<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
/ / Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE ALPINE GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of security to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
August 12, 1998
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
Wednesday, September 16, 1998 at 12:00 p.m., local time, at The Lotos Club, 5
East 66th Street, New York, New York.
At this meeting, you will be asked to consider and vote upon the election of
three 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 SEPTEMBER 16, 1998
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 September
16, 1998 at 12:00 p.m., local time, at The Lotos Club, 5 East 66th Street, 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 three 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 July 20, 1998 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
August 12, 1998
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 SEPTEMBER 16, 1998
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 12:00 p.m., local time, on September 16, 1998 at The
Lotos Club, 5 East 66th Street, New York, New York and at any and all
adjournments or postponements thereof.
The stockholders of record at the close of business on July 20, 1998 will be
entitled to receive notice of and to vote at the meeting and any adjournments or
postponements thereof. As of August 4, 1998, there were issued and outstanding
17,093,786 shares of the Company's Common Stock, par value $.10 per share (the
"Common Stock"), and 250 shares of the Company's 9% Cumulative Convertible
Senior Preferred Stock, par value $1.00 per share (the "9% Preferred Stock"),
the only classes of voting securities outstanding. Each stockholder of record
will be entitled to one vote for each share of Common Stock and 100 votes for
each share of 9% Preferred Stock registered in his or her name on the record
date. The holders of the Common Stock and the 9% 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 August 12, 1998.
Shares of the Common Stock and the 9% 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 three 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. 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.
<PAGE>
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table contains information as of August 4, 1998 regarding the
number of shares of Common 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.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------
<S> <C> <C>
NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT OF CLASS
- ------------------------------------------------------------------------------------ ---------- -----------------
Steven S. Elbaum.................................................................... 1,980,050(1) 11.1%
1790 Broadway
New York, NY 10019-1412
Heartland Advisors, Inc............................................................. 1,767,500(2) 10.3
790 North Milwaukee Street
Milwaukee, WI 53202
Alexandra Investment Management, Ltd................................................ 1,380,191(3) 8.1
237 Park Avenue
Ninth Floor
New York, NY 10017
Craig A. Drill...................................................................... 1,116,300(4) 6.5
c/o Craig Drill Capital L.P.
767 Fifth Avenue
New York, NY 10153
Bragi F. Schut...................................................................... 640,832(5) 3.7
Kenneth G. Byers, Jr................................................................ 526,202(6) 3.1
James R. Kanely..................................................................... 313,296(7) 1.8
David S. Aldridge................................................................... 297,164(8) 1.7
John C. Jansing..................................................................... 201,836(9) 1.2
Stephen M. Johnson.................................................................. 129,800 10) *
Stewart H. Wahrsager................................................................ 87,221 11) *
Randolph Harrison................................................................... 55,877 *
Ernest C. Janson, Jr................................................................ 26,000 *
All directors and executive officers as a group..................................... 4,250,767 12) 23.0
</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,
(ii) 45,000 shares held by the The Elbaum Family Foundation, Inc., a
not-for-profit charitable foundation of which Mr. Elbaum is a trustee, as to
which shares Mr. Elbaum disclaims beneficial ownership and (iii) 699,632
shares issuable upon exercise of certain stock options.
2
<PAGE>
(2) Based upon a Schedule 13-G, Amendment No. 2, filed with the Securities and
Exchange Commission on or about January 27, 1998.
(3) Based upon a Schedule 13-D, Amendment No. 1, filed with the Securities and
Exchange Commission on or about November 26, 1997. In addition, Mikhail A.
Filimonov, the Chairman, Chief Executive Officer and Chief Investment
Officer of such entity, and Dimitri Sogoloff, the Chief Operations Officer
of such entity, may be deemed to be the beneficial owners of such shares by
reason of their power to direct the voting and disposition of such shares.
(4) Based upon a Schedule 13-D, Amendment No. 2, filed with the Securities and
Exchange Commission on or about December 11, 1997. Each of Craig A. Drill,
Craig Drill Capital, L.L.C. and Craig Drill Capital L.P. shares the power to
vote and dispose of such shares.
(5) Includes (i) 3,450 shares owned by Mr. Schut's wife, as to which shares Mr.
Schut disclaims beneficial ownership and (ii) 249,340 shares issuable upon
exercise of certain stock options.
(6) Includes 39,409 shares owned by Byers Engineering Company, of which Mr.
Byers is the president and sole shareholder.
(7) Includes (i) 122,011 shares issuable upon exercise of certain stock options,
(ii) 6,260 shares held in Superior Telecommunications Inc. 401(k) Plan and
(iii) 138 shares owned by Mr. Kanely's wife, as to which shares Mr. Kanely
disclaims beneficial ownership.
(8) Includes (i) 192,404 shares issuable upon exercise of certain stock options
and (ii) 4,042 shares held in Superior Telecommunications Inc. 401(k) Plan.
(9) Includes 30,503 shares issuable upon exercise of certain stock options.
(10) Includes 99,800 shares issuable upon exercise of certain stock options.
(11) Includes (i) 31,221 shares issuable upon exercise of certain stock options
and (ii) 45,000 shares held by The Elbaum Family Foundation, Inc., a
not-for-profit charitable foundation of which Mr. Wahrsager is a trustee, as
to which shares Mr. Wahrsager disclaims beneficial ownership.
(12) Includes (i) 1,424,911 shares issuable upon exercise of certain stock
options and (ii) 60,152 shares as to which the officers and directors
disclaim beneficial ownership.
All of the 250 issued and outstanding shares of the 9% Preferred Stock are
held by Patrick W. Allender, 5 Holly Leaf Court, Bethesda, MD 20817.
PROPOSAL I: ELECTION OF DIRECTORS
The Board of Directors of the Company consists of three classes of
directors, with terms expiring in successive years. Three current directors,
Steven S. Elbaum, James R. Kanely and Bragi F. Schut, have been nominated for
reelection with terms to expire in 2001. The terms of the remaining four current
directors expire in 1999 (Mr. Jansing) and 2000 (Messrs. Byers, Jr., Harrison
and Janson, Jr.). Gene E. Lewis resigned as a director of the Company effective
July 21, 1998.
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 three
nominees. In case any of the nominees is unable or declines 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 nominee(s). 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. 55 1993 President and sole shareholder of Byers Engineering Company, a
telecommunications technical services firm, for more than the past five
years.
Steven S. Elbaum 49 1980 Chairman of the Board of Directors and Chief Executive Officer of the
Company since 1984; Chairman of the Board of Directors of Superior
TeleCom Inc., the Company's 50.1% owned subsidiary, Cables of Zion
United Works, Ltd., an Israel-based, publicly traded wire and cable
manufacturer and Superior TeleCom Inc.'s 51% owned subsidiary, and
PolyVision Corporation, an information display company; a director of
Interim Services, Inc., a provider of value added staffing and health
care services.
Randolph Harrison 66 1980 Private investor and consultant to Poten & Partners, Inc., an energy
and shipping industry consulting firm.
John C. Jansing 72 1978 Private investor; a director of Vestaur Securities, Inc. and 14 Lord
Abbett mutual funds.
Ernest C. Janson, Jr. 75 1987 A partner with Coopers & Lybrand LLP, independent public accountants,
until his retirement in 1985.
James R. Kanely 57 1993 Private investor; President and Chief Operating Officer of the Company
from November 1993 to October 1995; prior thereto, President of
Superior TeleTec Inc.
Bragi F. Schut 57 1983 Executive Vice President of the Company since 1986; a director of
Superior TeleCom Inc., Cables of Zion United Works, Ltd. and PolyVision
Corporation.
</TABLE>
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended April 30, 1998, 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, and no other committees.
The present members of the Compensation Committee are Messrs. Harrison,
Jansing and Janson, Jr. The principal functions of the Compensation Committee
are to administer the Company's 1987 Long-Term Equity Incentive Plan, 1984
Restricted Stock Plan, Employee Stock Purchase Plan and the 1997 Stock Option
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, 1998, the Compensation
Committee had one meeting.
4
<PAGE>
The present members of the Audit Committee are Messrs. Byers, Jr. and
Janson, Jr. 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,
1998.
VOTE REQUIRED
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF THE COMMON STOCK AND 9%
PREFERRED STOCK VOTE FOR THE THREE NOMINEES LISTED ABOVE. Their election will
require a plurality of the votes cast by holders of the Common Stock and 9%
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, each of whom serves at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- ----------------------------------- --- ----------------------------------------------------------------------
<S> <C> <C>
Steven S. Elbaum 49 Chairman of the Board of Directors and Chief Executive Officer since
1984, Chairman of the Board, President and Chief Executive Officer of
Superior TeleCom Inc. since 1996.
Bragi F. Schut 57 Executive Vice President since 1986.
Stephen M. Johnson 49 Executive Vice President and Chief Operating Officer since November
1995. President of Premier Refractories Inc. (a subsidiary of the
Company) from April 1994 through October 1995. From January 1994 to
April 1994, he was an independent consultant. President of Climax
Metals Company, a minerals mining and chemical subsidiary of Amax,
Inc., from 1987 through 1993.
David S. Aldridge 44 Chief Financial Officer since November 1993 and Treasurer since
January 1994. Chief Financial Officer and Treasurer of Superior
TeleCom Inc. since 1996. Prior to 1994, he was Chief Financial Officer
of Superior TeleTec Inc. until its merger with and into the Company in
November 1993.
Stewart H. Wahrsager 49 Senior Vice President, General Counsel and Secretary since January
1996 and Secretary of Superior TeleCom Inc. since 1996. Prior thereto
he was a partner in the New York law firm of Rubin Baum Levin Constant
& Friedman.
</TABLE>
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information during each of the
Company's three fiscal years ended each of April 30, 1996, April 30, 1997 and
April 30, 1998 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.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION (1) COMPENSATION AWARDS
----------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FISCAL OTHER ANNUAL RESTRICTED
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTION SHARES OTHER (10)
- ---------------------------- ----------- --------- --------- ------------- ----------- --------------- -----------
Steven S. Elbaum............ 1998 $ 540,000(2) $ 650,000(5) $ 134,006(6) 280,350(3) $ 13,043
Chairman and Chief 1997 433,200(2) 650,000(5) 74,259(6) 347,716(4) 9,271
Executive Officer 1996 419,000 261,700(5) 114,532(6) 133,500 10,388
175,000(7)
Bragi F. Schut.............. 1998 $ 270,000 $ 293,000(5) 70,200(3) $ 33,425
Executive Vice President 1997 237,800 293,000(5) 118,705(4) 31,762
1996 203,000 114,900(5) 65,400 33,476
75,000(7)
Stephen M. Johnson (11)..... 1998 $ 312,000 $ 250,000(5) $ 153,750(9) 27,750(3) $ 14,930
Executive Vice President 1997 294,000 169,000(5) 113,800 8,838
and Chief Operating 1996 145,100 207,600(8) 80,300 8,849
Officer
David S. Aldridge........... 1998 $ 240,000 $ 250,000(5) $ 119,953(6) 70,200(3) $ 24,844
Chief Financial Officer 1997 195,000 252,000(5) 52,500(6) 57,700 18,185
1996 184,000 90,500(5) 35,305(6) 65,400 19,413
60,000(7)
Stewart H. Wahrsager (11)... 1998 $ 178,000 $ 144,400(5) $ 45,000(9) 8,250(3) $ 15,004
Senior Vice President, 1997 151,000 144,000(5) 34,000 14,245
General Counsel and 1996 50,000 33,700(8) 29,833 4,988
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) Does not include salary of $175,000 and $102,000 paid to Mr. Elbaum by
Superior TeleCom Inc. in fiscal 1998 and fiscal 1997, respectively, under
his employment agreement with such entity. See "Certain Transactions."
(3) During fiscal 1997, the Company discontinued the use of performance options
due to the variable accounting nature of such stock options and the
resulting non-cash charges to earnings. In fiscal 1998, for the foregoing
reasons and because the historical financial performance of the Company
indicated that certain performance targets were likely to be achieved, the
Company converted performance options granted to its executive officers in
fiscal 1995 and 1996 to non-contingent stock options. All of the other terms
of the options remain unchanged, as follows: (i) the options are priced, as
to the 1995 tranche, at fair market value, and as to the 1996 tranche, at
150% of fair market value, on the date of their initial grant; (ii) the
options vest three years, and expire 10 years, after the date of such grant;
and (iii) in light of the Company's likely attainment of the relevant
financial performance targets, the options are exercisable for the maximum
number of shares issuable under the executive officers' stock option
agreements with the Company. See "Compensation Committee Report on Executive
Compensation."
(4) Options granted to Messrs. Elbaum and Schut include 183,016 and 61,005
options, respectively, which represent a reissuance of previously issued
options which were due to expire during fiscal 1997. The new options are
identical to the original options, except that the new options vest over the
three-year period commencing on the date of the reissuance.
(5) Includes annual cash incentive bonus payments awarded pursuant to the annual
cash incentive bonus program of the Company and discretionary cash bonuses
awarded by the Compensation Committee.
6
<PAGE>
(6) Payments to Messrs. Elbaum and Aldridge pursuant to their employment
agreements for federal tax consequences upon vesting of certain restricted
stock grants.
(7) 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.
(8) Fiscal 1996 bonus payments to Messrs. Johnson and Wahrsager include, in
addition to cash incentive bonus payments pursuant to the cash incentive
bonus 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.
(9) The dollar value set forth is based on the closing price per share for the
Common Stock on the respective dates of grant.
(10) The amounts set forth include (i) matching contributions made by the
Company under defined contribution plans of its subsidiaries, (ii) $11,750
accrued under an unfunded, nonqualified defined benefit plan for the payment
of future annuities to Mr. Aldridge and (iii) with respect to Mr. Schut,
$23,750 representing the net present value of the vested portion of an
annuity the Company has agreed to pay in 15 equal annual installments of
$18,900 commencing in the year Mr. Schut reaches age 60.
(11) Messrs. Johnson and Wahrsager joined the Company in November 1995 and
January 1996, respectively. Prior to November 1995, and since December 1994,
Mr. Johnson served as President and Chief Operating Officer of Adience,
Inc., now Premier Refractories Inc., a subsidiary of the Company. Mr.
Johnson's compensation during fiscal 1996, as reported in the above table,
does not include compensation received as an officer of Premier Refractories
Inc.
STOCK OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE (AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ------------------------
NAME GRANTED (1) FISCAL 1998 ($/SH) DATE 5% 10%
- ------------------------------------- ----------- --------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum..................... 160,200 27.8% $ 5.125 11/15/05 $ 516,338 $ 1,308,502
120,150 20.9 $5.625 4/10/06 425,035 1,077,121
Bragi F. Schut....................... 56,100 9.8 $ 5.125 11/15/05 180,815 458,221
14,100 2.5 $5.625 4/10/06 49,879 126,404
David S. Aldridge.................... 56,100 9.8 $ 5.125 11/15/05 180,815 458,221
14,100 2.5 $5.625 4/10/06 49,879 126,404
Stephen M. Johnson................... 27,750 4.8 $ 5.625 4/10/06 98,167 248,773
Stewart H. Wahrsager................. 8,250 1.4 $ 5.625 4/10/06 29,185 73,960
</TABLE>
- ------------------------
(1) During fiscal 1997, the Company discontinued the use of performance options
due to the variable accounting nature of such stock options and the
resulting non-cash charges to earnings. In fiscal 1998, for the foregoing
reasons and because the historical financial performance of the Company
indicated that certain performance targets were likely to be achieved, the
Company converted performance options granted to its executive officers in
fiscal 1995 and 1996 to non-contingent stock options. All of the other terms
of the options remain unchanged, as follows: (i) the options are priced, as
to the 1995 tranche, at fair market value, and as to the 1996 tranche, at
150% of fair market value, on the date of their initial grant; (ii) the
options vest three years, and expire 10 years, after the date of such grant;
and (iii) in light of the Company's likely attainment of the relevant
financial performance targets, the options are exercisable for the maximum
number of shares issuable under the executive officers' stock option
agreements with the Company. See "Compensation Committee Report on Executive
Compensation."
7
<PAGE>
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, 1998 and
the number of shares underlying, and the value of, unexercised options
outstanding at April 30, 1998:
<TABLE>
<CAPTION>
NUMBER OF SHARES
EXERCISES DURING UNDERLYING VALUE OF UNEXERCISED
THE FISCAL YEAR UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS (1)
----------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF
SHARES VALUE
NAME ACQUIRED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------- ----------- ---------- ----------- ------------- ------------ -------------
Steven S. Elbaum......................... 97,609 $ 920,133 464,430 504,555 $ 7,745,376 $ 7,669,439
Bragi F. Schut........................... 61,005 575,077 170,605 150,804 2,797,495 2,295,696
Stephen M. Johnson....................... -- -- 73,034 148,816 1,057,003 2,143,213
David S. Aldridge........................ 10,000 162,420 140,571 139,800 2,042,240 2,095,566
Stewart H. Wahrsager..................... -- -- 25,721 46,362 376,953 670,123
</TABLE>
- ------------------------
(1) Based on the closing price of $20.81 of the Common Stock on April 30, 1998.
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 Common Stock (based upon the fair market value of Common
Stock at the beginning of each fiscal year). Directors' fees also may be
deferred, 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 $540,000, Mr. Johnson serves as
Executive Vice President and Chief Operating Officer at an annual salary of
$312,000, Mr. Schut serves as Executive Vice President at an annual salary of
$270,000, Mr. Aldridge serves as Chief Financial Officer at an annual salary of
$240,000 and Mr. Wahrsager serves as Senior Vice President, General Counsel and
Secretary at an annual salary of $178,000. 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 certain restricted stock awards 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 10 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 he or 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 one-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
8
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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 is a participant in a Senior Executive Retirement
Plan ("SERP"). The SERP is 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 during 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 1998. There were no Compensation Committee
interlocks or insider (employee) participation during fiscal 1998.
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, 1984 Restricted Stock Plan,
Employee Stock Purchase Plan and the 1997 Stock Option 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.
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 which, like the Company, have a strong
entrepreneurial business approach.
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 generally has
been 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 and, in
recent years, the Company has introduced a more formal program of annual cash
incentive and long-term incentive awards. The Compensation Committee examines
compensation levels of executives who are employed in similar positions in
rapidly growing public companies with similar sales and market capitalizations.
The Compensation Committee has obtained the assistance of Hewitt Associates,
compensation and benefit consultants to the Company, to develop and approve a
compensation program consistent with the foregoing guidelines and emphases.
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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 awards are weighted 75% to the achievement by the Company or its
subsidiaries of certain objective performance targets, largely related to return
on capital employed, and 25% to a subjective assessment of the individual's job
performance. The Compensation Committee establishes financial performance
targets for executives prior to the beginning of each fiscal year and can modify
such targets based on the effect of external factors, such as additional
acquisitions, on the Company's operations. The Compensation Committee considers
the input of the Company's Chief Executive Officer when setting goals for other
executive officers. Financial performance targets are based upon the Company's
historical performance, the business plan for the ensuing fiscal year and
longer-term strategic objectives. All performance targets are set above normal
expectations of performance.
With respect to compensation payable for fiscal 1998, the Compensation
Committee determined that cash incentive awards are payable to certain of the
executive officers of the Company pursuant to their employment agreements. In
addition, after consultation with Hewitt Associates, the Compensation Committee
determined to pay discretionary cash bonuses in respect of fiscal 1998 to all
the executives indicated on the Summary Compensation Table in recognition of the
achievements and excellent operating results of the Company during fiscal 1998,
including (i) the increase in revenues, EBITDA and earnings per share (before
non-recurring gains and charge) by 59%, 57% and 29%, respectively, as compared
to fiscal 1997, (ii) the significant increase in the Company's market
capitalization during fiscal 1998, (iii) the acquisition of American Premier
Holdings, Inc. and its subsidiaries, as a result of which the Company became the
fourth largest worldwide manufacturer and supplier of refractory products and
services and (iv) Superior TeleCom Inc.'s continued strong operating results,
the substantial increase in its market capitalization during fiscal 1998 and the
international expansion of its business through the acquisition of a 51%
interest in Cables of Zion United Works, Ltd., an Israel-based, publicly traded
company.
The long-term incentive award program is based upon an annual long-term
incentive value assigned to each eligible executive, which value (based on the
Black-Scholes Option Pricing Model) is allocated to basic direct option grants,
which are awarded pursuant to the Company's 1987 Long-Term Equity Incentive Plan
and 1997 Stock Option Plan.
During fiscal 1997, the Company discontinued the use of performance options
due to the variable accounting nature of such stock options and the resulting
non-cash charges to earnings. In fiscal 1998, for the foregoing reasons and
because the historical financial performance of the Company indicated that
certain performance targets were likely to be achieved, the Company converted
performance options granted to its executive officers in fiscal 1995 and 1996 to
non-contingent stock options. All of the other terms of the options remain
unchanged, as follows: (i) the options are priced, as to the 1995 tranche, at
fair market value, and as to the 1996 tranche, at 150% of fair market value, on
the date of their initial grant; (ii) the options vest three years, and expire
10 years, after the date of such grant; and (iii) in light of the Company's
likely attainment of the relevant financial performance targets, the options are
exercisable for the maximum number of shares issuable under the executive
officers' stock option agreements with the Company.
The Company's policy with respect to the deductibility limit of Section
162(m) of the Internal Revenue Code of 1986, as amended, generally is to
preserve the federal income tax deductibility of compensation paid when it is
appropriate and is in the best interests of the Company and its stockholders.
However, the Company reserves the right to authorize the payment of
non-deductible compensation if it deems that it is appropriate.
10
<PAGE>
1998 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
During fiscal 1998, 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 certain comparable companies, (ii) the input of other
directors regarding the performance of the Chief Executive Officer and (iii)
advice from Hewitt Associates.
In establishing the total compensation paid to Mr. Elbaum for fiscal 1998,
the Compensation Committee considered the fact that Mr. Elbaum had significant
responsibilities as an executive officer of Superior TeleCom Inc. and Superior
TeleCom Inc.'s subsidiaries. Although Mr. Elbaum devoted a certain amount of
time to matters directly related to these other enterprises, the Committee
believes his total compensation from the Company for fiscal 1998 was appropriate
and reasonable. This judgment is based on the Committee's conclusion that Mr.
Elbaum has fully and effectively discharged the responsibilities of his position
with the Company to the Company's substantial benefit and on the amounts paid to
chief executive officers of other comparable rapidly growing public companies.
Moreover, the Committee believes that Mr. Elbaum's strong leadership, guidance
and direction to the Company as Chairman of the Board and Chief Executive
Officer during fiscal 1998 have contributed to the Company's growth and success
during this period.
A portion of the annual cash bonus awarded to the Chief Executive Officer in
fiscal 1998 was granted pursuant to the annual cash incentive provisions of his
employment agreement. As described above, this annual cash bonus award is
weighted 75% to the achievement by the Company of certain performance
objectives, largely related to return on capital employed, and 25% to a
subjective assessment of the individual's job performance. The Company achieved
excellent operating results in fiscal 1998. With respect to job performance, in
the Committee's judgment, the Chief Executive Officer fully satisfied all
expectations. A portion of the cash bonus awarded to the Chief Executive Officer
in fiscal 1998 was granted by the Compensation Committee as a discretionary
bonus in recognition of the Chief Executive Officer's contribution to the
extraordinary results and achievements of the Company during fiscal 1998.
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
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 Standard & Poor's 500 Stock Index, (ii) the Russell 2000
Index and (iii) a peer group of companies with market capitalizations similar to
that of the Company. The Company has ceased to compare the cumulative total
stockholder return on the Common Stock with that of the American Stock Exchange
market value index because, as of October 11, 1996, the Common Stock is no
longer traded on such exchange. The Company is changing its broad equity market
index from the Standard & Poor's 500 Stock Index to the Russell 2000 Index
because the latter index includes companies
11
<PAGE>
with market capitalizations more similar to that of the Company and thus
provides the most meaningful standard for comparison. In accordance with the
rules and regulations of the Securities and Exchange Commission, both of these
broad equity market indices are included in the performance graph for this
fiscal year but, in future years, the Standard & Poor's 500 Stock Index will no
longer be included. 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. The peer
group includes the following companies: Dime Community Bancorp, Inc.; Dura
Automotive Systems Inc.; Handleman Company; InterDigital Communications;
Intersolv, Inc.; Party City Corp.; Plains Resources, Inc.; Sovran Self Storage,
Inc.; Veeco Instruments, Inc.; and Ventana Medical Systems, Inc.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RESEARCH DATA GROUP, INC. TOTAL RETURN - DATA SUMMARY
<S> <C> <C> <C> <C> <C> <C>
AGI Cumulative Total Return
4/93 4/94 4/95 4/96
THE ALPINE GROUP, INC. 100 54 42 50
PEER GROUP 100 84 100 93
S & P 500 100 105 124 161
RUSSELL 2000 100 115 123 164
<CAPTION>
RESEARCH DATA GROUP, INC.
<S> <C> <C>
AGI
4/97 4/98
THE ALPINE GROUP, INC. 102 229
PEER GROUP 86 140
S & P 500 202 284
RUSSELL 2000 164 233
</TABLE>
12
<PAGE>
CERTAIN TRANSACTIONS
As of July 15, 1998, the Compensation Committee determined that a $300,000
loan (which bears interest at the prime rate plus one-half percentage point)
made by the Company in June 1987 to Steven S. Elbaum, Chairman of the Board and
Chief Executive Officer of the Company, to finance Mr. Elbaum's exercise of
certain stock options, would be forgiven over a period of four years, provided
that if Mr. Elbaum voluntarily ceases his employment with the Company at any
time during such period, the then outstanding balance of the loan would be
immediately due and payable. Mr. Elbaum will pay all taxes relating to any
cancellation of indebtedness income arising out of the forgiveness of the loan.
In addition, as of April 30, 1998, Mr. Elbaum owed the Company approximately
$14,000, which indebtedness bears interest at the prime rate.
Pursuant to their employment agreements with the Company, Steven S. Elbaum,
Bragi F. Schut and Stephen M. Johnson were advanced by the Company approximately
$398,000, $105,000 and $79,000, respectively, in respect of the tax consequences
of certain restricted stock awards. The indebtedness, which was outstanding as
of April 30, 1998, bears interest at the rate of 5.57%.
On October 2, 1996, in connection with a reorganization of its subsidiaries,
the Company entered into an agreement (as amended and extended to date, the
"Services Agreement") with Superior TeleCom Inc., the Company's 50.1% owned
subsidiary. Pursuant to the Services Agreement, the Company provides certain
financial, audit and accounting, corporate finance and strategic planning,
legal, treasury, insurance and administrative services to Superior TeleCom Inc.
for a per annum fee of $2.7 million, in addition to reimbursement of incidental
costs and expenses incurred in connection with the Company's provision of such
services. Such annual fee is estimated to reflect commercially reasonable costs
for the services provided.
In connection with the foregoing reorganization, Superior TeleCom Inc. also
entered into an employment agreement with Steven Elbaum, the Chairman of the
Board and Chief Executive Officer of the Company, which provides for Mr. Elbaum
to provide his services as Chairman of the Board, President and Chief Executive
Officer of Superior TeleCom Inc. for an indefinite term at an annual base salary
of $175,000, as adjusted annually for increases in the Consumer Price Index, and
an annual bonus payable at the discretion of the Board of Directors of Superior
TeleCom Inc. Mr. Elbaum's employment agreement with Superior TeleCom Inc.
contains customary terms and provisions with respect to termination and other
matters. See "Compensation Committee Report on Executive Compensation" above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, as amended (the "Exchange Act"), was in compliance with all
applicable filing requirements with respect to the Company's most recent fiscal
year, except that Mr. Kanely failed to file on a timely basis one report
required by Section 16(a) of the Exchange Act relating to three transactions.
These transactions related to three open market sales of the Common Stock by Mr.
Kanely in June 1997.
13
<PAGE>
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 and the 9% 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 VOTE
FOR THE PROPOSAL TO 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.
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, 1999 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
August 12, 1998
14
<PAGE>
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven S. Elbaum, Bragi F. Schut and Stewart
H. Wahrsager and each of them, as Proxies each with the power to appoint his
substitute and hereby authorizes them to represent and to vote, as designated
below, all of the shares of Capital Stock of The Alpine Group, Inc. (the
"Company") held of record by the undersigned on July 20, 1998 at the Annual
Meeting of Stockholders to be held on September 16, 1998 or any adjournments or
postponements thereof.
1. ELECTION OF THREE DIRECTORS
Nominees: Steven S. Elbaum, James R. Kanely and Bragi F. Schut
STOCKHOLDERS MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY DRAWING A LINE
THROUGH OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE. ANY PROXY
EXECUTED IN SUCH MANNER AS NOT TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION
OF ANY NOMINEE SHALL BE DEEMED TO GRANT SUCH AUTHORITY.
/ / GRANT authority to vote for the three nominees / / WITHHOLD
authority to vote for the three nominees
2. Ratification of the appointment of Arthur Andersen LLP as the independent
certified public accountants of the Company.
/ / FOR / / AGAINST / / ABSTAIN
3. Authority to vote in their discretion on such other business as may properly
come before the meeting
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON REVERSE SIDE)
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for each of the proposals named above.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Dated _______________________, 1998
___________________________________
(Signature)
___________________________________
(Signature if held jointly)
___________________________________
(Title if applicable)
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
