<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 Com-
mission 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)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] 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 26, 1997
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 Friday, April 25, 1997, 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 25, 1997
The annual meeting of stockholders of Lindberg Corporation will be held in
the Auditorium at Riverway, 6133 North River Road, Rosemont, Illinois on
Friday, April 25, 1997, at 9:00 a.m., Chicago time, for the following purposes:
1. To elect two Class III directors.
2. To approve amendments to the 1991 Stock Option Plan for
Directors.
3. To transact such other business as may properly come
before the meeting.
All stockholders of record at the close of business on March 10, 1997, 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 26, 1997
<PAGE> 4
LINDBERG CORPORATION
6133 NORTH RIVER ROAD
SUITE 700
ROSEMONT, ILLINOIS 60018
___________
March 26, 1997
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
25, 1997, 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 4,801,591
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, 1997, are entitled to vote at the meeting.
THE ELECTION OF DIRECTORS
The board of directors proposes the election of J. W. Puth and L. G.
Thompson as Class III directors, each of whom is an incumbent Class III
director. It is intended that shares represented by properly executed proxies
will be voted, in the absence of contrary instructions, for the election of
Messrs. Puth and Thompson as directors. 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 a nominee become
unable to accept nomination or election, which management does not anticipate,
the proxies may 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 each nominee for
Class III director and each Class I and Class II director.
<TABLE>
<CAPTION>
Name, Year
First Elected Principal Occupation for Last
Director and Age Five Years and Public Company Directorships
- ---------------- -------------------------------------------
NOMINEES FOR TERM EXPIRING IN 2000 (CLASS III)
<S> <C>
J. W. Puth........ President, J. W. Puth Associates (industrial consultants) since
1987--68 December 1987; also a director of L.B. Foster Co., System Software
Associates, Inc., U.S. Freightways Corporation, Allied Products
Corporation, A.M. Castle & Co. and Brockway Standard Holdings
Corporation.
L. G. Thompson.... President and Chief Executive
Officer of the Company since January 1991. 1987--56
DIRECTORS WHOSE TERM EXPIRES IN 1998 (CLASS I)
Dr. R. F. Decker.. President and Chief Executive Officer, University Science
1987--66 Partners, Inc. (a general 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, of
Thixomat, Inc. (a general partnership formed to promote and
commercialize Thixomolding(TM) technology and in which the
Company has a minority investment)(1). Also a director of
Wavemat, Inc.
R.A. Jean......... Executive Vice President and Chief Operating Officer, Varlen
1995--54 Corporation (manufacturer of engineered products) since
February 1993, Group Vice President from August 1988 to
January 1993.
DIRECTORS WHOSE TERM EXPIRES IN 1999 (CLASS II)
G. H. Bodeen...... Chairman of the Board of the Company since December 1980 and
1960--73 Chief Executive Officer from April 1965 to December 1990.
J.T. Schanck...... Retired; Vice Chairman from September 1986 to December 1988
1975--66 of Illinois Tool Works Inc. (producer of specialty engineered
products and systems).
</TABLE>
(1) Dr. Decker owns a 37% interest in University Science Partners, Inc.,
which owns a 31% equity interest in Thixomat, Inc., in which the Company
owns a 14% interest.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE FOREGOING NOMINEES FOR DIRECTORS. ---
2
<PAGE> 6
FUNCTIONING OF THE BOARD AND COMMITTEES
The Company's board of directors has an executive compensation committee,
an audit committee and a finance 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 of directors 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 candidates for
membership on the board and 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 1996, the committee met twice.
Members of the audit committee are R. F. Decker, chairman, R. A. Jean, 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 1996, the committee met once.
Members of the finance committee are J. W. Puth, chairman, G. H. Bodeen,
R. A. Jean and L. G. Thompson. The committee reviews and makes recommendations
to the full board regarding capital investments, dividend policy and major
financial matters. During 1996, the committee met once.
The board of directors of the Company met on five occasions during 1996.
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
-------------------- ------------
Securities
Underlying
Salary Bonus Options
Name and Principal Position Year ($) ($)(1) (#)(2)
- --------------------------- ---- ------- ------- ----------
<S> <C> <C> <C> <C>
L. G. Thompson................. 1996 268,764 67,950 24,000
President and Chief Executive 1995 250,000 159,725 0
Officer 1994 225,000 168,750 22,000
S. S. Penley................... 1996 144,000 25,500 7,000
Senior Vice President and 1995 135,000 60,375 0
Chief Financial Officer 1994 120,000 63,000 9,000
M. W. Nelson...................
Senior Vice President and 1996 144,000 48,950 10,000
President of Heat Treat 1995 135,000 80,850 0
Operations 1994 120,000 58,375 14,000
- ---------------------
</TABLE>
(1) Cash bonuses.
(2) 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. The exercise price for shares granted
under such options is their fair market value at the time of grant.
Compensation of non-employee directors consists of an annual retainer fee
of $20,000 and a fee of $1,000 for each board or committee meeting attended.
In addition, each committee chairman receives $2,000 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. See
"Proposed Amendments to the 1991 Stock Option Plan for Directors" beginning at
page 9.
In addition to his consulting fee described in the next paragraph and the
non-employee director fee described in the previous paragraph, Mr. Bodeen
received a fee of $37,500 as Chairman of the Board in 1996.
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, Mr. Bodeen receives annual
compensation of $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 fees as a Director, Chairman of the Board and
consultant described above, Mr. Bodeen receives annual retirement benefits of
$91,017 under the Company's Supplemental Retirement Benefits Plan.
OPTION GRANTS AND EXERCISES IN 1996 AND TABLE OF YEAR-END OPTION VALUES
The Company granted options to its executive officers and some of its
other employees in 1996. The following table sets forth information concerning
individual grants of stock options to the Company's executive officers during
1996.
4
<PAGE> 8
OPTION GRANTS IN 1996
<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 24,000 32.9 $7.50 01/27/06 $0 $113,202 $286,874
S. S. Penley 7,000 9.6 7.50 01/27/06 0 33,017 83,671
M. W. Nelson 10,000 13.7 7.50 01/27/06 0 47,167 119,531
- -----------------------------
</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) 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 aggregate gross value realized of
options exercised (market price on date of exercise less exercise price) by
executive officers during the fiscal year ended December 31, 1996 and year-end
value of unexercised options held by the executive officers on December 31,
1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at 12/31/96 at 12/31/96
Acquired on Value ------------------------- -----------------------------
Name Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- -------------- ------------ -------- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
L. G. Thompson 3,000 $19,875 33,000/42,000 $127,875 /$102,750
S. S. Penley 5,000 21,375 22,250/14,750 65,219 / 43,406
M. W. Nelson 0 0 14,500/22,500 52,938 / 70,813
</TABLE>
EXECUTIVE OFFICER EMPLOYMENT AGREEMENTS
In 1996, the Company entered into employment agreements with L. G.
Thompson and S. S. Penley which provide for the payment of compensation and
benefits in the event of termination following a change in control of the
Company. Each executive whose employment is terminated following a change in
control will receive compensation pursuant to the agreement only if the
termination was by the Company without cause or by the executive for good
reason. Once effective, the agreements provide, in addition to unpaid ordinary
compensation and benefits, a lump sum cash payment equal to the executive's
annual compensation times 3.0 with respect to L. G. Thompson and 2.5 with
respect to S. S. Penley.
5
<PAGE> 9
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 $21,000 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.
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
help align management's and stockholders' interests in enhancing stockholder
value. The committee has recommended that incentive pay tied to objective
performance of the Company and stock-based incentives should be significant
elements of the compensation for the executive officers.
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 levels of compensation of the Company's
executive officers.
RELATIONSHIP OF PERFORMANCE UNDER COMPENSATION PLANS
The primary measure of performance 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 up to 100% of each executive officer's target level of bonuses for 1996,
with business unit earnings performance criteria accounting for the rest in the
case of Mr. Nelson. Annual operating targets 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 1996, the executive
compensation committee awarded cash bonuses to the executive officers based on
earnings performance objectives approved by the board.
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 addition, in 1994 the Board of Directors approved a Supplemental
Executive Retirement Benefits Plan (the "Supplemental Plan"). Under the
Supplemental Plan, benefits are payable to participants to the extent such
benefits exceed the maximum
6
<PAGE> 10
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 per individual). Benefits
under these plans are not directly or indirectly tied to Company performance.
Messrs. Thompson, Penley and Nelson are participants 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. The committee considers the same factors in establishing the
Chief Executive Officer's incentive pay.
Mr. Thompson has been Chief Executive Officer since January 1, 1991. His
compensation consists of annual base salary, currently at $268,764, incentive
cash awards and stock option grants. For 1996, the Company awarded Mr.
Thompson a cash bonus of $67,950, which was based entirely on objective
performance as measured by actual net earnings against target net earnings.
MARCH 10, 1997
EXECUTIVE COMPENSATION COMMITTEE
J. T. Schanck (Chairman)
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 are participants in the
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, 1996,
the credited years of service under the Plan for Messrs. Thompson, Penley and
Nelson were 9, 9 and 13, respectively. Currently, they are the only
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>
$150,000 $25,050 $ 37,575 $ 50,100 $ 62,625 $ 75,150
200,000 33,400 50,100 66,800 83,500 100,200
250,000 41,750 62,625 83,500 104,375 125,250
300,000 50,100 75,150 100,200 125,250 150,300
350,000 58,450 87,675 116,900 146,125 175,350
400,000 66,800 100,200 133,600 167,000 200,400
450,000 75,150 112,725 150,300 187,875 225,450
</TABLE>
7
<PAGE> 11
DEFINED CONTRIBUTION PLANS
All of the executive officers are eligible to participate in one of the
Company's 401(k) defined contribution plans. Under these plans, the Company
matches 50% of the participant's contributions up to 4% of compensation.
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
capitalizations 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 31, 1991, 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
[PERFORMANCE GRAPH]
Total returns assume dividends reinvested on ex-date.
Fiscal year ending December 31.
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Lindberg Corporation $100 $ 92 $124 $178 $199 $305
Peer Group -- Metal
Processors $100 $122 $175 $147 $127 $159
Wilshire Next 1750 $100 $119 $139 $137 $179 $207
</TABLE>
8
<PAGE> 12
PROPOSED AMENDMENTS TO THE
1991 STOCK OPTION PLAN FOR DIRECTORS
The board of directors of the Company has adopted amendments to the 1991
Stock Option Plan for Directors (the "Plan"), subject to approval by
stockholders. The principal amendments are to (i) authorize the board of
directors to grant options under and administer the Plan, (ii) increase the
number of shares of common stock covered by the Plan from 72,000 to 150,000,
(iii) remove the prohibition against any director holding options on more than
9,000 shares, (iv) allow payment of the exercise price by delivery or
withholding of shares of common stock of the Company which the optionee
otherwise owns or is entitled to upon exercise, valued for this purpose at
their fair market value on the date of exercise, (v) remove the April 25, 2001
termination date of the Plan, (vi) allow exercise in full for the full term of
an option in the event of death, permanent disability or retirement at the
normal retirement age for the Company's directors, and (vii) provide that
options shall be fully exercisable in the event of a change in control of the
Company.
The Plan, a copy of which (as proposed to be amended) accompanies this
proxy statement as Appendix A, is designed to 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 Plan currently covers 72,000 shares of the Company's common stock,
which may be granted only to directors who are not employees of the Company.
The present Plan grants to each newly-elected director an option to purchase
9,000 shares of the Company's common stock. Under the proposed amendments, the
Plan will cover 150,000 shares, and authorize the board to grant additional
options to directors.
The option price for shares granted under the 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. If the proposed amendments are approved, payment of the purchase price
may also be made by delivering or withholding shares of common stock of the
Company which the optionee otherwise owns or is entitled to upon exercise,
valued for this purpose at their fair market value on the date of exercise.
Under the current Plan, all options are for a term of ten years from the
date of grant and become exercisable with respect to one-third of the shares
subject to the option on each of the first three anniversaries of their grant.
Under the proposed amendments, (i) the board of directors may grant additional
options to directors and determine if such options shall be exercisable in
installments and their term (but not longer than ten years from the date of
grant) and, (ii) currently outstanding and future options will be exercisable
in full for the remainder of their term in the event a director dies, becomes
permanently disabled or retires at the normal retirement age for the Company's
directors. Options will also become exercisable in full in the event of a
change in control of the Company, as defined in the amendments to the Plan.
The board of directors of the Company at its January 1997 meeting granted
options under the Plan as proposed to be amended to purchase 7,500 shares at an
exercise price of $9.00 per share to each of Messrs. Puth, Decker, Bodeen and
Schanck. Such options are for ten year terms, and become exercisable with
respect to one-third of the shares subject to the option on each of the first
three anniversaries of the grants. Each of the outstanding options to purchase
9,000 shares held by such persons, and the option to purchase 9,000 shares held
by Mr. Jean, were also amended to provide terms of exercise as described in the
last two sentences of the preceding paragraph. The board expects to also grant
a 7,500 share option to Mr. Jean after he has served for three years as a
director. The grants of options, and the amendments to existing options, are
subject to approval of the proposed amendments to the Plan by stockholders.
The Plan now 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. If the amendments are approved, the Plan will be administered by
the board of directors, and the board of directors will be authorized to grant
options, to interpret the Plan and to establish and modify such rules and
regulations as it deems necessary and appropriate. The board of directors may
amend or discontinue the 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.
9
<PAGE> 13
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.
Options are not transferable by the optionee otherwise than by will or the
laws of descent and distribution.
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 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.
On March 10, 1997, the closing bid price of the Company's common stock on
The Nasdaq Stock Market as reported in The Wall Street Journal was $9.00 per
share. -----------------------
VOTE NECESSARY TO APPROVE AMENDMENTS TO PLAN
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.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
THE AMENDMENTS TO THE 1991 DIRECTORS PLAN. ---
10
<PAGE> 14
STOCK OWNERSHIP
The following table sets forth information as of March 1, 1997 (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
Ira Sochet ...................................... 494,700(2) 10.3
9350 S. Dixie Highway
Suite 1260
Miami, Florida 33156
The Killen Group, Inc. .......................... 377,210(3) 7.9
1199 Lancaster Avenue
Berwyn, Pennsylvania 19312
Bank of America Illinois and G. H. Bodeen,
as co-trustees of trusts created
under the will of L. A. Lindberg and co-executors
of the S. Lindberg estate ...................... 317,125(4) 6.6
231 South LaSalle Street
Chicago, Illinois 60693
Nancy L. Bodeen(5) .............................. 310,671 6.5
1180 Whitebridge Hill
Winnetka, Illinois 60093
Dimensional Fund Advisors Inc. .................. 279,300(6) 5.8
1299 Ocean Ave., 11th Floor
Santa Monica, California 90401
DIRECTORS AND EXECUTIVE OFFICERS
G. H. Bodeen .................................... 411,875(4)(7)(8) 8.6
R. F. Decker .................................... 10,500(8) (9)
R. A. Jean ...................................... 3,500(8) (9)
J. W. Puth ...................................... 10,000(8) (9)
J. T. Schanck ................................... 10,000(8) (9)
L. G. Thompson .................................. 121,000(8) 2.5
S. S. Penley .................................... 37,000(8) (9)
M. W. Nelson .................................... 27,200(8) (9)
All directors and executive officers as a group
(8 persons) .................................... 631,075(10) 12.9
</TABLE>
11
<PAGE> 15
____________________
(1) Sole voting and dispositive power, except as otherwise indicated.
(2) Based on report of ownership on amendment to Schedule 13D, dated February
18, 1997, filed with the Securities and Exchange Commission reporting
ownership as of February 25, 1997.
(3) Based on a report of ownership on Schedule 13G, dated February 14, 1997,
filed with the Securities and Exchange Commission reporting ownership as
of December 31, 1996. The Killen Group, Inc. has sole power to vote
96,400 shares.
(4) Bank of America Illinois and G. H. Bodeen have shared voting and G. H.
Bodeen has sole dispositive power as to shares in their capacities as
co-trustees of trusts created under the will of L. A. Lindberg and as
co-executors of the estate of S. Lindberg.
(5) Nancy Bodeen 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.
(6) Based on a report of ownership on amendment to Schedule 13G, dated
February 4, 1997, filed with the Securities and Exchange Commission
reporting ownership as of December 31, 1996. Dimensional Fund Advisors
Inc. ("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 279,300 shares as of December 31, 1996, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust, and DFA Participations Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(7) G. H. Bodeen has sole voting and sole dispositive power over 94,750
shares which includes 75,750 shares he owns directly, 9,000 shares subject
to currently exercisable options, and 10,000 shares held by his personal
retirement trust of which he is co-trustee and co-beneficiary.
(8) Includes shares subject to stock options which are currently exercisable
or become exercisable within 60 days of March 1, 1997, as follows: G. H.
Bodeen, R. F. Decker, J. W. Puth, and J. T. Schanck, 9,000 shares each; R.
A. Jean, 3,000 shares; L. G. Thompson, 46,000 shares; S. S. Penley, 28,000
shares; and M. W. Nelson, 20,000 shares.
(9) Less than 1% of the outstanding shares of the Company.
(10) Includes 317,125 shares with shared voting power, and 133,000 shares
subject to stock options which are currently exercisable or become
exercisable within 60 days of March 1, 1997.
FINANCIAL STATEMENTS
Stockholders are referred to the annual report for the fiscal year ended
December 31, 1996, 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.
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, including nominations for director, 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 1998 must be received
at the principal executive office of the Company no later than November 25,
1997.
12
<PAGE> 16
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
During 1996, 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 1997.
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 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
13
<PAGE> 17
APPENDIX A
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. Options granted under this Plan are not
"Incentive Stock Options" as defined in section 422 of the Internal Revenue
Code.
2. Administration of the Plan. The Plan shall be administered by the
Board of Directors of the Company. The Board is authorized to select
optionees, to establish the number of shares and other terms applicable to each
option, and to interpret the Plan and the options granted thereunder, and to
establish and modify such rules and regulations as it deems necessary and
appropriate. The Board'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 person upon his or her first
election as a director of the Company shall be granted
an option to purchase 9,000 shares of the Company's
common stock ("Initial Option"); and
(ii) Each director shall be eligible to
receive additional options, as determined from time to
time by the Board of Directors ("Additional Options").
The aggregate number of shares which shall be available to be optioned
under the Plan shall be 150,000 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 below. If an option expires or is
terminated unexercised as to any shares, such released shares may again be
optioned.
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 Initial 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. Each Additional Option shall become exercisable
in such installments, if any, as shall be determined by the Board of Directors
at the time of grant.
<PAGE> 18
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. Payment of the
exercise price may also be made by the delivery or withholding of shares of
common stock of the Company which the optionee otherwise owns or is entitled to
upon exercise, valued for this purpose at their fair market value on the date
of exercise.
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. Change in Control. Any option granted under the Plan to an optionee
who is a director of the Company on the day preceding a "Change in Control"
shall be immediately exercisable in full on such day 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 Company 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
Company immediately prior to such merger, consolidation,
reorganization or offer;
(b) The Company 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 Company 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 Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Company's stockholders, of each new director of
the Company was approved by a vote of at least two-thirds of such
directors of the Company then still in office who were directors
of the Company at the beginning of any such period.
8. Duration and Termination of Options. Initial Options granted under the
Plan will expire ten years from the date of grant. Additional Options granted
under the Plan will expire at such time as determined by the Board of Directors
at the time of grant, but not more than ten years after the date of grant. In
the event of the death, permanent disability or retirement at normal retirement
age for the Company's directors of an optionee while serving as a director of
the Company, his or her option shall be fully exercisable (without regard to
installments) for the remainder of its term. In the event an optionee's
services as a director of the Company terminate
A-2
<PAGE> 19
for any other reason, his or her option shall be exercisable for three months
after the date of termination, but only to the extent installments were
exercisable at the date of termination (and in no event after the
expiration of such three-month period or the expiration of the term of
the option). An option may be exercised during its term by the estate
of a deceased optionee or the person or persons who acquire the right to
exercise such option by bequest or inheritance. For purposes of the Plan,
a person shall be considered to be "permanently 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 Company.
9. 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.
The Plan may be amended or discontinued by the Board of Directors at any
time. No such action shall change or impair any option previously granted
without the optionee's consent.
10. Effective Date. The Plan was adopted by the Board of Directors and
approved by stockholders in 1991, and amended by action of the Board of
Directors and stockholders in 1995. The 1997 amendments to the Plan were
adopted by the Board of Directors on January 25, 1997 and ordered to be
submitted to the stockholders of the Company for their approval; they will
become effective when so approved. The Board of Directors granted Additional
Options covering an aggregate of 30,000 shares on January 25, 1997, subject to
approval of the 1997 amendments by stockholders.
A-3
<PAGE> 20
PROXY PROXY
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 25, 1997, 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.
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
nominees listed on the reverse side and FOR Proposal 2.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE> 21
LINDBERG CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY. [Darkened oval]
The board of directors recommends that stockholders vote FOR the director
nominees listed below and FOR Proposal 2.
<TABLE>
<S> <C> <C> <C>
For Withhold For All
1. ELECTION OF DIRECTORS -- All All Except the nominee whose name appears below.
Nominees: J. W. Puth and L. G. Thompson [oval] [oval] [oval]
----------------------------
2. AMENDMENTS TO THE 1991 STOCK For Against Abstain
OPTION PLAN FOR DIRECTORS [oval] [oval] [oval]
3. IN THEIR DISCRETION, ON ANY OTHER
MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING.
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: _________________, 1997
Signature(s)
-------------------------
-------------------------------------
</TABLE>
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
2
