<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE ALPINE GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
THE ALPINE GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
4) Proposed 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:
------------------------------------------------------------------------
<PAGE>
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
September 16, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of The
Alpine Group, Inc. (the "Company"), a Delaware corporation, to be held on
Thursday, October 24, 1996 at 11:00 a.m., local time, at the Americas Room
located on the 50th floor of The McGraw-Hill Building, 1221 Avenue of the
Americas, New York, New York.
At this meeting, you will be asked to consider and vote upon the election of two
directors of the Company and the ratification of the appointment of Arthur
Andersen LLP as the Company's independent certified public accountants.
YOUR VOTE IS IMPORTANT. The Board of Directors appreciates and encourages
stockholder participation in the Company's affairs and cordially invites you to
attend the meeting in person. It is important in any event that your shares be
represented and we ask that you sign, date and mail the enclosed proxy card in
the envelope provided at your earliest convenience.
We sincerely thank you for your support.
Very truly yours,
Steven S. Elbaum
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 24, 1996
To the Stockholders of The Alpine Group, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The Alpine
Group, Inc. (the "Company"), a Delaware corporation, will be held on October 24,
1996 at 11:00 a.m., local time, at the Americas Room located on the 50th floor
of the McGraw-Hill Building, 1221 Avenue of the Americas, New York, New York for
the purposes of considering and voting upon the following matters, as more fully
described in the attached Proxy Statement:
1. To elect two directors of the Company;
2. To ratify the appointment of Arthur Andersen LLP as the independent
certified public accountants of the Company; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on August 28, 1996 as the
record date for the determination of stockholders entitled to notice of, and to
vote at, the meeting.
By Order of the Board of Directors,
Stewart H. Wahrsager
SECRETARY
September 16, 1996
YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
EXPECT TO BE PRESENT, PLEASE MARK, DATE, SIGN AND RETURN THE ACCOMPANYING FORM
OF PROXY IN THE ENVELOPE ENCLOSED (TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED
IN THE UNITED STATES) SO THAT YOUR VOTE CAN BE RECORDED.
<PAGE>
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 24, 1996
This Proxy Statement is being furnished to the stockholders of The Alpine
Group, Inc. (the "Company") in connection with the solicitation of proxies, in
the accompanying form, by the Company, for use at the Annual Meeting of
Stockholders to be held at 11:00 a.m., local time, on October 24, 1996 at the
Americas Room located on the 50th floor of The McGraw-Hill Building, 1221 Avenue
of the Americas, New York, New York and at any and all adjournments or
postponements thereof.
The stockholders of record at the close of business on August 28, 1996 will
be entitled to receive notice of and to vote at the meeting and any adjournments
or postponements thereof. As of August 28, 1996, there were issued and
outstanding 18,240,920 shares of the Company's Common Stock, par value $.10 per
share (the "Common Stock"), 1,750 shares of the Company's 9% Cumulative
Convertible Senior Preferred Stock, par value $1.00 per share (the "9% Preferred
Stock"), and 196,649 shares of the Company's 8% Cumulative Convertible Senior
Preferred Stock, par value $1.00 per share (the "8% Preferred Stock"), the only
classes of voting securities outstanding. The stockholders of record will be
entitled to one vote for each share of Common Stock, 100 votes for each share of
9% Preferred Stock and 6.45 votes for each share of 8% Preferred Stock
registered in his or her name on the record date. The holders of the Common
Stock, the 9% Preferred Stock and the 8% Preferred Stock will vote together as a
class on all matters presented at the meeting. A majority of all the outstanding
shares of the Common Stock constitutes a quorum and is required to be present in
person or by proxy to conduct business at the meeting.
Stockholders may revoke the authority granted by their executed proxies at
any time prior to their use by filing with the Secretary of the Company a
written revocation or a duly executed proxy bearing a later date or by attending
the meeting and voting in person. Solicitation of proxies will be made chiefly
through the mails, but additional solicitation may be made by telephone or
telegram by the officers or regular employees of the Company (who will not be
specifically compensated for such services). The Company may also enlist the aid
of brokerage houses or the Company's transfer agent in soliciting proxies, and
the Company will reimburse them for their reasonable expenses. All solicitation
expenses, including costs of preparing, assembling and mailing proxy material,
will be borne by the Company. This proxy statement and accompanying form of
proxy are being mailed to stockholders on or about September 16, 1996.
Shares of the Common Stock, the 9% Preferred Stock and the 8% Preferred
Stock represented by executed and unrevoked proxies will be voted in accordance
with the choice or instructions specified thereon. It is the intention of the
persons named in the proxy, unless otherwise specifically instructed in the
proxy, to vote all proxies received by them in favor of the two nominees named
herein for election as directors and in favor of the ratification of the
appointment of Arthur Andersen LLP as the independent public accountants of the
Company. The Board of Directors does not know of any other matters which may be
presented for consideration at the meeting. However, if other matters properly
come before the meeting, the persons named in the accompanying proxy intend to
vote thereon in accordance with their judgment.
If a quorum is present at the meeting, those nominees receiving a plurality
of the votes cast will be elected as directors. The affirmative vote of the
holders of a majority in voting power of the shares present in person or
represented by proxy and entitled to vote at the meeting will be required to
ratify the appointment of Arthur Andersen LLP as the independent public
accountants of the Company.
<PAGE>
Abstentions from voting on a proposal will have the effect of a "no" vote.
Broker non-votes are not considered shares present, are not entitled to vote and
therefore will not affect the outcome of the vote on a proposal.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table contains information as of August 15, 1996 regarding the
number of shares of Common Stock, 9% Preferred Stock and 8% Preferred Stock
beneficially owned by (i) each person known to the Company to have beneficial
ownership of more than five percent thereof, (ii) each director of the Company,
(iii) each executive officer named in the Summary Compensation Table herein, and
(iv) all directors and executive officers as a group. The information contained
herein is based on information provided by such beneficial holders to the
Company.
<TABLE>
<CAPTION>
COMMON STOCK 9% PREFERRED STOCK 8% PREFERRED STOCK
-------------------------- ---------------------- ----------------------
NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OF CLASS OF SHARES OF CLASS OF SHARES OF CLASS
- -------------------------------------------------- ------------ --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum ................................. 1,721,829(1) 9.2% -- -- -- --
1790 Broadway
New York, NY 10019-1412
Hermes Imperial Investments, L.P. ................ 1,529,641 8.4% -- -- 160,000 81.4%
237 Park Avenue
Ninth Floor
New York, NY 10017
Heartland Advisors, Inc. ......................... 1,327,000 7.3% -- -- -- --
790 North Milwaukee Street
Milwaukee, WI 53202
Herbert T. Kerr .................................. -- -- -- -- 35,905 18.3%
Pamtom Farm
Vaughn Road
Hudson Falls, NY 12839
Financial Strategic Portfolios, Inc. ............. -- -- 1,000 57.1% -- --
Technology Portfolio
7800 E. Union Avenue
Denver, CO 80237
Connecticut Innovations, Inc. .................... -- -- 500 22.6% -- --
845 Brook Street,
Rocky Hill, CT 06067
Patrick W. Allender .............................. -- -- 250 14.3% -- --
5 Holly Leaf Court
Bethesda, MD 20817
Kenneth G. Byers, Jr.............................. 526,963(2) 2.9% -- -- -- --
Bragi F. Schut.................................... 511,754(3) 2.8% -- -- -- --
James R. Kanely................................... 423,192(4) 2.3% -- -- -- --
John C. Jansing................................... 201,836(5) 1.1% -- -- -- --
David S. Aldridge................................. 150,553(7) * -- -- -- --
Randolph Harrison................................. 55,877 * -- -- -- --
Gene E. Lewis..................................... 48,299(6) * -- -- -- --
Stephen M. Johnson................................ 36,250(8) * -- -- -- --
Ernest C. Janson, Jr.............................. 26,000 * -- -- -- --
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK 9% PREFERRED STOCK 8% PREFERRED STOCK
-------------------------- ---------------------- ----------------------
NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OF CLASS OF SHARES OF CLASS OF SHARES OF CLASS
- -------------------------------------------------- ------------ --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Stewart H. Wahrsager.............................. 11,000 * -- -- -- --
All directors and executive officers as a group... 3,712,434(9) 19.3% -- -- -- --
</TABLE>
- ------------------------
* Less than one percent
(1) Includes (i) 1,262 shares owned by Mr. Elbaum's wife as custodian for their
minor son, as to which shares Mr. Elbaum disclaims beneficial ownership, and
(ii) 514,493 shares issuable upon exercise of certain stock options.
(2) Includes 361 shares held by Mr. Byers' wife, as to which shares Mr. Byers
disclaims beneficial ownership.
(3) Includes (i) 950 shares owned by Mr. Schut's wife, as to which shares Mr.
Schut disclaims beneficial ownership, (ii) 2,303 shares owned by Mr. Schut
as custodian for his minor son and (iii) 197,007 shares issuable upon
exercise of certain stock options.
(4) Includes 150,116 shares issuable upon exercise of certain stock options.
(5) Includes 30,503 shares issuable upon exercise of certain stock options.
(6) Includes 43,314 shares issuable upon exercise of certain stock options.
(7) Includes 94,287 shares issuable upon exercise of certain stock options.
(8) Includes 6,250 shares issuable upon exercise of certain stock options.
(9) Includes (i) 1,035,970 shares issuable upon exercise of certain stock
options and (ii) 2,573 shares as to which the officers and directors
disclaim beneficial ownership.
PROPOSAL I: ELECTION OF DIRECTORS
The Board of Directors of the Company consists of three classes of
directors, with terms expiring in successive years. Two current directors, John
C. Jansing. and Gene E. Lewis, have been nominated for reelection with terms to
expire in 1999. The terms of the remaining six current directors expire in 1997
(Messrs. Byers, Harrison and Janson Jr) and 1998 (Messrs. Elbaum, Kanely and
Schut).
It is the intention of each of the persons named in the accompanying form of
proxy to vote the shares represented thereby in favor of each of the two
nominees. In case either of the nominees are unable or decline to serve, such
persons named in the accompanying form of proxy reserve the right to vote the
shares represented by such proxy for another person duly nominated by the Board
in his stead or, if no other person is nominated, to vote such shares only for
the remaining nomine. The Board has no reason to believe that any person named
will be unable or will decline to serve.
3
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES AND CONTINUING DIRECTORS
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
NAME AGE DIRECTOR POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- -------------------------- --- --------- --------------------------------------------------------------
<S> <C> <C> <C>
Kenneth G. Byers, Jr 53 1993 President and sole shareholder of Byers Engineering Company, a
telecommunications technical services firm, for more than the
past five years; a director of Superior TeleTec Inc. until its
merger with and into the Company in November 1993.
Steven S. Elbaum 47 1980 Chairman of the Board of Directors and Chief Executive Officer
of the Company since 1984; a director of Interim Services,
Inc., a provider of value added staffing and health care
services, PolyVision Corporation, an information display
company and Humascan, Inc., a developer of medical testing
devices.
Randolph Harrison 64 1980 A private investor and consultant to Poten & Partners, Inc.,
an energy and shipping industry consulting firm, of which he
was President prior to 1985.
John C. Jansing 70 1978 Chairman of The Independent Election Corporation of America, a
shareholder proxy tabulating firm, from 1976 to 1992 and
currently a director of Vestaur Securities, Inc. and 14 Lord
Abbett mutual funds.
Ernest C. Janson, Jr 73 1987 A partner with Coopers & Lybrand LLP, independent public
accountants, until his retirement in 1985.
James R. Kanely 55 1993 A private investor; President and Chief Operating Officer of
the Company from November 1993 to October 1995; and prior
thereto, President of Superior TeleTec Inc.
Gene E. Lewis 68 1992 Chairman of the Board and Chief Executive Officer of Novecon
Technologies, L.P. since 1994; prior thereto, a consultant to
various health care and venture capital companies from 1989 to
1994.
Bragi F. Schut 55 1983 Executive Vice President of the Company since 1986; a director
of PolyVision Corporation, an information display company.
</TABLE>
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended April 30, 1996, the Board of Directors held
four meetings. Each member of the Board attended at least 75% of the meetings of
the Board and meetings of any committees of the Board on which he served that
were held during the time he served.
The Board of Directors has an Executive Committee, a Compensation Committee
and an Audit Committee.
The present members of the Executive Committee are Messrs. Elbaum (who
serves as Chairman), Jansing and Schut. The Executive Committee exercises all
authority of the Board of Directors in the management of the Company, subject to
certain limitations imposed by the General Corporation Law of the State of
Delaware.
The present members of the Compensation Committee are Messrs. Harrison,
Jansing and Janson. The principal functions of the Compensation Committee are to
administer the Company's 1987
4
<PAGE>
Long-Term Equity Incentive Plan and 1984 Restricted Stock Plan and, on behalf of
the Board of Directors, to review current and proposed employment arrangements
with existing and prospective senior management employees and to review and
determine matters pertaining to base and incentive compensation for the Chief
Executive Officer and other senior management employees. The Compensation
Committee is advised periodically by Hewitt Associates, a nationally recognized,
independent compensation and benefits consulting firm. During the fiscal year
ended April 30, 1996, the Compensation Committee had four meetings.
The present members of the Audit Committee are Messrs. Byers, Janson and
Lewis. The Audit Committee's principal functions are to review the Company's
annual and periodic financial statements, to examine and consider matters
relating to the administration and audit of the Company's accounts and its
financial affairs, to recommend the employment of outside auditors and to meet
with the Company's personnel as it deems appropriate to carry out its functions.
The Audit Committee met twice during the fiscal year ended April 30, 1996.
VOTE REQUIRED
The Board of Directors recommends that holders of the Common Stock, 9%
Preferred Stock and 8% Preferred Stock vote FOR the two nominees listed above.
Their election will require a plurality of the votes cast by holders of the
Common Stock, 9% Preferred Stock and 8% Preferred Stock present in person or
represented by proxy and entitled to vote, voting together as a single class.
MANAGEMENT
EXECUTIVE OFFICERS
Set forth below is certain information regarding the executive officers of
the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- -------------------------- --- -----------------------------------------------------------------------------
<S> <C> <C>
Steven S. Elbaum 47 Chairman of the Board of Directors and Chief Executive Officer since 1984.
Bragi F. Schut 55 Executive Vice President since 1986.
Stephen M. Johnson 47 Executive Vice President and Chief Operating Officer since November 1995.
Prior thereto he was President and Chief Operating Officer of Adience Inc. (a
wholly-owned subsidiary of the Company) from April 1994 through October 1995.
From January 1994 to April 1994 Mr. Johnson was an independent consultant. He
was President and Chief Executive Officer of Climax Metals Company, a
minerals mining and chemical subsidiary of Amax, Inc. from 1987 through 1993.
David S. Aldridge 42 Chief Financial Officer since November 1993 and Treasurer since January 1994.
Prior thereto he was Chief Financial Officer of Superior TeleTec Inc. until
its merger with and into the Company in November 1993.
Stewart H. Wahrsager 47 Senior Vice President, General Counsel and Secretary since January 1996.
Prior thereto he was a partner in the law firm of Rubin Baum Levin Constant &
Friedman.
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information during each of the
Company's three fiscal years ended April 30, 1996 with respect to compensation
earned by or paid to the Company's Chief Executive Officer and each of the four
most highly compensated executive officers of the Company other than the Chief
Executive Officer.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION (1) COMPENSATION AWARDS
-------------------------------------- ------------------------
FISCAL RESTRICTED OPTION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK (5) SHARES (6) OTHER (7)
- --------------------------------------------- ------ ----------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum............................. 1996 $ 419,000 $ 261,700(2) -- 133,500 $ 272,950
Chairman and Chief -- 175,000(3) -- -- --
Executive Officer 1995 275,000 175,000 -- -- 7,370
1994 256,785 125,000 $1,350,000 30,000 6,560
Bragi F. Schut............................... 1996 $ 203,000 $ 114,900(2) -- 65,400 $ 74,177
Executive Vice President and -- 75,000(3) -- -- --
Secretary 1995 172,000 75,000 -- -- --
1994 165,532 60,000 $ 250,000 15,000 15,772
Stephen M. Johnson (9)....................... 1996 $ 145,100 $ 207,600(4) $ 153,750 80,300 $ 8,849
Executive Vice President and
Chief Operating Officer
David S. Aldridge............................ 1996 $ 184,000 $ 90,500(2) -- 65,400 $ 69,871
Chief Financial Officer -- 60,000(3) -- -- --
1995 153,718 60,000 -- -- 55,813
1994 69,927(8) 30,000 $ 342,500 50,000 4,133
Stewart H. Wahrsager (9)..................... 1996 $ 50,000 $ 33,700(4) $ 45,000 29,833 $ 4,988
Senior Vice President, General Counsel and
Secretary
</TABLE>
- ------------------------
(1) The aggregate dollar value of all perquisites and other personal benefits,
securities or property earned by or paid to any of the named individuals did
not exceed the lesser of $50,000 or 10% of the total annual salary and bonus
set forth for such individual during any of the last three fiscal years.
(2) Annual cash incentive bonus payments awarded in respect of fiscal 1996
pursuant to the annual cash incentive bonus program of the Company as
described under "Compensation Committee Report on Executive Compensation --
Executive Compensation Policy".
(3) Bonus payments to Messrs. Elbaum, Schut and Aldridge which, although paid in
fiscal 1996, were approved by the Compensation Committee in respect of
fiscal 1995 but were deferred and became payable only upon completion of the
Company's acquisition of the U.S. and Canadian copper wire and cable
business of Alcatel NA Cable Systems, Inc. and Alcatel Canada Wire Inc.
which occurred during fiscal 1996.
(4) Fiscal 1996 bonus payments to Messrs. Johnson and Wahrsager include, in
addition to cash incentive bonus payments, pursuant to the cash incentive
bonuses program of the Company prorated for the respective periods of
employment of these executives during fiscal 1996, one time only payments of
$125,000 and $15,000, respectively, paid at the time of signing of their
respective employment agreements.
6
<PAGE>
(5) The dollar value set forth is based on the closing price per share for the
Common Stock on the respective dates of grant. The aggregate number of
shares of restricted stock held by each of the named individuals at April
30, 1996, the value of those holdings and the vesting schedule for continued
service are set forth below.
<TABLE>
<CAPTION>
STEVEN S. STEPHEN M. BRAGI F. DAVID S. STEWART H.
ELBAUM JOHNSON SCHUT ALDRIDGE WAHRSAGER
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Number of shares....................... 150,000 30,000 25,000 41,786 10,000
Value at April 30, 1996................ $ 731,250 $ 146,250 $ 121,875 $ 203,707 $ 48,750
Number of shares vesting
in fiscal
1997................................. 35,000 7,500 6,250 9,607 3,333
1998................................. 35,000 7,500 6,250 9,607 3,333
1999................................. 10,000 7,500 -- 3,357 3,333
2000................................. -- 7,500 -- -- --
</TABLE>
(6) Does not reflect the following performance options, each of which is subject
to adjustment as described under "Compensation Committee Report on Executive
Compensation -- Executive Compensation Policy":
<TABLE>
<CAPTION>
NUMBER OF EXERCISE
PERFORMANCE GRANTED PRICE EXPIRATION DATE
------------------- ------------- ---------------
<S> <C> <C> <C>
Steven S. Elbaum.................................. 106,800(a) $ 5.125 11/15/05
80,100(b) $ 5.63 4/10/06
Bragi F. Schut.................................... 37,400(a) $ 5.125 11/15/05
9,400(b) $ 5.63 4/10/06
Stephen M. Johnson................................ 15,500(b) $ 5.63 4/10/06
David S. Aldridge................................. 37,400(a) $ 5.125 11/15/05
9,400(b) $ 5.63 4/10/06
Stewart H. Wahrsager.............................. 5,500(b) $ 5.63 4/10/06
</TABLE>
(a) Performance options granted with respect to fiscal 1996, the
exercise price of which is equal to the market price of the Common
Stock at the date of grant.
(b) Performance options granted with respect to fiscal 1997, the
exercise price of which is equal to 150% of the market price of the
Common Stock at the date of grant.
(7) The amounts set forth include (i) matching contributions made by the Company
under defined contribution plans of its subsidiaries, (ii) $11,520 accrued
under an unfunded, nonqualified defined benefit plan for the payment of
future annuities to Mr. Aldridge, (iii) with respect to Mr. Schut, $23,748
representing the net present value of the vested portion of an annuity the
Company has agreed to pay in 15 equal annual installments of $18,900
commencing in the year when Mr. Schut reaches age 60 and (iv) with respect
to Messrs. Elbaum, Schut and Aldridge, payments of $263,568, $40,901 and
$49,630, respectively, pursuant to their employment agreements for federal
tax consequences upon vesting of certain restricted stock grants.
(8) The amounts set forth do not include amounts earned by Mr. Aldridge as an
executive of Superior TeleTec Inc. prior to its merger with and into the
Company on November 10, 1993.
(9) Messrs. Johnson and Wahrsager joined the Company in November 1995 and
January 1996, respectively. Prior to November 1995, and since December 1994,
Mr. Johnson served as President and Chief Operating Officer of Adience,
Inc., a wholly-owned subsidiary of the Company. Mr. Johnson's compensation
reflected in the above table does not include compensation received as an
officer of Adience, Inc.
7
<PAGE>
STOCK OPTION GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
(AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ----------------
NAME GRANTED (1) FISCAL 1996 PRICE ($/SH) DATE 5% 10%
- ---------------------------------------- ----------- ------------ ------------ ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum........................ 106,800(a) 10.0% $5.125 11/15/05 $344,300 $872,500
26,700(b) 2.5 $ 3.75 4/10/06 63,000 160,000
Stephen M. Johnson...................... 25,000(a) 2.4 $5.125 11/15/05 80,600 204,200
55,300(b) 5.2 $ 3.75 4/10/06 130,400 330,600
Bragi F. Schut.......................... 37,400(a) 3.5 $5.125 11/15/05 120,600 305,500
28,000(b) 2.6 $3.754 4/10/06 66,045 167,400
David S. Aldridge....................... 37,400(a) 3.5 $5.125 11/15/05 120,600 305,500
28,000(b) 2.6 $ 3.75 4/10/06 66,045 167,400
Stewart H. Wahrsager.................... 13,333(a) 1.3 $ 4.50 1/2/06 37,700 95,600
16,500(b) 1.6 $ 3.75 4/10/06 38,900 98,600
</TABLE>
- ------------------------
(1) Does not include the performance options described in footnote 6 to the
Summary Compensation Table.
(a) Stock options granted with respect to fiscal 1996.
(b) Stock options granted with respect to fiscal 1997.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table presents information for the individuals named above as
to the exercise of stock options during the fiscal year ended April 30, 1996 and
the number of shares underlying, and the value of, unexercised options
outstanding at April 30, 1996:
<TABLE>
<CAPTION>
EXERCISES DURING NUMBER OF SHARES
THE FISCAL YEAR UNDERLYING VALUE OF UNEXERCISED
--------------------------------- UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS (1)
NUMBER OF SHARES ------------------------------- ---------------------------
NAME ACQUIRED VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ---------------- -------------- ------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum......... -- -- 514,493 107,051 $ 800,085 $30,038
Bragi F. Schut........... -- -- 197,007 57,800 243,715 31,500
Stephen M. Johnson....... -- -- 6,250 74,050 -- 62,213
David S. Aldridge........ -- -- 94,287 68,184 58,247 31,500
Stewart H. Wahrsager..... -- -- -- 29,833 -- 23,562
</TABLE>
- ------------------------
(1) Based on the closing price of $4.875 of the Common Stock on April 30, 1996.
(2) Does not reflect the performance options described in footnote 6 to the
Summary Compensation Table.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or otherwise compensated by
the Company are entitled to be paid an annual retainer fee of $20,000 per year,
together with expenses of attendance, plus $1,000 for each meeting of the Board
or of a committee of the Board attended. A non-employee director with at least
five years of service also receives, upon reaching age 70 and termination of
service to the Company, a retirement benefit of $10,000 per year for 15 years
after his retirement, payable to the director or the director's beneficiaries in
the event of his death. At the option of each director, his director's fees may
be payable in shares of the Common Stock (based upon the fair market value of
the Common Stock at the beginning of each fiscal year). Directors' fees may also
be deferred,
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at the option of each director, pursuant to the Directors' Deferred Compensation
Plan and (i) be paid in cash with interest at the prime rate or (ii) be paid in
Common Stock based on stock units accumulated under the plan.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of its executive officers.
Pursuant to these agreements, Mr. Elbaum serves as Chairman of the Board and
Chief Executive Officer at an annual salary of $433,200, Mr. Johnson serves as
Executive Vice President and Chief Operating Officer at an annual salary of
$296,000, Mr. Schut serves as Executive Vice President at an annual salary of
$237,800, Mr. Aldridge serves as Chief Financial Officer at an annual salary of
$194,000 and Mr. Wahrsager serves as Senior Vice President, General Counsel and
Secretary at an annual salary of $150,000. The agreements also provide for
annual performance-based bonuses, participation in a performance based long-term
incentive stock option award program, indemnification from any income tax
liability arising from the vesting of restricted stock and certain other
benefits, including medical, dental and other insurance benefits. The agreements
with Messrs. Elbaum and Schut also provide that they will serve on the Board of
Directors of the Company, and Mr. Schut's agreement provides for the annuity
described in footnote 7 to the Summary Compensation Table.
Each employment agreement is for a term ending upon the occurrence of any of
the following events: (i) notification by the executive or the Company to the
other that it desires to terminate the employment agreement; (ii) the death or
disability of the executive; (iii) termination by the Company for "cause" and
(iv) termination by the executive for "good reason. Generally, if an executive
terminates his employment for "good reason," or the Company terminates his
employment without cause, the executive is entitled to receive a severance
payment equal to one to one and a half times his annual salary and bonus for the
prior year. In the event of termination of employment under other circumstances,
including a "change in control" of the Company (which is defined as (i) the
acquisition by a person or entity of 20% of the Company's voting securities,
(ii) the occurrence of circumstances such that individuals who constituted the
Company's Board of Directors as of April 26, 1995 no longer constitute a
majority of the Company's Board of Directors, (iii) a transaction involving the
sale of all or substantially all of the Company's assets or (iv) certain other
business combinations) each executive is entitled to varying benefits described
in the employment agreements.
Each executive officer will be a participant in a Senior Executive
Retirement Plan ("SERP") which will be effective not later than February 1,
1997. The SERP will be an unfunded defined benefit plan. Subject to vesting,
each participant will be entitled to an annual retirement benefit upon reaching
age 65 equal to 2.5% times his years of credited service (up to a maximum of 20
years), multiplied by his highest average cash compensation of any three
consecutive years during the final five years of his employment, less primary
social security benefits and certain other retirement benefits paid by the
Company and other employers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Randolph Harrison, John C. Jansing and Ernest C. Janson, Jr. served on the
Compensation Committee during fiscal 1996. There were no Compensation Committee
interlocks or insider (employee) participation during fiscal 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee is made up of independent outside directors who
are neither officers nor employees of the Company or its subsidiaries. The
principal functions of the Compensation Committee are to administer the
Company's 1987 Long-Term Equity Incentive Plan and 1984 Restricted Stock Plan
and, on behalf of the Board of Directors, to review current and proposed
employment arrangements with existing and prospective senior management
employees and to review and determine matters pertaining to base and incentive
compensation for the Chief Executive
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Officer and other senior management employees. In the exercise of its functions,
the Compensation Committee is advised periodically by Hewitt Associates, a
nationally recognized, independent compensation and benefits consulting firm.
EXECUTIVE COMPENSATION POLICY
The executive compensation policy is designed to attract and retain highly
qualified executive officers, to reinforce strategic performance objectives
through the use of incentive compensation programs, and to create a mutuality of
interest between executive officers and stockholders through compensation
structures that share the rewards and risks of strategic business planning and
implementation. Total compensation is intended to be competitive with that paid
to qualified executives of companies with a strong entrepreneurial business
approach likely to be more prevalent in a leveraged holding company than in
traditional operating companies.
There are three components of executive compensation: (i) base salary and
employee benefits applicable to all employees; (ii) annual cash incentive
awards; and (iii) long-term incentive awards.
The Compensation Committee's approach to base compensation is to offer
competitive salaries that are at the 50th percentile level relative to a peer
group of companies. It is intended that base salary be a relatively smaller
element in the total executive officer compensation as the Company has
introduced a more formal program of annual cash incentive awards and long-term
incentive awards. The Compensation Committee annually examines compensation
levels of executives who are employed in similar positions in public companies
with similar sales and market capitalization. The Compensation Committee
obtained the assistance of Hewitt Associates, compensation and benefit
consultants, to develop and approve a compensation program consistent with the
foregoing guidelines and emphases.
Annual cash incentive awards are intended to link executive pay with
performance in areas key to the Company's short-term operating objectives and
successes consistent with the Company's strategic business plan. The annual cash
bonus rewards are weighted 75% to the achievement of financial measures, largely
oriented around return on capital employed, and 25% to a subjective assessment
of individual performance. The financial performance targets are established in
April of the preceding fiscal year by the Compensation Committee. Discretionary
adjustments are possible if unforeseen events occur. When setting measures and
goals for other executive officers, the Compensation Committee considers the
input of the Company's Chief Executive Officer. Target financial performance
measures are based upon historical patterns of the Company's performance, the
next fiscal year's annual plan and strategic objectives. All performance targets
are set at or above normal expectations of performance to assure that bonuses
are not paid for substandard accomplishments.
The long-term incentive award program is based upon an annual long-term
incentive value assigned to each eligible executive, which value is allocated
equally between basic direct option grants and performance option grants, both
of which are awarded pursuant to the Company's 1987 Long-Term Equity Incentive
Plan. The basic direct option grants are priced at fair market value on date of
grant, vest equally over a period of three years and expire 10 years after the
date of grant. The performance options grants are priced at fair market value or
at a premium thereof, and are contingent and adjusted at the end of the third
fiscal year following grant, based upon actual financial performance of the
Company over such three-year period compared to target financial performance of
the Company for such period as established by the Compensation Committee in the
manner described above. This comparison, expressed as a three-year weighted
performance percentage, is utilized to convert the performance option grant to
an actual option grant in accordance with the conversion matrix established by
the Compensation Committee. Based upon the aforesaid performance percentage, the
matrix may yield actual option share awards which vary between 0% and 150% of
standard performance grant.
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1996 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
During fiscal 1996, the Chief Executive Officer of the Company received a
base salary in accordance with his employment agreement. In determining the
compensation under this agreement, the Compensation Committee considered (i)
data from outside studies and proxy materials regarding compensation of chief
executive officers at comparable companies, (ii) the input of other directors
regarding the performance of the Chief Executive Officer and (iii) advice from
Hewitt Associates.
A portion of the annual cash bonus awarded to the Chief Executive Officer in
fiscal 1996 was granted pursuant to the annual cash incentive provisions of his
employment agreement. As described above, this performance bonus is weighted 75%
to the achievement of financial measures and 25% to a subjective assessment of
job performance. The Company exceeded its financial performance targets in
fiscal 1996. With respect to job performance, in the Committee's judgment, the
Chief Executive fully satisfied all expectations.
The remainder of the cash bonus paid to the Chief Executive Officer was
awarded by the Compensation Committee in fiscal 1995 in connection with the
Company's acquisition of the U.S. and Canadian copper wire and cable business of
Alcatel NA Cable Systems, Inc. and Alcatel Canada Wire Inc., as described in
footnote 3 to the Summary Compensation Table.
Basic stock options and performance options were granted to the Chief
Executive Officer on November 15, 1995 with respect to fiscal 1996 and on April
10, 1996 with respect to fiscal 1997 (see footnote 6 to the Summary Compensation
Table). The grants were made pursuant to the Company's long-term award incentive
program and followed the principles described above with respect to such
program.
Overall, the Compensation Committee believes that the Chief Executive
Officer is being appropriately compensated in a manner that is consistent with
the long-term interests of stockholders.
The foregoing report is submitted by members of the Compensation Committee.
Randolph Harrison, CHAIRMAN
Ernest C. Janson, Jr.
John C. Jansing
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PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Common Stock for each of the Company's last five
fiscal years with the cumulative total return (assuming reinvestment of
dividends) of (i) the American Stock Exchange market value index and (ii) a peer
group of companies with market capitalization similar to that of the Company.
The Company compares its stockholder return on the Common Stock with that of
issuers with similar market capitalizations, because it cannot reasonably
identify a peer group engaged in the same lines of business as the Company. The
returns of each of the peer group of companies are weighted on a market
capitalization basis at the time of each registered data point.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF
THE ALPINE GROUP, INC., AMEX MARKET VALUE INDEX AND PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ALPINE GROUP CORPORATION PEER GROUP AMEX MARKET VALUE
<S> <C> <C> <C>
4/91 100 100 100
4/92 183 96 108
4/93 266 103 117
4/94 143 151 122
4/95 111 173 132
4/96 131 171 164
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
4/91 4/92 4/93 4/94 4/95 4/96
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
THE ALPINE GROUP, INC.............................. $ 100 $ 183 $ 266 $ 143 $ 111 $ 131
AMEX MARKET VALUE INDEX............................ 100 108 117 122 132 164
PEER GROUP......................................... 100 96 103 151 173 171
</TABLE>
- ------------------------
* $100 INVESTED ON 4/30/91 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING APRIL 30.
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CERTAIN TRANSACTIONS
In November 1995, Mr. Kanely, a director of the Company, entered into a
consulting agreement in amendment and termination of his employment agreement
with the Company whereby Mr. Kanely agreed to be retained by the Company to
serve as a consultant for five years at a fee of $120,000 per year.
As of April 30, 1996, Steven S. Elbaum, Chairman and Chief Executive Officer
of the Company, owed the Company approximately $314,000, consisting primarily of
the balance of a $373,000 loan made by the Company to finance Mr. Elbaum's
exercise of certain stock options. The indebtedness, which remained outstanding
at April 30, 1996, bears interest at the prime rate plus one half percentage
point (as to $300,000) and the prime rate (as to $14,000).
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely on a review of the reports and representations furnished to the
Company during the last fiscal year, the Company believes that each of the
persons required to file reports under Section 16(a) of the Securities Exchange
Act of 1934 (the "Exchange Act") is in compliance with all applicable filing
requirements, except that with respect to fiscal 1996 Messrs. Johnson, Aldridge,
Elbaum, Wahrsager, Schut, and Lewis failed to file on a timely basis one, one,
two, one, one and one, reports, respectively, required by Section 16(a) of the
Exchange Act relating to one, one, two, one, one and one transactions,
respectively. These transactions, none of wich involved market purchases or
sales of the Company's securities, related to (i) the options granted on
November 15, 1995 and April 10, 1996 pursuant to the 1987 Long-Term Equity
Incentive Plan; and (ii) the exchange by Messrs. Elbaum and Lewis of 99 shares
of 8% Preferred Stock per 4,119 shares of Common Stock, respectively, pursuant
to an exchange transaction completed in January 1996.
PROPOSAL II: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent public
accountants, to audit the books and records of the Company for the current
fiscal year. The affirmative vote of the holders of a majority in voting power
of the shares of the Common Stock, the 9% Preferred Stock and the 8% Preferred
Stock present, or represented, and entitled to vote at the meeting, voting as a
single class, will be required to ratify the appointment of Arthur Andersen LLP
as independent public accountants of the Company.
The Board of Directors recommends that the stockholders of the Company
ratify such appointment.
Representatives of Arthur Andersen LLP are expected to be available at the
meeting of stockholders to respond to appropriate questions and will be given
the opportunity to make a statement if they desire to do so.
OTHER MATTERS
The Company's Board of Directors does not know of any other matters which
may be brought before the meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
MISCELLANEOUS
It is important that proxies be returned promptly. Stockholders who do not
expect to attend the meeting in person are urged to mark, sign and date the
accompanying proxy and mail it in the enclosed return envelope, which requires
no postage if mailed in the United States, so that their votes can be recorded.
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STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next Annual Meeting of
Stockholders of the Company must be received by the Company by April 30, 1997 in
order to be considered for inclusion in the Company's proxy statement relating
to such meeting.
By Order of the Board of Directors,
Stewart H. Wahrsager
SECRETARY
New York, New York
September 16, 1996
14
