<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
[AMENDMENT NO..........]
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the approximate Box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Lancaster Colony 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(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.
1) Title of each class of securities to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securites to which transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of transaction computer
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> 2
LANCASTER COLONY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held November 20, 1995
The annual meeting of shareholders of Lancaster Colony Corporation (the
"Corporation") will be held at 11:00 a.m., Eastern Standard Time, November 20,
1995, in the Legislative AB Meeting Room of the Hyatt on Capitol Square, 75
East State Street, Columbus, Ohio 43215.
The meeting will be held for the following purposes:
1. To elect four directors for a term which expires in 1998.
2. To approve a proposal to adopt the 1995 Key Employee Stock Option
Plan.
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
By action of the Board of Directors, only persons who are holders of
record of shares of the Corporation at the close of business on September 22,
1995 will be entitled to notice of and to vote at the meeting.
If you do not expect to attend the meeting, please sign, date and
return the enclosed proxy. A self-addressed envelope which requires no postage
is enclosed for your convenience in returning the proxy. Its prompt return
would be appreciated. The giving of the proxy will not affect your right to
vote in person should you find it convenient to attend the meeting.
October 16, 1995
JOHN B. GERLACH, JR.
President and Secretary
1
<PAGE> 3
LANCASTER COLONY CORPORATION
37 WEST BROAD STREET, COLUMBUS, OHIO 43215
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Lancaster
Colony Corporation (the "Corporation") in connection with the solicitation by
the Board of Directors of the Corporation of proxies to be used in voting at
the annual meeting of shareholders to be held November 20, 1995, in the
Legislative AB Meeting Room, Hyatt on Capitol Square, 75 East State Street,
Columbus, Ohio 43215, at 11:00 a.m., Eastern Standard Time (the "Annual
Meeting"). The enclosed proxy, if completed and forwarded to the Corporation,
will be voted in accordance with the instructions contained therein. The
proposals referred to therein are described in this Proxy Statement.
The proxy may be revoked by the person giving it any time before it is
exercised. Such revocation, to be effective, must be communicated to the
Secretary or Assistant Secretary of the Corporation. The presence of a
shareholder at the Annual Meeting will not revoke the proxy unless specific
notice thereof is given.
The Corporation will bear the cost of solicitation of proxies,
including any charges and expenses of brokerage firms and others for forwarding
solicitation material to the beneficial owners of stock. In addition to the
use of the mails, proxies may be solicited by personal interview, by telephone
or through the efforts of officers and regular employees of the Corporation.
The Board of Directors has fixed the close of business on September 22,
1995 as the record date for the determination of shareholders entitled to
receive notice and to vote at the Annual Meeting or any adjournment thereof.
At that date the Corporation had outstanding and entitled to vote 29,583,696
shares of Common Stock, each share entitling the holder to one vote. The
Corporation has no other class of stock outstanding. This Proxy Statement is
first being mailed to shareholders on or about October 16, 1995.
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors of the Corporation is divided into three
classes. The members of the three classes are elected to serve for staggered
terms of three years. The Board of Directors currently consists of ten members.
Pursuant to Section 2.04 of the Code of Regulations, the number of directors
constituting each class will, as nearly as practicable, be equal. Thus, the
Board of Directors of the Corporation currently consists of two classes of
three members each and one class of four members.
The names and ages of the "Nominees" and the "Continuing Directors,"
their principal occupations during the past five years and certain other
information together with their beneficial ownership of the Corporation's
Common Stock as of September 1, 1995, are listed below. As of September 1,
1995, the Corporation had outstanding and entitled to vote 29,582,796 shares of
Common Stock.
NOMINEES FOR TERM TO EXPIRE IN 1998
<TABLE>
Name; Office with Corporation; Director Shares Owned at Percent of
Principal Occupation Age Since September 1, 1995 Class
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Frank W. Batsch; Retired; formerly 64 1963 58,544 *
Vice President of the Corporation(1)(2)
John B. Gerlach; Chairman of the Board 68 1961 5,841,816 19.75%
and Chief Executive Officer of
the Corporation(2)(3)(4)
Richard R. Murphey, Jr.; Of Counsel, law 70 1973 60,697 *
firm of Squire, Sanders & Dempsey(2)(5)
Henry M. O'Neill, Jr.; Chairman, 60 1976 13,101 *
Chief Executive Officer of AGT
International, Inc. (voice response
systems) since 1988; Chairman of the
Board of Evergreen Quality Catering
(mobile caterer) since 1987
<FN>
* Less than 1%
2
<PAGE> 4
(1) Mr. Batsch served as an officer of the Corporation until November
1992 and continues as a part-time consultant to the Corporation.
See "Compensation of Directors" for further discussion.
(2) See footnote 2 under "Continuing Directors," which explanation
applies to Messrs. Batsch, Gerlach and Murphey.
(3) See footnotes 1, 3, 4 and 5 under "Continuing Directors" which
explanations apply to Mr. Gerlach.
(4) Mr. John B. Gerlach is also a director of Drug Emporium, Inc.,
Huntington Bancshares Incorporated, M/I Schottenstein Homes, Inc.,
Scioto Downs, Inc. and Worthington Foods, Inc.
(5) Mr. Murphey is Of Counsel to a law firm which the Corporation has
retained from time to time during the last two full fiscal years and
proposes to retain during the current year.
</TABLE>
All the nominees have indicated a willingness to stand for election and
to serve if elected. It is intended that the shares represented by the enclosed
proxy will be voted for the election of the above named nominees. Although it
is anticipated that each nominee will be available to serve as a director,
should any nominee be unavailable to serve, the proxies will be voted by the
proxy holders in their discretion for another person designated by the Board of
Directors.
<TABLE>
<CAPTION>
CONTINUING DIRECTORS
Name; Office with Corporation; Director Term Shares Owned at Percent of
Principal Occupation Age Since Expires September 1, 1995 Class
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert L. Fox; Investment 46 1991 1996 710,339 2.40%
Executive for Advest, Inc.
(stock brokerage firm)
since 1978(2)(3)
John B. Gerlach, Jr.; 41 1985 1996 2,314,562 7.82%
President, Chief Operating
Officer and Secretary
of the Corporation
(1)(2)(3)(4)(5)(6)(7)
Morris S. Halpern; Retired; 65 1963 1997 117,047 *
formerly Vice President
of the Corporation(2)(9)
Robert S. Hamilton; 67 1985 1997 8,816 *
Vice Chairman and Director
of Liqui-Box Corporation
(plastic packaging manufacturer)(2)
Edward H. Jennings; 58 1990 1996 533 *
President Emeritus and
Professor of Finance at
The Ohio State University;
formerly President of The
Ohio State University from
1981 to 1990(8)
David J. Zuver; Retired; 71 1966 1997 144,099 *
formerly Vice President
of the Corporation(2)
All Directors and Executive Officers 7,228,793 24.38%
as a group (12 Persons)(1)(10)
<FN>
* Less than 1%
(1) Includes shares held by the Employee Stock Ownership Plan allocated to the accounts of Lancaster Colony Corporation employees.
Employees have the right to direct the voting of such shares.
3
<PAGE> 5
(2) Holdings include shares owned by spouses, minor children and
shares held in custodianship or as trustee. The following persons
disclaim beneficial ownership in such holdings with respect to the
number of shares indicated: Mr. Batsch, 2,570; Mr. Fox, 77,425; Mr.
John B. Gerlach, 1,301,554; Mr. John B. Gerlach, Jr., 1,201,858;
Mr. Halpern, 6,074; Mr. Hamilton, 2,683; Mr. Murphey, 8,661; and
Mr. Zuver, 72,847. The holdings disclaimed by Messrs. Gerlach
include those held in a trust referred to in footnote 5, below, in
which Messrs. Gerlach are subject to an undetermined beneficial
interest.
(3) Messrs. John B. Gerlach and John B. Gerlach, Jr., trustees of
Gerlach Foundation, Inc., and Mr. Fox, a trustee of Fox Foundation,
Inc., share voting and investment power with their respective
foundations, both of which are private charitable foundations.
Gerlach Foundation, Inc. holds 353,455 shares and Fox Foundation,
Inc. holds 61,338 shares. These shares are included in the above
table. Gerlach Foundation, Inc. and Fox Foundation, Inc. together
control an additional 410,318 shares held by Lehrs, Inc. The
shares held by Lehrs, Inc. are also included in the total number of
shares held by Messrs. Gerlach and Mr. Fox. The Trustees each
disclaim beneficial ownership of any of these shares.
(4) Messrs. John B. Gerlach and John B. Gerlach, Jr. by virtue of
their stock ownership and positions with the Corporation may be
deemed "control persons" of the Corporation. John B. Gerlach is
John B. Gerlach, Jr.'s father.
(5) John B. Gerlach is the Executor of the Estate of John J. Gerlach,
Deceased. In order to partially fund the federal estate tax
obligations of the estate, a trust which is the residuary legatee
of the estate and presently holds 944,630 shares of the Common
Stock of the Corporation sold the Corporation 250,000 shares of
Common Stock of the Corporation on August 8, 1995. Such purchase
was authorized by the Board of Directors on June 22, 1995. The
purchase price of $35.81 per share was established by the Board of
Directors based upon the average closing price of common shares of
the Corporation during the first 20 of the 22 business days
immediately preceding the date of such purchase.
(6) Mr. Gerlach, Jr. has the right to acquire 26,666 shares through
the exercise of stock options which shares are included in the
table.
(7) Mr. Gerlach, Jr. is also a director of The Cardinal Fund Inc.
(8) Mr. Jennings is also a director of Borden Chemicals & Plastic Ltd.
Partnership and Super Food Service, Inc.
(9) Mr. Halpern served as an officer of the Corporation until June
1992. The Corporation and Mr. Halpern have entered into a formal
consulting agreement discussed under "Compensation of Directors."
(10) Shares held include 72,332 shares subject to presently exercisable
options.
</TABLE>
The Board of Directors has established an audit committee (the "Audit
Committee") consisting of Messrs. Batsch, Hamilton and O'Neill. Mr. Hamilton
serves as Chairman of the Audit Committee. The Audit Committee is charged with
the responsibility of reviewing financial information (both external and
internal) about the Corporation and its subsidiaries, so as to assure (i) that
the overall audit coverage of the Corporation and its subsidiaries is
satisfactory and appropriate to protect the shareholders from undue risks and
(ii) that an adequate system of internal financial control has been implemented
throughout the Corporation and is being effectively followed. The Audit
Committee held three meetings during the fiscal year ended June 30, 1995
("fiscal 1995"). All members were in attendance except Mr. Batsch who was
absent for one meeting.
The Board of Directors has established a compensation committee (the
"Compensation Committee") consisting of Messrs. Hamilton, Jennings and O'Neill
as its members. Mr. Jennings serves as Chairman of the Compensation Committee.
The powers and duties of the Compensation Committee are to consider and
formulate recommendations to the Board of Directors with respect to all aspects
of compensation to be paid to the executive officers of the Corporation, to
undertake such evaluations and make such reports as are required by the
applicable rules of the Securities and Exchange Commission and to perform and
exercise such other duties and powers as shall from time to time be designated
by action of the Board of Directors. The Compensation Committee held one
meeting during fiscal 1995. All members were in attendance.
The Board of Directors does not have a Nominating Committee.
A total of five meetings of the directors of the Corporation were held
during fiscal 1995. Each director except Frank W. Batsch and Morris S. Halpern,
attended at least 75% of the total number of meetings of the directors.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of the Common Stock of the Corporation. To the Corporation's
knowledge, based solely on a review of such reports, during the past fiscal year
all Section 16(a) filing requirements applicable to the Corporation's directors
and executive officers were complied with, except that Mr. Halpern made a late
filing on Form 4 with respect to one transaction and Mr. John B. Gerlach made
late filings on Form 4 with respect to two transactions.
4
<PAGE> 6
COMPENSATION OF DIRECTORS
Except as noted below, directors who are not employees of the
Corporation or any of its subsidiaries receive an annual fee of $10,000 plus
$750 for each meeting attended. Directors who also serve on the Audit Committee
and/or Compensation Committee receive $750 for each such committee meeting
attended.
The Corporation has a consulting agreement with Mr. Halpern pursuant to
which Mr. Halpern has agreed to perform advisory and consulting services for an
annual fee of $200,000 for calendar year 1993 and $150,000 for calendar years
1994 through 1996. If at December 31, 1996 Mr. Halpern has satisfied all the
terms of the consulting agreement, he shall be entitled to receive additional
consulting fees of $50,000 per year beginning in 1997 and terminating upon his
death.
Subject to an informal arrangement, effective January 1, 1993 the
Corporation began paying Mr. Batsch as a part-time consultant based on an annual
fee of $18,000. Additionally, postretirement benefits pursuant to an informal
arrangement were paid by the Corporation to Mr. Zuver of $30,000 annually.
The payments to Messrs. Zuver, Halpern and Batsch also include their
services as directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following individuals have beneficial ownership, directly or
indirectly, of more than five percent of the outstanding Common Stock of the
Corporation:
<TABLE>
<CAPTION>
Nature of
Name and Beneficial Amount Percent of
Address Ownership Owned (1) Ownership
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
John B. Gerlach Direct and 5,841,816 19.75%
Lancaster Colony Corporation Indirect
37 West Broad Street
Columbus, Ohio 43215
John B. Gerlach, Jr. Direct and 2,314,562(2) 7.82%
Lancaster Colony Corporation Indirect
37 West Broad Street
Columbus, Ohio 43215
<FN>
(1) See footnotes 1, 2, 3, 4 and 5 under "Continuing Directors," which
explanations apply to Messrs. Gerlach.
(2) See footnote 6 under "Continuing Directors," which explanation applies to
John B. Gerlach, Jr.
</TABLE>
5
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned during the fiscal
years ended June 30, 1995, 1994 and 1993 by those persons who were the Chief
Executive Officer and the three other most highly compensated, reportable
executive officers of the Corporation during fiscal 1995:
<TABLE>
<CAPTION>
Long-Term
Fiscal Annual Compensation (1) Compensation All Other
Name and Principal Position Year Salary Bonus Options(#) Compensation(2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John B. Gerlach; 1995 $517,500 $5,795
Chairman of the 1994 485,000 4,978
Board and Chief 1993 425,000 5,207
Executive Officer
Larry G. Noble; 1995 $228,267 $272,000 15,000 $5,795
Vice President(3) 1994 219,508 252,000 4,978
1993 208,500 210,000 26,666 5,207
John B. Gerlach, Jr.; 1995 $345,833 $5,795
President, Chief 1994 297,083 4,978
Operating Officer 1993 266,216 5,207
and Secretary
John L. Boylan; 1995 $118,750 $ 15,000 4,000 $2,493
Treasurer and 1994 110,000 2,216
Assistant Secretary 1993 100,000 5,333 2,389
<FN>
(1) The named executive officers received certain perquisites in 1995, 1994 and 1993, the amount of which did not exceed the
reportable threshold of the lesser of $50,000 or 10% of any such officer's salary and bonus.
(2) Approximate amounts contributed on behalf of such executive officer to the Employee Stock Ownership Plan (ESOP).
(3) Bonus amounts listed as paid to Mr. Noble are discretionarily determined and relate to the preceding fiscal year. The bonus
relating to fiscal 1995 has not yet been determined but is currently expected not to exceed that paid in fiscal 1995 for
fiscal 1994.
</TABLE>
GRANTS OF STOCK OPTIONS
The following table sets forth information concerning individual grants
of stock options made during the 1995 fiscal year to each of the executive
officers named in the Summary Compensation Table. The Corporation has never
granted stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of Potential Realizable Value at
Total Options Assumed Annual Rates of
Granted to Stock Price Appreciation
Options Employees in Exercise Expiration for Option Term(2)
Name Granted(#)(1) Fiscal Year Price($/Sh) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Noble 15,000 6.9% $33.375 01/31/00 $315,000 $798,000
and
01/31/05
John L. Boylan 4,000 1.8% $33.375 01/31/97 $ 14,000 $ 28,000
<FN>
(1)Except for 3,701 nonqualified stock options granted to Mr. Noble, all
options were granted pursuant to the Corporation's 1981 Incentive Stock
Option Plan and become exercisable in partial amounts through January 31,
2005. All options were granted with an exercise price equal to the market
price of the Common Stock at the grant date.
(2)The amounts reflected in this table are based upon certain assumed rates of
appreciation as specified by the Securities and Exchange Commission. Actual
realized values, if any, on exercise of the option will be dependent on the
actual appreciation in the price of the Common Stock of the Corporation over
the term of the option. There can be no assurances that the Potential
Realizable Values reflected in this table will be achieved.
</TABLE>
6
<PAGE> 8
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to stock
options exercised during fiscal 1995 by each of the executive officers named in
the Summary Compensation Table and unexercised stock options held as of June 30,
1995 by such executive officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Underlying Unexercised Options at In-the-Money Options at
Options Value Fiscal Year-End(#) Fiscal Year-End($)(1)(2)
Name Exercised(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John B. Gerlach, Jr. 26,666 $592,839 26,666 $753,315
Larry G. Noble 5,344 $146,960 6,041 35,625 $ 32,555 $273,890
John L. Boylan 2,996 1,004 $ 7,116 $ 2,385
<FN>
(1) All values are shown pretax and are rounded to the nearest whole dollar.
(2) Based on the 1995 fiscal year-end closing price of $35.75 per share.
</TABLE>
SEVERANCE AGREEMENT
Mr. Boylan is a party to an agreement entitling him to severance
benefits equal to (i) full salary paid through the date of his termination plus
(ii) an amount equal to the lesser of (a) 100% of the highest annual rate of
salary and highest annual bonus paid to Mr. Boylan during the three-year period
prior to his date of termination, or (b) twice his annual compensation (salary
plus bonus) paid for the full fiscal year immediately preceding the date of his
termination, in the event that within a period of one year after a "change of
control" (as defined in the agreement) his employment is terminated by the
Corporation (other than for cause) or by Mr. Boylan (if there has been any
material adverse change in the terms of his employment).
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
consists entirely of outside, nonemployee directors. The compensation of
executive officers of the Corporation, other than the chief executive officer
("CEO") is established annually by the CEO in consultation with the Committee.
In establishing the compensation of executive officers various factors are
considered including the scope of responsibilities, the quality of the executive
officer's performance in discharging those responsibilities, and in certain
cases, the financial performance of the Corporation or of a particular division
of the Corporation under that executive officer's supervision. The
determination of the compensation of executive officers is essentially
subjective and dependent upon the recommendation of the CEO, and no specific
weight is given to any of the foregoing factors.
The compensation of the CEO was based on the Committee's evaluation of
his performance toward the achievement of the Company's financial, strategic and
other goals and his length of service as CEO. In determining the CEO's
compensation the Committee considered the CEO's hands-on oversight of all of the
Corporation's operations, his attention to detail and his reputation as a
business leader in the industries in which the Corporation operates as well as
competitive chief executive officer pay information. The determination of the
CEO's compensation was subjective, with no specific weight given to any
particular factor.
Edward H. Jennings, Chairman
Robert S. Hamilton
Henry M. O'Neill, Jr.
7
<PAGE> 9
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
OF LANCASTER COLONY CORPORATION, S&P INDEX AND PEER INDUSTRY GROUP
The graph set forth below compares the five-year cumulative total return
from investing $100 on June 30, 1990 in each of the Corporation's Common Stock,
the Standard and Poor's 500 Index and the S&P Conglomerates Index:
<TABLE>
<CAPTION>
Cumulative Total Return
------------------------------------------------
6/90 6/91 6/92 6/93 6/94 6/95
<S> <C> <C> <C> <C> <C> <C>
Lancaster Colony Corp 100 101 219 386 484 495
S & P 500 100 107 122 138 140 177
S & P Conglomerates 100 89 100 139 138 172
</TABLE>
8
<PAGE> 10
OTHER TRANSACTIONS
John B. Gerlach has a 46% interest in an accounting partnership known as
John Gerlach & Co. ("the Firm") which, pursuant to an arrangement that was
approved by the Audit Committee, provides internal auditing, accounting, tax and
internal management advisory services of a type generally available from an
independent accounting firm, including services relating to local taxation,
mergers and acquisitions and pension matters. The fee paid to the Firm for its
services is measured by the volume of work performed and is reviewed by the
Audit Committee. The fees for services for the fiscal year ended June 30, 1995
were $428,760.
The Corporation believes that the terms of the above transactions are as
favorable to it as those which could have been obtained from independent
parties.
PROPOSAL TO ADOPT 1995 KEY EMPLOYEE STOCK OPTION PLAN
The following summary description of the 1995 Plan is qualified in its
entirety by reference to the full text of the Plan which is attached as Exhibit
A.
The Corporation's 1981 Incentive Stock Option plan (the "1981 Plan"),
adopted by the shareholders on November 16, 1981 and amended by the shareholders
on November 19, 1990 expired May 30, 1995. Such expiration does not affect the
validity of options to purchase 319,958 shares which were outstanding on that
date. On August 31, 1995, the Board of Directors adopted a new 1995 Key Employee
Stock Option Plan (the "1995 Plan"), subject to shareholder approval, to
continue the Corporation's past policy of providing effective incentives
designed to attract and retain the services of valuable and experienced
employees. Under the 1995 Plan, options to purchase up to an aggregate of
2,000,000 shares of the Common Stock of the Corporation (the "Shares") may be
granted.
The 1995 Plan is essentially similar to the 1981 Plan. The purpose of
the 1995 Plan is to afford an incentive to, and encourage stock ownership by,
key employees of the Corporation and its subsidiaries so that such employees may
acquire or increase their proprietary interest in the success of the Corporation
and be encouraged to remain in the employ of the Corporation. Key employees
(including officers, whether or not they are directors) of the Corporation and
all of its subsidiaries are eligible to receive options.
The 1995 Plan permits the granting of (1) options to purchase Shares
which are either (a) nonstatutory stock options ("Nonstatutory Stock Options")
not intended to qualify for special tax treatment under the Internal Revenue
Code of 1986, as amended (the "Code"), or (b) options which are intended to
qualify as incentive stock options under the Code ("Incentive Stock Options"),
and (2) stock appreciation rights granted either in conjunction with stock
options or separately.
ADMINISTRATION
The 1995 Plan will be administered by a committee designated by the
Board of Directors (the "Committee"). The Committee shall be composed of at
least three directors and shall serve at the pleasure of the Board of Directors.
Each member of the Committee must be a director who is a "disinterested person"
under Rule 16b-3 under the Securities Exchange Act of 1934 and an "outside
director" under Section 162(m) of the Code and the regulations thereunder. The
Committee has the authority to determine (i) the employees who shall be granted
options or stock appreciation rights under the 1995 Plan, (ii) the time or times
at which options and stock appreciation rights shall be granted, (iii) the
option price of the shares subject to each option and stock appreciation right,
(iv) the time or times at which each option and stock appreciation right shall
become exercisable and the duration of the exercise period, (v) any additional
conditions to the grant and exercise of any option or stock appreciation right
and (vi) the rules and regulations for the administration of the 1995 Plan.
ELIGIBLE EMPLOYEES
The selection of persons who are eligible to be granted stock options
and stock appreciation rights shall be determined by the Committee. No employee
shall be granted an Incentive Stock Option if such employee, at the time the
Incentive Stock Option is granted, owns stock possessing more than 10% of the
combined voting power of all classes of stock of the Corporation unless the
option price pursuant to such Incentive Stock Option is at least 110% of the
fair market value of the Shares subject to the Incentive Stock Option at the
time of grant and such option is not exercisable more than five years after the
date of grant.
9
<PAGE> 11
STOCK OPTIONS
The option agreement in the form approved by the Committee (the "Option
Agreement") shall set forth the option price per share which will be not less
than 100% of the fair market value per Share on the date of grant if the option
is an Incentive Stock Option (or 110% of the fair market value per share in the
case of an employee who owns more than 10% of the combined voting power of all
classes of stock of the Corporation). Payment of the option price upon exercise
of an option may be made in cash, Shares, or a combination thereof, as set forth
in the Option Agreement. The term of each option shall be set forth in the
Option Agreement. The grant and terms of Incentive Stock Options will be limited
to the extent required by the Code. The Option Agreement shall set forth the
number of Shares that are subject to the option, the type of option granted, the
option price to be paid upon exercise, the manner in which the option is to be
exercised, the option period, and such other terms as may be approved by the
Committee.
STOCK APPRECIATION RIGHTS
Stock appreciation rights may be granted pursuant to the 1995 Plan
either separately or in conjunction with a stock option. Each stock appreciation
right shall be evidenced in writing, either as part of an Option Agreement or in
a separate stock appreciation rights agreement between the optionee and the
Corporation, all in such form as the Committee shall from time to time approve.
AMENDMENT OF THE 1995 PLAN
The Board of Directors may, with respect to Shares not subject to
outstanding options, suspend, discontinue, revise or amend the 1995 Plan in any
respect for any purpose which it may deem advisable; provided, however, that the
Board of Directors shall not, without the approval of the shareholders of the
Corporation, increase the aggregate number of Shares subject to the 1995 Plan,
change the designation of the class of employees eligible for participation in
the 1995 Plan, or otherwise amend the 1995 Plan in any manner that would cause
Incentive Stock Options issued under the 1995 Plan to fail to qualify as
Incentive Stock Options as defined in Section 422 of the Code.
FEDERAL INCOME TAX CONSEQUENCES
For federal income tax purposes, under existing statutes, regulations
and authorities, an optionee does not realize taxable income at the time of the
grant of an Incentive Stock Option, a Nonstatutory Stock Option or a stock
appreciation right. Upon the exercise of a Nonstatutory Stock Option, the
Corporation is entitled to a deduction and the optionee realizes ordinary income
in the amount by which the then fair market value of the Shares exceeds the
option price. Upon the exercise of a stock appreciation right, the Corporation
is entitled to a deduction and the optionee realizes ordinary income in the
amount of the cash or the fair market value of the Shares received. On the
subsequent sale of the Shares received upon the exercise of a Nonstatutory Stock
Option or stock appreciation right, the difference between the fair market value
of the Shares on the date of receipt and the amount realized on the sale will be
treated as capital gain or loss depending on the period for which the Shares are
held prior to the sale. An optionee will have no taxable income upon the
exercise of an Incentive Stock Option (except that the alternative minimum tax
may apply) and generally does not realize taxable income until the sale of the
Shares received upon exercise of the option. If a sale does not take place until
at least two years after grant and one year after exercise of the option, any
gain or loss realized will be treated as long term capital gain or loss. Under
such circumstances, the Corporation will not be entitled to a deduction in
connection with the grant or the exercise of the option. If a disposition
occurs prior to two years after grant or one year after exercise, then the
difference between the option price and the fair market value of the Shares on
the date of exercise (or in certain cases, the amount realized on sale, if less
than the market value on the date of exercise) will be taxable as ordinary
income to the optionee and deductible by the Corporation for federal income tax
purposes.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has acted as independent certified public
accountants of the Corporation during the fiscal year ended June 30, 1995.
Deloitte & Touche LLP is expected to have a representative present at the Annual
Meeting who may make a statement, if desired, and will be available to answer
appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be in the proxy statement for the 1996
Annual Meeting of Shareholders must be received by the Corporation at its
principal executive offices no later than June 18, 1996.
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OTHER MATTERS
As of the date of this statement, the Board of Directors knows of no
other business that will come before the Annual Meeting. Should any other matter
requiring the vote of the shareholders arise, the enclosed proxy confers upon
the proxy holders discretionary authority to vote the same in respect to the
resolution of such other matters as they, in their best judgment, believe to be
in the interest of the Corporation.
By Order of the Board of Directors
October 16, 1995
JOHN B. GERLACH, JR.
President and Secretary
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EXHIBIT A
LANCASTER COLONY CORPORATION
1995 KEY EMPLOYEE STOCK OPTION PLAN
This is the 1995 Key Employee Stock Option Plan (the "Plan") of
LANCASTER COLONY CORPORATION (the "Company"), effective as of August 31, 1995.
[SECTION] 1. PURPOSE OF PLAN. The purpose of the Plan is to advance
the interests of the Company and its shareholders by (i) providing an incentive
to key employees of the Company and its affiliates, (ii) encouraging stock
ownership by key employees so that such key employees may acquire or increase
their proprietary interest in the success of the Company and its affiliates, and
(iii) encouraging key employees to remain in the employ of the Company and its
affiliates. Some of the options granted pursuant to this Plan shall constitute
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, or any successor provision thereto
(hereinafter "incentive stock options").
[SECTION] 2. SHARES UNDER THE PLAN. The shares of stock subject to
any option granted pursuant to the Plan shall be shares of the Common Stock, no
par value, of the Company ("Shares"). The aggregate number of Shares which may
be subject to, and issued under, options granted pursuant to the Plan shall not
exceed 2,000,000 Shares; provided, however, that whatever number of shares that
remain reserved for issuance pursuant to the Plan at the time of any stock
split, stock dividend, or other change in the Company's capitalization shall be
appropriately and proportionately adjusted to reflect such stock split, stock
dividend, or other change in capitalization. Any Shares issued upon exercise of
options granted under the Plan may be authorized and unissued Shares or Shares
held by the Company in its treasury. In the event that any outstanding option
under the Plan expires, is terminated, or (with the consent of the optionee) is
canceled, those Shares allocable to the unused portion of such option may
thereafter be subject to new options granted pursuant to the Plan.
[SECTION] 3. ADMINISTRATION. The Plan shall be administered by a
committee appointed by the board of directors consisting of not less than three
directors (the "Committee"), each of whom shall be a "disinterested person"
under Rule 16b-3 of the Securities Exchange Act of 1934 and an "outside
director" under Section 162(m) of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder. Subject to the provisions of the Plan, the
Committee shall in its discretion:
(a) Determine the employees who shall be granted options
under the Plan, the number of Shares to be subject to
each such option and the designation of such options as
incentive stock options or non-statutory stock options,
except that options granted to members of the Board
shall be subject to the approval of a majority of the
disinterested directors of the Company;
(b) Determine the employees who shall be granted stock
appreciation rights under the Plan;
(c) Determine the time or times at which options and stock
appreciation rights shall be granted;
(d) Determine the option price of the Shares subject to
each option and stock appreciation right;
(e) Determine the time or times at which each option and
stock appreciation right shall become exercisable and
the duration of the exercise period;
(f) Specify additional conditions including, without
limitations, earnings and performance tests, to the
grant and exercise of any option or stock appreciation
right;
(g) Establish, amend and rescind rules and regulations for
the administration of the Plan; and
(h) Construe and interpret the provisions of the Plan or
any option or stock appreciation right granted pursuant
to the Plan.
All actions of the Committee under this Section, including any
construction or interpretation of the provisions of the Plan, shall be final,
conclusive and binding upon the Company and all optionees. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted pursuant to the Plan.
[SECTION] 4. ELIGIBLE EMPLOYEES. The persons who shall be eligible to
be granted options and stock appreciation rights shall be such officers and
other key employees (whether or not they are also directors) of the Company or
any of its affiliates as the Committee shall select from time to time; provided,
however, that no employee shall be granted an incentive stock option pursuant to
the Plan if such employee, at the time the incentive stock option is granted,
owns stock possessing more than 10% of the total combined voting
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power of all classes of stock of the Company or of any of its affiliates unless
the option price pursuant to any such incentive stock option is at least 110%
of the fair market value of the Shares subject to the incentive stock option at
the time such incentive stock option is granted and such option is not
exercisable by its terms after the expiration of five years from the date such
incentive stock option is granted.
[SECTION] 5. EFFECTIVE DATE OF PLAN. The Plan shall be effective upon
adoption of the Plan by the Board of Directors of the Company. The Plan shall be
submitted to the shareholders of the Company for approval within one year after
its adoption by the Board of Directors and, if the Plan shall not be approved by
the shareholders within said period, the Plan shall be void and of no effect.
Any options granted under the Plan prior to the date of approval by the
shareholders shall be void if such shareholders' approval is not obtained. Any
option granted pursuant to the Plan shall be granted within ten years from the
effective date of adoption and for any period of exercise permitted under
Section 6(e).
[SECTION] 6. TERMS AND CONDITIONS OF OPTIONS. Each option granted
pursuant to the Plan shall be evidenced by a written option agreement (the
"Option Agreement") between the optionee and the Company in such form as the
Committee shall from time to time approve. The Option Agreement shall specify
whether or not the option granted shall be treated as an incentive stock option
and shall contain such terms and conditions as the Committee shall deem
appropriate, including but not limited to the conditions set forth below:
(a) OPTIONEE'S EMPLOYMENT. The Option Agreement may provide
that the optionee agrees to enter into an employment
agreement with the Company or its affiliates in form
satisfactory to the Company as a condition to the grant of
an option. The Option Agreement may provide that the
optionee agrees to remain in the employ of, and to render
services to, the Company or its affiliates for a specified
period of time as a condition to the exercise of an option.
The Option Agreement shall not impose upon the Company or
its affiliates any obligation to retain the optionee in
their employ for any period.
(b) NUMBER OF SHARES. The Option Agreement shall set forth the
number of Shares subject to the option or options granted
to the optionee pursuant to the Plan.
(c) NO OBLIGATION TO EXERCISE. The Option Agreement shall
provide that there is no obligation on the optionee to
exercise any option.
(d) OPTION PRICE. The Option Agreement shall set forth the
option price per Share as determined by the Committee. If
the option is an incentive stock option, the price shall
not be less than 100% of the fair market value per Share
on the date the option is granted (110% in the case of any
employee who, at the time the option is granted, owns
stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of
any of its affiliates). The date on which the Committee
approves the granting of an option shall be deemed the
date on which the option is granted.
(e) PERIOD OF EXERCISE. The Option Agreement shall set forth
the period for exercise of each option. If the option is
an incentive stock option, the Option Agreement shall not
permit exercise of the option after the expiration of ten
years from the date such option is granted by the
Committee or that shorter period specified in Section 4.
(f) MEDIUM AND TIME OF PAYMENT. The option price shall be
payable upon exercise of the option and must be paid in
full in cash, Shares, a combination of cash and Shares or
such other consideration as the Committee may from time to
time determine to be acceptable. No stock certificates
shall be issued until full payment therefor has been
received by the Company.
(g) EXERCISE OF OPTIONS. The Option Agreement shall provide
for (and may limit or restrict) the date or dates and the
conditions on which the options may be exercised. The
Option Agreement may provide for exercise of the options
in installments on such terms and conditions as the
Committee may determine.
(h) LIMIT ON INCENTIVE STOCK OPTIONS. An Option Agreement that
grants an incentive stock option shall provide that the
maximum aggregate fair market value (determined as of the
time the option is granted) of all Shares with respect to
which incentive stock options may be exercisable by an
optionee for the first time in any calendar year under the
Plan or any other stock option plan of the Company or any
of its affiliates shall not exceed $100,000.
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(i) ADJUSTMENT. The Option Agreement may contain such
provisions as the Committee considers appropriate to
adjust the number of Shares subject to an option in the
event of a stock split, stock dividend, or other change in
the Company's capitalization. Such adjustments shall be
made by the Committee, whose determination in that respect
shall be final, binding, and conclusive upon the Company
and all optionees.
The grant of an option pursuant to the Plan shall not affect the right
or power of the Company to make adjustments, reclassifications, reorganizations,
or changes of its capital or business structure, or to merge, consolidate,
dissolve, liquidate, or sell or transfer all or any part of its business or
assets.
[SECTION] 7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
appreciation rights may be issued independent of or in conjunction with an
option. Each stock appreciation right granted pursuant to the Plan shall be
evidenced in writing, either as part of an Option Agreement or in a separate
stock appreciation rights agreement between the optionee and the Company in such
form as the Committee shall from time to time approve. The Option Agreement or
separate stock appreciation rights agreement shall contain such terms and
conditions as the Board shall deem appropriate, including but not limited to the
terms and conditions set forth in Section 3 and the conditions set forth in
Section 6 with respect to options.
[SECTION] 8. RIGHTS AS A SHAREHOLDER. An optionee or a transferee of
an option shall have no rights as a shareholder with respect to any Shares
subject to such option until the date of the issuance of a stock certificate to
him for such Shares.
[SECTION] 9. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS AND STOCK
APPRECIATION RIGHTS. Subject to the terms and conditions and within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
options and stock appreciation rights granted under this Plan, or accept the
surrender of outstanding options and stock appreciation rights and authorize
the granting of new options and stock appreciation rights in substitution
therefor. Options for Shares subject to lapsed options may be granted to other
eligible employees by the Committee at any time during the period permitted
under Section 5. Notwithstanding the foregoing, however, no modification of an
option or stock appreciation right shall, without the consent of the optionee,
alter or impair any rights or obligations under any option or stock appreciation
right theretofore granted to the optionee under the Plan.
[SECTION] 10. INDEMNIFICATION OF BOARD. In addition to such other
rights of indemnification as they may have as members of the board of directors
of the Company, the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorney's fees, actually and
necessarily incurred in connection with the defense of any action, suit or other
proceeding to which any of them may be a party as a result of any action or
failure to act under or in connection with the Plan or any option or stock
appreciation right granted thereunder, and against all amounts paid in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid in satisfaction of a judgment in any
such action, suit or other proceeding; provided, however, that any such member
of the Committee shall not be indemnified for any such expenses or amounts
relating to matters as to which it is determined in such action, suit or other
proceeding that such member of the Committee is liable for negligence or
misconduct in the performance of his duties.
[SECTION] 11. AMENDMENT OF PLAN. The Board of Directors may, with
respect to any Shares not subject to options at such time, suspend, discontinue,
revise or amend the Plan in any respect for any purpose which it may deem
advisable; provided, however, that the Board of Directors shall not, without the
approval of the shareholders of the Company, increase the aggregate number of
Shares subject to the Plan, change the designation of the class of employees
eligible for participation in the Plan, or otherwise amend the Plan in any
manner that will cause incentive stock options issued hereunder to fail to
qualify as incentive stock options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended.
[SECTION] 12. APPLICATION OF FUNDS. The proceeds received by the
Company from the sale of Shares pursuant to options granted under the Plan shall
be used for general corporate purposes.
[SECTION] 13. NAME OF PLAN. The Plan shall be known as the Lancaster
Colony Corporation 1995 Key Employee Stock Option Plan.
[End of Plan]
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LANCASTER COLONY CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS NOVEMBER 20, 1995
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert L. Fox, John B. Gerlach, Jr. and
Robert S. Hamilton, or any of them, proxies of the undersigned, with power of
substitution, to vote all shares of stock of the Corporation which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders to be held November 20, 1995, or at any adjournment
thereof, and to exercise all of the powers which the undersigned would be
entitled to exercise as a shareholder if personally present upon the following
matters:
(To Be Continued And Signed On The Other Side)
<PAGE> 17
[X] Please mark your
votes as in this
example.
If no contrary specification is made, this proxy will be voted FOR proposals
1 and 2.
FOR WITHHELD Nominees: For Term Expiring 1996:
1. Election of Frank W. Batsch
Directors [ ] [ ] John B. Gerlach
Richard R. Murphey, Jr.
and Henry M. O'Neill, Jr.
For, except vote withheld from the following nominee(s):
___________________________
FOR AGAINST ABSTAIN
2. Approval of a proposal to adopt the
1995 Key Employee Stock Option Plan. [ ] [ ] [ ]
3. The transaction of all other matters
as may properly come before the meeting.
(Continued from other side)
SIGNATURE(S) _________________________ DATE _________,1995
SIGNATURE(S) _________________________ DATE _________,1995
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. Please date, sign and mail this proxy in the
enclosed envelope. No postage is required for mailing in the United States.
