<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
SPECIALTY EQUIPMENT COMPANIES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
SPECIALTY EQUIPMENT COMPANIES, INC.
1245 CORPORATE BOULEVARD, SUITE 401
AURORA, ILLINOIS 60504
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 25, 2000
TO THE STOCKHOLDERS OF
SPECIALTY EQUIPMENT COMPANIES, INC.
Notice is hereby given that the Annual Meeting of Stockholders of
Specialty Equipment Companies, Inc., a Delaware corporation (the "Company"),
will be held at the Company's Corporate Offices located at 1245 Corporate Blvd.,
Suite 401, Aurora, Illinois on Thursday, May 25, 2000 at 10:00 a.m., Chicago
time, for the following purposes:
1. To consider and vote on the election of three members of the Company's
Board of Directors.
2. To consider and vote on the adoption of the 2000 Non-Employee Director
Stock Option Plan.
3. To consider and act upon such other matters as may properly come before
the meeting.
Stockholders of record at the close of business on March 31, 2000 are
entitled to notice of and to vote at the Annual Meeting and at any adjournment
or postponement thereof. For the ten days prior to the annual meeting, a
complete list of the stockholders entitled to vote at the Annual Meeting shall
be open to any stockholder, for any purpose germane to the meeting, during
normal business hours at the offices of LaSalle National Bank, 135 South LaSalle
Street, Chicago, Illinois 60674-9910.
A copy of the Annual Report and Form 10-K of the Company for the fiscal
year ended January 31, 2000 is enclosed herewith.
You are requested to sign, date and return the accompanying proxy in
the enclosed envelope, whether or not you expect to attend the meeting in
person.
By order of the Board of Directors,
/s/ DONALD K. MC KAY
-----------------------------------
Donald K. McKay, Secretary
Aurora, Illinois
April 24, 2000
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
IN PERSON, WE REQUEST THAT YOU MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY.
<PAGE> 3
SPECIALTY EQUIPMENT COMPANIES, INC.
1245 CORPORATE BOULEVARD, SUITE 401
AURORA, ILLINOIS 60504
PROXY STATEMENT
SOLICITATION OF PROXIES
This proxy statement (the "Proxy Statement") is furnished to
stockholders of Specialty Equipment Companies, Inc. (the "Company") in
connection with a solicitation by the Board of Directors of the Company (the
"Board of Directors") of proxies to be used at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held May 25, 2000 and any adjournments
or postponements thereof for the purposes set forth in the accompanying notice.
Any stockholder giving a proxy has the power to revoke it at any time prior to
the exercise thereof by executing and delivering to the Secretary of the Company
at the above address a subsequent proxy or a written notice of revocation of the
proxy, or by attending the Annual Meeting and voting in person. In the absence
of any contrary written direction in the proxy, each proxy will be voted for the
election of the nominees for directors named in this proxy statement and in the
proxy, and, in the best judgment of the persons named in the proxy as
representatives, upon any other matters which may properly come before the
Annual Meeting. The Company's Annual Report for its fiscal year ended January
31, 2000, including financial statements, and this Proxy Statement and the
attached form of proxy are first being mailed to stockholders on or about April
24, 2000.
Each stockholder of record at the close of business on March 31, 2000,
the record date stated in the notice of the meeting ("Record Date"), is entitled
to vote at the meeting and at any adjournments or postponements thereof. On the
Record Date, there were outstanding 19,246,334 shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), each entitled to one
non-cumulative vote. No other shares of the Company entitled to vote at the
Annual Meeting were outstanding.
With regard to the election of directors, votes may be cast in favor of
or withheld from one or more of the nominees; votes that are withheld will be
excluded entirely from the vote and will have no effect.
Proxies will be solicited by mail and may also be solicited by personal
interview, telephone, telecopy and telegram. Solicitation will be made on a
part-time basis by directors and officers of the Company and by other regular
employees, who will receive no compensation therefor other than their regular
salary. The Company will arrange for brokerage houses, nominees and other
custodians holding Common Stock of the Company of record to forward proxy
soliciting material to the beneficial owners of such shares, and will reimburse
such record owners for the reasonable out-of-pocket expenses incurred by them.
The cost of the solicitation of proxies will be borne by the Company.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's
Annual Meeting of Stockholders in 2001 must be received by the Secretary of the
Company at the above address by December 6, 2000, for inclusion in the Company's
proxy, notice of meeting and proxy statement relating to that meeting.
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table (the "Security Holdings Table") sets forth
information as of March 31, 2000 to the Company's knowledge based upon (a)
reports filed with the Securities and Exchange Commission (the "Commission") on
or before such date pursuant to Section 16(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and/or Rule 13D promulgated by the
Commission pursuant to the Exchange Act and (b) certain other information known
to the Company, (i) with respect to persons or groups who are believed by the
Company to be beneficial owners of more than five percent of the outstanding
Common Stock and (ii) with respect to beneficial ownership of the Company's
directors and the nominees to the Board of Directors who own such Stock, and
each of the executive officers named in the Cash Compensation Table below.
Beneficial ownership is defined, for this purpose, as the sole or shared power
to vote, or to direct the disposition of, the Common Stock. Unless otherwise
noted, the persons named in the following table have sole voting and investment
power with respect to all shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS (1)
------------------------ --------------- ------------
<S> <C> <C>
Malcolm I. Glazer (2) 7,736,569 40.2%
Ariel Capital Management, Inc. (2)(3) 5,471,990 28.4%
Daniel B. Greenwood 100,193 (6)
William E. Dotterweich (4) 100,000 (6)
Donald K. McKay (4) 264,661 1.4%
Jeffrey P. Rhodenbaugh (4)(5) 281,856 1.5%
Richard A. Kent 175,241 (6)
William W. Robertson --- (6)
Barry L. MacLean 20,241 (6)
Kevin E. Glazer (7) 16,606 (6)
Charles E. Hutchinson 15,241 (6)
Avram A. Glazer (7) 15,000 (6)
All directors and executive officers as a group (10 people)(4) 8,725,608 44.2%
</TABLE>
(1) For purposes of calculating the percent of class, the Company has used
the number of shares of its Common Stock outstanding as of the date
specified above, 19,246,334, adjusted in the cases of Messrs. McKay,
Rhodenbaugh and Dotterweich, as set forth in footnote 4 of this table.
(2) The addresses of the persons shown on the foregoing table who are
believed by the Company to be beneficial owners of more than 5% of the
Company's Common Stock are as follows: Malcolm I. Glazer, 1482 South
Ocean Boulevard, Palm Beach, Florida, 33480; and Ariel Capital
Management, Inc. ("Ariel"), 307 North Michigan Avenue, Suite 500,
Chicago, Illinois, 60601.
(3) Ariel holds its respective shares solely as a result of its position as
investment adviser for its clients. Ariel disclaims beneficial
ownership of such shares of Common Stock. Ariel has sole dispositive
power and sole voting power with respect to all such shares. Mr. John
W. Rogers, president and principal shareholder of Ariel, may be deemed
to have beneficial ownership of the shares beneficially owned by Ariel,
but disclaims such ownership.
2
<PAGE> 5
(4) The amounts and percentages include those reflected in column (b).
<TABLE>
<CAPTION>
(a) (b)
Shares Issuable on
Exercise of Options
Under
Name Employee Plan
---- -------------
<S> <C>
Jeffrey P. Rhodenbaugh 200,000
William E. Dotterweich 100,000
Donald K. McKay 200,000
All directors and 500,000
executive officers as a
group (10 people)
</TABLE>
(5) Includes an aggregate of 1,600 shares and 8,209 options held in trust
for the benefit of Mr. Rhodenbaugh's children as to which he may be
deemed to have shared voting and investment power.
(6) Less than one percent.
(7) Avram A. Glazer and Kevin E. Glazer are sons of Malcolm I. Glazer.
Section 16(a) of the Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's outstanding Common Stock, to file reports of ownership and changes in
ownership of such securities with the Commission. Officers, directors and
greater than ten-percent beneficial owners are required by applicable
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely upon a review of the copies of the forms furnished to the
Company, and written representations from certain reporting persons that no
other reports were required, the Company believes that all Section 16(a) filing
requirements applicable to its officers, directors and ten-percent holders
during or with respect to the Company's fiscal year ended January 31, 2000 were
met.
1. ELECTION OF DIRECTORS
Three members of the Board of Directors will be elected to the class of
the Board of Directors whose term expires at the annual meeting of stockholders
in the Company's fiscal year ending January 31, 2004.
The shares represented by proxies received by the Board of Directors
will be voted, in the absence of any contrary direction therein, for the
election of the nominees hereinafter listed and described. The Board of
Directors believes that the persons named will be available, but if any nominee
becomes unwilling or unable to serve as a director, the proxies will be voted
for another individual to be selected by the Board of Directors. The affirmative
vote of a plurality of the shares of the Company's Common Stock represented at
the Annual Meeting is required for the election of directors.
Malcolm I. Glazer, Jeffrey P. Rhodenbaugh and Barry L. MacLean are
nominated, and upon election will hold office for three year terms, expiring at
the annual meeting of stockholders in the Company's fiscal year ending January
31, 2004, and until their successors are chosen and have qualified.
Certain other information (as of the date of this proxy statement)
concerning the above-mentioned nominees and the current directors who will
continue to serve on the Board of Directors after the Annual Meeting is set
forth below.
3
<PAGE> 6
<TABLE>
<CAPTION>
Board Members and Nominees Age
- ----------------------------------------------------------
<S> <C>
Daniel B. Greenwood (member) 80
William E. Dotterweich (member) 64
Kevin E. Glazer (member) 38
Jeffrey P. Rhodenbaugh (member and nominee) 46
Malcolm I. Glazer (member and nominee) 71
Avram A. Glazer (member) 39
Charles E. Hutchinson, Ph.D. (member) 64
Richard A. Kent (member) 54
Barry L. MacLean (member and nominee) 61
</TABLE>
Mr. Rhodenbaugh, a member and nominee to the Board of Directors, has
been President and Chief Operating Officer of the Company since September 1996.
Mr. Rhodenbaugh became Chief Executive officer of the Company after Mr.
Dotterweich's retirement on May 1, 1997. He was President of Beverage-Air from
March 1996 to September 1996. From April 1993 to March 1996 he served as
Executive Vice President of Beverage-Air. He also served as Vice President of
Marketing of the Company from January 1991 to September 1996. He served as
President of Wells from January 1990 to January 1991 and as Wells' Vice
President of Sales and Marketing form 1986 to January 1990. Mr. Rhodenbaugh
joined Wells after nine years at Hobart Corporation as a field sales employee
and national account manager. Mr. Rhodenbaugh is active in industry trade
associations and, in 1997, served as president of the North American Association
of Food Equipment Manufacturers (NAFEM). Mr. Rhodenbaugh has served as a
director since May 1997.
Mr. Malcolm I. Glazer, is a member and nominee to the Board of
Directors. He has been a self-employed, private investor whose diversified
portfolio consists of investments in television broadcasting, restaurants,
health care, banking, real estate, sports franchises, stock, and corporate bonds
for more than the past nine years. He has been President and Chief Executive
Officer of the First Allied Corporation since 1984. He is Chairman of the Board
of Directors of Zapata Corporation ("Zapata",) a manufacturer of marine protein
products and food packaging services, and until 1997 a director of Envirodyne
Industries, Inc. ("Envirodyne"), a packaging materials company. He is a director
of Omega Protein Corporation ("Omega"), engaged in the production of marine
protein products. Malcolm Glazer is the father of Kevin Glazer, who is a current
director, and Avram Glazer, who is a current director. Mr. Glazer has served as
a director since May 1994.
Mr. MacLean, is a member and nominee to the Board of Directors. He is
currently the President and Chief Executive Officer of MacLean-Fogg Company, a
manufacturer of automotive parts and products for the power and telephone
utilities businesses, and has served in those positions since 1972. Mr. MacLean
also serves as a Director of Oce-U.S.A., Inc and L.R. Nelson Corp., a
manufacturer of lawn and garden sprinklers. Mr. MacLean is a Director and a
former Chairman of the Illinois Manufacturers Association, and is a trustee of
Dartmouth College. Mr. MacLean has served as a director of the Company since
March 1992.
Mr. Avram A. Glazer, a member of the Board of Directors, has been
employed by, and works on behalf of, Malcolm I. Glazer and a number of entities
owned and controlled by Malcolm Glazer, for more than the past ten years, with
his principal responsibilities including identifying, implementing, monitoring
and disposing of Malcolm Glazer's investment interests, including serving as
President and Chief Executive Officer of Zapata since March 1995. He is also a
director of Zapata and until 1997 he was a director of Envirodyne. He is
Chairman of the Board of Omega. Avram Glazer is the son of Malcolm Glazer and
the brother of Kevin Glazer, both of whom are current directors. Mr. Glazer has
served as a director since May 1994. His current term as a director expires in
fiscal 2003.
4
<PAGE> 7
Dr. Hutchinson, a member of the Board of Directors, is Dean (Emeritus)
of the Thayer School of Engineering at Dartmouth College. He was Dean of the
Thayer School of Engineering at Dartmouth College from 1984 to 1994, and is
currently the John H. Krehbiel, Sr. Professor for Emerging Technologies. Dr.
Hutchinson holds a Ph.D. from Stanford University. Dr. Hutchinson has also been
a Professor at the University of Massachusetts, has published extensively and
has extensive consulting experience with both public and private entities. He is
a member of the Board of Directors of Markem Corporation, Hypertherm, Inc. and
Medical Systems Inc., Microchips, Inc. and Dilon Technologies. Dr. Hutchinson
has served as a director of the Company since March 1992. His current term as a
director expires in fiscal 2003.
Mr. Kent, a member of the Board of Directors, is currently Chairman and
Chief Executive Officer of Kentco Capital Corporation. He is also President of
Parco Foods L.L.C. Mr. Kent was formerly Chairman/Chief Executive Officer and
President of Orval Kent Food Company, Inc. Mr. Kent is a past Vice President and
a member of the Board of Directors of the Salad Manufacturers Association. Mr.
Kent has served as a director of the Company since March 1992. His current term
as a director expires in fiscal 2003.
Mr. Greenwood, a member of the Board of Directors, has served as
Chairman of the Board since January 1985, and as Chief Executive Officer of the
Company from that date until September 1988 and from November 16, 1993 to
January 31, 1995. Before becoming Chairman he was employed by Taylor (one of the
Company's divisions) for thirty years, most recently as President. Mr. Greenwood
has served as a director since 1985. His current term as a director expires in
fiscal 2002.
Mr. Dotterweich, a member of the Board of Directors, has served as a
member of the Board of Directors since May 1995. Mr. Dotterweich was Chief
Executive Officer of the Company from December 1993 until May 1997 and served as
President and Chief Operating Officer of the Company from December 1993 until
September 1996. From 1989 to 1992, and since May 1997, Mr. Dotterweich has
worked for the Company in a consulting capacity. Prior to that time, from 1985
until 1989, Mr. Dotterweich served as President and Chief Operating Officer of
the Company. Mr. Dotterweich was a director of the Company from January 1985 to
September 1988. From 1981 to 1985 Mr. Dotterweich was employed by Beatrice as
President of its Commercial Equipment Division which included the food service
equipment group. His current term as a director expires in fiscal 2002.
Mr. Kevin E. Glazer, a member of the Board of Directors, has been
employed by, and works on behalf of, Malcolm Glazer and a number of entities
owned and controlled by Malcolm Glazer, for more than the past ten years, with
his principal responsibilities including overseeing the operations of Malcolm
Glazer's investment interests, including serving as a Vice President of First
Allied Corporation since 1986. He also serves as a director of Savannah Bank
N.A. Kevin Glazer is the son of Malcolm Glazer, who is a current director, and
the brother of Avram Glazer, who is a current director. Mr. Glazer has served
as a director since May 1994. His current term as a director expires in fiscal
2002.
2. APPROVAL OF THE SPECIALTY EQUIPMENT COMPANIES, INC. 2000 NON-EMPLOYEE
DIRECTOR LONG-TERM INCENTIVE PLAN
The Proposed Plan
On April 19, 2000, the Board of Directors unanimously approved the
Specialty Equipment Companies, Inc. 2000 Non-Employee Director Long-Term
Incentive Plan (the "2000 Director Plan"), subject to stockholder approval. The
terms of the 2000 Director Plan are summarized below. Also, we have attached a
copy of the 2000 Director Plan as Appendix A to this Proxy Statement. The
summary of the 2000 Director Plan is qualified in its entirety by the text of
the 2000 Director Plan.
5
<PAGE> 8
The Company adopted the 2000 Director Plan in order to promote the
long-term growth and financial success of the Company by enabling it to attract
and retain non-employee directors of outstanding ability and by enhancing the
identity of interest between the Company's non-employee directors and its
stockholders. The 2000 Director Plan was adopted by the Board of Directors on
April 19, 2000, subject to approval by the Company's stockholders at the annual
meeting scheduled for May 25, 2000.
Shares of Stock Reserved for Plan
A total of 250,000 shares are reserved for issuance under the 2000
Director Plan. That number, the number of shares covered by any option, and the
exercise price of options, will be adjusted to reflect a stock dividend, stock
split, reverse stock split, share combination, recapitalization, merger,
consolidation, acquisition of property or shares, separation, spin-off,
reorganization, stock rights offering, liquidation or similar event, of or by
the Company.
The Director Options
Pursuant to the 2000 Director Plan, on the day following the 2000
annual meeting and each subsequent annual meeting during the term of the plan,
each non-employee director then serving or elected to serve on the Board of
Directors (who immediately after the 2000 annual meeting are expected to be
Messrs. Malcolm Glazer, Kevin Glazer, Avram Glazer, Hutchinson, Kent and
MacLean) will be granted an option to purchase a number of shares determined
under a formula. (Mr. Dotterweich is expected to be eligible to be granted an
option beginning with the annual meeting in 2001). The formula is $32,000
divided by the per share present value of an option determined under the
Black-Scholes option pricing model. The model is applied using the interest rate
on 10-year Treasury bonds as of January 31 preceding the Grant Date as the
risk-free rate, an expected option life of 7.5 years, volatility determined with
quarterly observations over the three-fiscal-year period ending on the January
31 preceding the Grant Date, and, solely for purposes of determining the
Black-Scholes value, using the average daily Fair Market Value of the Stock for
the trading days in the fiscal quarter ending January 31 preceding the Grant
Date as the Stock price. The formula result is then rounded up to the next 100
whole shares. The option exercise price is the fair market value (generally, the
latest reported closing price) as of the date of grant.
For the options to be granted on the day immediately following the 2000
annual meeting, the formula will result in grants of options covering 2,800
shares to each non-employee director. Depending on the values of the parameters
for the Black-Scholes model, the number of shares could be greater or less in
future years, but the present value of each annual grant under the Black-Scholes
model will always be $32,000 per non-employee director (or slightly more due to
rounding).
Outstanding Director Options
No options have yet been granted under the 2000 Director Plan. In March
1993 the Board of Directors adopted for non-employee directors a "Specialty
Equipment Companies, Inc. Non-Employee Director Long-Term Incentive Plan" (the
"1993 Director Plan") which was approved by stockholders of the Company on May
6, 1993, and has since been amended from time to time. Under the 1993 Director
Plan, options to purchase 175,241 shares of stock at a price of $1.00 per share
were granted on the date of the 1993 annual meeting to each non-employee
director then serving or elected to serve on the Board. No further grants of
options or other awards could be made under the 1993 Director Plan. Options
outstanding under the 1993 Director Plan neither affect nor are affected by any
grants of options under the 2000 Director Plan. As of April 15, 2000, options
for 876,205 shares under the 1993 Director Plan had already been exercised and
no further options under the 1993 Director Plan remain outstanding.
6
<PAGE> 9
Vesting of Director Options
Options granted under the 2000 Director Plan vest and become
exercisable as to 80% of the option upon the earlier of the date of the annual
meeting in the fourth year after grant, or the fourth annual anniversary of the
grant. The remaining 20% vests and becomes exercisable on the earlier of the
date of the annual meeting in the fifth year after grant, or the fifth annual
anniversary of the grant. However, if the service of a non-employee director
terminates by reason of retirement (defined to be any termination at or after
age 65), death or disability, the options exercisable after such event are
determined under an alternate vesting schedule as if the option had become
vested and exercisable over a five-year period from the date of grant in five
annual installments, each vesting 20% of the options upon the earlier (in each
year) of the date of the annual meeting or the annual anniversary of the grant
date. Options that are vested and exercisable upon termination of service may be
exercised for three months after termination of service (but not later than the
term of the option), unless service terminated by retirement, death, or
disability, in which case options that are vested and exercisable upon
termination of service (including options that become vested on such termination
of service under the alternate vesting schedule) may be exercised for three
years after termination of service (but not later than the term of the option),
or unless service terminated for cause, in which case all options are forfeited.
In addition, all options will become vested and exercisable upon a change in
control of the Company, as described below.
Term of the Option
Director options expire upon the fifth anniversary of the vesting of
such option or portion of such option.
Transferability of Director Options
An option granted under the 2000 Director Plan is generally not
assignable or transferable other than by will or the laws of descent and
distribution and, during the grantee's lifetime, may only be exercised by the
grantee. However, the 2000 Director Plan provides that a grantee may designate a
beneficiary who may exercise his options after his death, or may transfer an
option to an inter-vivos trust of which the grantor is both settlor and trustee.
In addition, a grantee may make gifts of options to members of the grantee's
immediate family (which means the grantee's spouse, children, grandchildren,
stepchildren, parents, stepparents, grandparents, siblings, half siblings and
the spouses of any of those people), any trust for the benefit of the grantee's
immediate family or any partnership the partners of which are members of the
grantee's immediate family.
Exercise of Director Options
The exercise price for options under the 2000 Director Plan may be paid
in cash or by the delivery of shares of Stock (valued at their fair market value
on the date of exercise) which the optionholder had held for at least six months
before the option exercise.
As a condition for delivery of shares under a director option, the
director must retain 20% of the shares of stock acquired by exercise of the
option so long as he or she is a director, with an exception for gifts of stock
to immediate family members, trusts or partnerships to whom the option could
have been transferred, as described above.
Administration of the 2000 Director Plan
The Board of Directors has authority to interpret and administer the
2000 Director Plan, to establish, amend and rescind rules carrying out the 2000
Director Plan, to construe option agreements and to make all other
determinations and to take all actions that it deems necessary or desirable for
administering the 2000 Director Plan. Nevertheless, the Board of Directors will
not have authority to change criteria under the 2000 Director Plan for the
determination of participants under the 2000 Director Plan or the amount,
frequency or exercise price of the grant of any options under the Plan.
7
<PAGE> 10
Change of Control
All options will become vested and exercisable upon a change of
control. For this purpose a "change in control" occurs if a person or group
acquires beneficial ownership of voting securities representing 50% or more of
the voting capital stock of the Company; if within any two-year period the
individuals who were members of the Board of Directors at the beginning of such
period (and certain of their authorized successors) fail to constitute at least
a majority of the Board of Directors, if there is a merger, consolidation,
transfer or lease of assets after in which pre-transaction stockholders of the
Company will not own at least 50% of the total outstanding voting capital stock
of the surviving or acquiring corporation in substantially the same proportions,
or if there is the adoption of a plan, or occurrence, of liquidation or
dissolution of the Company.
Termination of the 2000 Director Plan
The 2000 Director Plan will terminate on April 19, 2010 or at such
earlier time as the Board of Directors may determine. Termination of the 2000
Director Plan will not affect outstanding options.
Federal Income Tax Implications of the 2000 Director Plan
An optionee realizes no taxable income upon the grant of an option
under the 2000 Director Plan. Upon exercise, the optionee will realize ordinary
taxable income at the time of exercise in an amount equal, in general, to the
excess at that time of the fair market value of the shares acquired upon
exercise over the exercise price. The Company is entitled to a corresponding
deduction. However, withholding of tax is generally not required. Upon a
subsequent sale or exchange of shares, the appreciation (or depreciation) after
the date of exercise is capital gain (or loss) to the optionee, which will be
short or long-term gain (or loss) depending on the holding period which has
elapsed between option exercise and the sale of the stock. The Company is not
entitled to a further tax deduction for such gain.
Approval Requirement
Approval of the 2000 Director Plan will require the affirmative vote of
the holders of a majority of the shares of Common Stock present, or represented,
and entitled to vote at the Annual Meeting. For these purposes, abstentions have
the effect of votes against the 2000 Director Plan and broker non-votes will
have no effect upon the outcome.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
The Board of Directors believes that the adoption of the 2000 Director
Plan will promote the interests of the Company and the stockholders and help the
Company to retain its qualified outside directors. Accordingly, the Board of
Directors has approved the adoption of the 2000 Director Plan and recommends
that stockholders vote "FOR" the proposal to adopt the 2000 Director Plan.
Proxies solicited by the Board of Directors will be voted "FOR" the adoption of
the 2000 Director Plan unless stockholders specify otherwise.
DIRECTORS COMMITTEES, MEETINGS AND COMPENSATION
The Board of Directors met four times in the Company's fiscal year
ending January 31, 2000. Board Committees include an Audit Committee, which met
one time during the last fiscal year, a Compensation Committee, which met one
time during that year, a Restricted Stock Committee, which met one time during
that year and a Stock Incentive Committee which met one time during that year.
The Board does not have a standing Nominations Committee.
All members of the Board of Directors attended at least 75% of the
meetings of the Board and each of the meetings of the committees on which he
served in the Company's fiscal year ending January 31, 2000 held during the
period in which he was a director.
8
<PAGE> 11
Except as noted below, each director who is not an employee or
consultant to the Company receives $28,000 annually, paid in quarterly
installments in advance, plus expenses paid for each regular quarterly meeting
attended. Each of the current directors, other than Mr. Greenwood, Mr.
Rhodenbaugh, Mr. Dotterweich, Mr. Avram Glazer, Mr. Kevin Glazer, and Mr.
Malcolm Glazer, received options pursuant to the 1993 Director Plan. However,
Mr. Greenwood, Mr. Rhodenbaugh and Mr. Dotterweich received options pursuant to
the Executive Long-Term Incentive Plan ("Employee Plan"). Mr. Greenwood, Mr.
Dotterweich and Mr. Rhodenbaugh do not receive fees for their services as
directors. Each director who is not an employee will receive options under the
2000 Director Plan, if approved by stockholders, as discussed above.
The Audit Committee consists of Mr. MacLean, Mr. Kent and Mr.
Hutchinson. This Committee considers matters relating to internal controls and
compliance with accounting policies. It also recommends independent auditors to
the Board of Directors and reviews the independence of such auditors, approves
the scope of the annual audit activities of the independent auditors and reviews
the audit fee payable to the independent auditors and the audit results.
The Restricted Stock Committee consists of Mr. MacLean, Mr. Kent and
Mr. Hutchinson. The Committee administers the Company's Restricted Stock Plan.
The Compensation Committee consists of Mr. MacLean, Mr. Kent, Mr.
Greenwood and Mr. Malcolm Glazer. The Compensation Committee reviews and makes
recommendations to the Board of Directors on compensation of corporate officers
and presidents of the Company's divisions.
The Stock Incentive Committee consists of Mr. Hutchinson, Mr. Kent, Mr.
MacLean and Mr. Avram Glazer. The Stock Incentive Committee administers the
Company's Employee Plan.
THE 1993 NON-EMPLOYEE DIRECTOR OPTION PLAN
Effective May 6, 1993, the Company adopted the 1993 Director Plan.
Pursuant to the 1993 Director Plan, on May 6, 1993 each of the five non-employee
directors then serving or elected to serve on the Board of Directors was granted
an option to purchase 175,241 shares of Common Stock at a price of $1.00 per
share; the aggregate grants under the 1993 Director Plan totaled 876,205 shares.
Each of Messrs. Hutchinson, Kent and MacLean, as well as two former directors,
received such options.
The options granted under the 1993 Director Plan all vested and became
exercisable on May 6, 1995, as on such date all of the conditions to vesting
were satisfied. The exercise price for options granted under the 1993 Director
Plan must be paid in cash. All options granted pursuant to the 1993 Director
Plan expire on May 6, 2000. Options awarded pursuant to the 1993 Director Plan
may not be transferred except in certain circumstances by will or by the laws of
descent and distribution. Options under the 1993 Director Plan that are vested
and exercisable at the date of a grantee's termination of service generally may
be exercised for three months thereafter, except that such awards may be
exercised for three years after death, disability and/or retirement.
The following table sets forth the number of shares covered by options,
all of which are exercisable, held by each non-employee director holding options
pursuant to the 1993 Director Plan on January 31, 2000 and the aggregate gains
that were realized upon their exercise during the fiscal year ended January 31,
2000 or would have been realized had those options been exercised on January 31,
2000. These calculations assume a market value for a share of Common Stock of
$17.875, which was the closing price of the Common Stock on January 31, 2000, as
quoted on the New York Stock Exchange.
9
<PAGE> 12
AGGREGATED NON-EMPLOYEE DIRECTOR PLAN
EXERCISES IN LAST FISCAL YEAR END AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised in-
Shares Acquired Options the-Money
On Exercise Value Realized at FY-End Options at FY-End
----------- -------------- --------- -----------------
<S> <C> <C> <C> <C>
Richard A. Kent - - 175,241 $2,957,192
Barry L. MacLean - - 20,241 341,567
</TABLE>
EXECUTIVE COMPENSATION
The following summary compensation table (the "Compensation Table")
summarizes compensation information with respect to the four most highly
compensated executive officers of the Company (collectively, the "Named
Executives") in fiscal 2000 for services rendered during such fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation Awards Payout
------------------- ------ ------
Restricted
Stock Options/ LTIP All Other
Fiscal Salary Bonus Award(s) SARS Payout Compensation
Name and Principal Positions Year ($)(2) ($)(2) ($) (#) ($) ($)(1)
---------------------------- ---- ------ ----- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Daniel B. Greenwood 1998 200,000 128,300 N/A N/A N/A 36,413
(Chairman of the Board) 1999 200,000 175,400 N/A N/A N/A 38,364
2000 200,000 140,888 N/A N/A N/A 35,094
Jeffrey P. Rhodenbaugh(3) 1998 337,500 314,525 N/A 50,000 N/A 3,140
(Chief Executive Officer, 1999 350,000 748,700 N/A N/A N/A 4,181
Chief Operating Officer and 2000 364,000 256,416 N/A N/A N/A 4,416
President, and Chief
Executive Officer, Taylor)
Donald K. McKay 1998 203,000 184,224 N/A N/A N/A 18,333
(Executive Vice President, 1999 213,000 451,866 N/A N/A N/A 17,422
Chief Financial Officer, 2000 223,650 157,548 N/A N/A N/A 16,870
Treasurer and Secretary)
William W. Robertson 1998 250,000 300,000 N/A N/A N/A 4,413
(Chairman and Chief Executive 1999 260,000 277,333 N/A N/A N/A 3,497
Officer, Beverage-Air) 2000 260,000 183,659 N/A N/A N/A 4,042
</TABLE>
1) Benefits include premiums paid by the Company with respect to term life
insurance for the benefit of the beneficiaries of the Named Executives
and the value of leased cars for the use of certain named Executives,
and in the case of Mr. McKay, Mr. Greenwood and Mr. Rhodenbaugh,
includes interest imputed on non-interest bearing loans from the
Company for payment of taxes on Restricted Stock holdings. See
"--Certain Transactions."
(2) Includes elected deferrals under the Specialty Equipment Companies
Retirement Savings Plan.
10
<PAGE> 13
(3) Effective May 1, 1997, Mr. Rhodenbaugh's annual salary was increased to
$350,000 upon his appointment as Chief Executive Officer.
Defined Benefit Plans
The Company maintains the Specialty Equipment Companies Retirement
Income Plan ("Retirement Plan") for certain of its salaried employees, including
executive officers. The Company also maintains the Specialty Equipment Companies
Supplemental Retirement Plan ("Supplemental Plan") for certain of its salaried
employees, including executive officers, in order to provide benefits in an
amount equal to the excess of the benefits that would be paid under the
Retirement Plan were it not for the limitations on benefits imposed by the U.S.
Internal Revenue Code ("IRC'). The benefits under the Supplemental Plan are
provided by means of unfunded payments made by the Company to the individuals
eligible for such payments, as described in the Supplemental Plan. Based on
estimated Social Security benefit levels and on IRC and Retirement Plan
applicable limitations in fiscal 2000, the table below reflects annual benefit
payments in the form of a single life annuity at age 65 to participants in the
Retirement Plan, as supplemented by the Supplemental Plan, at specified
compensation levels (based on final average annual earnings -- that is, cash
compensation in the five calendar years in which compensation was highest,
during the last fifteen calendar years) and with specified lengths of service.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE AT RETIREMENT
Final
Average
Annual
Earnings 5 10 15 20 25 30 40
-------- --- ----- ---- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
150,000 9,960 19,921 29,881 39,841 49,802 59,762 81,402
200,000 13,710 27,421 41,131 54,841 68,552 82,262 111,402
250,000 17,460 34,921 52,381 69,841 87,302 104,762 141,402
300,000 21,210 42,421 63,631 84,841 106,052 127,262 171,402
350,000 24,960 49,921 74,881 99,841 124,802 149,762 201,402
400,000 28,710 57,421 86,131 114,841 143,552 172,262 231,402
450,000 32,246 64,921 97,381 129,841 162,302 194,762 261,402
500,000 36,210 72,421 108,631 144,841 181,052 217,262 291,402
550,000 39,960 79,921 119,881 159,841 199,802 239,762 321,402
600,000 43,710 87,421 131,131 174,841 218,552 262,262 351,402
650,000 47,460 94,921 142,381 189,841 237,302 284,762 381,402
700,000 51,210 102,421 153,631 204,841 256,052 307,262 411,402
750,000 54,960 109,921 164,881 219,841 274,802 329,762 441,402
800,000 58,710 117,421 176,131 234,841 293,552 352,262 471,402
850,000 62,460 124,921 187,381 249,841 312,302 374,762 501,402
</TABLE>
For purposes of determining the collective pension benefits under the
Retirement Plan and the Supplemental Plan, the years of credited service and
final average annual earnings (as though the executive officer had retired at
age 65 on January 31, 2000) for the Named Executives are as follows: Mr. McKay,
22 years and $482,349; Mr. Robertson, 24 years and $460,082; and Mr.
Rhodenbaugh, 14 years and $592,022. Mr. Greenwood is not eligible to participate
in either the Retirement Plan or the Supplemental Plan.
Employee Option Plan
Each of the Company's executive officers are eligible to be granted
awards under the Employee Plan. The Employee Plan, as amended, permits the
delivery of a maximum of 5,004,814 shares of the Company's Common Stock on
account of the exercise of awards. Of this amount of shares of the Company's
Common Stock, a maximum of 1,500,000 shares of the Company's Common Stock may be
made subject to awards granted to any particular individual.
11
<PAGE> 14
The following table sets forth the number of shares covered by
exercisable and unexercisable options held by the Named Executives on January
31, 2000 and the aggregate gains that would have been realized had those options
been exercised on January 31, 2000, whether these options were exercisable or
not, on January 31, 2000. These calculations assume a market value for a share
of Common Stock of $17.875, which was the closing price of the Common Stock on
January 31, 2000, as quoted on the New York Stock Exchange.
<TABLE>
<CAPTION>
Shares
Acquired Number of Shares Covered by
Upon Options on Value of Options as of
Exercise Value January 31, 2000 January 31, 2000 (1)
-------- ----- ---------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Daniel B. Greenwood (3) 150,000 $4,128,625 --- --- $ --- ---
Jeffrey P. Rhodenbaugh (2)(4) 125,000 2,718,751 200,000 --- 2,050,000 ---
William E. Dotterweich (5) 128,000 2,654,500 100,000 --- 962,500 ---
Donald K. McKay --- --- 200,000 --- 3,375,000 ---
William W. Robertson (6) 117,600 3,251,736 --- --- --- ---
</TABLE>
(1) Option values are calculated based upon the difference between the
closing market price of the Company's common stock as reported on the New York
Stock Exchange on January 31, 2000 ($17.875) and the applicable exercise prices
of the options.
(2) All of the options granted to Mr. Rhodenbaugh vest two years after
the date of grant. 225,000 options were granted on June 8, 1993 at an exercise
price of $1.00, 50,000 options were granted on August 21, 1996 at an exercise
price of $12.00 and 50,000 options were granted on May 1, 1997 at an exercise
price of $12.50.
(3) Of the 175,000 shares exercised by Mr. Greenwood, 50,000 shares
were withheld for payment of withholding taxes and a total of 125,000 were
issued.
(4) Of the 125,000 shares exercised by Mr. Rhodenbaugh, 50,062 were
withheld for payment of withholding taxes and exercise price and a total of
66,938 were issued.
(5) Mr. Dotterweich is no longer an executive officer of the Company
since May 1, 1997. However, he continues to serve as a director.
(6) Of the 117,600 shares exercised by Mr. Robertson, 40,900 shares
were withheld for payment of withholding taxes and a total of 76,700 were
issued.
Options awarded pursuant to the Employee Plan may not be transferred
except in certain circumstances by will or by the laws of descent and
distribution. Options under the Employee Plan that are vested and exercisable at
the date of a grantee's termination of service generally may be exercised for
three months thereafter, except that such awards may be exercised for three
years after death, disability and/or retirement.
There were no option awards granted to any of the named executives
during fiscal 2000. Stock options exercisable into 449,000 shares of Common
Stock were granted to all employees and non-employee directors of the
Corporation as a group during the fiscal year ended January 31, 2000. The
exercise price is the closing market price on the date of grant. Options vest
and become exercisable commencing beginning on the fourth anniversary of the
grant date, and expire in five years from the vesting date.
12
<PAGE> 15
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of its
executive officers, among others, whereby the Company agreed to retain each of
them and each of them has agreed to remain in the employ of the Company for two
years from December 19, 1993. Each of these Agreements were renewed for an
additional two year term, effective December 19, 1995, and were amended so that
they will automatically renew for additional two year terms unless either party
delivers notice within 90 days prior to the end of the then applicable term.
Since May 1, 1997 Mr. Dotterweich has served as a consultant to the Company. The
Company and Mr. Dotterweich have agreed that he will continue to serve in such
capacity for four years, until May 1, 2001. In connection with his consulting
services the Company has agreed to pay Mr. Dotterweich $225,000, $175,000,
$125,000 and $75,000 for each of the years ended April 30, 1998, 1999, 2000 and
2001, respectively. The parties are negotiating the terms of a formal consulting
agreement and to date have not entered into any written agreement with respect
to these consulting services.
Under the terms of the employment agreement for the executive officers,
each executive officer is to receive: a salary equal to his salary as of the
date of his employment agreement, with any increases subject to the discretion
of the Compensation Committee and the approval of the Board of Directors; a
bonus determined by the Compensation Committee with the approval of the Board of
Directors; participation in any employee stock option program, such as the
Employee Plan, that may be adopted; participation in other incentive, savings
and retirement plans, welfare benefit plans and fringe benefits, expense
reimbursement and vacation policies applicable to Company executives; and
indemnification for liabilities arising from his service whether arising before
or during the term of his employment agreement.
Also, each executive officer, upon (i) termination without cause, (ii)
death, (iii) permanent disability or (iv) termination for good reason, will be
entitled to: (a) continuation of monthly salary, health and life insurance in
effect on the termination date for the "Continuation Term" (although the
agreements do not provide for continuation payments if the employment of the
executive is terminated at any time after the expiration date of such person's
employment agreement); (b) such terminated executive officer's share of cash
incentive bonus earned in the year of termination prorated based on the time
employed during the year; and (c) the continuation of any unexercised options as
specified in the Plan. The Continuation Term is six months, unless the
termination which gives rise to the severance benefits occurs following a Change
of Control (as defined therein), in which case the Continuation Term is 24
months. If a change of the ownership or effective control of a substantial
portion of the assets of the Company results in any executive officer becoming
subject to the 20% excise tax on excess parachute payments, the Company will
reimburse such person for the amount of the excise tax due and all taxes on the
reimbursement up to a maximum reimbursement limit of five times the excise tax.
CERTAIN TRANSACTIONS
In connection with the taxes payable on Company issued shares of
restricted stock, the Company has offered certain of its executives non-interest
bearing loans. All shares of restricted stock were granted on April 1, 1992 and
have become fully vested and are no longer restricted. As of April 1, 2000,
there was no indebtedness owed to the Company by any of the named executives.
During fiscal year 2000, the total income imputed from the forgiveness of
interest indebtedness for Mr. Greenwood, Mr. Rhodenbaugh and Mr. McKay, $2,028,
$838 and $3,266, respectively.
In connection with the Company's Stock Repurchase Plan, the Company
entered into a stock purchase agreement with Malcolm I. Glazer and the Malcolm
I. Glazer Family Limited Partnership (collectively, the "Malcolm Glazer
Interests"). Pursuant to this agreement, the Malcolm Glazer Interests have
participated in the Stock Repurchase Plan through an agreement to sell a pro
rata portion of their shares at the average per share price paid to other
selling stockholders. A special committee of the Board, consisting entirely of
outside directors, approved this agreement. A total of 210,914 shares of Common
Stock repurchased from the Malcolm Glazer Interests at an average price per
share of $17.53 during fiscal 1998 and fiscal 1999.
13
<PAGE> 16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Greenwood, who is an executive officer, is a member of the
Compensation Committee of the Board of Directors. The other members of the
Compensation Committee during fiscal 2000 were Messrs. MacLean, Kent, and
Malcolm Glazer.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
Executive Officer Compensation
The Company's compensation program for executive officers consists of
three elements: a base salary, a bonus and stock options. The Committee believes
that this approach best serves the interests of stockholders by ensuring that
executive officers are compensated in a manner which provides incentives based
upon both the short-term and long-term performance of the Company. Thus,
compensation for the Company's executive officers involves a high proportion of
pay which is at risk: the variable annual bonus and stock options (which
directly relate a significant portion of the executive officer's long-term
remuneration to stock price appreciation realized by the Company's
stockholders). The Compensation Committee generally believes that stock options
should be emphasized more than a bonus as a means to attract, retain and
motivate executives.
Base Salary. The Compensation Committee recommended, and the Board of
Directors approved a base salary for Mr. Rhodenbaugh of $364,000 for fiscal
2000. Mr. Rhodenbaugh's 2000 Compensation was established taking into his
account his overall qualifications and experience and market conditions for
executives of his caliber for comparable companies. In addition, it takes into
consideration, effective May 1, 1997 his added responsibilities as the Company's
Chief Executive Officer upon his election to such position at that time. The
salaries of the other executive officers of the Company were set based upon
subjective factors such as the level of experience and competency and complexity
of the duties performed by such executive officer, as well as objective
criterion such as the performance of the Company, as compared to its business
plan, including compliance by the Company with the financial covenants provided
in the Company's loan agreements. In the case of Mr. Robertson, the division
chairman of Beverage-Air, base salary is also affected by the performance of
that division compared with its business plan. The Compensation Committee's
discretion in setting the executive officers' base salaries, however, is limited
by the terms of the employment agreements, described above.
Stock Options. At the Annual Meeting of Stockholders in 1993, the
Company's stockholders approved the Employee Plan. The Employee Plan was
subsequently amended in 1995 and 1999. The 1999 amendment increased the number
of option awards under the plan from 4,004,814 shares to 5,004,814 shares. The
Employee Plan is designed to advance the interests of the Company by providing a
means by which key employees of the Company and its subsidiaries can acquire and
maintain stock ownership, thereby strengthening their commitment to the
Company's success and their desire to remain employed by the Company and its
subsidiaries. Allocations of options were based principally upon subjective
factors, including, most significantly, an assessment of how significant the
individual executive officer's performance was and would be to the future growth
and performance of the Company. A total of 50,000 stock options were granted to
Mr. Rhodenbaugh pursuant to the Employee Plan in the Company's fiscal year ended
January 31, 1998. These grants were made to reflect his increased
responsibilities as Chief Executive Officer and his increased importance to the
Company's overall performance and achievement of its objectives. Stock option
awards are not made by the compensation committee but rather are made by the
stock incentive committee, which is comprised of three non-employee directors.
14
<PAGE> 17
Annual Bonus. The Compensation Committee also reviews and approves
bonus compensation for the executive officers. Effective in Fiscal 2000 bonuses
for executive officers are based on a percentage of their salaries and were
derived from a formula based upon the Company's actual EVA (Economic Value
Added), as compared to the Company's targeted EVA. In the case of executive
officers who perform functions primarily at only one of the Company's divisions,
a portion of their bonuses are based upon the EVA of the division compared to
targeted EVA and a portion is based upon the Company's EVA as compared to the
Company's targeted EVA.
Each of the named executives has a target bonus level of 60% of base
salary. Under the EVA Plan, bonuses are awarded to each named executive based on
the improvement in EVA. The target EVA is set annually for each business unit
and for the Company as a whole based on the average of the prior fiscal year's
target and actual EVA plus an expected improvement in EVA for the current fiscal
year. If the annual improvement in EVA is in excess of the targeted improvement,
the bonus calculation will result in an amount in excess of the participant's
target bonus. If the annual improvement in EVA is less than the targeted
improvement, the bonus calculation will produce an amount less than the
individual's target bonus. Bonuses payable under the EVA Plan are not subject to
any minimum or maximum. In fiscal year 2000, the performance of the Company and
its business units resulted in Plan compensation ranging from 105% to 143% of
their targets.
In order to encourage a long-term commitment by executive officers and
other key employees to the Company and its stockholders, the EVA Plan requires
that two thirds of any bonus earned in a given year in excess of the target
bonus be deferred in a "bonus bank" for possible future payment by the Company.
One-third of the bonus bank balance is paid out each year. Consequently, the
total bonus payable in any given period consists of the individual's target
bonus, plus or minus a portion of the bonus bank balance. The bonus bank is
considered at risk in the sense that in any year EVA performance results in a
bonus amount which is negative, the negative bonus amount is subtracted from the
bank balance. In the event that the outstanding bonus bank balance at the
beginning of the year is negative, the bonus paid for that year is limited to
the aggregate of thirty-three percent of the positive bonus bank balance after
applying the remaining portion of the bonus earned for the year against the
negative balance in the bonus bank. The executive is not expected to repay
negative balances in the bonus. In the event that an executive voluntarily
terminates employment with the Company, the bonus bank balance is subject to
forfeiture.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the IRC generally disallows a tax deduction to public
companies for compensation exceeding $1 million paid to the corporation's Chief
Executive Officer or four other most highly compensated executive officers. The
Compensation Committee has reviewed the possible effect on the Company of
Section 162(m), and it does not believe that such section currently effects the
Company given its current compensation structure. To the extent that it is
possible that the compensation to any of the Company's executive officers could
exceed $1 million the Compensation Committee intends to further review and
consider the effect on the Company of Section 162 (m). Furthermore, the Employee
Plan was amended so as to make it possible to satisfy the conditions for an
exemption from Section 162(m)'s deduction limit. However, other characteristics
of a grant affect whether or not a deduction is actually available in a given
case.
Members of the Compensation Committee:
Daniel B. Greenwood
Barry L. MacLean
Richard A. Kent
Malcolm I. Glazer
15
<PAGE> 18
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis changes since
January 31, 1995 in (a) the total stockholder return on the Company's Common
Stock, (b) the total return of companies in the Russell 2000 Index, and (c) the
total return of companies in the Value Line Machinery Index. The total return
information presented in the graph assumes the reinvestment of dividends. The
graph assumes $100 was invested on January 31, 1995 in the Company's Common
Stock, the Russell 2000 Index and the Value Line Machinery Index.
COMPARISON OF CUMULATIVE TOTAL RETURN
[LINE GRAPH]
<TABLE>
<CAPTION>
1/31/95 1/31/96 1/31/97 1/31/98 1/31/99 1/31/00
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Specialty Equipment Companies, Inc. 100.00 108.54 131.71 165.85 273.78 174.39
Russell 2000 Index 100.00 129.94 154.49 182.16 183.60 213.48
Value Line Machinery Index 100.00 131.90 173.34 244.53 211.43 272.11
</TABLE>
The Company is included in the Russell 2000 Index (an index of small
capitalization companies) but is not part of the Value Line Machinery Index. The
Value Line Machinery Index includes a group of 124 companies, some of which are
direct competitors of the Company, with primary businesses that involve the
manufacture of a variety of machinery and equipment.
16
<PAGE> 19
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of KPMG LLP served as the Company's independent certified
public accountants for the fiscal year ended January 31, 2000. A representative
of that firm is expected to be present at the Company's 2000 Annual Meeting of
Stockholders with the opportunity to make a statement, if so desired, and to be
available to respond to appropriate questions.
3. OTHER MATTERS
It is not presently expected that any matters other than the election
of Directors will be brought before the meeting. If, however, other matters do
come before the meeting, it is the intention of the persons named as
representatives in the accompanying proxy to vote in accordance with their best
judgment on such matters.
By order of the Board of Directors,
/s/ DONALD K. MC KAY
-----------------------------------
Donald K. McKay, Secretary
Aurora, Illinois
April 24, 2000
17
<PAGE> 20
APPENDIX A
SPECIALTY EQUIPMENT COMPANIES, INC.
2000 NON-EMPLOYEE DIRECTORS LONG-TERM INCENTIVE PLAN
- --------------------------------------------------------------------------------
The Plan. The Specialty Equipment Companies, Inc. 2000 Non-Employee
Directors Long-Term Incentive Plan (the "Plan") is hereby established by the
Company effective April 19, 2000, subject to its approval by the stockholders of
the Company.
1. Purpose. The Plan is intended to promote the long-term growth and financial
success of the Company by enabling the Company to attract and retain
non-employee directors of outstanding ability and by enhancing the identity of
interest between the Company's non-employee directors and its stockholders.
2. Definitions. As used in the Plan, terms defined parenthetically immediately
after their use shall have the respective meanings provided by such definitions,
and the terms set forth below shall have the following meanings (equally
applicable to both the singular and plural forms of the terms defined):
(a) "Award Agreement" means the written agreement by which an Option is
evidenced.
(b) "Black-Scholes Value" means the per share fair value of an Option,
determined using the Black-Scholes option pricing model applying (i) the
interest rate on 10-year Treasury bonds as of January 31 preceding the Grant
Date as the risk-free rate, (ii) an expected Option life of 7.5 years, (iii)
volatility determined with quarterly observations over the three-fiscal-year
period ending on the January 31 preceding the Grant Date, and (iv) the average
daily Fair Market Value of the Stock for the trading days in the fiscal quarter
ending January 31 preceding the Grant Date as the Stock price.
(c) "Board" means the board of directors of the Company.
(d) "Cause" means a Grantee's habitual neglect of the Grantee's duties
(other than on account of Disability), habitual reckless conduct or willful
misconduct in carrying out his duties, breach of fiduciary duty to the Company
involving improper personal profits by the Grantee, or conviction of a felony
involving moral turpitude, except that Cause shall not mean:
(i) any act or omission believed by the Grantee in good faith
to have been in or not opposed to the interest of the Company;
(ii) any act or omission with respect to which a determination
could properly have been made by the Board that the Grantee met the
applicable standard of conduct under which indemnification or
reimbursement is permitted under the by-laws of the Company, or the
laws and regulations under which the Company is governed, in each case
in effect at the time of such act or omission; or
(iii) any act or omission with respect to which notice of
Termination of Service of the Grantee is given more than 12 months
after the earliest date on which any member of the Board who is not a
party to the act or omission, knew of such act or omission.
(e) "Company" means Specialty Equipment Companies, Inc., a Delaware
corporation.
(f) "Disability" means a mental or physical condition which renders a
Grantee unable or incompetent to carry out the duties of a director of the
Company, and which is expected to be permanent or for an indefinite duration.
(g) "Effective Date" means April 19, 2000.
(h) "Fair Market Value" of any security of the Company or any other
issuer means, as of any applicable date:
18
<PAGE> 21
(i) if the security is listed for trading on the New York
Stock Exchange, the closing price, regular way, of the security as
reported on the New York Stock Exchange Composite Tape, on the
immediately preceding day, or if no such reported sale of the security
shall have been reported for such date, on the next preceding date on
which such a sale was reported, or
(ii) if the security is not so listed, but is listed on
another national securities exchange or authorized for quotation on the
Nasdaq National Market, the closing price, regular way, of the security
on such exchange or the Nasdaq National Market, as the case may be, on
the immediately preceding day, or if no such reported sale of the
security shall have been reported for such date, on the next preceding
date on which such a sale was reported, or
(iii) if the security is not listed for trading on a national
securities exchange or authorized for quotation on the Nasdaq National
Market, the average of the closing bid and asked prices as reported by
the Nasdaq SmallCap Market on the immediately preceding day, or, if no
such prices shall have been so reported for such date, on the next
preceding date for which such prices were so reported, or
(iv) if the security is not listed for trading on a national
securities exchange and is not authorized for quotation on the Nasdaq
National Market or the Nasdaq SmallCap Market, the fair market value of
the security as determined in good faith by a qualified, independent
appraiser selected by the Board.
(i) "Grant Date" means the date of grant of an Option determined in
accordance with Section 6(a).
(j) "Grantee" means an individual who has been granted an Option.
(k) "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, and regulations and rulings thereunder. References to a particular
section of the Internal Revenue Code shall include references to successor
provisions.
(l) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(m) "Option" means an option to purchase Stock of the Company granted
under the Plan.
(n) "Option Price" means the per share purchase price of Stock subject
to an Option determined in accordance with Section 6(a).
(o) "Permissible Transferee" means any member of the Immediate Family
of the Grantee to whom such Option was granted, any trust for the benefit of
Grantee and/or members of the Grantee's Immediate Family ("Family Trusts"), or
any partnership whose partners are the Grantee and/or members of a Grantee's
Immediate Family or Family Trusts. For purposes of this definition, "Immediate
Family" includes the Grantee's spouse, children, grandchildren, great
grandchildren, stepchildren, parents, stepparents, grandparents, siblings, and
half siblings and the spouses of such individuals.
(p) "Plan" has the meaning set forth in the introductory paragraph.
(q) "Retirement" means a Termination of Service occurring on or after
an individual attains age 65.
(r) "Stock" means common stock of the Company, par value $.01 per
share.
(s) "Subsidiary" means a corporation as defined in Section 424(f) of
the Internal Revenue Code, with the Company being treated as the employer
corporation for purposes of this definition.
(t) "Termination of Service" occurs the first whole day on which an
individual is for any reason no longer serving as a director of the Company.
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<PAGE> 22
3. Scope of the Plan.
(a) Number of Shares Available Under the Plan. An aggregate of 250,000
shares of Stock is hereby authorized for issuance and is reserved for delivery
on account of the exercise of Options granted under the Plan.
(b) Treasury Stock. The Board shall have the authority to cause the
Company to purchase from time to time shares of Stock to be held as treasury
shares and used for or in connection with Options.
4. Administration.
(a) Rules; Interpretation; Determination. Subject to the provisions of
the Plan, the Board shall have full authority to interpret and administer the
Plan, to establish, amend and rescind rules for carrying out the Plan, to
construe Award Agreements and to make all other determinations and to take all
other actions that it deems necessary or desirable for administering the Plan;
provided, however, that no such interpretation, rule or determination shall
change the criteria for determining Participants in the Plan as provided in
Section 5, or the amount, frequency or exercise price of any Option that may be
granted under the Plan. Each determination, interpretation or other action made
or taken by the Board shall be final and binding for all purposes and upon all
persons. The Board may delegate any or all of its powers and functions under the
Plan (other than the power to amend the Plan pursuant to Section 19) to a
committee of the Board.
(b) Agents; Expenses. The Board may appoint agents (who may be
employees of the Company) to assist in the administration of the Plan, and may
authorize such persons to execute agreements or other documents on its behalf.
The Board may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan, and may rely upon any opinion
received from any such counsel or consultant and any computation received from
any such consultant or agent. All expenses incurred in the administration of the
Plan, including for the engagement of any counsel, consultant or agent, shall be
paid by the Company.
(c) No Liability. No director or former director or any agent
designated pursuant to Section 4(b) shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.
5. Eligibility. Only directors of the Company who are not employees of the
Company or any Subsidiary on the date of the grant of an Option ("Eligible
Directors") shall participate in the Plan.
6. Options.
(a) Grant of Options. Each Eligible Director is hereby granted, on the
day (the "Grant Date") following the date of each regular annual meeting of
stockholders of the Company ("Annual Meeting") beginning with the Annual Meeting
in the year 2000, an Option to purchase (i) a number of shares of Stock
determined by dividing $32,000 by the per share Black-Scholes Value for the
Grant Date, rounded up to the next 100 Shares, (ii) at an Option Price per share
equal to the Fair Market Value of a share of Stock on the Grant Date.
(b) Vesting. Except as provided by the following sentence or pursuant
to Section 18, eighty percent (80%) of each Option shall vest and become
exercisable on the earlier of the date of the Annual Meeting in the fourth year
after the Grant Date or the fourth annual anniversary of the Grant Date; and the
remaining twenty percent (20%) shall vest and become exercisable on the earlier
of the date of the Annual Meeting in the fifth year after the Grant Date, or the
fifth annual anniversary of the Grant Date. However, if a Grantee incurs a
Termination of Service by reason of death, Disability or Retirement, each of the
Grantee's Options shall become vested and exercisable upon such Termination of
Service to the extent it would have been vested and exercisable upon the date of
such Termination of Service if it had been granted with vesting and
exercisability to occur over a five-year period in five annual installments at
the rate of 20% each year on the earlier (in each year) of the dates of the
Annual Meetings in the first through fifth years after the Grant Date or the
first through fifth annual anniversaries of the Grant Date (the "Alternate
Vesting Schedule").
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<PAGE> 23
(c) Expiration. A Grantee may exercise all or any portion of an Option
at any time on or after the date on which the Option (or portion thereof) vests.
However, each Option (or portion thereof) shall expire and may not be exercised
after the fifth anniversary of the date the Option (or portion thereof) became
vested and exercisable (the "Expiration Date").
7. Non-transferability of Options.
(a) Each Option granted hereunder shall by its terms not be assignable
or transferable other than by will or the laws of descent and distribution and
may be exercised, during the Grantee's lifetime, only by the Grantee; except
that a Grantee by written instrument delivered to the Company during the
Grantee's lifetime may designate a beneficiary to exercise the Grantee's Options
after the Grantee's death (and may change such designation of beneficiary from
time to time in like manner without the consent of any beneficiary), and may
transfer an Option for no consideration or pursuant to a domestic relations
order to any Permissible Transferee or to a revocable inter vivos trust as to
which the Grantee is both the settlor and the trustee. The written instrument to
be used in connection with any such beneficiary designation or transfer shall be
subject to prior approval by the Board.
(b) The Permissible Transferee shall remain subject to all of the terms
and conditions applicable to such Option prior to such transfer including the
Grantee's obligation for taxes, to retain shares of Stock, and for compliance
with legal and regulatory requirements; and except as otherwise expressly
provided in the Plan a Permissible Transferee shall have all the rights and
obligations of the Grantee hereunder and the Grantee shall not retain any rights
with respect to the transferred Option; provided, however, that the payment of
any tax attributable to the exercise of an Option shall remain the obligation of
the Grantee and the period during which an Option shall remain exercisable under
Section 11 shall depend upon the time and circumstances of the Grantee's
Termination of Service.
8. Exercise of Options.
(a) Exercise. Each Grantee may exercise all or any portion of the
vested portion of an Option by delivering to the Company written notice of
intent to purchase a specific number of the shares of Stock covered by the
Option together with payment in full therefor at the Option Price. Such notice
and payment shall be delivered to the Office of the Secretary at the principal
executive offices of the Company. Exercise shall become effective as of the date
on which payment in full for the Shares being purchased is actually received by
the Office of the Secretary, provided, however, that no payment shall be
accepted which is received in the office of the Company's Secretary after the
Expiration Date.
(b) Payment. Payment shall be made, at the election of the Grantee, in
either of the following forms (or any combination thereof): (1) cash, certified
check, cashiers check or wire transfer made payable to "Specialty Equipment
Companies, Inc." or (2) shares of Stock, held by the Grantee for at least six
months prior to the date of exercise, valued at its Fair Market Value on the
date of exercise, or if the date of exercise is not a business day, the next
succeeding day. If shares of Stock held by the Grantee are used to pay the
Option Price for Stock, then if requested by the Secretary or an Assistant
Secretary of the Company, the Grantee shall deliver to the Secretary or
Assistant Secretary the Agreement evidencing the Option and the Grantee's
certificate that such Stock has been held by the Grantee for at least six months
and such certificate shall identify the number of shares of Stock and the Stock
Certificate or other document or notation which evidences such Stock ownership.
The number of shares of such Stock being so used and the number of shares
purchased upon exercise may be evidenced by a notation on the Agreement and the
Agreement shall be returned to the Grantee. No fractional shares of Stock (or
cash in lieu thereof) shall be issued upon exercise of an Option and the number
of shares of Stock that may be purchased upon exercise shall be rounded to the
nearest number of whole Shares.
(c) Compliance with Laws. The Company shall not be obligated to deliver
any certificates for the shares purchased if, in the opinion of legal counsel to
the Company, the issuance and delivery of such shares would constitute a
violation by the Grantee or the Company of any applicable law or regulation of
any governmental authority, including, without limitation, federal and state
securities laws, or the regulations of any stock exchanges on which the
Company's securities may then be listed.
21
<PAGE> 24
9. Mandatory Withholding Taxes. The Company shall require as a condition of
delivery of any shares of Stock that the Grantee remit an amount sufficient to
satisfy all federal, state, and local withholding tax requirements related
thereto, if any.
10. Retention of Shares. As a condition of delivery of any shares of Stock under
this Plan the Grantee agrees that so long as the Grantee is a member of the
Board the Grantee shall retain ownership of at least twenty percent (20%) of the
shares of Stock acquired by exercise of an Option hereunder, provided, however,
that the Grantee may transfer any of such shares of Stock for no consideration
or pursuant to a domestic relations order to any Permissible Transferee or to a
revocable inter vivos trust as to which the Grantee is both the settlor and the
trustee, and such shares of Stock shall be treated as retained by the Grantee
for purposes of this Section 10.
11. Termination of Service. If a Grantee has a Termination of Service, then the
unexercised portion of an Option, to the extent exercisable on the date of the
Grantee's Termination of Service may be exercised, in whole or in part, at any
time within three months following such Termination of Service but not later
than the Expiration Date, if earlier, provided, however, that (i) if the
Termination of Service is caused by the death, Disability or Retirement of the
Grantee, then the unexercised portion of an Option to the extent vested and
exercisable on the date of Termination of Service (after applying the Alternate
Vesting Schedule) may be exercised, in whole or in part, at any time within
three years after the Termination of Service, but not later than the Expiration
Date, if earlier, by the Grantee (or Permissible Transferee or other person to
whom an Option may have been transferred in accordance with Section 7(a)); and
(ii) if the Grantee's Termination of Service is for Cause, all unexercised
Options awarded to such Grantee shall immediately be forfeited.
12. Securities Law Matters. If necessary to comply with the Securities Act of
1933 and any applicable state securities law, the Company shall require a
written investment intent representation by the Grantee and shall require that a
restrictive legend be affixed to certificates for shares of Stock.
13. No Funding Required. Benefits payable under the Plan to any person shall be
paid directly by the Company. The Company shall not be required to fund, or
otherwise segregate assets to be used for payment of, benefits under the Plan.
14. No Service Rights. Neither the establishment of the Plan, nor the granting
of any Option shall be construed to (a) give any Grantee the right to remain in
the service of the Company or to any benefits not specifically provided by the
Plan or (b) in any manner modify the right of the Company to remove or to not
re-elect any Grantee in accordance with applicable law.
15. Rights as a Stockholder. A Grantee shall not, by reason of any Option, have
any right as a stockholder of the Company with respect to the shares of Stock
which may be deliverable upon exercise or payment of such Option until such
shares have been delivered to him.
16. Nature of Payments. Any and all grants of Options or deliveries of shares of
Stock hereunder shall constitute special incentive payments to the Grantee and
shall not be taken into account in computing the amount of compensation of the
Grantee for the purposes of determining any pension, retirement, death or other
benefits under (a) any pension, retirement, profit-sharing, bonus, life
insurance or other benefit plan of the Company or any of its Subsidiaries or (b)
any agreement between the Company or any Subsidiary, on the one hand, and the
Grantee, on the other hand, except as such plan or agreement shall otherwise
expressly provide.
17. Adjustments. In order to prevent dilution or enlargement of the benefits
intended to be awarded under the Plan,
a. the aggregate numbers of shares of Stock available under Section 3(a),
b. the number of shares of Stock covered by an Option, and
22
<PAGE> 25
c. the Option Price,
shall be adjusted to reflect a stock dividend, stock split, reverse stock split,
share combination, recapitalization, merger, consolidation, acquisition of
property or shares, separation, spin-off, reorganization, stock rights offering,
liquidation or similar event, of or by the Company.
18. Change of Control. In the event of a Change in Control, all Options granted
under the Plan shall immediately vest and become exercisable. For this purpose a
"Change in Control" shall mean, and be deemed to have occurred if and when:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the 1934 Act) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the 1934 Act, except that a person shall be deemed
to have beneficial ownership of all shares voting capital stock that such person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total voting power of all classes of voting capital stock of the Company; or
(b) during a period of two consecutive years, individuals who at the
beginning of such period constituted the Board (together with any new members of
the Board whose election to the Board, or whose nomination for election by the
holders of capital stock of the Company, was approved by a vote of 66-2/3% of
the members of the Board then still in office who were either members of the
Board at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of such Board then in office; or
(c) the Company consolidates with or merges with or into any person or
conveys, transfers or leases all or substantially all of its assets to any
person, or any corporation or partnership consolidates with or merges into or
with the Company, in any such event pursuant to a transaction in which the
outstanding voting capital stock of the Company is changed into or exchanged for
cash, securities or other property, other than any such transaction where the
persons who were the beneficial owners of the voting capital stock of the
Company immediately before the transaction directly or indirectly own,
immediately after the transaction, in substantially the same proportions, at
least 50% of the then-outstanding voting capital stock of the surviving,
resulting or acquiring corporation or partnership, or
(d) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
19. Amendment of the Plan. The Board may from time to time in its discretion
amend or modify the Plan without the approval of the stockholders of the
Company, except as such stockholder approval may be required (a) to permit
transactions pursuant to the Plan to be exempt from potential liability under
Section 16(b) of the 1934 Act or (b) under the listing requirements of any
securities exchange on which are listed any of the Company's equity securities.
20. Termination of the Plan. The Plan shall terminate on the tenth (10th)
anniversary of the Effective Date or at such earlier time as the Board may
determine. Any termination, whether in whole or in part, shall not affect (i)
any Option then outstanding under the Plan, (ii) the obligation to retain shares
of Stock under Section 10, or (iii) adjustments to Options in accordance with
Section 17.
21. No Illegal Transactions. The Plan and all Options granted pursuant to it are
subject to all laws and regulations of any governmental authority which may be
applicable thereto; and notwithstanding any provision of the Plan or any Option,
Grantees shall not be entitled to exercise Options or receive the benefits
thereof and the Company shall not be obligated to deliver any Stock or pay any
benefits to a Grantee if such exercise, delivery, receipt or payment of benefits
would constitute a violation by the Grantee or the Company of any provision of
any such law or regulation.
23
<PAGE> 26
22. Controlling Law. The law of the State of Delaware except its law with
respect to choice of law, shall be controlling in all matters relating to the
Plan.
23. Severability. If all or any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared to
be unlawful or invalid. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give
effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.
24
<PAGE> 27
PROXY PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SPECIALTY EQUIPMENT COMPANIES, INC.
1245 Corporate Boulevard, Suite 401
Aurora, Illinois 60504
FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 25, 2000
The undersigned stockholder hereby appoints DANIEL B. GREENWOOD, DONALD K. MCKAY
and DOUGLAS C. JOHNSON, or any of them, with full power of substitution (the
action of one, if only one be present and acting to be in any event
controlling), the proxies of the undersigned at the Annual Meeting of
Stockholders of Specialty Equipment Companies, Inc. (the "Company") to be held
at Specialty Equipment Companies, Inc. 1245 Corporate Blvd., Suite 401, Aurora,
Illinois 60504 on Thursday, May 25, 2000 at 10:00 a.m., Chicago time and at any
and all adjournments or postponements thereof, and to vote all shares which the
undersigned would be entitled to vote thereat as designated below, with all
powers which the undersigned would possess if personally present.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
<TABLE>
<S> <C>
(Comments/Change of Address)
------------------------------------
------------------------------------
------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side)
</TABLE>
................................................................................
FOLD AND DETACH HERE
<PAGE> 28
SPECIALTY EQUIPMENT COMPANIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT:
<C> <C> <C> <C> <C>
1. Election of Directors -- / / / / / /
Director Nominees:
Malcolm I. Glazer
Jeffrey P. Rhodenbaugh
Barry L. MacLean
<CAPTION>
FOR AGAINST ABSTAIN
<C> <S> <C> <C> <C>
2. Approval of the Company's 2000 / / / / / /
Non-Employee
Director Long-term Incentive Plan.
3. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before
the meeting.
</TABLE>
- --------------------------------------------
Nominee exception (INSTRUCTION: To withhold authority to vote for
any individual nominee or nominees, write the name(s) of the nominee(s)
on the line provided above.)
Comments/
Change
of
Address / / Dated: , 2000
------------------
------------------------------
Signature
------------------------------
Signature if held jointly
NOTE: Please sign exactly as
name appears at left. When
shares are held by joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
president or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
................................................................................
FOLD AND DETACH HERE
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
