THERMWOOD CORPORATION
P. O. Box 436
Old Buffaloville Road
Dale, Indiana 47523
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Thursday, December 14, 1995 at 9:00 A.M. (Dale, Indiana Time)
To the Stockholders:
The Annual Meeting of Stockholders of Thermwood Corporation
will be held at the Corporation's offices on Thursday,
December 14, 1995 at 9:00 A.M., Dale, Indiana time, for the
following purposes:
1.To elect five (5) directors for the ensuing one year
term;
2.To act upon the ratification of the selection by the
Board of Directors of KPMG Peat Marwick LLP as
independent auditors;
3.To transact any other business which properly may be
brought before the meeting.
All stockholders are cordially invited to attend, although
only stockholders of record at the close of business on
November 10, 1995 will be entitled to vote at the meeting.
By order of the Board of Directors,
/s/ Linda S. Susnjara
Linda S. Susnjara
Secretary
Dale, Indiana
November 21, 1995
YOUR VOTE IS IMPORTANT
You are urged to date, sign and promptly return
the accompanying form of proxy, so that if you
are unable to attend the meeting your shares may
nevertheless be voted.
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of
Thermwood Corporation (the "Corporation" or "Thermwood") for
use at the Annual Meeting of Stockholders (the "Annual
Meeting") on December 14, 1995.
The Corporation's principal executive office is located at
Old Buffaloville Road, Dale, Indiana 47523. The approximate
date on which this Proxy Statement is first being sent to
stockholders is November 22, 1995.
You may revoke this proxy at any time prior to its use by
delivering a written notice to the Secretary of the
Corporation, by executing a later-dated proxy or by
attending the meeting and voting in person. Proxies in the
form enclosed, unless previously revoked, will be voted at
the meeting in accordance with the specifications made by
you thereon, or, in the absence of such specifications, for
the election of directors nominated herein and to ratify the
selection of KPMG Peat Marwick LLP as independent auditors
for the fiscal year ending July 31, 1996.
Holders of record of Shares of Common Stock, without par
value per share ("Common Stock") of the Corporation at the
close of business on November 10, 1995, will be entitled to
vote at the Annual Meeting. Each share of Common Stock will
be entitled to one vote. The Common Stock will be voted
together as one class. On November 10, 1995, there
were5,850,546 outstanding shares of Common Stock of the
Corporation. There are no other voting securities
outstanding.
ELECTION OF DIRECTORS
At the annual meeting, five directors are to be elected to
serve for a term of one year and until their successors
shall have been elected and qualified. It is intended that
proxies will be voted for the nominees set forth herein.
Although it is expected that all candidates will be able to
serve, if one or more is unable to do so, the proxy holders
will vote the proxies for the remaining nominees and for
substitute nominees chosen by the Board of Directors unless
it reduces the number of directors to be elected.
The table below presents information as of November 4, 1995
on the nominees for election as directors of the Corporation
for a one-year term expiring in 1996:
<TABLE>
Principal Occupation Director Other
Name Business Experience Age Since Directorships
<S> <C> <C> <C> <C>
Kenneth J. Susnjara President and 48 1969 Automation
(1) Chairman Associates, Inc.
of Board since 1971
Linda S. Susnjara President of 46 1986 Automation
(1) Automation Associates, Inc.
Associates, Inc.
since 1985
Peter N. Lalos Engaged in the 61 1989
private practice of
law since 1961 and
senior partner, Lalos
& Keegan
Edgar Mulzer Chairman of the Board 77 1974 Dale State Bank
of Dale State Bank
(Retired)
Lee Ray Olinger Chairman of the Board 68 1989 First Bank
Olinger of First Bank of of Huntingburg
Huntingburg
</TABLE>
(1) Linda S. Susnjara and Kenneth J. Susnjara are husband
and wife.
Information on the executive officers of the Company is
contained in the following table:
<TABLE>
Name Principal Occupation Executive
Business Experience Age Officer Prior Position(s)
Since
<S> <C> <C> <C> <C>
Michael P. Hardesty Vice President of 41 1980 Project Engineer,
Engineering since Project Manager,
1988 Vice President
of Machining
Products since
1975
Rebecca F. Fuller Treasurer since 1993 45 1993 Controller;
Accounting
Manager since
1981
David J. Hildenbrand Vice President of 38 1988 Sales Manager;
Sales since 1988 Technical Manager
since 1977
Richard Kasten Vice President of 43 1993 Applications
Technical Services Manager since
since 1993 1990
</TABLE>
OPERATION OF BOARD OF DIRECTORS AND COMMITTEES
During 1995 the Board of Directors held 4 meetings and each
incumbent director attended at least 75% of the aggregate of
all Board of Directors' meetings and all meetings of
committees of the Board of Directors that he or she served
on.
All directors hold office until the next Annual Meeting of
shareholders of Thermwood or until their successors shall
have been elected and qualified. Directors receive
compensation in the amount of $500 for attending directors'
meetings, and are reimbursed for all related expenses.
The Audit Committee, consisting of Lee Ray Olinger, Edgar
Mulzer and Peter N. Lalos, met once during 1995. This
committee's function is to review the scope of the
Corporation's audit and generally to supervise the financial
affairs of Thermwood.
The Nominating Committee, consisting of Mr. Olinger, Mr.
Mulzer and Mr. Lalos, met once in 1995. The Nominating
Committee reviews officer performance and corporate needs
and proposes to the Board of Directors certain directions
and changes in titles, positions and responsibilities.
The Stock Option Committee, consisting of Mr. Olinger, Mr.
Mulzer and Mr. Lalos, met once in 1995. This committee
makes awards to Thermwood employees of stock options under
its incentive stock option plan and non-qualified stock
option plan.
The Compensation Committee, consisting of Mr. Olinger, Mr.
Mulzer and Mr. Lalos met once during 1995. The Compensation
Committee reviews salaries and other compensation paid to
the Corporation's officers and makes recommendations to the
Board of Directors regarding such items.
It is expected that Mr. Olinger, Mr. Mulzer and Mr. Lalos
will be reappointed to the foregoing committees.
EXECUTIVE COMPENSATION
The following table sets forth the annual remuneration paid
through July 31, 1995 to or accrued for the account of (i)
each of the most highly compensated executive officers or
directors of the Corporation whose total cash and cash-
equivalent remuneration exceeded $100,000 and (ii) all
directors and officers as a group:
<TABLE>
Summary Compensation Table
Annual compensation Long-term compensation
Other Awards Payouts
annual
Name and Year Salary Bonus compensa- Restricted Options/ LTIP All
principal tion stock SARs (#) payouts other
position (1) award(s) compen-
sation
- -------- ----- ------- ----- --------- ----------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth J. 1995 63,000 $94,739 $2,000 --- --- --- ---
Susnjara,
Chairman of 1994 74,250 --- 2,000 --- --- --- ---
the Board,
President 1993 64,025 --- 2,000 --- --- --- ---
and director
Michael
Hardesty
Vice- 1995 48,000 66,317
president
Engineering
David
Hildenbrand
Vice- 1995 45,000 73,964
president
Sales
All other 1995 80,000 77,618 --- --- --- ---
officers as
a group (2) --- --- --- ---
persons
All other 1994 170,116 4,237 --- --- --- ---
officers as
a group (4) 1993 180,755 --- --- --- --- ---
persons
</TABLE>
(1) Other annual compensation represents directors' fees
paid to Mr. Susnjara.
No stock options or stock appreciation rights were issued
in fiscal year 1995. At July 31, 1995 the exercise price of
some of the unexercised options were less than the market
price of the Company's Common Stock. On September 6, 1994,
registration statements on Form S-8 were filed with the
Securities and Exchange Commission under the Securities Act
of 1933 in connection with the registration of shares of the
Company's Common Stock under the Company's Employee
Incentive Stock Option Plan and Non-Qualified Stock Option
Plan.
In 1985 the Board of Directors appointed Mr. Susnjara to the
position of President and Chief Executive Officer. In this
position, he is to receive a bonus based on the pre-tax
profits of the Company as set forth below. See "Profit
Sharing Plan" below.
Certain other officers may be entitled to participate in the
Company's profit sharing plan. See "Profit Sharing Plan"
below.
Profit Sharing Plan.
In 1985, the Company instituted a management profit sharing
plan. This plan has been operative since fiscal 1987, and
was continued in an amended form for fiscal 1995. Covered
under the plan are the Chairman of its Board of Directors,
the President, Vice President of Engineering, Vice President
of Sales, Vice President of Technical Services, the
Treasurer and various departmental managers.
Under the plan, the Chairman is entitled to 5% of corporate
operating income. The Vice President of Sales and Vice
President of Technical Services each are entitled to 5% of
the divisional operating income and the Treasurer is
entitled to 3% of the Corporate operating income. Any
divisional losses are to be subtracted from these amounts so
that the total bonus paid does not exceed 25% of operating
income.
Department managers are entitled to various bonuses based
upon productivity of their departments. Payments due under
the plan accrue for each six-month period and are thereafter
paid in six monthly installments. Vesting of rights under
the plan requires eligible participants to be continually
employed through the payment dates. Divisional losses of
the fiscal year must be recouped in the succeeding year, or
years, in order to be eligible for profit sharing earnings
in the succeeding year(s).
Incentive Stock Option Plan.
Under the Company's Incentive Stock Option Qualified Plan
(the "Qualified Plan"), options to purchase a maximum of
400,000 shares of its Common Stock may be granted to
officers and other key employees of Thermwood. Options
granted under the Qualified Plan are intended to qualify as
incentive stock options as defined in Section 422A of the
Internal Revenue Code of 1954, as amended by the Tax Reform
Act of 1986.
The Qualified Plan is administered by the Board of Directors
and a Committee currently consisting of three members of the
Board which determines which persons are to receive options,
the number of shares that may be purchased under each option
and the exercise process. In the event an optionee
voluntarily terminates his employment with the Company, he
has the right to exercise his accrued options within 5 days
prior to such termination. However, the Company may redeem
any accrued options held by each optionee by paying him the
difference between the option price and the then fair market
value. If an optionee's employment is involuntarily
terminated, other than because of death, he also has the
right to exercise his accrued options within 30 days of
termination. Upon death, his estate or heirs have one year
to exercise his accrued options. The maximum term of any
option is ten years and the option price per share may not
be less than the fair market value of Thermwood's shares on
the date the option is granted. However, options granted to
persons owning more than 10% of the voting shares of the
Company may not have a term in excess of five years and the
option price per share may not be less than 110% of fair
market value at the date the option is granted.
The aggregate fair market value of the shares of Common
Stock (determined at the time the options are granted) with
respect to which incentive stock options are exercisable for
the first time by such optionee during any calendar year
(under all such plans) shall not exceed $100,000. Options
must be granted within ten years from the effective date of
this Qualified Plan.
Options granted under the Qualified Plan are not
transferable other than by will or the laws of descent and
distribution. Options granted under the Qualified Plan are
protected by anti-dilution provisions increasing the number
of shares issuable thereunder and reducing the exercise
price of such options, under certain conditions. During
fiscal year 1992, the life term of the Qualified Plan was
extended from December 3, 1991 to December 3, 1995, or on
such earlier date as the Board of Directors may determine.
Any option outstanding at the termination date will remain
outstanding at the termination date until it expires or is
exercised in full, whichever occurs first.
As of July 31, 1995, options to acquire 175,000 shares of
the Company's common stock for ten years at exercise prices
of $1.00 to $5.00 per share had been granted under the
Qualified Plan to 13 employees of the Company. Options for
the purchase of 175,000 shares were exercisable as of July
31, 1995.
Non-qualified Stock Option Plan.
Under Thermwood's Non-qualified Stock Option Plan ("NSO
Plan"), options to purchase a maximum of 350,000 shares of
its Common Stock may be granted to officers, directors, and
other key employees.
The NSO Plan is administered by the Board of Directors and a
committee of three members of the Board which determines
which persons are to receive such options, the number of
shares that may be purchased under the option, the exercise
prices, the time and manner of exercise and other related
matters.
In the event an optionee voluntarily terminates his
employment or tenure with the Company's consent or his
employment or tenure is terminated by Thermwood without
cause, he generally has the right to exercise his accrued
options within 30 days after such termination unless the
Committee elects other time periods. In all other cases of
termination of the optionee's employment or tenure other
than death, said options shall cease immediately. Upon
death, his estate or heirs have one year to exercise his
accrued options.
The Committee may grant an optionee the right to surrender
all or a portion of his accrued options to the Company and
receive from it the difference between the option price and
the then fair market value. Options become exercisable in
25% installments each year beginning in the second year
through the fifth year. Options are generally not
transferable and are conditioned upon the optionee remaining
in the Company's employ for at least one year from the date
of its grant. Under the NSO Plan, no option may be granted
after January 1, 2005 and the exercise price of such options
could have been less than the then fair market value. It is
within the Committee's discretion to grant anti-dilution
provisions to each optionee. Under present federal income
tax law, an employee, officer or director who is granted an
option will not have any income upon the grant of an option
and the Company will not be entitled to any deduction at the
time. When an optionee exercises his option, ordinary
income will be realized by him, measured by the excess of
the fair market value of the shares over the price paid for
the shares. The Company will be entitled to a deduction
equal to the amount of income realized by the holder of the
option. If the optionee surrenders all or part of his
option for a cash or common stock payment, he will realize
ordinary income in the amount of cash or fair market value
of stock received. The Company will be entitled to a
deduction equal to the amount of income realized by the
optionee.
As of July 31, 1995 options to acquire 200,000 shares of the
Company's common stock at exercise prices ranging from
$1.125 to $2.00 per share have been granted under the NSO
Plan to four directors and officers of Thermwood, all of
which are presently exercisable.
Other options.
Other options to purchase 660,000 shares have been granted
by the Board of Directors, all of which were exercisable as
of July 31, 1995. An option to purchase 600,000 of these
shares was granted to the President of the Company. The
option extends through October 18, 1997 and permits the
purchase of 200,000 shares at $5.00 per share, 200,000 at
$7.50 per share, and 200,000 at $10.00 per share. An option
for 30,000 shares was granted to the law firm of Lalos &
Keegan at $1.00 per share, is currently exercisable and
extends through May 22, 1996. A 30,000 share option was
granted to an employee at $1.00 per share and is exercisable
through October 1997.
Section 401(k) Plan
The Company adopted a tax-qualified cash savings plan (the
"401(k) Plan") which became effective in October 1989. This
Plan covers all employees who have completed 12 months of
continuous service prior to a plan entry date. Pursuant to
the 401(k) Plan, eligible employees may make salary deferral
(before tax) contributions of up to 12% of their total
compensation per plan year up to a specified maximum
contribution as determined by the Internal Revenue Service.
The Company also makes matching contributions equal to 25%
of the employee's contribution up to a maximum of 3% of the
employee's annual compensation. The 401(k) Plan also
includes provisions which authorize the Company to make
discretionary contributions. Such contributions, if made,
are allocated among all eligible employees as determined
under the 401(k) Plan. The trustee under the 401(k) Plan
is Merrill Lynch of Evansville, Indiana. It invests the
assets of each participant's account in funds at the
direction of such participant.
OWNERSHIP OF EQUITY SECURITIES OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership
The following table sets forth certain information regarding
the Company's Common Stock, including shares underlying the
convertible debentures and exercisable Common Stock warrants
and options owned as of September 30, 1995 by (i) each
person known by the Company to own beneficially more than 5%
of its outstanding Common Stock, (ii) each director, and
(iii) all officers and directors as a group:
<TABLE>
Shares Owned
Including
Those
Underlying
Percentage Exercisable Percentage
Names and Addresses Shares of Total Options, of Total
of Beneficial Owned at Outstanding Warrants and Outstanding
Owners (1) July 31, Shares Convertible Shares
1995 Owned Securities Owned
(2)
<S> <C> <C> <C> <C>
Kenneth J. Susnjara 1,330,000 25.8 2,155,000(5) 23.2(5)
(3,4)
Edgar Mulzer 940,562 18.3 990,562(6) 10.7(6)
401 10th Street
Tell City, Indiana
47586
Peter N. Lalos 25,000 0.5 135,000(7) 1.5(7)
14312 Darnstown
Road
Gaithersburg,
Maryland 20878
Linda S. Susnjara --- --- 50,000(8) 0.5(8)
(3,4)
Lee Ray Olinger --- --- --- ---
c/o First Bank of
Huntingburg
4th and Main Street
Huntingburg, IN
47542
All Officers and
Directors as a Group 2,300,562 44.7 3,426,562 36.9
(9 persons)
(5,6,7,8) (5,6,7,8)
</TABLE>
(1) All shares are beneficially owned and the sole voting
and investment power is held by the person indicated.
(2) Excludes (i) an aggregate of 3,105,000 shares of Common
Stock reserved for issuance upon conversion of debentures
and exercise of the redeemable warrants; (ii) 400,000 shares
reserved for issuance under the Company's Qualified Stock
Option Plan of which options to purchase 175,000 shares
have been granted and options to purchase 175,000 shares are
currently exercisable; (iii) 350,000 shares reserved for
issuance under the Company's Non-Qualified Stock Option Plan
of which options to purchase 200,000 shares have been
granted and are currently exercisable; (iv) 600,000 shares
reserved for issuance upon exercise of options granted to
Mr. Susnjara, all of which are currently exercisable; (v)
30,000 shares reserved for issuance of options granted to
Lalos & Keegan, all of which are currently exercisable; and
(vi) 30,000 shares reserved for issuance upon exercise of
options granted to an employee, all of which are currently
exercisable. See "Executive Compensation" and "Certain
Relationships and Related Transactions."
(3) The address of this person is c/o the Company.
(4) Mr. and Mrs. Susnjara may each be deemed to be a
beneficial owner of the Company's securities owned by the
other because of their marital relationship.
(5) Includes (i) an aggregate of 75,000 shares issuable
upon conversion of debentures and exercise of redeemable
warrants owned by Mr. Susnjara; (ii) 50,000 shares issuable
upon the exercise of options granted to Mr. Susnjara under
the Company's Non-Qualified Stock Option Plan; and (iii)
600,000 shares issuable upon the exercise of other options
granted to him.
(6) Includes 50,000 shares issuable upon the exercise of
options granted to Mr. Mulzer under the Company's Non-
Qualified Stock Option Plan.
(7) Includes (i) an aggregate of 30,000 shares issuable
upon conversion of debentures and exercise of redeemable
warrants owned by Mr. Lalos; (ii) 30,000 shares issuable
upon the exercise of options granted to Lalos & Keegan; and
(iii) 50,000 shares issuable upon the exercise of options
granted to Mr. Lalos under the Company's Non-Qualified Stock
Option Plan.
(8) Includes 50,000 shares issuable upon the exercise of
options granted to Mrs. Susnjara under the Company's Non-
Qualified Stock Option Plan.
Certain Relationships and Related Transactions
Bank Loans from Affiliated Parties:
Thermwood had an agreement, which expired on September 25,
1992, to borrow up to $1,500,000 from the Dale State Bank
(the "Dale Bank") in the form of a line of credit. Mr.
Mulzer was Chairman of the Board and the principal
shareholder of the Dale Bank during the period that this
loan was made. He is also a director and principal
shareholder of the Company. The loan bore interest at the
annual rate of prime plus 2.5%, payable quarterly, and was
secured by all of the Company's assets. Thermwood replaced
this loan, as of September 25, 1992, with a term loan in the
amount of $1,500,000 from the Dale Bank, also secured by all
of the Company's assets. The principal of the term loan,
together with interest at the annual rate of prime plus
2.75%, was due on March 24, 1993, at which time it was
assumed by Mr. Mulzer, who had agreed to collect only
interest, payable quarterly, until August 1, 1994, at which
time amortization was to have begun. Interest expense on
the Company's loans from the Bank and Mr. Mulzer totaled
$41,117, and $127,000, and for fiscal years 1994 and 1993.
There was no interest expense on this loan during fiscal
1995. The balance of this loan in the amount of
$1,499,800, along with accrued interest in the amount of
$23,011, was converted to Series A Preferred Stock (the
"Preferred Stock") on November 18, 1993.
Other Loans from Affiliated Party:
On March 26, 1986, the Company borrowed $250,000 from Mr.
Mulzer under a promissory note bearing annual interest at
the rate 10.5%. In March 1991 the note was converted into a
self amortizing five-year term loan, payable in monthly
installments of principal and interest of $5,373 through
March 1996. On November 18, 1994, the balance of this note
in the amount of $169,218 along with accrued interest in the
amount of $13,971 was converted to Preferred Stock.
Interest expense on this loan was $9,256 in 1994. There
was no interest expense on this loan in 1995.
Sale and Lease Back of Company's Facilities with Affiliated
Party:
In February 1987 the Company purchased its premises from an
independent third party for $1,000,636 and simultaneously
resold it to Mr. Mulzer for $1,800,000. At the same time
the Company leased the premises back from Mr. Mulzer for a
20-year period at a monthly rental of $19,353 or
approximately $232,000 on an annual basis. Total lease
payments and accrued interest were $138,579 for fiscal year
1994. There were no lease payments or interest expense for
fiscal year 1995.
The lease agreement, which is treated as a capitalized lease
for financial reporting purposes, also obligates the Company
to pay all maintenance, taxes, assessments, insurance
premiums and utilities incurred in connection with the
operation of the premises. Pursuant to a related agreement,
the Company has an option to repurchase the premises from
Mr. Mulzer, exercisable through 2006, at prices descending
on an annual basis from $1,786,781 in 1987 to $240,000 in
the last year.
On November 18, 1993, this lease payment obligation in the
amount of $1,608,629, together with accrued interest in the
amount of $122,491 was converted to Preferred Stock. Upon
the issuance of the Preferred Stock, the Company no longer
has any lease payments. The liability for all accrued and
future lease payments was converted to Preferred Stock.
Conversion by Affiliated Party of Debt to Preferred Stock:
As previously noted, an aggregate of $3,437,120 owed to Mr.
Mulzer was converted to an aggregate of 1,000,000 shares of
Preferred Stock on November 18, 1993. The holders of the
Preferred Stock are entitled to receive cumulative cash
dividends out of the net profits of the Company at the rate
of thirty-four cents ($0.34) per share per annum, payable
monthly in equal installments within the first fifteen days
of each month for the preceding month as directed by the
board of directors of the Company. The Company has the
right in its sole discretion to redeem the stock at any time
at $3.40 per share. Dividends were paid in the amount of
$367,910 for the fiscal year 1995.
Equipment Leases with Affiliated Party:
Thermwood has entered into agreements with a company owned
by Mr. Mulzer pursuant to which it has leased certain
computer, demonstration and manufacturing equipment with a
right to purchase this equipment at the end of the term of
each agreement for nominal consideration. Lease payments
under these agreements were $64,888 for the 1995 fiscal
year. These leases will terminate in fiscal year 1996.
Product Sales Through and Lease Agreement With Affiliated
Dealer:
Mr. and Mrs. Susnjara are the owners of Automation
Associates Incorporated ("AAI"), a dealer of the Company's
industrial products. The agreement between the Company and
AAI contains the same terms and conditions as do the
Company's agreements with its other dealers. The Company
sold no products to AAI during fiscal year 1995, but paid
AAI $578,000 in commissions during the year for assisting in
effecting sales of approximately $3,000,000. This amount
represents approximately 20% of the Company's gross sales
for fiscal year 1995. AAI also leases space from the
Company at what management believes is a fair market rate.
Rental payments were $7,200 during the 1995 fiscal year.
Payment of Legal Fees to Affiliated Party:
Lalos & Keegan, a law firm in which Mr. Lalos is the senior
partner, accrued fees of $94,000, $102,000, $77,000, for
the fiscal years 1995, 1994, and 1993, respectively. During
fiscal year 1995 the Company paid this firm an aggregate of
$135,000, of which $69,000 represented previously accrued
fees. Accordingly, as of July 31, 1995 the Company owed
Lalos & Keegan approximately $28,000, all of which has been
paid as of September 15, 1995. This firm performs patent,
trademark, general corporate and litigation services for the
Company.
Fairness of Transactions with Affiliated Parties:
Management believes that the terms of the transactions
between the Company and its affiliated parties as described
in this section are as fair as those which the Company would
have obtained if these transactions had been effected with
independent third parties. Each transaction was approved by
a majority of the disinterested directors. In the future,
all such transactions will continue to be approved by a
majority of the disinterested directors.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Based upon the recommendation of its Audit Committee, the
Board of Directors has selected the firm of KPMG Peat
Marwick LLP as the independent auditors of the Corporation
for the fiscal year ending July 31, 1996. KPMG Peat Marwick
LLP has acted for the Corporation in such capacity since
August 1993. The Board proposes that the stockholders
ratify such selection at the Annual Meeting.
If the stockholders do not ratify the selection of KPMG Peat
Marwick LLP by the affirmative vote of a majority of the
votes cast at the Annual Meeting on this proposal, the
selection of independent auditors will be reconsidered by
the Board of Directors.
Representatives of KPMG Peat Marwick LLP are expected to be
present at the Annual Meeting and will be afforded the
opportunity to make a statement if they so desire and to
respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters to come
before the meeting. Should any unanticipated business
properly come before the meeting, the persons named in the
enclosed form of proxy will vote in accordance with their
best judgment.
The cost of preparing and mailing this Proxy Statement and
the accompanying proxy and the cost of solicitation of
proxies on behalf of the Board of Directors will be borne by
the Corporation. Solicitation will be made by mail. Such
costs are estimated to be less than $25,000. Some personal
solicitation may be made by directors, officers and
employees without special compensation, other than
reimbursement for expenses.
Proposals which stockholders wish to include in the
Corporation's proxy materials relating to the 1996 Annual
Meeting of Stockholders must be received by the Corporation
no later than September 15, 1996.
It is important that proxies be returned promptly.
Stockholders are urged to sign and date the enclosed proxy
and return it promptly in the accompanying envelope.
By order of the Board of Directors,
/s/ Linda S. Susnjara
Linda S. Susnjara
Secretary
Dale, Indiana
November 21, 1995
