SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 Section 240.14a-11(c) or
Section 240.14a-12
Toastmaster Inc.
(Name of Registrant as Specified In Its Charter)
________________________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
_________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
______________________________________________________________
<PAGE>
March 28, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of Toastmaster Inc., to be held at the principal
executive offices of the Company, located at 1801 North Stadium
Boulevard, Columbia, Missouri, on Tuesday, May 13, 1997,
commencing at 10:00 a.m., local time. The business to be
conducted at the meeting is described in the attached Notice of
Annual Meeting and Proxy Statement. In addition, there will be
an opportunity to meet with members of senior management and
review the business and operations of the Company.
Your Board of Directors joins with me in urging you to
attend the meeting. Whether or not you plan to attend the
meeting, however, please sign, date and return the enclosed proxy
card promptly. A prepaid return envelope is provided for this
purpose. You may revoke your proxy at any time before it is
exercised and it will not be used if you attend the meeting and
prefer to vote in person.
Sincerely yours,
Robert H. Deming
Chairman of the Board
<PAGE>
TOASTMASTER INC.
1801 North Stadium Boulevard
Columbia, Missouri 65202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 13, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders of Toastmaster Inc., a Missouri corporation
("Toastmaster"), will be held at the principal executive offices
of Toastmaster, located at 1801 North Stadium Boulevard,
Columbia, Missouri, on Tuesday, May 13, 1997, commencing at 10:00
a.m., local time, and thereafter as it may from time to time be
adjourned, for the following purposes:
1. To elect two Class III directors to hold office for a
term expiring at the 2000 Annual Meeting of the
Shareholders of Toastmaster and until their respective
successors are duly elected and qualified or until
their respective earlier resignation or removal;
2. To consider and act upon ratification and approval of
the selection of the accounting firm of KPMG Peat
Marwick LLP as the independent auditors of Toastmaster
for the year ending December 31, 1997; and
3. To transact such other business as properly may come
before the meeting and any adjournment or adjournments
thereof.
The Board of Directors of Toastmaster has fixed the close of
business on March 18, 1997 as the record date for determination
of the shareholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournment or adjournments thereof.
All shareholders are cordially invited to attend the
meeting. Whether or not you intend to be present at the meeting,
the Board of Directors of Toastmaster solicits you to sign, date
and return the enclosed proxy card promptly. A prepaid return
envelope is provided for this purpose. You may revoke your proxy
at any time before it is exercised and it will not be used if you
attend the meeting and prefer to vote in person. Your vote is
important and all shareholders are urged to be present in person
or by proxy.
By Order of the Board of Directors
Linda G. Arnold
Secretary
March 28, 1997
Columbia, Missouri
<PAGE>
TOASTMASTER INC.
1801 North Stadium Boulevard
Columbia, Missouri 65202
__________________
PROXY STATEMENT
__________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 13, 1997
__________________
INTRODUCTION
This Proxy Statement is being furnished to the shareholders
of Toastmaster Inc., a Missouri corporation ("Toastmaster" or the
"Company"), in connection with the solicitation of proxies by the
Board of Directors of Toastmaster for use at the Annual Meeting
of Shareholders to be held on Tuesday, May 13, 1997, and at any
adjournment or adjournments thereof (the "Annual Meeting"). The
Annual Meeting will commence at 10:00 a.m., local time, and will
be held at the principal executive offices of the Company,
located at 1801 North Stadium Boulevard, Columbia, Missouri
65202.
This Proxy Statement and the enclosed form of proxy were
first mailed to the Company's shareholders on or about March 28,
1997.
PROXIES
You are requested to complete, date and sign the enclosed
form of proxy and return it promptly to the Company in the
enclosed postage prepaid envelope. Shares represented by
properly executed proxies will, unless such proxies previously
have been revoked, be voted in accordance with the shareholders'
instructions indicated in the proxies. If no instructions are
indicated, such shares will be voted in favor of the election of
the nominees for director named in this Proxy Statement, in favor
of ratifying the selection of the accounting firm of KPMG Peat
Marwick LLP as Toastmaster's independent auditors for the current
year, and, as to any other matter that properly may be brought
before the Annual Meeting, in accordance with the discretion and
judgment of the appointed proxies. A shareholder who has given a
proxy may revoke it at any time before it is exercised at the
Annual Meeting by filing written notice of revocation with the
Secretary of the Company, by executing and delivering to the
Secretary of the Company a proxy bearing a later date, or by
appearing at the Annual Meeting and voting in person.
VOTING AT THE MEETING
For purposes of voting on the proposals described herein,
the presence in person or by proxy of shareholders holding a
majority of the total outstanding shares of the Company's common
stock, $0.10 par value, shall constitute a quorum at the Annual
Meeting. Only holders of record of shares of the Company's
common stock as of the close of business on March 18, 1997 (the
"Record Date"), are entitled to notice of, and to vote at, the
Annual Meeting or any adjournment or adjournments thereof. As of
the Record Date, 7,538,250 shares of the Company's common stock
were outstanding and entitled to be voted at the Annual Meeting.
Each share of common stock is entitled to one vote on each matter
properly to come before the Annual Meeting. Shares of common
stock represented by a proxy which directs that the shares be
voted to abstain or to withhold a vote on any matter will be
counted in determining whether a quorum is present. Shares of
common stock as to which there is a broker non-vote (i.e., when a
broker holding shares for clients in street name is not permitted
to vote on certain matters without instruction) also will be
counted for quorum purposes.
<PAGE>
Directors are elected by a plurality (a number greater than
those cast for any other candidates) of the votes cast, in person
or by proxy, of shareholders entitled to vote at the Annual
Meeting for that purpose. The affirmative vote of a majority of
the shares of the Company's common stock, represented in person
or by proxy and entitled to vote at the Annual Meeting, is
required for (i) the ratification of the selection of KPMG Peat
Marwick LLP as the Company's independent auditors, and (ii) the
approval of such other matters as properly may come before the
Annual Meeting or any adjournment thereof.
A shareholder entitled to vote in the election of directors
can withhold authority to vote for all nominees for directors or
can withhold authority to vote for certain nominees for
directors. In addition, a shareholder entitled to vote with
respect to any other matters at the Annual Meeting may abstain
from voting on such matters. With respect to the election of
directors, votes withheld from one or more nominees will be
excluded from the vote and will have no effect. Abstentions from
the proposal to approve the ratification of the selection of the
Company's independent auditors or any other proposal are treated
as votes against the particular proposal. Broker non-votes on
any proposal to be voted on at the Annual Meeting are treated as
shares of Toastmaster common stock as to which voting power has
been withheld by the respective beneficial holders and,
therefore, as shares not entitled to vote on the proposal as to
which there is the broker non-vote.
SOLICITATION OF PROXIES
This solicitation of proxies for the Annual Meeting is being
made by the Company's Board of Directors. The Company will bear
all costs of such solicitation, including the cost of preparing
and mailing this Proxy Statement and the enclosed form of proxy.
After the initial mailing of this Proxy Statement, proxies may be
solicited by mail, telephone, telegram, facsimile transmission or
personally by directors, officers, employees or agents of the
Company. Brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward soliciting materials to
beneficial owners of shares held of record by them, and their
reasonable out-of-pocket expenses, together with those of
Toastmaster's transfer agent, will be paid by Toastmaster.
A list of shareholders entitled to vote at the Annual
Meeting will be available for examination at least ten days prior
to the date of the Annual Meeting during normal business hours at
the principal executive offices of Toastmaster located at 1801
North Stadium Boulevard, Columbia, Missouri. The list also will
be available at the Annual Meeting.
ITEM 1
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of six
directors. The Articles of Incorporation of Toastmaster divide
the Board of Directors into three classes of directors, with the
directors serving staggered terms of three years and until their
respective successors are duly elected and qualified or until
their respective earlier resignation or removal. The present
terms of Robert H. Deming and Daniel J. Stubler, the two
directors in Class III, expire at this Annual Meeting. Directors
in Class I (Edward J. Williams and James L. Hesburgh) and Class
II (John E. Thompson and S B. Rymer, Jr.) have been elected to
terms expiring at the time of the annual meetings of shareholders
in 1998 and 1999, respectively.
One of the purposes of this Annual Meeting is to elect two
directors in Class III to serve for a three-year term expiring at
the annual meeting of shareholders in 2000 and until their
respective successors are duly elected and qualified or until
their respective earlier resignation or removal. The Board of
Directors has designated Robert H. Deming and Daniel J. Stubler
as the two nominees proposed for election at the Annual Meeting.
Unless authority to vote for the nominees or a particular nominee
is withheld, it is intended that the shares represented by
properly executed proxies in the form enclosed will be voted for
the election as directors of both nominees. In the event that
one or both of the nominees should become unavailable for
election, it is intended that the shares represented by the
proxies will be voted for the election of such substitute nominee
or nominees as may be designated by the Board of <PAGE> Directors,
unless the authority to vote for both nominees or for the
particular nominee who has ceased to be a candidate has been
withheld. Each of the nominees has indicated his willingness to
serve as a director if elected, and the Board of Directors has no
reason to believe that either nominee will be unavailable for
election.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
ELECTION OF ROBERT H. DEMING AND DANIEL J. STUBLER AS DIRECTORS
OF CLASS III.
Toastmaster's Articles of Incorporation and Bylaws provide
that advance notice of shareholder nominations for the election
of directors must be given. With respect to this Annual Meeting,
written notice of a shareholder's intent to make a nomination at
the meeting must be received by Toastmaster's Secretary at the
Company's principal executive offices not later than the close of
business on April 14, 1997. At future meetings of shareholders,
notice of nominations or other business to be brought before the
meeting must be delivered to Toastmaster's Secretary at the
Company's principal executive offices not less than 60 days (30
days in the case of nominations for the election of directors)
prior to the first anniversary of the previous year's annual
meeting. In the event that the date of the annual meeting of
shareholders is advanced by more than 30 days or delayed by more
than 60 days from such anniversary date, however, notice by the
shareholder to be timely must be so delivered not later than the
close of business on the later of (i) the 60th day (in the case
of nominations, the 30th day) prior to such annual meeting or
(ii) the tenth day following the date on which public
announcement of the date of such meeting is first made.
The shareholder's notice of nomination must contain (i) the
name and address of the nominating shareholder, of each person to
be nominated and of the beneficial owner (as defined in the
Articles of Incorporation), if any, on whose behalf the
nomination is made, (ii) a representation that the nominating
shareholder is the holder of record of Toastmaster common stock
entitled to vote in the election of directors at the meeting and
intends to appear at the meeting in person or by proxy to
nominate the person or persons specified in the notice, (iii) the
number of shares of Toastmaster common stock owned beneficially
and of record by the nominating shareholder and by each person to
be nominated, (iv) a description of all arrangements or
understandings between the nominating shareholder and each
nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to
be made by the shareholder, (v) the consent of each nominee to
serve as a director if so elected, and (vi) such other
information regarding each nominee proposed by the nominating
shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and
Exchange Commission if Toastmaster were soliciting proxies for
the election of such nominees. If no such notice has been
received, the chairman of the Annual Meeting is entitled to
refuse to acknowledge the nomination of any person which is not
made in compliance with the foregoing procedure. The Board of
Directors does not know if, and has no reason to believe that,
anyone will attempt to nominate another candidate for director at
this Annual Meeting.
NOMINEES AND DIRECTORS CONTINUING IN OFFICE
The following table sets forth certain information with
respect to each person nominated by the Board of Directors for
election as a Class III director at the Annual Meeting and each
director whose term of office will continue after the Annual
Meeting.
<PAGE>
Present
Position
With Director
Name Age Toastmaster Since
NOMINEES
CLASS III: TERM TO EXPIRE IN 2000
Robert H. Deming 62 Chairman, Chief 1987
Executive Officer
and Director
Daniel J. Stubler 53 President, Chief 1987
Operating Officer
and Director
DIRECTORS CONTINUING IN OFFICE
CLASS I: TERM TO EXPIRE IN 1998
Edward J. Williams 74 Director 1991
James L. Hesburgh 63 Director 1992
CLASS II: TERM TO EXPIRE IN 1999
John E. Thompson 49 Executive Vice 1987
President--Chief
Financial Officer,
Treasurer and
Director
S B. Rymer, Jr. 81 Director 1991
The business experience of each of the directors of the
Company during the last five years is as follows:
Robert H. Deming has served as Chairman of the Board of
Directors, Chief Executive Officer and Director of the Company
since January 1987. Since joining the Company in 1976, he has
served as President from 1976 through January 1987 and as
Chairman of the Board of Directors and Chief Executive Officer
from 1980 through 1983. Mr. Deming holds a Bachelor of Science
degree in Accounting and a Master of Science degree in Business
Administration from the University of Colorado, as well as a
Doctorate in Business Administration from The Harvard University
Graduate School of Business Administration. Mr. Deming is not
engaged in the day-to-day operations of the Company, but rather
spends his business-related time on monitoring the performance of
the Company, strategic and long-range planning, and identifying
and evaluating acquisition opportunities. In addition, he spends
a portion of his business-related time in the furtherance of the
interests of the Company, which interests include activities
intended either to fulfill the Company's social responsibility or
to keep Mr. Deming abreast of developments or opportunities in
the Company's industry or related fields of knowledge or
management.
Daniel J. Stubler has served as President, Chief Operating
Officer and Director since January 1987. Between 1976 and
January 1987, he served the Company in several capacities, the
last of which was as Senior Vice President with responsibility
for marketing and administration of the Company. He currently
serves as a director of First Missouri Bancorporation. Mr.
Stubler holds a Bachelor of Science degree in Accounting from
Gannon University and a Masters of Science degree in Industrial
Relations from the University of Massachusetts at Amherst.
Edward J. Williams has served as a Director of the Company
since November 1991. He served the McGraw-Edison Company as
Chairman of the Board of Directors and Chief Executive Officer
from 1974 through 1984 and as President from 1972 through 1983.
From May 1985 through December 1985 he served as Vice Chairman of
the Board of Directors of Cooper Industries. He has served as a
consultant and a director of various other organizations since
January 1986. He currently is a director of Amstead Industries
Incorporated. The Company's senior executive officers operated
the consumer products group of the McGraw-Edison Company
beginning in 1976 and formed a privately-held company named
Toastmaster Inc. in 1980 to acquire the kitchen counter-top
appliance, environmental and time products businesses of this
group from McGraw-Edison.
<PAGE>
James L. Hesburgh has served as a Director of the Company
since January 1992. He has served as a director and president of
James L. Hesburgh International, Inc., an export management and
consulting company, since 1977. He currently serves as a
director and president of Battley USA, Inc., a holding company
for a specialty coatings producer, as a director and senior vice
president of Fremont Funding, Inc., a lending company, and as a
director of Sinto America, Inc., a holding company for a tool and
die manufacturing company and a machinery manufacturing company,
of FirstFed Corporation and its wholly-owned subsidiary First
Federal Bank of California, of Roberts Sinto Corporation, a
machinery manufacturing company, and of Logicon, Inc., a computer
software and consulting company. Mr. Hesburgh holds a Bachelor
of Business Administration degree from the University of Notre
Dame and a Masters of Business Administration degree from The
Harvard University Graduate School of Business Administration.
John E. Thompson has served as Executive Vice President -
Chief Financial Officer, Treasurer and Director of the Company
since January 1987. Between 1970 and January 1987, he served in
several capacities, the last of which was as Senior Vice
President of the Company. He currently serves as a director of
First National Bank & Trust Company, Columbia, Missouri. Mr.
Thompson holds a Bachelor of Science degree in Accounting from
Northern Illinois University.
S B. Rymer, Jr. has served as a Director of the Company
since November 1991. He has been engaged in the management of
personal investments since his retirement in 1987 from Magic
Chef, Inc. Mr. Rymer served as Chief Executive Officer of Magic
Chef from 1950 to 1987. The Company was a wholly-owned
subsidiary of Magic Chef from October 1983 until the acquisition
of the Company by the Company's current senior executive officers
(Messrs. Deming, Stubler and Thompson) effective as of January 1,
1987.
THE STOCKHOLDERS' AGREEMENT
The Company, Robert H. Deming, Daniel J. Stubler, John E.
Thompson, Ralph J. Ronalter, Jr., and certain other shareholders
of the Company are each party to a stockholders' agreement (the
"Stockholders' Agreement"). In the Stockholders' Agreement, each
of the shareholders who is a party to the Stockholders' Agreement
has agreed that such shareholder will vote those of their
respective shares of Toastmaster common stock that are subject to
the Stockholders' Agreement (representing 3,790,679 shares of
Toastmaster common stock as of January 31, 1997 and constituting
approximately 50.3% of the shares outstanding) in favor of the
election of directors approved by Mr. Deming but, at each
election of directors at which Mr. Deming, Mr. Stubler or Mr.
Thompson is eligible to stand for reelection to the Company's
Board of Directors, Mr. Deming is required to vote to elect Mr.
Deming, Mr. Stubler or Mr. Thompson, as the case may be, as a
director. To this end, each of such shareholders has given Mr.
Deming his proxy (which is irrevocable until May 16, 1999) to
vote such shareholder's shares in the election of all of the
Company's directors at any and all meetings of the Company's
shareholders in accordance with the preceding sentence. This
proxy automatically terminates upon Mr. Deming's death, mental
incapacity or voluntary termination of employment with the
Company, at such time as Mr. Deming, together with his family,
ceases to beneficially own at least 500,000 shares of Toastmaster
common stock (as adjusted for any stock dividend, stock split,
combination or reclassification of shares, recapitalization or
similar transaction) and upon the occurrence of certain other
events specified in the Stockholders' Agreement (and, in the case
of Mr. Stubler and Mr. Thompson, their voting agreement and
related proxy to Mr. Deming also terminate in the event that they
are involuntarily terminated from their respective offices or
removed as directors). In addition, each such shareholder has
granted to the Company an option to purchase such shareholder's
shares of Toastmaster common stock in the event of a proposed
sale or certain other transfers (other than a transfer to a
family member, a voluntary sale or gift of not more than 10,000
shares (as adjusted for any stock dividend, stock split,
combination or reclassification of shares, recapitalization or
similar transaction) which is not part of a series of
transactions with the purpose or effect of changing control of
the Company, or a pledge for collateral purposes not involving a
change in voting rights and certain other exempted dispositions,
some of which require the share transfers so exempted to remain
subject to the Stockholders' Agreement). In the event that the
Company does not exercise its right to purchase such
shareholder's shares, the other shareholders who are party to the
Stockholders' Agreement are also granted an option to purchase
such shares on a pro rata basis.
There is no arrangement or understanding between any
director and any other person pursuant to which such director was
selected as a director except as contemplated by the
Stockholders' Agreement described above.
<PAGE>
COMPENSATION OF DIRECTORS
During 1996, each of the Company's three outside directors
received $2,500 for each meeting of the Board attended and $1,250
for each committee meeting attended, plus reimbursement of
reasonable out-of-pocket expenses.
MEETINGS OF THE BOARD AND COMMITTEES
During 1996 the Board of Directors of Toastmaster held six
meetings. All directors attended 100% of the meetings of the
Board of Directors, except for Mr. Rymer, who attended 83% of
the meetings. All directors attended 100% of the committees of
the Board of Directors on which they served which were held
during 1996. It should be noted that the Company's directors
discharge their responsibilities throughout the year, not only at
such Board of Directors and committee meetings, but through
personal meetings and other communications with members of
management and others regarding matters of interest and concern
to the Company.
Pursuant to Toastmaster's Bylaws, the Board of Directors has
established Audit and Compensation Committees of the Board of
Directors. There currently is not a Nominating Committee or
committees performing similar functions of the Board of
Directors.
The Audit Committee assists the Board of Directors in
fulfilling its responsibilities with respect to Toastmaster's
accounting and financial reporting practices and in addressing
the scope and expense of audit and related services provided by
Toastmaster's independent auditors. The Audit Committee is
responsible for recommending the appointment of Toastmaster's
independent auditors and reviewing the terms of their engagement,
reviewing Toastmaster's policies and procedures with respect to
internal auditing, accounting and financial controls and
reviewing the scope and results of audits and any auditor
recommendations. The current members of the Audit Committee are
Edward J. Williams, Chairman, and James L. Hesburgh. The Audit
Committee met two times in 1996.
The Compensation Committee makes recommendations to the
Board of Directors regarding the compensation and benefits of
Toastmaster's executive officers, the members of the Board of
Directors and the members of the Audit Committee. The
Compensation Committee also administers the Company's Incentive
Stock Option Plan and Non-Statutory Stock Option Plan. The
current members of the Compensation Committee are James L.
Hesburgh, Chairman, Edward J. Williams and S B. Rymer, Jr. The
Compensation Committee met two times in 1996.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
The following table sets forth for the years ended December
31, 1994, 1995 and 1996, respectively, the compensation of the
Company's chief executive officer and of each of the Company's
four other most highly compensated executive officers whose
remuneration for 1996 was in excess of $100,000 for services to
the Company in all capacities:
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
<C> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name Other Under-
and Annual Restricted lying All Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus/1/ sation/2/ Award(s) SARs Payouts sation/3/
Robert H. Deming 1996 $290,698 $0 $56,899 -- -- -- $91,480
Chairman, Chief 1995 291,849 0 53,207 -- -- -- 99,201
Executive Office 1994 292,490 0 44,303 -- -- -- 83,608
and Director
Daniel J. Stubler 1996 215,505 0 40,998 -- -- -- 66,432
President, Chief 1995 215,142 0 34,969 -- -- -- 64,665
Operating Officer 1994 217,071 0 29,137 -- -- -- 54,438
and Director
John E. Thompson 1996 167,793 0 18,802 -- -- -- 31,212
Executive Vice 1995 168,240 0 15,990 -- -- -- 30,052
President -- 1994 166,159 0 13,321 -- -- -- 25,456
Chief Financial
Officer, Treasurer
and Director
Scott R. Thrasher 1996 108,371 0 4,661 -- -- -- 8,479
Senior Vice 1995 105,930 0 0 -- -- -- 908
President -- 1994 104,801 0 0 -- -- -- 910
Sales and
Marketing
Ralph J. Ronalter,
Jr., Vice 1996 99,557 0 3,364 -- -- -- 6,287
President and 1995 95,046 0 0 -- -- -- 797
and General 1994 95,257 0 0 -- -- -- 817
Manager--
Time Products
________________________
/1/ Reflects bonus earned for the years ended December 31, 1994, 1995 and 1996,
respectively.
/2/ Excludes perquisites and other benefits, unless the aggregate amount of such
compensation is the lesser of either $50,000 or 10% of the total of annual salary and
bonus reported for the named executive officer.
/3/ All Other Compensation for the years ended December 31, 1994, 1995 and 1996 includes
Toastmaster matching contributions which accrued for the accounts of Messrs. Deming,
Stubler, Thompson, Thrasher and Ronalter, Jr. under the Company's 401(k) Savings and
Investment Plan, and the cost of life insurance paid by the Company for the benefit
of such persons. All Other Compensation for Messrs. Deming, Stubler and Thompson
also includes Toastmaster contributions made in 1994, 1995 and 1996 to fund benefits
to be provided under the Supplemental Executive Retirement Plan for the respective
accounts of such persons. All Other Compensation for Messrs.Thrasher and Ronalter,
Jr. includes Toastmaster contributions made in 1996 to fund benefits to be provided
under the Supplemental Executive Retirement Plan II for the respective accounts of
such persons. Toastmaster matching contributions which accrued under the Company's
401(k) Savings and Investment Plan for 1994, 1995 and 1996 were $1,110, $975 and
$1,500, respectively, for Mr. Deming; $1,110, $982 and $1,500, respectively, for
Mr. Stubler; $1,100, $975 and $1,500, respectively, for Mr. Thompson; $771, $688 and
$1,059, respectively, for Mr. Thrasher; and $701, $617 and $950, respectively, for
Mr. Ronalter, Jr. The cost of life insurance paid by the Company for 1994, 1995 and
1996 was $3,861, $3,861 and $5,304, respectively, for Mr. Deming; $1,555, $1,555 and
$2,804, respectively, for Mr. Stubler; $689, $689 and $1,324, respectively, for
<PAGE>
Mr. Thompson; $139, $220 and $438, respectively, for Mr. Thrasher; and $116, $180 and
$386, respectively, for Mr. Ronalter, Jr. Contributions made in 1994, 1995 and 1996
with respect to the Supplemental Executive Retirement Plan were $78,637, $94,365 and
$84,676, respectively, for Mr. Deming, $51,773, $62,128 and $62,128, respectively,
for Mr. Stubler and $23,657, $28,388 and $28,388, respectively, for Mr. Thompson.
Contributions made in 1996 with respect to the Supplemental Executive Retirement Plan
II were $6,982 for Mr. Thrasher and $4,951 for Mr. Ronalter, Jr.
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with
Robert H. Deming, Daniel J. Stubler and John E. Thompson. The
agreements expire on November 12, 1997, subject to automatic
renewal for successive one year periods unless Toastmaster or the
employee gives notice that the term will not be extended, and
provide for the following annualized base salaries during the
term of the agreements, which base salaries were increased from
the previous base salaries, effective March 1, 1997, by action of
the Compensation Committee of the Board of Directors as
contemplated by the agreements: Mr. Deming--$317,361; Mr.
Stubler--$234,201; Mr. Thompson--$181,335. Each agreement
terminates in the event of death, disability or adjudication of
incompetence (entitling the employee to one year's salary in the
case of disability) and provides that the employee otherwise may
be terminated only for cause (as defined). The employee may
terminate his employment, upon ten days' prior written notice, at
any time within one year after a "Change of Control" and will be
entitled to receive two years' salary. A "Change of Control"
generally is defined to take place when disclosure of such a
change would be required by the proxy rules promulgated by the
Securities and Exchange Commission or when either (i) a person
(other than a current officer or director nominated or selected
by the Board or officer elected by the Board) acquires beneficial
ownership (as defined in SEC Rule 13d-3) of 25% or more of the
combined voting power of the Company's voting securities, (ii)
less than a majority of the directors are persons who were either
nominated or selected by the Board, (iii) a merger involving the
Company occurs in which the Company's shareholders own less than
80% of the voting stock of the surviving corporation, or (iv) a
plan of liquidation or sale of substantially all the assets of
the Company occurs. In addition, if the employee involuntarily
is terminated by the Company, he also is entitled to receive two
years' salary.
The employment agreements prevent the employees from
competing with the Company, soliciting customers or hiring
employees for a competitive business during the term of the
agreement and for a period of one year thereafter. In addition,
the employment agreements require the employees to maintain the
confidentiality of the Company's confidential information prior
to its disclosure by the Company.
INCENTIVE BONUS PLAN
Since 1987, the Company has had an incentive bonus plan for
approximately 20 key employees of the Company, including Messrs.
Deming, Stubler, Thompson, Thrasher and Ronalter, Jr. The plan
establishes a bonus pool each year based on up to 5% of the
Company's total profits (before provisions for income taxes and
interest), which is approved by the Company's President, and the
maximum bonus pool for 1997 is equal to approximately $769,000.
Pursuant to the incentive bonus plan, 50% of the amount of the
bonus pool is allocated to a mandatory bonus fund and the
remaining 50% is allocated to a discretionary bonus fund. Each
of the employees participating in the incentive bonus plan is
assigned an incentive target based on his or her job category,
which incentive target establishes a bonus of up to 65% of the
employee's salary that may be received. Based on salaries in
effect as of December 31, 1996, Messrs. Deming, Stubler,
Thompson, Thrasher and Ronalter, Jr. will be entitled to receive
24.4%, 16.6%, 12.9%, 6.1% and 6.1%, respectively, of the
mandatory bonus fund for 1997 if the income and return on
investment targets established pursuant to the incentive bonus
plan are achieved. The discretionary bonus fund will be used by
the Company to pay additional bonuses to the Company's key
employees, including executive officers.
<PAGE>
401(K) SAVINGS AND INVESTMENT PLAN
Employees of the Company are eligible to participate in the
Company's 401(k) Savings and Investment Plan. Participants may
make contributions to the plan by voluntarily reducing their
salary from the Company up to a maximum of 15% of total
compensation or $9,500 (or such higher amount as is prescribed by
the Secretary of the Treasury for cost of living adjustments),
whichever is less, and the Company, in its discretion, matches
such contributions to the extent of 50% of the first 2% of a
participant's salary reduction. Certain participant
contributions to the plan may qualify for deferred tax treatment
under Section 401(k) of the Internal Revenue Code. The Company's
matching contributions vest 100% immediately. Matching
contributions in the amounts of $975, $982, $975, $688 and $617
were made by the Company during 1996 with respect to 1995 for the
accounts of Messrs. Deming, Stubler, Thompson, Thrasher and
Ronalter, Jr., respectively, and matching contributions accrued
during 1996 for the accounts of such persons in the amounts of
$1,500, $1,500, $1,500, $1,059 and $950, respectively. Each
participant is entitled to direct the investment of all
participant and discretionary matching contributions in the
various investment options approved by the Company. In this
regard, participants who are not directors or executive officers
of the Company and do not own 10% or more of Toastmaster common
stock may invest up to 10% of their contributions in a
Toastmaster common stock fund.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS
The Company has adopted a supplemental executive retirement
plan ("SERP") for Messrs. Deming, Stubler and Thompson and a
supplemental executive retirement plan ("SERP II") for Messrs.
Ronalter and Thrasher. These executives were unable to
participate in the Company's qualified defined benefit plan
beginning January 1, 1989, because of changes in the tax laws
which imposed certain anti-discrimination requirements upon
qualified plans.
The SERP provides for a normal retirement benefit for each
of the three executives in the SERP in an amount equal to 50% of
such executive's final average compensation, which amount shall
be reduced by the sum of (i) the pension benefit accrued for such
executive under the Company's defined benefit plan and (ii) such
executive's primary Social Security benefit. For these purposes,
"final average compensation" is the average base salary payment
made to the executive during the five consecutive full calendar
years immediately preceding such executive's termination of
employment. The SERP II provides for a normal retirement benefit
for each of the two executives in the SERP II in an amount equal
to the pension benefit that such executive would have been
entitled to receive under the Company's defined benefit plan,
reduced by the pension benefit that such executive actually
receives under such plan. The normal retirement benefit
commences at age 65. In the event an executive continues to be
employed after age 65, the payment of benefits under the SERP and
SERP II would be delayed until the date of his actual retirement
and the amount of such benefits would be actuarially adjusted to
reflect the late retirement. The SERP and SERP II each provides
for early retirement in the event the executive's employment is
terminated, except that SERP benefits are not payable prior to
age 55 and in no event prior to March 1, 1999 and SERP II
benefits are not payable prior to age 55. Early retirement
benefits under the SERP and SERP II would be actuarially adjusted
to reflect the earlier commencement of the benefit. If the
executive under the SERP dies before he retires, one half of the
monthly benefit that the executive otherwise would have received
will be paid to the executive's spouse (or designated
beneficiary) for the greater of 180 months or the life of the
surviving spouse. If the executive under the SERP II dies before
he retires, the executive's spouse (or designated beneficiary)
shall not be entitled to any portion of the monthly benefit that
the executive otherwise would have received but shall be entitled
to receive payment of a death benefit. The benefits provided
under the SERP and SERP II are available to the executives
without regard to the number of years of service provided by them
to the Company. A five year vesting period is required, however,
in order for an executive to be eligible to receive benefits
under the SERP. The estimated annual benefits under the SERP
payable to Messrs. Deming, Stubler and Thompson as a single life
annuity upon reaching normal retirement age are $113,806,
$154,246 and $145,005, respectively. The estimated annual
benefits under the SERP II payable to Messrs. Ronalter and
Thrasher as a single life annuity upon reaching normal retirement
age are $24,603 and $27,996, respectively.
Life insurance policies are used for the SERP and SERP II
and held in trust for the executives. To the extent that an
executive is subject to income tax as annual contributions are
made by the Company to a trust, the Company will pay to the
executive each year an amount equal to the additional income tax
owed by the executive as a result of <PAGE> the contribution. The
beneficiary of the life insurance policies held in the secular
trusts under the SERP and SERP II will be the beneficiary
designated by the executive. The beneficiary of the life
insurance policies held in the rabbi trust under the SERP will be
the Company.
PENSION PLAN
The Toastmaster Inc. Pension Plan for Salaried Employees
(the "Plan") is a defined benefit pension plan established in
1982 by the Company to provide retirement benefits for eligible
salaried employees of the Company. Eligible employees are
salaried employees who either participated in the predecessor
plan or have completed at least 1,000 hours of service in a
single year. The Plan provides for normal retirement benefits
upon reaching age 65, provided that the employee has five years
of credited service. The Plan permits early retirement between
ages 55 and 65 upon completion of ten or more years of credited
service. Participants may elect to receive their pension
benefits in the form of a joint and survivor annuity or a single
life annuity, or other optional forms.
The following table shows the estimated annual retirement
benefits payable to a participant as a single life annuity upon
reaching normal retirement age for specified compensation and
years of benefit service classifications.
Five Year Estimated Annual Benefit for Representative
Average Annual Years of Benefit Service*
Compensation* 10 15 20 25 30
$ 70,000 $ 6,731 $10,096 $13,462 $16,827 $20,192
120,000 12,232 18,347 24,463 30,579 36,695
150,000 15,532 23,297 31,063 38,829 46,595
____________
* Under the Plan, annual retirement benefits may not
exceed the amounts payable to a participant having five
year average annual compensation in excess of $235,840
($150,000 for years beginning January 1, 1994), and
participants are given credit for no more than 30 years
of benefit service.
A participant is entitled to receive annual benefits,
payable in monthly installments, in an amount equal to the
product of (i) the sum of (A) .007 times average monthly
earnings, plus (B) .004 times average monthly earnings greater
than the Social Security integration level, multiplied by (ii)
such participant's number of years of credited service, up to a
maximum of 30 years. Average monthly earnings are determined by
dividing compensation for the participant's highest-paid
consecutive five calendar years by 60. For these purposes the
compensation covered by the Plan consists of the salaries and
bonuses paid to the participants, including salaries and bonuses
set forth in columns (c) and (d) of the Summary Compensation
Table under "Executive Compensation and Other Information--Executive
Compensation." The Social Security integration level
changes whenever there is a change in the maximum earnings that
are subject to Social Security taxes. The Plan's integration
level is $2,018.52 per month for 1997. As the result of changes
in the Employee Retirement Income Security Act ("ERISA"), Messrs.
Deming, Stubler, Thompson, Ronalter and Thrasher were not
eligible to accrue further benefits under the Plan, effective
January 1, 1989. From time to time, because of certain ERISA
requirements, the Company may require that other participants no
longer will be eligible to accrue benefits under the Plan,
effective at various dates.
SUPPLEMENTAL HEALTH INSURANCE PLAN
Toastmaster adopted a Supplemental Insurance Plan ("SIP") in
1988, which provides benefits in addition to those provided under
the Company's basic group medical benefit plan. Although
Toastmaster's basic group medical plan is provided to all of its
employees, the SIP is available only to its salaried employees
and their qualified dependents with tiered benefit limitations of
$500, $1,500 and $3,000 per year, the last of which is applicable
to the Company's executive officers.
<PAGE>
EMPLOYEE STOCK OPTION PLANS
The Company has adopted the Toastmaster Inc. Incentive Stock
Option Plan (the "ISO Plan") to provide for the granting of
common stock purchase options which qualify as "incentive stock
options" under Section 422A of the Internal Revenue Code of 1986,
and the Toastmaster Inc. Non-Statutory Stock Option Plan (the
"Non-Statutory Plan") to provide for the granting of common stock
purchase options which do not so qualify. The ISO Plan and the
Non-Statutory Plan are collectively referred to as the "Employee
Stock Option Plans." The purpose of the Employee Stock Option
Plans is to secure for the Company and its shareholders the
benefits of the incentive inherent in stock ownership by officers
and other key employees of the Company. The Company has granted
options to purchase a total of 98,500 shares of common stock
pursuant to the ISO Plan. No options have been granted pursuant
to the Non-Statutory Plan.
The Employee Stock Option Plans are administered by the
Compensation Committee of the Board of Directors (the
"Compensation Committee"), none of the members of which are
currently eligible to receive options under either of the
Employee Stock Option Plans. The Compensation Committee has the
power to determine in its discretion the persons to whom options
are granted under each Employee Stock Option Plan, the number of
shares covered by those options, and the time at which an option
becomes exercisable, subject in each case to the limitations set
forth in the respective Employee Stock Option Plans. Options can
be granted under the Employee Stock Option Plans only to officers
and key employees of the Company or any of its subsidiary
corporations. The eligibility of the persons to whom options may
be granted under the Employee Stock Option Plans is limited to
those persons whom the Compensation Committee determines have
made, or are expected to make, material contributions to the
successful performance of the Company. The period during which
an option may be exercised (but not to exceed ten years or, as
described above, five years) and the time at which it becomes
exercisable are fixed by the Compensation Committee at the time
the option is granted. Except as otherwise permitted by the
Compensation Committee, no option granted under the Employee
Stock Option Plans is transferable by the holder other than by
will or the laws of descent and distribution.
The number of shares which may be issued and sold pursuant
to options granted under the Employee Stock Option Plans may not
exceed an aggregate of 500,000 shares (as adjusted for any stock
dividend, stock split, combination or reclassification of shares,
or similar transaction), with the number of shares that may be
issued and sold under one Employee Stock Option Plan being
reduced by the number of shares issued and sold under the other
Employee Stock Option Plan. Shares subject to options granted
under either Employee Stock Option Plan which expire or terminate
without being exercised in full become available, to the extent
unexercised, for future grants under either Employee Stock Option
Plan. No consideration is paid to the Company by any optionee in
exchange for the grant of an option. The per share exercise
price for an option granted under either Employee Stock Option
Plan is determined by the Compensation Committee but may not be
less than the fair market value of the Company's common stock as
of the date of grant. The exercise price of an option under the
ISO Plan granted to an employee who owns stock possessing more
than 10% of the voting power of the Company's outstanding stock
must be at least equal to 110% of the fair market value of the
Company's common stock on the date of grant, and the maximum term
of such option may not exceed five years. The Employee Stock
Option Plans provide for automatic adjustments to prevent
dilution or enlargement of the optionee's rights in the event of
a stock split, stock dividend, reorganization, merger,
consolidation, liquidation, combination or exchange of shares, or
other change in the capital structure of the Company.
DIRECTOR STOCK OPTION PLAN
In May 1993, the Company's shareholders approved the
Toastmaster Inc. Non-Employee Directors Stock Option Plan (the
"1993 Director Plan") to provide for an automatic one-time grant
of common stock purchase options to the three non-employee
directors of the Company serving as such on the date the 1993
Director Plan was so approved. In addition, the Company has
adopted the Toastmaster Inc. 1997 Non-Employee Directors Stock
Option Plan (the "1997 Director Plan") in February 1997 to
provide for a one-time grant of common stock purchase options to
the three non-employee directors of the Company serving as such
on the date the 1997 Director Plan was so approved. The 1993
Director Plan and the 1997 Director Plan are collectively
referred to as the "Director Plans." The purpose of the Director
Plans is to enable such non-employee directors to participate in
the ownership of the Company, <PAGE> and to provide additional incentive
for them to promote the success of the Company's business through
sharing in the future growth of such business.
Pursuant to the 1993 Director Plan, the Company granted to
each non-employee director of the Company an option to purchase
the number of shares of common stock obtained by multiplying (i)
the number of full years that such non-employee director had
served as a director of the Company as of the date the 1993
Director Plan was approved by the Company's shareholders by (ii)
5,000. Options to purchase a total of 5,000 shares of common
stock were granted to each of James L. Hesburgh, S B. Rymer, Jr.,
and Edward J. Williams. Pursuant to the 1997 Director Plan, the
Company granted to these three non-employee directors of the
Company an option to purchase an additional 5,000 shares of
common stock. No additional options may be granted under the
Director Plans. The Director Plans provide for automatic
adjustments to prevent dilution or enlargement of the optionee's
rights in the event of a stock dividend, stock split,
reorganization, merger, consolidation, liquidation, combination
or exchange of shares, or other change in the capital structure
of the Company.
No consideration was paid to the Company by any optionee in
exchange for the grant of an option. The exercise price at which
shares of common stock may be purchased under an option granted
pursuant to the 1993 Director Plan and the 1997 Director Plan is
$7.375 and $3.4375, respectively, the mean of the high and low
sales prices of the common stock on the date the respective
options were granted. Neither the Board of Directors nor any
committee thereof had any discretion to determine the selection
of the directors to whom options were granted, the frequency of
option grants, the number of shares of common stock subject to an
option, or the terms and conditions of the options.
Any option granted under the Director Plans may be exercised
immediately, and may be exercised in whole or in part until
May 10, 1998, in the case of options granted under the 1993
Director Plan, and February 25, 2002, in the case of options
granted under the 1997 Director Plan. With certain limited
exceptions, no option granted under the Director Plans may be
exercised unless the optionee is at the time of such exercise a
non-employee director of the Company. An option granted pursuant
to the Director Plans is not transferable or assignable by the
optionee other than by will or the laws of descent and
distribution, and during the lifetime of the optionee the option
is exercisable only by the optionee.
COMPENSATION COMMITTEE REPORT
This report has been prepared by the Compensation Committee
of the Board of Directors, which has general responsibility for
the establishment, direction and administration of all aspects of
the compensation policies and programs for the Company's
executive officers. During 1996, the Compensation Committee was
composed of three independent outside directors, none of whom is
an officer or employee of the Company. Mr. Deming, the Chief
Executive Officer of the Company, and certain other executive
officers of the Company, may attend meetings of the Compensation
Committee, but are not present during discussions or
deliberations regarding their own compensation. The Compensation
Committee meets at least annually or more frequently as the
Company's Board of Directors may request.
COMPENSATION POLICY. The Company's executive compensation
policy is premised upon three basic goals: (1) to attract and
retain qualified individuals who provide the skills and
leadership necessary to enable the Company to achieve both its
short- and long-term earnings growth and return on investment
objectives; (2) to create incentives to achieve Company and
individual performance objectives through the use of performance-
based compensation programs; and (3) to create a mutuality of
interest between the Company's executive officers and
shareholders through compensation structures that create a direct
link between executive compensation and shareholder return.
In determining the structure and levels of each of the
components of executive compensation needed to achieve these
goals, the Compensation Committee considers all elements of the
compensation package in total, as well as the individual
components thereof. As more fully described below, the
determination of such levels of executive compensation is a
subjective process in which the Compensation Committee considers
many factors including the Company's performance (as measured by
earnings growth and return on investment, among other factors)
and the <PAGE> individual executive's specific responsibilities,
historical and anticipated personal contribution to the Company's
business, and length of service with the Company. In addition,
the Compensation Committee considers publicly available executive
compensation data for comparable positions in companies believed
to be most comparable for purposes of executive compensation,
presently consisting of Sunbeam Corp., National Presto
Industries, Inc., Rival Co., Royal Appliance Mfg. Co. and Health
o meter Products Inc (Mr. Coffee) (such companies are referred
to hereinafter as "Comparable Companies"). The Comparable
Companies are a small subset of the companies which comprise the
peer group index for purposes of comparing shareholder returns
(i.e., companies with the standard industrial classification for
household appliances) in the performance graph included elsewhere
in this Proxy Statement because the Compensation Committee
believes they are the Company's most direct and representative
competitors for executive talent. The levels of compensation
paid by the Company to its executive officers were matched to
comparable positions of executives at Comparable Companies and a
competitive level for the total compensation package and relevant
individual components was determined.
COMPENSATION COMPONENTS. The Company's compensation program
is reviewed annually to ensure that compensation levels and
incentive opportunities are competitive and reflect the
performance of the Company and the individual executive officer.
The principal components of the compensation program for
executive officers are base salary and annual incentive bonuses.
The Compensation Committee also took into account the incentive
to achieve earnings growth and return on investment objectives
that is inherent in the large number of shares of Company common
stock owned by the Company's Chief Executive Officer and each of
the other executive officers other than Ms. Linda Arnold and Mr.
Scott Thrasher. It has therefore not been necessary to date to
grant stock options or award other forms of long term incentive
compensation plan ("LTIP") compensation to strengthen the linkage
between executive compensation and shareholder return for those
officers, although a stock option plan is available should
further incentive become necessary for them. Ms. Arnold and Mr.
Thrasher each has been granted options in the past to provide
that sort of linkage and to provide incentive to continue their
respective employment with the Company.
The Compensation Committee believes that the total
compensation package previously awarded to those Company
executives who have not received options or LTIP awards is
significantly lower than the other Comparable Companies who have
utilized stock options and LTIP awards to reward their executives
for past performance and to create incentives for future
performance. Each of the components in the Company's executive
compensation package is addressed separately below.
Base Salary. The Compensation Committee reviews each
executive officer's base salary from the previous year and, in
determining whether to adjust base salary levels, takes into
account management's recommendations and assessments of each
executive's growth and effectiveness in the performance of his or
her duties and the Company's performance. In this regard, the
Compensation Committee's analysis of the Company's performance
included a review of the Company's revenues, earnings, return on
investment and new product development for the prior year. An
analysis of the role played by each individual executive in
generating the Company's performance included a consideration of
the executive's specific responsibilities, contributions to the
Company's business, and length of service. The Compensation
Committee also considered publicly available executive
compensation data for comparable positions in Comparable
Companies. Mr. Deming's base salary was based on the same type
of subjective analysis and took into account the amount of time
he spends on activities directly and indirectly benefitting the
Company. The factors impacting base salary levels are not
independently assigned specific weights. Rather the Compensation
Committee reviews all of these factors, and makes base pay
recommendations which reflect its analysis of the aggregate
impact of these factors. Based upon the foregoing
considerations, base salary levels for Mr. Deming, the Chief
Executive Officer, and the other executive officers were
increased effective March 1, 1997 by 10 % from the base salary
that had been in effect since March 1, 1993, except that
Mr. Ronalter's base salary had been in effect since September 1,
1996 and Mr. Thrasher's base salary had been in effect since
March 1, 1994. These base pay levels are competitive within a
range that is considered in the Compensation Committee's
judgment, to be reasonable and necessary.
Annual Incentive Bonus. The Company's executive officers
and certain other employees of the Company who, in the discretion
of the Compensation Committee, are considered to be in a position
to significantly influence the Company's results or operations
and level of profits are eligible to receive annual incentive
bonus awards under the <PAGE> Company's incentive bonus program. Annual
bonus opportunities allow the Company to communicate specific
goals that are of primary importance during the coming year and
motivate executives to achieve these goals. The Compensation
Committee's selection of the persons eligible to participate in
the incentive bonus program is necessarily subjective in nature
and is made after taking into account management's assessment of
each person's level of responsibility. The incentive program
establishes a bonus pool each year based on up to 5% of the
Company's total profits (before provisions for income taxes and
interest), which is approved by the Company's President in his
discretion. Each of the participants in the incentive program
are assigned an incentive target based on their job category,
which incentive target establishes a bonus of up to 65% of the
participant's salary that may be received. Bonuses are awarded
to participants when the Company's targets for earnings growth
and return on investment are achieved in relation to upper
quartile performance of competitors. This dual approach creates
incentives to efficiently manage assets, achieve appropriate
financial leverage and produce desired profitability, all of
which are determinants of share price over time. In addition,
discretionary bonus awards may be made to participants in an
amount up to 50% of the participant's maximum bonus payout target
to recognize outstanding individual performance as reflected by
the achievement of personalized goals. The personal goals of the
Company's Chief Executive Officer for purposes of this
discretionary bonus are the achievement by the Company of its
annual profit plan, marketing objectives and new product
development goals; the development of strategic and long-range
objectives for the Company; the identification and evaluation of
acquisition opportunities for the Company; and the effective
leadership of the Company's management team. The extent to which
these personal goals have been achieved is subjectively analyzed
by the Compensation Committee on the basis of their aggregate
impact on the success of the Company for the preceding year. The
size of the bonus pools, the persons who are eligible to receive
bonuses, the targets established for bonus participants and the
amount of bonus payments can vary from year to year and are
subject to the discretion of the Compensation Committee and
management.
Compensation Committee:
James L. Hesburgh
S B. Rymer, Jr.
Edward J. Williams
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As discussed above under "Compensation Committee Report,"
the Compensation Committee has general responsibility for the
establishment, direction and administration of all aspects of the
compensation policies and programs for the Company's executive
officers. During 1996, the members of the Compensation Committee
were Messrs. Hesburgh, Rymer, Jr. and Williams. None of the
members of the Compensation Committee was, during 1996, an
officer or employee of the Company or any of its subsidiaries, or
otherwise was formerly an officer of the Company or any of its
subsidiaries. Mr. Rymer served as Chief Executive Officer of
Magic Chef, Inc. from 1950 to 1987. The Company was a wholly-
owned subsidiary of Magic Chef from October 1983 until the
acquisition of the Company by the Company's current senior
executive officers (Messrs. Deming, Stubler and Thompson)
effective as of January 1, 1987.
COMPANY PERFORMANCE
The following performance graph shows a comparison of
cumulative total returns for the Company, the New York Stock
Exchange Market Value index and an index of peer companies having
the same standard industrial classification number (the SIC
number for household appliances) as the Company for the period
from March 3, 1992 (the date that Toastmaster's common stock
began trading on the New York Stock Exchange) through December
31, 1996.
<PAGE>
The cumulative total return on investment for the Company,
the New York Stock Exchange Market Value index and an index of
peer companies is based on the stock price or index at March 3,
1992. The performance graph assumes that the value of an
investment in the Company's common stock and each index was $100
at March 3, 1992 and that all dividends were reinvested. The
information presented in the performance graph is historical in
nature and is not intended to represent or guarantee future
returns.
The performance graph compares the performance of the
Company with that of the New York Stock Exchange Market Value
index and an index of peer companies. Companies in the peer
group index are Dynamics Corporation of America, Electrolux AB,
General Electric Co., Helen of Troy Corp., Iona Appliances, Inc.,
Janex International Inc., Maytag Corporation, National Presto
Industries, Inc., Rival Co., Royal Appliance Mfg. Co.,
Salton/Maxim Housewares Inc., Semi-Tech Corp., Singer Co. N.V.,
Sunbeam Corporation, Toastmaster, Whirlpool Corporation and
Windmere Corp.
<TABLE>
The comparison of cumulative total returns presented in the above graph was plotted
using the following index values and common stock price values:
<PAGE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
March 3 December 31 December 31 December 31 December 31 December 31
1992 1992 1993 1994 1995 1996
Toastmaster Inc. $100.00 $ 62.93 $ 44.83 $ 51.47 $ 28.35 $ 27.11
New York Stock
Exchange
Market Value $100.00 $106.25 $120.63 $118.29 $153.38 $184.76
Index
Peer Group index $100.00 $109.17 $137.43 $136.96 $191.98 $263.81
</TABLE>
OWNERSHIP OF TOASTMASTER COMMON STOCK
The following table sets forth certain information as of
January 31, 1997 regarding the beneficial ownership of
Toastmaster common stock by each person known to the Board of
Directors to own beneficially 5% or more of the Company's common
stock, by each director and nominee for director of the Company,
by each executive officer named in the Summary Compensation Table
under "Executive Compensation and Other Information--Executive
Compensation" and by all directors and officers of the Company as
a group. All information with respect to beneficial ownership
has been furnished by the respective directors, officers or 5% or
more shareholders, as the case may be.
Amount and
Nature of Percentage of
Beneficial Shares
Name Ownership/1/ Outstanding/1/
Robert H. Deming /2//3/ 3,790,679 50.3%
Beverly A. Deming /2//3/ 1,471,893 19.5%
Daniel J. Stubler /2//4/ 1,032,271 13.7%
Andrea F. Stubler /2//4/ 1,032,271 13.7%
John E. Thompson /2//5 691,865 9.2%
Scott R. Thrasher /6/ 23,850 *
Ralph J. Ronalter, Jr. /2//7/ 162,591 2.2%
Edward J. Williams /8//9/ 5,500 *
S B. Rymer, Jr. /9/ 52,198 *
James L. Hesburgh /9/ 5,500 *
All directors and executive
officers as a group
(9 persons) /10/ 4,071,436 53.9%
___________
* Less than one percent
/1/ Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission which
generally attribute beneficial ownership of securities to
persons who possess sole or shared voting power and/or
investment power with respect to those securities. Unless
otherwise indicated, the persons or entities identified in
this table have sole voting and investment power with
respect to all shares shown as beneficially owned by them.
Percentage ownership calculations are based on 7,538,250
shares of common stock outstanding.
/2/ Each of these persons, together with certain other
shareholders, is a party to the Stockholders' Agreement
described under "Election of Directors--The Stockholders'
Agreement," pursuant to which each such person has given his
or her irrevocable proxy to Robert H. Deming to vote shares
of Toastmaster common stock with respect to the election of
directors. The address for Messrs. Deming, Stubler and
Thompson, Mrs. Deming and Mrs. Stubler is 1801 North Stadium
Boulevard, Columbia, Missouri 65202.
/3/ Includes 316,334 shares owned of record by Mr. Deming,
549,095 shares owned of record by Mr. Deming's wife, 561,464
shares owned of record by Mr. Deming's wife as trustee of
trusts established for the benefit of Deming family members,
and 45,000 shares held by a charitable foundation
established by the Deming family. Mr. Deming and his wife
share voting power with respect to such shares pursuant to
the Stockholders' Agreement referred to in Note (2), and
otherwise share voting and investment power with respect
thereto. Included for Mr. Deming are 2,318,786 shares owned
of record by various other shareholders of the Company, as
to which Mr. Deming has no investment power but has shared
voting power pursuant to the Stockholders' Agreement
referred to in Note (2).
<PAGE>
/4/ Includes 906,000 shares owned of record jointly by Mr. and
Mrs. Stubler. Mr. and Mrs. Stubler share investment power
with respect to such shares and they, together with Mr.
Deming, share voting power with respect to such shares
pursuant to the Stockholders' Agreement referred to in Note
(2). Also includes 126,271 shares owned of record by Mrs.
Stubler as trustee of trusts established for the benefit of
Mr. and Mrs. Stubler's three adult children. Mr. and Mrs.
Stubler share voting and investment power with respect to
such shares.
/5/ Includes 55,300 shares owned of record by Mr. Thompson and
609,685 shares owned of record by Mr. Thompson as trustee of
a trust established for the benefit of Thompson family
members. Mr. Thompson has sole investment power with
respect to such 664,985 shares but shares with Mr. Deming
the voting power with respect thereto pursuant to the
Stockholders' Agreement referred to in Note (2). Also
includes 26,880 shares owned of record by Mr. Thompson's
wife as custodian for their two children. Mr. Thompson has
shared voting and investment power with respect to such
shares.
/6/ Includes 21,298 shares owned of record by Mr. Thrasher, 163
shares held in the Company's 401(k) Savings and Investment
Plan for his account and 389 shares held in the Company's
Stock Purchase Plan (which 552 shares were acquired prior to
Mr. Thrasher becoming an executive officer of the Company),
and 2,000 shares issuable pursuant to the exercise of stock
options.
/7/ Mr. Ronalter has sole investment power with respect to these
shares but shares with Mr. Deming the voting power with
respect thereto pursuant to the Stockholders' Agreement
referred to in Note (2).
/8/ Includes 500 shares owned of record by Mr. Williams as
trustee of a trust for the benefit of Mr. Williams.
/9/ Includes 5,000 shares issuable to each of these persons
pursuant to the exercise of stock options.
/10/ Includes 22,000 shares issuable pursuant to the exercise of
stock options.
ITEM 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Board's
Audit Committee, has selected the independent certified public
accounting firm of KPMG Peat Marwick LLP as Toastmaster's
independent auditors to audit the books, records and accounts of
the Company for the year ending December 31, 1997. Shareholders
will have an opportunity to vote at the Annual Meeting on whether
to ratify the Board's decision in this regard.
KPMG Peat Marwick LLP has served as the Company's
independent auditors since 1987. A representative of KPMG Peat
Marwick LLP is expected to be present at the Annual Meeting.
Such representative will have an opportunity to make a statement
if he or she desires to do so and will be available to respond to
appropriate questions.
Submission of the selection of the independent auditors to
the shareholders for ratification will not limit the authority of
the Board of Directors to appoint another independent certified
public accounting firm to serve as independent auditors if the
present auditors resign or their engagement otherwise is
terminated. If the shareholders do not ratify the selection of
KPMG Peat Marwick LLP at the Annual Meeting, the Company intends
to call a special meeting of shareholders to be held as soon as
practicable after the Annual Meeting to ratify the selection of
another independent certified public accounting firm as
independent auditors for the Company.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL
OF THE SELECTION OF KPMG PEAT MARWICK LLP.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires Toastmaster's directors
and executive officers, and persons who own more than 10% of the
Company's outstanding common stock, to file with the Securities
and Exchange Commission initial reports of ownership and reports
of changes in ownership in Toastmaster common stock and other
equity securities. In addition, under Section 16(a), a director,
executive officer or 10% shareholder who is a trustee and has a
pecuniary interest (such interest includes situations where a
member of the trustee's immediate family is a beneficiary of the
trust) in any holding or transaction in the Company's securities
held by the trust, must report the holding or transaction on the
trustee's individual form. Securities and Exchange Commission
regulations require directors, executive officers, greater than
10% shareholders and reporting trusts to furnish Toastmaster with
copies of all Section 16(a) reports they file.
To Toastmaster's knowledge, based solely on review of the
copies of such reports furnished to Toastmaster and written
representations that no other reports were required, during the
year ended December 31, 1996, all Section 16(a) filing
requirements applicable to its directors, executive officers and
greater than 10% shareholders were complied with.
OTHER BUSINESS OF THE MEETING
The Board of Directors is not aware of, and does not intend
to present, any matter for action at the Annual Meeting other
than those referred to in this Proxy Statement. If, however, any
other matter properly comes before the Annual Meeting or any
adjournment, it is intended that the holders of the proxies
solicited by the Board of Directors will vote on such matters in
their discretion in accordance with their best judgment.
ANNUAL REPORT
Toastmaster's Annual Report to Shareholders, containing
financial statements for the year ended December 31, 1996, is
being mailed with this Proxy Statement to all shareholders
entitled to vote at the Annual Meeting. Such Annual Report is
not to be regarded as proxy solicitation material.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
It is presently anticipated that the 1998 Annual Meeting of
Shareholders will be held on May 12, 1998. Shareholder proposals
intended for inclusion in the proxy statement for the 1998 Annual
Meeting of Shareholders must be received at the Company's
offices, located at 1801 North Stadium Boulevard, Columbia,
Missouri 65202, within a reasonable time before the solicitation
with respect to the meeting is made, but in no event later than
November 28, 1997. Such proposals must also comply with the
other requirements of the proxy solicitation rules of the
Securities and Exchange Commission. Shareholder proposals should
be addressed to the attention of the Secretary of Toastmaster.
By Order of the Board of Directors
Linda G. Arnold
Secretary
March 28, 1997
Columbia, Missouri
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
1997 ANNUAL MEETING OF SHAREHOLDERS OF TOASTMASTER INC.
The undersigned hereby appoints Robert H. Deming, Daniel J.
Stubler and John E. Thompson, and each of them, each with the
power to act alone and with full power of substitution and
revocation, as attorneys and proxies of the undersigned to attend
the 1997 Annual Meeting of Shareholders of Toastmaster Inc.
("Toastmaster") to be held at the principal executive offices of
Toastmaster, located at 1801 North Stadium Boulevard, Columbia,
Missouri, on Tuesday, May 13, 1997, commencing at 10:00 a.m.,
local time, and at all adjournments thereof, and to vote all
shares of capital stock of Toastmaster which the undersigned is
entitled to vote with respect to the following matters, all as
set forth in the Notice of Annual Meeting of Shareholders and
Proxy Statement, dated March 28, 1997:
THE BOARD OF DIRECTORS OF TOASTMASTER RECOMMENDS A VOTE "FOR"
EACH ITEM.
Item 1: Election of two Class III directors to hold office for
a term expiring at the 2000 annual meeting of
shareholders.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary below) listed below
NOMINEES: Robert H. Deming; Daniel J. Stubler
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name in this space:
_____________________________________________
Item 2: Proposal to ratify the selection of the accounting firm
of KPMG Peat Marwick LLP as Toastmaster's independent
auditors for the year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon
such other business as properly may come before the Annual
Meeting.
<PAGE>
This Proxy, when properly executed, will be voted in the
manner directed herein by the undersigned shareholder(s). IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
Dated: ____________________, 1997
_________________________________
Signature
__________________________________
Signature (if held jointly)
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as an 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.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE PREPAID ENVELOPE
