<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
WHITMAN CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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>
[LOGO]
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois
60008
Bruce S. Chelberg
Chairman and
Chief Executive Officer
March 18, 1994
Dear Shareholder:
We are pleased to invite you to attend the 1994 Annual
Meeting of Shareholders of Whitman Corporation, which will be
held in the First Chicago Center, One First National Plaza,
Dearborn and Madison Streets, Chicago, Illinois, on Thursday,
May 5, 1994, commencing at 10:30 a.m., Central Time.
As more fully set forth in the notice of the meeting and
proxy statement which appear on the following pages, the
principal items of business at the meeting will be the
election of directors and the ratification of the selection of
independent public accountants for the year 1994. We will also
report to you at the meeting on the business and affairs of
the Company.
Our Annual Report for 1993 accompanies this statement. In
accordance with our regular practice, a report of the annual
proceedings, including an account of actions taken, will be
sent to you following the meeting.
In order to complete arrangements for the meeting, we
would like to know in advance how many shareholders expect to
attend. If you plan to attend, please check the box provided
on the proxy card.
Your vote is important no matter how many shares you own.
We hope you will be able to attend the meeting in person, but
if you cannot, please sign and date the enclosed proxy and
return it in the accompanying envelope. PROMPT RETURN OF YOUR
PROXY WILL SAVE THE EXPENSE OF SENDING YOU A SECOND PROXY.
/s/ Bruce S. Chelberg
Chairman and Chief Executive
Officer
<PAGE>
WHITMAN CORPORATION
Notice of Annual Meeting of Shareholders
To: Shareholders of Whitman Corporation
The Annual Meeting of Shareholders of Whitman Corporation will be held in
the First Chicago Center, One First National Plaza, Dearborn and Madison
Streets, Chicago, Illinois, on Thursday, May 5, 1994, at 10:30 a.m., Central
Time, for the following purposes:
1. To elect nine directors of the Company;
2. To consider and vote upon a proposal to ratify the selection of KPMG
Peat Marwick as independent public accountants for the year 1994; and
3. To act upon such other matters as may properly come before the meeting.
The close of business on March 7, 1994, has been fixed as the record date
for determination of shareholders entitled to notice of and to vote at the
Annual Meeting.
Please sign and date the enclosed proxy and return it in the accompanying
envelope as promptly as possible. If you attend the meeting, you may vote your
stock in person if you wish. A proxy may be revoked by appropriate notice to the
secretary of the meeting at any time prior to the voting thereof.
/s/ William B. Moore
WILLIAM B. MOORE
Secretary
Rolling Meadows, Illinois
March 18, 1994
<PAGE>
WHITMAN CORPORATION
3501 Algonquin Road, Rolling Meadows, Illinois 60008
Proxy Statement
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1994
This proxy statement, which is first being mailed to shareholders on or
about March 18, 1994, is furnished in connection with the solicitation by the
Board of Directors of Whitman Corporation (the "Company") of proxies for use at
the Annual Meeting of Shareholders to be held on May 5, 1994, and any
adjournments thereof. Any shareholder giving a proxy may revoke it at any time
before it is voted. The giving of a proxy will not limit the right of a
shareholder to vote in person at the meeting.
There were outstanding at the close of business on March 7, 1994, the record
date for determination of the shareholders of the Company entitled to notice of
and to vote at the Annual Meeting, 105,902,919 shares of Common Stock entitled
to one vote per share. Only shareholders of record as of the record date will be
entitled to vote at the meeting or any adjournments thereof. Duly executed
proxies will be voted in accordance with the shareholders' specifications marked
thereon. If no specifications are marked thereon with respect to one or more
proposals, proxies will be voted as to such proposals in accordance with the
recommendations of the Board of Directors set forth in this proxy statement.
Except for the election of directors, which shall be by plurality vote, the
affirmative vote of the holders of a majority of the shares present or
represented by proxy at the meeting and entitled to vote on the matter is
required for approval of each proposal presented in this proxy statement and of
any other matter which may properly come before the meeting. In accordance with
Delaware law and the Company's Certificate of Incorporation and By-Laws, an
abstention will have the same effect as a vote "Against". Additionally, shares
which are not voted by a broker or other nominee on a particular matter will not
be considered as "shares present or represented by proxy" for the purposes of
calculating whether an affirmative vote has been attained.
The rules of the Securities and Exchange Commission require that an annual
report accompany or precede the proxy materials. However, no more than one
annual report need be sent to the same address. Shareholders receiving two or
more annual reports in the same household may wish to reduce the total number of
annual reports they receive, which will save expense to the Company. If so,
please check the appropriate box on the proxy card for the accounts you select.
Eliminating these duplicate mailings will not affect receipt of future proxy
statements and proxy cards.
ELECTION OF DIRECTORS
Nine directors are to be elected at the Annual Meeting. The directors so
elected will hold office as directors until the next Annual Meeting of
Shareholders and until their respective successors shall have been duly elected
and qualified. Unless otherwise directed, proxies in the accompanying form will
be voted for the nominees listed below. Proxies may also be voted for a
substitute nominee or nominees in the event any one or more of the nominees
shall be unable to serve for any reason or withdraws from nomination, a
contingency not now anticipated. Except for Mr. Gilbert, all of the following
nominees are present directors of the Company whose terms expire at the 1994
Annual Meeting.
1
<PAGE>
[PHOTO 1]
BRUCE S. CHELBERG DIRECTOR SINCE 1988
Chairman and Chief Executive Officer
Whitman Corporation
Mr. Chelberg, 59, received his BS degree from the
University of Illinois in 1956 and an LLB degree from the
University of Illinois College of Law in 1958. From 1958 to
1981 he was employed by Trans Union Corporation, where he
attained the position of President and Chief Operating
Officer and director. Mr. Chelberg joined Whitman
Corporation in 1982 as Senior Vice President-International.
After holding a number of other positions, he became Executive Vice President of
the Company in 1985 and Chairman and Chief Executive Officer in 1992. Mr.
Chelberg is a director of First Midwest Bancorp, Inc., Northfield Laboratories
Inc. and Snap-on Tools Corporation, and is a member of the Board of Higher
Education for the State of Illinois. He is also a member of the Illinois State
Bar Association.
[PHOTO 2]
RICHARD G. CLINE DIRECTOR SINCE 1987
Chairman, President and
Chief Executive Officer
NICOR Inc.
Mr. Cline, 59, joined NICOR Inc. as President and Chief
Operating Officer in July, 1985, and became Chairman of the
Board and Chief Executive Officer in January, 1986. NICOR is
a diversified holding company with subsidiaries engaged in
natural gas distribution and containerized liner shipping.
For the previous 22 years, Mr. Cline was an executive of
Jewel Companies, Inc. He was elected President of Jewel's Osco Drug, Inc.
subsidiary in 1970, President, Chief Operating Officer and a director of Jewel
in 1980, and Chairman, President and Chief Executive Officer in 1984. He
resigned in 1985 following Jewel's acquisition by another company. He is a
director of Pet Incorporated, a director and Chairman of the Federal Reserve
Bank of Chicago, a life trustee of Rush-Presbyterian-St. Lukes Medical Center
and a Governor of the Illinois Council on Economic Education. Mr. Cline is a
1957 graduate of the University of Illinois, and he serves as a director of the
University of Illinois Foundation.
[PHOTO 3]
JAMES W. COZAD DIRECTOR SINCE 1986
Retired Chairman and
Chief Executive Officer
Whitman Corporation
Mr. Cozad, 67, served as Chairman and Chief Executive
Officer of Whitman Corporation from January 1, 1990, until
his retirement in May, 1992. For the previous 20 years he
served as an officer of Amoco Corporation and its
affiliates. He joined Amoco Oil Company in 1969 as Financial
Vice President. He became a Vice President of Amoco
Corporation in 1971, a director in 1976, Executive Vice President in 1978 and
Vice Chairman in 1983. Prior to joining Amoco, he held positions as an officer
of Philip Morris, Inc. and Hygrade Food Products Corporation. Mr. Cozad is also
a director of Eli Lilly and Company, GATX Corporation, Inland Steel Industries,
Inc. and Sears, Roebuck & Co. A graduate of Indiana University, he serves as a
director of the Indiana University Foundation and the Chicago Medical School and
as President and a director of the Lyric Opera of Chicago. Mr. Cozad is also a
trustee of Northwestern Memorial Hospital.
2
<PAGE>
[PHOTO 4]
PIERRE S. DU PONT IV DIRECTOR SINCE 1990
Richards, Layton & Finger, P.A.
Governor du Pont, 59, is a member of the law firm of
Richards, Layton & Finger, P.A., Wilmington, Delaware. A
1956 graduate of Princeton University, he served in the U.S.
Navy from 1957-1960 and received his law degree from Harvard
University in 1963. After six years in business with E.I. du
Pont de Nemours & Co., Inc., he entered politics in 1968,
serving in the Delaware House of Representatives
(1968-1970), as a member of the U.S. House of
Representatives (1971-1977), and as Governor of the State of
Delaware (1977-1985). He is a trustee of The Northwestern Mutual Life Insurance
Company and a director of Pet Incorporated, Louisiana-Pacific Corporation and
the American Productivity & Quality Center, Inc. Governor du Pont served as
Chairman of the Hudson Institute in 1985-1986 and currently serves as Policy
Chairman of the National Center for Policy Analysis.
[PHOTO 5]
ARCHIE R. DYKES DIRECTOR SINCE 1985
Chairman
Capital City Holdings Inc.
Dr. Dykes, 63, is Chairman of Capital City Holdings
Inc., Nashville, Tennessee, a venture capital organization.
He is also Chairman of the Education Corporation of America.
Dr. Dykes served as Chairman and Chief Executive Officer of
the Security Benefit Group of Companies from 1980 through
1987. He served as Chancellor of the University of Kansas
from 1973 to 1980. Before that he was Chancellor of the
University of Tennessee. Dr. Dykes is a director of the Fleming Companies, Inc.,
Bradford Capital Partners, Education Corporation of America and Pet
Incorporated. He is also a member of the Board of Trustees of the Kansas
University Endowment Association and the William Allen White Foundation. He
formerly served as Vice Chairman of the Commission on the Operation of the
United States Senate and as a member of the Executive Committee of the
Association of American Universities.
[PHOTO 6]
HELEN GALLAND DIRECTOR SINCE 1981
President
Helen Galland Associates
Helen Galland, 68, has spent her career in
merchandising. Following graduation in 1945 from Hunter
College with a BA degree in Psychology, she began her
business career with Lord & Taylor. In 1950, she joined
Bonwit Teller as a buyer, ultimately becoming Senior Vice
President and General Merchandise Manager in 1970. In 1975,
Mrs. Galland left Bonwit Teller to become President of the
Wamsutta Trucraft Home Fashions Division of M. Lowenstein. She returned to
Bonwit Teller in 1980 as Senior Vice President of Fashion and Communications
prior to her appointment as President and Chief Executive Officer in that same
year. She left Bonwit Teller in 1983 to start her own marketing consulting and
business counseling organization. She is also a director of Pet Incorporated and
Woolworth Corporation. Mrs. Galland has served as President of The Fashion
Group. In 1981, she was named a member of the Board of Directors for the
Educational Foundation of the Fashion Institute of Technology. She is also a
Vice President and director of the City of Hope Hospital and Research Center and
a member of the Board of Advisors of Yankelovich Clancy & Shulman, a research
and trend forecasting company.
3
<PAGE>
[PHOTO 7]
JAROBIN GILBERT, JR. NEW NOMINEE
President and Chief Executive Officer
DBSS Group, Inc.
Mr. Gilbert, 48, is President and Chief Executive
Officer of DBSS Group, Inc., a management, planning and
international trade advisory firm which he founded in 1992.
Between 1990 and 1992, he was an independent consultant
concentrating in advisory services, trade consulting and
negotiations. During the previous 12 years, he served in
several executive capacities with National Broadcasting
Company, including Vice President Planning and
Development-NBC Sports, Vice President-Olympics, and Vice President, NBC
Television Network and Assistant to the Chief Operating Officer. He is a
director of the Woolworth Corporation and the Atlantic Mutual Companies. Mr.
Gilbert also serves on the Board of the American Council on Germany and the
Carnegie Council on Ethics and International Affairs, and is a permanent member
of the Council on Foreign Relations.
[PHOTO 8]
DONALD P. JACOBS DIRECTOR SINCE 1988
Dean, J. L. Kellogg
Graduate School of Management
Northwestern University
Dr. Jacobs, 66, is the Gaylord Freeman Distinguished
Professor of Banking and Dean of the J. L. Kellogg Graduate
School of Management of Northwestern University. He has been
a member of the Northwestern faculty since 1957, and chaired
the Finance Department from 1969 until his appointment as
Dean of the Kellogg School in 1975. He also serves as a
director of Commonwealth Edison Company, First Chicago Corporation and The First
National Bank of Chicago, Hartmarx Corporation, Pet Incorporated, UDC Homes,
Inc. and Unocal Corporation. Dr. Jacobs is a 1949 graduate of Roosevelt
University and received MA and PhD degrees in Economics from Columbia
University.
[PHOTO 9]
CHARLES S. LOCKE DIRECTOR SINCE 1991
Chairman of the Board and
Chief Executive Officer
Morton International, Inc.
Mr. Locke, 65, was Chairman of the Board and Chief
Executive Officer of Morton Thiokol, Inc. from 1980 until
July 1, 1989, when he was elected to corresponding offices
of Morton International, Inc. upon its spin-off from Morton
Thiokol. Morton International is a manufacturer of specialty
chemicals, automotive safety products and salt. Mr. Locke is
scheduled to retire from Morton International on March 31, 1994. Mr. Locke is
also a director of Avon Products, Inc., NICOR Inc., Northern Illinois Gas
Company and Thiokol Corporation. He is Chairman of the Board of Trustees of the
Museum of Science and Industry, a director of the Lyric Opera of Chicago and the
National Merit Scholarship Corporation, and a member of The Conference Board. He
received a BBA degree in 1952 and an MS degree in 1955 from the University of
Mississippi.
4
<PAGE>
GENERAL INFORMATION
The Board of Directors of the Company represents the interests of the
shareholders as a whole and is responsible for directing the management of the
business and affairs of the Company, as provided by Delaware law.
The Board of Directors held six meetings in 1993. All of the directors
attended 85% or more of both Board and Committee meetings, and average
attendance was 98%. Current directors C. Jackson Grayson, Jr. and Harry A. Merlo
will retire from the Board when their terms expire at the 1994 Annual Meeting.
The Board of Directors has the following committees:
The EXECUTIVE COMMITTEE of the Board is constituted by the Board of
Directors to act in lieu of the Board and between meetings of the Board. The
Committee consists of Bruce S. Chelberg, Chairman, Richard G. Cline, James W.
Cozad, Donald P. Jacobs and Charles S. Locke. The Executive Committee did not
meet in 1993.
The AUDIT COMMITTEE functions are to review the audit report of the Company
as prepared by its designated certified public accountants, recommend the
selection of a certified public accounting firm each year and review audit and
any non-audit fees paid to the Company's certified public accountants. The audit
reports of the Internal Audit Department are also available for review by the
Committee, and the head of that Department regularly attends Audit Committee
meetings and gives reports to and answers inquiries from the Audit Committee as
required. The Committee reports its findings and recommendations to the Board
for appropriate action. The Audit Committee is composed of the following
directors: Harry A. Merlo, Chairman, Pierre S. du Pont IV, Helen Galland, C.
Jackson Grayson, Jr. and Charles S. Locke. During 1993, the Committee held two
meetings.
The MANAGEMENT RESOURCES AND COMPENSATION COMMITTEE is charged with the
responsibility of supervising the Company's compensation policies; management
evaluation and succession planning; administering the Management Incentive
Compensation Plan and the Stock Incentive Plan; reviewing salaries on authority
delegated by the Board; approving salary adjustments except those of the
Chairman of the Company and the Chief Executive Officer of any operating
company; approving significant changes in salaried employee benefits; and
recommending to the Board such other forms of remuneration as it deems
appropriate. The Committee consists of Richard G. Cline, Chairman, James W.
Cozad, Archie R. Dykes and Donald P. Jacobs. During 1993, the Committee held six
meetings.
The COMMITTEE ON DIRECTORS is charged with the responsibility of presenting
nominations of prospective Board members to the Board of Directors and to
consider other matters pertaining to Board membership, such as meeting dates,
retirement policy and compensation of outside directors. The Committee is
composed of the following directors: Helen Galland, Chairwoman, Richard G.
Cline, Pierre S. du Pont IV and C. Jackson Grayson, Jr. During 1993, the
Committee held one meeting. In carrying out its responsibilities relative to
finding the best qualified persons to serve as directors, the Committee will
consider nominees recommended by other directors, shareholders and management
who present for evaluation by the Committee appropriate data with respect to the
suggested candidate, consisting of age, business experience, educational
background, current directorships, involvement in legal proceedings during the
last five years which are material to evaluation of the integrity of the
candidate, and an indication of the willingness of the candidate to serve as a
director. Each recommendation should be sent to the Secretary of the Company
prior to December 1 of each year.
The FINANCE AND PENSION COMMITTEE supervises the financial affairs of the
Company and receives and reviews reports of the Management Committee for the
Company's pension plans. The Board has delegated to the Finance and Pension
Committee and certain officers its authority to approve financing arrangements
involving the borrowing of up to $100 million in any one transaction. It
periodically reports to the Board of Directors of action taken to approve
financing transactions in excess of $25 million. The Committee consists of
Donald P. Jacobs, Chairman, Archie R. Dykes, Charles S. Locke and Harry A.
Merlo. During 1993, the Committee held two meetings.
5
<PAGE>
Directors who are not employees of the Company receive an annual retainer of
$20,000, plus $1,000 for each meeting of the Board and $600 for each Board
Committee meeting attended. The Chairman of each Board Committee is paid an
additional $5,000 annual retainer. In addition, on February 18, 1994, each
outside director received a payment of 300 shares of Common Stock plus its
equivalent fair market value in cash, or a total for the shares and cash of
$4,837.50, as a supplement to the annual retainer.
The Company has established a director emeritus program for eligible
non-employee directors. Upon the retirement of an eligible director at any time
(mandatory after the term in which the director attains age 70) who agrees to be
available to render advice at the pleasure of the Board, he will be designated
as a director emeritus and, depending upon length of service as a director, is
paid a retainer of $5,000 per calendar quarter up to a maximum of 40 quarters.
In the event of the death of a director who is participating in or who is
otherwise eligible for this program, such payments are made to the director's
surviving spouse.
PRINCIPAL SHAREHOLDERS
As of March 7, 1994, no person was known by the Company to be the beneficial
owner of more than 5% of the Company's Common Stock, except as set forth below.
The information below is contained in statements on Schedule 13G filed by
Oppenheimer Group, Inc. and Southeastern Asset Management, Inc., respectively,
with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OWNERSHIP OF CLASS
- ----------------------------------------------- ------------------- ------------
<S> <C> <C>
Oppenheimer Group, Inc. (1)
Oppenheimer Capital
Oppenheimer Tower
World Financial Center
New York, New York 10281....................... 12,955,818 12.1%
Southeastern Asset Management, Inc. (2)
860 Ridgelake Boulevard
Suite 301
Memphis, Tennessee 38120....................... 7,915,857 7.4%
<FN>
- ------------
(1) As of December 31, 1993, Oppenheimer Group, Inc. had shared voting power
and shared dispositive power as to 12,955,818 shares, which included
11,977,478 shares as to which Oppenheimer Capital had shared voting power
and shared dispositive power.
(2) As of December 31, 1993, Southeastern Asset Management, Inc. had sole
voting power as to 6,662,957 shares, sole dispositive power as to
6,782,957 shares, and shared voting power and shared dispositive power as
to an additional 1,060,000 shares.
</TABLE>
6
<PAGE>
SECURITIES OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned as of March 7, 1994, by each director and nominee for
director of the Company, by each executive officer named below, and by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OR IDENTITY OF GROUP OWNERSHIP OF CLASS
- ------------------------------------------------------ ------------- --------
<S> <C> <C>
Bruce S. Chelberg..................................... 382,525(a) *
Richard G. Cline...................................... 3,750 *
James W. Cozad........................................ 368,687(a) *
Pierre S. du Pont IV.................................. 1,300 *
Archie R. Dykes....................................... 3,685 *
Helen Galland......................................... 6,880 *
Jarobin Gilbert, Jr................................... 100 *
C. Jackson Grayson, Jr................................ 6,117 *
Donald P. Jacobs...................................... 2,217 *
Charles S. Locke...................................... 2,000 *
Harry A. Merlo........................................ 2,400 *
Thomas L. Bindley..................................... 72,565(a) *
Gerald A. McGuire..................................... 113,320(a) *
John R. Moore......................................... 188,032(a) *
J. Larry Vowell....................................... 89,954(a) *
All Directors and Executive
Officers as a Group (19 persons)..................... 1,537,157(b) 1.45
<FN>
- ------------
*Less than 1%.
(a) Includes shares which the named director or executive officer has the right
to acquire within 60 days after March 7, 1994, through exercise of stock
options, as follows: Mr. Chelberg, 158,933 shares; Mr. Cozad, 183,000
shares; Mr. Bindley, 63,433 shares; Mr. McGuire, 74,467 shares; Mr. Moore,
80,375 shares; and Mr. Vowell, 72,969 shares.
(b) The number of shares of Common Stock shown as beneficially owned include
653,395 shares which directors and executive officers have the right to
acquire within 60 days following March 7, 1994, through the exercise of
stock options, 50,600 shares subject to possible forfeiture under
outstanding Restricted Stock Awards, and 632 shares representing the vested
beneficial interest of such persons under the Company's Retirement Savings
Plan.
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below shows annual and long term compensation for each of the
Company's five most highly compensated executive officers for services in all
capacities to the Company and its subsidiaries during 1991, 1992 and 1993.
Compensation, as reflected in this table and the tables on stock options which
follow, is presented on the basis of rules of the Securities and Exchange
Commission and does not, in the case of certain stock-based awards or accruals,
necessarily represent the amount of compensation realized or which may be
realized in the future.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------------
AWARDS
--------------------------
SECURITIES ALL OTHER
ANNUAL COMPENSATION UNDER- COMPENSATION ($)(C)
-------------------------------------------------------- RESTRICTED LYING ---------------------
NAME AND PRINCIPAL OTHER ANNUAL STOCK OPTIONS
POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(C) AWARDS ($)(D) (#)
- ---------------------- --------- ----------- ----------- ------------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Bruce S. Chelberg (a) 1993 548,333 575,000 13,025 207,514 47,600 58,400
Chairman and Chief 1992 491,667 425,000 12,130 -0- 129,200 64,778
Executive Officer 1991 416,250 380,000 -0- 100,000
Thomas L. Bindley (b) 1993 360,208 280,000 12,440 101,723 23,300 14,616
Executive Vice 1992 240,038 150,000 4,193 -0- 117,000 -0-
President
Gerald A. McGuire 1993 289,625 270,000 9,865 84,091 19,400 25,418
Corporate Vice 1992 270,000 134,000 9,586 -0- 48,000 34,921
President; President 1991 251,667 170,000 -0- 52,000
and Chief Executive
Officer, Pepsi-Cola
General Bottlers,
Inc.
John R. Moore 1993 303,167 85,000 14,733 74,597 17,100 23,890
Corporate Vice 1992 288,333 95,000 13,311 -0- 48,000 30,487
President; President 1991 273,333 77,000 -0- 55,500
and Chief Executive
Officer, Midas
International
Corporation
J. Larry Vowell 1993 251,080 260,000 8,392 78,665 18,100 21,645
Corporate Vice 1992 230,004 272,000 3,765 -0- 48,000 36,606
President; President 1991 200,004 295,000 -0- 42,500
and Chief Executive
Officer, Hussmann
Corporation
<FN>
- ---------------
(a) Mr. Chelberg became Chairman and Chief Executive Officer in May, 1992. He
previously served as Executive Vice President of the Company.
(b) Mr. Bindley joined the Company as Executive Vice President in April, 1992.
(c) In accordance with the transitional provisions applicable to the revised
rules on disclosure of executive compensation adopted by the Securities
and Exchange Commission, amounts of Other Annual Compensation and All
Other Compensation are excluded for 1991. The amounts shown for All Other
Compensation in 1992 and 1993 are amounts accrued under a nonqualified
excess plan.
(d) The number of shares of restricted stock and the market value thereof held
by Messrs. Chelberg, Bindley, McGuire, Moore and Vowell at December 31,
1993, was as follows: Mr. Chelberg, 15,300 shares ($248,625); Mr. Bindley,
7,500 shares ($121,875); Mr. McGuire, 6,200 shares ($100,750); Mr. Moore,
5,500 shares ($89,375) and Mr. Vowell, 5,800 shares ($94,250). Such shares
vest ratably over a period of three years. However, as explained in the
Report of Management Resources and Compensation Committee on Executive
Compensation beginning on page 12, vesting of restricted stock may be
deferred from year to year if the performance criteria under the Company's
Long Term Performance Compensation Program are not met. Dividend
equivalents are paid on restricted stock at the times and in the same
amounts as dividends paid to all shareholders.
</TABLE>
8
<PAGE>
OPTION/SAR GRANTS IN 1993
Set forth below is information on stock options granted in 1993 to the
executive officers named in the Summary Compensation Table under the Company's
Stock Incentive Plan. No SARs were granted.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF PERCENTAGE OF ASSUMED ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OR TERM (B)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------------
NAME GRANTED (#)(A) 1993 ($/SH) DATE 5% ($) 10% ($)
- ----------------------- --------------- --------------- ----------- ---------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Bruce S. Chelberg...... 47,600 6.4 $ 13.563 5/5/03 406,028 1,028,922
Thomas L. Bindley...... 23,300 3.2 13.563 5/5/03 198,749 503,653
Gerald A. McGuire...... 19,400 2.6 13.563 5/5/03 165,482 419,350
John R. Moore.......... 17,100 2.3 13.563 5/5/03 145,863 369,634
J. Larry Vowell........ 18,100 2.5 13.563 5/5/03 154,393 391,250
All Shareholders....... N/A N/A N/A N/A 914,244,462 2,316,800,502
<FN>
- ---------------
(a) All options were granted at a price equal to 100% of the fair market value
of the Company's Common Stock at date of grant, which was May 5, 1993.
Options become exercisable as to 1/3 on the first anniversary of the date
of grant, 2/3 on the second anniversary, and in full on the third
anniversary.
(b) The dollar amounts under these columns are the result of calculations at
the 5% and 10% assumed annual growth rates mandated by the Securities and
Exchange Commission and, therefore, are not intended to forecast possible
future appreciation, if any, in the Company's stock price. The
calculations were based on the Exercise Price of $13.563 per share and the
10-year term of the options.
No gain to the optionees is possible without an increase in stock price,
which will benefit all shareholders proportionately. The last line in the
table shows the potential gain to all shareholders if they had purchased
their stock on May 5, 1993, at a price of $13.563 per share, and held
their stock for 10 years.
</TABLE>
AGGREGATED OPTIONS/SARS HELD AND YEAR-END VALUES
The following table contains information on stock options held by the
executive officers named in the Summary Compensation Table at the end of 1993.
None of such officers exercised any stock options or tandem stock appreciation
rights in 1993.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS HELD AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1993 (#) DECEMBER 31, 1993 ($)(A)
--------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C>
Bruce S. Chelberg........................................ 109,733 167,067 445,350 568,601
Thomas L. Bindley........................................ 39,000 101,300 116,042 294,690
Gerald A. McGuire........................................ 50,667 68,733 210,000 238,128
John R. Moore............................................ 56,175(b) 67,600 226,205 237,198
J. Larry Vowell.......................................... 52,769 64,267 206,544 220,385
<FN>
- ---------------
(a) Based on the closing price of the Company's Common Stock ($16.25) on
December 31, 1993, as reported for New York Stock Exchange Composite
Transactions.
(b) Includes tandem stock appreciation rights covering 3,175 shares.
</TABLE>
PENSION PLANS
The Company maintains qualified, defined benefit pension plans paying
monthly benefits in optional forms elected by the employee based upon percentage
multipliers which are applied to Covered Compensation and Credited Service. The
pension plans and related excess plans were amended effective January 1, 1992,
to reinstate benefit accruals that were frozen for most employees as of December
31, 1988, when the Company changed its benefit plan structure. The new benefit
formulas provide a normal retirement benefit of 1% of Covered Compensation for
each year of Credited Service (excluding 1989-1991), up to a maximum of 20
years. The changes also include special minimum benefits based on Credited
Service accrued through December 31, 1988, and Covered Compensation at
retirement.
The following table reflects future benefits, payable as life annuities upon
retirement, in terms of a range of amounts determined under the special minimum
benefit formulas mentioned above, at representative periods of Credited Service
through December 31, 1988.
9
<PAGE>
PROJECTED MINIMUM ANNUAL PENSION (IN 000'S)
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE AS OF DECEMBER 31, 1988 (2)
COVERED ----------------------------------------------------------------------
COMPENSATION (1) 15 20 25 30 35 40
- ------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$200,000........... $ 34- 46 $ 45- 61 $ 57- 72 $ 69- 80 $ 80- 87 $ 92- 96
$400,000........... 69- 92 92-122 115-144 138-160 161-175 184-192
$600,000........... 103-138 138-183 172-216 206-240 241-262 275-288
$800,000........... 138-183 183-245 229-288 275-319 321-350 367-384
<FN>
- ------------
(1) Covered Compensation includes salary and bonus, as shown in the Summary
Compensation Table, averaged over the five consecutive years in which such
compensation is the highest.
(2) The benefits for Messrs. McGuire, Moore and Vowell, who had 38, 23 and 29
years of Credited Service, respectively, at December 31, 1988, may be
derived from the pension table.
</TABLE>
The retirement benefits for Messrs. Chelberg and Bindley, who will have 15
and 17 years of Credited Service, respectively, at normal retirement age, will
be determined under the new benefit formula (1% of Covered Compensation for up
to 20 years of Credited Service). Such benefits are not subject to deduction for
social security or other offset amounts. As of December 31, 1993, Messrs.
Chelberg and Bindley have accrued benefits payable at normal retirement age of
approximately 9% and 2%, respectively, of Covered Compensation.
TERMINATION BENEFITS
In 1989, the Company entered into amended Severance Compensation and Change
in Control Agreements (the "Agreements"), with Messrs. Chelberg, McGuire, Moore
and other executive officers, and has entered into similar Agreements with
persons subsequently elected executive officers, including Mr. Bindley and Mr.
Vowell. The Agreements were a result of a determination by the Board of
Directors that it was important and in the best interests of the Company and its
shareholders to ensure that, in the event of a possible change in control of the
Company, the stability and continuity of management would continue unimpaired,
free of the distractions incident to any such change in control.
For purposes of the Agreements, a "change in control" includes (i) a
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation, other than a transaction in which the
proportionate ownership of the common stock of the Company and the surviving
corporation remains substantially unchanged, (ii) a shareholder approved plan or
proposal for the liquidation of the Company, (iii) the acquisition by any person
of 25% or more of the Company's voting securities, or (iv) over a two-year
period, persons who are directors of the Company cease to constitute a majority
of the Board, unless the new directors were approved by a two-thirds vote of the
continuing directors.
Benefits are payable under the Agreements only if a change in control has
occurred and within two years after the change the officer's employment is
terminated involuntarily without cause or voluntarily by the officer for reasons
such as demotion, relocation, loss of benefits or other changes. The principal
benefits to be provided to officers under the Agreements are (i) a lump sum
payment equal to three year's compensation (base salary and incentive
compensation), and (ii) continued participation in the Company's employee
benefit programs or equivalent benefits for three years following termination.
If the officer's termination occurs after age 62, separation payments are
reduced by a factor based upon the number of months remaining until the officer
reaches age 65. The Agreements provide that, if separation payments thereunder,
either alone or together with payments under any other plan of the Company,
would constitute a "parachute payment" as defined in the Federal Internal
Revenue Code and subject the officer to the excise tax imposed by Section 4999
of the Code, the Company shall pay such tax and any taxes on such payment.
The Agreements are not employment agreements, and do not impair the right of
the Company to terminate the employment of the officer with or without cause
prior to a change in control, or, absent a potential or pending change in
control, the right of the officer to voluntarily terminate his employment.
10
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPHS
Set forth below is a graph which compares the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock over the
past five years to the cumulative total return of the S&P 500 Composite Index
and the S&P Index of 11 Diversified Manufacturing Companies.
Performance Graph 1 filed under cover of Form SE.
In the third quarter of 1990, the Company announced a major restructuring
involving, among other actions, a plan to spin-off to shareholders the Company's
Pet Incorporated subsidiary, which accounted for approximately one-half of the
Company's total sales. The Pet spin-off was completed on April 1, 1991. The
following graph compares the cumulative total return on the Company's Common
Stock to the S&P 500 Composite Index and the S&P Index of 11 Diversified
Manufacturing Companies for the three-year period commencing January 1, 1991,
and ending December 31, 1993.
Performance Graph 2 filed under cover of Form SE.
11
<PAGE>
Shareholder returns in the above performance graphs assume reinvestment of
all dividends. Shareholder returns for Whitman further assume that the shares of
Illinois Central Transportation Co. and of Pet Incorporated, which were
distributed to shareholders in the first quarter of 1989 and the second quarter
of 1991, respectively, were sold and the proceeds reinvested in Whitman Common
Stock at the end of the quarter in which such shares were distributed.
REPORT OF MANAGEMENT RESOURCES AND COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The Management Resources and Compensation Committee of the Board of
Directors of the Company (the "Committee") consists of four non-employee
directors. The general responsibilities of the Committee are described on page 5
of this proxy statement.
INTRODUCTION
Most of the Company's compensation programs and executive compensation plans
have been in effect for many years. The Committee's responsibilities include
authorizing and evaluating programs and, where appropriate, establishing
relevant performance criteria. The Committee believes that while formula-driven
plans can contribute to the profitable growth of the Company and consistent
improvement in returns to shareholders, it must also exercise its judgment with
respect to portions of an executive's compensation in seeking to link total
compensation to corporate and executive performance.
Actual and potential awards under the Company's programs and plans as well
as performance criteria vary in proportion to each executive officer's
accountability with respect to policy making and execution. The Company's salary
policies and executive compensation plans are expressly constituted to encourage
and reinforce individual and collective performance leading to increased
shareholder value. The Company's programs also seek to align short and long-term
executive compensation opportunities with the interests of shareholders. The
short term incentive plan focuses on continuous improvement in annual financial
performance. The long term program is designed to reward above average returns
to shareholders through stock price appreciation and dividend growth.
SALARIES
Base salaries for executive officers of the Company and its subsidiaries are
determined pursuant to a widely-used job evaluation system which the Company has
had in place for more than 20 years. Point values for all salaried employees are
assigned based on specific job factors and comparative data from several hundred
companies generated by outside consultants. Those values are then converted into
salary ranges. Generally, the performance of each executive officer is evaluated
annually and salary adjustments are based on various factors including personal
performance, current position in the relevant salary range and comparator
company data. Accordingly, the Committee does not have a general policy to set
salaries of executive officers at any specific level within the salary range for
the particular position. The Committee approves salary actions for approximately
25 key corporate and operating company officers. In the case of Mr. Chelberg and
the subsidiary company Presidents, the Board of Directors approves specific
salary adjustments upon recommendation of the Committee. In determining the
amount of Mr. Chelberg's salary increase in 1993, the Committee considered
competitive salary data, the fact that Mr. Chelberg's salary was below the
minimum of the salary range that had previously been established for the office
of Chairman and Chief Executive Officer of the Company, contributions of a
strategic nature made by Mr. Chelberg in 1992 to improve productivity and
encourage investments to enhance long term growth, and the excellent results
reported by the Company in 1992. Mr. Chelberg's salary remains substantially
below the midpoint of the salary range for his position.
MANAGEMENT INCENTIVE COMPENSATION PLAN
The executive officers named in the Summary Compensation Table, together
with 107 additional executives of the Company and its subsidiaries, participate
in the Management Incentive Compensation Plan. Target amounts payable under this
Plan are established annually pursuant to the Company's job evaluation system
and are proportionate to each participant's accountability for business plans of
the
12
<PAGE>
Company or a subsidiary. The actual value of compensation earned is based
primarily on a formula which relates the target amounts and objectives
established by the Committee to corporate and subsidiary financial results and,
except for Mr. Chelberg, individual performance objectives. For Whitman
corporate executives, the financial performance measurement is budgeted earnings
per share (exceeded in 1993); for subsidiary company executives, the financial
performance measurement is budgeted operating income (exceeded in 1993 by Pepsi
and Hussmann and not met by Midas). The percentage of the target amount related
to attainment of financial objectives is 100% for Mr. Chelberg, and 70% for the
other executive officers named in the Summary Compensation Table with the
balance related to individual performance objectives. The 1993 incentive
compensation for Mr. Chelberg was based upon the fact that the earnings per
share performance objective set under this Plan was exceeded.
LONG TERM PERFORMANCE COMPENSATION PROGRAM
In June, 1992, the Board of Directors of the Company, upon recommendation of
the Committee, approved a new Long Term Performance Compensation Program ("Long
Term Program"). The Long Term Program is designed to provide guidelines to the
Committee for awarding restricted stock and stock options to executives of the
Company. The value of compensation available through the Long Term Program is
based on target amounts (expressed in dollars) that will be earned by
participants if the Company's cumulative total return to shareholders over
multiple-year measuring periods is at the 60th percentile of the S&P 500. Values
will range from 50% of the target amount for performance at the 50th percentile
of the S&P 500 to a maximum of 200% of the target amount at the 80th percentile.
The first performance measurement period was for two years, commencing on
April 2, 1991 (the first day of trading for Whitman stock after the date of the
Pet spin-off) and ending on March 31, 1993. The current and future performance
cycles under the Long Term Program will be for periods of three years ending on
each March 31. The shareholder returns for such performance cycles are not
precisely comparable to the comparative returns reflected in the performance
graph at the bottom of page 11 of this proxy statement because the graph
utilizes calendar years. However, the shareholder return assumptions are the
same.
The first performance awards under the Long Term Program were made in May,
1993. Following the measurement period ending March 31, 1993, shareholder return
for the period was at the 52.2 percentile of the S&P 500. Awards were valued at
61% of target. Award values were converted into restricted stock and stock
options for 28 senior executives of the Company and its subsidiaries and into
stock options for an additional 83 executives. Restricted stock so awarded vests
ratably over a three-year period beginning on the first anniversary of the
award, subject to continued performance at or above the 50th percentile of the
S&P 500, failing which the vesting of such restricted stock will be deferred on
a year-by-year basis. Stock options vest over the same three-year period without
regard to future performance.
TAX LAW CHANGES ON DEDUCTIBILITY
The Omnibus Budget Reconciliation Act of 1994 signed by President Clinton on
August 10, 1993, added Section 162(m) to the Internal Revenue Code. That Section
limits the deductibility of compensation paid or accrued by the Company to the
five most highly compensated employees in excess of $1 million, unless certain
forms of compensation meet certain performance or other criteria mandated by
law. Proposed regulations implementing Section 162(m) were released December 15,
1993. The criteria for preserving compensation deductibility are quite complex
and could limit the effectiveness of one or more of the Company's compensation
programs or overall compensation strategy if followed literally in their present
form.
Except only for a small portion of Mr. Chelberg's projected 1994
compensation, it is not anticipated that any of the executive officers named in
the Summary Compensation Table will receive compensation for 1994 which would
not be deductible for tax purposes. The Committee has not made any determination
with respect to the Company's total compensation program as it may be affected
by these tax law changes for future years.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The name of each person who served as a member of the Committee in 1993 is
set forth below. There are no compensation committee interlocks. Mr. Cozad
became a member of the Committee in May, 1992, following his retirement as
Chairman and Chief Executive Officer of the Company.
Richard G. Cline, Chairman Archie R. Dykes
James W. Cozad Donald P. Jacobs
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, acting upon the recommendation of the Audit
Committee, has appointed, subject to ratification by the shareholders at the
forthcoming Annual Meeting, the firm of KPMG Peat Marwick as independent
certified public accountants to audit the financial statements of the Company
for the year 1994. The total fees for services, including certain non-audit
services, paid to that firm in 1993 were approximately $1.4 million.
Representatives of KPMG Peat Marwick, who have been the Company's auditors
since 1973, are expected to be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so. In addition, such
representatives are expected to be available to respond to appropriate
questions.
Should the shareholders fail to ratify the appointment of KPMG Peat Marwick,
the Board of Directors will consider this an indication to select other auditors
for the following year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF KPMG PEAT MARWICK AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
OTHER MATTERS
The matters referred to in the Notice of Annual Meeting and in this proxy
statement are, to the knowledge of management, the only matters which will be
presented for consideration at the meeting. If any other matters should properly
come before the meeting, the persons appointed by the accompanying proxy will
vote on such matters in accordance with their best judgment pursuant to the
discretionary authority granted in the proxy.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by use of the mails, some of the officers, directors
and regular employees of the Company and its subsidiaries, none of whom will
receive additional compensation therefor, may solicit proxies in person or by
telephone, telegraph or other means. Solicitation will also be made by employees
of Kissel-Blake Inc., which firm will be paid a fee of $8,500, plus expenses. As
is customary, the Company will, upon request, reimburse brokerage firms, banks,
trustees, nominees and other persons for their out-of-pocket expenses in
forwarding proxy materials to their principals.
SHAREHOLDER PROPOSALS FOR THE 1995 ANNUAL MEETING
From time to time, shareholders present proposals which may be proper
subjects for inclusion in the proxy statement and for consideration at the
Annual Meeting. To be considered, proposals must be submitted on a timely basis.
Proposals for the 1995 Annual Meeting must be received by the Company no later
than November 18, 1994. Any such proposals, as well as any questions related
thereto, should be submitted in writing to the Secretary of the Company.
By order of the Board of Directors.
WILLIAM B. MOORE
Secretary
Rolling Meadows, Illinois
March 18, 1994
14
<PAGE>
P WHITMAN CORPORATION
R PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
O THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS -- MAY 5, 1994
X
Y The undersigned hereby constitutes and appoints Bruce S. Chelberg, Thomas L.
Bindley and William B. Moore, and each of them, his true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned
at the Annual Meeting of Shareholders of Whitman Corporation to be held in the
First Chicago Center, One First National Plaza, Dearborn and Madison Streets,
Chicago, Illinois on Thursday, May 5, 1994, and at any adjournments thereof,
on all matters coming before said meeting.
Election of Directors, Nominees:
Bruce S. Chelberg, Richard G. Cline, James W. Cozad, Pierre S. du Pont IV,
Archie R. Dykes, Helen Galland, Jarobin Gilbert, Jr., Donald P. Jacobs,
Charles S. Locke.
This Proxy also serves as a voting instruction card to the Trustee for shares,
if any, held in the trust for the Company's Retirement Savings Plan.
SHAREHOLDERS ARE REQUESTED TO MARK, DATE AND SIGN THIS PROXY ON THE REVERSE
SIDE, AND TO RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
SEE REVERSE
SIDE
<PAGE>
/X/ PLEASE MARK YOUR 7802
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION TO THE CONTRARY IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION
OF DIRECTORS AND FOR PROPOSAL 2 .
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR proposals 1 and 2.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
For Withheld For Against Abstain
1. Election of / / / / 2. Ratification of / / / / / / Discontinue Annual Report / /
Directors. independent Mailing for this Account.
(see reverse) accountants.
For, except vote withheld from the following Please mark this box if you
will personally be attending / /
- -------------------------------------------- the meeting.
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such.
-------------------------------------------------
,1994
-------------------------------------------------
SIGNATURE(S) DATE
</TABLE>
<PAGE>
APPENDIX
A picture of each nominee for Director of Whitman Corporation
is provided adjacent to the biographical information pertaining
to each such nominee on pages 2, 3 and 4 of the printed version.
