<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Anacomp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
Suzanne Bellamy
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
ANACOMP, INC.
11550 NORTH MERIDIAN STREET
P.O. BOX 40888
INDIANAPOLIS, INDIANA 46240
(317) 844-9666
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
To Our Shareholders:
The 1995 Annual Meeting ("Annual Meeting") of Shareholders of Anacomp,
Inc., will be held at the Red Lion Inn, 7450 Hazard Center Drive, San Diego,
California on January 27, 1995, at 11:00 a.m., for the following purposes:
1. To elect seven directors for a one-year term.
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
If you do not expect to attend the meeting, please sign, date and return
the enclosed proxy in the enclosed return envelope to which no postage need be
affixed if mailed in the United States.
Only shareholders of record at the close of business on December 2, 1994,
will be entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. In the event there are not sufficient votes for approval
of one or more of the above matters at the time of the Annual Meeting, the
Annual Meeting may be adjourned in order to permit further solicitation of
proxies.
By order of the Board of Directors,
Louis P. Ferrero
Chairman of the Board
Dated: December 22, 1994
Indianapolis, Indiana
PLEASE SIGN AND RETURN
THE ENCLOSED PROXY
<PAGE> 3
ANACOMP, INC.
11550 NORTH MERIDIAN STREET
P.O. BOX 40888
INDIANAPOLIS, INDIANA 46240
(317) 844-9666
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 27, 1995
PROXY STATEMENT
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished to the holders (the "Shareholders") of
Common Stock, par value $.01 per share (the "Common Stock") of Anacomp, Inc., an
Indiana corporation (the "Company"), by the Board of Directors in connection
with the solicitation of proxies to be used in voting at the 1995 Annual Meeting
of Shareholders to be held on January 27, 1995 at the Red Lion Inn, 7450 Hazard
Center Drive, San Diego, California, and at any adjournments thereof. The
approximate date on which this Proxy Statement and the accompanying form of
proxy are being mailed to Shareholders is December 22, 1994.
The enclosed proxy is solicited by the Board of Directors of the Company. A
person giving a proxy has the power to revoke it at any time before it is
exercised by giving written notice to the Secretary of the Company or by
attending the Annual Meeting and voting in person. The proxy, if returned
properly executed and not subsequently revoked, will be voted in accordance with
the choices made by the Shareholders with respect to the proposals listed
thereon. IF A CHOICE IS NOT MADE WITH RESPECT TO THE PROPOSALS, THE PROXY WILL
BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES. IF ANY OTHER
MATTERS SHOULD BE PRESENTED AT THE ANNUAL MEETING, THE HOLDERS OF THE PROXIES
WILL VOTE ON SUCH MATTERS IN ACCORDANCE WITH THE VIEWS OF A MAJORITY OF THE
DIRECTORS.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspectors of election appointed for the meeting, and such inspectors will
determine whether or not a quorum is present. The presence in person or by proxy
of the holders of a majority of the outstanding Common Stock in the aggregate
constitutes a quorum for the transaction of business. The inspectors of election
will treat abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the Shareholders for a vote.
If a quorum exists, action on any matter (other than the election of Directors)
is approved if the votes properly cast favoring the action exceed the votes
properly cast opposing the action. Directors shall be elected by a plurality of
the votes properly cast. If a broker indicates on the proxy that it does not
have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present and entitled to vote with
respect to that matter.
The cost of this solicitation will be borne by the Company. In addition to
the solicitation of proxies by use of the mails, officers and regular employees
of the Company may communicate with Shareholders personally or by mail,
telephone, telegram or otherwise for the purpose of soliciting such proxies. The
Company has also retained Chemical Bank to aid in the solicitation of proxies
from individual shareholders, brokerage firms, banks and institutional holders
of shares. The fee for such services is $7,000 plus expenses. The Company will
reimburse brokers and other nominees for their reasonable out-of-pocket expenses
in forwarding solicitation material to beneficial owners of shares held of
record by such brokers or nominees. A copy of the Company's Annual Report to
Shareholders accompanies this Proxy Statement. THE COMPANY WAS REQUIRED TO FILE
AN ANNUAL REPORT FOR ITS FISCAL YEAR ENDED SEPTEMBER 30, 1994 ON FORM 10-K WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"). A COPY OF THE FORM
10-K IS INCLUDED WITH THE COMPANY'S ANNUAL REPORT TO SHAREHOLDERS. SHAREHOLDERS
MAY OBTAIN A COPY OF THE COMPLETE EXHIBITS TO THE FORM 10-K BY WRITING TO
ANACOMP, INC., 11550 N. MERIDIAN STREET, P.O. BOX 40888, INDIANAPOLIS, INDIANA
46240.
<PAGE> 4
VOTING SECURITIES
As of December 2, 1994, the record date for the determination of
Shareholders entitled to notice of and to vote at the meeting, there were
45,784,836 shares of Common Stock issued and outstanding. All amounts listed
herein for shares of Common Stock of the Company and for prices for such shares
have been adjusted for all stock dividends and stock splits declared. Each share
of Common Stock is entitled to one vote on all matters.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHER BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock by each director and named executive officer and by
all directors and executive officers of the Company as a group and of certain
other beneficial owners of more than 5% of any class of the Company's voting
securities as of December 1, 1994, unless otherwise noted. Each such person has
sole voting and dispositive power with respect to such securities, except as
otherwise indicated.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES OF STOCK PERCENT
NAME BENEFICIALLY OWNED OF CLASS
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
Louis P. Ferrero 990,968(a) 2.1%
Clark A. Johnson 50,000(b) 0.1%
Richard E. Neal 93,505(c) 0.2%
Roger S. Palamara 118,013(d) 0.3%
Paul G. Roland 67,138(e) 0.1%
J. Mark Woods 557,918(f) 1.2%
Frederick W. Zuckerman 54,626(g) 0.1%
Jack R. O'Donnell 129,502(h) 0.3%
P. Lang Lowrey 64,377(i) 0.1%
Thomas R. Simmons 189,631(j) 0.4%
All directors and executive officers of the Company as a group (18
persons) 2,967,936(k) 6.2%
OTHER BENEFICIAL OWNERS
Merrill Lynch & Co., Inc.
World Financial Center
250 Vesey St.
New York, NY 10281-1323 4,058,941(l) 8.8%
Wellington Management Co.
75 State St.
Boston, MA 02109 3,462,250(m) 7.6%
</TABLE>
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(a) Includes 11,428 shares issuable upon the conversion of the Company's
13 7/8% Convertible Subordinated Debentures due January 15, 2002, and
828,314 shares issuable upon the exercise of stock options.
(b) Includes 40,000 shares issuable upon the exercise of stock options.
(c) Includes 50,000 shares issuable upon the exercise of stock options.
(d) Includes 50,000 shares issuable upon the exercise of stock options.
(e) Includes 50,000 shares issuable upon the exercise of stock options.
2
<PAGE> 5
(f) Includes 430,859 shares issuable upon the exercise of stock options.
(g) Represents 54,626 shares issuable upon the exercise of stock options.
(h) Includes 83,334 shares issuable upon the exercise of stock options.
(i) Includes 64,334 shares issuable upon the exercise of stock options.
(j) Includes 183,417 shares issuable upon the exercise of stock options.
(k) Includes 11,656 shares issuable upon the conversion of the Company's 13 7/8%
Convertible Subordinated Debentures due January 15, 2002, and 2,403,723
shares issuable upon the exercise of stock options.
(l) Includes 553,541 shares issuable upon the exercise of the Company's Common
Share Warrants. All shares represented have shared voting power and
dispositive power.
(m) Represents 737,550 shares with shared voting power and 2,724,700 shares with
shared dispositive power.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's stock, to file initial reports of ownership and reports of changes
in ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Officers, directors and greater than ten-percent beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that, during the fiscal year ended September 30,
1994, all Section 16(a) filings were made on a timely basis.
ELECTION OF DIRECTORS
(PROPOSAL 1)
At the annual meeting seven directors are to be elected to serve for the
ensuing year and until their respective successors are elected and qualified.
The shares represented by the proxies will be voted for the nominees of the
Board of Directors named below, unless otherwise specified on the proxy.
Pursuant to the provisions of the By-Laws, the Board of Directors has fixed the
number of directors at seven. All directors are elected annually.
If any nominee becomes unavailable for any reason or a vacancy should occur
before election (which events are not anticipated), the shares represented by
the proxies may be voted for such other person as may be determined by the
holders of such proxies in accordance with the views of a majority of the
directors.
3
<PAGE> 6
The following table sets forth the name of each nominee for director, his
principal occupation and five-year business history, the year in which he first
served as a director of the Company and his age.
<TABLE>
<CAPTION>
INITIAL SERVICE
NAME AND AGE PRINCIPAL OCCUPATION AS A DIRECTOR
<S> <C> <C>
- --------------------------------------------------------------------------------------------------
Louis P. Ferrero, 52 Chairman of the Board and Chief Executive 1984
Officer
Clark A. Johnson, 63 Chairman of the Board and Chief Executive 1991
Officer, Pier 1 Imports, Inc., Ft. Worth, TX
Richard E. Neal, 69 Retired Executive Vice President, City 1984
Securities Corp., Indianapolis, IN
Roger S. Palamara, 48 Vice President, International Banking, Bank 1983
One, Indianapolis, IN
Paul G. Roland, 60 Attorney and Partner of Ruckelshaus, 1984
Roland, Hasbrook & O'Connor,
Indianapolis, IN
J. Mark Woods, 52 President and Chief Operating Officer 1988
Frederick W. Zuckerman, 60 Vice President and Treasurer, IBM 1990
Corporation, Armonk, NY
</TABLE>
Mr. Ferrero was appointed as President of the Company in May, 1984, and
became a member of the Offices of the Chairman of the Board and Chief Executive
Officer on November 6, 1984. On February 5, 1985, the Board of Directors of the
Company amended the By-Laws of the Company to eliminate the Office of the
Chairman of the Board and Office of the Chief Executive Officer and elected Mr.
Ferrero Chairman of the Board and Chief Executive Officer. Mr. Ferrero has been
a member of the Company's senior management team since he joined the Company in
1979 as part of the Company's acquisition of Computer Micrographics, Inc. At the
Company, Mr. Ferrero initially served as a Senior Vice President with
responsibility for micrographics field operations, and later became a Senior
Division Vice President with responsibility for new business development. Mr.
Ferrero is also a director of Conseco, Inc.
The United States Securities and Exchange Commission (the "SEC") conducted
an investigation relating to the trading of the Common Stock of Xidex
Corporation ("Xidex") prior to the announcement in July 1988 of the possible
acquisition of Xidex by the Company. In January, 1991, the SEC approved bringing
a civil action against Mr. Ferrero and others alleging that Mr. Ferrero had been
a source of information to others who traded prior to such announcement. The SEC
allegations did not include any trading by, or financial benefit to, Mr.
Ferrero. In March 1991, Mr. Ferrero settled the charges with the SEC without
admitting or denying guilt and paid a fine of $277,750. Pursuant to the
Company's Restated Articles of Incorporation and Mr. Ferrero's Amended and
Restated Employment Agreement, the Board of Directors indemnified Mr. Ferrero
the amount of the SEC settlement plus an amount equal to the Federal and State
tax liability incurred by Mr. Ferrero as a result of such indemnification (a
total of $428,000) plus legal fees in the amount of $35,000.
Mr. Johnson joined Pier 1 Imports in 1985 as President and Chief Executive
Officer and was elected Chairman and Chief Executive Officer in 1988. Mr.
Johnson is also a director of Albertsons, Inc., Actava, Inc., Heritage Media,
and InterTAN, Inc.
Mr. Neal retired as an Executive Vice President of the investment banking
firm of City Securities Corporation in Indianapolis, Indiana in June, 1994, a
position which he held for more than the prior five years.
Mr. Palamara has been Vice President of Bank One, Indianapolis, N.A., in
charge of its International Services Department, since June 19, 1984.
Mr. Roland has been a partner with the law firm of Ruckelshaus, Roland,
Hasbrook & O'Connor for more than the past five years.
4
<PAGE> 7
Mr. Woods was elected President and Chief Operating Officer of the Company
in February, 1993. He had previously served as Executive Vice President and
Chief Operating Officer since May, 1989. From August, 1988 through April, 1989,
he served as President of the Micrographics Group. He served as Executive Vice
President and Chief Operating Officer of the Company from January, 1985 to
August, 1988. He was Senior Vice President, Eastern Division, Micrographics, for
the three years prior to that appointment. For more than the two years prior to
that, he was a data center manager. He was elected a member of the Office of the
President, Micrographics Division, in 1984.
Mr. Zuckerman joined IBM Corporation in September, 1993, as IBM Vice
President and Treasurer. Prior to that, he was with RJR Nabisco, Inc. as Senior
Vice President and Treasurer from February, 1991. Prior to that, he was an
independent consultant and professional director. From 1981 until September 30,
1990, he was Vice President and Treasurer of Chrysler Corporation. Mr. Zuckerman
is also a director of Northeast Federal Corporation, Meditrust, Inc., The
Singapore Fund, Northeast Savings Bank, The Turner Corporation, The Japan Equity
Fund and NVR, Inc.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held seven meetings in the fiscal
year ended September 30, 1994. No director attended less than 75% of the
meetings held by the Board of Directors and the committees on which he served.
The Board of Directors of the Company has an Audit Committee, a Compensation
Committee, and a Nominating Committee.
The members of the Company's Audit Committee during the fiscal year ended
September 30, 1994 were Messrs. Palamara, Neal, Roland and Zuckerman. The Audit
Committee met two times during the fiscal year ended September 30, 1994. The
principal duties assigned to the Audit Committee are to recommend to the Board
of Directors the accounting firm to be selected as independent accountants of
the Company and to meet with the Company's independent accountants after
completion of the annual audit and their rendering of their opinion as a result
thereof, to discuss their comments thereon and the Company's accounting methods
and procedures as the Audit Committee deems appropriate.
The Nominating Committee, composed of Messrs. Ferrero, Woods, Johnson, Neal
and Roland did not meet during the fiscal year ended September 30, 1994. It is
the responsibility of the Nominating Committee to review and report to the Board
of Directors concerning possible nominees for election to the Board of
Directors. The Nominating Committee does not presently solicit nominations from
Shareholders. During the fiscal year ended September 30, 1994, the Board of
Directors as a whole performed the functions of the Nominating Committee.
The Compensation Committee, composed of all non-employee directors, met two
times during the fiscal year ended September 30, 1994. The Compensation
Committee meets at the convenience of the Board of Directors to determine the
compensation of the Chief Executive Officer and to review the compensation of
other executive officers of the Company. The Compensation Committee also
oversees the Employee Stock Purchase Plans, the Stock Option Plans, the Deferred
Compensation Plan, the 1988 Executive Deferred Compensation Plan and the
Deferred Stock Option Plan.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $1,000 for each
directors' meeting attended, $750 for each committee meeting attended and an
annual retainer of $20,000. Employee directors receive no fees. Under the
Company's Stock Option Plans (1986 and 1987), directors are eligible to receive
stock options in the amounts specified in such Plans. Mr. Zuckerman has an
arrangement with the Company under which he receives $55,000 per year for
providing financial consulting services.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth as to the Company's
Chief Executive Officer and the other four most highly compensated executive
officers all compensation awarded to, earned by, or paid to said individuals
(the "Named Executive Officers") for all services rendered in all capacities to
the Company and its subsidiaries for the fiscal years ended September 30, 1994,
1993 and 1992, except as may otherwise be specifically noted.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------
OTHER ANNUAL STOCK
FISCAL SALARY BONUS COMPENSATION OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1)(2) (#) COMPENSATION(1)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Louis P. Ferrero, 1994 $500,000 $260,661 -- 0 $53,122(3)(4)
Chairman and Chief 1993 500,000 347,735 -- 300,000 68,012(3)(4)
Executive Officer 1992 350,000 867,851 -- 0 --
J. Mark Woods, 1994 250,000 229,500 -- 0 1,000(4)
President and Chief 1993 250,000 219,250 -- 200,000 1,000(4)
Operating Officer 1992 200,000 181,182 -- 0 --
Jack R. O'Donnell, 1994 160,000 170,331 -- 0 0
Executive Vice President, 1993 160,000 161,080 -- 50,000 0
Treasurer and Chief 1992 89,231 143,333 -- 75,000 --
Financial Officer
P. Lang Lowrey, 1994 147,500 180,836 -- 0 0
Vice President, 1993 147,500 130,243 -- 80,000 0
Magnetics Group 1992 147,500 133,622 -- 0 --
Thomas R. Simmons 1994 147,500 137,011 -- 0 1,000(4)
Vice President, Direct 1993 147,500 153,892 -- 100,000 1,000(4)
Sales Division -- East 1992 147,500 128,218 -- 0 --
</TABLE>
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(1) In accordance with the transitional provisions applicable to the revised
rules on executive officer and director compensation disclosure adopted by
the Securities and Exchange Commission, amounts of Other Annual
Compensation and All Other Compensation are excluded for the Company's 1992
fiscal year.
(2) The aggregate amount of perquisites and other personal benefits, securities
or property, given to each Named Executive Officer valued on the basis of
aggregate incremental cost to the Company did not exceed the lesser of
$50,000 or 10% of the total of annual salary and bonus for each such
officer during fiscal 1994 and fiscal 1993.
(3) $52,122 of this amount represents the imputed interest in 1994 ($67,012 in
1993) on Mr. Ferrero's loan from the Company, the terms of which are set
forth below in the Employment Contracts section of this Proxy Statement.
The interest is calculated on the basis of the applicable federal rate
computed by the Internal Revenue Service.
(4) These figures include the following contributions made by the Company to the
Anacomp Savings Plus Plan for fiscal 1994 and fiscal 1993: for Mr. Ferrero,
Mr. Woods and Mr. Simmons, $1,000 each per year.
6
<PAGE> 9
STOCK OPTIONS
No stock option grants were made to any of the Named Executive Officers
during fiscal 1994.
The following table sets forth information regarding all options exercised
during fiscal 1994 or held at September 30, 1994 by the Named Executive
Officers.
AGGREGATED OPTION EXERCISES IN FISCAL 1994
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED FY-END (#) FY-END ($)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Louis P. Ferrero 0 0 728,315/199,998 $628,313/$ 0
J. Mark Woods 0 0 364,192/133,333 $297,525/$ 0
Jack R. O'Donnell 0 0 66,667/ 58,333 $ 0/$ 0
P. Lang Lowrey 0 0 37,667/ 53,333 $ 11,000/$ 0
Thomas R. Simmons 0 0 150,084/ 66,666 $117,375/$ 0
</TABLE>
- ---------------
(1) Based on the September 30, 1994 closing price of $3.00 on the New York Stock
Exchange -- Composite Transactions of the Company's Common Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors are
Messrs. Johnson, Neal, Palamara, Roland and Zuckerman, none of whom are
employees of the Company.
EMPLOYMENT CONTRACTS
All of the Named Executive Officers are party to employment agreements with
the Company. Set forth below is a brief description of each such agreement.
LOUIS P. FERRERO. As of October 1, 1992, Mr. Ferrero entered into a
three-year Employment Agreement with the Company which expires on September 30,
1995. Mr. Ferrero's compensation plan for fiscal years 1994 and 1995 includes a
base salary of $500,000 and a minimum annual bonus equal to 1.7% of the
Company's net before-tax income. Thirty-five percent (35%) of Mr. Ferrero's
gross annual bonus is applied toward repayment of his outstanding loan described
below. The bonus is advanced each quarter based on quarterly results and is
adjusted at fiscal year end.
In 1987, the Company loaned Mr. Ferrero $1,800,000 (approximately
$1,087,000 of which is currently outstanding after receipt of approximately
$93,000 from his fiscal 1994 bonus). The loan is evidenced by a promissory note
(the "Note") and is currently secured by a security interest in Mr. Ferrero's
stock options and a right of set-off against any severance allowance to which
Mr. Ferrero may be entitled. The Note does not bear interest during the pendency
of Mr. Ferrero's full-time employment with the Company and is payable in one
installment due no later than two years after the termination of Mr. Ferrero's
employment with the Company or, upon demand in the event of a voluntary
resignation or termination with cause. In the event Mr. Ferrero's employment is
terminated due to a merger, consolidation or transfer of all or substantially
all of the Company's assets or a change in control of the Company, Mr. Ferrero's
loan will be forgiven in full.
7
<PAGE> 10
Mr. Ferrero's Employment Agreement provides that he will not compete with
the Company for a period of thirty-six months following any termination of
service. In consideration for such covenant not to compete, Mr. Ferrero has the
right to purchase up to 255,000 Common Stock options (at an exercise price of
$2.00 per share) at a purchase price of $1.00 per option during the term of his
current Employment Agreement or any extension thereof.
Mr. Ferrero's Employment Agreement further provides that in the event of a
merger or consolidation where the Company is not the surviving company, or a
transfer of all or substantially all of the Company's assets or a change in
control of the Company, Mr. Ferrero will receive a severance allowance equal to
his prior twenty-four months' compensation, including bonuses and the value of
Mr. Ferrero's loan (if such loan does not remain outstanding), but excluding
insurance benefits, other benefits that Mr. Ferrero continues to receive during
such twenty-four month period and the one-time bonus of $500,000 received by Mr.
Ferrero on January 1, 1992 (collectively, the "Severance Allowance"), if the
surviving or controlling company does not agree to be bound by the terms of the
Employment Agreement. In no event shall Mr. Ferrero's Severance Allowance exceed
$2,000,000. If the surviving or controlling company agrees to be bound by Mr.
Ferrero's Employment Agreement, Mr. Ferrero may nonetheless, within six months
after the occurrence of such merger, consolidation, transfer or change in
control, elect to treat the Employment Agreement as terminated and receive the
Severance Allowance. In addition, Mr. Ferrero is entitled to the Severance
Allowance if he is terminated without cause by the Company, if he deems a
termination to have occurred due to a demotion, transfer or reduction in
compensation or if his Employment Agreement is not renewed at the end of its
current term or any extension thereof.
J. MARK WOODS. Mr. Woods entered into a three-year Employment Agreement
with the Company which expires on September 30, 1995. He also entered into a
covenant not to compete with the Company for a period of two years following any
termination of employment. Such covenant provides that it shall be void in the
event of a change of control of the Company. Mr. Woods' compensation plan for
fiscal year 1995 includes a base salary of $350,000 and $150,000 in bonus
payments, provided that the Company meets 100% of certain revenue and profit
objectives for the fiscal year. The bonus is paid at the rate of one-fourth each
quarter based on quarterly results and is adjusted at fiscal year end.
Mr. Wood's Employment Agreement provides that in the event of a merger or
consolidation where the Company is not the surviving company, or a transfer of
all or substantially all of the Company's assets or a change in control of the
Company, Mr. Woods will receive a severance allowance equal to his prior twenty-
four months' compensation if the surviving or controlling company does not agree
to be bound by the terms of such Agreement. If the surviving or controlling
company does agree to be bound by Mr. Woods' Employment Agreement, he may
nonetheless, within six months after the occurrence of such merger,
consolidation, transfer or change in control, elect to treat such Agreement as
terminated and receive the severance allowance. In addition, Mr. Woods is
entitled to such severance allowance if he is terminated without cause by the
Company or if he deems a termination to have occurred due to a demotion,
transfer or reduction in compensation.
JACK R. O'DONNELL. Mr. O'Donnell entered into a three-year Employment
Agreement with the Company which expires on February 28, 1995. He has also
entered into a covenant not to compete unfairly with the Company for a period of
two years following any termination of employment. Mr. O'Donnell's compensation
plan for fiscal year 1995 includes a base salary of $224,000 and $96,000 in
bonus payments, provided that the Company meets 100% of certain revenue and
profit objectives for the fiscal year. The bonus is paid at the rate of
one-fourth each quarter based on quarterly results and is adjusted at fiscal
year end.
Mr. O'Donnell's Employment Agreement provides that in the event of a merger
or consolidation or a transfer of substantially all of the Company's assets or a
change in control of the Company, Mr. O'Donnell will receive a severance
allowance equal to his prior twenty-four months' compensation if he is
subsequently terminated without cause or if he deems a termination to have
occurred due to a demotion, transfer or reduction in compensation. Mr. O'Donnell
is also entitled to such severance allowance if he is terminated without cause
by the Company or if he deems a termination to have occurred due to a demotion,
transfer or reduction in compensation.
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P. LANG LOWREY. Mr. Lowrey entered into a three-year Employment Agreement
with the Company which expired on September 30, 1992. Such Agreement was renewed
for a third one-year term which expires on September 30, 1995. He also entered
into a covenant not to compete with the Company for a period of two years
following any termination of employment. Mr. Lowrey's compensation plan for
fiscal year 1995 includes a base salary of $252,000 and $108,000 in bonus
payments, provided that the Magnetics Group meets 100% of certain revenue and
profit objectives for the fiscal year. The bonus is paid at the rate of
one-fourth each quarter based on quarterly results and is adjusted at fiscal
year end.
Mr. Lowrey's Employment Agreement provides that in the event of a merger or
consolidation where the Company is not the surviving company and the surviving
company does not agree to be bound by the terms of such Agreement, or a transfer
of all or substantially all of the Company's assets where the transferee does
not agree to be bound by the terms of such Agreement, or a change in control of
the Company or a discontinuance of the business by the Company, Mr. Lowrey may
elect to treat any such occurrence as a termination of such Agreement and
receive a severance allowance equal to the greater of $250,000 or his prior
twelve months' compensation. In addition, Mr. Lowrey is entitled to such
severance allowance if he is terminated without cause by the Company or if he
deems a termination to have occurred due to a demotion, change in the Company's
management to whom he reports, transfer, reduction in compensation or an
intentional interference by the Company with the performance of his duties.
THOMAS R. SIMMONS. Mr. Simmons entered into a three-year Employment
Agreement with the Company which expires on September 30, 1995. He has also
entered into a covenant not to compete with the Company for a period of two
years following any termination of employment. Mr. Simmons' compensation plan
for fiscal year 1995 includes a base salary of $206,500 and $88,500 in bonus
payments, provided that the Direct Sales Division-East meets 100% of certain
revenue and profit objectives for the fiscal year. The bonus is paid at the rate
of one-fourth each quarter based on quarterly results and is adjusted at fiscal
year end.
Mr. Simmons' Employment Agreement provides that in the event of a merger or
consolidation or a transfer of substantially all of the Company's assets or a
change in control of the Company, Mr. Simmons will receive a severance allowance
equal to his prior twelve months' compensation if he is subsequently terminated
without cause or if he deems a termination to have occurred due to a demotion,
transfer or reduction in compensation. Mr. Simmons is also entitled to such
severance allowance if he is terminated without cause by the Company or if he
deems a termination to have occurred due to a demotion, transfer or reduction in
compensation.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
As discussed above, the Employment Agreements of Mr. Ferrero, Mr. Woods,
Mr. O'Donnell, Mr. Lowrey and Mr. Simmons provide for certain payments in the
event of a termination of employment or a change of control of the Company.
BOARD OF DIRECTORS'
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors exercises power over
the compensation arrangement of the Chairman/Chief Executive Officer, reviews
annually the compensation arrangements of all other executive officers and
oversees the Company's various incentive programs, including the Employee Stock
Purchase Plan, Stock Option Plans, Deferred Compensation Plans and Deferred
Stock Option Plan. The Committee is composed of all non-employee directors.
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<PAGE> 12
The compensation policy of the Company, which is endorsed by the Committee,
is that a substantial portion of the annual compensation of each executive
officer relates to and is contingent upon the individual executive's
performance. As a result, much of an executive officer's annual compensation is
"at risk," at target levels during fiscal 1994 amounting to approximately 50% of
total cash compensation.
The executive officers' performance for purposes of compensation decisions
is measured under the annual bonus plan against goals established by the Chief
Executive Officer and by the President and Chief Operating Officer and reviewed
by the Committee at the start of the fiscal year. As a general principle during
fiscal 1994, the bonus goals of the executive officers were tied 70% to a profit
objective and 30% to a revenue objective, in most cases at levels incentivising
the executive officer to achieve profit and revenue objectives higher than the
prior year's actual results.
The Committee's goal is to set total cash compensation at levels required
to attract and retain qualified persons in executive officer positions. To
assist the Committee in this judgment, the Company has retained the services of
an outside consulting firm which has compared levels of compensation of the
Company's executive officers with compensation levels for officers of 21 other
companies, primarily in the electronics, electrical equipment, precision
instruments, and computer industries. The consulting firm has reported to the
Company that the total compensation of the Company's executive officers is
competitive, that is, on balance in the middle range of compensation levels of
the companies in the comparison group.
The companies in the executive compensation comparison group are not the
same as those included in the stock price performance graph following this
report. The Committee believes the market for executive talent, and thus the
companies appropriate for executive pay comparisons, are different from the
companies that may be alternative investments for shareholders.
The compensation of the Chief Executive Officer for the fiscal year ending
September 30, 1994 was determined pursuant to a three-year employment agreement
entered into prior to October 1, 1992, the terms of which are set forth in the
Executive Compensation section of this Proxy Statement. Accordingly, all
Committee decisions for the fiscal year ending September 30, 1994 with respect
to Chief Executive Officer compensation were made prior to the period covered by
this Report.
Compensation Committee of the Board of
Directors
Clark A. Johnson
Richard E. Neal
Roger S. Palamara
Paul G. Roland
Frederick W. Zuckerman
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PERFORMANCE GRAPH
Set forth below is a graph showing the five-year cumulative total return
(assuming reinvestment of dividends) of the Company's Common Stock as compared
with Standard & Poor's 500 Stock Index and the Standard & Poor's 500 Computer
Software and Services Index (performance through September, 1994).
<TABLE>
<CAPTION>
S&P Computer
Measurement Period Software and
(Fiscal Year Covered) Anacomp, Inc. S&P 500 Services
<S> <C> <C> <C>
1989 100 100 100
1990 40 91 64
1991 65 119 99
1992 65 132 121
1993 58 149 161
1994 60 155 192
</TABLE>
INDEPENDENT ACCOUNTANTS
Arthur Andersen & Co. has served as the Company's independent accountant
for its most recently completed fiscal year. Representatives of Arthur Andersen
& Co. have been invited to attend the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so and will be available to
respond to Shareholders' questions.
SHAREHOLDER PROPOSALS
Any proposal which a Shareholder intends to submit for consideration by the
Shareholders at the next Annual Meeting of Shareholders of the Company must be
received by the Company by August 18, 1995. Any such proposals should be sent to
the Secretary of the Company at 11550 North Meridian Street, P.O. Box 40888,
Indianapolis, Indiana 46240.
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OTHER BUSINESS
The Board of Directors knows of no other business which may come before the
Annual Meeting of Shareholders. If any other business should come before the
Meeting, the proxyholders intend to vote the proxies received in accordance with
the business judgment of the proxyholders, and discretionary authority to do so
is included in the accompanying form of Proxy.
By Order of the Board of Directors,
Louis P. Ferrero
Chairman of the Board
December 22, 1994
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ANACOMP, INC.
11550 NORTH MERIDIAN STREET
P.O. BOX 40888
INDIANAPOLIS, INDIANA 46240
PROXY FOR THE 1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Louis P. Ferrero and William C. Ater,
and each of them, proxies and attorneys-in-fact, with the power of substitution
(the action of both of them or their substitutes present and acting or if only
one be present and acting then the action of such one to be in any event
controlling), to vote all stock of the undersigned at the 1995 Annual Meeting
of Shareholders of Anacomp, Inc., and at any adjournment thereof as follows:
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<PAGE> 16
<TABLE>
<CAPTION>
<S> <C>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE /X/ Please mark
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR your choice
PROPOSAL 1. like this in blue
or black ink.
------------------
COMMON
1. The election of the nominees for director as set forth in 2. To vote in accordance with the views of a majority of the
the Proxy Statement accompanying the Notice of Meeting Board of Directors on the transaction of such other busi-
and listed below. ness as may properly come before the meeting and any
adjournment thereof.
Messrs. L.P. Ferrero, C.A. Johnson, R.E. Neal, R.S. Palamara,
P.G. Roland, J.M. Woods, F.W. Zuckerman.
FOR all WITHHOLD AUTHORITY
nominees to vote for all nominess
listed above. listed above.
/ / / / If you plan to attend the annual / /
meeting, please mark the box.
WITHHOLD AUTHORITY to vote for the following only (Write that nominee's name
in the space provided below)
- ----------------------------------------------------------------------------
Signature(s)__________________________________________________________________________ Date________________________________
NOTE: Please sign exactly as name appears hereon, indicating official capacity. Joint
shareowners should all sign.
</TABLE>
