<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
THE MONARCH MACHINE TOOL COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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
THE MONARCH MACHINE TOOL COMPANY
SIDNEY, OHIO 45365
[MONARCH LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1997
The Annual Meeting of Shareholders of THE MONARCH MACHINE TOOL COMPANY, an
Ohio corporation, will be held at the office of the Company, 615 North Oak
Street, Sidney, Ohio, on Tuesday, May 6, 1997, at 1:00 o'clock p.m., Eastern
Daylight Savings Time, for the following purposes:
1. To elect three Directors to serve for a term expiring in 2000; and
2. To act upon such other matters as may properly come before the meeting.
The close of business on March 18, 1997, has been fixed by the Board of
Directors as the record date for determining shareholders entitled to notice of
the meeting and to vote.
By Order of the Board of Directors
RICHARD E. CLEMENS
President and Chief
Executive Officer
April 1, 1997
IMPORTANT
YOUR PROXY IS ENCLOSED, PLEASE SIGN AND RETURN YOUR PROXY NOW.
THE ENCLOSED RETURN ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
THE MONARCH MACHINE TOOL COMPANY
615 NORTH OAK STREET
SIDNEY, OHIO 45365
------------------
PROXY STATEMENT
------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 6, 1997
SOLICITATION OF PROXY
The accompanying Proxy is being solicited by the Board of Directors, and
the persons named in the Proxy have been selected by it. Solicitation is to be
made through the mails; the cost of preparing, assembling, and mailing the form
of Proxy and material used in the solicitation is to be paid by the Company. The
shares represented by Proxies in the accompanying form that are duly executed
and received by the Board of Directors before 1:00 o'clock p.m., on May 6, 1997,
will be voted. This Notice and Proxy Statement is being mailed to shareholders
on April 1, 1997.
REVOCATION OF PROXY
A shareholder may revoke a proxy at anytime prior to its exercise by
delivering to the Company a later dated Proxy or by giving notice to the Company
in writing or in open meeting.
VOTING SECURITIES
In accordance with the Regulations of the Company, the Board of Directors
has designated the close of business on March 18, 1997, as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting. As of that date, an aggregate of 3,776,724 voting shares, comprised of
3,761,967 Common Shares and 14,757 Series A Preferred Shares, were outstanding
and entitled to one vote each.
The holders of voting shares represented, in person or by proxy, at the
Annual Meeting constitute a quorum for the election of directors; but for any
other purpose, the holders of a majority of the outstanding voting shares of the
Company must be represented at the meeting, in person or by proxy.
Shares represented by proxies received by the Company will be counted as
present at the Annual Meeting for the purpose of determining the existence of a
quorum, regardless of how or whether such shares are voted on a specific
proposal. Abstentions will be treated as votes cast on a particular proposal as
well as shares present at the Annual Meeting. Where nominee shareholders are not
permitted to vote on a specific issue because they did not receive specific
<PAGE> 4
instructions on the specific issue from the beneficial owners of the shares
("Broker Nonvotes"), such Broker Nonvotes will be treated as not present at the
meeting for purposes of calculating the results of the vote on the specific
issue. Accordingly, abstentions and Broker Nonvotes have the effect of a
negative vote on any proposal where the vote required to pass the proposal is a
percentage of the outstanding shares, but only abstentions have the effect of a
negative vote when the vote required to pass a proposal is a percentage of the
shares present at the Annual Meeting.
Under Ohio General Corporation Law, the nominees for election as Directors
receiving the most votes are elected. Ohio law also provides that, if notice in
writing is given by any shareholder to the President, a Vice President, or the
Secretary of the Company not less than 48 hours before the time fixed for the
holding of the meeting that he desires that the voting for the election of
Directors be cumulative, and, if an announcement of the giving of the notice is
made upon the convening of the meeting, each shareholder shall have the right to
cumulate such voting power as he possesses in the election of Directors and to
give one candidate as many votes as the number of Directors to be elected
multiplied by the number of his votes equals, or to distribute his votes on the
same principle among two or more candidates, as he sees fit.
In the event that Directors are elected by cumulative voting and the
cumulated votes represented by Proxies given to the Board of Directors are
insufficient to elect all the nominees of the Board, then the Board's proxy
agents will vote such proxies cumulatively for the election of as many of the
nominees named below as possible, and in such order as the proxy agents may
determine. The order in which proxies may be cumulated by the proxy agents will
depend on a number of factors, including the number of directors that can be
elected based upon the shares voted for the Board's nominees and the manner in
which shareholders cumulate their votes in favor of particular candidates.
BOARD OF DIRECTORS
The Company's Board of Directors is divided into three classes, with two
classes comprised of three directors and one class comprised of four directors.
One class of directors is elected at each Annual Meeting of Shareholders for a
term of three years.
At the 1997 Annual Meeting, shareholders will elect three directors who
will hold office until the Annual Meeting of Shareholders in 2000. The three
persons who have been nominated by the Board of Directors are William A. Enouen,
David E. Lundeen, and John M. Richardson, all of whom are currently directors of
the Company. In case any of these nominees is, for any reason, not a candidate
at the Annual Meeting, the Proxy to that extent will be voted for such person or
persons as the Board of Directors may recommend. The Board, however, knows of no
reason to anticipate that this will occur.
2
<PAGE> 5
Richard E. Clemens, President and Chief Executive Officer of the Company,
was appointed a director of the Company, effective March 10, 1997, to fill a
vacancy in the class of directors whose term of office expires in 1998. There
remains a vacancy in the class of directors whose term of office expires in
1998, which the Board of Directors is authorized under the Company's Code of
Regulations to fill. The two vacancies in the Board arose in 1996 as a result of
the resignation of Robert J. Siewert as a director in May 1996 and the
resignation of Robert B. Meeker in June 1996.
The nominees for election to the class of Directors whose term of office
will expire in 2000, and the other Directors whose terms of office continue
after the meeting, with information as to each of them, as of March 18, 1997,
are as follows:
<TABLE>
<CAPTION>
EXPIRATION
OF
PRESENT
YEAR TERM OR
NAME, AGE, FIRST TERM FOR
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, ELECTED A WHICH
AND OTHER DIRECTORSHIPS DIRECTOR NOMINATED
- ------------------------------------------------------------ --------- ---------
<S> <C> <C>
WILLIAM A. ENOUEN (age 68), Retired on December 1, 1993 as 1990 2000
Senior Vice President and Chief Financial Officer, The
Mead Corporation, Dayton, Ohio, a forest products company;
Director of Morris Bean & Co. (1) (2) (3) (4) (5)
DAVID E. LUNDEEN (age 68), Acting President and Chief 1970 2000
Executive Officer of the Company from May 1996 to March
1997; retired in November 1994 as Vice President of the
Company and General Manager, Monarch Cortland, a position
he had held for more than five years. (5)
JOHN M. RICHARDSON (age 76), Retired on December 31, 1982 as 1979 2000
Senior Vice President, A. O. Smith Corporation,
diversified manufacturer of automobile and truck frames,
water heaters, agricultural equipment, and electric
motors. (2) (3) (4)
JOHN A. BERTRAND (age 58), President of A. O. Smith 1993 1999
Electrical Products Company, a manufacturer of electric
motors (a division of A. O. Smith Corporation), for more
than five years. (1) (2) (4) (5)
WALDEMAR M. GOULET (age 61), Professor of Finance at Wright 1991 1999
State University for more than five years and former Dean
of the College of Business and Administration at Wright
State University. (1)
KENNETH H. HOPKINS (age 68), Chairman of the Board of Field 1993 1999
Abrasive Incorporated, a manufacturer of abrasive
specialties, for more than five years. (1)
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
EXPIRATION
OF
PRESENT
YEAR TERM OR
NAME, AGE, FIRST TERM FOR
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE, ELECTED A WHICH
AND OTHER DIRECTORSHIPS DIRECTOR NOMINATED
- ------------------------------------------------------------ --------- ---------
<S> <C> <C>
JOHN F. TORLEY (age 85), Chairman and Director of Morris 1966 1999
Bean & Co.; President from 1985 to 1992 of the Miami
Valley Research Institute, a promoter of research at local
universities in the Dayton, Ohio area, and former
President and current Director of the related Miami Valley
Research Foundation; formerly Chairman of the Board and
Chief Executive Officer, Amcast Industrial Corporation,
Dayton, Ohio, producer of metal castings; Director of Van
Dyne Crotty, Inc. (1) (2) (3) (4)
RICHARD E. CLEMENS (age 47), President and Chief Executive 1997 1998
Officer of the Company since March 10, 1997; Vice
President and General Manager of the Frick Company, a
manufacturer of compressors, heat exchangers, and process
refrigeration equipment (a subsidiary of York
International) from July 1995 to February 1997; President
and Chief Executive Officer of Clark Material Handling
Company, a manufacturer of lift trucks, from March 1994 to
July 1995; President of the BMY Combat Systems, a division
of Harsco Corporation, from 1992 to 1994 and various other
management positions with the division from July 1985 to
1992.
JOSEPH M. RIGOT (age 53), Partner-in-Charge, Thompson Hine & 1994 1998
Flory LLP, Dayton, Ohio office (attorneys) since May 1993
and a partner in such firm for more than five years. (5)
(6)
</TABLE>
- ---------------
(1) Member of the Audit Committee, which met twice during 1996 for the purpose
of reviewing with the independent auditors of the Company the scope and
thoroughness of the auditors' examination, considering recommendations of
the independent auditors, reviewing the adequacy of the Company's systems of
internal accounting controls with the independent auditors and management,
and recommending to the Board of Directors the selection of independent
auditors for the year.
(2) Member of the Executive Committee, which did not meet in 1996. The Executive
Committee has responsibility for acting on various matters between meetings
of the Board of Directors.
(3) Member of the Compensation Committee, which met once during 1996.
4
<PAGE> 7
(4) Member of the Nominating Committee, which did not meet in 1996. The
Nominating Committee is willing to consider any shareholder recommendations
respecting possible candidates for positions on the Board of Directors, and
a shareholder desiring to submit a recommendation to the Committee may do so
by sending the candidate's resume to the Secretary of the Company.
(5) Member of the Special Committee which was appointed to assist in the
selection of, and to consult with, the Company's financial advisor, Lehman
Brothers Inc., and to assist in the selection of the Company's new chief
executive officer. The Special Committee met eight times in 1996.
(6) The law firm of Thompson Hine & Flory LLP performed legal services for the
Company last year and is performing legal services for the Company during
the current year.
During 1996, there were four meetings of the Board of Directors, in
addition to meetings of Board committees. No Director attended fewer than 75
percent of the total number of Board meetings and meetings held by the
Committees of the Board on which he served. A member of the Board of Directors
who is not an officer of the Company is compensated for services as a Director
at the annual rate of $10,000 and also receives $800 per meeting for attendance
at Board meetings. In addition, a non-officer Director who serves on a Board
Committee is compensated for services on the basis of $600 per meeting for
attendance at Committee meetings, or $800 per meeting if he is Chairman of the
Committee.
5
<PAGE> 8
OWNERSHIP OF SHARES
The following table sets forth, as of March 18, 1997 unless otherwise
indicated, the number and percent of the Company's Common Shares beneficially
owned by each Director or nominee for election as a Director of the Company, by
each Named Officer, by each person known to the Company to be the beneficial
owner of more than five percent of the Company's Common Shares, and by all of
the Company's Directors and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF COMMON
NAME OF INDIVIDUAL OR SHARES PERCENT
GROUP BENEFICIALLY OWNED(1) OF CLASS
- ----------------------------------- --------------------- --------
<S> <C> <C>
John A. Bertrand................... 430 (2)
Richard E. Clemens................. 17,000 (2)
William A. Enouen.................. 1,000 (2)
Waldemar M. Goulet................. 500 (2)
Kenneth H. Hopkins................. 1,000 (2)
Robert J. Kindt.................... 2,600 (2)
David E. Lundeen................... 12,600 (2)
Paul J. Maloney.................... 400 (2)
John M. Richardson................. 100 (2)
Joseph M. Rigot.................... 1,500 (2)
Robert A. Skodzinsky............... 1,750 (2)
John F. Torley..................... 10,056 (2)
14 Directors and executive officers
as a group, including those listed
above......................... 53,138 1.4%
Dimensional Fund Advisors, Inc..... 242,661(3)(8) 6.5%
Foyston, Gordon & Payne, Inc....... 194,550(4) 5.2%
Franklin Resources, Inc............ 351,000(5)(8) 9.3%
Greenway Group..................... 327,600(6)(8) 8.7%
Tweedy, Browne Company L.P., TBK
Partners, L.P. and Vanderbilt
Partners, L.P.................... 280,024(7) 7.4%
</TABLE>
- ---------------
(1) Shares are treated as "beneficially owned" if a person has or shares voting
or dispositive power with respect to the shares or has a right to acquire
the shares within 60 days of March 18, 1997. Unless otherwise indicated,
total voting power and total dispositive power are exercised by each
individual and/or a member of his household. The number of shares included
in the table which a listed person or group has a right to acquire within 60
days of March 18, 1997 are: Mr. Kindt -- 2,500; Mr. Maloney -- 400; and Mr.
Skodzinsky -- 1,250; and directors and executive officers as a
group -- 7,900.
(2) Less than 1%.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), 1299 Ocean Avenue, Santa
Monica, CA 90401, a registered investment advisor, is deemed to own
beneficially 242,661 Common Shares as of December 31, 1996. Dimensional has
sole dispositive power with
6
<PAGE> 9
respect to all of the listed shares and sole voting power with respect to
166,300 shares. These 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 Participation Group Trust, all of which
Dimensional serves as investment manager. Dimensional disclaims beneficial
ownership of all of these shares.
(4) Foyston, Gordon & Payne Inc., a registered investment counsel, is located at
151 Yonge Street, Suite 1208, Toronto, Ontario M5C 2W7.
(5) Franklin Resources, Inc., an investment adviser, located at 777 Mariners
Island Blvd, San Mateo, California 94403-7777, has sole voting power and
shared dispositive power with respect to the listed shares.
(6) A Schedule 13D was filed with the Securities and Exchange Commission on
September 16, 1996 by the following persons or entities in which it was
affirmed they were filing as members of a group (where shares are held
directly by a member of the Group, it is so indicated in parenthesis):
Greenway Partners, L.P. (100,500 shares), Greentree Partners, L.P. (42,100
shares), Greenhouse Partners, L.P., Greenhut, L.L.C., Greenbelt Corp.
(150,000 shares), Greensea Offshore, L.P. (35,000 shares), Greenhut
Overseas, L.L.C., Alfred D. Kingsley, and Gary K. Duberstein (the "Greenway
Group"). Messrs. Kingsley and Duberstein have shared voting and shared
dispositive power by virtue of various offices they hold with respect to all
of the 327,600 shares owned by the Greenway Group. The address of the
Greenway Group is 27 Park Avenue, New York, NY 10017.
(7) Tweedy, Browne Company L.P. ("TBC"), TBK Partners, L.P. ("TBK"), and
Vanderbilt Partners, L.P. ("Vanderbilt") have an address at 52 Vanderbilt
Avenue, New York, NY 10017. TBC is engaged primarily in the business of a
securities broker-dealer and investment advisor. TBK and Vanderbilt are
private investment partnerships engaged in the business of investing in
securities for their own accounts. TBC, TBK, and Vanderbilt may be deemed to
own beneficially 259,524, 15,000, and 5,500 Common Shares, respectively, and
may also be deemed a group under the Securities Exchange Act of 1934. TBC,
TBK, and Vanderbilt make no admission that they are members of a group, and
they disclaim beneficial ownership of all of these shares.
(8) Information is based on ownership reports filed by the named entities with
the Securities and Exchange Commission, and the information is as of
December 31, 1996 as to each entity except for Greenway Group for which
information is as of September 16, 1996.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
executive officers of the Company and owners of more than 10% of the Company's
common shares to file an initial ownership report with the Securities and
Exchange Commission and a monthly or annual report listing any subsequent change
in their ownership of common shares. The Company believes, based on information
provided to the Company by the persons required to
7
<PAGE> 10
file such reports, that all filing requirements applicable to such persons
during the period from January 1, 1996 through December 31, 1996 were met.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Executive Compensation program is administered by the
Compensation Committee of the Board of Directors. During 1996, the Committee was
comprised of the three independent, nonemployee Directors listed below. The
Committee has responsibility for fixing compensation for executives of the
Company and considering employee benefit programs generally. The Committee
submits the following report:
"EXECUTIVE COMPENSATION POLICY. The Compensation Committee is
committed to a strong, positive link between business, performance, and
benefit programs. Our compensation policy is designed to improve
shareholder value by: attracting and retaining highly qualified and
productive individuals; maintaining externally competitive and internally
equitable compensation; basing compensation levels on both Company and
individual performance; and encouraging executive stock ownership so that
the executive shares the same interests as the shareholder.
BASE SALARY. The salaries of the executives are reviewed
annually. The Committee establishes salary levels based on responsibility,
Company performance, individual performance, internal equity, and
competitiveness.
STOCK OPTIONS. To better align the interests of Company
management and shareholders, the Company, in 1994, designed and adopted an
employee stock option plan to replace the expired 1984 Employee Stock
Option Plan. This plan covers all divisions and subsidiaries of the
Company. No options were granted to the Named Officers in 1996.
CEO AND OTHER OFFICER COMPENSATION. David E. Lundeen was
appointed Acting President and CEO of the Company in May 1996 to succeed
Robert J. Siewert who resigned as President and CEO in May 1996. Mr.
Lundeen was paid at an annual rate of $200,000 during his tenure as Acting
President and Chief Executive Officer. Richard A. Clemens was elected
President and Chief Executive Officer of the Company on March 10, 1997. The
salary of the other executive officers named in the Summary Compensation
Table was slightly increased in 1996 to better reflect compensation levels
in the industry and their increased responsibilities. No incentive
compensation was paid to any officer for 1996 services. Throughout 1996,
the Board of Directors of the Company did not modify or reject any action
or recommendation of the Compensation Committee."
Compensation Committee
John M. Richardson
Joseph M. Rigot
John F. Torley
8
<PAGE> 11
SUMMARY COMPENSATION TABLE
The following table sets forth the annual, long-term compensation and all
other compensation paid by the Company for the fiscal years ended December 31,
1996, 1995, and 1994, to the persons who served as chief executive officer in
1996 and the other executive officers of the Company who earned in excess of
$100,000 in salary and bonus for the fiscal year ended December 31, 1996 (the
"Named Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
NUMBER OF
COMMON
ANNUAL SHARES
COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) OPTIONS COMPENSATION(2)
- ---------------------------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
David E. Lundeen 1996 $114,793 0 0
Former Acting President 1995 0 0 0
and CEO(1) 1994 129,770 2,000 $908
Robert J. Siewert 1996 $200,000 0 $950
Former President and 1995 198,750 0 924
CEO(1) 1994 185,000 5,000 924
Robert J. Kindt 1996 $144,583 0 $434
President, Stamco/Busch 1995 133,500 0 401
Subsidiaries & Divisions 1994 124,250 2,000 373
Robert A. Skodzinsky 1996 $124,375 0 $950
V.P. & General 1995 119,375 0 924
Manager 1994 90,417 1,000 0
Paul J. Maloney 1996 $110,004 0 $950
V.P. & General Manager 1995 78,927 0 474
1994 72,039 800 288
</TABLE>
- ---------------
(1) Mr. Lundeen was appointed Acting President and Chief Executive Officer of
the Company on May 13, 1996 to replace Mr. Siewert who resigned from such
positions on that date. On March 10, 1997, Mr. Clemens was appointed
President and Chief Executive Officer of the Company. See "Certain
Agreements," below.
(2) The amount represents the Company's contribution for the Named Officers
under the Company's Retirement Savings Plan.
9
<PAGE> 12
FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to unexercised
options to purchase the Company's common shares granted under the Company's
employee stock option plans to the Named Officers and held by them at December
31, 1996. None of the Named Officers exercised stock options during fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS THE-MONEY OPTIONS
AT 12/31/96 AT 12/31/96(1)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
David E. Lundeen................. 0 0 $ 0 $ 0
Robert J. Siewert................ 7,500 2,500 0 0
Robert J. Kindt.................. 2,500 1,000 0 0
Robert A. Skodzinsky............. 1,250 750 0 0
Paul J. Maloney.................. 400 400 0 0
</TABLE>
- ---------------
(1) The exercise price of outstanding options exceeded the market value of a
common share at December 31, 1996.
RETIREMENT BENEFITS
The Company provides retirement benefits for its salaried employees. The
Company's Pension Plan A provides for benefits based on the average of the
aggregate compensation during the five consecutive years of employment in the
ten consecutive years of employment preceding retirement that yield the highest
average. Compensation covered by the Plan includes salary paid for service
rendered while an employee but excludes bonuses.
The following table sets forth the estimated annual benefits payable at
normal retirement (age 65) under the Company's Pension Plan A to an employee,
including the Named Officers, with indicated final average base compensation, as
defined in the Plan, and periods of service. The benefit amounts are based upon
years of benefit service (not in excess of 35) multiplied by 1.25% of the final
average base compensation. The amounts shown in the table below have been
prepared on the straight life equivalent basis.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFIT
(ASSUMING RETIREMENT ON JANUARY 1, 1997)
FINAL AVERAGE -------------------------------------------------------
ANNUAL BASE 15 20 25 30 35
COMPENSATION YEARS YEARS YEARS YEARS YEARS
- ---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000 $25,711 $34,281 $42,852 $51,422 $59,992
150,000 30,853 41,138 51,422 61,706 71,991
175,000 30,853 41,138 51,422 61,706 71,991
200,000 30,853 41,138 51,422 61,706 71,991
225,000 30,853 41,138 51,422 61,706 71,991
</TABLE>
10
<PAGE> 13
The applicable years of benefit service as of January 1, 1997, for the
named Officers are Mr. Siewert--9 years, Mr. Kindt--7 years, Mr. Skodzinsky--3
years, and Mr. Maloney--5 years.
CERTAIN AGREEMENTS
Under the letter agreement pursuant to which Richard E. Clemens became
President and Chief Executive Officer of the Company, effective March 10, 1997,
Mr. Clemens was granted options to purchase 75,000 common shares of the Company,
with a ten-year term, at an option exercise price of $8.438 per share, which was
the fair market value of a share on the date of grant. Such options become
exercisable as follows: 25,000 shares if the market price of the common shares
is $15 per share or higher for a 10-day period; an additional 25,000 shares if
the market price is $18 per share or higher for a 10-day period; and an
additional 25,000 shares if the market price is $20 per share or higher for a
ten-day period. All such options, to the extent they did not otherwise become
exercisable, become exercisable on the earlier of March 1, 2003 or the
occurrence of a change of control. In addition, Mr. Clemens was issued 17,000
restricted common shares, 8,500 of which vest on each of March 1, 1998 and 1999
if he is employed by the Company on such dates.
There is a letter agreement between Mr. Siewert, former President and Chief
Executive Officer of the Company, which was entered into in May 1996 in
connection with his ceasing to be President and Chief Executive Officer of the
Company. The agreement provides that the Company will make to Mr. Siewert 11
monthly payments of $16,670, followed by 13 monthly payments of $6,335. The
agreement includes a 24-month non-competition provision and confidentiality
provisions and provides that Mr. Siewert, when requested by the Company, will
assist the Company in areas of product development and customer relations.
11
<PAGE> 14
COMMON SHARE PERFORMANCE GRAPH
The following Common Share Performance Graph compares the five year
cumulative return, assuming dividend reinvestment, from investing $100 on
December 31, 1991, in each of the Company's Common Shares, the S&P 500 Index of
companies, and a peer group of various machine tool companies (the "Peer Group")
consisting of the following companies: Cincinnati Milacron, Inc., Gleason
Corporation, The Monarch Machine Tool Company, Giddings & Lewis Inc., Hurco
Companies Inc., Met-Coil Systems Corporation, and Newcor Inc.
<TABLE>
<CAPTION>
Measurement Period Monarch Ma-
(Fiscal Year Covered) chine Tool Peer Group S&P 500
<S> <C> <C> <C>
12/31/91 100 100 100
12/31/92 118 147 108
12/31/93 113 161 118
12/31/94 103 133 120
12/31/95 131 158 165
12/31/96 88 133 203
</TABLE>
INDEPENDENT AUDITORS
Coopers & Lybrand has been appointed as the Company's independent auditors
for the fiscal year ending December 31, 1997, pursuant to the recommendation of
the Company's Audit Committee. Coopers & Lybrand has served as independent
auditors for the Company for more than 50 years.
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A representative of Coopers & Lybrand is expected to be present at the
Annual Meeting with an opportunity to make a statement if he desires to do so,
and to respond to appropriate questions, with respect to that firm's examination
of the Company's financial statements for the fiscal year ended December 31,
1996.
OTHER MATTERS
The Board of Directors has no knowledge of any other matters to be
presented at the meeting. In the event other matters do properly come before the
meeting, the persons named in the Proxy will vote in accordance with their best
judgment on the particular matters.
1998 ANNUAL MEETING
The 1998 Annual Meeting of Shareholders is currently scheduled to be held
on May 5, 1998. The deadline for shareholders to submit proposals to be
considered for inclusion in the proxy statement for that meeting is December 4,
1997.
ANNUAL REPORT
The Annual Report of the Company for the year ended December 31, 1996, was
mailed on April 1, 1997, to each shareholder of record on March 18, 1997.
THE MONARCH MACHINE TOOL COMPANY
RICHARD E. CLEMENS
President and Chief
Executive Officer
April 1, 1997
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FORM 10-K ANNUAL REPORT
Copies of The Monarch Machine Tool Company's 1996 Annual Report on Form 10-
K, filed with the Securities and Exchange Commission, are available without
charge (other than for exhibits) to shareholders upon written request sent to:
Attention: Corporate Secretary
The Monarch Machine Tool Company
P.O. Box 668
Sidney, Ohio 45365-0668
====================================================
NOTICE
OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
- --------------------------------------------------------------------------------
LOGO
LOGO
- --------------------------------------------------------------------------------
IMPORTANT
Each shareholder is requested to date, fill in, sign, and promptly return the
enclosed Proxy in the envelope provided.
A shareholder wishing to attend the meeting may withdraw his Proxy if he has
previously sent in his Proxy and votes in person.
ANNUAL MEETING
OF
SHAREHOLDERS
MAY 6, 1997
====================================================
<PAGE> 17
THE MONARCH MACHINE TOOL COMPANY
P R O X Y
ANNUAL MEETING OF SHAREHOLDERS, MAY 6, 1997
ROBERT B. RIETHMAN and EARL J. HULL, and each of them, are
hereby authorized to represent me at the Annual Meeting of
Shareholders of the Company to be held on May 6, 1997, and at any
adjournment, and at the meeting to vote my shares on the following:
1. Election of Directors.
[ ] FOR all nominees of the Board of Directors, namely
William A. Enouen, David E. Lundeen and John M. Richardson
(except as marked to the contrary below), including
authority to cumulate votes selectively among such
nominees.
[ ] WITHHOLD AUTHORITY to vote for all nominees
listed below.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write that nominee's
name on the line provided below.)
-----------------------------------------------------------
2. Upon any other business that may properly come before the
meeting.
(Continued, and to be signed, on the reverse side.)
(Continued from the reverse side.)
THE MONARCH MACHINE TOOL COMPANY
P R O X Y
IT IS UNDERSTOOD THAT THIS PROXY WILL BE VOTED AS SPECIFIED
ON THE REVERSE SIDE, AND, WHERE NO CHOICE IS SPECIFIED BY THE
SHAREHOLDER, THE PROXY WILL BE VOTED FOR THE NOMINEES LISTED
ON THE REVERSE SIDE.
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
Dated ______________________, 1997
__________________________________
__________________________________
Please sign your name as imprinted
hereon, and, in the case of multiple
or joint ownership, all should sign.
Proxy Card
