LANCER CORPORATION
6655 Lancer Blvd.
San Antonio, Texas 78219
April 22, 1999
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders (the
Meeting) of Lancer Corporation (the Company) to be held at the Companys
Corporate Headquarters at 6655 Lancer Blvd., San Antonio, Texas on Thursday, May
27, 1999 at 9:30 a.m., local time.
The attached Notice of Annual Meeting and Proxy Statement fully describes the
formal business to be transacted at the Meeting, which includes electing seven
directors of the Company, and transacting such other matters as may properly
come before the Meeting or any adjournments thereof.
Directors and officers of the Company, as well as a representative of the
Companys independent auditors, will be present at the annual meeting to respond
to any questions that you may have.
The Companys Board of Directors believes that a favorable vote on the matter to
be considered at the Meeting is in the best interest of the Company and its
shareholders and unanimously recommends a vote FOR such matter. Accordingly, we
urge you to review the accompanying material carefully, and to sign, date and
return the enclosed Proxy promptly. If you attend the Meeting, you may vote in
person even if you have previously mailed a Proxy.
Sincerely,
/s/ George F. Schroeder
George F. Schroeder
President and Chief Executive Officer
<PAGE>
LANCER CORPORATION
6655 Lancer Blvd.
San Antonio, Texas 78219
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 27, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the Meeting) of
Lancer Corporation (the Company or Lancer) will be held at the Companys
Corporate Headquarters at 6655 Lancer Blvd., San Antonio, Texas on Thursday, May
27, 1999 at 9:30 a.m., local time. A form of Proxy and a Proxy Statement for the
Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of a Board of Directors consisting of seven directors for the
ensuing year; and
2. Such other matters as may properly come before the Meeting or any
adjournments thereof.
The close of business on April 12, 1999 has been fixed by the Board of Directors
as the record date for determining shareholders entitled to notice of and to
vote at the Meeting or any adjournments thereof. For a period of at least 10
days prior to the Meeting, a complete list of shareholders entitled to vote at
the Meeting shall be open to the examination of any shareholder during ordinary
business hours at the Companys Corporate Headquarters, 6655 Lancer Blvd., San
Antonio, Texas 78219.
Information concerning the matters to be acted upon at the Meeting is set forth
in the accompanying Proxy Statement.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, YOU MAY VOTE
IN PERSON EVEN IF YOU HAVE PREVIOUSLY MAILED A PROXY.
By Order of the Board of Directors
/s/ George F. Schroeder
George F. Schroeder
President and Chief Executive Officer
San Antonio, Texas
April 22, 1999
<PAGE>
LANCER CORPORATION
6655 Lancer Blvd.
San Antonio, Texas 78219
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 27, 1999
THE PROXY
This Proxy Statement is being furnished to shareholders of Lancer Corporation
(the Company or Lancer) in connection with the solicitation of Proxies (the
Proxies) for use at the Annual Meeting of Shareholders (the Meeting) to be held
at the Companys Corporate Headquarters at 6655 Lancer Blvd., San Antonio, Texas
on Thursday, May 27, 1999, at 9:30 a.m., local time, or at such other time and
place to which the Meeting may be adjourned. The enclosed Proxy is solicited by
the Board of Directors of the Company. Where a shareholder has appropriately
specified how a Proxy is to be voted, it will be voted accordingly.
The Proxy may be revoked at any time by providing written notice of such
revocation to The Bank of New York, Securities Transfer Services, 1301 Fannin,
Suite 2215, Houston, Texas 77002, Attention: Proxy Department. This notice must
be received prior to 5:00 p.m., local time on May 13, 1999. If notice of
revocation is not actually received by the Proxy Department by such date, a
shareholder may nevertheless revoke a Proxy by attending the Meeting and voting
in person.
The address of the principal executive offices of the Company is 6655 Lancer
Blvd., San Antonio, Texas 78219. This Proxy Statement and enclosed Proxy are
first being mailed to shareholders on or about April 22, 1999.
RECORD DATE AND VOTING SECURITIES
The record date for determining the shareholders entitled to vote at the Meeting
is the close of business on April 12, 1999 (the Record Date), at which time the
Company had issued and outstanding 9,121,482 shares of Common Stock, par value
$.01 per share (the Common Stock), which class of stock constitutes the only
outstanding securities of the Company entitled to vote at the Meeting.
QUORUM AND VOTING
The presence at the Meeting, in person or by Proxy, of the holders of a majority
of the outstanding shares of Common Stock is necessary to constitute a quorum.
Each share of Common Stock is entitled to one vote with respect to each matter
to be voted on at the Meeting. The approval of all proposals requires the
affirmative vote of a majority of the outstanding shares of Common Stock present
in person or by Proxy at the Meeting. Neither the Companys Articles of
Incorporation nor Bylaws provide for cumulative voting.
Abstentions and broker non-votes will be included in determining the presence of
a quorum at the meeting. Because matters to be voted upon at the meeting must be
approved by a vote of the holders of a majority of the shares of the Company
present at the meeting in person or by proxy, any abstention (including broker
non-votes) on any matter will have the effect of and be counted as a no vote.
1
<PAGE>
ACTIONS TO BE TAKEN AT THE MEETING
All shares represented by valid Proxies, unless the shareholder otherwise
specifies, will be voted FOR (i) the election of the seven persons named under
Election of Directors of the Company; and (ii) at the discretion of the proxy
holders, any other matter that may properly come before the Meeting or any
adjournment thereof. The Board of Directors of the Company unanimously
recommends a vote FOR the proposal described in this Proxy.
PROPOSAL I - ELECTION OF DIRECTORS
There are seven directors to be elected. It is intended that the names of the
persons indicated in the following table will be placed in nomination and that
the persons named in the Proxy will vote for their election unless otherwise
instructed. Each of the nominees has indicated his or her willingness to serve
as a member of the Board of Directors, if elected. In case any nominee shall
become unavailable for election to the Board of Directors for any reason not
presently known or contemplated, the proxy holders will have discretionary
authority in that instance to vote the Proxy for a substitute. To be elected, a
nominee must receive the affirmative vote of the holders of a majority of the
shares of Common Stock present, in person or by Proxy, at the Meeting. Each
nominee elected will serve as director for the ensuing year and until his or her
successor shall have been duly qualified and elected.
The nominees are as follows:
<TABLE>
<CAPTION>
Name Age Position
- --------------------------------- --------------- -------------------------------------
<S> <C> <C>
Alfred A. Schroeder (1) 62 Chairman of the Board
George F. Schroeder (1) 59 President, Chief Executive Officer
and Director
Walter J. Biegler (2) 57 Director
Jean M. Braley 69 Director
Charles K. Clymer (2) 63 Director
Michael E. Smith (2) 58 Director
E.T. (Toby) Summers III 51 Director
<FN>
(1) Alfred A. Schroeder and George F. Schroeder are brothers. No other nominee
is related by blood, marriage or adoption to another nominee or to any
executive officer of the Company or its subsidiaries.
(2) Member of the Compensation, Audit, and Stock Option Committees.
</FN>
</TABLE>
Mr. Alfred A. Schroeder is a co-founder of the Company and has served as
Chairman of the Board of Directors of the Company since its inception in 1967.
His primary responsibilities include conceptual engineering design, new product
development and corporate planning. He is the brother of George F. Schroeder,
and is also a partner in Lancer Properties. See Compensation and Certain
Transactions.
Mr. George F. Schroeder is a co-founder of the Company and has served as its
President, Chief Executive Officer and director since 1967. His primary
responsibilities include strategic planning, marketing, overall production
management and corporate administration. He is the brother of Alfred A.
Schroeder, and is also a partner in Lancer Properties. See Compensation and
Certain Transactions.
Mr. Walter J. Biegler has served as a director of the Company since 1985. Mr.
Biegler is a private investor. From 1991 until 1998, he was Chief Financial
Officer of Periodical Management Group, Inc., a San Antonio, Texas distributor
of periodicals, books and specialty items in the United States, Mexico and the
Virgin Islands. Prior to November 1991, he served as the Chief Financial Officer
and Senior Vice President-Finance of La Quinta Motor Inns, Inc. of San Antonio,
Texas, a national hotel chain.
2
<PAGE>
Ms. Jean M. Braley has served as a director of the Company since 1976. She
served as Secretary of the Company from 1982 to 1985. Ms. Braley has been a
private investor since 1985. She is also a partner in Lancer Properties. See
Compensation and Certain Transactions.
Mr. Charles K. Clymer has served as a director of the Company since 1996. Mr.
Clymer retired from The Coca-Cola Company in 1993 after 31 years of service.
Managerial positions held with Coca-Cola International included Manager of
Chile, Director and Senior Vice President of Coca-Cola (Japan) Company Limited,
and Vice President of On Premise Market Development and Customer Service for the
Latin America Group.
Mr. Michael E. Smith has served as a director of the Company since 1985. Mr.
Smith is presently a principal shareholder and Executive Vice President of
Gosling & Sachse, an insurance brokerage firm. He has been employed by the same
firm since 1968. Mr. Smith has been the Companys insurance broker since 1981.
See Compensation and Certain Transactions.
Mr. E.T. (Toby) Summers III served in a variety of leadership positions with
Coca-Cola Bottling Company of the Southwest from 1973 through 1998. Most
recently he held the position of President and Chief Operating Officer from 1988
through 1998 until the companys merger with Coca-Cola Enterprises. Mr. Summers
also served as Chairman of the Board of Directors of Western Container
Corporation, a manufacturer of plastic bottles for the beverage industry, and as
a member of the Board of Governors of the National Coca-Cola Bottlers
Association from 1989-1998.
Board of Directors and Committees
The business of the Company is managed under the direction of the Board of
Directors. The Board meets on a periodic basis to review significant
developments affecting the Company and to act on matters requiring Board
approval. The Board of Directors met four times and acted by unanimous written
consent two times during the 1998 fiscal year. During such period, each member
of the Board participated in at least 75% of all Board and applicable Committee
meetings.
The Board of Directors has established audit, compensation and stock option
committees to devote attention to specific subjects and to assist it in the
discharge of its responsibilities. Mr. Walter J. Biegler, Mr. Charles K. Clymer
and Mr. Michael E. Smith are the members of the audit, compensation and stock
option committees. The Audit Committee is responsible for the review of the
audited financial results and coordination of the annual audit. The Compensation
Committee is responsible for officer compensation. The Stock Option Committee is
responsible for administering the Companys stock option plans. The Compensation
Committee met once, and the Stock Option Committee acted by unanimous consent
four times during the 1998 fiscal year. The Audit committee met once during the
1998 fiscal year.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 26, 1999, regarding the
beneficial ownership of common stock of Lancer by each person known by Lancer to
own 5% or more of the outstanding shares of each class of Lancers Common Stock,
each director of Lancer, each executive officer of the Company named in the
Summary Compensation Table set forth in this proxy, and the directors and
executive officers of Lancer as a group. The persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
owned by them, unless otherwise noted. Number of Shares Name of Beneficial Owner
and Number of Common Stock Percent of of Persons in Group Beneficially Owned
Class Alfred A. Schroeder (1)(2) 1,209,183 12.6 George F. Schroeder (1)(3)
1,393,901 14.6 Walter J. Biegler 6,750 * Jean M. Braley (1)(4) 477,177 5.0
Charles K. Clymer 6,521 * Michael E. Smith 7,650 * Greenbriar Partners, Ltd. (5)
549,225 5.7 All directors and executive officers as a group (ten persons) (6)
3,115,007 32.5 *Less than 1%
(1) The mailing address for Mr. Alfred A. Schroeder, Mr. George F. Schroeder and
Ms. Jean M. Braley is 6655 Lancer Blvd., San Antonio, Texas 78219.
(2) Includes 111,375 shares purchasable pursuant to options which are
exercisable within the next 60 days, but excludes 206,969 shares held of
record by Mr. Alfred A. Schroeders two adult children.
(3) Includes 447,525 shares held by trusts for the children of Mr. George F.
Schroeder, of which Mr. George F. Schroeder is the trustee, and includes
111,375 shares purchasable pursuant to options which are exercisable within
the next 60 days. Excludes 15,187 shares held by Mr. George F. Schroeders
three adult children.
(4) Includes 265,318 shares held by the Estate of William V. Braley for which
Ms. Braley serves as sole independent executrix.
(5) Greenbriar Partners, Ltd. is an investment firm whose mailing address is
1901 N. Akard, Dallas, Texas 75201. Includes 13,500 shares held by Rowe
Family Partnership, Ltd.
(6) Includes 235,350 shares purchasable pursuant to options which are
exercisable within the next 60 days.
4
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the executive
officers of the Company:
<TABLE>
<CAPTION>
Name Age Position with the Company
- --------------------------- ------- ---------------------------------------
<S> <C> <C>
Alfred A. Schroeder 62 Chairman of the Board
George F. Schroeder 59 President and CEO
Michael W. Andaloro 52 Chief Operating Officer
David E. Green 42 Chief Financial Officer
Christi A. Rohmer 34 Controller
</TABLE>
Mr. Alfred A. Schroeder is a co-founder of the Company and has served as
Chairman of the Board of Directors of the Company since its inception in 1967.
His primary responsibilities include conceptual engineering design, new product
development and corporate planning. He is the brother of George F. Schroeder,
and is also a partner in Lancer Properties. See Compensation and Certain
Transactions.
Mr. George F. Schroeder is a co-founder of the Company and has served as
President, Chief Executive Officer and director since 1967. His primary
responsibilities include strategic planning, marketing, overall production
management and corporate administration. He is the brother of Alfred A.
Schroeder, and is also a partner in Lancer Properties. See Compensation and
Certain Transactions.
Mr. Michael W. Andaloro joined Lancer in 1998 as Chief Operating Officer. Mr.
Andaloro previously held various senior positions, including Vice President
Operations and Group Vice President of Technical Services, during 15 years with
Pioneer Flour Mills in San Antonio, Texas. Mr. Andaloro is a business resource
planning specialist, having led Pioneer in a successful Class A MRP II
implementation.
Mr. David E. Green joined Lancer in 1998 as Chief Financial Officer. Before
coming to Lancer, Mr. Green spent 14 years with Coca-Cola Bottling Company of
the Southwest, a wholly-owned subsidiary of Texas Bottling Group. Mr. Green
served in senior positions including Vice President Operations and Chief
Financial Officer. Before joining Coca-Cola Bottling Company of the Southwest,
Mr. Green worked four years in public accounting with Deloitte Haskins & Sells.
Ms. Rohmer joined Lancer in 1995 and serves as Corporate Controller. Before
joining Lancer, Ms. Rohmer worked for five years as Assistant Controller for
Pioneer Flour Mills, and three years in public accounting with Ernst & Young,
LLP.
COMPENSATION AND CERTAIN TRANSACTIONS
Report of the Compensation Committee and the Stock Option Committee on Executive
Compensation
The Compensation Committee of the Board of Directors consists of three
non-employee directors of the Company. It is authorized to review and consider
the Companys compensation standards and practices. The Compensation Committee
considers suggestions from management and makes recommendations to the Board of
Directors concerning the cash compensation to be paid to executive and other
officers of the Company and its subsidiaries. The Stock Option Committee of the
Board of Directors was formed in 1985 at the time of the adoption of the
Companys first Incentive Stock Option plan. It consists of three non-employee
directors. The Committee administers such plans and awards long-term
compensation in the form of stock options to executive officers and other
eligible employees under such plans.
The Companys executive compensation program is designed to attract and retain
talented managers and to motivate such managers to increase profitability and
shareholder value over time. Executive officers compensation consists of base
salary and benefits and may include incentives in the form of annual cash
bonuses and stock options.
5
<PAGE>
In determining base salaries for executive and other officers, the Compensation
Committee considers recommendations from the President and CEO of the Company.
Annual cash bonuses are typically tied to a performance target approved by the
Compensation Committee. Bonuses may also be awarded at the Compensation
Committees discretion for special individual contributions to the success of the
Company. Since the Company did not achieve desired results for the year,
executive officers were generally not awarded cash bonuses. The Chairman did
receive a $36,512 bonus in 1998 that was not directly related to an overall
performance target.
Based upon available data, the Compensation Committee believes the base salaries
and cash bonuses of its executive officers were set at or below the levels
of comparable companies as measured by market capitalization.
All employees, including executive officers and non-employee directors are
eligible to receive grants of stock options from the Company. Options granted
generally have an exercise price equal to the market value of the Common Stock
on the date of grant, generally become exercisable in equal annual installments
over four years after the date of grant, and are contingent upon the optionees
continued employment with the Company. The number of options granted to an
individual varies according to his or her individual contribution to the success
of the Company. The Stock Option Committee intends to make future grants as
necessary to focus managers on increasing profitability and shareholder value.
Recent amendments to the federal income tax laws impose limitations on the
deductibility of compensation in excess of $1 million paid to executive officers
in certain circumstances. Certain performance-based compensation, however, is
specifically exempt from such limitations. Since the vesting of options under
the Companys 1992 Non-Statutory Stock Option Plan (the 1992 Plan) is not subject
to the attainment of performance objectives, it is possible that awards to Named
Officers under this plan, when taken in conjunction with their annual
compensation, could become subject to the limitations of Section 162(m) of the
Internal Revenue Code. Awards made under the 1992 Plan to two of the Named
Officers will expire if not exercised by January 12, 2002. Therefore, it is
likely that these options will be exercised by January 12, 2002. When added to
other compensation likely to be paid to such officers in 2002, compensation
related to these awards is likely to be partially non-deductible to the Company
under Section 162(m). The committee believes the compensation of its executive
officers cannot always be based upon fixed formulas, and that the prudent use of
discretion in determining compensation is in the best interest of the Company
and its shareholders. In some cases, the Committee, in the exercise of such
discretion, may approve executive compensation that is not fully deductible.
However, the Company does not expect the limitations on deductibility to have a
material impact on its financial condition.
Compensation and Stock Option Committees
Walter J. Biegler, Chairman
Charles K. Clymer
Michael E. Smith
Compensation of Directors
Directors who are also employees of the Company receive no compensation for
serving as a director. Directors who are not employees of the Company receive a
fee of $2,000 per meeting.
6
<PAGE>
Compensation Committee Interlocks and Insider Participation
Mr. Michael E. Smith is a member of the Companys Compensation and Stock Option
Committees. Mr. Smith is a principal shareholder and Executive Vice President of
the insurance brokerage firm of Gosling & Sachse. The Company paid approximately
$373,000, $279,000 and $305,000 in premiums in 1998, 1997 and 1996,
respectively, for various insurance policies placed by or through Gosling &
Sachse.
Summary Compensation Table
The following table sets forth the compensation paid or to be paid by the
Company to the Chairman of the Board and the Chief Executive Officer for
services rendered in all capacities for the years ended December 31, 1998, 1997
and 1996.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Other Securities
Annual Underlying All Other
Year Salary Bonus Compensation (1) Options Compensation (2)
Name/Title ($) ($) ($) (#) ($)
- ------------------------------ -------- ---------- --------- ---------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Alfred A. Schroeder 1998 199,992 36,512 4,624 - 57,199
Chairman of the 1997 199,992 38,214 4,945 - 52,432
Board 1996 199,992 47,693 4,441 - 60,385
George F. Schroeder 1998 199,992 - 4,624 - 29,324
President & CEO 1997 199,992 - 4,945 - 28,080
1996 199,992 28,782 4,441 - 31,314
<CAPTION>
(1) These amounts reflect Company contributions to its profit sharing plan for
the benefit of the Named Officers for the years indicated.
(2) These amounts include insurance premiums paid for the benefit of the Named
Officers and certain other taxable fringe benefits.
</TABLE>
7
<PAGE>
Options Exercised During the 1998 Fiscal Year and Fiscal Year End Option Values
The following table discloses, for the Chairman of the Board, the Chief
Executive Officer, and the Named Executive Officers, information concerning
options exercised during the fiscal year ended December 31, 1998, and the number
and value of the options held at the end of fiscal year 1998 based upon the
closing price of $11.00 per share of Common Stock on December 31, 1998. Amounts
are adjusted for the three-for-two stock dividends paid in July 1997, July 1996
and July 1995.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the
Money
Shares Options at FY-End Options at FY-End
Acquired Value Exercisable/ Exercisable/
Name/Title on Realized Unexercisable Unexercisable
Exercise
- -------------------------- ----------- -------------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Alfred A. Schroeder 76,612 $643,005 111,375/ $1,080,783/
Chairman of the 0 $ 0
Board
George F. Schroeder 76,612 $643,005 111,375/ $1,080,783/
President & CEO 0 $ 0
</TABLE>
8
<PAGE>
Company Performance
The following graph shows a comparison of cumulative total returns for the
Company, the Standard & Poors SmallCap 600 Index, and the Standard & Poors
Specialized Manufacturing (SPSM) Index for the five-year period ended December
31, 1998.
The total cumulative return on investment (change in the year end stock price
plus reinvested dividends) for each year for the Company, the Standard & Poors
SmallCap 600 Index, and the SPSM Index is based on the stock price or composite
index on December 31 of each year presented. The comparison assumes that $100
was invested in the Companys Common Stock and in each of the other two indices.
Profit Sharing Plan
In 1991 the Company amended the non-contributory profit sharing plan it
originally adopted in 1985 to comply with changes in the law. The amount of
annual contributions made by the Company is at the discretion of the Board of
Directors but may not exceed an amount equal to fifteen percent of the
compensation paid or accrued during the year to all participating employees.
Substantially all United States employees are eligible to participate. The
Companys consolidated statements of income for the years ended December 31,
1998, 1997, and 1996 include provisions of $559,000, $576,000 and $520,000,
respectively, attributable to the plan.
9
<PAGE>
Certain Transactions
Michael E. Smith, a principal shareholder and Executive Vice President of the
insurance brokerage firm Gosling & Sachse, has been the Companys insurance
broker since 1981. The Company paid approximately $373,000, $279,000 and
$305,000 in premiums for various insurance policies placed by or through
Bailey-Gosling Associates, Inc. in 1998, 1997 and 1996, respectively, for which
Mr. Smiths services were used in connection therewith.
Lancer Properties is a Texas general partnership that owns the land and building
at 235 West Turbo in San Antonio, Texas where a portion of the Companys
production operations are located. Lancer Properties leased the premises to the
Company for a term of 21 years from June 1, 1977 until May 31, 1998 at a rental
of $6,600 per month. The Company now leases the premises on a month-to-month
basis for $6,600 per month. The Company also leases adjoining operating
facilities at 257R West Turbo, from Lancer Properties on a month-to-month basis
for $800 per month. The Company pays all maintenance expenses, property taxes,
assessments and insurance premiums on these facilities. In conjunction with a
debt refinancing in 1992, the Company advanced $220,000 to this partnership.
Repayment of this advance was made through a reduction of lease payments
otherwise due between the Company and the partnership and includes an interest
charge at a rate of 9.25% per annum. The advance was retired during 1997.
Improvements to these properties paid by the Company are recorded as an offset
against the lease payments. Alfred A. Schroeder, George F. Schroeder and Jean M.
Braley, all of whom were directors of the Company during 1998, own 13.33%,
13.33% and 15%, respectively, of Lancer Properties. The Estate of William V.
Braley, for which Mrs. Braley serves as sole independent executrix, also holds a
15% interest in the partnership.
As of December 31, 1998, Alfred A. Schroeder and George F. Schroeder were
indebted to the Company for approximately $371,000 for cash advances received
from the company prior to and during 1998. The obligation to repay this
indebtedness is evidenced by promissory notes due on or before January 10, 2000,
and payable to the company in four equal annual installments, beginning on or
before January 10, 1997, together with interest at the AFR rate, as published by
the Internal Revenue Service.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP (KPMG) has acted as the Companys independent auditors to make an
examination of the accounts of the Company for the fiscal year 1998. It is
expected that a representative of KPMG will be present at the Meeting with an
opportunity to make a statement if such representative so desires, and will be
able to respond to appropriate questions by shareholders. The appointment of
independent public accountants for the 1999 fiscal year will be made by the
Board of Directors of the Company based upon a recommendation of the Audit
Committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Companys
executive officers and directors, and persons who own more than ten percent of
the Companys Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and the American Stock Exchange.
Based solely on reports and other information submitted by executive officers
and directors, the Company believes that during the year ended December 31, 1998
each of its executive officers, directors and persons who own more than ten
percent of the Companys Common Stock filed all reports required by Section
16(a), except for one late filing by Michael W. Andaloro, Chief Operating
Officer, pursuant to the grant of an option to buy 25,000 shares of the
Companys common stock.
10
<PAGE>
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder action
at subsequent annual meetings of the Company. For such proposals to be
considered for inclusion in the Proxy Statement and Proxy relating to the 2000
Annual Meeting of Shareholders, such proposals must be received by the Company
no later than December 29, 1999. Such proposals should be directed to Lancer
Corporation, 6655 Lancer Blvd., San Antonio, Texas 78219, Attn: Chief Financial
Officer. For any proposal that is not submitted for inclusion in next years
Proxy Statement, but is instead sought to be presented directly at the 2000
annual meeting of shareholders, management will be able to vote proxies in its
discretion if the Company (i) receives notice of the proposal before the close
of business on March 14, 2000, and advises shareholders in the Companys Proxy
Statement about the nature of the matter and how management intends to vote on
such matter or (ii) does not receive notice of the proposal prior to the close
of business on March 14, 2000.
OTHER BUSINESS
The Board of Directors knows of no matter other than those described herein that
will be presented for consideration at the Meeting. However, should any other
matters properly come before the Meeting or any adjournment thereof, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their best judgment in the interest of the Company.
MISCELLANEOUS
The expenses of preparing, printing and mailing this notice of meeting and proxy
material and all other expenses of soliciting proxies will be borne by the
Company. Georgeson & Company Inc., New York, New York, will distribute proxy
soliciting material to brokers, banks, and institutional holders and will
request such parties to forward soliciting material to the beneficial owners of
the Common Stock held of record by such persons. The Company will pay Georgeson
& Company Inc. an estimated fee of $2,000 for its services and will reimburse
Georgeson & Company Inc. for payments made to brokers and other nominees for
their expenses in forwarding soliciting material.
The Companys Annual Report to Shareholders for the fiscal year ended December
31, 1998 accompanies this Proxy statement. The Annual Report is not deemed to be
part of this Proxy Statement.
By order of the Board of Directors
/s/ George F. Schroeder
George F. Schroeder
President and Chief Executive Officer
San Antonio, Texas
April 22, 1999
11
<PAGE>
LANCER CORPORATION
1999 ANNUAL MEETING OF SHAREHOLDERS - MAY 27, 1999
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned shareholder of LANCER CORPORATION, a Texas corporation, hereby
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement, each dated April 22, 1999 and hereby appoints George F. Schroeder and
Alfred A. Schroeder or either of them, proxies and attorneys-in-fact, with full
power to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 1999 Annual Meeting of Shareholders of Lancer
Corporation to be held May 27, 1999 at 9:30 a.m., local time, at the Companys
facility at 6655 Lancer Blvd., San Antonio, Texas, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth on the reverse side hereof and in their discretion, upon
such other matter or matters which may properly come before the meeting or any
adjournment or adjournments thereof.
This Proxy will be voted as directed or, if no contrary direction is indicated,
will be voted FOR the election of all listed directors, and as said proxies deem
advisable on such other matters as may come before the meeting.
(Continued, and to be signed and dated, on the reverse side.)
<PAGE>
LANCER CORPORATION
PO BOX 11214
NEW YORK, NY 10203-0214
1. ELECTION OF DIRECTORS FOR all nominees / /
listed below
WITHHOLD AUTHORITY to vote / /
for all nominees listed below
EXCEPTIONS / /
Nominees: Alfred A. Schroeder; George F. Schroeder; Walter J. Biegler;
Jean M. Braley; Charles K. Clymer; Michael E. Smith; E. T. (Toby)
Summers III
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the Exceptions box and strike a line through that nominees name.)
FOR / / AGAINST / / ABSTAIN / /
Address Change and/or
Comments Mark Here / /
(This Proxy should be marked, dated and signed by the shareholder(s)
exactly as his or her name appears hereon, and returned promptly in
the enclosed envelope. Persons signing in a fiduciary capacity should
so indicate, if shares are held by joint tenants both should sign.)
Dated , 1999
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Signature
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Signature
Votes MUST be indicated (x) in
Black or Blue ink. / /
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope
<PAGE>
