<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SCOTSMAN INDUSTRIES, INC.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
SCOTSMAN INDUSTRIES, INC.
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
N/A
- - - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
N/A
- - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
N/A
- - - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- - - --------------------------------------------------------------------------------
/ / 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:
N/A
- - - --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
N/A
- - - --------------------------------------------------------------------------------
(3) Filing party:
N/A
- - - --------------------------------------------------------------------------------
(4) Date filed:
N/A
- - - --------------------------------------------------------------------------------
- - - -------------------------
1Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE> 2
[LOGO]
May 2, 1994
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Scotsman Industries, Inc. which will be held on Friday, June 10, 1994 at 2:00
p.m., local time, at our headquarters in Vernon Hills, Illinois. Please refer to
the attached map for directions to the premises.
At the Annual Meeting, shareholders are being asked to elect two directors
to serve terms which expire in 1997. The Board of Directors recommends a vote
"FOR" each nominee.
Your vote is important. Whether or not you plan to attend the Annual
Meeting and regardless of the size of your holdings, you are encouraged to sign,
date, and mail the enclosed Proxy in the envelope provided. Your right to vote
in person at the meeting is not affected by returning the Proxy.
On behalf of the Board of Directors, officers and employees of Scotsman, I
would like to thank you for your continued interest and support.
Sincerely,
/s/ RICHARD C. OSBORNE
-------------------
Richard C. Osborne
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
[INSERT MAP HERE]
- - - -- Place of Annual Meeting
Scotsman's headquarters is located at 775 Corporate Woods Parkway in Vernon
Hills, Illinois, approximately 40 miles northwest of downtown Chicago.
Shareholders attending the meeting who will be using the Tri-State Tollway
(Interstate Route 94-294) should exit at Half Day Road (Route 22) and travel
west to reach Milwaukee Avenue (Route 21). Turn right onto Milwaukee Avenue and
travel north approximately 1 mile to reach Corporate Woods Parkway (the second
or northern Corporate Woods entrance).
Parking facilities will be available and refreshments will be served beginning
at 1:30 P.M.
<PAGE> 4
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
708-215-4500
[LOGO]
May 2, 1994
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 10, 1994
------------------------
To the Shareholders of SCOTSMAN INDUSTRIES, INC.
Notice is hereby given that the annual meeting of shareholders of Scotsman
Industries, Inc. (the "Company") will be held at the Company's headquarters at
775 Corporate Woods Parkway, Vernon Hills, Illinois 60061 on Friday, June 10,
1994, at 2:00 p.m., local time, for the following purposes:
1. To elect two directors to serve for a term of three years.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on April 19, 1994, are
entitled to notice of and to vote at the meeting and any adjournment thereof.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO
THE COMPANY IN THE ENVELOPE PROVIDED. THE GIVING OF SUCH PROXY WILL NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
By Order of the Board of Directors
/s/ DONALD D. HOLMES
-----------------
Donald D. Holmes,
Vice President -- Finance and
Secretary
<PAGE> 5
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
[LOGO]
May 2, 1994
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 10, 1994
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Scotsman Industries, Inc., a Delaware
corporation (the "Company"), for use at the annual meeting of shareholders of
the Company to be held at the Company's principal executive offices at 775
Corporate Woods Parkway, Vernon Hills, Illinois 60061 on June 10, 1994 at 2:00
p.m. (the "1994 Annual Meeting") and at any adjournments thereof. The 1994
Annual Meeting is being held to consider and vote upon the election of two
directors to serve until the 1997 annual meeting of shareholders of the Company
or until the successors of such directors have been elected and qualified. The
Company's Board of Directors knows of no other business that will be presented
for consideration at the 1994 Annual Meeting other than the matters described in
this Proxy Statement.
The close of business on April 19, 1994 has been fixed by the Board of
Directors as the record date (the "Record Date") for determination of
shareholders entitled to vote at the meeting. Accordingly, only holders of
record of shares of the Company's common stock (the "Common Stock") at the close
of business on such date will be entitled to vote at the 1994 Annual Meeting. As
of the close of business on that date, there were outstanding 7,013,429 shares
of Common Stock (not including 202,295 shares of Common Stock held in treasury).
Each share of Common Stock outstanding as of the Record Date, excluding the
treasury shares, is entitled to one vote.
Any shareholder who has given a proxy may revoke it at any time prior to
its exercise at the 1994 Annual Meeting by (1) giving written notice of such
revocation to the Secretary of the Company, (2) properly submitting to the
Company a duly executed proxy bearing a later date or (3) appearing in person at
the 1994 Annual Meeting and voting in person. All written notices of revocation
or other communications with respect to revocation of proxies should be
addressed as follows: Scotsman Industries, Inc., 775 Corporate Woods Parkway,
Vernon Hills, Illinois 60061, Attention: Donald D. Holmes, Secretary. Duly
executed proxies received prior to the meeting will be voted in accordance with
the instructions indicated in the proxy. IF NO INSTRUCTIONS ARE INDICATED, SUCH
PROXIES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN THE
PROXY.
This Proxy Statement is first being mailed to the Company's shareholders on
or about May 2, 1994. The 1993 Annual Report to Shareholders, including
financial statements for the fiscal year ended January 2, 1994, was separately
mailed to the Company's shareholders on or about April 1, 1994.
The presence, in person or by proxy, of a majority of the shares of Common
Stock entitled to vote will constitute a quorum at the 1994 Annual Meeting.
Votes cast by proxy or in person at the 1994 Annual Meeting will be tabulated by
the inspectors of election appointed for the meeting to determine whether or not
a quorum is present. The inspectors will treat abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the shareholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter.
The Company will bear the cost of soliciting proxies. In addition to
solicitations by mail, officers, directors, or employees of the Company or its
subsidiaries may make solicitations in person or by telephone without
compensation other than the compensation such persons otherwise receive for
their services as officers, directors or employees. Arrangements will also be
made with brokerage firms and other custodians,
1
<PAGE> 6
nominees and fiduciaries to forward solicitation materials to the beneficial
owners of shares of Common Stock held of record by such persons, and the Company
will reimburse such brokerage firms, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses in connection with forwarding such materials.
In addition, the Company has retained Morrow & Co., Inc. to aid in the
solicitation of proxies. The fees to be paid to such firm for such services are
not expected to exceed $4,000 plus reimbursement for out-of-pocket costs and
expenses.
YOUR VOTE IS IMPORTANT TO THE COMPANY. IF YOU DO NOT EXPECT TO VOTE IN PERSON AT
THE 1994 ANNUAL MEETING, WE URGE YOU TO COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
ELECTION OF DIRECTORS
The Company's by-laws provide for a Board of Directors, the number of which
shall be fixed from time to time by a resolution adopted by a majority of the
whole Board of Directors. The number of the Board of Directors has been fixed at
eight.
The Company's by-laws also provide that the directors are to be divided
into three classes with respect to the time for which they hold office. At each
annual meeting of shareholders of the Company, successors of the class whose
terms of office expire in that year are to be elected for three-year terms or
until their successors have been duly elected and qualified. The terms of two
directors, Frank W. Considine and George D. Kennedy, will expire at the 1994
Annual Meeting, and the Company's Board of Directors has renominated both for
re-election to the Board of Directors. If re-elected, both will serve until the
1997 annual meeting of shareholders of the Company or until their successors
have been duly elected and qualified. The Company's by-laws establish certain
procedures for shareholder nominations of candidates for directors. Those
procedures are set forth below in the section entitled "Notice Provisions for
Shareholder Proposals and Shareholder Nominations of Directors."
Since two positions are to be filled on the Board of Directors, the two
nominees receiving the highest number of votes cast at a meeting at which a
quorum is present will be elected as directors. The inspectors of election will
not count abstentions or broker non-votes in determining the number of votes
received by any nominee.
It is the intention of the parties named in the enclosed proxy to vote the
shares represented thereby for the election of the nominees listed below unless
the proxy is marked otherwise. Each of the nominees has agreed to serve as a
director if elected, and the Company has no reason to believe that any nominee
will be unable to serve. In the event that one or more nominees should become
unwilling or unable to accept nomination for election, however, the persons
named in the enclosed proxy will vote such proxy for such other person or
persons as may be nominated for director by the Board of Directors of the
Company.
INFORMATION REGARDING NOMINEES AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY OR OTHER PRINCIPAL
NAME AND AGE OCCUPATION AND OTHER DIRECTORSHIPS
- - - ---------------------------------------------------------------------------------------------
NOMINEES FOR ELECTION AT THE 1994
ANNUAL MEETING TO SERVE UNTIL 1997
- - - ---------------------------------------------------------------------------------------------
<S> <C>
Frank W. Considine (72) Mr. Considine is Honorary Chairman of the Board, Chairman of
the Executive Committee and a director of American National
Can Company, a packaging manufacturer. He was Chairman of the
Board of American National Can Company from 1983 to 1990,
President from 1969 to 1988, and Chief Executive Officer from
1973 to 1988. Mr. Considine is a director of Encyclopedia
Britannica, Inc., Helene Curtis Industries, Inc., IMC
Fertilizer Group, Inc., Pechiney International, S.A. and
Schwitzer, Inc. Mr. Considine is also Chairman of the Board
of Trustees of Loyola University, Chicago, and serves on the
</TABLE>
2
<PAGE> 7
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY OR OTHER PRINCIPAL
NAME AND AGE OCCUPATION AND OTHER DIRECTORSHIPS
- - - ---------------------------------------------------------------------------------------------
<S> <C>
Board of Trustees of the Field Museum of Natural History,
Chicago. Mr. Considine has been a director of the Company
since April, 1989.
George D. Kennedy (67) Mr. Kennedy is Chairman and a director of Mallinckrodt Group
Inc. (formerly IMCERA Group Inc.), a producer of medical
products, animal products and chemicals, and has held such
positions since 1986. He was Chief Executive Officer of
IMCERA Group Inc. from 1983 to 1991. Mr. Kennedy is also a
director of Brunswick Corporation, Illinois Tool Works, Inc.,
American National Can Company, Kemper National Insurance
Company, Stone Container Corporation, Kemper Corporation and
Medical Care America, Inc. He has been a director of the
Company since April, 1989.
DIRECTORS CONTINUING TO SERVE UNTIL 1995
---------------------------------------------------------------
Richard C. Osborne (50) Mr. Osborne is Chairman of the Board, President and Chief
Executive Officer of the Company. Mr. Osborne has been
Chairman of the Board since May, 1991 and President and Chief
Executive Officer since April, 1989. He was an Executive Vice
President of Household Manufacturing, Inc. ("HMI") from 1982
to April, 1989. HMI was a wholly-owned subsidiary of
Household International, Inc. ("Household"), and certain
divisions and subsidiaries of HMI were transferred to the
Company's wholly-owned subsidiary, Scotsman Group, Inc.
("SGI"), shortly before Household effected a spin-off of the
Company in April, 1989. Mr. Osborne is also a director of
Joslyn Corporation. He has been a director of the Company
since April, 1989.
Donald C. Clark (62) Mr. Clark is Chairman of the Board, Chief Executive Officer and
a director of Household, a financial services business. Mr.
Clark has been Chief Executive Officer of Household since
1982 and Chairman of the Board of Household since 1984. He
served as President of Household from 1977 through 1987. Mr.
Clark is also a director of Schwitzer, Inc., Ameritech
Corporation, and Warner-Lambert Co. He has been a director of
the Company since April, 1989 and served as Chairman of the
Board of the Company from April, 1989, to May, 1991.
Timothy C. Collins (37) Mr. Collins is a Managing Director of Onex Investment Corp.
(New York), a management company for the U.S. investments of
Onex Corporation, an Ontario corporation ("Onex"), and has
held that position since 1990. From 1988 to 1990, he was a
Vice President of Lazard Freres & Co., an investment banking
firm. He was a director of DFC Holding Corporation ("DFC")
and of Whitlenge Acquisition Limited ("WAL") prior to their
acquisition by the Company. Mr. Collins was appointed a
director of the Company following their acquisition on April
29, 1994.
DIRECTORS CONTINUING TO SERVE UNTIL 1996
---------------------------------------------------------------
James J. O'Connor (57) Mr. O'Connor is Chairman, Chief Executive Officer and a
director of Commonwealth Edison Company, an electric utility
company, and has held those positions since 1980. Mr.
O'Connor is also a director of Corning Incorporated, First
Chicago Corporation, The First National Bank of Chicago,
Tribune Company, UAL Inc., and American National Can Company
and serves on the Board of Governors of the Chicago Stock
Exchange. He has been a director of the Company since April,
1989.
</TABLE>
3
<PAGE> 8
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY OR OTHER PRINCIPAL
NAME AND AGE OCCUPATION AND OTHER DIRECTORSHIPS
- - - ---------------------------------------------------------------------------------------------
<S> <C>
Robert G. Rettig (64) Mr. Rettig is a consultant to Illinois Tool Works, Inc., a
manufacturer of industrial products and components, and a
consultant to, and a director of, The Tech Group, a custom
molding company. He was an Executive Vice President of
Illinois Tool Works, Inc. from 1983 to January, 1990. Mr.
Rettig is also a director of Lawson Products, Inc. and Ames
Supply Company. He has been a director of the Company since
April, 1989.
Matthew O. Diggs, Jr. (61) Mr. Diggs is the Chief Executive Officer of The Diggs Group, a
New York general partnership that provides investment banking
services, and has held that position since 1990. From 1987 to
1990, Mr. Diggs was Vice Chairman of Copeland Corporation, a
refrigerator compressor manufacturer, having served as
President and Chief Executive Officer of Copeland Corporation
from 1975 to 1987. He was the Chairman of the Board of DFC
and WAL prior to their acquisition by the Company. Mr. Diggs
was appointed a director of the Company following their
acquisition on April 29, 1994.
</TABLE>
AGREEMENT GOVERNING THE APPOINTMENT AND FUTURE NOMINATION OF CERTAIN DIRECTORS
Effective April 29, 1994, Timothy C. Collins and Matthew O. Diggs, Jr. were
appointed directors of the Company following consummation of the acquisition by
the Company of DFC and its wholly-owned subsidiary, The Delfield Company
("Delfield"), and WAL and its wholly-owned subsidiary, Whitlenge Drink Equipment
Limited ("Whitlenge"). On April 29, 1994, the Company acquired DFC and Delfield
through a merger (the "Merger") between DFC and a new wholly-owned subsidiary of
the Company, and it acquired WAL and Whitlenge through the acquisition of all of
the outstanding shares of WAL (the "Share Acquisition").
Under the terms of the Merger Agreement, dated as of January 11, 1994,
pursuant to which the Company acquired DFC and Delfield (the "Merger
Agreement"), the Company agreed to increase the size of its board of directors
from seven to eight directors, with the additional directorship to be in the
class of directors whose term expires at the 1996 annual meeting, to appoint Mr.
Diggs to fill the newly created directorship, and to appoint Mr. Collins to fill
a vacancy in the class of directors whose term expires at the 1995 annual
meeting. The Company also agreed that, so long as the former shareholders of DFC
and WAL, together in each case, with certain permitted transferees
(collectively, the "New Scotsman Shareholders") own, on a fully diluted basis,
at least 50% of the number of shares of Common Stock issued to them in
connection with the Merger and the Share Acquisition (representing approximately
16% of the total number of shares outstanding on a fully diluted basis upon
consummation of the Merger and the Share Acquisition), they will be entitled to
designate the persons nominated by the Board of Directors to fill the
directorships currently held by Mr. Collins and Mr. Diggs. If at any time such
shareholders own, on a fully diluted basis, fewer than 50% but more than 33% of
the number of shares of Common Stock issued to them in connection with the
Merger and the Share Acquisition (representing approximately 11% of the total
number of shares outstanding, on a fully diluted basis, upon consummation of the
Merger and the Share Acquisition), they will be entitled to designate one such
nominee. If such shareholders own fewer than 33% of the number of shares of
Common Stock issued to them in the Merger and the Share Acquisition, they will
have no further right to designate any nominee.
So long as the New Scotsman Shareholders are entitled to designate at least
one nominee to the Board of Directors, (i) the Company has agreed that, subject
to the right of the holders of its preferred stock to elect directors under
certain circumstances, it will not increase the number of directors to more than
eight directors, and (ii) subject to certain limited exceptions, the former
shareholders of DFC and WAL who were parties to the Merger Agreement and the
Share Acquisition Agreement, dated as of January 11, 1994, have agreed to vote,
to cause any affiliates or associates controlled by them to vote, and to use
reasonable efforts to cause any other affiliates or associates to vote, all
shares of capital stock of the Company owned by them in favor of all of the
nominees to the Board of Directors recommended by the Board of Directors.
4
<PAGE> 9
The right of the New Scotsman Shareholders to designate one or more
nominees to the Company's Board of Directors will terminate on January 11, 2004
unless such obligation is extended by written agreement among the Company and
the New Scotsman Shareholders after January 11, 2002 but before the termination
date. Upon termination of the right of the New Scotsman Shareholders to
designate one or more nominees to the Board of Directors at a time when any
designee of the New Scotsman Shareholders is currently on the Board and upon the
request of the Company, (i) any such designee who is a New Scotsman Shareholder
shall promptly resign as a director, and (ii) the New Scotsman Shareholders will
use their best efforts to cause any designee or designees who are not New
Scotsman Shareholders to promptly resign.
Certain former shareholders of DFC and WAL have entered into a
Stockholders' Agreement, dated as of January 11, 1994 (the "Stockholders'
Agreement"), under which they have, among other things, allocated among
themselves the power to designate the persons or persons to be nominated as
directors. The Stockholders' Agreement provides that, so long as they hold
Common Stock or Series A $0.62 Cumulative Convertible Preferred Stock of the
Company, par value $1.00 per share (the "Series A Convertible Preferred Stock"),
Onex and certain of its affiliates shall have the right to designate (and
remove) one such director and EJJM, a New York general partnership of which Mr.
Diggs is the sole managing general partner ("EJJM"), shall have the right to
designate (and remove) the other such director. If the New Scotsman Shareholders
are entitled to designate only one nominee to the Board of Directors, whichever
of Onex and its affiliates or EJJM owns the higher percentage of Common Stock
(on a fully diluted basis) at the time of such designation will be entitled to
make such designation. In all other cases, the holders of a majority of the
Common Stock held by the New Scotsman Shareholders at the time that they are
entitled to designate one or more nominees to the Board of Directors shall make
such designation. Scotsman is not a party to the Stockholders' Agreement.
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of Common Stock and
Series A Convertible Preferred Stock for each director and nominee for director,
each executive officer named in the Summary Compensation Table elsewhere in this
Proxy Statement and all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
NO. OF SHARES NO. OF SHARES OF
OF COMMON STOCK SERIES A CONVERTIBLE
BENEFICIALLY PERCENT OF PREFERRED STOCK PERCENT OF
OWNED(1) CLASS(2) BENEFICIALLY OWNED CLASS(3)
----------------- ------------- -------------------- -----------
<S> <C> <C> <C> <C>
DIRECTORS AND
DIRECTOR NOMINEES
Donald C. Clark............... 39,553(4) * 0 0%
Timothy C. Collins............ 89,647(5) 1.08%(6) 65,787(7) 3.29%
Frank W. Considine............ 8,864 * 0 0%
Matthew O. Diggs, Jr.......... 570,128(8) 6.68%(9) 418,308(10) 20.92%
George D. Kennedy............. 9,154 * 0 0%
James J. O'Connor............. 7,865 * 0 0%
Richard C. Osborne............ 169,520(11) 2.03%(12) 0 0%
Robert G. Rettig.............. 8,865 * 0 0%
CERTAIN EXECUTIVE OFFICERS
David W. Campbell............. 31,453(11) * 0 0%
Donald D. Holmes.............. 68,399(11) * 0 0%
Randall C. Rossi.............. 18,466(11) * 0 0%
Emanuele Lanzani.............. 62,207(11) * 0 0%
Directors and Officers as a Group
(16 individuals, including all
those listed above)......... 1,220,892(11)(13) 13.65%(14) 544,607 27.23%
</TABLE>
5
<PAGE> 10
- - - ---------------
* Less than one percent of the outstanding Common Stock.
(1) Information relating to the number of shares of Common Stock beneficially
owned by directors, nominees for directors and executive officers is based
upon information furnished by, or on behalf of, each person to the Company
or reflected in the records of SGI's Tax Reduction Investment Plan ("TRIP")
or the Company's Long-Term Executive Incentive Compensation Plan.
Information relating to shares held in the TRIP has been furnished as of
December 31, 1993, the latest date for which such information is available.
Information relating to the number of shares of Common Stock and Series A
Convertible Preferred Stock beneficially owned by Mr. Collins, Mr. Diggs
and one former officer of Delfield has been furnished as of April 29, 1994,
the effective date of the Merger and the date on which each such person
became a director or executive officer of the Company, and has been
furnished for all other directors, nominees for directors and executive
officers as of February 15, 1994. Since the Record Date has been set at
April 19, 1994, the holders of shares issued in the Merger on April 29,
1994 are not entitled to vote those shares at the 1994 Annual Meeting.
Except as indicated otherwise in the notes to this table, each person named
in the table has sole voting and investment power over the number of shares
of Common Stock and Series A Convertible Preferred Stock listed opposite
his name.
(2) Unless otherwise indicated in these notes, percentages are based upon a
total of 8,213,421 issued and outstanding shares of Common Stock as of
April 29, 1994, the effective date of the Merger, including 1,199,992
shares of Common Stock issued in the Merger.
(3) Based upon a total of 1,999,992 shares of Series A Convertible Preferred
Stock issued in the Merger.
(4) Includes 5,789 shares with respect to which Mr. Clark has shared investment
but no voting power.
(5) Includes 39,472 shares of Common Stock and 50,175 shares of Common Stock
issuable upon the conversion of 65,787 shares of Series A Convertible
Preferred Stock issued to Mr. Collins in the Merger, with respect to which
Mr. Collins has sole investment power and shared voting power, pursuant to
the Onex Proxy described under "Security Ownership of Certain Beneficial
Owners." Does not include any shares of Common Stock beneficially owned by
Onex or its affiliates.
(6) On a partially diluted basis, assuming only the conversion of those shares
of Series A Convertible Preferred Stock held by Mr. Collins.
(7) Consists of those shares of Series A Convertible Preferred Stock issued in
the Merger with respect to which Mr. Collins has sole investment power and
shared voting power, pursuant to the Onex Proxy described under "Security
Ownership of Certain Beneficial Owners." Does not include any shares of
Series A Convertible Preferred Stock beneficially owned by Onex or its
affiliates.
(8) Includes 250,985 shares of Common Stock and 319,043 shares of Common Stock
issuable upon the conversion of 418,308 shares of Series A Convertible
Preferred Stock issued in the Merger to EJJM, with respect to which Mr.
Diggs has sole investment power and shared voting power, pursuant to the
Onex Proxy described under "Security Ownership of Certain Beneficial
Owners," 70 shares of Common Stock owned by Mr. Diggs prior to the Merger,
and 30 shares of Common Stock owned by Mr. Diggs' son, Matthew O. Diggs
III. Mr. Diggs disclaims beneficial ownership of the 30 shares owned by his
son.
(9) On a partially diluted basis, assuming only the conversion of those shares
of Series A Convertible Preferred Stock held by Mr. Diggs.
(10) Consists of those shares of Series A Convertible Preferred Stock issued in
the Merger to EJJM with respect to which Mr. Diggs has sole investment
power and shared voting power, pursuant to the Onex Proxy described under
"Security Ownership of Certain Beneficial Owners."
(11) Includes shares issuable pursuant to stock options exercisable within 60
days after February 15, 1994 as follows: Mr. Osborne, 114,998; Mr.
Campbell, 27,886; Mr. Holmes, 49,158; Mr. Rossi, 16,800; Mr. Lanzani,
62,207; all directors and officers as a group, 314,836. Also includes
shares held for the account of executive officers under the TRIP with
respect to which each such officer has sole voting but no investment power
as follows: Mr. Osborne, 5,023; Mr. Campbell, 2,061; Mr. Holmes, 7,902; Mr.
Rossi, 1,666; all executive officers as a group, 17,455.
(12) On a partially diluted basis, assuming only the exercise of stock options
held by Mr. Osborne which are exercisable within 60 days. As of the Record
Date, Mr. Osborne beneficially owned, on such a partially diluted basis,
2.38% of the outstanding shares of Common Stock.
(13) Includes 415,370 shares of Common Stock issuable upon the conversion of
544,607 shares of Series A Convertible Preferred Stock issued in the Merger
to Mr. Collins, Mr. Diggs, and an officer of Delfield who became an
executive officer of the Company as of April 29, 1994. Such executive
officer has sole investment power and shared voting power, pursuant to the
Onex Proxy described under "Security Ownership of Certain Beneficial
Owners," with respect to 36,307 shares of Common Stock and 60,512 shares of
Series A Convertible Preferred Stock issued to him in the Merger.
(14) On a partially diluted basis, assuming only the exercise of the 314,836
stock options referred to in note 11 above and the conversion of the
544,607 shares of Series A Convertible Preferred Stock referred to in note
13. As of the Record Date, all directors and officers as a group
beneficially owned, on such a partially diluted basis, 6.53% of the
outstanding shares of Common Stock.
6
<PAGE> 11
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company held eight meetings during 1993. The
standing committees of the Board of Directors held a total of six meetings. The
average attendance at the aggregate of the total number of meetings of the Board
of Directors and the total number of committee meetings was 95%. Each of the
directors of the Company attended at least 83% of the aggregate total number of
meetings of the Board of Directors and meetings of any committee of the Board of
Directors on which that director served. The Board of Directors has standing
Audit, Compensation and Executive Committees. It does not have a standing
nominating committee.
The Audit Committee is composed of Frank W. Considine and Robert G. Rettig.
Mr. Considine is the Chairman of the Committee. The Audit Committee's duties and
functions include reviewing the internal accounting controls and audit functions
of the Company and its subsidiaries, the Company's accounting principles,
policies and practices and financial reporting, the scope of the audits
conducted by the Company's independent public accountants and internal auditors,
and the annual financial statements of the Company and its subsidiaries. The
Audit Committee is responsible for informing the Chief Executive Officer of the
Company and the Board of Directors of any material concerns that may arise in
connection with its review. The Audit Committee also recommends to the Board of
Directors the selection of the Company's principal independent public
accountants and reviews their professional services to determine if their
independence may have been impaired by the performance of any non-audit
services. The Audit Committee met twice during 1993.
The Compensation Committee is composed of George D. Kennedy, Donald C.
Clark and James J. O'Connor. Mr. Kennedy is the Chairman of the Committee. The
Compensation Committee is responsible for determining the salaries, salary
ranges and bonuses of the five highest paid executive officers of the Company
and its subsidiaries. It also recommends to the Board of Directors the adoption
of, or any substantive amendments to, any pension, profit-sharing, employee
benefit or long-term executive compensation plan or program in which senior
management participates. The Compensation Committee is also responsible for the
granting of stock options, stock appreciation rights and other awards under any
long-term executive incentive compensation plan or program of the Company. The
Compensation Committee met four times during 1993.
DIRECTORS' FEES AND COMPENSATION
Non-management directors of the Company receive for their services (1) an
annual retainer fee paid in shares of Common Stock with a total market value of
approximately $16,000, determined as of the day immediately preceding the date
of the annual meeting of the shareholders of the Company, and (2) a fee of $900
for each Board of Directors and committee meeting attended. In addition, any
non-management director who serves as chairman of the Audit, Compensation or
Executive Committees of the Board of Directors receives as compensation for
those services additional shares of Common Stock with a total market value of
approximately $2,000 determined as of the same valuation date used in
determining the number of shares to be granted to the directors as annual
retainer fees. The Company transfers shares of treasury stock to the directors
in payment of such fees at the time of, or shortly after, the first meeting of
the Board of Directors following the annual meeting of the shareholders of the
Company.
7
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(2) LONG-TERM COMPENSATION
---------------------------- -------------------------------------------------
OTHER ALL
PRINCIPAL ANNUAL OTHER
NAME POSITION(1) YEAR SALARY BONUS COMP. AWARDS PAYOUTS COMP.(3)
- - - -------------- ---------------- ----- ------ ------ ------- ----------------------- -------- --------
SECURITIES
RESTRICTED UNDERLYING
STOCK STOCK LTIP
AWARDS OPTIONS(#) PAYOUTS
------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R. Osborne Chairman of the 1993 $301,250 $182,500 -- $0 25,800 $0 $13,387
Board, CEO & 1992 $286,250 $145,000 -- $0 27,700 $0 $12,638
President 1991 $268,750 $135,000 -- $0 39,270 $0 $11,964
E. Lanzani Exec.VP; Mgng. 1993 $150,236 $ 47,688 -- $0 12,700 $0 $ 0
Dir., Frimont 1992 $174,314 $ 19,976 -- $0 13,500 $0 $ 0
S.p.A. 1991 $171,381 $ 26,561 -- $0 19,360 $0 $ 0
& Castel MAC S.p.A.
D. Holmes VP Finance & 1993 $145,667 $ 60,597 -- $0 8,900 $0 $ 5,626
Secretary 1992 $137,667 $ 41,851 -- $0 9,500 $0 $ 5,313
1991 $130,458 $ 39,137 -- $0 13,530 $0 $ 4,926
D. Campbell VP; President, 1993 $122,154 $ 14,170 -- $0 5,400 $0 $ 4,497
Booth, Inc. 1992 $115,992 $ 30,276 -- $0 5,100 $0 $ 4,364
1991 $114,001 $ 54,720 -- $0 7,370 $0 $ 4,031
R. Rossi VP -- Sales & 1993 $106,800 $ 50,196 -- $0 2,800 $0 $ 4,291
Marketing, Scotsman 1992 $101,533 $ 36,247 -- $0 2,900 $0 $ 3,752
Ice Systems 1991 $ 94,834 $ 23,519 -- $0 4,200 $0 $ 3,250
</TABLE>
(1) Each executive officer held the same position with the Company in each of
the years indicated.
(2) Includes amounts earned in the fiscal year, whether or not deferred.
(3) Amounts in this column consist of Company-matching contributions to the TRIP
and the Supplemental Tax Reduction Plan.
OPTIONS AND STOCK APPRECIATION RIGHTS
The following tables summarize option grants to and exercises by the
executive officers named in the Summary Compensation Table above during the 1993
fiscal year and the value of the options held by such persons at the end of the
1993 fiscal year. No stock appreciation rights have been granted to date by the
Company.
8
<PAGE> 13
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
<TABLE>
<CAPTION>
- - - ------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS IN 1993 POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR 10-YEAR OPTION TERM(1)
- - - -------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED EMPLOYEES(2) PRICE(3) DATE 0% 5% 10%
- - - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Osborne 25,800 33.40% $11.1875 02/12/03 $0 $ 181,439 $ 460,079
- - - -------------------------------------------------------------------------------------------------------------------------------
E. Lanzani 12,700 16.44% $11.1875 02/12/03 $0 $ 89,313 $ 226,473
- - - -------------------------------------------------------------------------------------------------------------------------------
D. Holmes 8,900 11.52% $11.1875 02/12/03 $0 $ 62,589 $ 158,709
- - - -------------------------------------------------------------------------------------------------------------------------------
D. Campbell 5,400 6.99% $11.1875 02/12/03 $0 $ 37,976 $ 96,296
- - - -------------------------------------------------------------------------------------------------------------------------------
R. Rossi 2,800 3.62% $11.1875 02/12/03 $0 $ 19,691 $ 49,931
- - - -------------------------------------------------------------------------------------------------------------------------------
All Shareholders(4) $0 $49,285,546 $124,974,689
- - - -------------------------------------------------------------------------------------------------------------------------------
Named Executive Officers'
Gains as a % of all
Shareholder Gains 0.793% 0.793%
- - - -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company is unaware of any formula which provides an accurate depiction
of the value of a stock option as of the date of grant.
(2) Based on 77,250 options granted to all employees.
(3) Fair market value (the average of the high and low prices for the Common
Stock as reported in the Wall Street Journal) on February 11, 1993, the date
of grant.
(4) Total dollar gains based on the assumed annual rates of appreciation shown
here and calculated on 7,008,254 outstanding shares -- the number of shares
outstanding on December 31, 1993.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- - - ---------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF SECURITIES TOTAL VALUE OF UNEXERCISED,
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS HELD
OPTIONS HELD AT FISCAL YEAR END AT FISCAL YEAR END(1)
- - - ---------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Osborne 0 $0 83,598 74,570 $ 430,611 $ 378,553
- - - ---------------------------------------------------------------------------------------------------------------------------
E. Lanzani 0 $0 47,007 36,460 $ 234,555 $ 184,826
- - - ---------------------------------------------------------------------------------------------------------------------------
D. Holmes 0 $0 38,258 25,830 $ 184,227 $ 131,266
- - - ---------------------------------------------------------------------------------------------------------------------------
D. Campbell 0 $0 21,786 14,670 $ 95,373 $ 73,559
- - - ---------------------------------------------------------------------------------------------------------------------------
R. Rossi 0 $0 13,000 8,500 $ 52,856 $ 43,788
- - - ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the fair market value of the Common Stock on December 31, 1993 of
$14.25 (the average of the high and low prices for the Common Stock as
reported in the Wall Street Journal).
PENSION PLAN
The Salaried Pension Plan of SGI is a non-contributory, defined benefit
plan for certain salaried employees of SGI and its subsidiaries. The amount of a
participant's pension benefits depends primarily on years of employment, age at
retirement, and average annual compensation (salary plus bonus, whether paid in
cash or stock) for the five successive highest-paid years out of the employee's
last ten years of employment, adjusted for wages subject to Social Security
taxes. Participants become fully vested in their accrued pension benefits after
five years of service. Payment of vested pension benefits normally begins at age
65, but an early retirement benefit at reduced levels may be paid if a
participant is at least 55 years of age with 10 years of
9
<PAGE> 14
service. The following table illustrates the amount of the plan's annual pension
benefits for eligible employees retiring at age 65 with the following
remuneration and numbers of credited years of service.
PENSION PLAN
<TABLE>
<CAPTION>
- - - --------------------------------------------------------------------------
YEARS OF SERVICE
- - - --------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- - - --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$100,000 $18,433 $24,577 $30,721 $ 36,866 $ 43,010
$175,000 $32,036 $42,729 $53,421 $ 64,114 $ 74,806
$250,000 $45,692 $61,255 $76,818 $ 92,382 $107,945
$325,000 $49,759 $66,775 $83,790 $100,806 $117,822
$400,000 $49,759 $66,775 $83,790 $100,806 $117,822
$475,000 $49,759 $66,775 $83,790 $100,806 $117,822
$550,000 $49,759 $66,775 $83,790 $100,806 $117,822
</TABLE>
The benefits set forth in the above table are computed on a straight-line
annuity basis. Offsets for Social Security payments and other offsets provided
for in the plan are not reflected in the table. For purposes of determining the
benefit under the Salaried Pension Plan for Messrs. Osborne, Campbell, and
Holmes, credited years of service and the amount of covered compensation (salary
plus bonuses paid in cash or stock) for 1993 are as follows: Mr. Osborne, 15
years and $446,250; Mr. Campbell, 7 years and $152,430; Mr. Holmes, 19 years and
$187,518; Mr. Rossi, 5 years and $143,047. Covered compensation, in each case,
is equal to the salary reported for such officer in the Summary Compensation
Table for 1993 plus the bonus reported for 1992 since bonuses earned in a given
fiscal year are paid the following fiscal year. In calculating credited years of
service under the Salaried Pension Plan, years of service with Household or its
former subsidiaries prior to the spin-off of the Company by Household in 1989
have been taken into account.
Mr. Lanzani is not covered by SGI's Salaried Pension Plan. Mr. Lanzani
does, however, have an agreement with Frimont S.p.A. ("Frimont"), which provides
that he will receive monthly payments beginning at the later of July 1, 1999 or
termination of his employment and ending at his death. These monthly payments
will be equal to .0133 times his average monthly compensation times his credited
service. For purposes of the agreement, "average monthly compensation" means his
regular salary plus short-term bonuses received during the five-year period
prior to termination of employment divided by 60 and "credited service" means
the number of years of continuous service from November 7, 1967 to the date of
termination of employment. For purposes of this plan, Mr. Lanzani is currently
credited with 26 years of service, and he received a total of $170,212 in salary
and bonuses in 1993. If Mr. Lanzani's employment is terminated before he reaches
age 65, then at age 65 he will begin receiving such monthly payments.
EXECUTIVE COMPENSATION AND SEVERANCE AGREEMENTS, INCLUDING CHANGE OF CONTROL
PROVISIONS
Mr. Osborne has entered into an employment agreement with SGI under which
he is currently entitled to an annual base salary of $305,000, subject to annual
review, and to benefits under SGI's benefit plans. The agreement also
establishes an annual target bonus under the Company's Executive Incentive
Compensation Program equal to 50% of his annual salary. The agreement provides
for certain continued compensation in the event of (i) termination of employment
by SGI or its subsidiaries prior to age 65 for any reason other than willful and
deliberate misconduct or disability for a specified period that prevents him
from reasonably performing his duties; or (ii) Mr. Osborne's resignation from
his position prior to age 65 because of a reassignment to a position of lesser
rank or status, reduction of salary, benefits or target bonus, or reassignment
to a geographic area more than 50 miles from his residence as of the date the
agreement was executed.
In the event Mr. Osborne's employment is terminated or he resigns for any
of the reasons described in the preceding paragraph, he will be entitled for the
next 18 months to (i) continued salary at the rate at which last received; (ii)
continued target bonuses (prorated for such 18-month period) and (iii)
continuation of pension accrual, savings plan contributions, deferred
compensation (if any) and medical and life insurance benefits or, in each case
under (iii), the economic equivalent thereof. Benefit plan accruals under (iii)
that would be
10
<PAGE> 15
payable to Mr. Osborne on a deferred basis, were he to continue his employment,
may be deferred or payable in an actuarially equivalent lump sum at the end of
the 18-month period. Mr. Osborne's employment agreement further provides that
SGI will reimburse Mr. Osborne for any excise tax due upon any of the benefits
described in this paragraph and for any additional federal income and excise
taxes due as the result of such reimbursement.
Mr. Osborne and SGI have also entered into a separate, executive severance
agreement (the "Severance Agreement") under which Mr. Osborne will be entitled
to receive a single cash payment equal to the sum of (i) three times the amount
of his highest annual base salary in effect during the immediately preceding
12-month period and (ii) three times the amount of the greater of his then
current target bonus under the Program or the average target bonus paid or
payable to him under the Program in the last five fiscal years, if at any time
before he reaches age 65, Mr. Osborne's employment with SGI is terminated or he
resigns for "good reason" following a "change of control" of the Company. Under
such circumstances, Mr. Osborne will also become fully vested in any accrued
benefits in which he is not then fully vested under SGI's Salaried Pension Plan
and in any employer matching contributions in which he is not then fully vested
under SGI's Tax Reduction Investment Plan ("TRIP") or Supplemental Tax Reduction
Plan ("Supplemental TRIP"). SGI will be obligated to pay Mr. Osborne, within 30
days of his termination or resignation, a lump sum equal to the actuarial
equivalent of such accrued benefits under the Salaried Pension Plan and the
amount of such employer matching contributions. SGI will also be obligated to
keep in full force and effect, for a period of three years, all medical and
insurance policies provided to Mr. Osborne by SGI at the same level of coverage
and upon the same terms and conditions in effect as of the date of termination
of his employment. Any payments made and benefits provided to Mr. Osborne under
the Severance Agreement will be in lieu of those payments and benefits to which
Mr. Osborne would otherwise be entitled under his employment agreement. The
Severance Agreement further provides that SGI will reimburse Mr. Osborne for any
excise tax due upon any payment made as a result of a change of control and for
any additional federal income and excise taxes due as the result of such
reimbursement.
For purposes of the Severance Agreement, a "change of control" will be
deemed to have occurred if any of the following events occurs:
(i) subject to certain specified exceptions, any individual, entity,
or group, including any "person" (as defined in Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) acquires beneficial ownership of 20% or more of the Common Stock or
of the combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of directors (the
"Voting Securities");
(ii) persons who were directors of the Company as of the effective
date of the amendment or persons nominated by those directors to succeed to
their positions or their successors (the "Incumbent Board") shall cease to
constitute a majority of the board of directors of the Company;
(iii) the shareholders shall approve a reorganization, merger or
consolidation of the Company, unless, following such reorganization, merger
or consolidation, (A) at least 60% of the Common Stock and 60% of the
Voting Securities are owned by all or substantially all of the same persons
who were beneficial owners of such securities immediately prior to such
reorganization, consolidation or merger, in substantially the same
proportions relative to one another, (B) no person beneficially owns 20% or
more of the common stock or voting securities of the surviving corporation,
other than specified entities controlled by the Company or a person who had
beneficial ownership of 20% or more of the Common Stock or the Voting
Securities immediately prior to the reorganization, consolidation or
merger, and (C) at least a majority of the members of the board of
directors of the surviving corporation were members of the Incumbent Board;
or
(iv) the shareholders approve a plan of liquidation or dissolution of
the Company or the sale or disposition of all or substantially all of the
assets of the Company to another corporation other than a corporation which
meets the following requirements: (A) at least 60% of the common stock and
60% of the voting securities of the corporation are owned by all or
substantially all of the same persons who were beneficial owners of the
Common Stock and the Voting Securities immediately prior to such sale or
11
<PAGE> 16
disposition, in substantially the same proportions relative to one another,
(B) no person beneficially owns 20% or more of the common stock or voting
securities of the corporation, other than specified entities controlled by
the Company or a person who had beneficial ownership of 20% or more of the
Common Stock or the Voting Securities immediately prior to such sale or
disposition, and (C) at least a majority of the members of the board of
directors of the corporation were members of the Incumbent Board.
For purposes of the Severance Agreement, however, a "change of control" will not
be deemed to have occurred as a result of the acquisition by the Company of DFC
and Delfield, and WAL and Whitlenge, or the approval by the shareholders of the
Company of the issuance of securities of the Company pursuant to the agreements
governing such acquisitions.
Mr. Osborne will be deemed to have had "good reason" to terminate his
employment with SGI following a change of control if, among other things,
without his written consent, he is assigned to duties inconsistent with his
duties or responsibilities with SGI immediately prior to the change of control,
his salary or benefits are reduced, he is reassigned to any location other than
the facility where he is located at the time of the change of control or,
following a merger or consolidation in which the Company is not the surviving
corporation or the transfer of all or substantially all of the assets of the
Company to another corporation, SGI fails to obtain from such corporation an
agreement to assume all of SGI's obligations under the Severance Agreement.
In addition to Mr. Osborne, Mr. Campbell, Mr. Holmes, Mr. Lanzani and Mr.
Rossi each have employment agreements with SGI. Under their employment
agreements with SGI, Mr. Campbell, Mr. Holmes, Mr. Lanzani and Mr. Rossi are
currently entitled to annual base salaries of $127,000, $152,000, 255,000,000
Lire (approximately $148,900 as of December 31, 1993) and $119,100,
respectively, subject to annual review. The employment agreements of Mr.
Campbell, Mr. Holmes and Mr. Lanzani also establish for each an annual target
bonus equal to 30% of his annual salary. Mr. Rossi is entitled to an annual
target bonus equal to 25% of his annual salary. The remaining provisions of Mr.
Campbell's, Mr. Holmes' and Mr. Lanzani's employment agreements are identical to
those of Mr. Osborne's employment agreement except that (i) the provisions
relating to continuation of compensation apply for a period of 12, rather than
18 months, (ii) there is no provision in the agreements for reimbursement of
excise taxes, and (iii) each agreement will remain in effect, not until the
executive officer who is a party to the agreement reaches age 65, but only until
June 20, 1995. Thereafter, the term of each agreement will be automatically
extended each year for one additional year, unless the Compensation Committee
delivers written notice of termination three months prior to the end of such
term or extended term. The remaining provisions of Mr. Rossi's employment
agreement are identical to the provisions of Mr. Campbell's, Mr. Holmes' and Mr.
Lanzani's employment agreements except that the term of Mr. Rossi's employment
agreement extends only to July 20, 1994, with no provision for automatic annual
extensions of the term.
Mr. Holmes and Mr. Lanzani have also entered into executive severance
agreements with SGI and Mr. Campbell has entered into an executive severance
agreement with SGI's wholly-owned subsidiary, Booth, Inc. ("Booth"). The
provisions of those agreements are identical to the provisions of Mr. Osborne's
Severance Agreement with SGI except that each of these officers will be entitled
to receive a single cash payment equal to the sum of (i) two (rather than three)
times the amount of his highest annual base salary in effect during the
immediately preceding twelve-month period and (ii) two (rather than three) times
the amount of the greater of his then current target bonus or the average target
bonus paid or payable to him in the preceding five fiscal years, if at any time
before he reaches age 65, such officer's employment is terminated or he resigns
for "good reason" following a "change of control" of the Company. Unlike Mr.
Osborne's Severance Agreement, such agreements may be terminated prior to the
occurrence of a change of control by SGI or Booth, as applicable, upon six
months prior notice to the executive who is a party to the agreement, provided
that, to the knowledge of the board of directors of SGI or Booth, as applicable,
no person has taken, at the time of such notice, steps reasonably calculated to
effect a change of control.
12
<PAGE> 17
OTHER AGREEMENTS
Mr. Lanzani has an agreement with Frimont which provides that, so long as
he is employed in his present position at Frimont, he will receive 2.4% of the
annual net operating income of Frimont. This agreement replaced his prior
ownership of 10% of the shares of Frimont. The agreement provides that if Mr.
Lanzani resigns from his position or is terminated without cause before May 31,
1996, he thereafter may elect to receive a lump sum payment, in lieu of payments
under the agreement, equal to the present value of the projected annual payments
under the agreement which he would have received had he remained employed by
Frimont until June 30, 1996. The projection will be based on the average net
operating income growth of Frimont for the prior five years. Since the payments
made to Mr. Lanzani pursuant to this agreement replaced his prior ownership of
shares of Frimont stock, the Company does not consider these payments to be cash
compensation for services rendered and, accordingly, such payments have not been
included in the summary compensation table set forth above.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
developing executive compensation philosophies, determining the executive
compensation program components and assuring that the program is administered
consistent with the program's philosophies and objectives. All Committee members
are outside directors of the Company.
The Committee believes that since executive officers are in positions to
make substantial contributions to the long-term success of the Company, the
executive compensation program should be structured to provide meaningful
incentives to increase shareholder value. On an annual basis, the Committee
reviews the actual results of each executive officer's performance against the
objectives established by, and for, such executive for the preceding year. The
Committee also reviews the program components and plan for each executive
officer for the upcoming year and relies upon the advice of independent
compensation consultants regarding the competitiveness of the programs. The
Committee approves each plan with such modifications as it deems appropriate.
During the year, the Committee reviews individual salaries in conjunction with
criteria set forth for base salaries listed below, taking into account any
significant event that could affect program objectives and design.
The Company's executive officer compensation program is comprised of a base
salary, an annual cash incentive compensation program and a long-term incentive
compensation plan in the form of stock options, stock appreciation rights,
restricted stock and restricted stock rights. In addition, executives are
eligible for other benefits which are generally available to employees of the
Company, including insurance protection, retirement plans and vacations and
holidays.
Base Salary
Base salary ranges for executives are set at the 50th percentile of the
national marketplace for manufacturing companies with sales in the range of
$100-$300 million. In determining salaries, the Committee takes into account
salary rates compared with the marketplace, the performance of individuals and
other factors deemed relevant by the Committee.
Mr. Osborne's 1993 base salary increase was similar in size to increases
reported in marketplace surveys which indicated that the average expected
increase in chief executive officers' base salaries was in the range of 5% in
1993. The resultant base salary for Mr. Osborne places him within 6% of the
median of chief executive officers in comparably sized manufacturing companies.
Executive Incentive Compensation Program
The Executive Incentive Compensation Program is designed to provide
increased incentives to key executives to meet or exceed aggressive financial
targets and to accomplish significant projects contributing to the Company's
success.
13
<PAGE> 18
The targets for awards under this plan are set at the 50th percentile of
the national marketplace. Incentives earned are based primarily on performance
compared with financial targets established for the Company and/or a subsidiary
or division of the Company at levels approved by the Committee. The financial
targets include targets for earnings and return on investment or return on
equity. A portion of earned awards are based on discretionary factors to reflect
individual contributions to the Company's success each year.
In a given fiscal year, Mr. Osborne may earn incentive compensation which
ranges from 0% to 75% of his annual base salary, with a target payout of 50% of
annual base salary. For 1993, Mr. Osborne received a bonus of 60.6% of his
annual base salary. In reviewing Mr. Osborne's incentive amount, the Committee
considered economic conditions, the performance of the continuing operations of
the Company and successes in restructuring the Company to promote the growth of
the business. Although the economic climate remains less than favorable in
Europe where the Company has significant operations, overall earnings per share
increased significantly from 1992 to 1993. During 1993, the operations of Simag
(an ice machine manufacturing company which was acquired by Frimont in 1993)
were integrated into the operations of Frimont, and the Company began the
process of integrating the operations of Booth and Booth's Crystal Tips division
(which was acquired by Booth in 1992). In 1993, the Company also negotiated
agreements to purchase Delfield and Whitlenge. The acquisitions were consummated
in April of 1994. The Committee believes that these significant changes will
favorably impact the Company's future performance.
Long-Term Executive Incentive Compensation Plan
The Committee believes that long-term incentives should provide significant
portions of total compensation for executives while encouraging long-term stock
ownership. The objectives of the Scotsman Long-Term Executive Incentive
Compensation Plan ("the Long-Term Plan") are to align executive and shareholder
long-term interests by creating a strong and direct link between executive pay
and shareholder return. The Committee endorses the value of stock ownership as
an incentive for Company executives to increase shareholder value through
improved executive performance.
The Long-Term Plan meets these objectives through permitting the Company to
make annual grants of non-qualified stock options to participants who can make
significant contributions to the long-term success of the Company. The Long-Term
Plan also permits the Company to reward executives through other forms of stock
grants such as restricted stock, restricted stock rights and stock appreciation
rights.
The Committee has established programs for each executive officer under the
Long-Term Plan which provide for stock option grants as a portion of each
participant's salary grade midpoint. The stock option price is equal to the fair
market value of the Common Stock on the date of the grant. Value to the
executive is dependent upon an increase in the share price above the stock
option price. The program established for Mr. Osborne under the Long-Term Plan
has a target equal to 100% of his salary grade midpoint. In 1993, the Committee
approved a stock option grant equal to 100% of his 1993 salary grade midpoint.
The Committee believes that an appropriate portion of Mr. Osborne's total
compensation is tied directly to shareholder value.
Benefit Programs
The Company provides its executive officers with insurance protection plans
including medical, dental, life, accidental death and dismemberment, travel and
accident and disability insurance, retirement programs and vacation and holiday
plans. These plans are generally available to Company employees.
George D. Kennedy, Committee Chairman
Donald C. Clark, Committee Member
James J. O'Connor, Committee Member
14
<PAGE> 19
COMMON STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Common Stock for the last five fiscal years (see note below) with the cumulative
total return of the Russell 2000 Index and the S&P Diversified Manufacturing
Index over the same period. Most of the Company's direct competitors are private
companies or small segments of larger companies and do not permit construction
of a realistic peer group. Therefore, the S&P Diversified Manufacturing Index is
used in lieu of a peer group for this comparison.
COMPARISON OF FIVE YEAR* CUMULATIVE TOTAL RETURN**
SCOTSMAN INDUSTRIES, RUSSELL 2000,
AND S&P DIVERSIFIED MANUFACTURING
<TABLE>
<CAPTION>
S&P DIVERSI-
MEASUREMENT PERIOD SCOTSMAN IN- FIED MANU-
(FISCAL YEAR COVERED) DUSTRIES FACTURING RUSSELL 2000
<S> <C> <C> <C>
4/3/89 100.00 100.00 100.00
12/31/89 81.59 114.67 107.93
12/31/90 55.46 113.67 86.88
12/31/91 66.41 139.31 126.89
12/31/92 77.53 150.98 150.27
12/31/93 117.87 183.26 178.68
</TABLE>
Assumes $100 invested on March 31, 1989 in Scotsman Industries' Common Stock,
Russell 2000, and S&P Diversified Manufacturing Group.
* Scotsman Industries' Common Stock began trading on April 3, 1989.
** Total return assumes reinvestment of dividends on a quarterly basis.
15
<PAGE> 20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following persons are known to the Company to be the beneficial owners
of more than 5% of (i) the outstanding Common Stock as of the most recent date
prior to the preparation of this Proxy Statement for which information is
available to the Company, and (ii) the outstanding Series A Convertible
Preferred Stock as of April 29, 1994. Since the Record Date has been set at
April 19, 1994, the holders of the shares issued in the Merger on April 29, 1994
are not entitled to vote those shares at the 1994 Annual Meeting.
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES OF PERCENT OF
NUMBER OF SERIES A SERIES A
SHARES OF CONVERTIBLE CONVERTIBLE
COMMON STOCK PERCENT OF PREFERRED STOCK PREFERRED STOCK
BENEFICIALLY CLASS OF COMMON BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED STOCK OWNED OWNED(1)
- - - -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mario J. Gabelli.................... 846,100(2) 10.30%(3) 0 0%
Gabelli Funds, Inc.
GAMCO Investors, Inc.
Gabelli & Company, Inc.
655 Third Avenue
New York, New York 10017
- - - -------------------------------------------------------------------------------------------------------------
Brinson Partners, Inc............... 433,500(4) 5.28%(3) 0 0%
Brinson Trust Company
Brinson Holdings, Inc.
209 South LaSalle Street
Chicago, Illinois 60604-1295
- - - -------------------------------------------------------------------------------------------------------------
Neuberger & Berman.................. 561,340(5) 6.83%(3) 0 0%
605 Third Avenue
New York, New York 10058
- - - -------------------------------------------------------------------------------------------------------------
Onex Corporation.................... 2,725,385(6) 27.98%(7) 1,999,992(8) 100%
Onex DHC LCC (as a result of (as a result of (as a result of (as a result of
Onex U.S. Investments Inc. Onex Proxy) Onex Proxy) Onex Proxy) Onex Proxy)
421 Leader Street
Marion, Ohio 43302 1,285,525 14.39% 943,366 47.17%
(without Onex (without Onex (without Onex (without Onex
Proxy) Proxy) Proxy) Proxy)
- - - -------------------------------------------------------------------------------------------------------------
Pacific Mutual Life Insurance 507,442(9) 5.97%(10) 372,380(11) 18.62%
Company.............................
700 Newport Center Drive
Newport Beach, California 92660
- - - -------------------------------------------------------------------------------------------------------------
Matthew O. Diggs, Jr. .............. 570,128(12) 6.68%(13) 418,308(14) 20.92%
EJJM
c/o The Diggs Group
1630 Kettering Tower
Dayton, Ohio 45423
- - - -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based upon a total of 1,999,992 shares of Series A Convertible Preferred
Stock issued in the Merger and outstanding on April 29, 1994.
(2) Based on information provided in a Schedule 13D, as amended through
Amendment No. 19 thereto, dated August 27, 1993, filed with the Securities
Exchange Commission ("SEC") by various entities which, according to the
filing, Mario J. Gabelli directly or indirectly controls and for which he
acts as chief investment officer. According to the filing, (a) GAMCO
Investors, Inc. ("GAMCO") is the beneficial owner of 812,600 shares of
Common Stock, (b) Gabelli & Company, Inc. is the beneficial owner of 13,500
shares, and (c) Gabelli Funds, Inc. ("GFI") is the beneficial owner of
20,000 shares. According to the filing, Mr. Gabelli is deemed to have
beneficial ownership of the shares beneficially
16
<PAGE> 21
owned by each of the foregoing persons, and GFI is deemed to have
beneficial ownership of the shares beneficially owned by each of the
foregoing persons other than Mr. Gabelli. The filing also states that
GAMCO, Gabelli & Company, Inc., GFI and Mr. Gabelli each have sole voting
and investment power over the shares which they are reported as
beneficially owning or as being deemed beneficially to own except that (a)
GAMCO lacks voting power over 57,700 shares, (b) under certain
circumstances, GFI will share with certain individual funds voting power
with respect to 20,000 shares held by one or more of those funds, (c)
Gabelli & Company, Inc. shares with its clients voting and investment power
with respect to 13,500 shares purchased for the accounts of such clients,
and (d) the voting and investment power of Mr. Gabelli and GFI (with
respect to the shares beneficially owned by GAMCO and Gabelli & Company,
Inc.) is indirect.
(3) Based upon a total of 8,213,421 issued and outstanding shares of Common
Stock, as of April 29, 1994, including 1,199,992 shares of Common Stock
issued in the Merger.
(4) Based on information provided in a Schedule 13G, dated February 11, 1994,
filed with the SEC by Brinson Holdings, Inc. ("BHI"), Brinson Partners,
Inc. ("BPI"), a wholly-owned subsidiary of BHI, and Brinson Trust Company
("BTC"), a wholly-owned subsidiary of BPI. According to the filing, BPI has
sole voting and investment power over 205,900 shares of Common Stock, BTC
has sole voting and investment power over 227,600 shares of Common Stock
and BHI has indirect voting and investment power over the shares owned by
BPI and BTC solely through its ownership of BPI which, in turn, owns BTC.
(5) Based on information provided in a schedule 13G, dated January 31, 1994,
filed with the SEC by Neuberger & Berman. According to the filing,
Neuberger & Berman has shared investment power with respect to all 561,340
shares, sole voting power with respect to 111,800 shares and no voting
power with respect to the remaining shares. According to the filing, the
shares do not include 91,600 shares of Common Stock owned by partners of
Neuberger & Berman in their personal securities accounts as to which
Neuberger & Berman disclaims beneficial ownership.
(6) Based on information furnished by, or on behalf of, Onex DHC LLC ("Onex
DHC") and Onex U.S. Investments Corp. ("Onex U.S.") in connection with the
Merger and the Share Acquisition. Onex DHC and Onex U.S. are both
wholly-owned, indirect subsidiaries of Onex. The shares consist of (i)
1,285,525 shares (consisting of 566,020 shares of Common Stock and 719,505
shares of Common Stock issuable upon the conversion of 943,366 shares of
Series A Convertible Preferred Stock issued to Onex DHC in the Merger) with
respect to which Onex and Onex DHC have sole voting and investment power,
and (ii) 1,439,860 shares (consisting of 633,972 shares of Common Stock and
805,888 shares of Common Stock issuable upon the conversion of 1,056,626
shares of Series A Convertible Preferred Stock issued in the Merger to
former shareholders of DFC, other than Onex DHC) with respect to which
Onex, Onex DHC and Onex U.S. have no investment power but shared voting
power pursuant to an irrevocable proxy (the "Onex Proxy") granted to Onex
DHC, Onex U.S. and Onex under the Stockholders' Agreement. The Onex Proxy
includes the right to vote for the transaction of any and all business that
may come before an annual, general or special meeting of the Company's
shareholders, including the right to vote for the sale of all or any part
of the assets, the liquidation, or the dissolution of the Company. The Onex
Proxy will automatically terminate on January 10, 1999 or at such time that
Onex holds less than 30% of the number of shares of Common Stock (on a
fully diluted basis) initially acquired by it pursuant to the Merger. The
Onex Proxy will also terminate with respect to specific shares of Common
Stock upon the transfer of such shares to any person other than certain
specified types of affiliates or associates of the former DFC shareholders
which have granted the Onex Proxy. Timothy C. Collins, a director of the
Company, is the Managing Director of an affiliate of Onex. See also
"Agreement Governing the Appointment and Future Nomination of Certain
Directors."
(7) Based upon a total of 9,738,814 shares of Common Stock deemed to be
outstanding as of April 29, 1994, assuming the conversion of all of the
1,999,992 shares of Series A Convertible Preferred Stock beneficially owned
pursuant to the Onex Proxy. Assuming only the conversion of the 943,366
shares of Series A Convertible Preferred Stock issued to Onex DHC in the
Merger and therefore based upon a total of 8,932,926 shares of Common Stock
deemed to be outstanding as of April 29, 1994, on a partially diluted
basis, Onex and Onex DHC would beneficially own 14.39% of the Common Stock.
17
<PAGE> 22
(8) Based on information furnished by, or on behalf of, Onex DHC in connection
with the Merger. The shares consist of (i) 943,366 shares of Series A
Convertible Preferred Stock issued to Onex DHC in the Merger, with respect
to which Onex DHC has sole voting and investment power, and (ii) 1,056,626
shares of Series A Convertible Preferred Stock issued in the Merger to
former shareholders of DFC, other than Onex DHC, with respect to which
Onex, Onex DHC and Onex U.S. have no investment power but shared voting
power pursuant to the Onex Proxy.
(9) Based on information furnished by, or on behalf of, Pacific Mutual Life
Insurance Company ("Pacific Mutual") and PM Group Life Insurance Co., a
wholly-owned subsidiary of Pacific Mutual ("PM Group"), in connection with
the Merger. The shares consist of (i) 197,143 shares of Common Stock and
250,601 shares of Common Stock issuable upon the conversion of 328,571
shares of Series A Convertible Preferred Stock issued to Pacific Mutual in
the Merger with respect to which Pacific Mutual has sole investment power
and shared voting power, pursuant to the Onex Proxy, and (ii) 26,285 shares
of Common Stock and 33,413 shares of Common Stock issuable upon the
conversion of 43,809 shares of Series A Convertible Preferred Stock issued
to PM Group, with respect to which Pacific Mutual has shared investment
power with PM Group and shared voting power, pursuant to the Onex Proxy.
The shares do not include 132,100 shares of Common Stock with respect to
which two indirect, wholly-owned subsidiaries of Pacific Mutual have
investment discretion: NFJ Investment Group, Inc., which as of January 11,
1994, beneficially owned 121,500 shares, and Cadence Capital Management
Corporation, which as of January 11, 1994, beneficially owned 10,600
shares, and as to which Pacific Mutual disclaims beneficial ownership.
(10) Based upon a total of 8,497,435 outstanding shares of Common Stock deemed
to be outstanding as of April 29, 1994, on a partially diluted basis,
assuming only the conversion of the 372,380 shares of Series A Convertible
Preferred Stock beneficially owned by Pacific Mutual.
(11) Based on information furnished by, or on behalf of, Pacific Mutual and PM
Group in connection with the Merger. The shares consist of (i) 328,571
shares of Series A Convertible Preferred Stock issued to Pacific Mutual in
the Merger, with respect to which Pacific Mutual has sole investment power
and shared voting power, pursuant to the Onex Proxy, and (ii) 43,809 shares
of Series A Convertible Preferred Stock issued to PM Group in the Merger,
with respect to which Pacific Mutual has shared investment power with PM
Group and shared voting power, pursuant to the Onex Proxy.
(12) Based on information furnished by, or on behalf of, EJJM and Matthew O.
Diggs, Jr., the sole managing partner of EJJM, in connection with the
Merger. The shares consist of (i) 250,985 shares of Common Stock and
319,043 shares of Common Stock issuable upon the conversion of 418,308
shares of Series A Convertible Preferred Stock issued to EJJM in the
Merger, with respect to which Mr. Diggs and EJJM have sole investment power
and shared voting power, pursuant to the Onex Proxy, (ii) 70 shares of
Common Stock owned by Mr. Diggs with respect to which Mr. Diggs has sole
voting and investment power, and (ii) 30 shares of Common Stock owned by
Mr. Diggs' son. Mr. Diggs disclaims beneficial ownership of the 30 shares
owned by his son.
(13) Based upon a total of 8,532,464 outstanding shares of Common Stock, on a
partially diluted basis, deemed to be outstanding as of April 29, 1994,
assuming only the conversion of 418,308 shares of Series A Convertible
Preferred Stock issued to EJJM in the Merger.
(14) Based on information furnished by, or on behalf of, EJJM and Mr. Diggs in
connection with the Merger. This amount includes 418,308 shares of Series A
Convertible Preferred Stock issued to EJJM in the Merger, with respect to
which EJJM and Mr. Diggs have sole investment power and shared voting
power, pursuant to the Onex Proxy.
AUDITORS
The independent public accounting firm of Arthur Andersen & Co. has audited
the Company's consolidated 1993 financial statements. Arthur Andersen & Co. will
serve as the Company's independent auditors in 1994. A representative from
Arthur Andersen & Co. will be present at the 1994 Annual Meeting and will have
the opportunity to make a statement and to respond to appropriate questions.
18
<PAGE> 23
NOTICE PROVISIONS FOR SHAREHOLDER PROPOSALS AND SHAREHOLDER NOMINATIONS OF
DIRECTORS
The Company's by-laws establish an advance notice procedure with regard to
the nomination, other than by or at the direction of the Board of Directors of
the Company, of candidates for election as directors (the "Nomination
Procedure") and with regard to certain matters to be brought before an annual
meeting of shareholders of the Company (the "Business Procedure").
The Nomination Procedure provides that only persons who are nominated by,
or at the direction of, the Board of Directors or by a shareholder who has given
timely written notice to the Secretary of the Company prior to the meeting at
which directors are to be elected will be eligible for election as directors of
the Company. The Business Procedure provides that at an annual meeting, and
subject to any other applicable requirements, only such business may be
conducted as has been brought before the meeting by, or at the direction of, the
Board of Directors or by a shareholder who has given timely prior written notice
to the Secretary of the Company of such shareholder's intention to bring such
business before the meeting. In order for business to be properly brought before
an annual meeting, such business must also be a proper matter for shareholder
action. To be timely, notice of a nomination or proposed business must be
received by the Company not later than the close of business on the 60th day nor
earlier than the close of business on the 90th day before the first anniversary
of the preceding year's annual meeting.
Special provisions apply if the date of an annual meeting is more than 30
days before or 60 days after such anniversary date. Under those circumstances,
in order to be timely, notice must be received by the Company not earlier than
the close of business on the 90th day before the date of the annual meeting nor
later than the later of (i) the close of business on the 60th day before the
annual meeting or (ii) the close of business on the 10th day after the date on
which the Company first publicly announces the meeting (either by a press
release reported by the Dow Jones News Service, Associated Press or a comparable
national news service or by a filing with the Securities and Exchange
Commission). Special provisions also apply in the event that the number of
directors to be elected at an annual meeting is increased and there is no such
public announcement naming all of the nominees for directors or specifying the
size of the increased board at least 70 days before the first anniversary of the
preceding year's annual meeting. Under those circumstances, a notice shall be
timely, but only with respect to nominees for any new positions created by the
increase, if the notice is received by the Company not later than the close of
business on the 10th day after the date that the Company first makes such a
public announcement. Any shareholder who gives notice of the nomination of any
person for election as a director or notice of business to be brought before an
annual meeting must be a shareholder of record at the time of the giving of
notice and entitled to vote on the matter with respect to which such notice is
given.
Under the Nomination Procedure, notice to the Company from a shareholder
who proposes to nominate a person at an annual meeting for election as a
director must contain certain information about that person, including age,
business and residence addresses, principal occupation, the class and number of
shares of Common Stock beneficially owned and such other information as would be
required to be included in a proxy statement soliciting proxies for the election
of the proposed nominee (including such person's written consent to being named
as a nominee and to serving as a director if elected). Under the Business
Procedure, notice relating to the conduct of business other than the nomination
of directors at an annual meeting must contain certain information about the
business to be brought, including a brief description of the business, the
reasons for conducting such business at the annual meeting, and any material
interest of such shareholder in the business so proposed. Any notice given under
either the Nomination Procedure or the Business Procedure must also contain
certain information about the shareholder giving such notice and the beneficial
owner, if any, on whose behalf the nomination or proposal has been made,
including the name and address of the shareholder as they appear on the
Company's books, the name and address of such beneficial owner, if any, and the
number of shares of Common Stock owned beneficially and of record by such
shareholder and beneficial owner, if any.
If the Chairman or other officer presiding at a meeting determines that a
person was not nominated in accordance with the Nomination Procedure, such
person will not be eligible for election as a director, or if such Chairman or
other officer determines that other business was not properly brought before
such meeting
19
<PAGE> 24
in accordance with the Business Procedure, such business will not be conducted
at such meeting. Nothing in the Nomination Procedure or the Business Procedure
will preclude discussion by any shareholder of any nomination or business
properly made or brought before the annual meeting in accordance with the above-
mentioned procedures.
1995 ANNUAL MEETING OF THE COMPANY'S SHAREHOLDERS
Proposals from shareholders to be presented at the 1995 annual meeting of
the shareholders of the Company must be received by the Company on or before
January 2, 1995 in order to be eligible for inclusion in the Company's proxy
statement and form of proxy for that meeting.
OTHER BUSINESS
The management of the Company knows of no business other than that stated
in this Proxy Statement which will be presented for action at the 1994 Annual
Meeting. If however, other business should properly come before the meeting, the
persons designated in the enclosed proxy will vote or refrain from voting in
respect thereof in accordance with their best judgment.
THE COMPANY WILL PROVIDE WITHOUT COST TO ANY SHAREHOLDER A COPY OF THE
COMPANY'S REPORT ON FORM 10-K FOR ITS MOST RECENT FISCAL YEAR, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES, WHICH THE COMPANY IS REQUIRED TO FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION. WRITTEN REQUESTS FOR THE REPORT SHOULD
BE DIRECTED TO SCOTSMAN INDUSTRIES, INC., 775 CORPORATE WOODS PARKWAY, VERNON
HILLS, ILLINOIS 60061, ATTENTION: DONALD D. HOLMES, SECRETARY.
20
<PAGE> 25
APPENDIX
The following graphic material cannot be transmitted pursuant to EDGAR:
1. A map of the area of Vernon Hills, Illinois indicating directions to the
site of the annual meeting, including directions from O'Hare Airport,
which appears on the page following the cover letter.
2. The graph captioned "Comparison of Five Year Cumulative Total Return,
Scotsman Industries, Russell 2000, and S & P Diversified Manufacturing
which appears on page 15 of the Proxy Statement, which has been separately
submitted under cover of Form SE.
<PAGE> 26
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF SCOTSMAN INDUSTRIES, INC.
The undersigned hereby appoint(s) Richard C. Osborne and Donald D. Holmes, or
either of them, as proxies for the undersigned, with full power of
substitution, to act and to vote all the shares of common stock of Scotsman
Industries, Inc. that the undersigned would be entitled to vote if personally
present at the annual meeting of shareholders to be held on Friday, June 10,
1994, or at any adjournment thereof. Said proxies are directed to vote as
instructed on the matters set forth below and otherwise at their discretion.
Receipt of a copy of the notice of said meeting and proxy statement is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED ON THE REVERSE SIDE OF THIS
CARD.
(PLEASE SIGN AND DATE THE REVERSE SIDE AND MAIL IN THE ENCLOSED RETURN
ENVELOPE.)
<PAGE> 27
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL THE NOMINEES.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
<TABLE>
<S> <C> <C> <C> <C>
Withhold For All Except the
For Authority Nominee Written Below
1. Election of Directors
Nominees: Frank W. Considine, / / / / / / _________________________________
George D. Kennedy Signature
_________________________ _________________________________
Signature (if held jointly)
Dated: _____________________, 1994
IMPORTANT: Please sign exactly as
your name or names appear on the
left. If stock is held jointly,
all joint owners must sign.
Executors, administrators, trustees,
guardians, custodians, corporate
officers and others signing in a
representative capacity should
give their full titles.
</TABLE>
