVE STOCK PLAN:
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF 1993 DIRECTORS INCENTIVE STOCK PLAN:
/ / FOR / / AGAINST / / ABSTAIN
(Continued and to be signed on other side)
<PAGE>
IF YOU SIGN AND RETURN THIS PROXY, THE SHARES REPRESENTED HEREBY WILL BE
VOTED IN ACCORDANCE WITH SPECIFICATIONS MADE HEREON. IF NOT OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
DATED: ____________________, 1994
___________________________(L.S.)
___________________________(L.S.)
IMPORTANT: Please sign exactly as
your name or names appear on the
stock certificate or
certificates, and when shares are
held by joint tenants, both
should sign. When signing as
attorney, executor,
administrator, trustees or
guardian, give your full title as
such. If the signatory is a
corporation or partnership sign
the full corporate or partnership
name by duly authorized officer
or partner.
NOTE: Please date, sign and mail
this proxy in the enclosed
envelope. No postage is required
for mailing in the United States.
<PAGE>
FORM OF DIRECTION
ALLIED PRODUCTS CORPORATION
SMART PLAN
DIRECTIONS FOR VOTING SHARES OF ALLIED PRODUCTS CORPORATION (ALLIED) HELD IN
TRUST FOR THE EMPLOYEE
The undersigned hereby authorizes the Advisory Committee for the
above-captioned plan (the "Plan") to direct the Trustees for the Plan to vote at
the Annual Meeting of Stockholders of Allied on May 27, 1994, or at any
adjournments thereof, all shares of Allied stock credited to the account of the
undersigned under the Trust for such Plan at the close of business on March 31,
1994, as directed below on the following matters, and, in their discretion, on
any other matters that may come before the meeting:
1. ELECTION OF / / FOR all nominees / / WITHHOLD AUTHORITY
DIRECTORS: listed below to vote for all
nominees listed below
RICHARD A. DREXLER JAMES J. HAYDEN KENNETH B. LIGHT
JOHN W. PUTH STANLEY J. GOLDRING WILLIAM D. FISCHER
INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through that nominee's name.
2. APPROVAL OF AMENDMENT TO 1977 INCENTIVE STOCK PLAN:
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF 1993 DIRECTORS INCENTIVE STOCK PLAN:
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
IF YOU SIGN AND RETURN THIS DIRECTION, THE SHARES REPRESENTED HEREBY WILL BE
VOTED IN ACCORDANCE WITH SPECIFICATIONS MADE HEREON. SMART SHARES FOR WHICH NO
INSTRUCTIONS ARE RECEIVED WILL BE VOTED IN THE SAME PROPORTION AS NON-SMART
SHARES ARE VOTED.
Dated: .................. , 1994
........................ (L.S.)
Signature
NOTE: PLEASE DATE, SIGN AND MAIL
THIS DIRECTION IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED
FOR MAILING IN THE UNITED STATES.
