LINDBERG CORP /DE/, DEF 14A, 1995-03-28

LINDBERG CORP /DE/
DEF 14A, 1995-03-28
MISCELLANEOUS PRIMARY METAL PRODUCTS

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
LINDBERG CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
LINDBERG CORPORATION
- --------------------------------------------------------------------------------
(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 Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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

LINDBERG CORPORATION
6133 NORTH RIVER ROAD
SUITE 700
ROSEMONT, ILLINOIS 60018

LEO G. THOMPSON
President and
Chief Executive Officer

March 24, 1995

TO OUR STOCKHOLDERS:

You are cordially invited to attend the annual meeting of stockholders of
Lindberg Corporation, which will be held in the Auditorium at Riverway, 6133
North River Road, Rosemont, Illinois, on Wednesday, April 26, 1995, at 9:00
a.m., Chicago time.

At the meeting, management will review with you the Company's performance
during the past year and major developments which occurred during the year.
There will be an opportunity for stockholders to ask questions about the
Company and its operations.

To assure that your shares are represented at the meeting, please return
the enclosed proxy card as soon as possible. The proxy is revocable and will
not affect your right to vote in person if you are able to attend the meeting.

Sincerely yours,

/s/ Leo G. Thompson
<PAGE> 3

LINDBERG CORPORATION

__________

Notice of Annual Meeting of Stockholders

APRIL 26, 1995

The annual meeting of stockholders of Lindberg Corporation will be held
in the Auditorium at Riverway, 6133 North River Road, Rosemont, Illinois on
Wednesday, April 26, 1995, at 9:00 a.m., Chicago time, for the following
purposes:

1. To elect one Class I director.

2. To approve amendments to the 1991 Stock Option Plan for Key Employees.

3. To approve amendments to the 1991 Stock Option Plan for Directors.

4. To transact such other business as may properly come before the
meeting.

All stockholders of record at the close of business on March 10, 1995
are entitled to vote at the meeting. A list of stockholders of the Company
entitled to vote at the meeting will be kept at the offices of the Company for
a period of ten days prior to the meeting.

Stockholders who do not intend to be present at the meeting in person
are requested to mark, date, sign and return the enclosed proxy, which does not
require postage if mailed in the United States.

S. S. PENLEY
Secretary

Rosemont, Illinois
March 24, 1995

<PAGE> 4

LINDBERG CORPORATION
6133 NORTH RIVER ROAD
SUITE 700
ROSEMONT, ILLINOIS 60018

___________

March 24, 1995
Proxy Statement

ANNUAL MEETING OF STOCKHOLDERS

This proxy statement is furnished in connection with the
solicitation by the board of directors of Lindberg Corporation (the "Company")
of proxies for use at the annual meeting of stockholders of the Company to be
held on April 26, 1995, and at any adjournments of such meeting. Stockholders
who execute proxies may revoke them at any time before they are voted, either
in person at the meeting, by written notice to the Secretary at the above
address, or by delivery of a later-dated proxy.

SHARES OUTSTANDING AND VOTING RIGHTS

The Company had outstanding on the record date for the meeting
4,722,016 shares of common stock. Each share has one vote, without the right
to cumulate votes in the election of directors. All stockholders of record at
the close of business on March 10, 1995 are entitled to vote at the meeting.

THE ELECTION OF DIRECTORS

The board of directors proposes the election of R. F. Decker
as a Class I director. He is an incumbent Class I director. It is intended
that shares represented by properly executed proxies will be voted, in the
absence of contrary instructions, for the election of Dr. Decker as director.
Directors are elected by a plurality of the votes cast by the holders of common
stock at a meeting at which a quorum is present. This means that the
individual receiving the largest number of votes cast will be elected. Broker
non-votes, abstentions and proxies specifying "withhold authority" are counted
for purposes of establishing a quorum, but will have no effect on the election.
Should the nominee become unable to accept nomination or election, which
management does not anticipate, the proxies will be voted for such other person
as shall be determined by the board of directors in its discretion.

<PAGE> 5

The following table sets forth information concerning the nominee for
Class I director and each incumbent Class II and Class III director.

<TABLE>
<CAPTION>
Name, Year
First Elected Principal Occupation for Last
Director and Age Five Years and Public Company Directorships
- ---------------- -------------------------------------------
NOMINEE FOR TERM EXPIRING IN 1998 (CLASS I)
<S> <C>
R. F. Decker . . . . . . . . . . . . . . President and Chief Executive Officer, University Science Partners, Inc. (a general
1987--64 partnership that funds, develops and commercializes university and national
laboratory technology) since August 1986; Chairman since December 1988, Chief
Executive Officer from December 1988 to April 1993, President from January 1990 to
December 1990, and Treasurer from December 1988 to December 1990, of Thixomat, Inc.
(a general partnership formed to promote and commercialize Thixomolding(TM)
technology and in which the Company has a minority investment)(1).

DIRECTORS WHOSE TERM EXPIRES IN 1996 (CLASS II)

G. H. Bodeen . . . . . . . . . . . . . . Chairman of the Board since December 1980 and Chief Executive Officer from April
1960--71 1965 to December 1990.

J. T. Schanck . . . . . . . . . . . . . . Retired; director from September 1986 to April 1991 and Vice Chairman from
1975--64 September 1986 to December 1988, of Illinois Tool Works Inc. (producer of specialty
engineered products and systems).

DIRECTORS WHOSE TERM EXPIRES IN 1997 (CLASS III)

J. W. Puth . . . . . . . . . . . . . . . President, J. W. Puth Associates (industrial consultants) since December 1987;
1987--66 Chairman, American Lantern Company (manufacturer of outdoor lighting fixtures) since
December 1987; Chairman of the Executive Committee, Sullivan Graphics, Inc.
(commercial printer) from June 1992 to February 1993. Also a director of L.B.
Foster Co., System Software Associates, Inc., TNT Freightways Corporation, Allied
Products Corporation and A.M. Castle & Co.

L. G. Thompson . . . . . . . . . . . . . President and Chief Executive Officer since January 1991, and President and Chief
1987--54 Operating Officer from September 1987 to December 1990, of the Company.

</TABLE>

(1) Dr. Decker owns a 43.2% interest in University Science Partners, Inc.,
which owns a 26% equity interest in Thixomat, Inc., in which the Company
owns an 11% interest.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE
ELECTION OF THE NOMINEE FOR DIRECTOR.

2
<PAGE> 6

FUNCTIONING OF THE BOARD AND COMMITTEES

The Company's board of directors has an executive compensation committee,
an audit committee, a finance committee and a directors stock option committee.

Members of the executive compensation committee are J. T. Schanck,
chairman, G. H. Bodeen and J. W. Puth. The committee reviews the performance
of the Company's Chief Executive Officer, makes recommendations to the full
board with respect to salary policy and compensation of senior officers and
administers the 1991 Stock Option Plan for Key Employees. The committee also
performs the function of a nominating committee, reviewing and making
recommendations to the full board with respect to the qualifications and
responsibilities of members of the board. The committee will consider persons
brought to its attention by officers, directors and stockholders. Proposals
may be submitted to the committee at the address shown on page one of this
proxy statement, attention of the Secretary. During 1994, the committee met
twice.

Members of the audit committee are R. F. Decker, chairman, J. W. Puth and
J. T. Schanck. Its responsibilities are to review audit procedures and the
scope of examination by the Company's independent public accountants, results
of the annual audit by the Company's independent public accountants, internal
audit procedures, and to recommend to the full board annually the independent
public accountants. During 1994, the committee met once.

Members of the finance committee are J. W. Puth, chairman, G. H. Bodeen
and L. G. Thompson. The committee reviews and makes recommendations to the
full board regarding capital investments, dividend policy and major financial
matters. During 1994, the committee met three times.

The board of directors of the Company met on six occasions during 1994.

EXECUTIVE COMPENSATION
COMPENSATION OVERVIEW

The Company compensates its executive officers at competitive levels
while at the same time structuring that compensation in a manner that links
executive compensation to the performance of the Company. The following table
sets forth information regarding the compensation of the Company's Chief
Executive Officer and the Company's other executive officers.

3
<PAGE> 7

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------------------------ ------------
Other Annual
Salary Bonus Compensation
Name and Principal Position Year ($) ($)(1) ($)(2) Options (#)
- --------------------------- ---- ------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C>
L. G. Thompson . . . . . . . . . . 1994 225,000 168,750 -- 22,000
President and Chief 1993 204,792 126,850 -- 6,000
Executive Officer 1992 196,458 35,000 17,109 --

S. S. Penley . . . . . . . . . . . 1994 120,000 63,000 -- 9,000
Senior Vice President and 1993 114,125 46,625 -- 4,000
Chief Financial Officer 1992 111,625 -- -- --

M. W. Nelson . . . . . . . . . . . 1994 120,000 58,375 -- 14,000
Senior Vice President and 1993 104,000 31,525 -- 4,000
Manager of Heat Treat 1992 94,000 12,189 -- --
Operations
</TABLE>

(1) In 1992, Mr. Thompson received compensation in the form of an award of
10,000 shares of common stock of the Company in recognition of past
and future services performed by Mr. Thompson as Chief Executive
Officer of the Company. The stock was valued at the market price of
the shares on the day of the award. Messrs. Thompson and Penley's
1993 and 1994 bonuses, and Mr. Nelson's 1992--1994 bonuses were cash
bonuses.

(2) Mr. Thompson's Other Annual Compensation for 1992 consists of the
amount the Company paid to Mr. Thompson to reimburse him for the
estimated amount of the income taxes that he incurred as a result of
the stock award discussed in note (1).

Compensation of non-employee directors consists of an annual retainer
fee of $16,000 ($20,000 after January 1995) and a fee of $750 ($1,000 after
January 1995) for each board or committee meeting attended. In addition, each
committee chairman receives a $1,000 ($2,000 after January 1995) per year.
Under the Company's 1991 Stock Option Plan for Directors, each non-employee
director is granted, upon becoming a director, an option to purchase 9,000
shares of the Company's common stock, exercisable in equal installments on each
of the first, second, and third anniversaries of the grant. The exercise price
for shares granted under such plan is their fair market value at the time of
grant.

In addition to his consulting fee described in the next paragraph, Mr.
Bodeen receives a fee of $30,000 per year as Chairman of the Board.

Mr. Bodeen retired as an employee of the Company effective January 1,
1991 and entered into an agreement to provide consulting services to the
Company. In consideration for the consulting services, the agreement provides
that Mr. Bodeen will receive annual compensation of at least $100,000 until
December 31, 2000, and certain perquisites consistent with the position. The
agreement prohibits Mr. Bodeen from competing with the Company during the term
of the agreement. In the event that during the term of the agreement Mr.
Bodeen becomes permanently disabled or dies, he or his wife will receive
annually one-half the amount of compensation he would have otherwise received
under the agreement. In addition to his fee as Chairman of the

4
<PAGE> 8

Board described above, Mr. Bodeen receives annual retirement benefits of
$91,017 until the year 2000 under the Company's Supplemental Retirement
Benefits Plan.

OPTION GRANTS AND EXERCISES IN 1994 AND TABLE OF YEAR-END OPTION VALUES

The Company granted options to its executive officers and some of its
other employees in 1994. The following table sets forth information concerning
individual grants of stock options to the Company's executive officers during
1994.

OPTION GRANTS IN 1994

<TABLE>
<CAPTION>
Potential Realizable
Value at Annual
Rates of
Percent of Stock Price
Total Options Exercise Appreciation For
Number of Granted to Price Option Term
Options Employees in Per Expiration --------------------------
Name Granted(1) Fiscal Year Share(2) Date 0%(3) 5%(4) 10%(4)
- ---- ---------- ----------- -------- ---- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
L. G. Thompson 22,000 24.58 $8.000 9/29/04 $0 $110,685 $280,499
S. S. Penley 6,000 6.70 8.000 9/29/04 0 30,187 76,500
3,000 3.35 5.375 1/28/04 0 10,141 25,699
M. W. Nelson 8,000 8.94 8.000 9/29/04 0 40,249 102,000
6,000 6.70 5.375 1/28/04 0 20,282 51,398
</TABLE>

(1) Options were granted for a term of ten years, subject to earlier
termination in certain events related to termination of employment.
Options become exercisable in four equal annual installments
commencing on the first anniversary of the grant.

(2) All of the options have an exercise price of the market price of the
Company's common stock at the time of grant.

(3) This column is included to show that, as the options have an exercise
price of market price at grant, the optionees will realize gains only
when there is an increase in the stock price above the exercise price,
in which event all stockholders will benefit commensurately.

(4) The amounts under the columns labeled "5%" and "10%" are included
pursuant to certain rules promulgated by the Securities and Exchange
Commission and are not intended to forecast future appreciation, if
any, in the price of the Company's common stock. These amounts are
based on the assumption that the named executives hold the options
granted for the full term of their options and that the price of the
Company's common stock appreciates at assumed rates of 5% and 10%,
respectively, compounded annually over the term of the options. The
actual value of the options will vary in accordance with the market
price of the Company's common stock.

The following table sets forth the year-end value of unexercised
options held by the executive officers on December 31, 1994.

5
<PAGE> 9

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money Options
Shares Options at FY-End at FY-End
Acquired on Value ------------------------- ------------------------
Name Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
L. G. Thompson 4,000 8,563 20,000/34,000 $10,000/$16,125
S. S. Penley 3,000 9,375 21,750/13,250 875/11,500
W. Nelson 1,000 2,000 8,500/18,500 2,250/14,250
</TABLE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the executive compensation committee are J. T. Schanck,
chairman, G. H. Bodeen and J. W. Puth. G. H. Bodeen currently holds the office
of Chairman of the Company, and was, until January 1, 1991, the Chief Executive
Officer of the Company. J. W. Puth is the owner of J. W. Puth Associates, to
which the Company pays approximately $18,000 per year for rent and secretarial
services for the office that G. H. Bodeen rents from J. W. Puth Associates.

EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Decisions on compensation of the Company's executives are made by the
three-member executive compensation committee of the board. Each member of the
executive compensation committee is a non-employee director. The committee
establishes the compensation of L. G. Thompson, Chief Executive Officer, based
on its evaluation of Mr. Thompson's performance. It establishes the
compensation of the other officers of the Company in consultation with Mr.
Thompson. All decisions by the executive compensation committee relating to
the compensation of all the Company's officers are reviewed by the full board,
except for decisions about awards under certain of the Company's stock-based
compensation plans, which must be made solely by the committee in order for the
grants or awards under such plans to satisfy Rule 16b-3 under the Securities
Exchange Act of 1934. Set forth below is the report submitted by Messrs.
Schanck, Bodeen and Puth in their capacity as the board's executive
compensation committee.

COMPENSATION POLICIES FOR EXECUTIVE OFFICERS

The executive compensation committee's executive compensation policies
are designed to provide competitive levels of compensation that integrate with
the Company's annual and long-term performance goals, reward above-average
corporate performance, recognize individual initiative and achievements, and
assist the Company in attracting and retaining qualified executives.

The executive compensation committee also endorses the position that
stock ownership by management and stock-based performance compensation
arrangements are beneficial in aligning management's and stockholders'
interests in the enhancement of stockholder value. The committee has
recommended that stock-based incentives and incentive pay tied to objective
performance of the Company should be significant elements of the compensation
for the executive officers.

6
<PAGE> 10

Section 162(m) of the Internal Revenue Code of 1986, as amended, which
limits the deduction for federal income tax purposes of certain compensation
paid by any publicly held corporation to its chief executive officer and its
four other highest compensated officers to $1 million per each such executive,
is not relevant at the current level of compensation of the Company's executive
officers.

RELATIONSHIP OF PERFORMANCE UNDER COMPENSATION PLANS

The primary measure of performance that is utilized under the Company's
compensation plans each year is targeted versus actual annual net earnings.
Actual versus targeted annual net earnings for the Company as a whole accounted
for from fifty to one hundred percent of each executive officer's target level
of bonuses for 1994, with business unit earnings performance criteria
accounting for the rest. Annual operating budgets utilized for purposes of
evaluating annual bonuses are developed by the Company's senior officers,
including Mr. Thompson. They are subsequently approved by the board of
directors. In the event that the minimum threshold level of target net
earnings is not attained, no cash bonus is paid. In 1994, the executive
compensation committee awarded cash bonuses to the executive officers based on
objectives established by the board for Company earnings performance.

The executive compensation committee considers stock options effective
incentives for enhanced future performance by the Company's employees. In
1994, the committee granted stock options to the executive officers and other
key managers.

OTHER COMPENSATION PLANS

At various times in the past the Company has adopted certain
broad-based employee benefit plans in which executive officers have been
permitted to participate and has adopted certain retirement, life and health
insurance plans. In September 1994, the Board of Directors of the Company
approved a Supplemental Executive Retirement Benefits Plan (the "Supplemental
Plan"). Under the Supplemental Plan, benefits are payable to eligible
participants to the extent such benefits exceed the maximum benefits payable
under the Lindberg Corporation Pension Plan (the "Pension Plan") (by federal
law, deductibility of benefits is limited to those based on maximum annual
covered compensation of $150,000). Benefits under these plans are not directly
or indirectly tied to Company performance. Messrs. Thompson, Penley and Nelson
will be eligible to participate in the Supplemental Plan. (See also "Pension
and Retirement Plans.")

CEO COMPENSATION

The executive compensation committee establishes the annual base salary
of the Chief Executive Officer. In setting the base salary of the Chief
Executive Officer, the committee considers a number of factors, including
competitive compensation data, the individual's experience, responsibility and
job performance.

Mr. Thompson became Chief Executive Officer on January 1, 1991, at
which time his salary was established at $205,000 per year. In July 1992, Mr.
Thompson recommended to the board that his salary be lowered by 10% in response
to business conditions at the time. The board approved that decrease, and it
remained in effect until June 1, 1993. Mr. Thompson's salary was increased to
$225,000 per year in August 1993, which was his first increase since becoming
Chief Executive Officer. His salary was increased to $250,000 per year in
January 1995.

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<PAGE> 11

Mr. Thompson is eligible for a cash bonus and a stock option grant
pursuant to the plans described above. In 1994, the Company awarded Mr.
Thompson a cash bonus of $168,750, which was based entirely on objective
performance as measured by actual net earnings against target net earnings, and
a grant of 22,000 options.

MARCH 1, 1995

EXECUTIVE COMPENSATION COMMITTEE
J. T. Schanck
G. H. Bodeen
J. W. Puth

PENSION AND RETIREMENT PLANS

The executive officers of the Company are covered by the Pension Plan.
The Pension Plan provides retirement benefits for participating employees which
are calculated with reference to years of service and final average monthly
compensation (salary and bonus). In addition, they will be eligible to
participate in the Company's Supplemental Plan. The following table shows
estimated annual benefits payable upon retirement under the Pension Plan and
the Supplemental Plan to employees with the indicated years of service and
final average annual compensation. The estimated annual benefits are based on
the assumption that both plans will continue in effect and that the participant
retires at age 65. Benefits are not subject to reduction for Social Security
benefits. At December 31, 1994, the credited years of service under the Plan
for Messrs. Thompson, Penley, and Nelson were 7, 7, and 11, respectively.
Currently, they are the only prospective participants in the Supplemental Plan
- -- see "Executive Compensation Committee Report on Executive
Compensation--Other Compensation Plans."

<TABLE>
<CAPTION>
Years of Service
Final Average --------------------------------------------------------------------
Compensation 10 15 20 25 30
- ------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$120,000 $20,000 $30,000 $40,000 $50,000 $60,000
150,000 25,000 37,500 50,000 62,500 75,000
200,000 33,333 50,000 66,667 83,333 100,000
250,000 41,667 62,500 83,333 104,167 125,000
300,000 50,000 75,000 100,000 125,000 150,000
350,000 58,333 87,500 116,667 145,834 175,000
</TABLE>

8
<PAGE> 12

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS

The chart below sets forth a comparison of the Company's annual stockholder
return with the annual stockholder return of (i) the Wilshire Next 1750
Universe index (an index of the stocks of 1,750 companies that have market
capitalization ranging from $70 million to $725 million), and (ii) a peer group
of publicly-traded companies that are similar in size and produce products and
perform services similar to those of the Company. The companies in the peer
group are Ampco-Pittsburgh Corporation, Steel Technologies Inc. and Fansteel
Inc., and each company's contribution to the peer group's total value is
weighted based on that company's market capitalization. The chart is based on
an investment of $100 on December 29, 1989, and assumes that all dividends were
reinvested. The chart is not an indicator of the future performance of the
Company. Thus, it should not be used to predict the future performance of the
Company's stock. The chart and related data were furnished by Wilshire
Associates, a Santa Monica, California-based financial and investment firm.

FIVE YEAR CUMULATIVE
TOTAL RETURNS

<TABLE>
<CAPTION>
12/29/89 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94
<S> <C> <C> <C> <C> <C> <C>
Lindberg Corporation $100.00 $116.00 $89.00 $82.00 $110.00 $158.00
Peer Group--Metal Processors $100.00 $105.00 $98.00 $120.00 $171.00 $143.00
Wilshire Next 1750 $100.00 $82.00 $119.00 $141.00 $166.00 $163.00
</TABLE>

9
<PAGE> 13

PROPOSED AMENDMENTS TO THE
1991 STOCK OPTION PLAN FOR KEY EMPLOYEES

The board of directors of the Company has adopted an amendment to the
1991 Stock Option Plan for Key Employees (the "1991 Employee Plan"), subject to
approval by stockholders, which would increase the number of shares of common
stock covered by the 1991 Employee Plan from 300,000 to 675,000. There are
currently available 40,625 shares of common stock remaining for grant of
options under the 1991 Employee Plan, and the board of directors believes it is
desirable to have additional shares available for option.

A copy of the 1991 Employee Plan, as proposed to be amended,
accompanies this proxy statement as Appendix A. Its purpose is to secure for
the Company and its stockholders the benefits of incentive inherent in the
ownership of common stock of the Company by key employees who will be
responsible for its future growth and continuing success.

The 1991 Employee Plan provides that it will be administered by a stock
option committee (the "Committee") appointed by the board of directors. It
provides for the issuance of both incentive stock options ("Incentive Options")
within the meaning of Section 422 of the Internal Revenue Code of 1986, and
options which do not qualify as Incentive Options ("Non-Statutory Options").
If the amendment is approved, the 1991 Employee Plan will permit the Committee
until January 23, 2001 to grant options to purchase a total of not more than
675,000 shares of the Company's common stock to certain key employees of the
Company and its subsidiaries (including officers, whether or not they are
directors). The Committee also may grant substitute options, with the
optionee's consent, at a different option price to replace previously granted
options. Options issued under the 1991 Employee Plan are currently held by 31
employees.

The option price of an option granted under the 1991 Employee Plan is
to be determined by the Committee at the time of grant but may not be less than
the fair market value of the Company's common stock on the date of grant.
Options may be exercised by giving written notice to the Company specifying the
number of shares to be purchased, accompanied by the full purchase price in
cash or by certified or cashier's check.

Options may be granted under the 1991 Employee Plan for a term of not
more than ten years and will be exercisable in such installments, at such time
or times and subject to such conditions, as the Committee in its discretion
determines. In the event of a "change in control" of the Company, as defined
under the 1991 Employee Plan, all options outstanding become immediately
exercisable in full without regard to any installments established under the
1991 Employee Plan. In the event that any outstanding option for any reason
expires or is terminated, the shares allocable to the unexercised portion of
such option may again be optioned.

The Board may amend or discontinue the 1991 Employee Plan, except that
no amendment or discontinuance may change or impair any option previously
granted without the consent of the optionee, increase the maximum number of
shares subject to option, change the minimum purchase price, change the
limitations on the option period, or increase the time limitation on the grant
of options.

In the event that the Company's shares of common stock are changed by a
stock dividend, split or combination of shares, or a merger, consolidation or
reorganization with another company in which holders of the Company's common
stock receive other securities, or other relevant change in the capitalization
of the Company, a proportionate or equitable adjustment will be made in the
number or kind of shares subject to unexercised options or available for
options and in the purchase price for shares.

10
<PAGE> 14

Options are not transferable by the optionee otherwise than by will or
the laws of descent and distribution. Options expire if the optionee's
employment is terminated for "cause," which is defined in the 1991 Employee
Plan as dishonesty, disloyalty or insubordination. In the event of death while
the optionee is employed with the Company or within three months after
termination of employment, the optionee's heirs, legatees or legal
representatives, within one year after the date of death, may exercise the
option in full if death occurred on or after the first anniversary of the
option. If death occurred before the first anniversary of the option, the
option may be exercised to the extent it was exercisable at the date of death.
In the event of termination because of disability, the optionee may exercise
the option within one year after such termination to the extent it was
exercisable at the date of termination. In the event of termination other than
for cause or by death or disability, the optionee may exercise the option
within three months after such termination to the extent it was exercisable at
the date of termination.

With respect to Non-Statutory Options granted under the 1991 Employee
Plan, the Company understands that under existing federal income tax law (i) no
income will be recognized to the optionee at the time of grant, (ii) upon
exercise of an option, the optionee will be required to treat as ordinary
income the difference on the date of exercise between the option price and the
fair market value of the stock purchased, and the Company will be entitled to a
deduction equal to such amount, and (iii) assuming the shares received upon the
exercise of such option constitute capital assets in the optionee's hands, any
gain or loss upon disposition of the shares (measured by reference to the fair
market value of the shares on the date of exercise) will be treated as capital
gain or loss which will be long-term if the shares have been held longer than
one year.

Incentive Options granted under the 1991 Employee Plan are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986. The Company understands that under existing
federal income tax law, if shares purchased pursuant to the exercise of an
Incentive Option are not disposed of by the optionee within two years from the
date of grant of the option or within one year after the transfer of the shares
to him, then (i) no income will be recognized to the optionee upon either the
grant or the exercise of the option, (ii) any gain or loss will be recognized
to the optionee only upon ultimate disposition of the shares and, assuming the
shares constitute capital assets in the optionee's hands, will be treated as
long-term capital gain or loss, and (iii) the Company will not be entitled to a
federal income tax deduction in connection with the grant or the exercise of
the option. For purposes of computing the alternative minimum tax, the
difference between the option price and the fair market value of the shares
acquired upon exercise of an Incentive Option will increase the optionee's
alternative minimum taxable income.

If an optionee disposes of the shares acquired upon exercise of an
Incentive Option within two years from the date of grant of the option or
within one year after the transfer of the shares to him, ordinary income will
be recognized to the optionee in any amount equal to the difference between the
option price and the lesser of the fair market value of the shares on the date
of exercise or the selling price. The balance of the optionee's gain on such
disposition, if any, will be taxed as capital gain. If the Company complies
with certain withholding requirements, it will be entitled to a deduction in
the year of disposition equal to the amount of ordinary income recognized to
the optionee.

The only other amendment to the 1991 Employee Plan is to reflect the
history of its adoption and amendment (Paragraph 12 of Appendix A).

11
<PAGE> 15

PROPOSED AMENDMENTS TO THE
1991 STOCK OPTION PLAN FOR DIRECTORS

The board of directors of the Company has also adopted amendments to
the 1991 Stock Option Plan for Directors (the "1991 Directors Plan"), subject
to approval by stockholders. The principal amendments are to extend the period
during which options may be granted under the 1991 Directors Plan by five
years, from April 25, 1996 to April 25, 2001, and to extend the period of
duration of options granted under the 1991 Directors Plan from five to ten
years. The 1991 Directors Plan would also be amended to remove references to
options granted under the 1986 Directors Stock Option Plan, and to reflect the
history of its adoption and amendment (see Paragraph 9 of Appendix B). There
are currently options to purchase 9,000 shares outstanding under the 1991
Directors Plan held by each of Messrs. Bodeen, Puth, Decker and Schanck,
exercisable at a price of $7.00 per share, expiring April 25, 1996. If the
amendments are approved by stockholders, these options will also be amended and
expire on April 25, 2001.

The 1991 Directors Plan, a copy of which accompanies this proxy
statement as Appendix B, is designed to help attract and retain well-qualified
directors who are not employees of the Company, thus promoting the interests
and long-range prospects of the Company and its stockholders.

The 1991 Directors Plan covers 72,000 shares of the Company's common
stock, which may be granted only to directors who are not employees of the
Company. Under the 1991 Directors Plan, each person who becomes an eligible
director will be granted an option to purchase 9,000 shares of the Company's
common stock. No option may be granted under the 1991 Directors Plan, as
proposed to be amended, subsequent to April 25, 2001.

The option price for shares granted under the 1991 Directors Plan is
the fair market value of the stock at the time of grant. Options may be
exercised by giving written notice to the Company specifying the number of
shares to be purchased, accompanied by the full purchase price in cash or by
certified or cashier's check.

All options under the 1991 Directors Plan, as proposed to be amended,
will be for a term of ten years from the date of grant and become exercisable
with respect to one-third of the total number of shares subject to the option
one year after the date of grant and with respect to an additional one-third at
the end of the second and third years thereafter. In the event that any
outstanding option expires or is terminated, the shares allocable to the
unexercised portion of such option may again be optioned.

The 1991 Directors Plan provides that it shall be administered by a
committee composed of one or more directors of the Company who are salaried
employees of the Company. The board of directors may amend or discontinue the
1991 Directors Plan at any time provided that no such amendment or
discontinuance may change or impair any option previously granted without the
consent of the optionee and generally it may not be amended more than once
every six months.

12
<PAGE> 16

Options are not transferable by the optionee otherwise than by will or
the laws of descent and distribution. In the event that an optionee ceases to
be a director of the Company, the optionee or his heirs, legatees or legal
representatives may exercise the option at any time within one year after
termination of board membership for reasons other than death, but only to the
extent it was exercisable at the time of termination and not after the
expiration of the term of the option.

The Company understands that under existing federal income tax law (i)
no income will be recognized to the optionee at the time of grant of an option
under the 1991 Directors Plan, (ii) upon exercise of an option, the optionee
will be required to treat as ordinary income the difference on the date of
exercise between the option price and the fair market value of the stock
purchased, and the Company will be entitled to a deduction equal to such
amount, and (iii) assuming the shares received upon the exercise of such option
constitute capital assets in the optionee's hands, any gain or loss upon
disposition of the shares (measured by reference to the fair market value of
the shares on the date of exercise) will be treated as capital gain or loss
which will be long-term if the shares have been held longer than one year.

VOTE NECESSARY TO APPROVE AMENDMENTS TO PLANS

The affirmative vote of the holders of a majority of the shares of the
Company's common stock present and entitled to vote at the annual meeting is
necessary to approve the amendments. Unless otherwise instructed, proxies will
be voted in favor of the approval of the amendments. Broker non-votes and
abstentions will not be included in calculating the number of votes cast on the
amendments. On March 10, 1995, the closing bid price of the Company's common
stock on the NASDAQ National Market System as reported in The Wall Street
Journal was $6.50 per share.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS APPROVE THE
AMENDMENTS TO THE 1991 EMPLOYEE PLAN AND THE 1991 DIRECTORS PLAN.

13
<PAGE> 17

STOCK OWNERSHIP

The following table sets forth information as of February 14, 1995
(except as otherwise noted) concerning shares of common stock of the Company
beneficially owned by each person known to the Company to own more than 5% of
its outstanding shares, and by the Company's directors and executive officers.

<TABLE>
<CAPTION>
Number of Shares Percent of
Beneficially Outstanding
Name and Address Owned(1) Shares
- ---------------- -------- ------
<S> <C> <C>
5% STOCKHOLDERS

Bank of America Illinois (formerly
Continental Bank N.A.) and G. H. Bodeen,
as co-trustees of trusts created
under the will of L. A. Lindberg . . . . . . . . . . 423,674(2) 9.0
231 South LaSalle Street
Chicago, IL 60693

Nancy L. Bodeen(3) . . . . . . . . . . . . . . . . . . 353,257 7.5
1180 Whitebridge Hill
Winnetka, Illinois 60093

Pioneering Management Corporation . . . . . . . . . . . 434,000(4) 9.2
60 State Street
Boston, MA 02109-1820

Dimensional Fund Advisors Inc. . . . . . . . . . . . . 238,000(5) 5.0
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401

DIRECTORS AND EXECUTIVE OFFICERS

G. H. Bodeen . . . . . . . . . . . . . . . . . . . . . 518,824(2)(6)(7) 11.0

R. F. Decker . . . . . . . . . . . . . . . . . . . . . 10,500(7) (8)

J. W. Puth . . . . . . . . . . . . . . . . . . . . . . 10,000(7) (8)

J. T. Schanck . . . . . . . . . . . . . . . . . . . . . 10,000(7) (8)

L. G. Thompson . . . . . . . . . . . . . . . . . . . . 88,500(7) 1.9

S. S. Penley . . . . . . . . . . . . . . . . . . . . . 27,500(7) (8)

M. W. Nelson . . . . . . . . . . . . . . . . . . . . . 14,200(7) (8)

All directors and executive officers as a group
(7 persons)(9) . . . . . . . . . . . . . . . . . . . 679,524(10) 14.1

</TABLE>

14
<PAGE> 18

- ---------------
(1) Sole voting and dispositive power, except as otherwise indicated.

(2) Bank of America Illinois and G. H. Bodeen have shared voting and G. H.
Bodeen has sole dispositive power as to 423,674 shares in their
capacities as co-trustees of trusts created under the will of L. A.
Lindberg.

(3) Nancy Bodeen, her mother and her sister are the beneficiaries of the
trust created under the will of L. A. Lindberg. Mrs. Bodeen is the wife
of G. H. Bodeen, Chairman of the Board of the Company.

(4) Based on a report of ownership on Schedule 13G dated January 17, 1995
filed with the Securities and Exchange Commission reporting ownership as
of December 31, 1994.

(5) Based on a report of ownership on Schedule 13G dated January 31, 1995
filed with the Securities and Exchange Commission reporting ownership as
of December 31, 1994. Dimensional Fund Advisors Inc. has sole voting
power as to 163,000 shares.

(6) Mr. Bodeen individually owns beneficially 95,150 shares of common stock
of the Company.

(7) Includes shares subject to stock options which are currently exercisable
or become exercisable within 60 days of February 14, 1995, as follows:
Messrs. Bodeen, Puth, Decker, and Schanck, 9,000 shares each, Mr.
Thompson, 21,500 shares, Mr. Penley, 23,500 shares, and Mr. Nelson,
11,000 shares.

(8) Less than 1% of the outstanding shares of the Company.

(9) During 1994, the officers filed late reports required by Section 16(a) of
the Securities Exchange Act of 1934 on transactions in the Company's
common stock as follows: L. G. Thompson, one report regarding an
otherwise exempt stock option grant; S. S. Penley, one report regarding
an otherwise exempt stock option grant; and M. W. Nelson, one report
regarding three stock option grants that occurred prior to his becoming
subject to the reporting requirements of Section 16(a).

(10) Includes 423,674 shares with shared voting power, and 92,000 shares
subject to stock options which are currently exercisable or become
exercisable within 60 days of February 14, 1995.

FINANCIAL STATEMENTS

Stockholders are referred to the annual report for the fiscal year ended
December 31, 1994, which is enclosed with this proxy statement, for financial
and other information about the activities of the Company for such fiscal year,
but such report is not incorporated in this proxy statement and is not a part
of the proxy soliciting material.

15
<PAGE> 19

OTHER BUSINESS

Management knows of no other matters which will be brought before the
meeting. However, if any other matter is properly brought before the meeting,
the persons named in the enclosed proxy will vote in accordance with their
judgment on such matters. For business to be properly brought before the
meeting by a stockholder, notice in proper written form must be given to the
Secretary not less than 30 days or more than 60 days before the meeting and
otherwise in compliance with the Company's By-Laws.

STOCKHOLDER PROPOSALS

Any stockholder proposal to be considered for inclusion in proxy material
for the Company's annual meeting of stockholders in April 1996 must be received
at the principal executive office of the Company no later than November 24,
1995.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

During 1994, the Company engaged Arthur Andersen LLP as its independent
public accountants.

The appointment of auditors is approved annually by the board of
directors, upon recommendation of the audit committee. The audit committee
expects to recommend that Arthur Andersen LLP be selected as auditors for 1995.

It is expected that a representative of Arthur Andersen LLP will be present at
the annual meeting of stockholders, with the opportunity to make a statement
and to respond to appropriate questions by stockholders.

GENERAL

The cost of solicitation of proxies will be borne by the Company. In
addition to solicitation of proxies by use of the mails, officers, directors
and employees of the Company may solicit proxies on its behalf by means of
telephone or telegraph. The Company will request brokers and other custodians,
nominees and fiduciaries to forward proxy soliciting material to the beneficial
owners of shares held of record by such persons, and reimburse them for their
reasonable out-of-pocket costs.

Management does not know of any other matters of business that may come before
the meeting. In the event that other matters should properly come before the
meeting and are submitted for a vote, the individuals named in the proxy will
vote in accordance with their judgment on such matters.

By Order of the Board of Directors

S. S. PENLEY
Secretary

16
<PAGE> 20

APPENDIX A

1991 STOCK OPTION PLAN FOR KEY EMPLOYEES

1. Purpose. The purpose of the Lindberg Corporation 1991 Stock Option
Plan for Key Employees (the "Plan") is to secure for Lindberg Corporation and
its stockholders the benefits of incentive inherent in the ownership of common
stock of the Corporation by key employees who will be responsible for its
future growth and continued success. Options granted under this Plan may be
either "Incentive Stock Options" as defined in section 422 of the Internal
Revenue Code as heretofore or hereafter amended (the "Code"), or non-Incentive
Stock Options.

2. Administration. The Plan shall be administered by a stock option
committee (the "Committee") consisting of three directors of the Corporation
none of whom is (or was at any time within one year before his appointment to
the Committee) eligible to participate in the Plan. The Committee members
shall be appointed by the Board of Directors of the Corporation, and shall
serve at the pleasure of the Board. The Committee shall have the power to
select optionees, to establish the number of shares and other terms applicable
to each option, to interpret the Plan and options granted thereunder, to
prescribe, amend and rescind rules relating to the Plan and to options granted
thereunder and to make all other determinations necessary or advisable for the
administration of the Plan. Any decision or action by the Committee shall be
conclusive and binding upon all persons having any interest under the Plan.

3. Eligibility. Options shall be granted only to key employees of the
Corporation and its subsidiaries (including officers but excluding directors of
the Corporation who are not also employees) selected by the Committee on the
basis of the special importance of their services in the management,
development and operations of the Corporation or its subsidiaries.

4. Granting of Options. (a) The Committee may grant options to purchase
from the Corporation a total of not more than 675,000 shares of the
Corporation's common stock, subject to adjustment as provided in Paragraph 12.

(b) With respect to Incentive Stock Options, (i) the aggregate fair
market value (determined as of the time the option is granted) of the
stock with respect to which options are exercisable for the first time by
any employee during any calendar year (under all incentive stock option
plans of the Corporation and its parent and subsidiary corporations) shall
not exceed $100,000, and (ii) no option may be granted to any employee
who, immediately after such option is granted, would own, within the
meaning of section 422(b)(6) of the Code, stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Corporation or any of its subsidiaries, except that an option may be
granted to such an employee if at the time the option is granted the
option price is at least 110 percent of the fair market value of the stock
subject to the option and the option by its terms is not exercisable after
the expiration of five years from the date the option is granted.

(c) No option shall be granted under the Plan after January 23,
2001. Each option granted pursuant to the Plan shall be evidenced by a
written option agreement or certificate duly executed by the Corporation
and the optionee. If an option expires or is terminated unexercised as to
any shares, such released shares may again be optioned. Shares subject to
options may be made available from unissued or reacquired shares of common
stock.

A-1

<PAGE> 21

(d) The Committee may grant substitute options, with the optionee's
consent, to replace previously granted options, notwithstanding the fact
that the option price of the later option may differ from the option price
of the earlier option.

5. Option Price. The option price shall be determined by the Committee
but, subject to adjustment under Paragraph 12, shall be not less than the fair
market value at the time the option is granted, of the stock subject to the
option.

6. Terms of Option. The term of each option shall be determined by the
Committee but shall not be more than ten years. Subject to Paragraph 9, (a)
each option shall become exercisable in such installments, at such time or
times and subject to such conditions, as the Committee in its discretion
determines, and (b) the Committee may in its discretion at any time accelerate
the exercisability of any option.

7. Change in Control. Any option granted under the Plan to an optionee
who is an employee of the Corporation or any of its subsidiaries on the date of
a "Change in Control" shall be immediately exercisable in full on such date and
thereafter during its specified term. The words "Change in Control" shall mean
the occurrence, at any time during the specified term of an option granted
under the Plan, of any of the following events:

(a) The Corporation is merged, consolidated or reorganized into or
with another corporation or other legal person, or there is an offer to
holders of the common stock generally relating to the acquisition of their
shares, and as a result of such merger, consolidation, reorganization or
offer, less than 75% of the outstanding voting securities or other capital
interests of the surviving, resulting or acquiring corporation or other
legal person are owned in the aggregate by the stockholders of the
Corporation immediately prior to such merger, consolidation,
reorganization or offer;

(b) The Corporation sells all or substantially all of its business
and/or assets to any other corporation or other legal person, less than
75% of the outstanding voting securities or other capital interests of
which are owned in the aggregate, directly or indirectly, by the persons
who were stockholders of the Corporation immediately before or after such
sale; or

(c) During any period of two consecutive years, individuals who at
the beginning of any such period constitute the directors of the
Corporation cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the
Corporation's stockholders, of each new director of the Corporation was
approved by a vote of at least two-thirds of such directors of the
Corporation then still in office who were directors of the Corporation at
the beginning of any such period.

8. Exercise of Option. (a) In order to exercise any option, the
optionee or the optionee's heirs, legatees or legal representatives, as the
case may be, shall deliver to the Corporation a written notice of exercise
specifying the number of shares as to which the option is being exercised. Such
notice shall be accompanied by the full purchase price in cash or by certified
or cashier's check for the shares being purchased.

(b) At the time of exercise of any option, the Corporation may, if
it determines it necessary or desirable for any reason, require the
optionee (or the optionee's heirs, legatees or legal representatives, as
the case may be), as a condition to the exercise thereof to deliver to the
Corporation a written representation of present intention to purchase the
shares for

A-2

<PAGE> 22

investment and not for distribution. Each option shall also be subject to
the requirement that, if at any time the Corporation determines, in its
discretion, that the listing, registration or qualification of the shares
subject to the option upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental or regulatory
body, is necessary or desirable as a condition of, or in connection with,
the issue or purchase of shares thereunder, the option may not be
exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Corporation.

9. Termination of Employment-Exercise Thereafter. (a) If the employment
of an optionee with the Corporation or any of its subsidiaries terminates for
any reason except discharge for cause, the option may be exercised as follows:

(i) if the optionee's employment is terminated otherwise
than by death or disability, by the optionee at any time
within three months after such termination;

(ii) if the optionee's employment is terminated by death or
if the optionee dies within three months after the
termination of the optionee's employment, by the
optionee's heirs, legatees or legal representatives at
any time within one year after the date of death; or

(iii) if the optionee's employment is terminated because of
disability, by the optionee at any time within one year
after the date of such termination.

(b) Notwithstanding the foregoing, an option shall not be
exercisable after the expiration of its specified term and shall be
exercisable only to the extent it was exercisable at the date of such
termination of employment, except that if the optionee's employment is
terminated by death at any time on or after the first anniversary of the
option, the option may be exercised in full during its specified term
within one year after the date of death.

(c) If an optionee is discharged for cause, the option shall expire
forthwith and all rights to purchase shares under it shall terminate
immediately. For this purpose, "discharge for cause" means a discharge on
account of dishonesty, disloyalty or insubordination.

(d) For purposes of the Plan, a person shall be considered to be
"disabled" if the person is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than twelve
months, and the existence of such disability is established by medical
evidence satisfactory to the Corporation.

(e) A transfer of an employee from one company to another among the
Corporation and its subsidiaries, or a transfer of an employee to another
corporation assuming the option, or issuing a substitute option, in a
transaction to which section 424(a) of the Code applies, shall not be
considered a termination of employment for the above purposes.

A-3
<PAGE> 23

10. Non-Transferability of Options. No option shall be transferable by
the optionee otherwise than by will or the laws of descent and distribution,
and each option shall be exercisable during the optionee's lifetime only by the
optionee.

11. Withholding. At the time of exercise of any non-Incentive Stock
Option, the Corporation may require, as a condition of the exercise of such
option, the optionee to pay the Corporation an amount equal to the amount of
the tax the Corporation may be required to withhold to obtain a deduction for
federal income tax purposes as a result of the exercise of such option by the
optionee.

12. Adjustment. The number and kind of shares subject to the Plan and to
options granted under the Plan shall be adjusted as follows: (a) in the event
that the Corporation's outstanding common stock is changed by any stock
dividend, stock split or combination of shares, the number of shares subject to
the Plan and to options granted thereunder shall be proportionately adjusted;
(b) in the event of any merger, consolidation or other reorganization of the
Corporation with any other corporation or corporations, there shall be
substituted for each share of common stock then subject to the Plan, whether or
not at the time subject to outstanding options, the number and kind of shares
of stock or other securities or cash or other property into which each
outstanding share of common stock of the Corporation shall be converted by such
merger, consolidation or reorganization; and (c) in the event of any other
relevant change in the capitalization of the Corporation, the Board of
Directors shall provide for an equitable adjustment in the number of shares of
common stock then subject to the Plan, whether or not then subject to
outstanding options. In the event of any such adjustment the purchase price per
share shall be proportionately adjusted.

13. Miscellaneous. (a) Nothing contained in the Plan or in any option
granted pursuant thereto shall confer upon any optionee any right to be
continued in the employment of the Corporation or any subsidiary of the
Corporation or to interfere in any way with the right of the Corporation or its
subsidiaries to terminate the optionee's employment at any time.

(b) No holder of any option shall be entitled to any rights of a
stockholder of the Corporation with respect to any shares subject to the
option until such shares have been paid for in full and issued.

14. Amendment of Plan. The Board of Directors of the Corporation may
amend or discontinue the Plan at any time. However, no such action (other than
an adjustment under Paragraph 12) shall (a) change or impair any option
previously granted without the consent of the optionee, (b) increase the
maximum number of shares subject to option hereunder, (c) change the minimum
purchase price, (d) change the limitations on the option period or (e) increase
the time limitation on the grant of options.

15. Effective Date. The Plan was adopted by the Board of Directors on
January 24, 1991, and approved by the holders of a majority of the shares of
the Corporation's stock present and entitled to vote at a meeting of
stockholders on April 26, 1991. The 1995 amendments to the Plan were adopted
by the Board of Directors on January 28, 1995 and ordered to be submitted to
the stockholders of the Corporation for their approval. If the 1995 amendments
are approved by the holders of a majority of the shares of the Corporation's
stock present and entitled to vote at a meeting of stockholders, the amendments
shall become effective on that date.

A-4

<PAGE> 24

APPENDIX B

1991 STOCK OPTION PLAN FOR DIRECTORS

1. Purpose. The purpose of the 1991 Stock Option Plan for Directors
(the "Plan") is to help attract and retain well-qualified directors who are not
employees of the Company, thus promoting the interests and long-range prospects
of the Company and its stockholders.

2. Administration of the Plan. The Plan shall be administered by a
committee composed of one or more directors of the Company who are salaried
employees of the Company. The Committee is authorized to interpret the Plan and
the options granted thereunder, and to establish and modify such rules and
regulations as they deem necessary and appropriate. The Committee's
interpretation of the Plan and options granted thereunder is conclusive.

3. Eligibility for Options. Directors who are not salaried employees of
the Company shall be eligible for options under the Plan.

4. Granting of Options. Options shall be granted to eligible directors
of the Company as follows:

(i) Each eligible director of the Company shall be granted
on the effective date of this Plan an option to purchase
9,000 shares of the Company's common stock; and

(ii) Each person who becomes an eligible director after the
effective date of this Plan shall be granted an option
to purchase 9,000 shares of the Company's common stock.

No director may hold at any time outstanding options on more than 9,000
shares.

The aggregate number of shares which shall be available to be optioned
under this Plan shall be 72,000 shares. Such number of shares, and the number
of shares subject to options outstanding under the Plan, shall be subject in
all cases to adjustment as provided later in this Plan. If an option expires
or is terminated unexercised as to any shares, such released shares may again
be optioned.

No option shall be granted under the Plan subsequent to April 25, 2001.

5. Price. The option price for shares granted under the Plan shall be
the fair market value of the shares subject to option on the date the option is
granted.

6. Exercise of Options. Each option granted under the Plan shall become
exercisable in three equal installments, one-third becoming exercisable one
year after the date of the grant, one-third becoming exercisable two years
after the date of the grant, and one-third becoming exercisable three years
after the date of the grant.

An optionee may exercise his or her option by giving written notice to
the Company specifying the number of shares to be purchased, accompanied by full
payment therefor in cash, or by certified or cashier's check.

B-1

<PAGE> 25

The Company may require an optionee to deliver at the time of exercise a
written representation of present intention to purchase shares for investment
and not for distribution.

7. Duration and Termination of Options. Options granted under the Plan
will expire ten years from the date of grant. If a director to whom an option
is granted ceases to be a director for any reason other than death, such option
may be exercised by him or her at any time within three months after such
termination of Board membership to the extent it was exercisable at the time of
termination (but in no event after the expiration of such three-month period or
ten years from the date of grant). In the event of a director's death while
serving on the Company's Board, that director's option may be exercised by his
or her estate or the person or persons who acquire the right to exercise such
option by bequest or inheritance at any time within one year after the date of
death to the extent the director was entitled to exercise the option at his or
her death (but in no event after the expiration of such one-year period or ten
years from the date of grant).

8. Other. Options are not transferable otherwise than by will or the
laws of descent and distribution, and during the director's life may be
exercised only by the director.

The number and kind of shares subject to the Plan and to options granted
under the Plan shall be subject to adjustment as follows: (a) in the event that
the Company's outstanding common stock is changed by any stock dividend, stock
split or combination of shares, the number of shares subject to the option
shall be proportionately adjusted; (b) in the event of any merger,
consolidation or other reorganization of the Company with any other corporation
or corporations, there shall be substituted for each share of common stock then
subject to the option the number and kind of shares of stock or other
securities or cash or other property into which each outstanding share of
common stock of the Company shall be converted by such merger, consolidation or
reorganization; and (c) in the event of any other relevant change in the
capitalization of the Company, the Board of Directors shall provide for an
equitable adjustment in the number of shares of common stock then subject to
the option. In the event of any such adjustment, the purchase price per share
shall be proportionately adjusted.

Options granted under the Plan shall be evidenced by a certificate, signed
by the President or a Vice President of the Company.

This Plan may be amended or discontinued by the Board of Directors at any
time, provided that it may not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. No such action shall
change or impair any option previously granted without the optionee's consent.

When the Plan becomes effective as indicated below, no options shall be
granted thereafter under the 1986 Plan.

9. Effective Date. The Plan was adopted by the Board of Directors on
January 24, 1991, and approved by the holders of a majority of the shares of
the Corporation's stock present and entitled to vote at a meeting of
stockholders on April 26, 1991. The 1995 amendments to the Plan were adopted
by the Board of Directors on January 28, 1995 and ordered to be submitted to
the stockholders of the Corporation for their approval. If the 1995 amendments
are approved by the holders of a majority of the shares of the Corporation's
stock present and entitled to vote at a meeting of stockholders, the amendments
shall become effective on that date.

B-2

<PAGE> 26

LINDBERG CORPORATION
6133 NORTH RIVER ROAD
SUITE 700
ROSEMONT, ILLINOIS 60018

THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS

The undersigned hereby appoints G. H. Bodeen, L. G. Thompson and S. S.
Penley as Proxies, each with the power to appoint a substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of common stock of Lindberg Corporation which the undersigned would be entitled
to vote if personally present at the annual meeting of stockholders to be held
on April 26, 1995 or any adjournment thereof. A majority (or if only one, then
that one) of the above Proxies (or their substitutes) present and acting at the
meeting shall have all of the powers conferred hereby.

1. ELECTION OF DIRECTORS. Nominee: R. F. Decker
/ / FOR / / WITHHELD

2. AMENDMENTS TO THE 1991 STOCK OPTION PLAN FOR KEY EMPLOYEES
/ / FOR / / AGAINST / / ABSTAIN

3. AMENDMENTS TO THE 1991 STOCK OPTION PLAN FOR DIRECTORS
/ / FOR / / AGAINST / / ABSTAIN

4. In their discretion, on any other matters that may properly come before
the meeting.

The board of directors recommends that stockholders vote for the director
nominee listed above and for Proposals 2 and 3.

(Please sign and date this proxy on the reverse side and return it in the
enclosed envelope.)

<PAGE> 27

(Continued from reverse side)

This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder.

If no direction is made, this proxy will be voted FOR the director
nominee listed on the reverse side, and FOR Proposals 2 and 3.

Please sign exactly as name or names appear below. Joint owners should
each sign personally. If you sign as agent or in any other representative
capacity, please state the capacity in which you sign. Attorneys should submit
powers of attorney.

DATE:________________________, 1995

________________________________
Signature

________________________________
Signature if held jointly

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.