PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant-X
Check the Appropriate box:
X - Preliminary Proxy Statement
- Definitive Proxy Statement
- Definitive Additional Materials
- Soliciting Material Pursuant to 240.14a
JOSLYN CORPORATION
__________________
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (check the approprite box):
X - $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l),
or 14a-6(j)(2).
- $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
- Fee computed on table below per Exchange Act Rules 14a-6(i)
(4) and 0-11.
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. ___
/__/
<PAGE>
JOSLYN Joslyn Corporation
CORPORATION 30 South Wacker Drive
Chicago, Illinois 60606
Telephone: (312) 454-2900
Telecopier: (312) 454-2930
Notice of Annual Meeting of Shareholders
To Be Held April 27, 1994
______________________________________________________________________________
The Secretary of Joslyn Corporation hereby gives notice that the Annual
Meeting of Shareholders of Joslyn Corporation will be held in the Assembly
Room, 6th Floor, The Northern Trust Company Building, 50 South LaSalle Street,
Chicago, Illinois 60675 on Wednesday, April 27, 1994, at 10:00 o'clock a.m.,
for the following purposes:
(1) the election of six Directors;
(2) the ratification of the appointment of Arthur Andersen & Co. as
independent public accountants for the year 1994;
(3) the amendment of the Joslyn Corporation Articles of Incorporation
to limit the personal liability of the Corporation's directors;
and
(4) the transaction of such other business as may properly come
before the meeting or any adjournment thereof.
Only Shareholders of record at the close of business on March 1, 1994
will be entitled to vote at the meeting.
The Annual Report of the Corporation for the year 1993, including
financial statements, accompanies this Proxy Statement.
Each Shareholder, whether or not he or she expects to be present at the
meeting, is requested to sign, date and return the enclosed Proxy in the
envelope which is supplied with this Notice.
By order of the Board of Directors,
Joslyn Corporation
Wayne M. Koprowski
Secretary
______________________________________________________________________________
<PAGE>
JOSLYN
CORPORATION
30 South Wacker Drive
Chicago, Illinois 60606
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Joslyn Corporation (the
"Corporation") for the Annual Meeting of Shareholders to be held in the
Assembly Room, 6th Floor, The Northern Trust Company Building, 50 South
LaSalle Street, Chicago, Illinois 60675 on Wednesday, April 27, 1994, at 10:00
o'clock a.m., or any adjournment thereof. On or before March 30, 1994, this
Proxy Statement and the enclosed Proxy were first sent or given to the
Corporation's Shareholders. The 1993 Annual Report to Shareholders, including
financial statements for the fiscal year ended December 31, 1993, accompanies
this Proxy Statement.
The executive offices of the Corporation are located at 30 South Wacker
Drive, Chicago, Illinois 60606.
The only voting securities of the Corporation are its Common Shares, of
which there were 7,108,141 shares outstanding on March 1, 1994, the record
date. A majority of such shares will constitute a quorum for the transaction
of business at the Annual Meeting. Shareholders are entitled to one vote for
each Common Share of the Corporation held. The Board of Directors is
soliciting discretionary authority to accumulate votes. In the election of the
Board of Directors, shareholders have the right to vote the number of shares
owned by them for each of the six nominees, or they may cumulate their votes
and give six votes to one nominee for each share owned, or they may distribute
their votes on the same principal among as many nominees as they choose. No
act need be done or notice given prior to the exercise of such cumulative
voting rights. An affirmative vote of the shareholders of at least two-thirds
of the outstanding shares entitled to vote is required to approve the
amendment to the Articles of Incorporation. For the purpose of counting votes,
abstentions, broker non-votes and other shares not voted have the same effect
as a vote against the proposal.
Each proxy received by the Board of Directors of the Corporation will be
voted as specified by the Shareholder thereon. Any Shareholder may revoke
their proxy at any time prior to the voting thereof by (1) giving written
notice of such revocation to the Secretary of the Corporation, (2) properly
submitting to the Corporation a duly executed proxy bearing a later date or
(3) appearing in person at the 1994 Annual Meeting and voting in person.
The cost of preparation of proxy solicitation materials and solicitation
of proxies will be paid by the Corporation. In addition to use of the mails,
proxies may be solicited by any Director, Officer, or employee of the
Corporation either personally or by such other means as he may choose, and
any such solicitation shall be made without additional compensation.
The Corporation may reimburse brokers and others for their expenses in
forwarding proxy solicitation materials to beneficial owners. The Corporation
has retained Proxy Services Corporation to assist in the solicitation of
proxies at an estimated fee of less than $10,000, plus reasonable expenses.
<PAGE>
NOMINEES FOR ELECTION AS DIRECTOR
The Board of Directors has designated the six persons hereinafter listed
to be nominees for election as Directors of the Corporation at the Annual
Meeting. Proxies solicited by the Board of Directors will be voted as
directed therein with respect to the election of Directors; but if no choice
is specified in any proxy, then such proxies will be voted for such nominees.
The entire Board of Directors is elected annually and each Director is elected
to serve until his successor is duly elected and qualified unless the
Directorship is eliminated, in which case the Directorship will expire at the
next Annual Meeting.
Each of the nominees has consented to serve as a Director if he is
elected. If for any reason any such nominee for election should become
unavailable for election, a circumstance the Board of Directors does not
anticipate, discretionary authority may be exercised for a substitute nominee.
The persons named in proxies hereby solicited reserve the right, exercisable
in their sole discretion, to vote proxies cumulatively so as to elect all or
as many as possible of such nominees depending upon circumstances at the
meeting.
NOMINEES FOR REELECTION AS DIRECTOR:
William E. Bendix
Mr. Bendix is President, Chief Executive Officer and a Director of Mark
Controls Corporation, a NASDAQ listed company, and has held this position
since 1987. Mark Controls Corporation is a manufacturer of industrial valves,
liquid temperature control devices and electronic controllers. Prior to that,
Mr. Bendix was Group Vice President and a Director and was responsible for
five of the company's business units. Mr. Bendix joined Mark Controls as Vice
President of Manufacturing in 1969, was subsequently named Vice President of
Operations and was elected a Director in 1973. Prior to joining Mark
Controls, Mr. Bendix was a principal at Theodore Barry and Associates, a
management consulting firm with a practice emphasizing operations management.
Mr. Bendix is a Director of DEP Corporation, the former Chairman of the Valve
Manufacturers Association of America, and a former Director of Sargent-Welch
Scientific Company. Mr. Bendix is 59 years of age.
John H. Deininger
Mr. Deininger is Chief Executive Officer and President of Union City Body
Company, L.P., a manufacturer of truck bodies. He is a retired Executive
Vice President of Illinois Tool Works, Inc., a manufacturer of engineered
components and industrial systems. He was formerly President, Chief Operating
Officer and a Director of Signode Industries, Inc., now a wholly-owned
subsidiary of Illinois Tool Works, Inc. Mr. Deininger is currently a Director
of Eljer Industries, a New York Stock Exchange listed company which
manufactures and markets plumbing and heating ventilation products.
Mr. Deininger is also a Director of Life Fitness, Inc., a maker of exercise
and fitness equipment and a Director of Wayn-Tex, Inc., a manufacturer of
plastic woven for the carpet and food packaging industries. He formerly was
a Director for Allied Tube & Conduit, a manufacturer of metal tubing for
plumbing and electrical use. He is also a part-time consultant on industrial
business operations. Mr. Deininger is 62 years of age.
<PAGE>
Donald B. Hamister
Mr. Hamister is Chairman of Joslyn Corporation's Board of Directors. Mr.
Hamister joined Joslyn in 1939. He became an Operating Manager of the
Corporation in 1958 and was elected a Vice President and Director of the
Corporation in 1973. He was elected President and Chief Executive Officer in
1978 and Chairman of the Board in 1979. He retired as President and Chief
Executive Officer of the Corporation in 1985, was reelected to the position of
Chief Executive Officer in 1986, and held that position until 1987. He was
reelected as Chief Executive Officer in 1991 and held that position through
December, 1992. Mr. Hamister served in the United States Navy from 1942 to
1946 attaining the rank of lieutenant. He is a member of the Institute of
Electrical and Electronics Engineers and the Airline Avionics Institute. He
served as Chairman of the Airline Avionics Institute from 1972 to 1974. Mr.
Hamister is 73 years of age.
Raymond E. Micheletti
Mr. Micheletti is President and Chief Executive Officer of Joslyn
Corporation. He joined Joslyn in 1966, became General Manager of the Joslyn
Hi-Voltage Equipment Division in 1972, was named Vice President of the
Corporation in 1976 and assumed the additional responsibility of Joslyn's
Wood Products Group. In 1984, he led the acquisition of a new business unit,
Joslyn Clark Controls, Inc. He was named a Senior Vice President of the
Corporation in 1988 with responsibility for the Industrial Controls business
segment. In 1991, Mr. Micheletti was elected President and a Director of the
Corporation. He led the acquisition of a new business unit, Joslyn Jennings
Corporation, in 1992 and later that year was elected to his current position
with the Company. He is a graduate electrical engineer and a member of the
Institute of Electrical and Electronics Engineers. Mr. Micheletti is 68 years
of age.
Richard C. Osborne
Mr. Osborne is President, Chief Executive Officer and Chairman of the
Board of Scotsman Industries, Inc., a New York Stock Exchange listed company.
Scotsman is a leading manufacturer of refrigeration products primarily
serving the foodservice, hospitality, beverage, bakery and healthcare
industries, with a secondary focus on luxury appliances for the consumer
market. Mr. Osborne previously held the position of Executive Vice President
of Household Manufacturing, Inc. from 1982 to 1989, and from 1979 to 1982 was
President of Structo and Halsey Taylor, a division of Household Manufacturing,
Inc. Mr. Osborne was the Director of Manufacturing of Pillsbury Company from
1967 to 1979, and began his career as an Engineer with the Chevrolet Division
of General Motors. Mr. Osborne is 50 years of age.
Lawrence G. Wolski
Mr. Wolski is Executive Vice President, Chief Financial Officer, and
Director of the Utility Systems Group. He joined Joslyn in 1974 as Controller,
having been employed previously by Arthur Andersen & Co. for eight years, his
last position being that of Audit Manager. In 1976, he was elected Vice
President, Finance, of the Corporation. He was elected Chief Financial
Officer of the Corporation in 1980, Senior Vice President in 1987, and
Executive Vice President in 1993. Mr. Wolski was elected a Director of the
Corporation in 1981. Mr. Wolski is 49 years of age.
SECURITY OWNERSHIP OF MANAGEMENT ON MARCH 3, 1994
The following table sets forth information about the beneficial ownership
of Common Stock for each Director and nominees for Director, each Executive
Officer named in the Summary Compensation Table in this Proxy Statement, and
all Directors and Executive Officers of the Corporation as a group as of March
3, 1994.
<PAGE>
Directors and Number
Nominees of Shares(a)
______________ _____________
William E. Bendix . . . . . . . . . . . . . . . . . . 2,000
John H. Deininger . . . . . . . . . . . . . . . . . . 900
Donald B. Hamister . . . . . . . . . . . . . . . . . 12,000
Raymond E. Micheletti . . . . . . . . . . . . . . . . 25,937
Richard C. Osborne . . . . . . . . . . . . . . . . . 750
Lawrence G. Wolski . . . . . . . . . . . . . . . . . 36,664
Certain Executive
Officers
_________________
Wayne M. Koprowski . . . . . . . . . . . . . . . . . 20,044
Steven L. Thunander . . . . . . . . . . . . . . . . . 21,645
A. Russell Gray . . . . . . . . . . . . . . . . . . 11,541
Directors and Officers as a Group . . . . . . . . . . 155,897
____________
(a) Includes shares Executive Officers have the right to acquire pursuant
to the Corporation's Employee Stock Benefit and Stock Option Plans. The
number of shares which each of the above individuals have the right to
acquire are: Mr. Micheletti 12,253 shares; Mr. Wolski 22,664 shares; Mr.
Koprowski 15,044 shares; Mr. Thunander 18,356 shares; and Mr. Gray 6,136
shares.
In addition to the shares shown as owned by the nominees in the preceding
table, the following approximate number of shares are held by the Profit
Sharing Plan in which the individuals named have shared voting power as to
those shares: Mr. Micheletti x,xxx shares; Mr. Wolski x,xxx shares; Mr.
Koprowski x,xxx shares; Mr. Thunander x,xxx shares; and Mr. Gray x,xxx shares.
None of the Director nominees or Executive Officers hold 1.0% or more of the
outstanding shares of the Corporation.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information regarding the
beneficial ownership of the Corporation's Common Shares on December 31, 1993,
by each person known by management to be the beneficial owner of more than 5%
of the outstanding shares of the Corporation:
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
____________________ ____________________ _________
Robert D. MacDonald, James H. Ingersoll & . . . . . 659,439(a) 9.2%
David L. Everhart, Trustees
150 N. Michigan Avenue, Suite 2500
Chicago, Illinois 60601
Joslyn Retirement Plans' Company Stock Trust . . . . 454,472(b) 6.4%
30 South Wacker Drive
Chicago, Illinois 60606
Pioneering Management Corporation . . . . . . . . . 430,337(c) 6.0%
60 State Street
Boston, Massachusetts 02109
<PAGE>
___________________
(a) Includes 515,645 shares held by Messrs. MacDonald, Ingersoll and
Everhart as co-trustees of the Alice Newell Joslyn Trust and the Marcellus
Lindsey Joslyn Trust. These trusts have sole voting and dispositive power
with respect to the shares in each trust. In addition to the 515,645 shares
held with co-trustees Messrs. Ingersoll and Everhart, Mr. MacDonald holds
143,793 shares as a trustee of four other trusts.
(b) Joslyn Retirement Plans' Company Stock Trust ("Trust") has sole
voting and investment power for 43,173 of such shares and shared voting and
investment power for 411,299 of such shares. The Trust beneficially owns
certain of the above shares for the Corporation's Employees' Savings and
Profit Sharing Plan ("Profit Sharing Plan") and the Trustee has power to
dispose of such shares; provided, however, that in the event of a tender or
exchange offer, the participants generally have the right to direct the
Trustee on how to respond to the tender or exchange offer.
(c) Pioneering Management Corporation has reported in its Form 13G that
it has sole voting power as to 430,337 shares and shared dispositive power as
to 430,337 shares.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has standing Audit, Compensation and Nominating
Committees. Messrs. William E. Bendix, Donald B. Hamister, Richard C. Osborne
and Walter W. Schoenholz were the members of the Audit Committee during 1993.
Messrs. John H. Deininger, Hamister, Osborne and Schoenholz were members of
the Compensation Committee during 1993. Messrs. Raymond E. Micheletti,
Bendix, Deininger, and Hamister were members of the Nominating Committee
during 1993. In addition, the Board of Directors formed an ad hoc Succession
Committee for the purpose of identifying candidates for the position of
President and Chief Executive Officer to succeed Mr. Micheletti upon his
retirement. Messrs. Bendix, Deininger, Hamister, Osborne and Schoenholz were
members of the Succession Committee in 1993.
Among other responsibilities, the Audit Committee recommends the
selection of the independent public accountants, reviews the scope and
procedures of the planned audit activities and reviews the results of the
audits. The Audit Committee considers and approves in advance non-audit
services performed by the independent public accountants to determine that
such services do not compromise their independence. The Compensation
Committee recommends the compensation to be paid for the services of the
Directors and Executive Officers of the Corporation. The Nominating Committee
develops criteria for Directors, evaluates the qualifications of and
interviews prospective candidates for the Board of Directors of the
Corporation and makes recommendations to the Directors of nominees for
election to the Board of Directors of the Corporation.
During 1993, there were two meetings for each of the Audit and
Compensation Committees and one meeting of the Succession Committee. There
were five meetings of the Board of Directors in 1993. All members of the
Board attended all of the meetings of the Board, and all members of the
Committees attended all meetings of the Committees of the Board.
COMPENSATION OF DIRECTORS
Directors of the Corporation who are employees serve without additional
compensation. Directors of the Corporation who are not employees of the
Corporation each receive an annual compensation payment of $19,000. These
Directors also receive $700 for each meeting of the Board of Directors or a
Committee thereof attended and $700 for each day or fraction thereof spent in
the conduct of the Corporation's business other than Board or Board Committee
meetings. The Chairman of the Board of Directors receives an additional
$10,000 per year to serve in that capacity.
<PAGE>
Directors who are not employees may elect to become participants in the
Deferred Compensation Plan in order to defer all or a portion of their fees.
Deferred fees otherwise payable are credited to a participant's Deferred Fee
Account bearing an annual interest rate. Upon termination of their services,
payment from the Deferred Fee Account will be paid to the former Directors in
installments.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid or to be paid for
the fiscal year 1993 to the Chief Executive Officer and to the four most
highly compensated Executive Officers of the Corporation. A more detailed
explanation follows the table.
Name and Principal Fiscal All Other
Position Year Salary(1) Bonus Compensation(2)
____________________ _______ _________ _______ _______________
Raymond E. Micheletti 1993 $xxx,xxx $xxx,xxx $xx,xxx
President and Chief 1992 250,557 107,800 16,078
Executive Officer 1991 219,657 76,223 14,812
Lawrence G. Wolski 1993 $xxx,xxx $xx,xxx $xx,xxx
Exec. Vice President, 1992 233,001 82,854 16,078
Chief Financial Officer 1991 220,534 71,320 14,812
Wayne M. Koprowski 1993 $xxx,xxx $xx,xxx $xx,xxx
Vice President 1992 145,157 40,625 13,845
1991 136,718 36,963 9,849
Steven L. Thunander 1993 $xxx,xxx $xx,xxx $xx,xxx
Vice President 1992 163,800 28,529 7,997
1991 163,132 10,000 4,796
A. Russell Gray 1993 xxx,xxx $xx,xxx $x,xxx
Dir., Communications 1992 xxx,xxx xx,xxx x,xxx
& Defense Group 1991 xxx,xxx xx,xxx x,xxx
______________________
1) Salary includes base compensation and contributions made under the
Joslyn Corporation Retirement Parity Compensation Plan ("Parity Plan").
Certain Executive Officers of Joslyn Corporation are participants in the
Parity Plan. The Parity Plan provides annual payments to eligible employees
who may elect to deposit their payments in an individual trust. Each trust
provides for distribution upon: (1) retirement after attaining age 60, (2)
disability or death, (3) attaining age 65, or (4) termination of employment
prior to age 60. The 1993 Parity Plan amount for eligible individuals listed
in the Summary Compensation Table were: Mr. Micheletti $xx,xxx; Mr. Wolski
$xx,xxx; Mr. Koprowski $xx,xxx; and Mr. Thunander $xx,xxx.
2) "All Other Compensation" is comprised of contributions on behalf of
the Executive Officers to the Joslyn Corporation Profit Sharing Plan, a
defined plan, except that it also includes a $1,000 director fee for Messrs.
Gray and Thunander for being subsidiary company board members.
<PAGE>
STOCK OPTION/SAR GRANTS IN 1993
The following tables show, as to the Chief Executive Officer and the
four most highly compensated Executive Officers of the Corporation,
information with respect to grants of non-qualified stock options and stock
exercises for the period January 1, 1993 to December 31, 1993.
Non-Qualified Option grants awarded December 31, 1993
<TABLE>
<CAPTION>
Securities % of Total Potential Realizable Value at
Underlying Granted to Assumed Annual Rates of Stock Price
Options Employees Base Price Expiration Appreciation for Option Term
Name Granted(1) in 1993 ($/share)(2) Date at 0% at 5% at 10%
_______________________ __________ _______ ____________ ___________ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C> <C>
Raymond E. Micheletti 9,413 11.9% $24.38 6/29/99 $0 $70,726 $158,585
Lawrence G. Wolski 6,144 7.8% $24.38 6/29/99 0 46,164 103,511
Wayne M. Koprowski 3,445 4.4% $24.38 6/29/99 0 25,884 58,039
Steven L. Thunander 3,691 4.7% $24.38 6/29/99 0 27,733 62,184
A. Russell Gray 2,584 3.3% $24.38 6/29/99 0 19,415 43,534
</TABLE>
_______________________
(1) All options were granted on December 31, 1993, and first become
exercisable on June 29, 1994.
(2) The Base Price equals the average of the last reported high and low
transactions of Common Shares on the NASDAQ National Market System on
the date of the grant of options.
Aggregated Option/SAR Exercises in 1993 and Fiscal Year-end Option/SAR
Values
This table provides the number of shares acquired by stock option
exercise during 1993. The value realized is the difference between the market
price on the date of exercise and the base price multiplied by the number of
shares exercised. The table also provides the year-end value of all stock
options and Stock Appreciation Rights ("SAR's") granted to but not yet
exercised by each executive. The value represents the difference of the
market price on December 31, 1993 and the base price multiplied by the number
of outstanding options. This value may go up or down as the stock price
fluctuates and is not realized until exercised.
<TABLE>
<CAPTION>
Securities Value
Underlying of Unexercised
Unexercised In-the-Money
Options/SAR's at Options/SAR's at
1993 Fiscal Year-end: 1993 Fiscal Year-end:
Shared Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
_________________________ ___________ ______________ _____________ _____________
<S> <C> <C> <C> <C>
Raymond E. Micheletti 16,066 $76,289 12,253/9,413 $21,115/0
Lawrence G. Wolski 0 0 22,664/6,144 90,527/0
Wayne M. Koprowski 2,200 21,574 15,044/3,445 53,596/0
Steven L. Thunander 0 0 18,356/3,691 78,821/0
A. Russell Gray 557 5,503 6,136/2,584 20,896/0
</TABLE>
DEFINED BENEFIT PENSION PLAN
Salaried employees participated in the Employees' Supplemental
Retirement Plan of Joslyn Corporation ("Pension Plan") until December 31, 1988
when the Pension Plan was frozen. Therefore, no additional benefit accruals
for either additional employment service or compensation increases will be
incurred. The estimated annual benefits payable upon retirement at age 65 for
each of the individuals named in the Summary Compensation Table are as
follows: Mr. Micheletti $xx,xxx; Mr.Wolski $xx,xxx; Mr. Koprowski $xx,xxx; Mr.
Thunander $xx,xxx and Mr. Gray $xx,xxx.
<PAGE>
EMPLOYMENT AGREEMENTS
The Corporation has entered into separate employment agreements with the
following individuals: Messrs. Raymond E. Micheletti (President, Chief
Executive Officer and a Director) and Lawrence G. Wolski (Executive Vice
President, Chief Financial Officer and a Director). Each agreement provides
for an annual salary to be paid to the employee at least equal to that being
received at the date of the agreement.
The agreements expire on March 31, 1994 as to Mr. Micheletti, and on
December 31, 1996 as to Mr. Wolski. These agreements may be earlier
terminated by Joslyn upon 180 days written notice. Messrs. Micheletti and
Wolski each are entitled to receive salary at the rate in effect at the date
of notice for a period of 18 months following termination of employment
conditioned upon their rendition of consulting services to Joslyn for the
remaining term of their Agreement. However, Joslyn may terminate an agreement
within such period if the employee accepts other employment prior to the
expiration of the period, and Joslyn reasonably determines the new employment
to be in conflict or competition with Joslyn. Upon the death of any such
employee, his legal representative is entitled to receive his salary payable
to the end of the month following the month in which death occurs, plus
incentive compensation for the fiscal year extended to the last day of the
month following date of death, plus an amount equal to the monthly base salary
in effect at the time of death multiplied by three. Mr. Micheletti has
announced his intention to retire at the end of 1994 from his position of
President and Chief Executive Officer and therefore his agreement will not be
extended.
JOSLYN CORPORATION STOCK PERFORMANCE GRAPH
The graph provided below compares Joslyn Corporation's cumulative
shareholder total return with that of the NASDAQ Composite Index and the Dow
Jones Electrical Equipment Group. The comparison is made by calculating the
difference in share price from December 31, 1988, and December 31, 1993 and
including the cumulative amount of dividends, assuming reinvestment, during
this five year period. An initial investment of $100.00 has been used as a
common point of reference.
Comparative Five Year Cumulative Total Return
- GRAPH -
<PAGE>
For ease of comparison, the table below provides the data utilized in the
graph. The table assumes an investment of $100.00 on December 31, 1988 and
indicates the appreciation or depreciation of each investment over a five year
period.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
_______ _______ ______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Joslyn Corporation $100.00 $108.63 $88.92 $133.08 $182.13 $178.12
NASDAQ Market Index 100.00 112.89 91.57 117.56 118.71 142.40
Dow Jones Electrical 100.00 107.47 90.28 99.41 95.96 117.52
Equipment Group
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving to the Board compensation for the Executive Officers
of the Corporation, including the Chief Executive Officer and the four most
highly compensated Executive Officers. The Committee reviews base salaries
and corporate and individual bonus goals of the Chief Executive Officer and of
the Executive Officers as recommended by the Chief Executive Officer. The
Committee also approves all grants of stock options under the Corporation's
Stock Option Plan. All Committee members are non-employee, outside directors
of the Corporation.
Compensation Philosophy
The Corporation seeks to link Executive Officer compensation to
profitability resulting in enhanced shareholder value. The compensation
philosophy has the following objectives:
- to attract and retain quality management
- to encourage and reward performance on an individual,
business unit and corporate basis
- to reward both short term and long term performance
- to tie executive compensation to long term growth of
shareholder value
The Corporation's executive compensation program is comprised of a base
salary, an annual incentive bonus program and a long term incentive
compensation plan in the form of stock options. In addition, Executive
Officers are eligible to participate in various benefit plans, including
medical insurance coverage and profit sharing, which are available to all
employees.
Base Salary
Base salaries for Executive Officers are determined in consideration of
each Executive Officer's position, responsibilities, experience and
performance. In setting compensation, the Committee takes into account the
national marketplace for a group of companies consisting of electrical and
electronics manufacturing companies of similar size (annual sales between $100
and $600 million) in the Corporation's labor market ("Labor Market Group").
The Committee decided against using the companies in the industry peer group
as reflected in the Performance Graph because the Committee believes that the
comparatively large size of many of the peer group companies distorts
compensation levels for similar positions. Each Executive Officer's base
salary is initially set at the median for similar positions within the Labor
Market Group.
<PAGE>
The Committee annually reviews and may adjust individual salaries of all
Executive Officers including the Chief Executive Officer and the four highest
compensated Executive Officers taking into account compensation guidelines
(utilizing executive compensation surveys, outside compensation specialists,
or both), business performance and individual performance. Business
performance is evaluated in reference to both actual corporate earnings
results and comparative results of the companies in the Corporation's industry
peer group as reflected in the Performance Graph. The factors impacting base
salary are not independently assigned specific weights. Rather, the Committee
reviews all the factors and makes salary recommendations which reflect the
Committee's analysis of the aggregate impact of these factors.
Mr. Micheletti's 1992 base salary of $220,000 was increased to $270,000
in 1993 in recognition of his promotion to Chief Executive Officer, the
additional responsibilities that would be imposed on him in that capacity and
the Corporation's record earnings performance in 1992. The Committee used
market comparisons obtained from compensation surveys for comparably sized
manufacturing companies in setting his 1993 base salary. Mr. Micheletti's base
salary places him about 20% below the median for chief executive officers in
the Labor Market Group.
Annual Incentive Bonus Program
In addition to base salary, each Executive Officer is eligible for an
annual incentive cash bonus award under the Executive Management Incentive
Plan. The Compensation Committee believes that the plan provides an additional
short term incentive to those executives who have a greater potential impact
on business performance by having a larger portion of their total compensation
in variable bonus opportunities. Annual cash bonuses are paid based on
formulas which take into consideration attainment of corporate and business
unit earnings goals and individual goals designed to improve the
Corporation's overall performance. Individual performance goals are taylored
to each Executive Officer's position and vary from person to person. For
Executive Officers, excluding the Chief Executive Officer, potential bonus
payments range from 0% to a maximum of 50% of base salary depending on the
Executive Officer's position with half of the bonus potential based upon
corporate or business unit earnings performance and the other half based upon
individual performance. However, since actual payouts are dependent on
achieving pre-determined performance goals, failure to attain those goals
could result in no bonus.
For 1993, Mr. Micheletti's potential bonus ranges from 0% to 70% of base
salary with a target payment of 35% of base salary. Over 70% of his annual
potential bonus was based upon the attainment targeted net income goals for
the plan year, with the remaining bonus based upon the achievement of
individual goals. For 1993, Mr. Micheletti was awarded a bonus of $91,125,
which is 33.7% of base salary based in part upon the Committee's achievement
of its 1993 business plan.
Long Term Incentive Compensation Plan (Stock Option Plan)
The Compensation Committee believes that by providing key employees,
including the Chief Executive Officer and the four highest compensated
Executive Officers, who have substantial responsibility over the management
and growth of the Corporation, with an opportunity to increase their ownership
of the Corporation's stock, the interests of the shareholders and key
employees, including Executive Officers, will be more closely aligned. The
Stock Option Plan meets this objective by permitting the Corporation through
the Compensation Committee to make annual grants of non-qualified stock
options to key employees, including the Chief Executive Officer and the four
highest paid Executive Officers. Stock options are granted with an exercise
price equal to the fair market value of the Corporation's common stock on the
date of grant and typically may be exercised over a period of five years.
This approach is intended to motivate the key employees to contribute to the
creation and growth of shareholder value over the long term. Value to the
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optionee is dependent upon an increase in the stock price above the exercise
price. The size of each person's stock option grant is based upon a formula,
originally recommended by an outside compensation consultant, which provides a
range of possible grants utilizing a multiple of the optionee's base salary.
The formula for determining the number of stock option grants is the base
salary times a multiplier (ranging from 0.3 to 1.0), divided by the then
market price of the Corporation's stock. Currently, the stock option grants
awarded by the Committee place optionees approximately 66% below the median
compared to optionees in the Labor Market Group. The Compensation Committee
also considers previous options granted but unexercised as well as actual
ownership in the Corporation's stock in making additional grants of options.
In 1993, Mr. Micheletti was granted 9,413 options at an exercise price of
$24.38. The option grant was below the median compared to grants typically
made to chief executive officers in the Labor Market Group.
Richard C. Osborne, Chairman
John H. Deininger
Donald B. Hamister
Walter W. Schoenholz
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO LIMIT DIRECTOR LIABILITY
The proposed amendment would limit the personal liability of the
Directors to the Corporation or its shareholders for monetary damages arising
from breach of fiduciary duty. The proposed amendment is authorized by a
change to the Illinois Business Corporation Act of 1983 that became effective
January 1, 1994 and will assist the Corporation in attracting and retaining
qualified individuals to serve as Directors of the Corporation.
Background
Until the amendment of the Illinois Business Corporation Act in July
1993, Illinois was one of the few states that had not taken action to protect
corporate directors who acted in good faith but were nevertheless threatened
with substantial liability from negligence claims. As a result of the change
in the law, an Illinois corporation is now able to provide its directors with
liability protection similar to that available to companies incorporated in a
vast majority of other states, including Delaware. Liability is not limited
under Illinois law if the acts or omissions of directors are in bad faith,
involve intentional wrongdoing, violate certain statutory provisions, or
result in profit or other advantage to which the director is not legally
entitled.
Text of Proposed Amendment
The text of the proposed amendment to be added to the Corporation's
Articles of Incorporation as Article Nine is as follows:
The Directors of the Corporation shall not be liable to the Corporation
or to its shareholders for monetary damages for breach of fiduciary
duties as a Director, provided that this provision shall not eliminate or
limit the liability of a Director (i) for any breach of the Director's
duty of loyalty to the Corporation or its shareholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a
knowing violation of the law, (iii) under Section 8.65 of the Illinois
Business Corporation Act or (iv) for any transaction from which the
Director derived an improper personal benefit.
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Reasons for the Proposed Amendment
Directors of Illinois corporations are required, under Illinois law, to
perform their duties in good faith and with that degree of care that an
ordinarily prudent person in a like position would use under similar
circumstances. A director may rely upon information, opinions and reports
prepared by certain officers or employees, professional advisors, or
committees of the Board. Decisions made on that basis are protected by the
"business judgment rule" and should not be questioned by a court in the event
of a lawsuit challenging such decisions. However, the expense of defending
such lawsuits and the inevitable uncertainties of applying the business
judgment rule to particular facts and circumstances mean, as a practical
matter, that directors are not relieved of the threat of monetary damage
awards. The Board of Directors of the Corporation, therefore, believes that
the proposed amendment should be adopted in order to ensure that the
Corporation will continue to be able to attract and retain competent,
qualified and talented persons to serve as directors.
Effect of the Proposed Amendment
The proposed amendment would protect the Corporation's Directors against
personal liability to the Corporation or its shareholders for any breach of
duty unless a judgment or other final adjudication adverse to them establishes
(i) a breach of the duty of loyalty to the Corporation, (ii) acts or omissions
in bad faith or involving intentional misconduct or a knowing violation of the
law, (iii) acts violating the prohibitions contained in Section 8.65 of the
Illinois Business Corporation Act against certain improper distributions of
assets, or (iv) an improper personal benefit to a Director to which he or she
was not legally entitled. No claim of the type which would be affected by the
proposed amendment is presently pending or, to the knowledge of management of
the Corporation, threatened.
The amendment as proposed would not reduce the fiduciary duty of a
Director, it merely limits monetary damage awards to the Corporation and its
shareholders arising from certain breaches of that duty. It does not affect
the availability of equitable remedies, such as the right to enjoin or rescind
a transaction, based upon a Director's breach of fiduciary duty. The
amendment also does not affect a Director's liability for acts taken or
omitted prior to the time it becomes effective (after shareholder approval and
upon filing with the Illinois Secretary of State). The limitation of
liability afforded by the proposed amendment affects only actions brought by
the Corporation or its shareholders, and does not preclude or limit recovery
of damages by third parties.
With respect to this proposal, shareholders may direct that their votes
be cast for or against such proposal, or may abstain, by marking the proper
box on the Proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT.
Proxies solicited by management will be so voted unless shareholders specify
a contrary choice in their proxies. For approval, the proposed requires the
affirmative vote of at least two-thirds of the outstanding shares of Common
Stock of the Corporation. Abstentions and broker non-votes will have the
effect of a vote against the proposal.
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Shareholders will be asked to ratify the appointment by the Board of
Directors of Arthur Andersen & Co. as independent public accountants for the
Corporation and its subsidiary companies for the year 1994. Arthur Andersen
& Co. served in this capacity in 1993, and has been retained by the
Corporation in this capacity since 1933. THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT BY THE BOARD OF
DIRECTORS OF ARTHUR ANDERSEN & CO. AS INDEPENDENT ACCOUNTANTS FOR THE YEAR
1994.
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Representatives of Arthur Andersen & Co. are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they
wish and will be available to respond to any questions at the Annual Meeting.
The Chairman of the Meeting will refer appropriate questions from Shareholders
to the representatives of Arthur Andersen & Co. for response.
SHAREHOLDER PROPOSAL FOR 1995 ANNUAL MEETING
The 1995 Annual Meeting of the Shareholders of the Corporation is
expected to be held on April 26, 1995. If any Shareholder wishes a proposal
to be considered for presentation at the 1995 Annual Meeting, such proposal
must be received by the Corporation at its offices at 30 South Wacker Drive,
Chicago, Illinois 60606 not later than November 29, 1994.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at
the Meeting other than those mentioned in the Notice of Annual Meeting of
Shareholders. However, if other matters come before the meeting, it is the
intention of each person named in the accompanying proxy to vote said proxy in
accordance with his judgment of such matters.
The Notice of Annual Meeting of Shareholders and Proxy Statement are
hereby sent by order of the Board of Directors.
Chicago, Illinois
March 25, 1994
