<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
ROBBINS & MYERS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXX
(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: ................................................................
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<PAGE> 2
[Robbins & Myers Logo]
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
<TABLE>
<S> <C>
Date: Wednesday, December 8, 1999
Time: 11:00 A.M., E.S.T.
Place: Kettering Tower, 12th Floor
Second and Main Streets
Dayton, Ohio 45423
At the Annual Meeting, shareholders of Robbins & Myers, Inc. will:
</TABLE>
- - ELECT FOUR DIRECTORS FOR A TWO-YEAR TERM;
- - VOTE ON APPROVING THE COMPANY'S 1999 LONG-TERM INCENTIVE STOCK PLAN;
- - VOTE ON APPROVING THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING AUGUST 31, 2000; AND
- - TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
Shareholders of record at the close of business on October 22, 1999 may vote at
the meeting.
Your vote is important. Please fill out the enclosed proxy card and return it in
the reply envelope.
By Order of the Board of Directors,
Joseph M. Rigot
Secretary
November 10, 1999
<PAGE> 3
PROXY STATEMENT FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
ROBBINS & MYERS, INC. November 10, 1999
1400 KETTERING TOWER
DAYTON, OHIO 45423
SOLICITATION AND VOTING OF PROXIES
The Board of Directors of Robbins & Myers, Inc. is sending you this Proxy
Statement to solicit your proxy. If you give the Board your proxy, the proxy
agents of the Board will vote your shares at the Annual Meeting of Shareholders
on December 8, 1999 and any adjournment of the meeting. The proxy agents will
vote your shares as you specify on the proxy card. If you do not specify how
your shares should be voted, the proxy agents will vote your shares in
accordance with the Board's recommendations.
You may revoke your proxy at any time before the proxy agents use it to vote on
a matter. You may revoke your proxy in any one of three ways:
- You may send in another proxy card with a later date.
- You may notify the Company in writing before the Annual Meeting that
you have revoked your proxy.
- You may vote in person at the Annual Meeting.
The Company first mailed this Proxy Statement to shareholders on November 10,
1999.
VOTING SECURITIES AND RECORD DATE
You are entitled to notice of the Annual Meeting and to vote at the meeting if
you owned common shares of record at the close of business on October 22, 1999.
For each share owned of record, you are entitled to one vote. On October 22,
1999, the Company had 10,938,945 common shares outstanding, which are the only
outstanding voting securities.
QUORUM REQUIREMENT AND VOTING
A quorum of shareholders is necessary to hold a valid meeting. The presence, in
person or by proxy, of the holders of one-third of the common shares is
necessary to have a quorum for the election of directors. The presence, in
person or by proxy, of the holders of a majority of the outstanding shares is
necessary for any other purpose. Abstentions and broker non-votes are counted as
present for establishing a quorum. A broker non-vote occurs when a broker votes
on some matters on the proxy card but not on others because he does not have the
authority to do so.
In counting votes on a particular item, the Company will treat abstentions as
votes cast on the particular matter. The Company will not, however, treat broker
non-votes as either votes cast or shares present for matters related to the
particular item.
If a shareholder notifies the Company in writing 48 hours or more before the
meeting that the shareholder desires that directors be elected by cumulative
voting, then shareholders will have cumulative voting rights in the election of
directors. Cumulative voting allows each shareholder to multiply the number of
shares owned by the number of directors to be elected and to cast the total for
one nominee or distribute the votes among the nominees as the shareholder
desires. Nominees who receive the greatest number of votes will be elected.
<PAGE> 4
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into two classes of four directors
each. One class of directors is elected at each Annual Meeting of Shareholders
for a term of two years.
At the 1999 Annual Meeting, shareholders will elect four directors who will hold
office until the Annual Meeting of Shareholders in 2001. The Board has nominated
Robert J. Kegerreis, William D. Manning, Maynard H. Murch IV, and John N.
Taylor, Jr. for election as directors. All nominees are presently directors.
If a nominee becomes unable to stand for reelection, the Board's proxy agents
will vote the proxies for a substitute nominee of the Board. If shareholders
vote cumulatively in the election of directors, then the Board's proxy agents
will vote the shares represented by the proxies cumulatively for the election of
as many of the Board's nominees as possible and in such order as the proxy
agents determine.
NOMINEES FOR TERM OF OFFICE EXPIRING IN 2001
ROBERT J. KEGERREIS, PH.D. DIRECTOR SINCE 1972
Dr. Kegerreis, 78, served as President of Wright State University from July 1973
to June 1985. He is currently a management consultant and has served as
Executive Director of the Arts Center Foundation, Dayton, Ohio, since 1989. Dr.
Kegerreis is a director of Energy Innovations Inc.
WILLIAM D. MANNING DIRECTOR SINCE 1995
Mr. Manning, 65, was Senior Vice President of The Lubrizol Corporation
(industrial chemicals) from 1985 to his retirement in April 1994. He is
currently a management consultant. Mr. Manning is a director of Unifrax
Corporation and Fletcher Paper Corporation.
MAYNARD H. MURCH IV DIRECTOR SINCE 1977
Mr. Murch, 55, has been Chairman of the Board of the Company since July 1979. He
is President and Chief Executive Officer of Maynard H. Murch Co., Inc.
(investments) which is managing general partner of M.H.M. & Co., Ltd.
(investments). Since 1976, Mr. Murch has been Vice President of Parker/Hunter,
Incorporated (dealer in securities), a successor firm to Murch and Co., Inc., a
securities firm which Mr. Murch had been associated with since 1968. Mr. Murch
is a director of Lumitex, Inc.
JOHN N. TAYLOR, JR. DIRECTOR SINCE 1988
Mr. Taylor, 64, has been Chairman since August 1986, and was President from
October 1974 until August 1986, of Kurz-Kasch, Inc. (a specialty manufacturer of
plastic-based components, stators and coil products). Mr. Taylor is a director
of LSI Industries, Inc.
2
<PAGE> 5
DIRECTORS CONTINUING IN OFFICE UNTIL 2000
GERALD L. CONNELLY DIRECTOR SINCE 1998
Mr. Connelly, 58, has been President and Chief Executive Officer of the Company
since January 1, 1999. From April 1997 to January 1999, he was Executive Vice
President and Chief Operating Officer of the Company and from June 1994 to April
1997, he was a Vice President of the Company and President of its Process
Industries Group. He is also a director of Genesis Worldwide Inc.
DANIEL W. DUVAL DIRECTOR SINCE 1986
Mr. Duval, 63, has been Vice Chairman of the Board since January 1, 1999. From
December 1986 to January 1999, he was President and Chief Executive Officer of
the Company. He was President and Chief Operating Officer of Midland-Ross
Corporation (a manufacturer of electrical, electronic and aerospace products and
thermal systems) from July 1983 to 1986. Mr. Duval is a Director of Arrow
Electronics, Inc., ABC-NACO Inc., Dayton Superior Company, and National City
Bank.
THOMAS P. LOFTIS DIRECTOR SINCE 1987
Mr. Loftis, 55, has been engaged in commercial real estate development, asset
management and consulting with Midland Properties, Inc. since 1981. Mr. Loftis
has been a general partner of M.H.M. & Co., Ltd. (investments) since 1986.
JEROME F. TATAR DIRECTOR SINCE 1991
Mr. Tatar, 52, has been Chairman, President and Chief Executive Officer of The
Mead Corporation (forest products) since November 1, 1997. From April 1996 to
November 1997, he was President and Chief Operating Officer and a director of
The Mead Corporation. From July 1994 to April 1996, he was Vice
President-Operating Officer of The Mead Corporation. Mr. Tatar is also a
director of National City Corp.
3
<PAGE> 6
DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors met five times in fiscal 1999. The Board of Directors has
two committees: the Audit Committee [Messrs. Taylor (Chairman), Kegerreis and
Manning], which met twice in fiscal 1999, and the Compensation Committee
[Messrs. Kegerreis (Chairman), Manning and Tatar], which met four times in
fiscal 1999. Each director attended all of the meetings of the Board of
Directors and the committees on which he served in fiscal 1999, except one
director was unable to attend one Board meeting.
The Audit Committee meets with Company personnel and with representatives of
Ernst & Young LLP, the Company's independent auditors, to review internal
auditing procedures, the annual audit of the Company's financial statements, and
compliance with the Company's Code of Business Conduct. The Committee reports
its findings and recommendations to the Board of Directors.
The Compensation Committee develops and administers the Company's executive
compensation policies and programs and sets the compensation of executive
officers. The Committee also advises the Board of Directors on the creation,
administration or modification of employee compensation policies and procedures.
DIRECTOR COMPENSATION
Directors who are not employees of the Company received the following
compensation in fiscal 1999:
<TABLE>
<S> <C>
Annual Retainer: $30,000 (50% is paid in restricted
shares of the Company which vest
after one year)
Committee Chairman Stipend: $3,000
Stock Options: 2,000 share option granted to each
director on the date he is elected to
a new term; option price is equal to
fair market value on date of election
</TABLE>
4
<PAGE> 7
SECURITY OWNERSHIP
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information as of October 22, 1999 concerning common shares
of the Company beneficially owned by each director, each executive officer named
in the Summary Compensation Table, and directors and executive officers as a
group.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
NUMBER OF SHARES
BENEFICIALLY OWNED PERCENT OF
INDIVIDUAL OR GROUP AS OF 10/22/99(1) CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Gerald L. Connelly 161,989 1.5%
Daniel W. Duval 315,059 2.8%
Robert J. Kegerreis 30,293 (5)
Thomas P. Loftis 38,329(2) (5)
William D. Manning 17,410 (5)
Maynard H. Murch IV 3,088,941(3) 28.2%
Jerome F. Tatar 18,816 (5)
John N. Taylor, Jr. 129,734(4) 1.2%
Stephen R. Ley 27,144 (5)
Hugh E. Becker 51,008 (5)
Kevin J. Brown 6,513 (5)
Directors and Executive Officers as a
Group (13 persons) 3,912,213 34.5%
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise indicated, total voting power and total investment power
are exercised by each individual and/or a member of his household. Shares
which a person may acquire within 60 days of October 22, 1999 are treated as
"beneficially owned" and the number of such shares included in the table for
each person is:
<TABLE>
<S> <C> <C>
Mr. Connelly --90,000 Dr. Kegerreis -- 8,367 Mr. Loftis -- 8,917
Mr. Duval -- 201,000 Mr. Murch -- 8,000 Mr. Tatar -- 12,000
Mr. Manning -- 9,500 Mr. Becker -- 11,667 Mr. Ley -- 27,500
Mr. Taylor -- 8,000 Mr. Brown -- 5,667
Directors and executive officers as a group -- 396,862
</TABLE>
(2) Includes 11,368 shares with respect to which Mr. Loftis has sole voting and
shared investment power and 1,024 shares with respect to which he has shared
voting and investment power.
(3) Includes 32,000 shares with respect to which Mr. Murch has sole voting and
shared investment power and 2,994,254 shares beneficially owned by M.H.M. &
Co., Ltd. See Footnote (1) in the following section.
(4) Includes 20,200 shares held of record in the name of K-K Realty Partners,
Ltd., of which Mr. Taylor is the general partner.
(5) Less than 1%.
5
<PAGE> 8
PRINCIPAL SHAREHOLDERS
The only persons known by the Board of Directors of the Company to be beneficial
owners of more than 5% of the outstanding common shares of the Company as of
October 22, 1999 are listed in the following table:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER OF COMMON
SHARES BENEFICIALLY
NAME AND ADDRESS OWNED AS OF 10/22/99 % OF CLASS
- --------------------------------------------------------------------------------------
<S> <C> <C>
M.H.M. & Co., Ltd.(1) 2,994,254 27.4%
830 Hanna Building
Cleveland, Ohio 44115
- --------------------------------------------------------------------------------------
The Prudential Insurance Company of 615,694 5.6%
America(2)
751 Broad Street
Newark, New Jersey 07102
- --------------------------------------------------------------------------------------
WEDGE Capital Management L.L.P.(3) 1,235,600 11.3%
2920 One First Union Center
301 South College Street
Charlotte, North Carolina 28202
- --------------------------------------------------------------------------------------
</TABLE>
(1) M.H.M. & Co., Ltd. is an Ohio limited partnership (the "Partnership").
Maynard H. Murch Co., Inc. is the managing general partner, and Thomas P.
Loftis is the other general partner, of the Partnership. Partnership
decisions with respect to the voting and disposition of Company shares are
determined by Maynard H. Murch Co., Inc., whose board of directors is
comprised of Maynard H. Murch IV and Robert B. Murch, who are brothers, and
Creighton B. Murch, who is their first cousin.
(2) The Prudential Insurance Company of America is an insurance company and a
registered investment adviser. The listed shares include 382,535 as to which
Prudential has shared voting and dispositive power and 144,844 which it has
a right to acquire upon conversion of outstanding 6.5% Convertible
Subordinated Notes of the Company.
(3) WEDGE Capital Management L.L.P. is an investment adviser.
6
<PAGE> 9
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board's Compensation Committee develops and administers the Company's
compensation policies and programs. It sets the compensation of executive
officers. The Committee members are three directors who are not present or
former employees of the Company.
OBJECTIVES AND POLICIES
The Committee seeks to:
- Offer a total compensation package which compares favorably to those
of industrial companies similar to the Company;
- Tie compensation to the annual business plan and progress on long-term
goals;
- Reward both Company and individual performance;
- Attract and retain talented executives critical to the Company's
long-term success; and
- Link executive's goals with those of shareholders.
Tax Deductibility of Compensation. Because certain executives could realize more
than $1,000,000 in compensation in one year due to payout of long-term
incentives and option exercises, the Committee addressed the $1,000,000 annual
limitation on deductibility for federal income tax of compensation paid to
executives named in the "Summary Compensation Table" at page 10. In 1996,
shareholders approved the Company's annual cash bonus plan and amendments to the
1994 Long-Term Incentive Stock Plan. This year shareholders are being asked to
approve the 1999 Long-Term Incentive Stock Plan. Assuming approval of the new
plan, incentive compensation paid to the Company's executives as cash bonuses,
performance shares, and options should normally be deductible for federal income
taxes.
TYPES OF COMPENSATION
The Company pays two types of compensation:
- Annual compensation -- includes base salary and a cash bonus if
certain financial targets are achieved; and
- Long-term compensation -- includes restricted shares which are only
granted to executives if a specified three-year goal is met and annual
stock option grants which are only valuable if the Company's stock
price increases.
ANNUAL COMPENSATION
Base Salary. The Company pays executives a salary each year which it believes is
competitive with salaries paid by other industrial companies similar to the
Company based on survey data of independent compensation consultants. The
Committee reviews this survey data and periodically adjusts the Company's salary
structure. The structure is adjusted, when necessary, to maintain salary ranges
slightly above the survey median. Individual salaries, which are considered
annually, may be adjusted to reflect changes in the Company's salary structure,
7
<PAGE> 10
attainment of individual objectives during the preceding year, and overall
Company performance.
Annual Cash Bonus Opportunity. Executives can earn a cash bonus each year. For
fiscal 1999, the bonuses were calculated as follows:
- Available bonuses at targeted performance levels ranged from 30% to
50% of salary; executives with higher positions on the Hay Position
Evaluation System were eligible for a larger bonus percentage,
effectively making more of their total compensation dependent on
performance.
- Performance measures and the respective weighting assigned to each
were:
-- Consolidated sales growth (33.3%)
-- Income before interest and taxes (33.3%)
-- Controllable asset management (33.3%)
- No bonuses were paid for fiscal 1999 since the required performance
benchmarks were not achieved.
LONG-TERM COMPENSATION INCENTIVES
The Company's executives make strategic business decisions which are ultimately
successful only if they increase shareholder value. The Committee believes a
significant portion of executive compensation should be tied to increases in
shareholder value and paid in Company stock. To accomplish this, the Committee
uses stock options and restricted shares as long-term incentives.
Stock Options. The Committee annually grants stock options to executives under
the Company's 1994 Long-Term Incentive Stock Plan. The option price is the fair
market value of a Company share on the date of grant. Options generally become
exercisable over a three-year period and expire ten years after grant. The
Committee determines the number of shares, if any, to be granted to each
executive based on:
- Executive's ability to impact the Company's long-term financial
results;
- Executive's recent performance; and
- Importance of executive to achieving the Company's long-term goals.
Performance Shares. At the beginning of fiscal 1997, the Committee awarded
performance shares to executives. The number of performance shares, which
convert to restricted shares earned were directly related to the total
shareholder return for the Company over the three-year period ended August 31,
1999 compared to the total shareholder return for companies in the Russell 2000
Company Group Index ("Index") for the same period. No restricted shares are
earned unless the total shareholder return for the Company for the three-year
period is at least equal to the median return for companies in the Index. No
restricted shares were earned for the period September 1, 1997 through August
31, 1999.
8
<PAGE> 11
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In determining Mr. Connelly's total compensation, the Committee considers the
Company's financial results, his leadership in developing and executing the
Company's strategic plan, and his key role in the Company's acquisition program.
The Committee increased Mr. Connelly's salary in October 1998 as Executive Vice
President and Chief Operating Officer from $310,000 to $325,000. On January 1,
1999, in conjunction with his promotion to President and Chief Executive
Officer, his salary increased to $400,000. Mr. Connelly, as a participant in the
annual cash bonus plan, had a target award at 50% of his base salary for fiscal
1999. Based on the Company's failure to achieve the performance measures
applicable for fiscal 1999, no bonus was paid to Mr. Connelly.
During fiscal 1999, the Committee granted Mr. Connelly options to purchase
30,000 common shares. This represents the normal annual grant under the 1994
Long-Term Incentive Stock Plan for the President and Chief Executive Officer. In
determining the size of the award, the Committee evaluated the accomplishments
of major strategic objectives as well as Mr. Connelly's potential for
influencing future results. Consideration was also given to the relationship of
previous grants and his total number of outstanding options.
The Committee believes its compensation policies and program for executive
officers, including the Chief Executive Officer, effectively tie executive
compensation to the Company's performance and shareholder value.
THE COMPENSATION COMMITTEE
Robert J. Kegerreis, Chairman
William D. Manning
Jerome F. Tatar
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following sections show compensation information relating to the Chief
Executive Officer and the next four most highly compensated executive officers
of the Company at August 31, 1999. The information is presented on a fiscal year
basis.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
----------------------------------------------------------
NAME AND NUMBER OF SHARES ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS COMPENSATION(1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gerald L. Connelly, 1999 $400,000 $ -0- 30,000 $4,000
President and 1998 310,000 88,350 20,000 5,890
Chief Executive Officer 1997 280,000 217,000 20,000 5,226
Daniel W. Duval, 1999 $420,000 $ -0- -0- $4,000
Vice Chairman 1998 420,000 119,700 27,000 5,900
1997 400,000 310,000 27,000 5,700
Stephen R. Ley, 1999 $190,000 $ -0- 15,000 $2,631
Vice President, Finance and 1998 165,000 37,620 15,000 4,489
Chief Financial Officer 1997 128,000 69,440 7,500 4,461
Hugh E. Becker, 1999 $169,000 $ -0- 10,000 $2,340
Vice President, Investor
Relations and Human
Resources(2)
Kevin J. Brown, 1999 $125,000 $ -0- 5,000 $1,731
Controller 1998 113,500 22,643 6,000 3,152
1997 98,700 38,246 2,500 4,055
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) All amounts presented are Company contributions under its Employee Savings
Plan.
(2) Mr. Becker became an executive officer on December 9, 1998.
10
<PAGE> 13
FISCAL 1999 STOCK OPTION GRANTS
The following table presents information concerning stock options granted in
fiscal 1999 to the persons named in the Summary Compensation Table. The table
also shows the hypothetical gains that would exist for the options at the end of
their ten-year terms, assuming compound rates of stock appreciation of 0%, 5%
and 10%. The actual future value of the options will depend on the market value
of the Company's common shares.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS(1)
------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SHARES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------------
NAME GRANTED FISCAL 1999 PRICE DATE 0% 5% 10%
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerald L. Connelly 30,000 18.6% $25.25 6/21/09 $ 0 $476,388 $1,200,260
Daniel W. Duval -0- -- -- -- -- -- --
Stephen R. Ley 15,000 9.3% 25.25 6/21/09 0 238,194 603,630
Hugh E. Becker 10,000 6.2% 25.25 6/21/09 0 158,796 402,420
Kevin J. Brown 5,000 3.1% 25.25 6/21/09 0 79,398 201,210
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the Company's option plans, one-third of the shares subject to an
option may be purchased one year after the date of grant, two-thirds after
two years, and 100% after three years and the options have a ten-year term.
(2) The dollar amounts under these columns are the result of calculations at 0%
and at the 5% and 10% rates, assuming annual compounding, prescribed by
rules of the Securities and Exchange Commission and are not intended to
forecast possible appreciation, if any, of the Company's share price.
OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
The following table presents information concerning all exercises of options to
purchase Company shares during fiscal 1999 by the persons named in the Summary
Compensation Table and the value of all unexercised options at August 31, 1999.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT 8/31/99 OPTIONS AT 8/31/99(2)
SHARES ACQUIRED VALUE ---------------------------------------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gerald L. Connelly -0- -0- 90,000 50,000 $ 651,330 -0-
Daniel W. Duval 48,000 $633,120 201,000 27,000 2,084,940 -0-
Stephen R. Ley -0- -0- 16,500 27,500 108,480 -0-
Hugh E. Becker 14,000 176,750 11,667 17,833 4,480 -0-
Kevin J. Brown -0- -0- 5,667 9,833 12,000 -0-
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the excess of the market value of the acquired shares on the
dates of exercise over the aggregate option price paid.
(2) Represents the excess of the market value at August 31, 1999 of the shares
subject to the options over the aggregate option exercise price.
11
<PAGE> 14
PENSION PLAN
The Company has a noncontributory, defined benefit pension plan for officers and
other salaried employees (the "Pension Plan"). The Company calculates retirement
benefits under the Pension Plan on the basis of the employee's average annual
compensation for the five highest years during the employee's last ten years of
employment with reductions for credited years of service less than 35. The
maximum annual retirement benefit that the Company can pay under the Pension
Plan to any participant as a result of limitations imposed under sections of the
Internal Revenue Code is presently $135,000.
Compensation for the purpose of calculating retirement benefits includes salary
and bonuses (exclusive of deferred incentive compensation). The total amount of
such compensation for executive officers for fiscal 1999 is presented in the
Summary Compensation Table under the heading "Annual Compensation."
The Company also has a Supplemental Pension Plan (the "Supplemental Plan") which
provides supplemental retirement benefits for Messrs. Duval, Connelly, Becker
and other key employees as they obtain eligibility under the criteria
established by the Board for participation in the plan. The supplemental
retirement benefit is provided under terms and conditions similar to those under
the Pension Plan except the Supplemental Plan allows for the crediting of
additional years of service by the Committee. The supplemental retirement
benefit is equal to the excess of (i) the benefit that would have been payable
to the employee under the Pension Plan without regard to certain annual
retirement income and benefit limitations imposed by federal law and at the
years of service credited under the Supplemental Plan over (ii) the benefit
payable to the employee under the Pension Plan.
The following table shows the estimated maximum annual retirement benefits
payable at normal retirement (age 65) under the Pension Plan and Supplemental
Plan at selected compensation levels after various years of service. The
credited years of service for the persons named in the Summary Compensation
Table is: Mr. Connelly -- 6, Mr. Duval -- 17, Mr. Ley -- 4, Mr. Becker -- 23,
and Mr. Brown -- 3. Amounts shown are straight life annuity amounts. These
amounts are not reduced to take into account Social Security benefits paid to
the employee.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
ESTIMATED ANNUAL RETIREMENT BENEFITS
FOR SPECIFIED YEARS OF SERVICE
FINAL AVERAGE -----------------------------------------------------------------------------------------
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$200,000 $ 40,918 $ 54,544 $ 68,169 $ 81,794 $ 95,378
250,000 51,418 68,543 85,668 102,793 119,876
300,000 61,919 82,544 103,170 123,796 144,379
350,000 72,418 96,544 120,669 144,794 168,878
400,000 82,918 110,543 138,168 165,793 193,376
500,000 103,918 138,544 173,169 207,794 242,378
600,000 124,919 166,544 208,170 249,796 291,379
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 15
OTHER
The Company has agreed to pay Mr. Connelly one year's salary in the event the
Company terminates his employment as Chief Executive Officer for reasons other
than misconduct. If such termination occurs within three years after a change of
control of the Company (as defined in the agreement) his salary continues for a
three-year period.
On June 18, 1999, the Company purchased 46,987 of its shares from Daniel W.
Duval at $24.38 per share which was the closing price of the Company shares on
the New York Stock Exchange on June 17, 1999.
13
<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareholders on the
Company's common shares for its last five fiscal years with the cumulative total
return of the Russell 2000 Company Group Index and the S&P Diversified Machinery
Index for the same periods. The graph depicts the value on August 31, 1999 of a
$100 investment made on August 31, 1994 in Company shares and each index, with
all dividends reinvested.
<TABLE>
<CAPTION>
S&P MACHINERY
ROBBINS & MYERS, INC. RUSSELL 2000 (DIVERSIFIED)
--------------------- ------------ -------------
<S> <C> <C> <C>
8/94 100 100 100
8/95 148 121 115
8/96 240 134 128
8/97 359 173 196
8/98 263 142 140
8/99 263 180 189
</TABLE>
PROPOSAL TO ADOPT 1999 LONG-TERM INCENTIVE STOCK PLAN
At the meeting, shareholders will vote on approval of the Company's 1999
Long-Term Incentive Stock Plan (the "Plan"). The Plan was approved by the Board
of Directors on October 6, 1999, subject to approval by shareholders. Approval
of the Plan requires the affirmative vote of the holders of a majority of the
outstanding common shares present, in person or by proxy, and entitled to vote
at the meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE PLAN.
The Compensation Committee will administer the Plan. The Plan provides for the
grant of options and other long-term incentive stock awards with respect to a
maximum of 550,000 common shares of the Company. The Plan is intended to replace
the Company's 1994 Long-Term Incentive Stock Plan which expired in October 1999.
The Board believes adoption of the
14
<PAGE> 17
Plan provides the Committee the continuing flexibility necessary to design and
implement performance-based compensation utilizing stock incentives.
A description of the essential features of the Plan appears below. The Company
will provide you a copy of the full text of the Plan upon request directed to
the Company, either by telephoning 937-222-2610, or by writing Robbins & Myers,
Inc., 1400 Kettering Tower, Dayton, Ohio 45423, Attention: Secretary.
GENERAL INFORMATION
The Plan authorizes the Committee to grant incentive awards in the form of stock
options, performance shares and units, and restricted shares to officers and
other key employees of the Company and its subsidiaries ("Incentive Awards"). No
more than 550,000 shares may be issued under the Plan. The shares that may be
issued may be authorized but unissued shares or treasury shares. If there is a
stock split, stock dividend or other relevant change affecting the Company's
shares, the Committee will make appropriate adjustments in the maximum number of
shares issuable under the Plan and subject to outstanding Incentive Awards.
The Plan also contains annual limits on Incentive Awards to individual
participants. In any calendar year, no participant may be granted stock options
for more than 100,000 shares, Restricted Share Awards with a value of more than
$500,000 at the time of award, or Performance Awards with a value of more than
$1,000,000 at the time of award.
FORM OF INCENTIVE AWARDS
Stock Options. The Committee may grant options qualifying as incentive stock
options under the Internal Revenue Code of 1986 and nonqualified stock options.
The term of an option may not exceed ten years from the date of grant. The
option price per share may not be less than the fair market value of a Company
share on the date of grant.
The option price is payable either in cash, by delivery to the Company of shares
of the Company already owned by the optionee, or by any combination of such
methods of payment. Under the Plan, an optionee may use shares received upon the
exercise of a portion of an option to pay the exercise price for additional
portions of the option. The Plan also permits the use of shares issuable upon
exercise of an option to pay applicable withholding taxes due upon the exercise
of a nonqualified stock option. The Committee may, however, adopt guidelines
limiting or restricting the use of shares as a method of payment of the option
price and withholding taxes.
The Committee may provide that an option is exercisable at any time during its
term, or only with respect to a stated number of shares over staggered periods.
An option may only be exercised while the optionee is employed by the Company or
a subsidiary of the Company or within 30 days after cessation of the optionee's
employment if the reason for cessation of employment is other than disability,
retirement, or death. In the case of disability, normal retirement, or death, an
option may be exercised to the extent it was exercisable on the date the
optionee ceased to be employed by the Company for the lesser of three years
after termination of employment or the remaining term of the option. In the
event of a change of control of the Company (as defined in the Plan), any option
which is not then exercisable, automatically becomes exercisable.
15
<PAGE> 18
Performance Awards. The Committee may grant performance awards under which
payment is made, in the Committee's discretion, in shares, in cash, or a
combination of shares and cash if the performance of the Company or any
subsidiary or division of the Company selected by the Committee meets certain
goals established by the Committee during an award period. The Committee
determines the goals, the length of an award period, the maximum payment value
of an award, and the minimum performance required before a payment is made.
Except for performance awards intended as "performance-based compensation" under
Section 162(m) of the Internal Revenue Code (the "Code"), the Committee may
revise the goals and the computation of payment at any time to account for
unforeseen events which occur during an award period and which have a
substantial effect on the performance of the Company, subsidiary or division. In
order to receive payment, a grantee must remain in the employ of the Company
until the completion of the award period, except that the Committee may provide
complete or partial exceptions to that requirement as it deems equitable.
Restricted Share Awards. The Committee may also issue or transfer shares under a
restricted share award. The grant of the award sets forth a restricted period
during which the grantee must remain in the employ of the Company. If the
grantee's employment terminates during the period, the grant terminates and the
grantee must return the shares to the Company. However, the Committee may
provide complete or partial exceptions to this requirement as it deems
equitable. The grantee may not dispose of the shares prior to the expiration of
the restricted period. During this period, the grantee is entitled to vote the
shares and receives dividends.
PERFORMANCE-BASED COMPENSATION
Section 162(m) of the Code limits the amount of the deduction that the Company
may take on its federal income tax return for compensation paid to any of the
Named Executive Officers in the Summary Compensation Table (the Code refers to
these officers as "covered employees"). The limit is $1 million per covered
employee per year, with certain exceptions. This deductibility cap does not
apply to "performance-based compensation," if approved by shareholders. Options
granted under the Plan will qualify as performance-based compensation and other
Incentive Awards may also qualify if the Committee so designates the other
Incentive Awards as performance-based compensation and administers the Plan with
respect to these designated awards in compliance with Section 162(m) of the
Code.
The Plan contains a number of measurement criteria that the Committee may use to
determine whether and to what extent any covered employee has earned a
Performance Award or Restricted Share Award. The measurement criteria that the
Committee may use to establish specific levels of performance goals include any
one or a combination of the following: level of sales, earnings per share,
income before income taxes and cumulative effect of accounting changes, income
before cumulative effect of accounting changes, net income, return on assets,
return on equity, return on capital employed, total stockholder return, market
valuation, cash flow and completion of acquisitions. The foregoing criteria have
any reasonable definitions that the Committee may specify, which may include or
exclude any or all of the following items, as the Committee may specify:
extraordinary, unusual or non-recurring items; effects of accounting changes;
effects of currency fluctuations; effects of financing activities (e.g., effect
on earnings per share of issuing convertible debt securities); expenses for
restructuring or productivity initiatives; non-operating items; acquisition
expenses; and effects of divestitures. Any such
16
<PAGE> 19
performance criterion or combination of such criteria may apply to a
participant's award opportunity in its entirety or to any designated portion of
the award opportunity, as the Committee may specify.
The Committee may set performance goals based on the achievement of specified
levels of corporate-wide performance or performance of a Company subsidiary or
business unit in which the participant works. The Committee may make downward
adjustments in the amounts payable under an award, but it may not increase the
award amounts or waive the achievement of a performance goal.
FEDERAL INCOME TAX CONSEQUENCES
Stock Options. The grant of an incentive stock option or a nonqualified stock
option does not result in income for the grantee or in a deduction for the
Company.
The exercise of a nonqualified stock option results in ordinary income for the
optionee and a deduction for the Company measured by the difference between the
option price and the fair market value of the shares received at the time of
exercise. Tax withholding by the Company is required.
The exercise of an incentive stock option does not result in income for the
grantee if the grantee (i) does not dispose of the shares within two years after
the date of grant or one year after the transfer of shares upon exercise (the
"holding periods") and (ii) exercises the option while employed by the Company
or a subsidiary of the Company or within three months of cessation of such
employment. If these requirements are met, the basis of the shares upon later
disposition is the option price. Any gain upon disposition is taxed to the
employee as long-term capital gain. The excess of the market value on the
exercise date over the option price of an incentive stock option is an item of
tax preference, potentially subject to the alternative minimum tax.
If the grantee disposes of the shares acquired upon exercise of an incentive
stock option prior to the expiration of the holding periods, the grantee
recognizes ordinary income and the Company is entitled to a deduction equal to
the lesser of the fair market value of the shares on the exercise date minus the
option price or the amount realized on disposition minus the option price. Any
gain in excess of the ordinary income portion is taxable as capital gain.
Restricted Share Awards. The grant of a restricted share award or the issuance
of performance shares as restricted shares does not result in income for the
grantee or in a deduction for the Company for federal income tax purposes,
assuming the shares transferred are subject to restrictions resulting in a
"substantial risk of forfeiture" as intended by the Company. Dividends paid to
grantee while the shares remained subject to restriction are treated as
compensation for federal income tax purposes. At the time the restrictions
lapse, the grantee receives ordinary income, and the Company is entitled to a
deduction measured by the fair market value of the shares at the time of lapse.
Income tax withholding by the Company is required.
17
<PAGE> 20
ADMINISTRATION
The Compensation Committee of the Board, which is comprised of three or more
directors, administers the Plan. Committee members must be non-employee
directors and outside directors for applicable regulatory requirements. This
means, among other things, that they cannot be current or former Company
officers.
Subject to the provisions of the Plan, the Committee has the authority to select
the persons to whom it will grant awards, to determine the types of awards and
the number of shares covered, and to set the terms and conditions of the awards.
The Committee also has authority to interpret the Plan, to establish, amend and
rescind rules applicable to the plan and awards under the Plan, to approve the
terms and provisions of any agreements relating to Plan awards and to make all
determinations relating to awards under the Plan.
The Board may terminate or amend the Plan as it deems advisable. Unless
shareholders approve, however, no amendment may increase the maximum number of
shares subject to the Plan, permit the granting of options at a price less than
the fair market value of a share on the date of grant, or materially modify the
requirements as to eligibility for participation in the Plan. No action taken by
the Board or the Committee may impair the existing rights of a participant
without the participant's consent.
GENERAL
All employees of the Company and its subsidiaries are eligible for awards under
the Plan, including the Named Executive Officers. The Company estimates that
approximately 45 persons meet the Committee's current criteria for the grant of
Incentive Awards under the Plan. No awards have been made under the Plan.
Information concerning awards under the 1994 Long-Term Stock Incentive Plan is
set forth in the Summary Compensation Table at page 10 and under "Fiscal 1999
Stock Option Grants" at page 11.
On October 22, 1999 (the record date for the Annual Meeting), the last sale
price for the Company's common shares as reported on the New York Stock Exchange
was $16.00 per share.
The Board adopted the Plan on October 6, 1999, subject to shareholder approval.
If the Plan is not approved by you, the Plan terminates. If approved by
shareholders, the Plan will expire on December 8, 2008.
APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP served as the Company's independent auditors during the fiscal
year ended August 31, 1999. A representative of Ernst & Young LLP is expected to
be present at the Annual Meeting with the opportunity to make a statement if he
desires to do so and to respond to appropriate questions from shareholders.
Subject to ratification by the shareholders, the Board of Directors of the
Company has selected Ernst & Young LLP as independent auditors for the Company
for the fiscal year ending August 31, 2000. THE BOARD RECOMMENDS A VOTE "FOR"
THE PROPOSAL TO RATIFY SUCH
18
<PAGE> 21
SELECTION. In the event shareholders do not approve the selection of Ernst &
Young LLP, the Board will seek to determine from shareholders the principal
reasons Ernst & Young LLP was not approved, evaluate such reasons, and consider
whether, in view of the circumstances, a different firm of independent auditors
should be selected for fiscal 2000.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
meeting other than those mentioned above. However, if other matters should
properly come before the meeting, or any adjournment thereof, it is intended
that the Board's proxy agents will vote the proxies in their discretion.
The Company will bear the cost of soliciting proxies. In addition to the use of
the mails, certain officers, directors, and regular employees of the Company may
solicit proxies by telephone or personal interview. The Company will request
brokerage houses, banks and other persons to forward proxy material to the
beneficial owners of shares held of record by such persons.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
executive officers of the Company and owners of more than 10% of the Company's
common shares to file an initial ownership report with the Securities and
Exchange Commission and a monthly or annual report listing any subsequent change
in their ownership of common shares. The Company believes, based on information
provided to the Company by the persons required to file such reports, that all
filing requirements applicable to such persons during the period from September
1, 1998 through August 31, 1999, were met, except that the exercise of a 48,000
share option by Mr. Duval and a 1,700 share option by Mr. Raiteri were
inadvertently reported late.
SHAREHOLDER PROPOSALS
If you intend to submit a proposal for inclusion in the Company's proxy
statement and form of proxy for the 2000 Annual Meeting of Shareholders, the
Company must receive the proposal at 1400 Kettering Tower, Dayton, Ohio 45423,
Attention: Corporate Secretary, on or before July 11, 2000. The 2000 Annual
Meeting of Shareholders is presently scheduled to be held on December 13, 2000.
For any proposal that is not submitted for inclusion in next year's proxy
statement, but is instead sought to be presented directly by a shareholder at
the 2000 Annual Meeting, management will be able to vote proxies in its
discretion if the Company: (1) receives notice of the proposal before the close
of business on September 26, 2000 and advises shareholders in the 2000 proxy
statement about the nature of the matter and how management intends to vote on
such matter or (2) does not receive notice of the proposal before the close of
business on September 26, 2000.
19
<PAGE> 22
The Company's Code of Regulations, which is available upon request to the
Corporate Secretary, provides that nominations for director may only be made by
the Board of Directors (or an authorized board committee) or a shareholder
entitled to vote who sends notice of the nomination to the Corporate Secretary
not fewer than 50 days nor more than 75 days prior to the meeting date. Such
notice is required to contain certain information specified in the Company's
Code of Regulations. For a nominee of a shareholder to be eligible for election
at the 2000 Annual Meeting, the shareholder's notice of nomination must be
received by the Corporate Secretary between October 1, 2000 and October 25,
2000. This advance notice period is intended to allow all shareholders to have
an opportunity to consider nominees expected to be considered at the meeting.
All submissions to, or requests from, the Corporate Secretary should be sent to
Robbins & Myers, Inc., 1400 Kettering Tower, Dayton, Ohio 45423.
By Order of the Board of
Directors,
Joseph M. Rigot
Secretary
20
<PAGE> 23
ROBBINS & MYERS LOGO
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON DECEMBER 8, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned holder(s) of Common Shares of ROBBINS & MYERS, INC., an Ohio
corporation (the "Company"), hereby appoints Gerald L. Connelly, Robert J.
Kegerreis, and Maynard H. Murch IV, and each of them, attorneys of the
undersigned, with power of substitution, to vote all of the Common Shares which
the undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held on Wednesday, December 8, 1999, and at any adjournment
thereof, as follows:
<TABLE>
<S> <C> <C>
1. Election of Directors. [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed below.
below), including authority to
cumulate votes selectively among such
nominees.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Robert J. Kegerreis, William D. Manning, Maynard H. Murch IV, John N. Taylor, Jr.
2. Adoption of the Company's 1999 Long-Term Incentive Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the appointment of Ernst & Young LLP as independent auditors for the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)
<TABLE>
<S> <C> <C>
4. In their discretion, upon such other business as may properly come before the meeting or any adjournment thereof.
</TABLE>
A VOTE FOR PROPOSALS 1, 2 AND 3 IS RECOMMENDED BY THE BOARD OF DIRECTORS. WHEN
PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS SPECIFIED, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
Receipt is acknowledged of Notice of the above meeting, the Proxy Statement
relating thereto and the Annual Report to Shareholders for the fiscal year ended
August 31, 1999.
DATED: ___________________________, 1999 -----------------------------
-----------------------------
(SIGNATURES)
SHAREHOLDERS SHOULD DATE THIS
PROXY AND SIGN HERE EXACTLY AS
NAME APPEARS AT LEFT. IF STOCK
IS HELD JOINTLY, BOTH OWNERS
SHOULD SIGN THIS PROXY.
EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS AND OTHERS
SIGNING IN A REPRESENTATIVE
CAPACITY SHOULD INDICATE THE
CAPACITY IN WHICH THEY SIGN.
