<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 appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
LANCASTER COLONY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee: Not Applicable
<PAGE> 2
LANCASTER COLONY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held November 18, 1996
The annual meeting of shareholders of Lancaster Colony
Corporation (the "Corporation") will be held at 11:00 a.m., Eastern
Standard Time, November 18, 1996, 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 three directors for a term which expires in 1999.
2. 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 20, 1996 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, 1996
JOHN B. GERLACH, JR.
President and Secretary
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<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 18, 1996, 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 20,
1996 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 29,437,851
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, 1996.
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors of the Corporation currently consists of ten
members and is divided into three classes. The members of the three classes
are elected to serve for staggered terms of three years. 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 August 30, 1996, are listed below. As of August 30, 1996, the Corporation
had outstanding and entitled to vote 29,467,851 shares of Common Stock.
NOMINEES FOR TERM TO EXPIRE IN 1999
<TABLE>
<CAPTION>
NAME; OFFICE WITH CORPORATION; DIRECTOR SHARES OWNED AT PERCENT OF
PRINCIPAL OCCUPATION AGE SINCE AUGUST 30, 1996 CLASS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert L. Fox; Investment 47 1991 715,136 2.43%
Executive for Advest, Inc.
(stock brokerage firm)
since 1978(1)
John B. Gerlach, Jr.; 42 1985 1,930,921 6.55%
President, Chief Operating
Officer and Secretary
of the Corporation
(1)(2)(3)
Edward H. Jennings; 59 1990 533 *
President Emeritus and
Professor of Finance at
The Ohio State University;
formerly President of The
Ohio State University from
1981 to 1990(4)
</TABLE>
_________________
* Less than 1%
2
<PAGE> 4
(1) See footnotes 2 and 3 under "Continuing Directors" which explanation
applies to Messrs. Fox and Gerlach, Jr.
(2) See footnotes 1, 4 and 10 under "Continuing Directors" which
explanations apply to Mr. Gerlach, Jr.
(3) Mr. Gerlach, Jr. is also a director of The Cardinal Fund Inc.
(4) Mr. Jennings is also a director of Borden Chemicals & Plastic Ltd.
Partnership and Super Food Service, Inc.
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.
CONTINUING DIRECTORS
<TABLE>
<CAPTION>
NAME; OFFICE WITH CORPORATION; DIRECTOR TERM SHARES OWNED AT PERCENT OF
PRINCIPAL OCCUPATION AGE SINCE EXPIRES AUGUST 30, 1996 CLASS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Frank W. Batsch; Retired; formerly 65 1963 1998 48,544 *
Vice President of the Corporation(2)(5)
John B. Gerlach; Chairman of the Board 69 1961 1998 5,503,912 18.68%
and Chief Executive Officer of
the Corporation(1)(2)(3)(4)(6)(10)
Morris S. Halpern; Retired; 66 1963 1997 94,071 *
formerly Vice President
of the Corporation(2)(8)
Robert S. Hamilton; 68 1985 1997 8,816 *
Vice Chairman and Director
of Liqui-Box Corporation
(plastic packaging manufacturer)(2)
Richard R. Murphey, Jr.; Of Counsel, law 71 1973 1998 51,236 *
firm of Squire, Sanders & Dempsey(7)
Henry M. O'Neill, Jr.; Chairman, 61 1976 1998 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
David J. Zuver; Retired; 72 1966 1997 135,473 *
formerly Vice President
of the Corporation(2)
All Directors and Executive Officers 6,834,274 23.16%
as a group (12 Persons)(1)(9)
</TABLE>
___________________________
* 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.
(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, 81,635; Mr. John B.
Gerlach, 932,163; Mr. John B. Gerlach, Jr., 839,554; Mr. Halpern,
4,028; Mr. Hamilton, 2,683; and Mr. Zuver, 70,514. The holdings
disclaimed by Messrs. Gerlach include those shares held in a trust
referred to in footnote 10, below, in which Messrs. Gerlach have an
undetermined beneficial interest.
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<PAGE> 5
(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 339,955 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 413,415 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) 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.
(6) 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.
(7) 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.
(8) 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."
(9) Shares held include 45,666 shares subject to presently exercisable
options.
(10) 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 578,586 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.
The Board of Directors has established an audit committee (the "Audit
Committee") currently consisting of Messrs. Hamilton, Jennings 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,
1996 ("fiscal 1996").
The Board of Directors has established a compensation committee (the
"Compensation Committee") currently 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 1996.
The Board of Directors does not have a Nominating Committee.
In addition to the committee meetings previously mentioned, the Board of
Directors held a total of four meetings during fiscal 1996. Each director
attended at least 75% of the aggregate of all meetings of the Board of
Directors and the committees on which they served during fiscal 1996, except
Mr. Batsch, who attended 60% of such meetings.
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 are
4
<PAGE> 6
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 5,503,912 18.68%
Lancaster Colony Corporation Indirect
37 West Broad Street
Columbus, Ohio 43215
John B. Gerlach, Jr. Direct and 1,930,921 6.55%
Lancaster Colony Corporation Indirect
37 West Broad Street
Columbus, Ohio 43215
- ---------------------------
</TABLE>
(1) See footnotes 1, 2, 3, 4 and 10 under "Continuing Directors," which
explanations apply to Messrs. Gerlach.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned during the fiscal years
ended June 30, 1996, 1995 and 1994 by those persons who were the Chief
Executive Officer and the three other most highly compensated, reportable
executive officers of the Corporation during fiscal 1996:
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION (1) COMPENSATION
FISCAL ------------------------------ ------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) COMPENSATION(2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John B. Gerlach; 1996 $550,000 $2,646
Chairman of the 1995 517,500 2,905
Board and Chief 1994 485,000 4,978
Executive Officer
Larry G. Noble; 1996 $235,558 $272,000 $2,646
Vice President(3) 1995 228,267 272,000 15,000 2,905
1994 219,508 252,000 4,978
John B. Gerlach, Jr.; 1996 $364,583 $2,646
President, Chief 1995 345,833 2,905
Operating Officer 1994 297,083 4,978
and Secretary
John L. Boylan; 1996 $130,000 $ 20,000 $2,562
Treasurer and 1995 118,750 15,000 4,000 2,436
Assistant Secretary 1994 110,000 2,216
</TABLE>
- ---------------------------
(1) The named executive officers received certain perquisites in 1996,
1995 and 1994, the amount of which did not exceed the reportable
threshold of the lesser of $50,000 or 10% of any such officer's salary
and bonus.
(2) Approximate amounts contributed on behalf of such executive officer to
the Employee Stock Ownership Plan (ESOP).
(3) Bonus amounts listed as paid to Mr. Noble are discretionarily
determined and relate to the preceding fiscal year. The bonus
relating to fiscal 1996 has not yet been determined but is currently
expected not to exceed that paid in fiscal 1996 for fiscal 1995.
5
<PAGE> 7
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to stock
options exercised during fiscal 1996 by each of the executive officers named in
the Summary Compensation Table and unexercised stock options held as of June
30, 1996 by such executive officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
OPTIONS VALUE FISCAL YEAR-END(#) FISCAL YEAR-END($)(2)(3)
NAME EXERCISED (#) REALIZED ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John B. Gerlach, Jr. 26,666(1) $796,647
Larry G. Noble 9,947 31,719 $88,388 $285,764
John L. Boylan 4,000 $16,000
</TABLE>
(1) The actual number of shares received were less than indicated as Mr.
Gerlach, Jr. elected to have shares withheld for the payments of the
exercise price and withholding tax liability.
(2) All values are shown pretax and are rounded to the nearest whole
dollar.
(3) Based on the 1996 fiscal year-end closing price of $37.375 per share.
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, non-employee 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.
6
<PAGE> 8
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, 1991 in each of the Corporation's Common Stock,
the Standard and Poor's 500 Index and the S&P Conglomerates Index:
Lancaster
Colony S&P
Corporation S&P 500 Conglomerates
----------- ------- -------------
6/91 $100 $100 $100
6/92 218 113 112
6/93 384 129 157
6/94 481 131 155
6/95 493 165 193
6/96 525 208 233
7
<PAGE> 9
OTHER TRANSACTIONS
John B. Gerlach has a 50% 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, 1996
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.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has acted as independent certified public
accountants of the Corporation during the fiscal year ended June 30, 1996.
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 1997
Annual Meeting of Shareholders must be received by the Corporation at its
principal executive offices no later than June 18, 1997.
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, 1996
JOHN B. GERLACH, JR.
President and Secretary
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<PAGE> 10
LANCASTER COLONY CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS NOVEMBER 18, 1996
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert S. Hamilton, Richard R. Murphey,
Jr. and Henry M. O'Neill, Jr., 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 18, 1996, or at any and all
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)
- --------------------------------------------------------------------------------
A /X/ Please mark your
vote as in this
example.
If no contrary specification is made, this proxy will be voted FOR proposal 1.
FOR WITHHELD Nominees: For Term expiring 1999:
1. Election of / / / / Robert L. Fox
Directors John B. Gerlach, Jr.
Edward H. Jennings
For, except vote withheld from the following nominee(s):
_____________________________________________________
2. The transaction of all other matters as may properly come before the
meeting.
(Continued from other side)
SIGNATURE(S)________________________________________________DATE__________, 1996
SIGNATURE(S)________________________________________________DATE__________, 1996
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.
