<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14c-6(e)(2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SCHAWK, INC.
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined.)
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
/ / Fee paid 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
SCHAWK, INC.
(FORMERLY FILTERTEK, INC.)
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, MAY 17, 1995
To the Stockholders of SCHAWK, INC.:
Notice is hereby given that the 1995 Annual Meeting of the Stockholders of
Schawk, Inc. will be held at 10:00 a.m. (local time), Wednesday, May 17, 1995,
at Schawkgraphics, 1600 East Sherwin Avenue, Des Plaines, Illinois, for the
following purposes:
1. Election of the Board of Directors for Schawk, Inc.
2. Transaction of such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The close of business on March 24, 1995, has been fixed as the record date for
the determination of stockholders entitled to receive notice of and to vote at
said meeting and any adjournment or adjournments thereof. The stock transfer
books of Schawk, Inc. will not be closed.
By Order of the Board of Directors,
Des Plaines, Illinois A. ALEX SARKISIAN, Esq.
March 30, 1995 Secretary
<PAGE> 3
SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
(708) 827-9494
PROXY STATEMENT
FOR THE 1995 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, MAY 17, 1995
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Schawk, Inc. ("Schawk" or
the "Company") for use at the 1995 Annual Meeting of Stockholders to be held at
10:00 a.m. (local time), Wednesday, May 17, 1995, at Schawkgraphics, 1600 East
Sherwin Avenue, Des Plaines, Illinois, and at any adjournment thereof (the
"Annual Meeting"). This Proxy Statement and the accompanying Proxy are first
being mailed on or about March 30, 1995, to stockholders of record at the close
of business on March 24, 1995.
On December 30, 1994, the corporation previously known as Schawk, Inc.
("Old Schawk"), Lincoln Graphics, Inc. ("Lincoln Graphics") and Flexo Graphics,
Inc. ("Flexo Graphics") (collectively the "Old Schawk Companies") were merged
(the "Merger") with and into the Company's predecessor, Filtertek, Inc.
("Filtertek"). Upon consummation of the Merger, Filtertek changed its name to
"Schawk, Inc." Pursuant to the Merger, the Company acquired all of the assets
and businesses of the Old Schawk Companies and assumed all of those
corporation's liabilities. The Company issued an aggregate of 16,245,399
shares of Class A Common Stock, 22,000 shares of Series A Preferred Stock and
5,207 shares of Series B Preferred Stock, each newly designated in connection
with the Merger, to the stockholders of the Old Schawk Companies and the shares
of the Company's Class A Common Stock previously held by Old Schawk (which had
a controlling interest prior to the Merger) were cancelled.
The Company's operations presently consist of two segments, its
graphics business (the "Graphics Group") and its plastics business (the
"Plastics Group"). The Plastics Group is comprised primarily of what was the
business of Filtertek prior to the Merger and the Graphics Group is comprised
primarily of what was the business of the Old Schawk Companies.
PROPOSALS
The purpose of the meeting is to (i) elect the Board of Directors of
the Company and (ii) transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
PROXIES AND SOLICITATION
Any person signing and mailing the enclosed proxy may revoke the proxy
at any time prior to its exercise by (i) executing a subsequent proxy; (ii)
notifying the Secretary of the Company of such revocation in a written notice
received by him at Schawk, Inc., 1695 River Road, Des Plaines, Illinois 60018,
prior to the Annual Meeting; or (iii) attending the Annual Meeting and voting
in person.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or facsimile, by Directors of the Company (each a "Director" and
collectively, the "Directors") and executive officers and regular employees of
the Company. The Company does not now expect to pay any compensation for the
solicitation of proxies, but may reimburse brokers and other persons
<PAGE> 4
holding shares in their names or in the names of nominees for their expenses in
sending proxy material to principals and obtaining their proxies. First
Chicago Trust Company of New York, the transfer agent and registrar of the
Class A Common Stock, may aid in the solicitation of proxies and will be
reimbursed for any expenses incurred as a result of any such activity.
Shares of the Company represented by properly executed proxies will,
unless such proxies have been previously revoked, be voted in accordance with
the instructions indicated in the proxies. Unless otherwise instructed in the
proxy, the agent named in the proxy intends to cast the proxy votes FOR the
election of the nominees for Directors of Schawk. Assuming a quorum is
present, an affirmative vote of the holders of a plurality of the shares,
present and voting at the meeting, is required for a nominee to be elected as a
Director. Therefore abstentions and shares for which authority to vote is not
given will thus have no effect on the election of directors.
QUORUM REQUIREMENTS AND VOTING
The presence, in person or by proxy, of the holders of a majority of
the Company's Class A Common Stock outstanding on the record date is required
for a quorum at the Annual Meeting. Abstentions will be treated as shares
present and entitled to vote for purposes of determining whether a quorum is
present, but not voted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a proxy returned by a broker
indicates that the broker does not have discretionary authority to vote some or
all of the shares covered thereby for any matter submitted to the stockholders
for a vote, such shares will be considered to be present for purposes of
determining whether a quorum is present, but will not be considered to be
present and entitled to vote at the Annual Meeting.
As to all anticipated votes, each share of Class A Common Stock will
have one (1) vote as to each matter to be voted on at the annual meeting.
Stockholders entitled to vote or to execute proxies are stockholders of record
at the close of business on March 24, 1995. The Company had 19,175,840 shares
of Class A Common Stock outstanding on such date. The stock transfer books of
the Company will not be closed.
ELECTION OF DIRECTORS
At the meeting, ten Directors are to be elected for the Company. Each
of the elected Directors will hold office for a term of one year, expiring at
the Annual Meeting of Stockholders to be held in 1996, and thereafter until a
successor shall be duly elected and qualified. Unless authority to vote is
withheld, proxies received in response to this solicitation will be voted FOR
the election of the nominees named hereafter, each of whom presently serves as
a Director of the Company. It is not contemplated that any of the nominees
will be unable, or will decline to serve; however, if such situation arises,
the shares represented by the proxies being solicited will be voted FOR the
election of a nominee or nominees designated by the Board of Directors of the
Company.
The Board of Directors are responsible for the overall affairs of the
Company. The Board of Directors had seven meetings in 1994. Each member of
the Board of Directors attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors held and (ii) the total number of
meetings held by all committees of the Board of Directors on which such
Director served.
The Board of Directors currently has an Executive Committee, an Audit
Committee, a 401(k) Administration Committee and an Option Committee, whose
members are elected by the respective Board of Directors. The present members
of the Executive Committee are: Clarence W. Schawk, David A. Schawk, Ronald
J. Kay, A. Alex Sarkisian and John T. McEnroe. The Executive Committee is
authorized to act on behalf of the Board of Directors in the management of the
businesses and the affairs of the Company and acts as the Compensation
Committee for the Board of Directors. The Executive Committee met three times
in 1994.
- 2 -
<PAGE> 5
Judith W. McCue, Robert Meinken and Hollis W. Rademacher have been
appointed as members of the Audit Committee. The Audit Committee recommends
the selection of the Company's independent public accountants, reviews and
approves their fee arrangements, examines their detailed findings and reviews
areas of possible conflicts of interest and sensitive payments. The Audit
Committee met three times in 1994.
The 401(k) Administration Committee is composed of David A. Schawk,
Marie Meisenbach Graul, A. Alex Sarkisian and Larry Larkin. The 401(k)
Administration Committee reviews and selects the agent managing the 401(k) plan
and evaluates the participative values. The 401(k) Administration Committee
met once in 1994.
The Option Committee members are Judith W. McCue, Robert F. Meinken,
John T. McEnroe and Hollis W. Rademacher. The Option Committee evaluates the
performance of key personnel and makes incentive rewards in the form of future
exercisable options. The Option Committee met once in 1994.
The following is a list of the nominees for election as Directors of
the Company followed by a brief biographic statement of each nominee:
NOMINEES FOR ELECTION AS DIRECTORS
OF THE COMPANY
----------------------------------
CLARENCE W. SCHAWK
DAVID A. SCHAWK
A. ALEX SARKISIAN, ESQ.
MARIE MEISENBACH GRAUL
RONALD K. KAY
LARRY LARKIN
JUDITH W. MCCUE, ESQ.
ROBERT F. MEINKEN
JOHN T. MCENROE, ESQ.
HOLLIS W. RADEMACHER
Clarence W. Schawk has been Chairman of the Board of the Company since
September 1992, when he was also appointed to the Executive Committee. He
served as Chief Executive Officer of Filtertek from September 1992 until
February 1993. Clarence W. Schawk also served as Chairman of the Board of Old
Schawk from 1953 until the Merger and served as Chief Executive Officer until
June 1994. He is the father of David A. Schawk, President and Chief Executive
Officer of the Company. Clarence W. Schawk previously served as President and
a Director of the International Prepress Association. Mr. Schawk also served
as a Director of Old Schawk until the Merger. Age: 69
David A. Schawk was appointed Chief Operating Officer of the Company
in September 1992, and elected Chief Executive Officer and President in
February 1993. He was appointed to the Board of Directors in September 1992.
David A. Schawk served as the President of Old Schawk from 1987 until the
Merger and was appointed Chief Executive Officer in June 1994. David A. Schawk
serves on the Company's Executive and 401(k) Administration Committees. David
A. Schawk is the son of Clarence W. Schawk. David A. Schawk currently serves
as a Director of the International Prepress Association. Mr. Schawk also
served as a Director of Old Schawk until the Merger. Age: 39
A. Alex Sarkisian, Esq., was appointed to the Company's Board of
Directors and as Corporate Secretary in September 1992 and, in 1994, was
appointed Executive Vice President. Mr. Sarkisian was also appointed President
of the Company's Graphics Group effective as of January 1995. Mr. Sarkisian
was the Executive Vice President and Secretary of Old Schawk and held such
positions since 1988 and 1986, respectively. Mr. Sarkisian
- 3 -
<PAGE> 6
also served as a Director of Old Schawk until the Merger. He is a member of
the Executive and 401(k) Administration Committees. Age: 43
Marie Meisenbach Graul was appointed Treasurer, Public Information
Officer and Director of the Company in September 1992 and was appointed Chief
Financial Officer in 1994. Ms. Graul was also the Chief Financial Officer and
Treasurer of Old Schawk from 1989 until the Merger. Prior thereto, Ms. Graul
was Vice President and Financial Analyst from 1987 to 1989 for J & W Seligman
and Company, a money management firm in New York, New York. Ms. Graul is a
member of the 401(k) Administration Committee. Age: 39
Ronald J. Kay was appointed President, Plastics Group North American
Operations in February 1993 and to the Company's Board of Directors in August
1993, and is a member of the Executive Committee. He was President of RJK
Associates, specializing in management, consulting and international joint
venturing, from 1991 through 1993. Prior to 1991, he served in general
management and financial assignments with Recon/Optical Inc. from 1984 to 1991,
with Martin Marietta Corporation from 1981 to 1984, and with Honeywell
Corporation from 1971 to 1981. He serves on the Board of Directors of K & S
Manufacturing, a family-owned fastener business. Age: 47
Larry Larkin began his employment with Filtertek as Director of
Corporation Quality in October 1986. He was elected Executive Vice President
of the Company in 1987. He was appointed a Director of the Company in 1988 and
a member of the 401(k) Administration Committee in 1992. Age: 56
Judith W. McCue has been a partner with the law firm of Keck, Mahin &
Cate, where she has practiced since 1972. Ms. McCue was appointed Director of
the Company in September 1992 and is a member of the Audit and Option
Committees. Age: 46
Robert F. Meinken has been a retired private investor and businessman
since 1988 after an extensive career in sales and marketing. Mr. Meinken was
appointed Director of the Company in September 1992 and is a member of the
Audit and Option Committees. Age: 69
John T. McEnroe, Esq., has been a partner with the law firm of Vedder,
Price, Kaufman & Kammholz, and counsel to Filtertek, since May 1992. Prior to
this position, he was a partner with the law firm of Keck, Mahin & Cate where
he practiced from 1976 to 1992. Mr. McEnroe was appointed a Director of the
Company in September 1992 and is a member of the Executive and Option
Committees. Mr. McEnroe also served as a Director of Old Schawk until the
Merger. Age: 43
Hollis W. Rademacher was appointed a Director of the Company in
January 1995. From 1957 to 1993, Mr. Rademacher held various positions with
Continental Bank, N.A., Chicago, Illinois, and from 1988 to 1993 was Chief
Financial Officer of Continental Bank Corporation, Chicago, Illinois. Mr.
Rademacher is currently self-employed in the fields of consulting and
investments, in Chicago, Illinois. Mr. Rademacher is a member of the Audit and
Option Committees. Age: 59
Currently, all Directors who are not employees of the Company (except
for Mr. McEnroe) receive a $500 fee for attendance at each regularly scheduled
or special board or committee meeting. All non-employee Directors are also
reimbursed for ordinary and necessary expenses incurred in attending Board or
committee meetings. In addition, certain of the Directors have received
options under the Company's 1991 Outside Directors' Formula Stock Option Plan
(the "Outside Directors' Plan"). See "Executive Compensation -- Stock Option
Plans -- 1991 Outside Directors' Formula Stock Option Plan."
- 4 -
<PAGE> 7
EXECUTIVE COMPENSATION
The table below sets forth certain information for fiscal years 1994,
1993 and 1992 with respect to the annual and other compensation paid by the
Company to: (i) the Chairman of the Board of Directors; (ii) the President and
Chief Executive Officer; and (iii) the other executive officers of the Company
who were most highly compensated in 1994 (collectively, the "Named Executive
Officers") for services rendered in all capacities to the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------------------------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION(5)
- ------------------------- ---------- ----------------- ----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Clarence W. Schawk, 1994 $223,349(2) $2,325,000(2) $ -- 30,030(3) $7,500
Chairman(1) 1993 223,349(2) 2,150,664(2) 39,148(2) 30,030(3) 8,994
1992 212,713(2) 1,242,804(2) 106,580(2) -- 8,728
David A. Schawk, 1994 146,772(2) 1,300,000(2) 12,999(2) 30,030(3) 7,500
President and CEO(1) 1993 146,772(2) 1,202,962(2) 13,646(2) 30,030(3) 8,994
1992 139,783(2) 965,144(2) 14,211(2) -- 8,728
A. Alex Sarkisian, 1994 135,000(2) 225,000(2) 8,086 13,013(4) 7,500
Executive Vice President 1993 130,000(2) 190,000(2) 8,086 13,013(4) 8,994
and Secretary 1992 120,000(2) 150,000(2) 648 -- 8,728
Marie Meisenbach Graul, 1994 95,000(2) 85,000(2) -- 11,011(4) 4,750
Chief Financial Officer, 1993 90,000(2) 50,000(2) -- 11,011(4) 8,484
Treasurer and Public 1992 84,893(2) 30,000(2) -- -- 5,345
Information Officer
Ronald J. Kay, President, 1994 160,550 32,000 13,813 867
Plastics Group North 1993 130,000 -- -- 12,462 --
American Operations(1)
</TABLE>
_________________
(1) Clarence W. Schawk became Chairman of the Board and Chief Executive Officer
of the Company in September 1992, when Old Schawk effectively acquired
61.0% of Filtertek. David A. Schawk became Chief Operating Officer in
September 1992, and Chief Executive Officer and President in February 1993.
Ronald J. Kay was appointed President, Plastics Group North American
Operations in February 1993.
(2) Prior to the Merger, which was effective December 30, 1994, Clarence W.
Schawk, David A. Schawk, A. Alex Sarkisian and Marie Meisenbach Graul
received no cash compensation from Filtertek, but were compensated by Old
Schawk for services provided to Old Schawk, including management of its
investment in Filtertek. These individuals will be compensated directly by
the Company for 1995 and future years.
(3) Clarence W. Schawk and David A. Schawk were each granted options for 5,005
shares under the Outside Directors' Plan and 25,025 shares under the 1988
Equity Option Plan.
(4) A. Alex Sarkisian and Marie Meisenbach Graul were each granted options for
5,005 shares under the Outside Directors' Plan. The remaining shares were
granted under the 1988 Equity Option Plan.
(5) Reflects matching contributions made pursuant to the Company's 401(k) plans
to the accounts of such individuals.
- 5 -
<PAGE> 8
The table below sets forth certain information with respect to stock
options granted during fiscal 1994 to the Named Executive Officers.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1994
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SHARES OF PERCENTAGE OF STOCK PRICE APPRECIATION FOR
CLASS A TOTAL OPTION TERM(1)
COMMON STOCK OPTIONS/SARS -----------------------------
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR(2) ($/SH) DATE 5%($) 10%($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Clarence W. Schawk 30,030(2) 12.52% $9.750 5/31/04 $ 184,136 $466,636
David A. Schawk 30,030(2) 12.52 9.750 5/31/04 184,136 466,636
A. Alex Sarkisian 13,013(3) 5.42 9.750 5/31/04 79,792 202,209
Marie M. Graul 11,011(3) 4.56 9.750 5/31/04 67,516 171,000
Ronald J. Kay 13,813(4) 5.76 9.750 5/31/04 84,697 214,640
</TABLE>
_________________
(1) The amounts set forth represent the value that would be received by the
Named Executive Officers upon exercise of the option or the date before the
expiration date of the option based upon assumed annual growth rates in the
market value of the Company's shares of 5% and 10%, rates prescribed by
applicable SEC rules. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Company's shares and other
factors such as the general condition of the stock markets and the timing
of the exercise of the options.
(2) Clarence W. Schawk and David A. Schawk were each granted options for 5,005
shares under the Outside Directors' Plan and 25,025 shares under the 1988
Equity Option Plan. No stock appreciation rights ("SARs") were granted
during fiscal 1994.
(3) A. Alex Sarkisian and Marie Meisenbach Graul were each granted options for
5,005 shares under the Outside Directors' Plan. The remaining shares were
granted under the 1988 Equity Option Plan.
(4) Represents shares granted under the 1988 Equity Option Plan.
- 6 -
<PAGE> 9
The table below sets forth certain information with respect to options
and SARs exercised by the Named Executive Officers during fiscal 1994 and with
respect to options and SARs held by the Named Executive Officers at the end of
fiscal 1994. The value realized upon exercise of options and SARs is based
upon the closing price of the Company's shares on the respective exercise dates
as reported on the NYSE. The value of unexercised options and SARs at the end
of fiscal 1994 is based on the closing price of $10.750 reported on the NYSE on
December 30, 1994, the last trading day of fiscal 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
DECEMBER 31, 1994 AT DECEMBER 31, 1994
SHARES ----------------------------- -----------------------------
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ----------------------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Clarence W. Schawk -- $ -- 28,359 31,701 $36,074 $38,375
David A. Schawk -- -- 28,359 31,701 36,074 38,375
A. Alex Sarkisian -- -- 11,343 14,683 15,088 19,372
Marie M. Graul -- -- 9,342 12,680 12,620 17,135
Ronald J. Kay -- -- 12,912 26,275 15,820 14,817
</TABLE>
EMPLOYMENT AND NON-COMPETITION AGREEMENTS
In January 1991, Old Schawk entered into employment agreements with
Clarence W. Schawk and David A. Schawk to serve as executive officers. These
agreements, upon review of comparable base salaries for executives of similarly
situated companies, have been amended and restated effective October 1, 1994,
and were assumed by the Company by operation of law as a result of the Merger
after approval by the Board of Directors of the Company (David A. Schawk and
Clarence W. Schawk abstaining from such vote). Each employment agreement, as
amended and restated in October 1994, provides for an initial term of 10 years
(through December 31, 2004), with one-year extensions thereafter unless
terminated by either the Company or the executive. Each employment agreement
provides for payment of a base salary, adjustable annually by the Board of
Directors based upon a merit review and to account for inflation, as well as an
annual bonus consisting of short- and long-term incentives. Clarence W.
Schawk's employment agreement provides for a base salary of $500,000 for the
calendar year 1995, and David A. Schawk's employment agreement provides for a
base salary of $400,000 for the calendar year 1995. The short-term EVA-based
plan contemplates cash payments of 5.0% and 3.0% of the excess of "adjusted net
income" over $10.0 million with respect to Clarence W. Schawk and David A.
Schawk, respectively. "Adjusted net income" means annual net income after
taxes, but before bonuses to the Chairman and the President of the Company and
amortization of goodwill resulting from acquisitions of the Company consummated
after January 1, 1995. The amounts of such cash payments are subject to
adjustment based upon the Company's financial performance during the relevant
fiscal year. The long-term plan contemplates a non-cash distribution of
options calculated to equal 5.0% and 3.0% of the excess of "adjusted net
income" over $10.0 million for Clarence W. Schawk and David A. Schawk,
respectively. The employment agreements contain non-competition provisions
which are effective during the term of the agreements and for two years after
termination and are intended to provide for severance payments for 48 months
following termination of employment without cause. The employment agreements
further provide that, following a "change in control" (as defined in the
agreements), the Company may not terminate the executive's employment without
cause.
- 7 -
<PAGE> 10
Filtertek entered into an employment agreement (the "Agreement") with
Ronald J. Kay, the term of which commenced March 1, 1993 (subject to automatic
renewal for an additional year unless proper notice of termination is given by
Filtertek). The Agreement provides for an annual salary of $156,000, adjusted
annually based on changes in the Consumer Price Index. Additionally, the
Agreement entitles Mr. Kay to an annual bonus ranging from 20% to 40% of his
respective annual salary subject to attaining certain performance goals. A
bonus of $32,000 was paid to Mr. Kay for 1994 under the Agreement. Upon
termination without cause, the Agreement provides for severance pay equal to
six months of annual salary.
STOCK OPTION PLANS
1988 Equity Option Plan
On March 25, 1988, the Company adopted the 1988 Equity Option Plan
("Stock Incentive Plan") pursuant to which 2,252,250 shares of Class A Common
Stock are reserved for issuance pursuant to options and other benefits which
may be granted to officers, key employees and non- affiliated directors. The
Option Committee of the Board of Directors will administer the Stock Incentive
Plan. Under the Stock Incentive Plan, the Option Committee is authorized to
determine the officers and other key employees to whom, and the times at which,
options and other benefits are to be granted, the number of shares subject to
each award, its term and any applicable vesting provisions.
The Option Committee may award non-qualified stock options ("NSOs") or
incentive stock options ("ISOs"), shares of restricted stock or stock
appreciation rights under the Stock Incentive Plan. The exercise price with
respect to any ISOs may not be less than the fair market value of the Class A
Common Stock on the date of grant and the exercise price with respect to any
NSOs may not be less than eighty-five percent (85%) of the fair market value of
the Class A Common Stock on the date of grant. "Fair market value" will be
determined by averaging the highest and lowest sales prices for the Class A
Common Stock reported on the NYSE on the date of the grant.
Shares of Class A Common Stock granted as restricted stock under the
Stock Incentive Plan will be restricted as to transfer and subject to
forfeiture prior to the expiration of the restriction period determined by the
Option Committee. The expiration of the restriction period may be tied to the
attainment of certain performance objectives or based upon a period of
continued employment. To the extent that the restriction period expires, the
shares of Class A Common Stock will be released to the award recipient free of
all restrictions. If the performance objectives are not met in the required
time period or if the recipient's employment terminates prior to completing the
required service period, the recipient's right to the shares will be forfeited.
Stock appreciation rights may be granted alone or with respect to
options granted concurrently or previously under the Stock Incentive Plan.
Each stock appreciation right permits the recipient thereof to receive a cash
payment equal to the difference between the fair market value of the Class A
Common Stock on the date the stock appreciation right is exercised and such
fair market value on the date the stock appreciation right was awarded. To the
extent that a stock appreciation right was awarded with respect to an option,
exercise of the stock appreciation right will result in a pro rata
extinguishment of such option.
NSOs or ISOs may be granted to officers and other key employees of the
Company. The right of the recipient to exercise the options will be subject to
such vesting and forfeiture requirements and provisions as determined by the
Option Committee and must be exercised within 10 years of the date of grant.
1991 Outside Directors' Formula Stock Option Plan
The Company's Outside Directors' Plan, as amended, provides that each
"Outside Director" (defined in the Outside Directors' Plan as any Director who
is not a compensated employee of the Company) receive a non-qualified stock
option to purchase 5,000 shares upon his or her election, and subsequent
re-election, to the Board of Directors at an exercise price equal to the fair
value of such shares on the date of election or re-election as a Director.
Only the number of shares specified by such formula is eligible for grant under
the Outside Directors' Plan. Options
- 8 -
<PAGE> 11
granted under the Outside Directors' Plan are exercisable for a term of 10
years from the date of grant and vest in one-third increments on the date of
grant and on the first and second anniversaries of the date of grant. In 1993,
options to purchase 5,005 shares (as adjusted to reflect the conversion of
paired shares of the Company to shares of Class A Common Stock) were granted
under this plan to each of Clarence W. Schawk, David A. Schawk, A. Alex
Sarkisian, Marie Meisenbach Graul, John T. McEnroe, Judith W. McCue and Robert
F. Meinken at a per share exercise price of $8.625, and in 1994 each of such
Directors received additional options to purchase 5,005 shares (as adjusted) at
a per share exercise price of $9.750.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All decisions regarding the compensation of the Company's executive
officers are made by the Executive Committee of the Board of Directors, except
for awards under the Stock Incentive Plan which are administered by the Option
Committee. The members of the Executive Committee are Clarence W. Schawk,
David A. Schawk, A. Alex Sarkisian, Ronald J. Kay and John T. McEnroe. Mr.
McEnroe does not receive cash compensation from the Company. The Option
Committee is comprised of the Company's Outside Directors. Mr. Kay
participated in the deliberations of the Executive Committee with regard to the
compensation of the other executive officers, but did not participate in the
deliberations with respect to his own compensation.
Clarence W. Schawk and David A. Schawk were the majority owners,
executive officers and directors, A. Alex Sarkisian was an executive officer
and director, and John McEnroe was a director, of Old Schawk which prior to the
Merger was the majority stockholder of Filtertek. In October 1993, Filtertek
acquired Robinson Industries, Inc. and Fuzere Midwest Division from Old Schawk
and Fuzere Manufacturing Company from the stockholders of Old Schawk, including
Clarence W. Schawk and David A. Schawk (Robinson, Fuzere Midwest and Fuzere now
comprise Tek Packaging Group, Inc.), for approximately $13.2 million, payable
in a combination of $8.0 million in cash payments and 518,627 shares of
Filtertek Class A Common Stock. Independent stockholders of Filtertek approved
the transaction at the Special Meeting of Stockholders held on December 23,
1994.
Effective December 30, 1994, Clarence W. Schawk, David A. Schawk and
other members of the Schawk Family received 16,245,399 shares of Class A Common
Stock, 22,000 shares of Series A Preferred Stock and 5,207 shares of Series B
Preferred Stock pursuant to the Merger of the Old Schawk Companies into
Filtertek. Also, pursuant to the terms of the Merger, Filtertek and Clarence
W. Schawk, David A. Schawk and other members of their immediate families (the
"Schawk Family") entered into a certain Registration Rights Agreement as of
December 30, 1994, pursuant to which the Company has agreed, upon the request
of the Schawk Family, to register, at any time after January 1, 1996, all or a
portion of the shares of Class A Common Stock held by the Schawk Family. The
costs of such registration shall be borne by the Company exclusive of
underwriting discounts and commissions.
In addition, effective in 1992, Filtertek entered into an
administrative services agreement with Old Schawk. See "Certain Transactions."
JOINT REPORT ON EXECUTIVE COMPENSATION
Under the supervision of the Executive Committee and the Option
Committee, the Company has developed and implemented compensation policies,
plans and programs which seek to enhance the profitability of the Company, and
thus stockholder value, by aligning the financial interests of the Company's
executive officers with those of its stockholders. In furtherance of these
goals, annual base salaries are generally set at or below competitive levels.
The Company relies to a large degree on annual bonus, if any, and stock option
incentives to attract and retain executive officers and other key employees of
outstanding ability, and to motivate them to perform to the full extent of
their abilities. Both types of incentive compensation are closely tied to the
performance of the Company and the individual in a manner that encourages a
sharp and continuing focus on building profitability and stockholder value.
- 9 -
<PAGE> 12
During 1993, the Executive Committee reviewed, reevaluated and
approved an annual salary plan for the Company. This salary plan was developed
based on industry, peer group and market surveys, and performance judgments as
to the past and expected future contributions of the individual executive
officer targeting the salaries to the median level of such comparable
companies.
Individual bonus arrangements can be established for certain key
executive officers to attain a particular or group of particular goals or
levels of performance. The Company entered into a bonus plan with Mr. Kay and
three other executive officers pursuant to which they are entitled to receive
bonus amounts ranging from 20% to 40% of their annual salary based on the
Company attaining 100% to 140% of certain specified pre-tax profit levels. The
Company met its specified pre-tax profit levels for 1994 and cash bonuses were
paid to Mr. Kay and certain other executive officers of the Company.
The cash compensation paid to Clarence W. Schawk, David A. Schawk, Mr.
Sarkisian and Ms. Graul was determined by the board of directors of Old Schawk
for fiscal year 1994. Such compensation will be reviewed by the Board of
Directors of the Company beginning in 1995.
As a consequence of the Merger, the Company assumed employment
agreements entered into by Old Schawk and Clarence W. Schawk and David A.
Schawk, respectively, after approval by the Board of Directors (Clarence W.
Schawk and David A. Schawk abstaining from such vote). These agreements were
amended and restated effective October 1, 1994, after a review by the board of
directors of Old Schawk of comparable base salaries for executives of similarly
situated companies. The agreements provide for base salary, and annual bonuses
based on formula performance measures. The Board of Directors can adjust the
base salary annually based upon merit review. See "Executive Compensation -
Employment and Non-Competition Agreements."
During each fiscal year the Option Committee considers the
desirability of granting executive officers and other key employees of the
Company stock options under the 1988 Equity Option Plan. The granting of stock
options is based upon the overall performance of the Company and the
performance of the particular employee. The Option Committee considers such
performance and the recommendations of management in determining the amounts
recommended to be granted. The Option Committee believes its pattern of grants
has successfully focused the Company's executive officers and other key
employees on building profitability and stockholder value. For fiscal 1994,
options were granted to executive officers, including the Named Executive
Officers, in furtherance of this philosophy. The number of options granted to
the respective executive officers reflects the Option Committee's assessment of
the particular officer's level of responsibility and its desire to match the
award level with the executive's responsibility level. The purpose of these
awards is to reward such officers for their performance with respect to the
Company and to give such officers a stake in the Company's future, which is
directly aligned with the creation of stockholder value.
The Executive Committee does not believe that the provisions of the
Revenue Reconciliation Act of 1993 will limit the deductibility of compensation
expected to be paid by the Company, however, the Executive Committee will
continue to evaluate the impact of such provisions and take such actions as it
deems appropriate.
This report is submitted by the members of the Company's Executive
Committee and Option Committee:
Executive Committee: Option Committee:
Clarence W. Schawk Judith W. McCue
David A. Schawk Robert F. Meinken
Ronald J. Kay John T. McEnroe
A. Alex Sarkisian Hollis W. Rademacher
John T. McEnroe
- 10 -
<PAGE> 13
PERFORMANCE GRAPH
The graph below sets forth a comparison of the yearly percentage
change in the cumulative total stockholder return on the Company's Class A
Common Stock against the cumulative total return of the RUSSELL 2000 Small
Stock Index ("RUSSELL 2000"), a broad-based market index, and the Value Line
Chemicals: Diversified Index ("Peer Group"), a peer group of common stocks of
16 specialty chemicals industry manufacturers, for the five-year period
beginning December 31, 1989.
Comparison of Five-Year Cumulative Total Returns*
(Performance Results Through 12/31/94)
ISSUER 1989 1990 1991 1992 1993 1994
- ------ ---- ---- ---- ---- ---- ----
SCHAWK INC 100.00 68.93 115.17 131.67 131.59 155.27
Russell 2000 Index 100.00 80.49 117.56 139.21 165.52 162.24
Chemicals: Divers. 100.00 102.18 128.58 127.34 146.31 155.07
Assumes $100 invested at the close of trading 12/89 in Schawk, Inc. common
stock, Russell 2000 Index, and Chemicals: Diversified.
*Cumulative total return assumes reinvestment of dividends.
The Merger of Old Schawk Companies into the Company was effective on
December 30, 1994.
The Joint Report on Executive Compensation and the Performance Graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporate this information by
reference and shall not otherwise be deemed filed under such Acts.
- 11 -
<PAGE> 14
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the shares
beneficially owned as of March 15, 1995, (i) by each person who is known by the
Company to own beneficially more than 5% of the outstanding shares of Class A
Common Stock; (ii) by each Director of the Company, including the nominees for
reelection as Directors; and (iii) by all Directors and officers of the Company
as a group. All information with respect to beneficial ownership has been
furnished to the Company by the respective stockholders.
<TABLE>
<CAPTION>
AMOUNT OF PERCENTAGE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS OUTSTANDING
- ------------------------------------------------------- ----------------------------- ------------------------
<S> <C> <C>
Clarence W. Schawk(2) . . . . . . . . . . . . . . . 10,324,434(3) 53.76%
David A. Schawk(2) . . . . . . . . . . . . . . . . . 1,498,465(4) 7.80
Ronald J. Kay . . . . . . . . . . . . . . . . . . . . 19,117(5) *
Larry Larkin . . . . . . . . . . . . . . . . . . . . 80,812(6) *
A. Alex Sarkisian . . . . . . . . . . . . . . . . . . 768,450(7)(8) 4.01
Marie Meisenbach Graul . . . . . . . . . . . . . . . 10,432(9) *
John T. McEnroe . . . . . . . . . . . . . . . . . . . 5,763(10) *
Judith W. McCue . . . . . . . . . . . . . . . . . . . 4,337(11) *
Robert F. Meinken . . . . . . . . . . . . . . . . . . 3,636(12) *
Hollis W. Rademacher . . . . . . . . . . . . . . . . 1,666(13) *
Cathy Ann Schawk(2)(14) . . . . . . . . . . . . . . 1,252,504(15) 6.53
Judith Lynn Gallo(2)(16) . . . . . . . . . . . . . . 1,621,629(17) 8.46
Lisa Beth Stearns(2)(18) . . . . . . . . . . . . . . 1,009,893(15) 5.27
Executive Officers and Directors as a group
(14 persons) . . . . . . . . . . . . . . . . . . . 12,795,528(19) 65.88%
</TABLE>
_________________
*Less than 1%
(1) Unless otherwise indicated, (i) beneficial ownership is direct and (ii)
the person indicated has sole voting and investment power.
(2) Each is a member of the Schawk Family. The address for each of the
Schawk Family members is 1695 River Road, Des Plaines, Illinois 60018.
(3) Includes currently exercisable options to purchase 28,359 shares.
Includes 10,145,436 shares received in the Merger by Mr. Schawk and his
wife and 484 shares held by Mrs. Schawk. Does not include 1,498,465
shares beneficially owned by Clarence W. Schawk's son David A. Schawk,
or an aggregate of 4,639,201 shares beneficially owned by Clarence W.
Schawk's daughters Cathy Ann Schawk, Judith Lynn Gallo and Lisa Beth
Stearns, and held in family trusts for the benefit of certain of his
grandchildren. Mr. Schawk does not share voting power or investment
authority over shares of the Company held by or on behalf of his children
or grandchildren.
(4) Includes currently exercisable options to purchase 28,359 shares and
1,460,762 shares received in the Merger. Does not include 10,324,434
shares beneficially owned by David A. Schawk's father, Clarence W.
Schawk, or an aggregate of 4,639,201 shares beneficially owned by or held
in family trusts for the benefit of David A. Schawk's sisters Cathy Ann
Schawk, Judith Lynn Gallo and Lisa Beth Stearns, and certain of Clarence
W. Schawk's grandchildren.
(5) Includes currently exercisable options to purchase 12,912 shares.
- 12 -
<PAGE> 15
(6) Includes currently exercisable options to purchase 79,811 shares.
(7) Includes currently exercisable options to purchase 11,343 shares.
(8) Includes 755,175 shares received in the Merger by various Schawk Family
trusts for the benefit of certain of Clarence W. Schawk's grandchildren
with respect to which Mr. Sarkisian has voting and dispositive power.
(9) Includes currently exercisable options to purchase 9,342 shares.
(10) Includes currently exercisable options to purchase 3,336 shares (and
1,426 owned indirectly by Mrs. McEnroe.)
(11) Includes the indirect ownership of 1,001 shares placed in a retirement
trust account and currently exercisable options to purchase 3,336 shares.
(12) Includes currently exercisable options to purchase 3,336 shares.
(13) Represents currently exercisable options to purchase shares.
(14) Ms. Schawk is the daughter of Clarence W. Schawk and sister of David A.
Schawk, Judith Lynn Gallo and Lisa Beth Stearns.
(15) Reflects shares received pursuant to the Merger.
(16) Ms. Gallo is the daughter of Clarence W. Schawk and the sister of David
A. Schawk, Cathy Ann Schawk and Lisa Beth Stearns.
(17) Reflects shares received pursuant to the Merger, including shares
received by two Schawk Family trusts with respect to which Ms. Gallo has
voting and dispositive power.
(18) Ms. Stearns is the daughter of Clarence W. Schawk and the sister of David
A. Schawk, Cathy Ann Schawk and Judith Lynn Gallo.
(19) Includes currently exercisable options to purchase an aggregate of
246,761 shares held by certain executive officers and Directors.
In addition to the shares of Class A Common Stock reflected in the
above table, members of the Schawk Family received in the Merger 22,000 shares
of Series A Preferred Stock of the Company and 5,207 shares of Series B
Preferred Stock.
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's Directors and executive officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission and the New York Stock Exchange reports of
ownership and changes in ownership of common stock and other equity securities
of the Company. Officers, Directors and greater than 10% stockholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of copies of such reports
forwarded to the Company or written representations that no other reports were
required, the Company believes that, during the 1994 fiscal year, all filing
requirements applicable to its officers, Directors and greater than 10%
beneficial owners were complied with, except that one report, covering one
transaction, was filed late by David A. Schawk.
- 13 -
<PAGE> 16
CERTAIN TRANSACTIONS
Clarence W. Schawk owns Geneva Waterfront, Inc., a Wisconsin
corporation that owns The Geneva Inn, a hotel in Geneva, Wisconsin. Prior to
the Merger, Geneva Waterfront, Inc. employees were eligible to participate in
Old Schawk's health plan and such persons continue to be eligible to
participate in the Company's health plan. Old Schawk was reimbursed for the
full costs of such insurance in the past. Old Schawk believed that this
arrangement benefitted the company because it enhanced Old Schawk's bargaining
power with its health insurance providers. The arrangement is beneficial to
Geneva Waterfront, Inc. because it enables Geneva Waterfront, Inc. to purchase
health insurance for its employees at a lower cost than it would be able to
obtain independently. In 1992, 1993 and 1994, Old Schawk received $113,000,
$141,000 and $168,000, respectively, in insurance premium reimbursements from
Geneva Waterfront, Inc.
Pursuant to agreements with Filtertek and Robinson, Fuzere Midwest and
Fuzere, Old Schawk charged such entities management fees for legal, marketing,
administrative (including treasury, credit support and cash management) and
executive support rendered by Old Schawk personnel. Old Schawk waived
Filtertek's payment of such fees during 1994. Amounts charged to Robinson,
Fuzere Midwest and Fuzere were $498,000 and $353,000 in 1994 and 1993,
respectively. These agreements were terminated upon consummation of the
Merger.
The Graphics Group facilities at 1200 West Monroe Street, Chicago,
Illinois are leased from The Clarence W. Schawk 1979 Children's Trust, a trust
established for the benefit of the children of Clarence W. Schawk, including
David A. Schawk. Based on third-party appraisals, management believes that the
gross rent and other terms and conditions of this lease are comparable to those
that would have been obtained in an arm's-length transaction. The amount paid
by Old Schawk in each of 1992, 1993 and 1994 under this lease was $380,000.
At December 31, 1993, Old Schawk had approximately $1.2 million in
notes receivable from a trust set up for the beneficial interest of certain
members of the Schawk Family. Interest on these notes ranged from 5.0% to
9.0%. Such notes were paid in full on June 15, 1994.
The Graphics Group facility at 1600 East Sherwin Avenue, Des Plaines,
Illinois is leased from C.W. Properties, Chicago, a group consisting of a
Missouri corporation and certain individuals, all of whom are unrelated to the
Schawk Family. The lease provides for an option to purchase the building and
the adjoining property at 70% of the fair market value. The option is held by
Graphics IV, Ltd., an Illinois limited partnership ("Graphics IV"). The
limited partners of Graphics IV are David A. Schawk and the daughters of
Clarence W. Schawk, all of whom were beneficial owners of Old Schawk. Based on
third party appraisals, management believes that the gross rent and other terms
and conditions of this lease are comparable to those that would have been
obtained in an arm's-length transaction. The amount paid by Old Schawk in each
of 1992, 1993 and 1994 under this lease was $579,000.
Prior to the Merger, Clarence W. Schawk and David A. Schawk were
majority owners, executive officers and directors, A. Alex Sarkisian was an
executive officer and director, Marie Meisenbach Graul was an executive officer
and John T. McEnroe was a director, of Old Schawk which was the controlling
stockholder of Filtertek. In October 1993, Filtertek acquired Robinson and
Fuzere Midwest from Old Schawk and Fuzere from the stockholders of Old Schawk,
including Clarence W. Schawk and David A. Schawk (Robinson, Fuzere Midwest and
Fuzere now comprise Tek Packaging Group, Inc.), for an aggregate of
approximately $13.2 million, payable in a combination of $8.0 million in cash
payments and 518,627 shares of Class A Common Stock. Such transaction received
final stockholder approval as required by Section 203 of the Delaware General
corporation Law at the Special Meeting of Stockholders held on December 23,
1994.
Clarence W. Schawk, David A. Schawk and other members of the Schawk
Family received an aggregate of 16,245,399 shares of Class A Common Stock,
22,000 shares of Series A Preferred Stock and 5,207 shares of Series B
Preferred Stock pursuant to the Merger of the Old Schawk Companies into
Filtertek. Also, in connection with the Merger, Filtertek and the Schawk
Family entered into a certain Registration Rights Agreement dated as of
December 30, 1994, pursuant to which the Company has agreed, upon the request
of the Schawk Family, to register,
- 14 -
<PAGE> 17
at any time after January 1, 1996, all or a portion of the shares of Class A
Common Stock held by the Schawk Family. The costs of such registration shall
be borne by the Company exclusive of underwriting discounts and commissions.
In addition, Old Schawk paid to the Schawk Family in the form of notes
payable a dividend in the aggregate amount of approximately $8.8 million, which
approximated the income taxes estimated to be payable by the Schawk Family with
respect to earnings through the date of the Merger. Such notes bear interest
at 5% per annum and are payable upon demand, or December 31, 1995 if earlier.
INDEPENDENT ACCOUNTANTS
As of the date of this Proxy Statement, the Board of Directors had not
selected the independent accountants for the Company for fiscal 1995 due to the
Merger. Prior to the Annual Meeting, the Audit Committee may recommend to the
Board of Directors independent accountants for the Company for fiscal 1995. In
the event the Board of Directors selects independent accountants for 1995
before the Annual Meeting, such selection will be announced at the Annual
Meeting.
Filtertek's principal accountant from 1983 through January 16, 1995
was Arthur Andersen LLP. The Old Schawk Companies' principal accountant from
January 1, 1992 through December 30, 1994 was Ernst & Young LLP.
On January 16, 1995, the Board of Directors decided to continue to
retain Arthur Andersen LLP to audit the Plastics Group and Ernst & Young LLP to
audit the Graphics Group for the fiscal year ended December 31, 1994. However,
as a result of the Merger, Ernst & Young LLP became the Company's principal
accountants because under accounting rules the financial statements of the Old
Schawk Companies are treated as the financial statements of the Company.
Consequently, Ernst & Young LLP has delivered an audit opinion on behalf of the
Company for the fiscal year ended December 31, 1994. Arthur Andersen LLP
delivered an audit opinion with respect to the Plastics Group for the year
ended December 31, 1994 and Ernst & Young LLP referred to such opinion in
delivering its audit opinion on behalf of the Company.
The Company and Arthur Andersen LLP have not disagreed on any matter
of accounting principles or practice, financial statement disclosure or
auditing scope or procedure in connection with the audits for the Company's two
most recent audited fiscal years or during the period January 1, 1994 to
January 16, 1995. The Board of Directors determination not to retain Arthur
Andersen LLP was not based on the expectation that any such disagreement would
arise in connection with the audit of its financial statements for the year
ended December 31, 1994, but rather by virtue of the Merger.
Arthur Andersen LLP's reports on the financial statements of
Filtertek, Inc. for the fiscal years ended December 31, 1993 and December 31,
1992 did not contain an adverse opinion or a disclaimer of opinion, nor were
such reports qualified or modified as to uncertainty, audit scope or accounting
principles.
Other than as described above, Filtertek had not engaged or otherwise
consulted with Ernst & Young LLP regarding any matter relating to Filtertek's
financial statements, and no written report or oral advise was provided to
Filtertek, Inc. by Ernst & Young LLP regarding any decision of Filtertek as to
any accounting, auditing or financial reporting issue.
Representatives of Arthur Andersen LLP and Ernest & Young LLP are
expected to be present at the Annual Meeting and will be available to respond
to any appropriate questions raised at the meeting and to make a statement if
such representatives so wish.
- 15 -
<PAGE> 18
OTHER MATTERS
The Board of Directors know of no matters other than those described
above that may come before the Annual Meeting. As to other matters, if any,
that properly may come before the Annual Meeting, the Board of Directors intend
that proxies in the accompanying form will be voted in respect thereof in
accordance with the judgment of the person voting the proxies.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholder proposals for inclusion in the Company's Proxy Statement
for the 1996 Annual Meeting of Stockholders must be received by the Company not
later than November 30, 1995. The person submitting the proposal must have
been a record or beneficial owner of shares of Class A Common Stock for at
least one year, and the securities so held must have a market value of at least
$1,000.
By Order of the Board of Directors,
Des Plaines, Illinois A. ALEX SARKISIAN, Esq.
March 30, 1995 Secretary
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<PAGE> 19
SCHAWK, INC.
SCHAWK, INC.
1695 RIVER ROAD, DES PLAINES, ILLINOIS 60018
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The
undersigned hereby appoints A. Alex Sarkisian, Esq. as Proxy, with the power to
appoint his substitute and hereby authorizes him to represent and to vote as
designated below, all the shares of Schawk, Inc. Class A Common Stock held on
record by the undersigned on March 24, 1995, at the annual meeting of
stockholders to be held on May 17, 1995, or any adjournment thereof.
1. FOR the election of the nominees for Director of Schawk.
FOR all nominees listed below (Except as withheld in the space
provided) WITHHOLD AUTHORITY to vote for all nominees listed below
Clarence W. Schawk Larry Larkin
David A. Schawk Judith W. McCue, Esq.
A. Alex Sarkisian, Esq. Ronald J. Kay
Marie Meisenbach Graul Hollis W. Rademacher
Robert F. Meinken John T. McEnroe, Esq.
________ FOR ________ WITHHELD FOR ALL
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name on the lines provided below.
___________________________________________________
___________________________________________________
___________________________________________________
2. In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting.
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1.
<PAGE> 20
THE BOARD OF DIRECTORS OF SCHAWK, INC. RECOMMEND A VOTE FOR PROPOSAL 1. Please
mark, sign, date and return your proxy without delay in the return envelope
provided for that purpose, which requires no postage if mailed within the
United States or Puerto Rico.
Dated ___________, 1995
_________________________________________________
Signature
_________________________________________________
Signature if held jointly
Please sign exactly as name appears hereon, joint
owners should each sign. When signing as Attorney,
Executor, Administrator, or Guardian, please give
full title as such. If signer is a corporation,
please sign with the full corporation name by duly
authorized officer or director.
- 2 -
