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
SCHNITZER STEEL INDUSTRIES, 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:
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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.
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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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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<PAGE>
SCHNITZER STEEL INDUSTRIES, INC.
December 14, 1998
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of your Company,
which will be held on Monday, January 25, 1998 at 8 A.M., local time, at the
Multnomah Athletic Club, 1849 SW Salmon Street, Portland, Oregon 97205.
The formal notice of the meeting and the proxy statement appear on the following
pages and describe the matters to be acted upon. Time will be provided during
the meeting for discussion and you will have an opportunity to ask questions
about your Company.
Whether or not you plan to attend the meeting in person, it is important that
your shares be represented and voted. After reading the enclosed notice of the
meeting and proxy statement, please sign, date and return the enclosed proxy at
your earliest convenience. Return of the signed and dated proxy card will not
prevent you from voting in person at the meeting should you later decide to do
so.
Sincerely,
ROBERT W. PHILIP
Robert W. Philip
President
<PAGE>
SCHNITZER STEEL INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 25, 1999
The Annual Meeting of Shareholders of Schnitzer Steel Industries, Inc. (the
Company) will be held at the Multnomah Athletic Club, 1849 SW Salmon Street,
Portland, Oregon 97205 on Monday, January 25, 1999 at 8 A.M., local time, for
the following purposes:
(1) To elect eleven directors each to serve until the next Annual Meeting
of Shareholders and until a successor has been elected and qualified;
(2) To approve and ratify the selection of PricewaterhouseCoopers LLP as
the independent auditors for the Company and its subsidiaries for the
fiscal year ending August 31, 1999; and
(3) To transact such other business as may properly be brought before the
meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on December 7, 1998 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
Please sign and date the enclosed proxy and return it promptly in the enclosed
reply envelope. If you are able to attend the meeting, you may, if you wish,
revoke the proxy and vote personally on all matters brought before the meeting.
By Order of the Board of Directors,
DORI SCHNITZER
Dori Schnitzer
Secretary
Portland, Oregon
December 14, 1998
<PAGE>
SCHNITZER STEEL INDUSTRIES, INC.
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Schnitzer Steel Industries, Inc., an Oregon
corporation (the Company), to be voted at the Annual Meeting of Shareholders to
be held at the time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting.
All proxies in the enclosed form that are properly executed and received by the
Company prior to or at the Annual Meeting and not revoked will be voted at the
Annual Meeting or any adjournments thereof in accordance with the instructions
thereon. Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by (i)
filing with the Secretary of the Company, at or before the taking of the vote at
the Annual Meeting, a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a subsequent proxy relating to the same shares and
delivering it to the Secretary of the Company before the Annual Meeting, or
(iii) attending the Annual Meeting and voting in person (although attendance at
the Annual Meeting will not in and of itself constitute a revocation of a
proxy). Any written notice revoking a proxy should be sent to Schnitzer Steel
Industries, Inc., P.O. Box 10047, Portland, Oregon 97296-0047, Attention: Dori
Schnitzer, Secretary, or hand-delivered to the Secretary at or before the taking
of the vote at the Annual Meeting.
The mailing address of the principal executive offices of the Company is P.O.
Box 10047, Portland, Oregon 97296-0047. This Proxy Statement and the
accompanying Notice of Annual Meeting and Proxy Card are first being mailed to
shareholders on or about December 14, 1998.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The record date for determination of shareholders entitled to receive notice of
and to vote at the Annual Meeting is December 7, 1998. At the close of business
on December 7, 1998, 5,542,526 shares of Class A Common Stock (Class A), par
value $1.00 per share, and 4,430,328 shares of Class B Common Stock (Class B),
par value $1.00 per share, of the Company (collectively, the Common Stock) were
outstanding and entitled to vote at the Annual Meeting. Each share of Class A
Common Stock is entitled to one vote and each share of Class B Common Stock is
entitled to ten votes with respect to each matter to be voted on at the Annual
Meeting.
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock, as of August 31, 1998 (unless otherwise noted in
the footnotes to the table), by (i) persons known to the Company to be the
beneficial owner of more than 5% of either class of the Company's Common Stock,
(ii) each of the Company's directors and nominees for director, (iii) each
executive officer of the Company named in the Summary Compensation Table, and
(iv) all directors and executive officers of the Company as a group. Unless
otherwise noted in the footnotes to the table, the persons named in the table
have sole voting and investment power with respect to all outstanding shares of
Common Stock shown as beneficially owned by them. Except as noted below, the
address of each shareholder in the table is Schnitzer Steel Industries, Inc.,
P.O. Box 10047, Portland, Oregon 97296-0047.
1
<PAGE>
<TABLE>
<CAPTION>
Name of Beneficial Owner or Class A Shares Class B Shares
Number of Persons in Group Beneficially Owned (1) Beneficially Owned (1)
- ------------------------------------------------------- --------------------------------- ------------------------------
Number Percent Number Percent
- ------------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Schnitzer Steel Industries, Inc. Voting Trust
(the Schnitzer Trust) 4,421,728 99.8%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Manuel Schnitzer (2) 22,500 * 290,554 6.6%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Marilyn S. Easly (2) 10,300 * 317,938 7.2%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Carol S. Lewis (2) 1,000 * 195,812 4.4%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Scott Lewis 6,000 * 79,064 1.8%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
MANUEL SCHNITZER FAMILY GROUP,
Carol S. Lewis, Trustee (3) 1,149,027 25.9%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Dori Schnitzer (2) 334,374 7.5%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Susan Schnitzer (2) 335,009 7.6%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Jean S. Reynolds (2) 274,342 6.2%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
MORRIS SCHNITZER FAMILY GROUP,
Dori Schnitzer, Trustee (3) 1,167,814 26.4%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Gilbert and Thelma S. Schnitzer (2) 45,800 (4) * 479,729 10.8%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Kenneth M. and Deborah S. Novack (2) 42,472 (4,5) * 272,037 6.1%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Gary Schnitzer (2) 32,255 (6) * 207,097 4.7%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
GILBERT SCHNITZER FAMILY GROUP,
Gary Schnitzer, Trustee (3) 963,288 21.7%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Leonard and Lois T. Schnitzer (2) 52,715 (7) 1.0% 207,247 4.7%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Robert W. and Rita S. Philip (2) 56,985 (8) 1.1% 139,646 3.2%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
LEONARD SCHNITZER FAMILY GROUP,
Rita S. Philip, Trustee (3) 1,141,599 25.8%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Tweedy Browne & Company (13) 465,200 (9) 8.4%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Heartland Advisors (14) 349,700 (9) 6.3%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
J.P. Morgan & Co., Inc. (15) 860,500 (9) 15.5%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Wanger Asset Management LP (16) 455,900 (9) 8.2%
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Robert S. Ball 5,000 *
- ------------------------------------------------------- ------------- ------------- ------------- -------------
William A. Furman 3,500 *
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Ralph R. Shaw 5,000 *
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Barry A. Rosen 28,484 (10) *
- ------------------------------------------------------- ------------- ------------- ------------- -------------
Kurt C. Zetzsche 29,397 (11) *
- ------------------------------------------------------- ------------- ------------- ------------- -------------
All directors and executive officers as a group
(15 persons) (2) 289,088 (12) 1.9% 1,718,951 38.8%
======================================================= ============= ============= ============= =============
2
<PAGE>
* Less than 1%
(1) Includes, in all cases, shares held by either spouse, either directly or as
trustee or custodian. For purposes of this table, Class A shares
beneficially owned do not include Class A shares issuable upon conversion
of Class B shares.
(2) Class B shares owned by these shareholders are subject to the Schnitzer
Trust and represented by voting trust certificates beneficially owned by
the shareholders.
(3) Class B shares shown in the table as owned by a family group represent the
total number of shares subject to the Schnitzer Trust by members of the
family group. The trustee for each family group has certain voting powers
with respect to the family group's shares as described below under
"Schnitzer Steel Industries, Inc. Voting Trust and Buy-Sell Agreement."
(4) Includes shares contributed by the shareholders to a foundation for which
shareholders serve as trustees.
(5) Includes 7,922 shares subject to options exercisable prior to October 30,
1998.
(6) Includes 32,155 shares subject to options exercisable prior to October 30,
1998.
(7) Includes 42,115 shares subject to options exercisable prior to October 30,
1998.
(8) Includes 46,935 shares subject to options exercisable prior to October 30,
1998.
(9) Beneficial ownership as of November 10, 1998 as reported by the investment
manager on Form 13F. Data was obtained from information published by the
Nasdaq Stock Market, Inc.
(10) Includes 24,484 shares subject to options exercisable prior to October 30,
1998.
(11) Includes 29,297 shares subject to options exercisable prior to October 30,
1998.
(12) Includes 186,108 shares subject to options exercisable prior to October 30,
1998.
(13) Tweedy Brown & Company, 52 Vanderbilt Ave., New York, NY 10017
(14) Heartland Advisors, 790 North Milwaukee Street, Milwaukee, WI 53302
(15) J.P. Morgan & Co., Inc., 50 Wall Street, New York, NY 10260
(16) Wagner Asset Management, LP, 227 Monroe, Suite 3000, Chicago, IL 60606
</TABLE>
Schnitzer Steel Industries, Inc. Voting Trust and Buy-Sell Agreement
Voting Trust Provisions. Pursuant to the terms of the Schnitzer Steel
Industries, Inc. Voting Trust and Buy-Sell Agreement dated March 31, 1991 (the
Schnitzer Trust Agreement), the beneficial owners of substantially all
outstanding shares of Class B Common Stock have made their shares subject to the
terms of the Schnitzer Steel Industries, Inc. Voting Trust (the Schnitzer
Trust). The Schnitzer Trust is divided into four separate groups, one for each
branch of the Schnitzer family. Carol S. Lewis, Dori Schnitzer, Gary Schnitzer,
and Rita S. Philip are the four trustees of the Schnitzer Trust and each is also
the separate trustee for his or her separate family group. Pursuant to the
Schnitzer Trust Agreement, the trustees as a group have the power to vote the
shares subject to in the Schnitzer Trust Agreement and, in determining how the
trust shares will be voted, each trustee separately has the number of votes
equal to the number of shares held in trust for his or her family group. Any
action by the trustees requires the approval of trustees with votes equal to at
least 52.5% of the total number of shares subject to the Schnitzer Trust
Agreement. Before voting with respect to the following actions, each trustee is
required to obtain the approval of holders of a majority of the voting trust
certificates held by his or her family group: (a) any merger or consolidation of
the Company with any other corporation, (b) the sale of all or substantially all
the Company's assets or any other sale of assets requiring approval of the
Company's shareholders, (c) any reorganization of the Company requiring approval
of the Company's shareholders, (d) any partial liquidation or dissolution
requiring approval of the Company's shareholders, and (e) dissolution of the
Company. The Schnitzer Trust Agreement will terminate on March 31, 2001 unless
terminated prior thereto by agreement of the holders of trust certificates
representing two-thirds of the shares held in trust for each family group.
Provisions Restricting Transfer The trustees are prohibited from selling or
encumbering any shares held in the Schnitzer Trust. The Schnitzer Trust
Agreement prohibits shareholders who are parties thereto from selling or
otherwise transferring their voting trust certificates or their shares of Class
B Common Stock except to other persons in their family group or to entities
controlled by such persons. Such transfers are also restricted by the Company's
Restated Articles of Incorporation. A holder of voting trust certificates is
permitted to sell or make a charitable gift of the shares of Class B Common
Stock represented by his or her certificates by first directing the trustees to
convert the shares into Class A Common Stock which will then be distributed to
the holder free from restrictions under the agreement. However, before causing
any shares to be converted for sale, a holder must offer the shares (or the
voting trust certificates representing the shares) to the other voting trust
certificate holders who may purchase the shares at the
3
<PAGE>
current market price for the Class A Common Stock. After the expiration of the
Schnitzer Trust Agreement, these transfer restrictions will continue to apply to
the Class B Common Stock formerly held by the Schnitzer Trust unless terminated
by agreement of the holders of two-thirds of the Class B Common Stock held by
each family group.
ELECTION OF DIRECTORS
Eleven directors are to be elected at the Annual Meeting, each to hold office
until the next Annual Meeting and until his or her successor has been duly
elected and qualified. Proxies received from shareholders, unless directed
otherwise, will be voted FOR the election of the following nominees: Leonard
Schnitzer, Robert W. Philip, Kenneth M. Novack, Gary Schnitzer, Dori Schnitzer,
Carol S. Lewis, Jean S. Reynolds, Scott Lewis, Robert S. Ball, William A.
Furman, and Ralph R. Shaw. If any nominee is unable to stand for election, the
persons named in the proxy will vote the same for a substitute nominee. All of
the nominees are currently directors of the Company. The Company is not aware
that any nominee is or will be unable to stand for reelection. Directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. Abstentions and broker non-votes will have no effect on the results
of the vote.
Set forth below is the name, age, position with the Company, present principal
occupation or employment and five-year employment history of each of the
nominees for director of the Company.
<TABLE>
<CAPTION>
Name and Year First
Became Director Business Experience Age
- ----------------------- ------------------------------------------------------------- -----
<S> <C> <C>
Leonard Schnitzer Chief Executive Officer since August 1973; became Chairman of 74
1948 the Board in March 1991.
Robert W. Philip President and a director since March 1991. Became director 51
1991 in March 1991. He had been a Vice President of the Company
since 1984 with responsibility for the Company's Metra steel
distribution division from 1984 to the time of its sale in
July 1990. Mr. Philip is Leonard Schnitzer's son-in-law.
Kenneth M. Novack Executive Vice President of the Company and President of 52
1991 Schnitzer Investment Corp. (SIC) and certain other Schnitzer
Group Companies. From 1975 to 1980, he worked for the Company
as Vice President and then Executive Vice President. Mr.
Novack was also President of SIC from 1978 to 1980. From 1981
until April 1991, he was a partner in the law firm known
formerly as Ball, Janik & Novack. Mr. Novack is the son-in-law
of Gilbert Schnitzer, a brother of Leonard Schnitzer.
Gary Schnitzer Executive Vice President in charge of the Company's 56
1993 California scrap operations since 1980 and a director since
September 1993. Gary Schnitzer is the son of Gilbert
Schnitzer.
Dori Schnitzer Secretary of the Company since June 1987 and became a 45
1991 director in March 1991. She also served as corporate counsel
of the Company from October 1987 to May 1991 when she became
Vice President of Lasco Shipping Co. Dori Schnitzer is a
daughter of Morris Schnitzer, a deceased brother of Leonard
Schnitzer.
4
<PAGE>
Carol S. Lewis Director of the Company since December 1987. She is 61
1987 currently a proprietor of Virginia Jacobs, which has three
linen and home accessories stores. From 1991 until 1995 she
worked as a marketing and fund-raising consultant. From 1981
until 1991 she worked for Oregon Public Broadcasting, the
nonprofit operator of public television and radio in Oregon,
most recently as President of the Oregon Public Broadcasting
Foundation. Carol Lewis is a daughter of Manuel Schnitzer, a
brother of Leonard Schnitzer.
Scott Lewis Director of the Company since 1998. Mr. Lewis is an 39
1998 information technology consultant. He formerly was President
of Sora Corporation, a software company located in Portland,
Oregon.
Jean S. Reynolds Director of the Company since September 1993. Jean S. 49
1993 Reynolds is a marketing consultant. She is a daughter of
Morris Schnitzer, a deceased brother of Leonard Schnitzer.
Robert S. Ball Director of the Company since September 1993. Since 1982, he 57
1993 has been a partner in the Portland, Oregon law firm of Ball
Janik LLP.
William A. Furman Director of the Company since September 1993. Since 1981, he 53
1993 has been President, Chief Executive Officer and a director
of The Greenbrier Companies of Portland, Oregon, a publicly
held company with subsidiaries, including Gunderson, Inc.,
engaged in manufacturing, marketing and leasing of railcars
and other equipment.
Ralph R. Shaw Director of the Company since September 1993. Mr. Shaw is 58
1993 President of Shaw Management, Inc., a financial services and
venture capital firm. He is also a director of TRM Copy
Centers Corporation.
</TABLE>
The Board of Directors held four meetings during the fiscal year ended August
31, 1998. Each director attended at least 75% of the aggregate number of
meetings of the Board and of committees of the Board on which they served.
The Company has Compensation and Audit Committees of the Board of Directors.
Messrs. Ball, Furman, and Shaw are members of the Audit Committee and Messrs.
Furman and Shaw are members of the Compensation Committee. The principal
function of the Audit Committee is to make recommendations to the Board as to
the engagement of independent auditors, to review the scope of the audit and
audit fees, and to discuss the results of the audit with the independent
auditors. The Compensation Committee administers the Company's 1993 Stock
Incentive Plan and makes recommendations to the Board of Directors regarding
compensation for executive officers of the Company. During fiscal 1998, the
Audit Committee held two meetings and the Compensation Committee held one
meeting. The Company does not have a nominating committee of the Board of
Directors. Shareholders who wish to submit names for consideration for Board
membership should do so in writing addressed to the Board of Directors, c/o Dori
Schnitzer, Secretary, Schnitzer Steel Industries, Inc., P.O. Box 10047,
Portland, Oregon 97296-0047.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE
NOMINEES NAMED IN THIS PROXY STATEMENT.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain summary information concerning compensation
paid or accrued by the Company to or on behalf of the Company's Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company (hereinafter referred to as the Named Executive Officers) for the
fiscal years ended August 31, 1998, 1997, and 1996:
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------
Awards
------------- All
Annual Compensation Securities Other
Name and Fiscal --------------------------------------- Underlying Compensa-
Principal Position Year Salary(1) Bonus Other Options tion (1,2)
- ----------------------------------- ---------- ------------ ------------ --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Schnitzer 1998 $ 288,869 $ 124,000 16,888 $ 8,000
---------- ------------ ------------ --------- ------------- -------------
Chief Executive Officer 1997 $ 286,391 $ 207,200 19,665 $ 7,175
---------- ------------ ------------ --------- ------------- -------------
1996 $ 275,187 $ 207,200 18,948 $ 6,750
- ----------------------------------- ---------- ------------ ------------ --------- ------------- -------------
Robert W. Philip 1998 $ 394,626 $ 248,000 21,154 $ 8,000
---------- ------------ ------------ --------- ------------- -------------
President 1997 $ 358,624 $ 412,500 29,220 $ 7,175
---------- ------------ ------------ --------- ------------- -------------
1996 $ 340,269 $ 375,000 21,043 $ 6,750
- ----------------------------------- ---------- ------------ ------------ --------- ------------- -------------
Gary Schnitzer 1998 $ 273,073 $ 96,000 12,621 $ 8,000
---------- ------------ ------------ --------- ------------- -------------
Executive Vice President 1997 $ 260,737 $ 160,000 16,440 $ 7,175
---------- ------------ ------------ --------- ------------- -------------
1996 $ 250,651 $ 150,000 11,843 $ 6,750
- ----------------------------------- ---------- ------------ ------------ --------- ------------- -------------
Kurt C. Zetzsche 1998 $ 239,853 $ 100,000 11,353 $ 16,000
---------- ------------ ------------ --------- ------------- -------------
President of Steel Operations 1997 $ 235,426 $ 90,000 12,991 $ 16,000
---------- ------------ ------------ --------- ------------- -------------
1996 $ 227,142 $ 90,000 10,649 $ 15,000
- ----------------------------------- ---------- ------------ ------------ --------- ------------- -------------
Barry A. Rosen 1998 $ 211,166 $ 66,000 10,002 $ 8,000
---------- ------------ ------------ --------- ------------- -------------
Vice President - Finance 1997 $ 195,117 $ 110,000 11,787 $ 7,175
---------- ------------ ------------ --------- ------------- -------------
1996 $ 188,110 $ 100,000 9,405 $ 6,750
- ----------------------------------- ---------- ------------ ------------ --------- ------------- -------------
(1) The amounts in the table above do not include the amounts of salary and
bonus separately paid by other Schnitzer Group companies to these officers
through a reimbursement arrangement under the Shared Services Agreement.
(2) For fiscal years, 1996, 1997 and 1998, All Other Compensation consists
entirely of Company contributions, net of reimbursement from other
Schnitzer Group companies, to the Company's Supplemental Retirement Plan
and Salary Deferral Retirement Plan, except that for Mr. Zetzsche for
fiscal 1996, All Other Compensation consists of Company contributions to
the Cascade Steel Rolling Mills, Inc. Employees' Retirement Plan.
</TABLE>
6
<PAGE>
Stock Option Grants in Last Fiscal Year
The following table provides information regarding stock options for Class A
Common Stock granted to the Named Executive Officers in the fiscal year ended
August 31, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------- Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to Exercise for Option Term (2)
Options Employees in Price Expiration ---------------------------
Name Granted (1) Fiscal Year Per Share Date 5% 10%
- ------------------------ -------------- --------------- ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Schnitzer 16,888 17.2% $ 24.25 6/24/08 $ 257,554 $ 652,692
- ------------------------ -------------- --------------- ----------- ------------- ------------ ------------
Robert W. Philip 21,154 21.6% 24.25 6/24/08 322,613 817,565
- ------------------------ -------------- --------------- ----------- ------------- ------------ ------------
Gary Schnitzer 12,621 12.9% 24.25 6/24/08 192,479 487,780
- ------------------------ -------------- --------------- ----------- ------------- ------------ ------------
Kurt C. Zetzsche 11,353 11.6% 24.25 6/24/08 173,141 438,774
- ------------------------ -------------- --------------- ----------- ------------- ------------ ------------
Barry A. Rosen 10,002 10.2% 24.25 6/24/08 152,537 386,560
- ------------------------ -------------- --------------- ----------- ------------- ------------ ------------
(1) Each option was granted on the date 10 years prior to the expiration date
shown in the table. Options become exercisable for 20% of the shares on
each of the first five anniversaries of the grant date.
(2) In accordance with rules of the Securities and Exchange Commission, these
amounts are the hypothetical gains or "option spreads" that would exist for
the respective options based on assumed rates of annual compound stock
price appreciation of 5% and 10% from the date the options were granted
over the full option term.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table provides certain information concerning exercises of stock
options during the fiscal year ended August 31, 1998, by each of the Named
Executive Officers as well as the number and value of unexercised options held
by such persons at August 31, 1998.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised in the
Options at Money Options at
Shares Fiscal Year-End Fiscal Year-End (1)
Acquired on Value --------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------------- ------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Schnitzer -- -- 42,115 57,184 -- --
- ------------------------- ------------- ------------- ----------- ------------- ----------- -------------
Robert W. Philip -- -- 45,935 70,769 -- --
- ------------------------- ------------- ------------- ----------- ------------- ----------- -------------
Gary Schnitzer -- -- 31,155 42,113 -- --
- ------------------------- ------------- ------------- ----------- ------------- ----------- -------------
Kurt C. Zetzsche -- -- 28,296 36,599 -- --
- ------------------------- ------------- ------------- ----------- ------------- ----------- -------------
Barry A. Rosen -- -- 23,484 31,986 -- --
- ------------------------- ------------- ------------- ----------- ------------- ----------- -------------
(1) Aggregate value of shares covered by the options at August 31, 1998, less
the aggregate exercise price of such options.
</TABLE>
7
<PAGE>
Defined Benefit Retirement Plans
Pension Retirement Plan. The Company's Pension Retirement Plan (the Plan) is a
defined benefit plan qualified under Section 401(a) of the Internal Revenue Code
of 1986 (the Code). All employees (except Leonard Schnitzer and certain union
and on-call employees) of the Company and certain other Schnitzer Group
companies are eligible to participate in the Plan after meeting certain service
requirements. Generally, pension benefits become fully vested after five years
of service and are paid in monthly installments beginning when the employee
retires at age 65. Annual benefits equal 2% of qualifying compensation for each
Plan year of service after August 31, 1986. Upon their retirement, assuming
retirement at age 65 and no increase in annual compensation from current levels,
Messrs. Gary Schnitzer, Robert W. Philip, and Barry A. Rosen would receive
annual benefits for life of $77,992, $92,909, and $88,797, respectively.
Supplemental Executive Retirement Bonus Plan. The Supplemental Executive
Retirement Bonus Plan (the Supplemental Plan) was adopted to provide a
competitive level of retirement income for key executives selected by the Board
of Directors. The Supplemental Plan establishes an annual target benefit for
each participant based on continuous years of service (up to a maximum of 25
years) and the average of the participant's five highest consecutive calendar
years of compensation, with the target benefit subject to an inflation-adjusted
limit equal to $175,891 in 1998. The target benefit is reduced by 100% of
primary social security benefits and the Company-paid portion of all benefits
payable under the Company's qualified retirement plans to determine the actual
benefit payable under the Supplemental Plan. The actual benefit shall be paid as
a straight life annuity or in other actuarially equivalent forms. Benefits are
payable under the plan only to participants who terminate employment after age
55 with 10 credited years of service or after age 60. The following table shows
the estimated annual target benefits under the Supplemental Plan, before the
reductions based on social security and Company-paid retirement benefits, for
executives who retire at age 60 (the normal retirement age under the
Supplemental Plan) with various levels of pay and service, based on the 1998
value for the inflation-adjusted cap.
<TABLE>
<CAPTION>
Highest Consecutive Five-Year Credited Years of Service
Average Qualifying ------------- ------------- ------------- -------------
Compensation 10 15 20 25
- ----------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 200,000 $ 52,000 $ 78,000 $ 104,000 $ 130,000
- ----------------------------- ------------- ------------- ------------- -------------
$ 250,000 $ 65,000 $ 97,500 $ 130,000 $ 162,500
- ----------------------------- ------------- ------------- ------------- -------------
$ 300,000 $ 68,014 $ 102,021 $ 136,028 $ 175,891
- ----------------------------- ------------- ------------- ------------- -------------
$ 350,000 $ 68,014 $ 102,021 $ 136,028 $ 175,891
- ----------------------------- ------------- ------------- ------------- -------------
$ 400,000 $ 70,356 $ 105,535 $ 140,713 $ 175,891
- ----------------------------- ------------- ------------- ------------- -------------
</TABLE>
As of December 31, 1997, Messrs. Gary Schnitzer, Robert W. Philip and Barry A.
Rosen had 33, 26 and 16 years of service, respectively, and highest consecutive
five-year average qualifying compensation of $310,362, $493,456 and $302,160,
respectively. For Mr. Philip and Mr. Rosen, the compensation differs
significantly from that shown in the Summary Compensation Table because benefits
under the Supplemental Plan are based on total qualifying compensation received
from all Schnitzer Group companies.
Director Compensation
Directors who are not employees of Schnitzer Group companies receive an annual
fee of $10,000 plus $500 for attending each Board meeting or committee meeting
held other than on the same day as a Board meeting, and are reimbursed for
expenses of attending Board and committee meetings.
8
<PAGE>
CERTAIN TRANSACTIONS
The Company is part of the Schnitzer Group of companies, all of which are
controlled by members of the Schnitzer family. Other companies in the group
include: Schnitzer Investment Corp. (SIC), engaged in the real estate and
shipping agency businesses; Pacific Coast Shipping Co. (PCS) and its
wholly-owned subsidiary, Trans-Pacific Shipping Co. (TPS), and Liberty Shipping
Group Limited Partnership (LSGLP) and Liberty Belle Limited Partnership (LBLP)
and their general partner LSGGP Corp. (LSGGP), all engaged in the ocean shipping
business, and Island Equipment Company, Inc. (IECO), engaged in various
businesses in Guam and other South Pacific islands.
Certain executive officers of the Company fulfill similar executive functions
for other companies in the Schnitzer Group. Leonard Schnitzer, Robert W. Philip
and Kenneth M. Novack, the members of the Company's Office of the President,
also make up the Office of the President of SIC. Robert W. Philip has the
principal operating responsibility for the Company, but he also spends time on
the businesses of other Schnitzer Group companies. Leonard Schnitzer serves as
Chairman of the Schnitzer Group's shipping companies and spends substantial
amounts of his time on their businesses. Kenneth M. Novack spends substantial
amounts of his time on the businesses of SIC, IECO, and other Schnitzer Group
companies. Barry A. Rosen serves as Chief Financial Officer for all of the
Schnitzer Group companies. The Company believes that the sharing of top
management and other resources (such as data processing, accounting, legal,
financial, tax, treasury, risk management and human resources) provides benefits
to the Company and the other Schnitzer Group companies by giving each of them
access to a level of experience and expertise that can only be supported by a
larger organization.
The Company leases certain properties used in its business from SIC. These
properties and certain lease terms are set forth in the following table:
<TABLE>
<CAPTION>
EXPIRATION
PROPERTY ANNUAL RENT OF LEASES
- ------------------------------------------ --------------- ---------------
<S> <C> <C>
Corporate Headquarters $ 254,000 2002-2006
- ------------------------------------------ --------------- ---------------
Scrap Operations:
Portland facility and marine terminal 1,056,000 2063
Sacramento facility 80,000 2003
- ------------------------------------------ --------------- ---------------
Total $1,382,000
- ------------------------------------------ --------------- ---------------
</TABLE>
The rent for the Portland scrap operations was adjusted on September 1, 1998 and
will adjust every five years thereafter. The adjustments made on September 1,
2003 and every fifteen years thereafter will be to appraised fair market rent.
Intervening rent adjustments will be based on the average of the percentage
increases or decreases in two inflation indexes over the five years prior to the
adjustment. The Sacramento facility rent was also adjusted on September 1, 1998
based on the same inflation indexes. The Company subleases a portion of the
Portland facility to a third party for $38,000 per year until 2001.
The Company ships steel scrap on vessels chartered from PCS and TPS. In fiscal
1998, the Company incurred a total of $6,627,000 in charter expense to PCS and
TPS for shipments of steel scrap. SIC acts as managing agent for PCS and TPS and
was paid $99,000 in agency fees by the Company during fiscal 1998. In May 1993,
the Company entered into a five-year time charter of a ship from TPS. Under this
charter, the Company paid to TPS the actual cost of operating the ship plus
approximately $130,000 per quarter, and paid to SIC agency fees of $185,000 per
year. At the end of the charter, the Company guaranteed that TPS would be able
to sell the ship for TPS's remaining capital investment at that time of
$2,500,000, and the Company was entitled to either purchase the ship or receive
any proceeds in excess of $2,500,000. Upon expiration of the agreement, the
Company paid TPS the guaranteed residual of $2,500,000 and entered into an
additional five-year time charter, at the end of which ownership of the vessel
will be transferred to the Company. During the five-year time charter, the
Company pays to TPS the actual cost of operating the ship. In May 1995, the
Company entered into two additional seven-year time charters for other vessels
with TPS. In August 1996, these two time charters were re-negotiated due to the
condition of the vessels and lower charter rates experienced in the shipping
industry. Under each of these re-negotiated charters, the Company pays to TPS
the actual cost of operating the ship plus approximately $200,000 per quarter.
9
<PAGE>
Additionally, the vessels discussed above are periodically sub-chartered to
third parties. In this case, SIC acts as the Company's agent in the collection
of income and payment of expenses related to sub-charter activities. Charter
expense to PCS and TPS incurred for these vessels while sub-chartered totaled
$3,151,000 in 1998. These charter expenses were offset by sub-charter income of
$3,099,000 in 1998.
The Company provides management and administrative services to, and in some
cases receives services from, SIC, LSGLP, LBLP, LSGGP, IECO, and other Schnitzer
Group companies pursuant to a Second Amended Shared Services Agreement, as
amended as of September 1, 1994. The agreement provides that all service
providing employees, except executive officers, are charged out at rates based
on the actual hourly compensation expense to the Company for such employees
(including fringe benefits but excluding bonuses) plus an hourly charge for
reimbursement of space costs associated with such employees, all increased by
15% as a margin for additional overhead and profit. The Company independently
determines the salaries to pay its executive officers, and the other companies
reimburse the Company fully for salaries and related benefits the other
companies decide to pay, plus the hourly space charge and the 15% overhead and
profit margin. Under the agreement, the Company independently determines the
amount of bonus to pay to each of its employees, and the other companies
reimburse the Company fully for any bonuses the other companies decide to pay.
The agreement also provides for the monthly payment by these related parties to
the Company of amounts intended to reimburse the Company for their proportionate
use of the Company's telephone and computer systems. Charges by the Company
under the agreement in fiscal 1998 totaled $1,223,000.
From time to time, the law firm of Ball Janik LLP, of which director Robert S.
Ball is a partner, provides legal services to the Company. Ball Janik LLP
provides legal services on a more regular basis to other companies in the
Schnitzer Group.
Pursuant to a policy adopted by the Board of Directors, all transactions with
other Schnitzer Group companies require the approval of a majority of the
independent directors or must be within guidelines established by them.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the Committee) is composed
of two outside directors. The Committee is responsible for developing and making
recommendations to the Board with respect to the Company's compensation policies
and the levels of compensation to be paid to executive officers. In addition,
the Committee has sole responsibility for the administration of, and the grant
of stock options and other awards under, the Company's 1993 Stock Incentive
Plan, as ammended. The Company has engaged a nationally recognized compensation
and benefits consulting firm to assist the Committee and the Company in
gathering information on competitive compensation practices and in reviewing
executive compensation.
The objectives of the Company's executive compensation program are to attract
and retain highly qualified executives, and to motivate them to maximize
shareholder returns by achieving both short-term and long-term strategic Company
goals. The three basic components of the executive compensation program are base
salary, annual bonus dependent on corporate performance, and stock options.
Base Salary
For purposes of determining fiscal 1998 salaries, the Committee considered
market analyses prepared by the Company's compensation consultant. The salary
data consisted of a broad survey of durable goods manufacturing companies and
steel companies. Using trend line analysis on the broad survey data, the
consultant estimated average salary levels for a durable goods company with $400
million in annual revenues, which such averages were reasonably confirmed by the
steel industry data. The Committee used these estimated averages as the basis
for establishing salaries for executive officers, with modifications in certain
cases to reflect historical salary levels or reduced time commitments to the
Company's business.
Annual Bonuses
Executive officers are eligible to receive annual bonuses, based on Company
performance, which provide them a direct financial incentive to achieve
corporate objectives each year. Bonuses for 1998 for all named executive
officers were determined with reference to target bonus amounts expressed as a
percentage of salary. Target bonuses are higher as a percentage of salary for
more senior officers. The determination of actual bonuses is discretionary for
the Committee and is based generally on overall Company profitability, business
unit profitability, achievement of nonfinancial objectives and subjective
judgements as to individual performance. No specific weight is accorded to any
single factor
10
<PAGE>
and different factors may be accorded greater or lesser weight in particular
years or for particular officers.
Fiscal 1998 results were negatively impacted by the Asian financial crisis, with
net income down from the previous year. It is the Committee's belief that
bonuses for executive officers should reflect only some of the Asian financial
crisis impacts on earnings, as much of the impact was beyond management control.
Offsetting the above, the Company continued expanding its position in the scrap
steel industry through some strategic joint venture acquisitions. Additionally,
the Company's finished steel operations reported its highest level of operating
income since 1990.
While the Committee views that the Company took all the steps it could in
reaction to the Asian financial crisis and views the continued expansion efforts
very favorably, earnings per share suffered. As a result executive bonuses were
set at lower levels than in previous years.
As a result of the Company's overall performance and achievement of other
objectives, such as those mentioned above, during 1998, all named executive
officers received bonuses within the target range.
Stock Options
The stock option program is the Company's principal long-term incentive plan for
executive officers. The objectives of the stock option program are to align
executive and shareholder long-term interests by creating a strong and direct
link between executive compensation and shareholder return, and to create
incentives for executives to remain with the Company for the long term through
standard five-year vesting of options. Options are awarded with an exercise
price equal to the market price of Class A Common Stock on the date of grant and
have a term of 10 years.
The Committee has implemented an annual option grant program. Annual awards to
the top five executive officers are made based on grant guidelines expressed as
a percentage of salary, with such guidelines generally set at the median for
companies in the broad market survey provided by the consultants.
Section 162(m) of the Internal Revenue Code of 1986 limits to $1,000,000 per
person the amount that the Company may deduct for compensation paid to any of
its most highly compensated officers in any year. The levels of salary and bonus
generally paid by the Company do not exceed this limit. Under IRS regulations,
the $1,000,000 cap on deductibility will not apply to compensation received
through the exercise of a nonqualified stock option that meets certain
requirements. This option exercise compensation is equal to the excess of the
market price at the time of exercise over the option price and, unless limited
by Section 162(m), is generally deductible by the Company. It is the Company's
current policy generally to grant options that meet the requirements of the IRS
regulations.
Chief Executive Officer Compensation
Mr. Schnitzer's base salary for fiscal 1998 was fixed at $289,000, which was
approximately 75% of the average salary level for his position estimated by the
Company's compensation consultant based on survey data as discussed above. The
Committee believes that a lower than average salary level is appropriate since
Mr. Schnitzer devotes time to the businesses of other companies in the Schnitzer
Group to a greater extent than most executive officers of the Company.
Mr. Schnitzer received a bonus for 1998 of $124,000, which was 43% of the salary
established for him for fiscal 1998. This is within the range of target bonuses
payable under the annual bonus program and was awarded for the reasons discussed
above.
During fiscal 1998, Mr. Schnitzer received an option for 16,888 shares of Class
A Common Stock as part of the Company's annual option grant program. The size of
the award was determined using the median grant guideline percentage for chief
executive officers determined from survey data and applying that guideline
percentage to Mr. Schnitzer's 1998 base salary.
COMPENSATION COMMITTEE
Ralph R. Shaw, Chair
William A. Furman
11
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock with the cumulative total return of the
Standard & Poor's 500 Stock Index and the Standard & Poor's Steel Industry Group
Index for the period commencing on November 16, 1993 (the date of the Company's
initial public offering) and ending on August 31, 1998. The graph assumes that
$100 was invested in the Company's Common Stock and each index on November 16,
1993, and that all dividends were reinvested.
[Line graph depicting performance omitted.]
<TABLE>
<CAPTION>
11/16/93 8/31/94 8/31/95 8/31/96 8/31/97 8/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Schnitzer Steel Industries, Inc. 100.00 136.39 143.03 141.36 177.63 82.09
Standard & Poors 500 100.00 104.01 126.32 149.99 210.96 228.03
Standard & Poors Steel Index 100.00 125.88 95.18 82.07 105.37 64.96
</TABLE>
12
<PAGE>
APPROVAL AND RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has, subject to approval and ratification
by the shareholders, selected PricewaterhouseCoopers LLP as independent auditors
for the Company for the fiscal year ending August 31, 1999.
A representative of PricewaterhouseCoopers LLP is expected to be present at the
meeting. Such representative will have the opportunity to make a statement if he
desires to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL
AND RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than 10% of the
outstanding Common Stock of the Company, to file with the Securities and
Exchange Commission reports of changes in ownership of the Common Stock of the
Company held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all forms
they file under this regulation. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and
representations that no other reports were required, during fiscal 1998 all of
its officers, directors and 10% shareholders complied with all applicable
Section 16(a) filing requirements, except that Manual Schnitzer filed one report
relating to one transaction late and the Lewis Children Trust filed its initial
statement of beneficial ownership late.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any proposal by a shareholder of the Company to be considered for inclusion in
proxy materials for the Company's 2000 Annual Meeting of Shareholders must be
received in proper form by the Company at its principal office no later than
August 16, 1999.
GENERAL
The Board of Directors of the Company is not aware of any matters other than the
aforementioned matters that will be presented for consideration at the Annual
Meeting. If other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy to vote thereon in
accordance with their best judgement.
The cost of preparing, printing and mailing this Proxy Statement and of the
solicitation of proxies by the Company will be borne by the Company.
Solicitation will be made by mail and, in addition, may be made by directors,
officers and employees of the Company personally, or by telephone or telegram.
The Company will request brokers, custodians, nominees and other like parties to
forward copies of proxy materials to beneficial owners of stock and will
reimburse such parties for their reasonable and customary charges or expenses in
this connection.
The Company will provide to any person whose proxy is solicited by this proxy
statement, without charge, upon written request to its Corporate Secretary, a
copy of the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1998.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS WHO
DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED.
By Order of the Board of Directors,
DORI SCHNITZER
Dori Schnitzer
Secretary
December 14, 1998
13
<PAGE>
SCHNITZER STEEL INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1999 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints ROBERT W. PHILIP, KENNETH M. NOVACK, and
BARRY A. ROSEN, and each of them, with full power of substitution, as proxies,
and authorizes them to represent and to vote, as designated below, all the stock
of SCHNITZER STEEL INDUSTRIES, INC. that the undersigned is entitled to vote at
the 1999 Annual Meeting of Stockholders of SCHNITZER STEEL INDUSTRIES, INC. to
be held on January 25, 1999, at 8:00 a.m., local time, at the Multnomah Athletic
Club, 1849 SW Salmon Street, Portland, OR 97205, and at any adjournment or
postponement thereof, as indicated on the reverse side.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s).
If no direction is made, this proxy will be voted FOR the Election of
Directors and FOR the proposal to ratify the selection of Price Waterhouse LLP
as the Company's independent auditors for the current fiscal year. If this proxy
is executed in such manner as not to withhold authority to vote for the election
of any nominee to the Board of Directors, it shall be deemed to grant such
authority.
(Continued, and to be dated and signed
on the reverse side.)
SCHNITZER STEEL INDUSTRIES, INC.
P.O. Box 11119
New York, N.Y. 10203-0119
<PAGE>
<TABLE>
<CAPTION>
Directors recommend a vote "FOR"
<S> <C> <C> <C>
1. Election of Directors FOR all nominees [ ] WITHHOLD AUTHORITY [ ] EXCEPTIONS [ ]
listed below to vote for all
nominees listed
below.
Nominees: Leonard Schnitzer, Robert W. Philip, Kenneth M. Novack, Gary Schnitzer, Dori Schnitzer,
Carol S. Lewis, Jean S. Reynolds, Scott Lewis, Robert S. Ball, William A. Furman, and
Ralph R. Shaw
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box
and write that nominee's name in the space provided below.
Exceptions _______________________________________________________________________________________
Directors recommend a vote "FOR"
2. Proposal to ratify the selection of 3. These proxies may vote in their discretion as
PricewaterhouseCoopers LLP as independent to other matters which may come before the
auditors for the fiscal year ending meeting.
August 31, 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and [ ]
or Comments Mark Here
Note: Please sign exactly as shown at left.
If stock is jointly held, each owner should
sign. Executors, administrators, trustees,
guardians, attorneys and corporate officers
should indicate their fiduciary capacity or
full title when signing.
Dated: ______________________________, 1998
___________________________________________
Signature
___________________________________________
Signature (if jointly held)
Votes MUST be indicated (X) [ ]
in Black or Blue Ink
Please Mark, Date, Sign and Mail This Proxy Card Promptly in the Enclosed Envelope.
</TABLE>
