<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / 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 Section240.14a-11(c) or
Section240.14a-12
SAUER INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[SAUER INC. LOGO]
2800 EAST 13TH STREET
AMES, IOWA 50010
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 22, 1999
------------------------
TO OUR STOCKHOLDERS:
The annual meeting of stockholders of Sauer Inc., a Delaware corporation,
will be held at the Scheman Building, Iowa State Center, Iowa State University,
Ames, Iowa 50010, on Thursday, April 22, 1999, commencing at 10:00 a.m. local
time. At the meeting, stockholders will act on the following matters:
1. To elect two (2) Class I directors for a term of three (3) years
expiring at the Annual Meeting of Stockholders to be held in 2002, and
until a respective successor is duly elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for 1999.
3. To transact such other business as may properly come before the meeting
or any postponement, adjournment, or adjournments.
Stockholders of Record at the close of business on March 12, 1999, are
entitled to notice of and to vote at the annual meeting or any postponement,
adjournment, or adjournments.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE EITHER
COMPLETE, DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY CARD IN THE PROVIDED
ENVELOPE OR VOTE YOUR SHARES BY TELEPHONE OR VIA THE INTERNET USING THE
INSTRUCTIONS ON THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN ORDER TO
ENSURE YOUR REPRESENTATION AT THE MEETING. EVEN IF YOU HAVE GIVEN YOUR PROXY,
WHETHER BY MAIL, BY TELEPHONE, OR VIA THE INTERNET, YOU MAY STILL VOTE IN PERSON
IF YOU ATTEND THE MEETING. IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK,
OR OTHER NOMINEE ("STREET NAME") YOU WILL NEED TO OBTAIN FROM THE RECORD HOLDER
AND BRING TO THE MEETING A PROXY ISSUED IN YOUR NAME, AUTHORIZING YOU TO VOTE
THE SHARES.
By order of the Board of Directors,
[SIGNATURE]
Kenneth D. McCuskey
CORPORATE SECRETARY
Ames, Iowa
March 26, 1999
<PAGE>
SAUER INC.
2800 EAST 13TH STREET
AMES, IOWA 50010
------------------------
PROXY STATEMENT
MARCH 26, 1999
------------------------
GENERAL INFORMATION
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy is being solicited on behalf of the Board of Directors of
Sauer Inc. (the "Company") for use at the annual meeting of the stockholders to
be held on April 22, 1999 (the "Annual Meeting"), and at any postponement,
adjournment, or adjournments. Most stockholders have a choice of voting via the
Internet, by using a toll-free telephone number, or by completing a proxy card
and mailing it in the envelope provided. Check your proxy card or the
information forwarded by your bank, broker, or other holder of record to see
which options are available to you. Please be aware that if you vote over the
Internet, you may incur costs such as telecommunication and Internet access
charges for which you will be responsible. The Internet and telephone voting
facilities for stockholders of record will be available until midnight of April
21, 1999, the day prior to the Annual Meeting.
Any proxy given does not effect your right to vote in person at the meeting
and may be revoked at any time before it is exercised by notifying Kenneth D.
McCuskey, Corporate Secretary, by mail, by facsimile, by timely delivery of a
properly executed, later-dated proxy (including an Internet or telephone vote)
or by appearing at the Annual Meeting in person and voting by ballot. Persons
whose shares are held of record by a brokerage house, bank, or other nominee and
who wish to vote at the meeting, must obtain from the record holder a proxy
issued in such person's name.
The Company intends to mail this Proxy Statement and the accompanying proxy
on or about March 26, 1999.
EXPENSE OF SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
the preparation, assembly, printing, and mailing of this Proxy Statement, the
accompanying proxy, and any additional information furnished to stockholders.
The Company will reimburse banks, brokerage houses, custodians, nominees, and
fiduciaries for reasonable expenses incurred in forwarding proxy material to
beneficial owners. In addition to solicitations by mail, regular employees and
directors of the Company may solicit proxies in person or by telephone. The
Company does not expect to pay any compensation for the solicitation of proxies.
1
<PAGE>
VOTING OF PROXIES
All shares entitled to vote and represented by properly completed proxies
received prior to the Annual Meeting and not revoked will be voted in accordance
with the instructions on the proxy. If no instructions are indicated on a
properly completed proxy, the shares represented by that proxy will be voted for
the election of the nominees designated below as directors and for ratification
of the appointment of Arthur Andersen LLP as independent accountants of the
Company for 1999.
PERSONS ENTITLED TO VOTE
Only holders of common stock of the Company of record as of the close of
business on March 12, 1999, are entitled to notice of and to vote at the Annual
Meeting. At the close of business on that date, 27,397,050 shares of common
stock were outstanding. Holders of common stock are entitled to one (1) vote for
each share held on all matters to be voted upon. Shares cannot be voted at the
Annual Meeting unless the owner is present in person or represented by proxy.
The directors shall be elected by an affirmative vote of a plurality of the
shares that are entitled to vote on the election of directors and that are
represented at the meeting by stockholders who are present in person or by
proxy, assuming a quorum is present. Accordingly, the two nominees for Class I
directors receiving the greatest number of votes at the Annual Meeting will be
elected as Class I directors. For all other matters to be voted upon at the
Annual Meeting, the affirmative vote of a majority of shares present in person
or represented by proxy, and entitled to vote on the matter, is necessary for
approval.
When a broker or other nominee holding shares for a customer votes on one
proposal, but does not vote on another proposal because the broker or nominee
does not have discretionary voting power with respect to such proposal and has
not received instructions from the beneficial owner, it is referred to as a
"Broker Nonvote." Properly executed proxies marked "Abstain" or proxies required
to be treated as Broker Nonvotes will be treated as present for purposes of
determining whether there is a quorum at the meeting. Abstentions will be
considered shares entitled to vote in the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as negative votes.
Broker Nonvotes are counted towards a quorum, but are not counted for any
purpose in determining whether a matter has been approved.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 11, 1999,
with respect to shares of common stock of the Company that were owned
beneficially by: (i) each beneficial owner of more than 5% of the outstanding
shares of common stock; (ii) each of the directors; (iii) each of the executive
officers of
2
<PAGE>
the Company named in the Summary Compensation table; and (iv) all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
BENEFICIAL OWNERS, DIRECTORS, AND EXECUTIVE OFFICERS OWNED(2)(3) SHARES
- ---------------------------------------------------------------------------- ------------------------- ---------------
<S> <C> <C> <C>
Sauer GmbH(1)............................................................... 10,362,500 37.8%
Klaus Murmann & Co. KG(1)................................................... 4,900,000 17.9%
Klaus H. Murmann, Director, Chairman and Chief
Executive Officer(1)...................................................... 15,690,725 (4)(5)(6) 57.3%
Hannelore Murmann(1)........................................................ 15,562,500 (4)(5)(6) 56.8%
Nicola Keim, Director(1).................................................... 15,562,500 (4)(5)(6) 56.8%
Sven Murmann, Director(1)................................................... 15,562,500 (4)(5)(6) 56.8%
Ulrike Murmann-Knuth(1)..................................................... 15,562,500 (4)(5)(6) 56.8%
Jan Murmann(1).............................................................. 15,562,500 (4)(5)(6) 56.8%
Anja Murmann(1)............................................................. 15,562,500 (4)(5)(6) 56.8%
Brigitta Zoellner(1)........................................................ 15,562,500 (4)(5)(6) 56.8%
Christa Zoellner(1)......................................................... 15,562,500 (4)(5)(6) 56.8%
Tonio P. Barlage, Director, President and Chief Operating Officer........... 600,000 (7) 2.2%
David L. Pfeifle, Director and Executive Vice President..................... 282,200 (8) 1.0%
James R. Wilcox, Vice President of Sauer-Sundstrand Company................. 121,500 (9) *
Thomas K. Kittel, Vice President of Sauer-Sundstrand
GmbH & Co................................................................. 279,800 (10) 1.0%
Johannes F. Kirchhoff, Director............................................. 400 *
Agustin A. Ramirez, Director................................................ 13,000 *
Richard M. Schilling, Director.............................................. 5,000 *
All directors and executive officers as a group (13 persons)................ 17,403,675 (11) 63.5%
</TABLE>
- ------------------------
*Represents less than 1%.
(1) The mailing address for each of these entitles and persons is c/o
Sauer-Sundstrand GmbH, Krokamp 35, 24539 Neumunster, Federal Republic of
Germany.
(2) Unless otherwise indicated in the following notes, each of the stockholders
named in this table has sole voting and investment power with respect to the
shares shown as beneficially owned.
(3) This table includes the number of shares of Restricted Common Stock held by
certain executive officers and issued pursuant to the Company's 1998
Long-Term Incentive Plan. The number of shares of Restricted Common Stock
held by an executive officer is indicated in the following notes. The shares
of Restricted Common Stock of the Company are subject to a substantial risk
of forfeiture, but the holders possess voting and dividend rights.
(4) These shares include 10,362,500 shares owned directly by Sauer GmbH, a
German limited liability company. These shares are owned indirectly by K.
Murmann Verwaltungsgesellschaft mit beschrankter Haftung, a German limited
liability company ("Murmann VmbH") as a result of its owning 100% of Sauer
GmbH. These shares are also owned indirectly by Klaus Murmann & Co. KG, the
100% owner of Murmann VmbH. These shares are also owned indirectly by Klaus
H. Murmann
3
<PAGE>
and Hannelore Murmann as the general partners of Klaus Murmann & Co. KG and
by Nicola Keim, Sven Murmann, Ulrike Murmann-Knuth, Anja Murmann, Jan
Murmann, Brigitta Zoellner, and Christa Zoellner as limited partners of
Klaus Murmann & Co. KG who share the power to vote on investment decisions.
Klaus H. Murmann and Hannelore Murmann each disclaim beneficial ownership of
8,340,776 of these shares. Nicola Keim, Sven Murmann, Ulrike Murmann-Knuth,
Anja Murmann, and Jan Murmann each disclaim beneficial ownership of
8,800,871 of these shares. Brigitta Zoellner and Christa Zoellner each
disclaim beneficial ownership of 10,096,184 of these shares.
(5) These shares include 4,900,000 shares owned directly by Klaus Murmann & Co.
KG, a German limited partnership (the "Partnership"). These shares are owned
indirectly by Klaus H. Murmann and Hannelore Murmann as the general partners
of the Partnership and by Nicola Keim, Sven Murmann, Ulrike Murmann-Knuth,
Anja Murmann, Jan Murmann, Brigitta Zoellner, and Christa Zoellner as
limited partners of the Partnership who share the right to vote on
investment decisions. Klaus H. Murmann and Hannelore Murmann each disclaim
beneficial ownership of 3,944,010 of these shares. Nicola Keim, Sven
Murmann, Ulrike Murmann-Knuth, Anja Murmann, and Jan Murmann each disclaim
beneficial ownership of 4,161,570 of these shares. Brigitta Zoellner and
Christa Zoellner each disclaim beneficial ownership of 4,774,070 of these
shares.
(6) These shares include 300,000 shares owned directly by EMF Europaische
Marketing and Finanzmanagement Aktiengesellschaft, a German corporation
("EMF"). These shares are owned indirectly by Murmann VmbH as a result of
its 99.99% interest in Sauer GmbH & Co. Hydraulik KG ("Sauer Hydraulik"), a
German limited partnership, which is the 100% owner of EMF. These shares are
also owned indirectly by the Partnership as a result of its 100% ownership
of Murmann VmbH. These shares are also owned indirectly by Klaus H. Murmann
as a .01% owner of Sauer Hydraulik. These shares are also owned indirectly
by Klaus H. Murmann and Hannelore Murmann, as the general partners of the
Partnership and by Nicola Keim, Sven Murmann, Ulrike Murmann-Knuth, Anja
Murmann, Jan Murmann, Brigitta Zoellner, and Christa Zoellner, as limited
partners of the Partnership who share the power to vote on investment
decisions. Klaus H. Murmann and Hannelore Murmann each disclaim beneficial
ownership of 241,446 of these shares. Nicola Keim, Sven Murmann, Ulrike
Murmann-Knuth, Anja Murmann, and Jan Murmann each disclaim beneficial
ownership of 254,795 of these shares. Brigitta Zoellner and Christa Zoellner
each disclaim beneficial ownership of 292,291 of these shares.
(7) Includes 250,000 shares held by Mr. Barlage's spouse.
(8) Includes 7,200 shares of Restricted Common Stock.
(9) Includes 9,000 shares of Restricted Common Stock.
(10) Includes 4,800 shares of Restricted Common Stock.
(11) Includes 38,100 shares of Restricted Common Stock and stock owned by Mr.
Barlage's spouse and the spouse of one other executive officer, and stock
owned by the minor children of an executive officer.
ELECTION OF DIRECTORS
The Board of Directors of the Company (the "Board") is divided into three
classes, each class consisting, as nearly as possible, of an equal number of
directors. Directors are elected for staggered three-year terms. There are
presently eight members on the Board.
4
<PAGE>
Each of the two nominees for Class I directors are currently directors and
if elected, will serve for three years until the 2002 Annual Meeting and until a
successor has been elected and qualified, or until such director's earlier
death, resignation, or removal. The directors remaining in Classes II and III
will continue in office until the 2000 and 2001 Annual Meetings of Stockholders,
respectively.
Each share is entitled to one vote for each of two directors. The persons
named in the accompanying proxy will vote it for the election of the nominees
named below as directors of Class I unless otherwise directed by the
Stockholder. Each nominee has consented to be named and to continue to serve if
elected. In the unanticipated event that a nominee becomes unavailable for
election for any reason, the proxies will be voted for the other nominee and for
any substitute.
CLASS I NOMINEES TO SERVE THREE YEARS UNTIL THE 2002 ANNUAL MEETING
KLAUS H. MURMANN, age 67, a director of the Company since April 1990, has
served as Chairman and Chief Executive Officer of the Company and its
predecessor since 1987. Mr. Murmann founded Sauer Getriebe in 1967 which, as a
licensee of and later joint venture partner with Sundstrand Corporation, has
been involved in the hydrostatics business since 1967. He is a member of the
supervisory boards of Fried. Krupp AG, Hoesch-Krupp, Essen, a German industrial
company, and PreussenElektra AG, Hannover, a German utility. He is Chairman of
the Board of Gothaer Insurance Group, Gottingen/Cologne, a German insurance
company, Chairman of the Board of PSVaG, a national pension fund, a member of
the board of Bankgesellschaft Berlin AG, Berlin, a German bank, and a director
of GKN PLC, United Kingdom, a manufacturing company. Mr. Murmann is also a
director of Sundstrand Corporation. Klaus Murmann is the father of Nicola Keim
and Sven Murmann, each of whom is a director of the Company. He is a member of
the Executive Committee of the Board.
NICOLA KEIM, age 38, has been a director of the Company since April 1990.
Ms. Keim served as a Member of the Supervisory Board of Sauer Getriebe from
November 1990 through June 1997. Ms. Keim is the daughter of Klaus H. Murmann,
Chairman and Chief Executive Officer of the Company and a sister of Sven
Murmann, a director of the Company.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE ELECTION OF EACH OF THE
NAMED NOMINEES.
CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL THE 2000 ANNUAL MEETING
TONIO P. BARLAGE, age 47, a director of the Company since March 1989, has
been President and Chief Operating Officer of the Company since 1995. Prior to
attaining his current position in 1995, Mr. Barlage was the Chief Financial
Officer of the Company and its predecessor from 1987 to 1995. From 1986 to
January of 1987, Mr. Barlage was also Chief Financial Officer of Sauer Getriebe.
Prior to joining the Company in 1986, Mr. Barlage was with Arthur Andersen & Co.
He is a member of the Executive Committee of the Board.
SVEN MURMANN, age 31, has been a director of the Company since April 1994.
Mr. Murmann has served as an Assistant Professor at the University of Zurich
since October 1997. He was a research assistant at Ludwig-Maximilians University
in Munich from April 1994 through August 1995. Mr. Murmann is the son of Klaus
H. Murmann, Chairman and Chief Executive Officer of the Company and a brother of
Nicola Keim, a Director of the Company.
5
<PAGE>
RICHARD M. SCHILLING, age 61, has been a director of the Company since April
1990, and of its predecessor since 1985. He began his career at Sundstrand
Corporation, a manufacturer of components for aerospace and industrial
applications, in April 1968 as a corporate attorney and assistant secretary. In
1978, he was named General Counsel and Vice President, and in 1988, he was
elected Secretary of Sundstrand Corporation. Mr. Schilling retired from
Sundstrand Corporation on December 31, 1997, and is currently a partner at
Hinshaw & Culbertson, a law firm in Rockford, Illinois. He is Chairman of the
Audit Committee of the Board and a member of the Compensation Committee of the
Board.
CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING
JOHANNES F. KIRCHHOFF, age 41, has been a director of the Company since
April 1997. Mr. Kirchhoff has been owner and Managing Director of the FAUN
Umwelttechnik GmbH & Co., a German manufacturer of vehicles for waste disposal,
since December 1994. From November 1989 through November 1994, Mr. Kirchhoff
served as a Managing Director of Edelhoff Polytechnik GmbH & Co., a German
manufacturer of vehicles for waste disposal. Mr. Kirchhoff also served on the
Board of Directors of Edelhoff AG & Co., the holding company of Edelhoff
Polytechnik GmbH & Co., from June 1993 through November 1994. He is Chairman of
the Compensation Committee of the Board and a member of the Audit Committee of
the Board.
DAVID L. PFEIFLE, age 54, a director of the Company since April 1994, has
been Executive Vice President of the Company and President of Sauer-Sundstrand
Company, the primary U.S. operating subsidiary of the Company, since 1994. For
more than five years prior to 1994, he held various senior management positions
with Sauer-Sundstrand Company with increasing responsibility. Mr. Pfeifle is a
member of the board of the Construction Industry Manufacturers Association and
of the board of the National Fluid Power Association. He is a member of the
Executive Committee of the Board.
AGUSTIN A. RAMIREZ, age 52, has been a director of the Company since
December 1997. Since 1987, Mr. Ramirez has served as President, Chief Executive
Officer, and Chairman of HUSCO International, Inc., a manufacturer of hydraulic
controls for mobile equipment applications with operations in North America and
Europe. He served as past Chairman of the Board of the National Fluid Power
Association and as a member of the Advisory Board of Bank One Wisconsin. He is a
member of the Audit and Compensation Committees of the Board.
BOARD COMMITTEES AND MEETINGS
The Board held four meetings during 1998, including one meeting by
telephone. The Board has an Executive Committee, an Audit Committee, and a
Compensation Committee. The Board has no standing nominating committee nor any
committee performing similar functions. During 1998 the Audit Committee held two
meetings and the Compensation Committee held one meeting. The Executive
Committee held no formal meetings, but took action by unanimous written consent.
Each director attended at least 75% of the aggregate of the total number of
meetings of the Board and the total number of meetings held by all committees of
the Board on which the director served during 1998.
EXECUTIVE COMMITTEE. The Executive Committee possesses all of the powers of
the Board, except for certain powers specifically reserved by Delaware law to
the Board. Messrs. Klaus Murmann, Barlage, and Pfeifle are the current members
of the Executive Committee.
6
<PAGE>
AUDIT COMMITTEE. The Audit Committee is composed of three directors, none
of whom is an employee of the Company. The Audit Committee makes recommendations
to the Board regarding the independent auditors to be appointed for ratification
by the stockholders, reviews the scope of the annual audit activities of the
independent auditors and the Company's internal auditors, reviews audit results
and administers the Code of Business Conduct and Lawful Practices. The Audit
Committee currently consists of Messrs. Schilling (Chairman), Kirchhoff, and
Ramirez.
COMPENSATION COMMITTEE. The Compensation Committee is composed of three
directors, none of whom is an employee of the Company. The Compensation
Committee reviews and determines the salaries of the executive officers of the
Company and administers the Company's Bonus Plan and 1998 Long-Term Incentive
Plan. The current members of the Compensation Committee are Messrs. Kirchhoff
(Chairman), Ramirez, and Schilling.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive annual retainers of
$16,000, plus $1,000 for each Board meeting attended and $500 for participation
in a telephonic meeting, together with expenses relating to their duties as
directors.
Pursuant to the Non-Employee Director Stock Plan, the Board has determined
that following each Annual Meeting in April, beginning with the 1999 Annual
Meeting, each non-employee director shall receive 1,000 shares of Restricted
Common Stock of the Company. All shares of Restricted Common Stock of the
Company will vest on the third anniversary of the date of grant. The
non-employee directors will have voting and dividend rights, but the Restricted
Common Stock will be forfeited upon termination of service from the Board for
any reason prior to the third anniversary of the grant.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning total compensation
awarded or paid to or earned by the Chief Executive Officer and the four other
most highly compensated executive officers of the Company, who served in such
capacities as of December 31, 1998 (the "Named Executive Officers") for services
rendered to the Company in all capacities during each of the last two fiscal
years ended December 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------- ----------
OTHER RESTRICTED PAYOUTS
ANNUAL STOCK -----------
COMPENSATION AWARDS ($) LTIP
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (5) PAYOUTS ($)
- ------------------------------------------ ---- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Klaus H. Murmann.......................... 1998 $ 500,000 $ 407,800 -- -- --
Chairman and Chief 1997 475,000 450,000 -- -- --
Executive Officer
Tonio P. Barlage.......................... 1998 400,000 326,240 -- -- --
President and Chief 1997 375,000 550,000 -- -- --
Operating Officer
David L. Pfeifle.......................... 1998 286,661 220,216 $1,920 $ 188,250 $216,320
Executive Vice President 1997 246,981 220,002 5,760 -- 46,400
James R. Wilcox........................... 1998 168,666 72,307 1,938 235,312 162,240
Vice President of 1997 157,546 81,766 6,000 -- --
Sauer-Sundstrand Company(1)
Thomas K. Kittel.......................... 1998 170,629(3) 27,757(4) 1,193 125,500 118,976
Vice President of 1997 158,785(3) 25,325(4) 3,560 -- 17,400
Sauer-Sundstrand GmbH & Co.(2)
</TABLE>
- ------------------------
(1) Sauer-Sundstrand Company is the U.S. operating subsidiary of the Company.
(2) Sauer-Sundstrand GmbH & Co. is the German operating partnership of the
Company.
(3) Payment to Mr. Kittel was made in Deutsche marks, which amounts have been
converted to U.S. dollars for this table using weighted average annual
exchange rates for 1998 and 1997, respectively.
(4) Payments were made in Deutsche marks and converted to U.S. dollars for this
table using the exchange rates as of March 3, 1999, and April 15, 1998,
respectively.
(5) Includes shares of Restricted Common Stock ("Restricted Shares") and
Restricted Stock Units ("Restricted Units") granted in 1998. On December 31,
1998, certain of the Named Executive Officers held the following number of
Restricted Shares and Restricted Units with the following value,
8
<PAGE>
based on the closing per share price of common stock of the Company on
December 31, 1998, of $7.5625: Mr. Pfeifle--7,200 Restricted Shares and
4,800 Restricted Units with an aggregate value of $90,750 (of which 1,800
Restricted Shares and 1,200 Restricted Units will vest in each of 1999,
2000, 2001, and 2002); Mr. Wilcox--9,000 Restricted Shares and 6,000
Restricted Units with an aggregate value of $113,438 (of which 2,250
Restricted Shares and 1,500 Restricted Units will vest in each of 1999,
2000, 2001, and 2002); and Mr. Kittel--4,800 Restricted Shares and 3,200
Restricted Units with an aggregate value of $60,500 (of which 1,200
Restricted Shares and 800 Restricted Units will vest in each of 1999, 2000,
2001, and 2002). Each of the foregoing Named Executive Officers has the
right to vote and receive dividends on the Restricted Shares and to receive
dividend equivalents on the Restricted Units.
RETIREMENT PLANS
U.S. RETIREMENT PLAN. The following table sets forth the estimated annual
benefits payable under the Sauer-Sundstrand Company Employees' Retirement Plan
(the "U.S. Retirement Plan") to participants retiring at a normal retirement
date of January 1, 1999, for the specified average annual earnings and years of
participation. The benefits have been calculated on the basis of a straight-life
annuity.
U.S. RETIREMENT PLAN TABLE
<TABLE>
<CAPTION>
ANNUAL YEARS OF PARTICIPATION
AVERAGE ----------------------------------------------
EARNINGS 15 20 25 30
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$150,000 $37,970 $50,626 $63,283 $75,898
175,000 42,897 57,196 71,495 85,748
200,000 43,259 58,679 72,098 86,471
225,000 43,259 58,679 72,098 86,471
250,000 43,259 58,679 72,098 86,471
275,000 43,259 58,679 72,098 86,471
</TABLE>
The U.S. Retirement Plan is a defined benefit pension plan intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986 (the
"Code"). Benefits are based only on salary and any sales commissions (the
Company currently pays no sales commissions). The current compensation covered
by the U.S. Retirement Plan for Messrs. Pfeifle and Wilcox are the amounts set
forth under "Salary" in the Summary Compensation Table. No other Named Executive
Officer participated in the U.S. Retirement Plan.
Under the U.S. Retirement Plan, the monthly amount of a participant's
retirement benefit at the participant's normal retirement date (the date the
participant reaches age 65) is calculated pursuant to a formula contained in the
plan based on (i) the average of the participant's highest five-year annual
earnings less an offset for Social Security benefits and (ii) the participant's
years of participation in the Retirement Plan. Messrs. Pfeifle and Wilcox have
completed 29 and 7 years of participation, respectively, and their estimated
annual U.S. Retirement Plan benefits at their normal retirement dates, assuming
their present salaries and present Social Security benefits remain unchanged,
would be $88,429 and $54,908, respectively. No other Named Executive Officer is
entitled to benefits under the U.S. Retirement Plan.
9
<PAGE>
U.S. SUPPLEMENTAL PLANS. The Code generally limits to $130,000 indexed for
inflation, the amount of any annual benefit that may be paid from the U.S.
Retirement Plan. Moreover, the U.S. Retirement Plan may consider no more than
$160,000 as indexed for inflation, of a participant's annual compensation in
determining that participant's retirement benefit. In recognition of these two
limitations, the Company has adopted two Supplemental Retirement Benefit Plans
(the "U.S. Supplemental Plans"). Both of these U.S. Supplemental Plans are
designed to provide supplemental retirement benefits to the extent that a
participant's benefits under the Retirement Plan are limited by either the
$130,000 annual benefit limitation or the $160,000 annual compensation
limitation.
One of these two U.S. Supplemental Plans has an additional purpose. It
provides supplemental retirement benefits equal to the difference between the
benefit the participant would have received under the applicable Sundstrand
Corporation pension plan for former employees of Sundstrand Corporation (if the
participant's earnings and service with the Company had been taken into account
under the Sundstrand Corporation plan) and the benefit payable under the U.S.
Retirement Plan. Under both U.S. Supplemental Plans, however, the actual payment
of supplemental benefits is entirely at the discretion of the Company.
At January 1, 1999, Messrs. Pfeifle and Wilcox participated in the U.S.
Supplemental Plans, but only Mr. Pfeifle was eligible for the supplement for
benefits that would have been payable under the Sundstrand Corporation plan. The
estimated annual supplemental retirement benefits for Messrs. Pfeifle and
Wilcox, at their normal retirement dates at age 65, assuming their present
salaries until retirement, would be $102,509 and $7,676 respectively. No other
Named Executive Officer is entitled to benefits under the U.S. Supplemental
Plans.
EUROPEAN PENSION PLANS. Messrs. Murmann and Barlage are entitled to
retirement benefits from the Company equal to 60% of their annual base salary
immediately prior to retirement. These benefits are payable as a straight-life
annuity, commencing at the normal retirement age of 60. In the event either
executive leaves a surviving spouse, that spouse would be entitled to a
straight-life annuity benefit equal to 60% of the benefit payable to the
deceased executive. Based on his 1998 base salary and an assumed 6% compounded
annual salary growth rate during the 13 years remaining until he attains age 60,
Mr. Barlage would be entitled to an estimated annual retirement benefit of
$511,903 at his normal retirement age. Mr. Murmann has already attained his
normal retirement age, and could therefore receive an annual retirement benefit
of $300,000 if he were to retire immediately.
Mr. Kittel participates in the pension plan covering most of the Company's
German employees. The plan is similar in nature to a defined contribution plan
in the United States, with the exception that the plan is unfunded. Under the
plan, a monthly pension is paid to employees who retire after attaining the age
of 65, calculated pursuant to a formula based on (i) a percentage of each
employee's base monthly salary as of the end of October of each year and (ii)
the participant's years of service. Mr. Kittel completed 11 years of service as
of December 31, 1998, and assuming that his present salary remains unchanged and
that he will retire at age 65, his pension will be DM 32,584 per year ($19,529
using the exchange rate as of December 31, 1998). Mr. Kittel does not
participate in the arrangement covering Messrs. Murmann and Barlage. No other
Named Executive Officer is entitled to benefits under a European pension plan.
10
<PAGE>
EMPLOYMENT ARRANGEMENTS
The Company has employment contracts with Messrs. Murmann and Barlage
providing for annual salaries of not less than $450,000 and $350,000,
respectively. The employment contracts with Messrs. Murmann and Barlage provide
that each shall participate in the Company's benefit plans for which he is
presently eligible and in any plans substituted therefor, and each shall be
entitled to certain retirement benefits. In the event the Company terminates the
employment of Messrs. Murmann or Barlage in violation of the contract, he would
be entitled to receive all compensation and benefits provided for under the
contract until such time as his employment would otherwise terminate pursuant to
the contract. The employment contracts with Messrs. Murmann and Barlage expire
on December 31, 2001, and contain agreements not to compete during the period of
the employment contract. The German Operating Company has an employment contract
with Mr. Kittel that provides for an annual salary of DM 300,000 ($170,629 using
the weighted average annual exchange rate for 1998), which contract expires on
December 31, 2002, and does not contain an agreement not to compete. No other
Named Executive Officer is a party to an employment contract with the Company.
11
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total returns from
May 12, 1998 (the date of the Company's initial public offering of its common
stock), to December 31, 1998, for the Company, the Russell 2000 Index, and the
Media General Financial Services, Inc.--Diversified Machinery Index ("MG--
Diversified Machinery Index").
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SAUER INC MG--DIVERSIFIED MACHINERY INDEX
<S> <C> <C>
5/12/1998 $100.00 $100.00
5/29/1998 $89.61 $97.79
6/30/1998 $78.11 $92.53
7/31/1998 $70.83 $89.09
8/31/1998 $50.00 $74.05
9/30/1998 $44.11 $75.26
10/30/1998 $40.28 $86.38
11/30/1998 $52.11 $86.94
12/31/1998 $42.00 $85.95
ASSUMES $100 INVESTED ON 05/12/98 IN EACH OF THE
COMPANY'S COMMON STOCK, THE RUSSELL 2000 INDEX, AND THE MEDIA
GENERAL FINANCIAL SERVICES, INC.--DIVERSIFIED MACHINERY INDEX
ASSUMES REINVESTMENT OF DIVIDENDS
<CAPTION>
RUSSELL 2000 INDEX
<S> <C>
5/12/1998 $100.00
5/29/1998 $94.61
6/30/1998 $94.81
7/31/1998 $87.14
8/31/1998 $70.22
9/30/1998 $75.71
10/30/1998 $78.80
11/30/1998 $82.84
12/31/1998 $87.83
ASSUMES $100 INVESTED ON 05/12/98 IN EACH OF THE
COMPANY'S COMMON STOCK, THE RUSSELL 2000 INDEX, AND THE MEDIA
GENERAL FINANCIAL SERVICES, INC.--DIVERSIFIED MACHINERY INDEX
ASSUMES REINVESTMENT OF DIVIDENDS
</TABLE>
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MURMANN FAMILY LIMITED PARTNERSHIP INTEREST IN THE GERMAN OPERATING COMPANY
The Company conducts its German operations through Sauer-Sundstrand GmbH &
Co., a German partnership (the "German Operating Company"). The Company and
Sauer Sundstrand GmbH, a company wholly-owned by the Company, are the general
partners of the German Operating Company. Sauer GmbH and Klaus H. Murmann & Co.
KG, as holding company for Sauer GmbH & Co. Hydraulik KG, have limited
partnership interests (the "Limited Partners") in the German Operating Company.
The Limited Partners are owned entirely by Klaus H. Murmann (a director and
Chairman and Chief Executive Officer of the Company) and members of his family
(the "Murmann Family"). The creation of the limited partnership interests as
opposed to the acquisition of the entire share capital of the Company was a
result of tax considerations in connection with the formation of the Company in
1989. The limited partnership interests remained essentially unchanged since
that date. The German Operating Company is required to pay annually to the
Limited Partners an amount in cash (the "Annual Cash Payment") equal to a
percentage of the Company's consolidated income before taxes and the Limited
Partners' interests ("Percentage"). The Percentage is subject to adjustment
based on changes in the number of outstanding shares of common stock of the
Company during the applicable year. The Percentage is equal to the ratio of
2,250,000 shares divided by the sum of 2,250,000 shares and the number of
outstanding shares of common stock of the Company. As of March 1, 1999, the
Percentage is equal to 2,250,000/(2,250,000 + 27,397,050), or 7.6%.
The Annual Cash Payment is based on the overall income of the Company in
order to avoid any potential conflicts between the Company and the Limited
Partners regarding whether, for example, sales should be made by the U.S.
Operating Company or the German Operating Company and the pricing of
intercompany sales between the U.S. Operating Company and the German Operating
Company. The amount of the Annual Cash Payment to be made by the Company for
1998 is $3,573,000, which was converted to DM 5,961,551 as of December 31, 1998,
for payment in Deutsche marks in 1999.
The Company has the right to elect by the action of its independent
directors or the holders of its common stock other than the Murmann Family to
terminate the limited partnership interests in exchange for 2,250,000 shares of
common stock of Sauer Inc. (subject to antidilution adjustment) and the balance
of the current account of the Limited Partners at any time after notice to the
Limited Partners as specified in the limited partnership agreement. The
dissolution of the German Operating Company will be deemed an election to
terminate the limited partnership interests. Unless the Company's election to
terminate the limited partnership is related to (i) stock transfers resulting in
a decline in the Murmann Family's beneficial ownership (economic or voting) of
the Company's common stock to less than 50.1% (subject to adjustment for
dilution); (ii) a sale of a majority in book value of the consolidated assets of
the Company and its subsidiaries or assets that generated a majority of the
consolidated revenues of the Company and its subsidiaries in the prior fiscal
year; (iii) a transfer of the beneficial ownership of the limited partnership
interest (or any voting rights in respect thereof) outside the Murmann Family;
(iv) a merger or other business combination in which the Company is not the
survivor or the acquisition of at least 50.1% of the outstanding common stock of
the Company pursuant to a tender or exchange offer; or (v) the withholding of
the consent of the Limited Partners in certain circumstances in a manner adverse
to holders of the Company's common stock, or is effected after December 31,
2016, in addition to the payment of the current account balance and issuance of
common stock of the Company in exchange for and in complete satisfaction of all
Limited Partners' claims with respect to the German Operating Company, the
Company
13
<PAGE>
will pay the Limited Partners an amount in cash equal to the income tax payable
as a result of the exchange of the shares of common stock of the Company for the
limited partnership interests. In no event will the payment with respect to the
tax exceed 24 million Deutsche marks. The right to receive the payment in
respect of the taxes is not transferable to persons or companies outside the
Murmann Family and companies which are 90% owned by the Murmann Family.
The Limited Partners may elect to terminate the limited partnership
interests at any time upon three months' notice to the Company and to the German
Operating Company. In such case, the Limited Partners will receive the balance
of their current accounts and the Company will issue 2,250,000 shares of its
common stock (subject to antidilution adjustment) in exchange for, and in
complete satisfaction of, all claims of the Limited Partners. No tax
reimbursement will be payable by the Company in such event.
The consent of the Limited Partners is required, among other things, to (i)
change the business purpose of the German Operating Company, (ii) admit
additional limited partners who are not members of the Murmann Family, (iii)
authorize the German Operating Company to take actions out of the ordinary
course of business of the German Operating Company, (iv) amend the partnership
agreement of the German Operating Company in a manner that adversely affects the
Limited Partners or amend the limited partnership agreement and (v) partially or
wholly dissolve the German Operating Company. Klaus H. Murmann on behalf of the
Limited Partners has agreed that they will not unreasonably withhold such
consent.
Klaus H. Murmann, on behalf of the Murmann Family, has agreed with the
underwriters of the initial public offering of the Company's common stock
consummated in May of 1998, not to cause the Company and the Limited Partners to
amend the German limited partnership agreement to increase the Percentage, to
change the basis on which the Annual Cash Payment is computed in a way that is
less favorable to the Company or in any other way adversely affecting the rights
of the Company or the Company's stockholders. The Limited Partners may not
transfer the limited partnership interests in the German Operating Company to a
person who is not in the Murmann Family without the consent of the Company.
PURCHASE OF NEUMUNSTER FACILITIES
Since 1987, the German Operating Company leased the real estate and building
of the Company's facility in Neumunster, Germany, from the Murmann Family. The
lease agreement was between the German Operating Company and Sauer GmbH & Co.
Hydraulik KG ("Sauer Hydraulik"), which is wholly owned by the Murmann family.
The lease payments were DM 3,960,000 per annum plus value added tax at
prevailing rates.
Under the lease agreement, the German Operating Company had an option to
purchase and Sauer Hydraulik had the right to require the German Operating
Company to purchase the property at any time during the term of the lease
agreement on an "as is" basis without warranties and at the fair market value of
the property. Sauer-Sundstrand GmbH, a wholly owned subsidiary of the Company,
purchased the facility from Sauer Hydraulik effective May 1, 1998, under this
clause of the lease agreement. The purchase price for the facility was DM
40,800,000 ($23,193,679 based on the exchange rate at May 19, 1998) and was
determined by an independent appraisal conducted by OTTO STOEBEN GmbH of Kiel,
Germany.
14
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board has appointed Arthur Andersen LLP as independent accountants to
examine the consolidated financial statements of the Company and its
subsidiaries for 1999, subject to ratification of the stockholders at the Annual
Meeting. Arthur Andersen LLP has served as the Company's independent accountants
since 1989.
Representatives of Arthur Andersen LLP will be present at the Annual Meeting
with the opportunity to make a statement and to respond to appropriate
questions. The affirmative vote of a majority of the shares present and entitled
to vote on this item at the Annual Meeting is necessary for the approval of the
appointment of Arthur Andersen LLP as independent accountants for 1999. In the
event stockholders do not ratify the appointment of Arthur Andersen LLP, the
appointment will be reconsidered by the Audit Committee and the Board.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR
1999.
ADDITIONAL INFORMATION
NOTICE REQUIREMENTS
To permit the Company and its stockholders to deal with stockholder
proposals in an informed and orderly manner, the Bylaws of the Company establish
an advance notice procedure. No stockholder proposals or other business may be
brought before an annual meeting unless written notice of such proposal or other
business is received by the Secretary of the Company at the address set forth on
page 1 of this Proxy Statement not less than 120 calendar days in advance of the
date that the Company's proxy statement was released to stockholders in
connection with the previous year's Annual Meeting. Such notice must contain
certain specified information concerning the matters to be brought before the
meeting as well as the stockholder submitting the proposal. For the Company's
annual meeting in the year 2000, the Company must receive this notice on or
before November 29, 1999. A copy of the applicable Bylaw provisions may be
obtained, without charge, upon written request to the Secretary of the Company
at the address set forth on page 1 of this Proxy Statement.
In addition, stockholder proposals intended to be included in the Company's
Proxy Statement for the annual meeting in 2000 must be received by the Secretary
of the Company at the address set forth on page 1 of this Proxy Statement, not
later than November 29, 1999. Such proposals must comply with certain rules and
regulations promulgated by the Securities and Exchange Commission.
DISCRETIONARY AUTHORITY
If any other matters are properly presented at the Annual Meeting for
consideration, including, among other things, consideration of a motion to
adjourn the Annual Meeting to another time or place, the persons named as
proxies and acting thereunder will have discretion to vote on those matters to
the same extent as the person delivering the proxy would be entitled to vote. If
any other matter is properly brought before the Annual Meeting, proxies in the
enclosed form returned to the Company prior to the Annual Meeting will be voted
in accordance with the recommendation of the Board or, in the absence of such a
recommendation, in accordance with the judgment of the proxy holder. At the date
this Proxy
15
<PAGE>
Statement went to press, the Company did not anticipate that any other matters
would be properly brought before the Annual Meeting.
FORM 10-K
THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF ITS
ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES, AND LIST OF EXHIBITS. REQUESTS
SHOULD BE SENT TO KENNETH D. MCCUSKEY, CORPORATE SECRETARY, AT THE ADDRESS SET
FORTH ON PAGE 1 OF THIS PROXY STATEMENT.
<TABLE>
<S> <C>
By Order of the Board of Directors
[SIGNATURE]
March 26, 1999 Kenneth D. McCuskey
CORPORATE SECRETARY
</TABLE>
16
<PAGE>
P
R
O
X
Y
SAUER INC.
2800 EAST 13TH STREET, AMES, IOWA 50010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING ON APRIL 22, 1999
The undersigned hereby appoints Klaus H. Murmann, Tonio P. Barlage, and
David L. Pfeifle, and each of them, with full power of substitution, as proxies,
to vote all the shares of Common Stock of Sauer Inc. (the "Company") which the
undersigned is entitled to vote at the 1999 Annual Meeting of Stockholders to be
held April 22, 1999, and any adjournment thereof, upon the matters set forth
below, AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. A majority of said proxies, or any substitute or
substitutes, who shall be present and act at the meeting (or if only one shall
be present and act, then that one) shall have all the powers of said proxies
hereunder.
PLEASE VOTE, DATE, AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
SAUER INC.
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, APRIL 22, 1999 AT 10:00 A.M. LOCAL TIME
SCHEMAN BUILDING
IOWA STATE CENTER
IOWA STATE UNIVERSITY
AMES, IOWA 50010
<PAGE>
X
PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE
THIS PROXY, IF SIGNED AND RETURNED, WILL BE VOTED AS SPECIFIED ON THE FRONT
SIDE. IF NO SPECIFICATIONS ARE MADE, YOUR SHARES WILL BE VOTED FOR ALL NOMINEES
IN ITEM 1 AND FOR ITEM 2.
The Board of Directors recommends a vote FOR all nominees in item 1 and FOR
item 2.
1. ELECTION OF DIRECTORS.
To elect the following
nominees, and while the Company
has no reason to believe that
any of the nominees will
decline or be unable to serve,
if any do, to vote with
discretionary authority:
1. KLAUS H. MURMANN and
2. NICOLA KEIM.
FOR WITHELD
For all nominees except the following:
2. TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS.
FOR AGAINST ABSTAIN
Please sign exactly as name
appears. Joint owners should each
sign. Attorneys-in-fact,
executors, administrators,
trustees, guardians, or
corporation officers should
indicate the capacity in which
they are signing.
PLEASE SIGN, DATE, AND MAIL THIS
PROXY PROMPTLY WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING. YOU
MAY NEVERTHELESS VOTE IN PERSON IF
YOU DO ATTEND.
SIGNATURE DATE , 1999
SIGNATURE DATE , 1999
FOLD AND DETACH HERE
<PAGE>
SAUER INC.
Dear Stockholder:
We encourage you to take advantage of two new and convenient ways by which
you can vote your shares. You can vote your shares electronically by
telephone or via the Internet, which eliminates the need to return the proxy
card.
VOTE BY TELEPHONE. To vote your shares by telephone, use a touch-tone
telephone and call the following toll-free number: 1-800-652-8683, 24 hours
a day, 7 days a week. Insert the Control Number printed in the box above,
just below the perforation. Follow the simple recorded instructions.
VOTE BY INTERNET. To vote via the Internet, go to web site
WWW.VOTE-BY-NET.COM. Insert the Control Number printed in the box above, just
below the perforation. Follow the simple instructions. Please be aware that
if you vote over the Internet, you may incur costs such as telecommunication
and Internet access charges for which you will be responsible.
The Internet and telephone voting facilities will be available until
midnight on April 21, 1999, the day before the Annual Meeting.
YOUR VOTE IS IMPORTANT!
THANK YOU FOR VOTING
DO NOT RETURN PROXY IF YOU ARE VOTING BY TELEPHONE OR THE INTERNET
