SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
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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))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
Bucyrus International, Inc.
(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):
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[ ] 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:
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4) Date Filed:
<PAGE>
BUCYRUS INTERNATIONAL, INC.
P.O. Box 500
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
Notice of Annual Meeting of Shareholders
To Be Held April 30, 1997
To the Shareholders of Bucyrus International, Inc.:
You are hereby notified that the annual meeting of shareholders of Bucyrus
International, Inc. will be held at the South Milwaukee Community Center, 1919
12th Avenue, South Milwaukee, Wisconsin, on Wednesday, April 30, 1997, at
10:00 a.m. Central Time, for the following purposes:
1. To elect seven directors to serve for the ensuing year.
2. To ratify the appointment of Arthur Andersen LLP to serve as
independent auditors of the Company.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 17, 1997
as the record date for the determination of the shareholders entitled to
notice of and to vote at the annual meeting.
We hope that you will be able to attend the meeting in person, but if you
are unable to do so, please complete, sign and promptly mail back the enclosed
proxy form, using the return envelope provided. If, for any reason, you
should subsequently change your plans, you can revoke the proxy at any time
before it is actually voted.
By Order of the Board of Directors
BUCYRUS INTERNATIONAL, INC.
/s/Craig R. Mackus
Craig R. Mackus
Secretary and Controller
South Milwaukee, Wisconsin
March 26, 1997
<PAGE>
BUCYRUS INTERNATIONAL, INC.
P.O. Box 500
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To be Held April 30, 1997
This proxy statement is being furnished to shareholders by the Board of
Directors (the "Board") of Bucyrus International, Inc. (the "Company"), a
Delaware corporation, in connection with a solicitation of proxies by the
Board for use at the annual meeting of shareholders to be held on April 30,
1997, at 10:00 a.m. Central Time, at the South Milwaukee Community Center,
1919 12th Avenue, South Milwaukee, Wisconsin, and all adjournments or
postponements thereof (the "Annual Meeting"), for the purposes set forth in
the attached Notice of Annual Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will not
affect a shareholder's right to attend the Annual Meeting and to vote in
person. Presence at the Annual Meeting of a shareholder who has signed a
proxy does not in itself revoke a proxy. Any shareholder giving a proxy may
revoke it at any time before it is voted by giving notice thereof to the
Company in writing or in open meeting, by attending the Annual Meeting and
voting in person, or by delivering a proxy bearing a later date.
A proxy, in the enclosed form, which is properly executed, duly returned
to the Company and not revoked will be voted in accordance with the
instructions contained therein. The shares represented by executed but
unmarked proxies will be voted FOR the election to the Board of Directors of
the seven nominees named below, FOR ratification of the appointment of Arthur
Andersen LLP as the Company's independent auditors for fiscal 1997, and on
such other business or matters which may properly come before the Annual
Meeting in accordance with the best judgment of the persons named as proxies
in the enclosed form of proxy. Other than the election of directors and the
proposal to ratify Arthur Andersen LLP as independent auditors, the Board has
no knowledge of any matters to be presented for action by the shareholders at
the Annual Meeting.
Only holders of record of the Company's common stock, $.01 par value (the
"Common Stock"), at the close of business on March 17, 1997 are entitled to
notice of and to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 10,534,574 shares of Common Stock, each of
which is entitled to one vote per share. Proxy statements and proxies will be
mailed to shareholders on or about March 31, 1997. All expenses of
solicitation of proxies will be borne by the Company. In addition to
soliciting proxies by mail, proxies may be solicited personally and by
telephone by certain officers and regular employees of the Company. The
Company has retained D. F. King to assist in the solicitation of proxies, and
expects to pay such firm a fee of approximately $4,000 plus out-of-pocket
expenses. Brokers, nominees and custodians who hold Common Stock in their
names and who solicit proxies from the beneficial owners will be reimbursed by
the Company for out-of-pocket and reasonable clerical expenses.
A quorum of shareholders is necessary to take action at the Annual
Meeting. A majority of the outstanding shares of Common Stock, represented in
person or by proxy, will constitute a quorum of shareholders at the Annual
Meeting. Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the inspectors of election appointed for the Annual Meeting. The
inspectors of election will determine whether or not a quorum is present at
the Annual Meeting. The inspectors of election will treat abstentions as
shares of Common Stock that are present and entitled to vote for purposes of
determining the presence of a quorum. If a broker indicates on the proxy that
it does not have discretionary authority to vote certain shares of Common
Stock on a particular matter (a "broker non-vote"), those shares will not be
considered as present and entitled to vote with respect to that matter. For
purposes of determining the approval of any matter submitted to the
shareholders for a vote, abstentions will have the same effect as shares of
Common Stock that have been withheld for the purpose of electing directors and
as voted "against" the ratification of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 1997, and broker non-
votes will have no effect on the voting.
ELECTION OF DIRECTORS
The Board currently consists of nine persons. On March 5, 1997, the
Board, acting pursuant to Section 4.2 of the Restated Bylaws of the Company,
adopted a resolution establishing the number of directors at seven, effective
as of the date of the Annual Meeting. Accordingly, at the Annual Meeting,
seven directors will be elected to hold office until the 1998 annual meeting
of shareholders and until their successors are duly elected and qualified.
Management does not expect that any of the nominees listed below will be
unable to serve as director, but if that should occur for any reason prior to
the Annual Meeting, the persons named as proxies on the enclosed form of proxy
reserve the right to vote for another person of their choice.
The vote necessary to elect the directors nominated is governed by Section
3.9 of the Company's Bylaws, which provides that directors are elected by a
"plurality" of the votes cast. This means that the number of nominees
corresponding to the number of seats on a board of directors to be filled at a
shareholders' meeting who receive the highest number of votes shall be
elected. In the case of the Annual Meeting, the seven nominees who receive
the highest number of votes for their election as directors will be the
persons elected to the seven director positions to be filled at the Annual
Meeting. The vote required for the ratification of the appointment of Arthur
Andersen LLP as independent auditors for the year ending December 31, 1997,
and the vote required to approve any other matter to be presented at the
Annual Meeting, is the affirmative vote of a majority of the shares of Common
Stock present in person or represented by proxy at the Annual Meeting.
Nominees for Election at the Annual Meeting
The following sets forth certain information, as of March 17, 1997, about
each of the nominees for election at the Annual Meeting. Except as otherwise
noted, each nominee has engaged in the principal occupation or employment and
has held the offices shown for more than the past five years. Except for Mr.
Armour Swanson, each nominee has previously served as a director of the
Company. Messrs. Macaluso, Poole and Victor have not been nominated for
reelection because the number of directors has been reduced from nine to seven
and their terms will expire on the date of the Annual Meeting.
CRAIG SCOTT BARTLETT, JR., 63, Director of the Company since December 14,
1994. Since 1990, Mr. Bartlett has been a consultant on banking matters, and
in conjunction with such activities was Senior Vice President and Chief Credit
Officer of MTB Bank, a private banking firm, from 1992 to 1994. From 1984 to
1990, he was Executive Vice President, Senior Lending Officer and Chairman,
Credit Policy Committee, of National Westminster Bank USA. Mr. Bartlett is a
director of MTB Bank, The Bibb Company, Darling International, Inc., Harvard
Industries, Inc., Janus Industries, Inc., NVR, Inc., Ocean View Capital, Inc.,
and Western Systems, Inc.
WILLARD R. HILDEBRAND, 57, Director, President and Chief Executive Officer
of the Company since March 11, 1996. Mr. Hildebrand was President and Chief
Executive Officer of Great Dane Trailers, Inc. (a privately held manufacturer
of a variety of truck trailers) from 1991 to 1996. Prior to 1991, Mr.
Hildebrand held a variety of sales and marketing positions with Fiat-Allis
North America, Inc. and was President and Chief Operating Officer from 1985 to
1991.
FRANK W. MILLER, 52, Director of the Company since March 11, 1996. Mr.
Miller was the Interim President and Chief Executive Officer of the Company
from August 1, 1995 to March 11, 1996. Mr. Miller is President of Miller
Associates, Inc. ("Miller Associates"), a management consulting and private
investment corporation established by Mr. Miller in January, 1995. From 1989
to 1994, Mr. Miller was Vice Chairman and Chief Executive Officer of Darling
International, Inc. Mr. Miller is a director of Entex Information Services,
Inc., Quality Institute International, Sound Advice and M. F. Horan Company.
JOSEPH J. RADECKI, JR., 38, Director of the Company since December 14,
1994. Since 1990, Mr. Radecki has been an Executive Vice President of
Jefferies & Company, Inc., an investment banking and advisory firm. From 1983
to 1990, Mr. Radecki was a First Vice President in the International Capital
Markets Group at Drexel Burnham Lambert, Inc. where he specialized in
financial restructurings and recapitalizations.
F. JOHN STARK, III, 37, Director of the Company since December 14, 1994.
Since 1990, Mr. Stark has been a Senior Vice President, General Counsel and
portfolio manager of the Special Investments Portfolio for PPM America, Inc.,
an investment management company. Mr. Stark is also a Senior Managing
Director of the PPM America Special Investments Fund, LP. From 1989 to 1990,
Mr. Stark was employed by Washington Square Capital. From 1986 to 1989 he was
Chief Operating Officer and General Counsel of Rubber Research Elastomerics,
Inc. in Minneapolis, Minnesota, and from 1984 to 1986 he was employed by the
law firm of Briggs and Morgan in Minneapolis, Minnesota. Mr. Stark is a
director of PPM America, Inc., Carolina Steel Corporation, LePage's
Incorporated and IPM Products Corporation.
RUSSELL W. SWANSEN, 39, Director of the Company since December 14, 1994.
Mr. Swansen has been President of PPM America, Inc. since 1990. From 1987 to
1990, Mr. Swansen was an Executive Vice President of Washington Square
Capital, a financial services subsidiary of NWNL Co., where he headed its
investment advisory division and was a director of Washington Square Mortgage
Company, a residential mortgage banking firm. Mr. Swansen is a director of
PPM America, Inc. and Carolina Steel.
ARMOUR F. SWANSON, 64, currently serves as Acting President and Chief
Executive Officer of Carolina Steel Corporation (on an interim basis) and was
previously President and Chief Executive Officer of Zenith Sintered Products,
Inc. (a privately held manufacturer of powder metal components) from 1985 to
1995. From 1983 to 1985, Mr. Swanson was President of Universal Instruments
Division of Dover Corporation and from 1980 to 1983 he was President of
Waukesha Bearings Division of Dover Corporation. Mr. Swanson is a director of
Carolina Steel Corporation, Spacesaver Corporation, Omni-Tech Corporation and
Zenith Sintered Products, Inc.
Unless otherwise indicated, each director listed above is a citizen of the
United States and the address of such person is the Company's principal
executive offices. There are no family relationships among directors and
executive officers of the Company.
BOARD OF DIRECTORS
General
The Board held six meetings in 1996. Each director attended at least 75%
of the aggregate of (a) the total number of meetings of the Board and (b) the
total number of meetings held by all committees of the Board on which the
director served during 1996.
The Board has a standing Audit Committee ("Audit Committee") and a
standing Compensation and Management Development Committee (the "Compensation
Committee"). The Audit Committee consists of Messrs. Poole, Radecki and
Stark. The principal functions performed by the Audit Committee, which met
once in 1996, are to meet with the Company's independent public accountants
before the annual audit to review procedures and the scope of the audit; to
review the results of the audit; to review the financial control mechanisms
used by the Company and the adequacy of the Company's accounting and financial
controls; and to annually recommend to the Board a firm of independent public
accountants to serve as the Company's auditors. The Compensation Committee in
1996 consisted of Messrs. Bartlett and Swansen. The principal functions of
the Compensation Committee, which met once in 1996, are to review and make
recommendations to the Board concerning (i) the compensation and related
benefits of elected officers; (ii) incentive and bonus plans that include
elected officers; and (iii) long-range planning for executive development and
succession. It also reviews Company policies regarding compensation for
senior management and other employees, and establishes and periodically
reviews Company policies on management perquisites. In addition, a committee
consisting of Messrs. Bartlett and Stark administers the 1996 Employees' Stock
Incentive Plan and Non-Employee Directors' Stock Option Plan.
The Board has no standing nominating committee.
Director Compensation
Directors of the Company, other than full time employees, currently
receive $2,500 each month, regardless of whether meetings are held or the
number of meetings held. Messrs. Stark and Swansen have declined to accept
any fees. Instead, such fees are paid by the Company directly to Jackson
National Life Insurance Company ("JNL"), the assets of which are managed by
PPM America, Inc., the employer of Messrs. Stark and Swansen. For the period
January 1, 1996 to March 10, 1996, JNL directed that Messrs. Swansen's and
Stark's $2,000 monthly fees be paid by the Company to Jefferies & Company, of
which Mr. Radecki is Executive Vice President. For the period March 11, 1996
to December 31, 1996, JNL directed that Messrs. Swansen's and Stark's $2,500
monthly fees be paid by the Company to Miller Associates, of which Mr. Miller
is President. No fees are paid for attendance at committee meetings, except
for Mr. Bartlett who was paid $13,000 during 1996, at the rate of $1,000 per
day for the period January 1, 1996 to March 31, 1996 and $1,500 per day for
the period April 1, 1996 to December 31, 1996, for services performed as a
member of certain committees of the Board. Directors are also reimbursed for
out-of-pocket expenses.
In addition to the compensation described above, each director who was not
a full time employee of the Company automatically received an option for 2,000
shares of Common Stock at an option price of $6.00 per share on February 16,
1995 (the effective date of the Non-Employee Directors' Stock Option Plan), an
option for 2,000 shares of Common Stock on February 8, 1996 at an option price
of $9.25 per share and an option for 2,000 shares of Common Stock on February
5, 1997 at an option price of $7.50 per share, in accordance with the terms of
such plan. Under the terms of the Non-Employee Directors' Stock Option Plan,
each person who was a director on the effective date of the plan automatically
received an option for 2,000 shares of Common Stock. The plan further
provides that each person who was not a director on the effective date of the
plan automatically receives an option for 2,000 shares of Common Stock when
first elected as a non-employee director of the Company. Pursuant thereto,
Messrs. Macaluso and Miller were each granted an option for 2,000 shares of
Common Stock on March 11, 1996 at an option price of $9.00 per share.
Subsequent to the initial grant, each non-employee director (who continues to
serve in such capacity) automatically receives an option to purchase an
additional 2,000 shares of Common Stock on the date of the first Board meeting
of each calendar year for as long as the plan remains in effect.
Notwithstanding the above, Messrs. Stark and Swansen have declined to accept
any options under such plan. The option price for all options granted under
the Non-Employee Directors' Stock Option Plan is equal to the last sale price
of the Common Stock on The Nasdaq Stock Market on the date of grant. Options
granted to non-employee directors under the Non-Employee Directors' Stock
Option Plan terminate on the earlier of (a) ten years after the date of grant,
(b) six months after the non-employee director ceases to be a director by
reason of death, or (c) three months after the non-employee director ceases to
be a director for any reason other than death.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership as of March 17,
1997 of the outstanding Common Stock by each person who is known to the
Company to be the beneficial owner of five percent or more of the outstanding
Common Stock:
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
Jackson National Life
Insurance Company(1)
5901 Executive Drive
Lansing, MI 48911-5333 4,228,382(1) 40.14%
SSP, Inc.(2)
3801 Kennett Pike
Wilmington, DE 19807
1,160,979(2) 11.02%(2)
Greycliff Partners(2)
89 Headquarters Plaza
Morristown, NJ 07960
Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404 774,899(3) 7.36%
____________________
(1) According to the Schedule 13D ("13D") statement dated December 23,
1994, as amended by Amendment No. 1 thereto dated April 4, 1995
(i) JNL shares voting power and dispositive power with PPM America,
Inc. over all such shares; (ii) PPM America, Inc. serves as the
investment advisor to JNL pursuant to a Discretionary Investment
Management Agreement between JNL and PPM America, Inc. dated as of
April 14, 1993; and (iii) JNL and PPM America, Inc. are both indirect,
wholly-owned subsidiaries of Prudential Corporation plc, a corporation
organized under the laws of the United Kingdom.
(2) According to a 13D dated June 16, 1995, Greycliff Partners shares
voting and dispositive power over 1,160,979 shares of Common Stock
with Mikael Salovaara and Alfred C. Eckert, III, its general partners.
The 13D also states that Greycliff Partners is the investment advisor
for and shares voting and dispositive power with the South Street
Corporate Recovery Fund I, L.P., the South Street Leveraged Corporate
Recovery Fund, L.P. and the South Street Corporate Recovery Fund I
(International), L.P. (collectively the "South Street Funds"), except
that such powers held by Greycliff Partners are subject to the
supervision and control of the South Street Funds' respective general
partners. Such funds share voting and dispositive power over 914,908
shares, 223,297 shares and 22,774 shares of Common Stock,
respectively. The 13D also states that SSP, Inc., the ultimate
general partner for both the South Street Corporate Recovery Fund I,
L.P. and the South Street Leveraged Corporate Recovery Fund, L.P.,
shares voting and dispositive power over 1,138,205 shares of Common
Stock, and that SSP International, Inc., the ultimate general partner
for the South Street Corporate Recovery Fund I (International), L.P.,
shares voting and dispositive power over 22,774 shares of Common
Stock. Notwithstanding the above reference to Greycliff Partners, it
is the Company's understanding that since the filing of the 13D, SSP,
Inc. has assumed direct responsibility for exercising the voting and
dispositive power over the South Street Corporate Recovery Fund I,
L.P. and the South Street Leveraged Corporate Recovery Fund, L.P. All
such shares over which Greycliff Partners and the other parties
described herein share beneficial ownership were acquired upon the
conversion of certain debt securities of the Company during
bankruptcy. JNL has objected to the proofs of claim filed with the
Bankruptcy Court by the indenture trustees for the debt securities to
the extent that such proofs of claim related to debt securities
beneficially owned by the South Street Funds. As a result of such
objection, the Company believes that the shares of Common Stock
beneficially owned by the South Street Funds are being held in escrow
pursuant to an agreement between JNL and the South Street Funds
pending further order of the Bankruptcy Court with respect to JNL's
objection.
(3) Includes 741,331 shares of Common Stock beneficially owned by Age High
Income Fund. Age High Income Fund, a Colorado organization, is a
subsidiary of Franklin Resources, Inc., a Delaware corporation.
According to the Schedule 13G statement dated February 12, 1996 filed
with the Securities and Exchange Commission by Franklin Resources,
Inc. and Age High Income Fund (i) Franklin Resources, Inc. has shared
dispositive power over and sole voting power over 774,899 shares of
Common Stock; and (ii) Age High Income Fund has sole voting power
over, shared dispositive power over, the right to receive dividends
from and the right to receive proceeds from the sale of 741,331 shares
of Common Stock.
Executive Officers and Directors
The following table sets forth the beneficial ownership as of March 17,
1997 of the Common Stock by each director and nominee, each of the executive
officers named in the Summary Compensation Table below, and by all directors
and executive officers of the Company as a group.
Amount and Nature
Name of of Beneficial Percent of
Beneficial Owner Ownership(1) Class(2)
C.S. Bartlett, Jr. 6,000 (3) *
W.R. Hildebrand 500,000 (4) 4.66%
C.S. Macaluso 4,000 (3) *
C.R. Mackus 972 *
F.W. Miller 4,100 (3) *
M. G. Onsager 0 *
T.B. Phillips 0 *
G.A. Poole, Jr. 6,000 (3) *
J.J. Radecki, Jr. 6,000 (3) (5) *
F.J. Stark, III 0 (3) (6) *
T.W. Sullivan 0 *
R.W. Swansen 0 (3) (7) *
A. F. Swanson 100 *
S.M. Victor 6,000 (3) *
All directors and
executive officers
as a Group (14 persons) 533,072 4.95%
____________________
(1) Unless otherwise noted, amounts indicated reflect shares as to which
the beneficial owner possesses sole voting and dispositive powers.
Also included are shares subject to stock options if such options are
exercisable within 60 days of March 17, 1997.
(2) Percentage of total number of shares of Common Stock outstanding,
plus, for each individual owning options and for the group, the
assumed exercise of that number of options which are included in the
total number of shares beneficially owned by them. Asterisk denotes
less than 1%.
(3) Includes options to purchase shares of Common Stock granted under the
Non-Employee Directors' Stock Option Plan as follows: for Messrs.
Bartlett, Poole, Radecki and Victor - 6,000 options each; for Messrs.
Macaluso and Miller - 4,000 options each.
(4) Includes 200,000 shares subject to the exercise of options under the
1996 Employees' Stock Incentive Plan, as well as 266,667 shares of
restricted Common Stock issued under the 1996 Employees Stock
Incentive Plan over which Mr. Hildebrand holds sole voting power.
(5) Mr. Radecki was selected as a director of the Company by JNL (which is
deemed to be the beneficial owner of 4,228,382 shares of Common Stock)
pursuant to the provisions of Section 5.04(c) of the Amended Plan.
Mr. Radecki disclaims beneficial ownership of all such shares.
(6) Mr. Stark is a director and an officer of PPM America, Inc., which is
deemed to be the beneficial owner of 4,228,382 shares of Common Stock.
Mr. Stark disclaims beneficial ownership of all such shares.
(7) Mr. Swansen is a director and an officer of PPM America, Inc., which
is deemed to be the beneficial owner of 4,228,382 shares of Common
Stock. Mr. Swansen disclaims beneficial ownership of all such shares.
LEGAL PROCEEDINGS
JNL, currently the holder of approximately 40.14% of the outstanding
Common Stock and 97.2% of the Company's Secured Notes due December 14, 1999
(see "CERTAIN RELATIONSHIPS - Ownership of Secured Notes"), filed a claim (the
"JNL 503(b) Claim") against the Company with the United States Bankruptcy
Court, Eastern District of Wisconsin ("Bankruptcy Court") for reimbursement of
approximately $3,300,000 of professional fees and disbursements incurred in
connection with the Company's chapter 11 proceedings pursuant to Section
503(b) of the Bankruptcy Code. Pursuant to a settlement agreement dated May
23, 1995, JNL agreed that, in the event that the JNL 503(b) Claim is allowed
in whole or in part by the Bankruptcy Court, in lieu of requiring payment of
any award in cash, JNL will accept payment in Common Stock at a price equal to
$5.6375 per share. By order dated June 3, 1996, the Bankruptcy Court ruled
that JNL would be awarded the sum of $500. JNL has appealed the decision.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information for each of the last
three fiscal years concerning compensation awarded to, earned by or paid to
each person who served as the Company's Chief Executive Officer during fiscal
1996 and each of the four most highly compensated executive officers other
than the Chief Executive Officer who were in office on December 31, 1996. The
persons named in the table are sometimes referred to herein as the "named
executive officers."
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<TABLE>
<CAPTION>
Annual Long-Term Compensation
Compensation(1) Awards
Restricted Securities
Name and Stock Underlying All Other
Principal Position Year Salary($) Bonus($) Award($)(4) Options(#) Compensation ($)(2)
<S> <C> <C> <C> <C> <C> <C>
Willard R. Hildebrand 1996 $323,816 $200,000 $2,700,000 200,000 $265,931
President and Chief
Executive Officer
Frank W. Miller 1996 (3) - - - -
Interim President 1995 (3) - - - -
and Chief Executive
Officer (3)
Craig R. Mackus 1996 123,000 26,975 - - 4,090
Secretary and 1995 114,900 10,000 - - 3,732
Controller 1994 105,030 - - - 3,447
Michael G. Onsager 1996 101,672 22,666 - - 3,336
Vice President - 1995 80,361 - - - 2,617
Engineering 1994 70,255 - - - 2,291
Thomas B. Phillips 1996 119,168 26,976 - - 4,299
Vice President - 1995 104,202 10,000 - - 3,833
Materials 1994 97,096 - - - 3,397
Timothy W. Sullivan 1996 128,004 34,644 - - 4,260
Vice President - 1995 114,932 10,000 - - 4,124
Marketing 1994 102,507 - - - 3,362
<FN>
_______________
(1) Certain personal benefits provided by the Company to the named executive
officers are not included in the table. The aggregate amount of such
personal benefits for each named executive officer in each year
reflected in the table did not exceed the lesser of $50,000 or 10% of
the sum of such officer's salary and bonus in each respective year.
(2) "All Other Compensation" includes the employer match under the Company's
401(k) savings plan for 1996, 1995 and 1994, respectively: W. R.
Hildebrand ($4,750), C. R. Mackus ($3,690, $3,403, $3,151),
M. G. Onsager ($3,050, $2,411, $2,108), T. B. Phillips ($3,262, $2,961,
$2,913), and T. W. Sullivan ($3,840, $3,798, $3,075); life insurance
premium payments for 1996, 1995 and 1994, respectively: W. R.
Hildebrand ($2,775), C. R. Mackus ($400, $329, $296), M. G. Onsager
($286, $206, $183), T. B. Phillips ($1,037, $872, $484), and T. W.
Sullivan ($420, $326, $287); and payments made in 1996 in connection
with employment agreements: W. R. Hildebrand ($258,406 including a
relocation allowance of $187,021 and a pension benefit of $71,385).
(3) Mr. Miller became Interim President and Chief Executive Officer pursuant
to a Management Agreement (the "Management Agreement"), dated July 21,
1995, as amended, between the Company and Miller Associates. Amounts
paid by the Company under the Management Agreement were paid to Miller
Associates and Mr. Miller was separately compensated by Miller
Associates. Pursuant to the Management Agreement, Mr. Miller served as
Interim President and Chief Executive Officer until March 11, 1996 when
Mr. Hildebrand was appointed as President and Chief Executive Officer by
the Board. See "CERTAIN RELATIONSHIPS - Transactions with Management."
(4) Represents the market value on the date of grant of restricted Common
Stock granted under the 1996 Employees' Stock Incentive Plan. At the
end of the last fiscal year, the number and value (based on the fiscal
year-end closing price of $8.75 per share) of the aggregate restricted
stock holdings of the named individual were 300,000 ($2,625,000). Of
the 300,000 shares, 33,333 vested on March 11, 1997, 33,333 will vest on
March 11, 1998 and 33,334 will vest on March 11, 1999. The remaining
200,000 shares of restricted Common Stock vest under a Time Accelerated
Restricted Stock Agreement, which provides for vesting in eight years
(assuming continued employment, with certain exceptions) and provides
for earlier release in the third, fourth, and fifth years if certain
earnings targets are reached by the Company. Dividends are payable on
the restricted Common Stock at the same rate as on unrestricted shares.
</TABLE>
Option Grants Table
The following table shows all individual grants of stock options and
stock appreciation rights under the Company's 1996 Employees' Stock Incentive
Plan to the named executive officers during 1996:
<PAGE>
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/
Underlying SARs Grant
Options/ Granted to Exercise or Date
SARs Employees Base Price Per Expiration Present
Name Granted(#) In 1996 Share($/sh)(1) Date Value ($)(2)
<S> <C> <C> <C> <C> <C>
W. R. Hildebrand 200,000(3) 71% $5.0875 3/10/2006 $1,310,000
<FN>
(1) The market price of the Common Stock on the date of grant, March 11,
1996, was $9.00 per share.
(2) Present value is determined as of the grant date, March 11, 1996, using
the Black-Scholes Model. This is a theoretical value for the stock
options which was constructed with the following underlying assumptions:
a five year expected period to time of exercise; a risk free rate of
return of 6.34%; an expected dividend yield of 0%; and a calculated
volatility of 66.82%. The amount realized from a stock option
ultimately depends on the market value of the stock at a future date.
(3) Non-qualified stock options.
</TABLE>
Executive officers of the Company are eligible to receive stock options,
stock appreciation rights ("SARs"), restricted stock, and other awards under
the Company's 1996 Employees' Stock Incentive Plan. An award of 30,000 stock
options and 50,000 SARs was made to Mr. Daniel Smoke, the Company's chief
financial officer, upon his hiring in November, 1996, and on February 5, 1997
the Board approved the award of stock options to various employees, including
the named executive officers (but not including Mr. Hildebrand and Mr. Smoke).
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table provides certain information about stock option
exercises and year-end values of stock options held by Mr. Hildebrand, who is
the only named executive officer who held stock options during the fiscal year
ended December 31, 1996.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-the-Money
Shares Underlying Unexercised Options/SAR's at
Acquired Options/SARs at Fiscal Fiscal Year End (1)
On Value Year End (#) ($)
Exercise Realized
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Willard R.
Hildebrand 0 N/A 200,000 0 $732,500 N/A
<FN>
(1) Based on the $8.75 per share market value of the Common Stock on December
31, 1996, determined with reference to the last sale price of the Common
Stock on that date as reported on The Nasdaq Stock Market. Options are
"in-the-money" if the fair market value of the stock on the date
indicated exceeds the exercise price.
</TABLE>
Pension Plan Table
The following table sets forth the estimated annual benefits payable on
a straight life annuity basis (prior to offset of one-half of estimated Social
Security benefits) to participating employees, including officers, upon
retirement at normal retirement age for the years of service and the average
annual earnings indicated under the Company's defined benefit pension plan.
Years of Service
Remuneration 35 30 25 20 15
$125,000 $ 76,563 $ 65,625 $ 54,688 $ 43,750 $ 32,813
150,000 91,875 78,750 65,625 52,500 39,375
175,000 107,188 91,875 76,563 61,250 45,938
200,000 122,500 105,000 87,500 70,000 52,500
225,000 137,813 118,125 98,438 78,750 59,063
250,000 153,125 131,250 109,375 87,500 65,625
300,000 183,750 157,500 131,250 105,000 78,750
400,000 245,000 210,000 175,000 140,000 105,000
450,000 275,625 236,250 196,875 157,500 118,125
500,000 306,250 262,500 218,750 175,000 131,250
Covered compensation for purposes of the Company's defined benefit
pension plan consists of the average of a participant's highest total salary
and bonus (excluding compensation deferred pursuant to any non-qualified plan)
for a consecutive five year period during the last ten calendar years of
service prior to retirement.
The years of credited service under the defined benefit pension plan for
each of the named executive officers are as follows: Mr. Hildebrand (0), Mr.
Mackus (17), Mr. Onsager (17), Mr. Phillips (20) and Mr. Sullivan (18).
Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
amended, limit the annual benefits which may be paid from a tax-qualified
retirement plan. As permitted by the Employee Retirement Income Security Act
of 1974, the Company has supplemental plans which authorize the payment out of
general funds of the Company of any benefits calculated under provisions of
the applicable retirement plan which may be above the limits under these
sections.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board, subject to the approval of the
Board, is responsible for the compensation packages offered to the Company's
executive officers, including the Chief Executive Officer (the "CEO") and the
named executive officers. Prior to March 11, 1996, the Compensation Committee
consisted of Messrs. Bartlett and Stark; since March 11, 1996, the
Compensation Committee consists of Messrs. Bartlett and Swansen.
Executive Compensation
The Compensation Committee, in consultation with the CEO, establishes
base salaries for the executive officers of the Company which the Company
believes are commensurate with their respective responsibilities, position,
and experience. Consideration is also given to the compensation levels of
similarly situated personnel of other companies in the industry where such
information is available. When making adjustments in base salaries, the
Compensation Committee generally considers the foregoing factors as well as
corporate financial performance and return to shareholders. In individual
cases where appropriate, the Compensation Committee also considers
nonfinancial performance measures, such as increases in market share,
manufacturing efficiency gains, improvements in product quality, and
improvements in relations with customers, suppliers, and employees. Executive
officer base salaries are reviewed annually. The Compensation Committee
generally begins its review by analyzing the current base salaries of the
executive officers. Based on such review, the corporate performance of the
Company, the individual contributions of the executive officers, and the
factors discussed above, the Compensation Committee then recommends approval
of its determinations to the Board.
Executive officers and other Company employees participated in the 1996
Management Incentive Plan. Under the 1996 Management Incentive Plan, the
Compensation Committee established a management incentive budget based on
budgeted earnings before interest expense, taxes, depreciation and
amortization ("EBITDA") and, in consultation with the CEO, established target
incentive bonus percentages of between 10% and 30% of base salary for
executive officers (other than the CEO, whose target incentive bonus
percentage is established pursuant to his employment agreement - see "Chief
Executive Officer Compensation," below) and certain employees. These targeted
percentages were adjustable pursuant to a formula based on a range of values
whereby the target incentive bonus percentage would be zero (and no bonuses
would be paid) if actual EBITDA was less than 90% of budgeted EBITDA, and a
maximum bonus of two times the target incentive bonus percentage would be paid
if actual EBITDA was 150% or more of budgeted EBITDA. In 1996, the Company's
actual EBITDA exceeded budgeted EBITDA, and the target incentive bonus
percentages were increased by approximately 9%. After target bonus amounts
were established, actual bonuses were further adjusted, again in consultation
with the CEO, based on the achievement of preestablished individual
performance objectives. Various employees, including the named executive
officers, received bonuses under the 1996 Management Incentive Plan.
Chief Executive Officer Compensation
The base salary and certain awards under the Company's 1996 Employees'
Stock Incentive Plan for Mr. Hildebrand, the Company's CEO, were established
by negotiation between the Company and Mr. Hildebrand at the time he was hired
in 1996 and are set forth in an employment agreement between the Company and
Mr. Hildebrand. See "CERTAIN RELATIONSHIPS - Employment Agreement; Change of
Control." The factors recited in the first paragraph above under "Executive
Compensation," were considered by the Compensation Committee and the Board in
these negotiations.
Mr. Hildebrand also participated in the 1996 Management Incentive Plan
on the same basis as the other employees who participated. Mr. Hildebrand's
target incentive bonus percentage of 50% of base salary was established
pursuant to his employment agreement. No individual performance adjustment
was made for Mr. Hildebrand.
International Revenue Code Section 162(m)
Under Section 162(m) of the Internal Revenue Code, the tax deduction by
certain corporate taxpayers, such as the Company, is limited with respect to
compensation paid to certain executive officers unless such compensation is
based on performance objectives meeting specific regulatory criteria or is
otherwise excluded from the limitation. The compensation package of Mr.
Hildebrand, the Company's CEO, does not so qualify, nor does the 1996
Management Incentive Plan meet the regulatory criteria for exclusion from the
limitation. Where practical, the Compensation Committee intends to qualify
compensation paid to the Company's executive officers in order to preserve the
full deductibility thereof under Section 162(m), although the Compensation
Committee reserves the right in individual cases to cause the Company to enter
into compensation arrangements which may result in some compensation being
nondeductible under Code Section 162(m).
BUCYRUS INTERNATIONAL, INC.
COMPENSATION COMMITTEE
C. Scott Bartlett, Jr.
F. John Stark, III (prior to March 11, 1996)
Russell W. Swansen (from March 11, 1996)
Compensation Committee Interlocks and Insider Participation
From July 25, 1995 to March 11, 1996, the Compensation Committee
consisted of Messrs. Bartlett and Stark. The Compensation Committee now
consists of Messrs. Bartlett and Swansen. Mr. Swansen is an Executive Officer
of PPM America, Inc., which serves as investment advisor to, and is a sister
company to, JNL, owner of approximately 40.14% of the outstanding Common
Stock. JNL is also a holder of approximately $63,963,000 face amount of the
Company's Secured Notes due December 14, 1999 (the "Secured Notes"). For a
description of such notes, see "CERTAIN RELATIONSHIPS - Ownership of Secured
Notes."
PERFORMANCE INFORMATION
The following graph compares the Company's cumulative total shareholder
return with the cumulative total return of the Standard & Poor's 500 Stock
Index and the Machinery (Diversified) Subgroup of the Standard & Poor's 500
Stock Index. The graph assumes $100 was invested on December 31, 1994 and
assumes the reinvestment of dividends. The companies currently in the
Machinery (Diversified) Subgroup are Case Corp., Caterpillar, Inc., Cincinnati
Milacron, Cooper Industries, Deere & Co., Dover Corporation, Harnischfeger
Industries, Ingersoll-Rand, NACCO Industries and Timken Co. Data for only
1995 and 1996 is presented since the Common Stock did not begin to publicly
trade until December 22, 1994.
Comparison of Cumulative Total Return
Among Bucyrus International, Inc., Standard & Poor's 500 Stock Index
and Machinery (Diversified) Subgroup Index
[LINE GRAPH SHOWING THE CHART BELOW]
December 31,
1994 1995 1996
S&P 500 Stock Index. . . . . . . . . . . . . . . . $100 $137 $169
Machinery (Diversified) Subgroup Index. . . . . . 100 124 154
Bucyrus International, Inc. . . . . . .. . . . . . 100 116 125
CERTAIN RELATIONSHIPS
Transactions with Management
The Company entered into the Management Agreement with Miller
Associates, pursuant to which the Company engaged Miller Associates to provide
certain management services, including those of Mr. Miller as Interim
President and Chief Executive Officer and James D. Annand as Interim Chief
Financial Officer. Mr. Miller is the President of Miller Associates.
The Management Agreement provided that Messrs. Miller and Annand and
certain other employees of Miller Associates (the "Project Team") would
provide management services and expertise to the Company and manage the
operations of the Company commencing on August 2, 1995 until terminated by the
Company as described below. Pursuant to the Management Agreement, the Company
agreed to pay Miller Associates a monthly fee of $65,000 for each of August
and September, 1995 and $55,000 for each month thereafter until the Company
hired a new chief executive officer and such person commenced employment with
the Company. The Company also agreed to reimburse Miller Associates for all
reasonable out-of-pocket expenses incurred by Miller Associates in connection
with the Project Team's performance under the Management Agreement. The
Management Agreement further provided that neither Mr. Miller or Mr. Annand,
nor any other employee of Miller Associates, would be considered an employee
of the Company and that Miller Associates would be responsible for payment of
compensation, disability benefits and unemployment insurance, and for the
payment and withholding of payroll taxes. The Management Agreement was
terminated with the hiring of Mr. Hildebrand as President and Chief Executive
Officer on March 11, 1996. As provided by the Management Agreement, following
the termination thereof, Mr. Annand remained as Interim Chief Financial
Officer through August, 1996. The total cost to the Company in 1996 for these
services was approximately $268,000.
Employment Agreement; Change of Control
The Company and Mr. Hildebrand are parties to an Employment Agreement,
dated March 11, 1996, pursuant to which Mr. Hildebrand was employed as
President and Chief Executive of the Company. The Company also agreed to use
its best efforts to elect him as a director. The base salary provided is
$400,000 per year, subject to increase at the discretion of the Board.
Mr. Hildebrand is also eligible to participate in the Company's Management
Incentive Plan ("Bonus Plan") which shall provide for an annual cash incentive
bonus equal to 50% of base salary in the event of achievement of targeted
performance and a maximum of 100% of base salary in the event of exceptional
performance, as determined in accordance with the Bonus Plan. The Employment
Agreement provided for a payment of $187,021 to compensate Mr. Hildebrand for
his change of residence as well as reimbursement of reasonable relocation
costs. Mr. Hildebrand is entitled to participate in the Company's employee
benefit plan for senior executives and is provided other fringe benefits, such
as country club membership, vacation and the use of a Company car. To
reimburse Mr. Hildebrand for lost retirement benefits, the Company agreed to
provide him with a fully vested retirement benefit at a cost to the Company of
$71,385.
The initial term of the Employment Agreement is three (3) years, with
two (2) automatic one-year renewals unless the Company terminates at least two
(2) months before a renewal period. In addition, the Company may terminate
Mr. Hildebrand's employment at any time for "cause," as defined, and on two
(2) months' notice without cause. Mr. Hildebrand may terminate his employment
at any time by giving at least ninety (90) days' notice. Mr. Hildebrand is to
receive different severance compensation based on whether the termination is
(i) for "cause," (ii) voluntary on Mr. Hildebrand's part, (iii) voluntary on
the Company's part without "cause," or (iv) due to death or Disability, as
defined.
The Employment Agreement provides for certain payments in the event that
Mr. Hildebrand's employment is terminated as a result of a "Qualifying
Termination," as defined, due to a "Change of Control" of the Company, defined
(i) as acquisition of 20% or more of the voting power of the Company's
securities by a person who did not own 5% or more of the Company's voting
securities on the date of the Employment Agreement, (ii) as shareholder
approval of a merger or consolidation of the Company with another corporation
where the former Company shareholders own less than 50% of the combined
entity, (iii) as shareholder approval of a sale of substantially of all of the
Company's assets, (iv) if, during any period of two (2) consecutive years,
individuals who, at the beginning of such period, constituted the Board cease
to constitute at least a majority of the directors, unless the election or
nomination for election of each new director was approved by the vote of at
least two-thirds of the directors then still in office who were directors at
the beginning of the period, (v) the sale by JNL or any of its affiliates of
more than 66% of the Common Stock owned by JNL on March 11, 1996, except to
JNL or any affiliate of JNL, or (vi) the Company shall become eligible to
terminate the registration of any class of its securities then registered
under the Securities Exchange Act of 1934, as amended.
One of the events of Qualifying Termination is termination by
Mr. Hildebrand for "Good Reason," which is defined as (i) assignment of duties
materially inconsistent with the President's duties, responsibilities and
status or a material reduction or material alteration thereof, (ii) basing
Mr. Hildebrand at least fifty (50) miles further from his residence than the
distance such residence is, at the date of the Change of Control, from the
Company's headquarters, (iii) a reduction in Mr. Hildebrand's base salary, or
(iv) a material reduction in Mr. Hildebrand's participation in various Company
plans. Upon the termination of employment under a Qualifying Termination
within six (6) months before, or twenty-four (24) months after, a Change of
Control, the Company is obligated to pay Mr. Hildebrand's base salary for the
greater of (i) the remainder of the employment term, or (ii) one (1) year. In
addition, Mr. Hildebrand is to receive the average of the bonus compensation
paid to him in the past two (2) years, or if bonus compensation has been paid
for one (1) year or less preceding the Qualifying Termination, a fractional
share of such bonus. The Employment Agreement provides that if any
compensation which would be payable under the Employment Agreement contingent
on a Change in Control would result in the imposition of an excise tax on
Mr. Hildebrand pursuant to the Internal Revenue Code or in the non-
deductibility of such compensation by the Company for Federal income tax
purposes, then arrangements shall be made to pay Mr. Hildebrand one dollar
($1) less than the maximum which he would receive without becoming subject to
the excise tax or which the Company may pay without losing its deduction;
provided, however, such reduction will be made only if it results in
Mr. Hildebrand receiving a greater net benefit than he would have received had
a reduction not occurred and an excise tax been paid.
Pursuant to the Employment Agreement, Mr. Hildebrand was granted non-
qualified stock options for 200,000 shares of Common Stock, 100,000 shares of
restricted Common Stock, and 200,000 shares of restricted Common Stock
pursuant to a Time Accelerated Restricted Stock Agreement. The agreements
covering the 300,000 shares of restricted Common Stock provide that the
restriction period ends on a Change of Control and that all such shares will
then be free of restrictions.
Senior Executive Termination Benefits Agreements
In December, 1995, the Company and each of Messrs. Mackus, Phillips and
Sullivan (each an "Executive") entered into Senior Executive Termination
Benefits Agreements which provided for the payment of certain termination
benefits (generally, the continuation of base salary for a period of 18 months
and continued participation in the Company's employee benefit and fringe
benefit plans for a period of 12 months following termination) if their
employment was terminated in any case other than voluntary termination,
termination for "cause," as defined, or upon normal retirement. These
terminations benefits would also have been payable following certain events,
such as a change in function or status with the Company, or a Company-imposed
requirement that he relocate his residence or primary place of business.
These Agreements also provided for an increase in Messrs. Mackus', Phillips'
and Sullivan's base salaries to $123,000, $115,000 and $128,000, respectively,
and a cash bonus of $10,000, which was paid to each in 1995. These agreements
expired by their terms on December 31, 1996. The Company is in the process of
negotiating Employment Agreements with Messrs. Mackus, Onsager, Phillips and
Sullivan.
Financial Advisory Agreement
The Company entered into a Letter Agreement (the "Letter Agreement")
dated March 7, 1997, with Jefferies & Company ("Jefferies") pursuant to which
Jefferies will act as the Company's exclusive financial advisor in connection
with a specified transaction. Mr. Radecki, a director of the Company, an
Executive Vice President of Jefferies. The Company has agreed pursuant to the
Letter Agreement to pay Jefferies a one-time retainer fee and a fee for each
fairness opinion that Jefferies issues. The Company will, in addition, pay
Jefferies a success fee and all reasonable out-of-pocket expenses incurred by
Jefferies in connection with the Letter Agreement. The Letter Agreement also
contains standard indemnification provisions whereby the Company will
indemnify and hold harmless Jefferies and certain related parties from
liabilities arising out of the Letter Agreement. The Company had a similar
agreement dated June 14, 1995, and amended on August 9, 1995, with Jefferies
and Chanin and Company ("Chanin"), of which Mr. Victor, a director of the
Company, is Executive Vice President and a principal, pursuant to which
Jefferies and Chanin acted as financial advisors. This prior agreement has
expired.
Registration Rights Agreement
Pursuant to the terms of the Second Amended Joint Plan of Reorganization
(the "Amended Plan"), under which the Company emerged from Bankruptcy on
December 14, 1994 (the "Effective Date"), the Company entered into a
Registration Rights Agreement (the "Registration Rights Agreement") which
grants rights to each person entitled to receive in the aggregate 1,000,000 or
more shares of Common Stock (a "Relevant Holder") pursuant to the provisions
of the Amended Plan. To the knowledge of the Company, JNL is the only person
or entity entitled to the benefits of the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, a Relevant Holder has the right
to (a) require the Company under certain circumstances to file a registration
statement under the Securities Exchange Act of 1933 ("Securities Act"), to
permit a public offering of Common Stock owned by such Relevant Holders; and
(b) participate in certain other registrations of Common Stock under the
Securities Act made on behalf of the Company for other holders of Common
Stock. Under the terms of the Registration Rights Agreement, Relevant Holders
holding 15% or more of the shares of Common Stock then entitled to the
benefits of such agreement may request the Company to file one or more
registration statements under the Securities Act with respect to their shares
of Common Stock, and the Company is required to use its best efforts to effect
such registration provided that the Company generally will not be required to
effect more than three such registrations. Relevant Holders also may
participate in offerings proposed by the Company. These rights are subject to
certain conditions and limitations, among them the right of the Company to
postpone for a reasonable period of time (but not exceeding 120 days) the
requested filing of a registration statement if the Company determines such
registration would interfere with a material corporate transaction,
development or other specified matters. Pursuant to the terms of the
Registration Rights Agreement, the Company must pay all expenses, other than
fees and commissions of underwriters, incident to the registration and sale of
shares of Common Stock held by Relevant Holders. The registration rights, if
not fully exercised, terminate on the third anniversary of the Effective Date.
Ownership of Secured Notes
On February 29, 1996, JNL, the holder of approximately 40.14% of the
outstanding Common Stock (see "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT"), purchased from parties other than the Company approximately
$56,000,000 face amount of the Company's Secured Notes. The Secured Notes pay
interest semi-annually at a rate of 10.5% per annum, if paid in cash, or 13.0%
per annum if paid in kind. Interest on the Secured Notes is payable in kind
at the discretion of the Company. Because all interest on the Secured Notes
has been paid in kind, JNL now holds approximately $63,963,000 of the Secured
Notes, or approximately 97.2% of the $65,785,000 of Secured Notes outstanding
on December 31, 1996. The Secured Notes are secured by a security interest on
substantially all of the Company's property (other than land and buildings),
the shares of the Company's United States subsidiaries and 65% of the shares
of certain non-United States subsidiaries, subject, however, to a prior
security interest in such assets securing not more than $16,000,000 of
indebtedness. Messrs. Radecki, Stark and Swansen, directors of the Company,
were selected by JNL prior to the Effective Date to serve as directors.
INDEPENDENT PUBLIC AUDITORS
On February 5, 1997, the Board, based on the recommendation of the Audit
Committee, appointed the firm of Arthur Andersen LLP, to serve as the
Company's independent auditors for the current fiscal year. It is expected
that representatives of such firm will be present at the Annual Meeting to
answer appropriate questions and, if they so desire, to make a statement.
Arthur Andersen LLP has served as the Company's independent auditors
since May 31, 1995. On May 31, 1995, the Company dismissed Deloitte &
Touche LLP as its independent auditors. Deloitte & Touche LLP's reports on
the Company's financial statements for the period January 1, 1994 to
December 13, 1994 and the period December 14, 1994 to December 31, 1994
contained no adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles. The
Board approved the decision to change the Company's independent auditors upon
the recommendation of the Audit Committee. During the Company's two most
recent fiscal years and through May 31, 1995 there have been no disagreements
with Deloitte & Touche LLP on any matters of accounting principles or
practices, financial statement disclosures or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Deloitte & Touche
LLP, would have caused that firm to make reference to the subject matter of
the disagreement in connection with its report on the financial statements for
such years. During the Company's two most recent fiscal years and through
May 31, 1995, there have been no reportable events.
Although not required by law to submit the appointment to a vote by
shareholders, the Board believes it appropriate, as a matter of policy, to
request that the shareholders ratify (by a simple majority of the shares
represented at the Annual Meeting in person or by proxy) the appointment of
Arthur Andersen LLP as independent auditors for 1997. If the shareholders
should not so ratify, the Board will reconsider the appointment.
THE BOARD RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1997. SHARES OF
COMMON STOCK REPRESENTED AT THE ANNUAL MEETING BY EXECUTED BUT UNMARKED
PROXIES WILL BE VOTED "FOR" SUCH RATIFICATION.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10%
of a registered class of the Company's equity security, to file with the
Securities and Exchange Commission ("SEC") and with The Nasdaq Stock Market
reports of ownership and changes in ownership of common stock and other equity
securities of the Company. Directors, executive officers and greater than 10%
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on review of such reports furnished to the Company or
written representations that no other reports were required, the Company
believes that, during the 1996 fiscal year, all filing requirements applicable
to its directors, executive officers and greater than 10% beneficial owners
were complied with except two reports on Form 5, each covering one
transaction, which were filed late by Mr. Victor and Mr. Radecki, each a
director of the Company. In addition, the following individuals and entities
failed to file a required Form 3 to report their acquisition of securities
arising out of the distribution to them of Common Stock under the Company's
Second Amended Joint Plan of Reorganization in December, 1994: Greycliff
Partners; Alfred C. Eckert, III; Mikael Salovaara; South Street Corporate
Recovery Fund I, L.P.; South Street Corporate Recovery Fund I (International),
L.P.; South Street Leveraged Corporate Recover Fund I, L.P.; SSP Advisers,
L.P.; SSP, Inc.; SSP International, Inc.; SSP International Partners, L.P.,
and SSP Partners, L.P. These failures to file have been corrected by the
filing of Form 5's by each of the above-named persons and entities in October,
1996. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
Form 5 is not required to be filed if there are no previously unreported
transactions or holdings to report. Nevertheless, the Company is required to
disclose the names of directors, executive officers and greater than 10%
beneficial owners who did not file a Form 5, unless the Company has obtained a
written statement that no filing is required. At the date of this proxy
statement, the Company has received such written statements from all reporting
persons who did not file a Form 5.
SHAREHOLDER PROPOSALS
A shareholder who intends to present a proposal for action at any annual
meeting and who desires that such proposal be included in the Company's proxy
materials must submit the proposal to the Company in advance of the meeting.
Proposals for the annual meeting to be held in 1998 must be received by the
Company at its principal office no later than December 31, 1997. The
Company's Bylaws establish advance notice procedures as to (1) business to be
brought before an annual meeting of shareholders other than by or at the
direction of the Board; (2) the nomination, other than by or at the direction
of the Board, of candidates for election as directors; and (3) the request to
call a special meeting of shareholders. Any shareholder who wishes to take
such action should obtain a copy of the By-Laws and may do so by written
request addressed to the Secretary of the Company at the principal executive
offices of the Company.
OTHER MATTERS
The Board is not aware of any other matters that may come before the
Annual Meeting. If any other matters are properly presented to the Annual
Meeting for action, it is the intention of the persons named as proxies in the
enclosed form of proxy to vote such proxies in accordance with the best
judgment of a majority of the proxies on such matters.
ANNUAL REPORT
The Company's Annual Report to Shareholders, including audited financial
statements for the year ended December 31, 1996, although not a part of this
Proxy Statement, is delivered herewith.
By Order of the Board of Directors
BUCYRUS INTERNATIONAL, INC.
/s/Craig R. Mackus
Craig R. Mackus
Secretary and Controller
South Milwaukee, Wisconsin
March 26, 1997
The Company will furnish to any shareholder, without charge, a copy of
its Annual Report on Form 10-K for the fiscal year 1996. Requests for Form
10-K must be in writing and addressed to Investor Relations, Bucyrus
International, Inc., Post Office Box 500, 1100 Milwaukee Avenue, South
Milwaukee, Wisconsin 53172.
<PAGE>
BUCYRUS INTERNATIONAL, INC.
P. O. Box 500
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned, having received the Notice of Annual Meeting of
Shareholders and the Proxy Statement furnished therewith, hereby appoints
C. R. Mackus and J. F. Bosbous, and each of them, as Proxies with the power of
substitution (to act jointly or if only one acts then by that one) and hereby
authorizes them to represent and to vote as designated below all of the shares
of Common Stock of Bucyrus International, Inc. held of record by the
undersigned on March 17, 1997, at the annual meeting of shareholders to be
held on April 30, 1997, or any adjournment or postponement thereof.
(Continued on reverse side)
<PAGE>
Please mark your
A / X / votes as in this
example.
FOR all nominees WITHHOLD
listed at right (except AUTHORITY to vote
as marked to the for all nominees
contrary below) listed at right
Nominees:
1. Election of C. Scott Bartlett, Jr.
Directors / / / / Willard R. Hildebrand
Frank W. Miller
Joseph J. Radecki, Jr.
INSTRUCTIONS: To withhold authority to vote for F. John Stark, III
any individual nominee, write that nominee's name Russell W. Swansen
in the space provided below. Armour F. Swanson
____________________________________________________
FOR AGAINST ABSTAIN
2. Ratify the appointment of Arthur / / / / / /
Andersen LLP to serve as independent
auditors of the Company.
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
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" the
election of the Board's nominees, "FOR" Item 2 and with
respect to any other matter which may properly come
before the Annual Meeting in accordance with the best
judgement of the proxies appointed.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
Signature __________________ ___________________________ DATED ______, 1997
SIGNATURE (IF HELD JOINTLY)
IMPORTANT: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by the
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
