<PAGE> 1
The following items were the subject of a Form 12b-25 and are included
herein: Items 10(a), 10(c), 11, 12 and 13
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[ X ] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to ___________
Commission File Number 1-8591
FIGGIE INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 52-1297376
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
4420 Sherwin Road
Willoughby, Ohio 44904
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (216) 935-2700
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
<S> <C>
10-3/8% Subordinated Debentures Pacific Stock Exchange Inc.
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, Par Value $.10 Per Share
(Title of class)
Class B Common Stock, Par Value $.10 Per Share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. YES X
NO _____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within
60 days prior to the date of filing. (See the definition of affiliate in
Rule 405.) AT 4/8/94 $126,312,104
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class A Common Stock, Par Value $0.10 Per share (outstanding as of
4/8/94) 13,673,595
Class B Common Stock, Par Value $0.10 Per share (outstanding as of
4/8/94) 4,944,645
<PAGE> 2
FIGGIE INTERNATIONAL INC.
Amendment No. 1
The undersigned registrant hereby amends the
following items, financial statements, exhibits or other
portions of its Annual Report for 1993 on Form 10-K as set
forth in the pages attached hereto:
(List all such items, financial statements,
exhibits or other portions amended)
Items 10(a), 10(c), 11, 12 and 13
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Company has duly caused this
amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIGGIE INTERNATIONAL INC.
(Company)
Date: April 30, 1994
By: /s/ L. A. Harthun
L. A. Harthun
Senior Vice President-International
General Counsel and Secretary
<PAGE> 3
PART III
Item 10. Directors and Executive Officers of the Registrant
<TABLE>
<CAPTION>
(a) Identification of Directors
Served as
Name and Director
Principal Occupation Since
<S> <C>
WALTER M. VANNOY, age 66 1981
Vice Chairman of the Board, Figgie
International, Inc.;
President, Vannoy Enterprises, Ltd.;
Director, Illinois Power Company;
Director, ChemPower, Inc.; former
Vice Chairman, McDermott International Inc.;
former President and Chief Operating
Officer, Babcock & Wilcox.
GERALD K. RUGGER, age 77 1981
Retired; former Chairman of the Board and
Chief Executive Officer of Home Life
Insurance Company.
Dr. HARRY E. FIGGIE, III, age 40(1),(2) 1985
President and Director, The Clark-Reliance
Corporation, manufacturer of boiler and
steam gauges and controls; Vice Chairman
of Technology and Strategic Planning,
Figgie International Inc. between September
1990 and March 1994; previously Assistant to the
Chief Executive Officer/Financial Analysis,
Figgie International Inc; formerly physician
and orthopedic surgeon, Cleveland, Ohio.
C.B. ROBERTSON, III, age 59 1986
President, CBR Associates, Inc., real
estate development.
<PAGE> 4
Served as
Name and Director
Principal Occupation Since
HARRY E. FIGGIE, JR., age 70(1)(2) 1963
Chairman of the Board and Chief Executive
Officer, Figgie International Inc.;
Chairman of the Board, The Clark-Reliance
Corporation, manufacturer of boiler and
steam gauges and controls.
HAROLD B. SCOTT, age 75 1974
Retired; Director, Key Trust N.A.; Chairman
of the Board and Chief Executive Officer,
Harold B. Scott, Inc.; former Chairman of
the Board, Syracuse Supply Co.; former
Chairman of the Board, Givaudan Corp.;
former President and Chief Executive
Officer, U.S.-U.S.S.R. Trade and Economic
Council, Inc.; former Assistant Secretary,
U.S. Department of Commerce.
DALE S. COENEN, age 65 1964
President and Director, Coenen & Co., Inc.,
investments; Chairman of the Board and
President, Trans-Industries, Inc.,
manufacturer of electronic information
systems, composite structures, environmental
systems and mechanical assemblies; Director,
The Clark-Reliance Corporation.
ROBERT A. WEAVER, JR., age 74(1) 1980
Chairman and Chief Executive Officer,
Robert A. Weaver, Jr. and Associates, Inc.,
consultants in international strategic
planning and corporate growth; Chairman,
Weaver Europe, S.A., and Weaver
International Corp.; Director, Newsteam
Video, Inc. and Boston Parents Paper, Inc.
FRED J. BRINKMAN, age 65 1992
Consultant; former partner
Arthur Andersen & Co. public accountants,
Senior Partner Eastern Europe, Asia &
Pacific areas from 1989 to 1991 and
Managing Partner of the firm's
Washington, D.C. office from 1981
to 1989, Director, Washington Gas Light Co.
<PAGE> 5
Served as
Name and Director
Principal Occupation Since
VINCENT A. CHIARUCCI, age 64(1) 1989
President and Chief Operating Officer
of Figgie International Inc.; Group Vice
President of Figgie International Inc.'s
Safety Products Distribution Group from
1988 to 1989; Business Consultant
(self-employed) from 1986 to 1988;
Director, Community Mutual Insurance Company.
ALFRED V. GANGNES, age 73 1972
Retired; former President, Figgie
International Inc.; former Director,
Evaluation Research Corporation.
HARRISON NESBIT, II, age 67(1) 1969
Chairman and Director, Godine, Nesbit,
McCabe & Co., an insurance brokerage
firm; former General Agent, State of
Virginia, Massachusetts Mutual Life
Insurance Co.; Director, St. George
Metals, Inc.; Director, O-Three Limited.
A.A. SOMMER, JR., age 70 1986
Partner, Morgan, Lewis & Bockius,
Washington, D.C., law firm; Director,
Consolidated Natural Gas Co.; Chairman,
Public Oversight Board of the American
Institute of Certified Public Accountants;
Member, Board of Governors, National
Association of Securities Dealers.
F. RUSH McKNIGHT, age 64 1985
Partner, Calfee, Halter & Griswold,
Cleveland, Ohio, law firm; Managing Partner
from 1985 to 1991.
JOHN S. LANAHAN, age 71 1985
Consultant; former Senior Vice President-
Commercial, Chessie System Railroads; former
President and Managing Director, the
Greenbrier Resort Hotel.
(1) See discussion under the caption "CERTAIN TRANSACTIONS."
(2) Dr. Harry E. Figgie, III is the son of Harry E. Figgie,
Jr., who is a director and Chairman of the Board and
Chief Executive Officer of the Corporation.
</TABLE>
<PAGE> 6
(c) Compliance with Section 16(a)
On March 7, 1994 a Form 5, "Annual Statement of Changes
in Beneficial Ownership," was filed with the Securities and
Exchange Commission by Dean E. Steel, a former employee of
the Corporation, to report sales of shares of the
Corporation's Common Stock after the termination of his
employment with the Corporation but within six months of
various changes in his beneficial ownership of the
Corporation's Common Stock as a result of his participation
in the Corporation's Automatic Dividend Reinvestment Plan,
Supplementary Retirement Savings Plan, Stock Ownership Trust
and Plan, Stock Ownership Trust and Plan for Salaried
Employees and Stock Bonus Trust and Plan, which transactions
were eligible for deferred reporting under Section 16 of the
Exchange Act. The sales should have been reported on timely
Form 4s and the Form 5 should have been filed no later than
February 14, 1994.
Item 11. Executive Compensation
DIRECTORS' COMPENSATION
The Directors, except those who are also employees of
the Corporation, receive a stipend based on an annual rate of
$20,000. In addition, the members of the Audit,
International, Real Estate, Insurance, Nominating and
Compensation Committees, except for a director who is also an
employee of the Corporation, receive $6,000 per year, and the
members of the Executive and Finance Committee, except for a
director who is also an employee of the Corporation, receive
$9,000 per year. The Chairmen of the Committees of the Board
of Directors other than Mr. Figgie receive an additional
$1,000 per year for each chairmanship held.
The Corporation has agreed to pay a death benefit, in
the amount of $200,000, to the estate of each Director, other
than a director who is also an employee, upon his death.
This benefit is provided to a Director while in office and
after retirement if he has served 5 years. The benefit is
payable from the general assets of the Corporation and the
Corporation has insured this liability by purchasing life
insurance policies on the lives of the eligible Directors.
The Board of Directors and Committee members also
receive travel and lodging expenses in connection with their
attendance at Board and Committee meetings.
<PAGE> 7
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
|-----ANNUAL COMPENSATION-----|AWARDS
OTHER RESTRICTED ALL
ANNUAL STOCK OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION AWARD(S)(3) COMPENSATION(4)
<S> <C> <C> <C> <C> <C> <C>
Harry E. Figgie, Jr. 1993 $755,000 $0 $105,802 $2,539,087 $642,547
Chairman and CEO 1992 $695,000 $663,692 $92,758 $957,662
1991 $635,833 $666,045
Vincent A. Chiarucci 1993 $371,875 $0 $1,434,825 $116,931
President 1992 $331,250 $332,050 $39,187
1991 $277,500 $277,180
Dr. Harry E. Figgie, III 1993 $379,167 $0 $1,475,382 $22,844
Vice Chairman 1992 $329,167 $313,362 $307,177 $12,752
1991 $237,500 $190,475
L. A. Harthun 1993 $219,000 $0 $277,405 $41,667
Sr. Vice President, 1992 $207,333 $189,856 $26,723
General Counsel 1991 $199,167 $185,982
Joseph J. Skadra 1993 $210,000 $0 $369,873 $29,073
Sr. Vice President-Finance 1992 $190,000 $196,210 $19,182
1991 $166,873 $174,355 $17,021
(1) Includes the full amount of the discretionary component
of the bonus, although only one quarter of that bonus is
paid in the year that it is declared and the remaining
three quarters of that bonus are paid in equal
installments in each of the three years after the
discretionary bonus is declared if the executive
continues to be employed by the Corporation or if the
termination of employment is due to death, disability or
retirement. In cases of termination for any other
reason, the Compensation Committee has sole discretion
to determine whether the remaining bonus installments
will be paid.
<PAGE> 8
(2) The amount indicated represents the incremental cost to
the Corporation of expenses associated with the use of a
company car ($46,971), aircraft ($19,078) and club dues
($39,753).
(3) The transfer and pledge restrictions on the restricted
shares reflected in the table with respect to 1993 are
scheduled to lapse upon the termination of the 1993
Restricted Stock Purchase Plan for Employees (the "1993
Plan") on July 1, 1998 under the terms of the 1993 Plan.
The transfer and pledge restrictions on the restricted
shares reflected in the table for years prior to 1993
lapsed upon the termination of the 1988 Restricted Stock
Purchase Plan for Employees (the "1988 Plan") by the
Board of Directors on December 22, 1992. As of December
31, 1993, the aggregate number and the value of the
shares (less the purchase price paid by the executive)
of restricted stock held by the executives was as
follows: Harry E. Figgie, Jr., 156,450 shares having a
market value (less purchase price) of $2,062,681; Mr.
Chiarucci, 91,100 shares having a market value (less
purchase price) of $1,150,137; Dr. Figgie, 91,100 shares
having a market value (less purchase price) of
$1,197,454; Mr. Harthun, 17,613 shares having a market
value (less purchase price) of $222,364; Mr. Skadra,
23,484 shares having a market value (less purchase
price) of $296,485.
(4) The amounts disclosed in this column include:
(a) The amount of the entire premium paid by the
Corporation during 1993 for one or more split-dollar
insurance policies notwithstanding the fact that the
premiums are refunded to the Corporation upon the death
of the executive or when the executive obtains his
policy under the terms of the policy. The executive
officer paid a portion of the premium based upon a rate
for term life insurance. Until an executive officer
obtains his policy, the Corporation, but not the
executive, can obtain loans for its benefit against the
policies. The amounts reflected in the table for split-
dollar insurance are as follows: Mr. Figgie - $128,985;
Mr. Chiarucci - $116,931; Dr. Figgie - $22,844; Mr.
Harthun - $41,667; and Mr. Skadra - $29,073.
(b) Monthly payments made by the Corporation to Mr.
Figgie for 1993 in an aggregate amount of $513,562 under
the Corporation's Senior Executive Benefits Program.
This program provides retirement and other benefits
prior to retirement in the event that a person remains
an employee of the Corporation after the normal
retirement date of age 65 (or in certain circumstances,
age 62).
</TABLE>
<PAGE> 9
RETIREMENT BENEFITS
Salaried Employee Retirement Income Provisions of the
Retirement Income Plan II
All of the Executive Officers of the Corporation, with
the exception of Mr. Figgie, are currently accruing
retirement income credits under, or will accrue them upon
their satisfaction of the eligibility requirements set forth
in, the Retirement Income Plan II (the "Salaried Provision").
The Salaried Provision covers the salaried employees of the
Corporation except employees of certain non-participating
divisions and subsidiaries. Directors who are not employees
are not entitled to receive retirement benefits under the
Retirement Income Plan II.
<TABLE>
<CAPTION>
In general, the Salaried Provision, as adopted effective
July 31, 1993, is a defined benefit plan which provides that
salaried employees accrue dollar units of retirement income
credits for each calendar year of participation in the
Salaried Provision and employees contribute, where required,
on the basis of their "Annual Pensionable Earnings" each
calendar year and such calendar year's "Covered Compensation"
according to the percentages detailed in the following table:
Annual
Pensionable Earnings(1)
0-100% of Over 100% of
Covered Covered
Compensation Compensation
(2) (2)
<S> <C> <C>
Retirement Income Credit 0.7% 1.2%
Employee Contributions 0 % 2.0%
(1) "Annual Pensionable Earnings" includes cash salaries
and bonuses received by the participant but excludes
any such earnings in excess of $235,840 for calendar
year 1993 and 1994 and $150,000 thereafter (plus any
increase for cost-of-living as shall be prescribed by
the Secretary of the Treasury pursuant to Sections
401(a)(17) and 415(d) of the Internal Revenue Code).
(2) "Covered Compensation" means the average of the
contributions and benefit bases in effect under Section
230 of the Social Security Act for each such calendar
year in the 35 calendar years ending immediately prior
to each calendar year.
For calendar year 1994, Covered Compensation will equal
$22,716.
</TABLE> <PAGE> 10
Generally, any salaried employee of the Corporation
except employees of certain nonparticipating divisions and
subsidiaries is eligible to participate under the Salaried
Provision after the earlier of the completion of one year of
service or attainment of age 40. A participant becomes
vested under the Salaried Provision five years after the
participant's hire date. Upon reaching normal retirement at
age 65, each participant is generally entitled to receive an
annual retirement benefit for life equal to the total of the
retirement income credits accrued by him during his period of
participation. Such benefit is not subject to any deduction
for Social Security benefits. A reduced annual retirement
income benefit may be payable to a retired employee under
other actuarially equivalent forms of pay-out provided for in
the Salaried Provision. The Salaried Provision also contains
provisions for early retirement and preretirement death
benefits payable to spouses and dependent children of certain
deceased participants. During 1993, certain employees of the
Corporation and its subsidiaries accrued retirement benefits
under separate retirement plans of the Corporation which
cover employees of its divisions or subsidiaries which are
not or were not at the time participating under the Salaried
Provision or the Prior Plan.
As of December 31, 1993, the annual benefits payable
upon retirement under the Salaried Provision, including
accrued benefits from a prior plan which was terminated on
November 21, 1988 ("Prior Plan"), to the 5 individuals named
in the Summary Compensation Table are stated below. In
determining such benefits, the executives' earnings were
estimated through 1993 and were assumed not to exceed
$150,000 for 1994 and thereafter. Covered Compensation
($22,716 for 1994) was assumed not to increase after 1993,
the maximum allowable employer-funded benefit under the
Internal Revenue Code (which is the greater of $115,641 or
the accrued benefit as of December 31, 1982) was assumed to
continue to retirement and executives were assumed to
continue working until at least age 65 and to be fully
vested. Based upon the preceding assumptions, the annual
benefits payable to such persons including benefits payable
as a result of voluntary contributions and the accrued
benefits from the Prior Plan are as follows: Mr. Figgie,
$130,590; Dr. Figgie, $12,753; Mr. Chiarucci, $14,740; Mr.
Harthun, $115,087; and Mr. Skadra, $52,493.
<PAGE> 11
Senior Executive Benefits Program
The following plan table shows the annual benefits upon
retirement at age 65 in 1993 for various combinations of
compensation and lengths of service which may be payable
under the Corporation's Senior Executive Benefits Program
(the "SEBP") to the executives named in the Summary
Compensation Table. These amounts are paid in addition to
the amounts payable under the Corporation's Salaried
Provision discussed above.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
ANNUAL BENEFIT IF THE EXECUTIVE RETIRES FROM THE COMPANY'S EMPLOYMENT
AT AGE 65 WITH THE NUMBER OF YEARS OF CREDITED SERVICE SHOWN (1)
REMUNERATION(2) 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C> <C>
$125,000 $16,295 $36,486 $29,594 $22,701 $15,809 $8,917
150000 24128 48236 39844 31451 23059 14667
175000 34961 64486 56094 47701 39309 30917
200000 45795 80736 72344 63951 55559 47167
225000 56628 96986 88594 80201 71809 63417
250000 67461 113236 104844 96451 88059 79667
300000 89128 145236 137344 128951 120559 112167
400000 132461 210736 202344 193951 185559 177167
450000 154128 243236 234844 226451 218059 209667
500000 175795 275736 267344 258951 250559 242167
(1) Annual benefits are computed on the basis of 100% joint
and survivor benefit. The annual benefits reflected in
the table constitute 65% of final covered remuneration,
less assumed social security benefits of $24,087.60 and
less assumed amounts of benefits payable under the
Salaried Provision. The benefits under the Salaried
Provision have been calculated based upon the
assumptions that the amount of Covered Compensation, as
defined in the Salaried Provision, remains fixed and
the amount of Annual Pensionable Earnings, as defined
in the Salaried Provision, is limited to amounts that
do not exceed $150,000. (See the description of the
Salaried Provision set forth above.) The annual
benefits would be increased by 10% of final covered
remuneration for a participant in the SEBP as of
February 18, 1987 or a person hired prior to February
18, 1987 who had completed 20 years of service. The
annual benefits would be reduced by any deferred
compensation plans of former employers which, when
added to the benefits afforded by the SEBP, would
exceed the 65% or 75% of final covered remuneration, as
applicable under the SEBP.
(2) Consists of base salary and the installment payments
that have been received by an executive under the
discretionary bonus component of the Corporation's
incentive bonus arrangements.
As of December 31, 1993, the credited years of service
for the 5 individuals named in the Summary Compensation Table
are as follows: Harry E. Figgie, Jr., 30 years; Harry E.
Figgie, III, 18 years; Vincent A. Chiarucci, 7 years;
Luther A. Harthun, 28 years; and Joseph J. Skadra, 24 years.
Harry E. Figgie, III and Joseph J. Skadra are not accruing
any additional benefits under the SEBP since their
resignations from the Corporation.
</TABLE>
<PAGE> 13
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Corporation entered into an Employment Agreement
dated November 18, 1988 (the "Employment Agreement") with
Harry E. Figgie, Jr., Chairman of the Board and Chief
Executive Officer, providing for his employment through
December 31, 1995, at an annual base salary of at least
$500,000. Mr. Figgie has the option under certain
circumstances of extending his employment arrangement for an
additional 3 years to December 31, 1998. In addition to his
base salary, Mr. Figgie is entitled to receive both a
discretionary bonus, which shall not be less than 60% of his
base salary for the fiscal year to which such bonus relates,
and a formula-based bonus, and to participate in other
benefit plans provided by the Corporation. [Mr. Figgie
waived his right to the minimum discretionary bonus for 1993
pursuant to the Employment Agreement.] Pursuant to the terms
of the Employment Agreement, Mr. Figgie purchased 72,812
shares of Class A Common Stock and 27,188 shares of Class B
Common Stock at a price of $1.00 per share pursuant to the
1988 Plan as a sign-on bonus. Those shares were forfeitable
under the terms of the 1988 Plan until its termination in
December 1992. The Employment Agreement also provides that
the Corporation may terminate the employment of Mr. Figgie
for cause or upon his disability (as defined). Mr. Figgie
may terminate his employment under the Employment Agreement
for good reason (as defined, including actions by the
Corporation resulting in a diminution of his position,
authority, duties or responsibilities). If Mr. Figgie should
elect to terminate his employment for good reason or his
employment is terminated by the Corporation other than for
cause, he is entitled to receive an amount equal to (i) his
base salary, discretionary bonus and formula-based bonus for
the remaining term of the employment period, (ii) any unpaid
bonuses previously awarded for years prior to such
termination year, (iii) any other benefits provided under the
Corporation's plans, programs and practices, and (iv) those
amounts otherwise payable under his consulting arrangement
(see discussion below). In the event Mr. Figgie's
employment should be terminated by the Corporation for cause
or by Mr. Figgie other than for good reason, or in the event
of his death or disability, Mr. Figgie (or his successor in
interest) is only entitled to receive his base salary through
the date of termination, any unpaid bonuses previously
awarded for years prior to such termination year and such
other benefits through the date of termination as may be
available at such time pursuant to the terms of governing
Corporation plans, programs and practices. Upon completion
of his term of employment under the Employment Agreement
(including any extension thereof to December 31, 1998),
Mr. Figgie becomes a consultant to the Corporation under the
terms of the Employment Agreement for an additional
three-year period at 50% of his prior level of compensation.
<PAGE> 14
In May 1989, all corporate officers and corporate level
department heads, other than Mr. Figgie, who report to the
Chief Executive Officer of the Corporation, entered into
severance agreements (the "Severance Agreements") with the
Corporation which become effective in the event of a change
of control of the Corporation (as defined). The Severance
Agreements provide compensation in the event that within 3
years of such change of control the executive is terminated
other than for cause (as defined) or such employment
terminates because the executive's duties, title,
compensation, employee benefits or place of employment are
adversely changed. In addition, if the executive terminates
his employment during a period of 30 days following the end
of 6 months after a change of control, the executive is
entitled to severance compensation. Upon termination of
employment where severance compensation is payable under the
Severance Agreements, the executive is entitled to receive a
payment comprised of 2 times his highest annual base salary,
discretionary bonus and formula-based bonus awards through
the date of his termination of employment, together with
payments relating to the fair market value of any restricted
stock forfeited pursuant to the terms of the related
restricted stock purchase plan by such executive, all amounts
payable which had previously been deferred on such
executive's behalf and amounts provided under the
Corporation's compensation or retirement plans to the extent
such executive participated in such plan or plans at the time
of such change of control. These payments are subject to
reduction to the extent necessary to keep the aggregate
amount of such severance compensation within the limits
imposed by Section 280G of the Internal Revenue Code.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors
currently consists of Harry E. Figgie, Jr., Dale S. Coenen,
and Walter M. Vannoy and Fred J. Brinkman. The members of
the Compensation Committee during fiscal year 1993 were Harry
E. Figgie, Jr., Dale S. Coenen, and Dr. Harry E. Figgie, III.
Mr. Figgie is the Chairman of the Board of the Corporation
and its Chief Executive Officer and the Chairman of the Board
of The Clark-Reliance Corporation. Dr. Figgie is the
President of The Clark-Reliance Corporation and, during 1993,
was Vice Chairman of Technology and Strategic Planning of the
Corporation.
The Stock Option Committee of the Board of Directors
currently consists of Dale S. Coenen and A.A. Sommer, Jr. The
members of the Stock Option Committee during fiscal year 1993
were Dale S. Coenen, A.A. Sommer, Jr. and Russell W. McFall.
On August 25, 1993, the Corporation made a loan to
Harry E. Figgie, Jr. to enable him to acquire restricted
shares under the 1993 Plan. The loan was in the amount of
$156,450, was payable on demand and bore an interest rate
equal to the Bank of Boston's prime rate. As of April 28,
1994 the full amount of the loan had been repaid.
<PAGE> 15
In December 1992, the Corporation made short term,
interest free loans to Harry E. Figgie and to Dr. Figgie to
pay the federal, state and local taxes owed by them at the
time of the lapse of the transfer restrictions on the
restricted shares they acquired under the 1988 Plan, which
was terminated by the Board of Directors of the Corporation
on December 22, 1992. The amount of the loan made to Harry
E. Figgie was $2,443,381 and the loan made to Dr. Figgie was
in the amount of $146,519. Harry E. Figgie and Dr. Figgie
repaid their loans prior to May 5, 1993.
Nancy Figgie, the wife of Harry E. Figgie, Jr. was Vice
President of Facilities Planning of the Corporation until her
resignation in February, 1994, and Matthew Figgie, the son of
Harry E. Figgie, Jr., is Director of Mergers and
Acquisitions, Currency Trading and Corporate Investments of
the Corporation. In 1993, Mrs. Figgie and Matthew Figgie
collectively earned salaries and bonuses in the amount of
$85,540 in their foregoing capacities.
As of October 30, 1991, the Corporation purchased
$1,000,000 of 10% Convertible Subordinated Debentures due
October 30, 2001 issued by Trans-Industries, Inc. The
debentures provide for prepayment without premium of $142,857
per year commencing in 1995 and additional optional
prepayments at declining premiums over the same period. The
debentures are convertible at any time at the option of the
Corporation into common stock of Trans-Industries at $2.00
per share. Mr. Coenen is President, Chairman of the Board
and a shareholder of Trans-Industries and Mr. Harry E.
Figgie, Jr. is also a shareholder of Trans-Industries. The
common stock of Trans-Industries is publicly traded in the
over-the-counter market. The purchase was approved by the
Board of Directors with Mr. Figgie and Mr. Coenen abstaining.
<PAGE> 16
Item 12. Security Ownership of Certain Beneficial Owners and
Management
<TABLE>
<CAPTION> PRINCIPAL STOCKHOLDERS
The stockholders named in the following table are those
which are known to the Corporation to be the beneficial
owners of 5% or more of the Corporation's Class A Common
Stock or Class B Common Stock. Unless otherwise indicated,
the information is as of April 8, 1994. For purposes of this
table, and as used elsewhere in this Proxy Statement, the
term "beneficial owner" means any person who, directly or
indirectly, has or shares the power to vote, or to direct the
voting of, a security or the power to dispose, or to direct
the disposition of, a security. Except as otherwise
indicated, the Corporation believes that each individual
owner listed below exercises sole voting and dispositive
power over his or its shares.
Amount and
Nature of
Title of Name and Address of Beneficial Percent
Class Beneficial Owner Ownership of Class
<S> <C> <C> <C>
Class A Neuberger & Berman
Common Stock 605 Third Avenue
New York, New York 10158 723,900(1) 5.3%
Class A NewSouth Capital Management, Inc.
Common Stock 755 Crossover Lane, Suite 233
Memphis, Tennessee 38117 1,363,574(2) 10.0%
Class A Merrill Lynch Asset Management, L.P.
Common Stock 800 Scrudders Mill Road
Plainsboro, New Jersey 08536 1,063,234(3) 7.8%
Class B Figgie International Inc. ESOP
Common Stock 4420 Sherwin Road
Willoughby, Ohio 44094 374,367(4) 7.6%
Class B Harry E. Figgie, Jr.
Common Stock Figgie International Inc.
4420 Sherwin Road
Willoughby, Ohio 44094 849,579(5) 17.2%
<PAGE> 17
(1) This amount, as reflected in a report on Schedule 13G
dated January 31, 1994, consists of 204,700 shares as to
which the reporting person claims sole voting power, and
723,900 shares as to which the reporting person claims
shared dispositive power.
(2) This amount, as reflected in a report on Schedule 13G
dated July 7, 1993, consists of 1,291,574 shares as to
which the reporting person claims sole voting power,
72,000 shares as to which the reporting person claims
shared voting power, and 1,363,574 shares as to which
the reporting person claims sole dispositive power.
(3) This amount, as reflected in a report on Schedule 13G
dated February 16, 1994, filed by Merrill Lynch & Co.,
Inc., Merrill Lynch Group, Inc., and Princeton Services,
Inc. (which are parent holding companies), Merrill Lynch
Capital Fund, Inc. (the investment company which holds
the shares), and Merrill Lynch Asset Management, L.P.
(doing business as Merrill Lynch Asset Management, the
investment advisor to Merrill Lynch Capital Fund, Inc.),
as a group, consists of 1,063,234 shares as to which the
reporting persons claim shared voting power and
1,063,234 shares as to which the reporting persons claim
shared dispositive power.
(4) As of March 31, 1994, the ESOP held no shares of Class A
Common Stock but held 683,355 shares of Class B Common
Stock, of which 308,988 shares were allocated to
participants. Allocations based on 1993 compensation
have not been made as of April 8, 1994. As of such
date, the ESOP may have residual voting power with
respect to 374,367 shares of Class B Common Stock and no
dispositive power with respect to any shares of Class B
Common Stock. The Department of Labor has expressed the
view that, under certain circumstances, the Employee
Retirement Income Security Act of 1974 may require a
trustee of an employee stock ownership plan to vote or
determine whether to tender shares which are not
allocated to participants' accounts. In view of the
terms of the ESOP, the ESOP disclaims beneficial
ownership of the unallocated shares held by the ESOP.
The terms of the trust agreement for the ESOP provide
that the Trustee has the authority to dispose of certain
allocated and unallocated shares held by the ESOP only
pursuant to the directions of participants with respect
to the diversification of the investments of participant
accounts, a response to a tender or exchange offer or as
needed for the purposes of making distributions of cash
in lieu of fractional shares or distributions of shares
of Class A Common Stock instead of Class B Common Stock.
The terms of the trust agreement for the ESOP, as
amended effective April 1, 1994, also provide that
participants are entitled to instruct the Trustee, on a
confidential basis, on how to vote shares allocated to
their accounts and on how to vote certain of the
unallocated shares on any matter to be voted on by the
stockholders of the Corporation. Under the trust
agreement, allocated and unallocated shares for which no
instructions are received cannot be voted or tendered by
the Trustee. Each active participant is entitled to
instruct the Trustee as to the voting or tendering of a
portion of the unallocated shares in the proportion that
his prior year's compensation (subject to a maximum
amount of compensation) bears to the prior year's
compensation of all active participants who actually
give voting or tendering instructions. The Board of
Directors of the Corporation appoints the trustee or
<PAGE> 18
trustees to act as the Trustee of the ESOP. In March
1994, the Board of Directors accepted the resignations
of the prior individual trustees of the ESOP and the
Board of Directors is now seeking an institutional
trustee.
(5) For a description of Mr. Figgie's beneficial ownership,
see the table under the caption "STOCK OWNERSHIP OF
DIRECTORS, NOMINEES FOR DIRECTORS AND EXECUTIVE
OFFICERS" and footnotes (2), (4), (5) and (8) thereto.
</TABLE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
The following table and notes thereto set forth
information, as of April 8, 1994, except as otherwise noted,
with respect to the beneficial ownership of shares of Class A
and Class B Common Stock by each Director and each Executive
Officer named in the Summary Compensation Table and, as a
group, by the current Directors and Executive Officers of the
Corporation, based upon information furnished to the
Corporation by such persons.
AMOUNT OF BENEFICIAL OWNERSHIP AS OF APRIL 8, 1994 (1)
CLASS A PERCENTAG CLASS B PERCENTAGE
NAME OF BENEFICIAL OWNER COMMON STOCK OF CLASS COMMON STOCK OF CLASS
<S> <C> <C> <C> <C> <C> <C>
Fred J. Brinkman 500 * 3,000 *
Vincent A. Chiarucci 92,691 (2) * 9,124 (2) *
Dale Coenen 300 * 3,000 *
Harry E. Figgie, Jr. (3) 380,576 (2) (4) 2.8% 849,579 (2) (5) (8) 17.2%
Dr. Harry E. Figgie, III (3) 9,972 (2) (6) * 193,818 (2) (7) (8) 1.2%
Alfred Gangnes 22,371 (9) * 12,504 (9) *
John Lanahan 358 * 6,536 *
F. Rush McKnight 1,315 (10) * 6,503 (8) (10) *
Harrison Nesbit, II 1,005 (11) * 6,562 (11) *
C.B. Robertson, III 2,500 (12) * 9,000 *
Gerald Rugger 300 * 6,300 *
Harold B. Scott 14,100 (13) * 4,500 *
A.A. Sommer, Jr. 2,250 * 7,750 *
Walter M. Vannoy 1,150 * 6,150 *
Robert A. Weaver, Jr. 270 * 3,000 (14) *
L.A. Harthun 19,317 (2) * 5,877 (2) *
Joseph J. Skadra 1,687 (2) (15) * 2,328 (2) (15) *
All Directors and Executive
Officers as a Group (23 pers 550,662 (2) 4.0% 1,000,967 (2) 20.2%
* Less than 1%
<PAGE> 19
(1) Except as otherwise indicated in footnotes (2), (4),
(5), (6), (8), (10), and (14), each Director or
Executive Officer owning shares listed or included in
this table exercises sole voting and dispositive power
over such shares.
(2) These amounts include shares of Class A and Class B
Common Stock held by the ESOP for Salaried Employees,
the ESOP and the Stock Bonus Plan which are subject to
certain pass-through voting and tendering rights. The
rights of participants in the ESOP to vote the shares
held by such plans and to instruct the Trustee as to
the tendering of both shares allocated to such
participants and unallocated shares are described above
in footnote (4) to the table under the caption
"PRINCIPAL STOCKHOLDERS." The pass-through voting and
tendering rights of participants in the ESOP for
Salaried Employees are identical to those of the
participants in the ESOP except that shares received
from the Corporation's Salaried Provision (the "Prior
Plan") purchased with amounts received from such plan
or purchased with a loan repaid with amounts received
from such plan must remain in the ESOP for Salaried
Employees. The Prior Plan was terminated in 1988. The
pass-through voting and tendering rights of
participants in the Stock Bonus Plan are identical to
those of the participants in the ESOP, except that all
of the shares in the Stock Bonus Plan have been
allocated to participants. The numbers of shares of
Class A and Class B Common Stock held by the ESOP for
Salaried Employees, the ESOP and the Bonus Plan which
have been allocated as of May 5, 1993 based on 1992
compensation to Mr. Figgie, Dr. Figgie, Mr. Chiarucci,
Mr. Harthun, Mr. Skadra and all Executive Officers as a
group are as follows: (1) allocated shares in the ESOP
for Salaried Employees: Mr. Figgie -- 840 shares of
Class A Common Stock and 419 shares of Class B Common
Stock; Dr. Figgie -- 519 shares of Class A Common Stock
and 279 shares of Class B Common Stock; Mr. Chiarucci -
- 720 shares of Class A Common Stock and 365 shares of
Class B Common Stock; Mr. Harthun -- 833 shares of
Class A Common Stock and 415 shares of Class B Common
Stock; Mr. Skadra -- 816 shares of Class A Common Stock
and 407 shares of Class B Common Stock; and all
Executive Officers as a group -- 6,558 shares of Class
A Common Stock and 3,307 shares of Class B Common
Stock; and (2) allocated shares in the ESOP: Mr.
Figgie -- 421 shares of Class B Common Stock; Dr.
Figgie -- 290 shares of Class B Common Stock; Mr.
Chiarucci -- 368 shares of Class B Common Stock; Mr.
Harthun -- 418 shares of Class B Common Stock; Mr.
Skadra -- 410 shares of Class B Common Stock; and all
Executive Officers as a group -- 3,358 shares of Class
B Common Stock; and (3) allocated shares in the Bonus
Plan: Mr. Figgie -- 12,566 shares of Class B Common
Stock; Dr. Figgie -- 171 shares of Class B Common
Stock; Mr. Chiarucci -- 15 shares of Class B Common
Stock; Mr. Harthun -- 4,198 shares of Class B Common
Stock; Mr. Skadra -- 665 shares of Class B Common
Stock; and all Executive Officers as a group -- 19,439
shares of Class B Common Stock. The numbers of shares
of Class A and Class B Common Stock held by the ESOP
for Salaried Employees and the ESOP which have not been
allocated and are reflected in the table above as
beneficially owned as of May 5, 1993 based on 1992
compensation by Mr. Figgie, Dr. Figgie, Mr. Chiarucci,
Mr. Harthun, Mr. Skadra and all Executive Officers as a
group are as follows: (1) unallocated shares in the
ESOP for Salaried Employees: Mr. Figgie -- 871 shares
<PAGE> 20
of Class A Common Stock and 355 shares of Class B
Common Stock; Dr. Figgie -- 871 shares of Class A
Common Stock and 355 shares of Class B Common Stock;
Mr. Chiarucci -- 871 shares of Class A Common Stock and
355 shares of Class B Common Stock; Mr. Harthun -- 871
shares of Class A Common Stock and 355 shares of Class
B Common Stock; Mr. Skadra -- 871 shares of Class A
Common Stock and 355 shares of Class B Common Stock;
and all Executive Officers as a group -- 8,031 shares
of Class A Common Stock and 3,262 shares of Class B
Common Stock; and (2) unallocated shares in the ESOP:
Mr. Figgie -- 491 shares of Class B Common Stock; Dr.
Figgie -- 491 shares of Class B Common Stock;
Mr. Chiarucci -- 491 shares of Class B Common Stock;
Mr. Harthun -- 491 shares of Class B Common Stock; Mr.
Skadra -- 491 shares of Class B Common Stock; and all
Executive Officers as a group -- 4,496 shares of Class
B Common Stock.
(3) Harry E. Figgie, Jr., Chairman of the Board and Chief
Executive Officer of the Corporation, is the father of
Dr. Harry E. Figgie, III, a Director of the
Corporation. Dr. Harry E. Figgie, III resigned from
his position as Vice Chairman-Technology and Strategic
Planning on March 16, 1994.
(4) This amount includes 37,844 shares of Class A Common
Stock owned by The Clark-Reliance Corporation
("Clark-Reliance"), which are also included in the
beneficial ownership of Dr. Figgie. Mr. Figgie, who is
Chairman of the Board of Clark-Reliance, owns, together
with members of his immediate family, all of the shares
of Clark-Reliance and has shared voting and dispositive
power with respect to the shares of Class A Common
Stock owned by Clark-Reliance. This amount does not
include: (i) a total of 28,183 shares of Class A Common
Stock, consisting of 10,296 shares owned directly by,
as of April 18, 1994, and 17,887 shares owned in trust
for members of Mr. Figgie's immediate family, including
Dr. Figgie's beneficial ownership as of May 5, 1993 in
certain of the Corporation's employee benefit plans
(see footnote (2) above); and (ii) 1,500 shares of
Class A Common Stock owned directly by the Figgie
Family Foundation of which Mr. Figgie is one of 4
trustees. Some of the shares listed in (i) above are
beneficially owned by Dr. Figgie. See footnote (6)
below.
(5) This amount includes 835,327 shares of Class B Common
Stock as to which Mr. Figgie has sole voting and
dispositive power and 134,564 shares of Class B Common
Stock owned by Clark-Reliance as to which Mr. Figgie
has shared voting and dispositive power. The Clark-
Reliance shares are also included in the beneficial
ownership of Dr. Figgie. This amount does not include:
(i) a total of 301,435 shares of Class B Common Stock,
consisting of 175,686 shares owned directly by, as of
April 18, 1994, and 125,749 shares owned in trust for
members of Mr. Figgie's immediate family, including Dr.
Figgie's beneficial ownership as of May 5, 1993 in
certain of the Corporation's employee benefit plans
(see footnote (2) above); and (ii) 2,112 shares of
Class B Common Stock owned directly by the Figgie
Family Foundation, of which Mr. Figgie is one of 4
trustees. Some of the shares listed in (i) above are
beneficially owned by Dr. Figgie. See footnote (7)
below.
<PAGE> 21
(6) This amount does not include 2,499 shares of Class A
Common Stock owned in trust for Dr. Figgie. This
amount includes 37,844 shares of Class A Common Stock
owned by Clark-Reliance, of which Dr. Figgie is
president, a director and a minority stockholder. Dr.
Figgie has shared voting and dispositive power with
respect to the shares of Class A Common Stock owned by
Clark-Reliance. The other shares of Class A Common
Stock listed as beneficially owned by Dr. Figgie are
not included in the number of shares of Class A Common
Stock listed as beneficially owned by Mr. Figgie. See
footnote (4) above.
(7) This amount does not include 2,499 shares of Class B
Common Stock held in trust for Dr. Figgie. This amount
includes 134,564 shares of Class B Common Stock owned
by Clark-Reliance. Dr. Figgie has shared voting and
dispositive power with respect to the shares owned by
Clark-Reliance. The other shares of Class B Common
Stock listed as beneficially owned by Dr. Figgie are
not included in the number of shares of Class B Common
Stock listed as beneficially owned by Mr. Figgie. See
footnote (5) above.
(8) These amounts do not include 47,493 shares of Class B
Common Stock held in a trust established by Mr. Figgie
for a member of his immediate family. Dr. Figgie and
Mr. McKnight serve as 2 of 3 trustees of such trust.
(9) Mr. Gangnes shares voting and dispositive power with
respect to 22,371 shares of Class A Common Stock and
12,504 shares of Class B Common Stock with his wife.
(10) These amounts do not include 575 shares of Class A
Common Stock and 575 shares of Class B Common Stock
owned by Mr. McKnight's wife, as to which shares
Mr. McKnight disclaims beneficial ownership.
(11) These amounts do not include 2,405 shares of Class A
Common Stock and 47 shares of Class B Common Stock
owned by Mr. Nesbit's wife.
(12) This amount does not include 2,500 shares of Class A
Common Stock owned by Mr. Robertson's wife.
(13) This amount includes 3,600 shares of Class A Common
Stock for which Mr. Scott has shared voting and
dispositive power as a co-trustee of a trust and 500
shares of Class A Common Stock for which Mr. Scott has
shared voting and dispositive power as the custodian of
a custodial account for his minor children.
(14) This amount does not include 1,000 shares of Class B
Common Stock owned in a trust of which Mr. Weaver's
wife is the beneficiary.
(15) Joseph J. Skadra resigned from his position as Senior
Vice President-Finance and Controller on March 16,
1994.
</TABLE>
<PAGE> 22
Item 13. Certain Relationships and Related Transactions
CERTAIN TRANSACTIONS
Mr. Weaver, a member of the Board of Directors, is
president of Robert A. Weaver, Jr. and Associates, Inc.,
which has performed consulting services for the Corporation
in the area of acquisitions and dispositions. In 1993, the
Corporation paid to Robert A. Weaver, Jr. and Associates,
Inc. $[160,410] in retainers, fees, advances and reimbursed
expenses.
Mr. Nesbit, a member of the Board of Directors, is
Chairman of Godine, Nesbit, McCabe & Co., which has performed
insurance underwriting services for the Corporation in
providing the Split-Dollar Insurance Program for Mr. Figgie
and the Split-Dollar Program for Executive Officers. In 1993
until Mr. Nesbit's retirement from Godine, Nesbit, McCabe & Co. on
July 1, 1993, the Corporation paid to Massachusetts Mutual Life
Insurance Co. $1,644,558 in insurance premiums for split-dollar
insurance programs for executive officers, of which
Mr. Nesbit received insurance commissions and other payments
in the aggregate amount of $33,400.18. In addition, the
Corporation paid Godine, Nesbit, McCabe & Co. $35,727.34
for Corporate Officers' Life Insurance in 1993.
Certain transactions relating to the Corporation and
Harry E. Figgie and Dr. Figgie are described under Item 11
under the caption "Compensation Committee Interlocks and
Insider Participation" and are incorporated by reference.
On August 25, 1993, the Corporation made a loan to
Joseph J. Skadra to enable him to acquire restricted shares
he acquired under the 1993 Plan. The loan was in the amount
of $23,484, was payable on demand and bore interest at a rate
equal to the Bank of Boston's prime rate. As of April 22,
1994, 1994, the amount outstanding was $0.
In December 1992, the Corporation made short term,
interest free loans to each of its executive officers to pay
the federal, state and local taxes owed by each executive
officer at the time of the lapse of the transfer restrictions
on the restricted shares they acquired under the 1988 Plan
when that plan was terminated by the Board of Directors of
the Corporation. The amount of the loan made to certain of
its executive officers and the amount outstanding on each
such loan as of April 25, 1994 are as follows: Vincent A.
Chiarucci, original note amount - $129,615, amount
outstanding as of April 25, 1994 - $129,615; Luther A.
Harthun, original note amount - $79,226, amount outstanding
as of April 25, 1994 - $79,226; Joseph J. Skadra, original
note amount - $72,462, amount outstanding as of April 25,
1994 - 0.
