<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
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. ___)
[x] Filed by the Registrant
[_] 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
HEARTLAND TECHNOLOGY, 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:
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:
4) Date Filed:
================================================================================
<PAGE>
HEARTLAND TECHNOLOGY, INC.
330 North Jefferson Court
CHICAGO, ILLINOIS 60661
---------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 31, 2000
---------
TO THE HOLDERS OF COMMON STOCK OF HEARTLAND TECHNOLOGY, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Heartland
Technology, Inc. (the "Company") will be held at 10:00 A.M., local time, on
October 31, 2000, at The LaSalle National Bank, 135 South LaSalle Street, 2/nd/
Floor, Conference Room 2F, Chicago, Illinois 60603, for the following purposes:
1. To elect two directors of the Company to hold office until the 2003
Annual Meeting of Stockholders and until such directors' successor
shall be elected and qualified.
2. To consider and vote upon a proposal to amend the Company's 1997
Incentive and Capital Accumulation Plan.
3. To vote upon the ratification of the appointment of Ernst & Young
LLP as the Company's independent accountants for the fiscal year 2000.
4. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of record of the Company's common stock at the close of
business on September 22, 2000, are entitled to receive notice of, and to vote
at, the Annual Meeting of Stockholders and any adjournment(s) thereof. Such
stockholders may vote in person or by proxy. A list of the stockholders entitled
to vote will be available for examination at the office of the secretary of the
company, 330 North Jefferson Court, Suite 305, Chicago, Illinois for a period
of 10 days prior to the Annual Meeting.
Stockholders who find it convenient are cordially invited to attend the
meeting in person. Whether or not you intend to be present in person or to be
otherwise represented at the meeting, you are requested to complete, sign and
date the enclosed proxy card and return it in the enclosed envelope. This action
will not limit your right to revoke your proxy in the manner described in the
accompanying Proxy Statement or to vote in person if you wish to attend the
Annual Meeting and vote personally.
By Order of the Board of Directors,
/s/ Richard P. Brandstatter
Richard P. Brandstatter
Vice President-Finance,
Secretary and Treasurer
Dated: September 25, 2000
<PAGE>
HEARTLAND TECHNOLOGY, INC.
_______________
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
October 31, 2000
________________
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Heartland Technology, Inc. (the "Company") of proxies
to be used at the Annual Meeting of Stockholders of the Company to be held at
10:00 A.M., local time, on October 31, 2000, at The LaSalle National Bank, 135
South LaSalle Street, 2/nd/ Floor, Conference Room 2F, Chicago, Illinois 60603,
and at any adjournment(s) thereof (the "Annual Meeting").
If the proxy card accompanying this Proxy Statement is properly executed
and returned, the shares of common stock, $.30 par value per share, of the
Company (the "Common Stock"), represented thereby will be voted as instructed on
the proxy card, but if no instructions are given, such shares of Common Stock
will be voted (1) for the election as directors of the nominees of the Board of
Directors named below, (2) in favor of the Amendment to the Milwaukee Land
Company 1997 Incentive and Capital Accumulation Plan, (3) in favor of the
ratification of the appointment of Ernst & Young LLP as the Company's
independent accountants for the 2000 fiscal year and (4) in the discretion of
the proxies named on the proxy card on any other proposals to properly come
before the meeting or any adjournment(s) thereof.
Any proxy may be revoked prior to its exercise, but the attendance at the
meeting by any stockholder who has previously given a proxy will not have the
effect of revoking his or her proxy as the case may be, unless such stockholder
delivers written notice of revocation to the Secretary of the Annual Meeting of
Stockholders prior to the exercise of the rights specified by the proxy. The
approximate date of mailing of this Proxy Statement and the accompanying proxy
is September 25, 2000. The Annual Report of the Company for the year ended
December 31, 1999, including audited financial statements for the Company was
mailed April 28, 2000. Shareholders added to the registrar's records from April
29, 2000 to September 22, 2000 will be mailed the Annual Report of the Company
on September 25, 2000.
VOTING
The close of business on September 22, 2000, is the date fixed by the Board
of Directors for the determination of stockholders of record entitled to notice
of, and to vote at, the Annual Meeting. On the record date there were issued and
outstanding 1,671,238 shares of Common Stock. Each share of Common Stock is
entitled to vote with respect to each matter to be voted upon. At all meetings
at which a quorum is present, a plurality of the votes cast shall elect
directors. Consequently, only shares that are voted in favor of the nominees for
election as Class I directors will be counted toward such nominees' attaining a
plurality. Shares present at the meeting that are not voted for a particular
nominee or shares present by proxy where the stockholder properly withholds
authority to vote for such nominees (including broker non-votes) will not be
counted toward such nominees' attainment of a plurality.
Approval of the proposal to amend the Milwaukee Land Company 1997 Incentive
and Capital Accumulation Plan requires the affirmative vote of a majority of the
outstanding shares of common stock. Abstentions and broker non-votes will have
the same effect as votes against the proposal.
Approval of the proposal to ratify the appointment of Ernst & Young LLP as
the Company's independent accountants for the 2000 fiscal year requires the
affirmative vote of holders of a majority of the shares of Common Stock
represented in person or by proxy at a meeting at which a quorum is present.
Abstentions will have the same effect as votes against the proposal because the
shares are considered present at the meeting, but are not affirmative votes, and
broker non-votes will not be counted in respect of the proposal.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 7, 2000, certain
information concerning ownership of shares of the Common Stock: (i) by persons
who are known by the Company to be beneficial owners of more than 5% of the
outstanding shares of the Common Stock; (ii) by each director and nominee of the
Company; (iii) by each Named Executive Officer (as defined under the heading
"Executive Compensation"); and (iv) by all directors and executive officers of
the Company as a group. As of September 7, 2000, there were 1,671,238 shares of
Common Stock outstanding.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name of Beneficial Owner Beneficial Ownership (1) of Class (2)
------------------------- -------------------------- ------------
<S> <C> <C>
Ezra K. Zilkha 185,000 (3) (4) 9.0%
767 Fifth Avenue
Suite 4605
New York, NY 10153
Martin S. Roher 154,750 (11) 7.5%
One Embarcadero Center
Suite 2330
San Francisco, CA 94111
MSR Capital Partners 113,500 (5) 5.5%
One Embarcadero Center
Suite 2330
San Francisco, CA 94111
Jerold S. Solovy 125,000 (6) 6.1%
c/o Jenner & Block
One IBM Plaza
Chicago, IL 60611-7602
Dorsey R. Gardner 134,800 (7) 6.6%
P.O. Box 190240
Miami Beach, FL 33119
Gordon H. Newman 1,000 *
Robert S. Davis 2,000 *
Edwin Jacobson 174,500 (8) (9) 8.5%
John R. Torell III 15,000 *
All directors and executive 377,500 (10) 18.4%
officers as a group
(consisting of 7 persons)
</TABLE>
________________________________
*Constitutes less than one percent.
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to such securities.
2
<PAGE>
(2) In each case the percent of the class is calculated on the basis that
380,000 shares represented by stock options and warrants are deemed
outstanding. No voting or investment power exists with respect to such
shares prior to exercise and acquisition.
(3) Based on a Schedule 13D, dated January 17, 1996, and to the Company's
knowledge, Mr. Zilkha is a member of a group consisting of himself, The
Zilkha Foundation, Inc. and Zilkha & Sons, Inc. Mr. Zilkha directly owns
and has sole voting and investment power over all shares except for: 1,500
shares owned by his wife, as to which he shares voting and investment
power; 15,000 shares owned by The Zilkha Foundation, Inc., as to which Mr.
Zilkha may be deemed to share voting and dispositive power with the other
directors and officers of the foundation; and 24,500 shares owned by
Zilkha & Sons, Inc., as to which Mr. Zilkha may be deemed to be the
beneficial owner.
(4) Includes 82,500 shares that Mr. Zilkha has the right to acquire through
the exercise of warrants.
(5) Based on a Schedule 13D, dated January 10, 2000.
(6) Based on a Schedule 13G, dated February 26, 1998.
(7) Based on Schedule 13G, dated February 11, 2000, and based on Company
knowledge.
(8) Includes 132,500 shares which Mr. Jacobson has the right to acquire
through the exercise of stock options and warrants.
(9) Includes 3,000 shares owned by Mr. Jacobson's spouse, as to which Mr.
Jacobson shares voting and investment power.
(10) The number of shares that all directors and officers as a group have the
right to acquire through the exercise of stock options and warrants is
215,000.
(11) Includes 113,500 shares reported as beneficially owned by MSR Capital
Partners as Mr. Roher is a general partner of MSR Capital Partners. Also
includes 41,250 shares that Mr. Roher has the right to acquire through the
exercise of warrants. According to the Schedule 13D filed by MSR Capital
Partners, "MSR has no contracts, arrangements, understandings or
relationships (legal or otherwise) with any other person relating to the
securities of the issuer, other than the relationship of Mr. Roher to MSR
by virtue of his position as general partner of MSR. On Monday January 10,
2000, Mr. Roher individually invested $250,000 in a private placement
acquiring a 13% Subordinated Note due January 2002, with detachable
warrants to acquire 41,250 additional shares of the Company's Common
Stock. The warrants are exercisable at 2.375 per shares through January
2004. There is no contract arrangement or understanding between Mr. Roher
and MSR with respect to such warrants or the shares which may be acquired
thereby. Mr. Roher has advised MSR that the transaction was for investment
purposes only."
3
<PAGE>
ELECTION OF DIRECTORS
(Proposal No. 1)
The Company's Certificate of Incorporation and By-laws provide for a Board
of Directors elected by the holders of Common Stock, which is divided into three
classes of directors serving staggered three-year terms. The Board of Directors
is currently comprised of five members, with Class I and Class III consisting of
two directors each and Class II consisting of one director.
At the 2000 Annual Meeting of Stockholders, two Class I directors will be
elected for terms expiring at the 2003 Annual Meeting of Stockholders. The Board
of Directors has recommended Gordon H. Newman and Robert S. Davis as the
nominees for election as the Class I directors. The continuing Class II
director, Ezra Zilkha, is serving a term that expires on the date of the 2001
Annual Meeting of Stockholders. The continuing Class III directors, John R.
Torell III and Edwin Jacobson, are serving a term that expires on the date of
the 2002 Annual Meeting of Stockholders.
Unless otherwise specified in the accompanying proxy, the shares of Common
Stock voted pursuant thereto will be cast for Gordon H. Newman and Robert S.
Davis, the Class I directors, to hold office until the 2003 Annual Meeting of
Stockholders and until their successors have been duly elected and shall have
qualified. If, for any reason, at the time of election, Gordon H. Newman and
Robert S. Davis should be unable or unwilling to accept nomination or election,
it is intended that such proxy will be voted for the election, in their place,
of a substitute nominee or nominees recommended by the Board of Directors.
However, the Board of Directors has no reason to believe that either Gordon H.
Newman and Robert S. Davis will be unable or unwilling to serve as directors.
Information with respect to the Company's nominees for directors and
continuing directors is set forth below. The Board of Directors recommends that
the stockholders vote FOR the election of Robert S. Davis and Gordon H. Newman
as the Company's Class I Directors.
<TABLE>
<CAPTION>
Principal Occupation, Business
Name and Age Experience and Directorships
------------- ----------------------------
<S> <C>
Nominees for Class I Directors
Gordon H. Newman, 67.............. Director of the Company (Class I) (since February 1999);
Member of the audit committee of the Board of the Company;
Private Investor and Trustee for various non-profit
entities (since 1995); Senior Vice President, General
Counsel (1975-1995) and Vice President, Assistant General
Counsel and Assistant Secretary (1967-1975), Sara Lee
Corporation (formerly Consolidated Foods Corporation).
Robert S. Davis, 85............... Director of the Company (Class I) (since October 1988);
Member of the compensation committee and chairman of the
audit committee of the Board of the Company; Self-employed
consultant (for more than the past five years); Senior Vice
President (1978-79), St. Paul Companies (insurance), St.
Paul, Minnesota.
Continuing Class II Director
Ezra K. Zilkha, 74................ Director of the Company (Class II) (since October 1988);
Chairman of the Board of the Company; Member of the
executive committee and chairman of the compensation
committee of the Board of the Company; President and
Director (since 1956), Zilkha & Sons, Inc. (private
investments), New York, New York; Mr. Zilkha also serves
as a director of The Newhall Land and Farming Company.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name and Age Principal Occupation, Business
------------ Experience and Directorships
----------------------------
<S> <C>
Continuing Class III Directors
Edwin Jacobson, 70................ President and Chief Executive Officer of the Company
(since September 1990); Director of the Company (Class III)
(since November 1985); Chairman of the executive committee of
the Board of the Company; President and Chief Executive Officer
of CMC Heartland Partners (since September 1990), Chicago,
Illinois (real estate) (a general partnership of which the
Company is the managing general partner); Chairman of the
Executive Committee (June 1992-March 1999) and President
and Chief Executive Officer (1994-1997), Avatar Holdings
Inc. (real estate, water and wastewater utilities
operations), Coral Gables, Florida. Mr. Jacobson also
serves as a director of JCC Holdings Inc.
John R. Torell III, 60............ Director of the Company (Class III) (since September 1997);
Member of the executive committee of the Board of the
Company, Chairman (since 1990), Torell Management Inc.
(financial advisory), New York, New York; Chairman and
Chief Executive Officer (1990-1994), Fortune Bancorp
(banking), Tampa, Florida; Chairman, President and Chief
Executive Officer (1988-1989), CalFed, Inc. (banking), Los
Angeles, California; President (1982-1988), Manufacturers
Hanover Corporation (banking), New York, New York. Mr.
Torell also serves as a director of American Home Products
Corporation, Claremont Technology Group, Inc., Paine
Webber Group Inc., and marchFIRST, Inc.
</TABLE>
Meetings and Committees of the Board of Directors
During the fiscal year ended December 31, 1999, the Board of Directors held
twelve meetings. During such period, each of the incumbent directors of the
Company attended 75% or more of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held by
all committees of the Board of Directors on which such director served. The
Board of Directors has standing executive, audit and compensation committees.
The members of the executive committee are Edwin Jacobson, John R. Torell
III and Ezra K. Zilkha. The executive committee, subject to certain exceptions,
has the authority to act in place of the Board of Directors, when it is not in
session, on all matters which would otherwise come before the Board of
Directors, including the functions of board nominations. The executive committee
held no meetings during the fiscal year ended December 31, 1999.
The members of the audit committee are Gordon H. Newman and Robert S.
Davis. The audit committee's primary responsibilities are to select the
Company's independent auditors, to approve the overall scope of the audit, to
review the results of operations of the Company and to review the Company's
system of internal controls. The audit committee held two meetings during the
fiscal year ended December 31, 1999.
The members of the compensation committee are Ezra K. Zilkha and Robert S.
Davis. The compensation committee's primary responsibilities are to review the
compensation arrangements relating to executive officers and key employees of
the Company, to make recommendations to the Board of Directors concerning
executive compensation and benefits policies for the Company, and to administer
the Company's 1997 Incentive and Capital Accumulation Plan. The compensation
committee held no meetings during the fiscal year ended December 31, 1999.
5
<PAGE>
Executive Officers
The following table sets forth certain information with regard to the
executive officers of the Company (other than Edwin Jacobson, who also serves as
a director of the Company).
<TABLE>
<CAPTION>
Principal Occupation, Business
Name and Age Experience and Directorships
------------- ----------------------------
<S> <C>
Lawrence S. Adelson, 50........... Vice President and General Counsel (since October 1988) of
the Company; General Counsel (since June 1990), CMC
Heartland Partners (real estate) (a general partnership of
which the Company is the managing general partner); Vice
President and General Counsel (1988-1995), Chicago
Milwaukee Corporation (investment company); General Counsel
(1985-1989), CMC Real Estate Corporation.
Richard P. Brandstatter, 44....... Vice President - Finance, Secretary and Treasurer of the
Company (since February 1999); Vice President - Finance,
Secretary and Treasurer (since August 1995); Controller
(November 1994-August 1995) CMC Heartland Partners;
Controller (1987-1994), Montalbano Builders (land
development and homebuilding).
</TABLE>
6
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee")
consists entirely of nonemployee directors, and its primary function is to make
recommendations to the Board of Directors concerning executive compensation and
benefits policies for the Company. The overall compensation policy which the
Committee pursues for the executive officers and key employees of the Company is
to provide a reward structure that motivates such individuals toward achieving
the Company's strategic and financial goals, while concurrently providing
compensation sufficient to attract and retain highly competent management
personnel. The Committee is also responsible for administering the Company's
1997 Incentive and Capital Accumulation Plan (the "Plan").
The Company's compensation structure consists of base salary, annual cash
bonuses and stock-based awards under the Plan. The combination of these three
components of an individuals' compensation coordinates the goals of providing
compensation that attracts and retains highly competent managers, and aligning
the interests of such managers with the interests of stockholders in
appreciation of the value of the Common Stock.
Base salary levels are set to reflect an individuals' position,
responsibilities, experience, leadership and contribution to the success of the
Company. Cash bonuses further reward eligible executives for superior individual
performance and overall performance of the Company. Stock based compensation
pursuant to the Plan creates an incentive to eligible executives to enhance the
performance of the Company and the Common Stock in the future. Determination of
the amount of cash bonuses and stock based compensation depends upon factors
specific to each individual, and is made by the subjective determination of the
Compensation Committee.
In 1997, the stockholders of the Company approved the Plan in order to
provide incentives which will attract and retain highly competent persons as key
employees of the Company and its subsidiaries, and to assist in aligning the
interest of the Company's key employees with those of its stockholders. The Plan
makes available, subject to certain adjustments, 175,000 shares of Common Stock
to be reserved for awards under the Plan. The Committee has the authority to
select officers and other key employees of the Company and its subsidiaries who
are to receive benefits pursuant to the Plan. The Committee also has the power
to modify or waive restrictions, amend benefits and to grant extensions and
accelerations of benefits under the Plan. The Plan provides for the grant of any
or all of the following types of benefits: (i) stock options, including
incentive stock options and non-qualified stock options; (ii) stock appreciation
rights; (iii) stock awards, including restricted stock; (iv) performance awards;
and (v) stock units. During 1998, the Committee granted benefits in respect of
an aggregate of 175,000 shares of Common Stock.
During 1999, Mr. Jacobson received compensation from the Company for acting
in his capacity as President and Chief Executive Officer of the Company. Mr.
Jacobson's compensation is paid pursuant to an employment agreement, dated as of
June 29, 1993, as amended. No cash bonuses were paid to him for 1999.
There were no matters that required the attention of the Compensation
Committee during 1999.
Members of the Compensation Committee:
Ezra K. Zilkha, Chairman
Robert S. Davis
7
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total returns on an assumed
investment of $100 in the Common Stock at the closing price of the Common Stock
on the last trading day of the calendar year ending December 31, 1993, as of the
last trading day of each of the calendar years indicated below with the returns
of a similar investment in the American Stock Exchange Market Value Index (a
market value weighted broad market index maintained by Media General Financial
Services, Inc. covering stocks listed on the American Stock Exchange) and a
market value weighted index of all publicly traded companies in the Printed
Circuit Board industry (SIC Code 3672) that have a market capitalization of less
than $500 million (the Peer Index). The calculation of total returns herein
assumes full reinvestment of dividends and no payment of brokerage or other
commissions or fees. Past performance is not necessarily indicative of future
performance. As a result of an acquisition on May 30, 1997, the Company began
operating in the Printed Circuit Board industry. Prior to that time, the Company
invested in securities.
[GRAPH]
1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ -------
Heartland Technology, Inc... 100.00 92.19 77.34 206.25 68.75 37.50
Amex Market Index.......... 100.00 128.90 136.01 163.66 161.44 201.27
Peer Index*................. 100.00 160.61 213.87 291.85 519.17 1007.62
Source: Media General Financial Services, Inc.
* The Peer Index includes: ACT Manufacturing, Inc., Actel Corp., Ariel Corp.,
Benchmark Electronics, Circuit Systems, Inc., EFTC Corporation, Elamex S.A. DE
C.V. CL 1, Eltek Ltd., Flextronics International Ltd., Gadzoox Networks, Inc.,
Hadco Corp., IEC Electronics Corp., Imaging Technologies CP, Jabil Circuit,
Inc., M-Wave, Inc., Merix Corp., Palomar Medical Tech., Park Electrochemical
CP, Parlex Corp., Performance Tech, Inc., Plexus Corp., Qlogic Corp., Sanmina
Corp., SCI Systems, Inc., Sheldahl, Inc., Sigmatron International, Inc., Smtek
International, Inc., Solectron Corp., Sypris Solutions, Inc.
The Compensation Committee Report and Performance Graph contained in this
Proxy Statement are not incorporated by reference into any filings by the
Company under the Securities Act of 1933 or the Securities Exchange Act of 1934
that incorporate filings or portions thereof without specific reference to the
incorporation of these captions of the Proxy Statement.
8
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table*
The following table sets forth information in respect of the compensation
for 1999, 1998 and 1997 of the Company's Chief Executive Officer, the only
executive officer of the Company whose total salary and bonus in 1999 exceeded
$100,000 (sometimes referred to herein as the "Named Executive Officer"):
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------
Annual Compensation Securities All Other
------------------- Underlying Compensation
Options/SARs
Year Salary ($) Bonus ($) (#) ($) (1)
---- ---------- --------- ----- ----------
<S> <C> <C> <C> <C> <C>
Edwin Jacobson* 1999 175,000 0 0 1,950
President and 1998 175,000 0 75,000 5,000
Chief Executive Officer 1997 139,583 0 0 1,599
</TABLE>
______________________
* Mr. Jacobson also provides services to CMC Heartland Partners (the general
partnership of which the Company and Heartland Partners L.P. ("Heartland
Partners") are general partners) ("CMC Heartland"). Since 1997, CMC
Heartland has paid the full compensation of Mr. Jacobson for services
rendered to the Company and to CMC Heartland. CMC Heartland has been
reimbursed by the Company pursuant to a certain Facilities Agreement for
the cost allocated to the Company with respect to the services Mr. Jacobson
has rendered to the Company. Therefore, the table sets forth compensation
awarded to, earned by or paid to Mr. Jacobson that has been allocated to
the Company.
(1) All Other Compensation for 1999 consists of contributions for Mr. Jacobson
made by CMC Heartland under CMC Heartland's Group Savings Plan, a salary
reduction plan qualified under Sections 401(a) and (k) of the Internal
Revenue Code of 1986, as amended, to match 1998 pre-tax elective deferrals
contributions (included under Salary) made to such plan.
9
<PAGE>
Aggregated Option/SAR Exercises in 1999 and
Option/SAR Values at December 31, 1999
No options or stock appreciation rights were exercised by Mr. Jacobson
in 1999. The following table provides information regarding the total number of
securities underlying unexercised options and stock appreciation rights as of
December 31, 1999.
Number of Securities Underlying
Unexercised Options/SARs at
December 31, 1999 (#)
-------------------------
Exercisable Unexercisable
----------- -------------
Edwin Jacobson 75,000 0
Employment Agreement
Edwin Jacobson, the Company's President and Chief Executive Officer,
provides services to the Company in such capacities pursuant to an employment
agreement, dated June 29, 1993, as amended, for a term ending on May 30, 2005.
The employment agreement provides for an annual base salary of $175,000, all or
a portion of which may be deferred at Mr. Jacobson's election. During the term
of the employment agreement, Mr. Jacobson has the right to continue his
employment with CMC Heartland and to pursue other employment and business
activities not in competition with the activities of the Company (after prior
notice of such activities has been delivered to the Chairman of the Executive
Committee of the Board of Directors of the Company), and is not obligated to
devote his full business time to the activities of the Company. Mr. Jacobson
is, however, required to devote an amount of time to the activities of the
Company determined by the Board of Directors to be required of him to accomplish
the business objectives of the Company. On June 1, 1997, the employment
agreement was amended to increase Mr. Jacobson's base salary from $90,000 to the
current $175,000 per year. On April 11, 2000, the Employment Agreement was
amended to extend the expiration date to May 30, 2005.
Mr. Jacobson's employment agreement provides for certain payments to
be made in the event his employment is terminated prior to the end of its term.
If Mr. Jacobson's employment is terminated by his death, the Company will pay
his designated beneficiary (or if there is none, to his estate) an amount equal
to the amount, if any, by which $150,000 exceeds the proceeds payable to his
designated beneficiary (or estate) pursuant to any life insurance policy
covering his life maintained by the Company. If Mr. Jacobson's employment is
terminated by the Company for "Cause" or by Mr. Jacobson for other than "Good
Reason", the Company will pay him his base salary through the date of
termination. If Mr. Jacobson's employment is terminated either by the Company
other than for "Cause" or other than on account of Mr. Jacobson's "permanent
disability" or by Mr. Jacobson for "Good Reason", then the Company will continue
to pay him base salary through May 30, 2005, will pay him all his other damages
that he may be entitled to receive as a result of such termination, and will
maintain until May 30, 2005, for his benefit, all employee benefit plans and
programs in which he was entitled to participate. The terms "Cause", "Good
Reason" and "permanent disability" are defined in the employment agreement.
Director Compensation
The Company's compensation program for nonemployee directors provides
that each nonemployee director receive an annual retainer of $18,000, payable in
quarterly installments, and receive $1,000 for each Board meeting physically
attended. Nonemployee directors also receive $1,000 for each committee meeting
physically attended. Employees of the Company receive no additional
compensation for serving as a director. The Company also reimburses directors
for meeting expenses.
10
<PAGE>
APPROVAL OF AMENDMENT TO THE COMPANY'S 1997 INCENTIVE AND CAPITAL
ACCUMULATION PLAN
(Proposal No. 2)
The Board of Directors has approved, subject to the approval by the
stockholders at the Annual Meeting, an amendment to the Milwaukee Land Company
1997 Incentive and Capital Accumulation Plan which would make an additional
75,000 shares of common stock available under the Plan.
Background
On April 4, 1997, Heartland Technology, Inc., formerly known as
Milwaukee Land Company (the "Company"), established the Milwaukee Land Company
1997 Incentive and Capital Accumulation Plan (the "Plan") for the benefit of
eligible employees of the Company.
The Compensation Committee desires to amend the Plan to provide that
an additional 75,000 shares of common stock be available for benefit for an
aggregate of 250,000 shares under the Plan.
The Board of Directors voted and approved that:
Effective March 22, 2000, the Plan shall hereinafter be known as
the Heartland Technology, Inc. 1997 Incentive and Capital
Accumulation Plan; and
Subject to shareholder approval, effective March 22, 2000,
Section 5 of the Plan is hereby amended by deleting all
references to "175,000" and replacing such references with
"250,000."
The foregoing summary of the proposed changes to the Plan is not
intended to be complete and is qualified in its entirety by reference to the
copy of the Amendment that is annexed to this Proxy Statement.
Required Vote
Approval of the amendment to the Plan requires the affirmative vote of
the holders of the majority of the Common Stock represented at the meeting and
voting on the issue, whether in person or by proxy.
The Board of Directors recommends that the stockholders vote FOR the
amendment to the Plan.
ADDITIONAL INFORMATION
Certain Relationships and Related Transactions
Edwin Jacobson, a director of the Company and its President and Chief
Executive Officer, also serves as the President and Chief Executive Officer of
Heartland Partners and CMC Heartland. The Company is the general partner of
Heartland Partners and the managing general partner of CMC Heartland (with
Heartland Partners being the other general partner of CMC Heartland). The
Company also owns the Class B limited partnership interest in Heartland
Partners.
The Company has a management agreement with CMC Heartland, pursuant to
which CMC Heartland is required to pay the Company an annual management fee in
the amount of $425,000 through December 31, 1999. The Company has a facilities
agreement with Heartland Partners pursuant to which Heartland Partners makes
available to the Company office space, equipment and personnel. Total expense
incurred for 1999 was $1,028,000. As of December 31, 1999, a portion remained
unpaid and is included in payable to affiliates.
On December 23, 1999 the Company received subscriptions for $2 million
in subordinated debentures at an interest rate of 13% for a two-year term. The
subscribers were Ezra Zilkha, chairman, Edwin Jacobson, chief executive officer,
and other shareholders of Heartland Technology. The Debentures were accompanied
by warrants which permit the purchase of 165 Heartland Technology common shares
per $1,000 principal amount of the debentures, or an aggregate of 330,000 common
shares for the entire $2 million subscribed. The warrants are exercisable at any
time during their four-year duration at an exercise price of $2-3/8 per share.
The debentures are secured by the Class B units of Heartland Partners, L.P.
which are held by Heartland Technology. In the event that Heartland Partners
enters into a loan agreement with Heartland Technology collateralized by the
Class B units, that security interest will be released. At March 31, 2000, all
$2 million subscriptions had been funded.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and any persons who own more than ten percent
of Common Stock, to file forms reporting their initial beneficial ownership of
Common Stock and subsequent changes in that ownership with the Securities and
Exchange Commission and the American Stock Exchange. Officers, directors and
greater than ten-percent beneficial owners are also required to furnish the
Company with copies of all such Section 16(a) forms they file. Based solely upon
a review of the copies of the forms furnished to the Company, or written
representations from certain reporting persons that no Forms 5 were required,
the Company believes that during the 1999 fiscal year all Section 16(a) filing
requirements were complied with.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal No. 3)
Upon recommendation of the audit committee, the Board of Directors has
appointed Ernst & Young LLP as the Company's independent accountants for the
fiscal year ending December 31, 2000.
In the event stockholders do not ratify the appointment of Ernst &
Young LLP as the Company's independent accountants for the forthcoming fiscal
year, such appointment will be reconsidered by the audit committee and the Board
of Directors.
A representative of Ernst & Young LLP will be present at the Annual
Meeting of Stockholders to respond to appropriate questions and to make such
statements as he or she may desire.
The Board of Directors recommends that the stockholders vote FOR
ratification of the appointment of Ernst & Young LLP as the Company's
independent accountants.
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OTHER INFORMATION
Stockholder Proposals and Director Nominations for 2001 Annual Meeting
Any stockholder who wishes to present a proposal for action at the
next annual meeting of the Company, and who wishes to have it set forth in the
Company's proxy statement for such annual meeting and identified in the form of
proxy proposed by the Company in reliance on Rule 14a-8 under the Securities
Exchange Act of 1934, must notify the Company in such a manner that such notice
is received by the Company not later than December 31, 2000, and in such form as
is required by the rules and regulations promulgated by the Securities and
Exchange Commission.
With respect to a proposal submitted by a stockholder outside of the
process of Rule 14a-8 for which notice is not received by the Company at its
principal executive offices prior to March 15, 2001, the proxy to be solicited
on behalf of the Company's Board of Directors for the 2001 Annual Meeting may
confer discretionary authority to vote on any such proposal properly coming
before the 2001 Annual Meeting.
Cost of Solicitation
The Board of Directors of the Company is soliciting proxies from
stockholders for use at the Annual Meeting. The expense of this solicitation
will be borne by the Company. Officers and employees of the Company, in the
ordinary course of business and at nominal expense, may supplement this
solicitation by mail, telephone call, telegraph or letter, for which they will
be reimbursed for out-of-pocket expenses but will receive no additional
compensation. The Company has retained D.F. King, Inc. to assist in the
distribution of proxy solicitation materials and with the solicitation of
proxies, at a cost of approximately $4,000. Brokers or other persons holding
Common Stock in their names or in the names of their nominees will, upon
request, be reimbursed for their actual expenses in forwarding proxies and proxy
material to the beneficial owners of such stock.
Other Business
The Board of Directors of the Company knows of no other matters that
may be presented at the Annual Meeting of Stockholders other than as set forth
in the accompanying Notice of Annual Meeting of Stockholders. However, if any
other matters properly come before the meeting, or any adjournment or
adjournments thereof, it is intended that holders of proxies solicited hereby
will vote thereon in their discretion.
It is important that your shares be represented at the meeting. If
you are unable to be present in person, you are respectfully requested to sign
the enclosed proxy and return it in the enclosed stamped and addressed envelope
as promptly as possible.
By Order of the Board of Directors,
/s/ Richard P. Brandstatter
Richard P. Brandstatter
Vice President - Finance, Secretary and Treasurer
Dated: September 25, 2000
Chicago, Illinois
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ANNEX A
FIRST AMENDMENT TO THE
MILWAUKEE LAND COMPANY
1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN
WHEREAS, effective April 4, 1997, Heartland Technology, Inc., formerly
known as Milwaukee Land Company (the "Company"), established the Milwaukee Land
Company 1997 Incentive and Capital Accumulation Plan (the "Plan") for the
benefit of eligible employees of the Company.
WHEREAS, Section 2 of the Plan provides that the Plan shall be
administered by a committee of the Board of Directors of the Company or a
subcommittee of the Committee of the Board, appointed by the Board from among
its members (the "Committee");
WHEREAS, Section 20 of the Plan provides that the Committee has the
power to amend the Plan.
WHEREAS, the Committee desires to change the name of the Plan to the
Heartland Technology, Inc. 1997 Incentive and Capital Accumulation Plan to
reflect the change in the name of the Company from the Milwaukee Land Company to
Heartland Technology, Inc.; and
WHEREAS, the Committee desires to amend the Plan to provide that an
additional 75,000 shares of common stock be available for benefit for an
aggregate of 250,000 shares under the Plan.
THEREFORE, the Plan is amended as follows:
1. Effective March 22, 2000, the Plan shall hereinafter be known as
the Heartland Technology, Inc. 1997 Incentive and Capital Accumulation Plan; and
2. Subject to shareholder approval, effective March 22, 2000,
Section 5 of the Plan is hereby amended by deleting all references to "175,000"
and replacing such references with "250,000."
IN WITNESS WHEREOF, the Committee has executed this amendment by its
duly authorized officers on the date written below:
HEARTLAND TECHNOLOGY, INC.
By: Edwin Jacobson
------------------------------------
Its: President and CEO
-----------------------------------
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ANNUAL MEETING OF STOCKHOLDERS - OCTOBER 31, 2000
The undersigned hereby appoints EDWIN JACOBSON, RICHARD P. BRANDSTATTER
and LAWRENCE S. ADELSON, and each or any of them, as proxies, with full power of
substitution to vote all shares of Common Stock of HEARTLAND TECHNOLOGY, INC.
represented by this proxy which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held on October 31, 2000, and at any
adjournment(s) thereof, with all powers the undersigned would possess if
personally present at such meeting, on the following matters:
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
HEARTLAND TECHNOLOGY, INC.
The Board recommends a vote FOR Proposals 1, 2 and 3.
Withhold
For Authority
1. Election of Directors [ ] [ ]
Nominees: Gordon H. Newman
Robert S. Davis
2. Ratification of the Amendment to the Milwaukee For Against Abstain
Land Company 1997 Incentive and [ ] [ ] [ ]
Capital Accumulation Plan.
3. Ratification of selection of Ernst & Young, LLP For Against Abstain
as the Company's independent auditors. [ ] [ ] [ ]
4. In their sole discretion on any other matters coming before the meeting or
any adjournment or adjournments thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, the proxy will be voted
FOR the nominees listed in Proposal 1, FOR proposal 2, FOR proposal 3, and in
the sole discretion of the proxies upon such other business as may properly come
before the meeting or any adjournments thereof.
Dated:_____________, 2000
Signature (s)______________________________________
IMPORTANT: Please date and sign exactly as your
name appears hereon. When signing as executor,
administrator, trustee, agent, attorney, guardian,
or corporate officer, please set forth your full
title. Joint owners should each sign.
