<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
PEERLESS MFG CO.
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[PEERLESS LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 18, 1999
To the Shareholders of
PEERLESS MFG. CO.:
We will hold this year's annual stockholders' meeting on Thursday, November
18, 1999 at 10:00 a.m. at our corporate offices, 2819 Walnut Hill Lane, Dallas,
Texas. At this meeting we will ask you to consider and vote on the election of
two Directors to serve as Class II Directors for a three-year term and until
their successors are elected and qualified; and we will also discuss and take
action on any other business that is properly brought before the meeting.
If you were a stockholder at the close of business on September 27, 1999,
you are entitled to vote on the proposals to be considered at this year's
stockholders' meeting.
It is important that your stock be represented at the meeting regardless of
the number of shares you hold. You are invited to attend the meeting in person,
but whether or not you plan to attend, please complete, date, sign and return
the accompanying proxy in the enclosed postage-paid self-addressed envelope. If
you do attend the meeting, you may, if you wish, revoke your proxy and vote
your shares in person. We look forward to hearing from you.
By Order of the Board of Directors,
/s/ Paul W. Willey
Secretary
Dated: October 20, 1999
YOUR VOTE IS IMPORTANT. PLEASE DATE, EXECUTE AND RETURN PROMPTLY
THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
<PAGE> 3
[PEERLESS LETTERHEAD]
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 18, 1999
---------------
PROXY SOLICITATION
We are sending this proxy statement to the shareholders of Peerless Mfg.
Co. in connection with our Board of Directors' soliciting of proxies to be used
at the Annual Meeting of the Shareholders which will be held at our corporate
offices, 2819 Walnut Hill Lane, Dallas, Texas on Thursday, November 18, 1999 at
10:00 a.m. On October 20, 1999, we began mailing this proxy statement to
everyone who was a stockholder as of September 27, 1999.
VOTING AT THE ANNUAL MEETING
On September 27, 1999, 1,456,492 shares of our common stock were issued and
outstanding. Each of our shareholders is entitled to one vote for each share
they owned on September 27, 1999 on all matters presented at the meeting. A
majority of the holders of the outstanding shares of our common stock must be
present, in person or by proxy, to constitute a quorum at the annual meeting.
If a quorum is present, we need the affirmative vote of a majority of the
shares eligible to vote and actually voted at the annual meeting to elect
directors and take action on such other matters as may properly come before the
annual meeting.
Shares represented by valid proxies will be voted in accordance with
instructions on the proxies, or, if no instructions are on the proxies, in
accordance with the board of directors' recommendations. Any shareholder who is
present at the meeting but who abstains from voting shall be counted for
purposes of determining whether a quorum exists, but an abstention shall not be
counted as an affirmative vote. Shareholders have the right to revoke their
proxies at any time prior to the voting of the proxy, by written notice of
revocation to Paul W. Willey, Secretary, Peerless Mfg. Co., 2819 Walnut Hill
Lane, Dallas, Texas 75229, by executing a new proxy, or by attending the annual
meeting and casting a contrary vote. Revocation will not be effective unless we
have received the notice of revocation at or prior to the annual meeting.
We will bear the expense of preparing, printing and mailing this proxy
statement and accompanying material to shareholders. Our officers or other
employees may solicit your proxy by mail, personal contact, telephone and
facsimile, but these officers and employees will not receive additional
compensation for these services. We may also request brokerage houses,
nominees, custodians, fiduciaries and other similar parties to forward
soliciting material to our record shareholders, and we will reimburse any of
these persons for their reasonable charges and expenses.
<PAGE> 4
ELECTION OF CLASS II DIRECTORS
If all director nominees are elected, our board of directors will consist
of five directors following the annual shareholders' meeting. Unless a
shareholder indicates otherwise, the persons named as proxies in the enclosed
proxy card have indicated that they intend to vote for the election of the
nominees named below. If either of the nominees is not available to serve as a
director at the time of election, the proxies may be voted for a substitute
nominee.
On May 21, 1997, our board of directors amended our bylaws to provide for a
classified board. Our board of directors now consists of three classes, with
one director serving in Class I, and two directors serving in each of Classes
II and III. Each class of directors serves three-year terms or until successors
have been elected or qualified.
NOMINEES FOR DIRECTORS TO SERVE UNTIL 2002
Bernard S. Lee, 64 -- President, Institute of Gas Technology. Mr. Lee is
also a director of NUI Corporation and National Fuel Gas Company. Mr. Lee
has been a director of our company since 1982.
Joseph V. Mariner, Jr., 79 -- Investments. Mr. Mariner is also a director
of Renters Choice, Inc. and Temtex Industries, Inc. Mr. Mariner has been a
director of our company since 1980.
DIRECTORS CONTINUING TO SERVE UNTIL 2000
Sherrill Stone, 63 -- Chairman of the Board, Chief Executive Officer and
President of the Company. Mr. Stone has served as a director of our company
since 1985.
Donald A. Sillers, Jr., 73 -- Investments. Mr. Sillers is our former
Chairman of the Board and Chief Executive Officer, and has served as a
director of our company since 1970.
DIRECTOR CONTINUING TO SERVE UNTIL 2001
David D. Battershell, 73 -- Consulting engineer and a director of our
company since 1980.
Our board of directors has an audit committee and a compensation committee.
The audit committee is responsible for reviewing the scope of the audit by the
independent auditors, reviewing the management letter received from the
auditors and recommending changes in our internal accounting controls. The
compensation committee is responsible for recommending to the full Board of
Directors salaries and bonuses for our key employees. Messrs. Battershell, Lee,
Sillers and Mariner were members of the audit committee and the compensation
committee in fiscal 1999. Our board of directors does not have a nominating
committee.
During fiscal 1999, our board of directors held six meetings, the audit
committee held two meetings and the compensation committee held one meeting.
Each of the directors attended at least 75% of the total number of meetings of
the Board of Directors and any meetings held by any committee on which that
director served. Non-employee directors are paid $1,575 per quarter, plus $950
for each board or special committee meeting they attended.
OUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE NOMINEES FOR DIRECTORS
DESCRIBED ABOVE.
2
<PAGE> 5
COMMON STOCK OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table shows the number of shares of our common stock
beneficially owned as of September 27, 1999 by our directors, the nominees for
director, our named executive officers, and each person who we know
beneficially owns more than 5% of our common stock.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON STOCK COMMON
NAME BENEFICIALLY OWNED STOCK
-------------------------------------------------- ------------------ ----------
<S> <C> <C>
Sherrill Stone(1) ................................ 42,008 2.9%
Donald A. Sillers, Jr.(2) ........................ 95,888 6.6%
David D. Battershell(3) .......................... 9,300 *
Bernard S. Lee(4) ................................ 6,300 *
Joseph V. Mariner, Jr.(5) ........................ 4,050 *
G. D. Cornwell (6) ............................... 15,750 1.1%
Edward Perry (7) ................................. 5,100 *
Ray Muzyka(8) .................................... 4,375 *
Paul Willey (9) .................................. 6,250 *
Royce & Associates, Inc.(10) ..................... 100,900 6.9%
Cannell Capital Management(11) ................... 85,600 5.9%
CECO Environmental Corp(12) ...................... 177,900 12.2%
All Directors and Officers as a Group (fourteen
persons including those named above) .......... 207,471 14.3%
</TABLE>
- ----------
* Less than 1%.
(1) Includes 18,750 stock options that are exercisable within 60 days of this
proxy statement. Does not include 150 shares owned of record by Mrs. Jo Ann
Stone, Mr. Stone's wife, as to which shares Mr. Stone disclaims any
beneficial interest. Mr. Stone's address is c/o Peerless Mfg. Co., 2819
Walnut Hill Lane, Dallas, TX 75229.
(2) Includes 26,000 shares owned of record by Mr. Sillers as sole trustee of a
trust, the income from which is payable for life to Mr. Sillers and his
wife, remainder to their children and 2,700 stock options that are
exercisable within 60 days of this Proxy Statement. Does not include 939
shares owned of record by Mrs. Virginia Sillers, Mr. Sillers' wife, as to
which shares Mr. Sillers disclaims any beneficial interest. Mr. Sillers'
address is 8609 Northwest Plaza Drive, #403, Dallas, TX 75225.
(3) Includes 2,700 stock options that are exercisable within 60 days of this
proxy statement. Mr. Battershell's address is D.D. Battershell and
Associates, 114 Dan Moody Trail, Georgetown, TX 78628.
(4) Includes 2,700 stock options that are exercisable within 60 days of this
proxy statement. Does not include 1,500 shares owned of record by Mrs.
Pauline Lee, Mr. Lee's wife, as to which shares Mr. Lee disclaims any
beneficial interest. Mr. Lee's address is Institute of Gas Technology, 1700
S. Mount Prospect Road, Des Plaines, IL 60018.
(5) Includes 2,700 stock options that are exercisable within 60 days of this
proxy statement. Mr. Mariner's address is Mariner Ranch, 2002 School House
Road, Gordon, TX 76453.
(6) Includes 4,250 stock options that are exercisable within 60 days of this
proxy statement. Mr. Cornwell's address is c/o Peerless Mfg. Co., 2819
Walnut Hill Lane, Dallas, TX 75229.
(7) Includes 4,000 stock options that were exercised September 24, 1999. Mr.
Perry's address is c/o Peerless Mfg. Co., 2819 Walnut Hill Lane, Dallas, TX
75229.
3
<PAGE> 6
(8) Includes 2,750 stock options that are exercisable within 60 days of this
proxy statement. Mr. Muzyka's address is c/o Peerless Mfg. Co., 2819
Walnut Hill Lane, Dallas, TX 75229.
(9) Includes 5,250 stock options that are exercisable within 60 days of this
proxy statement. Mr. Willey's address is c/o Peerless Mfg. Co., 2819
Walnut Hill Lane, Dallas, TX 75229.
(10) Based on a 13(g) filing dated February 10, 1999, Royce & Associates, Inc.
and Charles M. Royce, controlling person of Royce & Associates, Inc., are
deemed the beneficial owners of 100,900 shares of Common Stock. Royce &
Associates is located at 1414 Avenue of the Americas, New York, NY 10019.
(11) Based on a 13(d) filing dated June 11, 1997, Cannell Capital Management is
deemed the beneficial owner of 85,600 shares of Common Stock. Cannell
Capital Management is located at 750 Battery Street, San Francisco, CA
94111.
(12) Based on a 13(d) filing dated July 22, 1999, CECO ENVIRONMENTAL CORP is
deemed the beneficial owner of 177,900 shares of common stock. CECO
ENVIRONMENTAL CORP. is located at 505 University Avenue, Toronto, Ontario,
Canada M5G 1X3.
4
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation we paid
during our fiscal year ended June 30, 1999 to our Chief Executive Officer and
the four of our most highly compensated executive officers whose total annual
salaries and bonuses during fiscal 1999 exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------ ----------------------- ------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
FISCAL SALARY BONUS SATION AWARD(S) SAR'S PAYOUTS SATION
YEAR ($) ($)(1) ($)(2) ($)(3) (#) ($) ($)(4)
------ ------ ------ ------ ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sherrill Stone 1999 187,818 58,080 0 0 0 0 3,756
Chairman, CEO & 1998 187,207 116,496 0 0 5,000 0 3,744
President 1997 171,693 0 0 0 0 0 3,434
G.D. Cornwell 1999 129,854 52,272 0 0 0 0 2,597
Senior Vice President 1998 120,991 105,906 0 31,875 4,000 0 2,420
1997 103,723 0 0 0 0 0 2,074
Edward Perry 1999 125,983 34,848 0 0 0 0 2,520
Senior Vice President 1998 125,861 79,429 0 0 1,000 0 2,517
1997 117,942 0 0 0 0 0 2,315
Ray Muzyka 1999 98,248 34,848 0 0 0 0 1,965
Vice President 1998 99,140 68,839 0 0 3,000 0 1,983
1997 92,694 0 0 0 0 0 1,854
Paul Willey 1999 100,835 26,136 0 0 5,000 0 2,017
Chief Financial Officer 1998 25,012 1,146 0 0 0 0 0
Secretary/Treasurer 1997 0 0 0 0 0 0 0
</TABLE>
- --------
(1) Bonuses are paid in the fiscal year following the fiscal year in which the
bonus was earned.
(2) The aggregate value of Other Annual Compensation paid does not exceed the
lesser of $50,000 or 10% of the salary and bonuses paid to the executive
officers named above.
(3) Restricted stock awards are valued at the closing market price of our
common stock as of the date of grant. We pay dividends on restricted
shares at the same rate we pay dividends to all shareholders. Our
Restricted Stock Plan is discussed in the "Board Compensation Committee
Report on Executive Compensation -- 1995 Stock Option and Restricted Stock
Plan" section.
(4) Amounts shown represent contributions we made on behalf of the named
executive officers to the Peerless Mfg. Co. Retirement Savings Plan Trust,
a defined contribution plan defined under Section 401(k) of the Internal
Revenue Code of 1986, as amended.
OPTION GRANTS DURING 1999 FISCAL YEAR
In fiscal 1999, we granted 2,000 common stock options (500 Common Stock
options for each non-employee director), all of which were immediately
exercisable. In addition, we gave 5000 common stock options to one employee,
which options vest 25% ratably over the first four years of the 10-year
exercise period.
5
<PAGE> 8
AGGREGATED OPTION EXERCISES IN 1999 FISCAL YEAR AND
FISCAL YEAR ENDED JUNE 30, 1999 OPTION VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF OPTIONS IN-THE-MONEY OPTIONS
AT FY-END AT FY-END
JUNE 30, 1999 JUNE 30, 1999
SHARES (#) ($)
ACQUIRED VALUE -------------------------- --------------------------
ON EXERCISE REALIZED
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sherrill Stone ..... 0 0 8,750 6,250 9,375 3,125
G. D. Cornwell ..... 0 0 2,250 4,250 1,563 1,563
Edward Perry ....... 0 0 4,000 2,000 4,688 1,563
Ray Muzyka ......... 0 0 750 2,250 0 0
Paul Willey ........ 0 0 0 5,000 0 0
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee of our Board of directors is composed of Messrs.
Battershell, Lee, Sillers and Mariner, our four independent outside directors.
No compensation committee interlocks existed and no employees participated in
compensation committee decisions in fiscal 1999.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee is responsible for setting the annual base
compensation and bonus levels and administering the restricted stock program
for our employees, including our executive officers. Its recommendations are
subject to final approval by the board of directors. We believe that the key to
a successful executive compensation program is in setting aggressive business
goals by integrating the program with our annual and strategic planning and
evaluation processes and by comparing our results against industry performance
levels. The compensation committee takes into account achievements during the
past fiscal year, as well as the individual achievements of our various
business units and divisions, in making executive compensation determinations.
In addition, we recognize that we compete in an increasingly competitive
environment, and executive compensation therefore must also take into account
our performance as compared to that of other companies in our industry or in
similar industries. The compensation committee also evaluates on an annual
basis our corporate performance, revenues and share performance with respect to
a broader group of companies, such as the Standard & Poor's 500.
Annual Base Compensation
Annual base compensation awarded in any particular fiscal year to each of
our executive officers is based upon the following factors: our corporate
performance during the prior year, performance of our divisions for which the
executive officer is responsible, and a more subjective evaluation of the
executive officer's personal performance. The evaluation of our corporate
performance is directly linked to our profitability during the period, and
therefore is based upon the value of our stock. In making this determination,
the compensation committee reviews our percentage growth in earnings per share
over the prior year, and our overall return on equity for that period. The
compensation committee believes that these two factors are the primary
determinants of stock price over time. The compensation committee next reviews
the profit performance of the individual divisions for which the executive
officer is responsible. Finally, the compensation committee determines the
personal rating for each executive officer, which is based upon such
qualitative factors as the achievement of certain financial objectives and
specific organizational and management goals for that officer. Annual base
compensation for our Chief Executive Officer is determined in the same manner
as for our other executive officers, except that the compensation committee
does not review or evaluate any particular division's performance, but looks to
our company as a whole in determining corporate performance relevant to the
Chief Executive Officer's compensation. Additionally, we entered into an
Employment Agreement with our Chief Executive Officer in 1994 which provides
that, under certain circumstances, we will pay the Chief Executive Officer 90%
of his annual base compensation for three years as severance pay.
6
<PAGE> 9
The compensation committee also recognizes that in order to attract and
retain the highest quality executive officers, their base compensation must be
competitive in relation to that paid by companies in similar industries and in
comparable geographic areas. Accordingly, the compensation committee
periodically reviews the executive compensation paid by such companies.
Annual Bonus Plans
We have an incentive bonus plan pursuant to which certain key employees,
including the named executive officers, are selected annually by the
compensation committee to earn a cash bonus based upon our after-tax
profitability. This plan requires that we achieve a specific after-tax return
on beginning-of-year equity, after which bonuses may be paid out.
The available bonus pool is calculated on earnings in excess of the base level.
Once the total bonus pool is calculated, we distribute it to participants
in the plan in accordance with pre-determined percentages as set by the
compensation committee annually. The determination of the bonus level awarded
to our Chief Executive Officer is made in the same manner as that of our other
executive officers. The bonuses paid in fiscal 1999 to the executive officers
are described in the Summary Compensation Table.
The compensation committee also recommended that an additional
discretionary bonus pool of $20,000 be established, to be used by the President
for the purpose of recognizing certain outstanding contributions made by any
employee, including the named executive officers, but excluding the President.
Awards under this plan may be made in order to recognize new product inventions
or improvements, ideas for major manufacturing cost reductions, originations of
large and profitable orders or for other purposes.
1985 Restricted Stock Plan
Our board of directors adopted the 1985 Restricted Stock Plan to attract,
motivate and retain qualified employees. The 1985 Plan was approved by our
shareholders on November 13, 1985 and became effective as of December 13, 1985.
The 1985 Plan is administered by our board of directors, which delegates to the
compensation committee its power to determine which employees should be awarded
restricted stock pursuant to the plan. Under the terms of the 1985 Plan, we may
grant up to an aggregate of 75,000 shares of restricted common stock to any
employee or employees. Employees receiving restricted stock do not pay for such
stock; however, certain ownership restrictions are placed upon the stock on the
date of its issuance which lapse within five years after such issuance.
Dividends are paid to the employee on restricted shares during the restriction
period. During fiscal 1999, we made no distributions of shares of restricted
stock pursuant to the 1985 Plan and cancelled 5,000 shares.
1995 Stock Option and Restricted Stock Plan
Our board of directors adopted the 1995 Stock Option and Restricted Stock
Plan to attract, motivate and retain qualified employees. The 1995 Plan was
approved by our shareholders on November 21, 1996 and became effective
immediately thereafter. The 1995 Plan is administered by our board of
directors, which delegated to certain members of the compensation committee,
Messrs. Battershell, Lee and Mariner, acting as the stock option committee, its
power to determine which employees should be awarded restricted stock pursuant
to the plan. From time to time, our Chief Executive Officer will recommend to
the stock option committee individuals he believes should be subject to an
option or grant, and, with respect to any recommended option, whether the
option should be a qualified or nonqualified option. The stock option committee
will consider, but need not accept, the Chief Executive Officer's grant
recommendations. Each of our non-employee directors received nonqualified
options to purchase 500 shares of common stock on the date that the
shareholders approved the 1995 Plan and will receive additional options on the
date of our annual shareholder's meeting for each following year that the
director serves on the board of directors.
Under the terms of the 1995 Plan, we may provide options or grant up to an
aggregate of 100,000 shares of restricted common stock to any employees or
non-employee directors.
7
<PAGE> 10
The stock option committee will determine the number and the exercise price
of the options, and the time or times that the options become exercisable,
provided that an option exercise price may not be less than the fair market
value of our common stock on the date of grant. The term of an option will also
be determined by the stock option committee, provided that the term of a
qualified option may not exceed 10 years.
The stock option committee may grant shares of restricted stock without
requiring the payment of cash consideration for the shares. Currently, there
are no restricted stock grants awarded under this plan.
In fiscal 1999, we gave 500 common stock options to each non-employee
director which were immediately exercisable, and 5,000 common stock options to
an employee, which options vest 25% ratably over the first four years of its 10
year exercise period.
This report is submitted by the members of the compensation committee:
DAVID D. BATTERSHELL
BERNARD S. LEE
JOSEPH V. MARINER, JR.
DONALD A. SILLERS, JR.
This report and the following performance graph will not be deemed to be
incorporated by reference in any filing by us under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that we specifically incorporates this report or the performance graph
by reference.
CORPORATE PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return over a
five-year period, assuming $100 invested at June 30, 1994 in each of (i)
Peerless Mfg. Co. common stock, (ii) the Dow Jones Industrial Average and (iii)
a peer group consisting of manufacturers in the industrial sector providing
industrial and commercial services to other commercial enterprises. Total
shareholder return is based on the increase in the price of the common stock
with dividends reinvested.
The stock price performance depicted in the Corporate Performance Graph is
not necessarily indicative of future price performance.
8
<PAGE> 11
TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 6/30/94)
[GRAPH]
<TABLE>
<CAPTION>
PEERLESS MFG. DJ INDUSTRIAL AVG. DJ INDUSTRIAL-DIVERSIFIED
------------- ------------------ -------------------------
<S> <C> <C> <C>
6/30/94 $ 100.00 $ 100.00 $ 100.00
6/30/95 $ 113.74 $ 129.18 $ 118.89
6/28/96 $ 117.92 $ 164.07 $ 149.09
6/30/97 $ 123.25 $ 227.37 $ 202.92
6/30/98 $ 149.43 $ 269.92 $ 247.82
6/30/99 $ 131.52 $ 336.58 $ 322.41
</TABLE>
Source: Carl Thompson Associates www.crossline.com (800) 959-9677. Data
from Bloomberg Financial Markets.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our executive officers and directors, and persons who own more than 10% of a
registered class of our equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Executive
officers, directors and greater than 10% shareholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of Forms 3, 4 and 5 furnished to
us or written representations from reporting persons that no Forms 5 were
required for those persons, we believe that, during the fiscal year ended June
30, 1999, our officers, directors and greater than 10% shareholders complied
with all applicable Section 16(a) filing requirements.
AUDITORS
Grant Thornton LLP has audited our financial statements since fiscal 1970
and has been selected to act in that capacity for the ensuing fiscal year. We
expect representatives of Grant Thornton LLP to be present at the annual
meeting, they will have the opportunity to make a statement if they desire to
do so, and they will respond to shareholder questions raised during the
meeting.
9
<PAGE> 12
SHAREHOLDER PROPOSALS
A proper proposal submitted by any of our shareholders for presentation at
our 2000 Annual Shareholders Meeting and/or for inclusion in our 2000 proxy
statement and received at our executive office not earlier than May 23, 2000 and
not later than June 22, 2000 will be eligible for presentation at our 2000
Annual Shareholders Meeting and/or to be included in our proxy statement and
form of proxy relating to the meeting.
Shareholders wanting to properly submit any business at the 2000 Annual
Meeting must give notice in writing, delivered in person or by certified mail,
to our corporate secretary at the address on the cover page of this proxy
statement. A shareholder's notice to submit business to an annual meeting of
shareholders should set forth (i) the name and address of the shareholder, (ii)
the class and number of shares of stock beneficially owned by such shareholder,
(iii) the name in which such shares are registered on the stock transfer books
of the corporation, (iv) a representation that the shareholder intends to
appear at the meeting in person or by proxy to submit the business specified in
such notice, (v) any material interest of the shareholder in the business to be
submitted, and (vi) a brief description of the business they wish to be
submitted to the annual meeting, including the complete text of any resolutions
to be presented at the annual meeting, and the reasons for conducting such
business at the annual meeting. We may exclude any shareholder proposal that is
excludable pursuant to any rule, regulation or ruling of the Securities and
Exchange Commission.
OTHER MATTERS
Neither our management nor board of directors knows of any matter to be
acted upon at the annual meeting other than the matters described above. If any
other matter properly comes before the annual meeting or any adjournments
thereof, however, the proxies in the enclosed form confer upon the persons
entitled to vote the shares represented by such proxies discretionary authority
to vote on the matter in accordance with their best judgment in Peerless'
interest.
IF YOU SEND YOUR REQUEST IN WRITING TO PAUL W. WILLEY, SECRETARY, C/O
PEERLESS MFG. CO., 2819 WALNUT HILL LANE, DALLAS, TEXAS 75229, WE WILL PROVIDE,
WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
By Order of the Board of Directors,
/s/ Paul W. Willey,
Secretary
Dallas, Texas
October 20, 1999
10
<PAGE> 13
PEERLESS MFG. CO.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS AT 10:00 A.M., THURSDAY, NOVEMBER 18, 1999
2819 WALNUT HILL LANE, DALLAS, TEXAS 75229
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE. IF A
CHOICE IS NOT INDICATED WITH RESPECT TO ITEM (1) THIS PROXY WILL BE VOTED "FOR"
SUCH ITEM. THE PROXIES WILL USE THE DISCRETION WITH RESPECT TO ANY MATTER
REFERRED TO IN ITEM (3). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS
EXERCISED.
Receipt herewith of the Company's Annual Report and Notice of Meeting and
Proxy Statement, dated October 20, 1999, is hereby acknowledged.
The undersigned shareholder of Peerless Mfg. Co. (the "Company") hereby
appoints Sherrill Stone and Paul Willey or either of them, as proxies, each with
full powers of substitution, to vote the shares of the undersigned at the
above-stated Annual Meeting and at any adjournment(s) thereof.
(PLEASE SIGN ON THE OTHER SIDE)
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<PAGE> 14
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
Please mark [X]
your votes as
indicated in
this example
1. Election of Dr. Bernard S. Lee as a Class II Director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Election of Mr. Joseph V. Mariner as a Class II Director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business or matters as may properly come before the meeting or any
adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Dated , 1999
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Signature(s)
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Signature(s)
(JOINT OWNERS MUST EACH SIGN EXACTLY AS
YOUR NAME(S) APPEAR(S) ON THIS CARD.
WHEN SIGNING AS ATTORNEY, TRUSTEE,
EXECUTOR, ADMINISTRATOR, GUARDIAN OR
CORPORATE OFFICER, PLEASE GIVE YOUR
FULL TITLE.)
PLEASE SIGN, DATE AND MAIL TODAY.
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