<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NORTEK, INC.
...............................................................................
(Name of Registrant as Specified In Its Charter)
Not Applicable
...............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
........................................................................
2) Aggregate number of securities to which transaction applies:
........................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
........................................................................
4) Proposed maximum aggregate value of transaction:
........................................................................
*Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the off-setting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form of Schedule and the date of its filing.
1) Amount Previously Paid:
.......................................................................
2) Form, Schedule or Registration Statement No.
.......................................................................
3) Filing Party:
.......................................................................
4) Date Filed:
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Notes:
<PAGE> 2
NORTEK
NORTEK, INC. 50 KENNEDY PLAZA, PROVIDENCE, RHODE ISLAND 02903-2360 401-751-1600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 15, 1994
The Annual Meeting of Stockholders of Nortek, Inc. (the "Company") will be
held at the Omni Biltmore Hotel, Kennedy Plaza, Providence, Rhode Island, on
September 15, 1994 at 11 o'clock a.m., local time, for the following purposes:
1. To elect two directors for a term expiring at the 1997 Annual Meeting
of Stockholders.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on August 18, 1994
as the record date of the Annual Meeting to determine the stockholders entitled
to notice of and to vote at the meeting or any adjournment or postponement
thereof. The Company's stock transfer books will not be closed prior to the
Annual Meeting.
By Order of the Board of Directors,
KEVIN W. DONNELLY
Secretary
Providence, Rhode Island
August 23, 1994
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE DATE, SIGN
AND PROMPTLY RETURN THE ENCLOSED FORM(S) OF PROXY IN THE ENCLOSED STAMPED AND
ADDRESSED ENVELOPE.
<PAGE> 3
NORTEK, INC.
50 KENNEDY PLAZA
PROVIDENCE, RHODE ISLAND 02903-2360
PROXY STATEMENT
The enclosed form(s) of proxy and this Proxy Statement have been mailed to
stockholders on or about August 23, 1994 in connection with the solicitation by
the Board of Directors of Nortek, Inc. (the "Company") of proxies for use at its
Annual Meeting of Stockholders to be held on September 15, 1994 or at any
adjournment or postponement thereof.
A copy of the Company's 1993 Annual Report to Stockholders, which includes
the Annual Report on Form 10-K, has been previously mailed to each stockholder
entitled to vote at the meeting.
As of August 18, 1994 the Company had outstanding 11,999,447 shares of
Common Stock, $1.00 par value (the "Common Stock"), and 544,244 shares of
Special Common Stock, $1.00 par value (the "Special Common Stock"). Holders of
record at the close of business on August 18, 1994 are entitled to vote at the
meeting or any adjournment or postponement thereof. Holders of shares of Common
Stock are entitled to one vote for each share, and holders of shares of Special
Common Stock are entitled to ten votes per share on each matter to be voted on
at the meeting. With respect to the election of directors, holders of Common
Stock shall be entitled to elect one director and the holders of Special Common
Stock shall have no voting rights with respect to the election of such director.
The holders of Common Stock and Special Common Stock, voting as a single class,
shall be entitled to elect the other director to be elected.
It is the intention of the persons named as proxies to vote shares of
Common Stock and Special Common Stock represented by duly executed proxies for
the election of the nominees for director selected by the Board of Directors
unless authority to do so has been withheld or a contrary specification made. If
any other business is properly brought before the Annual Meeting and on all
matters incidental to the conduct of the meeting, the proxy will be voted in
accordance with the discretion of the persons named as proxies. Any such proxy
may be revoked by the stockholder at any time prior to the voting of the proxy
by a written revocation received by the Secretary of the Company, by properly
executing and delivering a later-dated proxy, or by attending the meeting,
requesting return of the proxy and voting in person. Proxies will be tabulated
by the Company's transfer agent, State Street Bank and Trust Company. A
plurality of votes properly cast by the appropriate class of stockholders will
elect directors. Abstentions from voting will have no effect on the outcome of
the election of directors, even though a person analyzing the results of the
voting may interpret such a vote differently.
1. ELECTION OF DIRECTORS
The By-laws of the Company provide that the Board of Directors shall
consist of not less than three directors and that the number of directors at any
time shall be the number of directors fixed by resolution of the Board of
Directors. The Board of Directors has fixed the number of directors at seven
which is the current number of directors. The Board of Directors is divided into
three classes, with each class to hold office for a term of three years. At the
meeting, two directors are to be elected for a term of three years expiring at
the 1997 Annual Meeting and until their respective successors are elected and
qualified. Holders of Common Stock, voting separately as a class, are entitled
to elect 25% of the directors to be elected at the Annual Meeting, which in this
case constitutes one director. Barry Silverstein has been nominated to be
elected by the holders of Common Stock voting separately as a class for a term
of three years expiring at the 1997 Annual
1
<PAGE> 4
Meeting. Richard L. Bready has been nominated to be elected by the holders of
Common Stock and Special Common Stock voting as a single class for a term of
three years expiring at the 1997 Annual Meeting.
Each of the nominees has agreed to serve as a director, if elected. If, at
the time of the Annual Meeting, a nominee is unwilling or unable to serve (which
is not currently anticipated), the Board may fix the number of directors at less
than seven, or the persons named as proxies may nominate and may vote for other
persons in their discretion. The By-laws require nominations of directors, other
than by the Board of Directors, to be submitted to the Company's Chief Executive
Officer or Secretary at least 30 days before the meeting and be accompanied by a
petition signed by at least 100 stockholders of record, holding in the aggregate
at least 1% of the capital stock entitled to vote, and by certain other
information.
Presented below is information regarding the nominees for director as well
as those directors continuing in office.
NOMINEES FOR THE BOARD OF DIRECTORS
<TABLE>
<CAPTION>
NOMINEES FOR TERM EXPIRING DIRECTOR
AT THE 1997 ANNUAL MEETING PRINCIPAL OCCUPATION AGE SINCE
- - - - --------------------------------- ------------------------------------------- --- --------
<S> <C> <C> <C>
Richard L. Bready................ Chairman, President and Chief Executive 50 1976
Officer of the Company
Barry Silverstein................ Principal owner and a director of Coaxial 61 1992
Communications of Central Ohio, Inc.,
Coaxial Communications of Southern Ohio,
Inc. (cable television services) and
related entities
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE
1995 ANNUAL MEETING
- - - - ---------------------------------
Dennis J. McGillicuddy........... President and a director of Coaxial 52 1990
Communications of Central Ohio, Inc.,
Coaxial Communications of Southern Ohio,
Inc. (cable television services) and
related entities
D. Stevens McVoy................. Vice President and a director of Coaxial 51 1993
Communications of Central Ohio, Inc.,
Coaxial Communications of Southern Ohio,
Inc. (cable television services) and
related entities
TERM EXPIRING AT THE
1996 ANNUAL MEETING
- - - - ---------------------------------
Philip B. Brooks................. Retired, Certified Public Accountant 80 1981
Richard J. Harris................ Vice President and Treasurer of the Company 58 1984
J. Peter Lyons................... President of The J. Peter Lyons Companies 59 1991
(consulting services for employee insurance
benefits)
</TABLE>
Mr. Bready became Chairman and Chief Executive Officer of the Company in
1990 after serving as President, Chief Operating Officer and Chief Financial
Officer of the Company for more than the past five years. Mr. Silverstein, for
more than the past five years, has been the principal owner and a director of
the Coaxial Communications Companies, which he founded along with Messrs.
McGillicuddy and McVoy.
2
<PAGE> 5
Mr. Silverstein has also been Chief Executive Officer (June 1985 to May 1988 and
February 1991 to May 1991), Chairman of the Executive Committee (May 1988 to
February 1991) and Chairman of the Board (June 1986 to May 1988 and February
1991 to present) of CCX, Inc., a manufacturer of building products. Messrs.
Bready, McGillicuddy and McVoy are also directors of CCX, Inc. Mr. McGillicuddy
has been President and a director and Mr. McVoy has been Vice President and a
director, for more than the past five years, of the Coaxial Communications
Companies, which they founded along with Mr. Silverstein. Mr. Brooks is a
certified public accountant who retired from active practice in 1967. Mr. Harris
has been employed by the Company in his present capacities for more than the
past five years. Mr. Lyons, for more than the past five years, has been
President of The J. Peter Lyons Companies which in the past has designed benefit
plans and provided insurance services to the Company.
The Board of Directors held ten meetings during 1993. Each director
attended more than 75% of the meetings and of the meetings of the committees of
the Board on which he served. The Board of Directors has a standing Audit
Committee, consisting of Messrs. Brooks (Chairman of the committee) and Lyons.
The duties of the Audit Committee consist of reviewing with the Company's
independent auditors and its management the scope and results of the annual
audit, the scope of other services provided by the Company's auditors, proposed
changes in the Company's financial and accounting standards and principles, the
Company's policies and procedures with respect to its internal accounting,
auditing and financial controls, and making recommendations to the Board of
Directors on the engagement of the independent auditors. During 1993 the Audit
Committee held one meeting. The Stock Option Committee of the Board, consisting
of Messrs. Brooks, Lyons and McVoy, which is authorized to administer the
Company's stock option plans, held two meetings in 1993. The Board of Directors
does not have a standing nominating committee. A standing Compensation
Committee, comprised of Messrs. Brooks and Lyons, was formed in 1994 with
authority to recommend to the full Board changes in the compensation
arrangements with the Chief Executive Officer and certain other executive
officers. Directors who are not officers or employees of the Company or its
subsidiaries receive directors' fees from the Company. The fees currently paid
to such directors are $1,000 per month and $750 per meeting ($350 if a director
participates by telephone). In addition, members of committees of the Board of
Directors receive $350 per committee meeting.
In a civil injunction action filed March 12, 1990 in the federal court in
Washington, D.C., the Securities and Exchange Commission ("SEC") alleged that
the Company violated Sections 10(b) and 13(d) of the Securities Exchange Act of
1934 and Rules 10b-5 and 13d-1 thereunder in connection with reporting on a
Schedule 13D its purchases of stock of Rexham Corporation ("Rexham") in January
1987. The complaint also alleged that Messrs. Harris and Bready and Ralph R.
Papitto (former Chairman and Chief Executive Officer of the Company) aided and
abetted the Company's violations of Section 13(d) and Rule 13d-1. For purposes
of settling, each of the Company and Messrs. Papitto, Harris and Bready, without
admitting or denying the SEC allegations, agreed to an entry of a permanent
injunction enjoining them from future violations of the statutory provisions and
rules they were alleged to have violated and the Company agreed to pay into a
fund created by the court $634,593 including interest, to compensate persons who
sold Rexham securities during the four-day period the Company's Schedule 13D
filing was allegedly delinquent.
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of equity
securities of the Company by the Company's directors, by nominees for director,
by its executive officers named in the Summary Compensation Table, by its
directors and executive officers as a group, and by those known by the Company
to own beneficially more than 5% of its Common Stock or Special Common Stock,
all as of August 5, 1994 except for the number of shares held by Gabelli Funds,
Inc. as to which the date is July 27, 1994.
<TABLE>
<CAPTION>
COMMON STOCK SPECIAL COMMON STOCK
------------------------ ------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL PERCENT BENEFICIAL PERCENT
NAME (1) OWNERSHIP (2) OF CLASS OWNERSHIP (2) OF CLASS
- - - - --------------------------------------------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C>
Richard L. Bready(3)(4)...................... 1,740,759 14.5 318,327 54.6
Philip B. Brooks............................. 38,600 * 6,699 1.2
Almon C. Hall................................ 28,613 * 2,078 *
Richard J. Harris(4)......................... 287,376 2.4 50,106 9.2
J. Peter Lyons............................... -- --
Dennis J. McGillicuddy(3).................... 1,503,959 12.5 234,564 43.0
D. Stevens McVoy(3).......................... 1,503,959 12.5 234,564 43.0
Siegfried Molnar............................. 22,000 * --
Kenneth J. Ortman............................ 32,989 * --
Barry Silverstein(3)......................... 1,503,959 12.5 234,564 43.0
All directors and executive officers as a
group(3)(4)(5)............................. 1,924,721 15.9 330,957 56.2
Bready Associates(3)......................... 1,503,959 12.5 234,564 43.0
Phoenix Associates III(3).................... 1,503,959 12.5 234,564 43.0
Gabelli Funds, Inc.,
One Corporate Center
Rye, NY 10580(6)........................... 2,075,439 17.3 22,631 4.2
- - - - ---------------
* Less than 1%
(1) The address of all such persons unless otherwise stated is c/o Nortek, Inc.,
50 Kennedy Plaza, Providence, Rhode Island 02903-2360. The address of Mr.
McVoy, Bready Associates and Phoenix Associates III is 3770 East Livingston
Avenue, Columbus, Ohio 43227. The address of Messrs. McGillicuddy and
Silverstein is 5111 Ocean Boulevard, Sarasota, Florida 34242. Certain of the
shares shown in the table are shares as to which the persons named in the
table have the right to acquire beneficial ownership, as specified in Rule
13d-3(d)(1) promulgated under the Securities Exchange Act of 1934, as
amended. Unless otherwise indicated, the persons or entities identified in
this table have sole voting and investment power with respect to all shares
shown as beneficially held by them, subject to community property laws where
applicable.
(2) Includes shares subject to currently exercisable options in the case of
Messrs. Bready (37,500 shares of Special Common Stock), Brooks (36,000
shares of Common Stock and 6,000 shares of Special Common Stock), Hall
(18,000 shares of Common Stock), Harris (30,000 shares of Common Stock),
Molnar (16,000 shares of Common Stock) and Ortman (25,950 shares of Common
Stock). Does not include future rights to acquire shares upon the exercise
of options in the case of Messrs. Bready (150,000 shares of Common Stock),
Hall (30,000 shares of Common Stock), Harris (30,000 shares of Common
Stock), Molnar (8,000 shares of Common Stock) and Ortman (11,250 shares of
Common Stock). Includes 200 shares of Common Stock and 33 shares of Special
Common Stock beneficially owned by
</TABLE>
4
<PAGE> 7
Mr. McGillicuddy's wife, as to which Mr. McGillicuddy disclaims beneficial
ownership, and 2,869 shares of Common Stock jointly owned by Mr. McVoy and
his wife.
(3) Mr. Bready holds a 15% junior interest (1% senior interest), Mr.
McGillicuddy a 19% junior interest (22% senior interest), Mr. McVoy a 9%
junior interest (10% senior interest) and Mr. Silverstein a 57% junior
interest (67% senior interest) in Bready Associates, a partnership which
directly held 1,059,291 shares of Common Stock at August 5, 1994. Under the
terms of the partnership agreement of Bready Associates, the partnership
also exercises sole voting and dispositive power over shares of Common and
Special Common held by the partners and their affiliates. Phoenix
Associates III is a partnership whose general partners are Messrs.
McGillicuddy (a 22.5% interest), McVoy (a 10% interest) and Silverstein (a
67.5% interest). As of August 5, 1994 Phoenix Associates III directly held
183,700 shares of Common Stock. Accordingly, all shares held by the
partnerships, the partners and their affiliates are included in the table
as being beneficially owned by Messrs. Bready, McGillicuddy, McVoy and
Silverstein and by the partnerships and are also included under shares held
by directors and executive officers as a group.
(4) Various defined benefit pension plans of the Company and certain of its
subsidiaries held approximately 2.0% of the outstanding Common Stock of the
Company and 8.5% of the outstanding Special Common Stock at August 5, 1994.
Under the provisions of the trust agreement governing the plans, the
Company may instruct the trustee regarding the acquisition and disposition
of plan assets and the voting of securities held by the trust. Accordingly,
although the directors and officers disclaim beneficial ownership of such
shares, the shares are included in the table as being beneficially owned by
Messrs. Bready and Harris and are also included under shares held by
directors and executive officers as a group.
(5) Includes 135,200 shares of Common Stock and 43,500 shares of Special Common
Stock that directors and executive officers as a group have a right to
acquire upon the exercise of currently exercisable options. Does not
include future rights of executive officers to acquire shares upon exercise
of options totalling 248,000 shares of Common Stock. Includes 200 shares of
Common Stock and 33 shares of Special Common Stock owned by Mr.
McGillicuddy's wife as to which Mr. McGillicuddy disclaims beneficial
ownership, and 2,869 shares of Common Stock jointly owned by Mr. McVoy and
his wife. Except as set forth in the above table, the Company knows of no
persons who at August 5, 1994, beneficially owned more than 5% of the
shares of Common Stock or Special Common Stock of the Company outstanding
on that date.
(6) Includes 139 shares of Common Stock which may be acquired upon the exercise
of conversion rights of the Company's 7 1/2% Convertible Debentures due
2006 at $21.56 per share.
SECTION 16(A) REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and beneficial owners of more than 10% of its
Common Stock or Special Common Stock to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission and
the New York Stock Exchange and to furnish the Company with copies of the
reports they file. Messrs. McGillicuddy, McVoy and Silverstein, directors and
beneficial owners of more than 10% of the Company's Common Stock failed to file
Form 4 reports and an annual Form 5 report reflecting acquisitions of Common
Stock by Bready Associates, a partnership in which they are partners. Form 4
reports regarding these acquisitions have been filed late. In addition, Mr.
McVoy filed late a Form 4 report reflecting acquisitions of the Company's Common
Stock.
5
<PAGE> 8
FIVE-YEAR AND ONE-YEAR SHAREHOLDER RETURN COMPARISONS
The following line-graph compares the yearly percentage change for the last
five years in the cumulative total shareholder return of the Company's Common
Stock against the cumulative total return of the Russell 2000 Index and a group
of peer companies which are listed below.
[GRAPH INSERTS HERE]
6
<PAGE> 9
The peer group companies are:
<TABLE>
<S> <C>
Armstrong World Industries, The Stanley Works
Inc. Maytag Corporation
Bird Corporation Fedders Corporation
Masco Corporation Whirlpool Corporation
Morgan Products Ltd.
Ply-Gem Industries, Inc.
</TABLE>
For 1993, based on quarterly changes, the following line-graph compares the
percentage change in cumulative shareholder return of the Company's Common Stock
against the same index and peer company group.
[GRAPH INSERTS HERE]
7
<PAGE> 10
REPORTS ON EXECUTIVE COMPENSATION
BOARD OF DIRECTORS
The Company's policy with respect to the compensation of executive officers
is primarily based on the performance of the individual officer along with such
other factors as compensation paid by competitors of the Company, local
geographical factors, the term of employment, salary surveys and the use of
consultants when considered necessary. Bonuses for executive officers are
awarded on a discretionary basis by the Chief Executive Officer based on
individual goals derived from the responsibilities of the individual and which
are determined, in part, on Company performance and to a greater extent on
individual performance. The Company has no supplementary pension plan for the
executive officers other than a modest fixed benefit for the Chief Executive
Officer and two other executive officers described below under the heading
"Pension Plan". Executive officers are ineligible to participate in the
Company's 401(k) plan.
The executive officers named in the Summary Compensation Table other than
the Chief Executive Officer received no salary increases in 1993 and bonuses
awarded such executive officers for the year reflected the achievement of
certain cash flow objectives, improvement in operating performance of certain
units and other factors.
The Board of Directors considers performance in 1993 to be excellent in
terms of achieving Company objectives and the resulting ongoing positive impact
on the balance sheet and operating results.
By the Board of Directors:
Richard L. Bready Dennis J. McGillicuddy
Philip B. Brooks D. Stevens McVoy
Richard J. Harris Barry Silverstein
J. Peter Lyons
SPECIAL COMPENSATION COMMITTEE
The compensation of the Chief Executive Officer, Mr. Bready, is governed by
the terms of his employment agreement with the Company which was last amended in
November 1990. The terms of the agreement are set forth below in a footnote to
the Summary Compensation Table. Mr. Bready's annual base salary last fixed in
1990 has increased since then based on annual increases in the cost of living.
He received no incentive compensation under the agreement for 1991, 1992 and
1993 since the Company had no pre-tax earnings upon which his incentive
compensation is based. As provided in his employment agreement Mr. Bready is
eligible to receive bonuses at the discretion of the Board. A Special
Compensation Committee of the Board consisting of Messrs. Brooks and Lyons,
after consulting with an independent firm specializing in executive
compensation, approved a cash bonus for Mr. Bready in the amount of $2,450,000
in recognition of his leadership in connection with the Company's performance
during the three years since he became Chief Executive Officer of the Company.
The bonus was based upon his base compensation for each of the three years plus
an assumed value of $1 per share of an option award of 500,000 shares as if such
award had been made at the time he became Chief Executive Officer.
By the Special Compensation Committee:
Philip B. Brooks J. Peter Lyons
STOCK OPTION COMMITTEE
With respect to long-term incentive compensation, the Company believes that
stock options are an additional incentive for executive officers and other
selected key employees of the Company and its subsidiaries and upon whose
efforts the Company is largely dependent for the successful conduct of its
8
<PAGE> 11
business. The award of stock options will encourage such persons to improve
operations and increase profits and to accept employment with or remain in the
employ of the Company or its subsidiaries. The Company's stock option plans are
administered by the Stock Option Committee of the Board whose members are
Messrs. Brooks, Lyons and McVoy. In 1993 the Committee awarded options to Mr.
Bready for 150,000 shares of Common Stock. In making the award, the Committee
considered stock option grants previously made to him and exercised subjective
judgment and discretion. Stock options were awarded to certain other executive
officers based on their recent salary history, prior option awards, job
performance and overall success of the Company.
By the Stock Option Committee:
Philip B. Brooks D. Stevens McVoy
J. Peter Lyons
INTERLOCKS AND INSIDER PARTICIPATION
Mr. Bready, President and Chief Executive Officer of the Company is
Chairman of the Board of Directors. Mr. Harris, Vice President and Treasurer of
the Company is also a director. As directors they participate in Board
deliberations regarding executive compensation.
EXECUTIVE COMPENSATION
The following table sets forth, on an accrual basis, information concerning
the compensation for services to the Company and its subsidiaries for 1991, 1992
and 1993 of those persons who were, at December 31, 1993, the Chief Executive
Officer and the other four most highly compensated executive officers of the
Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION(1) SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(2)(3)
- - - - ------------------------------ ----- -------- ---------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Richard L. Bready 1993 $731,649 $2,450,000* 150,000 $3,420
Chairman, President, and 1992 711,029 -0- -0- 3,780
Chief Executive Officer(4) 1991 689,650 -0- -0-
Almon C. Hall 1993 210,000 100,000 40,000 9,288
Vice President, Controller 1992 210,000 75,000 -0- 1,338
and Chief Accounting 1991 210,000 150,000 -0-
Officer
Richard J. Harris 1993 175,000 100,000 40,000 793
Vice President and 1992 175,000 75,000 -0- 877
Treasurer 1991 175,000 125,000 -0-
Siegfried Molnar 1993 200,000 30,000 -0- -0-
Senior Vice President -- 1992 200,000 20,000 -0- -0-
Group Operations 1991 200,000 -0- -0-
Kenneth J. Ortman 1993 150,000 75,000 15,000 -0-
Senior Vice President -- 1992 150,000 75,000 -0- -0-
Group Operations 1991 150,000 35,000 -0-
- - - - ---------------
* A cumulative bonus for 1991, 1992 and 1993.
</TABLE>
9
<PAGE> 12
(1) The aggregate amount of any compensation in the form of perquisites and
other personal benefits (club dues, personal use of Company property, etc.)
paid in 1992 and 1993 based on the Company's incremental cost, did not
exceed the lesser of 10% of the executive officer's annual salary and bonus
or $50,000.
(2) No disclosure is made of All Other Compensation for 1991 as permitted by the
transition rules of the Securities and Exchange Commission.
(3) For certain executive officers, the Company provides additional amounts of
life insurance over those provided to other salaried employees. The amounts
shown for 1993 are the premiums paid for such coverage. In addition $8,077
in accrued vacation pay for Mr. Hall is included for 1993.
(4) Mr. Bready's employment agreement with the Company provides for his
employment as President and Chief Executive Officer through December 31,
1998. As of November 1, 1990, his annual base salary was $650,000 with
adjustments based upon increases in the cost of living. The agreement also
provides for incentive compensation based upon the Company's annual
consolidated pre-tax earnings as follows: 0.7% of the amount of such
earnings up to $10,000,000, plus 1.05% of the amount of such earnings in
excess of $10,000,000 and provides that discretionary bonuses may be
awarded. In 1993 the Company awarded Mr. Bready a bonus covering the years
1991, 1992 and 1993 in the total amount of $2,450,000. The employment
agreement may be terminated at the election of Mr. Bready and in such event
he is to be retained by the Company for five years as a consultant at an
annual rate of 60% of his then current annual salary, plus incentive
compensation. The Company may terminate the agreement at any time but in
such event Mr. Bready would receive severance pay in an amount equal to 60%
of his then current annual salary, plus incentive compensation, payable for
five years following termination. If there has been a Change in Control of
the Company (as defined in the agreement) within two years before or one
year after his termination, then Mr. Bready may elect to accelerate the
receipt of his severance pay. If he becomes disabled or dies while
employed, the Company will pay to Mr. Bready or his estate an amount equal
to 60% of his then current annual salary, plus incentive compensation for
five years, or, if he was performing consulting services at the time, an
amount equal to 60% of the consulting fee plus incentive compensation for
the remainder of the consulting period. Mr. Bready is entitled to receive
bonuses and to participate in any of the Company's corporate incentive and
other benefit plans except for the Company's 401(k) plan in which no
executive officers are eligible to participate.
The Company has established a severance plan for certain of its executive
officers, including Messrs. Hall, Molnar, Ortman, and Harris. The plan provides
that in consideration of each such employee's agreement not to voluntarily
terminate his employment if there is an attempted Change in Control (as that
term is defined in the plan) of the Company, if such an employee is terminated
within the 24-month period following a Change in Control (including termination
by reason of a material adverse change in the terms of employment as provided in
the plan), such employee will be entitled to severance pay for a period of 24
months following such termination at a rate equal to his base salary plus bonus
or incentive compensation (at the highest rate in the previous three years) and
to continued medical, life insurance and other benefits for such 24-month period
(or payment of an amount equal to the cost of providing such benefits). If a
Change in Control were to have occurred as of August 1, 1994, and the named
executive officers were terminated as of such date, the officers covered under
this plan would have been entitled to receive, over the next succeeding 24-month
period, an aggregate of approximately $2,230,000. Mr. Ortman is entitled to a
minimum of 15 months severance pay if his employment is terminated without
cause.
10
<PAGE> 13
STOCK OPTIONS
The following table provides information regarding stock options granted to
the named executive officers in 1993. In addition, hypothetical gains are shown
based on assumed rates of stock price appreciation of 5% and 10% compounded
annually from the date the options were granted over the full option term.
Except for Mr. Bready, the options are exercisable as to 25% on the date of
grant (December 30, 1993) and thereafter as to an additional 25% on each
anniversary date of the grant. Mr. Bready's options are exercisable in full two
years after the date of grant.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
% OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NO. OF OPTIONS ANNUAL RATES OF STOCK
SHARES GRANTED PRICE APPRECIATION FOR
UNDERLYING TO OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION ----------------------
NAME GRANTED IN 1993 PRICE DATE 5% 10%
- - - - -------------------------- ---------- ----------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Bready......... 150,000 53.6% $ 8.75 12/30/03 $825,000 $2,092,500
Almon C. Hall............. 40,000 14.3 8.75 12/30/03 220,000 558,000
Richard J. Harris......... 40,000 14.3 8.75 12/30/03 220,000 558,000
Kenneth J. Ortman......... 15,000 5.4 8.75 12/30/03 82,500 209,250
</TABLE>
The following table contains information with respect to the value realized
(market value less exercise price) of options exercised in 1993 by those
executive officers listed in the Summary Compensation Table and the value of
their unexercised options at year-end.
AGGREGATED OPTION EXERCISES IN 1993 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR-END AT YEAR-END
ACQUIRED -------------------------- --------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - - ----------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard L. Bready...... -- -- 37,500(1) 150,000 $ 62,500 $37,500
Almon C. Hall.......... -- -- 18,000 30,000 51,500 7,500
Richard J. Harris...... -- -- 30,000 30,000 125,000 7,500
Siegfried Molnar....... -- -- 8,000 16,000 49,000 98,000
Kenneth J. Ortman...... 2,800 $ 13,650 25,950 11,250 136,913 2,813
- - - - ---------------
(1) Special Common Stock; all other option information relates to Common Stock.
</TABLE>
11
<PAGE> 14
PENSION PLAN
The following table shows the estimated annual retirement benefits payable
as a straight-life annuity to eligible employees of the Company, including
executive officers, under the Company's qualified pension plan for its
headquarters employees. Annual earnings for the purpose of calculating benefits
(includes all compensation reported on the employee's Form W-2) cannot exceed
certain limitations; the limit for 1993 was $235,840. Beginning in 1994 the
maximum earnings may not exceed $150,000 and while accrued pension benefits may
not be reduced from those at December 31, 1993 such accrued benefits may remain
level for several years.
<TABLE>
<CAPTION>
ANNUAL AVERAGE
REMUNERATION YEARS OF SERVICE
(LAST 5 YEARS --------------------------------------------
PRIOR TO RETIREMENT) 10 20 25 30 AND OVER
- - - - ------------------------------------------------ ------- ------- ------- -----------
<S> <C> <C> <C> <C>
$150,000...................................... $23,273 $46,547 $58,184 $ 69,820
175,000...................................... 27,398 54,797 68,496 82,195
200,000...................................... 31,523 63,047 78,809 94,570
225,000...................................... 35,648 71,297 89,121 106,945
235,840...................................... 37,437 74,874 93,593 112,311
</TABLE>
The maximum annual benefit payable by a qualified pension plan in the form
of a life annuity is limited to $115,641 plus adjustments for increases in the
cost of living after 1993. Benefits are not subject to deduction for Social
Security or other offset amounts. As of March 1, 1994 Messrs. Bready, Hall,
Harris, Molnar and Ortman had 19, 17, 21, 4 and 4 years of service, respectively
for the purposes of the plan.
The Company provides deferred compensation benefits for Messrs. Bready,
Hall and Harris. The agreements provide for 180 monthly payments beginning at
age 65, although, in the Company's discretion, the employee may receive reduced
benefits upon retirement as early as age 60. Benefits are subject to forfeiture
(except in the case of Mr. Bready) in the event employment terminates for any
reason prior to age 60. Benefits are also subject to forfeiture in the event
that the employee engages in competitive activity. Monthly payments to Messrs.
Bready, Hall and Harris respectively, will, assuming retirement at age 65, be
$5,050, $1,833 and $1,833.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Investment in Ecological Engineering Associates Limited
Partnership. Ecological Engineering Associates Limited Partnership (EEA) is
engaged in the design and operation of wastewater-treatment systems. Messrs.
McGillicuddy, Silverstein and McVoy, directors of the Company, are directors and
sole stockholders of Environmental Engineering Inc. (EEI) which is the general
partner of EEA. The Company has made an investment in EEA of $1,030,000 through
July 1994 in the form of a note with interest accruing at 2% over prime and
compounded annually and is currently investing at the rate of $15,000 per month
contingent on EEI matching such investment and subject to termination at the
discretion of management. The note, secured by a first lien on the partnership
assets, matures on January 8, 1998. The Company also receives, in connection
with its investment, warrants to acquire limited partnership units proportionate
to all debt and equity investments made by other investors in EEA.
AUDIT MATTERS
The Board of Directors has selected Arthur Andersen & Co., auditors of the
Company in 1993 to continue in that capacity for 1994. Representatives of Arthur
Andersen & Co., are expected to be present at the Annual Meeting with the
opportunity to make a statement if they so desire and to be available to respond
to appropriate questions.
12
<PAGE> 15
STOCKHOLDER PROPOSALS
In order for any proposal that a stockholder intends to present at the 1995
Annual Meeting of Stockholders of the Company to be eligible for inclusion in
the Company's proxy material for that meeting, it must be received by the
Secretary of the Company at the Company's offices in Providence, Rhode Island,
no later than April 25, 1995.
OTHER MATTERS
As of the date of this Proxy Statement, management of the Company knows of
no business to be presented for consideration at the Annual Meeting of
Stockholders other than as stated in the Notice of the Annual Meeting of
Stockholders.
In addition to the solicitation of proxies by mail, management and
employees of the Company may solicit proxies in person or by telephone, for
which they will receive no additional compensation. The Company also retained
D.F. King & Co., Inc., New York, New York, to assist in the solicitation of
proxies and will pay such firm a fee, estimated not to exceed $8,000 plus
reimbursement of reasonable out-of-pocket expenses. Persons holding stock as
nominees will, upon request, be reimbursed for their reasonable out-of-pocket
expenses in sending soliciting materials to their principals. The cost of
solicitation will be borne by the Company.
August 23, 1994
13
<PAGE> 16
PROXY FOR SPECIAL COMMON STOCK PROXY FOR SPECIAL COMMON STOCK
NORTEK, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS for the
ANNUAL MEETING OF STOCKHOLDERS
September 15, 1994
The undersigned hereby appoints Richard L. Bready, Richard J. Harris and Kevin
W. Donnelly, or any of them, proxies with power of substitution to each, to
vote at the Annual Meeting of Stockholders of Nortek, Inc. to be held on
September 15, 1994 at the Omni Biltmore Hotel, Kennedy Plaza, Providence,
Rhode Island, at 11:00 o'clock a.m., local time, or at any adjournment or
postponement thereof, all of the shares of Special Common Stock, par value $1
per share, of Nortek, Inc. that the undersigned would be entitled to vote if
personally present. The undersigned instructs such proxies or their
substitutes to act on the following matters as specified by the undersigned,
and to vote in such manner as they may determine on any other matters that may
properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder(s). IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEE FOR DIRECTOR.
ADDRESS CHANGE:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(OVER)
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
NORTEK, INC.
SPECIAL COMMON STOCK
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
RECORD DATE SHARES:
_____________________________________________________________________
| |
| |
| REGISTRATION |
| |
| |
| |
| |
|___________________________________________________________________|
_________________________________
Please be sure to sign and date this Proxy. |Date |
_____________________________________________|_______________________________|
| |
| |
| |
| |
| |
| |
|______Shareholder sign here _________________Co-owner sign here_____________|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS
---
For Withhold
1.) Election of Directors / / / /
Election of one director by holders of Common Stock and Special Common
stock, voting together as a class.
RICHARD L. BREADY
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.
______________________________________________________________________________
2.) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark box at right if address change has been noted on the reverse side
of this card. / /
<PAGE> 17
PROXY FOR COMMON STOCK PROXY FOR COMMON STOCK
NORTEK, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS for the
ANNUAL MEETING OF STOCKHOLDERS
September 15, 1994
The undersigned hereby appoints Richard L. Bready, Richard J. Harris and Kevin
W. Donnelly, or any of them, proxies with power of substitution to each, to
vote at the Annual Meeting of Stockholders of Nortek, Inc. to be held on
September 15, 1994 at the Omni Biltmore Hotel, Kennedy Plaza, Providence, Rhode
Island, at 11:00 o'clock a.m., local time, or at any adjournment or
postponement thereof, all of the shares of Common Stock, par value $1 per
share, of Nortek, Inc. that the undersigned would be entitled to vote if
personally present. The undersigned instructs such proxies or their
substitutes to act on the following matters as specified by the undersigned,
and to vote in such manner as they may determine on any other matters that may
properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder(s). IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEE FOR DIRECTOR.
ADDRESS CHANGE:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(OVER)
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
NORTEK, INC.
COMMON STOCK
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
RECORD DATE SHARES:
_____________________________________________________________________
| |
| |
| |
| REGISTRATION |
| |
| |
| |
| |
|___________________________________________________________________|
________________________________
Please be sure to sign and date this Proxy. |Date |
_____________________________________________|_______________________________|
| |
| |
| |
| |
| |
| |
|______Shareholder sign here _________________Co-owner sign here_____________|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS
---
For Withhold For all
Except
1.) Election of Director / / / / / /
Election of one director by holders of Common Stock voting as a class.
BARRY SILVERSTEIN
Election of one director by holders of Common Stock and Special Common
Stock, voting together as a class.
RICHARD L. BREADY
INSTRUCTION:
To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below.
____________________________________________________________________
2.) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Mark box at right if address change has been noted on the reverse side
of this card. / /
