<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MASCOTECH, 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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
MASCOTECH, INC.
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: May 18, 2000
Time: 10:00 a.m.
Place: MascoTech, Inc.
21001 Van Born Road
Taylor, Michigan 48180
The purposes of the Annual Meeting are:
1. To elect two Class III Directors;
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors for the Company for the year 2000; and
3. To transact such other business, including a stockholder proposal, as
may properly come before the meeting.
Stockholders of record at the close of business on March 31, 2000 are
entitled to vote at the Meeting or any adjournment thereof.
Your attention is called to the accompanying Proxy Statement and Proxy.
Whether or not you plan to attend the Meeting, you can be sure your shares are
represented at the Meeting by promptly voting and submitting your proxy by
telephone, by Internet, or by completing, signing, dating and returning your
proxy card in the enclosed postage prepaid envelope. Prior to being voted, the
Proxy may be withdrawn in the manner specified in the Proxy Statement.
By Order of the Board of Directors
/s/ EUGENE A. GARGARO, JR.
EUGENE A. GARGARO, JR.
Secretary
April 20, 2000
<PAGE> 3
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS OF
MASCOTECH, INC.
May 18, 2000
GENERAL INFORMATION
The solicitation of the enclosed Proxy is made by the Board of Directors of
MascoTech, Inc. (the "Company") for use at the Annual Meeting of Stockholders of
the Company to be held at its offices at 21001 Van Born Road, Taylor, Michigan
48180, on Thursday, May 18, 2000 at 10:00 A.M., and at any adjournment. This
Proxy Statement and the enclosed Proxy are being mailed or given to stockholders
on or about April 20, 2000.
The expense of this solicitation will be borne by the Company. Solicitation
will be by mail, and executive officers and other employees of the Company may
solicit Proxies, without extra compensation, personally and by telephone and
other means of communication. In addition, the Company has retained Morrow &
Company, Inc. to assist in the solicitation of Proxies for a fee of $5,000, plus
expenses. The Company will also reimburse brokers and other persons holding
Company Common Stock in their names or in the names of their nominees for their
reasonable expenses in forwarding Proxies and Proxy materials to beneficial
owners.
Stockholders of record at the close of business on March 31, 2000 will be
entitled to vote at the Meeting. On that date, there were 44,688,377 shares of
Company Common Stock, $1 par value, outstanding and entitled to vote. Each share
of outstanding Company Common Stock entitles the holder to one vote. The Meeting
will be held if a quorum, consisting of a majority of the outstanding shares of
Common Stock, is represented in person or by proxy. Broker non-votes and
abstentions will be counted toward the establishment of a quorum. A broker
"non-vote" occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee has not been instructed by the
beneficial owner how to vote on the proposal and does not have discretionary
voting power to vote on the proposal.
The Company has been advised that Masco Corporation and Directors and
officers of the Company hold in the aggregate approximately 33 percent of the
voting power of the Company and intend to vote their shares in favor of the
nominees, for the ratification of the selection of PricewaterhouseCoopers LLP,
against the stockholder proposal and in accordance with the recommendations of
the Company's Board of Directors on any other matters.
Stockholders can ensure that their shares are voted at the Meeting by
submitting proxy instructions by telephone, by Internet, or by completing,
signing, dating and returning the enclosed proxy card in the envelope provided.
Submitting instructions by any of these methods will not affect the right to
attend the Meeting and vote. The telephone and Internet voting procedures are
designed to authenticate
<PAGE> 4
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. The Company has been advised by counsel that the procedures that have
been put in place comply with applicable law. Specific instructions for
stockholders of record who wish to use the telephone or Internet voting
procedures are included with the enclosed proxy card. A stockholder who gives a
proxy may revoke it at any time before it is exercised by voting in person at
the Meeting, by delivering a subsequent proxy, or by notifying the Company in
writing (Attention: Eugene A. Gargaro, Jr., Secretary at its executive offices
at 21001 Van Born Road, Taylor, Michigan 48180) of such revocation.
2
<PAGE> 5
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. The term of office of
the Class III Directors expires at this Meeting and the Board of Directors
proposes the re-election of William K. Howenstein and John A. Morgan for
election to the Board as Class III Directors.
The Class I, Class II and Class III Directors will serve for terms expiring
at the Annual Meetings of Stockholders in 2001, 2002 and 2003, respectively, or
until their respective successors are elected and qualified. The Board of
Directors expects that the persons named as proxies in the Proxy will vote the
shares represented by each Proxy for the election as Directors of the above
nominees unless a contrary direction is indicated. If prior to the Meeting
either nominee is unable or unwilling to serve as a Director, which the Board of
Directors does not expect, the persons named as proxies will vote for such
alternate nominee, if any, as may be recommended by the Board of Directors.
Directors are elected by a plurality of the votes cast. Abstentions (indicated
on the proxy card as "withhold authority") will not be treated as votes cast,
and therefore, will not affect the election.
Information concerning the nominees and continuing Directors is set forth
below.
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR DIRECTORSHIPS AND OTHER INFORMATION
----------------------------------- -----------------------------------
<S> <C>
CLASS I (TERM TO EXPIRE AT THE ANNUAL MEETING IN 2001)
Richard A. Manoogian................. Mr. Manoogian, 63, has served as Chairman and
Chairman of the Board of the Director of the Company since its formation in 1984
Company and Chairman of the Board and served as Chief Executive Officer until January
and Chief Executive Officer of 1998. He joined Masco Corporation in 1958, was
Masco Corporation, a manufacturer elected Vice President and a Director in 1964,
of home improvement and building President in 1968 and Chairman and Chief Executive
products. Officer in 1985. He served as Chairman of the Board
Director since 1984. of TriMas Corporation from 1989 until it was
acquired by the Company in January 1998. He is also
a director of Bank One Corporation, MSX
International, Inc., an affiliate of the Company,
Detroit Renaissance and The American Business
Conference, Chairman of the Detroit Institute of
Arts Board of Directors and a trustee of the
Archives of American Art (Smithsonian Institute),
Center for Creative Studies, The Fine Arts
Committee of the State Department, Trustees Council
of the National Gallery of Art, Armenian General
Benevolent Union, Detroit Investment Fund and the
Henry Ford Museum and Greenfield Village.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR DIRECTORSHIPS AND OTHER INFORMATION
----------------------------------- -----------------------------------
<S> <C>
Helmut F. Stern...................... Mr. Stern, 80, has served as President of Arcanum
President of Arcanum Corporation, a Corporation since 1970. He was President of
private research and development Industrial Tectonics, Inc., manufacturer of
company. precision balls and ball and roller bearings, from
Director since 1998. 1946 to 1983, and of its parent company, ITI
Holding Corp. from 1949 to 1983. Mr. Stern served
as a director of TriMas Corporation from 1989 until
it was acquired by the Company in January 1998.
CLASS II (TERM TO EXPIRE AT THE ANNUAL MEETING IN 2002)
Frank M. Hennessey................... Mr. Hennessey, 61, became Vice Chairman and Chief
Vice Chairman and Chief Executive Executive Officer of the Company in January 1998.
Officer of the Company. Prior to joining the Company, he served as Masco
Director since 1998. Corporation's Executive Vice President from
September 1995 and as its Vice President of
Strategic Planning from 1990 to 1995. He also
served as Emco Limited's President and Chief
Executive Officer from 1990 until 1995, as its
Chief Executive Officer from 1995 until 1997 and
has been its Chairman since 1995. In 1981 he became
President of the Handleman Company and assumed the
additional responsibilities of Chief Executive
Officer in 1988. Previously, he was the Group
Managing Partner of Coopers & Lybrand's Detroit
Group from 1977 to 1981. He is a director of MCN
Energy Group Inc. and Emco Limited. He is also a
director of New Detroit, Inc., a member of the
Detroit Regional Chamber Executive Committee,
Chairman of Detroit Regional Economic Partnership,
a director at large of the National Council of
Northeastern University, director and treasurer of
the United Way Community Services, trustee of the
Citizen's Research Council of Michigan, trustee of
the Hudson-Webber Foundation and director and past
Chairman of the Japan America Society of Greater
Detroit and Windsor.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR DIRECTORSHIPS AND OTHER INFORMATION
----------------------------------- -----------------------------------
<S> <C>
Peter A. Dow......................... Mr. Dow, 66, initially joined Campbell-Ewald
Private investor; Retired Vice Company in 1958 and returned in 1979 to serve as
Chairman, Chief Operating Officer Executive Vice President and Director of General
and Chairman of the Executive Accounts. In 1982, he became President, Chief
Committee of Campbell-Ewald, an Operating Officer and Chairman of the Executive
advertising and marketing Committee, and then served as Vice Chairman from
communications company. 1993 until his retirement in 1995. He was named
Director since 1992. Director of Advertising for the Chrysler-Plymouth
Division of Chrysler Corporation in 1968.
Subsequently, he became responsible for advertising
and merchandising for Chrysler Corporation and all
of its divisions. In 1978 he was named Director of
Marketing for Chrysler Corporation. Mr. Dow is
currently a director of The Stroh Brewery Company,
The Stroh Companies, Inc. and Comtrad Industries,
Inc. He is also Trustee Emeritus of The
Lawrenceville School, a trustee of the Alice Kales
Hartwick Foundation and a member of the Board of
Directors of the Detroit Institute of Arts.
Roger T. Fridholm.................... Mr. Fridholm, 59, has been President -- Business,
President -- Business, Technology Technology and Staffing Services Group of MSX
and Staffing Services Group of MSX International, Inc., an affiliate of the Company,
International, Inc., an engineering since May 1998. He has been President of St. Clair
and business services company. Group, Inc. since 1991. He also has served as
Director since 1996. Chairman of Ad Hoc Legal Resources LLC since 1995,
as President of IPG Services Corporation since 1996
and President of Ad Hoc, Inc. since 1997, all of
which are staffing service companies. He is the
past President and Chief Executive Officer of
Counsel Enterprises, Inc. and past Senior Vice
President of Corporate Development of Kelly
Services, Inc. He served as President and Chief
Operating Officer of The Stroh Brewery Company from
1979 to 1991. He is currently a director of The
Stroh Brewery Company, The Stroh Companies, Inc.,
MCN Energy Group Inc. and Comerica Bank.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION AGE, BUSINESS EXPERIENCE,
AND PERIOD OF SERVICE AS A DIRECTOR DIRECTORSHIPS AND OTHER INFORMATION
----------------------------------- -----------------------------------
<S> <C>
CLASS III (NOMINEES FOR TERM TO EXPIRE AT THE ANNUAL MEETING IN 2003)
William K. Howenstein................ Mr. Howenstein, 66, held various positions at
Retired President of TMX Division Copper and Brass Sales, Inc., including Chairman
of Thyssen, Inc., N.A., a materials and Chief Executive Officer, from 1965 until its
management and logistic service acquisition in 1997 by Thyssen, Inc., N.A. He
company. served as President of TMX Division of Thyssen,
Director since 1997. Inc., N.A., until his retirement in 1998, and
remains a consultant. He is a director of Thyssen,
Inc., N.A., The Stroh Brewery Company and The Stroh
Companies, Inc., and the United Way Community
Services for Southeastern Michigan.
John A. Morgan....................... Mr. Morgan, 69, has been Managing Director of
Managing Director, Morgan Lewis Morgan Lewis Githens & Ahn, Inc. since founding
Githens & Ahn, Inc., investment that firm in 1982. From 1977 to 1982, he was Vice
bankers. Chairman of Smith Barney, Harris Upham & Co., Inc.,
Director since 1984. in charge of the firm's merger and acquisition
activities, a member of the executive committee and
a director of Smith Barney International Inc. Prior
to becoming Vice Chairman of Smith Barney, Mr.
Morgan had been Senior Vice President in charge of
the Corporate Finance Department. He was a director
of TriMas Corporation from 1989 until it was
acquired by the Company in January 1998. He is
currently a director of Furnishings International
Inc. and Masco Corporation. He also serves as a
trustee of the Provident Loan Society of New York.
</TABLE>
Further information concerning Masco Corporation is set forth in "Certain
Relationships and Related Transactions."
The Board of Directors held five meetings during 1999. The Audit Committee
of the Board of Directors, consisting of Messrs. Dow, Howenstein and Stern, held
six meetings during 1999. It reviews and acts on or reports to the Board with
respect to various auditing and accounting matters, including the selection and
fees of the Company's independent auditors, the scope of audit procedures, the
Company's internal audit program and results, the nature of services to be
performed by the independent auditors and the Company's accounting practices.
The Compensation Committee of the Board of Directors held four meetings during
1999. The Committee consists of Messrs. Dow, Howenstein, Morgan and Stern. This
Committee establishes and monitors executive compensation and administers and
determines awards and options granted under the Company's restricted stock
incentive and stock option plans. The Nominating Committee of the Board of
Directors, consisting of Messrs. Dow, Fridholm, Howenstein and Morgan, was
established to identify and consider candidates to serve as Directors of the
Company. During 1999, the Committee members conferred on various occasions
regarding possible candidates. The Nominating Committee will consider candidates
for nominees for election as Directors of the
6
<PAGE> 9
Company submitted by stockholders. Any stockholder who wishes to have the
Committee consider a candidate should submit the name of the candidate, along
with any biographical or other relevant information the stockholder wishes the
Committee to consider, to the Secretary of the Company at the address appearing
on the first page of this Proxy Statement.
COMPENSATION OF DIRECTORS
Under the 1997 Non-Employee Directors Stock Plan (the "Directors Stock
Plan"), one-half of the cash compensation formerly paid to non-employee
Directors was replaced with an annual vesting of shares of restricted stock.
Pursuant to the Directors Stock Plan, each non-employee Director received an
award of Company Common Stock to vest over a five-year period in 20 percent
annual installments. The value of the stock awards was based on the market price
of Company Common Stock on the date of grant and the value equaled five years of
the replaced cash compensation. All non-employee Directors (except Messrs.
Howenstein and Stern) each received awards of 5,790 shares in 1997. Mr.
Howenstein was awarded 5,100 shares following his election at the 1997 Annual
Meeting, and Mr. Stern was awarded 4,220 shares following his election at the
1998 Annual Meeting, reflecting proration for their partial years of service.
For 1999, non-employee Directors each received a cash fee of $22,000 and $1,000
for each Board of Directors meeting attended in person (and committee meeting
attended in person, if not held on a date on which the entire Board met). The
Directors Stock Plan also provides for the grant to each non-employee Director
on the date of each annual meeting of a non-qualified option to purchase 5,000
shares of Company Common Stock at the then current market price. These options
become exercisable in 20 percent installments on the first five anniversaries of
the grant date. Each option has a ten-year term from the date of grant, except
that options may be exercised for only a limited period of time following
termination of service as a non-employee Director.
7
<PAGE> 10
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
Set forth below is information concerning beneficial ownership of Company
Common Stock as of March 15, 2000 by (i) all persons known by the Company to be
the beneficial owners of five percent or more of Company Common Stock, (ii) each
of the nominees and Directors, (iii) each of the named executive officers, and
(iv) all Directors and executive officers of the Company as a group. Except as
indicated below, each person exercises sole voting and investment power with
respect to the shares listed.
<TABLE>
<CAPTION>
SHARES OF COMPANY PERCENTAGE OF COMPANY
COMMON STOCK COMMON STOCK
NAME BENEFICIALLY OWNED BENEFICIALLY OWNED
---- ------------------ ---------------------
<S> <C> <C>
William T. Anderson(1).............................. 78,640 *
Peter A. Dow(2)..................................... 49,982 *
Roger T. Fridholm(2)(3)............................. 17,840 *
Lee M. Gardner(1)................................... 466,901 1.0%
Frank M. Hennessey(1)(4)............................ 581,777 1.3%
William K. Howenstein(2)............................ 13,100 *
David B. Liner(1)(5)................................ 33,384 *
Richard A. Manoogian(1)(6).......................... 6,683,529 14.7%
John A. Morgan(2)................................... 32,790 *
Helmut F. Stern(2).................................. 11,220 *
Timothy Wadhams(1)(3)............................... 367,408 *
All 13 Directors and executive officers of the
Company as a group (excluding subsidiary,
divisional and group
executives)(1)(2)(3)(4)(5)(6)(7).................. 8,517,098 18.6%
Cramer Rosenthal McGlynn, LLC
707 Westchester Avenue
White Plains, New York 10604(8)................... 2,498,377 5.6%
Masco Corporation
21001 Van Born Road
Taylor, Michigan 48180............................ 7,824,690 17.5%
</TABLE>
- -------------------------
* Less than one percent.
(1) Includes unvested restricted stock award shares held under the Company's
restricted stock incentive plans (44,250 shares for Mr. Anderson, 115,480
shares for Mr. Gardner, 241,390 shares for Mr. Hennessey, 23,230 shares for
Mr. Liner, 201,360 shares for Mr. Manoogian, 94,890 shares for Mr. Wadhams
and 772,434 shares for all Directors and executive officers as a group) and
shares which may be acquired before May 15, 2000 upon exercise of stock
options (12,000 shares for Mr. Anderson, 288,061 shares for Mr. Gardner,
70,000 shares for Mr. Hennessey, 251,000 shares for Mr. Manoogian, 143,769
shares for Mr. Wadhams and 779,830 shares for all Directors and executive
officers as a group). Holders have sole voting but no investment power over
unvested restricted shares and exercise neither voting nor investment power
over unexercised option shares.
8
<PAGE> 11
(2) Includes unvested restricted stock award shares held under the Company's
1997 Non-Employee Directors Stock Plan (2,316 shares for each of Messrs.
Dow, Fridholm and Morgan; 2,150 shares for Mr. Howenstein; 2,664 shares for
Mr. Stern and 11,762 shares for all Directors and executive officers of the
Company as a group) and shares which may be acquired before May 15, 2000
upon exercise of stock options under such Plan (3,000 for Messrs. Dow,
Fridholm, Howenstein and Morgan and 1,000 for Mr. Stern; and 13,000 for all
Directors and executive officers of the Company as a group). Holders have
sole voting but no investment power over unvested restricted shares and have
neither voting nor investment power over unexercised options.
(3) Includes 250 shares owned by a relative of Mr. Fridholm and 1,500 shares
owned by a relative of Mr. Wadhams (1,750 for all Directors and executive
officers of the Company as a group), as to which beneficial ownership is
disclaimed.
(4) Includes 9,677 which could be acquired upon conversion of convertible
securities owned by Mr. Hennessey.
(5) Mr. Liner shares voting and investment power with respect to 10,154 shares.
(6) Includes 1,676,760 shares owned by charitable foundations for which Mr.
Manoogian serves as director, 334,193 shares which could be acquired upon
conversion of convertible securities owned by such charitable foundations
and 51,000 shares held by trusts of which Mr. Manoogian serves as trustee.
The directors of the foundations and trustees of the trusts share voting and
investment power with respect to the securities owned by the foundations and
the trusts, respectively, but Mr. Manoogian disclaims beneficial ownership
of such securities.
(7) Includes 2,000 shares held by a charitable foundation for which one
executive officer serves as a director, 27,000 shares held by trusts for
which such executive officer serves as a trustee and 4,354 shares which
could be acquired upon conversion of convertible debt securities owned by
such trusts. Such executive officer, in his capacity as director of the
foundation and as trustee of the trusts, shares voting and investment power
with respect to the securities owned by such entities, but such executive
officer disclaims beneficial ownership of such securities.
(8) Based on a Schedule 13G dated January 31, 2000 and filed with the Securities
and Exchange Commission, at December 31, 1999 Cramer Rosenthal McGlynn, LLC
beneficially owned 2,498,377 shares of Company Common Stock and shares
voting and investment power over these shares.
Masco Corporation and Mr. Manoogian may each be deemed a controlling person
of the Company by reason of their respective significant ownership of Company
Common Stock and, in the case of Mr. Manoogian, his positions as a Director and
Chairman of the Board of the Company as is more fully described under "Certain
Relationships and Related Transactions."
9
<PAGE> 12
EXECUTIVE COMPENSATION COMMITTEE REPORT
During 1999, the Compensation Committee continued to closely link executive
compensation to the achievement of significant increases in the price of Company
Common Stock. The Committee believes this will promote management's commitment
to the Company's established financial goals and thereby create superior
long-term value for stockholders. The Committee believes that these programs
maintain the Company's ability to attract, retain and motivate the highest
quality executive management team, while ensuring that executives remain firmly
focused on enhancing stockholder value. The key components of these programs are
described below.
COMPENSATION PROGRAMS TO ENHANCE STOCKHOLDER VALUE
The Company's Chairman, Richard A. Manoogian, and Vice Chairman and Chief
Executive Officer, Frank M. Hennessey, continued to receive a reduced annual
salary and bonus of $1 for 1999. Messrs. Manoogian and Hennessey first requested
in 1998 that their salary and bonus be reduced to $1 to demonstrate their
commitment to enhance stockholder value and their disappointment with the
Company's recent stock price performance. The Compensation Committee, in
accordance with its strategy of linking compensation to the long-term interests
of stockholders, replaced their 1999 salary and bonus with stock options for
shares of Company Common Stock (60,000 shares for Mr. Manoogian and 100,000
shares for Mr. Hennessey), exercisable only if the price of Company Common Stock
exceeds a record $35 per share within two years from the February 1999 date of
grant, a 150 percent increase from the $14 price on the date of grant. In
addition, Messrs. Manoogian and Hennessey received restricted stock awards for
72,000 and 120,000 shares of Company Common Stock, respectively, which generally
vest in ten percent annual installments over a period of ten years from the date
of grant. The Committee believes that replacing all of the cash compensation for
Messrs. Manoogian and Hennessey with compensation that is tied to the value of
Company Common Stock over an extended period of time firmly links the interests
of the Company's senior executive management with those of stockholders.
In order to give key employees a direct interest in the market value of
Company Common Stock, in early 1998 the Committee granted specially designed
stock options to approximately 100 senior management and operating executives,
including Messrs. Manoogian and Hennessey. Holders of these options, which have
an exercise price of $19, the grant date market price, have pledged not to
exercise the options unless the share price reaches levels of $30 and $35 per
share within a three year period. The options will vest in installments only if
these prices are met for a specified period of time before certain dates. Even
if the price targets are met, the options will then only vest over time,
retroactive to February 2000 for 20 percent of the options and thereafter at an
annual rate of 10 percent of the options through February 2005 and 30 percent in
2006. The attainment of a higher price target will also trigger the vesting of
stock options which did not occur because a lower price target was not met. In
order for the entire option to become exercisable in the installments noted
above, the price of Company Common Stock must appreciate from the date of grant
by 84 percent to $35 per share by February 2001.
In order to further align the objectives of the Company's key employees
with the long-term interests of its stockholders, special "career" restricted
stock awards were also granted in 1998 to approximately 450 corporate and
operating employees. The vesting of these awards is linked to the achievement of
10
<PAGE> 13
either the $30 or $35 target share prices or target earnings per share levels.
Even if the targets are met, vesting generally occurs in installments over a ten
year period. If such prices or growth is not achieved, the vesting will not
commence until retirement. Messrs. Manoogian and Hennessey also participate in
this program.
Although Company Common Stock has historically been a major part of
compensation for key employees because of its inherent alignment with the
interests of stockholders, the Compensation Committee believes that by replacing
Messrs. Manoogian's and Hennessey's cash compensation with stock compensation,
and by directly linking a significant amount of other key employees'
compensation to the attainment of significant increases in the share price of
Company Common Stock, the compensation programs discussed above more directly
align officers' and other key employees' interests with those of stockholders.
Because compensation strategy includes a variety of components, the terms and
conditions of future options and awards may vary from those granted in the past.
The customary terms and conditions of restricted stock awards and stock options
granted prior to 1998 are described below.
In order to formalize the Board's policy of encouraging stock ownership by
officers and require executives to remain at risk by maintaining a substantial
interest in Company Common Stock, the Board has established stock ownership
guidelines for officers. The guidelines require the Chairman and Chief Executive
Officer to own stock with a value of at least five times normalized base pay;
the President to own stock with a value of at least four times base pay;
Executive Vice Presidents to own stock with a value of at least three times base
pay; and all other officers to own stock with a value of at least two times base
pay. Officers are required to achieve the share ownership (including restricted
stock awards) necessary to meet the guidelines within three years of becoming
subject to them.
GENERAL COMPENSATION INFORMATION
Executive officers currently receive a combination of base salary, annual
cash bonus and long-term (up to ten year) incentives utilizing Company Common
Stock. In making its decisions, the Compensation Committee uses a variety of
resources as it considers information concerning current compensation practices
and trends within the Company's industries including published compensation
surveys (for companies that are included in the Standard & Poor's Trucks & Parts
Index). In addition, the Compensation Committee takes into account the
compensation policies and practices of corporations in other industries which
are similar to the Company in terms of revenues and market value, since the
Committee believes that the Company competes with such companies for executive
talent. Although the Committee reviews such information for general guidance, it
does not specifically target compensation of the executive officers to
compensation levels at other companies.
Annual cash compensation consists of salary and bonus. Base salaries are
usually determined annually. A range of increases is established by management
for corporate office employees generally that reflects inflation, promotions and
merit. The Compensation Committee then establishes a similar range for the
executive officers. The salary ranges reflect changes observed in general
compensation levels of salaried employees, and in particular, within the
geographic area of the Company's corporate office and within the Company's
industries. The Company's performance for the particular year and the Company's
prospects are more significant factors in determining the range for year-end
bonuses than in
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<PAGE> 14
determining the salary range. In connection with the payment of bonuses,
corporate performance goals are considered by the Committee in light of general
economic conditions, and include items such as comparisons of year-to-year
operating results, including value creation in excess of the Company's cost of
capital, market share performance and the achievement of budget objectives and
forecasts. However, the Committee does not identify specific goals that must be
satisfied in order for bonuses to be paid. There can be variations from the
established ranges for a variety of subjective factors such as an individual's
contribution to the performance of the Company and its affiliates in addition to
the competitive considerations noted above. Historically, the potential bonus
opportunity for executive officers is up to fifty percent of base salary.
Restricted stock awards and stock options granted under the 1991 Long Term
Stock Incentive Plan (the "1991 Plan") are generally used as part of the
Company's long-term incentive arrangements, which focus the recipient on
long-term enhancement in stockholder value and help retain key employees.
Factors reviewed by the Compensation Committee in determining whether to grant
options and awards are generally the same factors considered in determining
salaries and bonuses described above. In order to provide a strong incentive and
reinforce the individual's commitment to the Company, there can be awards that
are significant in size and potential value. The history of restricted stock
awards and stock options previously granted to an executive is also a factor in
determining new awards and grants. In general, the potential opportunity for
annual restricted stock awards under the Company's restricted stock award
program is based in large part on the financial performance of the Company in
the preceding year and ranges from thirty percent of base salary for senior
executives to ten percent of base salary for salaried employees. In addition,
supplemental restricted stock awards are granted periodically.
The Company has historically purchased shares of Company Common Stock in
the open market sufficient to provide for all restricted stock awards to avoid
any earnings per share dilution resulting from these awards. This expense is
amortized over the vesting period of the awards. Because the Company's tax
deduction is based on the fair market value at the time the restrictions lapse,
the after-tax cost of this program can be favorable to the Company based on the
future appreciation of Company Common Stock. The Company believes that the
extended vesting of stock awards with the opportunity for substantial
appreciation promotes retention, and also spreads compensation expense over a
longer term, which generally has resulted in a significant reduction in the
Company's after-tax cost of this stock related compensation.
Restricted stock awards granted under the 1991 Plan generally vest in ten
percent annual installments over a period of ten years from the date of grant,
except for those awards described above with vesting tied to the achievement of
share price targets. In general, vesting is contingent on continuing employment
or a post-employment consulting relationship with the Company. The 1991 Plan
provides, however, that all shares vest immediately upon death, permanent and
total disability or the occurrence of certain events constituting a change in
control of the Company. Executive officers (including Messrs. Manoogian and
Hennessey), group executives and key corporate and operating employees received
restricted stock awards in 1999 as part of the Company's annual long-term
incentive compensation program based on the operating results of the Company.
Original stock option grants made under the 1991 Plan generally vest in
installments beginning in the third year and extending through the eighth year
after grant and, unless otherwise provided, may be
12
<PAGE> 15
exercised until the earlier of ten years from the date of grant or, as to the
number of shares then exercisable, the termination of the employment or
consulting relationship of the participant. Stock option grants generally do not
have a financial reporting expense associated with them since they are granted
at fair market value, and in fact, when exercised, raise additional equity for
the Company. The difference between the exercise price and fair market value of
Company Common Stock on the date of exercise is, however, generally deductible
by the Company for federal income tax purposes and thereby provides tax savings
to the Company. The Compensation Committee permits Company Common Stock to be
used in payment of federal, state and local withholding tax obligations
attributable to the exercise of stock options. The 1991 Plan also permits the
Compensation Committee to accept the surrender of an exercisable stock option
and to authorize payment by the Company of an amount equal to the difference
between the option exercise price of the stock and its then fair market value.
Recipients of stock options are eligible to receive restoration options. A
restoration option is granted when a participant exercises a stock option and
pays the exercise price by delivering shares of Company Common Stock. The
restoration option is granted equal to the number of shares delivered by the
participant and does not increase the number of shares covered by the original
stock option. The exercise price is 100 percent of the fair market value of
Company Common Stock on the date the restoration option is granted so that the
participant benefits only from subsequent increases in the Company's stock
price. The Compensation Committee believes that restoration options help to
align more closely the interests of executives with the long-term interests of
stockholders and allow executives to maintain the level of their equity-based
interest in the Company through a combination of direct stock ownership and
stock options. The 1991 Plan also provides that, upon the occurrence of certain
events constituting a change in control of the Company, all stock options
previously granted immediately become fully exercisable, and all restricted
stock awards immediately vest. Generally, if a participant incurs an excise tax
under Section 4999 of the Internal Revenue Code of 1986 (the "Code") in
connection with a payment or distribution following a change in control, the
1991 Plan provides that the participant will receive an additional payment to
reimburse them for such excise tax.
In addition to the stock-based plans noted above, most Company salaried
employees participate in defined contribution profit sharing retirement plans,
which further link compensation to Company performance. Discretionary
contributions are made into these plans based on the Company's performance.
Historically, aggregate annual contributions and allocations for the profit
sharing plans in which executive officers participate have ranged from
approximately four percent to seven percent of participants' base salaries. See
footnote (3) to the "Summary Compensation Table."
Beginning in 1994, Section 162(m) of the Code limits deductibility of
compensation in excess of $1 million paid to the Company's chief executive
officer and to each of the other four highest paid executive officers unless
this compensation qualifies as "performance-based". In 1997 the Board approved,
and the stockholders adopted, amendments to the 1991 Plan so that stock options
granted under the 1991 Plan will continue to result in compensation fully
deductible by the Company under Section 162(m). In addition, the Compensation
Committee approved, and stockholders adopted, the 1997 Annual Incentive
Compensation Plan to continue the Committee's practice of structuring
determinations for cash bonuses to make them performance-based and therefore
fully tax deductible. In order for stock options and cash bonuses to qualify as
deductible under Section 162(m), Mr. Morgan
13
<PAGE> 16
does not participate in any Committee decisions relating to the granting of
options and cash bonuses to the named executive officers. Historically, the
compensation of the Company's named executive officers has not exceeded the
$1,000,000 limit. The Compensation Committee continues to believe it is in the
Company's interest to retain flexibility in its compensation program, and
although compensation may in some circumstances exceed the limitation of Section
162(m), the Compensation Committee believes that any tax deduction lost on
account of any such excess compensation will be insignificant for the
foreseeable future.
Compensation decisions for 1999 for all executive officers, including the
Chairman of the Board and Chief Executive Officer, are generally based on the
criteria described above.
Peter A. Dow, Chairman
William K. Howenstein
John A. Morgan
Helmut F. Stern
14
<PAGE> 17
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table summarizes the annual and long-term compensation of the
Company's chairman of the board, chief executive officer and the other four
highest paid executive officers for 1999, 1998 and 1997. All of the individuals
in the table are referred to collectively as the "named executive officers."
Mr. Manoogian and Mr. Hennessey each received salary and bonus for 1999 of
$1, a rate which has been in effect at their request since January 1998. For
further information, see "Executive Compensation Committee Report."
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL -----------------------
COMPENSATION(1) RESTRICTED SECURITIES
------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(2) OPTIONS COMPENSATION(3)
- --------------------------- ---- ------ ----- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Manoogian........ 1999 $ 1 $ 0 $1,150,000 60,000 $ 94,000
Chairman of the Board 1998 1 0 1,710,000 280,000 80,000
1997 400,000 173,000 131,000 0 38,000
Frank M. Hennessey.......... 1999 $ 1 $ 0 $1,915,000 100,000 $ 0
Vice Chairman and 1998 1 0 2,367,000 400,000 0
Chief Executive Officer(4)
Lee M. Gardner.............. 1999 $650,000 $231,000 $ 155,000 0 $116,000
President and Chief 1998 662,000 260,000 344,000 49,000 106,000
Operating Officer 1997 601,000 271,000 190,000 34,550 70,000
Timothy Wadhams............. 1999 $442,000 $157,000 $ 106,000 0 $ 73,000
Executive Vice President 1998 448,000 177,000 951,000 30,000 67,000
--
Finance and Administration 1997 336,000 203,000 106,000 20,611 40,000
William T. Anderson......... 1999 $256,000 $ 93,000 $ 59,000 0 $ 42,000
Vice President -- 1998 246,000 105,000 292,000 20,000 38,000
Controller(4)
David B. Liner.............. 1999 $213,000 $ 80,000 $ 48,000 0 $ 21,000
Vice President and 1998 197,000 84,000 183,000 14,000 20,000
General Counsel(4)
</TABLE>
- -------------------------
(1) Officers may receive certain perquisites and personal benefits, the dollar
amounts of which are below current Securities and Exchange Commission
thresholds for reporting requirements. For purposes of applying these
thresholds, Mr. Manoogian has been treated as if his 1999 salary and bonus
equaled his 1997 salary and bonus of approximately $573,000. Mr. Hennessey
has been treated as if his 1999 salary and bonus were also equal to
$573,000.
(2) This column sets forth the dollar value, as of the date of grant, of
restricted stock awarded under the Company's 1991 Long Term Stock Incentive
Plan (the "1991 Plan"). In general, restricted stock
15
<PAGE> 18
awards shown in the table vest over a period of ten years from the date of
grant with ten percent of each award vesting annually. Vesting is generally
contingent on continuing employment or a consulting relationship with the
Company. The following number of shares were awarded to the named executive
officers in 1999: Mr. Manoogian -- 79,300 shares; Mr. Hennessey -- 132,100
shares; Mr. Gardner -- 10,700 shares; Mr. Wadhams -- 7,300 shares; Mr.
Anderson -- 4,100 shares; and Mr. Liner -- 3,300 shares. A portion of the
1998 awards provide that vesting generally occurs over a three-year period
after the recipients retire from the Company after reaching age 65; however,
annual vesting of part or all of these shares begins earlier if Company
Common Stock attains certain price targets ($30 and $35 per share) or if
earnings per share targets are met, by specified dates. Even if these goals
are reached, vesting still generally occurs in installments over a ten-year
period. As of December 31, 1999, the aggregate number and market value of
unvested restricted shares of Company Common Stock held by each of the named
executive officers were: Mr. Manoogian -- 209,490 shares valued at
$2,658,000; Mr. Hennessey -- 249,600 shares valued at $3,167,000; Mr.
Gardner -- 109,900 shares valued at $1,394,000; Mr. Wadhams -- 94,520 shares
valued at $1,199,000; Mr. Anderson -- 43,880 shares valued at $557,000; and
Mr. Liner -- 20,800 shares valued at $264,000. Recipients of restricted
stock awards have the right to receive dividends on unvested shares.
(3) This column includes (a) Company contributions and allocations under the
Company's defined contribution retirement plans for 1999 for the accounts of
each of the named executive officers other than Mr. Manoogian, who does not
participate in these plans (for 1999: Mr. Hennessey -- none; Mr.
Gardner -- $46,000; Mr. Wadhams -- $31,000; Mr. Anderson -- $18,000; and Mr.
Liner -- $15,000), and (b) cash payments made pursuant to certain tandem
rights associated with the annual vesting of certain restricted stock awards
granted in 1989 (in 1999: Mr. Manoogian -- $94,000; Mr. Hennessey -- none;
Mr. Gardner -- $71,000; Mr. Wadhams -- $42,000; Mr. Anderson -- $24,000; and
Mr. Liner -- $6,000). For further information regarding these rights, see
"Certain Relationships and Related Transactions."
(4) Messrs. Hennessey, Anderson and Liner became executive officers in 1998.
Consequently, the table does not set forth information for 1997, but
information for 1998 includes the entire year.
16
<PAGE> 19
OPTION GRANT TABLE
The following table sets forth information concerning options granted to
the named executive officers in 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF % OF TOTAL EXERCISE POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS PRICE ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED (SUBJECT TO PRICE APPRECIATION FOR OPTION TERM
OPTIONS TO EMPLOYEES CERTAIN EXPIRATION -----------------------------------
NAME GRANTED IN 1999 RESTRICTIONS) DATE 5% 10%
---- ---------- ------------ ------------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Richard A. Manoogian........ 60,000 32.4% $14 3/01/06 $0 or $344,000 $ 0 or $ 803,000
Frank M. Hennessey.......... 100,000 54.1% $14 3/01/06 $0 or $574,000 $0 or $1,339,000
Lee M. Gardner.............. 0
Timothy Wadhams............. 0
William T. Anderson......... 0
David B. Liner.............. 0
</TABLE>
- -------------------------
Securities and Exchange Commission regulations require information as to the
potential realizable value of each of these options, assuming that the market
price of Company Common Stock appreciates in value from the date of grant to the
end of the option term at annual rates of five percent and ten percent. These
options, which are discussed further under "Executive Compensation Committee
Report," are not exercisable unless Company Common Stock attains certain price
targets by certain dates. As shown in the table, these price targets would not
be attained, and the potential realizable value would be $0, if Company Common
Stock only appreciates in value from the date of grant at an annual rate of five
percent, and further, the price targets would not be met, and the potential
realizable value would be $0, even if Company Common Stock appreciates in value
from the date of grant at an annual rate of ten percent. Assuming the price
targets are attained by the target dates, the potential realizable value at the
end of the option term at assumed annual rates of stock price appreciation of
five percent and ten percent are as set forth above. These amounts are based on
assumed rates of appreciation only. Actual gains, if any, on stock option
exercises and Company Common Stock holdings will depend on overall market
conditions and the future performance of the Company and its Common Stock. There
can be no assurance that the amounts reflected in the table will be realized.
17
<PAGE> 20
OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth information concerning each exercise of
stock options during 1999 by each named executive officer and the value at
December 31, 1999 of unexercised options held by such individuals under the
Company's stock option plans. The value of unexercised options reflects the
increase in market value of Company Common Stock from the date of grant through
December 31, 1999 (the closing price of Company Common Stock on December 31,
1999 was $12.688 per share). The value actually realized upon future option
exercises by the named executive officers will depend on the value of Company
Common Stock at the time of exercise.
AGGREGATED OPTION EXERCISES IN 1999, AND DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
---- ----------- -------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Manoogian....... 80,000 $645,000 678,000 42,000 $1,575,000 $ 0
Frank M. Hennessey......... 0 500,000 0 0 0
Lee M. Gardner............. 0 219,000 288,061 58,000 1,397,000
Timothy Wadhams............ 0 114,000 143,769 0 860,000
William T. Anderson........ 0 48,000 12,000 0 0
David B. Liner............. 0 14,000 0 0 0
</TABLE>
PENSION PLANS
The executive officers other than Mr. Manoogian participate in pension
plans maintained by the Company for certain of its salaried employees. The
following table shows estimated annual retirement benefits payable for life at
age 65 for various levels of compensation and service under these plans.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE(1)
-------------------------------------------------------------
REMUNERATION(2) 5 10 15 20 25 30
- --------------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 5,645 $11,290 $ 16,935 $ 22,580 $ 28,225 $ 33,870
200,000 11,290 22,580 33,870 45,161 56,451 67,741
300,000 16,935 33,870 50,806 67,741 84,676 101,611
400,000 22,580 45,161 67,741 90,321 112,902 135,482
500,000 28,225 56,451 84,676 112,902 141,127 169,352
600,000 33,870 67,741 101,611 135,482 169,352 203,223
700,000 39,516 79,031 118,547 158,062 197,578 237,093
800,000 45,160 90,321 135,482 180,643 225,803 270,964
</TABLE>
- -------------------------
(1) The plans provide for credit for employment with any of the Company or Masco
Corporation and their subsidiaries. Vesting occurs after five full years of
employment. The benefit amounts set forth in the table above have been
converted from the plans' calculated five-year certain and life benefit
18
<PAGE> 21
and are not subject to reduction for social security benefits or for other
offsets, except to the extent that pension or equivalent benefits are
payable under a Masco Corporation plan. The table does not depict Code
limitations on tax-qualified plans because one of the plans is a
non-qualified plan established by the Company to restore for certain
salaried employees (including certain of the named executive officers)
benefits that are otherwise limited by the Code. Approximate years of
credited service for the named executive officers participating in the plan
are: Mr. Hennessey -- 10; Mr. Gardner -- 13; Mr. Wadhams -- 24; Mr. Anderson
-- 27; and Mr. Liner -- 20.
(2) For purposes of determining benefits payable, remuneration in general is
equal to the average of the highest five consecutive January 1 annual base
salary rates paid by the Company prior to retirement. The compensation
covered by the plans includes compensation paid to Mr. Hennessey by Masco
Corporation prior to his employment with the Company, and equivalent
estimates are used where compensation has been curtailed by agreement with
the Company or Masco Corporation.
Under the Company's Supplemental Executive Retirement and Disability Plan,
certain officers and other key executives of the Company, or any company in
which the Company or a subsidiary owns at least 20 percent of the voting stock,
may receive retirement benefits in addition to those provided under the
Company's other retirement plans and supplemental disability benefits. Each
participant is designated by the Chairman of the Board (and approved by the
Compensation Committee) to receive annually upon retirement on or after age 65,
an amount which, when combined with benefits from the Company's other retirement
plans, and for most participants any retirement benefits payable by reason of
employment by prior employers, equals 60 percent of the average of the
participant's highest three years' cash compensation received from the Company
(limited to base salary and regular year-end cash bonus). Participants are
limited to an annual payment under this plan, which when combined with benefits
under the Company's non-qualified plan, may not exceed a maximum, currently
approximately $412,000. A participant may also receive supplemental medical
benefits. A participant who has been employed at least two years and becomes
disabled prior to retirement will receive annually 60 percent of the
participant's total annualized cash compensation in the year in which the
participant becomes disabled, subject to certain limitations on the maximum
payment and reduced by benefits payable pursuant to the Company's long-term
disability insurance and similar plans. Upon a disabled participant's reaching
age 65, such participant receives the annual cash benefits payable upon
retirement, as determined above. A surviving spouse will receive reduced
benefits upon the participant's death. Participants are required to agree that
they will not engage in competitive activities for at least two years after
termination of employment, and if employment terminates by reason of retirement
or disability, during such longer period as benefits are received under this
plan. Messrs. Gardner and Wadhams participate in this plan.
19
<PAGE> 22
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on Company Common Stock with the cumulative total return of the Standard
& Poor's SmallCap 600 Index ("S&P 600 Index") and the Standard & Poor's Trucks &
Parts Index ("S&P Trucks Index") for the period from January 1, 1995 through
December 31, 1999, when the closing price of Company Common Stock was $12.688
per share (on April 12, 2000 the closing price was $12 1/8 per share). The graph
assumes investments of $100 on December 31, 1994 in Company Common Stock, the
S&P 600 Index and the S&P Trucks Index, and the reinvestment of dividends.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
MASCOTECH S&P SMALLCAP 600 INDEX S&P TRUCKS & PARTS INDEX
--------- ---------------------- ------------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 84.73 129.79 103.78
1996 128.99 157.32 131.71
1997 146.47 197.38 211.91
1998 138.58 194.74 171.80
1999 105.10 218.70 224.97
</TABLE>
The table below sets forth the value, as of December 31 of each of the
years indicated, of a $100 investment made on December 31, 1994 in each of
Company Common Stock, the S&P 600 Index and the S&P Trucks Index, and the
reinvestment of dividends.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MascoTech $100.00 $ 84.73 $128.99 $146.47 $138.58 $105.10
- ---------------------------------------------------------------------------------------------------------
S&P SmallCap 600 Index 100.00 129.79 157.32 197.38 194.74 218.70
- ---------------------------------------------------------------------------------------------------------
S&P Trucks & Parts Index 100.00 103.78 131.71 211.91 171.80 224.97
- ---------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 23
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors currently consists of
Messrs. Dow, Howenstein, Morgan and Stern. From time to time Morgan Lewis
Githens & Ahn, Inc., of which Mr. Morgan is Managing Director, performs
investment banking and other related services for the Company and Masco
Corporation. No fees were paid by the Company to such firm in 1999. Mr.
Fridholm, a Director of the Company, serves as an executive officer of MSX
International, Inc. ("MSXI"), an affiliate of the Company. Mr. Gardner, an
executive officer of the Company, is a member of the board of directors of MSXI
and serves on its Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company became a publicly owned company in July 1984 as part of a
restructuring of Masco Corporation, a manufacturer of home improvement and
building products.
In January 1998, the Company expanded its business operations when it
acquired the remaining 63 percent of the outstanding shares of TriMas
Corporation that it did not previously own for approximately $920 million in
cash. Upon completion of this acquisition, Mr. Hennessey resigned as Masco
Corporation's Executive Vice President and became a Director and Vice Chairman
and Chief Executive Officer of the Company. Mr. Hennessey has agreed to serve as
a part-time employee of Masco Corporation (for no more than twenty percent of
his time) in connection with matters with which he was involved as Executive
Vice President of Masco Corporation. Mr. Hennessey receives from Masco
Corporation an annual salary of $100,000 plus a bonus opportunity of up to
$50,000, and he continues to participate in certain Masco Corporation benefit
and incentive arrangements, including a supplemental executive retirement plan.
The Company is a party to certain agreements with Masco Corporation as
described below.
CORPORATE SERVICES AGREEMENT. Under a Corporate Services Agreement, Masco
Corporation provides the Company and its subsidiaries with office space for
executive offices, use of Masco Corporation's data processing equipment and
services, certain research and development services, corporate administrative
staff and other support services in return for the Company's payment of an
annual base service fee of .8 percent of its consolidated annual net sales,
subject to adjustments. This agreement also provides for various license rights
and confidential treatment of information which may arise from Masco
Corporation's performance of research and development services on behalf of the
Company. Approximately $6.4 million was paid by the Company to Masco Corporation
for 1999, in accordance with the terms of the agreement, which renews
automatically for one-year periods, unless terminated by either party upon at
least 90 days' notice before any October 1 renewal date.
CORPORATE OPPORTUNITIES AGREEMENT. The Company and Masco Corporation are
parties to a Corporate Opportunities Agreement which addresses potential
conflicts of interest with respect to future business opportunities. This
agreement materially restricts the ability of either party to enter into
acquisitions, joint ventures or similar transactions involving businesses in
which the other party is engaged without the consent of the other party. It
renews automatically from year to year, unless terminated by either party at
least 90 days before any October 1 renewal date.
21
<PAGE> 24
STOCK REPURCHASE AGREEMENT. Under a Stock Repurchase Agreement, Masco
Corporation has the right to sell to the Company, at a price based on fair
market value, shares of Company Common Stock upon certain events that would
result in Masco Corporation's ownership of Company Common Stock exceeding 49
percent of the Company's then outstanding shares. Such events include
repurchases of Company Common Stock initiated by the Company or any of its
subsidiaries and reacquisitions of Company Common Stock through forfeitures of
shares previously awarded by the Company pursuant to employee stock incentive
plans. In each case the Company has control over the amount of Company Common
Stock it would ultimately acquire, including shares subject to repurchase under
the Stock Repurchase Agreement. Masco Corporation's right expires 30 days from
the date notice of an event is given by the Company. In view of Masco
Corporation's current level of ownership of Company Common Stock, the Company
does not anticipate that this right will ever be invoked.
RIGHT OF FIRST REFUSAL. In connection with the Company's 1996 purchase from
Masco Corporation of Company Common Stock and warrants, Masco Corporation
granted the Company a right of first refusal, which expires September 30, 2000,
to purchase the remaining shares of Company Common Stock held by Masco
Corporation.
ASSUMPTION AND INDEMNIFICATION AGREEMENT. Under an Assumption and
Indemnification Agreement, the Company assumed, and agreed to indemnify Masco
Corporation against, all of the liabilities and obligations of the businesses
transferred to it in Masco Corporation's 1984 restructuring, including claims
and litigation resulting from events or circumstances that occurred or existed
prior to the transfer, but excluding specified liabilities.
In addition, Masco Corporation agreed to indemnify a subsidiary of the
Company against certain liabilities of businesses acquired by such subsidiary
from Masco Corporation in 1990.
SECURITIES PURCHASE AGREEMENT. Under a Securities Purchase Agreement, the
Company and Masco Corporation agreed that Masco Corporation will purchase from
the Company at the Company's option up to $200 million of subordinated
debentures and, in connection therewith, the Company pays an annual commitment
fee to Masco Corporation of $250,000. This commitment extends to March 31, 2002.
As part of the 1996 transaction referred to above, the Company has also agreed
to file registration statements under the federal securities laws to enable
Masco Corporation from time to time to publicly dispose of securities of the
Company held by Masco Corporation.
OTHER MATTERS
MascoTech GmbH, a German subsidiary of the Company, and Masco GmbH, a
German subsidiary of Masco Corporation, from time to time advance excess funds
held in such foreign country to one another to be used for working capital. The
parties negotiated a fluctuating rate of interest for these loans. The largest
amount outstanding payable by MascoTech GmbH to Masco GmbH during 1999 was
approximately $772,000.
Sales of products and services and other transactions occur from time to
time between the Company and Masco Corporation. As a result of such transactions
in 1999, the Company paid approximately $50,000 to Masco Corporation and
received approximately $9.9 million from Masco Corporation. The Company also
participates with Masco Corporation in a number of national
22
<PAGE> 25
purchasing programs which enable them to obtain favorable terms from certain of
their service and product suppliers.
In 1989 the Company made long-term restricted stock awards to a number of
key Company employees, which included tandem rights to phantom TriMas shares
having a value equal to the value of TriMas common stock. At the time of the
grant, the aggregate value of the award of Company Common Stock to each
participant was equal to the aggregate value of the alternative phantom TriMas
shares that were awarded. On each vesting date the participant received the
vesting shares of Company Common Stock and, if the value of the vesting phantom
TriMas shares was greater, the participant also received the excess paid in
cash. For the 1998 vesting and the final vesting in 1999, the Compensation
Committee of the Board of Directors determined the per share value of TriMas to
be $34.50, the price per share paid by the Company in connection with its 1998
acquisition of TriMas.
Ownership of securities and various other relationships and incentive
arrangements may result in conflicts of interest in the Company's dealings with
Masco Corporation and others. The Corporate Opportunities Agreement with Masco
Corporation and other aspects of the relationship between the companies may
affect their ability to make acquisitions and develop new business under certain
circumstances, although the Company does not believe that it has experienced any
such effect to date. Three persons affiliated with Masco Corporation are
currently members of the Company's Board of Directors. Mr. Manoogian, the
Company's Chairman of the Board, is also the Chairman of the Board and Chief
Executive Officer of Masco Corporation and a significant stockholder of both
companies. Mr. Hennessey, a Director and Vice Chairman and Chief Executive
Officer of the Company, was formerly Executive Vice President and is currently a
part-time employee of Masco Corporation. Mr. Morgan, who is a Director of the
Company, is also a Director of Masco Corporation. Because of these
relationships, an independent committee of the Company's Board of Directors
reviews its significant transactions with affiliated companies.
23
<PAGE> 26
The following table sets forth the number of shares of Masco Corporation
common stock beneficially owned as of March 15, 2000 by nominees, Directors and
named executive officers and by the Directors and executive officers of the
Company as a group. Except as indicated below, each person exercises sole voting
and investment power with respect to the shares listed.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK OF
MASCO CORPORATION
NAME BENEFICIALLY OWNED(1)
---- ---------------------
<S> <C>
William T. Anderson......................................... 0
Peter A. Dow................................................ 11,000
Roger T. Fridholm........................................... 0
Lee M. Gardner.............................................. 0
Frank M. Hennessey(2)....................................... 353,400
William K. Howenstein....................................... 0
David B. Liner(2)(3)........................................ 68,268
Richard A. Manoogian(2)(4).................................. 10,136,290
John A. Morgan(5)........................................... 14,940
Helmut F. Stern............................................. 0
Timothy Wadhams............................................. 18,000
All 13 Directors and executive officers of the Company as a
group (excluding subsidiary, divisional and group
executives)(2)(3)(4)(5)(6)................................ 10,843,982
</TABLE>
- -------------------------
(1) The only nominee, Director or named executive officer of the Company who
beneficially owns one percent or more of Masco Corporation common stock is
Mr. Manoogian, who beneficially owns 2.3 percent of Masco Corporation common
stock. Directors and executive officers of the Company as a group
beneficially own 2.4 percent of Masco Corporation common stock.
(2) Includes unvested restricted stock award shares issued under Masco
Corporation's restricted stock incentive plan (173,666 shares for Mr.
Hennessey; 315,527 shares for Mr. Manoogian; 7,516 for Mr. Liner; and
555,070 shares for all Directors and executive officers of the Company as a
group) and shares which may be acquired before May 15, 2000 upon exercise of
Masco Corporation stock options (69,734 for Mr. Hennessey; 2,003,882 shares
for Mr. Manoogian; 49,280 shares for Mr. Liner; and 2,211,418 shares for all
Directors and executive officers of the Company as a group). Holders have
voting but no investment power over unvested restricted shares and exercise
neither voting nor investment power over unexercised option shares.
(3) Mr. Liner shares voting and investment power with respect to 11,472 shares.
(4) Includes 3,319,800 shares of Masco Corporation common stock owned by
charitable foundations for which Mr. Manoogian serves as director. Shares
beneficially owned by Mr. Manoogian and by all Directors and executive
officers of the Company as a group include in each case 1,429,000 shares of
Masco Corporation common stock owned by a trust for which Mr. Manoogian
serves as a trustee. The directors of the foundations and the trustees share
voting and investment power with respect to the Masco Corporation common
stock owned by the foundations and trusts, but Mr. Manoogian disclaims
beneficial ownership of such shares.
24
<PAGE> 27
(5) Includes 2,776 unvested restricted stock award shares issued under Masco
Corporation's 1997 Non-Employee Directors Stock Plan and 4,800 shares which
may be acquired before May 15, 2000 upon exercise of stock options issued
under such Plan. Holders have voting but no investment power over unvested
restricted shares and exercise neither voting nor investment power over
unexercised option shares.
(6) Includes 26,802 shares of Masco Corporation common stock owned by a
charitable foundation for which one executive officer serves as a director
and 28,820 shares of Masco Corporation common stock held by trusts for which
certain executive officers serve as trustees. The directors of the
foundation and the trustees share voting and investment power with respect
to the Masco Corporation common stock owned by the foundation and trusts,
but such executive officers disclaim beneficial ownership of such shares.
Mr. Manoogian may be deemed to be a controlling person of Masco Corporation
by reason of his significant ownership of Masco Corporation common stock and his
position as a director and executive officer of Masco Corporation.
25
<PAGE> 28
STOCKHOLDER PROPOSAL
Mr. Richard Dee, 115 East 89th Street, New York, NY 10128, record owner of
2,592 shares of Company Common Stock, has submitted the following proposal:
"STOCKHOLDERS OF PUBLICLY-OWNED CORPORATIONS DO NOT 'ELECT' DIRECTORS.
Directors are 'selected' by incumbent directors and managements -- stockholders
merely 'RATIFY' or approve director selections much as they ratify selections of
auditors.
"The term 'Election of Directors' is misused in corporate proxy materials
to refer to the process by which directors are empowered. The term is
inappropriate -- and it is misleading. WITH NO CHOICE OF CANDIDATES, THERE IS NO
ELECTION.
"Incumbent directors are anxious to protect their absolute power over
corporate activities. The root of that power is control of Corporate
Governance -- which is assured by control of board composition. Unfortunately,
the 'Elective process rights' of stockholders are being ignored.
"Approval of this Corporate Governance proposal will provide MascoTech
stockholders with a choice of director candidates -- an opportunity to vote for
those whose qualifications and views they favor. And approval will provide
stockholders with 'duly elected' representatives.
"In a democracy, those who govern are duly elected by those whom they
represent -- and are held accountable by their electors. Continuing in office
requires satisfying constituents, not just nominators. Corporate directors take
office unopposed -- and answer only to fellow directors.
"It is hereby requested that the MascoTech Board of Directors adopt
promptly a resolution requiring the Nominating Committee to propose two
candidates for each directorship to be filled by the voting of stockholders at
annual meetings. In addition to customary personal background information, Proxy
Statements shall include a statement by each candidate as to why he or she
believes they should be elected.
"A substantial majority of MascoTech directors are closely allied to Masco
Corporation (and affiliates), as present or past senior officers and
directors -- or as suppliers to MascoTech or Masco.
"MascoTech and Masco have vastly different stockholder constituencies. What
may be good for stockholders of one may not be good for stockholders of the
other.
"As long as MascoTech directors are allowed to select and to propose only
the number of so-called 'candidates' as directorships to be filled -- and as
long as it is impossible, realistically, for stockholders to utilize
successfully their illusory right to nominate and to elect directors -- no
practical means will exist for stockholders to bring about director
turnover -- until this or a similar proposal is adopted. Turnover reduces the
possibility of inbreeding and provides sources of new ideas, viewpoints and
approaches.
"Although Delaware law provides for nominees to be selected by incumbents,
approval of this proposal will enable MascoTech stockholders to replace any or
all directors if they become dissatisfied with them -- or with the results of
corporate policies and/or performance. Not a happy prospect even for those able
to nominate their possible successors!
26
<PAGE> 29
"The benefits that will accrue to MascoTech stockholders by having
democratically-elected directors, willing to have their qualifications and views
reviewed and considered carefully by those whose interests they are supposed to
serve, far outweigh arguments by those accustomed to being 'selected' -- and who
are determined to maintain their absolute power over the Corporate Governance
process.
"PLEASE VOTE FOR THIS PROPOSAL."
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
A nearly identical proposal was put forward last year by the same
stockholder. As we stated last year, your Board of Directors believes that its
appropriate role is to provide Company stockholders with a slate of Director
candidates whom the Board has determined, in its best judgment and in keeping
with its fiduciary duties to stockholders, to be the most qualified to manage
the affairs of the Company in a way to further the common interests of our
stockholders.
To fulfill this function, we established a Nominating Committee in 1998
whose responsibility is to identify and consider candidates to serve as
Directors of the Company. Stockholders are encouraged to recommend the names of
suitable candidates to the Nominating Committee. As we stated in our Proxy
Statement for the 1999 Annual Meeting of Stockholders, the Nominating Committee
will consider any candidates proposed by stockholders for nomination as
Directors.
In keeping with its role, the Nominating Committee has carefully reviewed
the qualifications of each candidate prior to nominating that candidate for the
position of Director and has made its nominations based on the qualifications of
each candidate to serve the best interests of the Company. The experience of
incumbent Directors and the contributions they make in the service of the
Company are important considerations in nominating incumbent Directors for
re-election.
We do not agree with Mr. Dee's statement that a "substantial majority" of
the Company's Directors are closely allied to Masco Corporation (and its
affiliates) or with suppliers to MascoTech or Masco. To the contrary, four of
the seven Directors of the Company -- a majority of the Board -- are not current
or former officers or Directors of Masco Corporation, have no other material
relationship with Masco Corporation and are not officers or directors of
companies having any material supplier relationships with the Company or Masco
Corporation. These unaffiliated Directors also represent all of the members of
the Audit Committee and three out of four of the members of the Nominating and
Compensation Committees.
We do not think it is in the interests of stockholders, or consistent with
our fiduciary duties, to be required to propose an alternative slate of
Directors who are not the Nominating Committee's first choice. The candidates
selected by the Nominating Committee are often in demand by other companies
seeking proven director talent. We believe that our ability to recruit the best
potential candidates would be hurt if we were required to ask such candidates to
set aside other available directorships without the assurance that they have in
fact been identified as the Nominating Committee's best choice for the Company's
Board of Directors and have the full support of the Nominating Committee.
Furthermore, we do not believe it is the proper role of the Nominating Committee
to foster a political environment in which nominees compete with each other for
available directorships.
27
<PAGE> 30
The Board of Directors believes the existing process for evaluating
potential candidates, including those proposed by Company stockholders, is the
most efficient way to present stockholders with qualified Directors to serve the
Company. The affirmative vote of a majority of the votes cast on the proposal is
required for approval. Abstentions and broker non-votes are not counted as votes
cast, and therefore do not affect the outcome of the proposal. Because we, your
Board of Directors, believe that the current selection process for choosing
Directors serves the best interests of stockholders, WE URGE STOCKHOLDERS TO
VOTE AGAINST THIS PROPOSAL.
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
selected the independent public accounting firm of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers") to audit the Company's financial statements for the
year 2000, and believes it appropriate to submit its choice for ratification by
stockholders.
PricewaterhouseCoopers has acted as the Company's independent certified
public accounting firm since the Company's formation in 1984. It has performed
services of an accounting and auditing nature and, from time to time, has
provided other consulting services for the Company as well as for Masco
Corporation. Representatives of PricewaterhouseCoopers are expected to be
present at the meeting, will have the opportunity to make a statement and are
expected to be available to respond to appropriate questions. If the selection
is not ratified, the Board will consider selecting another public accounting
firm as the independent auditors.
The affirmative vote of a majority of the votes cast is required for the
ratification of the selection of independent auditors. Abstentions and broker
non-votes are not counted as votes cast, and therefore do not affect the
ratification of the selection of auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS AS INDEPENDENT AUDITORS FOR THE COMPANY FOR
THE YEAR 2000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and Directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, Directors and greater than ten
percent stockholders are required by regulations of the Securities and Exchange
Commission to furnish the Company copies of all Section 16(a) forms they file.
Based solely on the Company's review of copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
are required for those persons, the Company believes that its Directors,
officers and greater than ten percent beneficial owners met all applicable
filing requirements during the last fiscal year.
28
<PAGE> 31
STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Stockholders who intend to present a proposal for inclusion in the
Company's proxy statement and proxy relating to the 2001 Annual Meeting or at
such Meeting must provide written notice of such intent to the Chairman or
Secretary of the Company at its address stated in the Notice of Annual Meeting
by December 20, 2000. The Company will have the right to exercise discretionary
voting authority on any matter presented at the 2001 Annual Meeting that has not
been presented to the Company in writing by December 20, 2000.
OTHER MATTERS
The Board of Directors knows of no other matters to be voted upon at the
Meeting. If any other matters properly come before the Meeting, it is the
intention of the proxies named in the enclosed Proxy to vote the shares
represented thereby with respect to such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ EUGENE A. GARGARO, JR.
EUGENE A. GARGARO, JR.
Secretary
Taylor, Michigan
April 20, 2000
29
<PAGE> 32
MASCOTECH, INC.
ANNUAL MEETING OF STOCKHOLDERS
AT CORPORATE HEADQUARTERS
21001 VAN BORN ROAD
TAYLOR, MICHIGAN 48180
[MAP]
FROM DOWNTOWN DETROIT (EAST)
- - Take I-94 west to the Pelham Road exit.
- - Turn right onto Pelham Road and travel to Van Born Road.
- - Turn left onto Van Born Road and proceed to the corporate headquarters.
FROM METRO AIRPORT (WEST)
- - Take I-94 east to the Pelham Road exit.
- - Turn left onto Pelham and travel to Van Born Road.
- - Turn left onto Van Born Road and proceed to the corporate headquarters.
FROM SOUTHFIELD/BIRMINGHAM (NORTH)
- - Take the Southfield Freeway to the Outer Drive/ Van Born Road exit.
- - Stay on the service drive and proceed to Van Born Road.
- - Bear right onto Van Born Road and travel to the corporate headquarters.
FROM TOLEDO (SOUTH)
- - Take I-75 north to the Telegraph Road north exit.
- - Proceed on Telegraph Road north to Van Born Road.
- - Turn right on Van Born Road and proceed to the corporate headquarters.
<PAGE> 33
________________________________________________________________________________
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY, 18, 2000
MASCOTECH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, hereby revoking any Proxy heretofore given, appoints
RICHARD A. MANOOGIAN and EUGENE A. GARGARO, JR. and each of them attorneys and
proxies for the undersigned, each with full power of substitution, to vote the
shares of Company Common Stock registered in the name of the undersigned to the
same extent the undersigned would be entitled to vote if then personally present
at the Annual Meeting of Stockholders of MascoTech, Inc. to be held at the
offices of the Company at 21001 Van Born Road, Taylor, Michigan 48180, on
Thursday, May 18, 2000, at 10:00 a.m. and at any adjournment thereof.
The undersigned hereby acknowledges receipt of the accompanying Notice of
Annual Meeting of Stockholders and Proxy Statement.
(Continued and to be dated and signed on the reverse side.)
MASCOTECH, INC.
P.O. BOX 11275
NEW YORK, N.Y. 10203-0275
________________________________________________________________________________
<PAGE> 34
PLEASE DETACH HERE
YOU MUST DETACH THIS PORTION OF THE PROXY CARD
BEFORE RETURNING IT IN THE ENCLOSED ENVELOPE
\/ \/
MASCOTECH, INC. VOTE BY TELEPHONE OR INTERNET OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
<TABLE>
<CAPTION>
_____________________________ ________________________________ __________________________
TELEPHONE INTERNET MAIL
OR OR
800-648-2068 HTTP://PROXY.SHAREHOLDER.COM/MSX
_____________________________ ________________________________ __________________________
<S> <C> <C>
Use any touch-tone telephone Use the Internet to vote your Mark, sign and date your
to vote your proxy. Have your proxy. Have your proxy card in proxy card and return it
proxy card in hand when you hand when you access the website. in the postage-paid
call. You will be prompted to You will be prompted to enter envelope we have provided.
enter your control number, your control number, located
located in the box below, in the box below, to create
and then follow the simple an electronic ballot.
directions.
</TABLE>
___________________________________________________________________________
Your telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy
card.
___________________________________________________________________________
___________________________________________________________________________
If you have submitted your proxy by telephone or the Internet there is no
need for you to mail back your proxy card.
___________________________________________________________________________
<TABLE>
<S> <C>
CALL TOLL-FREE TO VOTE
IT'S FAST AND CONVENIENT
800-648-2068
_____________________________
CONTROL NUMBER
FOR TELEPHONE/INTERNET VOTING
_____________________________
</TABLE>
DETACH PROXY CARD HERE IF YOU ARE VOTING BY MAIL
\/ \/
<TABLE>
<S> <C> <C> <C>
(1) Election of Directors FOR all nominees / / WITHHOLD AUTHORITY to vote / / EXCEPTIONS / /
listed below for all nominees listed
below
</TABLE>
Class III Directors to hold office until the Annual Meeting of Stockholders in
2003 or until their respective successors are elected and qualified.
Nominees: WILLIAM K. HOWENSTEIN AND JOHN A. MORGAN
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME.)
<TABLE>
<S> <C>
(2) Ratification of the selection of PricewaterhouseCoopers (3) Stockholder proposal regarding choice of
LLP as independent auditors for the Company for the year director nominees.
2000.
FOR / / AGAINST / / ABSTAIN / / FOR / / AGAINST / / ABSTAIN / /
(4) In the proxies' discretion upon such other
business as may properly come before the meeting.
</TABLE>
<TABLE>
<S> <C>
The shares represented by this Proxy will be voted in accordance with the Change of Address or
specifications above. IF SPECIFICATIONS ARE NOT MADE, THE PROXY WILL Comments Mark Here / /
BE VOTED FOR THE ELECTION OF ALL NOMINEES, FOR RATIFICATION OF INDEPENDENT
AUDITORS, AGAINST THE STOCKHOLDER PROPOSAL AND IN THE PROXIES' DISCRETION
ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. Please sign exactly as name appears at left.
Executors, administrators, trustees, et al,
should so indicate when signing. If the
signature is for a corporation, please sign
the full corporate name by an authorized
officer. If the signature is for a
partnership, please sign the full partnership
name by an authorized person. If shares are
registered in more than one name, all holders
must sign.
Dated:__________________________ , 2000
________________________________ (L.S.)
Signature
________________________________ (L.S.)
Signature
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
IF VOTING BY MAIL, PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE.
</TABLE>
