<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
SIFCO Industries, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
[SIFCO LOGO]
970 EAST 64TH STREET, CLEVELAND, OHIO 44103
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
The 2001 Annual Meeting of Shareholders of SIFCO Industries, Inc. will
be held in the National City Bank auditorium (4th floor) of the National City
Center Annex Building, 1900 East 9th Street, Cleveland, Ohio, on January 30,
2001 at 10:30 a.m., for the following purposes:
1. To elect three directors for a three-year term expiring in 2004.
2. To ratify the designation of Arthur Andersen LL as the
independent auditors of the Company.
3. To consider and take action upon such other matters as may
properly come before the meeting or any adjournment thereof.
The holders of record of Common Shares at the close of business on
December 8, 2000, will be entitled to receive notice of and vote at the meeting.
The Company's Annual Report for the fiscal year ended September 30,
2000 has been previously mailed to Shareholders.
By order of the Board of Directors.
SIFCO Industries, Inc.
Carolyn J. Buller, Secretary
December 21, 2000
KINDLY FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT
IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ARE PRESENT AND VOTE IN PERSON AT THE MEETING, YOUR PROXY
WILL NOT BE USED.
<PAGE> 3
[SIFCO LOGO]
970 EAST 64TH STREET, CLEVELAND, OHIO 44103
December 21, 2000
PROXY STATEMENT
GENERAL INFORMATION
The proxy that accompanies this statement is solicited by the Board of
Directors of SIFCO Industries, Inc. (the "Company") for use at the 2001 Annual
Meeting of the Shareholders of the Company to be held January 30, 2001, or at
any adjournment thereof. This proxy statement was first mailed on December 21,
2000 to shareholders of record on December 8, 2000.
Any shareholder giving a proxy for the meeting may revoke it before it
is exercised by giving a later dated proxy or by giving notice of revocation to
the Company in writing or at the 2001 Annual Meeting. However, the mere presence
at the 2001 Annual Meeting of the shareholder granting a proxy does not revoke
the proxy. Unless revoked by notice as above stated, the shares represented by
valid proxies will be voted on all matters to be acted upon at the 2001 Annual
Meeting. On any matter or matters with respect to which the proxy contains
instructions for voting, such shares will be voted in accordance with such
instructions. Abstentions will be deemed to be present for the purpose of
determining a quorum for the 2001 Annual Meeting, but will be deemed not voting
on the issues or matters as to which abstention is applicable. Brokers who have
not received voting instructions from beneficial owners generally may vote in
their discretion with respect to the election of directors and the ratification
of the auditors. Broker non-votes will not affect the outcome of any matter for
which the 2001 Annual Meeting is called.
The cost of solicitation of proxies in the form accompanying this
statement will be borne by the Company. Proxies will be solicited by mail or by
telephone or personal interview with an officer or regular employee of the
Company or by requesting brokers and other custodians, nominees and fiduciaries
to forward proxy soliciting material to the beneficial owners of shares held of
record by such brokers, custodians, nominees or fiduciaries, who will be
reimbursed by the Company for their expenses in so doing.
1
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The record date for determining shareholders entitled to vote at the
2001 Annual Meeting is December 8, 2000. As of November 30, 2000, the
outstanding voting securities of the Company were 5,135,063 Common Shares. Each
Common Share, exclusive of treasury shares, has one vote. The Company held
70,700 Common Shares in its treasury on the record date. The holders of a
majority of the Common Shares of the Company issued and outstanding, present in
person or by proxy, shall constitute a quorum for the purposes of the 2001
Annual Meeting.
Under the General Corporation Law of Ohio, if notice in writing is
given by any shareholder to the President or any Vice President or the Secretary
of the Company, not less than forty-eight hours before the time fixed for
holding the meeting, that the shareholder desires that the voting for election
of directors shall be cumulative, each shareholder will have cumulative voting
rights in the election of directors if notice of the meeting has been given at
least ten days before the meeting, and, if the ten days' notice has not been
given, not less than twenty-four hours before such meeting time, that the
shareholder desires that the voting at such election shall be cumulative,
provided that an announcement of the giving of such notice is made upon the
convening of the meeting by the Chairman of the Board or Secretary of the
Company or by or on behalf of the shareholder giving such notice. Cumulative
voting allows the shareholder to give one candidate a number of votes equal to
the number of directors to be elected multiplied by the number of shares held by
the shareholder, or distribute such number of votes among as many candidates and
in such manner as the shareholder deems advisable. In case of such notice, it is
intended that the persons named in the accompanying proxy will vote cumulatively
for all or such of the nominees hereinafter mentioned as they deem best.
As of November 30, 2000, Janice Carlson and Charles H. Smith, III, 970
East 64th Street, Cleveland, Ohio 44103, owned, as Trustees, 2,002,947 Common
Shares representing 39.01% of the outstanding Common Shares of the Company, such
Common Shares having been deposited with them or their predecessors, as
Trustees, under a Voting Trust Agreement entered into as of February 1, 1997 and
extended to January 31, 2002. Voting Trust Certificates for the number of Common
Shares so deposited have been delivered by the Trustees (or their predecessors)
to the beneficial owners thereof, except for any numbers of shares less than one
hundred (100) as may exist from time to time, for which no Voting Trust
Certificates are delivered. The Trustees under the Voting Trust Agreement share
voting control with respect to all such Common Shares.
The table below names the persons who are known by the Company to be
the beneficial owners of more than 5% of its outstanding Common Shares as of
November 30, 2000, the number of such Common Shares beneficially owned by, or
held in trust for, each such person (including their spouses and children who
live with them, if any) and the percentage of the outstanding Common Shares
which that number of shares constitutes.
2
<PAGE> 5
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>
Mrs. George D. Gotschall 692,972 (1) 13.49%
7425 Pelican Bay Boulevard, Marbella #606
Naples, Florida 34108
Charles H. Smith, Jr. 571,936(1) 11.14%
4565 South Lake Drive
Boynton Beach, FL 33436
Dimensional Fund Advisors, Inc. 344,590 (2) 6.71%
</TABLE>
(1) All shares owned by Mrs. G. D. Gotschall and C. H. Smith Jr. are subject
to the Voting Trust Agreement described above.
(2) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment manager to
certain other investment vehicles, including commingled group trusts.
(These investment companies and investment vehicles are the
"Portfolios.") In its role as investment advisor and investment manager,
Dimensional possesses both voting and investment power over 344,590
Common Shares as of September 30, 2000. The Portfolios own all Common
Shares reported in this statement, and Dimensional disclaims beneficial
ownership of such securities.
ELECTION OF DIRECTORS
The size of the Board of Directors is currently fixed at ten and
classified into three classes. The term of office of one class of directors
expires in each year. The terms of office of George D. Gotschall, Richard S.
Gray and Thomas J. Vild will expire on the day of the 2001 Annual Meeting.
Proxies solicited hereunder granting authority to vote on the election
of directors will be voted for the election of Messrs. George D. Gotschall,
Richard S. Gray and Thomas J. Vild to serve for three-year terms ending in 2004,
and until their respective successors are elected. All nominees currently serve
as directors of the Company.
The nominees receiving the greatest number of votes shall be elected.
Although the Company does not contemplate that any of the nominees will be
unavailable for election, if a vacancy in the slate of nominees is occasioned by
death or other unexpected occurrence, it is currently intended that the
remaining directors will, by the vote of a majority of their number, designate a
different nominee for election to the Board at the 2001 Annual Meeting.
The following information was furnished to the Company by each
director/nominee and sets forth the name, age, principal occupation or
employment of each such person and the period during which he has served as a
director of the Company. Except as otherwise noted below, each director has held
his principal occupation or employment for at least five years.
3
<PAGE> 6
Nominees for election to the Board of Directors
GEORGE D. GOTSCHALL, 80, director of the Company from 1950 to 1958 and
continuously since 1962 is retired. Mr. Gotschall is Assistant
Secretary of the Company and previously served the Company until 1983
as Vice President-International and Treasurer.
RICHARD S. GRAY, 69, director of the Company since 1986 is retired. Mr. Gray
was President, Enterprise Development Inc., a cooperative venture with
the Weatherhead School of Management of Case Western Reserve University
from 1987 to 1999. Mr. Gray was director of The Center for Venture
Development from 1985 to 1987, and Senior Vice President of LTV Steel,
Cleveland, Ohio (primary steel manufacturer) from 1984 to 1985. He is a
director of Davey Tree Expert Company (tree care and line clearing).
THOMAS J. VILD, 66, director of the Company since 1994. Mr. Vild has been a
Management Consultant since 1990. Mr. Vild was an aerospace industry
analyst with the investment firm of Roulston Research from 1987 through
1990 and former Director of Market Analysis and Forecasting for the
Aircraft Components Group of TRW from 1978 to 1987. Prior to such time,
Mr. Vild served in a variety of management positions at TRW, Martin
Marietta Corporation and Gould, Inc.
Directors whose terms expire in 2003
JEFFREY P. GOTSCHALL, 52, director of the Company since 1986. Mr. Gotschall has
been Chief Executive Officer of the Company since 1990 and President of
the Company since 1989. Mr. Gotschall previously served the Company
from 1986 to 1990 as Chief Operating Officer, from 1986 through 1989 as
Executive Vice President and from 1985 through 1989 as President of
SIFCO Turbine Component Services. Mr. Gotschall is also a director of
National Processing, Inc. (credit and debit processing service).
DR. DAVID V. RAGONE, 70, director of the Company since 1983. Dr. Ragone has been
a partner of Ampersand Ventures (venture capital fund), Wellesley,
Massachusetts since 1988. He was a Senior Lecturer at Massachusetts
Institute of Technology (Department of Materials Science and
Engineering) from 1988 to 1998 and prior to that, a Visiting Professor
at M.I.T. from 1987 through 1988. Dr. Ragone was President of Case
Western Reserve University from 1980 through 1987 and theretofore Dean
of the College of Engineering at the University of Michigan. Dr. Ragone
is also a director of Cabot Corporation, Boston, Massachusetts (carbon
black and natural gas).
4
<PAGE> 7
CHARLES H. SMITH, JR., 80, director of the Company since 1941. Chairman of the
Board of the Company since 1970. Mr. Smith previously served the
Company as its Chief Executive Officer from 1943 until 1983. Mr. Smith
is a former Chairman of the Board of the Chamber of Commerce of the
United States. He served as a member of the governing body of the
International Labor Organization from 1975 to 1978 and served as the
United States employer delegate to the ILO from 1975 to 1992.
Directors whose terms expire in 2002
MAURICE FOLEY, 60, director of the Company since 1999. Mr. Foley was a director
of the Company's Irish subsidiary, SIFCO Turbine Components Limited,
from 1996 to 1999. Mr. Foley is currently a director of the Irish
subsidiary of Newcourt Credit Group, Inc. Mr. Foley also was a director
of the Irish subsidiary of ABN AMRO Bank NV from 1993 to 1999. Mr.
Foley served in a variety of senior executive and board positions with
Aer Lingus plc, an Irish airline, and its affiliates and with GPA Group
from 1964 to 1994.
WILLIAM R. HIGGINS, 58, director of the Company since 1992. Mr. Higgins has
been the Chief Executive Officer of Applied Fiber Systems (a specialist
in carbon fiber impregnated raw material), Clearwater, Florida since
1998. Mr. Higgins served as President/General Manager of AAR
Composites, Inc., Clearwater, Florida (design and manufacturing of
advanced composite material products) from 1997 to 1998, and President
of Advanced Technology & Research, Inc., Clearwater, Florida, from 1980
to 1997. Mr. Higgins also previously served as a research consultant in
composites technology for Jet Executive International and Gulfstar,
Inc. and as President of Force Engineering, Sarasota, Florida from 1974
to 1978 (design and manufacture of composites technology products for
boat industry).
HUDSON D. SMITH, 49, director of the Company since 1988. Mr. Smith has been
Treasurer of the Company since 1983 and President of SIFCO Forge Group
since 1998. Mr. Smith previously served as Vice President and General
Manager of SIFCO Forge Group from 1995 through 1997, General Manager of
SIFCO Forge Group's Cleveland Operations from 1989 through 1995 and
Group General Sales Manager of SIFCO Forge Group from 1985 through
1989.
J. DOUGLAS WHELAN, 61, director of the Company since 1995. Mr Whelan recently
retired from his positions as President and Chief Operating Officer of
Wyman-Gordon Company, North Grafton, Massachusetts, and as a member of
that company's board of directors. He previously served from 1994
through 1997 as President of Wyman-Gordon Forgings, Houston, Texas and
from 1989 through 1994, as Vice President of Operations for the Cameron
Forged Products Division of Cooper Industries, Houston, Texas. From
1965 to 1989, Mr. Whelan served in a variety of executive, technical
and management positions with Cameron Iron Works.
5
<PAGE> 8
STOCK OWNERSHIP OF OFFICERS, DIRECTORS AND NOMINEES
The following table sets forth as of November 30, 2000, the number of
Common Shares of the Company beneficially owned by each director and officer
and all directors and officers as a group, according to information furnished
to the Company by such persons:
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP (1) OF CLASS
Tim Crean (1) 146,493 2.85%
Maurice Foley 4,000 *
George D. Gotschall (2)(3)(4) 692,972 13.49%
Jeffrey P. Gotschall (1) (2)(4)(5) 119,350 2.32%
Richard S. Gray 11,500 *
William R. Higgins 1,000 *
David V. Ragone (6) 11,125 *
Charles H. Smith, Jr. (2)(3)(4) 571,936 11.14%
Hudson D. Smith (1)(2)(4)(5) 135,090 2.63%
Thomas J. Vild 1,000 *
J. Douglas Whelan 8,000 *
All Directors and Officers as a Group 1,702,466 33.15%
*Common Shares owned are less than one percent of class.
(1) Unless otherwise stated below, the shares owned are owne of record by
that person who has sole voting and investment power as to those
shares. A portion of the total number of shares for the following
persons and group represents shares which could be acquired within 60
days of the date of this Proxy Statement by exercise of stock options:
Tim Crean, 97,500 shares; Jeffrey P. Gotschalll 2,500 shares; Hudson D.
Smith, 1,250 shares; and all directors and officers as a group, 101,500
shares.
(2) Includes in the cases of Messrs. G. D. Gotschall, J. P. Gotschall, H.
D. Smith and C. H. Smith, Jr. shares owned by their spouses and any
minor children or in trust for them, their spouses and their lineal
descendants.
(3) Mr. C. H. Smith, Jr. and Mr. G. D. Gotschall are brother in-law.
(4) Includes Voting Trust Certificates issued by the Voting Trust described
above representing an equivalent number of Common Shares held by such
Trust as follows: Mr. G. D. Gotschall-- 692,972; Mr. J. P. Gotschall--
116,850; Mr. C. H. Smith, Jr.-- 571,936; and Mr. H. D. Smith-- 132,151.
(5) Mr. J. P. Gotschall is the son of Mr. G. D. Gotschall an the nephew of
Mr. C. H. Smith, Jr. Mr. H. D. Smith is the son of Mr. C. H. Smith, Jr.
and the nephew of Mr. G. D. Gotschall.
(6) Includes Common Shares owned jointly with his wife.
6
<PAGE> 9
ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS
The Company's Board of Directors held four regularly scheduled meetings
during the last fiscal year. The Board of Directors' standing committees are the
Audit; Compensation, Pension and Stock Option; Nominating; and Technology
Committees.
The functions of the Audit Committee are to determine the scope of the
audit, to discuss any special problems that may arise during the course of the
audit and to review the audit and its findings for the purpose of reporting to
the Board of Directors. The Audit Committee, currently composed of Messrs.
Foley, Gray, Higgins and Vild held three (3) meetings during the last fiscal
year.
The function of the Compensation, Pension and Stock Option Committee is
to review the compensation of directors and officers of the Company and to
recommend to the Board of Directors the employees of the Company to whom stock
options should be granted and the number of shares which should be subject to
each option so granted. The Compensation, Pension and Stock Option Committee,
currently composed of Dr. David V. Ragone and Messrs. Higgins and Whelan, held
one (1) meeting during the last fiscal year.
The function of the Nominating Committee is to recommend candidates for
the Board of Directors. The Nominating Committee is currently composed of
Messrs. G. D. Gotschall and Gray and Dr. Ragone. The Nominating Committee will
consider shareholder nominations for directors at any time. Any shareholder
desiring to have a nominee considered by the Nominating Committee should submit
such recommendation in writing to a member of the Nominating Committee or the
Secretary of the Company. The Nominating Committee did not hold any formal
meetings during the last fiscal year.
The function of the Technology Committee is to review developments in
technology that may impact the businesses and marketplace the Company serves.
The Technology Committee, comprised of Messrs. Vild and Whelan and Dr. Ragone,
held two (2) meetings during the last fiscal year.
In fiscal 2000, each director (other than directors who are employed by
the Company) received an annual retainer fee of $12,000 and an attendance fee of
$1,000 per Board meeting, $1,000 per Committee meeting for meetings held on a
day other than the day of a Board meeting and $500 per Committee meeting for
meetings held on the day of a Board meeting. Committee chairmen received an
additional $2,000 annual retainer for such service.
Under the Company's deferred compensation program, a director may defer
all or any portion of his compensation as a director. Compensation so deferred
is credited to an account or accounts on the Company's books and is credited, at
the participant's election, with interest at a money market rate, or with units
the value of which is tied to the market value of the Common
7
<PAGE> 10
Shares at the time the compensation is earned. The amounts so deferred may be
distributed, at the election of the director, upon termination of his position
with the Company, or at a future date, in a lump sum or in installments over a
period not to exceed ten years.
COMPENSATION, PENSION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The members of the Compensation, Pension and Stock Option Committee are
Dr. David V. Ragone (Chairman), and Messrs. Higgins and Whelan, none of whom is
employed by the Company. In fiscal 2000, there were no director relationships
that require disclosure under this section.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
for the Company's Chief Executive Officer and the highest paid executive
officers of the Company whose salary and bonus exceed $100,000, together with
the total compensation paid to each such individual for the Company's three
previous fiscal years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM
COMPENSATION COMPENSATION
NAME & OPTION LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) AWARDS PAYOUTS ($) COMPENSATION
(3) (1)
<S> <C> <C> <C> <C> <C> <C>
Jeffrey P. Gotschall 2000 260,442 32,000 10,000 76,984 3,120
President & CEO 1999 261,498 61,000 -0- -0- 3,120
1998 250,007 125,000 -0- -0- 2,250
Frank A. Cappello 2000(2) 85,483 19,000 5,000 -0- -0-
Vice President & CFO
Timothy V. Crean 2000 174,332 58,091 10,000 159,506 -0-
Executive Vice President 1999 179,804 61,162 55,000 -0- -0-
1998 156,193 126,633 -0- -0- -0-
Hudson D. Smith, Treasurer 2000 113,376 3,574 6,000 199,312 1,320
1999 110,000 2,109 -0- -0- 1,320
1998 107,705 15,810 -0- -0- 1,260
</TABLE>
(1) Represents amounts contributed by the Company as matchin contributions
with respect to U.S. employees pursuant to the Company's Employee
Thrift Plan, a defined contribution plan.
(2) Represents amounts since February 21, 2000, date on whic officer was
hired.
(3) Represents final distributions from the Company's Phanto Stock Plan.
The value of non-cash compensation and personal benefits furnished by
the Company to its executive officers in 2000, valued at their incremental cost
to the Company, did not exceed ten percent of the reported cash compensation for
such person.
8
<PAGE> 11
OPTION GRANTS
Set forth below is information on grants of stock options pursuant to
the company's 1995 Stock Option Plan during the fiscal year ended September 30,
2000 to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
OPTION TERM
% OF TOTAL OPTIONS
OPTIONS/ GRANTED TO EXERCISE
NAME SARS EMPLOYEES IN FISCAL OR BASE EXPIRATION 5% ($) 10% ($)
GRANTED YEAR PRICE DATE
# ($/SHARE)
<S> <C> <C> <C> <C> <C> <C>
Jeffrey P. Gotschall 10,000 13% 7.63 11/2/2004 48,010 121,666
Frank A. Cappello 5,000 7% 6.81 2/21/2010 21,414 54,267
Timothy V. Crean 10,000 13% 6.94 11/2/2009 43,645 110,606
Hudson D. Smith 6,000 8% 7.63 11/2/2004 28,806 73,000
</TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Set forth below, for each individual named in the Summary Compensation
Table, is information relating to such person's exercise of stock options during
the fiscal year ended September 30, 2000 and ownership of unexercised stock
options at September 30, 2000.
<TABLE>
<CAPTION>
SHARE NUMBER OF SECURITIES VALUE OF UNEXERCISED IN
NAME ACQUIRED ON VALUE UNDERLYING UNEXERCISED THE MONEY OPTIONS AT
EXERCISE REALIZED OPTIONS AT YEAR-END FISCAL YEAR-END
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------- -------------- -------------- -------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey P. Gotschall -0- -0- -0- 10,000 -0- -0-
Frank A. Cappello -0- -0- -0- 5,000 -0- -0-
Timothy V. Crean -0- -0- 83,750 51,250 $104,095 -0-
Hudson D. Smith -0- -0- -0- 6,000 -0- -0-
</TABLE>
9
<PAGE> 12
PENSION PLAN
The amounts stated in the foregoing Summary Compensation Table do not
include amounts paid by the Company for purposes of funding the Company's
non-contributory pension plan. Messrs. J. P. Gotschall, F. A. Cappello and H. D.
Smith participate on the same basis as other salaried employees in a qualified,
non-contributory pension plan known as SIFCO Industries, Inc. Salaried
Retirement Plan (the "Retirement Plan"). Mr. R. A. Demetter, former Vice
President and CFO, retired from the Company during fiscal 2000 and received a
final lump sum distribution of $374,000 from the Retirement Plan. Mr. T. V.
Crean participates in the SIFCO Turbine Components Limited Pension Plan (the
"STCL Plan"), which is described later in this section.
The Summary Compensation Table includes both base salary and incentive
compensation. Benefits payable under the Retirement Plan are calculated using
only base salary. Under the terms of the Retirement Plan, the amount of normal
annual retirement benefit payable to a participating employee is generally based
upon years of service with the Company prior to normal retirement date, "final
average earnings" (average basic salary during the 60 consecutive month period
within the 120 month period preceding retirement during which the total amount
of basic salary was the highest) and average Social Security covered
compensation. For an employee retiring with 25 years of service or less, the
benefit is equal to 2.144% of final average earnings minus .625% of average
Social Security covered compensation multiplied by years of service up to 25
years. If an employee has more than 25 years of service at retirement, the
benefit is increased by 1.25% of final average earnings multiplied by his years
of service in excess of 25 years. The amount so determined is payable in the
form of a single life annuity or a lump sum payment. Under the Internal Revenue
Code, the maximum annual benefit payable under the Retirement Plan to covered
employees is limited to $135,000 per year for 2000. In addition, the maximum
amount of final average earnings used to compute benefits under the Retirement
Plan is limited by the Internal Revenue Code. Therefore, in response to such
limitations, the Company established a non-qualified Supplemental Executive
Retirement Plan ("SERP") to provide covered employees with a benefit amount
equal to what they would have been entitled to receive under the Retirement Plan
if no such limitations existed.
The estimated annual retirement benefit under the combined Plans for
each participant is based upon the assumption that base salary will remain
unchanged until the normal retirement age of 65 is reached, and that likewise
the provisions of the Retirement Plan with respect to those retirement benefits
will remain unchanged. The following table shows estimated combined annual
benefits payable upon retirement under the Retirement Plan and the SERP:
10
<PAGE> 13
<TABLE>
<CAPTION>
Years of Service
--------------------- ----------------- --------------- --------------- --------------- -------------
Remuneration 15 20 25 30 35
--------------------- ----------------- --------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
$ 50,000 12,789 17,053 21,316 24,441 27,566
75,000 20,829 27,773 34,716 39,403 44,091
100,000 28,869 38,493 48,116 54,366 60,616
150,000 44,949 59,933 74,916 84,291 93,666
200,000 61,029 81,373 101,716 114,216 126,716
250,000 77,109 102,813 128,516 144,141 159,766
300,000 93,189 124,253 155,316 174,066 192,816
</TABLE>
The payments by the Company to fund the benefits under the Retirement
Plan and SERP are actuarially determined. The estimated annual benefits payable
upon retirement and projected years of credited service to retirement are as
follows: Mr. J. P. Gotschall-- $177,944 (39.8 years); Mr. F. A. Cappello--
$63,708 (24.0 years); and Mr. H. D. Smith-- $69,166 (42.5 years). Total pension
expense related to the Retirement Plan for fiscal year 2000 was $506,000.
Mr. T. V. Crean participates in the STCL Plan. This is a contributory
plan for employees of the Company's Irish subsidiary, SIFCO Turbine Components
Limited ("STCL"). Under the STCL Plan, the employee and STCL each pay 50% of
retirement benefits. Other costs such as life insurance are borne by STCL.
Under the terms of the STCL Plan, the amount of normal annual
retirement benefits payable to a participating employee is generally based upon
years of service with STCL prior to normal retirement date, "final pensionable
salary" (average basic salary during the period of 38 consecutive months within
the 120 months preceding retirement during which the total of basic salary was
the highest) and average government pension. The benefit is 1/60th of final
pensionable salary for each year of service, subject to a maximum of 40 years,
minus 1 1/2 times the single person's annual rate of government retirement
pension. Years of service for senior managers who will have completed at least
ten years service may be augmented. The additional cost is paid by STCL.
The payments by STCL and employees to fund the benefits under the STCL
Plan are actuarially determined. The current dollar value of estimated annual
benefits payable (in Irish pounds) upon retirement and projected years of
credited service to retirement for Mr. T. V. Crean is $100,437 (40 years). Total
pension expense for the Retirement Plan for fiscal year 2000 was $214,000.
11
<PAGE> 14
EMPLOYEES' THRIFT PLAN
The amounts stated in the Summary Compensation Table include amounts
contributed and expensed by the Company under the SIFCO Industries, Inc.
Employees' Thrift Plan. This Plan is a qualified 401(k) plan for salaried U.S.
employees and was established in 1981 to encourage savings among employees. By
the terms of this Plan, all salaried U.S. employees are permitted to contribute
up to 16% of their pay, including wages, overtime pay and any commissions
received, up to a maximum amount of $10,000 in calendar year 2000, to a trust
fund. Under the Plan, the Company matches 60% of the first 2% of pay
contributed.
Employee contributions may be invested in one or more of four funds: an
equity fund, an international equity fund, a balanced fund and a government
money market fund. Company matching contributions are made in Company shares.
For employees with less than three full years of service, one-half of the
amounts contributed by the Company are automatically vested. The remaining 50%
becomes fully vested after three full years of service. Amounts contributed by
the Company for employees with three or more full years of service vest
immediately. All amounts in the fund credited to an employee are payable in cash
or stock upon the employee's death, retirement or permanent disability.
PHANTOM STOCK PLANS
During fiscal 2000, the Company had award units outstanding pursuant to
three compensatory Phantom Stock Plans for key employees of the Company and its
subsidiaries. All remaining participants in the Company's Phantom Stock Plans
elected, during fiscal 2000, to discontinue participation in the Plans and,
therefore, all such participants received full and final distributions from the
Plans during fiscal 2000. The aggregate amount of distributions paid from the
Plans in 2000 was approximately $919,000. Amounts received by individuals named
in the Summary Compensation Table are included in "LTIP Payouts." As of the date
of this Proxy Statement, there were no award units outstanding and the Company
had no further liability under the Phantom Stock Plans.
EMPLOYMENT AGREEMENTS
During fiscal 2000, the Company's Board determined that it was prudent,
for appropriate business reasons, to enter into agreements with certain key
executives of the Company in order to protect the Company and such key
executives in the event of a change in control of the Company. The purpose of
these agreements is to reinforce and encourage the continued attention and
dedication of these executives to their assigned duties without distraction in
the face of (i) solicitations by other employers and (ii) the potentially
disturbing circumstances arising from the possibility of a change in control of
the Company. To that end, the Executive Employment Agreements obligate the
Company to provide certain severance benefits, described below, to any of these
officers whose employment is terminated under certain circumstances. Such
benefits for Messrs. J. P. Gotschall, H. D. Smith and F. A. Cappello include a
payment equal to a maximum of 200% of the employee's annual compensation,
continuation of insurance coverage for up to 24 months following termination,
and accelerated vesting of existing stock options and certain retirement
benefits.
12
<PAGE> 15
REPORT OF THE PENSION, COMPENSATION
AND STOCK OPTION COMMITTEE
The Company's compensation of its executive personnel has three
components: base salary, cash incentive compensation and non-cash incentives
(stock options).
Based on a consideration of CEO salaries in manufacturing companies of
comparable size, and in view of uncertainty in the aerospace industry, the
Compensation Committee continued Mr. Gotschall's annual salary at $260,000 at
the start of the fiscal 2001 year.
The Company has incentive plans for each business unit and for the
corporate headquarters staff. The SIFCO Forge Group's incentive plan is a
gainsharing plan for all employees of the Group based on profits in excess of
quarterly performance goals.
Members of the other business units share in compensation pools equal
to 10% of the unit's operating profits, less interest and parent expense. Each
pool is allocated by the applicable business unit manager among the participants
in the plan in the general proportion that each participant's salary bears to
the aggregate salaries of all participants, with individual awards subject to
salary caps.
Members of the corporate staff earned incentives from a pool equal to
3% of profits before tax, subject to certain adjustments. Mr. Gotschall's cash
incentive for fiscal 2000 was $32,000.
During fiscal 2000, options on 76,000 shares were awarded to
participants in the Company's 1998 Long-Term Incentive Plan, including awards of
10,000 shares to Mr. J. P. Gotschall, 10,000 shares to Mr. T. V. Crean, 6,000
shares to Mr. H. D. Smith, and 5,000 shares to Mr. F. A. Cappello.
David V. Ragone
William R. Higgins
J. Douglas Whelan
13
<PAGE> 16
PERFORMANCE GRAPH
Set forth below is a graph comparing the price performance of the
Company's Common Shares to the price performance of the S&P Composite - 500
Stock Index and the S&P Aerospace/Defense Group. The graph assumes that the
value of the investment in the Common Shares, the S&P Composite - 500 Stock
Index and the S&P Aerospace/Defense Group was $100 on September 30, 1995.
COMPARISON OF FIVE-YEAR PRICE PERFORMANCE OF
SIFCO INDUSTRIES, INC., S&P 500 INDEX
AND S&P AEROSPACE/DEFENSE GROUP
[LINE GRAPH]
Qtr. SIFCO S&P 500 S&P Aerospace/
Ended Stock Index Defense
9/95 100.0 100.0 100.0
3/96 156.3 110.5 120.2
3/97 267.6 129.6 137.8
9/97 467.6 162.1 164.5
3/98 515.5 188.5 160.4
9/98 281.7 174.0 120.6
3/99 171.8 220.1 112.3
9/99 157.7 219.5 122.1
3/00 132.4 256.4 101.3
9/00 131.0 245.8 159.8
14
<PAGE> 17
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviewed and discussed the audited financial
statements of the Company for the fiscal year ended September 30, 2000, with the
Company's management and with the Company's independent accountants, Arthur
Andersen LLP. The Audit Committee also discussed with Arthur Andersen LLP the
matters required to be discussed by Statement of Auditing Standards No. 61
(Communication with Audit Committees).
The Audit Committee received the written disclosures and the letter
from Arthur Andersen LLP required by Independence Standards Board Standard No. 1
and the Audit Committee discussed the independence of Arthur Andersen LLP with
that firm.
Based upon the Audit Committee's review and discussion noted above, the
Audit Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 2000.
Audit Committee
Richard S. Gray, Chairman
Maurice Foley
William R. Higgins
Thomas J. Vild
APPROVAL OF DESIGNATION OF AUDITORS
The accounting firm of Arthur Andersen LLP has been the Company's
independent accountants and auditors and has audited the accounts of the Company
and its consolidated subsidiaries for a number of years. The Board of Directors
has chosen that firm to audit the accounts of the Company and its consolidated
subsidiaries for the fiscal year ending September 30, 2001, subject to the
approval of the shareholders for which the affirmative vote of a majority of the
Common Shares present and voting at the 2001 Annual Meeting (in person or by
proxy) is required. Arthur Andersen LLP has advised the Company that neither the
firm nor any of its members or associates has any direct or indirect financial
interest in the Company or any of its affiliates other than as auditors. The
Board of Directors recommends ratification of the selection of Arthur Andersen
LLP as independent auditors of the Company for the year ending September 30,
2001.
Representatives of Arthur Andersen LLP are expected to be present at
the 2001 Annual Meeting with the opportunity to make a statement if they desire
to do so and to be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Any shareholder who is the record or beneficial owner of at least 1% or
$2,000 in market
15
<PAGE> 18
value of Common Shares of the Company entitled to be voted at the 2001 Annual
Meeting and who has held such Common Shares for at least one year may present a
proposal at the 2001 Annual Meeting of Shareholders. A shareholder who intends
to present a proposal at the 2001 Annual Meeting, and who wishes to have the
proposal included in the Company's proxy statement and form of proxy for that
meeting, must deliver the proposal to the Company no later than August 19, 2001.
Any shareholder proposal submitted other than for inclusion in the Company's
proxy materials for the 2001 Annual Meeting must be delivered to the Company no
later than November 14, 2001 or such proposal will be considered untimely. If a
shareholder proposal is received after November 14, 2001, the Company may vote
in its discretion as to the proposal all of the Common Shares for which it has
received proxies for the 2001 Annual Meeting.
OTHER MATTERS
The management does not know of any other matters which will come
before the meeting. In case any other matter should properly come before the
meeting, it is the intention of the persons named in the enclosed proxy to vote
in accordance with their best judgment.
By order of the Board of Directors
Carolyn J. Buller, Secretary
December 21, 2000
16
<PAGE> 19
SIFCO INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints CHARLES H. SMITH, JR. and GEORGE D.
GOTSCHALL, and each of them, the proxies of the undersigned to vote the shares
of the undersigned at the Annual Meeting of the Shareholders of SIFCO
Industries, Inc., to be held on January 30, 2001, and at any and all
adjournments thereof, upon the following:
(1) ELECTION OF DIRECTORS. To elect the following persons for
three-year terms ending in 2004.
George D. Gotschall Richard S. Gray Thomas J. Vild
<TABLE>
<S> <C>
[ ] FOR all nominees listed above [ ] WITHHOLD Authority to
(except as noted below) vote for all nominees
</TABLE>
(INSTRUCTIONS: If you wish to withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
---------------------------------------------------------------------
(2) RATIFICATION OF THE DESIGNATION OF ARTHUR ANDERSEN LLP. as
independent auditors of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment thereof.
[ ] GRANT AUTHORITY [ ] WITHHOLD AUTHORITY
(Continued on other side)
(Proxy -- continued from other side)
Proxy No. Shares
IF NO INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE NOMINEES FOR DIRECTORS, FOR THE PROPOSAL TO RATIFY THE DESIGNATION OF
INDEPENDENT AUDITORS AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER BUSINESS
AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT.
Dated
---------------------------------
---------------------------------
---------------------------------
NOTE: The signature of this proxy
should correspond with the name
(or names), as shown hereon, in
which your stock is registered.
Where stock is registered jointly
in the name of two or more
persons, all should sign.
