<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 [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
THE OILGEAR COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
3) Filing Party:
- --------------------------------------------------------------------------------
4) Date Filed:
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<PAGE> 2
OILGEAR LOGO
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
ON APRIL 15, 1997
The Annual Meeting of Shareholders of THE OILGEAR COMPANY will be held at
the offices of the Company at 2300 South 51st Street, Milwaukee, Wisconsin
53219, on Tuesday, April 15, 1997, at 2:00 P.M. (Milwaukee Time), for the
following purposes:
(1) To elect three directors, for terms expiring in the year 2000; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 3, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting and any adjournment thereof; only shareholders of record
at the close of business on that date will be entitled to vote. The list of
shareholders of record entitled to notice of and to vote at the meeting will be
available for inspection by any shareholder at Oilgear's principal office at
2300 South 51st Street, Milwaukee, Wisconsin, prior to the meeting and will also
be available at the meeting.
YOU WILL GREATLY ASSIST THE COMPANY IN CONDUCTING ITS ANNUAL MEETING IF YOU
WILL INDICATE YOUR VOTING DIRECTIONS, SIGN AND DATE THE ACCOMPANYING PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED POSTPAID ENVELOPE. THE PROXY MAY BE REVOKED
AT ANY TIME PRIOR TO ITS EXERCISE AND WILL NOT BE USED IF YOU ATTEND THE MEETING
AND VOTE IN PERSON.
A copy of the Annual Report to Shareholders for 1996 and a Proxy Statement
accompany this Notice.
By Order of the Board of Directors
Thomas J. Price, Corporate Secretary
Milwaukee, Wisconsin
March 25, 1997
------------------
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S FORM 10-K ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
WILL BE PROVIDED WITHOUT CHARGE TO EACH RECORD OR BENEFICIAL OWNER OF THE
COMPANY'S COMMON STOCK AS OF MARCH 3, 1997 ON THE WRITTEN REQUEST OF SUCH PERSON
DIRECTED TO: THOMAS J. PRICE, CORPORATE SECRETARY, THE OILGEAR COMPANY, 2300
SOUTH 51ST STREET, P.O. BOX 343924, MILWAUKEE, WISCONSIN 53234-3924.
<TABLE>
<S> <C> <C>
THE OILGEAR COMPANY Telephone: 414/327-1700
2300 So. 51st. Street Fax: 414/327-0532
Post Office Box 343924
Milwaukee, WI 53234-3924
</TABLE>
<PAGE> 3
THE OILGEAR COMPANY
2300 SOUTH 51ST STREET
MILWAUKEE, WISCONSIN 53219
* * * * *
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
ON
APRIL 15, 1997
* * * * *
SOLICITATION AND VOTING
The proxy enclosed with this Proxy Statement is solicited on behalf of the
Board of Directors of The Oilgear Company (the "Company" or "Oilgear"). All of
the expenses of soliciting proxies will be paid by the Company. Upon request,
the Company will reimburse brokers, dealers, voting trustees, banks,
associations or other entities that exercise fiduciary powers for reasonable
expenses incurred in forwarding copies of the proxy material and Annual Report
to the beneficial owners of shares which such persons hold of record.
Solicitation of proxies will be principally by mail, but may also be conducted
in person, or by telephone, telegraph or facsimile, by officers and by regular
employees of the Company. This proxy material is being mailed to shareholders
commencing on or about March 25, 1997.
Only the holders of the Common Stock of the Company at the close of
business on March 3, 1997, the record date, will be entitled to vote at the
meeting. At such date there were outstanding 1,256,190 shares of Common Stock.
Each shareholder of record will be entitled to one vote for each share of stock
standing in such holder's name on the books of the Company on the record date
with regard to the election of directors and any other matter which may be
presented at the meeting. There shall be no cumulative voting.
If a shareholder is a participant in either the Oilgear Stock Retirement
Plan or the Oilgear Savings Plus Plan, the proxy card will also serve as a
voting instruction with respect to the shares of Company Common Stock allocated
to the Plan account of the shareholder-participant. If voting instructions are
not received for shares in the Plans five days prior to the meeting, those
shares will be voted in the same proportion on a proposal as the proportion of
instructed votes for each Plan. If a shareholder participates in both Plans or
maintains accounts under different names (e.g., with and without a middle
initial), the shareholder may receive more than one set of proxy materials. To
insure that all shares are voted, the shareholder must sign and return every
proxy card received.
A majority of the votes entitled to be cast on a matter, represented in
person or by proxy, constitutes a quorum for action on that matter. Directors
are elected by a plurality of the votes cast by the holders of shares entitled
to vote in the election at a meeting at which a quorum is present. "Plurality"
means that the individuals who receive the largest number of votes cast are
elected as directors up to the maximum number of directors to be chosen at the
meeting. Consequently, any shares not voted (whether by withheld authority,
broker non-vote or otherwise) have no effect in the election of directors.
Withheld votes and broker non-votes will, however, count toward establishing a
quorum. Any votes attempted to be cast "against" a candidate are not given legal
effect and are not counted as votes cast in an election of directors. The
Inspectors of Election appointed by the Board of Directors shall count the votes
and ballots.
Any shareholder entitled to vote may vote either in person or by duly
authorized proxy. A proxy may be revoked by the shareholder at any time prior to
the voting thereof, but a revocation will not be effective until oral or written
notice thereof has been received by the Secretary of the Company prior to such
voting. All shares represented by properly executed proxies received by the
Company will be voted at the meeting and all adjournments thereof in accordance
with the terms of such proxies, unless revoked. Where a shareholder specifies a
choice by means of a ballot provided in the proxy, the shares will be voted in
accordance with such specification.
<PAGE> 4
ELECTION OF DIRECTORS
The Articles of Incorporation and Bylaws provide for classification of the
Board of Directors into three separate classes, each class having three
directors and to be elected for a term expiring at the third annual meeting of
shareholders after its election. At each annual meeting of shareholders, a
number of directors equal to the number constituting the class whose term
expires at such meeting is elected to hold office until the third succeeding
annual meeting and until their successors have been elected. Thus, one class of
directors (three of the nine directors) is nominated for election at the 1997
annual meeting. The balance of the directors were elected by the shareholders at
the 1995 and 1996 annual meetings for terms expiring in 1998 and 1999,
respectively, as shown in the table below.
Otto F. Klieve will be retiring from the Board of Directors at the end of
his current term, which expires at the 1997 annual meeting, although he will
continue as a consultant to the Company following his retirement. Mr. Klieve has
served Oilgear for many years, as a director, as the former President and Chief
Executive Officer of the Company and in other officer positions. For all of his
distinguished service, wise counsel and numerous contributions he is gratefully
acknowledged. Hubert Bursch, Oilgear's Vice President -- European Operations,
has been nominated to fill the vacancy created by Mr. Klieve's retirement. In
addition, David A. Zuege and Randolph W. Carson are nominated for re-election at
the 1997 annual meeting, to hold office with Mr. Bursch until the year 2000.
Proxies received will be voted for the election of the three nominees named
for the term specified. If any of the nominees should decline or be unable to
act as a director, which eventuality is not foreseen, proxies may be voted with
discretionary authority for such substitute nominee(s) as may be selected by the
Board.
<TABLE>
<CAPTION>
NOMINEES DIRECTOR PRINCIPAL OCCUPATION
(FOR TERM EXPIRING 2000) AGE SINCE AND BUSINESS EXPERIENCE
------------------------ --- -------- -----------------------
<S> <C> <C> <C>
HUBERT BURSCH.......................... 57 Nominee Vice President -- European Operations
of Oilgear since 1994; Chairman of the
Board of Management -- Europe for the
Company, 1991-1993; other positions
with the Company's European operations,
including Geschaftsfuhrer of Oilgear
GmbH (now Oilgear Towler GmbH),
1966-1991.
DAVID A. ZUEGE(1)...................... 55 1982 President and Chief Executive Officer
of Oilgear since 1996; Executive Vice
President and Chief Operating Officer
of Oilgear, 1993-1995; Senior Vice
President and Secretary of Oilgear
during 1993; Vice President -- Finance
and Secretary of Oilgear, 1979 to 1993.
RANDOLPH W. CARSON..................... 46 1994 Executive Vice President, Rockwell
Automation (manufacturing), since 1996;
Senior Vice President, Automation
Group, Allen-Bradley Company
(manufacturing), 1994-1995; previously
Vice President of Operations, Interface
Business, Allen-Bradley Company; also a
director of Dynapro Systems, Inc. and
Rockwell Software, Inc.
TERM EXPIRES 1998
- -----------------
CARL L. GOSEWEHR(1).................... 70 1972 Chairman of the Board of Oilgear since
1992; President of Oilgear, 1974-1991;
also a director of M&I Marshall &
Ilsley Bank and Redmond Construction
Co.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
Director Principal Occupation
TERM EXPIRES 1998 (continued) Age Since and Business Experience
- ----------------------------- --- -------- -----------------------
<S> <C> <C> <C>
EDWARD NEUWIRTH........................ 76 1987 Director, E.R. Wagner Manufacturing
Company; Consultant, E.R. Wagner
Manufacturing Company, 1990-1995; Vice
Chairman and Chief Executive Officer,
E.R. Wagner Manufacturing Company,
1987-1989, and President, 1975-1987;
also a director of Benz Oil Company.
FRANK L. SCHMIT(1)..................... 61 1976 Chairman, Chief Executive Officer and
director, Water Pollution Control Corp.
(producer of wastewater treatment
equipment), since 1994; President and
director, Water Pollution Control
Corp., 1978-1994; also a director of
Austgen Biojet Wastewater Systems, Inc.
TERM EXPIRES 1999
- -----------------
GERHARD W. BAHNER...................... 58 1992 Vice President -- Engineering of
Oilgear since 1991; Director of
Engineering of Oilgear, 1987-1991;
Managing Director of Oilgear's
subsidiary, Oilgear Towler Ltd.,
1989-1991.
ROGER G. DeLONG(1)..................... 79 1975 Retired Vice Chairman and director
emeritus of Twin Disc, Incorporated
(manufacturing).
THOMAS L. MISIAK....................... 50 1996 President, The Falk Corporation
(manufacturing), since 1992; Vice
President and General Manager -- Fluid
Handling Division, Milton Roy Co.
(manufacturing), 1991-1992; Vice
President Operations/Information
Systems, Sunstrand Fluid Handling
(manufacturing), 1991; Plant Manager,
Sunstrand Aerospace -- Denver
(manufacturing), 1988-1990.
</TABLE>
- -------------------------
(1) Member of Executive Committee during 1996, which committee held four
meetings in that fiscal year.
The Board of Directors held five meetings during 1996. All of the directors
attended at least 75% of the meetings of the Board and committees of which they
are members.
There is no standing nominating committee of the Board. The entire Board of
Directors functions as an audit committee and is charged with the
responsibilities of: reviewing with the Company's independent public accountants
the plan and scope of their audit and the findings and conclusions of their
auditing engagement; reviewing the Company's procedures for internal auditing,
the adequacy of its system of internal controls and the accounting principles
and policies of the Company; reviewing and evaluating the independence of the
independent accountants and approving services rendered by such accountants; and
considering the engagement, continuation or discharge of the independent public
accountants.
The Compensation Committee of the Board consists of Messrs. DeLong,
Gosewehr and Schmit. The Compensation Committee held two meetings in 1996. The
primary functions of the Compensation Committee are to review and make
recommendations to the Board of Directors regarding the compensation and benefit
programs of the Company and the corporate policies that pertain to those
programs, and to administer the 1992 Stock Option Plan.
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information as of March 3, 1997 with respect
to any person known to the Company to be the "beneficial owner" (determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934) of more
than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
---------------- -------------------- --------
<S> <C> <C>
Oilgear Stock Retirement Plan(1)...................... 289,647(1) 23.1%
Oilgear Savings Plus Plan(1).......................... 240,284(1) 19.1%
Oilgear Salaried Retirement Plan(1)................... 77,078(1) 6.1%
</TABLE>
- -------------------------
(1) Held of record by the Trustee, M&I Marshall & Ilsley Bank, for the Oilgear
Stock Retirement Plan, the Oilgear Savings Plus Plan and the Oilgear
Salaried Retirement Plan. The Company and the Trustee disclaim beneficial
ownership of shares of Company Common Stock held by the Oilgear Stock
Retirement Plan and the Oilgear Savings Plus Plan since the power to direct
the voting and disposition of shares allocated to participants' accounts is
passed through to the participants and neither the plan administrators nor
the Trustee may dispose of the allocated shares in those Plans except to or
upon the instructions of participants pursuant to the terms of such Plans.
Voting and investment power with respect to shares held by the Oilgear
Salaried Retirement Plan is as described in note 2 to the table below. The
address of the Plans is the Company's address.
In addition to the above holdings, Common Stock of the Company is held in
the Oilgear Company Non-Contributory Pension Plan (11,762 shares) and the
Oilgear Ferris Foundation, Inc. (21,900 shares). Voting and investment power
with respect to these shares is held by the individuals identified in note 2 to
the table below.
The following table sets forth information regarding the beneficial
ownership of Common Stock of the Company, as of March 3, 1997, by each director
and nominee for director, by each executive officer named below in the Summary
Compensation Table and by all directors and executive officers of the Company as
a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP(1)(3) OF CLASS
---- -------------------------- --------
<S> <C> <C>
Gerhard W. Bahner.................. 9,452(2) 0.8%
Hubert Bursch...................... 5,894(4) 0.5%
Randolph W. Carson................. 460 *
Roger G. DeLong.................... 1,450 0.1%
Carl L. Gosewehr................... 22,290(2) 1.8%
Otto F. Klieve..................... 20,155(2) 1.6%
Thomas L. Misiak................... 150 *
Edward Neuwirth.................... 1,050 0.1%
Thomas J. Price.................... 20,942(2)(4) 1.7%
Doward L. Runyan................... 6,683 0.5%
Frank L. Schmit.................... 950 0.1%
David A. Zuege..................... 25,973(2)(4) 2.1%
All directors and executive
officers as a group (14
persons)......................... 248,980(2)(4) 19.7%
</TABLE>
- -------------------------
* Less than 0.1%
4
<PAGE> 7
(1) The specified persons have sole voting power and sole investment power as to
all of the shares indicated, except for the shares referred to in note 2 and
except for 4,880 shares as to which voting power and investment power are
shared with other persons, including 4,590 shares as to which Mr. Klieve has
shared voting and investment power and 290 shares as to which Mr. Price has
shared voting and investment power.
(2) Messrs. Gosewehr, Klieve and Zuege share voting power and investment power
with respect to 21,900 shares of Oilgear Common Stock held by the Oilgear
Ferris Foundation, Inc., a private charitable foundation funded by Oilgear.
As officers of the Company, Messrs. Zuege, Bahner and Price share voting
power and investment power with respect to 77,078 shares held in the Oilgear
Salaried Retirement Plan and 11,762 shares held in the Oilgear Company
Non-Contributory Pension Plan. All of such shares are included in the total
for all directors and executive officers as a group but not in the
individual beneficial ownership amounts shown in the table. As officers of
the Company, Messrs. Zuege and Price also share dispositive power, in the
event of a tender or exchange offer for the Company's Common Stock, with
respect to any shares of Common Stock held in the Oilgear Stock Retirement
Plan and the Oilgear Savings Plus Plan which are not allocated to the
accounts of participants. There were a minimal number of such unallocated
shares as of March 3, 1997; such shares are not included in the table.
(3) Includes shares allocated to the accounts of officers under the Oilgear
Savings Plus Plan and the Oilgear Stock Retirement Plan, as to which such
officers have voting and investment power.
(4) Includes shares underlying currently exercisable options granted to
executive officers under the 1992 Stock Option Plan in the following
amounts: Mr. Bursch 727, Mr. Price 986, Mr. Zuege 1,736, and all executive
officers 5,877.
The above beneficial ownership information is based on information
furnished by the specified persons and is determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934, as required for purposes of
this Proxy Statement. It includes shares as to which beneficial ownership may be
disclaimed and is not necessarily to be construed as an admission of beneficial
ownership for other purposes.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any director, officer or more than 10%
beneficial owner who failed to timely file with the Securities and Exchange
Commission a required report relating to ownership and changes in ownership of
Oilgear Common Stock during 1996. Based solely upon a review of Forms 3 and 4
and amendments thereto furnished to the Company during the last fiscal year and
Forms 5 and amendments thereto furnished to the Company with respect to the last
fiscal year, the Company is not aware of any such failure.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY
The following table sets forth certain information for each of the last
three fiscal years concerning all compensation for services in all capacities to
the Company and its subsidiaries of (1) the Chief Executive Officer of the
Company at the end of fiscal 1996, and (2) the Company's other four most highly
compensated executive officers who were serving as such at the end of fiscal
1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------------------------
AWARDS
----------------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
POSITION YEAR ($) ($)(1) ($) (#)(2) ($)(3)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
DAVID A. ZUEGE 1996 $193,000 $104,446 $0 6,559 $17,450
President and Chief 1995 142,000 60,609 0 1,414 7,904
Executive Officer(4) 1994 142,000 43,246 0 0 8,793
---------------------------------------------------------------------------------
HUBERT BURSCH 1996 $154,190/ $ 46,274 $0 578 $ 4,670
Vice President -- DM231,000
European Operations(5) 1995 $153,470/ 36,442 0 1,455 1,747
DM220,000
1994 $135,960/ 24,712 0 0 2,862
DM220,000
---------------------------------------------------------------------------------
DOWARD L. RUNYAN 1996 $ 98,700 $ 38,341 $0 0 $11,425
Vice President -- 1995 98,700 31,455 0 0 5,062
Manufacturing 1994 98,700 21,623 0 0 7,220
---------------------------------------------------------------------------------
GERHARD W. BAHNER 1996 $ 98,000 $ 38,341 $0 2,129 $ 9,380
Vice President -- 1995 98,000 29,537 0 0 7,183
Engineering 1994 98,000 20,079 0 0 8,179
---------------------------------------------------------------------------------
THOMAS J. PRICE 1996 $ 95,000 $ 38,341 $0 2,059 $12,505
Vice President of 1995 92,000 29,537 0 1,414 9,054
Finance and Corporate 1994 87,000 20,079 0 0 10,651
Secretary
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For 1996 and 1995, consists of bonuses pursuant to the Oilgear Variable
Compensation Program. For 1994, consists of bonuses pursuant to the Oilgear
Profit Sharing Program. Portions of the 1996 and 1995 bonus amounts were
paid in quarterly installments during the respective year with the remainder
paid at the beginning of the following year. Bonuses for 1994 were earned
and accrued during 1994 and fully paid at the beginning of 1995.
(2) Consists entirely of stock options.
(3) Includes employer contributions to the Oilgear Savings Plus Plan allocated
to the accounts of the named executive officers for 1996 in the following
amounts: Mr. Zuege $6,179, Mr. Runyan $2,531, Mr. Bahner $2,528 and Mr.
Price $5,730. Such employer contributions are comprised of matching
contributions equal to 50% of the first 2% of total compensation deferred by
the participant, 25% of the next 3% of total deferred compensation and an
amount equal to 20% of the market price of any Company Common Stock
purchased by the participant through designation of the Company Common Stock
Fund as an investment choice. Also includes principal and interest amounts
owed to the Company by the named executive officers which were forgiven
during 1996 pursuant to the Oilgear Key Employee Stock Purchase Plan, along
with the value of the below-market portion of such interest for the same
period, in the following amounts: Mr. Zuege $7,341, Mr. Bursch $4,670, Mr.
Runyan $5,646, Mr. Bahner $3,386 and Mr. Price $3,396. For 1996, also
includes Common Stock allocations to the named executive officers' accounts
pursuant to the Oilgear Stock Retirement Plan of approximately the following
numbers of shares (valued as indicated based upon the $14.50 contribution
rate): Mr. Zuege 271 shares ($3,930), Mr. Runyan 224
6
<PAGE> 9
shares ($3,248), Mr. Bahner 239 shares ($3,466) and Mr. Price 233 shares
($3,379). Benefits under the Stock Retirement Plan are integrated with
benefits payable under the Oilgear Salaried Retirement Plan as described in
the section entitled "Retirement Plans".
(4) Mr. Zuege became President and Chief Executive Officer of the Company
effective January 1, 1996.
(5) Mr. Bursch receives his compensation in Deutsche Marks. The dollar amount
variations between his 1995 and 1994 base salaries, which remained constant
at DM220,000, were attributable to a fluctuating exchange rate.
STOCK OPTIONS
The following tables set forth certain information with respect to the
executive officers named in the Summary Compensation Table concerning fiscal
1996 option grants and exercises, and the number and value of options
outstanding at the end of fiscal 1996. None of the executive officers named in
the Summary Compensation Table received or exercised SARs during the last fiscal
year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS(1) OPTION-TERM
- -----------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/ GRANTED TO EXERCISE OR
SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
DAVID A. ZUEGE 1,500 10.5% $15.25 1/1/01 $ 6,320 $13,965
559 3.9% $14.75 4/1/01 $ 2,278 $ 5,034
4,500 31.5% $14.25 12/11/01 $17,717 $39,149
- -----------------------------------------------------------------------------------------------------------
HUBERT BURSCH 578 4.0% $14.25 12/12/01 $ 2,276 $ 5,028
- -----------------------------------------------------------------------------------------------------------
DOWARD L. RUNYAN 0 0 -- -- -- --
- -----------------------------------------------------------------------------------------------------------
GERHARD W. BAHNER 2,129 14.9% $15.50 5/8/01 $ 9,118 $20,147
- -----------------------------------------------------------------------------------------------------------
THOMAS J. PRICE 559 3.9% $14.75 4/1/01 $ 2,278 $ 5,034
1,500 10.5% $14.25 12/11/01 $ 5,906 $13,050
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists entirely of incentive stock options granted pursuant to the 1992
Stock Option Plan. The plan is administered by the Compensation Committee of
the Board of Directors which designates the persons to be granted options,
the type of option, the number of underlying shares, the option price, the
date of grant and the date options are first exercisable. Certain of these
options were granted to replace shares delivered to the Company by the
optionee in satisfaction of the exercise price of previously-granted
options. The exercise price of these options is 100% of the fair market
value of Oilgear Common Stock on the date of grant. The options vest in
accordance with the following schedule: (i) as to 50% of the underlying
shares, one year from the date of grant; (ii) as to an additional 25% of the
underlying shares, two years from the date of grant; and (iii) as to the
remaining 25% of the underlying shares, three years from the date of grant.
To the extent an optionee satisfies the option exercise price or tax
withholding obligations upon exercise with shares of previously-owned
Oilgear Common Stock, or satisfies such withholding obligations with shares
issuable upon the option exercise, the Compensation Committee has the
discretion to grant replacement options to the optionee covering the number
of shares delivered or withheld at an exercise price equal to the then
current fair market value of such shares. Upon a change in control of the
7
<PAGE> 10
Company while the optionee is employed by the Company, or the disposition of an
operating unit resulting in the termination of the optionee's employment,
options which are not yet exercisable shall fully vest.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE UNEXERCISED OPTIONS/SARS AT OPTIONS/SARS AT FISCAL YEAR-END
ON EXERCISE REALIZED FISCAL YEAR-END (#) ($)(8)
(#)(2) ($) ----------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
DAVID A. ZUEGE 750 $ 2,813(3) 707 7,266 $0 $3,515
-----------------------------------------------------------------------------------------------------
HUBERT BURSCH 750 $ 2,438(4) 727 1,306 $0 434
-----------------------------------------------------------------------------------------------------
DOWARD L. RUNYAN 1,000 $ 4,000(5)
2,000 $ 7,500(6) 0 0 -- --
-----------------------------------------------------------------------------------------------------
GERHARD W. BAHNER 3,000 $13,500(7) 0 2,129 -- $ 0
-----------------------------------------------------------------------------------------------------
THOMAS J. PRICE 750 $ 2,813(3) 707 2,766 $0 $1,265
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists entirely of stock options.
(2) Reflects the total number of shares covered by the exercised option, not the
net number of additional shares owned by the optionee as a result of the
optionee's satisfaction of the option exercise price with shares of
previously-owned Company stock.
(3) Based upon a price of $14.75, which was the closing bid price of Oilgear
Common Stock on the Nasdaq Stock Market on April 1, 1996, the date of
exercise.
(4) Based upon a price of $14.25, which was the closing bid price of Oilgear
Common Stock on the Nasdaq Stock Market on December 12, 1996, the date of
exercise.
(5) Based upon a price of $15.00, which was the sale price of Oilgear Common
Stock on the Nasdaq Stock Market on the date of exercise.
(6) Based upon a price of $14.75, which was the closing bid price of Oilgear
Common Stock on the Nasdaq Stock Market on December 20, 1996, the date of
exercise.
(7) Based upon a price of $15.50, which was the closing bid price of Oilgear
Common Stock on the Nasdaq Stock Market on May 8, 1996, the date of
exercise.
(8) Based upon a price of $15.00, which was the last sale price of Oilgear
Common Stock on the Nasdaq Stock Market on December 31, 1996.
8
<PAGE> 11
RETIREMENT PLANS
The table below sets forth the estimated annual benefits payable for a
participant's lifetime (with 10 years certain) upon retirement at age 65 during
1997 for specified compensation and years of service classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
YEARS OF SERVICE(1)
- ---------------------------------------------------------------------------------------------
REMUNERATION(2) 15 20 25 30 35
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$100,000 $ 19,918 $ 26,557 $ 33,196 $ 39,835 $ 46,475
- ---------------------------------------------------------------------------------------------
150,000 31,168 41,557 51,946 62,335 72,725
- ---------------------------------------------------------------------------------------------
200,000 42,418 56,557 70,696 84,835 98,975
- ---------------------------------------------------------------------------------------------
250,000 53,668 71,557 89,446 107,335 125,225
- ---------------------------------------------------------------------------------------------
300,000 64,918 86,557 108,196 129,835 151,475
- ---------------------------------------------------------------------------------------------
350,000 76,168 101,557 126,946 152,335 177,725
- ---------------------------------------------------------------------------------------------
</TABLE>
- -------------------------
(1) The benefit shown for the respective years of service is based on the
formula described below as amended to comply with provisions of the Tax
Reform Act of 1986. However, the amount shown does not consider the impact
of the Oilgear Stock Retirement Plan offset nor does it consider the current
maximum benefit limitation of $125,000 on a single life annuity basis or the
grandfathered benefit determination on prior plan provisions. The benefit
shown assumes retirement in 1997 at age 65 with Covered Compensation (as
defined below) of $29,304.
(2) Represents final average annual compensation, which is 12 times the average
of the highest consecutive 60 months compensation within the last 120 months
of employment where compensation includes total earnings plus contributions
to the Oilgear Savings Plus Plan, any cafeteria plan and any flexible
spending account less reimbursements for moving expenses and any income
derived from the disposition of qualified stock options. Such compensation
shall be limited to $160,000 for 1997. The final average annual compensation
on which the Oilgear Salaried Retirement Plan bases benefits may be
substantially less than the current annual compensation reflected in the
Summary Compensation Table. The final average annual compensation for Mr.
Zuege is currently approximately $191,000; for Mr. Runyan, it is $125,000;
for Mr. Bahner, it is $121,000; and for Mr. Price, it is $112,000.
The Oilgear Salaried Retirement Plan (the "Salaried Plan") provides a
monthly benefit upon retirement at the later of age 65 or the fifth anniversary
of participation equal to the greater of (i) $6.00 times years of benefit
service or (ii) the sum of .009125 times final average monthly compensation
times years of benefit service (not to exceed 35), plus .005875 times the excess
of final average monthly compensation over "Covered Compensation" (the
applicable average monthly Social Security wage base), times years of benefit
service (not to exceed 35). Final average compensation for this purpose is the
average of the highest monthly earnings of an employee during any 60 consecutive
months within the last 120 months of service. The applicable average monthly
Social Security wage base is determined over a 35-year period ending with the
employee's Social Security retirement age (ages 65 through 67, depending upon
date of birth). Benefits under the Salaried Plan are also subject to reduction
for certain benefits under the Oilgear Stock Retirement Plan, as noted below.
Mr. Zuege has accrued 29 years of benefit service; Mr. Runyan, 11 years; Mr.
Bahner, 33 years; and Mr. Price, 30 years.
Participants with at least 10 years of vesting service may elect early
retirement at any time after age 55, in which event the normal retirement
benefits shown in the table would be reduced by a percentage based on the number
of months by which the early retirement date precedes the normal retirement date
(at age 65). Optional forms of benefit payments and a benefit for death prior to
termination of employment are provided for.
9
<PAGE> 12
The Company maintains a Retirement Benefits Equalization Plan (the
"Equalization Plan") for highly compensated or management employees who are
designated as eligible by the Compensation Committee, to restore to such
individuals and their beneficiaries retirement income which would otherwise be
lost because of certain tax law limitations on a tax-qualified defined benefit
retirement plan. Mr. Zuege has been designated as an eligible participant in the
Equalization Plan. The Equalization Plan provides a monthly benefit equal to the
difference between the amount which is received pursuant to the Salaried Plan
and the amount which would be received if the Internal Revenue Code limitation
provisions described in notes 1 and 2 above were not applied. Payment of
Equalization Plan benefits commences upon initial receipt of Salaried Plan
benefits and continues until Salaried Plan benefits cease. Equalization Plan
benefits are paid out of Company general funds; the status of eligible employees
with respect to those funds is that of general unsecured creditors. As amended
effective December 13, 1995, upon the occurrence of a change in control (as
defined in the Equalization Plan) each active or retired eligible participant
(or his or her beneficiary) is entitled to a lump sum payment of the then
present value of all accrued benefits under the Equalization Plan. In the case
of active eligible participants, any subsequent payments pursuant to the
Equalization Plan would then be reduced to reflect the value of the prior lump
sum payment.
The trusteed defined contribution Oilgear Stock Retirement Plan (the "Stock
Plan") covers substantially all salaried employees. The Stock Plan provides for
Company contributions based on a percentage of defined earnings of eligible
employees, subject to maximum limitations, which may be made in the form of
Company Common Stock. The Stock Plan will provide a portion of the pension
benefits for salaried employees measured by the value of the Company Common
Stock contributed by the Company and allocated to the employees' accounts
excluding any appreciation thereof. Benefits payable under the Salaried Plan may
be reduced by benefits under the Stock Plan.
Mr. Bursch does not participate in the retirement plans described above.
Rather, Mr. Bursch participates in a broad-based retirement program applicable
to the Company's German employees. That program is funded by a life insurance
policy owned by the Company and provides a retirement annuity, assuming
retirement at age 65, which for Mr. Bursch was most recently calculated to be
approximately DM43,000 per year.
DIRECTORS' COMPENSATION
Non-employee directors receive a retainer of $550 per month, a fee of $850
for each Board meeting and a fee of $550 for each committee meeting attended,
unless the committee meeting takes place on the same day as a Board meeting, in
which case no committee meeting fee is paid. Inside directors do not receive
separate compensation for service on the Board or Board committees. In lieu of
all fees otherwise payable to him as a non-employee director, effective January
1, 1997 the Chairman of the Company's Board of Directors is paid a retainer in
the amount of $2,000 per month.
Under the Oilgear Company Deferred Directors' Fee Plan (the "Fee Plan") any
inside director may elect to defer an amount of compensation approximately equal
to the retainer paid to outside directors. The Fee Plan provides that the
Company shall maintain a separate account for the compensation deferred by each
inside director, which account shall be an unsecured liability of the Company. A
director who chooses to defer payment of his compensation may elect to: (1) have
the amount of such compensation credited with interest at a rate based upon the
prevailing Treasury Bill rate, or (2) have the Company place the deferred
compensation in an investment account in the name of the Company, with the
director having investment authority, or (3) enter into an agreement with the
Company whereby the Company agrees to pay a sum certain for a future period not
to exceed 15 years and fund the obligation by an insurance policy purchased (and
owned) by the Company, at a cost not to exceed the amount of the deferred
compensation plus interest thereon. In the event of a director's death or
termination as a director, the balance in his account shall be payable in a lump
sum or in level payments over a period not to exceed 15 years, as determined by
the Board of Directors after consultation with the director or his
beneficiaries. No inside directors made deferrals pursuant to the Fee Plan
during 1996. However, previously deferred amounts were paid during 1996 to Carl
L. Gosewehr in the amount of $51,980 and to Otto F. Klieve in the amount of
$47,600.
10
<PAGE> 13
To promote director ownership of Company Common Stock, the Company
maintains The Oilgear Company Amended and Restated Directors' Stock Plan (the
"Directors' Plan"). Each director who is otherwise eligible to receive
directors' fees is eligible to participate in the Directors' Plan. Pursuant to
the Directors' Plan, increases in directors' fees are payable in Company Common
Stock and up to 30% of the remaining cash fees payable to each eligible director
may be paid in stock, as determined by the director. Stock issued in lieu of
fees pursuant to the Directors' Plan is issued at the market price of such stock
on the date of purchase. A total of 10,000 shares of Company Common Stock were
authorized for issuance under the Directors' Plan. The provisions of the
Directors' Plan prohibit a director who has received a grant thereunder from
selling, assigning, transferring, pledging or otherwise encumbering the shares
received until six months after termination of service as a director. Unless the
Directors' Plan is terminated earlier, it shall expire at such time as all
available shares under the Directors' Plan have been issued. Each eligible
director received 150 shares of Company Common Stock pursuant to the Directors'
Plan in 1996.
Effective January 1, 1992, the Company entered into a five-year consulting
agreement with Carl L. Gosewehr which terminated at the end of 1996. Mr.
Gosewehr retired as President at the end of 1991 but remains as a director of
the Company. The consulting fee for the first year (1992) was $85,000 and the
compensation rate for each successive year was negotiated, with a minimum of
$25,000 per year. During 1996, Mr. Gosewehr earned $55,000 under this agreement.
Pursuant to the terms of the agreement, Mr. Gosewehr deferred receipt of all
amounts earned through 1996. The amounts deferred earn a return based upon the
return of one or more mutual funds generally available to the investing public
or one or more common, collective or group trusts sponsored by a Wisconsin bank,
trust company or affiliate thereof, as selected by Mr. Gosewehr. The Company has
no obligation, though, to actually so invest Mr. Gosewehr's deferred amounts. In
the event of a change in control of the Company, Mr. Gosewehr shall be paid a
lump sum equal to the balance of his deferred fees.
Effective upon Otto F. Klieve's retirement as President and Chief Executive
Officer on December 31, 1995, the Company entered into a 16-month consulting and
deferred compensation agreement with Mr. Klieve, who remained as a director of
the Company during that time. Mr. Klieve's agreement has been extended through
December 31, 1997. The consulting agreement provides for a deferred monthly
payment of $5,000 which generally becomes payable at the earlier of his death or
January 1, 2001. The amounts deferred pursuant to Mr. Klieve's agreement earn a
return based upon, at Mr. Klieve's election, the return of one or more mutual
funds generally available to the investing public or one or more common,
collective or group trusts sponsored by a Wisconsin bank, trust company or
affiliate thereof. The Company has no obligation, however, to actually invest
Mr. Klieve's account in any such investment vehicle. For so long as Mr. Klieve
is entitled to a consulting fee pursuant to his agreement, he is not entitled to
any directors' fees for his service on the Board of Directors. In the event of a
change in control of the Company, Mr. Klieve's agreement shall immediately
terminate and Mr. Klieve shall be paid a lump sum equal to the balance of his
deferred fees.
11
<PAGE> 14
FINANCIAL PERFORMANCE GRAPH
The following graph shows the cumulative total shareholder return on
Oilgear Common Stock over the last five fiscal years as compared to the returns
of the Nasdaq Stock Market Index (as presented by Media General Financial
Services) and the "Machinery-Heavy" industry index published by Media General
Financial Services, assuming that $100 was invested in each at the close of
business on December 31, 1991 and assuming reinvestment of dividends in each
case.
[LINE GRAPH]
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD OILGEAR INDUSTRY INDEX BROAD MARKET
(FISCAL YEAR COVERED)
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 86.60 102.68 100.98
1993 90.22 140.56 121.13
1994 117.91 145.74 127.17
1995 144.26 169.02 164.96
1996 130.67 198.16 204.98
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION PRINCIPLES
The Compensation Committee has designed the Company's executive
compensation program so that executive compensation is directly linked to
execution of the Company's business strategies and initiatives, with particular
emphasis on the creation of shareholder equity. The Compensation Committee is
comprised of three independent directors, each of whom also serves on the
Company's Executive Committee and is therefore in the best possible position to
monitor management performance.
There are three components of the Company's executive compensation program:
base salary, short-term incentives and long-term incentives. The principles that
guide the decisions of the Compensation Committee in implementing the program
include the following:
- The various elements of the compensation program should be integrated
into a package that will attract and retain competent managers who are
critical to the long-term success of the Company.
- Short-term incentives should be closely tied to the Company's operating
performance.
- Shareholder interests should be linked with executive compensation
through long-term stock-based incentive programs that will reward
executives for the enhancement of shareholder value.
12
<PAGE> 15
BASE SALARY
Base salaries for the Company's executive officers are reviewed on an
annual basis by the Compensation Committee. As part of its review, the
Compensation Committee takes into account survey data relating to manufacturing
firms of comparable size (measured by sales), and executive officer salaries are
adjusted as warranted in light of individual and Company performance measured by
earnings and other financial performance criteria. If appropriate, salaries are
also adjusted to reflect increased responsibilities due to promotion.
The Compensation Committee sets executive officer base salaries at a level
so that the competitiveness of an individual's overall compensation package
depends significantly upon the compensation earned through the Company's short-
and long-term incentive plans. In order to emphasize the performance-based
component of the executive compensation program during fiscal 1996 (as described
under "Short-Term Incentives" below), the Compensation Committee opted to
provide for only modest increases in the base salaries of the Company's
executive officers. In connection with Mr. Zuege's promotion to President and
Chief Executive Officer, his salary was increased to the same level as his
predecessor.
SHORT-TERM INCENTIVES
Company executive officers, including the CEO, are able to earn annual
profit sharing bonuses each year under the Oilgear Variable Compensation Program
(the "Variable Program"). The Variable Program provides performance-based
incentive opportunities to executive officers, non-executive officers and other
key employees of the Company. In particular, the Variable Program has been
designed to respond to increasing market pressures relating to the Company's
ability to provide competitive compensation packages to key employees.
During 1996, participants in the Variable Program were entitled to receive
cash incentive payments which, in total, could have comprised up to 40% of total
1996 compensation, but no incentive payments would have been made if the
Company's net income had not exceeded 4% of shareholders' equity at the
beginning of the year. The number of bonus units assigned to each eligible
executive officer, including the CEO, was established by the Compensation
Committee at the beginning of the year, based upon an evaluation of various
factors including each individual's responsibility, ability, experience and past
performance. Each bonus unit was equal to a percentage of corporate net income,
as follows: .15% if the return on beginning shareholders' equity was 4-8%, .175%
if the return on beginning shareholders' equity was 8-16%, and .2% if such
return was more than 16%. Fiscal 1996 return on equity equalled 11.1%, resulting
in a bonus point percentage of .175% and payment of the bonuses indicated in the
Bonus column of the Summary Compensation Table for each of the executive
officers named therein, including the CEO. The Variable Program provides that in
the event that the total accrued bonus payout for a given year exceeds the 40%
threshold described above, each participant's bonus must be reduced on a pro
rata basis. The Variable Program further provides that, at the discretion of
Company management, the Company may make quarterly payments of up to 75% of the
bonus accrued during the year of accrual based on the Company's performance as
reflected in its unaudited financial statements; such quarterly payments were
made in 1996. Final payment of the full bonus amounts must be made within 75
days after the end of the Company's fiscal year, or as soon thereafter as the
Company's audit is complete.
LONG-TERM INCENTIVES
The Company strives to align employee and shareholder interests through the
maintenance of four stock-based compensation plans: the Key Employee Stock
Purchase Plan, the Savings Plus Plan, the Stock Retirement Plan and the 1992
Stock Option Plan. All executive officers, including the CEO, are eligible to
participate in these plans except that Hubert Bursch is not eligible to
participate in the Savings Plus Plan or the Stock Retirement Plan.
The Company's Key Employee Stock Purchase Plan provides an opportunity for
selected officers and other key employees to purchase shares of Company Common
Stock at the market bid price and to pay for such shares by delivering two
promissory notes to the Company bearing annual interest at a rate of 5%. One
note for one-half of the aggregate purchase price is payable in three equal
annual installments due on the 2nd,
13
<PAGE> 16
3rd and 4th February 28th after the date of purchase. The other note for the
remaining one-half of the purchase price is payable in three equal annual
installments which will be forgiven if none of the purchased stock has been
resold and the purchaser is still in the employ of the Company on the due dates,
which are the 4th, 5th and 6th February 28th after the date of purchase. Two of
the Company's executive officers, one of whom was the CEO, acquired shares
pursuant to the program in fiscal 1996.
The Savings Plus Plan is a pre-tax 401(k) savings plan. It provides
eligible Company employees, including executive officers, the ability to
contribute a portion of their earnings and to invest those earnings, along with
Company matching contributions, in various investment funds, including a Company
Common Stock fund. All of the Company's eligible executive officers, including
the CEO, participate in the Savings Plus Plan.
Under the Stock Retirement Plan, all eligible salaried employees, including
the CEO and the other executive officers, receive a defined contribution in
Company Common Stock which is integrated with the Company's defined benefit
retirement plan and may provide an increased retirement benefit based upon the
stock's performance.
The Company's 1992 Stock Option Plan is designed to reward key employees
for outstanding performance by providing an opportunity, and as a result an
incentive, for such employees to benefit from a future increase in the value of
the Company's Common Stock. Stock options granted pursuant to the plan must have
an exercise price at least equal to the market value of the Company's stock on
the date of grant, resulting in a direct link between the amount potentially
realizable by the employee and the amount realized by all shareholders alike.
Pursuant to the plan, the Compensation Committee has the discretion to grant a
replacement option (exercisable at the then-current fair market value of the
Company's stock) to any optionee who exercises an option and satisfies the
exercise price with previously-owned Company stock. Replacement option grants
were made by the Compensation Committee to each executive officer, including the
CEO, who exercised options during fiscal 1996 except for executive officers who
were close to retirement (because any such replacement options would not vest
prior to their retirement). In addition, the Committee granted options to
certain executive officers who were promoted during 1996, including two grants
totaling 6,000 shares to the new CEO.
COMPLIANCE WITH NEW TAX REGULATIONS REGARDING EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code, added by the Omnibus Budget
Reconciliation Act of 1993, generally disallows a tax deduction to public
companies for compensation over $1 million paid to the executive officers named
in the Summary Compensation Table in the corporation's proxy statement.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. The Compensation Committee does not
believe that Oilgear's executive compensation program, as presently constructed,
will generate non-deductible compensation in excess of the limit. However, the
Compensation Committee will continue to review these evolving tax regulations as
they apply to the Company's executive compensation program, with the intent of
preserving the deductibility of executive compensation to the extent reasonably
practicable consistent with its other compensation objectives.
Roger G. DeLong
Carl L. Gosewehr
Frank L. Schmit
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As indicated above, Oilgear's Compensation Committee consists of Messrs.
DeLong, Gosewehr and Schmit. Mr. Gosewehr was President of Oilgear from 1974 to
1991.
14
<PAGE> 17
AUDITORS
Representatives of KPMG Peat Marwick LLP, the Company's independent public
accountants for 1996 and 1997, are expected to be present at the annual meeting
to respond to appropriate questions and make a statement if they desire to do
so.
OTHER MATTERS
The Board of Directors has not been informed and is not aware that any
other matters will be brought before the meeting. However, proxies may be voted
with discretionary authority with respect to any other matters that may properly
be presented at the meeting.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than
November 25, 1997 in order to be considered for inclusion in next year's annual
meeting proxy material.
THE OILGEAR COMPANY
By
Thomas J. Price, Corporate
Secretary
Milwaukee, Wisconsin
March 25, 1997
15
<PAGE> 18
1997 ANNUAL MEETING OF SHAREHOLDERS OF THE OILGEAR COMPANY
PROXY/VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Carl L. Gosewehr, David A. Zuege and Thomas J.
Price, and each of them, proxies, each with full power of substitution, to
represent and to vote all shares of stock the undersigned is entitled to vote at
the Annual Meeting of Shareholders of The Oilgear Company to be held at the
offices of the Company at 2300 South 51st Street, Milwaukee, Wisconsin 53219, on
Tuesday, April, 15, 1997, at 2:00 P.M. (Milwaukee Time), and at any adjournment
thereof, hereby revoking any and all proxies heretofore given:
(1) Election of Directors:
Hubert Bursch, David A. Zuege, Randolph W. Carson
<TABLE>
<S> <C>
FOR all nominees WITHHOLD authority to vote for all nominees
(except as marked to the contrary below) [ ] (except as marked to the contrary below) [ ]
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee,
print that nominee's name on the line provided below:)
- --------------------------------------------------------------------------------
(2) In their discretion on such other matters as may properly come before
the meeting or any adjournment thereof; all as set out in the Notice and Proxy
Statement relating to the meeting, receipt of which is hereby acknowledged.
(Continued and to be signed on reverse side.)
This proxy also provides voting instructions for shares held in the various
employee savings/retirement plans of the Company as described in the Proxy
Statement. IF REGISTRATIONS ARE NOT IDENTICAL, YOU MAY RECEIVE MORE THAN ONE SET
OF PROXY MATERIALS. PLEASE SIGN AND RETURN ALL CARDS YOU RECEIVE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH NOMINEE LISTED IN ITEM 1.
Dated:____________________, 1997
- ---------------------------------------
Signature of shareholder
- ---------------------------------------
Signature of shareholder
(Please sign exactly as name appears above. If stock is owned by more than one
person, all owners should sign. Persons signing as executors, administrators,
trustees or similar capacities should so indicate. If a corporation, please sign
in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.)
