<PAGE>
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 Section 240.14a-11(c) or
Section 240.14a-12
Giddings & Lewis, Inc.
.............................................................................
(Name of Registrant as Specified In Its Charter)
Giddings & Lewis, Inc.
..............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 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:
.......................................................................
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: _/
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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:
......................................................
Notes:
<PAGE>
LOGO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
To the Shareholders of
Giddings & Lewis, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Giddings &
Lewis, Inc. (the "Company") will be held on Wednesday, April 27, 1994, at 11:00
A.M., local time, at the Ramada Hotel, 1 North Main Street, Fond du Lac,
Wisconsin 54935, for the following purposes:
1. To elect three directors to hold office until the 1997 annual meeting of
shareholders and until their successors are duly elected and qualified.
2. To consider and act upon such other business as may properly come before
the meeting or any adjournment or postponement thereof.
The close of business on March 4, 1994 has been fixed as the record date for
the determination of shareholders entitled to notice of, and to vote at, the
meeting and any adjournment or postponement thereof.
A proxy for the meeting and a proxy statement are enclosed herewith.
By Order of the Board of Directors
GIDDINGS & LEWIS, INC.
Richard C. Kleinfeldt
Secretary
Fond du Lac, Wisconsin
March 24, 1994
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. TO
ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE THE ENCLOSED PROXY,
WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR NAME APPEARS
THEREON AND RETURN IMMEDIATELY.
<PAGE>
LOGO
142 DOTY STREET
FOND DU LAC, WISCONSIN 54935
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
This proxy statement is being furnished to shareholders by the Board of
Directors (the "Board") of Giddings & Lewis, Inc. (the "Company") beginning on
or about March 24, 1994 in connection with a solicitation of proxies by the
Board for use at the annual meeting of shareholders to be held on Wednesday,
April 27, 1994, at 11:00 A.M., local time, at the Ramada Hotel, 1 North Main
Street, Fond du Lac, Wisconsin 54935, and all adjournments or postponements
thereof (the "Annual Meeting") for the purposes set forth in the attached
Notice of Annual Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will not affect a
shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has signed a proxy does not
in itself revoke a proxy. Any shareholder giving a proxy may revoke it at any
time before it is exercised by giving notice thereof to the Company in writing
or in open meeting.
A proxy, in the enclosed form, which is properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
contained therein. The shares represented by executed but unmarked proxies will
be voted FOR the three persons nominated for election as directors referred to
herein and on such other business or matters which may properly come before the
Annual Meeting in accordance with the best judgment of the persons named as
proxies in the enclosed form of proxy. Other than the election of directors,
the Board has no knowledge of any matters to be presented for action by the
shareholders at the Annual Meeting.
Only holders of record of the Company's common stock, $.10 par value per share
(the "Common Stock"), at the close of business on March 4, 1994 are entitled to
vote at the Annual Meeting. On that date, the Company had outstanding and
entitled to vote 34,272,058 shares of Common Stock, each of which is entitled
to one vote per share.
ELECTION OF DIRECTORS
The Company's By-laws provide that the directors shall be divided into three
classes, with staggered terms of three years each. At the Annual Meeting, the
shareholders will elect three directors to hold office until the 1997 annual
meeting of shareholders and until their successors are duly elected and
qualified. Unless shareholders otherwise specify, the shares represented by the
proxies received will be voted in favor of the election as directors of the
three persons named as nominees herein. The Board has no reason to believe that
any of the listed nominees will be unable or unwilling to serve as a director
if elected. However, in the event that any nominees should be unable to serve
or for good cause will not serve, the shares represented by proxies
1
<PAGE>
received will be voted for other nominees selected by the Board. Directors will
be elected by a plurality of the votes cast at the Annual Meeting (assuming a
quorum is present). Consequently, any shares not voted at the Annual Meeting,
whether due to abstentions, broker non-votes or otherwise, will have no impact
on the election of directors. Votes will be tabulated by inspectors of election
appointed by the Board.
The following sets forth certain information, as of March 1, 1994, about each
of the Board's nominees for election at the Annual Meeting and each director of
the Company whose term will continue after the Annual Meeting.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
Terms expiring April 1997
JOSEPH R. COPPOLA, 63, has served as Chairman of the Board and
- ------------ Chief Executive Officer of the Company since July 1993. Prior
- ------------ thereto, Mr. Coppola was Senior Vice President of Manufacturing
Services for Cooper Industries, Inc. (a manufacturer of
electrical equipment, tools and hardware, automotive products
and petroleum and industrial equipment).
Director since: 1989
- ------------ CLYDE H. FOLLEY, 66, served as Vice Chairman and as Chief
Financial Officer of Ingersoll-Rand Company (a manufacturer of
compressors, automated tools and construction, mining and
industrial process equipment) from 1986 until his retirement in
August 1992. Mr. Folley served as Chairman of the Board and
Chief Executive Officer of the Company from April 1993 to June
1993. Mr. Folley is a director of Faber-Castell Corporation.
- ------------
Director since: 1990
BEN R. STUART, 59, has served as President and Chief Executive
- ------------ Officer of Dresser-Rand Company (a manufacturer of centrifugal,
- ------------ axial and reciprocating compressors, gas and steam turbines and
electric motors) since March 1992. Since 1988, Mr. Stuart has
also served as Senior Vice President-Operations of Dresser
Industries, Inc. (a manufacturer of drilling, mining and energy
processing equipment). Mr. Stuart is a director of CRSS, Inc.
Director since: 1990
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND URGES
EACH SHAREHOLDER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON STOCK REPRESENTED
BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL NOMINEES.
2
<PAGE>
DIRECTORS CONTINUING IN OFFICE
Terms expiring April 1995
JOHN A. BECKER, 52, has served as President and Chief Operating
- ------------ Officer of Firstar Corporation (a bank holding company) since
- ------------ February 1991 and as President since January 1990. Mr. Becker
had been Chairman and Chief Executive Officer of Firstar Bank
Milwaukee, N.A. (a subsidiary of Firstar Corporation) from
September 1989 to February 1991. Prior thereto, Mr. Becker had
served as President and/or Chief Executive Officer of Firstar
Bank Milwaukee, N.A. from January 1987 to September 1989. Mr.
Becker is a director of Firstar Corporation and Firstar Trust
Company.
Director since: 1989
PETER P. DONIS, 69, served as President and Chief Operating
- ------------ Officer of Caterpillar Inc. (a manufacturer of construction
- ------------ equipment) from 1985 until his retirement in June 1989. Mr.
Donis retired as a director of the Company at the time of the
1993 annual meeting of shareholders. In June 1993, Mr. Donis
was reappointed as a director to fill a vacancy on the Board.
Mr. Donis is also a director of Thomas Industries, Inc.
Director since: 1989
- ------------ JAMES R. UNDERKOFLER, 70, has served as Chairman and Chief
Executive Officer of H.C. Prange Company (an operator of retail
stores) since February 1994. Mr. Underkofler retired as
Chairman and Chief Executive Officer of WPL Holdings, Inc. (a
holding company with utility and nonutility businesses) and as
Chairman of its Wisconsin Power and Light Company and Heartland
Development Corporation subsidiaries in July 1990. Mr.
Underkofler served in a number of senior management positions
with Wisconsin Power and Light Company from 1960 until his
retirement. Mr. Underkofler retired as a director of the
Company at the time of the 1993 annual meeting of shareholders.
In June 1993, Mr. Underkofler was reappointed as a director to
fill a vacancy on the Board. Mr. Underkofler also serves as a
director of WPL Holdings, Inc., Wisconsin Power and Light
Company and Heartland Development Corporation.
- ------------
Director since: 1989
Terms expiring April 1996
ALBERT J. BACIOCCO, JR., 63, has served as President of The
- ------------ Baciocco Group, Inc. (a technical and management consulting
- ------------ firm) since April 1987. A 1953 graduate of the U.S. Naval
Academy, Mr. Baciocco retired from naval service as a Vice
Admiral in 1987, after thirty-four years of distinguished
service in the submarine force and in naval research and
technology development. Mr. Baciocco is a director of
Honeywell, Inc., Vectra Technologies, Inc. (formerly Pacific
Nuclear Systems, Inc.), and Golder Federal Services, Inc.
Director since: 1992
3
<PAGE>
- ------------ RUTH M. DAVIS, 65, has served as President and Chief Executive
- ------------ Officer of The Pymatuning Group, Inc. (a technology management
services firm) since 1981 and as Chairperson of The Aerospace
Corporation (a nonprofit entity engaged in government-sponsored
research and development) since December 1992. Dr. Davis is a
trustee of Consolidated Edison Company of New York and is a
director of Air Products and Chemicals, Inc., Ceridian
Corporation, Premark International, Inc., SofTech, Inc., Sprint
Corporation, and Varian Associates, Inc.
Director since: 1993
BENJAMIN F. GARMER, III, 52, has been a partner in the law firm
- ------------ of Foley & Lardner, Milwaukee, Wisconsin, since 1974 and has
- ------------ been an attorney with such firm since 1967. Foley & Lardner has
acted as outside counsel for the Company since its initial
public offering in 1989.
Director since: 1990
- ------------ RICHARD C. KLEINFELDT, 52, has served as Vice President-Finance
of the Company since May 1989 and as Secretary since July 1989.
Mr. Kleinfeldt has been employed by the Company since 1964 and
served as Vice President-Finance of the Giddings & Lewis
Machine Tool Division of United Dominion Industries, Inc. from
1987 to July 1989.
- ------------
Director since: 1989
BOARD OF DIRECTORS
GENERAL
The Board has standing Audit, Compensation, and Executive/Nominating
Committees. The Audit Committee recommends to the Board the appointment of
independent auditors, approves the scope of the annual audit activities of the
auditors, approves the audit fee payable to the auditors and reviews audit
results. Dr. Davis and Messrs. Donis, Folley (Chairman) and Underkofler are
members of the Audit Committee. The Audit Committee held three meetings in
1993. The Compensation Committee (i) reviews and recommends to the Board the
compensation structure for the Company's directors, officers and other
managerial personnel, including salary rates, participation in any incentive
bonus plans, fringe benefits, non-cash perquisites and other forms of
compensation, and (ii) administers the Company's 1989 Restricted Stock Plan
(the "1989 Restricted Stock Plan"), 1989 Stock Option Plan (the "1989 Stock
Option Plan"), 1993 Stock and Incentive Plan (the "1993 Plan"), and Independent
Director Stock Based Incentive Plan (the "Independent Director Plan"). Messrs.
Baciocco, Becker, Garmer and Stuart (Chairman) are members of the Compensation
Committee. The Compensation Committee held six meetings in 1993. The
Executive/Nominating Committee may exercise all of the powers of the Board when
the Board is not in session, except as otherwise provided by law or the
Company's By-laws. The Executive/Nominating Committee also recommends persons
to be nominated by the Board for election as directors of the Company and
recommends persons to fill vacancies on the Board. Messrs. Baciocco, Becker,
Coppola (Chairman) and Folley are members of the Executive/Nominating
Committee. The Executive/Nominating Committee held one meeting in 1993. The
Executive/Nominating Committee will consider nominees recommended by
shareholders, but has no established procedures which shareholders must follow
to make a recommendation.
4
<PAGE>
The Board held eight meetings in 1993. Each director attended at least 75% of
the aggregate of (i) the total number of meetings of the Board and (ii) the
total number of meetings held by all committees of the Board on which such
director served during the year.
DIRECTOR COMPENSATION
Retainer and Fees. Directors who are officers or employees of the Company
receive no compensation for service as members of the Board. Directors who are
not officers or employees of the Company or any affiliate of the Company ("non-
employee directors") are paid an annual retainer fee of $17,000, plus a fee of
$1,000 for each Board meeting attended and a fee of $1,000 ($1,200 for the
committee chairman) for each committee meeting attended. Payment of director
fees may be deferred, in whole or in part, at the option of a non-employee
director, under the Company's Deferred Compensation Plan for Non-Employee
Directors (the "Deferred Compensation Plan"). The Deferred Compensation Plan
provides that any fees deferred thereunder shall be credited at the end of each
quarter to (i) a share account, which allows for the purchase of share units
that represent shares of Common Stock, (ii) a cash account, which pays interest
at a rate based on the ninety-day Treasury bill rate over the past twelve
months, or (iii) a combination of both. The amount deferred under the Deferred
Compensation Plan will be paid, at the non-employee director's option, in a
lump sum, or over a ten-year period commencing, on the first business day of
the calendar year following the year during which the non-employee director
ceases to be a director of the Company.
Stock Based Plans. The Company maintains the Independent Director Plan for its
non-employee directors. Under the Independent Director Plan, on each date on
which a non-employee director is elected or re-elected (whichever the case may
be) (the "Election Date") to serve on the Board, such non-employee director
will automatically receive options to purchase 1,000 shares of Common Stock.
Options granted under the Independent Director Plan are not exercisable until
such non-employee director's term as a director (which began as of the Election
Date for which such options were granted) has expired; provided, however, that
if a non-employee director's status as a director terminates due to such non-
employee director's death, disability or retirement after reaching age 65, the
options will become immediately exercisable in full. The purchase price at
which shares of Common Stock may be purchased under the Independent Director
Plan will be equal to the closing price of a share of Common Stock on the
Election Date (or if such day is a day for which no closing price is set forth,
the next preceding day for which a closing price is so set forth). Stock
options granted under the Independent Director Plan will terminate on the
earlier of ten years following a non-employee director's Election Date; six
months after the non-employee director ceases to be a director of the Company
by reason of death, disability or retirement; or the time at which the non-
employee director ceases to be a director of the Company for any reason other
than by reason of death, disability or retirement. All stock options granted
under the Independent Director Plan are non-qualified stock options for
purposes of the Internal Revenue Code. The aggregate number of shares of Common
Stock eligible for issuance to non-employee directors upon the exercise of
stock options under the Independent Director Plan is 50,000. On May 14, 1993,
each of Dr. Davis and Messrs. Baciocco and Garmer were granted options to
purchase 1,000 shares of Common Stock at a per share exercise price of $23.875.
On June 8, 1993, upon his reappointment to the Board, Mr. Donis was granted an
option to purchase 1,000 shares of Common Stock at a per share exercise price
of $22.25. The options will become exercisable upon the expiration of the
current terms of each of said non-employee directors. Except for Mr. Donis who
exercised an option for 1,000 shares of Common Stock and realized a gain of
$9,188 and Mr. Underkofler who exercised options for 2,000 shares of Common
Stock and realized a gain of $14,688, no other options granted to the non-
employee directors under the Independent Director Plan were exercised in 1993.
Messrs. Donis and Underkofler continue to hold the shares of Common Stock
acquired in connection with the foregoing stock option exercises.
The non-employee directors of the Company are also eligible to receive
automatic grants of shares of restricted Common Stock under the 1993 Plan.
Under the terms of the 1993 Plan, each non-employee director
5
<PAGE>
of the Company will automatically be granted, on the date of the Company's
annual meeting of shareholders in each year during the existence of the 1993
Plan, such number of shares of restricted stock (rounded to the next highest
whole number) equal to 50% of such director's annual retainer fee for serving
as a director of the Company divided by the closing price of the Common Stock
on the day preceding the date of grant (or if such day is a day for which no
closing price is set forth, the next preceding date for which a closing price
is set forth). The annual retainer fee used in making the foregoing
determination is the annual retainer fee in effect on the date of grant,
exclusive of committee, attendance or other fees to which the non-employee
director may otherwise be entitled. Shares of restricted stock granted to a
non-employee director will not be eligible to be sold or otherwise transferred
while the non-employee director remains a director of the Company and
thereafter such restrictions will lapse. However, in the event the non-employee
director has not served as a director of the Company for at least three
calendar years at the time his or her service as a director ends, the shares of
restricted stock held by such non-employee director will be forfeited to the
Company. The non-employee directors are entitled to exercise full voting rights
and receive any dividends or other distributions paid with respect to their
shares of restricted stock. On May 14, 1993, 357 shares of restricted stock
were awarded under the 1993 Plan to each of Dr. Davis and Messrs. Baciocco,
Becker, Coppola, Garmer and Stuart.
PRINCIPAL SHAREHOLDERS
MANAGEMENT
The following table sets forth information, as of March 1, 1994, regarding
beneficial ownership of Common Stock by each director and nominee, each of the
executive officers named in the Summary Compensation Table set forth below, and
all of the directors and executive officers (including the executive officers
named in the Summary Compensation Table) as a group. The directors and
executive officers of the Company own less than 1% of the outstanding shares of
Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1)(2)(3)
------------------------ ------------------
<S> <C>
Albert J. Baciocco, Jr................................ 1,757(4)
John A. Becker........................................ 2,557
Joseph R. Coppola..................................... 33,357
Ruth M. Davis......................................... 357
Peter P. Donis........................................ 3,000
Clyde H. Folley....................................... 5,000(5)
Benjamin F. Garmer, III............................... 2,357
Richard C. Kleinfeldt................................. 30,900
Ben R. Stuart......................................... 2,357
James R. Underkofler.................................. 4,000
Thomas L. Taylor...................................... 15,968
James B. Simon........................................ 30,800
Stephen M. Peterson................................... 30,456
William J. Fife, Jr. (6).............................. 60,000
All directors and executive officers as a group (20
persons)............................................. 313,394
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes the following shares subject to stock options which are currently
exercisable or exercisable within 60 days of March 1, 1994: Mr. Baciocco,
1,000 shares; Mr. Becker, 1,000 shares; Mr. Coppola, 1,000 shares; Mr.
Folley, 1,000 shares; Mr. Garmer, 1,000 shares; Mr. Stuart, 1,000 shares;
Mr. Taylor, 5,468 shares; Mr. Peterson, 12,456 shares; and all current
directors and executive officers as a group, 33,924 shares.
6
<PAGE>
(2) Includes the following restricted shares of Common Stock granted under the
1989 Restricted Stock Plan over which the holders have sole voting but no
investment power: Mr. Coppola, 30,000 shares; Mr. Kleinfeldt, 30,000
shares; Mr. Taylor, 10,000 shares; Mr. Simon, 30,000 shares; Mr. Peterson,
18,000 shares; Mr. Fife, 60,000 shares; and all directors and executive
officers (including the executive officers named in the Summary
Compensation Table) as a group, 257,000 shares.
(3) Includes the following restricted shares of Common Stock granted under the
1993 Plan to non-employee directors over which the holders have sole voting
but no investment power: Mr. Baciocco, 357 shares; Mr. Becker, 357 shares;
Mr. Coppola, 357 shares; Dr. Davis, 357 shares; Mr. Garmer, 357 shares; and
Mr. Stuart, 357 shares.
(4) Mr. Baciocco shares voting and investment power over 400 shares of his
Common Stock with his wife.
(5) Mr. Folley shares voting and investment power over 4,000 shares of his
Common Stock with his wife.
(6) Mr. Fife resigned as Chairman of the Board and Chief Executive Officer and
as a director of the Company in April 1993.
OTHER BENEFICIAL OWNERS
The following table sets forth information, as of December 31, 1993, regarding
beneficial ownership by the only persons known to the Company to own more than
5% of the outstanding Common Stock. The beneficial ownership set forth below
has been reported in filings made on Schedule 13G with the Securities and
Exchange Commission by each of the beneficial owners.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP
-------------------------------- PERCENT
NAME AND ADDRESS INVESTMENT OF
OF BENEFICIAL OWNER VOTING POWER POWER AGGREGATE CLASS
- --------------------------- ----------------- -------------- --------- -------
SOLE SHARED SOLE SHARED
------- --------- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Kemper Financial Services, -0- 3,133,300 -0- 3,133,300 3,133,300 9.1%
Inc.
120 South LaSalle Street
Chicago, Illinois 60603
Loomis, Sayles & Company, 881,950 4,200 -0- 1,996,300 1,996,300 5.8%
L.P.
One Financial Center
Boston, Massachusetts
02111
</TABLE>
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION INFORMATION
The following table sets forth certain information concerning compensation
paid for the last three fiscal years to the persons who served as the Company's
Chief Executive Officer during 1993 and each of the Company's four other most
highly compensated executive officers whose total cash compensation exceeded
$100,000 in fiscal 1993. The persons named in the table are sometimes referred
to herein as the "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL -----------------------
COMPENSATION(1) AWARDS
-------------------- -----------------------
SECURITIES
NAME AND RESTRICTED UNDERLYING
PRINCIPAL SALARY BONUS STOCK STOCK ALL OTHER
POSITION YEAR ($) ($)(2) AWARDS($)(3) OPTIONS(#) COMPENSATION($)(4)
--------- ---- -------- -------- ------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Joseph R. 1993 $174,996 $134,470 $605,523 30,000 $210,293
Coppola (5)
Chairman, 1992 -- -- -- -- 21,000
Chief
Executive 1991 -- -- -- -- 20,250
Officer and
Director
Richard C.
Kleinfeldt 1993 199,992 76,837 221,500 -- 1,689
Vice Presi-
dent--Fi-
nance, 1992 183,503 123,179 -- 18,430 2,182
Secretary
and Direc-
tor 1991 166,417 92,813 -- -- 1,756
Thomas L. 1993 177,996 106,473 -- -- 1,720
Taylor
Group Vice 1992 163,333 126,275 -- 16,405 2,182
President
and General 1991 137,250 104,931 -- -- 1,333
Manager--
Integrated
Automation
Group
James B. Si- 1993 189,996 72,996 221,500 -- 1,611
mon
Vice Presi- 178,083 119,795 -- 17,924 2,182
dent-- 1992
Engineering 1991 161,413 76,985 -- -- 1,718
and Total
Quality
Stephen M.
Peterson 1993 159,996 61,470 221,500 -- 1,338
Vice Presi-
dent-- 1992 134,333 89,339 -- 13,367 2,182
Worldwide
Sales 1991 111,837 37,049 -- -- 1,057
Clyde H.
Folley (6) 1993 100,000 -- -- -- 16,700
1992 -- -- -- -- 20,250
1991 -- -- -- -- 19,500
William J.
Fife, Jr.
(7) 1993 217,831(8) -- -- -- 86,752
1992 404,167 270,724 -- 40,506 6,782
1991 358,746 199,688 -- -- 3,087
</TABLE>
- --------------------------------------------------------------------------------
(1) Certain personal benefits provided by the Company and its subsidiaries to
the named executive officers are not included in the table. The aggregate
amount of such personal benefits for each named executive officer in each
year reflected in the table did not exceed the lesser of $50,000 or 10% of
the sum of such officer's salary and bonus in each respective year.
8
<PAGE>
(2) Consists of awards under the Company's Management Incentive Compensation
Plan, which is a performance-based plan.
(3) The amounts in the table reflect the market value on the date of grant (net
of any consideration paid by the named executive officers) of restricted
shares of Common Stock awarded under the 1989 Restricted Stock Plan and the
1993 Plan. The number of shares of restricted Common Stock held by the
named executive officers and the market value of such shares (net of any
consideration paid by the named executive officers) as of December 31, 1993
was as follows: Mr. Coppola, 30,357 shares ($778,693); Mr. Kleinfeldt,
30,000 shares ($770,500); Mr. Taylor, 10,000 shares ($257,000); Mr. Simon,
30,000 shares ($770,500); Mr. Peterson, 18,000 shares ($462,100); and Mr.
Fife, 60,000 shares ($1,542,000). Mr. Folley does not hold any restricted
shares of Common Stock. During fiscal 1993, the following grants of
restricted Common Stock were made to the named executive officers: Mr.
Coppola, 30,357 shares, 15,000 shares of which will vest on each of July 1,
1994 and July 1, 1995 and 357 shares of which will vest in accordance with
the terms of the 1993 Plan, see "Board of Directors--Director
Compensation"; Mr. Kleinfeldt, 10,000 shares, 5,000 shares of which will
vest on each of August 1, 1995 and August 1, 1996; Mr. Simon, 10,000
shares, 5,000 shares of which will vest on each of August 1, 1995 and
August 1, 1996; and Mr. Peterson, 10,000 shares, 5,000 shares of which will
vest on each of August 1, 1994, and August 1, 1996. Holders of shares of
restricted Common Stock are entitled to receive dividends on such shares.
(4) The amounts reflected in the table for fiscal 1993 consist of the
following: (a) for Mr. Coppola, a $29,167 transfer allowance paid by the
Company in connection with Mr. Coppola's appointment as Chairman of the
Board and Chief Executive Officer, $16,250 in directors' fees paid prior to
Mr. Coppola becoming Chairman of the Board and Chief Executive Officer, a
$24,757 contribution credited to Mr. Coppola's account under his
supplemental pension arrangement, see "Pension Benefits," and a payment of
$140,119 to compensate Mr. Coppola for the loss he incurred upon disposal
of his former residence in Houston, Texas; (b) for Mr. Folley, $16,700 in
directors' fees paid for periods during which Mr. Folley was not serving as
Chairman of the Board and Chief Executive Officer; (c) for Mr. Fife, an
aggregate of $83,333 in partial payment of a covenant not to compete
contained in Mr. Fife's termination and severance agreement, see
"Agreements with Named Executive Officers," $2,856 in life insurance
premiums paid by the Company on Mr. Fife's behalf, and a $563 Company
matching contribution under the Giddings & Lewis Savings Plan (the "Savings
Plan"), which is a profit sharing plan under Section 401(k) of the Internal
Revenue Code; and (d) for all other named executive officers, Company
matching contributions under the Savings Plan.
(5) Mr. Coppola was elected Chairman of the Board and Chief Executive Officer
of the Company in July 1993.
(6) Mr. Folley served as Chairman of the Board and Chief Executive Officer of
the Company from April through June 1993.
(7) Mr. Fife resigned as Chairman of the Board and Chief Executive Officer and
as a director of the Company in April 1993.
(8) Includes $20,769 paid for accrued but unused vacation time.
9
<PAGE>
STOCK OPTIONS
The Company has in effect stock option plans pursuant to which options to
purchase Common Stock may be granted to key employees (including officers) of
the Company and its subsidiaries. The following table presents certain
information as to grants of stock options made during fiscal 1993 to Mr.
Coppola. No other executive officer was granted options in fiscal 1993.
OPTION GRANTS IN 1993 FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF
STOCK PRICE APPRECIATION
FOR
INDIVIDUAL GRANTS TEN-YEAR GRANT TERM(2)
- ---------------------------------------------------------------------- ------------------------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS EXERCISE AT 0% AT 5% AT 10%
OPTIONS GRANTED TO OR BASE ANNUAL ANNUAL ANNUAL
GRANTED EMPLOYEES IN PRICE EXPIRATION GROWTH GROWTH GROWTH
NAME (#)(1) FISCAL YEAR ($/SHARE) DATE RATE RATE RATE
---- ---------- ------------- --------- ---------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph R. Coppola ...... 30,000 71.4% $20 7/1/03 $ 0 $377,337 $956,245
</TABLE>
- --------------------------------------------------------------------------------
(1) The options reflected in the table (which are non-qualified options for
purposes of the Internal Revenue Code) were granted on July 1, 1993 and
vest ratably over the three-year period from the date of grant.
(2) This presentation is intended to disclose the potential value which would
accrue to the optionee if the option were exercised the day before it would
expire and if the per share value had appreciated at the compounded annual
rate indicated in each column. The assumed rates of appreciation of 5% and
10% are prescribed by the rules of the Securities and Exchange Commission
regarding disclosure of executive compensation. The assumed annual rates of
appreciation are not intended to forecast possible future appreciation, if
any, with respect to the price of the Common Stock.
The following table sets forth information regarding the exercise of stock
options by each of the named executive officers during the 1993 fiscal year and
the fiscal year-end value of unexercised options held by such persons.
AGGREGATED OPTION EXERCISES IN 1993
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES VALUE FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)
ACQUIRED ON REALIZED ------------------------- -------------------------
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph R. Coppola....... -- $ -- 31,000 $ -- $186,313
Richard C. Kleinfeldt... 26,143 315,688 -- 32,287 -- 448,722
Thomas L. Taylor........ 10,000 115,000 5,468 30,937 32,808 408,122
James B. Simon.......... 25,975 314,806 -- 31,949 -- 446,694
Stephen M. Peterson..... 8,000 145,000 4,456 24,911 26,736 335,466
Clyde H. Folley......... -- -- -- 1,000 -- 13,813
William J. Fife, Jr..... 120,000 1,921,875 -- -- -- --
</TABLE>
- --------------------------------------------------------------------------------
(1) The dollar values are calculated by determining the difference between the
fair market value of the underlying Common Stock and the exercise price of
the options at exercise or fiscal year-end, respectively.
10
<PAGE>
PENSION PLAN BENEFITS
The following table shows at different levels of remuneration and years of
credited service the estimated annual benefits payable as a straight life
annuity to a covered participant (assuming retirement at age 65) under the
Giddings & Lewis Retirement Plan as presently in effect (the "Retirement Plan")
and under the Company's unfunded supplemental benefit pension plan, which
provides benefits that would otherwise be denied participants by reason of
certain limitations imposed by the Internal Revenue Code on qualified plan
benefits (the "excess benefit plan").
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE ------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
- ------------ ------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 75,000................ $ 6,188 $12,375 $ 18,563 $ 24,750 $ 30,938 $ 37,125 $ 43,313
150,000................ 12,375 24,750 37,125 49,500 61,875 74,250 86,625
200,000................ 16,500 33,000 49,500 66,000 82,500 99,000 115,500
300,000................ 24,750 49,500 74,250 99,000 123,750 148,500 173,250
400,000................ 33,000 66,000 99,000 132,000 165,000 198,000 231,000
450,000................ 37,125 74,250 111,375 148,500 185,625 222,750 259,875
</TABLE>
Remuneration covered by the plans is a participant's salary and bonus, as
shown in the Summary Compensation Table, whether or not such compensation has
been deferred at the participant's election. Benefits are based on a
participant's average remuneration for the five consecutive of the last ten
calendar years for which such average is the highest, or in the case of a
participant who has been employed for less than five full calendar years, the
period of his employment covered by the plans. Under the Retirement Plan, only
salary, as shown in the Summary Compensation Table, up to the limits imposed by
the Internal Revenue Code, is taken into account. The 1993 compensation limit
applicable to the Retirement Plan is $235,840. The number of years of credited
service as of December 31, 1993 that will be recognized for certain of the
named executive officers is as follows: Mr. Kleinfeldt, 29 years; Mr. Taylor,
25 years; Mr. Simon, 29 years; and Mr. Peterson, 25 years. Benefits under the
plans include a Social Security offset only for benefits attributable to
service before 1989. No benefits are payable under the plans unless a
participant has at least five years of service. Mr. Coppola does not, and Mr.
Folley during his tenure as an executive officer of the Company did not,
participate in the Retirement Plan and the excess benefit plan. At the time of
his resignation, Mr. Fife had 6.6 years of credited service under the
Retirement Plan. Mr. Fife did not participate in the excess benefit plan.
In addition to the benefit plans reflected in the table, the Company maintains
another unfunded supplemental benefit pension plan covering only those persons
who were serving as elected officers of the Company on December 31, 1990 to
provide benefit accruals to these individuals on their service after 1988 under
the pre-1988 Retirement Plan benefit formula. The Company also has in effect an
unfunded supplemental pension arrangement for the benefit of Mr. Coppola. This
arrangement provides for an annual benefit accrual to be credited to Mr.
Coppola's account in an amount equal to 8% of his salary and bonus. Mr. Coppola
is fully vested under this arrangement and will be entitled to receive the
amounts credited to his account upon retirement plus credited earnings thereon.
AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company entered into an employment agreement with Mr. Coppola effective
July 1, 1993 pursuant to which the Company will employ Mr. Coppola as its
Chairman of the Board and Chief Executive Officer until
11
<PAGE>
the earlier of June 30, 1996 or his death, disability or termination (whether
for cause or voluntarily by the Company or Mr. Coppola). Mr. Coppola's
employment agreement provides for an annual base salary of $350,000 (subject to
upward adjustment) and entitles Mr. Coppola to participate in the bonus and
other employee benefit plans (other than the Retirement Plan and the excess
benefit plan) generally available to the Company's executive officers. In lieu
of participation in the Retirement Plan and the excess benefit plan, Mr.
Coppola's agreement provides him with the unfunded supplemental retirement plan
described under "Pension Plan Benefits" above. In connection with his
employment agreement, Mr. Coppola was also granted 30,000 shares of restricted
Common Stock under the 1989 Restricted Stock Plan and options to purchase
30,000 shares of Common Stock under the 1989 Stock Option Plan. Under the terms
of his employment agreement, if Mr. Coppola's employment is voluntarily
terminated by the Company without cause, Mr. Coppola will be entitled to
receive his then current base salary and continuing health insurance until June
30, 1996. The employment agreement also contains a covenant not to compete
which extends for a period of two years after Mr. Coppola's term of employment
ends.
The Company also has employment and severance agreements with certain of its
executive officers, including Messrs. Coppola, Kleinfeldt, Taylor, Simon and
Peterson. The agreements provide that each executive officer is entitled to
benefits if, within five years after a change in control of the Company (as
defined in the agreements), the officer's employment is ended through (i)
termination by the Company, other than by reason of death or disability or for
cause (as defined in the agreements), or (ii) termination by the officer
following the first anniversary of the change in control or due to a breach of
the agreement by the Company or a significant change in the officer's
responsibilities. The benefits provided are: (i) a cash termination payment of
up to three times the sum of the executive officer's annual salary and his
highest annual bonus during the three years before the termination and (ii)
continuation for up to five years of equivalent hospital, medical, dental,
accident, disability and life insurance coverage as in effect at the time of
termination. Each agreement provides that if any portion of the benefits under
the agreement or under any other agreement for the officer would constitute an
"excess parachute payment" for purposes of the Internal Revenue Code, benefits
will be reduced so that the officer will be entitled to receive $1 less than
the maximum amount which he could receive without becoming subject to the 20%
excise tax imposed by the Code, or which the Company may pay without loss of
deduction under the Code. With respect to Mr. Coppola, any benefits payable
under his employment and severance agreement are in lieu of the severance
payments that may be due Mr. Coppola under his employment agreement.
In August 1993, the Company entered into a termination and severance agreement
with Mr. Fife, the Company's former Chairman and Chief Executive Officer.
Pursuant to the terms of this agreement, Mr. Fife forfeited options to purchase
120,000 shares of Common Stock and 60,000 shares of restricted Common Stock
previously awarded to him. The Company agreed to (i) continue Mr. Fife's group
health insurance coverage and term life insurance policy for one year (or, if
earlier, until he is covered by another group health and/or life insurance
plan), (ii) pay Mr. Fife for accrued but unused vacation time, and (iii) pay
Mr. Fife $250,000 per year over the two-year term of a non-compete and
confidentiality arrangement. Under his agreement, Mr. Fife released the Company
from any and all liability and agreed, among other things, not to solicit for
employment any person employed by the Company during the two-year term of the
covenant not to compete. The agreement also obligated Mr. Fife to purchase from
the Company a four unit condominium located in Tan-tar-a, Missouri and a 216
acre tract of land outside of Fond du Lac, Wisconsin. The Tan-tar-a
condominium, which Mr. Fife sold to the Company for $155,000 in June 1992, was
repurchased by Mr. Fife for $301,827 in cash. The Fond du Lac property, which
was purchased by the Company for $380,000 in December 1992 in conjunction with
Mr. Fife's purchase from the same seller of an adjacent 70 acre tract of land,
was purchased by Mr. Fife for $402,925 by delivery of a promissory note to the
Company. Such
12
<PAGE>
promissory note bears no interest until maturity and is due on the earlier of
September 1, 1994 or Mr. Fife's receipt of proceeds from the sale of any of his
remaining shares of restricted Common Stock. In the event that Mr. Fife
violates the terms of the agreement, the Company is entitled to withhold and
terminate all payments and benefits provided under the agreement and recover
from Mr. Fife all payments and benefits previously provided to him thereunder.
EXECUTIVE RELOCATION PROGRAM
In connection with the relocation of executive officers at the Company's
request, the Company from time to time offers an interest-free advance to allow
an executive officer to finance the purchase of a new home while the executive
is in the process of selling his existing home. In July 1993, Robert W. Kynast,
Group Vice President and General Manager of the Company's Automation
Measurement and Control Group, received a $140,000 advance from the Company in
connection with his transfer to the Company's Dayton, Ohio facility. Mr. Kynast
repaid the amount advanced in January and March 1994.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board is responsible for all aspects of the
Company's compensation package offered to its corporate officers, including the
named executive officers. The following report was prepared by the members of
the Compensation Committee.
The Company's executive compensation program is designed to be closely linked
to corporate performance and returns to shareholders. To this end, the Company
has developed an overall compensation strategy and specific compensation plans
that tie a significant portion of executive compensation to the Company's
success in meeting specified performance goals and to appreciation in the
Company's stock price. The overall objectives of this strategy are to attract
and retain qualified executive talent, to motivate these executives to achieve
the goals inherent in the Company's business strategy, to link executive and
shareholder interests through equity based plans and to provide a compensation
package that recognizes individual contributions as well as overall business
results.
The Compensation Committee continually monitors the operation of the executive
compensation program and annually conducts a full review of the Company's
programs. This review includes a comprehensive review by independent
compensation consultants assessing the effectiveness of the Company's
compensation program by comparing the Company's executive compensation,
corporate performance, stock price appreciation and total return to
shareholders to both general compensation survey data and to a group of public
companies that have characteristics similar to the Company with respect to size
and performance. The Compensation Committee reviews the selections of companies
used for this analysis.
The annual compensation review permits an ongoing evaluation of the link
between the Company's performance and its executive compensation in the context
of the compensation programs of other similar companies. The companies included
in this comparison are not limited to those companies which constitute the
Standard & Poor's Diversified Machinery Index to which the Company compares its
cumulative return (see "Performance Information"). The Compensation Committee
believes that expansion of the comparison group is appropriate since each of
the companies in the Standard & Poor's Diversified Machinery Index has greater
total revenue than the Company. The Compensation Committee's target is to set
compensation at the median level relative to the compensation peer group.
The Compensation Committee determines the compensation of the Chief Executive
Officer, and sets the policy for, reviews, and approves the recommendations of
management (subject to such adjustments as may
13
<PAGE>
be deemed appropriate by the Compensation Committee and subject to the
Committee's sole discretion regarding awards for stock options and restricted
shares) with respect to the compensation awarded to other corporate officers
(including the other named executive officers). The key elements of the
Company's compensation program consist of base salary, annual bonus
opportunity, and grants of stock options and restricted stock. The Compensation
Committee's policies with respect to each of these elements, including the
basis for the compensation awarded the Company's Chief Executive Officer, are
discussed below. While the elements of compensation described below are
considered separately, the Compensation Committee takes into account the full
compensation package offered by the Company to the individual, including
pension benefits, supplemental retirement benefits, severance plans, life
insurance, and other welfare benefits and perquisites consistent with
prevailing industry practices as well as the programs described below.
Base Salaries. The Company has established competitive base salary ranges for
all executive officers, including the named executive officers. These salary
ranges are based on the recommendations of the Company's independent
compensation consultants, and are reviewed annually to assure their continuing
competitiveness. The basis for setting these ranges is an analysis of
recognized compensation surveys that include hundreds of companies. The
Company's policy is to target its base salary ranges at the median of the
competitive market.
Annual salary adjustments are determined by evaluating the performance of the
Company and of each executive officer and also take into account new
responsibilities. In the case of executive officers with responsibility for a
particular business unit, such unit's financial results are also considered.
The Compensation Committee, where appropriate, also considers nonfinancial
performance measures. These include increase in market share, manufacturing
efficiency gains, improvements of product quality and improvements in relations
with customers, suppliers and employees. These factors are considered on a
case-by-case basis and the Compensation Committee does not assign any specific
weight to any one of these factors.
After a search, Mr. Coppola was hired as the Company's Chief Executive Officer
on July 1, 1993. His base salary was set at $350,000, which reflected the
salary range established for this position by the Compensation Committee based
on discussions with outside consultants and Mr. Coppola's prior experience and
managerial expertise, his knowledge of the Company's operations and the
industry in which the Company operates, and his knowledge of the Company's
customer base. In addition, in setting Mr. Coppola's base salary, the
Compensation Committee recognized the need to consider Mr. Coppola's
compensation at his former employer.
Mr. Folley, who served as Chief Executive Officer of the Company from April
1993 until Mr. Coppola was hired, was paid $100,000 for his services. The
amount paid Mr. Folley was set based on his broad business experience and the
scope of his assigned duties with the Company. Mr. Fife, who resigned as Chief
Executive Officer of the Company in April 1993, was paid his normal base salary
for the period prior to his resignation. Mr. Fife remained an employee of the
Company until August 27, 1993, at which time he entered into a termination and
separation agreement with the Company. The terms of this agreement are
described elsewhere in this Proxy Statement. See "Agreements with Named
Executive Officers."
Annual Bonus. The Company's executive officers are eligible for an annual cash
bonus under the Company's Management Incentive Compensation Plan. Corporate
performance objectives under this Plan are established at the beginning of each
year. Eligible executives are assigned minimum, target, maximum and reach bonus
levels. The target bonus levels represent competitive target bonuses based on
recognized compensation survey data as determined by the Compensation Committee
in consultation with the Company's independent compensation consultants.
14
<PAGE>
The corporate performance measure for bonus payments is based, depending upon
the circumstances, in part or in whole on return on average shareholders equity
("ROE"). Bonuses for those executives with business unit accountability are
based 50% on the unit's success in meeting bookings and earnings goals for the
period and 50% on the Company's ROE. Bonuses for those executives, including
Mr. Coppola, without specific unit accountability are based solely on ROE. In
all cases, if the minimum corporate ROE is not met, no bonuses will be paid. In
1993, the Company fell short of its target ROE objective but above its minimum
objective. Based on these results, Mr. Coppola was awarded a bonus of $134,470
against a target bonus of $175,000. In accordance with Mr. Coppola's employment
agreement, the Company agreed to calculate Mr. Coppola's 1993 bonus as if he
had been employed for the full calendar year to reflect the fact that he
forfeited his 1993 bonus at his former employer.
Stock Options. Under the Company's stock option plans, which were approved by
shareholders, stock options are granted to key employees of the Company,
including key executive officers. Based on recommendations of independent
compensation consultants retained by the Company, the Compensation Committee
has set guidelines for the size of stock option awards based on competitive
compensation practices among comparable organizations. The Compensation
Committee does take past and current corporate performance into account in
establishing guidelines governing stock option awards. In determining whether
to grant stock options and the guidelines governing such grants, the
Compensation Committee also considers the size of prior grants made to the
Company's executive officers.
In connection with his employment, the Compensation Committee granted an
option to purchase 30,000 shares of Common Stock to Mr. Coppola. The option has
an exercise price of $20 per share which reflects the market value of the
Common Stock on the date of the award. No other executive officer was awarded
stock options in 1993.
Restricted Stock. From time to time, the Compensation Committee grants
executives shares of restricted stock to recognize corporate success (including
corporate performance) and individual contributions. The Compensation
Committee, considering recommendations made by the Chief Executive Officer,
decides appropriate award amounts based on the circumstances of the situation,
e.g., in the case of a new hire, the level of the position to be filled and the
qualifications of the executive sought to satisfy that role. In determining
whether to grant shares of restricted stock and the number of shares subject to
the grants made, the Compensation Committee considers the size of prior
restricted stock grants made to the Company's executive officers. Based upon
recommendations of management, grants of restricted stock to the Company's
executive officers were made in June 1993. In addition, upon the commencement
of Mr. Coppola's employment as Chief Executive Officer on July 1, 1993, he was
granted 30,000 shares of restricted stock. It was the Compensation Committee's
determination that the value of this restricted stock grant approximated the
value in his former employer's long-term compensation plan that Mr. Coppola
forfeited upon joining the Company.
Stock Retention Policy. The Compensation Committee has adopted guidelines to
assist key employees, including executive officers, in determining appropriate
levels of Common Stock ownership. The guidelines set forth a minimum value of
Common Stock which the Compensation Committee suggests each key employee hold.
The minimum value established for any particular individual relates to varying
multiples of his or her salary depending upon the individual's position with
the Company. The multiple is the highest for the Chief Executive Officer. The
Compensation Committee expects the guidelines will be met no later than
December 31, 1996 by all current covered executive officers and within three
years after hire or promotion for all new executive officers covered by the
guidelines.
15
<PAGE>
Section 162(m) Limitations. Under Section 162(m) of the Internal Revenue Code,
a tax deduction by corporate taxpayers, such as the Company, is limited with
respect to the compensation of certain executive officers unless such
compensation is based upon performance objectives meeting certain regulatory
criteria or is otherwise excluded from the limitation. Based upon the
Compensation Committee's commitment to link compensation with performance as
described in this report, the Compensation Committee currently intends to
qualify compensation paid to the Company's executive officers for deductibility
by the Company under Section 162(m).
Conclusion. Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to corporate performance
and stock price appreciation. In 1993, as in previous years, 35% to 50% of the
Company's executive compensation consisted of these performance-based variable
elements, based on a five-year projection of total compensation for each of the
executive officers. The Compensation Committee intends to continue the policy
of linking executive compensation to corporate performance and returns to
shareholders, recognizing that the ups and downs of the business cycle from
time to time may result in an imbalance for a particular period.
GIDDINGS & LEWIS, INC.
COMPENSATION COMMITTEE
Ben R. Stuart, Chairman John A. Becker
Albert J. Baciocco, Jr. Benjamin F. Garmer, III
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are identified above. Mr.
Garmer, a member of the Compensation Committee, is a partner in the law firm of
Foley & Lardner, Milwaukee, Wisconsin. Foley & Lardner has acted as outside
counsel for the Company since its initial public offering in 1989. Mr. Coppola
served as a member of the Compensation Committee prior to his election as
Chairman of the Board and Chief Executive Officer of the Company on July 1,
1993.
16
<PAGE>
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis the yearly changes since
July 20, 1989 (the date of the Company's initial public offering) in (a) the
total shareholder return on the Common Stock with (b) the total return on the
Standard & Poor's 500 Composite Index (the "S&P 500 Index") and (c) the total
return on the Standard & Poor's Diversified Machinery Index (the "S&P
Diversified Machinery Index"). Such yearly changes have been measured by
dividing (a) the sum of (i) the amount of dividends for the measurement period,
assuming dividend reinvestment, and (ii) the difference between the price per
share at the end of and the beginning of the measurement period, by (b) the
price per share at the beginning of the measurement period. The graph assumes
$100 was invested on July 20, 1989 in Common Stock, the S&P 500 Index and the
S&P Diversified Machinery Index.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
JULY 20, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1989 1989 1990 1991 1992 1993
-------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
GIDDINGS & LEWIS, INC... $100 $119 $128 $220 $372 $375
S&P 500................. 100 109 103 129 134 161
S&P DIVERSIFIED
MACHINERY.............. 100 101 87 95 102 164
</TABLE>
17
<PAGE>
MISCELLANEOUS
INDEPENDENT AUDITORS
Ernst & Young acted as the independent auditors for the Company in 1993 and it
is anticipated that such firm will be similarly appointed to act in 1994.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting with the opportunity to make a statement if they so desire. Such
representatives are also expected to be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Proposals which shareholders of the Company intend to present at and have
included in the Company's proxy statement for the 1995 annual meeting must be
received by the Company by the close of business on November 24, 1994. In
addition, a shareholder who otherwise intends to present business at the 1995
annual meeting must comply with the requirements set forth in the Company's By-
laws. Among other things, to bring business before an annual meeting, a
shareholder must give written notice thereof to the Secretary of the Company in
advance of the meeting in compliance with the terms and within the time periods
specified in the By-laws.
OTHER MATTERS
Section 16(a) of the Exchange Act requires the Company's officers and
directors to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. The regulations of the Securities and
Exchange Commission require officers and directors to furnish the Company with
copies of all Section 16(a) forms they file. Based on such forms, the Company
believes that all its officers and directors have complied with the Section
16(a) filing requirements, except that William J. Fife, Jr., a former executive
officer and director of the Company, filed a year-end report on Form 5 which
covered an aggregate of fourteen transactions, seven of which were not reported
on a timely basis.
The cost of soliciting proxies will be borne by the Company. In addition to
soliciting proxies by mail, proxies may be solicited personally and by
telephone by certain officers and regular employees of the Company. The Company
has retained D.F. King & Co., Inc. to assist in the solicitation of proxies
from brokers, banks and other nominees for an estimated fee of $5,500 plus out-
of-pocket expenses. The Company may also reimburse brokers and other nominees
for their expenses in communicating with the persons for whom they hold Common
Stock.
By Order of the Board of Directors
GIDDINGS & LEWIS, INC.
Richard C. Kleinfeldt
Secretary
March 24, 1994
18
<PAGE>
GRAPHICS APPENDIX
1. Page 2 of the Proxy Statement contains photographs of each of the three
nominees for election as directors at the Company's 1994 Annual Meeting of
Shareholders, and Pages 3 and 4 contain photographs of each of the other
seven directors of the Company.
2. Page 17 of the Proxy Statement contains a graph comparing the total
shareholder return on the Common Stock of the Company for the period from
the date of the Company's initial public offering through December 31, 1993
with the total return on the Standard & Poor's 500 Composite Index and the
Standard & Poor's Diversified Machinery Index.
<PAGE>
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Joseph R. Coppola
GIDDINGS & LEWIS, INC. and Richard C. Kleinfeldt, and each of them,
142 Doty Street as Proxies with the power of substitution (to
Fond du Lac, Wisconsin 54935 act jointly or if only one acts then by that one)
and hereby authorizes them to represent and to
vote as designated below all of the shares of
Common Stock of Giddings & Lewis, Inc. held of
record by the undersigned on March 4, 1994,
at the annual meeting of shareholders to be
held on April 27, 1994, or any adjournment or
postponement thereof.
1. ELECTION OF DIRECTORS
[] FOR all nominees listed [] WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed
below
Terms expiring at the 1997 Annual Meeting:
J. Coppola, C. Folley and B. Stuart
PROXY INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in
the space provided below.
- --------------------------------------------------------------------------------
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
(Continued on reverse side)
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
"FOR" the election of the Board's nominees.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
DATED:_________________________, 1994,
______________________________________
Signature
______________________________________
Signature (if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE>
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Joseph R. Coppola
GIDDINGS & LEWIS, INC. and Richard C. Kleinfeldt, and each of them,
142 Doty Street as Proxies with the power of substitution (to
Fond du Lac, Wisconsin 54935 act jointly or if only one acts then by that one)
and hereby authorizes them to represent and to
vote as designated below all of the shares of
Common Stock of Giddings & Lewis, Inc. held of
record by the undersigned on March 4, 1994,
at the annual meeting of shareholders to be
held on April 27, 1994, or any adjournment or
postponement thereof.
1. ELECTION OF DIRECTORS
[] FOR all nominees listed [] WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed
below
Terms expiring at the 1997 Annual Meeting:
J. Coppola, C. Folley and B. Stuart
PROXY INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in
the space provided below.
- --------------------------------------------------------------------------------
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
(Continued on reverse side)
SAVINGS PLAN
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
"FOR" the election of the Board's nominees.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
DATED:_________________________, 1994,
______________________________________
Signature
______________________________________
Signature (if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE>
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Joseph R. Coppola
GIDDINGS & LEWIS, INC. and Richard C. Kleinfeldt, and each of them,
142 Doty Street as Proxies with the power of substitution (to
Fond du Lac, Wisconsin 54935 act jointly or if only one acts then by that one)
and hereby authorizes them to represent and to
vote as designated below all of the shares of
Common Stock of Giddings & Lewis, Inc. held of
record by the undersigned on March 4, 1994,
at the annual meeting of shareholders to be
held on April 27, 1994, or any adjournment or
postponement thereof.
1. ELECTION OF DIRECTORS
[] FOR all nominees listed [] WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed
below
Terms expiring at the 1997 Annual Meeting:
J. Coppola, C. Folley and B. Stuart
PROXY INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in
the space provided below.
- --------------------------------------------------------------------------------
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
(Continued on reverse side)
DIVIDEND REINVESTMENT PLAN
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
"FOR" the election of the Board's nominees.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
DATED:_________________________, 1994,
______________________________________
Signature
______________________________________
Signature (if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
