<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
Central Sprinkler Corporation
- -----------------------------------------------------------------------------
(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:
___________________________________________________________________________
<PAGE>
LOGO
CENTRAL SPRINKLER CORPORATION
------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 7, 1997
------
TO OUR SHAREHOLDERS:
You are invited to be present either in person or by proxy at the Annual
Meeting of Shareholders of Central Sprinkler Corporation (the "Company") to be
held at the Company's executive offices, 451 North Cannon Avenue, Lansdale,
Pennsylvania on Friday, March 7, 1997 at 11:00 a.m. for the following purposes:
1. To elect nine directors to serve for one-year terms and until their
successors are elected and qualified;
2. To consider and act upon a proposal to approve the Central Sprinkler
Corporation 1996 Equity Compensation Plan;
3. To consider and act upon a proposal to ratify the selection by the
Board of Directors of Arthur Andersen LLP as independent public
accountants for the Company for fiscal year 1997; and
4. To transact such other business as may properly come before the
Meeting.
The Board of Directors has fixed the close of business on January 31, 1997 as
the record date for determining the shareholders entitled to notice of, and to
vote at, the Annual Meeting or any adjournments thereof.
The Directors hope that you will find it convenient to attend the Meeting in
person, but whether or not you plan to attend, please sign, date and return the
enclosed proxy to assure that your shares are represented at the Meeting.
Returning your proxy does not deprive you of your right to attend the Meeting
and vote your shares in person.
/s/ George G. Meyer
-----------------------------
George G. Meyer, Secretary
February 6, 1997
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Central Sprinkler
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of proxies to be used at the Annual Meeting of Shareholders (the
"Meeting") to be held on Friday, March 7, 1997, at the time and place and for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders.
The approximate date upon which this Proxy Statement and the form of proxy
are to be mailed to shareholders is February 6, 1997.
If the enclosed proxy is executed and returned, it may nevertheless be
revoked at any time before it is exercised by giving written notice to the
Secretary of the Company, but mere attendance at the Meeting, without such
notice, will not revoke the proxy. Shares represented by a valid proxy that is
received pursuant to this solicitation and not revoked before it is exercised
will be voted as provided on the proxy at the Meeting or any adjournments
thereof.
The Company's executive offices are located at 451 North Cannon Avenue,
Lansdale, Pennsylvania 19446.
VOTING AT THE MEETING
Only holders of shares of Common Stock of the Company (the "Common Stock") of
record at the close of business on January 31, 1997 will be entitled to vote at
the Annual Meeting. On January 31, 1997, 3,845,637 shares of Common Stock, the
only outstanding voting securities of the Company, were issued and outstanding.
Each share of Common Stock is entitled to one vote on all matters.
The holders of a majority of the shares entitled to vote, present in person
or represented by proxy, constitute a quorum. Except for the election of
directors, for which a plurality is required, the affirmative vote of a majority
of the shares present in person or represented by proxy at the meeting and
entitled to vote is required for the adoption of the proposals to approve the
Central Sprinkler Corporation 1996 Equity Compensation Plan (the "Plan"), to
ratify the selection of the independent accountants, or to take action with
respect to any other matter as may properly be brought before the Meeting.
Shares cannot be voted at the Meeting unless the holder of record is present in
person or by proxy. The enclosed proxy is a means by which a shareholder may
authorize the voting of his or her shares at the Meeting. The shares of Common
Stock represented by each properly executed proxy card will be voted at the
Meeting in accordance with each shareholder's directions. Shareholders are urged
to specify their choices by marking the appropriate boxes on the enclosed proxy;
if no choice has been specified, the shares will be voted as recommended by the
Board of Directors. If any other matters are properly presented to the Meeting
for action, the proxy holders will vote the proxies (which confer discretionary
authority to vote on such matters) in accordance with their judgment.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect, other than for purposes of determining the presence of a
quorum. Abstentions may be specified on the proposals to approve the Plan and to
ratify the selection of the independent accountants (but not for the election of
directors). Abstentions will be considered present and entitled to vote at the
Meeting, but will not be counted as votes cast in the affirmative. Abstentions
on the proposals to approve the Plan and to ratify the selection of the
independent accountants will have the effect of a negative vote because these
proposals require the affirmative vote of a majority of the shares present at
the Meeting in person or represented by proxy at the Meeting and entitled to
vote.
1
<PAGE>
Brokers that are member firms of the New York Stock Exchange ("NYSE") and who
hold shares in street name for customers have the authority under the rules of
the NYSE to vote those shares with respect to the election of directors and the
proposals to approve the Plan and to ratify the selection of the independent
accountants if they have not received instructions from a beneficial owner. A
failure by brokers to vote those shares will have no effect in the outcome of
the election of directors and the adoption of the proposals to approve the Plan
and to ratify the selection of the independent accountants because such shares
will not be considered shares present and entitled to vote with respect to such
matters.
Your proxy vote is important. Accordingly, you are asked to complete, sign
and return the accompanying proxy whether or not you plan to attend the meeting.
If you plan to attend the Meeting to vote in person and your shares are
registered with the Company's transfer agent (StockTrans, Inc.) in the name of a
broker, bank or other custodian, nominee or fiduciary, you must secure a proxy
from such person assigning you the right to vote your shares.
SECURITY OWNERSHIP
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of January 1, 1997 by (1) each person known by
the Company to own beneficially more than 5% of the outstanding Common Stock,
(2) each director of the Company, (3) each executive officer named in the
summary compensation table included elsewhere herein and (4) all executive
officers and directors as a group. Percentages of less than one percent have
been omitted. Unless otherwise indicated, the shares listed in the table are
owned directly by the individual or entity, or by both the individual and the
individual's spouse, and the individual or entity has sole voting and investment
power as to shares shown or, in the case of the individual, such power is shared
with the individual's spouse.
2
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature Percent
of Beneficial of
Ownership Class
----------------- ---------
<S> <C> <C>
Over 5% Shareholders
Central Sprinkler Corporation Employee Stock ................. 621,000 16.1%
Ownership Plan (the "Central ESOP")(1)
451 North Cannon Avenue, Lansdale, PA 19446
Delaware Management Company, Inc. (2) ........................ 488,300 12.7%
2005 Market Street, Philadelphia, PA 19103
Wellington Management Company(2) ............................. 339,473 8.8%
75 State Street, Boston, MA 02109
Dimensional Fund Advisors Inc.(2) ............................ 240,400 6.3%
1229 Ocean Avenue, 11th Floor, Santa Monica, CA 90401
William J. Meyer(3)(4) ....................................... 257,907 6.5%
George G. Meyer(3)(5) ........................................ 431,065 10.4%
Stephen J. Meyer(3)(6) ....................................... 359,029 8.8%
451 North Cannon Avenue, Lansdale, PA 19446
Directors
Winston J. Churchill(7) ...................................... 4,000 --
Barbara M. Henagan(7) ........................................ 4,508 --
Joseph L. Jackson(7) ......................................... 4,325 --
Richard P. O'Leary(7) ........................................ 9,000 --
Thomas J. Sharbaugh(7)(8) .................................... 4,498 --
Timothy J. Wagg(7) ........................................... 4,000 --
Executive Officers
James R. Buchanan(3)(9) ...................................... 93,356 2.4%
Albert T. Sabol(3)(10) ....................................... 42,601 1.1%
All executive officers and directors as a group (22
persons)(3)(11) ............................................ 1,403,028 29.7%
</TABLE>
- ------
(1) The amount shown excludes 159,000 shares that have been allocated to
Central ESOP participants and will be voted by such participants pursuant
to the Central ESOP provisions. Shares that are not voted by such
participants, along with the remaining unallocated shares, will be voted by
the Central ESOP trustees pursuant to the provisions of the Central ESOP,
which provides that such shares shall be voted in accordance with the
directions received with respect to the plurality of the allocated shares.
(2) Each of these shareholders holds all of its shares for the beneficial
interest of various clients or open-end investment companies for which it
acts as investment advisor. Based on the information contained in a Form
13F for the quarter ended September 30, 1996, Delaware Management Company,
Inc. has sole dispositive power with respect to all shares held, has sole
voting power with respect to 66,800 of such shares (or 1.7%) and has no
voting power with respect to the remaining shares. The amount shown for
Delaware Management Company, Inc. includes 337,100 shares (or 8.8%) owned
by Delaware Group-Trend Fund and 67,700 shares (or 1.8%) owned by Delaware
Group-Value Fund. Based on the information contained in a
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<PAGE>
Form 13F for the quarter ended September 30, 1996, Wellington Management
Company LLP ("Wellington") has sole dispositive power with respect to
177,345 shares held and shared dispositive power with respect to the
remaining shares. Wellington has sole voting power with respect to 51,405
shares held (or 1.3%), shared voting power with respect to 85,515 of such
shares (or 2.2%) and no voting power with respect to the remaining shares.
Based on the information contained in a Form 13F-E for the quarter ended
September 30, 1996, Dimensional Fund Advisors Inc. ("DFAI") has sole
dispositive power with respect to all shares held and sole voting power
with respect to 166,900 such shares (or 4.3%). Certain officers of DFAI,
who also act as officers of two open-end investment companies that hold
shares, may vote the remaining shares held by DFAI.
(3) The amount shown includes shares held for such officer's account in the
Central ESOP. Mr. George Meyer and Mr. Sabol are two of three trustees
of the Central ESOP and each of them disclaims beneficial ownership of
the shares owned of record by the Central ESOP.
(4) The amount shown includes 116,875 shares that may be acquired under options
of which 86,875 are currently exercisable, with the remaining 30,000
subject to the approval of the 1996 Equity Compensation Plan by the
Company's shareholders.
(5) The amount shown includes 303,875 shares that may be acquired under options
of which 81,875 are currently exercisable, with the remaining 222,000
subject to the approval of the 1996 Equity Compensation Plan by the
Company's shareholders.
(6) The amount shown includes 231,875 shares that may be acquired under options
of which 81,875 are currently exercisable, with the remaining 150,000
subject to the approval of the 1996 Equity Compensation Plan by the
Company's shareholders.
(7) The amount shown includes 4,000 shares that may be acquired under options
that are currently exercisable.
(8) The amount shown includes 125 shares that are owned by Mr. Sharbaugh's
minor daughter.
(9) The amount shown includes 46,875 shares that may be acquired under options,
of which 11,250 are not exercisable within 60 days.
(10) The amount shown includes 39,375 shares that may be acquired under options,
of which 11,250 are not exercisable within 60 days.
(11) The amount shown includes 880,750 shares that may be acquired under
options, of which 474,000 are not exercisable within 60 days.
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<PAGE>
NOMINATION AND ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors will consist of
three to eleven directors, as determined from time to time by resolution of the
Board. The Board has fixed the number of directors at nine, all of whom are to
be elected at the 1997 Annual Meeting. Each such director will serve until the
1998 Annual Meeting and until a successor has been elected and qualified or
until the director's earlier resignation or removal. Each nominee has consented
to be named in this Proxy Statement and to serve if elected.
If any nominee becomes unavailable for any reason or if a vacancy occurs for
any other reason before the election (which events are not anticipated), the
shares represented by the enclosed proxy may be voted for such other person as
may be determined by the holders of such proxies.
The Board of Directors recommends a vote FOR each of the nominees for
director.
NOMINEES
The persons nominated to be directors of the Company are listed below. All of
the nominees listed below are currently directors of the Company.
<TABLE>
<CAPTION>
Position(s) with the Company and, where indicated,
with the Company's primary operating subsidiary,
Name Age Central Sprinkler Company ("Central Sprinkler")
-------------------- ----- ------------------------------------------------------
<S> <C> <C>
Winston J. Churchill 56 Chairman of the Board and Director
William J. Meyer 76 President and Director; Chairman of the Board and Treasurer
of Central Sprinkler
George G. Meyer 47 Chief Executive Officer, Secretary, Treasurer and Director;
President and Chief Executive Officer of Central Sprinkler
Stephen J. Meyer 45 Director; Executive Vice President of Central Sprinkler
Barbara M. Henagan 37 Director
Joseph L. Jackson 69 Director
Richard P. O'Leary 58 Director
Thomas J. Sharbaugh 45 Director
Timothy J. Wagg 62 Director
</TABLE>
WINSTON J. CHURCHILL -- Mr. Churchill has been Chairman of the Board and a
director of the Company and a director of Central Sprinkler since 1984. Mr.
Churchill has been the President of Churchill Investment Partners, Inc., a
private investment firm, since 1989. He was a partner of Bradford Associates,
a private investment firm, from 1984 to 1989. Mr. Churchill is also Chairman
of the Board of IBAH, Inc., Geotek Communications, Inc. and Tescorp, Inc.
WILLIAM J. MEYER -- Mr. Meyer has been President and a director of the
Company and Chairman of the Board of Central Sprinkler since 1984. He has also
served Central Sprinkler as a director and Treasurer since 1975 and as President
from 1975 to 1984.
GEORGE G. MEYER -- Mr. Meyer has been Chief Executive Officer since 1987 and
Secretary and Treasurer of the Company since 1985, and a director of the Company
and President and a director of Central Sprinkler since 1984. He was Executive
Vice President of the Company from 1985 to 1987.
5
<PAGE>
STEPHEN J. MEYER -- Mr. Meyer has been a director of the Company and
Executive Vice President of Central Sprinkler since 1986. He has been a
director of Central Sprinkler since 1983.
BARBARA M. HENAGAN -- Ms. Henagan has been a director of the Company since
1986. She has been a Senior Managing Director (since 1992) and a Managing
Director (since 1990) of Bradford Ventures Ltd., a private investment firm.
Ms. Henagan has been a general partner of Bradford Associates since 1986.
JOSEPH L. JACKSON -- Mr. Jackson has been a director of the Company since
1986. He has been the Executive Vice President of Churchill Investment Partners,
Inc., a private investment firm, since 1990. Mr. Jackson was also Secretary and
Treasurer (from 1990 to 1993) and Chief Financial Officer (from 1992 to 1993) of
IBAH, Inc. He was Executive Director-Corporate Treasury of Bell Atlantic
Corporation from December 1987 until his retirement in December 1989.
RICHARD P. O'LEARY -- Mr. O'Leary has been a director of the Company since
1990. He is a Consultant, and he was former Vice President of Betz
Laboratories, Inc. from January 1990 until his retirement in March 1991. He
was President and Chief Operating Officer of Betz Equipment Systems, a
division of Betz Laboratories, Inc., from 1987 and Vice President & General
Manager of Betz Genesis Division of Betz Laboratories, Inc. prior to that
time.
THOMAS J. SHARBAUGH -- Mr. Sharbaugh has been a director of the Company
since 1986. He has been a partner in the law firm of Morgan, Lewis & Bockius
LLP since 1988.
TIMOTHY J. WAGG -- Mr. Wagg has been a director of the Company since 1984.
He is a Financial Consultant and he was Vice President, Administration of
Stone-Consolidated Inc. (forest products and packaging, formerly
Consolidated-Bathurst Inc.) from March 1989 until his retirement in July
1991. He served as Vice President, Planning and Administration from November
1988 to March 1989, and as Vice President, Finance prior to that time.
George G. Meyer and Stephen J. Meyer are brothers and are sons of William
J. Meyer.
GENERAL INFORMATION ABOUT BOARD OF DIRECTORS
There were four regular meetings and one special meeting of the Board of
Directors in the 1996 fiscal year. During this period, each incumbent director
attended at least 75% of the aggregate of (1) the total number of meetings of
the Board held during the period for which such incumbent was a director, and
(2) the total number of meetings held by all committees of the Board on which
such incumbent served.
DIRECTOR COMPENSATION
Directors of the Company who are not full time employees of the Company or
its operating subsidiaries receive $2,000 for each meeting attended, as well as
an annual retainer of $8,000. In addition, upon the date that directors are
elected or reelected, each non-employee director shall receive options to
acquire 2,000 shares of Common Stock under the Non-Employee Director Stock
Option Plan. The price per share shall be equal to the fair market value of the
Common Stock as determined in accordance with the terms of the plan. The options
are exercisable immediately and for ten years from the date of grant.
With each option grant, the director shall also receive option surrender
rights ("OSRs"). A participant may exercise an OSR only during the 60-day period
following a Change of Control (as defined in the plan). Upon exercise of an OSR
and the surrender of the related option, the participant has the right to
receive an amount in cash equal to the difference between the exercise price of
the related option and the higher of (i) the highest price
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<PAGE>
paid for a share of Common Stock in a Change of Control transaction or
transactions or (ii) the highest price paid for the Common Stock during the
60-day period immediately preceding the Change of Control. When an OSR is
exercised, a corresponding amount of the related option is canceled, and
conversely when an Option is exercised, a corresponding amount of the related
OSR is canceled.
BOARD COMMITTEES
The Board of Directors has several committees, including an Audit Committee,
a Compensation Committee and a Stock Option Committee, but it does not have a
Nominating Committee. Non-employee directors are paid $750 for each Audit
Committee meeting or other committee meeting that is held independently of a
meeting of the full Board, and $500 for each other committee meeting held in
connection with a meeting of the full Board.
The Audit Committee consists of two non-employee directors, Messrs. Wagg and
Jackson. The Audit Committee meets with the Company's independent auditors and
with the appropriate corporate officers for the purposes of reviewing matters
relating to the corporate financial reporting and accounting procedures and
policies of the Company and its subsidiaries and reporting thereon to the Board
of Directors. The Audit Committee also recommends to the Board the appointment
of the Company's independent auditors, subject to ratification by the
shareholders at the Annual Meeting. The Audit Committee held two meetings during
the 1996 fiscal year.
The Compensation Committee consists of four directors, Ms. Henagan and
Messrs. Churchill, O'Leary and Sharbaugh. The Compensation Committee reviews
with the principal executive officers of the Company the compensation of all
officers of the Company and its subsidiaries. It also negotiates the terms of
employment of the principal executive officers of the Company and its
subsidiaries and negotiates such employment contracts as maybe necessary in
connection therewith. The Compensation Committee held one meeting during the
1996 fiscal year.
The Stock Option Committee consists of two directors, Messrs. O'Leary and
Wagg. The Stock Option Committee administers the Company's stock option plans.
The Stock Option Committee held one meeting during the 1996 fiscal year.
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<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation of the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company or its operating subsidiary, Central Sprinkler, for the fiscal
years ended October 31, 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
--------------------------------- --------------
Other
Name and Principal Compensation
Position Year Salary Bonus Payout (1) (2)
------------------------------------- ------ ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C>
George G. Meyer 1996 $350,000 $202,327 -- $10,479
Chief Executive Officer 1995 332,692 401,700 -- 10,587
1994 250,962 137,386 -- 16,318
William J. Meyer 1996 220,000 207,070 $120,000 44,426
President 1995 220,000 418,180 120,000 24,104
1994 217,629 172,290 120,000 26,778
Stephen J. Meyer 1996 250,000 155,302 -- 9,872
Executive Vice President, 1995 240,481 305,890 -- 9,964
Central Sprinkler 1994 190,915 80,093 -- 15,241
James R. Buchanan 1996 168,000 47,025 -- 9,247
Executive Vice President, 1995 165,923 88,065 -- 9,778
Sales of Central Sprinkler 1994 155,918 36,385 -- 13,356
Albert T. Sabol 1996 168,000 47,025 -- 10,051
Executive Vice President, 1995 162,807 88,065 -- 10,537
Finance and Administration, 1994 133,726 36,385 -- 12,624
of the Company and Central Sprinkler
</TABLE>
- ------
(1) Amount represents payments under a deferred compensation arrangement,
pursuant to such executive officer's employment agreement, which pays the
executive officer $10,000 per month from August 1993 through July 1998.
(2) (a) Includes the following amounts paid by the Company on behalf of the
executive officer for the year indicated to his respective account under
the Company's 401(k) Profit Sharing Plan and Trust: 1996 -- George G.
Meyer, William J. Meyer, Stephen J. Meyer, James R. Buchanan, and Albert
T. Sabol, $3,000; 1995 -- George G. Meyer, William J. Meyer, Stephen J.
Meyer, James R. Buchanan, and Albert T. Sabol, $3,000; and 1994 -- George
G. Meyer and William J. Meyer, $4,716; Stephen J. Meyer, $4,282; James R.
Buchanan, $3,989; and Albert T. Sabol, $3,435.
(b) Includes the following amounts paid by the Company on behalf of the
executive officer for the year indicated to his respective account under
the Central ESOP: 1996 -- George G. Meyer, William J. Meyer, Stephen J.
Meyer, James R. Buchanan and Albert T. Sabol, $4,645; 1995 -- George G.
Meyer, William J. Meyer, Stephen J. Meyer, James R. Buchanan and Albert
T. Sabol, $4,962; and 1994 -- George G. Meyer, William J. Meyer and
Stephen J. Meyer, $9,331; James R. Buchanan, $8,022; and Albert T. Sabol,
$6,916.
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<PAGE>
(c) Includes premiums for term life insurance paid by the Company on behalf
of the executive officer for the year indicated: 1996 -- George G. Meyer,
$2,834; William J. Meyer, $36,781; Stephen J. Meyer, $2,227; James R.
Buchanan, $1,602; and Albert T. Sabol, $2,406; 1995 -- George G. Meyer,
$2,625; William J. Meyer, $16,142; Stephen J. Meyer, $2,002; James R.
Buchanan, $1,816; and Albert T. Sabol, $2,575; and 1994 -- George G. Meyer,
$2,271; William J. Meyer, $12,731; Stephen J. Meyer, $1,628; James R.
Buchanan, $1,345; and Albert T. Sabol, $2,273. The death benefit under such
life insurance is three times the executive officer's annual salary.
The following table sets forth certain information concerning grants of stock
options made during the year ended October 31, 1996 to the persons named in the
Summary Compensation Table.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realization Value at
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise Option Term (10 years)(1)
Options Employees Price Expiration ---------------------------------
Name Granted In Fiscal Year ($/share) Date 5% 10%
-------------------- ------------ -------------- ---------- ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
George G. Meyer(2) . -- -- -- -- -- --
William J. Meyer(2) -- -- -- -- -- --
Stephen J. Meyer(2) -- -- -- -- -- --
James R. Buchanan .. 10,000 10% $29.95 3/14/06 $ 0 $160,900
Albert T. Sabol .... 10,000 10% $29.95 3/14/06 $ 0 $160,900
</TABLE>
- ------
(1) The dollar amounts under these columns are the result of calculations at 5%
and 10% rates set by the Securities and Exchange Commission and, therefore,
are not intended to forecast possible future appreciation of the price of
the Common Stock. The Company did not use an alternative formula for a grant
date valuation. The Company is not aware of any formula that will determine
with reasonable accuracy a present value based on future unknown or volatile
factors.
(2) Grants of options were made on December 16, 1996 to George G. Meyer (222,000
shares), Stephen J. Meyer (150,000 shares) and William J. Meyer (30,000
shares) under the Central Sprinkler Corporation 1996 Equity Compensation
Plan (the "Plan"). These options remain subject to the approval of the Plan
by the Company's shareholders.
9
<PAGE>
The following table summarizes certain information regarding the number and
value of stock options for the persons named in the Summary Compensation Table
at October 31, 1996. Year end values are based upon the closing price of a share
of the Company's Common Stock on October 31, 1996 of $17.75.
AGGREGATED STOCK OPTION EXERCISES IN FISCAL 1996
AND FISCAL YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
Number of
Shares Securities Value of
Acquired Underlying Unexercised
on Exercise Unexercised Options In-the-Money
(Number Value at October 31, 1996 Options at
Name of Shares) Realized (Number of Shares)(1) October 31, 1996
----------------- ------------- ---------- ----------------------- ----------------
<S> <C> <C> <C> <C>
George G. Meyer . -- -- 113,125 $740,544
William J. Meyer -- -- 118,125 760,294
Stephen J. Meyer -- -- 113,125 740,544
James R. Buchanan -- -- 41,875 134,106
Albert T. Sabol . -- -- 34,375 96,281
</TABLE>
- ------
(1) All options listed for George G. Meyer, William J. Meyer and Stephen J.
Meyer were exercisable at October 31, 1996. Of the options listed for
James R. Buchanan and Albert T. Sabol, 34,375 and 26,875 were exercisable
at October 31, 1996, respectively.
INCENTIVE COMPENSATION PLAN
The Company has an Incentive Compensation Plan, administered by the
Compensation Committee of the Board of Directors, which provides awards to
designated officers and other employees. The plan provides for aggregate awards
in an amount equal to 8.0% of consolidated monthly operating income, as defined
in the plan, to be credited to the incentive compensation fund each year. In
fiscal 1996, this total was allocated to executive officers and key employees,
based on specified percentage participations in the Plan. The awards made to the
persons named in the Summary Compensation Table are included in the amounts
listed in the table.
401(K) PROFIT SHARING PLAN AND TRUST
All non-union Central Sprinkler employees who have attained age 21 and
completed one year of service are eligible to participate in Central Sprinkler's
401(k) Profit Sharing Plan and Trust. Under the terms of the plan, the Company
has agreed to match 100% of each participant's basic contributions ("Basic
Contributions"). The Basic Contribution is limited to 2% of the participant's
total compensation. A participant may also make supplemental contributions of up
to the maximum permissible amount allowed by law ("Supplemental Contributions").
Basic and Supplemental Contributions are made on a pre-tax basis. In addition, a
participant may contribute up to 10% of compensation as an after-tax
contribution ("Voluntary Contribution"). The Company may also, in its
discretion, make an additional contribution to the Plan out of its current or
accumulated net profits. Any additional Company contribution would be allocated
to the accounts of all participants in the proportion that each participant's
Basic Contributions for the year bear to the total Basic Contributions of all
participants for the year. All such contributions are subject to applicable
contribution and annual addition limitations imposed by the Internal Revenue
Code of 1986, as amended.
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Company contributions vest at the rate of 25% after three years of service
and an additional 25% for each succeeding year of service. A participant is
fully vested in his Basic, Supplemental and Voluntary Contributions at all times
and in his Company contributions upon the earliest of completion of six years of
service, attainment of age 55, death or disability. A participant may withdraw
his Voluntary Contributions once a year. Basic Contributions and earnings on
both Basic and Supplemental Contributions may be withdrawn by participant upon
attainment of age 59 1/2 or for financial hardship. At termination of employment
for any reason, a participant receives his vested benefits in the form of a lump
sum cash payment or annuity, or a combination of both.
A participant may borrow up to the amount of the sum of his Basic,
Supplemental and Voluntary Contributions and the vested balance of his Company
contributions, except that if the loan amount exceeds $10,000, the limitation is
50% of such sum, and in no event may the loan exceed $50,000. Loans must be
repaid within a period and at an interest rate determined by the plan committee.
For the past three years, the Company has made no discretionary
contributions. The Company's matching contributions that were credited to the
accounts of the named persons listed in the Summary Compensation Table above are
included in such table.
DEFERRED COMPENSATION PLAN
In August 1978, Central Sprinkler established a Deferred Compensation Plan
for selected officers, at the level of Vice President and above of Central
Sprinkler, who have been employees for at least three years. There is presently
only one officer (Albert H. Schoenberger, Jr.) in the plan. The plan provides
retirement benefits based on individually established percentages of average
annual pretax earnings for the three years prior to leaving Central Sprinkler.
Vesting is based on age and the number of years of service with Central
Sprinkler. Vested amounts are payable to the participant or a surviving spouse
over a ten-year period commencing the later of the date the selected officer
leaves Central Sprinkler or age 60. The plan also provides for forfeiture of all
rights to benefits under certain circumstances.
Inasmuch as the payments to be made under the plan are tied to earnings,
Central Sprinkler has guaranteed minimum retirement payments to those officers
selected to participate in the plan. These guaranteed payments equal $20,000 per
year for Mr. Schoenberger. To be eligible for the minimum payments, the
participant must remain in the employ of Central Sprinkler until age 62 and,
thereafter, not engage in any activities which compete with Central Sprinkler.
These minimum payments are to be reduced by amounts earned under the formula
described above. Currently, the minimum payments exceed the amount provided
under the average earnings formula.
EMPLOYMENT CONTRACTS
In March 1990, William J. Meyer, George G. Meyer and Stephen J. Meyer,
entered into employment agreements with Central Sprinkler, under which their
employment could not be terminated without five years' prior notice by either
party. The employment agreements of William J. Meyer and George G. Meyer provide
for a minimum annual salary of not less than $220,000 and $350,000,
respectively, and entitle the executive to an annual bonus for each fiscal year
in an amount equal to a specified dollar payment for each $1,000 increase over
the Company's consolidated net profits for the 1985 fiscal year (the
"Income-Based Bonus"). For the 1994 fiscal year, William J. Meyer and George G.
Meyer were each entitled to receive an Income-Based Bonus equal to $12.50 for
each $1,000 increase over the Company's consolidated net profits for the 1985
fiscal year. The Income-Based Bonus paid to each such officer for the 1994
fiscal year was $27,000. On January 5, 1996, the employment agreements of
William J. Meyer and George G. Meyer were amended to reduce their Income-Based
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Bonus payments, thereby permitting Stephen J. Meyer to participate in the
Income-Based Bonus plan without increasing the aggregate bonus percentage paid
by the Company. Commencing with the 1995 fiscal year, William J. Meyer and
George G. Meyer are entitled to an Income-Based Bonus equal to $10.00 and $7.50,
respectively, for each $1,000 increase over the Company's consolidated net
profits for the 1985 fiscal year. The Income-Based Bonus paid to William J.
Meyer for the 1995 and 1996 fiscal years was $65,920 and $18,970, respectively.
The Income-Based Bonus paid to George G. Meyer for the 1995 and 1996 fiscal
years was $49,440 and $14,227, respectively. Each agreement also guarantees a
minimum participation interest in the Company's Incentive Compensation Plan.
Stephen J. Meyer's employment agreement provides for a minimum annual salary of
not less than $250,000 and entitles him to a minimum participation interest in
the Company's Incentive Compensation Plan. In connection with the aforementioned
amendments to the employment agreements of William J. Meyer and George G. Meyer,
Stephen J. Meyer's employment agreement was amended on January 5, 1996 to
provide him with an Income-Based Bonus for each fiscal year, commencing with the
1995 fiscal year, in an amount equal to $7.50 for each $1,000 increase over the
Company's consolidated net profits for the 1985 fiscal year. The Income- Based
Bonus paid to Stephen J. Meyer for the 1995 and 1996 fiscal years was $49,440
and $14,227, respectively.
In September 1992, James R. Buchanan, William J. Pardue and Albert T. Sabol
each entered into an amended employment agreement with Central Sprinkler, which
provides for a minimum annual salary of $175,000, $145,000 and $175,000,
respectively, for an additional five-year term effective August 1993 through
August 1998, and successive one-year renewals, unless notice of termination is
given by either the employee or Central Sprinkler at least ninety days prior to
the end of the initial or a renewal term. The agreement also guarantees a
minimum participation interest in the Company's Incentive Compensation Plan.
George S. Polan entered into a five-year employment agreement with Central
Sprinkler in October 1992. The agreement provides for an annual salary of not
less than $95,000. The agreement automatically renews for additional one-year
terms unless either party terminates the agreement at the end of a term.
Albert H. Schoenberger, Jr. entered into a five-year employment agreement
with Central Sprinkler in February 1986. The agreement provides for an annual
salary of not less than $92,500. The agreement automatically renews for
additional one-year terms unless either party terminates the agreement at the
end of a term. The agreement continues through January 31, 1997.
James E. Golinveaux entered into a three-year employment agreement with
Central Sprinkler on November 30, 1995. The agreement provides for an annual
salary of not less than $125,000. The agreement automatically renews for
additional one-year terms unless notice of termination is given by either the
employee or Central Sprinkler at least ninety days prior to the end of the
initial or a renewal term.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Barbara M. Henagan and Winston J. Churchill served on the Compensation
Committee during fiscal 1996. Ms. Henagan is a partner in Bradford Associates.
The Company has agreements with Bradford Ventures Ltd., an affiliate of Bradford
Associates, and Churchill Investment Partners, Inc., a company of which Mr.
Churchill is the President, under which each entity has agreed to provide
various financial consulting services to the Company until October 1997 for an
annual fee of $100,000, plus out-of-pocket expenses. The agreements
automatically renew for successive one-year terms unless notice of termination
is given by either party at least 90 days prior to the end of any term. During
the 1996 fiscal year, the Company paid each entity $100,000 for services
rendered and expenses incurred under such agreements.
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Mr. Sharbaugh served on the Compensation Committee during fiscal 1996. He is
a partner in the law firm of Morgan, Lewis & Bockius LLP. The Company retained
this firm for various matters during the 1996 fiscal year and expects to do so
again during the 1997 fiscal year.
Notwithstanding anything to the contrary, the following report of the
Compensation Committee and the performance graph on page 18 shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or under the Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
COMPENSATION COMMITTEE REPORT
The Company's Compensation Committee consists of four directors: Winston
J. Churchill, Barbara M. Henagan, Richard P. O'Leary and Thomas J. Sharbaugh.
The Company's compensation policies, plans and programs, as developed and
implemented by the Compensation Committee, seek to maintain the high level of
technical expertise necessary to ensure profitability, to attract and retain
professional management and to motivate the Company's executive officers to
perform to the full extent of their capabilities.
The Company has entered into employment agreements with George G. Meyer, the
Company's chief executive officer, and eight other current executive officers of
the Company. The agreements set the base salary of these officers. These
agreements expire at various dates from 1997 through 2001, but have renewal
terms.
During fiscal 1996, the Committee did not change Mr. George Meyer's base
salary. The Committee approved an increase in the base salary for Mr. George
Meyer from $250,000 to $350,000 in fiscal 1995. The increase was the result of
the Committee's review of Mr. Meyer's performance relating to the Company's
improving market share in the sprinkler industry, the results of the Company's
investment in research and development, the performance of the Company's stock
on the NASDAQ/NMS stock market, the results of operations of the Company during
the past two years and Mr. Meyer's achievement of the Committee's specific goal
that he guide the Company with a view toward its long-term competitive position.
There was no change to Mr. Meyer's base salary during fiscal 1994.
In adjusting an executive officer's base salary and in determining the salary
of new executive officers, the Committee sets salaries to be competitive with
other comparable companies, taking into consideration the results of the
Company, if applicable, the position's complexity and responsibility and the
need for special expertise. In addition, the Committee also uses the performance
criteria that were used in determining Mr. George Meyer's base salary discussed
above. The Company has enjoyed a long-standing relationship with its executive
officers, most of whom have worked for the Company for many years. The Committee
will continue to match the Company's goals of increased profitability and
shareholder return with executive performance.
The Stock Option Committee, as Plan Administrator of the Company's Incentive
and Non-Qualified Stock Option Plans, and the Compensation Committee, as Plan
Administrator of the Company's Employee Stock Ownership Plan, use stock options
and grants of stock as an additional incentive to employees. The objective of
these plans is to align employee interests, including senior management, with
shareholder long-term interests. Individual grants under the plans are based on
individual performance or, with respect to the Central ESOP, annual
compensation.
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Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
deduction that may be claimed by a "public company" for total compensation in
excess of $1 million paid to the chief executive officer or to any of the other
four most highly compensated officers except to the extent that any compensation
in excess of $1 million is paid pursuant to a performance-based plan. This
provision became effective November 1, 1994 with respect to the Company. After
considering the application of Section 162(m) to its compensation policies, the
Committee has determined that the provisions of that Section would not affect
the compensation of any of the executive officers of the Company. To the extent
that this might not continue to be the case, the Committee would consider any
changes necessary to conform to the provisions of Section 162(m).
Compensation Committee of the Board of Directors
Winston J. Churchill Barbara M. Henagan
Richard P. O'Leary Thomas J. Sharbaugh
CERTAIN TRANSACTIONS
The Company leases an aircraft from a business in which Stephen J. Meyer, a
director and executive officer of the Company, is the sole proprietor. During
fiscal 1996, the Company paid such business $395,000 for the use of such
aircraft.
PROPOSAL TO APPROVE THE
CENTRAL SPRINKLER CORPORATION
1996 EQUITY COMPENSATION PLAN
At the Meeting, there will be presented to the shareholders a proposal to
approve the 1996 Equity Compensation Plan (the "Plan"). In November 1996, the
Board of Directors of the Company approved the Plan. The Plan is intended to
foster and promote the long-term financial success of the Company by (1)
attracting and retaining employees and non-employee directors of outstanding
ability by the granting of stock options; (2) providing employee and director
compensation opportunities which are competitive with those of other
corporations; and (3) enabling such employees and directors to participate in
the financial success of the Company by encouraging them to become shareholders
of the Company.
MATERIAL FEATURES OF THE PLAN
To accomplish the purposes described above, the Plan provides for the grant
of incentive stock options ("ISOs") and non-qualified stock options ("NQSOs")
(collectively, "Options") to designated employees, including employee members of
the Board of Directors and non-employee directors (collectively,
"Participants"). Only employees are eligible to receive grants of ISOs under the
Plan. Those Participants to receive Options are selected by a committee composed
of two or more persons who are appointed by the Board of Directors and who are
considered "outside directors" and "non-employee directors" (the "Committee").
All Options granted to non-employee directors must be ratified or approved by
the Board of Directors.
The price per share of all Options is determined by the Committee on the date
the Option is granted and may be equal to, less than or more than the fair
market value of a share of common stock on the date of grant, determined in
accordance with the Plan; provided, however, that the price per share of an ISO
cannot be less than the fair market value of a share of common stock on the date
of grant. Options are exercisable in accordance with terms designated by the
Committee and set forth in each Participant's grant letter. An ISO granted to a
Participant who owns more than 10% of the combined voting power of the Company's
stock must have a
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price per share of at least 110% of the fair market value of a share of Company
stock on the date of grant and will expire five years from the date of grant.
All other Options generally expire ten years from the date of grant, but will
expire earlier in the case of the Participant's termination of service,
disability or death.
The Participant will be permitted to pay the exercise price of the Option (i)
in cash, (ii) with the approval of the Committee, by delivering shares of
Company stock owned by the Participant (including Company stock acquired in
connection with the exercise of the Option, subject to such restrictions as the
Committee deems appropriate) and having a fair market value on the date of
exercise equal to the exercise price or (iii) by such other method as the
Committee may approve, including payment by tendering the Participant's
promissory note, in such form and on such terms as the Committee shall
determine, or payment through a broker in accordance with certain permitted
procedures. All grants under the Plan shall be subject to applicable federal
(including FICA), state and local tax withholding requirements. The Company may
require the Participant or other person receiving shares upon the exercise of an
Option to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Option, or to make other arrangements
satisfactory to the Committee, including, if the Committee so permits, payment
by tendering the Participant's promissory note in such form and on such terms as
the Committee may determine, or the Company may deduct from other wages paid by
the Company the amount of any withholding taxes due with respect to such Option.
The maximum number of shares of common stock which may be issued by the
Company under the Plan is 800,000 and the maximum number of shares any
individual may receive under the Plan during a calendar year is 300,000. If
there is any change in the number or kind of shares of Company stock outstanding
because of a stock split or recapitalization, merger or reorganization, payment
of an extraordinary dividend or a similar corporate change or event occurs, the
maximum number of shares authorized under the Plan, the individual yearly limit,
and the number of shares issuable to Participants upon the exercise of Options
shall be appropriately adjusted by the Board of Directors.
The Plan provides for certain actions to be taken in the event of a merger,
consolidation, sale of all or substantially all of the Company's assets, the
liquidation of the Company, a tender or exchange offer for more than 50% of the
Company's common stock, or if the Board of Directors consists of a majority of
individuals who were not nominated or elected by the directors in office at the
time of the nomination or election.
The Board of Directors can modify or amend the Plan, except that without
shareholder approval it may not make any amendment that would require
shareholder approval under Section 162(m) of the Internal Revenue Code of 1986,
as amended.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
There are no federal income tax consequences to a Participant or the Company
upon the grant of an Option under the Plan. Upon the exercise of a NQSO, a
Participant will recognize ordinary compensation income in an amount equal to
the excess of the fair market value of the shares at the time of exercise over
the option price, and the Company will generally be entitled to a corresponding
federal income tax deduction at such time. Upon the sale of shares acquired by
the exercise of a NQSO, a Participant will have a capital gain or loss
(short-term or long-term depending upon whether the shares were held for more
than six months) in an amount equal to the difference between the Participant's
basis in the shares and the amount realized upon the sale.
Upon the exercise of an ISO, a Participant will not recognize taxable income,
but in the year in which an ISO is exercised, will include in the computation of
the recipient's alternative minimum taxable income the amount by which the fair
market value of the shares acquired upon exercise exceeds the option price. Upon
the
15
<PAGE>
sale of shares acquired by the exercise of an ISO after two years from the date
of grant and after one year from the date such shares were transferred to the
Participant upon exercise of the ISO, the Participant will recognize long-term
capital gain or loss in the amount of the difference between the option price
(or the Participant's other tax basis in the shares) and the amount realized on
the sale, and the Company will not be entitled to any tax deduction by reason of
the grant or exercise of the ISO. As a general rule, if a Participant disposes
of the shares acquired upon exercise of an ISO before satisfying both holding
period requirements (a "disqualifying disposition"), the gain recognized on such
a disposition will be taxed as ordinary income to the extent of the difference
between the fair market value of such shares on the date of exercise and the
option price, and the Company will be entitled to a deduction in that amount.
The gain, if any, in excess of the amount recognized as ordinary income on such
a disqualifying disposition will be long-term or short-term capital gain,
depending upon the length of time the Participant held the shares prior to the
disposition.
If the sale of shares acquired upon the exercise of an Option under the Plan
could subject the Participant to liability under Section 16(b) of the Exchange
Act, special rules will govern the federal income tax consequences to such
Participant and the Company with respect to the exercise of the Option.
REQUIRED APPROVAL FOR THE PLAN
Approval of the Plan requires an affirmative vote by the holders of a
majority of the shares of Common Stock present in person or by proxy at the
Meeting and entitled to vote thereon.
The Board of Directors recommends a vote FOR the proposal to approve the
Central Sprinkler Corporation 1996 Equity Compensation Plan.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of Arthur Andersen LLP as
independent public accountants to audit the books, records and accounts of the
Company for fiscal year 1997. This firm audited the Company's books for fiscal
year 1996, has no ownership interest in the Company and is considered to be well
qualified.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he desires to do
so and will be available to respond to appropriate questions at the meeting. If
the shareholders do not ratify the selection of this firm, the selection of
another firm of independent public accountants will be considered by the Board
of Directors.
The Board of Directors recommends a vote FOR the proposal to ratify the
selection of Arthur Andersen LLP as independent public accountants.
17
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COMPARATIVE PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Common Stock with the cumulative total shareholder return of (i) the Standard&
Poors Building Material Index (the "S&P Index") and (ii) the NASDAQ Stock Market
(U.S.) Index (the "NASDAQ Index"), assuming an investment of $100 on October 31,
1991 in each of the Common Stock of the Company, the NASDAQ Index stocks and the
S&P Index stocks. The graph assumes dividend reinvestment.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG CENTRAL SPRINKLER CORPORATION, THE NASDAQ STOCK MARKET-US INDEX
AND THE S & P BUILDING MATERIALS INDEX
350 ------------------------------------------------------------------------
#
D 300 ------------------------------------------------------------------------
O
250 ------------------------------------------------------------------------
L *
L 200 ------------------------------------------------------------------------
* @
A @ @ #
150 ------------------------------------------------------------------------
R * *
*@ # @
S 100 -#@*--------------------------------------------------------------------
# #
50 -----------------------------------------------------------------------
0 -----------------------------------------------------------------------
10/91 10/92 10/93 10/94 10/95 10/96
CENTRAL SPRINKLER CORPORATION = # NASDAQ STOCK MARKET-US = *
S & P BUILDING MATERIALS = @
10/91 10/92 10/93 10/94 10/95 10/96
----- ----- ----- ----- ----- -----
CENTRAL SPRINKLER CORPORATION 100 74 121 93 307 165
NASDAQ STOCK MARKET-US 100 113 145 146 197 232
S & P BUILDING MATERIALS 100 119 158 126 154 180
* $100 INVESTED ON 10/31/91 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING OCTOBER 31.
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OTHER MATTERS
The Board of Directors knows of no other matter which will be presented at
the Meeting for action by the shareholders. However, if other matters properly
come before the Meeting, or any adjournment thereof, it is intended that the
proxies will be voted according to the judgment of the person authorized to act
by the proxies. If the enclosed proxy is properly executed and returned prior to
voting at the Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. In the absence of such
instructions, the shares will be voted for the nominees of the Company in the
election of directors and for the other proposals specified in the Notice.
The expense of this solicitation will be paid by the Company. If necessary,
some of the officers of the Company and regular employees of Central Sprinkler
may solicit proxies personally or by telephone.
Further information regarding the Company is set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1996 which has
been filed with the Securities and Exchange Commission. The Form 10-K (including
financial statements and schedules, but without exhibits) may be obtained free
of charge by writing to: Central Sprinkler Corporation, 451 North Cannon Avenue,
Lansdale, Pennsylvania 19446. Copies of exhibits to the Form 10-K will be
furnished upon request and the payment of a reasonable fee.
A copy of the Company's 1996 Annual Report to Shareholders, which includes
financial statements, is being transmitted herewith, but does not form a part of
the proxy solicitation materials.
Shareholders are reminded that proposals of shareholders intended to be
presented at the Company's next Annual Meeting of Shareholders in 1998 must be
received by the Company for inclusion in its Proxy Statement and form of proxy
relating to that Meeting by October 8, 1997.
The Board of Directors will appreciate the prompt return of the enclosed
proxy, dated and signed. You may revoke your proxy before it is exercised by
giving written notice to the Secretary of the Company, and you may vote in
person if you attend the Meeting.
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PROXY PROXY
CENTRAL SPRINKLER CORPORATION
ANNUAL MEETING OF SHAREHOLDERS, MARCH 7, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints WILLIAM J. MEYER and GEORGE G. MEYER, and
each of them, jointly and severally, proxies, with full power of substitution,
to vote, as designated below and on the reverse side hereof, all shares of
Common Stock which the undersigned is entitled to vote on the election of
directors, the proposals on the reverse side hereof and on all other matters
which may come before the 1997 Annual Meeting of Shareholders of Central
Sprinkler Corporation or any adjournment thereof.
The shares represented by this Proxy, duly executed, will be voted. If
instructions are given in the spaces below and on the reverse side hereof, the
shares will be voted in accordance therewith; if instructions are not given, the
shares will be voted for the election of the directors named in Proposal 1 below
and in favor of Proposals 2 and 3 set forth on the reverse side hereof.
1. ELECTION OF DIRECTORS. FOR all nominees listed / / WITHHOLD AUTHORITY to / /
(except as marked to vote for all nominees
the contrary) listed below
(Winston J. Churchill, William J. Meyer, George G. Meyer, Stephen J. Meyer,
Barbara M. Henagan, Joseph L. Jackson, Richard P. O'Leary, Thomas J.
Sharbaugh and Timothy J. Wagg)
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list above.)
(Continued and to be signed on reverse side)
2. PROPOSAL TO APPROVE THE CENTRAL SPRINKLER CORPORATION 1996 EQUITY
COMPENSATION PLAN.
FOR / / AGAINST / / ABSTAIN / /
3. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS.
FOR / / AGAINST / / ABSTAIN / /
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 1997
----------------------
-----------------------------[SEAL]
Signature
---------------------------------
Signature if held jointly
