<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
ALLIED PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(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):
/ / $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:
------------------------------------------------------------------------
/X/ Fee paid previously.
/ / 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 1995 Annual Meeting on Wednesday, May 17, 1995. 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 1994 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 5, 1995
<PAGE>
[LOGO]
10 SOUTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606
Telephone: (312) 454-1020
- ------------------------------------------
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD
ON May 17, 1995
- ---------------------------------
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 Wednesday, May 17, 1995 at 9:30 o'clock A.M. (Chicago Time) in the
Shareholders Room, 21st Floor, Bank of America Illinois (formerly Continental
Bank N.A.), 231 South La Salle Street, Chicago, Illinois 60697, for the
following purposes:
1. To elect 4 directors in accordance with the Company's By-Laws.
2. 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 March 24,1995, 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
April 5, 1995
<PAGE>
- ---------------------------------
PROXY STATEMENT
- ------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OF ALLIED PRODUCTS CORPORATION
May 17, 1995
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 Wednesday, May 17, 1995, 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-votes, 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 5, 1995.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on March 24, 1995, 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 March 24, 1995, 9,104,482 shares of Common Stock (par value $.01 per
share), were issued and outstanding. In addition, 146,800 shares of Series B
Variable Rate Cumulative Preferred Stock (without par value), and 115,000 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 with the shares of Common Stock, on the election of directors.
Allied's SMART Plan (an employee benefit plan formed pursuant to Section 401(k)
of the Internal Revenue Code) holds 561,290 shares of Common Stock representing
6.16% of the outstanding shares of Allied Common Stock. Continental Trust
Company acts as trustee for the SMART Plan. Of the total number of
2
<PAGE>
shares held in the SMART Plan, 546,716 shares of Common Stock, representing 6.0%
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 17,700 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 Allied Products Corporation Master Trust, which is the trust for the pension
plans of certain employees of the Verson and Bush Hog divisions and certain
former Littell division employees, holds 349,629 shares of Common Stock
representing 3.84% of the outstanding shares of Allied Common Stock. Continental
Trust Company acts as trustee 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.,
("Dimensional") whose address is 1299 Ocean Avenue, Santa Monica, California
90401, is deemed to have beneficial ownership of 590,278 shares of Common Stock
as of December 31, 1994, representing 6.48% of the outstanding shares of Allied
Common Stock. All of such shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or in series of
the DFA Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all such
shares.
The Company has been informed that FMR Corp., whose address is 82 Devonshire
Street, Boston, Massachusetts 02109 beneficially owns 687,500 shares of Common
Stock, representing 7.6% of the outstanding shares of Allied Common Stock. It
has voting power over only 58,000 of such shares.
The Company has been informed that Neumeier Investment Counsel, whose address is
26435 Carmel Rancho Boulevard, Carmel, California 93923 beneficially owns
470,500 shares of common stock representing 5.2% of the outstanding shares of
Allied common stock.
Transamerica Commercial Finance Corporation, whose address is 225 North Michigan
Avenue, Chicago, Illinois 60601 owns 146,800 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
76,667 shares and Ford Motor Credit Company, whose address is The American Road,
Dearborn, Michigan 48121, owns 38,333 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
On November 30, 1994 and March 15, 1995, the Board of Directors nominated the
following individuals to run for election as Directors. The terms of three of
the present Directors expire this year and each has been nominated to reelection
to a term of three years expiring in 1998. Mr. Quain, who was elected to the
Board on February 24, 1995 has been nominated for election to a term expiring in
1997.
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 B DIRECTOR (TERM EXPIRES IN 1998)
LLOYD A. DREXLER, age 77, was the Co-Chairman of the Board from June 1992 until
August 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
1992. Mr. Drexler is a private investor and the father of Mr. Richard A.
Drexler.
STANLEY J. GOLDRING, age 49, 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 during his 25-year career on Wall Street. He
has been a member of the Board of Directors since August 1993.
JOHN E. JONES, age 60, has been a member of the Board of Directors since 1974.
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.
CLASS A DIRECTOR (TERM EXPIRES IN 1997)
MITCHELL I. QUAIN, age 43, has been a member of the Board of Directors since
February 1995. Since 1988 he has been a managing director of Wertheim Schroder &
Company and co-head of the Industrial Manufacturing Group.
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.
4
<PAGE>
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:
RICHARD A. DREXLER, age 47, has been Chairman of the Board since August 1993,
President since 1982 and Chief Executive Officer since 1986. He has been a
member of the Board of Directors since 1982 and serves as a Class A Director
whose term expires in 1997.
WILLIAM D. FISCHER, age 66, has been a member of the Board of Directors since
1993 and serves as a Class C Director whose term expires in 1996. He 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 processor and marketer of nuts and
snacks.
KENNETH B. LIGHT, age 62, has been a member of the Board of Directors since 1993
and serves as a Class C Director whose term expires in 1996. He has been
Executive Vice President and Chief Administrative Officer of Allied Products
since 1982 and Chief Financial Officer since March 17, 1995. He served as
secretary from 1972 to March 17, 1995. Mr. Light joined the Company in 1961 and
served as its General Counsel for more than a decade.
JOHN W. PUTH, age 66, has been a member of the Board of Directors since 1993 and
serves as a Class A Director whose term expires in 1997. He 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.
S. S. SHERMAN, age 77, was the Co-Chairman of the Board from June 1992 until
August 1993. He was Chairman of the Board from 1973 until June 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 is a private investor.
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information as of March 24, 1995, regarding the
beneficial ownership of Common 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 1994 and the
5
<PAGE>
directors and executive officers of the Company as a group. Except as otherwise
indicated, the stockholders listed in the table have sole voting and investing
powers with respect to the Common Stock owned by them.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER OR GROUP CLASS AMOUNT PERCENT
- -------------------------------------------------- ------ ----------- -------
<S> <C> <C> <C>
Lloyd A. Drexler.................................. Common 338,718(1) 3.72%
Richard A. Drexler................................ Common 426,283(2) 4.68%
William D. Fischer................................ Common 6,000(3) 0.07%
Martin A. German.................................. Common 36,027(4) 0.40%
Stanley J. Goldring............................... Common 6,000(3) 0.07%
John E. Jones..................................... Common 39,958(3) 0.44%
Kenneth B. Light.................................. Common 99,604(5) 1.09%
Bobby Middlebrooks................................ Common 27,667(6) 0.30%
John W. Puth...................................... Common 13,000(3) 0.14%
Mitchell I. Quain................................. Common 10,000 0.11%
S. S. Sherman..................................... Common 556,766(7) 6.12%
All Executive officers and directors as a group
(13 persons)..................................... Common 1,577,349(8) 17.3 %
<FN>
- ---------
(1) Includes 80,297 shares of restricted stock; 168,708 shares owned by a
partnership of which Mr. Lloyd Drexler is a partner; and 27,000 shares
owned by Mr. Drexler's wife and by a family trust of which Mr. Drexler's
wife is the trustee. 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.
(2) Includes 37,819 shares of restricted stock; 35,000 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; 35,888 shares credited to
Mr. Drexler's account in the Company's 401(k) Plan; and 143,360 shares
which Mr. Drexler has the right to acquire by exercise of stock options
within sixty days of the date of this proxy statement.
(3) Includes 5,000 shares which each of Messrs. Fischer, Goldring, Jones and
Puth have the right to acquire by exercise of stock options within sixty
days of the date of this proxy statement.
(4) Includes 13,527 shares credited to Mr. German's account in the Company's
401(k) Plan and 22,500 shares which Mr. German has the right to acquire by
exercise of stock options within sixty days of the date of this proxy
statement.
(5) Includes 9,198 shares of restricted stock; 66,530 shares which Mr. Light
has the right to acquire by exercise of stock options within sixty days of
this proxy statement; and 23,825 shares credited to Mr. Light's account in
the Company's 401(k) Plan.
(6) Includes 2,067 shares of restricted stock; 20,940 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.
(7) 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; and 50,600 shares which Mr. Sherman has the right to acquire
by exercise of stock options within sixty days of the date of this proxy
statement.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(8) Includes 414,545 shares which the group has the right to acquire by
exercise of stock options within sixty days of the date of this proxy
statement; 99,839 shares credited to the accounts of members of the group
in the Company's 401(k) Plan; and 172,725 shares of restricted stock.
</TABLE>
See the information under "Beneficial Owners" for information concerning
ownership of certain classes of the Company's Preferred Stock.
MANAGEMENT COMPENSATION
REPORT OF STOCK OPTION AND COMPENSATION COMMITTEE
The Stock Option and Compensation Committee of the Board of Directors was
comprised during fiscal 1994 of John W. Puth, William D. Fischer and John E.
Jones, all outside directors of the Company. 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 are made solely
by the Committee pursuant to the provisions of Exchange Act Rule 16b-3.
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 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.
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 its lenders under the Company's then
existing 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 Stock Option and Compensation
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
7
<PAGE>
compensation levels and stock option awards for certain executive officers and
other employees of the Company, the Stock Option and 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. In determining the 1994 compensation levels and stock
option awards for certain executive officers and other employees of the Company,
the Stock Option and Compensation Committee took into consideration the dramatic
turn-around in profits from a net loss of approximately $25 million in 1992 to a
net profit of over $15 million in 1993. Also considered was the relative
compensation of employees within other companies with comparable sales and in
comparable industries. These decisions were deemed by the Stock Option and
Compensation Committee to be in keeping with its policy.
CEO COMPENSATION
During 1994, the Company's most highly compensated officer was Richard A.
Drexler, Chairman of the Board, President and Chief Executive Officer. The Stock
Option and Compensation Committee reviewed the performance of Mr. Drexler and
made recommendations to the Board concerning annual compensation (salary plus
bonus) and long-term compensation in the form of stock options. Comparisons were
made to other companies of comparable size and industries. Through Mr. Drexler's
efforts, the Company was able to complete a restructuring of the Company's debt
and turn around its performance from very large losses into excellent profits
for 1993 which profits increased significantly in 1994. Taking this into
account, the Stock Option and Compensation Committee recommended compensation
slightly higher than the median.
John W. Puth, Chairman
William D. Fischer
John E. Jones
8
<PAGE>
SUMMARY COMPENSATION TABLE
The table below sets forth certain information regarding compensation paid
during each of the Company's last three fiscal years to the Company's Chief
Executive Officer and each of the Company's four other most highly compensated
executive officers, based on salary and bonus earned during fiscal 1994.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- -------------------- -------
OTHER ANNUAL RESTRICTED OPTIONS/ LTIP ALL OTHER
COMPENSATION STOCK SARS(#) PAYOUTS COMPENSATION
NAMES AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (A) AWARDS($) (B) ($) ($)(C)
- ---------------------------------------- ---- --------- -------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard A. Drexler 1994 350,000 157,500 3,192 30,000 9,576
Chairman, President and CEO 1993 315,000 74,000 35,000 --
1992 279,046 13,000 35,000 9,388
Martin A. German 1994 190,000 110,000 5,517 12,000 9,576
Senior Vice President 1993 176,000 110,000 5,000 --
1992 165,800 33,000 7,500 6,450
James J. Hayden* 1994 205,000 76,000 1,860 20,000 9,576
Executive V.P. and CFO 1993 180,700 42,000 10,000 --
1992 66,000 -- 15,000 2,002
Bobby Middlebrooks 1994 191,000 72,400 12,000 --
Senior Vice President 1993 181,000 30,000 5,000 --
1992 175,800 19,250 15,000 --
Kenneth B. Light 1994 187,000 70,000 5,267 20,000 9,576
Executive V.P. and Secretary 1993 169,000 2,000 10,000 --
1992 151,250 13,000 20,000 6,043
<FN>
- ------------
* Mr. Hayden resigned from the Company on March 17, 1995
(A) While each named executive received certain perquisites and other benefits
in each of the years shown, the value of these amounts are not shown, in
accordance with the regulations of the Securities and Exchange Commission,
since such benefit did not exceed in aggregate the lessor of $50,000 or 10%
of an individual's salary and bonus in such year. The amounts shown
represent the Medicare Hospital Insurance taxes paid by the Company in 1994
on behalf of executive on the value of the increase in the executive's
vested accrued benefit in the Executive Retirement Plan as of 12/31/94 (see
"Retirement Plans" elsewhere in this document). No payments were made in
the prior two years.
(B) No stock appreciation rights were granted to the named executive officer in
any of the three years. See "Option Grants for 1994 Fiscal Year" for
description of options granted.
(C) Amounts shown consist of Company contributions to defined contribution
plans.
</TABLE>
9
<PAGE>
OPTION GRANTS DURING 1994 FISCAL YEAR
The following table provides information relating to options granted to the
named executive officers during fiscal 1994:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
---------------------------------------------------- STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS OPTIONS EXERCISE OPTION TERM(2)
GRANTED GRANTED IN PRICE EXPIRATION --------------------
NAME (#)(1) FISCAL YR. ($/SH) DATE 5% ($) 10% ($)
- ------------------------------------- ----------- ------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Drexler 30,000 11.6 12.50 1/2/2004 235,800 597,600
Martin A. German 12,000 4.6 12.50 1/2/2004 94,300 239,100
James J. Hayden 20,000 7.7 12.50 1/2/2004 157,200 398,400
Bobby Middlebrooks 12,000 4.6 12.50 1/2/2004 94,300 239,100
Kenneth B. Light 20,000 7.7 12.50 1/2/2004 157,200 398,400
<FN>
- ---------
(1) All options are non-qualified and have exercise prices equal to the fair
market value of the Common Stock on the date of grant. Each option is
exercisable as to 50% of the shares on the first anniversary date and as to
all shares on the second anniversary date and thereafter, and each option
includes the right to pay the exercise price in cash or shares of Common
Stock.
(2) The amounts shown in these columns are calculated based upon assumed annual
appreciation rates of 5% and 10%, as set by the Securities and Exchange
Commission, and are not intended to be forecasts of future appreciation of
the Company's Common Stock. If the assumed appreciation rates of 5% and 10%
over the life of the options are achieved, the value of the Common Stock at
the end of the period would be $20.36 and $32.42, respectively.
</TABLE>
OPTION EXERCISES DURING 1994 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The Company does not have any outstanding stock appreciation rights. The
following table provides information relating to the options exercised by the
named executive officers during fiscal 1994 and the value of options held at the
end of 1994:
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
END OF 1994(#) END OF 1994($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- ---------------------------------- ----------------- ------------ ----------------- -------------------
<S> <C> <C> <C> <C>
Richard A. Drexler 16,500 38,563 110,860/47,500 711,250/226,875
Martin A. German -- -- 14,000/14,500 112,500/46,875
James J. Hayden -- -- 20,000/25,000 230,625/86,250
Bobby Middlebrooks 13,500 107,871 12,440/14,500 0/46,875
Kenneth B. Light 5,000 11,563 51,530/25,000 387,250/86,250
<FN>
- ---------
(1) Value is calculated on the basis of the difference between the option
exercise price and $14.375, the closing price for the Company's Common
Stock as reported by the New York Exchange on 12/30/94, multiplied by the
number of shares of Common Stock underlying the option. The options that
were exercised by Messrs. Drexler and Light were exercised immediately
prior to their expiration.
</TABLE>
10
<PAGE>
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 benefit: one percent of his final monthly
salary multiplied by the number of years of service to the Company. Assuming Mr.
Middlebrooks' retirement at age 65 (he is now 59 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
at age 65, he would be entitled to a pension of $9,855 per month.
Effective January 1, 1994, the Company entered into agreements with Messrs.
Richard Drexler, German, Hayden and Light to provide retirement benefits
pursuant to an Executive Retirement Plan adopted by the Board of Directors. Each
of the participants shall be eligible, upon reaching Normal Retirement Date
(which is defined as the earlier of age sixty-five or completion of twenty-five
years of service, but in no event prior to reaching age fifty-five), to receive
a retirement benefit equal to three times his final average annual compensation
(which is defined as the average of the participant's compensation during the
thirty-six months prior to the participant's separation from service). Such
benefit shall be paid to participants in 120 equal monthly installments
commencing on the month following the date the participant terminates service
with the Company. If the participant dies during such period, the unpaid
remaining monthly installments will be paid to participant's named beneficiary
or to his estate. Based on the average compensation received during the past
three years, the participants, if vested, would receive on the normal retirement
date the following aggregate benefits (payable over ten years): Mr. Richard
Drexler - $1,188,546; Mr. German - $784,800; Mr. Hayden - $550,700; Mr. Light -
$632,250.
TERMINATION AGREEMENTS
Agreements between the Company and each of the named executive officers of the
Company provide that, if within one year following a defined change in ownership
or control of the Company there shall be an involuntary termination of such
executive's employment, or if there shall be defined patterns of activity during
such period by the Company causing such executive to resign, then, subject to
prevailing tax laws and regulations, the executive shall be entitled to payments
equal approximately to three years' compensation.
LOAN TO OFFICER
In October 1994, Mr. James J. Hayden borrowed $150,000 from the Company pursuant
to a personal loan which is secured by stock options owned by Mr. Hayden and
provides for interest at the prime rate per annum. The loan was to be repaid in
annual installments over a period of 4 years commencing April 15, 1995. Mr.
Hayden resigned from the Company on March 17, 1995, and arrangements are being
made to pay off the loan in full.
11
<PAGE>
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 1989, and
reinvestment of all dividends).
COMPARISON OF 5 YEAR TOTAL RETURN
AMONG ALLIED PRODUCTS, S&P 500 INDEX & S&P MACHINERY
DIVERSIFIED INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ALLIED PRODUCTS S&P 500 COMP-LTD MACHINERY DIVERSIFIED
<S> <C> <C> <C>
1989 100 100 100
1990 36.08 96.89 86.26
1991 34.7 126.42 102.54
1992 33.3 136.05 104.63
1993 138.75 149.76 154.93
1994 159.56 151.74 150.81
</TABLE>
BOARD COMMITTEES AND DIRECTOR COMPENSATION
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. In addition, under the Directors
Incentive Stock Plan, adopted by stockholders at the last annual meeting,
non-employee directors receive a non-qualified stock option to purchase 10,000
shares
12
<PAGE>
of Common Stock upon the director's initial appointment or election as a
director and thereafter receive an option for an additional 500 shares on the
date of each annual meeting. Each option granted under the plan has a term of
ten years and becomes exercisable as to 50% and 100% of the shares on the first
and second anniversary dates, respectively. The exercise price is equal to the
fair market value of the Common Stock on the date of grant.
Members of the Executive Committee are Messrs. R. Drexler (Chmn.), L. Drexler
and Sherman. During 1994, the Committee met on 10 occasions to exercise the
powers of the Board of Directors in the management of the business and affairs
of the Company.
Members of the Audit Committee are Messrs. Jones (Chmn.), Fischer, Goldring and
Puth. During 1994, 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 and Fischer. During 1994, 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 met once in
1994.
Allied's Board of Directors met on 8 occasions during 1994. All of the current
directors attended at least 75% of the meetings of the Board and the respective
committees to which they belong.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
During 1994, upon the recommendation of Allied's Audit Committee and approval by
the 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 October 20,
1994 meeting, the Audit Committee reviewed and approved the services described
above as well as the services to be performed in 1995 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 1994 all filing requirements applicable to its officers
and directors were complied with.
13
<PAGE>
STOCKHOLDER PROPOSAL
A stockholder proposal must be received by the Secretary of Allied on or before
December 4, 1995 for inclusion in the Proxy Statement and form of proxy relating
to Allied's 1996 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
April 5, 1995
14
<PAGE>
PROXY ALLIED PRODUCTS CORPORATION PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS--
FOR ANNUAL MEETING OF STOCKHOLDERS MAY 17, 1995
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
17, 1995, 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.
<TABLE>
<S> <C> <C>
ELECTION OF DIRECTORS:
/ / FOR all nominees / / WITHHOLD AUTHORITY
listed below (except as to vote for all
marked to the contrary nominees listed below
below)
</TABLE>
<TABLE>
<S> <C>
LLOYD A. DREXLER STANLEY J. GOLDRING
JOHN E. JONES MITCHELL I. QUAIN
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through that nominee's name.
(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 ALL NOMINEES FOR DIRECTOR.
DATED: ____________________, 1995
___________________________(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 Trustee for the Plan to vote at
the Annual Meeting of Stockholders of Allied on May 17, 1995, 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 December
31, 1994, as directed below on the following matters, and, in their discretion,
on any other matters that may come before the meeting:
ELECTION OF / / FOR all nominees / / WITHHOLD AUTHORITY
DIRECTORS: listed below to vote for all
nominees listed below
<TABLE>
<S> <C>
LLOYD A. DREXLER STANLEY J. GOLDRING
JOHN E. JONES MITCHELL I. QUAIN
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through that nominee's name.
(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: .................. , 1995
........................ (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.
