<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:
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
LeaRonal, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
LEARONAL, INC.
272 BUFFALO AVENUE
FREEPORT, NEW YORK 11520
---------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of LeaRonal,
Inc. (the "Corporation") will be held at the Garden City Hotel, 45 Seventh
Street, Garden City, New York 11530, on Tuesday, July 18, 1995 at 10:00 A.M.
(Eastern Daylight Savings Time), for the following purposes:
(1) To elect nine directors to serve in accordance with the By-Laws of
the Corporation until the next Annual Meeting of Stockholders, and until
their successors are elected and qualified;
(2) To ratify the appointment of Ernst & Young as auditors of the
Corporation for the current fiscal year; and
(3) To transact such other business as may properly come before the
meeting and any adjournments thereof.
Stockholders of record at the close of business on June 9, 1995 shall be
entitled to notice of and to vote at the meeting. The transfer books will not be
closed.
By Order of the Board of Directors
RICHARD KESSLER,
Secretary
Dated: Freeport, New York
June 16, 1995
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. If you cannot attend the meeting, you are urged to
complete, date, sign and return the enclosed proxy at your earliest convenience.
A postpaid return envelope is enclosed for this purpose.
<PAGE> 3
LEARONAL, INC.
272 BUFFALO AVENUE
FREEPORT, NEW YORK 11520
---------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 18, 1995
---------------------------
This Proxy Statement is being furnished to stockholders in connection with
the solicitation of proxies by the Board of Directors of LeaRonal, Inc. (the
"Corporation") for the 1995 Annual Meeting of Stockholders to be held on July
18, 1995, and at any adjournments thereof. If a proxy in the accompanying form
is properly executed and returned, the shares represented thereby will be voted
as instructed in the proxy. Any proxy may be revoked by a stockholder prior to
its exercise upon written notice to the Secretary of the Corporation, or by a
stockholder's vote in person at the meeting. This Proxy Statement and the
enclosed form of proxy is intended to be mailed on or about June 16, 1995.
The purposes of the meeting are (1) to elect nine directors to serve in
accordance with the By-Laws until the next Annual Meeting of Stockholders and
until their respective successors have been elected and qualified; (2) to ratify
the appointment of Ernst & Young as auditors of the Corporation for the current
fiscal year; and (3) to transact such other business as may properly come before
the meeting and any adjournments thereof.
The cost of this solicitation will be paid by the Corporation. Such costs
include preparation, printing and mailing of the Notice of Annual Meeting, Proxy
Statement and the enclosed proxy. The solicitation will be conducted principally
by mail, although directors, officers and regular employees of the Corporation
and its subsidiaries may solicit proxies personally or by telephone or fax.
Arrangements will be made with brokerage houses and other custodians, nominees
and fiduciaries for proxy material to be sent to their principals and the
Corporation will reimburse such entities and persons for their related expenses.
The shares represented by all properly executed and returned proxies will
be voted, if received in time for the meeting, in accordance with the
instructions, if any, given thereon. Unless otherwise indicated, or if no
instructions are given, with respect to any proposal, the shares represented by
such proxies will be voted FOR such proposal. A proxy is revocable at any time
prior to being voted.
The Corporation had outstanding and entitled to vote on June 9, 1995, the
record date for the meeting, 8,809,501 shares of Common Stock, which is its only
voting security. Each share is entitled to one vote. The only individual
stockholders known to the Corporation to own of record or beneficially more than
5% of the outstanding shares of Common Stock are Barnet D. Ostrow, Fred I. Nobel
and Sol Berg. Information with respect to such ownership is set forth in the
table under "Security Ownership of Directors and Executive Officers".
<PAGE> 4
STOCKHOLDERS PROPOSALS
If a stockholder intends to present a proposal at the Corporation's 1996
Annual Meeting, the proposal must be received by the Corporation by February 16,
1996, for inclusion in the Proxy Statement and form of proxy relating to that
meeting.
ELECTION OF DIRECTORS
There are nine nominees for election to the Board of Directors, all of
which are presently serving in such capacity. The nominees, constituting the
entire Board of Directors, are to be elected at the Annual Meeting for a term of
one year, and until the election and qualification of their respective
successors. If no contrary instructions are indicated, the proxies will be voted
for the election of directors of the nominees named below. The Board of
Directors has no reason to believe that any of the nominees will be unable to
serve as a director. If any nominee shall be unable, for any reason, to accept
nomination or election, it is the intention of the persons named in the enclosed
form of proxy to vote the proxy for the nomination and election of such other
person or persons as the Board of Directors may designate.
Set forth below is the principal occupation, business experience and other
affiliations during the last five years for each person nominated for reelection
to the Board of Directors. All ages given are as of the record date.
BARNET D. OSTROW
Mr. Ostrow, age 81, has served as a director of the Corporation since 1953.
He is presently Chairman of the Board of Directors and formerly served as
President and Chief Executive Officer of the Corporation.
FRED I. NOBEL
Mr. Nobel, age 77, has served as a director of the Corporation since 1953.
He is presently Vice Chairman of the Board of Directors and formerly served as
Executive Vice President and Secretary of the Corporation.
RONALD F. OSTROW
Mr. Ostrow, age 51, has served as a director of the Corporation since 1975.
He is presently President and Chief Executive Officer of the Corporation. Mr.
Ronald F. Ostrow is the son of Mr. Barnet D. Ostrow.
RICHARD KESSLER
Mr. Kessler, age 56, has served as a director of the Corporation since
1987. He is presently Executive Vice President and Secretary of the Corporation.
SOL BERG
Mr. Berg, age 70, has served as a director of the Corporation since 1972.
Mr. Berg is a private investor.
CARL N. GRAF
Mr. Graf, age 68, has served as a director of the Corporation since 1992.
He was the President and Chief Operating Officer of W.R. Grace & Co. from 1981
through January, 1987 and a member of the Board of Directors of Spire Corp. from
1987 through the present.
IRWIN LIEBER
Mr. Lieber, age 56, has served as a director of the Corporation since 1980.
He was the founder, and has been the Chief Investment Officer of GeoCapital
Corp. from October 1979 to
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<PAGE> 5
the present. Mr. Lieber also serves on the Boards of Directors of Complink, Ltd
and Scansource, Inc..
ARTHUR M. WINSTON
Mr. Winston, age 51, has served as a director of the Corporation since
1980. He has served as an Investment Manager for Glickenhaus & Co. from April
1991 to the present, as Vice President, Goldman, Sachs & Co. from October 1989
to April 1991, and as General Partner, Glickenhaus & Co. from October 1988 to
April 1989. Mr. Winston also serves on the Board of Directors of Hi-Shear
Industries, Inc.
KENNETH L. STEIN
Mr. Stein, age 57, has served as a director of the Corporation since 1987.
Mr. Stein is a partner of Greenfield Stein & Senior, LLP, which serves as
general counsel to the Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NOMINEE.
SECURITY OWNERSHIP OF DIRECTORS AND
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the ownership
of the Corporation's common stock as of June 9, 1995, the record date, by (i)
each director, (ii) each of the six most highly compensated executive officers
of the Corporation, and (iii) all directors and executive officers of the
Corporation as a group. As of the record date, the directors and executive
officers of the Corporation as a group (13 persons) beneficially owned 2,740,939
shares of common stock, or approximately 31.11% of the common stock outstanding
and entitled to vote at the Annual Meeting, not including an aggregate of 51,844
shares of common stock that such persons may acquire pursuant to options
exercisable within 60 days of the record date.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
-----------------------
BENEFICIALLY OWNED(1)
-----------------------
BENEFICIAL OWNER NUMBER PERCENT
--------------------------------------------------------- ---------- -------
<S> <C> <C>
Barnet D. Ostrow(2)(3)................................... 941,522 10.69
Fred I. Nobel(3)(4)(5)................................... 943,272 10.71
Ronald F. Ostrow(2)(6)................................... 275,000 3.12
Richard Kessler(7)....................................... 35,523 *
Donald Thomson(8)........................................ 26,276 *
David L. Rosenthal(9).................................... 8,414 *
David Schram(10)......................................... 4,483 *
James Martin(11)......................................... 2,908 *
Sol Berg(3)(4)(5)........................................ 496,346 5.63
Carl N. Graf(12)......................................... 500 *
Irwin Lieber(13)......................................... 390 *
Arthur M. Winston(14).................................... 4,680 *
Kenneth L. Stein(15)..................................... 1,625 *
All present directors and officers as a group
(13 persons)........................................... 2,740,939 31.11
</TABLE>
- ---------------
* less than 1%
(1) This table is based upon information supplied by directors and executive
officers. All directors and officers have the sole investment and voting
power over their respective shares, except as otherwise indicated.
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<PAGE> 6
(2) Ronald F. Ostrow is the son of Barnet D. Ostrow. No other family
relationships exist between or among any of the directors and officers.
(3) The indicated individuals may be deemed to be "controlled persons" of the
Corporation by reason of share ownership. The address of Messrs. Barnet D.
Ostrow and Fred I. Nobel is c/o LeaRonal, Inc., 272 Buffalo Avenue,
Freeport, New York 11520 and the address of Mr. Sol Berg is 515 Madison
Avenue, 38th Floor, New York, New York 10022.
(4) Mr. Berg is a trustee of trusts for the benefit of the children of Fred I.
Nobel which hold an aggregate of 62,195 shares. As one of two trustees of
such trusts, Mr. Berg has shared voting and investment power with respect
to such shares but has no beneficial interest therein. Such shares are not
listed as being owned by Messrs. Nobel or Berg.
(5) Fred I. Nobel and Sol Berg are co-trustees of trusts for the benefit of Mr.
Berg's children which hold an aggregate of 20,826 shares. As co-trustees of
such trusts, Fred I. Nobel and Sol Berg have shared voting and investment
power with respect to such shares, but have no beneficial interest therein.
Such shares are not listed as being owned by Messrs. Nobel and Berg. In
addition, Mr. Nobel disclaims beneficial ownership of 9,375 shares owned by
his wife.
(6) Includes (i) 175,781 shares held in trust for the benefit of Ronald F.
Ostrow, as to which Kenneth L. Stein and Ronald F. Ostrow are trustees and
share voting and investment power (as to which Mr. Stein has no beneficial
interest), (ii) 78,847 shares owned by Ronald F. Ostrow's children, and
(iii) 234 shares owned by Batsheva Ostrow, his wife. Does not include
18,906 shares that may be acquired within 60 days by exercise of stock
options.
(7) Does not include (i) an aggregate of 3,786 shares owned by Mr. Kessler's
children in which Mr. Kessler disclaims beneficial ownership, and (ii)
10,094 shares that may be acquired within 60 days by exercise of stock
options.
(8) Does not include 4,531 shares that may be acquired within 60 days by
exercise of stock options.
(9) Does not include 10,125 shares that may be acquired within 60 days by
exercise of stock options.
(10) Does not include 4,219 shares that may be acquired within 60 days by
exercise of stock options.
(11) Does not include 3,969 shares that may be acquired within 60 days by
exercise of stock options.
(12) Does not include 1,250 shares that may be acquired within 60 days by
exercise of stock options.
(13) GeoCapital Corp. is a registered investment advisory firm and as such is
the beneficial owner of 87,298 shares with sole voting and dispositive
power with respect thereto. Does not include 2,500 shares that may be
acquired within 60 days by exercise of stock options.
(14) Glickenhaus & Co. is an investment management company. Includes an
aggregate of 2,601 shares held for Mr. Winston's children, of which Mr.
Winston is custodian. Does not include 2,500 shares that may be acquired
within 60 days by exercise of stock options.
(15) Includes 1,000 shares held by Vanguard Discount Brokerage Services for Mr.
Stein's benefit under his firm's retirement plan.
4
<PAGE> 7
OTHER SECURITY OWNERSHIP
To the best knowledge of the Corporation, at May 31, 1995 (in addition to
those directors specified above) the following persons beneficially owned (as
that term is defined by the Securities and Exchange Commission) more than 5% of
the common stock outstanding and entitled to vote at the Annual Meeting:
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK
BENEFICIALLY
OWNED(1)
-----------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
- -------------------------------------------------------------------------- ------- -------
<S> <C> <C>
Quest Advisory Corp.(2)................................................... 676,643 7.68
1414 Avenue of the Americas
New York, N.Y. 10019
Mitchell Hutchins Institutional Investors, Inc.(3)........................ 816,400 9.27
1285 Avenue of the Americas
New York, N.Y. 10019
SoGen International Fund, Inc.(4)......................................... 482,500 5.48
Societe Generale Asset Management Corp.
1221 Avenue of the Americas
New York, N.Y. 10020
</TABLE>
- ---------------
(1) Based on Schedules 13G filed with the Securities and Exchange Commission by
such beneficial owners and additional information received from each as of
May 31, 1995.
(2) Quest Advisory Corp. has sole voting and dispositive power with respect to
such shares. It is an Investment Advisor registered under Section 203 of the
Investment Advisors Act of 1940.
(3) Mitchell Hutchins Institutional Investors, Inc. is an Investment Advisor
registered under Section 203 of the Investment Advisors Act of 1940. It has
shared voting and dispositive power over such shares.
(4) SoGen International Fund, Inc. (the "Fund") is an investment company
registered under Section 8 of the Investment Company Act of 1940, as
amended, and Societe Generale Asset Management Corp. (the "Advisor") is an
investment advisor registered under Section 203 of the Investment Advisor
Act of 1940, as amended. The Fund owns beneficially the shares, however the
Advisor, by virtue of its powers under its investment advisory contract with
the Fund, may be deemed to be a beneficial owner of such shares.
MEETINGS OF THE BOARD OF DIRECTORS AND ATTENDANCE
During the fiscal year ended February 28, 1995, the Board of Directors held
four meetings. Each director attended at least 75 percent of these meetings, as
well as the meetings of the Committees of which he was a member.
DIRECTORS' COMPENSATION AND CONSULTING ARRANGEMENTS
Non-employee directors, except Mr. Stein, received annual fees of $10,000
each, paid in equal quarterly installments. Effective July 18, 1995,
non-employee directors will receive annual fees of $11,000 each. Directors
receive no additional compensation for participation on committees of the Board.
Mr. Stein is a partner of Greenfield Stein & Senior, LLP, which serves as
general counsel to the Corporation. Directors who are employees of the
Corporation receive no fees for attending Board or committee meetings.
Messrs. Barnet D. Ostrow and Fred I. Nobel have consulting agreements with
the Corporation pursuant to which they earned fees of $135,000 and $130,000
respectively, in the Corporation's last fiscal year. Additionally, they are
provided with medical insurance. The
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<PAGE> 8
current term of each agreement ends February 28, 1996 and may be renewed for
successive additional periods of one year each.
Non-employee directors are eligible to participate in the 1990 Nonqualified
Stock Option Plan. During the Corporation's last fiscal year, no options were
granted to non-employee directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee consists of Messrs. Lieber and Winston. The Committee
meets annually to review the auditor's reports to the Board of Directors,
financial statements and internal accounting controls. It also monitors the
independence and fees of the independent auditors and recommends further
appointments thereof.
The Executive Compensation Committee consists of Messrs. Berg, Lieber and
Graf. The Committee recommends compensation for officers of the Corporation, and
met once during the fiscal year.
The Investment Committee consists of Messrs. Winston and Stein. The
Committee met twice during the fiscal year and conferred from time to time with
regard to investment of the Corporation's funds. On May 9, 1995 the Board voted
to dissolve the Investment Committee and delegated its functions to management,
subject to guidelines established from time to time by the Board.
The Stock Option Committee is composed of Messrs. Lieber and Winston, who
are independent non-employee directors, and Ronald F. Ostrow, the Corporation's
chief executive officer.
The Corporation does not have a standing nominating committee. However,
Messrs. Berg, Nobel and Barnet D. Ostrow recommend new directors and changes in
the composition of the Board of Directors.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Corporation's Board of Directors approves all compensation of the
Corporation's officers, including the chief executive officer, based on the
recommendations of the Compensation Committee, except that all grants of stock
options under the Corporation's stock incentive plan are approved solely by the
Stock Option Committee. The Compensation Committee is composed exclusively of
independent, non-employee directors who are not eligible to participate in any
executive compensation program, except the 1990 Nonqualified Stock Option Plan
previously approved by the stockholders of the Corporation.
The Corporation's compensation program is intended to enable the
Corporation to compete effectively with other firms in attracting, retaining and
motivating executives of the caliber needed for the future success of the
Corporation's business. This program contains three components: (i)
contractually based compensation; (ii) annual incentive compensation; and (iii)
longer-term incentives in the form of nonqualified stock options and
contributions to the 401(k) Employees Savings Plan. The annual incentive
compensation and nonqualified stock options are primarily dependent on the
Corporation's earnings and profitability as well as the returns realized by the
Corporation's stockholders.
A. Base Compensation
An officer's base compensation is contractually based, subject to increases
determined by a number of factors including, but not limited to: (i) an
assessment of his performance over time; (ii) competence; and (iii) potential.
Adjustments to each officer's base compensation are made annually in connection
with annual performance reviews.
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<PAGE> 9
B. Annual Incentive Compensation -- Bonus
The Corporation's annual incentive compensation program provides for the
payment of bonuses to the officers and certain other employees on an individual
basis. Such awards are based upon the Corporation's overall earnings growth, a
comparison of the Corporation's earnings in the last fiscal year with those of
the immediately preceding fiscal year, as well as individual performance. The
intent is to motivate and reward performance.
A specified bonus for each officer is first approved by the Compensation
Committee and then submitted for approval to the Board of Directors. In
contrast, the total available bonus pool for other employees is approved by the
Compensation Committee and the Board of Directors and distributed at the
discretion of the Corporation's President in consultation with the other
officers.
C. Longer-Term Incentives -- Nonqualified Stock Options/401K Plan
These incentives are designed to coordinate the longer-term interests of
the Corporation and its stockholders with those of the Corporation's key
employees, officers and directors. The Stock Option Committee meets periodically
to grant nonqualified stock options to key employees, officers and directors
pursuant to the 1990 Nonqualified Stock Option Plan. The plan is intended to
provide such individuals with additional incentive to advance the interests of
the Corporation as stock options only produce value to such individuals if the
price of the Corporation's common stock appreciates.
D. Chief Executive Officer Compensation
Mr. Ronald F. Ostrow's compensation results from his participation in the
same compensation program as the other executives of the Corporation. The bonus
paid to Mr. Ostrow for the fiscal year ended February 28, 1995 was greater than
the amount paid for the prior fiscal year, reflecting the improved performance
of the Corporation in that year.
Executive Compensation Committee
Sol Berg
Irwin Lieber
Carl Graf
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<PAGE> 10
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of
the Corporation's Chief Executive Officer and the other five highest paid
officers, as well as the total compensation paid to each for the Corporation's
most recent three fiscal years:
LEARONAL, INC.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------
ANNUAL COMPENSATION AWARDS
-------------------------------- -----------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION ENDED ($) ($) ($) (#) ($)(3)
- ------------------------ ------------- -------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ronald F. Ostrow........ February 1995 342,004 80,000 5,000 0
President and February 1994 290,318 65,000 67,387(1) 0 0
Chief February 1993 284,625 55,000 63,111(1) 35,000 0
Executive Officer
Richard Kessler......... February 1995 236,500 56,000 9,000 5,309
Executive Vice February 1994 202,364 45,000 0 4,717
President February 1993 198,884 38,500 20,000 4,364
and Secretary
Donald Thomson.......... February 1995 148,720 38,000 26,237(2) 5,000 5,309
Vice President- February 1994 129,358 30,000 0 3,067
Technology February 1993 121,109 25,500 10,000 1,279
David L. Rosenthal...... February 1995 176,000 40,000 8,000 5,309
Vice President- February 1994 146,867 31,000 0 3,414
Finance February 1993 141,092 25,000 15,000 2,909
and Treasurer
James Martin............ February 1995 129,250 16,000 5,000 4,915
Vice President February 1994 112,484 13,000 0 2,432
February 1993 108,680 10,750 5,000 2,388
David Schram............ February 1995 132,000 18,000 5,000 5,045
Vice President February 1994 114,400 13,000 0 2,468
February 1993 110,000 10,500 5,000 2,321
</TABLE>
- ---------------
(1) Mr. Ronald F. Ostrow exercised stock options in December, 1993 and 1992,
from which he realized benefits of $40,625 and $40,313, respectively,
representing the difference between the price paid for such common stock and
the net proceeds of sales. The only Other Annual Compensation for each of
the remaining named officers was in the form of perquisites and was less
than the level required for reporting purposes.
(2) Includes $19,219, representing the difference between the price paid on
exercise of common stock options and the market price on the date of
exercise.
(3) Consists of contributions by the Corporation to a 401(k) Employees Savings
Plan equal to 50% of the first 4% of the employee's contribution.
OPTION GRANTS DURING LAST FISCAL YEAR
The following table sets forth information concerning stock options granted
during the Corporation's last fiscal year, including the potential realizable
value of each grant assuming that the market value of the Corporation's common
stock appreciates in value from the date of the grant to the expiration of the
10 year option period at annualized rates of 5% and 10%, in each case compounded
annually over the life of the option. The value indicated is a net amount, since
the aggregate exercise price has been deducted from the final appreciated value
in accordance with Securities and Exchange Commission regulations. These assumed
rates of appreciation have been specified by the Securities and Exchange
Commission for illustrative purposes only and are not intended to predict future
prices of the Corporation's common stock. The Corporation has also elected to
provide a separate column indicating the potential
8
<PAGE> 11
realizable value of each grant assuming that the market value of the
Corporation's common stock appreciates at the Corporation's historic rate of
appreciation, 4.5% over the 10 year period ended July 19, 1994.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF
- --------------------------------------------------------------------------- STOCK PRICE
% OF TOTAL APPRECIATION FOR HISTORIC
OPTIONS OPTION PERIOD STOCK
GRANTED TO EXERCISE (10 YR.) APPRECIATION
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------- RATE
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5.0%($) 10.0%($) 4.5%($)
- --------------------------- ---------- ------------ --------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald F. Ostrow........... 5,000 5.52 17.125 7/19/04 53,858 136,486 44,779
Richard Kessler............ 9,000 9.93 17.125 7/19/04 96,945 245,675 80,603
Donald Thomson............. 5,000 5.52 17.125 7/19/04 53,858 136,486 44,779
David L. Rosenthal......... 8,000 8.83 17.125 7/19/04 86,173 218,378 71,647
James Martin............... 5,000 5.52 17.125 7/19/04 53,858 136,486 44,779
David Schram............... 5,000 5.52 17.125 7/19/04 53,858 136,486 44,779
</TABLE>
- ---------------
(1) All grants were made at 100% of fair market value as of date of grant. The
assumed annual rates of appreciation of 5% and 10% would result in the price
of the Corporation's common stock increasing to $27.90 and $44.40,
respectively, over the ten year option period.
(2) 25% of the options granted may be exercised immediately. Thereafter, the
annual limitation on the further exercise of each option is limited to 25%
of the shares covered thereby.
(3) In the Corporation's last fiscal year, options were granted covering 90,650
shares of common stock.
(4) All options expire 10 years from the date of grant. Additionally,
unexercised options granted under the 1990 Nonqualified Plan will expire if
the option holder voluntarily terminates his or her employment or the
Corporation terminates such employment "for cause" as defined in the 1990
Nonqualified Plan.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning stock options
exercised in the fiscal year ended February 28, 1995, including the "value
realized" upon exercise (the difference between the exercise price of the shares
acquired and the market value at the date of exercise), and the value of the
unexercised "in-the-money" options held at February 28, 1995 (the difference
between the exercise price of all such options held and the market value of the
shares covered by such options at February 28, 1995).
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<PAGE> 12
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
SHARES ACQUIRED VALUE UNEXERCISED OPTIONS
ON EXERCISE REALIZED OPTIONS AT FY-END
NAME (#) ($) AT FY-END($) ($)
- ---------------------------------------- --------------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Ronald F. Ostrow........................ 0 0 60,625 439,297
Richard Kessler (1)..................... 0 0 58,375 451,266
Donald Thomson.......................... 1,875 19,219 23,750 165,391
David L. Rosenthal...................... 0 0 40,500 292,688
James Martin............................ 0 0 15,875 105,578
David Schram............................ 0 0 16,875 116,328
</TABLE>
- ---------------
(1) In April, 1995 Mr. Kessler exercised stock options from which he realized
benefits of $44,337 representing the difference between the price paid for
such common stock and the market price on the date of exercise.
PENSION ARRANGEMENTS
On May 11, 1990, the Board of Directors of the Corporation ratified the
adoption of a 401(k) Employees Savings Plan (the "401(k) Plan"). The 401(k) Plan
is a Corporation-sponsored savings plan. The purpose of the 401(k) Plan is to
enable employees of the Corporation to accumulate savings on a tax-deferred
basis. All employees of the Corporation are eligible to participate in the
401(k) Plan, provided they are 21 years of age and have completed one (1) year
of service. Under the 401(k) Plan, eligible employees may contribute from 1% to
15% of their gross taxable income and the Corporation presently makes a matching
contribution equal to 50% of the first 4% of the employees' contribution.
EMPLOYMENT AGREEMENTS
The Corporation has employment agreements with each of its officers, the
terms of which presently expire on February 28, 1998, subject to earlier
termination in specified circumstances. Each agreement provides for the payment
of a specified minimum salary and other benefits to the extent provided by the
Corporation to all of its officers. The agreements also provide for automatic
renewals for additional periods of three years unless either party gives written
notice of termination six month prior to the expiration of any term.
PERFORMANCE COMPARISON
The graph and table on the following page compare the cumulative total
stockholder return on the Corporation's common stock from February 28, 1990
through February 28, 1995 (as measured by dividing (i) the sum of (A) the
cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the Corporation's share price at
the end and the beginning of the period; by (ii) the share price at the
beginning of the period) with the Standard & Poors Specialty Chemicals Index and
the Russell 2000, using data supplied by Star Services, Inc. The graph and table
assume an investment of $100 in the Corporation's common stock and each index on
February 28, 1990, as well as the reinvestment of dividends. The stock price
performance on the graph and table
10
<PAGE> 13
below is not necessarily indicative nor is it intended to forecast the future
performance of the Corporation's common stock.
<TABLE>
<CAPTION>
S & P
Measurement Period CHEMICALS
(Fiscal Year Covered) LeaRonal Inc. RUSSELL 2000 (SPCLTY)
<S> <C> <C> <C>
2/90 100 100 100
2/91 92 104 116
2/92 117 139 143
2/93 123 150 158
2/94 120 181 186
2/95 162 178 164
</TABLE>
RATIFICATION OF APPOINTMENT OF AUDITORS
Subject to the approval of the stockholders at the Annual Meeting, the
Board of Directors of the Corporation has engaged the firm of Ernst & Young to
audit the books, records and accounts of the Corporation for the current fiscal
year. Ernst & Young has acted in that capacity for several years.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting of Stockholders, will have the opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
11
<PAGE> 14
OTHER MATTERS
The Corporation has no knowledge of any other matters to be presented at
the meeting. If, however, other matters are presented at the meeting, it is the
intention of the persons named in the enclosed proxy to act in their discretion
on such other matters as may properly come before the meeting and any
adjournments thereof.
The Annual Report to Stockholders for the fiscal year ended February 28,
1995 was mailed on or about June 2, 1995 to all stockholders of record on May
26, 1995. Such Annual Report is not incorporated herein by reference and is not
to be deemed part of this Proxy Statement.
By Order of the Board of Directors
RICHARD KESSLER,
Secretary
Dated: Freeport, New York
June 16, 1995
12
<PAGE> 15
LEARONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This undersigned stockholder of LeaRonal, Inc., hereby appoints BARNET D.
OSTROW and FRED I. NOBEL, and each of them, attorneys and proxies, with full
power of substitution, to vote at the Annual Meeting of Stockholders to be held
at the Garden City Hotel, 45 Seventh Street, Garden City, New York 11530, on
Tuesday, July 18, 1995 at 10:00 A.M. (Eastern Daylight Savings Time), and at
any adjournments thereof, in the name of the undersigned and with the same
force and effect as the undersigned could do if personally present, upon the
matters set forth below as indicated.
(CONTINUED ON OTHER SIDE)
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
1. ELECTION OF DIRECTORS:
Barnet D. Ostrow, Fred I. Nobel, Ronald F. Ostrow, Richard Kessler, Sol
Berg, Carl N. Graf, Irwin Lieber, Arthur M. Winston and Kenneth L. Stein.
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below:
---------------------------------------------------------------------
WITHHOLD FOR ALL
AUTHORITY (except
to vote for nominee(s)
FOR all nominees written below)
/ / / / / /
2. RATIFICATION OF SELECTION OF AUDITORS: the proposal to ratify the
appointment of Ernst & Young as auditors of the Corporation for the current
fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, to act on any other matters which may properly come
before the meeting and any adjournments thereof.
The shares represented by this Proxy will be voted at the meeting. IF NO
CONTRARY INSTRUCTIONS ARE INDICATED, THIS PROXY SHALL BE DEEMED TO GRANT
AUTHORITY TO VOTE "FOR" ALL NOMINES AS DIRECTORS AND "FOR" THE PROPOSAL TO
RATIFY THE APPOINTMENT OF ERNEST & YOUNG AS AUDITORS OF THE CORPORATION FOR THE
CURRENT FISCAL YEAR.
(Please sign here exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, or in any other
representative capacity, please give your full title.)
Dated: , 1995
------------------------------------------------
(Please date this Proxy)
- ---------------------------------------------------------------
Signature of Stockholder
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS ABOVE.
