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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Giddings & Lewis, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
GIDDINGS & LEWIS/R/
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 30, 1997
To the Shareholders of
Giddings & Lewis, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders
of Giddings & Lewis, Inc. will be held on Wednesday, April 30, 1997, 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 two directors to hold office until the annual
meeting of shareholders in 2000 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 10, 1997 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.
Todd A. Dillmann
Secretary
Fond du Lac, Wisconsin
March 21, 1997
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>
GIDDINGS & LEWIS/R/
142 Doty Street
Fond du Lac, Wisconsin 54935
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 30, 1997
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 21, 1997 in connection with a solicitation of
proxies by the Board for use at the annual meeting of shareholders to be
held on Wednesday, April 30, 1997, 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 two 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 10, 1997 are entitled to vote at the Annual Meeting. On that date,
the Company had outstanding and entitled to vote 33,186,898 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 two directors to hold
office until the annual meeting of shareholders in 2000 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 two persons named as nominees
herein. The Board has no reason to believe that either of the listed
nominees will be unable or unwilling to serve as a director if elected.
However, in the event that either nominee should be unable to serve or for
good cause will not serve, the shares represented by proxies received will
be voted for another nominee selected by the Board. Directors will be
elected by a plurality of the votes cast at the Annual Meeting (assuming a
quorum is present). An abstention from voting will be tabulated as a vote
withheld on the election, and will be included in computing the number of
shares present for purposes of determining the presence of a quorum, but
will not be considered in determining whether each of the nominees has
received a plurality of the votes cast at the Annual Meeting. A broker or
nominee holding shares registered in its name, or the name of its nominee,
which are beneficially owned by another person and for which it has not
received instructions as to voting from the beneficial owner, has the
discretion to vote the beneficial owner's shares with respect to the
election of directors.
The following sets forth certain information, as of March 1,
1997, about the Board's nominees for election at the Annual Meeting and
each director of the Company whose term will continue after the Annual
Meeting. The following also includes information about those directors of
the Company whose current terms will expire in April 1997.
Nominees for Election at the Annual Meeting
Terms expiring April 2000
[Photo of Marvin L. Isles, 51, has served as President and Chief
Mr. Isles] Operating Officer of the Company since June 1996. From
1994 until joining the Company, Mr. Isles was Executive
Vice President of GenCorp Inc. (a manufacturer of
automotive, polymer and aerospace and defense products).
Between 1988 and 1994, Mr. Isles was Vice President of
GenCorp Inc. and President of its automotive business. On
March 17, 1997, Mr. Isles was appointed President and Chief
Executive Officer of the Company.
Director since: 1996
[Photo of Ben R. Stuart, 62, has served as President and Chief
Mr. Stuart] 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" BOTH NOMINEES. SHARES OF COMMON
STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR"
BOTH NOMINEES.
Directors Continuing in Office
Terms expiring April 1998
[Photo of John A. Becker, 55, has served as President and Chief
Mr. Becker] Operating Officer of Firstar Corporation (a bank holding
company) since February 1991 and as President thereof since
January 1990. Mr. Becker is a director of Firstar
Corporation and Firstar Trust Company.
Director since: 1989
[Photo of John W. Guffey, Jr., 59, has served as Chairman and
Mr. Guffey] Chief Executive Officer since February 1995, and as
President since May 1991, of Coltec Industries Inc. (a
manufacturer serving the aerospace, automotive and general
industrial markets). Mr. Guffey is a director of Coltec
Industries Inc. and Gleason Corporation.
Director since: 1995
Terms expiring April 1999
[Photo of Ruth M. Davis, 68, has served as President and Chief
Dr. Davis] 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 space technology) since December 1992.
Dr. Davis is Vice Chairman of the Board of Betac
Corporation, a trustee of Consolidated Edison Company of
New York and a director of Air Products and Chemicals,
Inc., BTG, Inc., Ceridian Corporation, Premark
International, Inc., Sprint Corporation, Tupperware Corp.
and Varian Associates, Inc.
Director since: 1993
[Photo of Benjamin F. Garmer, III, 55, has been a partner in the law
Mr. Garmer] 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
Terms expiring April 1997
[Photo of Joseph R. Coppola, 66, was appointed Chairman of the Board
Mr. Coppola] and Chief Executive Officer of the Company in 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). Mr. Coppola is a director of Belden Inc. and
Coltec Industries Inc. Mr. Coppola retired as Chief
Executive Officer of the Company on March 17, 1997 and his
current term as a director will expire in April 1997.
Director since: 1989
[Photo of Clyde H. Folley, 69, served as Vice Chairman and as Chief
Mr. Folley] 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.
Director since: 1990
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, reviews the adequacy of internal audit procedures and
reviews audit results. Dr. Davis and Messrs. Folley (Chairman) and Guffey
are members of the Audit Committee. The Audit Committee held three
meetings in 1996. 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. Becker
(Chairman), Garmer and Stuart are members of the Compensation Committee.
The Compensation Committee held four meetings in 1996. 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.
Coppola (Chairman), Becker, Folley and Stuart are members of the
Executive/Nominating Committee. The Executive/Nominating Committee did
not meet in 1996. The Executive/Nominating Committee will consider
nominees recommended by shareholders, but has no established procedures
which shareholders must follow to make a recommendation. The Company's
By-laws also provide for shareholder nominations of candidates for
election as directors. These provisions require such nominations to be
made pursuant to timely notice (as specified in the By-laws) in writing to
the Secretary of the Company. The shareholder's notice of nomination must
contain information relating to the nominee which is required to be
disclosed by the Company's By-laws and the Securities Exchange Act of
1934.
The Board held six meetings in 1996. 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 or 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 April 24, 1996,
each of Dr. Davis and Mr. Garmer were granted options to purchase 1,000
shares of Common Stock at a per share exercise price of $18. The options
will become exercisable upon the expiration of the current terms of each
of said non-employee directors. No options granted to the non-employee
directors under the Independent Director Plan were exercised in 1996.
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
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 April 24, 1996, 476 shares of restricted stock were
awarded under the 1993 Plan to each of Dr. Davis and Messrs. Becker,
Folley, Garmer, Guffey and Stuart.
PRINCIPAL SHAREHOLDERS
Management
The following table sets forth information, as of March 1, 1997,
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, nominees and executive
officers (including the executive officers named in the Summary
Compensation Table) as a group.
Amount and Nature of
Beneficial Percent of
Name of Beneficial Owner Ownership(1)(2) Class
John A. Becker . . . . . . 4,896 *
Joseph R. Coppola . . . . . 344,430(3) 1.0%
Ruth M. Davis . . . . . . . 2,696 *
Clyde H. Folley . . . . . . 7,339(4)(5) *
Benjamin F. Garmer, III . . 4,696 *
John W. Guffey, Jr. . . . . 4,984 *
Marvin L. Isles . . . . . . 110,000 *
Ben R. Stuart . . . . . . . 3,696 *
Heinz G. Anders . . . . . . 88,000 *
Stephen M. Peterson . . . . 87,517 *
Philip N. Ciarlo . . . . . 64,000 *
Richard C. Kleinfeldt . . . 125,566(6) *
All directors, nominees and
executive officers as a
group (18 persons) . . . 1,301,377 3.8%
_______________
* Less than one percent.
(1) Includes the following shares subject to stock options which are
currently exercisable or exercisable within 60 days of March 1,
1997: Mr. Becker, 2,000 shares; Mr. Coppola, 291,000 shares; Dr.
Davis, 1,000 shares; Mr. Folley, 2,000 shares; Mr. Garmer, 2,000
shares; Mr. Stuart, 1,000 shares; Mr. Anders, 31,000 shares; Mr.
Peterson, 31,367 shares; Mr. Ciarlo, 13,000 shares; Mr. Kleinfeldt,
62,287 shares; and all directors, nominees and executive officers
as a group, 623,334 shares.
(2) Includes the following restricted shares of Common Stock granted
under either the 1989 Restricted Stock Plan or the 1993 Plan over
which the holders have sole voting but no investment power: Mr.
Becker, 1,696 shares; Mr. Coppola, 357 shares; Dr. Davis, 1,696
shares; Mr. Folley, 1,339 shares; Mr. Garmer, 1,696 shares; Mr.
Guffey, 984 shares; Mr. Isles, 75,000 shares; Mr. Stuart, 1,696
shares; Mr. Anders, 51,000 shares; Mr. Peterson, 45,000 shares;
Mr. Ciarlo, 51,000 shares; Mr. Kleinfeldt, 36,000 shares; and all
directors, nominees and executive officers as a group, 498,064
shares. The shares of restricted stock reflected in the table
include shares granted to the executive officers in February 1997.
(3) Mr. Coppola's current term as a director will expire in April 1997.
(4) Mr. Folley's current term as a director will expire in April 1997.
(5) Mr. Folley shares voting and investment power over 4,000 shares of
his Common Stock with his wife.
(6) Mr. Kleinfeldt retired as Vice President - Finance and as a
director of the Company in December 1996.
Other Beneficial Owners
The following table sets forth information, as of December 31,
1996, 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 on filings made on
Schedule 13G with the Securities and Exchange Commission by the beneficial
owners.
Amount and Nature Percent
Name and Address of Beneficial Ownership of
of Beneficial Owner Voting Power Investment Power Aggregate Class
Sole Shared Sole Shared
State of Wisconsin 3,120,000 -0- 3,120,000 -0- 3,120,000 9.4%
Investment Board
P.O. Box 7842
Madison, Wisconsin
53707
Sanford C. Bernstein 1,446,450 27,950 1,710,200 -0- 1,710,200 5.2%
& Co., Inc.
767 Fifth Avenue
New York, New York
10153
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information concerning
compensation paid for the last three fiscal years to certain executive
officers of the Company, including the Company's Chief Executive Officer.
The persons named in the table are sometimes referred to herein as the
"named executive officers."
<TABLE>
Summary Compensation Table
Annual Long Term Compensation
Compensation(1) Awards
<CAPTION>
Securities
Restricted Underlying
Name and Principal Salary Bonus Stock Stock All Other
Position Year ($) ($)(2) Awards($)(3) Options(#) Compensation($)(4)
<S> <C> <C> <C> <C> <C> <C>
Joseph R. Coppola 1996 $475,008 $269,439 $450,000 - $62,022
Chairman, Chief Executive 1995 424,992 240,771 - 70,000 53,478
Officer and Director(5) 1994 399,996 188,158 968,750 105,000 50,112
Marvin L. Isles 1996 247,919 200,000 249,375 30,000 35,416
President and Chief Operating 1995 - - - - -
Officer(5) 1994 - - - - -
Heinz G. Anders 1996 246,700 40,000 225,000 15,000 -
Group Vice President and 1995 253,200 28,969 190,500 12,000 -
General Manager - European 1994 185,690 45,161 149,400 18,000 7,077
Operations
Stephen M. Peterson 1996 190,008 77,000 180,000 12,000 1,125
Group Vice President 1995 187,008 70,545 142,875 9,000 1,125
and General Manager - 1994 165,000 47,000 - 8,000 1,125
Fadal Engineering
Philip N. Ciarlo 1996 187,238 110,000 375,000 15,000 36,223
Group Vice President 1995 147,982 68,740 190,500 12,000 1,125
and General Manager - 1994 74,842 41,666 - - 1,125
Integrated Automation
Richard C. Kleinfeldt(6) 1996 227,004 85,000 270,000 18,000 1,125
1995 216,996 78,485 285,750 18,000 1,125
1994 207,996 63,563 - 12,000 1,125
(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.
(2) For 1996, 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 officer) 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, 1996, were as follows: Mr. Coppola, 80,357 shares ($1,034,596); Mr. Isles, 15,000 shares
($193,125); Mr. Anders, 29,000 shares ($373,375); Mr. Peterson, 21,000 shares ($270,375); Mr. Ciarlo, 37,000
shares ($476,375); and Mr. Kleinfeldt, 36,000 shares ($463,500). During 1996, Messrs. Coppola, Isles,
Anders, Ciarlo, Peterson and Kleinfeldt were awarded 30,000, 15,000, 15,000, 15,000, 12,000 and 18,000
shares of restricted stock, respectively, which, except for Mr. Isles' and Mr. Coppola's shares, will vest
following the release of financial statements for the year ended December 31, 1998 assuming certain
performance criteria are achieved. Mr. Isles' award will vest in increments of 5,000 shares on June 1,
1997, 1998 and 1999. Mr. Coppola's award was subject to vesting based on performance criteria for the year
ended December 31, 1996. Based on such performance criteria, 14,000 shares of Mr. Coppola's 1996 restricted
stock grant vested and the remaining shares were forfeited. During 1996, Mr. Ciarlo received an additional
grant of 10,000 shares of restricted stock, which shares were subject to vesting based on certain
performance criteria for the year ended December 31, 1996. All of such shares were forfeited by Mr. Ciarlo.
A portion of the shares of restricted stock granted to each named executive officer in 1995 will vest
following the release of financial statements for the year ended December 31, 1997 assuming that certain
performance criteria are achieved. During 1994, Mr. Coppola was awarded 12,000 shares of restricted stock
which vested on January 31, 1997 and 38,000 shares of restricted stock which by their terms were subject to
vesting on January 31, 1997 based on certain performance criteria. Of such 38,000 restricted shares, 8,000
shares vested on January 31, 1997 and the remaining shares were forfeited. Holders of shares of restricted
Common Stock are entitled to receive dividends on such shares.
(4) The amounts reflected in the table for fiscal 1996 consist of the following: (a) for Mr. Coppola, a $60,897
contribution (including accrued interest) credited to his account under his supplemental pension
arrangement, see "Pension Plan Benefits," and a Company matching contribution of $1,125 under the Giddings &
Lewis Savings Plan (the "Savings Plan"), which is a profit sharing plan under Section 401(k) of the Internal
Revenue Code; (b) for Mr. Isles, a $35,416 transfer allowance paid by the Company in connection with Mr.
Isles' appointment as President and Chief Operating Officer; (c) for Mr. Ciarlo, a $35,098 transfer
allowance paid by the Company in connection with Mr. Ciarlo's appointment as Group Vice President and
General Manager of the Company's Integrated Automation Group and a Company matching contribution of $1,125
under the Savings Plan; and (d) for all other named executive officers (except Mr. Anders), Company matching
contributions under the Savings Plan.
(5) Mr. Coppola retired as Chief Executive Officer of the Company on March 17, 1997. Mr. Isles was appointed as
Chief Executive Officer on that date to succeed Mr. Coppola.
(6) Mr. Kleinfeldt retired as Vice President-Finance and as a director of the Company in December 1996.
</TABLE>
Stock Options
The Company has in effect the 1989 Stock Option Plan and the
1993 Plan pursuant to which options to purchase Common Stock may be
granted to key employees (including officers) of the Company and its
subsidiaries. The following table presents certain information as to
grants of stock options made during fiscal 1996 to each of the named
executive officers.
<TABLE>
Option Grants in 1996 Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term (2)
<CAPTION>
Number of
Securities Percent of
Underlying Total Options At 0% At 5% At 10%
Options Granted to Exercise or Annual Annual Annual
Granted Employees in Base Price Expiration Growth Growth Growth
Name (#)(1) Fiscal Year ($/Share) Date Rate Rate Rate
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph R. Coppola . . . . - - - - - - -
Marvin L. Isles . . . . . 30,000 10.8% $16.625 6/1/06 $0 $313,661 $794,879
Heinz G. Anders . . . . . 15,000 5.4 15.00 2/2/06 0 141,501 358,592
Stephen M. Peterson . . . 12,000 4.3 15.00 2/2/06 0 113,201 286,874
Philip N. Ciarlo . . . . 15,000 5.4 15.00 2/2/06 0 141,501 358,592
Richard C. Kleinfeldt . . 18,000 6.5 15.00 2/2/06 0 169,802 430,310
_______________
(1) The options reflected in the table (which are non-qualified options for purposes of the Internal Revenue
Code) were granted in the case of Mr. Isles on June 1, 1996 and on February 2, 1996 in the case of the
other named executive officers and vest ratably over a three-year period from the date of grant.
(2) This presentation is intended to disclose the potential value which would accrue to the optionee if the
option were exercised the day before it would expire and if the per share value had appreciated at the
compounded annual rate indicated in each column. The assumed rates of appreciation of 5% and 10% are
prescribed by the rules of the Securities and Exchange Commission regarding disclosure of executive
compensation. The assumed annual rates of appreciation are not intended to forecast possible future
appreciation, if any, with respect to the price of the Common Stock.
</TABLE>
The following table sets forth information regarding the fiscal
year-end value of unexercised options held by the named executive
officers. No options were exercised by the named executive officers
during fiscal 1996.
Fiscal Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End(#) at Fiscal Year-End($)(1)
Name Exercisable Unexercisable Exercisable Unexercisable
Joseph R. Coppola 171,000 35,000 $938 0
Marvin L. Isles - 30,000 - 0
Heinz G. Anders 16,000 29,000 0 0
Stephen M. Peterson 24,067 20,666 0 0
Philip N. Ciarlo 4,000 23,000 0 0
Richard C. Kleinfeldt 46,287 34,000 117,500 0
_______________
(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 fiscal year-end.
Management Stock Purchase Program
On March 13, 1997, the Company adopted a Management Stock
Purchase Program pursuant to which certain members of the Company's senior
management team and other key employees purchased an aggregate of 282,355
shares of Common Stock. The program is intended to align more closely the
interests of management and shareholders. Under the terms of the
voluntary program, the participants used personal full-recourse loans to
exercise options to purchase Common Stock granted under the 1993 Plan with
an exercise price of $14.125 per share, which was the fair market value of
the Common Stock on the grant date as determined by the Compensation
Committee of the Board. The loans, which were arranged through a
commercial bank, are the personal obligations of the participants. The
Company has agreed to guarantee repayment to the bank in the event of a
default by a participant. The Company has also agreed to pay the interest
on the loans (net of dividends received on the purchased shares) on behalf
of the participants. Of the named executive officers participating in the
program, Messrs. Isles, Peterson and Ciarlo purchased 114,285, 25,000 and
14,000 shares, respectively. Other executive officers of the Company who
purchased shares under the program include: Douglas E. Barnett, Vice
President and Corporate Controller (19,000 shares); Carmine F. Bosco,
Group Vice President and General Manager-Automation Measurement and
Control (25,000 shares); Todd A. Dillmann, Corporate Counsel and Secretary
(16,570 shares); Robert N. Kelley, Vice President-Administration (22,000
shares); and James B. Simon, Group Vice President and General Manager-
Automation Technology (10,000 shares). Since the shares purchased under
the program were acquired after March 1, 1997, they are not reflected in
the ownership information presented under "Principal Shareholders" above.
Under the terms of the program, no participant may sell any
portion of the purchased shares unless all principal, interest and
prepayment fees, if any, due on the loan have been paid or all sale
proceeds are simultaneously applied first to the payment of such amounts.
The program also incorporates risk and benefit sharing provisions. Under
these provisions, if any portion of the purchased shares is sold before
the third anniversary of the exercise date, the participant will be
responsible for 100% of any loss, and will be entitled to receive 50% of
any gain, on that portion of the purchased shares. If any portion of the
purchased shares is sold on or after the third anniversary of the exercise
date while the loan remains outstanding, the participant will be
responsible for 50% of any loss, and will be entitled to receive 100% of
any gain, on that portion of the purchased shares. In the event of a
participant's death or disability, the participant will not be responsible
for any loss on the purchased shares and will be entitled to the entire
amount of any gain on the sale of such shares. In the event a participant
is terminated for cause (as defined in the program), the gain sharing
provision will continue to apply, but the participant will not be entitled
to receive any benefit of the loss sharing provision.
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>
Years of Service
<CAPTION>
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
500,000 . . . . 41,250 82,500 123,750 165,000 206,250 247,500 288,750
</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 1996 compensation limit applicable to the Retirement
Plan was $150,000. The number of years of credited service as of
December 31, 1996 that will be recognized for certain of the named
executive officers is as follows: Mr. Isles, 1 year; Mr. Peterson, 28
years; and Mr. Ciarlo, 2 years. At the time of his retirement as an
executive officer, Mr. Kleinfeldt had 32 years of credited service.
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 and Mr. Anders do not participate in the Retirement Plan and
the excess benefit plan.
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 has entered into an executive consulting agreement
with Mr. Coppola. Pursuant to the terms of the agreement, Mr. Coppola
will, following his retirement, be retained by the Company as senior
consultant for a three-year period, at annual compensation of $200,000 for
the first twelve months of his consultancy, $150,000 for the second twelve
months and $100,000 for the third twelve months. Additionally, the
Company purchased Mr. Coppola's residence in Fond du Lac, Wisconsin for
$715,000 in accordance with an option contained in the consulting
agreement requiring the Company to effect such purchase. Mr. Coppola
exercised the option requiring the purchase in January 1997. Mr.
Coppola's cost basis in his Fond du Lac residence, which was built in
1994, was $785,000. The consulting agreement also contains certain
noncompetition and confidentiality provisions applicable to Mr. Coppola.
The Company may only terminate the agreement for cause, which includes
theft, dishonesty, fraudulent misconduct, gross dereliction of duty or
other grave misconduct on the part of Mr. Coppola which is substantially
injurious to the Company.
The Company has also entered into a retirement agreement with
Mr. Kleinfeldt in connection with his retirement as Vice President-Finance
and as a director of the Company in December 1996. Pursuant to the terms
of the agreement, Mr. Kleinfeldt has agreed to remain as an employee of
the Company until April 1, 1997. Mr. Kleinfeldt's agreement further
provides, among other things, that from his retirement as an employee
through the first to occur of March 31, 1999 or his death, Mr. Kleinfeldt
will serve as a consultant to the Company. During his tenure as a
consultant, Mr. Kleinfeldt will be treated as an employee of the Company
for purposes of the Company's employee benefit plans and fringe benefits,
but will not be eligible to participate in any management incentive
compensation plans. Mr. Kleinfeldt's annual compensation as a consultant
will be equal to his base salary for 1996 ($227,000 per year) and will
also include certain other perquisites provided to Mr. Kleinfeldt while he
was an executive officer of the Company. Pursuant to the terms of the
retirement agreement, Mr. Kleinfeldt is subject to certain noncompetition,
nonsolicitation, and confidentiality provisions for the term of the
agreement.
The Company also has employment and severance agreements with
certain of its executive officers, including Messrs. Coppola, Isles,
Peterson and Ciarlo. The agreements provide that each executive officer
is entitled to benefits if, within five years after a "change in control
of the Company," 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. Among other
situations, a "change in control of the Company" will be deemed to have
occurred for purposes of the agreements if: (i) a person (other than with
respect to an employee benefit plan of the Company) becomes the beneficial
owner of 20% or more of the voting power of the Company's securities; (ii)
at any time one-third or more of the directors of the Company are not
Continuing Directors (as defined in the agreements); (iii) a merger is
consummated in which the Company is not the surviving corporation or
pursuant to which shares of Common Stock are converted into cash,
securities or other property, unless the holders of Common Stock maintain
their same proportionate ownership in the surviving corporation; (iv) the
Company sells or otherwise disposes of all or substantially all of its
assets; or (v) the shareholders of the Company approve a plan of
liquidation or dissolution for the Company. 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.
In addition, a subsidiary of the Company has an agreement with
Mr. Anders pursuant to which he will be employed as Managing Director of
such subsidiary until May 31, 1998, subject to voluntary termination by
Mr. Anders and termination for cause under German law. Mr. Ander's
employment agreement provides for a minimum annual base salary of DM
350,000 (approximately $206,955) and is subject to upward adjustment. He
is eligible to participate in the Company's Management Incentive
Compensation Plan and receive certain other perquisites. The employment
agreement provides that the subsidiary will pay one-half of Mr. Anders'
obligations with respect to certain social security contributions required
by German law and will pay to Mr. Anders or his beneficiary six months'
salary in the event of his disability and three months' salary in the
event of his death. The employment agreement also contains a covenant not
to compete which extends for a period of two years after termination of
such agreement.
Executive Relocations
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 April 1996, Mr. Ciarlo, Group Vice President and General Manager of the
Company's Integrated Automation Group, received a $100,000 advance from
the Company in connection with his transfer to the Company's Fraser,
Michigan facility. Mr. Ciarlo repaid the amount advanced in July 1996.
In connection with the hiring of Mr. Isles as the Company's
President and Chief Operating Officer, the Company in August 1996
purchased Mr. Isles' former residence in Akron, Ohio for $690,000, which
purchase price was based on third-party appraisals of the property
obtained by the Company.
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 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 be
deemed appropriate by the Compensation Committee and subject to the
Committee's sole discretion regarding awards of 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 executive 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 compensation program elements, including the basis for the
compensation awarded to 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.
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 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 program. This review includes a comprehensive assessment by
independent compensation consultants to determine the effectiveness of the
Company's compensation program in providing executives with a competitive
compensation opportunity which is tied to the Company's strategic and
business goals. The consultants compare the Company's executive
compensation levels to the market using general compensation survey data,
and then verify these results by comparing executive compensation, Company
financial performance, stock price appreciation and total return to
shareholders to a group of public companies that have characteristics
similar to the Company with respect to size and performance. The peer
group is reviewed by the Compensation Committee to ensure that the
selected companies are comparable with the Company. The Compensation
Committee's goal is to set executive compensation levels at the median
level indicated by both the peer group of companies used for comparison
purposes and the published survey data.
The peer group companies include those constituting the Standard
& Poor's Diversified Machinery Index to which the Company compares its
cumulative return (see "Performance Information") as well as other
companies. The Compensation Committee believes that expansion of the
comparator group beyond that index is appropriate since each of the
companies in the Standard & Poor's Diversified Machinery Index has greater
total annual revenues than the Company.
Base Salaries. The Company has established competitive base
salary ranges for all executive officers, including the named executive
officers. These salary ranges are set in accordance with the
recommendations developed by the Company's independent compensation
consultants with data from recognized compensation surveys covering
hundreds of manufacturing companies. The Company's policy is to target
its base salary ranges to the median of the competitive market which is
defined as companies of similar characteristics and size.
Annual salary adjustments for each executive officer are based
on competitive salary increase levels determined by published data, the
relationship of an executive officer's salary to the midpoint of the
applicable salary range, and the executive's individual performance over
the past year, taking into account any new responsibilities assumed by the
executive. In the case of executive officers with operating
responsibility for a particular business unit, individual performance may
be determined by either such business unit's financial results,
nonfinancial performance measures or both. Nonfinancial measures may
include an increase in market share, manufacturing efficiency gains,
improvements in product quality and improvements in relations with
customers, suppliers and employees. Nonfinancial measures used for
executive officers are determined on a case-by-case basis and the
Compensation Committee does not assign any specific weight to any one of
these factors.
The base salary established for Mr. Coppola reflects the
competitive market median salary range established for this position by
the Compensation Committee based on discussions with outside consultants,
his contribution to the Company's performance, his prior experience and
managerial expertise, his knowledge of the Company's operations and
industry, and his knowledge of the Company's customer base. For 1996, Mr.
Coppola's base salary was set at $475,000.
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. This is the same survey
data used to determine base salary ranges. The fiscal 1996 annual
incentive targets for executive officers were set at the competitive
median.
For all executives, the bonus is based 80% on financial
performance and 20% on individual performance. For those executives with
business unit accountability, the financial measures are related to
earnings goals for the period and management of controllable assets. The
financial goal for those executives, including Mr. Coppola, without
specific business unit accountability is budgeted earnings per share
("EPS"). In all cases, if minimum performance expectations (both
individual and corporate) are not met, no bonuses will be paid. In 1996,
the Company exceeded its minimum EPS objectives before extraordinary
charges, but fell slightly short of its target. Based on these results,
Mr. Coppola was awarded a bonus of $269,439 against a target bonus of
$285,000.
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 the
recommendations of independent compensation consultants retained by the
Company, the Compensation Committee has established guidelines for the
size of stock option awards based on competitive stock option grant levels
indicated by published survey data covering targeted manufacturing
companies. These guidelines are stated as total grant value as a multiple
of base salary. In determining whether to grant stock options in
accordance with the guidelines governing such grants, the Compensation
Committee also considers past and current corporate performance as well as
the size of prior grants made to the Company's executive officers.
All named executive officers, other than Mr. Coppola, were
awarded stock options in 1996 which vest ratably over three years.
Restricted Stock. From time to time, the Compensation Committee
grants executives shares of restricted stock to recognize individual
contributions, the vesting of which is generally dependent upon the
achievement of certain performance criteria. 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.
In 1996, all named executive officers, except Mr. Isles,
received grants of performance-based restricted stock. These shares
granted to Messrs. Anders, Ciarlo, Peterson and Kleinfeldt vest following
the release of financial statements for the year ended December 31, 1998
if the Company meets specified earnings per share targets for the 1996-
1998 period. A portion of Mr. Coppola's restricted shares vested based on
earnings per share targets for the year ended December 31, 1996. The
remaining shares that did not vest were forfeited. In addition, upon his
commencement of employment, Mr. Isles received a grant of restricted
shares that vest ratably over a three-year period based on his continued
employment.
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 intends to reference these guidelines when making future stock-
based awards to executive officers in order to ensure that the executive
officers have the opportunity to meet the established stock ownership
guidelines.
Section 162(m) Limitations. Under Section 162(m) of the
Internal Revenue Code, a tax deduction by certain corporate taxpayers,
including 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. The Compensation Committee is committed to
a compensation approach which links executive compensation with
performance as described in this report, and therefore will consider the
impact of Section 162(m) on the deductibility of compensation paid to the
Company's executive officers.
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 determining each
of the components of total compensation for executive officers, the
Compensation Committee targets 35% to 50% of total compensation to be in
the form of performance-based variable compensation. In 1996, as in
previous years, the performance-based components of the Company's
executive compensation fell within this range based on a projected value
of long-term compensation over five years. 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, during a
particular period, result in a compensation mix for an executive which is
different than the desired range.
GIDDINGS & LEWIS, INC.
COMPENSATION COMMITTEE
John A. Becker, Chairman
Benjamin F. Garmer, III
Ben R. Stuart
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 serves as a director of Coltec Industries
Inc. and was a member of that company's compensation committee during a
portion of fiscal 1996. Mr. Guffey, a director of the Company, is
Chairman and Chief Executive Officer and is a director of Coltec
Industries Inc.
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis the yearly
changes during the last five years 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 December 31, 1991 in Common Stock, the
S&P 500 Index and the S&P Diversified Machinery Index.
[Performance Graph]
<TABLE>
<CAPTION>
December 31, December 31, December 31, December 31, December 31, December 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
GIDDINGS & LEWIS, INC. $100 $169 $170 $ 98 $109 $ 85
S&P 500 100 104 112 110 148 178
S&P DIVERSIFIED MACHINERY 100 108 157 147 179 220
</TABLE>
MISCELLANEOUS
Independent Auditors
Ernst & Young LLP acted as the independent auditors for the
Company in 1996 and it is anticipated that such firm will be similarly
appointed to act in 1997. Representatives of Ernst & Young LLP 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 1998 annual
meeting must be received by the Company by the close of business on
November 21, 1997. In addition, a shareholder who otherwise intends to
present business at the 1998 annual meeting (including nominating persons
for election as directors) 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.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 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.
Solicitation Expenses
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 will
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.
Todd A. Dillmann
Secretary
March 21, 1997
<PAGE>
GIDDINGS & LEWIS, INC.
1997 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph R. Coppola and Todd A. Dillmann,
and each of them, as Proxies with the power of substitution (to 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
10, 1997 at the annual meeting of shareholders to be held on April 30,
1997, or any adjournment or postponement thereof.
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.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
GIDDINGS & LEWIS, INC. 1997 ANNUAL MEETING
1. ELECTION 1 - Marvin L. 2 - Ben R. [_] FOR all [_] WITHHOLD
OF Isles Stuart nominees AUTHORITY
DIRECTORS listed to vote
terms expiring to the for all
at the 2000 left nominees
Annual Meeting (except as listed to
marked to the left.
the contrary
below).
(Instructions: To withhold authority to vote for any
indicated nominee, write number(s) of the nominee(s) [ ]
in the box provided to the right.)
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Address Change? Date_____________, 1997 NO. OF SHARES
Mark Box [ ]
Indicate changes below:
[ ]
Signature(s) in Box
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.
