<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 sec.240.14a-11(c) or sec.240.14a-12
KAYDON CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
KAYDON CORPORATION
- - --------------------------------------------------------------------------------
(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), or 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 offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
KAYDON CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------
Tampa, Florida
March 14, 1994
To Shareholders:
The Annual Meeting of Shareholders of Kaydon Corporation ("Kaydon") will be
held at Tampa Airport Marriott, Tampa International Airport, Tampa, Florida on
Wednesday, April 27, 1994 at 10:00 a.m. for the following purposes:
(1) to elect a Board of Directors;
(2) to transact such other business as may properly come before the
meeting and any adjournment thereof.
Shareholders of record at the close of business on February 28, 1994 are
entitled to notice of and to vote at the meeting.
JOHN F. BROCCI
Vice President Administration
Corporate Secretary
THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND IMMEDIATE RETURN OF THE
ACCOMPANYING PROXY.
You can help avoid the necessity and expense of sending a follow-up letter by
the prompt completion and return of the enclosed proxy whether or not you expect
to attend the Annual Meeting of Shareholders. For your convenience, there is
enclosed a self-addressed envelope requiring no postage if mailed in the United
States.
<PAGE> 3
KAYDON CORPORATION
ARBOR SHORELINE OFFICE PARK
19345 U.S. 19 NORTH, SUITE 500
CLEARWATER, FLORIDA 34624
---------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 1994
---------------------
PROXY STATEMENT
---------------------
March 14, 1994
INTRODUCTION
The Annual Meeting of Shareholders of Kaydon Corporation ("Kaydon") will be
held on Wednesday, April 27, 1994, at the Tampa Airport Marriott, Tampa
International Airport, Tampa, Florida at 10:00 a.m. for the purposes set forth
in the accompanying notice. This statement is furnished in connection with the
solicitation by Kaydon's Board of Directors of proxies to be voted at such
meeting and at any and all adjournments thereof. Proxies properly executed, duly
returned and not revoked will be voted at the Annual Meeting (including
adjournments) in accordance with the specifications therein.
Participants in the Kaydon Corporation Employee Stock Ownership and Thrift
Plan and the Electro-Tec Corp. Employee Retirement Benefit Plan will receive
separate voting instruction cards covering the shares held for participants in
those Plans. Voting instruction cards must be returned or the shares will not be
voted by the trustee.
If a proxy in the accompanying form is executed and returned, it may
nevertheless be revoked at any time prior to the exercise thereof by executing
and returning a proxy bearing a later date, by giving notice of revocation to
the Secretary of Kaydon, or by attending the Annual Meeting and voting in
person.
At the Annual Meeting, holders of Kaydon's Common Stock shall have one vote
per share.
ELECTION OF DIRECTORS
The persons designated as proxies in the accompanying proxy have been
selected by the Board of Directors of Kaydon and have indicated that they intend
to vote all proxies received by them for the election of each of the following
nominees for the office of director of Kaydon, unless instructed otherwise, each
to serve until the Annual Meeting of Shareholders next succeeding their election
and until their successors have been duly elected and qualified.
The Directors shall be elected by a plurality of votes validly cast in
person or by proxy at any meeting at which a quorum is present. The presence in
person or by proxy of the holders of record of a majority of the shares entitled
to vote at a meeting of stockholders constitutes a quorum. Votes are counted at
the meeting by the Inspector of Elections. Abstentions will be counted as votes
for the election of all nominees as Directors. Broker non-votes will be voted
for the election of all nominees as Directors.
If for any reason any of the following nominees is not a candidate when the
election occurs, which is not anticipated, it is intended that the proxies will
be voted for the election of a substitute nominee designated by the Board of
Directors.
<PAGE> 4
NAME AND AGE OF NOMINEES
Glenn W. Bailey (68)....... Mr. Bailey was the Chairman of the Board of Kaydon
Corporation from its organization in October 1983
until April 1987. He was the Chairman and President
of Bairnco from its organization in January 1981
through May 1990. Mr. Bailey has been Chairman of
Keene Corporation since 1967. He is also on the
Board of Directors of the Genlyte Group Inc.
Gerald J. Breen (48)....... Mr. Breen has been the owner, President and Chief
Executive Officer of Cuyam Corporation since 1986.
From 1983 to 1986, Mr. Breen was the President and
General Manager of Hendrickson International, and
was with Imperial Clevite, Inc. from 1972 to 1983,
his last position being that of Vice President,
Replacement Marketing. He has been a Director of
Kaydon since January 1992.
Lawrence J. Cawley (59).... Mr. Cawley has been Chairman of the Board and Chief
Executive Officer of Kaydon Corporation since
September 1989. From November 1987 to September
1989, he was President and Chief Executive Officer
of Kaydon. He served as Kaydon's President and
Chief Operating Officer from April 1987 to November
1987 and was President of the Bearing Division of
Kaydon from October 1985 to April 1987. Prior to
joining Kaydon, Mr. Cawley was President and
General Manager of Clevite, a division of Imperial
Clevite Corporation.
Stephen K. Clough (40)..... Mr. Clough has been President and Chief Operating
Officer of Kaydon Corporation and a member of
Kaydon's Board of Directors since September 1989.
Prior to that he was Vice President and General
Manager of Kaydon's Bearing Division from April
1987 to October 1989 and was Vice President of
Operations of the Automotive Division of Kaydon
from April 1986 to April 1987. Prior to joining
Kaydon, Mr. Clough was a Plant Manager in the
Engine Parts Division of Imperial Clevite
Corporation.
John H.F. Haskell, Jr.
(61)....................... Mr. Haskell has served as a Managing Director of
Dillon, Read & Co. Inc. since 1975. Mr. Haskell is
a member of the Board of Directors of Dillon, Read
& Co. Inc., and Chairman of the Supervisory Board
of Dillon, Read (France) Gestion, an indirect
subsidiary of Dillon, Read & Co. Inc. located in
France. Mr. Haskell is a Director of The Equitable
Companies Incorporated and The Equitable Life
Assurance Society of the United States. He is also
a member of the Council on Foreign Relations. He
has been a Director of Kaydon since December 1984.
Norton Stevens (63)........ Mr. Stevens is a private investor located in New
York City. From 1958-1985, he was Chairman and CEO
of Norlin Corporation and its predecessor companies
including the Ecuadorian Corporation, Limited in
Ecuador. He is a Director of the Inter-American
Foundation, the International Rescue Committee, and
is a member of The Council on Foreign Relations. He
has been a Director of Kaydon since December 1987.
2
<PAGE> 5
DIRECTOR COMPENSATION AND BOARD COMMITTEES
During 1993, Kaydon's Board of Directors met six times for regular meetings
and once for a telephone conference call meeting. Each outside Director received
$1,750 for each attendance of the Board of Directors regular meeting and $300
for attendance at the telephone conference call meeting. Each outside Director
was paid $12,000 as a retainer for the year, which amount is paid quarterly.
During the year options for 10,000 shares of Kaydon stock were awarded to the
outside Directors in total. Each Director attended more than 75% of the
aggregate of the total meetings of the Board of Directors, and the total number
of meetings held by all committees of the Board of Directors on which the
Directors served.
The Board of Directors has an Audit Committee and a Compensation Committee.
The principal responsibilities of the Audit Committee are to ensure for the
Board of Directors: (a) that generally accepted accounting principles are being
followed; and (b) that the total audit coverage of the Corporation and its
subsidiaries is satisfactory. The Audit Committee provides an open avenue of
communication between management and the external auditors and the Board of
Directors. The Committee reviews the nature of all services performed by the
external auditors, including the scope and extent of their audit, the results of
their audit, and their compensation. The Committee met two times during the
year. The members of the Committee are: Glenn W. Bailey and John H.F. Haskell,
Jr.
The principal responsibilities of the Compensation Committee are to: (a)
review and advise management on broad compensation policies, incentive programs,
stock option and stock purchase plans, deferred compensation and retirement
plans; (b) approve and recommend to the Board of Directors base salaries, salary
increases and other benefits for elected officers; (c) take certain actions
required or permitted to be taken by the Board of Directors under the stock
option plan and incentive compensation plans of Kaydon; and (d) review
recommendations for major changes in compensation, benefit and retirement plans
which have application to significant numbers of Kaydon's total employees and
which require review or approval of the Board of Directors. The Committee met
three times during the year. The members of the Committee are Norton Stevens and
Gerald J. Breen.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
NUMBER OF SHARES OUTSTANDING, RECORD DATE AND LIST OF SHAREHOLDERS
Only shareholders of record at the close of business on February 28, 1994
are entitled to notice of and to vote at the Annual Meeting. At the close of
business on such date there were 16,689,641 shares of common stock of Kaydon
outstanding. A shareholders list will be available for examination by
shareholders at the Annual Meeting in accordance with Section 219 of the
Delaware Corporation Law.
3
<PAGE> 6
COMMON STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of December 31, 1993,
concerning the only persons known to Kaydon to be the beneficial owners of more
than 5% of Kaydon's issued and outstanding stock:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS AMOUNT AND NATURE ISSUED AND OUTSTANDING
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) COMMON STOCK
- - ----------------------------------------------------- -------------------------- ----------------------
<S> <C> <C>
Neuberger and Berman................................. 995,000 5.9%
605 Third Avenue
New York, NY 10158
First Pacific Advisors, Inc.......................... 1,249,700 7.5%
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
The Prudential Insurance Company of America.......... 1,391,325 8.3%
751 Broad Street
Newark, NJ 07102
</TABLE>
- - ---------------
(1) These shares are owned by various individual and institutional investors for
which Neuberger and Berman, First Pacific Advisors, Inc. and The Prudential
Insurance Company of America, respectively, serve as investment advisors
with power to direct investments and/or shared power to vote the shares.
For purposes of the reporting requirements of the Securities Exchange Act
of 1934, Neuberger and Berman, First Pacific Advisors, Inc. and The
Prudential Insurance Company of America are deemed to be beneficial owners
of such shares; however, each expressly disclaims that they are, in fact,
the beneficial owners of such shares.
The following table presents information regarding beneficial ownership of
Kaydon's common stock by each member of the Board of Directors and other
Executive Officers as of February 28, 1994.
<TABLE>
<CAPTION>
PERCENTAGE OF ISSUED
AMOUNT AND NATURE OF AND OUTSTANDING
BENEFICIAL OWNERSHIP OF COMMON STOCK ON
BOARD OF DIRECTORS COMMON STOCK FEBRUARY 28, 1994
- - ------------------------------------------------------ ------------------------ ---------------------
<S> <C> <C>
Glenn W. Bailey....................................... 597,076(1) 3.57%
230 Park Ave.
New York, NY 10169
Gerald J. Breen....................................... 5,000(2) .03%
5200 Harvard Ave.
Cleveland, OH 44105
Lawrence J. Cawley.................................... 165,568(3) .99%
19345 U.S. 19 North, Suite 500
Clearwater, FL 34624
Stephen K. Clough..................................... 94,288(4) .56%
19345 U.S. 19 North, Suite 500
Clearwater, FL 34624
John H.F. Haskell, Jr................................. 20,500(5) .12%
535 Madison Ave., 15th Floor
New York, NY 10022
Norton Stevens........................................ 5,700(6) .03%
780 3rd Avenue, Suite 1401
New York, NY 10017
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PERCENTAGE OF ISSUED
AMOUNT AND NATURE OF AND OUTSTANDING
BENEFICIAL OWNERSHIP OF COMMON STOCK ON
BOARD OF DIRECTORS COMMON STOCK FEBRUARY 28, 1994
- - ------------------------------------------------------ ------------------------ ---------------------
<S> <C> <C>
OTHER EXECUTIVE OFFICERS
John F. Brocci........................................ 27,964(7) .17%
19345 U.S. 19 North, Suite 500
Clearwater, FL 34624
All officers and directors as a group, 7 persons...... 916,096 5.49%
</TABLE>
- - ---------------
Note: Common Stock amounts represented above have been adjusted to reflect the
stock split of April 30, 1992.
(1) Included in these shares are 7,500 shares which are acquirable under the
Stock Option Plans in 1994.
(2) Included in these shares are 5,000 shares which are acquirable under the
Stock Option Plans in 1994.
(3) Included in these shares are 14,000 shares owned by Mrs. Cawley as to which
Mr. Cawley disclaims beneficial ownership, and 120,400 shares which are
acquirable under the Stock Option Plans in 1994.
(4) Included in these shares are 78,500 shares which are acquirable under the
Stock Option Plans in 1994.
(5) Included in these shares are 7,500 shares which are acquirable under the
Stock Option Plans in 1994.
(6) Included in these shares are 2,500 shares which are acquirable under the
Stock Option Plans in 1994.
(7) Included in these shares are 20,000 shares which are acquirable under the
Stock Option Plans in 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------- ----------------------- PAYOUTS
OTHER SECURITIES -------
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPEN- STOCK OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) SATION ($) AWARDS ($) SARS (#) ($) ($)
(A) (B) (C) (D) (E) (F) (G) (H) (I)
- - ------------------------- ---- -------- -------- ---------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence J. Cawley,...... 1993 $259,519 $176,800 0 0 30,000 0 0
Chairman and Chief 1992 $235,808 $147,500 0 0 0 0 0
Executive Officer 1991 $219,692 $187,500 0 0 97,200 0 0
Stephen K. Clough,....... 1993 $192,615 $130,100 0 0 20,000 0 0
President and Chief 1992 $177,115 $ 94,400 0 0 0 0 0
Operating Officer 1991 $155,769 $114,700 0 0 58,000 0 0
John F. Brocci,.......... 1993 $ 92,181 $ 46,500 0 0 10,000 0 0
Vice President 1992 $ 84,631 $ 33,300 0 0 10,000 0 0
Administration 1991 $ 78,875 $ 21,000 0 0 20,000 0 0
</TABLE>
- - ---------------
Column (C): Includes deferrals into the 401(k) plan.
Column (G): Reflects the number of Non-qualified Stock Options granted and
accounts for the stock split on April 30, 1992. Kaydon does not have
a Stock Appreciation Rights (SAR) Plan.
The Company has not entered into any employment contract with any of the
named Officers or Directors nor does it have any compensatory plan or
arrangement for said Officers or Directors.
REPORT OF THE KAYDON CORPORATION COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors is composed entirely
of independent outside directors. The Committee is responsible for establishing
and administering the Company's Executive Compensation program.
5
<PAGE> 8
(A) COMPENSATION PHILOSOPHY AND OBJECTIVES
The Company's compensation philosophy is designed to support the overall
objective of creating value for our shareholders through:
- Hiring, developing, rewarding and retaining talented and productive
employees;
- Emphasizing pay-for-performance by having a significant portion of
cash compensation for senior executives at-risk through performance bonus
plans based upon financial, operating, strategic and growth objectives; and
- Providing equity-based incentives for selected employees to ensure
they are motivated over the long-term to respond to the Company's business
challenges and opportunities as owners, as well as employees.
(B) THE PROGRAM IN GENERAL
Kaydon Corporation's executive pay program is made up of the following
elements:
- Base Salary
Salaries of officers are listed in the Summary Compensation Table.
Each executive officer's performance and salary is reviewed annually by the
Compensation Committee. The following considerations are used in
determining the appropriate salary level: (a) the individual's sustained
performance and contribution to the company; (b) their experience and job
mastery; (c) their level of responsibility; (d) internal equity; and (e)
external pay practices.
The Base Pay component of annual compensation is based upon
competitive pay practices of other industrial companies of similar size and
scope for persons of comparable positions and experiences. The Hewitt
Associates Middle Market Index and other national independent published
surveys are used to establish salary midpoints for comparable positions
within Kaydon. The salary surveys used by Kaydon may or may not contain
information from companies represented in the comparator group index graph.
Salary range midpoints are generally set at the 50th percentile of the
market. An individual executive's base salary may be above or below the
salary midpoint depending on such variables as the individual's performance
and achievement, their experience and job mastery, time in position and
their contributions. The weight given these factors or other performance
objectives during the annual review in setting each executive officer's
base salary is determined subjectively by the Compensation Committee.
Kaydon believes that maximum performance can be encouraged through the
use of substantial annual incentive programs based upon attaining planned
operating and growth goals, with increased proportional rewards for
exceeding targets. Except for base pay, all other elements of executive
compensation are at risk.
- Annual Incentive Compensation Program
Kaydon believes in results. Its incentive compensation program is
designed to reward results.
Kaydon's Management Incentive Compensation (MIC) Program is a
combination of Management by Objectives (MBO) and profit sharing that
focuses the Corporation and Operating Units on performance objectives
relative to financial, operating and strategic business unit and corporate
growth goals which are considered fundamental to the future success of our
business(es) and which build shareholder value. Officers and certain other
salaried employees are eligible to participate.
Management's performance, and hence its rewards, are measured in such
stockholder terms as Earnings Per Share (EPS), Earnings Before Interest and
Taxes (EBIT), and Return On Capital Employed (ROCE).
At Kaydon's Corporate office, the annual bonus pool for the MIC
program for eligible employees is generated at the rate of $80,000 for each
1% improvement in Kaydon's EPS over the prior year. The non-
6
<PAGE> 9
employee Directors may add to, or delete from, the formula generated pool
up to $250,000 at their discretion, based upon their subjective evaluation
of non-EPS performance factors. In 1993, Kaydon's EPS improved 8.8%. The
non-employee directors neither added to, nor deleted from, the formula
generated pool.
At the various operating units, the annual bonus pool for the MIC
program for eligible employees is a formula measuring Return On Capital
Employed (ROCE) and Earnings Before Interest and Taxes (EBIT) which have a
minimum threshold achievement requirement of 80% of plan.
Total payout from the Annual Incentive Compensation Program is limited
to no more than 15% of Kaydon's pre-tax earnings.
The actual award to executive officers under this program is a
function of the number of points each has been awarded under the program
multiplied by the dollar amount produced by the Earnings Per Share formula
described above. The points assigned to executive officers and the
comparison of performance to goals are determined subjectively for each
executive officer by the Compensation Committee and approved by the Board
of Directors.
All awards under this program are subject to review by the
Compensation Committee and approval of the Board of Directors.
- Employee Stock Options
Stock options encourage and reward effective management that results
in long term corporate financial success as measured by stock price
appreciation. Stock options only have value if the price of Kaydon's stock
appreciates in value from the date the stock options are granted.
Stockholders of Kaydon also benefit from such stock price appreciation.
Kaydon's Employee Stock Option Plan has two components: incentive
stock options and non-qualified stock options. No incentive stock options
have been awarded since 1986. To encourage a longer-term perspective, the
options cannot be exercised immediately. Further, grants have not been made
at an option price less than the market value on the day of the grant.
Stock options may be awarded annually consistent with the Company's
objective to weight total compensation toward long-term equity interest for
managers and executive officers with greater opportunity for reward if
long-term performance is sustained.
The Employee Stock Option Plan is overseen by the Compensation
Committee (which consists of non-employee directors who are disinterested
persons under the Plan). The Plan terms are supplemented by administrative
guidelines and internal policies which govern the day-to-day workings of
the Plan. However, consideration for and/or the granting of any stock
option is within the subjective determination of the Committee. In 1993,
the Committee granted awards totalling 124,750 options based on
considerations such as performance, length of time since last grant, level
of accountability, contribution to the Company's growth and the options
previously granted to the recipient. The Committee did not attach any
particular weight to any factor and the final grant, if any, was
subjectively determined by the Committee for each executive officer. Each
employee stock option award requires approval by the Compensation Committee
and the Board of Directors.
- CEO Compensation
Lawrence J. Cawley is Chairman and Chief Executive Officer. He has
been Chief Executive Officer since November, 1987.
- Base Salary
Mr. Cawley's base pay range and midpoint is established in the
manner described above.
Mr. Cawley's performance is reviewed annually by the Compensation
Committee. In 1993, Mr. Cawley's base salary was increased based on a
consideration of attainment of financial, operating
7
<PAGE> 10
and strategic corporation objectives and on consideration of an
independent survey of executive compensation performed for the
Compensation Committee by Hewitt Associates. No particular weight was
attached to any single factor or performance objective, and the final
determination was based on the Committee's subjective judgment regarding
the application of the Hewitt study and Mr. Cawley's attainment of the
designated financial, operating and strategic objectives.
- Annual Incentive Compensation
Mr. Cawley's annual incentive compensation is determined in the
manner described above (percentage improvement of Earnings Per Share
over the prior year) under the Annual Incentive Compensation Program.
Mr. Cawley's actual award is a function of the number of points he has
been awarded under the program (his points were established in 1987 and
remain unchanged) multiplied by the dollar amount produced by the
program formula. Mr. Cawley's 1993 incentive compensation award was not
adjusted by the Compensation Committee.
- Stock Options
In 1993 Mr. Cawley was granted options for 30,000 shares of Kaydon
stock based on his performance, overall contributions to the Company,
length of time since his last grant and the options previously granted
Mr. Cawley. No particular weight was attached to any single factor and
the final determination was based on the Committee's subjective judgment
regarding Mr. Cawley's performance, overall contributions to the Company
and other factors.
COMPENSATION COMMITTEE:
Norton Stevens
Gerald J. Breen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer, Director or member of the Compensation Committee of
the Company had any interlocking relationship which would require disclosure in
this Proxy Statement.
OPTION/SAR GRANTS TABLE
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- - ------------------------------------------------------------------------------------------------------------
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES of Alternative to
STOCK PRICE (F) and (G):
APPRECIATION for Grant Date
INDIVIDUAL GRANTS OPTION TERM Value
- - -------------------------------------------------------------------------- --------------- ---------------
(A) (B) (C) (D) (E) (F) (G) (H)
% OF TOTAL
NUMBER OF OPTIONS/
SECURITIES SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($) VALUE($)
- - --------------------- ------------ ------------ ----------- ---------- ------ ------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence J. Cawley... 30,000 26% 22.00 11/3/98 -- -- 8.18
Stephen K. Clough.... 20,000 17% 22.00 11/3/98 -- -- 8.18
John F. Brocci....... 10,000 9% 22.00 11/3/98 -- -- 8.18
</TABLE>
(Footnotes on following page)
8
<PAGE> 11
- - ---------------
(1) Column (H) calculation made in accordance with the Black-Scholes option
pricing model.
The model assumes:
(a) An option term of five (5) years which is the life of the grant.
(b) Expected volatility which is calculated using the daily closing
price of the stock for the six (6) months immediately preceding
the option grant.
(c) Dividend yield at $.40 per share which is the annualized dividend
paid to shareholders on the date of the grant.
(d) The risk-free rate of return is the average monthly U.S. Treasury
note with a maturity date corresponding to the option term (i.e.,
5 years).
(e) No adjustments for non-transferability or risk of forfeiture.
(2) The material terms of the option are as follows: 25% of the option is
exercisable one year from the date of the grant and an additional 25% is
exercisable each of the following three years. The right to purchase is
cumulative. Exercisability may be accelerated upon death, disability,
retirement, certain mergers or other corporate events, or a change in
control of Kaydon. The option price may be paid in stock or cash.
(3) Column (B) and (C) -- Kaydon does not have a Stock Appreciation Rights (SAR)
Plan.
(4) (a) Mr. Cawley received a single option grant of 30,000 shares for the last
fiscal year.
(b) Mr. Clough received a single option grant of 20,000 shares for the last
fiscal year.
(c) Mr. Brocci received a single option grant of 10,000 shares for the last
fiscal year.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR VALUE
- - --------------------------------------------------------------------------------------------------------
(D)
NUMBER OF (E)
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
(B) OPTIONS/SARS OPTIONS/SARS
SHARES (C) AT FY-END (#) AT FY-END ($)
ACQUIRED ON VALUE ------------- -------------
(A) EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- - --------------------------------------------- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Lawrence J. Cawley........................... 30,000 375,000 (E) 81,100 158,512
(U) 86,100 58,387
Stephen K. Clough............................ 2,500 34,217 (E) 54,000 102,500
(U) 54,000 34,250
John F. Brocci............................... 16,300 213,525 (E) 20,000 26,375
(U) 22,500 (31,875)
</TABLE>
- - ---------------
Note: All values reflect two-for-one stock split on April 30, 1992. Kaydon stock
closed at $20.75 on 12/31/93.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
- - --------------------------------------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE BASED PLANS
(B) (C) --------------------------------
NUMBER OF PERFORMANCE OR
SHARES, UNITS OTHER PERIOD UNTIL (D) (E) (F)
(A) OR OTHER RIGHTS MATURATION OR THRESHOLD TARGET ($ MAXIMUM
NAME (#) PAYOUT ($ OR #) OR #) ($ OR #)
- - --------------------------------------- --------------- ------------------ ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Lawrence J. Cawley..................... 0 0 0 0 0
Stephen K. Clough...................... 0 0 0 0 0
John F. Brocci......................... 0 0 0 0 0
</TABLE>
9
<PAGE> 12
COMPARISON OF FIVE YEAR CUMULATIVE RETURNS (1989-1993) TABLE
<TABLE>
<CAPTION>
MEASUREMENT PERIOD MACHINERY
(FISCAL YEAR COVERED) KAYDON INDEX S&P 500
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 119.38 110.93 131.49
1990 129.47 101.32 127.32
1991 170.67 129.29 166.21
1992 183.74 144.12 179.30
1993 164.83 183.59 197.23
</TABLE>
- Assumes $100 Invested in Common Stock on January 1, 1989.
- Total Return Assumes Reinvestment of Dividends.
- Based Upon Fiscal Year Ending December 31, 1993.
- Industry Index Based On Value Line Machinery Industry Index.
PENSION PLAN TABLE
The following table presents information regarding estimated annual
benefits payable as a straight life annuity upon retirement to persons in
specified remuneration and years of service classifications, under the present
plan formula.
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE AT RETIREMENT
AVERAGE ------------------------------------------------------------
PAY 5 10 15 20 25 30 OR MORE
- - ---------------------------------------- ------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000................................ $ 3,291 $ 6,582 $ 9,874 $13,165 $16,456 $ 19,747
75,000................................ 5,266 10,532 15,799 21,065 26,331 31,597
100,000................................ 7,241 14,482 21,724 28,965 36,206 43,447
125,000................................ 9,216 18,432 27,649 36,865 46,081 55,297
150,000................................ 11,191 22,382 33,574 44,765 55,956 67,147
175,000................................ 13,166 26,332 39,499 52,665 65,831 78,997
200,000................................ 15,141 30,282 45,424 60,565 75,706 90,847
225,000................................ 17,116 34,232 51,349 68,465 85,581 102,697
250,000 or more........................ 17,973 35,945 53,918 71,890 89,863 107,836
</TABLE>
- - ---------------
(1) Salary used for benefit calculations is limited to $235,840 per year as of
January 1, 1993 as prescribed by the IRS.
(2) Certain individuals, including the named officers discussed here, may not
receive the full benefit described here to the extent the regulations
require limitation or modification of the benefit formula.
(3) The benefits described herein are not subject to further deduction for
Social Security or other offset amounts.
10
<PAGE> 13
Remuneration covered by the Retirement Plan in a particular year includes
(1) that year's salary (base pay, overtime, and commissions), and (2)
compensation received in that year under the Management Incentive Compensation
Plan in an amount up to 50% of the participant's base pay as of December 31 of
the preceding calendar year. The 1993 remuneration covered by the Retirement
Plan for each participant, therefore, includes management incentive compensation
(up to such 50% ceiling) paid during 1993 in respect of 1992 awards.
For each of the following officers of Kaydon, the credited Years of Service
under the Retirement Plan, as of December 31, 1993, and the remuneration
received during 1993 covered by the Retirement Plan, were, respectively, as
follows: Mr. Cawley, 8 years and $235,840; Mr. Clough, 8 years and $235,840; Mr.
Brocci, 5 years and $125,481.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of Kaydon has selected Arthur Andersen & Co.,
independent public accountants, to audit Kaydon's consolidated financial
statements for the year ending December 31, 1993. A representative of Arthur
Andersen & Co. will be present at the Annual Meeting of Shareholders with an
opportunity to make a statement, if desired, and will be available to respond to
appropriate questions from shareholders present.
PROPOSALS BY HOLDERS OF COMMON STOCK
Any proposal which a shareholder of Kaydon desires to have included in the
proxy relating to the 1995 Annual Meeting of Shareholders must be received by
Kaydon at its Corporate offices (sent to the attention of the Corporate
Secretary) no later than October 31, 1994. The Corporate offices of Kaydon are
located at 19345 U.S. 19 North, Suite 500, Clearwater, Florida 34624.
EXPENSES AND OTHER MATTERS
EXPENSES OF SOLICITATION
Kaydon will pay the costs of preparing, assembling and mailing this proxy
statement and the material enclosed herewith. Kaydon has requested brokers,
nominees, fiduciaries and other custodians who hold shares of its common stock
in their names to solicit proxies from their clients who own such shares, and
Kaydon has agreed to reimburse them for their expenses in so doing.
In addition to the use of the mails, certain officers, directors and
regular employees of Kaydon, at no additional compensation, may request the
return of proxies by personal interview or by telephone or telegraph.
OTHER ITEMS OF BUSINESS
The management does not intend to present any further items of business to
the meeting, and knows of no such items which will or may be presented by
others. However, if any other matter properly comes before the meeting, the
persons named in the enclosed proxy form will vote thereon in such manner as
they may in their discretion determine.
John F. Brocci
Vice President Administration
Corporate Secretary
March 14, 1994
PLEASE SIGN, DATE AND IMMEDIATELY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE.
11
<PAGE> 14
PROXY KAYDON CORPORATION
ANNUAL MEETING OF SHAREHOLDERS, APRIL 27, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF KAYDON CORPORATION
The undersigned hereby appoints LAWRENCE J. CAWLEY and JOHN F. BROCCI, and
each of them, the proxies of the undersigned, with power of substitution in
each, to vote all stock of Kaydon Corporation that the undersigned is entitled
to vote at the Annual Meeting of Shareholders of such Corporation to be held at
Tampa Airport Marriott, Tampa International Airport, Tampa, Florida on
Wednesday, April 27, 1994 at 10:00 AM, Eastern time, and at any adjournment
thereof.
Your vote for the six directors may be indicated on the reverse side. Glenn
W. Bailey, Gerald J. Breen, Lawrence J. Cawley, Stephen K. Clough, John H.F.
Haskell, Jr. and Norton Stevens have been nominated for election as Directors.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO CONTRARY SPECIFICATION IS INDICATED, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES
AS DIRECTORS. PLEASE MARK BOX OR /X/ .
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
1. Election of Directors: (duly nominated and named on the reverse side of this
proxy)
<TABLE>
<S> <C> <C> <C> <C> <C>
/ / FOR all nominees (except as / / AUTHORITY WITHHELD for all. / / AUTHORITY WITHHELD for the following
listed to the contrary). only (write each nominee's name in
the space below)
</TABLE>
- - --------------------------------------------------------------------------------
Name(s)
(Continued and to be signed on the reverse side)
2. In their discretion, on other matters which properly come before the
meeting or any postponement or adjournment thereof.
You are urged to date, sign, and return promptly this proxy in the envelope
provided. It is important for you to be represented at the Meeting. The
execution of this proxy will not affect your right to vote in person if you are
present at the Meeting and wish to so vote.
Dated: ,1994
----------------
-------------------------
Signature
-------------------------
Signature if held jointly
IMPORTANT: Please sign
exactly as your name or names
appear hereon. If signing as
an attorney, executor,
administrator, trustee,
guardian, or in some other
representative capacity, or
as officer of a corporation,
please indicate your capacity
or full title. For joint
accounts, all tenants should
sign.
