<PAGE> 1
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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
7777 Washington Village Drive, Suite 130
Dayton, Ohio 45459
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 12, 1999
------------------
To the Shareholders of
Dayton Superior Corporation:
NOTICE HEREBY IS GIVEN that the 1999 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 Wednesday, May
12, 1999 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 18, 1999 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 6, 1999
<PAGE> 3
[DAYTON SUPERIOR LOGO]
DAYTON SUPERIOR CORPORATION
7777 WASHINGTON VILLAGE DRIVE, SUITE 130
DAYTON, OHIO 45459
------------------
PROXY STATEMENT
FOR
1999 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 12, 1999 and any adjournments thereof. This Proxy Statement and the
accompanying form of proxy are first being mailed to shareholders on or about
April 6, 1999.
Holders of record of the Class A Common Shares, without par value ("Common
Shares"), of the Company on March 18, 1999 will be entitled to vote at the
meeting. On that date there were 5,945,130 Common Shares outstanding. The
holders of the Common Shares are entitled to one vote per share, with respect to
any matter submitted to a vote of the shareholders. 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 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
<PAGE> 4
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 1999
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 67, has been a director since February 1997. Mr. Andrews
has been Chairman of the Board of Scovill Fasteners Inc., a manufacturer of
apparel and industrial fasteners, since 1995 and has been Chairman of the Board
of Northwestern Steel and Wire Company, a producer of structural steel products
and rod and wire products, since November 1998. Mr. Andrews was Chairman of the
Board of Schrader-Bridgeport International, Inc., a manufacturer of tire valves
and automotive accessories, from 1995 to 1998 and was Chairman, President and
Chief Executive Officer of Amdura Corporation (formerly American Hoist & Derrick
Co.), a speciality manufacturer, from 1993 until 1995. Mr. Andrews is a director
of Black Box Corp., Johnson Controls, Inc., Katy Industries and Navistar
International Corporation.
JOHN A. CICCARELLI
Mr. Ciccarelli, age 59, 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 42, 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 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.
2
<PAGE> 5
MATTHEW O. DIGGS, JR.
Mr. Diggs, age 66, 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 and Tower Automotive,
Inc.
MATTHEW M. GUERREIRO
Mr. Guerreiro, age 42, 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 67, 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 ten meetings of the Board of Directors during 1998. The
committees of the Board of Directors are the Executive Committee (consisting of
Messrs. Ciccarelli (Chairman), Collins and Diggs), which did not meet in 1998;
the Audit Committee (consisting of Messrs. Andrews, Diggs and Holmes
(Chairman)), which held three meetings in 1998; and the Compensation and
Benefits Committee (consisting of Messrs. Collins, Diggs (Chairman) and
Guerreiro), which held four meetings in 1998. 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 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 competi-
3
<PAGE> 6
tive. 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 for
service as a director an annual retainer of $20,000 plus an additional $2,000
for each committee of the Board of Directors of which the director serves as
chairman (a total of $50,000, in the case of the Chairman of the Board) payable
in Common Shares and an annual grant of an option to purchase 2,000 Common
Shares at an exercise price per share equal to the fair market value of a Common
Share on the grant date. These directors also receive a cash fee in the amount
of $500 for each meeting of the Board of Directors or committee of the Board of
Directors attended. Directors who are also employees of the Company or
Ripplewood receive no additional remuneration for serving as directors.
During 1998, each director attended at least 85% 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 1998, 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
executive officers of the Company and owners of more than 10% of the outstanding
Common Shares to file an initial ownership report with the Securities and
Exchange Commission and the New York Stock Exchange and a monthly or annual
report listing any subsequent change in their ownership of Common Shares. Copies
of these reports also must be furnished to the Company.
Based solely upon a review of copies of the forms filed under Section 16(a)
and furnished to the Company and written representations from reporting persons,
the Company believes that all filing requirements applicable to such reporting
persons with respect to 1998 were complied with, except that Raymond Bartholomae
reported late the purchase of 1,300 Common Shares and Mario Catani reported late
the sale of 1,000 Common Shares.
4
<PAGE> 7
OWNERSHIP OF COMMON SHARES
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information as of February 22, 1999 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
COMMON SHARES % OF
BENEFICIALLY OWNED AS OF COMMON
INDIVIDUAL OR GROUP FEBRUARY 22, 1999(1) SHARES(1)
------------------- ------------------------ ---------
<S> <C> <C>
William F. Andrews(2).................................. 8,821 *
Raymond E. Bartholomae(3).............................. 4,800 *
John A. Ciccarelli(4).................................. 186,500 3.1%
Timothy C. Collins(5).................................. 48,781 *
Michael C. Deis, Sr. (6)............................... 26,950 *
Matthew O. Diggs, Jr.(7)............................... 134,728 2.3%
Matthew M. Guerreiro(8)................................ 5,082 *
Robert B. Holmes(9).................................... 11,323 *
Alan F. McIlroy(10).................................... 22,150 *
James C. Stewart(11)................................... 26,950 *
Directors and Executive Officers As a Group
(16 persons)(12)..................................... 568,421 9.1%
</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 Common 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. Based on a
total of 5,950,643 Common Shares outstanding on February 22, 1999.
(2) Includes 4,000 Common Shares which may be acquired upon the exercise of
stock options.
(3) Includes 2,000 Common Shares which may be acquired upon the exercise of
stock options.
(4) Includes 149,000 Common Shares which may be acquired upon the exercise of
stock options.
(5) Consists of Common Shares held by the Ripplewood Foundation.
(6) Includes 20,600 Common Shares which may be acquired upon the exercise of
stock options.
(7) Includes 125,000 Common Shares owned by EJJM, an Ohio limited partnership,
a family limited partnership of which Mr. Diggs is a general partner. Also
includes 4,000 Common Shares which may be acquired upon the exercise of
stock options.
(8) Includes 3,333 Common Shares which may be acquired upon the exercise of
stock options.
(9) Includes 4,000 Common Shares which may be acquired upon the exercise of
stock options.
5
<PAGE> 8
(10) Includes 20,750 Common Shares which may be acquired upon the exercise of
stock options.
(11) Includes 20,600 Common Shares which may be acquired upon the exercise of
stock options.
(12) Includes 276,919 Common 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
COMMON SHARES % OF
BENEFICIALLY COMMON
NAME AND ADDRESS OWNED SHARES(1)
---------------- ------------- ---------
<S> <C> <C>
Skyline Asset Management, L.P.(2) 538,800 9.1%
31 South Wacker Drive
Suite 4500
Chicago, Illinois 60606
Brinson Partners, Inc.(3) 528,100 8.9%
UBS AG
209 South LaSalle
Chicago, Illinois 60604-1295
FMR Corp.(4) 482,670 8.1%
82 Devonshire Street
Boston, Massachusetts 02109
Jeffrey L. Gendell(5) 300,100 5.0%
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
</TABLE>
- ---------------
(1) Based on a total of 5,950,643 Common Shares outstanding on February 22,
1999.
(2) As reported in an Amendment to Schedule 13G dated February 16, 1999 filed
with the Securities and Exchange Commission by Skyline Asset Management,
L.P., a registered investment adviser, with respect to Common Shares held by
its clients. Skyline Asset Management, L.P. reported shared voting and
dispositive power with respect to 538,800 Common Shares.
(3) As reported in Amendment No. 2 to Schedule 13G dated February 3, 1999 filed
with the Securities and Exchange Commission jointly by Brinson Partners,
Inc. and UBS AG (Bahnhofstrasse 45, 8021, Zurich, Switzerland) with respect
to 528,100 Common Shares held by Brinson Partners, Inc., a registered
investment advisor. Brinson Partners, Inc. is an indirect wholly-owned
subsidiary of UBS AG, a bank. They reported shared voting and dispositive
power with respect to all 528,100 Common Shares.
6
<PAGE> 9
(4) As reported in Amendment No. 1 to Schedule 13G dated February 1, 1999 filed
with the Securities and Exchange Commission jointly by FMR Corp., Edward C.
Johnson 3d and Abigail P. Johnson with respect to 287,770 Common 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 194,900 Common 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.
(5) As reported in Amendment No. 1 to Schedule 13G dated February 1, 1999 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 120,000 Common 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
180,100 Common 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 300,100 Common
Shares owned by Tontine Partners, L.P. and Tontine Overseas Fund, Ltd.
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.
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<PAGE> 10
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 Manager Incentive
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 1998, 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 1998, the targeted incentive bonus for each of the named executive
officers other than Mr. Ciccarelli was 50% of the officer's base salary. 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 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 1998 was based on up to three
independent components (with the allocation among the components being based on
the individual's position and responsibilities): the degree to which the Company
as a whole achieved a specified financial target; the degree to which the
executive's product division (concrete accessories, concrete forming systems,
masonry products or paving products), if applicable, achieved specified
financial targets; and the degree to which the individual successfully achieved
certain identified nonfinancial objectives. The Chief Executive Officer's 1998
incentive bonus was based entirely upon the Company-wide performance component.
The incentive bonus for the corporate officers with no divisional
responsibilities was based primarily on Company-wide performance, but with
individual performance also being a component. The incentive bonus for the
officers with divisional responsibilities incorporated all three components,
with divisional performance being the largest component and Company-wide
performance being the next most significant component.
The Company-wide financial target was based on the Company achieving
targeted consolidated earnings before interest, taxes, depreciation and
amortization. The financial targets for the divisional components of the
incentive bonuses were based on the division achieving targeted earnings before
interest, taxes, depreciation and amortization; improvements in management of
working capital; and certain other financial performance, 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
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<PAGE> 11
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 1998, 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. The Company's executives receive a benefit from stock
options only if the Company's stock price appreciates after the date of grant.
In 1998, the Committee (with the approval of the Board of Directors) approved a
grant of stock options to executives, including all but one of the Company's
executive officers, under the Company's 1996 Stock Option Plan and the 1997
Stock Option and Restricted Stock Plan. The exercise price of each option
granted in 1998 is $16.81 per share, which was the fair market value of a Common
Share on the date of grant. Each option has a term of ten years from the date of
grant and becomes exercisable in three approximately annual equal installments,
commencing on the first anniversary of the date of grant, although each option
also will become exercisable in full upon a "change in control" of the Company.
The number of options, if any, to be granted to each executive was based on the
Committee's subjective judgment, after receiving a recommendation from the Chief
Executive Officer, as to the ongoing contribution made to the Company by each
executive. The Committee anticipates that stock options hereafter will be
granted periodically to the Company's executives, to the extent sufficient
options are available under the Company's option plans.
CHIEF EXECUTIVE OFFICER
Mr. Ciccarelli's base salary increased to $293,077 in 1998 from $227,692 in
1997. In addition, Mr. Ciccarelli's incentive bonus award under the Manager
Incentive Program with respect to 1998 was $275,000. Under the terms of the
Company's Manager Incentive Program, Mr. Ciccarelli's targeted incentive bonus
is separately determined by the Compensation Committee and is primarily based on
the financial performance of the Company as a whole. Mr. Ciccarelli's targeted
incentive bonus opportunity for 1998 was 60% of his base salary, or
approximately $175,000. 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
1998, the Compensation Committee considered in particular Mr. Ciccarelli's
contributions to the continuing growth in the Company's profitability, the
successful completion and integration of significant acquisitions by the
Company, including the successful integration of Symons Corporation, the
Company's largest acquisition to date, and the Company's record sales and
earnings in 1998.
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<PAGE> 12
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 $1,000,000 per
executive per year, with certain exceptions. The Compensation Committee has
considered the possible impact of this limitation on the cost to the Company of
its current compensation plans. The Compensation Committee does not anticipate
that any portion of the Company's deduction for employee compensation will be
unavailable as a result of Section 162(m) in 1998 or in future years by reason
of compensation paid or awarded in 1998. The Compensation Committee intends to
review the Company's executive compensation policies on an ongoing basis and
propose modifications to those plans as appropriate in order to avoid or
minimize any disallowance of deductions under Section 162(m), unless at the time
the Compensation Committee believes that compliance with Section 162(m) would
not be in the best interests of the Company and its shareholders.
THE COMPENSATION AND BENEFITS COMMITTEE
MATTHEW O. DIGGS, JR., Chairman
TIMOTHY C. COLLINS
MATTHEW M. GUERREIRO
10
<PAGE> 13
EXECUTIVE COMPENSATION
Information is set forth below with respect to the compensation for
services performed for the Company during the fiscal years ended December 31,
1996, 1997 and 1998 for Mr. Ciccarelli and each of the other four most highly
compensated executive officers who were serving as executive officers at
December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- ------------- ----------
OTHER ANNUAL SHARES LONG TERM ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION UNDERLYING INCENTIVE COMPENSATION
POSITION YEAR ($) ($) ($) OPTIONS (#) PAYOUTS($) ($)(1)
------------------ ---- -------- -------- ------------ ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John A. Ciccarelli 1998 $293,077 $275,000 0 15,000(2) 0 $12,800
President and Chief 1997 227,692 160,000 0 0 0 3,000
Executive Officer 1996 194,454 120,000 0 0 0 3,000
Alan F. McIlroy 1998 $191,154 $148,000 $16,202(4) 6,000(2) 0 $10,400
Vice President and 1997 65,856 37,000 39,617(4) 25,000(5) 0 0
Chief Financial Officer(3)
Raymond E. Bartholomae 1998 $173,000 $126,000 0 6,000(2) 0 $ 9,515
Vice President and General
Manager, Symons(6)
Michael C. Deis, Sr. 1998 $146,154 $129,000 0 6,000(2) 0 $10,400
Vice President and 1997 105,231 60,000 0 0 0 3,166
General Manager, 1996 96,200 53,700 0 0 0 2,016
Dayton/Richmond
James C. Stewart 1998 $146,231 $110,000 0 6,000(2) 0 $10,400
Vice President, Corporate 1997 107,538 60,000 $ 1,600(4) 0 0 3,166
Development 1996 100,115 55,400 0 0 0 2,176
</TABLE>
- ---------------
(1) For 1998, consists of Company retirement account contributions to the
Company's Savings Plan in the amount of $9,600 for Mr. Ciccarelli and $7,200
for each of the other named executive officers and Company matching
sec.401(k) contributions to the Savings Plan in the amount of $2,315 for Mr.
Bartholomae and $3,200 for each of the other named executive officers. For
years prior to 1998, consists only of Company matching sec.401(k)
contributions to the Savings Plan.
(2) Options to purchase Common Shares were granted under the Company's 1996
Stock Option Plan and its 1997 Stock Option and Restricted Stock Plan at an
exercise price of $16.81 per share, the average of the high and low prices
on the date of the grant. The options have a term of ten years and become
exercisable in three equal annual installments, commencing on the first
anniversary of the date of grant.
(3) Mr. McIlroy was elected an executive officer of the Company on July 17,
1997.
(4) Relocation expense paid by the Company.
(5) Options to purchase 25,000 Common Shares were granted to Mr. McIlroy in
July, 1997 under the Company's 1996 Stock Option Plan in connection with Mr.
McIlroy's employment by the Company. The options have an exercise price of
$12.5625 per share, the average of the high and low prices on the date of
the grant, and a term of ten years. The options were exercisable on the date
of grant with respect to 12,500 shares and become exercisable with respect
to an additional 6,250 shares on the first and second anniversaries of the
date of grant.
(6) Mr. Bartholomae was elected an executive officer of the Company on February
26, 1998 following the acquisition of Symons Corporation by the Company in
September, 1997.
11
<PAGE> 14
FISCAL 1998 STOCK OPTION GRANTS
The following table sets forth information for each of the executive
officers named in the Summary Compensation Table with respect to all stock
options granted in 1998. The table also shows the hypothetical gains that would
exist for the options at the end of their ten year terms, assuming compound
rates of stock appreciation of 5% and 10%, respectively. The actual future value
of the options will depend on the market value of the Common Shares.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
------------------------------------------------ VALUE AT ASSUMED
NUMBER % OF TOTAL ANNUAL RATES OF
OF SHARES OPTIONS STOCK PRICE
UNDERLYING GRANTED APPRECIATION FOR
OPTIONS TO EXERCISE OPTION TERM(3)
GRANTED EMPLOYEES PRICE EXPIRATION --------------------
NAME (#) IN 1998 ($/SH)(2) DATE 5%($) 10%($)
---- ---------- ---------- --------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
John A. Ciccarelli 15,000 20.1% $16.81 2/28/08 $158,576 $401,862
Alan F. McIlroy 6,000 8.1% $16.81 2/28/08 $ 63,430 $160,745
Raymond E. Bartholomae 6,000 8.1% $16.81 2/28/08 $ 63,430 $160,745
Michael C. Deis, Sr. 6,000 8.1% $16.81 2/28/08 $ 63,430 $160,745
James C. Stewart 6,000 8.1% $16.81 2/28/08 $ 63,430 $160,745
</TABLE>
- ---------------
(1) The options become exercisable in three equal annual installments,
commencing on February 27, 1999. In the event of a change in control (as
defined in the Company's option plans), the options will become exercisable
in full.
(2) The average of the high and low sale prices on the date the option was
granted.
(3) These amounts are calculated in accordance with rules adopted by the
Securities and Exchange Commission assuming annual compounding at the
specified rates over the term of the options and are not intended to
forecast future appreciation of the price of the Common Shares.
12
<PAGE> 15
FISCAL YEAR-END OPTION VALUES
The following table sets forth information for each of the executive
officers named in the Summary Compensation Table with respect to the number and
value of all unexercised options held by them at December 31, 1998. No options
were exercised by any of the named executive officers in 1998.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
12/31/98(#) AT 12/31/98($)(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
John A. Ciccarelli................... 144,000/15,000 $2,408,160/$36,600
Alan F. McIlroy...................... 18,750/12,250 $ 125,391/$56,437
Raymond E. Bartholomae............... 0/6,000 $ 0/$14,640
Michael C. Deis, Sr.................. 18,600/6,000 $ 315,474/$14,640
James C. Stewart..................... 18,600/6,000 $ 315,474/$14,640
</TABLE>
- ---------------
(1) Represents the excess of the aggregate closing price on December 31, 1998 of
the Common Shares subject to the options over the aggregate option exercise
price.
13
<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareholders on
the Company's Common 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, 1998, 1997
and 1996 of a $100 investment made on June 30, 1996 in the Company's Common
Shares and the two indices.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
RUSSELL 2000 AND PEER GROUP
<TABLE>
<CAPTION>
PEER GROUP RUSSELL 2000 DAYTON SUPERIOR
---------- ------------ ---------------
<S> <C> <C> <C>
'06/30/96' 100 100 100
'12/31/96' 97 105 100
'12/31/97' 150 126 126
'12/31/98' 179 122 148
</TABLE>
14
<PAGE> 17
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the Company's independent public accountants
during the year ended December 31, 1998, 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, 1999. 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, and no shareholder has informed the
Company of any intention to propose any other matter to be acted upon at the
meeting. 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 2000 Annual Meeting of Shareholders must, in
accordance with applicable regulations of the Securities and Exchange
Commission, be received by the Company, at 7777 Washington Village Drive, Suite
130, Dayton, Ohio 45459 on or before December 8, 1999 in order to be eligible
for such inclusion. In addition, if any shareholder who intends to propose any
other matter to be acted upon at the 2000 Annual Meeting of Shareholders does
not inform the Company of such matter on or before February 21, 2000, the
persons named as proxies for the 2000 Annual Meeting of Shareholders will be
permitted to exercise discretionary authority to vote on such matter even if the
matter is not discussed in the proxy statement for that meeting. The 2000 Annual
Meeting of Shareholders is presently scheduled to be held on May 11, 2000.
By Order of the Board of Directors,
/s/ Douglas L. Good
Douglas L. Good
Secretary
Dayton, Ohio
April 6, 1999
15
<PAGE> 18
DAYTON SUPERIOR CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON MAY 12, 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 Wednesday, May 12, 1999 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 1998 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>
