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. )
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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
PEERLESS MFG. CO.
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<PAGE>
PEERLESS MFG. CO.
2819 Walnut Hill Lane
Dallas, Texas 75229
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 16, 2000
To the Shareholders of
PEERLESS MFG. CO.:
We will hold this year's annual shareholders meeting on Thursday,
November 16, 2000 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 III Directors for a
three-year term and until their successors are elected and qualified, and to
ratify the selection of Grant Thornton LLP as our independent auditors for
fiscal year 2001. We will also discuss and take action on any other
business that is properly brought before the meeting.
If you were a shareholder at the close of business on September 25, 2000,
you are entitled to vote on the proposals to be considered at this year's
shareholders 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. However, regardless of
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/ Thomas J. Reeve
--------------------
Thomas J. Reeve
Secretary, Treasurer,
Chief Financial Officer
Dallas, Texas
October 19, 2000
YOUR VOTE IS IMPORTANT. PLEASE DATE, EXECUTE AND RETURN PROMPTLY
THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
<PAGE>
PEERLESS MFG. CO.
2819 Walnut Hill Lane
Dallas, Texas 75229
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 16, 2000
_______________
PROXY SOLICITATION
Peerless Mfg. Co. is sending this proxy statement to the shareholders of
Peerless Mfg. Co. for use at the Annual Meeting of Shareholders which will
be held at our corporate offices, 2819 Walnut Hill Lane, Dallas, Texas on
Thursday, November 16, 2000 at 10:00 a.m., or any adjournments thereof.
The record of shareholders entitled to vote at the annual meeting was
taken at the close of business on September 25, 2000. On October 19, 2000,
we began mailing this proxy statement to our shareholders.
The enclosed proxy is solicited on behalf of our Board of Directors and
can be revoked by you at any time prior to the voting of the proxy. Unless
a contrary choice is indicated, all duly executed proxies that we receive
will be voted in accordance with the instructions set forth on the back side
of the proxy card. If the proxy does not specify, it will be voted in
accordance with the recommendation of the Board of Directors.
VOTING AT THE ANNUAL MEETING
On September 25, 2000, 1,467,992 shares of our common stock, par value
$1.00 per share, were issued and outstanding. Each of our shareholders is
entitled to one vote for each share they owned as of the record date on all
matters presented at the meeting. Shareholders are not entitled to cumulate
their votes in the election of directors. 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 not
present, the annual meeting may be adjourned from time to time until a
quorum is obtained. 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, ratify the selection of our accountants, and
take action on such other matters as may properly come before the annual
meeting.
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 Thomas J. Reeve, 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 our 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>
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL 1 - Election Of Class III Directors
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.
There are two Class III directors whose terms expire at the annual
meeting. The Board of Directors has proposed Sherrill Stone and Donald A.
Sillers, Jr. as nominees for reelection as Class III directors to serve for
three year terms and until and their successors are elected and qualified.
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 foregoing nominees. All nominees have consented to serve
if elected. 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.
Nominees for Class III Directors to Serve Until 2003
Sherrill Stone, age 64 - Mr. Stone has served as Chairman of the Board and
Chief Executive Officer since 1993, and President of the Company since
1986. Mr. Stone has also served as a director of our company since 1986.
Donald A. Sillers, Jr., age 74 - 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.
Class II Directors Continuing to Serve Until 2002
Bernard S. Lee, age 65 - Mr. Lee, retired, served as the former President
of 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., age 80 - Investments. Mr. Mariner is also a
director of Rent-A-Center, Inc. and Temtex Industries, Inc. Mr. Mariner
has been a director of our company since 1980.
Class I Director Continuing to Serve Until 2001
David D. Battershell, age 74 - Mr. Battershell, retired consulting
engineer and former President of Hudson Engineering, has served as a
director of our company since 1980.
The business experience of each of the above listed nominees and directors
during the past five years was that typical to a person engaged in the
principal occupation listed.
<PAGE>
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, all of our
outside directors, were members of the audit committee and the compensation
committee in fiscal 2000. Our Board of Directors does not have a nominating
committee. The Board of Directors, as a whole, performed the functions
customarily attributable to a nominating committee.
During fiscal 2000, our Board of Directors held seven meetings, the audit
committee held three meetings and the compensation committee held two
meetings. 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 attend.
We also grant stock options for 500 shares of our common stock to each of
our non-employee directors on the date of our annual shareholder's meeting
for such director's prior years service. These are issued pursuant to the
1995 Stock Option and Restricted Stock Plan. Our officers do not receive
compensation for serving on our Board.
OUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE NOMINEES FOR CLASS III
DIRECTORS DESCRIBED ABOVE.
PROPOSAL 2 - Ratification of Selection of Independent Auditors
Grant Thornton LLP, independent certified public accountants, served as
independent auditors for the company for the fiscal year ended June 30, 2000
and has reported on the company's financial statements. The Board of
Directors has selected Grant Thornton LLP as the company's independent
auditors for fiscal year 2001 and recommends that the shareholders ratify
this selection.
A representative of Grant Thornton LLP is expected to be present at the
annual meeting and will have an opportunity to make a statement if he/she
desires to do so, and is expected to be available to respond to appropriate
questions.
Shareholder ratification is not required for the selection of Grant
Thornton LLP as the company's independent auditors for fiscal year 2001,
because the Board of Directors has responsibility for selection of the
company's independent auditors. The selection is being submitted for
ratification with a view toward soliciting the opinion of the shareholders,
which opinion will be taken into consideration in future deliberations.
OUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE RATIFICATION OF GRANT
THORNTON LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
<PAGE>
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 25, 2000 by (1) each current director,
(2) the nominees for director, (3) our named executive officers, (4) our
directors and officers as a group, and (5) each person known to us to own
beneficially more than 5% of our common stock.
Except as otherwise indicated and based on our review of information filed
with the Securities and Exchange Commission (we refer to it as the "SEC"),
we believe that the beneficial owners of the securities listed below have
sole investment and voting power with respect to such shares, subject to
community property laws, where applicable.
Shares of Percent of
Common Stock Common
Name Beneficially Owned Stock
----------------------------------- ------------------ ----------
Sherrill Stone(1) ................. 45,858 3.1%
Donald A. Sillers, Jr.(2) ......... 96,727 6.6%
David D. Battershell(3) ........... 9,800 *
Bernard S. Lee(4) ................. 6,800 *
Joseph V. Mariner, Jr.(5) ......... 4,550 *
G. D. Cornwell (6) ................ 14,250 *
Roy Cuny (7)....................... 3,000 *
Frank Fuller (8) .................. 6,000 *
Royce & Associates, Inc.(9) ....... 106,800 7.3%
Cannell Capital Management(10) .... 85,600 5.8%
Dimensional Fund Advisors Inc. (11) 76,150 5.2%
All Directors and Officers as a
Group (13 persons including
those named above) (12) ....... 197,060 12.9%
__________
* Less than 1%.
(1) Includes 22,500 shares of our common stock issuable pursuant to stock
options granted under the 1995 Stock Option and Restricted Stock Plan
that are exercisable currently or 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 3,200 shares of our common
stock issuable pursuant to stock options granted under the 1995 Stock
Option and Restricted Stock Plan, that are exercisable currently or
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.
<PAGE>
(3) Includes 3,200 shares of our common stock issuable pursuant to stock
options granted under the 1995 Stock Option and Restricted Stock Plan
that are exercisable currently or 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 3,200 shares of our common stock issuable pursuant to stock
options granted under the 1995 Stock Option and Restricted Stock Plan
that are exercisable currently or 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 6900 North Kilpatrick Ave, Lincolnwood, IL 60712.
(5) Includes 3,200 shares of our common stock issuable pursuant to stock
options granted under the 1995 Stock Option and Restricted Stock Plan
that are exercisable currently or within 60 days of this proxy statement.
Mr. Mariner's address is Mariner Ranch, 2002 School House Road, Gordon,
TX 76453.
(6) Includes 4,000 shares of our common stock issuable pursuant to stock
options granted under the 1995 Stock Option and Restricted Stock Plan
that are exercisable currently or 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) Mr. Cuny's address is c/o Peerless Mfg. Co., 2819 Walnut Hill Lane,
Dallas, TX 75229.
(8) Includes 6,000 shares of our common stock issuable pursuant to stock
options granted under the 1995 Stock Option and Restricted Stock Plan
that are exercisable currently or within 60 days of this proxy statement.
Mr. Fuller's address is c/o Peerless Mfg. Co., 2819 Walnut Hill Lane,
Dallas, TX 75229.
(9) Based on information provided to the company by Royce & Associates,
Inc. on September 25, 2000. Royce & Associates, Inc. and Charles M.
Royce, controlling person of Royce & Associates, Inc., are deemed the
beneficial owners of 106,800 shares of common stock. Royce & Associates
is located at 1414 Avenue of the Americas, New York, NY 10019.
(10) 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.
(11) Based on a 13(g) filing dated February 11, 2000. Dimensional Fund
Advisors Inc. is deemed the beneficial owner of 76,150 shares of common
stock. Dimensional Fund Advisors Inc. is located at 1299 Ocean Avenue,
11th Floor, Santa Monica, CA 90401
(12) Includes 59,175 shares of our common stock issuable upon the exercise
of stock options that are exercisable currently or within 60 days of the
date of the proxy statement.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation we paid
during our last three fiscal years to our Chief Executive Officer and all of
our most highly compensated executive officers (other than our Chief
Executive Officer) whose total annual salaries and bonuses during fiscal
2000 exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
----------------------------------- ------------------ ---------------
Other Securities
Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Fiscal Salary Bonus sation Award(s) SAR's Payouts sation
Year ($) ($)(1) ($)(2) ($)(3) (#) ($) ($)(4)
---- ------- ------- ------ ------ ------ ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sherrill Stone 2000 195,231 0 0 0 10,000 0 4,120
Chairman, CEO & 1999 187,818 58,080 0 0 0 0 3,756
President 1998 187,207 116,496 0 0 5,000 0 3,744
G.D. Cornwell 2000 132,024 0 0 0 2,000 0 2,685
Senior Vice President 1999 129,854 52,272 0 0 0 0 2,597
1998 120,991 105,906 0 31,875 4,000 0 2,420
Frank Fuller 2000 104,079 0 0 0 2,000 0 2,126
Vice President 1999 97,167 20,328 0 0 0 0 2,117
1998 98,971 47,965 0 0 2,000 0 2,043
Ray Muzyka * 2000 113,107 0 0 0 2,000 0 2,307
Vice President 1999 98,248 34,848 0 0 0 0 1,965
1998 99,140 68,839 0 0 3,000 0 1,983
* Retired as of June 30, 2000.
__________
(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 $50,000 or 10% of the salary and bonuses paid to the
executive officers named above.
(3) Restricted stock awards are valued at the closing market price of our
common stock as of the date of grant. We pay dividends on restricted
shares at the same rate we pay dividends to all shareholders. Our
Restricted Stock Plan is discussed in the Board Compensation Committee
Report on Executive Compensation set forth below.
(4) Amounts shown represent contributions we made on behalf of the named
executive officers to the Peerless Mfg. Co. Retirement Savings Plan
Trust, a defined contribution plan defined under Section 401(k) of the
Internal Revenue Code of 1986, as amended.
</TABLE>
<PAGE>
OPTION GRANTS DURING 2000 FISCAL YEAR
In fiscal 2000, we granted stock options to our non-employee directors for
an aggregate of 6,800 shares of our common stock (1,700 common stock per
director), all of which were immediately exercisable. In addition, stock
options for an aggregate of 36,000 shares of our common stock were issued to
10 employees, 30,000 of which were immediately exercisable and 6,000 of
which will vest 25% ratably over the first four years of the 10 year
exercise period.
<TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000 AND
FISCAL YEAR 2000 OPTION VALUE TABLE
Value of Unexercised
Number of Options In-The-Money Options
at FY-End at FY-End
Shares June 30, 2000 June 30, 2000
Acquired Value (#) ($) (1)
On Exercise Realized --------------------------- ----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
-------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sherrill Stone 0 0 22,500 2,500 140,625 15,625
G. D. Cornwell 2,500 15,625 4,000 2,000 22,250 12,500
Frank Fuller 0 0 6,000 1,000 38,875 6,250
Ray Muzyka * 0 0 3,500 1,500 19,125 9,375
* Retired as of June 30, 2000.
(1) The closing price for our common stock as reported on the NASDAQ
Stock Market National Market on June 30, 2000 was $16.875. Value is
calculated on the basis of the difference between $16.875 and the
option exercise price of "in the money" options, multiplied by the
number of shares of our common stock underlying the option.
</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 year 2000.
<PAGE>
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 compared 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
each of the executive officer's individual 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
evaluation, 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 individual 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 rather, looks to our company as a whole in
determining corporate performance relevant to the Chief Executive Officer's
compensation.
<PAGE>
We entered into employment agreements with Sherrill Stone, our Chief
Executive Officer, in 1994 which provides that upon a change of control, we
will pay the Chief Executive Officer 299% of his average annual compensation
as severance compensation, and under other certain circumstances, we will
pay the Chief Executive Officer 90% of his annual base compensation for
three years as severance pay. We also entered into employment agreements on
May 16, 2000 with Roy C. Cuny, our Chief Operating Officer, which provides
that upon a change of control, we will pay the Chief Operating Officer 299%
of his average annual compensation as severance compensation, and under
other certain circumstances, we will pay the Chief Operating Officer 90% of
his annual base compensation for three years as severance pay. In addition,
we entered into employment agreements on July 23, 1999 with Gilbert Darwyn
Cornwell, a Senior Vice President, which provides that upon a change of
control, we will pay the Chief Executive Officer 299% of his average annual
compensation as severance compensation, and under other certain
circumstances, we will pay the Senior Vice President 90% of his annual base
compensation for three years as severance pay.
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. No bonuses were paid in fiscal year 2000 to
the executive officers.
The compensation committee also recommended that an additional
discretionary bonus pool of $20,000 be established, to be used by the Chief
Executive Officer for the purpose of recognizing certain outstanding
contributions made by any employee, including the named executive officers,
but excluding the Chief Executive Officer. 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. In fiscal year 2000, $6,500 was awarded to
employees pursuant to this discretionary bonus pool.
<PAGE>
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 1985 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. 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
employees on restricted shares during the restriction period. During fiscal
year 2000, 6,500 shares of restricted common stock were issued pursuant to
the 1985 plan, and no shares were cancelled.
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, 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 designated non-employee
directors, 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. The designated non-employee directors
will consider, but need not accept, the Chief Executive Officer's
recommendations.
Under the terms of the 1995 plan, we may provide options or grants up to
an aggregate of 120,000 shares of restricted common stock to any employee or
non-employee director. Under the 1995 plan, each of our non-employee
directors will receive additional options on the date of our annual
shareholders meeting for the prior year's service on the Board of Directors.
The designated non-employee directors 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 designated non-employee directors,
provided that the term of a qualified option may not exceed 10 years.
Designated non-employee directors may grant shares of restricted stock
without requiring the payment of cash consideration for the shares.
Currently, no restricted stock grants have been awarded under this plan.
In fiscal year 2000, 1,700 shares of our common stock options were awarded
to each non-employee director which were immediately exercisable, and 36,000
shares of our common stock options were divided among 10 employees, of which
30,000 common stock options were immediately exercisable and 6,000 common
stock options vest 25% ratably over the first four years of its 10 year
exercise period.
<PAGE>
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 will not be deemed to be incorporated by reference in any
filing by the company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
company specifically incorporates this report 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, 1995 in each of (1)
our common stock, (2) the Dow Jones Industrial Average and (3) 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. The Corporate
Performance Graph will not be deemed incorporated by reference in any filing
by the company under the Securities Act of 1933, as amended, or the Exchange
Act of 1934, as amended, except to the extent the company specifically
incorporates this graph by reference.
TOTAL RETURN
(Assumes $100 investment on June 30, 1995)
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
Total Return Analysis
6/30/95 6/28/96 6/30/97 6/30/98 6/30/99 6/30/00
--------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Peerless Manufacturing $ 100.00 $ 103.68 $ 108.36 $ 131.38 $ 115.63 $ 192.96
DJ Industrial Average $ 100.00 $ 127.01 $ 176.01 $ 208.95 $ 260.55 $ 251.95
DJ US Total Mkt Industrial- $ 100.00 $ 125.40 $ 170.68 $ 208.44 $ 271.18 $ 314.31
Diversified
</TABLE>
<PAGE>
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 SEC. 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 such forms received by us, we
believe that during our fiscal year 2000, our officers, directors and
greater than 10% beneficial owners have complied with all applicable filing
requirements with respect to our equity securities, except that one
statement of beneficial ownership (Form 3) was filed late by Tom Reeve, who
became an officer of the company on January 3, 2000.
AUDITORS
Grant Thornton LLP has audited our financial statements since our fiscal
year 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 at
the annual meeting if they desire to do so, and they will respond to
shareholder questions raised during the meeting.
SHAREHOLDER PROPOSALS
Shareholders wanting to properly submit any business at an annual meeting
must give timely notice in writing, in accordance with our amended and
restated bylaws. To be considered timely, a shareholder's notice must be
delivered in person or by certified mail, and received at our executive
office (1) not less than 120 days nor more than 150 days before the first
anniversary date of the our proxy statement in connection with the last
annual meeting of shareholders or (2) if no annual meeting has been called
after the expiration of more than 30 days from the date for such meeting
contemplated at the time of the previous year's proxy statement, not less
than a reasonable time, as determined by our Board of Directors, prior to
the date of the applicable annual meeting. We may exclude any shareholder
proposal that is excludable pursuant to any rule, regulation or ruling of
the SEC.
A proper proposal submitted by any of our shareholders for presentation at
our 2001 annual shareholders meeting and/or for inclusion in our 2001 proxy
statement should be received at our executive office not earlier than
May 23, 2001 and not later than June 22, 2001 to be eligible for
presentation at our 2001 annual shareholders meeting and/or to be included
in our proxy statement and form of proxy relating to the 2001 meeting.
<PAGE>
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 the Company's interest.
FINANCIAL STATEMENTS
A copy of the company's 2000 annual report containing audited financial
statements accompanies this proxy statement. The annual report does not
constitute a part of the proxy solicitation materials.
IF YOU SEND YOUR REQUEST IN WRITING TO THOMAS J. REEVE, SECRETARY, C/O
PEERLESS MFG. CO., 2819 WALNUT HILL LANE, DALLAS, TEXAS 75229, WE WILL
PROVIDE YOU, WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K
(exclusive of exhibits) FILED WITH THE SEC.
By Order of the Board of Directors,
/s/ Thomas J. Reeve
--------------------
Thomas J. Reeve,
Secretary, Treasurer
Chief Financial Officer
Dallas, Texas
October 19, 2000
<PAGE>
[PROXY CARD FRONT & BACK APPEARS HERE]
PEERLESS MFG. CO.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS AT 10:00 A.M. THURSDAY, NOVEMBER 16, 2000
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), (2), or (3), THIS PROXY
WILL BE VOTED "FOR" SUCH ITEM. THE PROXIES WILL USE THE DISCRETION WITH
RESPECT TO ANY MATTER REFERRED TO IN ITEM (4). 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 19, 2000, is hereby acknowledged.
The undersigned shareholder of Peerless Mfg. Co. (the "Company") hereby
appoints Sherrill Stone and Tom Reeve 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)
<PAGE>
----------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1,2,3, and 4.
Please mark your vote as indicated in this example [ X ]
1. Election of Sherrill Stone as a Class III Director.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Election of Donald A. Sillers, Jr. as a Class III Director.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Ratification of the selection of Grant Thornton as the
Company's accountants for the 2001 fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. 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.
Dated: , 2000
-----------------------------
-----------------------------------------
Signature(s)
-----------------------------------------
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.
