<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
GENERAL BINDING CORPORATION
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] $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:
- - --------------------------------------------------------------------------------
[ ] 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:
- - --------------------------------------------------------------------------------
- - -------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
[GENERAL BINDING CORPORATION LOGO]
WILLIAM N. LANE, III
Chairman
March 31, 1999
To GBC stockholders:
You are cordially invited to attend the GBC annual meeting of stockholders,
which will be held on Tuesday, May 4, 1999 at 3:30 p.m. at the Holiday Inn North
Shore, 5300 W. Touhy Av., Skokie, Illinois.
At the meeting we shall report to you on the current business and
developments at GBC. The Board of Directors and many of our executives will also
be present to discuss the affairs of the Company with you. After the meeting,
Company products will be demonstrated and refreshments will be served.
Please sign and return the enclosed proxy card to assure that your shares
will be represented. If you plan to attend the meeting, please so indicate in
the appropriate space provided on the card. The proxy will not be used if you do
attend and wish to vote in person.
Sincerely yours,
/s/ William N. Lane, III
WILLIAM N. LANE, III
Chairman
<PAGE> 3
GENERAL BINDING CORPORATION
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 4, 1999
Northbrook, Illinois
March 31, 1999
The annual meeting of the stockholders of General Binding Corporation (the
"Company") will be held on Tuesday, the 4th day of May, 1999 at 3:30 p.m. local
time, at the Holiday Inn North Shore, 5300 W. Touhy Avenue, Skokie, Illinois for
the following purposes:
1. To elect a board of eleven directors for the ensuing year.
2. To act upon a proposal to ratify the selection of Arthur Andersen & Co.
as independent public accountants for the fiscal year 1999.
3. To transact such other business as may properly come before the meeting.
The transfer books will not be closed. Only stockholders of record, at the
close of business on March 17, 1999, are entitled to notice of and to vote at
this meeting or any adjournment thereof.
In order that your shares may be represented at the meeting, in the event
you are not personally present, please sign the proxy and return it in the
enclosed envelope.
By order of the Board of Directors
/s/ Steven Rubin
STEVEN RUBIN
Vice President, Secretary &
General Counsel
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN ORDER THAT YOUR SHARES WILL BE
VOTED. A RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES IS ENCLOSED FOR YOUR CONVENIENCE. IF YOU ATTEND THE MEETING YOU MAY
REVOKE THE PROXY AT ANY TIME BEFORE IT IS VOTED.
<PAGE> 4
GENERAL BINDING CORPORATION
ONE GBC PLAZA
NORTHBROOK, ILLINOIS 60062
------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 4, 1999
------------------
The enclosed proxy is solicited by the Board of Directors of the Company.
It may be revoked at any time before it is exercised, but if not revoked, the
shares represented by the proxy will be voted. If the proxy card is marked to
indicate a choice, the shares will be voted as directed. If no indication is
made, the proxy will be voted FOR the election of directors and FOR the
ratification of the selection of Arthur Andersen & Co. as independent auditors.
You may revoke your proxy by giving written notice of revocation to the
Secretary of the Company at any time before it is voted or by attending the
meeting and voting your shares in person. The expense incurred in the
solicitation of the proxies will be borne by the Company. In addition to this
solicitation by mail, proxies may be solicited by officers, directors, and
regular employees of the Company, without extra compensation, personally and by
mail, telephone or telegraph. Brokers, nominees, fiduciaries and other
custodians will be required to forward soliciting material to the beneficial
owners of shares and will be reimbursed for their expenses. This Proxy Statement
and the enclosed Proxy are being sent to the stockholders of the Company on or
about March 31, 1999.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The voting securities entitled to vote at the meeting are 13,334,825 shares
of Common Stock entitled to one vote per share and 2,398,275 shares of Class B
Common Stock entitled to fifteen votes per share. The record date for
determination of stockholders entitled to vote at the meeting is March 17, 1999.
By virtue of Lane Industries, Inc. direct ownership of the Common Stock and
Class B Common Stock as described below, it controls 88% of the eligible votes
at the meeting.
Abstentions and broker non-votes will be counted for purposes of
determining the presence of a quorum. Broker non-votes will not be counted as
shares present and entitled to vote nor as a vote cast on any matter presented
at the meeting. Directors are elected by a plurality of the votes of the shares
present and entitled to vote. Accordingly, abstentions and broker non-votes will
not have any effect on the election of directors. Action on any other matter is
approved by a majority vote of the shares present and entitled to vote at the
meeting. Accordingly, abstentions will have the effect of a negative vote on
such matters.
Lane Industries, Inc. intends to vote its shares for the election as
directors of the nominees named herein and to ratify the selection of
independent public accountants.
1
<PAGE> 5
The following beneficial owners of the Company's equity securities are the
only persons known to management of the Company who beneficially owned more than
five per cent of any class of the Company's voting securities as of February 28,
1999:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
CLASS OF STOCK NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
-------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Class B Common Stock..... Lane Industries, Inc. 2,398,275(1)(3) 100
One Lane Center
Northbrook, IL 60062
Common Stock............. Lane Industries, Inc. 9,801,959(2)(3) 62.3(4)
One Lane Center
Northbrook, IL 60062
Common Stock............. Ariel Capital Management, Inc. 2,018,931(5) 12.8(4)
307 N. Michigan Ave.
Chicago, IL 60601
</TABLE>
- - ---------------
(1) Class B Common Stock is convertible into Common Stock at the rate of one
share of Common Stock for each Class B share upon presentation of a Class B
share to the transfer agent.
(2) Includes the 2,398,275 Class B shares described in Note (1).
(3) Lane Industries, Inc. has the sole power to vote and to dispose of these
shares. The voting stock of Lane Industries, Inc. is owned by various trusts
under which certain members of the family of William N. Lane, deceased, are
beneficiaries. William N. Lane, III, Chairman and a Director of the Company
and other members of the Lane family are considered to have control of Lane
Industries, Inc. by virtue of their control of the voting stock of Lane
Industries, Inc. through a Voting Trust Agreement under which they act as
Voting Trustees.
(4) As a percent of the outstanding shares after giving effect to the possible
conversion of Class B Common Stock described in Note (1).
(5) As of December 31, 1998 based upon information provided in a Schedule 13-G
filed with the Securities and Exchange Commission and dated January 8, 1999.
Ariel Capital has sole dispositive and voting power over all of these
shares.
ELECTION OF DIRECTORS
It is intended that the proxy will be voted for the election of the eleven
nominees for director named below except in the event any of those named should
not continue to be available for election, discretionary authority may be
exercised to vote for a substitute. All of the nominees are current directors
and were elected by the stockholders except for Mr. Bayly, who was elected to
the Board by the other directors on August 7, 1998 and Mrs. Harshfield who is
being nominated for the first time. Mr. Rudolph Grua, a current director, is not
standing for reelection. There are no family relationships among any of the
nominees.
2
<PAGE> 6
No circumstances are now known which would render any nominee named herein
unavailable. The nominees of Management for election to the Board of Directors,
each to hold office until the next annual meeting, or until his successor is
elected, are as follows:
<TABLE>
<CAPTION>
COMMON STOCK
FIRST YEAR BENEFICIALLY PERCENT
ELECTED PRESENT POSITION OWNED OF
NAME AND AGE DIRECTOR WITH COMPANY FEBRUARY 28, 1999 CLASS(A)
------------ ---------- ---------------- ----------------- --------
<S> <C> <C> <C> <C>
George V. Bayly, 56.................... 1998 Director(b) 0 0
Richard U. De Schutter, 58............. 1997 Director(c) 1,000 0
Theodore Dimitriou, 72................. 1991 Director(d) 2,000 0
Elizabeth S. Harshfield, 45(e)......... -- -- 0 0
Thomas V. Kalebic, 55.................. 1977 Director(f) 91,505(g) .6
William N. Lane, III, 55............... 1977 Chairman and 299,102(i) 1.9
Director(h)
James A. Miller, 56.................... 1997 Director(j) 0 0
Arthur C. Nielsen, Jr., 80............. 1966 Director(k) 24,860 .2
Govi C. Reddy, 54...................... 1994 President and Chief 66,455(m) .4
Executive
Officer, and
Director(l)
Warren R. Rothwell, 82................. 1961 Director(n) 21,213(o) .1
Robert J. Stucker, 54.................. 1987 Director(p) 4,500 0
All Officers and Directors as a
group................................ 1,001,323(q) 6.4
</TABLE>
- - ---------------
(a) As a percent of outstanding shares after giving effect to the possible
issuance of shares pursuant to the Company's stock option plans described
below and the possible conversion of the Class B Common Stock (see note (1)
to Voting Securities and Principal Stockholders). Percentages less than .1%
are shown as 0%.
(b) Mr. Bayly is Chairman, President and CEO of Ivex Packaging Corporation, a
specialty packaging company engaged in the manufacturing and marketing of a
broad range of plastic and paper packaging products. He has held this
position for more than the past five years.
(c) Mr. De Schutter is currently the Chairman of the Board and Chief Executive
Officer of G.D. Searle & Co., a specialty pharmaceutical and foods company,
and has been in that position since April, 1995. Prior to assuming those
responsibilities he had been President of Searle since December, 1991.
(d) Mr. Dimitriou is currently a private investor. Prior to his retirement in
1998, he had been for more than the past five years, the Chairman and a
director of Wallace Computer Services, Inc., a business forms and computer
service and supply company.
(e) Mrs. Harshfield is the Senior Vice President in charge of the Midwestern
Region for Fannie Mae, the nation's largest source of funds for home
mortgages. Prior to assuming this position in 1999 she held the same
position in Fannie Mae's Western Region since 1996. For two years prior to
that assignment she had been the Senior Vice President in charge of
Investor Relations for Fannie Mae.
(f) Mr. Kalebic is currently Executive Vice President, Chief Operating Officer
and a Director of Lane Industries, Inc., a company with hotel, home
security, farming and ranching operations in addition to other investments.
He has been an officer of Lane Industries, Inc. since 1975 (see (i) below).
3
<PAGE> 7
Mr. Kalebic is also a Voting Trustee under the Agreement referenced in note
(3) to Voting Securities and Principal Stockholders.
(g) At March 1, 1999 Mr. Kalebic had outstanding options to acquire from Lane
Industries, Inc. up to 166,000 shares of the Company's Common Stock at
prices ranging from $14.50 to $30.00 each. Of those outstanding options
48,000 were exercisable prior to May 1, 1999 but are not included in the
figure included in the table.
(h) Mr. Lane is the Chairman, President and a Director of Lane Industries,
Inc., and has served in such capacity since September, 1978. He was elected
Chairman of General Binding Corporation in May, 1983. He also currently
serves as a director of Wallace Computer Services, Inc.
(i) Does not include 9,801,959 shares owned by Lane Industries, Inc., an
associate of Mr. Lane, III (see notes (2) and (3) to Voting Securities and
Principal Stockholders). Also includes 43,500 shares exercisable under
stock options by May 1, 1999.
(j) Mr. Miller is currently a private investor. Until 1998 he had been the
President, CEO and a director of Alliant FoodService, Inc. a broadline
food-service distributor. Prior to his appointment to that position in
1995, he had been serving, since 1991, as President of Kraft Food Service,
the predecessor to Alliant.
(k) Mr. Nielsen is Chairman Emeritus of the A. C. Nielsen Co. and now acts as a
consultant to that Company.
(l) Mr. Reddy became a director in June, 1994 and was named the Company's
President and Chief Executive Officer effective January 1, 1995. He has
been employed by the Company since July, 1978 in various management
positions, the most recent of which was Senior Vice-President of
Subsidiary Operations and President of the Company's laminating film
division.
(m) Includes 29,600 shares exercisable under stock options by May 1, 1999.
(n) Mr. Rothwell is a private investor. He was the Company's President on an
interim basis from November, 1983 to May, 1984. He had previously been the
Company's Chairman since November, 1978 until his retirement from that
position in May, 1983.
(o) 1,213 of these shares are owned by Mr. Rothwell's wife. Mr. Rothwell
disclaims beneficial ownership over these shares.
(p) Mr. Stucker is a partner with the law firm of Vedder, Price, Kaufman &
Kammholz. He is also a director of Lane Industries, Inc. (see (i) above).
Vedder, Price, Kaufman & Kammholz has performed legal services for the
Company and Lane Industries, Inc. for many years and it is anticipated that
they will continue to do so in the future.
(q) Includes 352,983 shares owned by the Company's Employee's 401-K Savings and
Retirement Plan. Messrs. Kalebic, Lane and Reddy share the power to direct
the disposition of these shares as members of the Company's Executive
Committee of the Board. The members of the Executive Committee disclaim
beneficial ownership of these shares. Also includes 115,412 shares
exercisable under stock options or exercisable by May 1, 1999 under the
Company's stock option plans.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than 10% of the Common
Stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission and with the exchange on which the shares of Common
Stock are traded. Such persons are also required to furnish the Company with
copies of all Section 16(a) forms they file. Based solely upon the Company's
review of such forms and, if appropriate, representations made to the Company by
any such reporting person concerning
4
<PAGE> 8
whether a Form 5 was required to be filed for the 1998 fiscal year, the Company
is not aware that any of its directors and executive officers or 10%
stockholders failed to comply with the filing requirements of Section 16(a)
during the period commencing January 1, 1998 through December 31, 1998, except
that Mr. Warren R. Rothwell, a Director, reported a December, 1998 sale of 500
shares of common stock in March, 1999. The transaction set forth in this one
late report did not result in any short-swing profits (under Section 16(b) of
the Exchange Act) for Mr. Rothwell.
STOCK OWNERSHIP OF MANAGEMENT
Following is information with respect to the ownership of the Company's
Common Stock by those non-director executive officers named in the Senior
Executive Compensation Table found on page 11 hereinafter.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
PRESENT POSITION OWNED
NAME WITH COMPANY FEBRUARY 28, 1999
---- ---------------- -----------------
<S> <C> <C>
Richard R. Gilbert................. Group President, Office 2,800(a)
Products
Elliott L. Smith................... Group President, 28,791(a)
Document Finishing
Robert O'Connor.................... Group President, 10,263(a)
Films
</TABLE>
- - ---------------
(a) Includes the following number of shares that could be obtained by exercising
options under the Company's stock option plans by May 1, 1999 -- 1,500 for
Mr. Gilbert, 12,150 for Mr. Smith and 4,700 for Mr. O'Connor.
BOARD OF DIRECTORS AND COMMITTEE DATA
The Board of Directors has appointed a standing Audit Committee. No
nominating committee has been appointed.
The current members of the Audit Committee are Messrs. Nielsen (Chairman),
DeSchutter, Dimitriou, Kalebic and Lane, III. The Committee (a) recommends to
the entire Board the firm to be retained each year as independent public
accountants, (b) reviews the scope of the audit to be performed by the public
accountants, (c) reviews the reports of the public accountants and (d)
periodically meets with the Company's internal auditors and financial management
to review the internal audit and control methods and procedures of the Company,
reporting thereon to the entire Board. The Audit Committee met four times in
1998.
The Board has also appointed a standing Executive Committee, which consists
of Messrs. Lane, Reddy, and Kalebic. This Committee is responsible for the
review of the Company's operations and finances. Included within these
responsibilities is the control and implementation of compensation policies and
programs for the Company's senior executives. The Executive Committee met twelve
times in 1998.
There were five meetings of the Board of Directors during 1998. Each member
of the Board attended at least 75% of all board and committee meetings of which
the director was a member during the year.
5
<PAGE> 9
DIRECTOR'S COMPENSATION
Directors who are not employees of the Company receive an annual director's
fee of $20,000 and are paid $1,000 for each Board meeting attended and $500 for
each Audit Committee meeting attended. Employee directors receive $1,000 per
meeting for attending regularly scheduled Board meetings. In addition, Thomas V.
Kalebic receives an annual fee of $5,000 to compensate him for Board Committee
participation and for the additional service he provides the Company as a member
of its Executive Committee.
Directors may elect to defer their annual and/or board meeting fees
pursuant to a Phantom Stock Plan which was established by the Company in 1995.
This Plan gives the Directors the ability to receive incentive compensation
based on any appreciation of the common stock of the Company and on the
dividends declared on such stock while the Directors remain in office.
Management believes this Plan promotes a closer identity of interests between
the Directors and the Company's shareholders.
Any Director who elects to participate in the Plan receives Phantom Stock
Units ("PSUS") in lieu of cash compensation for either or both of his annual
director's or board meeting fees as he so chooses. PSUS received in lieu of the
annual fee are credited as of the date of the Company's annual meeting of
stockholders during the fiscal year in question. The number of PSUS credited is
determined by dividing the amount of the annual fee by the average of the high
and low prices at which the Company's common stock trades on the NASDAQ stock
market on that date ("Value"). PSUS received in lieu of board meeting fees are
credited to a Director's account at the Value on the day of the board meeting
attended by the Director.
Directors who maintain a PSUS account also receive Dividend Equivalents in
a dollar amount equal to the cash dividend which the Director would have been
entitled to receive if he had been the owner, on the record date for a dividend
paid on the Company's common stock, of a number of shares of common stock equal
to the total PSUS then credited to the Director's account. Dividend Equivalents
are converted into PSUS and credited to the Director's PSUS account at the Value
existing on the last day of each fiscal year.
A participating Director may only redeem his PSUS account through a lump
sum cash payment within thirty (30) days after he ceases to be a member of the
Board, and his rights under the Plan may not be assigned, encumbered or
otherwise transferred except to a designated beneficiary in the event of the
death of a participant. PSUS have no voting or other shareholder rights attached
to them and the Company's obligation to redeem any PSUS is unsecured.
6
<PAGE> 10
At December 31, 1998, the PSUS account balances for the following named
Directors were:
<TABLE>
<CAPTION>
PHANTOM STOCK UNIT
ACCOUNT BALANCE
PHANTOM STOCK UNITS DECEMBER 31, 1998
DIRECTOR EARNED IN 1998 (IN TOTAL UNITS) ($ VALUE (1))
-------- ------------------- ---------------- -------------
<S> <C> <C> <C>
William N. Lane, III........................ 153.270 799.751 29,791
George V. Bayly............................. 475.589 475.589 17,716
Richard U. DeSchutter....................... 790.791 1,668.697 62,159
Theodore Dimitriou.......................... 837.840 3,073.970 114,505
Thomas V. Kalebic........................... 780.231 3,083.440 114,858
James A. Miller............................. 696.133 1,049.478 39,093
Arthur C. Nielsen, Jr....................... 830.840 2,495.025 92,940
Govi C. Reddy............................... 155.268 892.254 33,236
Robert J. Stucker........................... 779.231 2,991.004 111,415
</TABLE>
- - ---------------
(1) Based on $37.25 Value.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION IN COMPENSATION DECISIONS
During 1998 and currently, Mr. Kalebic, a member of the Company's Executive
Committee, served as an officer and director of Lane Industries, Inc. of which
William N. Lane, III, the Company's Chairman is also the Chairman and Chief
Executive Officer (see notes (f) and (i) to Election of Directors and
Transactions with Management).
During 1998 and currently, Mr. Lane has acted as Chairman of the
Compensation Committee of the Board of Directors of Wallace Computer Services,
Inc. of which Mr. Theodore Dimitriou, a Director of the Company, was Chairman of
the Board during a portion of that year.
During 1998, executive officer compensation matters were principally
decided by the Company's Executive Committee of the Board of Directors with the
Board in whole having oversight authority. The Executive Committee and the Board
also considered recommendations made by the Stock Option Plan Administrative
Committee, whose members are currently Mr. Dimitriou, Mr. Rothwell and Mr.
Miller, with respect to stock option matters. As members of the Company's Board
and its Executive Committee, Messrs. Lane and Reddy participated in
deliberations concerning their own compensation and the compensation of the
other executive officers of the Company.
7
<PAGE> 11
EXECUTIVE OFFICERS OF THE COMPANY (1)
<TABLE>
<CAPTION>
NAME AND AGE TITLE
------------ -----
<S> <C>
William N. Lane, III, 55.................. Chairman
Govi C. Reddy, 54......................... President and Chief Executive Officer
Richard R. Gilbert, 44.................... Group President, Office Products
Elliott L. Smith, 64...................... Group President, Document Finishing
Robert O'Connor, 59....................... Group President, Films
Walter M. Hebb, 59........................ Senior Vice President, Strategic Planning/Business
Development
Govind K. Arora, 50....................... Vice President, Worldwide Manufacturing and
Logistics
William R. Chambers, Jr., 44.............. Vice President & Chief Financial Officer
Steven Rubin, 51.......................... Vice President, Secretary and General Counsel
Wally G. Schnell, Jr., 53................. Vice President, Business Technology
Perry S. Zukowski, 40..................... Vice President, Human Resources
</TABLE>
- - ---------------
(1) All of the above-named officers have been actively engaged in the business
of the Company as Company employees for the past five years, in the capacity
indicated above or in a substantially similar capacity, except: Govi C.
Reddy, who before being named President and Chief Executive Officer on
January 1, 1995 had been employed by the Company in various management
positions since July, 1978 the most recent of which was Senior Vice
President, Subsidiary Operations and President of the Company's Film
Products division; Richard R. Gilbert, who was hired by the Company in
January, 1997 upon the Company's acquisition of the assets and business of
the Quartet Manufacturing Company, a manufacturer of visual presentation
products, where he had been Quartet's President for more than the past five
years; Robert J. O'Connor, who before being elected to this position in 1999
held general and sales management positions with the Company's Films
Division for more than the past five years; Walter M. Hebb, who had served
as the Company's Senior Vice President, Corporate Development prior to his
appointment to the position of Senior Vice President, Asia Pacific in July,
1995 for which he served until appointed to this position in January, 1998;
Elliott L. Smith, who before being named to this position on April 1, 1998
had been the Company's Executive Vice President for more than the past five
years; William R. Chambers, who before being named to this position in
August, 1997 had been the Company's Director of Manufacturing Development
since November, 1995 and prior to that time was the owner and chief
executive officer of a custom exhibit manufacturing and service company;
Govind K. Arora, who before being elected to his position in 1999 had held
various manufacturing management positions with the Company for more than
the past five years; Wally G. Schnell, Jr., who before joining the Company
in February, 1997 had been the Managing Director of SHL Systemhouse, a
systems integration and outsourcing firm since April, 1995, and prior to
that time had been the Director of Information Services for Wallace Computer
Services, a business forms and computer service and supply business for more
than five years; and Perry S. Zukowski, who before being named to this
position in March, 1998 had been the Company's Asst. Vice President, Human
Resources since March, 1997 and for the four years prior to that had been
Asst. Treasurer & Risk Management Director for Lane Industries, Inc.
There is no family relationship between any of the above named officers. All
officers are elected for a one-year term by the Board of Directors or until
reelected.
8
<PAGE> 12
BOARD EXECUTIVE COMMITTEE AND STOCK OPTION PLAN ADMINISTRATIVE
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In 1998, the Executive Committee of the Board of Directors approved the
compensation policies and programs of the Company as they pertained to the
Company's executive officers, with the Board having oversight responsibility on
these issues. This Committee will also bear this responsibility for the year
1999. The members of the Executive Committee were Messrs. Kalebic, Lane and
Reddy. Mr. Lane and Mr. Reddy are current officers and employees of the Company.
The Company and the Committee have maintained the philosophy that executive
officer compensation should be directly and materially linked to operating
performance. Thus, executive officer compensation is heavily weighted towards
bonuses paid on the basis of both corporate and personal performance and the
growth in wealth that can be achieved through the exercise of options in the
Company's common stock. Therefore, in years when the Company has had excellent
earnings growth, such as in 1997, its executive officers have been justly
rewarded. In years when the Company has not had excellent earnings growth, such
as in 1998, executive officer compensation has suffered.
The principal components of the compensation package for executive officers
of the Company are salary, bonus, and stock options. The Committee believes that
the compensation packages for the CEO and other executive officers are typical
of other companies of the same general size and necessary to attract, properly
motivate and retain a quality management team which will best serve the
interests of the stockholders.
Based on information provided in various compensation surveys subscribed to
and received by the Company, the salaries of the CEO individually and of all
other executive officers are approved by the Committee. The Committee believes,
based on this information, that the salaries paid in 1998 to Mr. Reddy and the
other executive officers, as well as their current salaries, are near the median
of the average base salaries for executive officers of other comparable sized
companies.
Senior executive compensation is most closely related to corporate
performance through awards made under the Management Incentive Compensation Plan
(the "MIC Plan") and grants of options under the Company's 1989 Stock Option
Plan. Under the MIC Plan participants can earn a bonus award, subject to minor
adjustments, of up to 80% of annual salary.
The amount of bonus awarded under the MIC Plan is based on a combination of
achieving certain annual corporate objectives as well as individual performance
objectives. In 1998 and again for 1999, the corporate performance objective is
based on attaining a certain earnings per share ("EPS") level. In 1998, the
Company did not achieve EPS that was within a range that had been targeted by
the Committee and the Board of Directors. Thus, Mr. Reddy and several other
executive officers did not receive a MIC Plan bonus for the year 1998. Messrs.
Gilbert and O'Connor received MIC Plan bonuses because their operating units
achieved operating income and other performance standards to which their awards
were tied.
The Committee also strongly believes that the granting of stock options to
the CEO and the other senior executives should be an integral portion of
over-all executive compensation. The opportunity to provide wealth to the
executive group through the growth in value of the Company's Common Stock is an
integral means of aligning the interest of management with stockholders and
helps focus the attention of management on the long-term success of the Company.
Options are granted to the CEO and the other executive officers on a periodic
basis by the Stock Option Plan Administrative Committee.
9
<PAGE> 13
Options awarded during 1998 reflect continuation of this policy through
intermittent grants to the CEO and other executive officers based on their
relative levels of compensation and responsibilities. In 1996, following review
of input received from management and its compensation consultant, the Board of
Directors adopted and the Shareholders approved an amendment and restatement of
the 1989 Stock Option Plan to enable the Stock Option Plan Administrative
Committee to grant longer term, performance-related options related to the
achievement of the Company's multi-year performance targets. With respect to the
performance related options that were granted in 1996 the Administrative
Committee has determined that the Company achieved ninety percent of its
performance targets for the three fiscal years ending December 31, 1998. As a
result it has accelerated the exercisability of ninety percent of the
performance-related options granted in 1996. Thus, Mr. Reddy has now vested in
options to acquire 32,400 shares of the Company's common stock at an exercise
price of $23 each, of which 16,200 options are currently exercisable and an
additional 16,200 options will become exercisable in March, 2000.
To further enhance the aligning of management interest with that of the
Stockholders, the Committee and the Board implemented an executive stock
ownership program effective January 1, 1994. Under the terms of this program,
the Company's senior officers, as well as certain other members of management,
are encouraged to acquire and maintain a certain level of ownership of the
Company's Common Stock. The level of required ownership call for ranges from a
number of shares in value equal to or greater than one times annual salary for
those employees with a salary level of $149,999 and below to two and one-half
times salary for those employees with a salary level of $300,000 or above.
Depending on length of service, an employee will have from five to seven years
to attain their desired ownership levels, however, the Committee will monitor
annually the progress being made by the employee to reach such level. If the
Committee is not satisfied with the progress of share acquisition by any
employee it could elect to recommend a reduction in future stock option grants
to the affected employees by the Stock Option Plan Administrative Committee.
Sec. 162(m) of the Internal Revenue Code generally limits the corporate tax
deduction for compensation paid to executive officers named in the Senior
Executive Compensation Table that follows to $1 million, unless certain
requirements are met. The Committee has determined not to modify the MIC Plan or
any of the Company's other compensation programs at this time since compensation
paid to executive officers under the current company programs would be less than
the $1 million limit. In the future, the Committee will periodically review the
necessity of modifying the compensation programs for executive officers so that
the corporate tax deduction is maximized, however, it will retain the
flexibility to not make such modifications when it deems such action to be in
the best interests of the Company and its shareholders.
<TABLE>
<S> <C>
The Executive Committee The Stock Option Plan
Thomas V. Kalebic Administrative Committee
William N. Lane, III Theodore Dimitriou
Govi C. Reddy Warren R. Rothwell
James A. Miller
</TABLE>
10
<PAGE> 14
SENIOR EXECUTIVE COMPENSATION
The following table shows the compensation paid and accrued by the Company
during the last fiscal year to each of its five highest paid senior executives,
including the Chief Executive Officer.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION TOTAL
ANNUAL COMPENSATION AWARDS COMPENSATION
------------------------------------ ------ ------------
OTHER ANNUAL OPTIONS/ ALL OTHER (TOTAL OF
NAME AND SALARY BONUS(1) COMPENSATION(2) SARS COMPENSATION(3) COLUMNS
PRINCIPAL POSITION YEAR ($)(A) ($)(B) ($)(C) (#) ($)(D) A-D)($)
------------------ ---- ------ -------- --------------- -------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
William N. Lane, III.......... 1998 252,115 -- -- 55,000 16,520 268,635
Chairman of the Board 1997 230,000 115,000 -- 15,000 11,700 356,700
1996 229,991 161,000 -- 60,000 11,250 402,241
Govi C. Reddy................. 1998 571,158 -- 10,922 47,000 35,827 617,907
President and Chief 1997 450,609 225,004 14,264 12,000 11,700 701,577
Executive Officer 1996 350,012 262,500 13,060 48,000 11,250 636,822
Richard R. Gilbert............ 1998 413,857(5) 125,000 -- 16,000 14,846 553,703
Group President, 1997 360,000 180,000 -- -- 14,400(6) 554,400
Office Products(4)
Elliott L. Smith.............. 1998 301,026 -- 9,470 15,000 19,135 329,631
Group President, 1997 245,342 124,204 9,638 5,000 11,700 390,884
Document Finishing 1996 228,385 119,902 9,371 17,000 11,250 368,908
Robert O'Connor............... 1998 192,308 51,923 589 6,000 9,608 254,428
Group President, Films
</TABLE>
- - ---------------
(1) Annual bonus amounts are earned and accrued during the fiscal years
indicated, and paid subsequent to the end of such year.
(2) The above named individuals receive certain non-cash personal benefits, the
aggregate cost of which to the Company are below applicable reporting
thresholds. The amounts included in this column represent the amounts
reimbursed to the named individuals for income taxes attributable to such
personal benefits.
(3) Unless otherwise noted below, these amounts represent contributions by the
Company to the Company's 401-K Savings and Retirement Plan on behalf of the
named individuals and to their respective accounts established pursuant to
the Company's non-tax qualified Supplemental Deferred Compensation Plan.
(4) Mr. Gilbert assumed this position on March 1, 1999. The income he earned in
1998 and 1997 was as President of the Company's Quartet Manufacturing Co.
Division.
(5) Mr. Gilbert was hired by the Company in January, 1997 in connection with the
Company's acquisition of the business and assets of The Quartet
Manufacturing Company. As part of that transaction, Mr. Gilbert entered into
a non-competition agreement with the Company for which the Company is paying
Mr. Gilbert $10,000 per month. The Company's obligation under this
non-competition agreement ceases on either January 15, 2000 or the date upon
which the employment by the Company of Mr. Gilbert terminates, whichever
first occurs. The non-competition obligations of Mr. Gilbert continue for a
period of three years following any termination of his employment with the
Company. The non-competition consideration paid to Mr. Gilbert is treated as
base compensation in addition to his salary for purposes of any award earned
pursuant to the Company's Management Incentive Compensation Plan and is
included as salary in the Compensation Table.
(6) Represents a $9,000 bonus paid to Mr. Gilbert in lieu of retirement plan
payments and a $5,400 Company contribution to his 401-K Savings and
Retirement Plan account.
During the year 1998 Mr. Howard B. Green acted as the Company's Group
President, Office Products, a position from which he resigned as of March 1,
1999. For the year 1998, Mr. Green was paid a total of $349,380 in base salary
and received an MIC bonus for the year 1998 in the amount of $135,000. He also
received $204,000 as non-competition consideration pursuant to an agreement
similar to that of Mr. Gilbert's described in footnote (5) above. The Company
contributed a total of $78,789 to Mr. Green's 401-K Savings and Supplemental
Deferred Compensation Plan accounts for the year 1998.
11
<PAGE> 15
RETIREMENT PLAN
The Company maintains a Guaranteed Retirement Income Plan ("GRIP") covering
all employees who participated in the Company's Profit Sharing Plan through
December 31, 1995. GRIP provides in pertinent part for annual retirement
benefits at age 65 after 30 years of benefit service equal to 50% of the average
of the five highest consecutive years of compensation out of the last ten years
worked. The retirement benefit is reduced by the annual income which would be
provided by the purchase or funding of an annuity with the balance in the
employee's retirement account under the Profit Sharing Plan and by 50% of the
primary social security benefit payable at age 65. The amount of the retirement
benefit and the social security offset are proportionately reduced for benefit
service of less than 30 years. No benefit is payable, except in certain
circumstances, to anyone with less than seven years participation in the Profit
Sharing Plan. All benefits accruing and earned under GRIP for plan participants
were frozen at the end of 1995 in connection with the Company's conversion of
its Profit Sharing Plan to a 401-K Savings Plan. As a result, no GRIP
participant can accrue any additional plan benefits while GRIP remains frozen.
No contribution was made by the Company in 1998 for GRIP because the Plan
has been actuarially determined to be currently overfunded with respect to any
Plan liability to participants.
All of the individuals listed in the cash compensation table presently
participate in GRIP other than Mr. Gilbert. For those individuals listed in the
cash compensation table, their respective years of benefit service as of
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
YEARS OF
INDIVIDUAL BENEFIT SERVICE
---------- ---------------
<S> <C>
William N. Lane, III................................... 29
Govi C. Reddy.......................................... 17
Elliott L. Smith....................................... 9
Robert O'Connor........................................ 20
</TABLE>
Upon reaching age 65 the only individual named in the cash compensation
table entitled to receive a GRIP benefit would be Mr. Smith and that benefit
would be $556 per month.
12
<PAGE> 16
STOCK OPTION INFORMATION
The following table sets forth the details of options granted to the
individuals listed in the Senior Executive Compensation Table during 1998. The
second table in this section sets forth certain information with respect to
options exercised by those individuals in 1998 as well as the value of their
unexercised options at the end of the year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SAR'S
OPTIONS/ GRANTED TO
SAR'S EMPLOYEES EXERCISE OR GRANT DATE
GRANTED IN FISCAL BASE PRICE EXPIRATION PRESENT VALUE(3)
NAME (#) YEAR ($/SHARE) DATE ($)
---- ---------- ---------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
William N. Lane, III...... 15,000(1) 15.7 30.00 1/4/06 201,150
40,000(2) 23.5 30.00 1/4/08 536,400
Govi C. Reddy............. 12,000(1) 12.6 30.00 1/4/06 160,920
35,000(2) 20.6 30.00 1/4/08 469,350
Richard R. Gilbert........ 6,000(1) 6.3 30.00 1/4/06 80,460
10,000(2) 5.9 30.00 1/4/08 134,100
Elliott L. Smith.......... 5,000(1) 5.3 30.00 1/4/06 67,050
10,000(2) 5.9 30.00 1/4/08 134,100
Robert O'Connor........... 1,000(1) 1.0 30.00 1/4/06 13,410
5,000(2) 2.9 30.00 1/4/08 67,050
</TABLE>
- - ---------------
(1) All options granted to the named individuals were granted under the
Company's 1989 Stock Option Plan on January 5, 1998. Twenty-five percent
(25%) of each option first became exercisable one (1) year after the
respective grant date. Only twenty-five percent (25%) of an initial option
grant may be exercised during any one (1) year period commencing with the
anniversary date of an option grant. All of these options were granted with
an exercise price equal to the closing price of the Company's Common Stock
after trading on the grant date in the NASDAQ stock market. No SARs were
granted in connection with these option grants.
(2) Long-term performance options granted on January 5, 1998. The options vest
in full on July 5, 2007 and expire on January 4, 2008, subject to earlier
vesting at the discretion of the Stock Option Plan Administrative Committee
in the event certain levels of revenue growth, return on equity and growth
in earnings per share of Common Stock are attained by the Company over a
three-year period ending December 31, 2001. To the extent options become
exercisable as a result of such performance, 50% of those options will be
exercisable on January 5, 2002 and 50% on January 5, 2003, in each case to
be exercised within four years of such date. The options will expire in the
event the optionee's employment terminates, except in certain circumstances
in the event of retirement, disability, death or involuntary termination
without cause. If retirement, disability or death occurs during the
three-year performance period, a pro rata portion of the option will remain
13
<PAGE> 17
outstanding until the end of the performance period at which time it will
vest to the extent performance measures are attained and will be exercisable
through January 5, 2003. If termination of employment occurs after the
option has become exercisable, then the option may be exercised for a period
of one year following such termination of employment due to death,
disability or retirement, or three months in the event of involuntary
termination without cause. All of these options were granted with an
exercise price equal to the closing price of the Company's Common Stock
after trading on the grant date in the NASDAQ stock market. No SAR's were
granted in connection with these option grants.
(3) Based on the Black-Scholes stock option pricing model. The following
assumptions were made for purposes of calculating the Grant Date Present
Value: the option term is assumed to be eight years; volatility at 37.45; a
dividend yield of 1.47%; and, a risk free interest rate of 5.6%. The actual
value, if any, a named individual may realize will depend on the market
value of the underlying shares at the time the option is exercised, so there
is no assurance the value realized will be at or near the value estimated by
the Black-Scholes model. The Company's use of this model should not be
construed as an endorsement of its accuracy at valuing stock options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR,
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/ OPTIONS/SARS
ACQUIRED SAR'S AT AT FY-END(2)
ON VALUE FY-END EXERCISABLE/
EXERCISE REALIZED(1) EXERCISABLE/ UNEXERCISABLE
NAME (#) ($) UNEXERCISABLE ($)
---- -------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
William N. Lane, III........ -- -- 19,500/144,500 325,469/1,750,157
Govi C. Reddy............... 15,650 178,400 3,000/108,900 22,500/1,423,626
Elliott L. Smith............ 3,000 41,781 5,500/37,500 414,407/424,000
Robert O'Connor............. 1,000 14,188 750/16,750 6,516/192,736
Richard R. Gilbert.......... -- -- 0/16,000 0/116,000
</TABLE>
- - ---------------
(1) Value realized represents the difference between the option exercise price
and the fair market value of the Company's Common Stock on the date the
option was exercised.
(2) Based on fair market value of $37.25 per Common Share on December 31, 1998.
14
<PAGE> 18
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock for the last five fiscal years with the cumulative total
return on the NASDAQ Composite Index and a peer group consisting of other
companies that manufacture and sell office products.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
12/93 12/94 12/95 12/96 12/97 12/98
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
General Binding Corporation 100 126 131 200 204 257
-----------------------------------------------------------------------------------
Peer Group 100 91 137 159 203 187
-----------------------------------------------------------------------------------
NASDAQ Total Return Index 100 98 138 170 209 293
-----------------------------------------------------------------------------------
</TABLE>
The peer group used in the preceding graph consists of the Company, The
Standard Register Company, Tab Products Co., Ennis Business Forms, Inc., Hunt
Manufacturing Co., A.T. Cross Company, Dixon Ticonderoga Company, Smith Corona
Corporation, Gradco Systems, Inc.(1), Day Runner, Inc., Varitronic Systems,
Inc.(1), United Stationers Inc., and Duplex Products Inc.(1)
TRANSACTIONS WITH MANAGEMENT
In 1978 the Company implemented a Recapitalization Plan which had been
previously approved by the stockholders. As part of the Plan the Company entered
into an agreement with Lane Industries, Inc., providing for the sharing of
Federal income tax savings, if any, between the Company and Lane Industries,
Inc., resulting from the filing of consolidated Federal income tax returns. In
1998 the Company made $7,500,000 in payments pursuant to this Agreement which
represented the Company's portion of its tax liability under this Agreement.
In 1985 the Company entered into an Agreement with Lane Industries, Inc.
providing for the sharing of state income tax savings, if any, realized by
filing unitary state tax returns on a combined basis with Lane Industries, Inc.
In 1998 the Company received $3,627,300 from Lane Industries, Inc. which
represented the Company's share of such savings for that year.
- - ---------------
1 Public trading of shares ceased during the year 1996
15
<PAGE> 19
Certain Lane Industries, Inc. personnel perform federal and state income tax
planning, legal, risk management, acquisition due diligence and finance services
for the Company. In 1998 and the first two months of 1999, the Company has paid
$1,821,155 to Lane Industries, Inc. for these and related support services and
facilities costs. Management of the Company believes that these costs are
reasonable and fair and that the expense incurred is less than the expense the
Company would incur for employing its own personnel with comparable levels of
skill and experience to perform these services.
The Company makes reservations for business travel and accommodations
through a travel agency which is controlled by Lane Industries, Inc. The Company
pays the rates charged by the various carriers, hotels and car rental companies
which in turn pay commissions to this travel agency. The Company booked
approximately $1,263,000 of business travel and accommodations through such
travel agency in 1998 and the first two months of 1999.
At certain times in 1998 the Company used jet aircraft, the ownership of
which was controlled by Lane Industries, Inc. When using this aircraft the
Company pays a mileage and usage rate which is comparable to rates charged by
other private business aircraft operators. In 1998 the Company paid Lane
Industries, Inc. $121,000 for the use of the jet aircraft.
On October 20, 1997, in anticipation of needing Swiss francs to complete
its purchase of Ibico AG, the Company agreed to purchase 20 million Swiss francs
from Lane Investment Limited Partnership ("LILP"), of which Lane Industries,
Inc. is the General Partner, at a cost of approximately $13,829,000. The price
paid for the Swiss francs was based on the mid-point between the bid and ask
forward exchange rates for April 30, 1998, the date the francs were to be
delivered to the Company, as established on the contract date by the Bank of New
York. The delivery date of the purchase was subsequently changed to February 27,
1998 to coincide with the scheduled closing date of the Ibico AG transaction. On
the delivery date, the Company paid LILP approximately $13,831,200 to acquire
the Swiss francs, reflecting the average foreign currency exchange rates on that
date. The Swiss francs acquired by the Company were paid to Ibico AG by the
Company as part of the purchase price consideration and were in turn used by
Ibico AG to repay a pre-closing loan made by LILP to Ibico AG. The Company
believes that it paid a lesser amount to LILP for the delivery of the foreign
currency than it would have paid in a comparable arms-length open market
transaction.
On February 26 and 27, 1998, the Company borrowed a total of $60,000,000
from Lane Industries, Inc. The proceeds of these borrowings were used to help
finance the purchase of Ibico AG. The notes issued by the Company for this loan
were issued pursuant to a Note Purchase Agreement entered into with Lane
Industries, Inc. on February 25, 1998 (the "Loan Agreement"). The Loan Agreement
provided, in pertinent part, that (i) the Company could borrow up to
$100,000,000 from Lane Industries at any time prior to April 30, 1998; (ii) that
all borrowings were subordinated to any other indebtedness of the Company; (iii)
that all borrowings would bear interest at a rate per annum that floats with the
London Interbank Offered Rate for three month loans as published by The Wall
Street Journal plus a 2% margin through May 26, 1998 and margins ranging from 4%
to 8% thereafter; and, (iv) that all borrowings, unless prepaid, would be due on
April 14, 2002. The borrowings under the Loan Agreement and all interest due was
repaid to Lane Industries Inc. by the Company on May 27, 1998. The Company
believes that the costs to the Company in connection with the Loan Agreement
were lower than those that would have been incurred in a comparable arms-length
open market transaction.
16
<PAGE> 20
In December, 1998 the Company sold 11.9 acres of real estate located in
Northbrook, Illinois to Lane Industries, Inc. for a total gross purchase price
of approximately $4,153,000. The property sold was the site of the Company's
former main manufacturing facility which had been closed down as part of a
manufacturing plant rationalization strategy. The sale price was based on the
higher of two appraisals made on the property by independent MAI real estate
appraisers. The transaction was reviewed prior to consummation by all of the
disinterested members of the Board of Directors at a meeting held on August 7,
1998 at which time those Directors determined that the transaction was fair to
the Company and in the best interests of the stockholders.
In January, 1998 the Company purchased for treasury purposes 4,500 shares
of its common stock from Rudolph Grua, one of the Company's Directors. These
shares were purchased at a price of $30.5625 each. In June, 1998, the Company
purchased for treasury purposes 5,062 shares of its common stock from Mr. Grua
at a price of $33.625 each. The price paid for both of these transactions was
equal to the average price of the Company's common stock for trades reported on
the NASDAQ stock market on the date the transaction took place.
17
<PAGE> 21
PROPOSAL TO RATIFY SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, on the recommendation of the Audit Committee, has
selected Arthur Andersen & Co. as independent public accountants to make an
audit of the accounts of the Company for the year 1999. If this selection is not
ratified, the Board of Directors will reconsider its selection.
The firm of Arthur Andersen & Co. has audited the books of the Company and
its predecessor annually since 1948, has offices in or convenient to most of the
locations in the United States and foreign countries where the Company operates,
and is considered to be well qualified. The Company has been advised by Arthur
Andersen & Co. that neither the firm nor any of its partners has any financial
interest, either direct or indirect in the Company or any of its subsidiaries.
Representatives of Arthur Andersen & Co. will be present at the annual meeting
and will have the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS FAVORS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION OF ARTHUR ANDERSEN & CO. AS INDEPENDENT PUBLIC ACCOUNTANTS.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder which is to be presented at the annual
meeting to be held in 2000 must be received at the Company's offices in
Northbrook, Illinois not later than December 9, 1999 in order to be included in
the proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be presented for
consideration at the meeting. Should any other matter requiring stockholders'
action or approval be presented to the meeting, it is the intention of the proxy
holders named in the enclosed form of proxy to take such action as shall be in
accordance with their best judgment in the interest of the Company.
By order of the Board of Directors
/s/ Steven Rubin
STEVEN RUBIN
Vice President, Secretary
and General Counsel
Northbrook, Illinois
March 31, 1999
A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE YEAR 1998 HAS BEEN
MAILED TO ALL STOCKHOLDERS. THE ANNUAL REPORT IS NOT TO BE REGARDED AS
PROXY SOLICITING MATERIAL.
18
<PAGE> 22
PROXY GENERAL BINDING CORPORATION PROXY
ONE GBC PLAZA, NORTHBROOK, ILLINOIS 60062
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints William N. Lane, III, Robert J. Stucker and
Govi C. Reddy, or any other them, with full power of substitution, to represent
and to vote as designated on the reverse side, all the shares of General Binding
Corporation held of record by the undersigned on March 17, 1999, at the annual
meeting of stockholders to be held on May 4, 1999, or at any adjournment
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO SPECIFIC DIRECTION IS GIVEN, THE
PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND PROPOSAL 2.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE RETURN
ENVELOPE.
(Continued and to be signed on reverse side)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- - --------------------------------------------------------------------------------
<PAGE> 23
<TABLE>
<S><C>
- - ------------------------------------------------------------------------------------------------------------------------------------
GENERAL BINDING CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
[ ]
For All
1. ELECTION OF DIRECTORS For Withheld Except Nominees written below 2. Ratification of the appointment For Against Abstain
G.V. Baly, / / / / / / of Arthur Andersen & Co. as / / / / / /
R. U. DeSchutter, ------------------- independent public accountants
T. Dimitriou, E.S. Harshfield Nominee Exception for the fiscal year 1999.
T. V. Kalebic,
J. A. Miller, 3. In their discretion upon such other matters as may
W. N. Lane, III, properly come before the meeting or any adjournment
R. J. Stucker or adjournmemrs thereof.
A. C. Nielsen, Jr.,
G. C. Reddy and The undersigned hereby revokes any proxy or proxies
W. R. Rothwell heretofore given to vote upon or act with respect to
said stock and hereby ratifies and confirms all that
said proxies and substitutes, or any of them, may
do by virtue thereof.
[ ] I (we) shall attend the meeting.
[ ] I (we) shall not attend the meeting.
Signature ________________________________________ Signature if held jointly _______________________________ Dated: _________, 1999
Please sign exactly as name appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please
give full title. If stock is held in the name of more than one person, all named holders must sign the proxy.
- - ------------------------------------------------------------------------------------------------------------------------------------
FOLD ANDD DETACH HERE
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
