PRELIMINARY COPY
FEDDERS CORPORATION
WESTGATE CORPORATE CENTER
505 MARTINSVILLE ROAD
LIBERTY CORNER, NEW JERSEY 07938
(908) 604-8686
January 13, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of the Company to be held at 10:30 a.m. on March 11, 1997.
Stockholders will be asked, among other things, to consider and act on
proposals to approve the action of the Board of Directors to amend or repeal
certain Articles of the Company's Charter that were originally designed to
provide "anti-takeover" protection. Articles Sixth, Eighth and Ninth of the
Charter provide such protection but, given the protections provided by the
Company's Class B Stock, your Board of Directors feels that it is no longer
necessary to retain provisions such as a "staggered" Board of Directors in
the Company's Charter.
Specifically, you will be asked to (i) amend Article Sixth to
replace the "staggered" Board of Directors with a provision to provide
for the annual election of all directors, (ii) elect directors, (iii)
repeal Article Eighth which requires a vote of four-fifths (4/5) of the
outstanding voting stock to approve certain business combinations, (iv)
repeal Article Ninth which requires a vote of two-thirds (2/3) of the
outstanding voting stock to approve mergers and other business transactions
that affect all or substantially all of the Company's assets and (v) ratify
the appointment of independent auditors.
It is important that your shares be represented at the meeting, whether
or not you are personally able to be present. If your shares are held in the
name of your broker or a nominee, the broker or nominee will forward the
proxy to you, as you must vote directly on Proposals 1, 3 and 4. Please
provide your specific instructions to your broker or nominee on these
proposals so that your vote will count. If you do not return the proxy
to your broker or nominee with your directions on how to vote on these
proposals, they will be considered to be an abstention or "broker non-vote"
which is the same as a negative vote on such Proposals. The Board strongly
recommends that you vote, or instruct your broker or nominee to vote, FOR
approval of all proposals, including the ones described above. Please sign,
date and return your proxy as soon as possible. If you do attend and wish
to vote in person, your proxy can be revoked at your request. Your prompt
response in immediately returning the enclosed proxy card will be appreciated.
Enclosed are the Notice of Meeting, Proxy Statement and proxy card.
Sincerely,
Salvatore Giordano Sal Giordano, Jr.
Chairman of the Board Vice Chairman, President, and
Chief Executive Officer
<PAGE>
FEDDERS CORPORATION
LIBERTY CORNER, NEW JERSEY 07938
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 11, 1997
____________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Fedders
Corporation (the "Company") will be held at the Somerset Hills Hotel, 200
Liberty Corner Road, Warren, NJ 07059 on Tuesday, March 11, 1997 at 10:30 a.m.
for the following purposes:
1. To consider and act upon a proposal to amend Article SIXTH of the
Company's Restated Certificate of Incorporation to eliminate the separation of
the Company's Board of Directors into three separate classes and to replace it
with a Board of Directors that is elected on an annual basis;
2. To elect three (3) directors to serve for a term of three (3) years;
PROVIDED, HOWEVER, that, if Proposal 1 is approved, the term of all directors
in office at the time the amendment to the Charter contemplated by Proposal 1
becomes effective shall expire at the annual meeting of stockholders to be
held in 1998 or at such time as their successors shall be elected and shall
have qualified;
3. To consider and act upon a proposal to repeal Article EIGHTH of the
Company's restated Certificate of Incorporation in its entirety which requires
the affirmative vote of four-fifths (4/5) of the outstanding shares of the
Company's capital stock entitled to vote for the approval of any of a series
of corporate takeover transactions initiated by a single person or entity, or
group of persons or entities, owning more than five percent (5%) of the
outstanding voting stock of the Company;
4. To consider and act upon a proposal to repeal Article NINTH of the
Company's Restated Certificate of Incorporation in its entirety which requires
the affirmative vote of two-thirds (2/3) of the Company's outstanding capital
stock entitled to vote for the approval of a merger, consolidation, or other
disposition of all or substantially all of the Company's assets;
5. To ratify the appointment of BDO Seidman, LLP as the Company's
independent auditors for the ensuing fiscal year; and
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on January 10, 1997 has been fixed as the record
date for the determination of the holders of shares of the Company's Common
Stock and Class B Stock entitled to notice of, and to vote at, the Annual
Meeting. A list of the Stockholders entitled to vote at the Annual Meeting
will be available during the period ten (10) days prior to the date of the
Annual Meeting for examination by any Stockholder, for any purpose germane
to the Annual Meeting, during ordinary business hours at the offices of the
Company, Westgate Corporate Center, 505 Martinsville Road, Liberty Corner,
New Jersey.
By order of the Board of Directors
KENT E. HANSEN
Secretary
Dated: January 13, 1997
Liberty Corner, New Jersey
IMPORTANT: THE BOARD OF DIRECTORS INVITES YOU TO ATTEND THE MEETING IN
PERSON, BUT IF YOU ARE UNABLE TO BE PERSONALLY PRESENT, PLEASE DATE, SIGN AND
RETURN THE ENCLOSED PROXY IMMEDIATELY. NO POSTAGE IS REQUIRED IF THE PROXY IS
RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.
<PAGE>
TABLE OF CONTENTS
PAGE
Proxy Statement 1
Proposal No. 1 - Amendment to Article SIXTH of the
Company's Charter 2
Proposal No. 2 - Election of Directors 3
Meetings of the Board of Directors and Certain Committees 4
Security Ownership of Directors and Executive Officers 6
Section 16(a) Beneficial Ownership Reporting Compliance 8
Principal Stockholders 8
Executive Compensation 9
Summary Compensation Table 9
Options/SAR Grants Table 10
Aggregated Option/SAR Exercises
and Fiscal Year-End Option/SAR Value Table 11
Compensation Committee Interlocks and Insider
Participation 11
Report of the Compensation Committee on Executive
Compensation 11
Employment Contract 12
Performance Graph 13
Proposal No. 3 - Repeal Article EIGHTH of the
Company's Charter 13
Proposal No. 4 - Repeal Article NINTH of the Company's Charter 14
Proposal No. 5 - Ratification of Selection of Independent Auditors 14
Stockholder Proposals - Next Annual Meeting 15
Cost of Solicitation 16
<PAGE>
FEDDERS CORPORATION
WESTGATE CORPORATE CENTER
505 MARTINSVILLE ROAD
LIBERTY CORNER, NEW JERSEY 07938
(908) 604-8686
____________________
PROXY STATEMENT
____________________
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Fedders Corporation ("Fedders" or the
"Company") of proxies in the accompanying form to be used at the Annual
Meeting of Stockholders of the Company to be held on Tuesday, March 11,
1997, and at all adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. It is intended that this Proxy
Statement and the proxies solicited hereby be mailed to Stockholders on
January 13, 1997. A Stockholder who shall sign and return a proxy in
the form enclosed with this Proxy Statement has the power to revoke it
at any time before it is exercised by giving written notice to the
Secretary of the Company to such effect or by delivering to the Company
an executed proxy bearing a later date. Any Stockholder who has given a
proxy may still attend the Annual Meeting, revoke his or her proxy, and
vote in person.
The Company's Annual Report to Stockholders for the period from
September 1, 1995 to August 31, 1996 (the "Fiscal Year"), including
financial statements, was previously mailed to Stockholders.
At the Annual Meeting, holders of shares of the Company's Common Stock and
Class B Stock will be asked to: (i) consider and act upon a proposal to amend
Article SIXTH of the Company's Restated Certificate of Incorporation (the
"Charter") to eliminate the separation of the Company's Board of Directors
into three separate classes and to replace it with a Board of Directors that
is elected on an annual basis; (ii) elect three (3) directors to serve for a
term of three (3) years; PROVIDED, HOWEVER, that, if Proposal 1 is approved,
the term of all directors in office at the time the amendment to the Charter
contemplated by Proposal 1 becomes effective shall expire at the annual
meeting of stockholders to be held in 1998 or at such time as their successors
shall be elected and shall have qualified; (iii) consider and act upon a
proposal to repeal Article EIGHTH of the Company's Charter in its entirety
which requires the affirmative vote of four-fifths (4/5) of the outstanding
shares of the Company's capital stock entitled to vote for the approval of
any of a series of corporate takeover transactions initiated by a single
person or entity, or group of persons or entities, owning more than five
percent (5%) of the outstanding voting stock of the Company; (iv) consider
and act upon a proposal to repeal Article NINTH of the Company's Charter in
its entirety which requires the affirmative vote of two-thirds (2/3) of the
Company's outstanding capital stock entitled to vote for the approval of a
merger, consolidation, or other disposition of all or substantially all of
the Company's assets; and (v) ratify the appointment of BDO Seidman, LLP as
the Company's independent auditors for the fiscal year ending August 31, 1997.
The close of business on January 10, 1997 has been fixed as the record
date for the determination of the Stockholders entitled to notice of, and to
vote at, the Annual Meeting. As of such date, 18,989,798 shares of Common
Stock and 2,266,706 shares of Class B Stock of the Company were outstanding
and entitled to be voted at the Annual Meeting. The holders of Class B Stock
are entitled to ten votes per share in any election of directors if more than
15% of the shares of Common Stock outstanding on the record date are owned
beneficially by a person or a group of persons acting in concert, or if a
nomination for the Board of Directors is made by a person or a group of
persons acting in concert (other than the Board) provided such nomination
is not made by one or more of the holders of Class B Stock, acting in
concert with each other, who beneficially own more than 15% of the shares
of Class B Stock outstanding on such record date. The Board of Directors
is not presently aware of any circumstance that would give holders of Class
B Stock the right to ten votes per share in the election of directors at the
Annual Meeting.
Under the terms of the Charter, approval of Proposal 1 to replace the
staggered Board of Directors and Proposal 4 to repeal Article NINTH of
the Charter, requires an affirmative vote of a majority of the
<PAGE>
outstanding Common Stock and Class B Stock, each voting separately as a
class. Approval of Proposal 3 to repeal Article EIGHTH of the Charter
requires the affirmative vote of four-fifths (4/5) of the outstanding
shares of the outstanding Common Stock and Class B Stock voting together
as a single class. A plurality of the votes of the shares of Common
Stock and Class B Stock present in person or represented by proxy at the
Annual Meeting shall be needed for the election of directors in Proposal
2, provided those shares present in person or represented by proxy at
the Annual Meeting constitute a quorum. The ratification of the
appointment of independent auditors in Proposal 5 requires the
affirmative vote of a majority of the shares of Common Stock and Class B
Stock voted on such proposal.
The proxies in the accompanying form will be voted as specified, but if
no specification is made they will be voted in favor of (i) amending
Aritcle SIXTH of the Company's Charter to replace the current election
of directors on a staggered basis, with the election of all directors on
an annual basis; (ii) electing three (3) directors to serve for a term
of three (3) years; PROVIDED, HOWEVER, that, if Proposal 1 is approved,
the term of all directors in office at the time the amendment to the
Charter contemplated by Proposal 1 becomes effective shall expire at the
annual meeting of stockholders to be held in 1998 or at such time as their
successors shall be elected and shall have qualified; (iii) repealing
Article EIGHTH of the Company's Charter; (iv) repealing Article NINTH of
the Company's Charter and (v) ratifying the appointment of BDO Seidman,
LLP as the Company's independent auditors for the ensuing fiscal year.
In the discretion of the proxyholders, the proxies will also be voted
for or against such other matters as may properly come before the
meeting. The Board of Directors is not aware that any other matters are
to be presented for action at the meeting.
The shares represented by a proxy which is timely returned and marked
"Abstain" as to any matter as well as broker non-votes will be
considered present at the Annual Meeting and will be included in the
calculation of those shares needed to constitute a quorum. The shares
represented by such proxies, although considered present for quorum
purposes, will not be considered a part of the voting power present with
respect to any proposal which is abstained from or to which the broker
non-vote relates. With respect to Proposals 1, 3 and 4, an abstention
or a broker non-vote is the equivalent of a negative vote on such
Proposals.
PROPOSAL NO. 1 - AMEND ARTICLE SIXTH OF THE COMPANY'S CHARTER
Subject to approval of the Stockholders, the Company's Board of
Directors, at a meeting held at the Company's executive offices on
August 27, 1996, has unanimously adopted the amendment to the Charter
which will eliminate the division of Directors into three classes (the
"Staggered Board") and replace it with a single class of Directors who
are elected annually.
Article SIXTH of the Charter currently provides as follows:
SIXTH: Directors shall be divided into three classes, each
class to be determined by the directors prior to the election
of a particular class. In the event that at any time or from
time to time the number of directors is increased, the newly
created directorships resulting therefrom shall be filled by a
vote of the majority of the directors in office immediately
prior to such increase and directors so elected shall serve
until the term of such class expires. In conformity with the
statute, the initial First Class directors shall be elected to
a term of one year, Second Class directors to a term of two
years, and Third Class directors to a term of three years, and
at each subsequent annual meeting, the successors to directors
whose term shall expire that year shall be elected to a term of
three years.
The Staggered Board was adopted by the Company in 1984 as a means of
preventing a takeover of the Company by a "hostile" board elected as the
result of a successful Stockholder initiative proposing an alternative
slate of directors at an annual meeting. The Company's Board of
Directors feels that it should no longer retain the Staggered Board
because of the negative perception among many potential investors and
investor groups concerning staggered boards in general.
2
<PAGE>
In addition, the Company's Class B Stock provides adequate protection
against this type of takeover. Specifically, Article THIRD A. II (a) of
the Charter provides in part that:
...every holder of Class B Stock shall be entitled to one (1) vote
in person or by proxy for each share of Class B Stock standing in
his name on the transfer books of the Corporation, except that each
holder of Class B Stock shall be entitled to ten (10) votes per
share on the election of any directors of [at] SIC any stockholders'
meeting (i) if more than 15% of the shares of Common Stock
outstanding on the record date for such meeting are beneficially
owned by a person or group of persons acting in concert (unless such
person or group is also the beneficial owner of a majority of the
shares of Class B Stock on such record date), or (ii) if a
nomination for the Board of Directors is made by a person or group
of persons acting in concert (other than the Board of Directors),
provided that such nomination is not made by one or more holders of
Class B Stock, acting in concert with each other, who beneficially
own more than 15% of the shares of Class B Stock outstanding on such
record date.
Therefore, subject to Stockholder approval, the Company's Board of
Directors has amended Article SIXTH of the Charter to read as follows:
SIXTH: Each director shall be elected by the stockholders at
each annual meeting and shall hold office until the next annual
meeting of stockholders and until such director's successor shall
have been elected and qualified. The term of office of each
director in office at the time this Article SIXTH becomes effective
shall expire at the annual meeting of stockholders next held after
the effectiveness of this Article SIXTH.
In conjunction with its approval of the above amendment to Article SIXTH
of the Charter, the Company's Board of Directors, at the same meeting,
and subject also to the approval of this Proposal 1, unanimously amended
Article II, Section 2 of the Company's By-Laws (which also provides for the
Staggered Board), to similarly provide for the annual election of all
directors.
If this amendment to Article SIXTH of the Charter is not authorized, the
Company will continue with the Staggered Board. If this amendment is
authorized, the Company will file a certificate with the Secretary of
State of the State of Delaware as soon as reasonably practicable after
the Annual Meeting reflecting the changes resulting from the amendment,
such changes to become effective on the filing thereof.
Under the terms of the Charter, approval of this amendment to the
Charter requires an affirmative vote of a majority of the outstanding
Common Stock and Class B Stock, each voting separately as a class.
Your Board of Directors has unanimously approved this amendment and
recommends that you vote in favor of this Proposal 1.
PROPOSAL NO. 2 - ELECTION OF DIRECTORS
Stockholders may vote for a maximum of three directors at the Annual
Meeting of Stockholders. The nominees for election as directors are
Messrs. Sal Giordano, Jr., S. A. Muscarnera and C. A. Keen. Messrs.
Giordano and Muscarnera were elected directors at the December 21, 1993
Annual Meeting and are now serving as such. Mr. Keen was elected by the
Board of Directors upon the merger of NYCOR, Inc. ("NYCOR") into the
Company on August 13, 1996. Set forth opposite the name of each nominee
and each director is his age, principal occupation for the past five
years, the name and principal business of any corporation or other
organization in which such employment is carried on and other business
directorships held by the nominee or director. The Company is not
presently aware of any circumstance which would prevent any nominee from
fulfilling his duties as a director of the Company.
While the directors elected at the Annual Meeting will be elected for a
term of three (3) years and until their successors shall be elected and
shall have qualified, if Proposal 1 is approved, the terms of all
directors in office when the Charter amendment contemplated by Proposal
1 becomes effective (including the directors elected at the Annual
Meeting) will expire at the annual meeting of stockholders to be held in
1998. In that case, the directors elected at the Annual Meeting will
effectively be elected for a term of one (1) year, and the
3
<PAGE>
term of office of directors with a remaining term of two (2) years will
effectively have their terms reduced by one (1) year.
DIRECTOR
NAME PRINCIPAL OCCUPATION AND AGE SINCE
NOMINEES
Sal Giordano, Jr. Vice Chairman, President and Chief
Executive Officer of the Company
(1)(2); 58 1965
S. A. Muscarnera Retired (1)(9); 56 1982
C. A. Keen Retired (8 ); 71 1996
DIRECTORS - TWO YEAR REMAINING TERM
Salvatore Giordano Chairman of the Board of the Company
(1)(2); 86 1945
Howard S. Modlin Partner, Weisman, Celler, Spett &
Modlin (3); 65 1977
William J. Brennan Financial Consultant (4); 68 1980
DIRECTORS - ONE YEAR REMAINING TERM
Joseph Giordano Retired (1)(5); 64 1961
Clarence Russel Moll President Emeritus, Widener
University (6); 83 1967
Anthony E. Puleo President, Puleo Tree Co. (7); 61 1994
- --------------------
(1) Messrs. Sal Giordano, Jr. and Joseph Giordano are sons, and Mr.
Muscarnera is the nephew, of Mr. Salvatore Giordano.
(2) Messrs. Salvatore Giordano and Sal Giordano, Jr. have been
associated in executive capacities with the Company for more than five
years.
(3) Principal occupation during the past five years. The law firm
of Weisman, Celler, Spett & Modlin renders legal services to the Company.
Mr. Modlin is also a director of General DataComm Industries, Inc. and
Trans-Lux Corporation.
(4) Principal occupation during the past five years. Mr. Brennan
served as a director of the Company from 1980 to 1987, and was again
elected a director in 1989. He is also Chairman of the Board of CSM
Environmental Systems, Inc.
(5) Mr. Giordano was a Senior Vice President of the Company until
his retirement on August 31, 1992, and President of NYCOR until its
merger into the Company on August 13, 1996.
(6) Principal occupation during the past five years. Dr. Moll is
also a director of Ironworkers' Savings Bank.
(7) Principal occupation during the past two and one half years.
Puleo Tree Co. is an importer of Christmas items and garden furniture.
Prior to that Mr. Puleo was President of Boulderwood Corporation.
(8) Mr. Keen was a Vice President of the Company for more than 20
years until his retirement in August 1992, with responsibilities in a
number of areas during that time, including marketing, treasury and
international sales and sourcing. He was also a director of NYCOR until
its merger into the Company on August 13, 1996.
(9) Mr. Muscarnera was Senior Vice President and Secretary of the
Company prior to his retirement on August 31, 1996. Mr. Muscarnera has
served in various capacities with the Company for more than 39 years,
including human resources and legal.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
During the Fiscal Year, the Board of Directors of the Company held
nine (9) meetings. All of the present directors attended 75% or more of
such meetings and of meetings of committees of which they were members
held during the periods they served as directors. Directors who are not
employees receive an annual fee of $20,000.
The Board of Directors has an Audit Committee consisting of Messrs.
Clarence Russel Moll, William J. Brennan and Howard S. Modlin. During
the Fiscal Year, this committee held four (4) meetings. The Audit
4
<PAGE>
Committee reviews the audit function with the Company's independent
auditors. The Chairman and other members of the Audit Committee receive
a fee of $1,000 and $500, respectively, for each meeting they attend.
The Board of Directors has a Compensation Committee consisting of
Messrs. Howard S. Modlin, William J. Brennan and Anthony E. Puleo.
During the Fiscal Year, this committee held one (1) meeting. The
Compensation Committee develops compensation plans for the executive
officers of the Company, subject to approval by the Board of Directors.
The Company does not have a nominating committee.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS OF FEDDERS
As of December 23, 1996, each director of the Company and each
executive officer of the Company named in the Summary Compensation Table
under "Executive Compensation" and all directors and executive officers
of the Company as a group, owned beneficially the number of shares of
the Company's equity securities set forth in the following table. Shares
subject to acquisition within 60 days pursuant to stock options are
shown separately. Unless otherwise indicated, the owners listed have
sole voting and investment power. The Company's Class A Stock and
Convertible Preferred Stock have no voting rights except as provided
under Delaware Law.
<TABLE>
<CAPTION>
SHARES
AMOUNT AND SUBJECT TO
NATURE OF ACQUISITION PERCENT
TITLE OF NAME OF INDIVIDUAL BENEFICIAL WITHIN 60 OF CLASS
CLASS OR PERSONS IN GROUP OWNERSHIP DAYS(16) OWNED(17)
<S> <C> <C> <C> <C>
Common Stock Salvatore Giordano 1,100(1) 0 Less than 1%
Sal Giordano, Jr. 1,100(1) 0 Less than 1%
Joseph Giordano 13,910(1) 0 Less than 1%
Howard S. Modlin 256,800(2) 0 1.35%
Clarence Russel Moll 61,400(3) 0 Less than 1%
William J. Brennan 5,000 0 Less than 1%
Anthony E. Puleo 2,000 0 Less than 1%
S. A. Muscarnera 55,000 0 Less than 1%
C. A. Keen 10,700
Robert L. Laurent, Jr. 115,000 0 Less than 1%
All directors and
executive officers as
a group 525,310 0 2.77%
Class A Stock Salvatore Giordano 1,210,815(4)(5) 647,314 9.15%
Sal Giordano, Jr. 694,864(4)(6)(7) 709,066 6.9%
Joseph Giordano 879,689(4)(7)(8) 301,875 5.92%
Howard S. Modlin 224,701(9) 171,564 2.0%
Clarence Russel Moll 80,788(10) 96,563 Less than 1%
William J. Brennan 4,375 144,376 Less than 1%
Anthony E. Puleo 0 9,375 Less than 1%
S. A. Muscarnera 48,125 278,750 1.64%
C. A. Keen 400 127,500 Less than 1%
Robert L. Laurent, Jr. 100,625 350,590 2.26%
Gordon Newman 0 46,845 Less than 1%
All directors and
executive officers as
a group 2,521,820 3,149,335 24.87%
Class B Stock(17) Salvatore Giordano 2,262,566(11) 0 99.82%
Sal Giordano, Jr. 2,262,566(11) 0 99.82%
Joseph Giordano 2,262,566(11) 0 99.82%
All directors and
executive officers as
a group 2,262,566 0 99.82%
Convertible
Preferred Stock Salvatore Giordano 1,207,543(12)(13) 0 16.1%
Sal Giordano, Jr. 1,131,397(12)(14) 0 15.1%
Joseph Giordano 857,102(12)(15) 0 11.4%
Howard S. Modlin 84,024 0 1.1%
Clarence Russel Moll 30,410 0 Less than 1%
William J. Brennan 129,402 0 1.7%
S. A. Muscarnera 56,500 0 Less than 1%
C. A. Keen 28,000 0 Less than 1%
All directors and
executive officers as
a group 2,040,059 0 27.14%
Ownership of Common
Stock, Class A Stock,
Class B Stock, and
Convertible Preferred
Stock combined, by all
directors and executive
officers as a group 7,349,755 3,149,335 20.36%
</TABLE>
6
<PAGE>
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(1) The amount shown includes 1,100 shares which are held by a
corporation in which Messrs. Salvatore Giordano, Sal Giordano, Jr.
and Joseph Giordano are officers, directors and stockholders, and
share voting and investment power over such shares.
(2) Includes 3,100 shares owned by members of Mr. Modlin's family as to
which Mr. Modlin disclaims beneficial ownership.
(3) Includes 15,000 shares owned by Dr. Moll's wife, as to which Dr.
Moll disclaims beneficial ownership.
(4) Includes 190,875 shares which are held by corporations in which
Messrs. Salvatore Giordano, Sal Giordano, Jr. and Joseph Giordano are
officers directors and stockholders, and share voting and investment
power over such shares.
(5) Includes 117,548 shares held of record by Mr. Giordano's wife, and
148,904 shares held of record by Mr. Giordano's wife in trust for
their grandchildren, as to which Mr. Giordano disclaims beneficial
ownership.
(6) Includes 10,462 shares held of record by Mr. Giordano's wife, as to
which Mr. Giordano disclaims beneficial ownership, and 56,328 shares
held by Mr. Giordano in trust as trustee for himself.
(7) Includes 345,625 shares held in trust, as to which Messrs. Sal
Giordano, Jr. and Joseph Giordano share voting and investment power.
(8) Includes 56,328 shares held by Mr. Giordano in trust as trustee for
himself.
(9) Includes 2,713 shares owned by members of Mr. Modlin's family as to
which Mr. Modlin disclaims beneficial ownership.
(10) Includes 13,125 shares owned by Dr. Moll's wife as to which Dr.
Moll disclaims beneficial ownership.
(11) Shares are owned by Giordano Holding Corpation as to which Messrs.
Salvatore Giordano, Sal Giordano, Jr. and Joseph Giordano share
voting and investment power.
(12) Includes 753,757 shares which are held by corporations in which
Messrs. Salvatore Giordano, Sal Giordano, Jr. and Joseph Giordano are
officers, directors and stockholders and share voting and investment
power over such shares.
(13) Includes 39,264 shares owned by Mr. Giordano's wife, as to
which he disclaims beneficial ownership, and 80,201 shares held of
record by Mr. Giordano's wife in trust for their grandchildren, as to
which Mr. Giordano disclaims beneficial ownership.
(14) Includes 7,493 shares held of record by Mr. Giordano's wife;
52,891 shares held of record by Mr. Giordano's wife in trust for
their grandchildren, for both of which Mr. Giordano disclaims
beneficial ownership, and 14,974 shares held by self as trustee for
self. Also includes 2,220 shares which would be realized upon
conversion of Fedders Convertible Subordinated Debentures held by Mr.
Giordano.
(15) Includes 40,400 shares held in trust by Mr. Giordano for his
grandchildren for which he disclaims beneficial ownership, and 14,974
shares held by self as trustee for self.
(16) The amounts shown are the number of shares held under options
exercisable within 60 days.
(17) The Class B Stock is convertible into Common Stock at any time on
a share-for-share basis. In the event that the individuals named as
owning Class B Stock converted their shares into Common Stock, less
than 5% of the class would remain outstanding, and pursuant to the
terms of the Charter, all remaining Class B Stock and all outstanding
Class A Stock would automatically be converted into Common Stock. If
such conversion took place, and the named individuals exercised all
of the options indicated, such individuals and the group would
beneficially own the following number of shares constituting the
indicated percentage of Common Stock outstanding: Mr. Salvatore
Giordano, 5,329,338 shares constituting 10.86%; Mr. Sal Giordano,
Jr., 4,798,993 shares constituting 9.77%; Mr. Joseph Giordano,
4,315,142 shares constituting 8.86%; and all directors and executive
officers as a group 10,499,090 shares constituting 20.36%. The share
totals for Messrs. Salvatore Giordano, Sal Giordano, Jr. and Joseph
Giordano include 3,208,304 shares which are held by corporations in
which they are officers, directors and stockholders and share voting
and investment power over such shares. In the event that the
individuals named as owning Class B Stock also converted their shares
of Convertible Preferred
7
<PAGE>
Stock, they would receive Common Stock, as the Class A Stock into which
the Convertible Preferred Stock is currently convertible would no longer
exitst, and their percentage of ownership of Common Stock would increase
in proportion to their holdings of Convertible Preferred Stock. The
numbers shown in this footnote 17 assume such conversion, and also
assume the conversion of any Convertible Subordinated Debentures.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any officer, director or owner or
more than 10% of the Company's Common Stock, Class A Stock, Convertible
Preferred Stock or the 8-1/2% Convertible Subordinated Debentures Due 2012
who failed to file on a timely basis with the Securities and Exchange
Commission and the New York Stock Exchange a required report relating to
beneficial ownership of such equity securities of the Company under Section
16 of the Securities Exchange Act of 1934. Based solely on a review of
information provided to the Company, all persons subject to these reporting
requirements filed the required reports on a timely basis for the Fiscal
Year.
PRINCIPAL STOCKHOLDERS OF FEDDERS
The following table sets forth information at December 23, 1996 with
respect to the beneficial ownership of the Company's voting securities
by all persons known by the Company to own more than 5% of the Company's
outstanding voting securities. Unless otherwise indicated, the owners
listed have sole voting and investment power.
AMOUNT
TITLE OF NAME AND ADDRESS BENEFICIALLY PERCENT
CLASS OF BENEFICIAL OWNER (1) OWNED OF CLASS
Class B Stock Salvatore Giordano 2,262,566 99.82%
Joseph Giordano and
Sal Giordano, Jr.
c/o Fedders Corporation
Liberty Corner, NJ 07938
__________
(1) See footnotes (11) and (17) to the previous table for more
detailed information with respect to the security ownership of the
named individuals.
8
<PAGE>
EXECUTIVE COMPENSATION
The following information is furnished as to all cash compensation
paid by the Company and its subsidiaries during the Fiscal Year to each
of the five highest paid executive officers of the Company whose
aggregate direct compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION.
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
(a) (b) (c) (d) (g) (i)
All Other
Fiscal Salary Bonus Options Compensation (1)
Name and Principal Position Year ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Salvatore Giordano.................. 1994 252,150 282,045 150,000 15,753
Chairman of the Board of Directors 1995 245,354 520,365 77,314 3,097,691(2)
1996 268,258 492,660 120,000 22,827
Sal Giordano, Jr. ................. 1994 335,375 282,045 180,000 17,548
Vice Chairman, President and 1995 341,530 520,365 139,066 32,424
Chief Executive Officer 1996 352,007 492,660 120,000 35,634
Robert L. Laurent , Jr. .......... 1994 209,725 141,023 95,000 8,425
Executive Vice President Finance 1995 226,489 260,183 50,590 15,281
and Administration, and Chief 1996 250,000 246,330 30,000 16,003
Financial Officer
S. A. Muscarnera................... 1994 181,875 141,023 15,000 7,641
Senior Vice President and 1995 191,144 260,183 18,750 16,726
Secretary 1996 186,000 153,956 35,000 13,590
Gordon E. Newman................... 1994 100,016 21,456 - 3,205
Senior Vice President, 1995 122,498 48,072 22,782 5,123
Supply Chain 1996 140,000 61,583 10,000 7,570
</TABLE>
____________________
(1) Includes the Company contribution to savings and investment
retirement plans up to the 3% offered to all employees of the Company in
1996, and the dollar value of the benefit of premiums paid for split-dollar
life insurance policies projected on an actuarial basis which cost is
recovered by the Company from the proceeds of such policies (Mr. Sal
Giordano, Jr. $10,294; Mr. Robert L. Laurent, Jr. $1,114; and Mr. S. A.
Muscarnera $3,391 and Mr. Gordon Newman $1,523).
(2) Includes a special award granted to Mr. Giordano in recognition of
over fifty years of extraordinary and exemplary service to the Company
as its President or Chairman, overseeing the growth of the Company from
a $7,000,000 radiator manufacturer to the leading manufacturer of room
air conditioners in North America.
9
<PAGE>
OPTIONS/SAR GRANTS TABLE
The following table sets forth information concerning the grant of
stock options and/or stock appreciation rights (SAR's) during the Fiscal
Year to the individual executive officers named in the Summary
Compensation Table.
The table shows the number of options granted to each named
executive officer, the number of options granted as a percentage of
options granted to all employees during the Fiscal Year, the exercise
price of each option, the expiration date for each option, and a
presentation of the potential realizable value for each option assuming
annual rates of stock appreciation of 5% and 10% over each option term.
OPTIONS/SAR GRANTS LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
% of
Total
Options
Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Salvatore Giordano 60,000 $4.50 10/25/00 $74,596 $164,838
30,000 (1) 3.25 12/31/98 21,012 45,250
30,000 (1) 1.88 12/31/98 12,122 26,106
-------
120,000 16.0%
Sal Giordano, Jr. 60,000 4.50 10/25/00 74,596 164,838
30,000 (1) 3.25 12/31/98 21,012 45,250
30,000 (1) 1.88 12/31/98 12,122 26,106
-------
120,000 16.0%
Robert L. Laurent, Jr. 30,000 4.0% 4.50 10/25/00 37,298 82,419
S. A. Muscarnera 20,000 4.50 10/25/00 24,865 54,946
50,000 4.87 08/27/01 67,344 148,812
7,500 (1) 3.25 12/31/98 5,253 11,312
7,500 (1) 1.88 12/31/98 3,031 6,526
-------
85,000 11.3%
Gordon E. Newman 10,000 1.3% 4.50 10/25/00 12,433 27,473
</TABLE>
- ----------------
(1) Replacement options were issued to take into account the terms of the
Agreement and Plan of Merger dated November 30, 1995, as amended, between the
Company and NYCOR (the "Merger Agreement") which provided that the employees
and directors of NYCOR were to be placed in the same economic position
following the merger as they were immediately prior to the date of the
execution of the merger agreement. The Merger Agreement also specifically
provides that the Company will replace all outstanding stock options held,
among others, by all NYCOR officers and directors.
10
<PAGE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table sets forth the number of shares exercised during
the Fiscal Year, the value realized upon exercise, the number of
unexercised options at the end of the Fiscal Year, and the value of
unexercised in-the-money options at the end of the Fiscal Year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS IN-THE-MONEY
SHARES AT OPTIONS
ACQUIRED ON VALUE FY-END (#) AT FY-END ($)
------------- -------------
Exercise Realized Exercisable/ Exercisable/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Salvatore Giordano - - 587,314 E 841,165 E
102,686 U 30,000 U
Sal Giordano, Jr. - - 658,066 E 879,544 E
997,000 U 2,216,958 U
Robert L. Laurent, Jr. - - 350,590 E 482,171 E
30,000 U 15,000 U
S. A. Muscarnera - - 258,750 E 387,234 E
70,000 U 16,250 U
Gordon E. Newman 14,063 35,050 22,782 E 11,391 E
10,000 U 5,000 U
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of three directors who are not
officers or employees of the Company (Howard S. Modlin, William J.
Brennan, and Anthony E. Puleo). The Committee submitted a plan to the
Company's Board of Directors (the "Board") for the Fiscal Year which was
approved by the Board on October 25, 1995.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
In determining the total compansation package for the chief executive
officer and all other executive officers for the Fiscal Year, the
Committee considered several factors including: the performance of the
Company; the individual contribution of each executive officer; the need
to attract and retain highly qualified executives in the air
conditioning industry necessary to build long-term stockholder value;
and the need to link a portion of each executive officer's long-term
capital accumulation to the growth in the market value of the Company's
Common Stock. Executive compensation was broken down into three major
components (i) cash compensation, (ii) incentive bonuses, and (iii)
stock options.
Cash compensation for the Fiscal Year is shown on the Summary
Compensation Table. For the Fiscal Year, the Committee recommended and
the Board adopted a modified version of prior years' plans, by
establishing significantly lower percentages to apply against
consolidated pre-tax income of the Company minus $1,000,000 ("Adjusted
Pre-Tax Income"). The awards under the plan are based heavily upon the
performance of the Company (the "Executive Plan"). In accordance with
the terms of the Executive Plan, the executive officers designated by
the Board may receive incentive awards based upon a prescribed formula.
The amount of the awards for the Fiscal Year range from 0.13% to 1.0% of
Adjusted Pre-Tax Income, compared to 0.5% to 1.5% in prior years. With
respect to the individuals named in the Summary Compensation Table, the
following percentages of Adjusted Pre-Tax Income have been designated:
11
<PAGE>
Mr. Salvatore Giordano 1.0% (previously 1.5%); Mr. Sal Giordano, Jr.
1.0% (previously 1.5%); Mr. Robert L. Laurent, Jr. 0.5% (previously
0.75%) Mr. S. A. Muscarnera 0.31% (previously 0.75%) and Mr. Gordon
Newman 0.13% (previously under a separate plan). Under the Executive
Plan, the following awards were made for Fiscal Year performance: Mr.
Salvatore Giordano $492,660 (compared to $520,365 for fiscal 1995); Mr.
Sal Giordano, Jr. $492,660 (compared to $520,365 for fiscal 1995); Mr.
Robert L. Laurent, Jr. $246,330 (compared to $260,183 for fiscal 1995);
Mr. S.A. Muscarnera $153,956 (compared to $260,183 for fiscal 1995); and
Mr. Gordon E. Newman $61,583 (compared to $48,072 for fiscal 1995). As
shown, the actual bonus amounts were less in this fiscal year, which was
a year of record breaking performance.
Respectfully submitted,
COMPENSATION COMMITTEE
Howard S. Modlin - Chairman
William J. Brennan
Anthony E. Puleo
EMPLOYMENT CONTRACT
Mr. Salvatore Giordano has an Employment Agreement with the Company,
which became effective on March 23, 1993. the material provisions of
the Agreement include: (1) an annual base salary of at least $238,000,
payable in equal semi-monthly installments; (2) annal participation in
all compensatory plans and arrangements of the Company no less favorable
than the fiscal year 1993 plans including, but not limited to, a bonus not
less than the amount of the fiscal year 1993 bonus (none was paid), and
continuing eligibility to be awarded stock options; (3) reimbursement for
all expenses incurred while on Company related business; and (4) annual
consideration for base salary and plan participation increases, if deemed
justified by the Company. The Agreement has a stated expiration date of
March 23, 2003, but the term of the Agreement automatically extends and has
a remaining term of ten years from any point in time, until the term is
finally fixed at a period of ten years from an intervening event, as
provided in the Agreement, such as permanent disability or death. During
the Fiscal Year, the Company amortized the estimated present value of
future non- salary benefits payable under the Agreement based upon certain
assumptions, in the amount of $356,000.
Following the merger of NYCOR into the Company on August 13, 1996, the
Employment Agreement was adjusted to take into account the terms of the
Merger Areement which stated that the employees and directors of NYCOR
were to be placed in the same economic position with respect to salaries
and other benefits provided by NYCOR.
12
<PAGE>
PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total
stockholder return on the Company's Common Stock with returns on the New
York Stock Exchange Composite Index, and on stocks included in the "Home
Appliance" category by THE VALUE LINE INVESTMENT SURVEY.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG FEDDERS CORPORATION,
NYSE COMPOSIT INDEX, AND HOME APPLIANCE STOCKS
ASSUMES $100 INVESTED ON SEPTEMBER 1, 1991
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED AUGUST 31, 1996.
[PLOT POINTS]
FISCAL YEAR ENDED
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
COMPANY
FEDDERS 100 53.45 74.14 105.18 145.53 144.60
NYSE MARKET 100 107.72 125.48 133.82 152.49 179.57
PEER GROUP 100 97.46 149.55 143.95 152.59 165.40
PROPOSAL NO. 3 - REPEAL ARTICLE EIGHTH OF THE COMPANY'S CHARTER
Subject to approval of the Stockholders, the Company's Board of
Directors, at a meeting held at the Company's executive offices on
August 27, 1996, unanimously adopted a resolution to repeal Article
EIGHTH of the Charter.
Article EIGHTH was adopted by the Company in 1984 to provide takeover
protection relating to Business Combinations between the Company and an
Acquiring Person. "Acquiring Person" is defined therein as any
individual, corporation (other than the Company), partnership or other
person or entity which, together with its Affiliates and Associates (as
defined in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934 as in effect at April 30, 1984,
collectively, and as so in effect, the "Exchange Act"), and with any
other individual, corporation (other than the Company), partnership or
other person or entity with which it or they have any agreement,
arrangement or understanding with respect to acquiring, holding, voting
or disposing of the capital stock of the Company entitled to vote for
the election of directors ("Voting Stock"), Beneficially Owns (as
described in Rule 13d-3 under the Exchange Act) in the aggregate 5% or
more of the outstanding Voting Stock of the Corporation. Directors of
the Company are given sole authority and discretion to determine who is
an Acquiring Person. A "Business Combination" is defined as including
among other things, any merger or consolidation of the Company or a
subsidiary of the Company
13
<PAGE>
with or into an Acquiring Person, or any sale, lease, exchange, transfer
or other disposition of all or substantially all of the assets of the
Company to an Acquiring Person.
Under the terms of Article EIGHTH, an affirmative vote of the holders of
not less than four-fifths (4/5) of the outstanding shares of Voting Stock held
by stockholders who are other than the Acquiring Person with which or by
or on whose behalf, directly or indirectly, a Business Combination is
proposed, voting as a single class, is required to approve or authorize
the Business Combination.
The Company's Board of Directors feels that it is no longer necessary to
retain the provisions of Article EIGHTH, as the terms of the Company's
Class B Stock provide adequate protection against abusive takeover
tactics, as does Section 203 of the Delaware General Corporation Law.
The terms of Article EIGHTH of the Charter specifically require the
affirmative vote of four-fifths (4/5) of the outstanding shares of
Voting Stock of the Company in order to amend, alter, change or repeal
the Article. Therefor, the repeal of this Article EIGHTH requires the
affirmative vote of four-fifths (4/5) of the outstanding Common Stock
and Class B Stock voting together as a single class.
Your Board of Directors has unanimously approved this amendment and
recommends that you vote in favor of this Proposal 3.
PROPOSAL NO. 4 - REPEAL ARTICLE NINTH OF THE COMPANY'S CHARTER
Subject to approval of the Stockholders, the Company's Board of
Directors, at a meeting held at the Company's executive offices on
August 27, 1996, unanimously adopted a resolution to repeal Article NINTH
of the Charter.
Article NINTH of the Charter which was adopted by the Company in 1985,
was also designed as an "anti-takeover" measure. Article NINTH requires
the affirmative vote of two-thirds (2/3) of the outstanding stock of the
Company entitled to vote for a merger or consolidation in order to
approve any merger or consolidation to which the Company is a party or
for any sale, lease, exchange or other disposition by the Company of all
or substantially all of its assets.
Like Article EIGHTH, the Company's Board of Directors feels that it is
no longer necessary to retain the provisions of Article NINTH, as the
terms of the Company's Class B Stock provide adequate protection against
abusive takeover tactics, as does Section 203 of the Delaware General
Corporation Law.
Under the terms of the Charter, approval of the repeal of Article NINTH
of the Charter requires an affirmative vote of a majority of the
outstanding Common Stock and Class B Stock, each voting separately as a
class.
Your Board of Directors has unanimously approved this amendment and
recommends that you vote in favor of this Proposal 4.
PROPOSAL NO. 5 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Pursuant to the recommendations of its Audit Committee, the Board of
Directors selected the firm of Ernst & Young, LLP ("E&Y") independent
auditors, to audit the consolidated financial statements of the Company
for the year ended August 31, 1995. The Company's Stockholders ratified
that selection at their Annual Meeting on December 20, 1994. On May 23,
1995, the Company dismissed E&Y as their independent auditors. The
reports of E&Y on the Company's financial statements for the years ended
August 31, 1994 and 1993 did not contain an adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principle. The Company's Board
of Directors approved the decision to change independent auditors upon
the recommendation of the Company's Audit Committee. During the last
two fiscal years, the Company has not had any disagreement with E&Y on
any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure that would require disclosure
in this Proxy Statement. There have been no reportable events (as
defined in Regulation S-K Item 304(a) (1) (v)). At the Company's
request, E&Y furnished a letter addressed to the Securities and Exchange
Commission as
14
<PAGE>
required by Item 304 (a) of Regulation S-K. A copy of such letter was
attached to the Company's report to the Commission on Form 8-K, dated
May 24, 1995 and is incorporated herein in its entirety by reference.
The Company engaged BDO Seidman, LLP ("BDO") as its new independent
auditors as of May 23, 1995. BDO has served as the Company's independent
auditors for all of the Fiscal Year. Prior to this engagement, BDO performed
audits on the Company's pension plans for the plan years ended October 31
and December 31, 1993.
On recommendation of the Audit Committee, the Board of Directors
appointed the firm of BDO, independent auditors, to audit the
consolidated financial statements of the Company and its subsidiaries
for the fiscal year ending August 31, 1997, subject to ratification by
the Company's Stockholders at the Annual Meeting. BDO does not have any
direct financial interest in the Company.
Representatives of BDO are expected to be at the Annual Meeting and
will be available to respond to any appropriate questions by
Stockholders and may make a statement, if they so choose.
STOCKHOLDER PROPOSALS - NEXT ANNUAL MEETING
If any Stockholder desires to submit a proposal for action at the
next regular annual meeting, it must be received by the Company, P.O.
Box 813, Liberty Corner, NJ 07938 on or before September 15, 1997.
COST OF SOLICITATION
The cost of preparing and mailing material in connection with the
solicitation of proxies is to be borne by the Company. To the extent
necessary in order to assure sufficient representation at the meeting,
such solicitation will be made by the Company's regular employees in the
total approximate number of five. Solicitations will be made by mail
and may also be made by telegram, telephone and in person and by D.F.
King & Co., for estimated professional fees of $6,500 plus phone costs.
By order of the Board of Directors
KENT E. HANSEN
Secretary
Dated: January 13, 1997
Liberty Corner, New Jersey
15
<PAGE>
DIRECTIONS TO
SOMERSET HILLS HOTEL
200 LIBERTY CORNER ROAD
WARREN, NJ 07059
(908) 647-6700
The Somerset Hills Hotel is located directly north of
Interstate 78 at Exit 33. Newark International Airport is
less than 35 minutes away, and New York City is within an
hour's commute. The Bernardsville and Lyons railroad
stations are conveniently located approximately seven minutes
from the Hotel.
<PAGE>
FEDDERS CORPORATION
PROXY - Annual Meeting of Stockholders - March 11, 1997
Solicited on behalf of the Board of Directors
The undersigned stockholder of FEDDERS CORPORATION (the "Company")
hereby constitutes and appoints SALVATORE GIORDANO, SAL GIORDANO, JR.
and S.A. MUSCARNERA, and each of them, the attorneys and proxies of the
undersigned with full power of substitution, to vote for and in the
name, place and stead of the undersigned, at the Annual Meeting of
Stockholders of the Company, to be held at the Somerset Hills Hotel, 200
Liberty Corner Road, Warren, New Jersey, on March 11, 1997 at 10:30
a.m., and at any adjournments thereof, the number of votes the
undersigned would be entitled to cast if present, on the items as set
forth on the reverse side of this proxy and in their discretion, upon
such other matters as may properly come before the meeting or any
adjournment thereof. The Board of Directors recommends the following
for Director -- Sal Giordano, Jr., S. A. Muscarnera and C. A. Keen.
A majority of said attorneys and proxies, or their substitutes, at said
meeting or any adjournments thereof (or, if only one, that one) may
exercise all of the power hereby given. Any proxy to vote any of the
shares with respect to which the undersigned is, or would be, entitled to
vote heretofore given to any persons, other than the persons named
above, is hereby revoked.
IN WITNESS WHEREOF, the undersigned has signed this proxy and hereby
acknowledges receipt of a copy of the notice of said meeting and proxy
statement in reference thereto both dated January 13, 1997.
IMPORTANT - This proxy is contined and is to be signed on the reverse
side.
SEE REVERSE SIDE
<PAGE>
DIRECTIONS TO
SOMERSET HILLS HOTEL
200 LIBERTY CORNER ROAD
WARREN, NJ 07059
(908) 647-6700
The Somerset Hills Hotel is located directly north of
Interstate 78 at Exit 33. Newark International Airport is
less than 35 minutes away, and New York City is within an
hour's commute. The Bernardsville and Lyons railroad
stations are conveniently located approximately seven minutes
from the Hotel.
[X] Please mark votes as in this example
Unless you specify, the Proxy will be voted FOR Items 1 through 5.
- ----------------------------------------------------------------------------
Directors recommend a vote FOR Items 1 through 5.
- ----------------------------------------------------------------------------
1. Approval of the amendment to the Company's Certificate of Incorporation
to eliminate the separation of the Company's Board of Directors into
three separate classes and to replace it with a Board of Directors that
is elected on an annual basis.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Election of Directors for a term of three years. Nominees: Sal Giordano,
Jr., S. A. Muscarnera and C. A. Keen.
FOR ALL WITHHELD
NOMINEES FROM ALL
NOMINEES
[ ] [ ]
[ ] ___________________
For the nominees
except as noted
above.
3. Appproval of the amendment to the Company's
Certificate of Incorporation to repeal Article EIGHTH.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Appproval of the amendment to the Company's Certificate of
Incorporation to repeal Article NINTH.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Ratification of the appointment of BDO Seidman, LLP as the Company's
independent auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
NOTE: The Proxy, properly filled in, dated and signed, should be returned
immediately in the enclosed post-paid envelope to Proxy Department, Bank of
Boston, P. O. Box 1628, Boston, Massachusetts 02105. If a signer is a
corporation, sign in full the corporate name by a duly authorized officer.
Attorneys, executors, administrators, trustees or guardians should sign full
name and mark as such.
Signature: ________ Date ______, 1997 Signature: ________ Date ________, 1997
<PAGE>
