<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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.
</TABLE>
HMI INDUSTRIES INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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: .........................................................
(4) Date Filed: ...........................................................
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
HMI INDUSTRIES INC.
GENESIS OFFICE BUILDING
6000 LOMBARDO CENTER
SEVEN HILLS, OHIO 44131
(216) 986-8008
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 8, 2000
------------------------
To the stockholders of
HMI INDUSTRIES INC.
Notice is hereby given that the Annual Meeting of Stockholders of HMI
INDUSTRIES INC. (the "Company") will be held on Wednesday, March 8, 2000, at
10:00 A.M., Eastern Standard time, at the Cleveland Marriott Downtown at Key
Center, 127 Public Square, Cleveland, Ohio, 44114 for the following purposes:
1. To elect three directors to hold office for the term expiring in
the year 2003.
2. To ratify the selection by the Board of Directors of the firm of
PricewaterhouseCoopers LLP as auditors of the Company for the year ending
September 30, 2000.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on January 14, 2000
are entitled to receive notice of and to vote at the Annual Meeting.
You are invited to attend the meeting and vote. Whether or not you attend
the meeting in person, you are requested to sign and date the enclosed proxy
card, and mail it to the Company in the enclosed envelope. If you attend the
meeting in person, you may withdraw your proxy and vote in person if you so
desire.
By Order of the Board of Directors
/s/ John S. Meany, Jr.
John S. Meany, Jr.
Secretary
January 28, 2000
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE AND RETURN YOUR PROXY PROMPTLY.
<PAGE> 3
HMI INDUSTRIES INC.
GENESIS OFFICE BUILDING
6000 LOMBARDO CENTER
SEVEN HILLS, OHIO 44131
(216) 986-8008
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MARCH 8, 2000
------------------------
VOTING RIGHTS
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of HMI Industries Inc. (the "Company") of proxies in
accompanying form, both of which are first being mailed to stockholders on
approximately January 28, 2000. The record date for the meeting is January 14,
2000. At that date there were 5,371,767 shares of Common Stock issued and
outstanding. Each share entitles the holder to one vote on each matter to come
before the meeting. The presence in person or by proxy of a majority of the
Common Stock issued and outstanding is necessary for a quorum at any meeting of
shareholders. Stockholders granting a proxy to vote on one issue but abstaining
or withholding authority to vote as to the other issue will be counted for
purposes of determining a quorum. Broker "non-votes" will be counted as present
for purposes of determining a quorum. A broker "non-vote" occurs when a nominee
holding shares for a beneficial owner does not vote on that particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner.
Provided a quorum is present, a plurality of votes duly cast will be
sufficient to elect directors. Votes that are withheld and broker "non-votes"
will have no effect on the balloting for directors. The affirmative vote of a
majority of votes cast will be required to ratify the selection of Price-
waterhouseCoopers as auditors of the Company. Broker "non-votes" will not be
counted in the balloting for auditors, and an abstention will have the same
effect as a vote against the auditors. Officers, directors and nominees for
director of the Company and their immediate families currently own or control in
excess of 49% of the outstanding shares of Common Stock. Such shares are
sufficient to elect the Company's nominees for director and ratify the
designation of PricewaterhouseCoopers as auditors of the Company.
A stockholder giving a proxy may revoke the proxy by notice in writing or
in person to the Secretary of the Company before it is exercised. All proxies
given and not revoked will be voted at the meeting. If the stockholder has
indicated a choice on the proxy with respect to any matters to be voted upon,
the shares will be voted as specified. If no choice is specified, the shares
will be voted for the nominees for election to the Board of Directors and for
the ratification of PricewaterhouseCoopers as auditors of the Company. In the
event of the death, disqualification, or inability of any of the director
nominees to serve, the shares will be voted for the election of such other
person as the Board of Directors may recommend in place of such nominee. The
Board of Directors has no reason to believe that any of the nominees will not be
a candidate or will be unable to serve.
<PAGE> 4
ELECTION OF DIRECTORS
Three Class B directors have been nominated for a three-year term expiring
in the year 2003. Donald L. Baker, a Class B director who has served on the
Board of Directors of this Company since 1986, will be retiring from the Board
at the conclusion of the Annual Meeting. The Board of Directors and management
are grateful to Mr. Baker for his counsel and advice during the past fourteen
years. Information regarding these nominees for election as director as well as
for those directors whose term of office will continue after the Annual Meeting
is as follows:
CLASS B DIRECTORS: TO SERVE FOR A THREE-YEAR TERM EXPIRING IN 2003.
Robert J. Abrahams, age 73, became a director in 1984. Mr. Abrahams has
been President of Crestwood Consultants, a financial consulting company, since
1988.
Thomas N. Davidson, age 60, is a nominee for election as director. He has
served as Chairman of the Quarry Hill Group, a venture capital firm and personal
investment holding company, since 1990. He is a director of Anderson Exploration
Ltd., Canop World Wide Corp., Derlan Industries Ltd. and MDC Corp., Inc.
James R. Malone, age 57, became a director in 1996. Mr. Malone was elected
Chairman of the Board of Directors of the Company in December 1996, and was
elected as Chief Executive Officer in May 1997. From 1993 to 1997 he was
Chairman, President and Chief Executive Officer of Anchor Glass Container
Corporation, a manufacturer of glass bottles and other containers. In September
1996, a petition was filed in the United States Bankruptcy Court in Delaware by
Anchor Glass under Chapter 11 of the Bankruptcy Code in order to restructure the
debt of Anchor Glass. Mr. Malone was an executive officer of that company at
that time. He is a director of AmSouth Bancorporation and Ametek Inc.
CLASS C DIRECTORS: TERM EXPIRING IN THE YEAR 2001.
Mark A. Kirk, age 42, became a director in 1997. He is Senior Vice
President and Chief Financial Officer of Scott Technologies Inc., a designer and
manufacturer of life saving products. He was President and Chief Operating
Officer of the Company from May 1997 to July 1998 and Chief Financial Officer of
the Company from February 1997 to March 1998. He served as Vice
President-Finance of the Company from February to May 1997. From 1993 to 1997 he
served as Senior Vice President and Chief Financial Officer of Anchor Glass
Container Corporation, a manufacturer of glass bottles and other containers. In
September 1996, a petition was filed in the United States Bankruptcy Court in
Delaware by Anchor Glass under Chapter 11 of the Bankruptcy Code in order to
restructure the debt of Anchor Glass. Mr. Kirk was an executive officer of that
company at that time.
John S. Meany, Jr., age 54, became a director in 1986. Mr. Meany is an
attorney in private practice and has served as Secretary of the Company since
1995. Mr. Meany previously served as Secretary of the Company from 1986 to 1991,
as Vice President-Legal of the Company from 1983 to 1990 and as Vice President
and General Counsel from 1990 to 1991.
Barry Needler, age 51, became a director in 1989. Mr. Needler is a private
investor. Since 1991 he has been President and Chief Executive Officer of
Steeplechase Corp. and since 1990 he has been President and Chief Executive
Officer of Fairway Inc., both personal holding companies for business
investments.
CLASS A DIRECTORS: TERM EXPIRING IN THE YEAR 2002.
Murray Walker, age 49, became a director in 1998. He has been President of
Isetan Management Ltd., a private investment company, since 1988. He has also
been President of Simcoe Coach Lines Ltd., a school and charter bus service
company, since 1989. From 1981 to 1994, he was President of Transcor Inc., a
school and charter bus service company.
2
<PAGE> 5
Ivan Winfield, age 65, became a director in 1995. He is an independent
business and financial consultant. Mr. Winfield was a partner of Coopers &
Lybrand, a predecessor firm to PricewaterhouseCoopers (the Company's auditors)
from 1970 to 1994. Mr. Winfield is a director of Boykin Lodging Company, Office
Max Inc. and Rainbow Rentals, Inc.
Carl H. Young III, age 58, became a director in 1998. He was elected
President of the Company in July 1998. He previously served as Executive Vice
President and General Counsel from May 1997 to July 1998, and as Vice President
and General Counsel from February to May 1997. From 1993 to 1997 he served as
Senior Vice President and General Counsel of Anchor Glass Container Corporation,
a manufacturer of glass bottles and other containers. In September 1996, a
petition was filed in the United States Bankruptcy Court in Delaware by Anchor
Glass under Chapter 11 of the Bankruptcy Code in order to restructure the debt
of Anchor Glass. Mr. Young was an executive officer of that company at that
time.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company, on the recommendation of its Audit
Committee, has selected PricewaterhouseCoopers LLP, independent certified public
accountants, to audit the accounts of the Company for the year ended September
30, 2000. PricewaterhouseCoopers, which has no other relationship to the
Company, served as the Company's auditors in 1999. It is intended that the
shares represented by proxies in the accompanying form will be voted for the
ratification of the selection of PricewaterhouseCoopers unless otherwise
specified in the space provided on the proxy. A representative of
PricewaterhouseCoopers will attend this meeting with the opportunity to make a
statement and to respond to appropriate questions from stockholders.
COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The Company's Board of Directors held four regularly scheduled and two
special meetings during 1999. The Board has a standing Audit Committee,
Compensation Committee and Executive/Nominating Committee. During 1999, each
director attended at least 75% of the meetings of the Board and those committees
on which the director served.
BOARD COMMITTEES
The Audit Committee is composed of Robert J. Abrahams, John S. Meany, Jr.
and Ivan Winfield (Chairman). The function of the Audit Committee is to
recommend to the Board of Directors the engagement of the independent auditors;
to review with the independent auditors the plan and scope of the audit and the
related audit fees; to review the audit report with the independent auditors; to
review the financial statements and the scope and results of the independent
auditors' examinations and report such matters to the Board of Directors; to
review the adequacy of the Company's internal controls; and to perform such
other duties as may be required by the Board of Directors. The Audit Committee
held two meetings in 1999.
During 1999 the Compensation Committee was composed of Robert J. Abrahams
(current acting Chairman), Moffat Dunlap (Chairman; resigned from the Board in
September 1999), Barry Needler and Murray Walker. The Compensation Committee
considers matters relating to the compensation of senior officers of the
Company, the employee benefit plans of the Company, including the 1992 Omnibus
Long-Term Compensation Plan, and such other matters as may be referred to it by
the Board of Directors. The Compensation Committee held three meetings in 1999.
The Executive/Nominating Committee is composed of James R. Malone
(Chairman), Barry L. Needler, Murray Walker and Ivan Winfield. The
Executive/Nominating Committee is authorized to exercise, between meetings of
the Board of Directors, the powers of the Board of Directors in the management
of business and affairs of the Company, except for those powers reserved by law
or resolution to the Board of Directors. The Executive/Nominating Committee also
recommends candi-
3
<PAGE> 6
dates to fill vacancies on the Board of Directors and considers such other
matters as may be referred to it by the Board of Directors. The
Executive/Nominating Committee does not consider nominees recommended by
security holders. The Executive/Nominating Committee held one meeting in 1999.
COMPENSATION
A director who is an employee of the Company or a subsidiary is not
separately compensated for service as a director. Each non-employee director
receives a retainer of $20,000 per year, payable quarterly. Each non-employee
director also receives $1,000 per meeting for each committee meeting attended
and for each Special Board of Directors meeting attended.
Pursuant to the Company's Omnibus Long-Term Compensation Plan, on the first
business day of each calendar year each non-employee director automatically
receives an option to purchase 6,000 shares of Common Stock of the Company (as
adjusted for stock splits).
CONSULTING AGREEMENTS
Several members of the Board of Directors have entered into consulting
contracts with the Company relating to various matters within their fields of
expertise. Information regarding these contracts follows.
The Company has a consulting agreement with Robert J. Abrahams, a director
of the Company, for consulting services relating to retail financing programs
for the Company's distributors throughout the world. A total of $50,000 was paid
to Mr. Abrahams in 1999 under this agreement. Mr. Abrahams' contract has been
amended to provide for payment on a per project basis rather than a quarterly
retainer .
The Company paid a management fee in the amount of $150,000 in 1999 to
Fairway Inc. for the consulting services of Mr. Needler relating to various
matters requested by the Company. Barry L. Needler, a director of the Company,
owns a majority of the outstanding shares of Fairway Inc. and is President of
that company. The contract with Fairway Inc. expired in late 1999.
The Company has an agreement with John Meany, a director of the Company, to
act as administrator of the Company's Profit Sharing Plan and to act as
corporate Secretary of the Company and to oversee the functions of the corporate
Secretary's office. Mr. Meany received total of $60,000 in 1999 under this
agreement.
4
<PAGE> 7
SECURITY OWNERSHIP
PRINCIPAL OWNERSHIP OF VOTING SECURITIES
The following table sets forth the names and share ownership as of January
14, 2000 of those persons who, to the knowledge of the Company, are the
beneficial owners of more than 5% of the Company's outstanding Common Stock
based upon information furnished to the Company by such person. Each beneficial
owner has sole power to vote and dispose of the shares indicated, except as
otherwise stated.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS OF NATURE OF
BENEFICIAL OWNERS BENEFICIAL PERCENT OF
AS OF JANUARY 14, 2000 OWNERSHIP COMMON STOCK
---------------------- ---------- ------------
<S> <C> <C>
Steeplechase Corp.(1) 1,709,250 31.82%
P.O. Box 2463, Station B
Richmond Hill, Ontario L4E 1A5
Barry L. Needler 1,860,000(2) 34.63%
P.O. Box 2463, Station B
Richmond Hill, Ontario L4E 1A5
Kirk W. Foley 555,016(3) 10.33%
2045 Lakeshore Blvd., #3507
Toronto, Ontario M8V 2Z6
Amherst Tanti U.S. Inc.(4) 520,148 9.68%
2045 Lakeshore Blvd., #3507
Toronto, Ontario M8V 2Z6
John S. Meany, Jr. 368,854(5) 6.85%
9200 S. Winchester Ave.
Chicago, Illinois 60620
Dimensional Fund Advisors 368,075 6.85%
1299 Ocean Drive
Santa Monica, CA 90401
</TABLE>
- ---------------
(1) Mr. Needler is the President and Chief Executive Officer of Steeplechase
Corp.
(2) Includes shares owned of record and beneficially by Fairway Inc. (150,750
shares) and Steeplechase Corp. (1,709,250 shares). Mr. Needler controls
these corporations and serves as a Director and Chief Executive Officer of
these corporations.
(3) Includes 520,148 shares owned of record by Amherst Tanti U.S. Inc. and
10,300 shares in a retirement fund.
(4) Amherst Tanti U.S. Inc. is owned by Kirk W. Foley and his wife. Mr. Foley
serves as President of this corporation.
(5) Includes 15,000 shares subject to issuance upon the exercise of stock
options exercisable within 60 days hereof. Also includes 6,750 shares owned
by his wife, beneficial ownership of which is disclaimed.
5
<PAGE> 8
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth, as of January 14, 2000, information
concerning the number of shares of Common Stock beneficially owned by each
director, each nominee for director, each named executive officer, and by all
executive officers and directors as a group. The totals shown below for each
person and for the group include shares held personally, shares held by
immediate family members, and shares acquirable within sixty days of the date
hereof by the exercise of stock options.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
<TABLE>
<CAPTION>
DIRECT EXERCISABLE
NAME OF BENEFICIAL OWNER OWNERSHIP OPTIONS(2) TOTAL PERCENT(3)
------------------------ --------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Robert J. Abrahams 28,175(4) 15,000 43,175 *
Donald L. Baker 143,536(5) 15,000 158,536 2.94%
Robert M. Benedict, Jr. 22,850(6) 13,333 36,183 *
Thomas N. Davidson 30,800 0 30,800 *
Mark A. Kirk 0 1,500 1,500 *
James R. Malone 107,700(7) 146,166 253,866 4.60%
Julie A. McGraw 19,500(8) 8,500 28,000 *
John S. Meany, Jr. 353,854(9) 15,000 368,854 6.85%
Barry L. Needler 1,860,000(10) 0 1,860,000 34.63%
Murray Walker 6,100(11) 1,500 7,600 *
Ivan Winfield 2,800 115,000 117,800 2.15%
Carl H. Young III 60,200 141,666 201,866 3.66%
All Executive Officers and Directors
as a Group 2,657,515 472,665 3,130,180 53.56%
</TABLE>
- ---------------
(1) Each person has sole voting and investment power with respect to all shares
shown except as indicated below.
(2) Represents shares subject to stock options that are currently exercisable
or become exercisable within 60 days hereof.
(3) Unless otherwise indicated, the percentage of Common Stock owned is less
than one percent of the Common Stock outstanding.
(4) Includes 27,500 shares held in his Individual Retirement Account.
(5) Includes 138,136 shares owned by his wife, beneficial ownership of which is
disclaimed. Mr. Baker owns 2,700 shares jointly with his wife.
(6) Includes 14,667 unvested restricted shares over which he does not exercise
any investment power.
(7) Includes 11,000 shares owned by his wife, beneficial ownership of which is
disclaimed.
(8) Includes 13,000 unvested restricted shares over which she does not exercise
any investment power.
(9) Includes 6,750 shares owned by his wife, beneficial ownership of which is
disclaimed.
(10) Shares are owned of record and beneficially by Fairway Inc. (150,750
shares) and Steeplechase Corp. (1,709,250 shares). These corporations are
controlled by Mr. Needler.
(11) Includes 6,100 shares held in a retirement plan.
6
<PAGE> 9
EXECUTIVE COMPENSATION
INTRODUCTION
The following table sets forth for each of the years 1997, 1998 and 1999
the respective amounts of compensation for the Chief Executive Officer and the
most highly compensated executive officers of the Company as of September 30,
1999 whose compensation exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
----------------------------------- COMPENSATION AWARDS(4)
OTHER ANNUAL ---------------------------
NAME AND COMPENSATION RESTRICTED STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) ($)(3) STOCK($)(5) OPTIONS(#)(6) COMPENSATION
------------------ ---- --------- -------- ------------ ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Malone(7) 1999 $180,209 $ 0 $50,000 $ 0 66,666 $ 8,898(8)
Chairman and Chief 1998 $320,667 $300,000 -- $255,850 0 $ 88,060(9)
Executive Officer 1997 $277,642 $ 0 -- $ 0 81,000 $ 0
Carl H. Young III(10) 1999 $269,792 $ 0 -- $ 0 66,666 $ 13,000(11)
President and 1998 $247,833 $300,000 -- $255,850 0 $135,945(12)
General Counsel 1997 $204,333 $ 0 -- $ 0 75,000 $ 0
Robert M. Benedict, Jr.(13) 1999 $144,822 $ 0 -- $ 15,000(14) 10,000 $ 0
Executive Vice President, 1998 $123,500 $100,000 -- $ 51,000 0 $ 0
Treasurer and Chief Financial 1997 $ 33,090 $ 0 -- $ 0 15,000 $ 0
Officer
Julie A. McGraw(15) 1999 $103,542 $20,000 -- $ 11,250(14) 7,500 $ 0
Vice President, Controller and 1998 -- -- -- -- -- --
Chief Accounting Officer 1997 -- -- -- -- -- --
</TABLE>
- ---------------
(1) Salary amounts include automobile allowance and automobile insurance, and
an employment bonus of $65,000 paid in 1997 to Carl Young.
(2) Amounts paid to Messrs. Malone, Young and Benedict in 1998 pursuant to a
stay bonus agreement with each individual related to the sale of Bliss
Manufacturing Company, a former subsidiary, in 1998. The amount paid in
1999 to Ms. McGraw is pursuant to a separate stay bonus arrangement.
(3) No executive officer received perquisites or other benefits required to be
disclosed under applicable regulations except for James R. Malone. In 1999
he received a lump sum payment to be spent in his discretion on such
perquisites and benefits as he desired.
(4) The Company maintains plans under which stock options may be awarded. The
Company does not, however, make "long term compensation awards" as that
term is used in applicable SEC rules, because the amount of Company
incentive awards is not measured by performance of the Company over longer
than a one-year period.
(5) Reflects the fair market value of grants of restricted stock on the dates
of grant. For Messrs. Malone and Young does not include the value of
restricted shares surrendered and returned to the Company. There was an
aggregate of 98,868 shares that were still restricted at September 30,
1999, with a value of $173,019. No dividends have been paid on the shares
awarded in the above table because no dividends have been declared by the
Company since those shares were awarded.
(6) Reflects the number of shares of Common Stock of the Company covered by
stock options granted during the year. No stock appreciation rights
("SAR"), either in conjunction with or separate from stock options, were
granted to the named executives during the years shown.
(7) Mr. Malone was elected as Chairman of the Company in December 1996 and
Chief Executive Officer in May 1997.
(8) Life insurance premium.
(9) Includes relocation expenses ($79,162) and life insurance premium ($8,898).
(10) Mr. Young was elected President effective July 1998. He was elected
Executive Vice President and General Counsel in May 1997 and previously
served as Vice President-Administration and General Counsel from February
1997 to May 1997.
(11) Life Insurance premium.
(12) Includes relocation expenses ($122,945) and life insurance premium
($13,000).
(13) Mr. Benedict was elected Vice President and Treasurer in May 1997, Chief
Financial Officer in May 1998 and Executive Vice President in December
1998.
(14) Restricted stock awarded in 1999 vests in three approximately equal
installments on the date of the award and on the first and second
anniversary dates of the award. In 1999 Mr. Benedict received an award of
10,000 shares of restricted stock and Ms. McGraw received an award of 7,500
shares of restricted stock.
(15) Ms. McGraw was elected Controller and Chief Accounting Officer in March
1998, and was elected Vice President in December 1998.
7
<PAGE> 10
1992 OMNIBUS LONG-TERM COMPENSATION PLAN
In 1992, the stockholders of the Company adopted the Omnibus Long-Term
Compensation Plan (the "Plan"). The purpose of the Plan is to advance the
long-term interests of the Company by motivating executive personnel by means of
long-term stock based or derivative compensation, to align the interests of
participants with those of the stockholders, and to permit the Company to
attract and retain Directors and executive personnel.
The Plan provides for the grant of the following types of awards: stock
options, including incentive stock options; stock appreciation rights, in tandem
with stock options or freestanding; common stock awards; phantom stock;
restricted stock; and performance shares. Awards are determined by the
Compensation Committee and approved by the Board of Directors.
The following table sets forth information regarding options granted in
1999 to the named executive officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF STOCK
SECURITIES PERCENT OF APPRECIATION FOR
UNDERLYING TOTAL OPTION OPTION TERM
OPTIONS GRANTED TO EXERCISE EXPIRATION ---------------------
NAME GRANTED EMPLOYEES PRICE(1) DATE 5%($) 10%($)
---- ---------- ------------ -------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
James R. Malone 66,666 22% $1.50 February 18, 2004 $27,628 $61,050
Carl H. Young III 66,666 22% $1.50 February 18, 2004 $27,628 $61,050
Robert M. Benedict, Jr. 10,000 3% $1.50 February 18, 2004 $ 4,144 $ 9,158
Julie A. McGraw 7,500 2% $1.50 February 18, 2004 $ 3,108 $ 6,878
</TABLE>
- ---------------
(1) The stock options issued in 1999 were valued at the closing price on
February 18, 1999, the date of grant.
The following table sets forth information regarding stock options held at
the end of the fiscal year by the named executive officers. There were no stock
option exercises in 1999 by any named executive officer.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 1999(2)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James R. Malone 146,166 1,500 $16,667 $ 0
Carl H. Young, III 141,666 0 $16,667 $ 0
Robert M. Benedict, Jr. 13,333 11,667 $ 833 $1,667
Julie A. McGraw 8,500 8,000 $ 625 $1,250
</TABLE>
- ---------------
(1) There were no SARs outstanding at September 30, 1999 and none were granted
during the year.
(2) The "value of unexercised in-the-money options at September 30, 1999" was
calculated by determining the difference between the fair market value of
the underlying shares of Common Stock at September 30, 1999 ($1.75 per
share) and the exercise price of the option. An option is "in-the-money"
when the fair market value of the underlying shares of Common Stock exceeds
the exercise price of the option. The only options held by the named
executive officers that were "in the money" on September 30, 1999 were those
granted in 1999.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
Mr. Malone and Mr. Young have employment agreements which state that they
are to receive one year's salary in the event of termination of employment
without cause. Certain executives of the Company, including the named executive
officers, also have agreements which provide that in the event of termination of
employment without cause (other than for death or disability, or voluntary
termination by the employee) in the twelve months following a change in control
(as defined in the agreement), the
8
<PAGE> 11
executives are to receive compensation equal to a certain number of months of
salary. In the case of Mr. Malone and Mr. Young, this compensation is equal to
two years' base salary. In the case of Mr. Benedict and Ms. McGraw, this
compensation is equal to one years' base salary.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for
recommending to the Board of Directors the compensation of executive officers
and key employees of the Company. During 1999 the Compensation Committee
consisted of Robert J. Abrahams, Moffat Dunlap (resigned from the Board in
September 1999), Barry Needler and Murray Walker. The Compensation Committee
currently consists of Robert J. Abrahams.
The Compensation Committee annually reviews compensation of the Chief
Executive Officer, other executive officers and key employees of the Company.
The Compensation Committee meets periodically during the year to monitor
performance and fix awards based on performance standards and to review
compensation decisions. The Committee's policy in evaluating and compensating
executive officers and key employees is to consider the performance of the
Company as a whole and the individual's contribution toward the Company's
attainment of established Company and individual goals. Factors considered in
evaluating performance are both subjective (such as the individual's performance
and development) and objective (such as the attainment of specified financial
goals).
The composition of compensation varies broadly among executive officers and
key employees of the Company based on their responsibilities. Generally, base
salary is targeted at competitive rates believed by the Committee members to be
necessary in their experience to retain qualified personnel. The Company
maintains an Incentive Bonus Plan under which participating employees may be
eligible for a bonus if the Company meets certain financial targets which are
established annually by the Compensation Committee. For 1999, the maximum bonus
payable to an individual was a percentage of base salary ranging from 10% to
50%. No bonuses were to be paid in 1999 unless the Company's earnings before
interest, taxes, depreciation and amortization (EBITDA) met or exceeded the
amount equal to the minimum bonuses payable under the plan. The targeted EBITDA
level was not reached, and therefore no bonuses were paid in 1999. Bonuses for
prior years were based on varying performance criteria, including the Company's
pretax profits, return on assess, cost containment programs and gross margin.
The annual targets established by the Compensation Committee have not been met
since 1994, and no bonuses have been awarded under this Plan since 1994. From
time to time, the Company engages outside compensation consultants to provide
information and advice about competitive levels of compensation and particular
compensation techniques.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Malone agreed to a reduction in salary effective August 1, 1998 to
$125,000 per year because of the change in the size and complexity of the
Company and because of the time devoted by Mr. Malone to other business
interests outside the Company. Effective May 1, 1999 Mr. Malone returned to the
company on a full-time basis and reduced his outside business commitments. At
that time, his salary was restored to its prior level of $325,000 per year. Mr.
Malone receives other benefits available generally to all executives and was
also given a lump sum payment of $50,000 to be spent in his discretion for other
benefits. The Company also paid life insurance premiums for Mr. Malone. Mr.
Malone did not participate in the incentive bonus plan in 1999 in order to
reduce the minimum target that had to be met in order to pay bonuses under the
incentive bonus plan.
For the Compensation Committee
Robert J. Abrahams
9
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Robert J. Abrahams, Moffat Dunlap (resigned from the Board of Directors in
September 1999), Barry Needler and Murray Walker served as members of the
Compensation Committee in 1999. Robert J. Abrahams provides consulting services
to the Company related to retail financing programs for the Company's
distributors worldwide. He received $50,000 for the services in fiscal 1999.
Barry Needler is the President and principal owner of Fairway Inc., which
provided management consulting services to the Company in 1999. Fairway Inc.
received $150,000 in 1999 for these services. Mr. Needler served as Vice
Chairman of the Company in 1999 and resigned that position in late 1999. See the
section entitled "COMMITTEES AND COMPENSATION OF THE BOARD OF
DIRECTORS -- Consulting Agreements" elsewhere in this proxy statement for more
information.
PERFORMANCE COMPARISONS
The following chart compares the cumulative shareholder return of the
Company for the five years ended September 30, 1999 to the NASDAQ National
Market Composite Index and a Company-determined peer group. The Company's Common
Stock was listed and traded on the NASDAQ National Market System until February,
1999 and since then has been traded on the NASDAQ OTC Bulletin Board. The chart
assumes the investment of $100 on September 30, 1994 and the immediate
reinvestment of all dividends. The companies making up the peer group are in
industries believed to be comparable to the Company.
10
<PAGE> 13
PERFORMANCE GRAPH AND TABLE
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG HMI INDUSTRIES INC.,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
[GRAPH]
Assumes $100 Invested on Oct. 1, 1994
Assumes Dividend Reinvested
Fiscal Year Ending Sept. 30, 1999
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
HMI Industries Inc. ......... 100.00 107.01 53.06 41.27 13.76 13.76
Peer Group................... 100.00 68.40 98.90 179.02 43.09 51.83
NASDAQ Market Index.......... 100.00 121.41 141.75 192.67 200.23 323.92
</TABLE>
The peer group companies include companies believed to be in similar lines
of business as the Company. The companies in the peer group are National Presto
Industries, Inc., Salton, Inc., Sunbeam Corporation, and Windmere-Durable
Holdings, Inc. Some of the Company's direct competitors are divisions of larger
corporations, privately held corporations or foreign corporations and are not
included in the peer comparisons since the pertinent information is not
available to the public.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's officers, directors and owners of more than 10% of the Company's
common stock file reports of ownership and changes in ownership of the Company's
securities with the Securities and Exchange Commission and to furnish the
Company with a copy of all such reports they file.
11
<PAGE> 14
Based solely on a review of the copies of such forms the Company has
received, the Company believes that all of its executive officers and directors
complied with all filing requirements applicable to them with respect to
transactions during the fiscal year ended September 30, 1999, except for Murray
Walker, a director, who on one occasion was delinquent in filing a Form 4 prior
to the due date. The delinquency was inadvertent and the required filing was
made promptly after the failure to file on a timely basis was noted.
PROPOSALS OF STOCKHOLDERS
Any proposal which a stockholder intends to present at the annual meeting
of stockholders to be held in the year 2001 and wishes to include in the proxy
statement must be received by the Secretary of the Company at its executive
offices at Genesis Office Building, 6000 Lombardo Center, Seven Hills, Ohio
44131 no later than September 30, 2000. If the Company is not notified of a
stockholder proposal by December 14, 2000, then the proxies held by management
may provide the discretion to vote against such proposals. All proposals
submitted must be accompanied by the name, address, telephone number and number
of shares owned by the proposing stockholder. If the proposing stockholder is
not a shareholder of record, proof of beneficial ownership must be submitted.
All proposals must be a proper subject for action by shareholders and must
comply with the rules of the Securities and Exchange Commission.
OTHER MATTERS; SOLICITATION OF PROXIES
As of the time of preparation of this proxy statement, the Board of
Directors knows of no matters other than those described herein. However, if any
other matter properly comes before the meeting or any adjournment thereof, the
person or persons voting the proxies will vote them in accordance with their
best judgment.
Costs of solicitation will be borne by the Company. Solicitation will be by
mail, except for any incidental personal solicitation made by directors,
officers and regular employees of the Company.
By Order of the Board of Directors
/s/ John S. Meany, Jr.
John S. Meany, Jr.
Secretary
January 28, 2000
Cleveland, Ohio
12
<PAGE> 15
HMI INDUSTRIES INC.
GENESIS OFFICE BUILDING, 6000 LOMBARDO CENTER, SEVEN HILLS, OHIO 44131
ANNUAL MEETING OF STOCKHOLDERS, MARCH 8, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James R. Malone, John S. Meany, Jr. and Carl
H. Young III or any of them, each with power of substitution, attorneys and
proxies for and in the name and place of the undersigned, to vote the number of
shares that the undersigned would be entitled to vote if then personally present
at the Annual Meeting of Stockholders of HMI Industries Inc., to be held at the
Cleveland Marriott Downtown at Key Center, 127 Public Square, Cleveland, OH
44115 on Wednesday, March 8, 2000, at 10:00 A.M. Eastern Standard Time, and at
any adjournment or postponement thereof upon the matters set forth in the Notice
of Annual Meeting and Proxy Statement, receipt of which is hereby acknowledged,
as follows:
<TABLE>
<S> <C> <C>
1. Election of Directors [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as noted to the contrary below) to vote for all nominees listed below
</TABLE>
NOMINEES: Robert J. Abrahams, Thomas N. Davidson, James R. Malone
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE FOLLOWING LINE:
- --------------------------------------------------------------------------------
2. Ratification of the selection of PricewaterhouseCoopers LLP as auditors of
the Company for the fiscal year 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon all other
matters properly brought before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED IN THE SPACE
PROVIDED. TO THE EXTENT NO DIRECTIONS ARE GIVEN, THEY WILL BE VOTED FOR THE
ELECTION OF ANY OR ALL OF THE NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2, AND IN
THE DISCRETION OF THE PROXIES ON ALL OTHER MATTERS PROPERLY BROUGHT BEFORE THE
MEETING AND ANY ADJOURNMENT THEREOF. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR
TO ITS EXERCISE.
Dated , 2000
----------------- --------------------------------
Signature
--------------------------------
Signature (if jointly held)
Where stock is registered
jointly in the names of two or
more persons, all should sign.
Signature should correspond
exactly with the name on the
stock certificate. Persons
signing in a representative
capacity should indicate that
capacity.
I DO [ ] DO NOT [ ]
PLAN TO ATTEND THE
ANNUAL MEETING IN PERSON.
Proxy Card
