<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 Section 240.14a-11(c) or
Section 240.14a-12
Atchison Casting Corporation
- --------------------------------------------------------------------------------
(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)(4)
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:
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(4) Date Filed:
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<PAGE>
[LOGO]
ATCHISON CASTING CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held November 19, 1999
Notice is hereby given that the Annual Meeting of Stockholders of Atchison
Casting Corporation (the "Company") will be held at the offices of the Company,
400 South Fourth Street, Atchison, Kansas, on the 19th day of November 1999, at
11:00 a.m. (Central Time) for the following purposes:
1. To elect two Class III Directors to serve for a term of three years.
2. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on September 21,
1999 as the record date for the determination of stockholders entitled to
receive notice of and to vote at the meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, WHETHER OR NOT
YOU PLAN TO BE PERSONALLY PRESENT AT THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL
BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
PLEASE RETURN YOUR PROXY - THANKS!
By Order of the Board of Directors,
/s/ Hugh H. Aiken
HUGH H. AIKEN
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Atchison, Kansas
September 30, 1999
P.S. - I look forward to seeing you at the meeting. We will give you a tour
of the foundry when it is over. If you would like transportation from and to
the Kansas City airport, let me or Jeff Brentano know your flight
information, and we will have you picked up and taken back. It is a 40 minute
ride.
<PAGE>
ATCHISON CASTING CORPORATION
400 South Fourth Street
Atchison, Kansas 66002-0188
(913) 367-2121
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 19, 1999
GENERAL INFORMATION
This proxy statement is being furnished on or about September 30, 1999,
in connection with the solicitation of proxies by the Board of Directors of
Atchison Casting Corporation, a Kansas corporation (the "Company"), for use
at the Annual Meeting of Stockholders to be held at the Company's offices,
400 South Fourth Street, Atchison, Kansas, at 11:00 a.m. (Central Time) on
Friday, November 19, 1999, for the purposes set forth in the foregoing Notice
of Annual Meeting of Stockholders. In order to provide every stockholder with
an opportunity to vote on all matters scheduled to come before the Annual
Meeting and to be able to transact business at the meeting, proxies are being
solicited by the Company's Board of Directors. Upon execution and return of
the enclosed proxy, the shares represented by it will be voted by the persons
designated therein as proxies, in accordance with the stockholder's
directions. A stockholder may vote on a matter by marking the appropriate box
on the proxy or, if no box is marked for a specific matter, the shares will
be voted as recommended by the Board of Directors on that matter.
The enclosed proxy may be revoked at any time before it is voted by (i)
so notifying the Secretary of the Company, (ii) exercising a proxy of a later
date and delivering such later proxy to the Secretary of the Company prior to
the Annual Meeting or (iii) attending the Annual Meeting and voting in
person. Unless the proxy is revoked or is received in a form that renders it
invalid, the shares represented by it will be voted in accordance with the
instructions contained therein.
The Company will bear the cost of solicitation of proxies, which will be
principally conducted by the use of the mails; however, certain officers and
employees of the Company may also solicit by telephone, telegram or personal
interview. Such expense may also include ordinary charges and expenses of
brokerage firms and others, for forwarding soliciting material to beneficial
owners.
On September 21, 1999, the record date for determining stockholders
entitled to vote at the Annual Meeting, the Company had outstanding and
entitled to vote 7,636,901 shares of common stock, par value $.01 per share
(the "Common Stock"). Each outstanding share of Common Stock entitles the
record holder to one vote.
1
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, elected for terms
of three years and until their successors are elected and qualified. At the
meeting two Class III directors are to be elected. The proxies named in the
accompanying proxy intend to vote for the election of Stuart Z. Uram and Ray
H. Witt. In the event Dr. Uram or Mr. Witt should become unavailable for
election, which is not anticipated, the proxies will be voted for such
substitute nominee as may be nominated by the Board of Directors. The two
nominees for election as Class III directors who receive the greatest number
of votes cast for election of the directors at the meeting, a quorum being
present, shall be elected directors of the Company. Abstentions, broker
nonvotes and instructions on the accompanying proxy card to withhold
authority to vote for a nominee will result in the nominee receiving fewer
votes.
INFORMATION CONCERNING NOMINEES
The following table sets forth information with respect to the nominees
to the Board of Directors.
CLASS III - TERM EXPIRING 1999
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- -------------------------------------------------------------------------------
<S> <C> <C>
Stuart Z. Uram 65 Director since August 1997. Since January 1997, Dr. Uram has been a Senior Consultant to
Carpenter Technology Inc., of Reading, Pennsylvania. Dr. Uram served as the President of
Certech, Inc., from 1970 to 1997, a producer of ceramic cores for the investment casting
industry as well as injection molded ceramics for a variety of industries. Dr. Uram founded
Certech, Inc. in 1970 and sold the company to Carpenter Technology Inc. in 1995. Dr. Uram holds
Doctor of Science, Master of Science and Bachelor of Science degrees from Massachusetts
Institute of Technology in Metallurgy. Dr. Uram is a member of the Compensation Committee of
the Company's Board of Directors.
Ray H. Witt 71 Director since August 1993. Mr. Witt served as Chairman of the Board and majority owner of CMI
International, Inc., from 1957 to 1999, which operated eight foundries in North America. Mr.
Witt founded CMI International in 1957 and sold the company to Hayes Lammerz International,
Inc. in 1999. Mr. Witt was President of the American Foundryman's Society from 1992 to 1993.
Mr. Witt currently serves as a director Hayes Lammerz International, Inc. Mr. Witt is a member
of the Audit Committee of the Company's Board of Directors.
</TABLE>
2
<PAGE>
Information Concerning Directors Continuing in Office
The following table sets forth information with respect to the directors
who are continuing in office for the respective periods and until their
successors are elected and qualified.
CLASS I - TERM EXPIRING 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hugh H. Aiken 55 Chairman of the Board, President, Chief Executive Officer and Director since June 1991.
</TABLE>
CLASS II - TERM EXPIRING 2001
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME AGE FIVE-YEAR EMPLOYMENT HISTORY
- ---- --- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
David L. Belluck 37 Director since June 1991. Since 1989, Mr. Belluck has been a Vice President of Riverside Partners, Inc.,
an investment firm located in Boston, Massachusetts. Mr. Belluck is a member of the
Compensation Committee of the Company's Board of Directors.
John O. Whitney 71 Director since June 1994. Since 1986, Mr. Whitney has been Professor and Director, Deming Center for
Quality Management at Columbia Business School. Mr. Whitney has also written a number of books
and articles on management and business strategy, and lectures on those subjects in the United
States and abroad. Mr. Whitney previously served as President and Director of the Pathmark
Division of Supermarkets General Corporation engaged in food distribution and retailing. Mr.
Whitney currently serves as a director of Church & Dwight Co., Inc. and The Turner
Corporation. Mr. Whitney is a member of the Audit Committee of the Company's Board of
Directors.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors consist of an Audit
Committee and a Compensation Committee.
The Audit Committee consists of Messrs. Whitney and Witt. The Audit
Committee annually makes recommendations to the Board regarding the
appointment of independent auditors of the Company and reviews the scope of
audits.
The Compensation Committee consists of Mr. Belluck and Dr. Uram. The
Compensation Committee annually reviews and makes recommendations to the
Board of Directors regarding
3
<PAGE>
compensation arrangements with the executive officers of the Company and
reviews and approves the procedures for administering employee benefit plans
of all types.
During the 1999 fiscal year, the Board of Directors met four times, the
Audit Committee met one time and the Compensation Committee met one time. All
Directors attended at least 75% of the meetings of the Board of Directors and
the committees on which they served.
COMPENSATION OF DIRECTORS
Non-employee directors receive a fixed fee of $8,000 each year and
$4,000 for each quarterly meeting of the Board of Directors attended, all or
part of which may be paid in cash or Common Stock at their election. In
addition, the Company reimburses directors for expenses incurred in
connection with attendance at meetings of the Board of Directors and
committees thereof. Upon their initial election, each non-employee director
is granted an option to purchase 10,000 shares of Common Stock at an exercise
price per share equal to its fair market value on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors during
fiscal 1999 was composed of David L. Belluck and Stuart Z. Uram.
During the fiscal year ended June 30, 1999, there were no interlocking
relationships between any executive officers of the Company and any entity
whose directors or executive officers serve on the Board's Compensation
Committee, nor did any current or past officers of the Company serve on the
Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company is
responsible for reviewing and approving policies, practices and procedures
relating to executive compensation and the establishment and administration
of employee benefit plans. The overall goal of the Compensation Committee is
to attract and retain strong management and to base incentive compensation on
both individual performance and the overall Company success. The key elements
of the Company's executive compensation package are base salary, annual
bonuses, and long-term incentives. Each of those elements are discussed below.
The Company's executive officers are compensated with base salary and
annual bonuses, as well as incentive stock options, restricted subsidiary
stock and by the Company's normal fringe benefits.
The base salary of each executive officer, other than the chief
executive officer ("CEO"), is determined by a subjective process of
negotiation and evaluation of performance involving the officer, the CEO and
the Compensation Committee. The base salary of the CEO was originally
determined by negotiation between the CEO and the major stockholders of the
Company in February 1991, resulting in a five-year employment contract
between the Company and the CEO. At the time of the Company's initial public
offering of its Common Stock (October 1993), this employment contract was
extended by two years, changing its expiration date from June 1996 to
4
<PAGE>
June 1998. The Employment Contract with the CEO has been further amended to
provide for the annual renewal of a three year term, although either party
may terminate the agreement with six month's notice. The CEO's employment
contract allows for annual increases.
From November 16, 1997 until July 1, 1998 the CEO reduced his salary by
25%. He had requested management at several subsidiaries to reduce their
salaries by up to 20% until certain goals were met, and felt that he should
participate in the salary reductions. As of July 1, 1999 Mr. Aiken's base
salary was $246,000. The Company missed its consolidated earnings target for
fiscal 1999 by more than 25%. As a result the CEO did not receive a bonus.
The annual bonus for executive officers for fiscal 1999 (and for the
prior two years) was based on earnings before interest, taxes and
amortization of intangibles, or "EBITA." Targets are set by the Board of
Directors for the fiscal year EBITA of each executive's subsidiary or
operating group. In the case of the CEO and the chief financial officer, the
target was based on consolidated earnings for the entire Company. The amount
of bonus which was to be earned if EBITA reached 100% of target was also set
by the Board (or by contract in the case of the CEO), and was approximately
100% of base salary for the CEO and 25% to 33% of base salary for other
corporate officers. If the target is reached, the officer receives 100% of
his annual bonus. For any percentage of actual EBITA above the target, the
amount of the calculated bonus at 100% of the target is increased by the same
percentage. A minimum level of EBITA is also set, below which no bonus is
paid. At EBITA above the minimum threshold the bonus is pro-rated based on
the relation of actual EBITA to the target and the minimum threshold. During
fiscal 1999, bonuses to executive officers ranged from 0% to 84% of the
amount of their bonus set by the Board.
The Compensation Committee may raise or lower a bonus at its discretion,
based on an individual's overall performance.
Incentive stock options are granted by the Company to eligible employees
under the Company's 1993 Incentive Stock Plan. The number of options granted
is determined by the Compensation Committee after considering subjective
criteria such as the employee's performance, the employee's value to the
Company and the use of options at other companies.
Restricted stock of subsidiaries of the Company for up to 10% of the
capital stock of some subsidiaries is made available to key managers of such
subsidiaries, and vests in equal annual installments over five years from the
date of awarding such stock. To participate in this plan, a manager must
purchase stock in the subsidiary.
This report has been issued over the names of each member of the
Compensation Committee, David L. Belluck and Stuart Z. Uram.
5
<PAGE>
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and
long-term compensation paid to the Chief Executive Officer and the four other
most highly paid executive officers whose compensation exceeded $100,000
during the last fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
SECURITIES
UNDERLYING
NAME AND OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#) COMPENSATION($)
------------------ ---- --------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Hugh H. Aiken............ 1999 $ 246,000 None 20,000 $ 5,327 (1)
Chairman of the 1998 $ 212,629 $174,500 20,000 $ 6,833
Board, President and 1997 $ 205,878 $155,778 20,000 $ 8,960
Chief Executive
Officer
David Fletcher........... 1999 $ 173,338 (2) None 3,000 $ 43,475 (3)
Group Vice President 1998 $ 180,495 $279,321 None $ 17,722
John R. Kujawa........... 1999 $ 150,000 $ 42,018 6,000 $ 7,100 (1)
Group Vice President 1998 $ 135,420 $ 33,126 None $ 7,675
1997 $ 120,566 $ 33,790 2,000 $ 7,200
Donald J. Marlborough.... 1999 $ 116,000 $ 10,324 5,000 $ 40,000 (4)
Group Vice President 1998 $ 116,000 None None None
1997 $ 113,545 $ 41,827 None None
James Stott.............. 1999 $ 121,658 None None $ 1,641 (1)
Vice President 1998 $ 132,804 None None $250,000
1997 $ 128,405 $ 31,250 5,000 None
</TABLE>
- ----------------------------------
(1) Consists solely of Company contributions to the Company's 401(k)
savings plan for the benefit of the executive.
(2) Mr. Fletcher's compensation has been converted from British pounds to
U.S. dollars at the exchange rate available at the close of business
on June 30, 1999.
(3) Consists of benefits of an auto, private medical insurance and pension
costs for the benefit of the executive.
(4) Consists solely of a fee paid to the executive based upon the
successful completion of the acquisition of London Precision Machine &
Tool Ltd.
6
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
INDIVIDUAL GRANTS OF STOCK PRICE APPRECIATION
----------------- FOR OPTION TERM
NUMBER OF % OF TOTAL ---------------
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR PRICE ($/SH) DATE 5%($) 10%($)
- ---- ------------- ----------- ------------ ---- ----- ------
<S> <C> <C> <C> <C>
Hugh H. Aiken................ 20,000 16.8% $ 18.000 06/30/08 $226,402 $573,747
David Fletcher............... 3,000 2.5% $ 10.375 06/03/09 $ 19,574 $ 49,605
John R. Kujawa............... 3,000 5.8% $ 9.875 09/23/08 $ 18,631 $ 47,215
4,000 $ 10.375 06/03/09 $ 26,099 $ 66,140
Donald J. Marlborough........ 3,000 $ 9.875 09/23/08 $ 18,631 $ 47,215
2,000 4.2% $ 10.375 06/03/09 $ 13,050 $ 33,070
James Stott.................. None
</TABLE>
(1) All options are rights to buy Common Stock of the Company. The options
granted are subject to a three-year vesting schedule commencing one year
from the date of the grant, with one-third of the grant vesting on each of
the three anniversaries from the grant date.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS/SARS AT
FY-END(#)
NAME EXERCISABLE/UNEXERCISABLE
- ---- -------------------------
<S> <C>
Hugh H. Aiken......................... 60,000/40,000
David Fletcher........................ 0/3,000
John R. Kujawa........................ 8,333/6,667
Donald J. Marlborough................. 18,000/5,000
James Stott 13,333/1,667
</TABLE>
7
<PAGE>
EMPLOYMENT CONTRACTS
The Company has entered into an employment agreement with Mr. Aiken that
has a rolling three year term. As of June 30, 1999, the minimum annual
compensation payable to Mr. Aiken pursuant to this agreement was $246,000. At
the discretion of the Board of Directors, the minimum annual compensation may
be increased during the term of this agreement. This agreement provides for a
severance payment in the amount of one year of base salary in the event of
his death or disability and three years of base salary in the event of a
change of control or termination other than for cause. This agreement
prohibits Mr. Aiken from competing with the Company for a period of two years
following termination of his employment. Mr. Aiken's employment contract has
been extended until June 30, 2002, subject to termination on six months'
notice.
As part of the Share Exchange Agreement between the Company, Atchison
Casting UK Ltd. ("ACUK"), David Fletcher and other minority shareholders of
Sheffield, on April 6, 1998 ACUK assumed Sheffield's obligations under an
employment agreement with Mr. Fletcher originally executed October 31, 1988.
This agreement can be terminated: (i) upon 12 months notice by Sheffield or
upon 6 months notice by Mr. Fletcher; or (ii) immediately upon a "serious" or
material breach of the employment agreement. The agreement provides for
minimum annual compensation payable to Mr. Fletcher of 110,000 pounds, which
may be increased at the discretion of the board of directors of Sheffield.
PENSION BENEFITS
The Company maintains a qualified defined benefit pension plan, the
Salaried Employees Retirement Plan of Atchison Casting Corporation (the
"Retirement Plan"), of which Mr. Aiken and Mr. Kujawa are participants. The
estimated annual benefits payable under the Retirement Plan payable upon
retirement at various years of credited service and at different levels of
remuneration are as follows:
<TABLE>
<CAPTION>
REMUNERATION YEARS OF CREDITED SERVICE AT RETIREMENT
- ------------ ---------------------------------------
15 20 25 30 35
-- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 50,000 16,719 17,326 17,933 18,540 19,146
75,000 26,719 27,951 29,183 30,415 31,646
100,000 36,719 38,576 40,433 42,290 44,146
125,000 46,719 49,201 51,683 54,165 56,646
150,000 56,720 59,826 62,933 66,040 69,146
160,000(1) 60,720 64,076 67,433 70,790 74,146
</TABLE>
- ----------------
(1) Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, and
the Omnibus Budget Reconciliation Act of 1993 limit the amount of
compensation that can be considered in computing benefits under a qualified
defined benefit pension plan. For 1999, the maximum amount of compensation
allowed for use in calculating an individual's pension benefits is
$160,000. This limit may be raised in the future by annual cost-of-living
adjustments determined by the U.S. Secretary of the Treasury.
8
<PAGE>
The remuneration covered by the Retirement Plan is the average of the
highest five consecutive years during all years of service prior to
eligibility to receive benefits under the Retirement Plan of total cash
remuneration, including salary and bonus (both as reported in the Summary
Compensation Table) paid or accrued and payable in the year following
accrual. As of the end of fiscal 1999, Mr. Aiken and Mr. Kujawa each had ten
years of service credited under the Retirement Plan. Benefits shown are
computed as life-only annuities beginning at age 65 and are not reduced for
Social Security benefits.
Sheffield maintains a qualified benefit pension plan for Mr. Fletcher
(the "Sheffield Pension Plan"). If Mr. Fletcher remains employed with
Sheffield until age 65, Mr. Fletcher will receive an annual pension benefit
equal to two-thirds of his base salary over the preceding twelve months. If
Mr. Fletcher leaves service or retires before age 65, the annual pension
benefits payable will be reduced proportionately based on the ratio that his
years of service with Sheffield from March 31, 1986 bears to 25. Had Mr.
Fletcher reached age 65 this year, his annual pension benefit would have been
$115,558.
9
<PAGE>
PERFORMANCE OF THE COMPANY'S COMMON STOCK
The graph set forth below compares the percentage change in cumulative
stockholder return of the Company's Common Stock, from June 30, 1994 to June
30, 1999 (the Company's fiscal year end), against the cumulative return of
the Index for the New York Stock Exchange (U.S. Companies only) (the "NYSE
Index") and an index prepared by the Center for Research in Security Prices
at the University of Chicago Graduate School of Business consisting of stocks
of U.S. companies traded on the New York Stock Exchange that transact
business in primary metals industries (S.I.C. 3300-3399) (the "NYSE Metals
Industry Index") covering the same period.
[GRAPH]
The Company undertakes to provide any stockholder upon written request,
without charge, a list of the component issues in either of the indexes. The
graph is based on $100 invested on June 30, 1994, in the Company's Common
Stock and each of the indexes, each assuming dividend reinvestment. The
historical stock price performance shown on this graph is not necessarily
indicative of future performance.
10
<PAGE>
CERTAIN TRANSACTIONS
ACUK has granted Mr. Fletcher options to purchase 660,000 shares of
Class "C" Ordinary Shares of ACUK at one pence per share. One-fifth of the
options vest on each anniversary date of the Agreement contingent upon Mr.
Fletcher remaining as an employee of ACUK upon each such anniversary. The
options are exercisable for a 10-year period, except upon the termination of
Mr. Fletcher's employment, in which case options exercisable pursuant to the
option scheme must be exercised within six weeks of termination. In addition
to the five-year vesting schedule described above, the options vest upon firm
negotiations or a firm proposal of a public offering of the shares of
Sheffield or ACUK, and become exercisable upon the completion of such public
offering. The options also vest upon any sale of control (as defined) of ACUK.
Mr. Fletcher was granted several rights related to the ACUK stock
received under a Share Exchange Agreement (the "Agreement") with the Company
and ACUK dated April 6, 1998. First, Mr. Fletcher was granted the right to
exchange all of his Class "B" Ordinary Shares and Class "C" Ordinary Shares
(whether actually owned or vested) of ACUK for Common Stock of the Company.
This right can be exercised any time during the period starting five years
and ending ten years from the date of the Agreement and allows Mr. Fletcher
to receive Common Stock of the Company equal to 85% of the net asset value of
the ACUK Class "B" Ordinary Shares and Class "C" Ordinary Shares exchanged.
Second, Mr. Fletcher was granted the right to put all of his Class "B"
Ordinary Shares and Class "C" Ordinary Shares at their net asset value to
ACUK within six weeks of his termination of employment. Third, the Company
must purchase the ACUK Class "B" Ordinary Shares and Class "C" Ordinary
Shares held by Mr. Fletcher at their net asset value or procure an offer for
an equivalent exchange in the event an offer is received for the purchase of
all of the shares of the Company.
For a discussion of certain other transactions, see "Election of
Directors -- Compensation Committee Interlocks and Insider Participation,"
"Compensation Committee Report on Executive Compensation" and "Executive
Compensation --Employment Contracts."
11
<PAGE>
CERTAIN BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
The following table sets forth information as of September 13, 1999,
concerning the shares of Common Stock beneficially owned by (i) each person
known by the Company to be the beneficial owner of 5% or more of the
Company's outstanding Common Stock, (ii) each of the directors of the
Company, (iii) each of the executive officers of the Company named in the
Summary Compensation Table and (iv) all directors and executive officers of
the Company as a group. Unless otherwise indicated, the named beneficial
owner has sole voting and investment power over the shares listed.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF COMMON
NAME OF INDIVIDUAL OR GROUP BENEFICIALLY OWNED STOCK OWNED
--------------------------- ------------------ -----------
<S> <C> <C>
Edmundson International, Inc. (1)........................... 901,812 11.8%
31356 Via Colinas
Westlake Village, CA 91362
Wanger Asset Management, Ltd. (2)........................... 891,400 11.7%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Wellington Management Company, LLP (3)...................... 695,000 9.1%
75 State Street
Boston, MA 02109
Dimensional Fund Advisors Inc. (4).......................... 552,700 7.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Ingalls & Snyder LLC (5).................................... 440,768 5.8%
61 Broadway
New York, NY 10006
Principal Mutual Holding Co. (6)............................ 422,300 5.5%
711 High St.
Des Moines, IA 50392-0088
Hugh H. Aiken (7)........................................... 348,372 4.5%
David L. Belluck (8)........................................ 27,509 *
John O. Whitney (9)......................................... 16,812 *
Ray H. Witt (10)............................................ 86,268 1.1%
Stuart Z. Uram (8).......................................... 15,799 *
John R. Kujawa (11)......................................... 34,803 *
James Stott (12)............................................ 13,333 *
David Fletcher.............................................. 0 *
Donald J. Marlborough (13).................................. 21,527 *
All directors and executive ................................ 605,406 7.8%
officers as a group (11 persons) (14)
</TABLE>
- --------------------
* Less than 1% of Common Stock outstanding.
(1) Based on a Schedule 13D Amendment No. 1 dated September 10, 1999, (a) the
Employees' Retirement Plan of Consolidated Electrical Distributors, Inc.
has sole voting and dispositive powers over 506,512 shares or approximately
6.6% of the outstanding shares of Common Stock, (b) the Employees'
Retirement Plan of Hajoca Corporation has sole voting and dispositive
powers over 169,600 shares or approximately 2.2% of the outstanding shares
of Common Stock and (c) Edmundson International, Inc. and Consolidated
Electrical Distributors, Inc share voting and dispositive powers over
225,700 shares or approximately 3.0% of the outstanding shares of Common
Stock and which Portshire Corp. and Lincolnshire Associates, Ltd. share
voting and dispositive power over 40,000 of such shares. The reporting
persons, although disclaiming membership in a group, have nonetheless
authorized Edmundson International, Inc. to file this Schedule 13D as a
group on behalf of each of them.
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(2) Based on a Schedule 13G Amendment No. 4 dated February 23, 1999, Wanger
Asset Management L.P. ("WAM") is an investment advisor, which shares voting
and dispositive powers with Wanger Asset Management Ltd., its general
partner, and Mr. Ralph Wanger, the principal stockholder of its general
partner. WAM also shares voting and dispositive powers with certain of its
clients, including Acorn Investment Trust, an investment company that
shares voting and dispositive powers over 539,000 shares or approximately
7.1% of the outstanding shares of the Common Stock.
(3) Based on a Schedule 13G Amendment No. 1 dated December 31, 1998, Wellington
Management Company, LLP is an investment adviser, which shares voting and
dispositive powers with certain of its clients who do not beneficially own
5% of more of the outstanding shares of Common Stock.
(4) Based on a Schedule 13G dated February 12, 1999, Dimensional Fund Advisors
Inc. is an investment advisor, which shares voting and dispositive powers
with certain of its clients who do not beneficially own 5% or more of the
outstanding shares of Common Stock.
(5) Based on a Schedule 13G Amendment No. 4 dated February 5, 1999, Ingalls &
Snyder LLC, is a broker-dealer, which shares voting and dispositive powers
over 431,217 of such shares with certain of its clients who do not
beneficially own 5% or more of the outstanding shares of Common Stock.
(6) Based on Schedule 13G Amendment No. 4 dated February 10, 1999, represents
shares of Common Stock owned by Principal Mutual Holding Co., which shares
voting and dispositive powers over such shares with Invista Capital
Management, LLC., an investment adviser.
(7) Includes 80,000 shares subject to exercisable options, 500 shares owned by
Mr. Aiken's wife and 500 shares owned by each of Mr. Aiken's three
children.
(8) Includes 10,000 shares subject to exercisable options held by each of
Messrs. Belluck and Uram, which they received pursuant to the Atchison
Casting Non-Employee Director Option Plan.
(9) Includes 12,698 shares held by the John O. Whitney Revocable Trust, of
which John O. Whitney is a trustee, and 800 shares held by the Marcia L.
Whitney Revocable Trust, of which John O. Whitney is a trustee.
(10) Includes 55,583 shares owned by CMI Management Services, Inc. Mr. Witt is
Chairman of the Board of CMI Management Services, Inc. Includes 10,000
shares subject to an exercisable option received by Mr. Witt in June 1996.
(11) Includes 9,333 shares subject to exercisable options.
(12) Includes 13,333 shares subject to exercisable options.
(13) Includes 19,000 shares subject to exercisable options.
(14) Includes 160,332 shares subject to exercisable options.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, all Section 16(a) filing requirements
applicable to its directors, executive officers and ten percent holders were
satisfied during the fiscal year ended June 30, 1999, except that one Form 4
relating to one transaction for Mr. Ray Witt was filed later than required.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors, on the recommendation of the Audit Committee,
has selected the firm of Deloitte & Touche LLP as independent auditors to
examine the financial statements of the Company and its subsidiaries for the
fiscal year 2000. Representatives of Deloitte & Touche LLP will be present at
the Annual Meeting, will have an opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions.
OTHER BUSINESS
As of the date of this proxy statement, management knows of no other
matters to be presented at the Annual Meeting. However, if any other matters
shall 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.
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the next
annual meeting must be received by the Company no later than June 2, 2000 in
order to be considered for inclusion in the proxy statement relating to that
meeting. Proposals of security holders not intended for inclusion in the
Company's 2000 proxy statement must be received by the Company in writing no
later than August 16, 2000 in order to preclude the Company's use of its
discretionary proxy voting authority if the proposal is raised at the 2000
annual meeting.
ATCHISON CASTING CORPORATION
/s/ Hugh H. Aiken
HUGH H. AIKEN
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Dated: September 30, 1999
Atchison, Kansas
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PROXY PROXY
ATCHISON CASTING CORPORATION
400 South Fourth Street
Atchison, Kansas 66002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Hugh H. Aiken and Kevin T. McDermed, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Atchison Casting Corporation the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held on November
19, 1999, or any adjournment or postponement thereof. This proxy revokes all
prior proxies given by the undersigned.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED PREPAID ENVELOPE.
(Continued and to be signed on the reverse side)
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<PAGE>
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ATCHISON CASTING CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES.
1. ELECTION OF DIRECTOR -- FOR WITHHOLD
NOMINEE: Stuart Z. Uram / / / /
NOMINEE: Ray H. Witt / / / /
2. In their discretion, the Proxies This proxy, when properly executed,
are authorized to vote upon such will be voted in the manner directed
other business as may properly herein by the undersigned
come before the meeting and all stockholder. If no direction is
matters incident to the conduct made, this proxy will be voted FOR
of the meeting. each of the nominees for Director
listed.
Dated: , 1999
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Signature(s)
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-----------------------------------
Please sign exactly as name appears
at left. When shares are held by
joint tenants, both should sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please sign in full corporate name
by President or other authorized
officer. If a partnership, please
sign in partnership name by an
authorized person.
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