<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 securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / 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:
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(4) Date Filed:
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<PAGE>
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
November 15, 1999
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, December 15, 1999 at 11:00 a.m., local time, at The Cornell Club, 6
East 44(th) Street, New York, New York.
At this meeting, you will be asked to consider and vote upon the election of one
director 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 DECEMBER 15, 1999
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 Wednesday,
December 15, 1999 at 11:00 a.m., local time, at The Cornell Club, 6 East 44(th)
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 one director 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 November 10, 1999 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
November 15, 1999
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 DECEMBER 15, 1999
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 Wednesday, December 15,
1999 at The Cornell Club, 6 East 44(th) Street, New York, New York and at any
and all adjournments or postponements thereof.
The stockholders of record at the close of business on November 10, 1999
will be entitled to receive notice of and to vote at the meeting and any
adjournments or postponements thereof. As of October 31, 1999, there were issued
and outstanding 14,600,452 shares of the Company's Common Stock, par value $.10
per share (the "Alpine 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 Alpine
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 Alpine 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 Alpine 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 November 15, 1999.
Shares of the Alpine 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 one nominee named herein for election
as a director and in favor of the ratification of the appointment of Arthur
Andersen LLP as the independent certified 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, the nominee receiving a plurality of
the votes cast will be elected as a director. 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 certified
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
As of October 31, 1999, there were issued and outstanding 14,600,452 shares
of Alpine Common Stock and 19,564,855 shares of Common Stock, par value $.01 per
share (the "Superior Common Stock"), of Superior TeleCom Inc., the Company's
majority owned subsidiary ("Superior TeleCom"). The following table contains
information as of such date regarding the number of shares of Alpine Common
Stock and Superior Common Stock beneficially owned by (i) each person known to
the Company to have beneficial ownership of more than five percent of the Alpine
Common Stock, (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>
ALPINE COMMON STOCK SUPERIOR COMMON STOCK
------------------------ -------------------------
NUMBER OF PERCENT NUMBER OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES OF CLASS SHARES OF CLASS
- --------------------------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Steven S. Elbaum................................. 2,372,676(2) 15.1% 10,546,325(14) 51.8%
Heartland Advisors, Inc.......................... 1,581,800(3) 10.8 -- --
790 North Milwaukee Street
Milwaukee, WI 53202
Alexandra Investment Management, Ltd............. 1,380,191(4) 9.5 -- --
237 Park Avenue
Ninth Floor
New York, NY 10017
Bragi F. Schut................................... 765,543(5) 5.1 37,946(15) *
Kenneth G. Byers, Jr............................. 526,202(6) 3.6 -- --
David S. Aldridge................................ 400,523(7) 2.7 78,125(16) *
Stephen M. Johnson............................... 243,249(8) 1.6 46,875(16) *
John C. Jansing.................................. 203,078(9) 1.4 -- --
James R. Kanely.................................. 200,025(10) 1.4 -- --
Stewart H. Wahrsager............................. 101,243(11) * 39,063(16) *
Randolph Harrison................................ 56,542(12) * -- --
Ernest C. Janson, Jr............................. 26,000 * -- --
All directors and executive officers as a
group.......................................... 4,851,951(13) 29.0 10,748,334(17) 53.3
</TABLE>
- ------------------------
* Less than one percent
(1) Unless otherwise indicated, the address of each beneficial owner is c/o The
Alpine Group, Inc., 1790 Broadway, New York, New York 10019-1412.
(2) 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) 974,085 shares issuable upon exercise of certain stock options and
(iii) 198,173 shares of restricted stock, which includes (A) 76,820 shares
of restricted stock credited to Mr. Elbaum's account under the Company's
Deferred Stock Account Plan, which provides that such shares shall be voted
by action of the Board of Directors of the Company, and (B) 55,353 shares of
restricted stock credited to the account of certain other officers and
employees of
2
<PAGE>
the Company under the Deferred Stock Account Plan, which provides that
Mr. Elbaum has the sole power to vote such shares.
(3) Based upon information provided to the Company by Heartland Advisors, Inc.
in connection with the preparation of this Proxy Statement. Heartland
Advisors, Inc. has sole voting power with respect to 535,500 of such shares
and sole dispositive power with respect to all of such shares.
(4) Based upon a Schedule 13D, 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 Alexandra Investment Management, Ltd., and Dimitri Sogoloff, the
Chief Operations Officer of Alexandra Investment Management, Ltd., 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.
(5) Includes (i) 3,450 shares owned by Mr. Schut's wife, as to which shares
Mr. Schut disclaims beneficial ownership, (ii) 317,175 shares issuable upon
exercise of certain stock options and (iii) 49,876 shares of restricted
stock. An aggregate of 19,876 shares of restricted stock have been credited
to Mr. Schut's account under the Company's Deferred Stock Account Plan,
which provides that Steven S. Elbaum has the sole power to vote such shares.
(6) Includes 39,409 shares owned by Byers Engineering Company, of which
Mr. Byers is the president and sole shareholder.
(7) Includes (i) 4,042 shares held in the Superior Telecommunications Inc.
401(k) Plan, (ii) 257,071 shares issuable upon exercise of certain stock
options and (iii) 39,093 shares of restricted stock. An aggregate of 17,093
shares of restricted stock have been credited to Mr. Aldridge's account
under the Company's Deferred Stock Account Plan, which provides that Steven
S. Elbaum has the sole power to vote such shares.
(8) Includes 213,249 shares issuable upon exercise of certain stock options.
(9) Includes 30,503 shares issuable upon exercise of certain stock options and
1,242 shares of restricted stock.
(10) Includes (i) 122,011 shares issuable upon exercise of certain stock
options, (ii) 6,260 shares held in the 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.
(11) Includes 73,082 shares issuable upon exercise of certain stock options and
17,161 shares of restricted stock. An aggregate of 6,161 shares of
restricted stock have been credited to Mr. Wahrsager's account under the
Company's Deferred Stock Account Plan, which provides that Steven S. Elbaum
has the sole power to vote such shares.
(12) Includes 665 shares of restricted stock.
(13) Includes (i) 1,987,176 shares issuable upon exercise of certain stock
options, (ii) 263,080 shares of restricted stock and (iii) 4,850 shares as
to which the officers and directors disclaim beneficial ownership.
(14) Includes 10,155,700 shares of Superior Common Stock owned by the Company.
Mr. Elbaum may be deemed to be the beneficial owner of such shares by virtue
of his position as Chairman of the Board and Chief Executive Officer of the
Company and his beneficial ownership of 15.1 percent of the issued and
outstanding shares of Alpine Common Stock. Also includes 390,625 shares
issuable upon exercise of certain stock options.
3
<PAGE>
(15) Includes 35,156 shares issuable upon exercise of certain stock options and
2,790 shares issuable upon conversion of 8 1/2% trust convertible preferred
securities of Superior Trust I, a Delaware statutory business trust in which
Superior TeleCom owns all the common equity interests.
(16) Shares issuable upon exercise of certain stock options.
(17) Includes (i) 10,155,170 shares of Superior Common Stock owned by the
Company, (ii) 589,844 shares issuable upon exercise of certain stock options
and (iii) 2,790 shares issuable upon conversion of 8 1/2% trust convertible
preferred securities of Superior Trust I.
In addition, there are issued and outstanding 250 shares of the 9% Preferred
Stock, all of which are held by Patrick W. Allender, 5 Holly Leaf Court,
Bethesda, Maryland 20817.
4
<PAGE>
PROPOSAL I: ELECTION OF DIRECTORS
The Board of Directors of the Company consists of three classes of
directors, with terms expiring in successive years. One current director, John
C. Jansing, has been nominated for reelection with a term to expire in 2002. The
terms of the remaining six current directors expire in 2000 (Messrs. Byers, Jr.,
Harrison and Janson, Jr.) and 2001 (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 the sole nominee. In
case the nominee 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. The
Board has no reason to believe that the nominee will be unable or will decline
to serve.
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...... 56 1993 President and sole shareholder of Byers Engineering
Company, a telecommunications technical services and
software firm, since 1971.
Steven S. Elbaum.......... 50 1980 Chairman of the Board of Directors and Chief Executive
Officer of the Company since 1984. Chairman of the
Board of Directors and Chief Executive Officer of
Superior TeleCom, a manufacturer of wire and cable
products and the Company's majority owned subsidiary,
since 1996. Chairman of the Board of Directors of
Superior Cables Limited (formerly known as Cables of
Zion United Works, Ltd.), an Israel-based, publicly
traded wire and cable manufacturer and Superior
TeleCom's 51 percent owned subsidiary, and PolyVision
Corporation, an information display company
("PolyVision"). A director of Interim Services, Inc., a
provider of value added staffing and health care
services, and Vestaur Securities, Inc., an investment
company.
Randolph Harrison......... 67 1980 Private investor and consultant to Poten & Partners,
Inc., an energy and shipping industry consulting firm.
John C. Jansing........... 74 1978 Private investor. A director of Vestaur Securities,
Inc. and 14 Lord Abbett mutual funds.
Ernest C. Janson, Jr...... 76 1987 A partner with Coopers & Lybrand LLP, independent
public accountants, until his retirement in 1985.
James R. Kanely........... 58 1993 Private investor. President and Chief Operating Officer
of the Company from November 1993 to October 1995.
Prior thereto, President of Superior TeleTec Inc., a
manufacturer of wire and cable products. A director of
PolyVision.
Bragi F. Schut............ 58 1983 Executive Vice President of the Company since 1986. A
director of Superior TeleCom, Superior Cables Limited
and PolyVision.
</TABLE>
5
<PAGE>
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended April 30, 1999, the Board of Directors held
five meetings. Each member of the Board attended at least 75 percent 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, an Executive Compensation
and Organization Committee (the "Compensation Committee") and an Audit
Committee.
The present members of the Compensation Committee are Messrs. Harrison,
Jansing and Janson, Jr. The Compensation Committee has three principal
responsibilities: (1) administering and approving all elements of compensation
for existing and prospective executive officers of the Company and certain other
senior management positions; (2) administering the Company's 1987 Long-Term
Equity Incentive Plan, 1984 Restricted Stock Plan, Employee Stock Purchase Plan,
1997 Stock Option Plan, Deferred Cash Account Plan and Deferred Stock Account
Plan and approving the issuance of treasury stock options; and (3) monitoring
the Company's executive management resources, structures, succession planning,
selection, development and performance. The Compensation Committee is advised
periodically by Frederic W. Cook & Co., Inc., a nationally recognized,
independent compensation and benefits consulting firm. During the fiscal year
ended April 30, 1999, the Compensation Committee held three meetings.
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,
1999.
VOTE REQUIRED
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF THE ALPINE COMMON STOCK
AND 9% PREFERRED STOCK VOTE FOR THE NOMINEE LISTED ABOVE. His election will
require a plurality of the votes cast by holders of the Alpine Common Stock and
9% Preferred Stock present in person or represented by proxy and entitled to
vote, voting together as a single class.
6
<PAGE>
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..................... 50 Chairman of the Board of Directors and Chief Executive
Officer of the Company since 1984. Chairman of the Board
of Directors and Chief Executive Officer of Superior
TeleCom since 1996.
Bragi F. Schut....................... 58 Executive Vice President of the Company since 1986.
Stephen M. Johnson................... 50 Executive Vice President and Chief Operating Officer of
the Company since November 1995. President of Premier
Refractories Inc., a refractories products and services
company and a former subsidiary of the Company, from
April 1994 through October 1995.
David S. Aldridge.................... 45 Chief Financial Officer of the Company since November
1993 and Treasurer since January 1994. Chief Financial
Officer and Treasurer of Superior TeleCom since 1996.
Stewart H. Wahrsager................. 50 Senior Vice President, General Counsel and Secretary of
the Company since January 1996 and Secretary of Superior
TeleCom since 1996. Prior thereto he was a partner in
the New York 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, 1997, April 30, 1998 and April 30,
1999 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
------------------------------------ ----------------------
FISCAL OTHER ANNUAL RESTRICTED OPTION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(3) COMPENSATION STOCK SHARES(6) OTHER(10)
- --------------------------- -------- -------- ---------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum...................... 1999 $555,000(2) $1,160,000 $150,013(4) $1,449,501(5) 523,000(7) $34,014
Chairman and Chief Executive Officer 1998 540,000(2) 650,000 134,006(4) 280,350(8) 13,043
1997 433,200(2) 650,000 74,259(4) 347,716(9) 9,271
Bragi F. Schut........................ 1999 $278,000 $ 468,000 $ 507,502(5) 229,000(7) $56,554
Executive Vice President 1998 270,000 293,000 70,200(8) 33,425
1997 237,800 293,000 118,705(9) 31,762
Stephen M. Johnson.................... 1999 $321,000 $ 121,000 88,000 $18,816
Executive Vice President and Chief 1998 312,000 250,000 27,750(8) 14,930
Operating Officer 1997 294,000 169,000 113,800 8,838
David S. Aldridge..................... 1999 $245,000 $ 409,000 $ 43,658(4) $ 397,498(5) 177,000(7) $29,581
Chief Financial Officer 1998 240,000 250,000 119,953(4) 70,200(8) 24,844
1997 195,000 252,000 52,500(4) 57,700 18,185
Stewart H. Wahrsager.................. 1999 $183,000 $ 144,000 $ 174,745(5) 93,000(7) $17,658
Senior Vice President, General 1998 178,000 144,400 8,250(8) 15,004
Counsel and Secretary 1997 151,000 144,000 34,000 14,245
</TABLE>
- ------------------------
7
<PAGE>
(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 percent 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, $175,000 and $102,000 paid to
Mr. Elbaum by Superior TeleCom in fiscal 1999, fiscal 1998 and fiscal 1997,
respectively, under his employment agreement with such entity. See "Certain
Transactions."
(3) Includes payments made pursuant to the annual cash incentive bonus program
of the Company and discretionary cash bonuses awarded by the Compensation
Committee. Included also are deferrals of $300,000 and $125,000 for
Messrs. Elbaum and Schut, respectively, made during fiscal 1999 to the
Company's Deferred Cash Account Plan. Mr. Johnson's 1999 bonus represents
only the annual cash incentive bonus. This table does not include a
discretionary bonus anticipated to be paid to Mr. Johnson in relation to the
sale by the Company of its former Premier Refractories International Inc.
subsidiary.
(4) Payments to Messrs. Elbaum and Aldridge pursuant to their employment
agreements for tax consequences upon vesting of certain restricted stock
grants.
(5) Based on the closing prices of $10.0625 and $10.25 of the Alpine Common
Stock on March 18, 1999 and March 23, 1999, respectively, the dates on which
the restricted stock grants were made by the Company. The shares of
restricted stock granted on March 18, 1999 represent a portion of each of
the executive officers' discretionary annual bonus (40 percent for
Mr. Elbaum and 30 percent for each of Messrs. Schut, Aldridge and Wahrsager)
which in the past had been paid in cash, and which the Compensation
Committee automatically deferred to the Company's Deferred Stock Account
Plan; such restricted stock vests on March 18, 2001 and will be distributed
from the Deferred Stock Account Plan at such time unless a longer deferral
period is elected by the executive officer in accordance with the terms of
the plan. The shares of restricted stock granted on March 23, 1999, which
were awarded by the Compensation Committee pursuant to the long-term
incentive award component of the Company's senior executive compensation
program, vest in equal installments on each of March 23, 2000, March 23,
2001 and March 23, 2002.
The following table presents the number of shares of restricted stock awarded
to the executive officers named above on each of March 18, 1999 and
March 23, 1999, the total number of shares of restricted stock held by such
officers as of April 30, 1999 and the aggregate value of such restricted
stock holdings, based on the closing price of $13.875 of the Alpine Common
Stock on April 30, 1999:
<TABLE>
<CAPTION>
AGGREGATE
TOTAL SHARES OF VALUE
RESTRICTED STOCK OF RESTRICTED
OWNED AS OF STOCK AS OF
NAME MARCH 18, 1999 MARCH 23, 1999 APRIL 30, 1999 APRIL 30, 1999
- ---- -------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
Steven S. Elbaum...................... 76,820 66,000 142,820 $1,981,627
Bragi F. Schut........................ 19,876 30,000 49,876 $ 692,029
David S. Aldridge..................... 17,093 22,000 39,093 $ 542,415
Stewart H. Wahrsager.................. 6,161 11,000 17,161 $ 238,108
</TABLE>
(6) All options to purchase Alpine Common Stock that have become vested by
June 30, 1999 are eligible for exercise under The Alpine Group, Inc. 1999
Stock Option Reload Program. As of April 30, 1999, none of the above-named
executive officers had been granted a reload option.
(7) Includes options to purchase Alpine Common Stock as well as options to
purchase from the Company issued and outstanding shares of Superior Common
Stock and common stock, par value $.001 per share, of PolyVision
("PolyVision Common Stock") that are owned by the Company. As set forth in
the table entitled "Stock Option Grants in Fiscal 1999" below, certain of
the options to purchase Alpine Common Stock were granted in respect of
fiscal 1998. The number of shares of Superior
8
<PAGE>
Common Stock and PolyVision Common Stock underlying the options to purchase
such shares from the Company is set forth in the following table:
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
UNDERLYING OPTIONS UNDERLYING OPTIONS
TO PURCHASE SUPERIOR TO PURCHASE POLYVISION
NAME COMMON STOCK COMMON STOCK
- ---- -------------------- ----------------------
<S> <C> <C>
Steven S. Elbaum.......................................... 32,000 105,000
Bragi F. Schut............................................ 14,000 47,000
David S. Aldridge......................................... 10,000 34,000
Stewart H. Wahrsager...................................... 5,000 17,000
</TABLE>
The options to purchase Superior Common Stock and PolyVision Common Stock
were granted on March 23, 1999 and expire on March 23, 2009. One-third of
each of these options becomes exercisable on each of the first, second and
third anniversaries of the date of grant at an exercise price of $18.375 for
the Superior Common Stock and $2.625 for the PolyVision Common Stock.
(8) 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 remained 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 percent of fair market value, on the date of their initial grant;
(ii) the options vested 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.
(9) Options granted to Messrs. Elbaum and Schut include 183,016 and 61,005
options, respectively, which represent a reissuance of previously issued
options that 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.
(10) 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,
$30,532 representing the net present value of the vested portion of an
annuity the Company has agreed to pay in 15 equal annual installments of
$18,900 commencing in the year Mr. Shut reaches age 60, (iv) medical
reimbursement, (v) automobile allowance and (vi) group term life insurance.
STOCK OPTION GRANTS IN FISCAL 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL (AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------------
NAME GRANTED FISCAL 1999 PRICE ($/SH) DATE 5% 10%
- ---- ---------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum.......... 180,000(1) 11.5% $ 20.813 7/15/08 $2,356,053 $5,970,701
206,000 13.1% $ 10.25 3/23/09 1,327,911 3,365,187
Bragi F. Schut............ 75,000(1) 4.8% $ 20.813 7/15/08 981,689 2,487,792
93,000 5.9% $ 10.25 3/23/09 599,494 1,519,235
Stephen M. Johnson........ 88,000 5.6% $ 20.813 7/15/08 1,151,848 2,919,909
David S. Aldridge......... 66,000(1) 4.2% $ 20.813 7/15/08 863,886 2,189,257
67,000 4.3% $ 10.25 3/23/09 431,893 1,094,503
Stewart H. Wahrsager...... 37,000(1) 2.4% $ 20.813 7/15/08 484,300 1,227,311
34,000 6.5% $ 10.25 3/23/09 657,509 1,666,258
</TABLE>
- ------------------------------
(1) Represents grants in respect of fiscal 1998.
9
<PAGE>
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
There were no exercises of stock options during the fiscal year ended
April 30, 1999. The following table presents information for the individuals
named above as to the number of shares underlying, and the value of, unexercised
options outstanding at April 30, 1999:
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Steven S. Elbaum.............................. 905,185 449,800 $8,289,177 $1,152,538
Bragi F. Schut................................ 292,175 187,234 2,653,294 447,721
Stephen M. Johnson............................ 137,733 172,117 1,028,133 633,553
David S. Aldridge............................. 211,637 175,668 1,595,385 564,232
Stewart H. Wahrsager.......................... 46,999 96,084 358,302 312,129
</TABLE>
- ------------------------
(1) Based upon the closing price of $13.875 of the Alpine Common Stock on
April 30, 1999.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------
REMUNERATION 15 20
- ------------ -------- --------
<S> <C> <C>
125,000................................................... 30,399 46,024
150,000................................................... 39,774 58,524
175,000................................................... 49,149 71,024
200,000................................................... 58,524 83,524
225,000................................................... 67,899 96,024
250,000................................................... 77,274 108,524
300,000................................................... 96,024 133,524
400,000................................................... 133,524 183,524
450,000................................................... 152,274 208,524
500,000................................................... 171,024 233,524
</TABLE>
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 percent 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. As of April 30, 1999, the estimated years of
credited service for each of the above-named executive officers were as follows:
Steven S. Elbaum, 19 years; Bragi F. Schut, 16 years; Stephen M. Johnson,
10 years; David S. Aldridge, 15 years; and Stewart H. Wahrsager, 8 years.
COMPENSATION OF DIRECTORS
Effective January 1, 1999, the Company increased the annual retainer to
$25,000 from $20,000 for directors who are not employees of the Company or
otherwise compensated by the Company, together with expenses of attendance. The
Company also increased to $1,500 from $1,000 the amount a non-employee director
will receive for each meeting of the Board of Directors or of a committee of the
Board attended ($2,000 for committee chairmen). 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.
10
<PAGE>
In addition to increasing the annual retainer and per committee meeting
fees, effective January 1, 1999, the Board adopted The Alpine Group, Inc. Stock
Compensation Plan for Non-Employee Directors (the "Stock Compensation Plan").
Under the Stock Compensation Plan, non-employee directors of the Company will
automatically receive 50 percent of the annual retainer in either restricted
stock or stock options, as elected by the non-employee director. Each
non-employee director may also elect to receive all or a portion of the
remaining amount of the annual retainer, in excess of 50 percent of the annual
retainer, and meeting fees in the form of restricted stock or stock options
instead of in cash.
Restricted stock and stock options that are attributable to the annual
retainer will be granted as of the first business day of each quarter of the
Company's fiscal year. Restricted stock and stock options that are attributable
to meeting fees will be granted as of the date of the meeting of the Board
and/or the committee of the Board with respect to which such grants relate.
Shares to be issued under the Stock Compensation Plan will be made available
only from issued shares of Alpine Common Stock reacquired by the Company and
held in treasury until such time as the Stock Compensation Plan may be approved
by the stockholders of the Company.
The number of shares of restricted stock to be granted under the Stock
Compensation Plan will be determined by dividing
(1) the amount of the annual retainer or meeting fees that a
non-employee director elected to receive in restricted stock, by
(2) the lesser of
(a) 100 percent of the fair market value of the Alpine Common Stock
on the first business day of the Company's fiscal year and
(b) 100 percent of the fair market value of the Alpine Common Stock
at the time of grant.
The number of stock options to be granted under the Stock Compensation Plan
will be determined by dividing
(1) the amount of the annual retainer or meeting fees that a
non-employee director elected to receive in stock options, by
(2) the value of a stock option on the date of grant as determined by
the Board, based on the purchase price per share of the Alpine
Common Stock, a Black-Scholes option pricing model and such other
factors as the Board deems appropriate.
Stock options granted under the Stock Compensation Plan will have a purchase
price equal to the lesser of:
(1) 100 percent of the fair market value of the Alpine Common Stock on
the first business day of the Company's fiscal year; and
(2) 100 percent of the fair market value of the Alpine Common Stock on
the date of grant.
Each stock option granted under the Stock Compensation Plan will expire on
the tenth anniversary of the date of grant.
Awards of restricted stock and stock options under the Stock Compensation
Plan will vest upon the earliest of the following to occur:
(1) the third anniversary of the date of grant;
(2) a non-employee director's death; and
(3) a change in control of the Company, as defined in the Stock
Compensation Plan.
The Stock Compensation Plan is administered and interpreted by the Board of
Directors.
11
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of its executive officers.
Pursuant to these agreements, during fiscal 1999, Mr. Elbaum served as Chairman
of the Board and Chief Executive Officer at a base salary of $555,000,
Mr. Johnson served as Executive Vice President and Chief Operating Officer at a
base salary of $321,000, Mr. Schut served as Executive Vice President at a base
salary of $278,000, Mr. Aldridge served as Chief Financial Officer at a base
salary of $245,000 and Mr. Wahrsager served as Senior Vice President, General
Counsel and Secretary at a base salary of $183,000. The agreements also provide
for annual performance-based bonuses, participation in a performance-based,
long-term incentive stock option award program 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) death or
disability of the executive; (iii) termination by the Company for "cause"; or
(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 percent 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, 1996 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 his employment agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Randolph Harrison, John C. Jansing and Ernest C. Janson, Jr. served on the
Compensation Committee during fiscal 1999. There were no compensation committee
interlocks or insider (employee) participation during fiscal 1999.
EXECUTIVE COMPENSATION AND ORGANIZATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Executive Compensation and Organization Committee (the "Compensation
Committee") of the Board of Directors is comprised of three outside directors
who are not officers or employees of the Company or its subsidiaries and are not
eligible to participate in any of the plans or programs the Compensation
Committee administers. In the opinion of the Board of Directors, these directors
are independent of management and free of any relationship that would interfere
with their exercise of independent judgment as Compensation Committee members.
The Compensation Committee held three meetings during fiscal 1999.
The Compensation Committee has three principal responsibilities:
(1) administering and approving all elements of compensation for existing and
prospective executive officers of the Company and certain other senior
management positions; (2) administering the Company's 1987 Long-Term Equity
Incentive Plan, 1984 Restricted Stock Plan, Employee Stock Purchase Plan, 1997
Stock Option Plan, Deferred Cash Account Plan and Deferred Stock Account Plan
and approving the issuance of treasury stock options; and (3) monitoring the
Company's executive management resources, structures, succession planning,
selection, development and performance.
12
<PAGE>
EXECUTIVE COMPENSATION POLICY AND PRACTICES
The executive compensation policy of the Company is designed to attract,
motivate and retain highly qualified executives, to reinforce strategic
performance objectives through its use of incentive compensation programs and to
align the interests of its executives with those of its stockholders.
To support the implementation of this policy, the following principles
provide a framework for the specific elements of the executive compensation
program: (1) provide total compensation value competitive with that paid to
qualified executives of companies which, like the Company, have a strong
entrepreneurial business approach and environment; (2) maintain a significant
portion of executives' total compensation value at risk as a result of being
significantly impacted by both annual and long-term financial performance of the
Company and the creation of stockholder value; (3) motivate executives to lead
the Company from the perspective of owners with an equity stake.
The Compensation Committee utilizes Frederic W. Cook & Co., Inc., an
independent compensation consulting firm ("Cook & Co."), to provide objective
and expert advice and assistance in the development of specific plans and
programs consistent with the foregoing policy and principles.
The executive compensation program consists of base salary, annual cash
incentive awards and long-term incentive awards.
The Compensation Committee's approach to base salary is to structure
competitive salaries that are generally at the 50th percentile level relative to
a peer group of companies. It is intended that base salary be a relatively
modest element of total compensation. The Compensation Committee, with the
guidance of Cook & Co., from time to time examines base salary levels of
executives who are employed in similar positions in rapidly growing
entrepreneurial public companies with similar sales and market capitalizations.
The Compensation Committee did not increase executive base salary levels beyond
a cost of living adjustment for fiscal 1999. Effective as of March 18, 1999, the
Compensation Committee approved a Deferred Cash Account Plan in which an
executive could elect to defer 10 to 100 percent of base salary for initial
periods of between two to 15 years.
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 percent to the achievement by the Company or its
subsidiaries of certain objective performance targets, largely related to return
on capital employed, and 25 percent 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
acquisitions and/or divestitures, 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 1999, the Compensation Committee determined that
cash incentive awards are payable to the executive officers of the Company, as
reflected in the Summary Compensation Table.
In addition, after consultation with Cook & Co., the Compensation Committee
determined to pay discretionary cash and restrictive stock grant bonuses in
respect of fiscal 1999 to all the executives indicated on the Summary
Compensation Table, except where noted, in recognition of certain achievements
of the Company during fiscal 1999, including: (1) the acquisition of Essex
International Inc. by Superior TeleCom, thereby nearly quadrupling the
annualized revenues of Superior TeleCom, significantly increasing profits and
cash flow and establishing the largest wire and cable producer in North America
and fourth largest in the world; and (2) the recapitalization of the Company's
affiliate, PolyVision, and
13
<PAGE>
PolyVision's acquisition of Alliance International Group Inc. Effective as of
March 18, 1999 the Compensation Committee approved a Deferred Stock Account Plan
under which the Compensation Committee required that a significant portion of
each executive's discretionary bonus (40 percent for Mr. Elbaum and 30 percent
for the other executives) be taken in the form of restricted stock in the
Company, as reported in the Summary Compensation Table.
Long-term incentive awards are designed to closely align executive interests
with the longer-term interests of stockholders by encouraging equity
participation. The Compensation Committee, with the concurrence of Cook & Co.,
determined these objectives could most effectively be accomplished by:
(1) structuring the value of long-term incentive grant levels between the 50th
and 75th percentiles relative to a peer group of companies, with two-thirds of
the value delivered through stock options (based on the Black-Scholes Option
Pricing Model) and one-third of the value delivered through grants of restricted
stock of the Company; and (2) delivering the stock option value by granting
stock options in the Company and in two other publicly-traded companies in which
the Company has a significant ownership interest. Consequently, in fiscal year
1999, 70 percent of the total stock option value was delivered in stock options
of the Company, 20 percent in stock options of Superior TeleCom and 10 percent
in stock options of PolyVision. The number of options granted to purchase such
shares is reflected in the Summary Compensation Table.
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
nondeductible compensation if it deems that it is appropriate.
FISCAL 1999 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The Compensation Committee determines the compensation for Steven S. Elbaum,
the Company's Chairman of the Board of Directors and Chief Executive Officer.
The Compensation Committee's determinations relative to base salary, annual cash
incentive award and long-term incentive award for Mr. Elbaum are reported in the
Summary Compensation Table. In making its determinations, the Compensation
Committee sought and received advice from Cook & Co.
The Compensation Committee's criteria for determining Mr. Elbaum's
compensation are driven by three major factors: the competitive marketplace; the
complexity inherent in leading the Company (with its multiple interests in
publicly-traded companies); and, most importantly, his performance. In
establishing the total compensation paid to Mr. Elbaum for fiscal 1999, the
Compensation Committee considered the fact that he had significant
responsibility as the Chairman and Chief Executive Officer of Superior TeleCom.
Although Mr. Elbaum devoted a certain amount of time to matters related to
Superior TeleCom, the Compensation Committee believes his total compensation
from the Company for fiscal 1999 was appropriate and reasonable.
During fiscal 1999, Mr. Elbaum received a base salary in accordance with his
employment agreement. He also received an annual cash incentive award consisting
of an annual cash bonus as well as a discretionary bonus. The annual cash bonus
awarded to Mr. Elbaum was granted pursuant to the provisions of his employment
agreement. As previously noted above, this annual cash bonus award is weighted
75 percent to the achievement by the Company of certain performance objectives
and 25 percent to a subjective assessment of the individual's job performance.
The Company achieved excellent operating results in fiscal 1999. With respect to
job performance, in the Compensation Committee's judgment, the Chief Executive
Officer fully satisfied all expectations. Also, as discussed previously in the
Compensation Committee's report, a discretionary bonus was granted to executives
of the Company including Mr. Elbaum in recognition of the fiscal 1999
achievements of the Company described above. Of this discretionary bonus,
60 percent of the total discretionary bonus awarded to the Chief Executive
Officer
14
<PAGE>
was paid in cash as reflected in the Summary Compensation Table and 40 percent
of his discretionary bonus was required by the Compensation Committee to be
taken in the form of restricted stock of the Company vesting on the second
anniversary of the award date.
The Compensation Committee believes that during fiscal 1999 Mr. Elbaum
continued to provide the leadership and vision that he has provided throughout
his 15 years as Chairman and Chief Executive Officer and that he is being
appropriately compensated in a manner that is consistent with the long-term
interests of stockholders.
The foregoing report on executive compensation is provided by the following
non-employee directors, who constituted the Executive Compensation and
Organization Committee during fiscal 1999:
Randolph Harrison, Chairman
Ernest C, Janson, Jr.
John C. Jansing
15
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Alpine Common Stock for each of the Company's
last five fiscal years with the cumulative total return (assuming reinvestment
of dividends) of (i) the Russell 2000 Index, (ii) a peer group of companies with
market capitalizations similar to that of the Company (the "1999 Peer Group")
and (iii) a peer group of companies which, for fiscal 1998, had market
capitalizations similar to that of the Company (the "1998 Peer Group"). The
Company compares its stockholder return on the Alpine 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
during the five-year period covered by the graph. 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 1998 Peer Group consists of the
following companies: Dime Community Bancorp, Inc.; Dura Automotive
Systems Inc.; Handleman Company; InterDigital Communications; Party City Corp.;
Plains Resources, Inc.; Sovran Self Storage, Inc.; Veeco Instruments, Inc.; and
Ventana Medical Systems, Inc. For fiscal 1999, the Company is changing its peer
group to the following 1999 Peer Group, whose market capitalizations more
closely reflect the current market capitalization of the Company: Centennial
Bancorp; CTC Communications Group Inc.; Dames & Moore Group; Emerald Financial
Corp.; Gliatech Inc.; Hypercom Corp.; Information Resources Inc.; Kellstrom
Industries Inc.; Rare Hospitality International Inc.; and A. O. Smith Corp. In
accordance with the rules and regulations of the Securities and Exchange
Commission, both the 1998 Peer Group and the 1999 Peer Group are included in the
performance graph for this fiscal year but, in future years, the 1998 Peer Group
will no longer be included.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE ALPINE GROUP, INC., THE RUSSELL 2000 INDEX,
THE 1999 PEER GROUP AND THE 1998 PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE ALPINE GROUP, INC. OLD PEER GROUP RUSSELL 2000 1999 PEER GROUP
<S> <C> <C> <C> <C>
4/94 $100 $100 $100 $100
4/95 $78 $116 $107 94
4/96 $92 $113 $143 111
4/97 $189 $108 $143 104
4/98 $426 $173 $203 152
4/99 $284 $142 $184 129
</TABLE>
* $100 invested on 4/30/94 in stock or index--including reinvestment of
dividends.
Fiscal year ending April 30.
16
<PAGE>
CERTAIN TRANSACTIONS
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. 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 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 also
entered into an employment agreement with Steven S. Elbaum, pursuant to which
Mr. Elbaum provides his services as Chairman of the Board and Chief Executive
Officer of Superior TeleCom 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. Mr. Elbaum's employment agreement with Superior TeleCom contains
customary terms and provisions with respect to termination and other matters.
Pursuant to their employment agreements with the Company, Steven S. Elbaum,
Chairman of the Board and Chief Executive Officer of the Company, Stephen M.
Johnson, Executive Vice President and Chief Operating Officer of the Company,
Bragi F. Schut, Executive Vice President of the Company, and Stewart H.
Wahrsager, Senior Vice President, General Counsel and Secretary of the Company,
were loaned by the Company approximately $398,000, $188,600, $105,000 and
$71,000, respectively, in respect of the tax consequences of certain restricted
stock awards. The indebtedness, which was outstanding as of October 31, 1999,
bears interest at the annual rate of 5.96 percent.
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 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 and
interest thereon 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 October 31, 1999, Mr. Elbaum owed
the Company approximately $14,000, which indebtedness bears interest at the
prime rate.
In November 1998, in connection with the acquisition by PolyVision of
Alliance International Group Inc., the Company exchanged approximately
$25.2 million in liquidation value of PolyVision's 8 percent Series A Preferred
Stock (plus accrued dividends) and a loan receivable from PolyVision of
approximately $7.4 million for 5.3 million shares of PolyVision Common Stock and
approximately $12.4 million in liquidation value of PolyVision's Series B
Convertible Preferred Stock. As part of this transaction, the Company also
acquired $5.0 million in liquidation value of PolyVision's Series C Convertible
Preferred Stock for cash and received a further $0.5 million in liquidation
value of PolyVision's Series B Convertible Preferred Stock and 200,000 shares of
PolyVision Common Stock for professional services rendered to PolyVision in
connection with its acquisition. The aforementioned recapitalization resulted in
the Company's common share equity ownership in PolyVision increasing to
48 percent from 17 percent. Mr. Elbaum is the Chairman of the Board of
PolyVision and is the beneficial owner of in excess of 10 percent of PolyVision
Common Stock.
The Company has a consulting agreement with James R. Kanely, a current
director and a former officer of the Company, which provides for the payment to
Mr. Kanely of a $10,000 per month consulting fee until October 2000. The
consulting agreement also provides that Mr. Kanely is entitled to (i) receive
health and medical benefits, (ii) continue participation under a supplemental
executive retirement plan maintained by a subsidiary of Superior TeleCom and
(iii) receive an annuity of $34,700 per year for 15 years, commencing in 2001,
all substantially in accordance with the terms of his former employment
agreement with the Company. In consideration of the termination of this
employment agreement in November 1995, the Company made a one-time payment to
Mr. Kanely of $610,000.
17
<PAGE>
The Company invests in an investment fund for which Mikhail A. Filimonov,
the Chairman, Chief Executive Officer and Chief Investment Officer of Alexandra
Investment Management, Ltd. ("AIML"), acts as investment advisor. AIML
beneficially owns in excess of five percent of Alpine Common Stock. During the
fiscal year ended April 30, 1999, the Company paid fees of $107,000 to AIML for
investment advisory services in respect of such fund.
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, was in compliance with all applicable filing
requirements with respect to the Company's most recent fiscal year.
PROPOSAL II: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
certified 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 Alpine 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 certified 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 that 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, 2000 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
November 15, 1999
18
<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 November 10, 1999 at the
Annual Meeting of Stockholders to be held on December 15, 1999 or any
adjournments or postponements thereof.
(CONTINUED, AND TO BE DATED AND SIGNED ON REVERSE SIDE)
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Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
|X| Please mark your
votes as in this
example using
dark ink only.
GRANT authority WITHHOLD authority
to vote for the to vote for the
one nominee one nominee
1. ELECTION Nominee: John C. Jansing
OF ONE |_| |_|
DIRECTOR
STOCKHOLDERS MAY WITHHOLD AUTHORITY TO VOTE FOR THE NOMINEE BY DRAWING
A LINE THROUGH OR OTHERWISE STRIKING OUT THE NAME OF THE NOMINEE. ANY PROXY
EXECUTED IN SUCH MANNER AS NOT TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF
THE NOMINEE SHALL BE DEEMED TO GRANT SUCH AUTHORITY.
FOR ABSTAIN AGAINST
2. Ratification of the appointment of
Arthur Andersen LLP as the independent |_| |_| |_|
certified public accountants of the
Company.
3. Authority to vote in their discretion on |_| |_| |_|
such other business as may properly
come before the meeting
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.
_____________________ ______________________________ ________________________
Signature Signature, if held jointly Title, if applicable
Date_______, 1999
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.
