<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
DAYTON SUPERIOR CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
[DAYTON SUPERIOR LOGO]
DAYTON SUPERIOR CORPORATION
721 Richard Street
Miamisburg, Ohio 45342
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 1998
------------------
To the Shareholders of
Dayton Superior Corporation:
NOTICE HEREBY IS GIVEN that the 1998 Annual Meeting of Shareholders of
Dayton Superior Corporation will be held at the Dayton Marriott Hotel, 1414
South Patterson Boulevard, Dayton, Ohio, at 9:30 a.m., EDT, on Thursday, May 7,
1998 for the purpose of considering and voting upon:
1. Election of six directors for a one-year term.
2. Transaction of such other business as properly may come before the
meeting or any adjournments thereof.
The close of business on March 13, 1998 has been fixed as the record date
for the determination of the shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournment.
Please complete, date, sign and return the enclosed proxy in the envelope
provided. Your prompt response will be appreciated.
By Order of the Board of Directors,
/s/ Douglas L. Good
Douglas L. Good
Secretary
Dayton, Ohio
April 8, 1998
<PAGE> 3
[DAYTON SUPERIOR LOGO]
DAYTON SUPERIOR CORPORATION
721 RICHARD STREET
MIAMISBURG, OHIO 45342
------------------
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Dayton Superior Corporation, an Ohio corporation (the
"Company"), of proxies to be used at the Annual Meeting of Shareholders to be
held on May 7, 1998 and any adjournments thereof. This Proxy Statement and the
accompanying form of proxy are first being mailed to shareholders on or about
April 8, 1998.
Holders of record of the Class A Common Shares, without par value ("Class A
Shares"), and Class B Common Shares, without par value ("Class B Shares"), of
the Company on March 13, 1998 will be entitled to vote at the meeting. On that
date there were 4,921,806 Class A Shares and 806,350 Class B Shares outstanding.
All of the outstanding Class B Shares are held by Ripplewood Holdings L.L.C. The
holders of the Class A Shares are entitled to one vote per share, and the holder
of the Class B Shares is entitled to ten votes per share, with respect to any
matter submitted to a vote of the shareholders. The holders of the Class A
Shares and the Class B Shares (together, the "Common Shares"), will vote
together as a single class on all matters to be considered at the meeting. The
holders of the Class A Shares have approximately 37.9% of the voting power of
the Company, and the holder of the Class B Shares has approximately 62.1% of the
voting power of the Company. The holders of the Common Shares do not have
cumulative voting rights.
All Common Shares represented by properly executed proxies in the
accompanying form received by the Company in sufficient time to permit
examination and tabulation before a vote is taken will be voted in accordance
with the directions of the shareholder specified on the proxy. IF NO DIRECTIONS
HAVE BEEN SPECIFIED BY MARKING THE APPROPRIATE SQUARES ON THE PROXY, THE SHARES
REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS. A shareholder signing and returning the accompanying
proxy has the power to revoke it at any time prior to its exercise by delivering
to the Company a later dated proxy or by giving notice to the Company in writing
or in open meeting but without affecting any vote previously taken.
The holders of Common Shares entitling them to a majority of the voting
power of the Company must be present in person or by proxy at the Annual Meeting
to constitute a
<PAGE> 4
quorum for conducting business. Shares represented by proxies received by the
Company will be counted as present at the Annual Meeting for purposes of
determining the existence of a quorum, regardless of how or whether such shares
are voted on a specific proposal. Directors will be elected by a plurality of
the votes cast, while, under the Company's Code of Regulations, the vote
required for approval of any other matter to be considered at the Annual Meeting
will be a majority of the shares present in person or by proxy at the meeting.
Abstentions and broker non votes are counted as shares present at the meeting
for purposes of determining the presence of a quorum and, except in the election
of directors, have the effect of a vote against any other matter considered by
the shareholders.
ELECTION OF DIRECTORS
The Company's Board of Directors consists of six directors. At the 1998
Annual Meeting, the shareholders will elect six directors to hold office until
the next Annual Meeting of Shareholders.
The six persons who have been nominated for election as directors are
William F. Andrews, John A. Ciccarelli, Timothy C. Collins, Matthew O. Diggs,
Jr., Matthew M. Guerreiro and Robert B. Holmes, all of whom presently are
directors of the Company. It is the intention of the holders of the proxies in
the accompanying form to vote for the election of these six nominees, unless
authorization to do so is withheld. The holders of the proxies may, in their
discretion, vote for substitute nominees in the event that any nominee becomes
unable to serve for any reason presently unknown.
NOMINEES
WILLIAM F. ANDREWS
Mr. Andrews, age 66, has been a director since February 1997. Mr. Andrews
has been Chairman of Schrader-Bridgeport International, Inc., a manufacturer of
tire valves and automotive accessories, and Chairman of Scovill Fasteners Inc.,
a manufacturer of apparel and industrial fasteners, since 1995. Mr. Andrews was
Chairman, President and Chief Executive Officer of Amdura Corporation (formerly
American Hoist & Derrick Co.), a speciality manufacturer, from 1993 until 1995
and President and Chief Executive Officer of UNR Industries, Inc., a
manufacturer of steel products, from 1991 to 1993. Mr. Andrews is a director of
Black Box Corp., Corrections Corporation of America, Johnson Controls, Inc.,
Katy Industries, Navistar International Corporation, Northwestern Steel & Wire
Co., and Southern New England Telecommunications Corporation.
JOHN A. CICCARELLI
Mr. Ciccarelli, age 58, has been President of the Company since 1989 and
has been Chief Executive Officer and a director of the Company since 1994.
TIMOTHY C. COLLINS
Mr. Collins, age 41, has been a director of the Company since 1991 and was
Chairman of the Board of Directors from June 1994 until December 1995. Mr.
Collins is Senior
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Managing Director and Chief Executive Officer of Ripplewood Holdings L.L.C., a
private holding company formed by him in October 1995 ("Ripplewood"). From
February 1990 to October 1995, Mr. Collins was a Senior Managing Director of
Onex Investment Corp. (New York), a management company for the United States
investments of Onex Corporation, an Ontario corporation listed on the Toronto
and Montreal Stock Exchanges. Mr. Collins also is a director of Danielson
Holding Corp. and several privately-held companies.
MATTHEW O. DIGGS, JR.
Mr. Diggs, age 65, has been a director of the Company since October 1995
and non-executive Chairman of the Board of Directors since December 1995. Mr.
Diggs has been Chief Executive Officer of The Diggs Group, a private investment
firm, since 1990. Mr. Diggs also has been the non-executive Chairman of
Ripplewood since its inception in October 1995. From 1991 to 1994, Mr. Diggs was
Chairman of The Delfield Company, a manufacturer of food service equipment. Mr.
Diggs also is a director of Helix Technologies Corporation, Tower Automotive,
Inc. and Cavert Wire Company, Inc.
MATTHEW M. GUERREIRO
Mr. Guerreiro, age 41, has been a director of the Company since February
1994. Mr. Guerreiro has been a Managing Director of Salomon Smith Barney, Inc.,
an investment banking firm, since September 1997. From October 1995 until
September 1997, Mr. Guerreiro was a principal of Ripplewood, and from August
1992 to October 1995, he was a principal in the New York office of Onex
Investment Corp. (New York).
ROBERT B. HOLMES
Mr. Holmes, age 66, has been a director of the Company since March 1996.
Mr. Holmes is a director of Mitsubishi International Corporation, an advisory
director of Ripplewood and a principal of the Lens Fund, a private investment
company.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
There were eight meetings of the Board of Directors during 1997. The
committees of the Board of Directors are the Executive Committee (consisting of
Messrs. Ciccarelli (Chairman), Collins and Diggs), which did not meet in 1997;
the Audit Committee (consisting of Messrs. Andrews, Diggs and Holmes
(Chairman)), which held two meetings in 1997; and the Compensation and Benefits
Committee (consisting of Messrs. Collins, Diggs (Chairman) and Guerreiro), which
held five meetings in 1997. The Board of Directors does not have a Nominating
Committee or other committee with a similar function.
The Executive Committee may exercise any of the authority of the Board of
Directors (except as to certain matters that are not delegable) between meetings
of the Board. In practice, the Executive Committee would act only in special
situations.
The Audit Committee recommends annually to the Board of Directors for its
approval the engagement of the independent public accountants, verifies and
assures their independence, reviews the professional services they provide,
reviews the fees charged for audit and non-audit services, reviews the broad
scope of the internal and external audit
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programs, and reviews with the independent public accountants, at the completion
of their audit, the Company's financial statements and matters relating to the
audit. The Committee reports its findings and recommendations to the Board of
Directors.
The Compensation and Benefits Committee is responsible for assuring that
the officers and key management of the Company are effectively compensated in
terms of salaries, incentive compensation and benefits which are internally
equitable and externally competitive. The Compensation and Benefits Committee is
responsible for setting the compensation of the executive officers.
Directors who are not employees of the Company or Ripplewood receive an
annual retainer of $20,000 payable in Class A Shares for services as a director.
In addition, these directors also receive an annual grant of an option to
purchase 2,000 Class A Shares at an exercise price per share equal to the fair
market value of a Class A Share on the grant date. Directors who are also
employees of the Company or Ripplewood receive no additional remuneration for
serving as directors.
During 1997, each director attended at least 93% of the meetings of the
Board of Directors and the committees on which he served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During 1997, the Compensation and Benefits Committee of the Board of
Directors consisted of Matthew O. Diggs, Jr. (Chairman), Matthew M. Guerreiro,
and Timothy C. Collins. Messrs. Collins and Diggs are the Senior Managing
Director and Chief Executive Officer and the non-executive Chairman of the
Board, respectively, of Ripplewood. In addition, Mr. Guerreiro was a principal
of Ripplewood through September 22, 1997.
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<PAGE> 7
OWNERSHIP OF COMMON SHARES
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information as of February 10, 1998 with respect to
Common Shares of the Company beneficially owned by each director, each executive
officer named in the Summary Compensation Table and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
NUMBER OF CLASS A NUMBER OF CLASS B
COMMON SHARES COMMON SHARES % OF
BENEFICIALLY OWNED AS OF BENEFICIALLY OWNED AS OF COMMON
INDIVIDUAL OR GROUP FEBRUARY 10, 1998(1) FEBRUARY 10, 1998(2) SHARES
------------------- ------------------------ ------------------------ ------
<S> <C> <C> <C>
William F. Andrews(3)............ 5,818 -- *
Mario J. Catani.................. 57,500 -- 1.0%
John A. Ciccarelli(4)............ 181,500 -- 3.1%
Timothy C. Collins(5)............ -- 806,350 14.1%
Michael C. Deis, Sr. (6)......... 24,950 -- *
Matthew O. Diggs, Jr.(7)......... 130,220 -- 2.3%
Matthew M. Guerreiro............. -- -- --
Robert B. Holmes(8).............. 8,220 -- *
John R. Paine, Jr.(9)............ 16,900 -- *
James C. Stewart(10)............. 24,950 -- *
Directors and Executive Officers
As a Group (13 persons)(11).... 499,358 806,350 21.9%
</TABLE>
- ---------------
* Signifies less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes sole or shared
voting or investment power with respect to the shares. Includes the number
of Class A Shares subject to outstanding options exercisable within 60
days. Unless otherwise indicated, voting and investment power are exercised
solely by each individual and/or a member of his household.
(2) Each of the Class B Shares is convertible, at the option of the holder,
into one Class A Share at any time. The holder of the Class B Shares is
entitled to ten votes per share.
(3) Includes 2,000 Class A Shares which may be acquired upon the exercise of
stock options.
(4) Includes 144,000 Class A Shares which may be acquired upon the exercise of
stock options.
(5) Mr. Collins is the Senior Managing Director and Chief Executive Officer of
Ripplewood, and the only Common Shares beneficially owned by him are the
Class B Shares held of record by Ripplewood. See "Principal Shareholders".
(6) Includes 18,600 Class A Shares which may be acquired upon the exercise of
stock options.
(7) Includes 125,000 Class A Shares owned by EJJM, an Ohio limited partnership,
a family limited partnership of which Mr. Diggs is a general partner. Also
includes 2,000 Class A Shares which may be acquired upon the exercise of
stock options. Mr. Diggs is non-executive Chairman of the Board of
Ripplewood. His shareholdings in the Company do not include Common Shares
beneficially owned by Ripplewood.
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<PAGE> 8
(8) Includes 2,000 Class A Shares which may be acquired upon the exercise of
stock options.
(9) Consists of Class A Shares which may be acquired upon the exercise of stock
options.
(10) Includes 18,600 Class A Shares which may be acquired upon the exercise of
stock options.
(11) Includes 244,100 Class A Shares which may be acquired by directors and
executive officers upon the exercise of stock options.
PRINCIPAL SHAREHOLDERS
Set forth below is certain information about the only shareholders known by
the Company to be a beneficial owner of more than 5% of the outstanding Common
Shares of the Company as of the most recent practicable date prior to the date
of this Proxy Statement.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
CLASS CLASS
A SHARES B SHARES % OF % OF
BENEFICIALLY BENEFICIALLY CLASS A COMMON
NAME AND ADDRESS OWNED(1) OWNED(1) SHARES(1) SHARES(1)
---------------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
Ripplewood Holdings L.L.C.(2) -- 806,350 14.1% 14.1%
Timothy C. Collins
Collins Family Partners, L.P.
Collins Family Partners, Inc.
712 Fifth Avenue, 49th Floor
New York, NY 10019
FMR Corp.(3) 498,400 -- 10.1% 8.7%
82 Devonshire Street
Boston, Massachusetts 02109
Brinson Partners, Inc.(4) 488,600 -- 9.9% 8.5%
Brinson Holdings, Inc.
SBC Holding (USA), Inc.
Swiss Bank Corporation
209 South LaSalle
Chicago, Illinois 60604-1295
Jeffrey L. Gendell(5) 432,700 -- 8.8% 7.6%
Tontine Partners, L.P.
Tontine Management, L.L.C.
Tontine Overseas Associates, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166
Skyline Asset Management, L.P.(6) 358,200 -- 7.3% 6.3%
31 South Wacker Drive
Suite 4500
Chicago, Illinois 60606
U.S. Bancorp.(7) 267,518 -- 5.4% 4.7%
U.S. Bank National Association
First Trust National Association
601 2nd Ave. South
Minneapolis, Minnesota 55402-4302
</TABLE>
6
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<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
CLASS CLASS
A SHARES B SHARES % OF % OF
BENEFICIALLY BENEFICIALLY CLASS A COMMON
NAME AND ADDRESS OWNED(1) OWNED(1) SHARES(1) SHARES(1)
---------------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C>
Wellington Management 262,400 -- 5.3% 4.6%
Company, LLP (8)
75 State Street
Boston, Massachusetts 02109
Massachusetts Financial Services 255,000 -- 5.2% 4.5%
Company(9)
MFS Series Trust II - MFS
Emerging Growth Fund
500 Boylston Street
Boston, Massachusetts 02116
</TABLE>
- ---------------
(1) Based on a total of 4,921,806 Class A Shares and 806,350 Class B Shares
outstanding on February 10, 1998. Each Class B Share is convertible at any
time, at the option of the holder, into one Class A Share. The holder of the
Class B Shares is entitled to ten votes per share.
(2) As reported in a Schedule 13G dated February 12, 1997 filed with the
Securities and Exchange Commission, these Class B Shares of the Company
(which are the only Class B Shares outstanding) are held by Ripplewood, a
limited liability company of which Collins Family Partners, L.P. is the
Class A Member with the power to appoint a majority of the directors of
Ripplewood. Timothy C. Collins, a director of the Company, is the President
and controlling shareholder of Collins Family Partners, Inc., the general
partner of Collins Family Partners, L.P., and the Senior Managing Director
and Chief Executive Officer of Ripplewood. Ripplewood, Mr. Collins, Collins
Family Partners, L.P. and Collins Family Partners, Inc. reported shared
voting and dispositive power with respect to all 806,350 Class B Shares held
by Ripplewood. The Class B Shares are convertible into Class A Shares on a
one-for-one basis.
(3) As reported in a Schedule 13G dated February 10, 1998 filed with the
Securities and Exchange Commission jointly by FMR Corp., Edward C. Johnson
3d and Abigail P. Johnson with respect to 220,600 Class A Shares as to which
Fidelity Management & Research Company, a registered investment adviser and
wholly-owned subsidiary of FMR Corp., has sole dispositive power as a result
of acting as investment adviser to various registered investment companies
and 277,800 Class A Shares as to which Fidelity Management Trust Company, a
wholly-owned subsidiary of FMR Corp., has sole voting and dispositive power
as a result of acting as investment manager of certain institutional
accounts.
(4) As reported in Amendment No. 1 to Schedule 13G dated February 11, 1998 filed
with the Securities and Exchange Commission jointly by Brinson Partners,
Inc., Brinson Holdings, Inc., SBC Holding (USA), Inc. (222 Broadway, New
York, New York 10038), and Swiss Bank Corporation (Aeschenplatz 6 CH-4002,
Basel, Switzerland) with respect to 488,600 Class A Shares held by Brinson
Partners, Inc., a registered investment advisor. Brinson Partners, Inc. is a
subsidiary of SBC Holding (USA), Inc.,
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<PAGE> 10
which is a subsidiary of Swiss Bank Corporation. They reported shared voting
and dispositive power with respect to all 488,600 Class A Shares.
(5) As reported in a Schedule 13G dated February 19, 1998 filed with the
Securities and Exchange Commission jointly by Tontine Partners, L.P.,
Tontine Management, L.L.C., Tontine Overseas Associates, L.L.C. and Jeffrey
L. Gendell, with respect to 143,550 Class A Shares owned by Tontine
Partners, L.P. as to which Tontine Partners, L.P. and Tontine Management,
L.L.C., its general partner, have shared voting and dispositive power, and
289,150 Class A Shares owned by Tontine Overseas Fund, Ltd., of which
Tontine Overseas Associates, L.L.C. serves as investment manager and has
shared voting and dispositive power. The report states that Jeffrey L.
Gendell is the Managing Member of Tontine Management, L.L.C. and of Tontine
Overseas Associates, L.L.C. and, in that capacity, directs their operations
and has shared voting and dispositive power with respect to all 432,700
Class A Shares owned by Tontine Partners, L.P. and Tontine Overseas Fund,
Ltd.
(6) As reported in a Schedule 13G dated February 12, 1997 filed with the
Securities and Exchange Commission by Skyline Asset Management, L.P., a
registered investment adviser, with respect to Class A Shares held by its
clients. Skyline Asset Management, L.P. reported shared voting and
dispositive power with respect to 358,200 Class A Shares.
(7) As reported in a Schedule 13G dated February 9, 1998 filed with the
Securities and Exchange Commission, U.S. Bancorp beneficially owns 267,518
Class A Shares held by its subsidiary banks, U.S. Bank National Association
and First Trust National Association. U.S. Bancorp reported sole voting
power with respect to 266,018 Class A Shares, sole dispositive power with
respect to 265,318 Class A Shares and shared dispositive power with respect
to 500 Class A Shares.
(8) As reported in Amendment No. 1 to Schedule 13G dated January 15, 1998 filed
with the Securities and Exchange Commission by Wellington Management
Company, LLP, a registered investment adviser, with respect to certain Class
A Shares owned by its clients. Wellington Management Company, LLP reported
shared voting power with respect to 126,800 Class A Shares and shared
dispositive power with respect to 262,400 Class A Shares.
(9) As reported in a Schedule 13G dated February 12, 1998 filed with the
Securities and Exchange Commission by Massachusetts Financial Services
Company and MFS Series Trust II-MFS Emerging Growth Fund. Massachusetts
Financial Services Company reported sole voting and dispositive power with
respect to all 255,000 Class A Shares.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In 1997, the Company paid Ripplewood a fee of $400,000 for financial
advisory services provided in connection with the Company's acquisition of
Symons Corporation and consummation of its new credit facility. The fee paid by
the Company may not have been on as favorable terms to the Company as could have
been obtained from a non-affiliate. The Company also agreed to indemnify
Ripplewood against losses arising from Ripplewood's performance of financial
advisory services on behalf of the Company. In addition, the
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Company, Ripplewood and certain other shareholders are parties to a shareholder
agreement which contains, among other things, provisions with respect to the
transfer of shares and registration rights. Timothy C. Collins, Matthew O.
Diggs, Jr. and Robert B. Holmes, directors of the Company, are the Senior
Managing Director and Chief Executive Officer, non-executive Chairman of the
Board and advisory director, respectively, of Ripplewood.
REPORT OF COMPENSATION AND BENEFITS
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee of the Board of Directors (the
"Compensation Committee") consists of three directors, none of whom are employed
by the Company. The Compensation Committee has broad responsibility for assuring
that the officers and key management of the Company are effectively compensated
in terms of salaries, incentive compensation and benefits which are internally
equitable and externally competitive. The Compensation Committee is responsible
for setting the compensation of the executive officers.
BASE SALARIES
The Compensation Committee's primary objective in establishing base
salaries is to provide salaries that are competitive with similar positions in
comparably-sized manufacturing companies. For purposes of making this
determination, the Compensation Committee relies upon national survey
information and proxy statement data with respect to a peer group of such
companies (which is not comparable to the peer group used for purposes of the
Performance Graph included elsewhere in this Proxy Statement). The survey
information and proxy statement data are provided by compensation consultants
retained by the Company who select the peer group and use both
publicly-available and private surveys available to them to develop such
information. In seeking to provide what the Compensation Committee believes is
competitive compensation for the executive officers, it has set base salaries
which have tended to be near the median for the peer group. The Compensation
Committee annually reviews the base salaries of the executive officers and,
within the foregoing framework, may adjust individual base salaries based on
changes in the peer group, individual performance and the effects of inflation.
ANNUAL INCENTIVE BONUSES
The annual incentive bonus component of each executive officer's
compensation is determined in accordance with the Company's Incentive Bonus
Program. The participants in the program (other than the President of the
Company) are selected by the President with the approval of the Compensation
Committee and, in 1997, all executive officers participated in the program.
Prior to the beginning of each year, the President recommends to the
Compensation Committee for approval a targeted incentive award (expressed as a
percentage of base salary) for each participant in the program other than
himself. For 1997, the targeted incentive bonus for each executive officer other
than Mr. Ciccarelli was 50% of the officer's base salary (40% in the case of Mr.
Catani). In approving the targeted incentive bonus percentage, the Compensation
Committee seeks to provide combined cash compensation (base salary and incentive
bonus opportunity) that, if the incentive bonus
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<PAGE> 12
targets are achieved, will be competitive with similar positions in the peer
group. Based on the survey information provided by the Company's compensation
consultants, the combined cash compensation of the executive officers has tended
to be near the median of the peer group.
Each individual's incentive bonus for 1997 was based on three independent
components of approximately equal size: the degree to which the Company as a
whole achieved specified financial targets, the degree to which the executive's
product division (concrete accessories, masonry products or paving products) or
functional division (corporate administration) achieved specified financial
targets; and the degree to which the Company successfully achieved certain
nonfinancial goals specified in the Company's business plan. Notwithstanding the
independence of the components, achieving a predetermined minimum level of
earnings was a condition to any bonuses being paid, and a limit was placed on
the aggregate amount of all incentive bonuses.
The financial targets for the Company-wide and divisional components of the
incentive bonuses were based on achieving targeted earnings before interest and
taxes, sales growth, and discretionary cash flow, with the first target being
the most significant factor. For each of these elements, there was a specified
minimum threshold level of performance (below which no incentive bonus was
payable), based on 70% of the targeted performance set forth in the Company's
business plan; a targeted level of performance (at which the full targeted
incentive bonus was payable), based on 100% of the targeted performance set
forth in the Company's business plan; and a maximum level of performance (above
which there was no further increase in the amount of the incentive bonus), based
on 120% of the targeted performance set forth in the Company's business plan.
For 1997, the Company and the divisions performed at or near the maximum levels
of performance, which resulted in the payment of incentive bonuses which were
near the maximum payable under the program.
STOCK OPTIONS
The Compensation Committee believes that equity-based compensation such as
stock options serve to align the long-term interests of the executives and the
shareholders by creating a direct link between executive compensation and
shareholder return. In 1994 and 1995, the Company granted stock options to a
number of its salaried employees, including all individuals who then were
executive officers. All of these options became fully exercisable at the time of
the Company's Initial Offering in June 1996. Prior to the adoption by the
shareholders of the 1997 Stock Option and Restricted Stock Plan, however, the
Compensation Committee believed that insufficient options were available for
grant to implement an effective ongoing equity-based long-term incentive
compensation program and, as a result, through the end of 1997, no additional
stock options were granted other than to newly-hired executive officers. With
additional stock options now available, however, the Compensation Committee
intends that stock options again will be an important component of executive
compensation, commencing in 1998.
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CHIEF EXECUTIVE OFFICER
Mr. Ciccarelli's base salary increased to $227,692 in 1997 from $194,454 in
1996. In addition, Mr. Ciccarelli's incentive bonus award under the Incentive
Bonus Program with respect to 1997 was $160,000. Under the terms of the
Company's Incentive Bonus Program, Mr. Ciccarelli's targeted incentive bonus is
separately determined by the Compensation Committee, primarily based on the
financial performance of the Company as a whole. As with the other executive
officers, the Compensation Committee attempts to establish a combined base
salary and bonus opportunity for Mr. Ciccarelli that is competitive with the
peer group; however, the Compensation Committee also believes that Mr.
Ciccarelli's incentive bonus opportunity should represent a relatively larger
percentage of his combined compensation than for the other executive officers.
In increasing Mr. Ciccarelli's base salary and determining Mr. Ciccarelli's
incentive bonus for 1997, the Compensation Committee considered in particular
Mr. Ciccarelli's contributions to the continuing growth in the Company's
profitability, the successful completion of significant acquisitions by the
Company, including the acquisition of Symons Corporation, which nearly doubled
the Company's revenues, and the implementation of management changes to
accommodate the Company's growth in size and complexity while providing for
career development opportunities and management continuity.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits the ability of the
Company to deduct compensation paid to a corporation's chief executive officer
and four other most highly compensated officers to a maximum of $1,000,000 per
executive per year, with certain exceptions. The Compensation Committee has
considered the possible impact of this limitation on the cost to the Company of
its current compensation plans. The Compensation Committee does not anticipate
that any portion of the Company's deduction for employee compensation will be
unavailable as a result of Section 162(m) in 1997 or in future years by reason
of compensation paid or awarded in 1997. The Compensation Committee intends to
review the Company's executive compensation policies on an ongoing basis and
propose modifications to those plans as appropriate in order to avoid or
minimize any disallowance of deductions under Section 162(m), unless at the time
the Compensation Committee believes that compliance with Section 162(m) would
not be in the best interests of the Company and its shareholders.
THE COMPENSATION AND BENEFITS COMMITTEE
MATTHEW O. DIGGS, JR., Chairman
TIMOTHY C. COLLINS
MATTHEW M. GUERREIRO
11
<PAGE> 14
EXECUTIVE COMPENSATION
Information is set forth below with respect to the compensation for
services performed for the Company during the fiscal years ended December 31,
1995, 1996 and 1997 for Mr. Ciccarelli and each of the other four most highly
compensated executive officers who were serving as executive officers at
December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- ------------- ----------
OTHER SHARES
ANNUAL UNDERLYING LONG TERM ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS INCENTIVE COMPENSATION
POSITION YEAR ($) ($) ($) (#)(1) PAYOUTS($) ($)(2)
------------------ ---- -------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John A. Ciccarelli 1997 $227,692 $160,000 0 0 0 $3,000
President & Chief 1996 194,454 120,000 0 0 0 3,000
Executive Officer 1995 175,529 105,000 0 40,000 0 3,000
Mario J. Catani(3) 1997 $136,998 $ 30,000 0 0 0 $7,730
President of 1996 132,000 34,800 $394,019(4) 0 0 7,496
Dur-O-Wal, Inc. 1995 26,458 34,000 0 0 0 1,085
James C. Stewart 1997 $107,538 $ 60,000 $ 1,600(5) 0 0 $3,166
Vice President, Corporate 1996 100,115 55,400 0 0 0 2,176
Development 1995 93,923 43,000 0 3,000 0 2,578
Michael C. Deis, Sr. 1997 $105,231 $ 60,000 0 0 0 $3,166
Vice President and 1996 96,200 53,700 0 0 0 2,016
General Manager, 1995 87,362 45,000 0 3,000 0 2,407
Concrete Accessories
John R. Paine, Jr. 1997 $102,462 $ 52,000 0 0 0 $3,009
Vice President, Sales 1996 97,923 48,000 0 0 0 2,176
and Marketing of 1995 93,923 40,000 0 3,000 0 2,559
Concrete Accessories
</TABLE>
- ---------------
(1) Options to purchase Class A Shares were granted under the Company's 1995
Stock Option Plan at an exercise price of $4.00 per share, the fair market
value at the time of the grant. The options have a term of ten years and are
immediately exercisable.
(2) Employer matching contributions under the Company's Savings (401(k)) Plan
and, for Mr. Catani, an amount accrued under the Company's Executive
Compensation Plan, which is a nonqualified, unfunded retirement plan for
certain executives of Dur-O-Wal who do not participate in the Company's
Employees Retirement Plan.
(3) At the time the Company acquired Dur-O-Wal in October 1995, Dur-O-Wal
entered into an employment agreement with Mr. Catani. The salary shown for
Mr. Catani for 1995 is the amount paid for the portion of the year during
which Dur-O-Wal was owned by the Company; however, the incentive bonus shown
was paid in 1996 with respect to all of 1995. Mr. Catani's employment
agreement provided for a base salary of $127,000 (subject to annual review
and possible increase by the Dur-O-Wal Board of Directors) and an annual
incentive compensation opportunity in an unspecified amount. The employment
agreement also provided for certain other benefits, including
12
<PAGE> 15
participation by Mr. Catani in the Executive Compensation Plan. The
agreement expired, effective as of December 31, 1997.
(4) Amounts paid in connection with the termination in 1996 of a supplemental
retirement arrangement and a deferred compensation arrangement established
by Dur-O-Wal for Mr. Catani's benefit in 1986.
(5) Relocation expense paid by the Company.
FISCAL 1997 STOCK OPTION GRANTS
No stock options were granted to any of the named executive officers in
1997.
FISCAL YEAR-END OPTION VALUES
The following table sets forth information for each of the executive
officers named in the Summary Compensation Table with respect to the number and
value of all unexercised options held by them at December 31, 1997. No options
were exercised by any of the named executive officers in 1997.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
12/31/97 AT 12/31/97(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
John A. Ciccarelli................... 144,000/0 $2,012,160/0
Mario J. Catani...................... -0- -0-
James C. Stewart..................... 18,600/0 $ 264,324/0
Michael C. Deis, Sr.................. 18,600/0 $ 264,324/0
John R. Paine, Jr.................... 16,900/0 $ 239,606/0
</TABLE>
- ---------------
(1) Represents the excess of the market value at December 31, 1997 of the Class
A Shares subject to the options over the aggregate option exercise price.
PENSION PLAN
The Company's Employees Retirement Plan provides retirement benefits based
upon an individual participant's years of service and final average compensation
(but not in excess of $150,000, which is the maximum amount of compensation on
which benefits can accrue under the law in effect in 1997) for the highest five
consecutive years of earnings during the last ten years of credited service. The
compensation covered by the Employees Retirement Plan includes wages plus any
normal incentive award or bonus, but does not include certain special
discretionary bonuses. Benefits under the Employees Retirement Plan are limited
to the extent required by provisions of the Internal Revenue Code of 1986, as
amended, and the Employment Retirement Income and Security Act of 1974, as
amended.
The following table sets forth the estimated annual retirement benefits
under the Employees Retirement Plan payable on a straight-life annuity basis to
participants in the
13
<PAGE> 16
specified compensation and years-of-service categories, assuming continued
active service until normal retirement age and that the Employees Retirement
Plan is in effect at such time. Benefits are not subject to deduction for social
security or other offset amounts. Each of the named executive officers (other
than Mr. Catani, who does not participate in the Employees Retirement Plan) has
eight years of credited service under the Employees Retirement Plan.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------
REMUNERATION 10 15 20 25 30 35
- ------------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$125,000 $16,255 $24,382 $32,510 $40,637 $48,765 $56,892
150,000 19,755 29,632 39,510 49,387 59,265 69,142
175,000 and above 21,155 31,732 42,310 52,887 63,465 74,042
</TABLE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareholders on
the Company's Class A Shares since the completion of the Initial Offering on
June 25, 1996 with the cumulative total return of the Russell 2000 Company Group
Index and a peer group (the "Peer Group") of construction supply companies
consisting of Calmat Co., Gibraltar Steel Corporation, Granite Construction
Incorporated, Holophane Corporation, Lafarge Corporation, Olympic Steel, Inc.,
OM Group, Inc., Simpson Manufacturing Co., Inc., Texas Industries, Inc. and
Vulcan Materials Company. The graph depicts the value on December 31, 1997 and
1996 of a $100 investment made on June 30, 1996 in the Company's Class A Shares
and the two indices.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
RUSSELL 2000 AND PEER GROUP
<TABLE>
<CAPTION>
DAYTON
MEASUREMENT PERIOD SUPERIOR
(FISCAL YEAR COVERED) PEER GROUP RUSSELL 2000 CORPORATION
<S> <C> <C> <C>
6/30/96 100.00 100.00 100.00
12/31/96 97.00 105.00 100.00
12/31/97 150.00 126.00 126.00
</TABLE>
14
<PAGE> 17
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the Company's independent public accountants
during the year ended December 31, 1997, and the Board of Directors of the
Company has selected Arthur Andersen LLP as independent public accountants for
the Company for the fiscal year ending December 31, 1998. A representative of
Arthur Andersen LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he desires to do so and to respond to
appropriate questions from shareholders.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
meeting other than those described above. If any other matter should properly
come before the meeting, or any adjournment thereof, it is intended that the
shares represented by proxies in the accompanying form will be voted by the
holders of the proxies in their discretion.
The Company will bear the cost of solicitation of proxies. In addition to
the use of the mails, proxies may be solicited by certain officers, directors,
and regular employees of the Company, without extra compensation, by telephone,
telegraph, or personal interview. Brokerage houses, banks and other persons will
be requested to forward solicitation material to the beneficial owners of shares
held of record by such persons.
SHAREHOLDER PROPOSALS
A proposal by a shareholder intended for inclusion in the Company's proxy
statement and form of proxy for the 1999 Annual Meeting of Shareholders must, in
accordance with applicable regulations of the Securities and Exchange
Commission, be received by the Company, at 721 Richard Street, Miamisburg, Ohio
45342 on or before November 26, 1998 in order to be eligible for such inclusion.
The 1999 Annual Meeting of Shareholders is presently scheduled to be held on May
6, 1999.
By Order of the Board of Directors,
/s/ Douglas L. Good
Douglas L. Good
Secretary
Miamisburg, Ohio
April 8, 1998
15
<PAGE> 18
DAYTON SUPERIOR CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON MAY 7, 1998
The undersigned holder of the Class A Common Shares of DAYTON SUPERIOR
CORPORATION, an Ohio Corporation (the "Company"), hereby appoints John A.
Ciccarelli, Matthew O. Diggs, Jr. and Robert B. Holmes, and each of them,
attorneys of the undersigned, with power of substitution, to vote all of the
Class A Common Shares which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held on Thursday, May 7, 1998 and
at any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. A
Vote FOR proposal 1 is recommended. When properly executed, this proxy will be
voted in the manner directed by the undersigned shareholder. If no direction is
specified, this proxy will be voted for proposal 1.
(To Be Voted and Signed on Reverse)
<PAGE> 19
[X] Please mark your votes
as in this example.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. ELECTION OF FOR WITHHOLD Nominees: William F. Andrews 2. In their discretion, upon such other business as may
DIRECTORS AUTHORITY John A. Ciccarelli properly come before the meeting or any adjournment
to vote for all Timothy C. Collins thereof.
nominees listed Matthew O. Diggs, Jr.
[ ] [ ] Matthew M. Guerreiro
Robert B. Holmes
FOR, except vote withheld from the following Receipt is acknowledged of Notice of the above meeting, the Proxy
nominees: Statement relating thereto and the 1997 Annual Report to Shareholders.
- --------------------------------------------
Please complete, sign, date and return this proxy promptly in the
envelope provided, which requires no postage if mailed in the
United States.
SIGNATURE(S)____________________________ DATE _____________ SIGNATURES(S) __________________________ DATE _________________
NOTE: Shareholders should date this proxy and sign here exactly as name appears above. If shares are held jointly, both
owners should sign this proxy. Executors, administrators, trustees, guardians and others signing in a representative
capacity should indicate the capacity in which they sign.
</TABLE>
Daysup-Proxy Card
