SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sections 240.14a-11(c) or
Section 240.14a-12
NATIONAL-STANDARD COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NATIONAL-STANDARD COMPANY
- --------------------------------------------------------------------------------
(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>
[GRAPHIC OMITTED]
NATIONAL-STANDARD
CORPORATE HEADQUARTERS
MICHAEL B. SAVITSKE
President and
Chief Executive
Officer
December 23, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting
of Shareholders which will be held on Thursday, January
28, 1999, 9:30 AM (local time) at the Windsor Park
Conference Center, located at 4020 Edison Lakes Parkway,
Mishawaka, Indiana.
The matters expected to be acted upon at the meeting are
described in the attached Proxy Statement. In addition,
we will report on the 1999 outlook for the Company, and
shareholders will have the opportunity to ask questions
and meet our officers, directors and auditors present at
the meeting.
We are pleased by our shareholders' continued interest
in National-Standard and appreciate that in the past, so
many of you have voted your shares in person or by
proxy; we hope that you will continue to do so and urge
you to return your proxy card promptly. In this way, you
can be sure your shares will be voted at the meeting.
Sincerely,
/s/ M.B.Savitske
<PAGE>
NATIONAL-STANDARD COMPANY
1618 TERMINAL ROAD
NILES, MICHIGAN 49120
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 28, 1999
---------------
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders
of NATIONAL-STANDARD COMPANY will be held at the Windsor Park
Conference Center, located at 4020 Edison Lakes Parkway, Mishawaka,
Indiana, on Thursday, the 28th day of January, 1999 at 9:30 AM (local
time) for the following purposes:
(1) To elect three directors to serve three years;
(2) To consider any other matters which may properly come
before the meeting or any adjournment thereof.
Accompanying this notice of annual meeting is a form of proxy, a
proxy statement, and a copy of the Company's Annual Report for the
fiscal year ending September 30, 1998, all to be mailed on or about
December 23, 1998.
The stock transfer books of the Company will not be closed, but
only shareholders of record as of the close of business on December 1,
1998 will be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
/s/ Timothy C. Wright
T. C. Wright
Secretary
Niles, Michigan
December 23, 1998
IMPORTANT
WHETHER YOU OWN FEW OR MANY SHARES, IT IS IMPORTANT THAT YOUR STOCK BE
REPRESENTED AT THE MEETING. THEREFORE, PLEASE FILL IN, DATE, SIGN THE
ENCLOSED PROXY, AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO STAMP
IS NECESSARY IF MAILED IN THE UNITED STATES.
<PAGE>
NATIONAL-STANDARD COMPANY
NILES, MICHIGAN
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, JANUARY 28, 1999
This Proxy Statement is furnished by the Board of Directors (the
"Board") of National-Standard Company (the "Company"), in connection
with its solicitation of proxies for use at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Thursday, January 28,
1999 and at any adjournment thereof. Mailing of the proxy material will
begin on or about December 23, 1998. Shareholders of record as of
December 1, 1998 of the Company's Common Stock will be entitled to one
vote for each share held on all matters to come before the meeting.
On December 1, 1998, there were outstanding 5,468,071 shares of
Common Stock; no other securities are entitled to vote at the meeting.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth in the following table are the beneficial holdings on
December 1, 1998 of each person known by the Company to own
beneficially more than 5% of its Common Stock, executive officers named
in the Summary Compensation Table and all executive officers and
directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
BENEFICIAL OWNER OR MANAGEMENT COMMON STOCK OWNED BENEFICIALLY % OF CLASS (6)
------------------------------ ------------------------------- --------------
<S> <C> <C>
National-Standard Company
Master Investment Trust 1,708,175 (1) 31.2
c/o U.S. Bank National Association
Attn: T. Sandwick SPEN0502
180 East 5th Street
St. Paul, MN 55101
National-Standard Company 685,274 (2) 12.5
Employees' Stock Savings Trust
c/o Key Trust Company of Indiana, N.A.
101 South Main Street
Elkhart, Indiana 46516
Dimensional Fund Advisors, Inc. 273,300 (3) 5.0
1299 Ocean Avenue, Suite 650
Santa Monica, California 90401
The Killen Group, Inc. 479,673 (4) 8.8
1189 Lancaster Avenue
Berwyn, Pennsylvania 19312
Michael B. Savitske 303,583 (5) 5.3
William D. Grafer 144,396 (5) 2.6
David M. Baldwin 2,582 (5) -
David L. Lawrence 62,161 (5) 1.1
Timothy C. Wright 23,669 (5) -
Executive Officers and Directors as a Group 613,291 (5) 10.3
(1) U.S. Bank National Association has informed the Company that
it held, as of December 1, 1998, these shares of the Company's
Common Stock as Trustee under the Company's Master Investment
Trust. Under the terms of the Trust, the Company's Investment
Committee directs the Trustee with respect to disposition and
voting of such shares.
- 2 -
<PAGE>
(2) Key Trust has advised the Company that it held, as of December
1, 1998, these shares as Trustee under the Company's
Employees' Stock Savings Plan. Under terms of the Trust, the
shares held therein are voted by the Trustee in the same
proportion as the voting instructions received from the Plan's
participants.
(3) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, has advised the Company that it is deemed
to have beneficial ownership of 273,300 shares of the
Company's Common Stock as of September 30, 1998, all of which
shares are held in portfolios of DFA Investment Dimensions
Group, Inc. (the "Fund"), a registered open-end investment
company, or in series of the DFA Investment Trust Company (the
"Trust"), a Delaware business trust, or the DFA Group Trust
and the DFA Participating 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. Dimensional has sole dispositive
power for all 273,300 shares and sole voting power for 162,200
of those shares. Persons who are officers of Dimensional also
serve as officers of the Fund and the Trust, each an open-end
management investment company registered under the Investment
Company Act of 1940. In their capacity as officers of the Fund
and the Trust, these persons vote 96,500 additional shares
which are owned by the Fund and 14,600 shares which are owned
by the Trust.
(4) The Killen Group, Inc. ("Killen"), has advised the Company
that as of December 1, 1998, it held 479,673 shares of the
Company's Common Stock and that it acquired these shares for
investment purposes and does not exert voting control over the
majority of these shares. Killen also advised that it has the
power to increase or decrease its investment position.
(5) Shares shown as beneficially owned include 59,246 shares held
in trust under the Employees' Stock Savings Plan and 500,500
shares which may be acquired within 60 days of December 1,
1998 through the exercise of stock options under the
National-Standard Stock Option Plan and the National-Standard
Company Stock Option Plan for Nonemployee Directors.
(6) Less than 1% unless otherwise indicated.
</TABLE>
ELECTION OF DIRECTORS (PROPOSAL 1)
The Board of Directors is currently composed of eight members
divided into two classes of three members each and one class of two
members each, with one class being elected in each year to serve a
three-year term, all as provided in the Certificate of Incorporation
and the Bylaws. Unless otherwise specified, proxies will be voted to
elect Mr. Ronald B. Kalich, Mr. Ernest J. Nagy and Mr. Donald R.
Sheley, Jr. for three-year terms. Mr. Harold G. Bernthal and Mr. John
E. Guth, Jr. will be retiring in January 1999.
If any nominee should not be able to serve (which management has
no reason to anticipate), the proxies will be voted for such person as
shall be designated as a replacement by the Board of Directors.
Information relative to the nominees for election and directors
continuing in office is set forth in the following table. No nominee or
director owns more than one percent of the Company's Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
YEAR FIRST OWNED BENE-
PRINCIPAL OCCUPATION AND BECAME FICIALLY AS OF
NAME AGE OTHER INFORMATION A DIRECTOR DEC. 1, 1998 (1)
---- --- ----------------- ---------- --------------
NOMINEES TO SERVE UNTIL THE ANNUAL MEETING IN 2002:
<S> <C> <C> <C>
Ronald B. Kalich 51 President, Getz Brothers & Co., Inc. (international 1998 0
distribution company); Director, The Carbide/Graphite
Group, Inc., Thomas and Betts Corp.
Ernest J. Nagy 68 Chairman, Tri Star Distributing, Inc. (distributor of electronic 1986 4,000(1)
components for the recreational vehicle industry); previously
Chairman, Sudler, Nagy, Inc. (real estate management and
investments), 1992 to 1995.
Donald R. Sheley, Jr. 56 Vice President Finance and CFO, Standard Products Co. N/A N/A
- 3 -
<PAGE>
COMMON STOCK
YEAR FIRST OWNED BENE-
PRINCIPAL OCCUPATION AND BECAME FICIALLY AS OF
NAME AGE OTHER INFORMATION A DIRECTOR DEC. 1, 1998 (1)
---- --- ----------------- ---------- --------------
<S> <C> <C> <C>
DIRECTORS CONTINUING TO SERVE UNTIL THE ANNUAL MEETING IN 2001:
David F. Craigmile 70 Executive Committee member, The Lincoln Foundation for 1989 1,150
Business Excellence; Director, Elkay Manufacturing Company;
formerly President, Elkay Manufacturing Company
(plumbing and drinking water products), 1985 to 1994.
Ranko Cucuz 54 Chairman and Chief Executive Officer of Hayes Lemmerz 1997 0
International (automobile industry supplier).
Donald F. Walter 66 Financial Consultant, Walter & Keenan Financial Consulting 1983 800(3)
Co.; Director, MetroBanCorp., CerProbe Corp.
DIRECTORS CONTINUING TO SERVE UNTIL THE ANNUAL MEETING IN 2000:
Michael B. Savitske 57 President and Chief Executive Officer of the Company; 1989 13,583(4)
Director, Protection Mutual Insurance Co.
Charles E. Schroeder 63 President, Miami Corporation (a private investment 1973 8,050(5)
company).
DIRECTORS WHOSE TERMS WILL END AT THE ANNUAL MEETING:
Harold G. Bernthal 70 Chairman, CroBern, Inc. (health care management and 1986 30,200
investment company); Director, Butler Manufacturing
Company, Nalco Chemical Company.
John E. Guth, Jr. 70 Chairman of the Board of the Company since July 1989; 1972 6,700
previously President and Chief Executive Officer of S.R.A.,
Inc. (education publications).
(1) Includes 1,000 shares owned through JNS Realty partnership.
(2) Includes in some cases shares held in fiduciary capacity or by wives,
children or relatives. The inclusion of these shares is not an admission of
beneficial ownership for any other purpose. Each nominee or director has
sole voting and investment power over the shares shown as beneficially
owned except as noted in footnotes (2) and (4) below and except for shares
held in the Employees' Stock Savings Plan, as to which they have sole
voting but no investment power. Also, shares shown as beneficially owned
include 4,000 shares for each nonemployee director that may be acquired
within 60 days of December 1, 1998, through the exercise of stock options
under the National-Standard Company Stock Option Plan for Nonemployee
Directors.
(3) Not included are 5,000 shares owned by the Edward and Irma Hunter
Foundation, on which board Mr. Walter serves as trustee and shares voting
and investment power with other trustees. Mr. Walter disclaims beneficial
ownership of such shares.
(4) Shares shown as beneficially owned include 11,783 shares held in trust
under the Employees' Stock Savings Plan but do not include 290,000 shares
which may be acquired within 60 days of December 1, 1998 through the
exercise of stock options under the National-Standard Stock Option Plan.
(5) Includes 5,831 shares voted by Mr. Schroeder as trustee of certain family
trusts. The inclusion of these shares is not an admission of beneficial
ownership for any other purpose.
</TABLE>
The affirmative vote of the holders of a plurality of the shares of Common Stock
represented at the Annual Meeting is required for the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE THREE NOMINEES
TO SERVE UNTIL THE ANNUAL MEETING IN 2002 (PROPOSAL 1).
- 4 -
<PAGE>
ORGANIZATION AND REMUNERATION OF THE BOARD
The Board of Directors has a standing Audit Committee, a
Governance Committee, and an Executive Committee.
The Audit Committee, composed of nonemployee directors, oversees
the audit of the corporate accounts through independent public
accountants whom it recommends for selection by the Board of Directors.
The Committee reviews the scope of the audit with such accountants and
their related fees. The Committee held three meetings during the 1998
fiscal year. The members of the Committee are Mr. Bernthal, Chairman,
Mr. Kalich, Mr. Nagy, and Mr. Schroeder.
Mr. Bernthal will be retiring in January 1999.
The Governance Committee, composed of nonemployee directors,
reviews and recommends executive and director compensation, including
bonus payments to elected corporate officers. It also has as its stated
purpose to develop, establish and recommend to the Board criteria for
the nomination and tenure of the directors and to submit for approval
of the Board nominees for election as directors at each annual meeting
of shareholders and for any vacancy that may occur on the Board. The
Committee may consider nominees recommended by shareholders or anyone
else, or, in its discretion, may limit its consideration to nominees
selected by the Committee. Any shareholder wishing to recommend a
nominee may forward such recommendation to the Governance Committee,
c/o the Secretary of the Company. The Committee members communicate
with each other from time to time in person and by telephone and act on
matters by either a formal meeting or by unanimous written consent. The
Committee held three meetings during the 1998 fiscal year. The members
of the Committee are Mr. Walter, Chairman, Mr. Craigmile, Mr. Cucuz,
and Mr. Guth. Mr. Guth will be retiring in January 1999.
The Executive Committee has, during the interval between regular
meetings of the Board of Directors, the authority to exercise all the
powers of the Board which may be legally delegated to it in the
management and direction of the business and affairs of the Company.
The Committee held five meetings during the 1998 fiscal year. The
members of the Committee are Mr. Craigmile, Chairman, Mr. Guth, and Mr.
Savitske.
The Company's Board of Directors held seven meetings during the
1998 fiscal year. All directors were present for 75% or more of the
total number of meetings of the Board and its Committees.
Directors who are employees of the Company receive no additional
compensation for service on the Board. Directors who are not employees
of the Company each receive an annual retainer of $16,000 (the
Chairman's retainer is $40,000), plus a fee of $800 for each Board or
Committee meeting attended and $250 for each subsequent meeting
attended in the same day. All directors are reimbursed for
out-of-pocket expenses in attending Board or Committee meetings;
directors, as such, do not participate in any Executive Compensation
Plans.
Under the Company's Directors' Retirement Income Plan, a
nonemployee director is entitled to receive an annual retirement
benefit, paid quarterly, equal to the annual retainer payable to the
- 5 -
<PAGE>
director during his last full year on the Board. A director's normal
retirement date is the later of age 70 or the end of any term of
service on the Board in which he attains age 70. No director whose
appointed or elected service on the Board is less than five years will
be entitled to a retirement benefit. Such amount is payable over a
period as measured by the shortest of:
(a) life, or
(b) years of service on the Board as computed in full
quarters, or
(c) 10 years.
The above benefits are payable only to the retired director. In
the event of death while on the Board, a death benefit equal to a full
year's retainer fee will be paid to the director's designated
beneficiary. This plan will no longer be offered to directors appointed
or elected after November 20, 1996.
Current and new nonemployee directors participate in the Stock
Option Plan for Nonemployee Directors ("Directors' Plan"). Under this
Directors' Plan, each nonemployee director will be granted an option to
purchase 2,000 shares of Common Stock on the first business day after
the date on which the Annual Meeting of Shareholders is held.
The option price for each option granted to nonemployee directors
shall be 100% of the fair market value of the shares subject to option
on the date of option grant. The option term shall be ten years. The
period of exercise following death shall be one year. In the event of
any other termination of service on the Board, each option shall be
exercisable for the lesser of three years or the balance of its
ten-year term.
Grants to date under the Directors' Plan include an initial grant
of 12,000 option shares at an option price of $8.50 made January 24,
1997 followed by a second grant of 14,000 option shares at an option
price of $5.8125 made January 23, 1998.
- 6 -
<PAGE>
GOVERNANCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report by the Governance Committee shall not be deemed to be
incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act
of 1933 or the Securities Exchange Act of 1934 and shall not otherwise
be deemed filed under such Acts.
FISCAL 1998 PERFORMANCE
In fiscal 1998, the Company's management continued to pursue the
long-term goals of meeting customers' delivery and quality expectations
100% of the time and improving operating margins by five points.
Progress was made in all of these areas, although not to the extent we
had expected. During the year, the Company successfully completed
QS-9000 registration. In addition, during the fourth quarter, actions
were identified to improve the short- and long-term operating
performance of the Company. These actions include a realignment of
operations and a reduction in staff as well as announcements of the
closure of the Canadian facility and the intention to divest its wholly
owned subsidiary located in the United Kingdom. These facilities
incurred losses in excess of $2.5 million in 1998. These restructuring
actions resulted in a nonrecurring charge to earnings of $7.7 million,
as discussed in the Company's annual report. Net income without this
charge would have been $1.0 million, and operating profit would have
been $4.1 million. The fourth consecutive year of operating profit
compared to prior year losses is indicative of management's commitment
to continuous improvement and of the level of success achieved in
developing, implementing, and adhering to a sound, long-term strategic
plan.
The Committee believes that the Company is taking the actions
necessary to produce significantly improved profitability in 1999 and
beyond.
The Company's compensation program for officers is based on two
objectives:
(1) Attract and retain qualified, talented and effective
executives.
(2) Motivate those executives to maximize profits and returns
to shareholders.
To that end, the Company's executive compensation program has the
following components:
BASE SALARIES are currently targeted at approximately the 50th
percentile (median) for similar-size manufacturing companies. Base
salaries for officers are at median competitive levels, based on
surveys of similar-size manufacturing companies.
ANNUAL INCENTIVE COMPENSATION opportunities are currently targeted
to be below median competitive levels for similar-size manufacturing
companies. Previously, incentive awards were based primarily on Company
net income and if the Company did not meet profit goals, no awards were
made. Consequently, no incentive awards were paid to officers for 1996
and 1997.
In 1998, the Board approved a bonus plan that is based upon
achieving multi-year economic profit targets and includes pro rata
targets for improvement in economic profit on an annual basis. Economic
profit is believed to be a better measure of value creation than net
income because it incorporates the full cost of capital, including both
debt and equity. It allows management to focus on the development of
new strategies and plans that create value over the planning period,
both eliminating operations that generate negative economic profit and
encouraging investment in higher return opportunities. When economic
profit or the trend in economic profit is positive, shareholder value
is created.
- 7 -
<PAGE>
The 1998 economic profit, as compared to the multi-year targets,
has resulted in the awards as noted elsewhere in this statement.
LONG-TERM INCENTIVE opportunities are now targeted at or below
median competitive levels for similar-size manufacturing companies and
are based solely on the Company's long-term stock performance. After
several years with no long-term incentives, the Board voted and the
shareholders approved the adoption of a stock option plan in 1993.
Stock option grants were made to certain but not all executives in
1993, 1995, 1996, and to all executives in 1997 and 1998.
1998 ACTIONS
Subsequent to the 1992 fiscal year end, the Board conducted a
thorough review of the entire executive compensation program. This
review was updated during 1995, and regularly thereafter. It included a
careful analysis of the executive pay levels and incentive
opportunities relative to the market. This analysis resulted in the
aforementioned stock option plan and, in 1998, a bonus plan that is
based upon the primary performance measure of economic profit. Goals
have been established and approved by the Board of Directors relative
to the expected improvement in economic profit for each year covered by
the plan.
While the Company generated positive operating profit, 1998 profit
plan objectives were not fully met and economic profit remains
negative. Several restructuring activities were identified to be
implemented in the first quarter of fiscal 1999 that are expected to
significantly improve results. These activities are more fully
discussed in the company's Annual Report and form 10-K filing with the
United States Securities and Exchange Commission. However, the Company
did generate economic profit results within the planning cycle's target
improvement range. This, along with the restructuring activities
previously mentioned, is an indication of the improvements and progress
made by the Company. The Board granted limited salary increases to all
officers early in the fiscal year; however, the Board has accepted
Management's recommendation that no base salary increases be granted to
officers for 1999 and that the bonus plan be suspended for fiscal 1999.
The 1998 actions are in keeping with the compensation philosophy
stated above.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The compensation package of Mr. M. B. Savitske consists of the
same elements as for the other officers named in the Summary
Compensation Table, specifically an annual base salary, participation
in the bonus plan, and participation in the National-Standard Stock
Option Plan.
During 1998, Mr. Savitske's base salary was increased 3.2% to
$325,000. Based upon the executive compensation review work of this
committee, Mr. Savitske's base salary remains below the position's
median for similar-sized manufacturing companies; however, as noted
above, there will be no salary increase for 1999 nor any bonus plan
participation.
Mr. Savitske received an annual incentive award related to 1998
based upon the Company's economic profit results. The award is included
in the Summary Compensation Table.
Governance Committee:
Donald F. Walter, Chairman
David F. Craigmile
Ranko Cucuz
John E. Guth, Jr.
- 8 -
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
(a) (b) (c) (d) (e) (g) (i)
OTHER ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) (#) COMPENSATION(2)
--------------------------- ---- ------ ----- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael B. Savitske 1998 $322,500 $ 48,061 $2,140 10,000 $4,750
President and 1997 307,500 0 2,794 10,000 4,750
Chief Executive Officer 1996 276,250 0 803 - 4,500
William D. Grafer 1998 181,975 22,599 743 5,000 4,869
Vice President, Finance 1997 174,750 0 829 10,000 5,243
1996 161,250 0 571 - 4,838
David M. Baldwin 1998 176,675 21,941 898 7,500 (3) 4,980
Vice President, 1997 169,875 0 3,660 5,000 (3) 5,096
Wire Division 1996 138,750 0 0 5,000 (3) 1,650
David L. Lawrence 1998 112,475 13,968 0 2,500 3,374
Treasurer, Assistant 1997 108,000 0 0 5,000 3,240
Secretary 1996 100,425 0 0 - 3,012
Timothy C. Wright 1998 117,125 14,545 294 2,500 2,655
Secretary, General Counsel 1997 113,375 0 0 5,000 4,750
1996 36,667 0 0 - 0
(1) Amounts reimbursed during the fiscal year for payment of taxes.
(2) Amounts are Company-matching contributions to the Employees' Stock Savings
Plan.
(3) Subsequently canceled with Mr. Baldwin's resignation in October 1998.
</TABLE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
(a) (b) (c) (d) (e) (f) (g)
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- --- ----------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Michael B. Savitske 10,000 24% $5.75 November 18, 2007 $ 36,160 $ 91,640
William D. Grafer 5,000 12% 5.75 November 18, 2007 18,080 45,820
David M. Baldwin 7,500 (1) 18% 5.75 November 18, 2007 27,120 68,730
David L. Lawrence 2,500 6% 5.75 November 18, 2007 9,040 22,910
Timothy C. Wright 2,500 6% 5.75 November 18, 2007 9,040 22,910
(1) Subsequently canceled with Mr. Baldwin's resignation in October 1998.
</TABLE>
- 9 -
<PAGE>
<TABLE>
YEAR-END OPTION VALUE TABLE (1)
<CAPTION>
(a) (d) (e)
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
NAME OPTIONS AT SEPT. 30, 1998 OPTIONS AT SEPT. 30, 1998 (2)
---- ------------------------- -------------------------
(ALL EXERCISABLE) (ALL EXERCISABLE)
<S> <C> <C>
Michael B. Savitske 140,000 $ -
William D. Grafer 57,000 -
David L. Lawrence 30,000 -
David M. Baldwin 17,500 (3) -
Timothy C. Wright 7,500 -
(1) No options were exercised during the fiscal year.
(2) The exercise price on all unexercised options at September 30,1998 was in
excess of the fair market value of the underlying securities on that date.
(3) Subsequently canceled with Mr. Baldwin's resignation in October 1998.
</TABLE>
SALARIED EMPLOYEES' RETIREMENT PLAN
The Salaried Employees' Retirement Plan (the "Plan") is a defined
benefit plan and provides for an annual lifetime pension at normal
retirement age (the later of age 65 or five years of participation in
the Plan) equal to 1.5% of the participant's total cash compensation
from the Company (including any contributions made to the Employees'
Stock Savings Plan from their pre-tax remuneration) for the period of
covered employment occurring after October 1, 1987. The compensation
elements upon which the Plan benefits are based are salary and payments
of cash awards under the various incentive plans.
The Company funds the entire cost of the Plan by periodic
contributions to the Plan trust on an actuarial basis. Company
contributions to the trust are not allocated to the account of any
particular employee; officers participate in the Plan on the same basis
as all other employees of the Company who are covered by the Plan.
Should they continue their covered employment with the Company at
their 1998 annual rate of cash compensation until attainment of normal
retirement age, the annual lifetime pension at normal retirement age
under the Plan would be $47,915 for Mr. Savitske; $50,216 for Mr.
Grafer; $39,232 for Mr. Lawrence; and $18,440 for Mr. Wright. Mr.
Baldwin resigned from the Company subsequent to the 1998 year end with
no vested pension benefits.
SUPPLEMENTAL RETIREMENT PLANS
The Supplemental Retirement Plan (the "SRP") provides an annual
supplemental pension benefit to any participant in the Salaried
Employees' Retirement Plan whose benefit under that plan is reduced or
limited as a result of rules set forth in the Internal Revenue Code.
The funding of the cost of this benefit will come from the general
assets of the Company.
Should they continue their covered employment with the Company at
their 1998 annual rate of cash compensation until attainment of normal
retirement age, the annual lifetime benefit at normal retirement age
under the SRP would be $30,787 for Mr. Savitske and $5,842 for Mr.
Grafer.
The Targeted Retirement Benefit Plan (the "Plan) provisions
provide that participants' retirement benefit will not be less than 55%
of final average earnings. To the extent that Company funded benefits
from the Salaried Employees' Retirement Plan and all other sources do
not achieve this target, the Plan will make up the difference. The
funding of the cost of this Plan will come from the general assets of
the Company. Current participants are Mr. Savitske and Mr. Grafer.
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<PAGE>
Should they continue their covered employment with the Company at
their 1998 annual rate of cash compensation until attainment of normal
retirement age, the estimated annual lifetime benefit at normal
retirement age under this Plan would be $53,093 for Mr. Savitske and
$12,467 for Mr. Grafer.
NATIONAL-STANDARD COMPANY
RELATIVE MARKET PERFORMANCE
TOTAL RETURN FOR FISCAL YEARS ENDING SEPTEMBER 30
[GRAPHIC OMITTED]
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
N-S Co. $144 $169 $ 95 $ 93 $ 39
S&P 400 102 128 146 203 190
Peer Group 115 114 113 168 88
Assumes $100 invested October 1, 1993 in National-Standard Co. Common
Stock, S&P 400 Midcap index and industry peer group (dividends
reinvested).
PEER GROUP USED IN PERFORMANCE CHART
The peer group shown in the performance chart is a subset of the
"Specialty and Other Products" subgroup of the Standard and Poor's
Steel and Heavy Machinery group and consists of the following
companies: Birmingham Steel Corp., Carpenter Technology, Chaparral
Steel Company, Commercial Metals, Keystone Construction Industries,
Inc., Lukens, Inc., Quanex Corp., and Timken Company.
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<PAGE>
INFORMATION REGARDING OTHER TRANSACTIONS
The Company has existing Supplemental Compensation Agreements (the
"Agreements") with certain executives, including all officers of the
Company (four persons including Mr. Savitske) which, following a change
in control of the Company, provide for a lump sum compensation payment
to the executive in the event of his termination of employment by the
Company, or by such executive following a substantial change in his job
responsibilities. The lump sum compensation payments for Messrs.
Savitske and Grafer are equal to 2.99 times their respective "base
amounts" [as defined under Section 280G(b)(3) of the Internal Revenue
Code]. The lump sum payment for the remaining covered executives,
including the officers, is equal to two times the particular
executive's "base amount" [as defined under Section 280G(b)(3) of the
Internal Revenue Code].
A "change in control" is defined in such Agreements as: (i) the
acquisition by any person or entity (other than any Company employee
benefit plan) of 30% or more of combined voting power of the Company's
outstanding securities; or (ii) shareholder approval of any
consolidation or merger where, following such consolidation or merger,
the Company's original shareholders do not hold at least 60% of the
voting securities of the surviving corporation; or (iii) during any
24-month period, the individuals (including "qualified replacements")
who, at the beginning of the period, make up the Board of Directors,
cease, for any reason, to constitute a majority of the Board; or (iv)
shareholder approval of any sale, lease, exchange or other transfer of
all, or substantially all, of the Company's assets to any entity in
which the Company, or its shareholders, own less than 60% of that
entity's outstanding voting securities. The Agreements extend through
September 30, 2000.
AUDITORS
During 1998, the Company engaged the firm of KPMG Peat Marwick LLP
as independent public accountants to render audit services, including
such matters as the annual audit of financial statements for the
Company and its subsidiaries. Upon the recommendation of the Audit
Committee, the Board of Directors has appointed KPMG Peat Marwick LLP
as independent auditors for the fiscal year ending September 30, 1999.
A representative of KPMG Peat Marwick LLP will be present at the
meeting with the opportunity to make a statement if appropriate and
will be available to respond to questions.
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K
The Company is required to file an annual report, called Form
10-K, with the Securities and Exchange Commission. A copy of Form 10-K
for the fiscal year ended September 30, 1998 will be made available
without charge to any person entitled to vote at the Annual Meeting.
Written request should be directed to T. C. Wright, Office of the
Corporate Secretary, National-Standard Company, 1618 Terminal Road,
Niles, Michigan 49120.
MISCELLANEOUS
COST OF SOLICITATION
The cost of soliciting proxies from the shareholders of the
Company will be borne by the Company. Proxies may be solicited by mail,
personal interviews, telephone and facsimile transmission (FAX). It is
anticipated that banks, brokerage houses and other custodians, nominees
or fiduciaries will be requested to forward soliciting material to
their principals and to obtain authorization for the execution of
proxies and will be reimbursed for their charges and expenses incurred
in connection therewith.
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<PAGE>
The Company has retained Corporate Investor Communications, Inc.,
111 Commerce Road, Carlstadt, New Jersey to assist in the solicitation
of proxies. Corporate Investor Communications, Inc. will receive a fee
of $3,000 plus out-of-pocket expenses and disbursements for its
services. Certain directors, officers and regular employees of the
Company may also solicit proxies without additional remuneration
therefor.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for
shareholder action at the Company's annual meetings, consistent with
rules and regulations of the Securities and Exchange Commission. To
have such proposals considered for inclusion in the Proxy Statement and
Proxy of the Board of Directors for the 2000 Annual Meeting, such
proposals must be received by the Secretary of the Company no later
than August 17, 1999.
In addition, the Bylaws provide that in order for business to be
brought before the Annual Meeting, a shareholder must deliver written
notice to the Secretary of the Company not less than sixty (60) nor
more than ninety (90) days prior to the date of the meeting. The notice
must state the shareholder's name, address, number of shares of Common
Stock held, and briefly describe the business to be brought before the
meeting and any material interest of the shareholder in the proposal.
DIVIDEND REINVESTMENT SERVICE SHARES
For shareholders in the Company's Dividend Reinvestment Service
offered by the State Street Bank and Trust Company, Boston,
Massachusetts, the Bank will vote any shares that it holds for the
participant's account in accordance with the proxy returned by the
participant to the Bank in respect of the shares of the Company Stock
held by the Bank in such participant's account. Shares in respect of
which a proxy or other written instructions are not received by the
Company or the Bank will not be voted.
MANNER IN WHICH THE PROXIES WILL BE VOTED
In the absence of contrary direction, the persons named in the
enclosed proxy propose to vote the proxies FOR the election of each of
the above nominees to the Board. Management knows of no other matter
which may come up for action at the meeting. However, if any other
matter properly comes before the meeting, the persons named in the
enclosed proxy form will vote in accordance with their judgment upon
such matter. Abstentions and broker non-votes will be counted to
determine if a quorum is present. Broker non-votes are not counted in
determining the number of shares voted for or against any proposal.
However, an abstention by any shareholder is counted as if it were a
vote against any proposal.
Shareholders who do not expect to attend in person are urged to
execute and return the enclosed form of proxy. Moreover, it is
important that the proxies be returned promptly. A proxy may be revoked
at any time before it is actually voted at the Annual Meeting by
delivering written notice of revocation to the Secretary of the
Company, by submitting a subsequently dated proxy or by attending the
meeting and withdrawing the proxy. A shareholder may also be
represented by another person present at the meeting through executing
a form of proxy designating such person to act on such shareholder's
behalf.
By Order of the Board of Directors,
/s/ Timothy C. Wright
T. C. Wright
Secretary
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<PAGE>
PROXY NATIONAL-STANDARD COMPANY PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, appoints MICHAEL B. SAVITSKE and
DONALD F. WALTER, or either of them, proxies of the undersigned, with full power
of substitution to vote all stock the undersigned is entitled to vote at the
National-Standard Company Annual Meeting of Shareholders to be held on Thursday,
January 28, 1999, and any adjournments thereof, (1) as specified on the matters
set forth below and (2) in their discretion on such other matters as may
properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE WITH AUTHORITY FOR THE ELECTION
OF THREE DIRECTORS.
Proposal 1 -
WITH / / WITHOUT / / Authority to vote for all nominees listed below:
Ronald B. Kalich, Ernest J. Nagy,
Donald R. Sheley, Jr.
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided here:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
(CONTINUED FROM OTHER SIDE)
ACCOUNT NUMBER NUMBER OF SHARES PROXY NUMBER
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS PROXY
WILL BE VOTED WITH AUTHORITY FOR THE ELECTION OF THE THREE DIRECTORS PROPOSED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement.
Dated: ______________________________, 19 __
--------------------------------------------
(Signature of Shareholder)
--------------------------------------------
(Signature of Shareholder)
Please sign exactly as name appears hereon.
If signing as attorney, executor,
administrator, trustee or guardian, please
give full title of such, and if signing for
a corporation, give your title. When shares
are in the names of more than one person,
any one may sign.
PLEASE DATE, SIGN, AND RETURN THIS CARD IN THE ENCLOSED ENVELOPE.
