SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (a)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
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 Rule 14a-11 (c) or Rule 14a-12
REINHOLD INDUSTRIES, INC.
----------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
-------------------------------------------------------------------------------
(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 Rule 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 date of its filing.
(1) Amount Previously Paid:
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(3) Filing Party:
(4) Date Filed:
<PAGE>
REINHOLD INDUSTRIES, INC.
12827 E. Imperial Highway
Santa Fe Springs, CA 90670
March 27, 2000
DEAR STOCKHOLDERS:
The Directors and Officers of Reinhold Industries, Inc., cordially invite
you to attend the Annual Meeting of Stockholders of the Corporation to be held
on Wednesday, May 10, 2000 at 10:00 A.M., Pacific Time. The meeting will be held
at the office of the Corporation at 12827 E. Imperial Highway, Santa Fe Springs,
CA 90670. Notice of the Annual Meeting and Proxy Statement are enclosed.
You are urged to mark, sign, date and mail the enclosed proxy immediately. By
mailing your proxy now you will not be precluded from attending the meeting.
Your proxy is revocable. In the event you find it convenient to attend the
meeting, you may, if you wish, withdraw your proxy and vote in person.
For your information, enclosed is the 1999 Annual Report of Reinhold Industries,
Inc.
Very truly yours,
/s/Ralph R. Whitney, Jr.
RALPH R. WHITNEY, JR.,
Chairman of the Board
<PAGE>
REINHOLD INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Santa Fe Springs, California
March 27, 2000
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Reinhold Industries, Inc., a Delaware corporation("Reinhold" or the "Company")
will be held at the offices of Reinhold Industries, Inc. 12827 East Imperial
Highway, Santa Fe Springs, California on Wednesday, May 10, 2000 at 10:00 A.M.,
local time, for the following purposes:
(1) To elect three members of the Board of Directors for Class A Common
Stockholders; and
(2) To transact such other business as may properly come before the
meeting and any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 17, 2000
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if he or she has returned a proxy.
By order of the Board of Directors,
/s/Brett R. Meinsen
BRETT R. MEINSEN
Secretary
THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND IMMEDIATE RETURN OF THE
ACCOMPANYING PROXY. PLEASE DATE, SIGN AND RETURN THE PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE.
<PAGE>
REINHOLD INDUSTRIES, INC.
12827 EAST IMPERIAL HWY
SANTA FE SPRINGS, CALIFORNIA 90670
ANNUAL MEETING OF STOCKHOLDERS
to be held on May 10, 2000
March 27, 2000
PROXY STATEMENT
INTRODUCTION
The Annual Meeting of Stockholders of Reinhold Industries, Inc.
("Reinhold" or the "Company") will be held on May 10, 2000 at the offices of
Reinhold Industries, Inc., 12827 East Imperial Highway, Santa Fe Springs,
California, at 10:00 A.M., for the purposes set forth in the accompanying
notice. This statement is furnished in connection with the solicitation by
Reinhold's Board of Directors (the "Board") of proxies to be voted at such
meeting and at any and all adjournments thereof. Proxies properly executed, duly
returned and not revoked will be voted at the Annual Meeting (including
adjournments) in accordance with the specifications therein. If a stockholder
does not specify on the proxy card how the shares are to be voted, they will be
voted FOR the election of Reinhold's nominee for Director.
If a proxy in the accompanying form is executed and returned, it may
nevertheless be revoked at any time prior to the exercise thereof by (i) filing
with the Secretary of the Company, at or before the taking of the vote at the
Annual Meeting, a written notice of revocation bearing a later date than the
proxy; (ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Company, before the taking of the vote at
the Annual Meeting or (iii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself constitute
a revocation of a proxy). Any written notice of revocation or subsequent proxy
should be sent so as to be delivered to Reinhold Industries, Inc., 12827 East
Imperial Highway, Santa Fe Springs, California 90670, Attention: Secretary, or
hand-delivered to the Secretary of the Company, in each case at or before the
taking of the vote at the Annual Meeting.
At the Annual Meeting, holders of Reinhold Class A Common Stock shall
each have one vote per share.
This proxy statement and accompanying form of proxy are first being sent to
stockholders on or about April 3, 2000.
<PAGE>
PLAN OF REORGANIZATION
On July 31, 1996 (the "Effective Date"), Keene Corporation ("Keene")
consummated its plan of reorganization under the Bankruptcy Code (the "Plan")
and emerged from bankruptcy. On the Effective Date, Reinhold was merged into and
with Keene, with Keene becoming the surviving corporation. Pursuant to the
merger, all of the issued and outstanding capital stock of Reinhold was
canceled. Keene, as the surviving corporation of the merger, was renamed
Reinhold. On the Effective Date, Reinhold issued 1,998,956 shares of Common
Stock, of which 1,020,000 shares of Class B Common Stock were issued to the
Trustees of a Creditors' Trust (the "Keene Creditors' Trust") set up to
administer Keene's asbestos claims. The remaining 978,956 shares of Class A
Common Stock were issued to Keene's former stockholders as of record date, June
30, 1996. All of Keene's previous outstanding Common Stock was canceled.
The Certificate of Incorporation adopted pursuant to the reorganization contains
certain restrictions on the transfer of the Class A Common Stock and Class B
Common Stock for a period of twenty-five months after the effective date of the
reorganization, which period has now expired. The Certificate of Incorporation
also provides for the automatic conversion of Class B Common Stock into Class A
Common Stock upon the occurrence of certain events, including the sale or
transfer of the Class B Common Stock by the Trust.
SALE OF CLASS B COMMON STOCK
On May 21, 1999, the Keene Creditors' Trust (the "Trust") sold 997,475 shares of
its Class B Common Stock representing approximately 49.9% of the outstanding
common stock of the Company. The purchasers were Massachusetts Mutual Life
Insurance Company, MassMutual High Yield Partners II LLC, MassMutual Corporate
Value Partners Limited, Ralph R. Whitney, Jr., Glenn Scolnik, Forrest E.
Crisman, Jr., Andrew McNally, IV and Ward S. McNally (collectively, the
"Purchasers"). Messrs. Whitney, Scolnik, Crisman, A. McNally and W. McNally are
directors and/or officers of Hammond, Kennedy, Whitney & Company ("HKW"), a
private equity firm. The purchasers also agreed to pay the Trust, on a pro rata
basis, a stock price deficiency payment, on the third anniversary of the
purchase, in an amount by which the market value of the Class A Common Stock
retained by the Trust, on a per share basis, is less than a predetermined value.
The Company has agreed to reimburse the purchasers for any such payments they
make to the Trust. The Company believes any such payment will be immaterial to
the results of operations.
The Company has also agreed that until Massachusetts Mutual Life Insurance
Company, MassMutual High Yield Partners II LLC and MassMutual Corporate Value
Partners collectively own less than five percent of the outstanding voting stock
of the Company, the Company will recommend one person designated by
Massachusetts Mutual Life Insurance Company to be included in the slate of
nominees recommended by the Board of Directors of the Company for election by
stockholders at the Company's annual meeting of the stockholders. Massachusetts
Mutual Life Insurance Company has chosen not to exercise this right for the 2000
Annual Meeting.
The Stock Purchase Agreement provided that it was a condition to the closing of
the sale of the shares that Lawrence H. Diamond and Robert B. Steinberg, the
members of the Board of Directors elected by the Trust (as the sole holder of
Class B Common Stock), resign as directors. Messrs. Diamond and Steinberg
resigned as directors on May 21, 1999. On June 3, 1999, Ralph R. Whitney, Jr.
and Andrew McNally, IV were appointed by the remaining director, Michael T.
Furry, as successor directors. The Board of Directors of the Company now
consists of: Michael T. Furry, Ralph R. Whitney, Jr., and Andrew McNally, IV.
<PAGE>
Pursuant to Reinhold's Certificate of Incorporation, upon consummation of the
sale of the Trust's shares, (i) all of the outstanding shares of Class B Common
Stock automatically converted into shares of Class A Common Stock, (ii) the
number of authorized shares of Class A Common Stock automatically increased by
the number of shares of Class B Common Stock so converted, and (iii) the number
of authorized shares of Class B Common Stock decreased by the number of shares
so converted. Accordingly, between May 22, 1999 and November 18, 1999, the
Certificate of Incorporation authorized 2,500,000 shares of capital stock, all
consisting of Class A Common Stock. On October 20, 1999, a Special Meeting of
Stockholders was held to act upon a proposal to 1) increase the number of
authorized Class A Common Stock from 2,500,000 shares to 45,000,000 shares, 2)
authorize a class of Preferred Stock consisting of 5,000,000 authorized shares,
and 3) make various changes to the Company's Amended and Restated By-Laws. All
proposals were approved at that meeting, with changes being effective as of
November 19, 1999.
Required Quorum; Required Vote
The required quorum for the transaction of business at the Annual
Meeting is a majority of the shares of Class A Common Stock. The Company intends
to include abstentions and broker non-votes as present or represented for
purposes of establishing a quorum for the transaction of business, but to
exclude broker non-votes from the calculation of shares entitled to vote with
respect to any proposal for which authorization to vote was withheld. Proxies
that reflect abstentions will be treated as voted for purposes of determining
the approval of the proposal and will have the same effect as a vote against the
proposal.
In the election of directors, the directors elected by the holders of
Class A Common Stock must be elected by a plurality of the shares of Class A
Common Stock voting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, the holders of Class A Common Stock, voting as a
class, shall elect three (3) Directors of the Company to serve until the next
Annual Meeting to be held in 2001 and until their successors are elected and
qualified. The Board is soliciting proxies to vote FOR its nominees, Ralph R.
Whitney, Jr., Andrew McNally, IV, and Michael T. Furry, as Directors of
Reinhold. Only holders of Class A Common Stock shall vote for the Class A
nominees.
All proxies will be voted in accordance with the stated instructions.
Unless the stockholder otherwise specifies therein, the accompanying proxy will
be voted (i) FOR the election of the nominees identified above, and (ii) at the
discretion of the proxy holders, either FOR or AGAINST any other matter or
business that may properly come before the meeting. The Board of Directors does
not know of any such other matter or business. If the nominee ceases to be a
candidate for election for any reason, the proxy will be voted for a substitute
nominee designated by the Board. The Board currently has no reason to believe
that these nominees will be unwilling or unable to serve as directors, if
elected.
<PAGE>
NOMINEES FOR CLASS A DIRECTORS
Ralph R. Whitney, Jr.
Mr. Whitney, age 65, became a Director of Reinhold on June 3, 1999
and is currently Chairman of the Board. He is also a member of the Audit and
Compensation Committees. Mr. Whitney has been a principal of Hammond, Kennedy,
Whitney & Company, a New York, New York private equity firm, since 1971 and
is currently Chairman of the Board of that firm. Mr. Whitney is also a director
of Control Devices, Inc., Excel Industries, Inc., Baldwin Technology Company,
Inc., Adage, Inc., IFR Systems, Inc., and Selas Corp. of America.
Andrew McNally, IV
Mr. McNally, age 60, became a Director of Reinhold on June 3, 1999.
He is als a member of the Audit and Compensation Committees. Mr. McNally is
currently Managing Director of Hammond, Kennedy, Whitney & Company and has held
that position since 1998. He is the former Chairman and Chief Executive Officer
and current Director of Rand McNally & Company (printing, publishing and map
making). Mr. McNally is also a current Director of Hubbell Incorporated, Mercury
Finance Company, Borg-Warner Securities Corporation and Morgan Stanley Funds.
Michael T. Furry
Mr. Furry, age 62, is President and Chief Executive Officer of
Reinhold. Mr. Furry has served as President of Reinhold since June 1986 and
became President of the Reorganized Company on the Effective Date. Mr. Furry
had been a Director of Keene since April 1990. From April 1976 to June 1986, Mr.
Furry was Vice President and General Manager of the composites division of
Reynolds & Taylor, Inc. Mr. Furry is a member of the Audit committee.
Other Executive Officer
Brett R. Meinsen
Mr. Meinsen, age 40, became Vice President - Finance and
Administration, Secretary and Treasurer of Reinhold in June 1997. Prior to
coming to Reinhold, Mr. Meinsen worked from 1986 until January 1997 as the
Director of Finance and Administration, Manager of Financial Analysis, and a
senior financial analyst at Philips Medical Systems.
Compensation of Directors
During 1999, the Board of Directors of Reinhold met five times for
regular meetings and there were four special meetings. Each non-employee
director received $1,000.00 for each regular or special meeting of the Board he
attended and will receive $1,000.00 for each such regular meeting in 2000. In
addition, each non-employee director also receives annual compensation of
$12,000.00 per year, paid quarterly, as a retainer for being a director.
Reinhold has standing Audit and Compensation Committees of the Board.
The Audit Committee and the Compensation Committee met twice. The non-employee
directors who are members of the Audit and Compensation Committees receive
$1,000.00 for each meeting attended on a day during which the Board did not meet
for a regular meeting and will receive $1,000.00 for each such meeting in 2000.
The Audit Committee reviews and recommends to the Board the engagement
of the independent auditors of the Company, reviews with the auditors their work
and fees, and reviews accounting policies and practices and internal accounting
controls of the Company.
The Compensation Committee reviews and recommends to the Board the
compensation proposed to be paid to officers and key employees of Reinhold,
including base salaries, stock options and management incentive compensation.
The Board does not have a Nominating Committee and as a whole performs
the functions normally performed by a Nominating Committee.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Number of Shares Outstanding, Record Date and List of Stockholders
Only stockholders of record at the close of business on March 17, 2000
are entitled to notice of, and to vote at, the Annual Meeting. At the close of
business on such date there were 1,998,956 shares of Reinhold Class A Common
Stock outstanding. A stockholder list will be available for examination by
stockholders at the Annual Meeting.
Common Stock Ownership of Certain Beneficial Owners
The following table sets forth information regarding the beneficial
ownership of Reinhold Class A Common Stock by the only persons known by Reinhold
to be beneficial owners of 5% or more of Reinhold's issued and outstanding
Common Stock as of March 3, 2000.
<TABLE>
<CAPTION>
Amount and Nature of Percentage of Issued
Name and Address of Beneficial Ownership of and Outstanding
Beneficial Owner Reinhold Common Stock Common Stock
- ------------------------------------- ------------------------------ -------------------------
<S> <C> <C>
Massachusetts Mutual Life 748,106(1) 37.4%
Insurance Company
1295 State Street
Springfield, MA 01111
MassMutual High Yield 314,204 15.7%
Partners II, LLC
1295 State Street
Springfield, MA 01111
MassMutual Corporate Value 119,697 6.0%
Partners Limited
1295 State Street
Springfield, MA 01111
<FN>
(1) Includes 314,204 shares owned by MassMutual High Yield Partners II LLC and
119,697 shares owned by MassMutual Corporate Value Partners Limited, as to which
Massachusetts Mutual Life Insurance Company shares voting and dispositive power
but disclaims beneficial ownership.
</FN>
</TABLE>
<PAGE>
Common Stock Ownership of Management
The following table presents information regarding beneficial ownership
of Reinhold Common Stock by each member of the Board of Directors, and by all
current directors and officers of Reinhold as a group, as of March 3, 2000.
<TABLE>
<CAPTION>
Percentage of Issued and
Amount and Nature of Beneficial Outstanding
Name and Address of Ownership of Reinhold Common Common Stock on March 3,
Beneficial Owner Stock 2000 (1)
- ----------------------------------------------- ---------------------------------- --------------------------
<S> <C> <C>
Ralph R. Whitney, Jr. 45,476 2.3%
230 Park Avenue, Suite 1616
New York, NY 10169
- ----------------------------------------------- ---------------------------------- --------------------------
Andrew McNally, IV 61,336(2) 3.1%
230 Park Avenue, Suite 1616
New York, NY 10169
- ----------------------------------------------- ---------------------------------- --------------------------
Michael T. Furry 11,115 *
12827 E. Imperial Hwy.
Santa Fe Springs, CA. 90670
- ----------------------------------------------- ---------------------------------- --------------------------
Brett R. Meinsen 1,000 *
12827 E. Imperial Hwy.
Santa Fe Springs, CA. 90670
=============================================== ================================== ==========================
All directors and officers of Reinhold as a 118,927 6.0%
group (4 persons)
<FN>
*The percentage of shares owned does not exceed 1% of the issued and outstanding
Common Stock.
(1) For the purposes of this table, the issued and outstanding Common Stock
of Reinhold has been calculated for each individual on the basis of all
shares of Common Stock issued and outstanding (excluding treasury
shares) on March 3, 2000.
(2) Includes 46,737 shares owned by Andrew Management IV, L.P. of which Mr.
McNally is the general partner and has sole voting and investment
power.
</FN>
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on its review of Forms 3, 4 and 5 received by the Company,
or written representations from certain reporting persons that no Forms 5 were
required for such persons, the Company believes that, during the fiscal year
ended December 31, 1999, the Company's officers, directors and 10% shareholders
satisfied all filing requirements under Section 16(a) of the Securities Exchange
Act of 1934.
<PAGE>
COMPENSATION OF MANAGEMENT
The following table sets forth a summary of the compensation paid to
the Chief Executive Officer and Vice President, Finance and Administration of
the Company for services rendered in all capacities to the Company for the
fiscal years ended December 31, 1999, 1998 and 1997. No executive officers of
the Company other than those listed above were paid annual salary (together with
any bonus) in excess of $100,000 in such fiscal years for services rendered to
the Company.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------------------------- -----------------
Securities
Fiscal Management Other Annual Underlying All Other
Name and Principal Position Year Salary Incentive Compensation Options/SARS Compensation
- ------------------------------- -------- ------------- ----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Michael T. Furry 1999 $236,000 $171,200 - 100,000 $15,000
President and Chief Executive
Officer (1)
1998 225,000 48,000 - - -
1997 225,000 47,800 - - -
- -------------------------------------------------------------------------------------------------------------------------------
Brett R. Meinsen 1999 $105,000 $72,760 - 8,000 $10,000
Vice President, Finance and
Administration (2)
1998 100,000 20,860 - - -
1997 50,385 12,000 - - -
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Mr. Furry became President and Chief Executive Officer of the Company as of the Effective Date.
(2) Mr. Meinsen became Vice President - Finance and Administration on June 30, 1997.
</FN>
</TABLE>
<PAGE>
Aggregate Option Exercises in the Last Fiscal Year and Fiscal Year End Options
The following table sets forth the number of options exercised and
redeemed and the realized value upon exercise and redemption by the named
executive officers during the fiscal year ended December 31, 1999 and the value
of outstanding options held by each executive officer as of December 31, 1999.
<TABLE>
<CAPTION>
No. of Securities Underlying Value of Unexercised
Unexercised Options at Fiscal In-The-Money Options at Fiscal
No. Shares Acquired Value Year-End Year-end
Name on Exercise Realized Exercisable / Unexercisable Exercisable / Unexercisable
- --------------------------- ---------------------- ----------- ----------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Michael T. Furry N/A N/A 0 100,000 $0 $200,000
- --------------------------- ---------------------- ----------- ----------------- ------------- --------------- ----------------
Brett R. Meinsen N/A N/A 0 8,000 $0 $16,000
- --------------------------- ---------------------- ----------- ----------------- ------------- --------------- ----------------
</TABLE>
Employment Agreement
An employment agreement with Michael T. Furry, as the Company's
President and Chief Executive Officer, was entered into on July 31, 1996 and
provides for employment by the Company for a period of five years commencing on
the Effective Date. The employment agreement was amended as of October 30, 1998
to provide for a base salary of $236,000 per year, and a 5% increase on October
30, 2000 and on every second year following the year 2000 during the term of the
employment agreement. The employment agreement provides for participation in the
Management Incentive Compensation Plan, Reinhold Industries, Inc. Retirement
Plan, and Reinhold Stock Incentive Plan. It also provides Mr. Furry with life
insurance with a face value of $200,000.
Management Incentive Compensation Plan
As a result of the Plan of Reorganization, Reinhold adopted the
Management Incentive Compensation Plan for the Reinhold staff, under which
awards may be made to officers and other key salaried employees of Reinhold.
Pools of award money are developed in accordance with the earnings of Reinhold
and will be limited to 15% of Reinhold's pre-tax earnings each year.
Distribution of awards to eligible employees will be dependent upon the
individual employee's achievement during a fiscal year, as measured against
predetermined specific objectives for that employee in such fiscal year.
Payments will be made in January of each year with respect to the previous
year's award.
<PAGE>
Retirement Plan
Reinhold presently maintains a non-contributory retirement plan (the
"Retirement Plan") in which all salaried employees and certain hourly employees
participate. The Retirement Plan provides an annual normal retirement benefit at
or after age 65 for a participant equal to the greater of (a) the participants'
accrued benefit as of December 31, 1988, based on the plan in effect at that
time; (b) the product of (x) the sum of 1.3% of the participant's annual average
compensation for the five highest consecutive years of employment during the
most recent ten calendar years of employment and 0.65% of such compensation in
excess of the average of the "Social Security Taxable Wage Base" in each year
during the 35-year period prior to the participant's retirement age under the
social security law multiplied by (y) his years of service credit (to a maximum
of 25) in the Retirement Plan; or (c) the accrued benefit as of December 31,
1993, plus a benefit based on (b) above and service after December 31, 1993,
with total service not in excess of 25 years. Certain maximum benefit
limitations are incorporated in the Retirement Plan. The Retirement Plan permits
a participant who has attained age 55 and completed 10 years of service to elect
to receive an actuarially reduced early retirement benefit and provides for
payment of benefits if certain participants become permanently disabled. A
participant's accrued pension benefit becomes 100% vested on the date on which
the participant completes five years of service. Death benefits are payable to
the surviving spouse of a fully or partially vested participant who dies before
payment of benefits has commenced.
The following table presents information regarding estimated annual
benefits payable upon normal retirement classified by remuneration and years of
service under the Reinhold Industries, Inc. Retirement Plan in which all
salaried employees and certain hourly employees participate:
<TABLE>
<CAPTION>
Average Compensation at
Retirement Years of Service at Retirement
- -------------------------- ----------------------------------------------------------------------------------------------------
5 10 15 20 25 or more
- -------------------------- ---------------- -------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
$50,000 $3,801 $7,601 $11,402 $15,202 $19,003
75,000 6,238 12,476 18,714 24,952 31,190
100,000 8,676 17,351 26,027 34,702 43,378
150,000 13,551 27,101 40,652 54,202 67,753
160,000 or more (1) 14,526 29,051 43,577 58,102 72,628
<FN>
(1) In accordance with Internal Revenue Service Regulations, the maximum
allowable compensation permitted in computing a benefit under the Retirement
Plan is $160,000 for 1999. However, employees will receive the greater of the
benefit outlined above or the accrued benefit as of December 31, 1993, which was
based on compensation in excess of $160,000 plus a benefit based on service
after December 31, 1993 and the final average compensation based on the $160,000
limit.
</FN>
</TABLE>
Remuneration covered by the Retirement Plan in a particular year
includes that year's base salary, overtime pay and commissions but excludes
compensation received in that year under the Management Incentive Compensation
Plan in excess of 50% of the participant's annual basic pay rate as of the
December 31 of the preceding calendar year. The 1999 remuneration covered by the
Retirement Plan for each participant therefore includes management incentive
compensation (up to such 50% ceiling) paid during 1999 in respect of 1998
awards.
For each of the following persons, the credited years of service under
the Retirement Plan, as of December 31, 1999, and the remuneration received
during 1999 covered by the Retirement Plan, were, respectively, as follows: Mr.
Furry, 14 years and $160,000; Mr. Meinsen 3 years and $111,727.
<PAGE>
Stock Incentive Plan
General Description
As of the Effective Date, the Company established the Reinhold Stock
Incentive Plan for key employees. The Reinhold Stock Incentive Plan permits the
grant of stock options, stock appreciation rights and restricted stock. The
total number of shares of stock subject to issuance under the Reinhold Stock
Incentive Plan may not exceed 100,000. The maximum number of shares of stock
with respect to which options or stock appreciation rights may be granted to any
eligible employee during the term of the Reinhold Stock Incentive Plan may not
exceed 10,000. The shares to be delivered under the Reinhold Stock Incentive
Plan may consist of authorized but unissued stock or treasury stock, not
reserved for any other purpose.
The exercise price of the options is established at the discretion of a
Committee of the Board of Directors (the "Committee"), provided that it may not
be less than the estimated fair value at the time of grant. The Reinhold Stock
Incentive Plan provides that the options are exercisable based on vesting
schedules, provided that in no event shall such options vest more rapidly than
33 1/3 % annually. The options expire no later than ten years from the date of
grant.
The Committee, in its discretion, in connection with grant of an
option, may grant to the optionee Stock Appreciation Rights (SARs). A SAR will
entitle the holder of the related option, upon exercise of the Stock
Appreciation Right, to surrender such option, and receive payment of an amount
determined by multiplying (i) the excess of the fair market value of a share of
stock on the date of exercise of such SAR over the purchase price of a share of
stock under the related option, by (ii) the number of shares as to which the
SARs has been exercised.
The Committee may grant shares of restricted stock to eligible
employees and in such amounts as it shall determine in its sole discretion.
On June 3, 1999, the Compensation Committee of the Board of Directors
granted 73,000 stock options to key employees at an option price of $8.25 per
share, the prevailing market rate on that date. The options shall not be
exercisable in whole or in part until three years after the grant date and are
exercisable up to ten years from the grant date.
On June 3, 1999, the Board of Directors approved and adopted the Reinhold
Industries, Inc. Stock Option Agreement by and between the Company and Michael
T. Furry, granting Mr. Furry the option, effective June 3, 1999, to acquire up
to 90,000 shares of Class A common stock of the Company at fair market value at
that date ($8.25 per share). Terms of the Agreement are equivalent to those in
the Reinhold Stock Incentive Plan.
Grants to Employees Under the Reinhold Stock Incentive Plan
Stock Options. The Compensation Committee can grant employees stock
options at an option exercise price not less than the fair market value of a
share on the date of grant. To exercise an option, an employee would pay the
option price in cash, or if permitted by the Committee, by delivering shares of
Reinhold Class A Common Stock already owned by the employee that have a fair
market value equal to the option price.
The term of each option is fixed by the Committee provided that no
option may be exercisable for more than 10 years after the date on which it
becomes exercisable. The Committee will determine the time or times at which
each option granted to an employee may be exercised as well as other terms and
conditions applicable to the option. Such options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
Committee.
<PAGE>
Stock Appreciation Rights. A SAR will entitle the holder of the related
option, upon exercise of the Stock Appreciation Right, to surrender such option,
and receive payment of an amount determined by multiplying (i) the excess of the
fair market value of a share of stock on the date of exercise of such SAR over
the purchase price of a share of stock under the related option, by (ii) the
number of shares as to which the SARs has been exercised.
A Stock Appreciation Right will be exercisable at such time or times
and only to the extent that a related option is exercisable, and will not be
transferable except to the extent that such related option may be transferable.
A Stock Appreciation Right granted in connection with an incentive stock option
shall be exercisable only if the fair market value of a share of stock on the
date of exercise exceeds the purchase price of a share of stock specified in the
related option.
Upon the exercise of a Stock Appreciation Right, the related option
shall be canceled to the extent of the number of shares of Stock as to which the
Stock Appreciation Right is exercised, and upon the exercise of an option
granted in connection with a Stock Appreciation Right, the Stock Appreciation
Right shall be canceled to the extent of the number of shares of stock as to
which the option is exercised or surrendered.
Restricted Stock. The Committee, at any time and from time to time, may
grant shares of Restricted Stock under the Reinhold Stock Incentive Plan to such
Eligible Employees and in such amounts as it shall determine in its sole
discretion. Each grant of Restricted Stock shall be made pursuant to a written
agreement which shall contain such restrictions, terms and conditions as the
Committee may determine in its discretion. Restrictions upon shares of
Restricted Stock shall lapse at such time or times and on such terms and
conditions as the Committee may determine; provided, however, that in no event
shall such restrictions on vesting lapse at a rate more rapidly, on an annual
basis, than 33 1/3% of the number of shares such Restricted Stock subject to
such grant beginning on the first anniversary date following the grant of such
Restricted Stock.
Termination of Employment. Unless otherwise determined by the
Committee, in the event of termination of employment by reason of retirement,
long term disability or death, any option may thereafter be exercised in full
for a period of three years (or such shorter period as the Committee shall
determine at grant), subject in each case to the stated term of the option. In
the event of termination of employment for any reason other than retirement,
disability or death, unless otherwise determined by the Committee, any
outstanding options held by the terminated employee will be canceled. The
Committee may permit an employee whose employment terminates for any such other
reason up to three years following termination to exercise an option.
Change in Control Provisions. The Reinhold Stock Incentive Plan
provides that, except as provided below, in the event of a "Change in Control"
(as defined in the Reinhold Stock Incentive Plan), the Committee, either at the
time Employee Options or shares of Restricted Stock are granted, or, if so
provided in the applicable Option Agreement or Restricted Stock grant, at any
time thereafter, shall [have the authority to] accelerate in whole or in part
the exercisability of Employee Options and/or the last day of the period of
restriction upon a Change in Control. The Option Agreements and Restricted Stock
grants approved by the Committee may contain provisions whereby, in the event of
a Change in Control, the acceleration of the exercisability of Employee Options
and/or the last day of the period of restriction may be automatic or may be
subject to the discretion of the Committee or may depend upon whether the Change
in Control shall be approved by a majority of the members of the Board or such
other criteria as the Committee may specify. Nothing herein shall obligate the
Committee to take any action upon a Change in Control.
<PAGE>
INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors of Reinhold selected KPMG
Peat Marwick LLP, independent auditors, to audit Reinhold's financial statements
for the year ended December 31, 1999 and have been selected to serve as
independent auditors for the year ending December 31, 2000. A representative of
KPMG Peat Marwick LLP will be present at the Annual Meeting with an opportunity
to make a statement, if desired, and will be available to respond to appropriate
questions from stockholders present.
<PAGE>
PROPOSALS BY HOLDERS OF COMMON STOCK
Any proposal which a stockholder of Reinhold desires to be considered
for inclusion in the proxy statement relating to the 2001 Annual Meeting of
Stockholders must be received by Reinhold at its executive offices no later than
November 30, 2000. The offices of Reinhold are located at 12827 East Imperial
Hwy, Santa Fe Springs, California, 90670.
EXPENSES AND OTHER MATTERS
Reinhold will pay the costs of preparing, assembling and mailing this
proxy statement and the material enclosed herewith. Reinhold has requested
brokers, nominees, fiduciaries and other custodians who hold shares of its
Common Stock in their names to solicit proxies from their clients who own such
shares, and Reinhold has agreed to reimburse them for their expenses in so
doing.
Management does not intend to present any further items of business to
the meeting, and knows of no such items which will or may be presented by
others. However, if any other matter properly comes before the meeting, the
persons named in the enclosed proxy form will vote thereon in such manner as
they may, in their discretion, determine.
/s/Brett R. Meinsen
BRETT R. MEINSEN
Secretary
March 27, 2000
PLEASE DATE, SIGN AND IMMEDIATELY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE.
<PAGE>
EXHIBIT A
REINHOLD INDUSTRIES, INC.
12827 East Imperial Highway
Santa Fe Springs, CA 90670
PROXY
This proxy is solicited on behalf of the Board of Directors for THE ANNUAL
Meeting of SHAREHOLDERS.
The undersigned hereby appoints Brett R. Meinsen and Judy Sanson, and each of
them, the proxies of the undersigned, with power of substitution in each, to
vote all Class A Common Stock of Reinhold Industries, Inc. that the undersigned
is entitled to vote at the Annual Meeting of Stockholders of such Corporation to
be held at the offices of Reinhold Industries, Inc., 12827 East Imperial
Highway, Santa Fe Springs, California on Wednesday, May 10, 2000 at 10:00 A.M.,
Pacific time, and at any adjournments thereof.
1. ELECTION OF THREE DIRECTORS to serve until the next annual meeting after
their election:
___FOR nominees listed below (except as marked to the contrary). ___ WITHHOLD
AUTHORITY to vote for nominees listed below.
RALPH R. WHITNEY, JR. ANDREW McNALLY, IV MICHAEL T. FURRY
(INSTRUCTION: To withhold authority to vote any individual nominee, write that
nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE
(Continued and to be signed on reverse side)
<PAGE>
(Continued side)
2. In their discretion, such other business as may properly come before the
meeting.
This proxy, when properly executed, will be voted as instructed herein by the
undersigned stockholder. If no contrary instructions are given, this Proxy will
be voted FOR the proposals as set forth in the accompanying Proxy Statement.
-------------------------
Date
-------------------------
Name of Registered Holder
-------------------------
Signature
-------------------------
Signature
Joint owners
should each sign.
When signing as
executor,
administrator,
trustee or
guardian, give
your full Title as
such.
