<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
Gardner Denver Machinery 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)(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> 2
GARDNER
---------- [LOGO]
DENVER
March 26, 1997
TO OUR STOCKHOLDERS:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders on Tuesday, May 6, 1997 at 1:30 p.m., at the Holiday Inn
Quincy, 201 South Third Street, Quincy, Illinois.
The attached Notice and Proxy Statement describe the business of
the meeting. After the transaction of the formal business, the
President will report on current operations and plans. A question and
answer period will follow.
We look forward to a significant vote of the Common Stock either in
person or proxy. Your support is appreciated, and we hope that you will
be able to join us at the May 6 meeting. However, whether or not you
expect to attend the Annual Meeting in person, please complete, date,
sign and return the enclosed proxy in the enclosed stamped and
addressed envelope at your earliest convenience. You may revoke your
proxy and vote in person if you decide to attend the Annual Meeting.
Cordially,
/S/ ALAN E. RIEDEL /S/ ROSS J. CENTANNI
Alan E. Riedel Ross J. Centanni
Chairman of the Board President and Chief Executive Officer
<PAGE> 3
GARDNER DENVER MACHINERY INC.
1800 GARDNER EXPRESSWAY
QUINCY, ILLINOIS 62301
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the 1997 Annual Meeting of
Stockholders of Gardner Denver Machinery Inc. (the "Company") will
be held at the Holiday Inn Quincy, 201 South Third Street, Quincy,
Illinois on Tuesday, May 6, 1997, at 1:30 p.m., for the following
purposes:
1. To elect two directors for a three-year term each; and
2. To transact such other business as properly may come before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on March 14,
1997, are entitled to notice of and to vote at the meeting. A
stockholder who executes and returns the accompanying proxy may
revoke such proxy at any time before it is voted at the meeting by
following the procedures set forth in the attached Proxy Statement.
FOR THE BOARD OF DIRECTORS
Helen W. Cornell
Vice President, Corporate Secretary
Quincy, Illinois
March 26, 1997
RETURN OF PROXIES REQUESTED
----------------------------------------------------------
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE
SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY,
FOR WHICH A RETURN ENVELOPE IS PROVIDED.
----------------------------------------------------------
<PAGE> 4
GARDNER DENVER MACHINERY INC.
1800 GARDNER EXPRESSWAY
QUINCY, ILLINOIS 62301
PROXY STATEMENT
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of Gardner
Denver Machinery Inc. (the "Company" or "Gardner Denver") and will be voted
in accordance with the instruction given in the proxy if it is returned duly
executed and is not revoked. A stockholder may revoke a proxy at any time
before it is voted by giving notice to the Company in writing or in open
meeting. Attendance at the meeting will not in and of itself revoke a proxy.
This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about March 26, 1997. The record date for determining the
stockholders entitled to vote at the meeting was the close of business on March
14, 1997 (the "Record Date"). On that date, the outstanding voting securities
of the Company were 9,920,625 shares of Common Stock, par value $0.01 ("Common
Stock"). Each share of Common Stock is entitled to one vote. A majority of the
outstanding shares of Common Stock is required to establish a quorum.
The Company is not aware of any matter that will be presented to the
meeting for action on the part of the stockholders other than that stated in
the notice. If any other matter is properly brought before the meeting, it is
the intention of the persons named in the accompanying proxy to vote the shares
to which the proxy relates in accordance with their best judgment. Abstentions
will be considered present at the meeting for purposes of determining a quorum
and will be counted as voting (but not for or against) with regard to the issue
to which the abstention relates. Any "broker nonvote" also will be considered
present for quorum purposes but will not be counted as voting with regard to
the issue to which it relates.
The enclosed proxy indicates on its face the total number of shares of
Common Stock registered in your name on the Record Date, whether held in book
entry or certificate form. If you return a proxy properly signed, but do not
indicate your voting preference, the shares represented by your proxy will be
voted for the election of the nominees for director named in this Proxy
Statement. If you are a participant in the Gardner Denver Machinery Inc.
Retirement Savings Plan (the "Savings Plan") the enclosed proxy includes the
number of equivalent shares credited to your respective account. When your
proxy is returned properly signed, it will serve as direction to NationsBank,
N.A., as Trustee (the "Trustee") for the Savings Plan, to vote the shares
held for your account in accordance with your instructions. Your properly
signed proxy will also serve as a direction to the Trustee to vote all of the
uninstructed shares of Common Stock credited to other participants' accounts
and shares of Common Stock not yet allocated to participants' accounts in the
same manner as you indicated. The Trustee will vote shares of Common Stock for
which no instructions are received and shares of Common Stock not yet allocated
to participants' accounts in the same proportion (for/against) as the shares of
Common Stock for which instructions are received from Savings Plan
participants. If you fail to return a proxy properly signed, the equivalent
shares of Common Stock credited to your account will be voted by the Trustee in
the same proportion as the shares for which instructions were received from
other Savings Plan participants.
The cost of soliciting proxies will be borne by the Company. The Company
will, upon request, reimburse brokerage houses, custodians, nominees and others
for their out-of-pocket and reasonable clerical expenses incurred in connection
with such solicitation. For the purpose of obtaining broad representation at
the meeting, Georgeson & Company Inc. has been retained by the Company to
assist in the solicitation of proxies at an anticipated cost of approximately
$10,000 plus reimbursement of reasonable expenses. Officers and employees of
the Company, without being additionally compensated, may also make requests by
letter, telephone or in person for the return of proxies.
1
<PAGE> 5
ELECTION OF DIRECTORS
The authorized number of directors of the Company is presently fixed at
five, divided into three classes: two classes having two members and one class
having one member. The directors in each class are elected for three-year terms
so that the term of office of one class of directors expires at each annual
meeting.
For election as directors at the Annual Meeting of Stockholders to be held
on May 6, 1997, the Board of Directors has approved the nominations of Alan E.
Riedel and Ross J. Centanni, who are currently directors, each to serve for a
three-year term expiring in 2000. The affirmative vote of a majority of the
outstanding shares of Common Stock present at the meeting, in person or by
proxy, is required to elect each of the nominees to the director positions.
If either of the nominees becomes unavailable for election, the
accompanying proxy will be voted for the election of such person, if any, as
shall be recommended by the Board of Directors, or will be voted in favor of
holding a vacancy to be filled by the directors. The Company has no reason to
believe that either nominee will be unavailable.
The following information is provided regarding the nominees for election
as a director and each of the other directors who will continue in office after
the meeting:
<TABLE>
NOMINEES FOR ELECTION
FOR TERMS EXPIRING AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
<S> <C>
[PHOTO] ALAN E. RIEDEL, age 66, has been Chairman of the Board of Directors of Gardner
OF Denver since its incorporation in November 1993. Mr. Riedel was previously Vice
RIEDEL Chairman of Cooper Industries, Inc. ("Cooper") from August 1992 until his
retirement in March 1994. From 1973 to August 1992, Mr. Riedel was Senior Vice
President, Administration for Cooper. He has a B.A. degree in government and an
Honorary Doctor of Laws degree from Ohio University and a J.D. degree from Case
Western Reserve University School of Law. He has also completed the Harvard
Business School's Advanced Management Program. Mr. Riedel is a director of
Arkwright Mutual Insurance Company; Belden Inc., a publicly held manufacturer of
electronic and electrical wire and cable; The Standard Products Company, a
publicly held manufacturer of rubber and plastic parts for the automotive
industry; and The First Knox Bank Corporation. He is a trustee and former
chairman of the Ohio University Foundation. Mr. Riedel currently is of counsel
to Squire, Sanders and Dempsey L.L.P., which provided legal services to the
Company during 1996 and continues to render such services to the Company.
[PHOTO] ROSS J. CENTANNI, age 51, has been President and Chief Executive Officer and a
OF director of Gardner Denver since its incorporation in November 1993. Prior to
CENTANNI Gardner Denver's spin-off from Cooper, he was Vice President and General Manager
of Gardner Denver's predecessor, the Gardner-Denver Industrial Machinery
Division of Cooper (the "Division"), where he also served as Director of
Marketing from August 1985 to June 1990. Mr. Centanni was Director of Corporate
Planning for Cooper from August 1981 until joining the Division in 1985. He has
a B.S. degree in industrial technology and an M.B.A. degree from Louisiana State
University. Mr. Centanni is a director of Boatmen's Bank of Quincy, Illinois and
Denman Services, Inc., a privately held supplier of medical products.
2
<PAGE> 6
<CAPTION>
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE MEETING
TERM EXPIRING AT THE 1998 ANNUAL MEETING OF STOCKHOLDERS
<S> <C>
[PHOTO] THOMAS M. MCKENNA, age 59, has been a director of Gardner Denver since its
OF spin-off from Cooper in April 1994. He has been President and Chief Executive
MCKENNA Officer of Moorman Manufacturing Company ("Moorman"), a privately held
manufacturer of agricultural supplies, since August 1993. Mr. McKenna joined
Moorman as Executive Vice President and Chief Operating Officer in August 1991,
was elected to the Board of Directors in November 1991 and was President and
Chief Operating Officer from November 1992 through July 1993. From 1989 until
joining Moorman, Mr. McKenna was President of CCL Custom Manufacturing, a
division of CCL Industries, a publicly held manufacturer of consumer products,
which is traded on the Toronto Exchange. Mr. McKenna has a B.A. degree from St.
Mary's College and an M.B.A. from Loyola University. Mr. McKenna is a director
of Mercantile Bancorp of Quincy, Illinois and the subsidiaries of Moorman.
TERMS EXPIRING AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] DONALD G. BARGER, JR., age 54, has been a director of Gardner Denver since its
OF spin-off from Cooper in April 1994. He has been Vice President, Chief Financial
BARGER Officer of Worthington Industries, Inc. ("Worthington"), a publicly held
manufacturer of metal and plastic products and processed steel products, since
September 1993. Mr. Barger was Vice President-Controller of The BF Goodrich
Company, a publicly held manufacturer of aerospace and specialty chemicals and
plastics, from 1986 until joining Worthington in 1993. Mr. Barger has a B.S.
degree from the United States Naval Academy and an M.B.A. from the University of
Pennsylvania, Wharton School of Business. Mr. Barger is a director of the Quanex
Corporation ("Quanex"), a publicly held manufacturer of specialized metals and
metal products.
[PHOTO] MICHAEL J. SEBASTIAN, age 66, has been a director of Gardner Denver since its
OF incorporation in November 1993. He was previously Executive Vice President of
SEBASTIAN Cooper from February 1982 until his retirement in August 1995. Mr. Sebastian has
a B.S.M.E. degree from Santa Clara University and has completed the Harvard
Business School's Advanced Management Program. Mr. Sebastian is a director of
Cooper Cameron Corporation, a publicly held manufacturer of oil and gas pressure
control equipment and gas turbines, compressors, reciprocating engines and
turbochargers, and Quanex. He also serves as an advisory director for the
University of Houston Center for Public Policy.
</TABLE>
3
<PAGE> 7
COMMITTEES, COMPENSATION AND GOVERNANCE OF
THE BOARD OF DIRECTORS
The Company's Board of Directors held seven meetings during 1996. The Board
has a standing Audit and Finance Committee and a standing Management
Development and Compensation Committee, each composed exclusively of
nonemployee directors. During 1996, each director attended at least 75% of the
meetings of the Board and 100% of the meetings of the committees on which the
director served. The Board does not have a standing Nominating Committee.
Director nominations are made by the full Board.
The Audit and Finance Committee, currently composed of Donald G. Barger,
Jr., Chairman, and Michael J. Sebastian, held three meetings during 1996. The
functions of the Audit and Finance Committee are to instruct the independent
auditors that the Board is the representative of the stockholders and as such
is the client of the auditors; to recommend the nomination of independent
auditors for appointment by the Board; to review the independence of the
auditors, the planned scope and results of their examination and the scope of
any significant non-audit work performed; to review the scope and results of
the Company's internal controls activity; to review accounting changes having a
material impact on the financial statements of the Company and filings made
with the Securities and Exchange Commission as required; to hold conferences
and reviews with the auditors as may be deemed desirable by either the Audit
and Finance Committee, the auditors or management, and to report to the Board
the results of such reviews and conferences; to monitor compliance with the
Company's Corporate Conflicts of Interest and Ethical Conduct Policy and review
information concerning environmental, legal and other matters which may
represent material financial exposure; and to submit to the Board any
recommendations the Committee may have. The Audit and Finance Committee also
oversees the Company's Pension Investment Committee in their establishment of
investment objectives, policies and performance criteria for the management of
the Company's retirement and benefit plan assets.
The Management Development and Compensation Committee, currently composed
of Alan E. Riedel, Chairman, and Thomas M. McKenna, held three meetings during
1996. The functions of the Management Development and Compensation Committee
are to review and consider succession planning, executive performance,
organizational structure and assist the Chief Executive Officer in developing
recommendations in these areas for Board consideration; to review and consult
with the Chief Executive Officer concerning the selection of officers of the
Company and to establish reasonable compensation for officers, including
incentive compensation and bonuses, deferred compensation, pensions, and other
benefits; to designate those employees who will receive grants of stock options
and other awards under the Company's Long-Term Incentive Plan (the "Incentive
Plan") and the type and size of such grants; to administer the Incentive Plan,
including amendments and restatements as appropriate; and to recommend to the
Board one or more candidates for Chief Executive Officer in the event the
position becomes unexpectedly vacant.
COMPENSATION OF DIRECTORS
The Company's nonemployee directors each receive an annual retainer of
$16,000. The Chairman receives an additional $16,000 annually for his duties as
Chairman. In addition, nonemployee directors receive meeting attendance fees of
$1,000 per meeting for special board or committee meetings not held in
conjunction with regularly scheduled board and committee meetings. In 1996,
there were no such special board or committee meetings. Directors are also
reimbursed for reasonable expenses incurred in connection with attending board
and committee meetings.
In 1996, the directors approved the Gardner Denver Machinery Inc. Phantom
Stock Plan for Outside Directors (the "Phantom Stock Plan") to more closely
align the interests of the nonemployee directors and the Company's stockholders
by increasing each nonemployee director's proprietary interest in the Company
in the form of "phantom stock units".
Under the Phantom Stock Plan, which is an unfunded plan, the Company
credits the equivalent of $4,000 annually, in equal monthly amounts, to the
phantom stock unit account of each nonemployee director. Phantom stock units
are credited based upon the previous month's average closing price per share
for the Company's Common Stock. Each nonemployee director may also elect to
defer all or some portion of his annual director's fees under the Phantom Stock
Plan and have such amount credited on a monthly basis as phantom stock units,
based on the previous month's average closing price per share for the Company's
Common Stock. If the Company were to pay dividends, dividend equivalents would
be credited to each nonemployee director's account on the dividend record date.
The fair
4
<PAGE> 8
market value of a director's account will be distributed as a cash payment to
the director (or his beneficiary), when the director ceases to be a director of
the Company for any reason. Alternatively, a director may elect to have the
fair market value of his account distributed in twelve or fewer equal monthly
installments, but without interest on the deferred payments. The fair market
value of a director's account is determined by reference to the average closing
price per share for the Company's Common Stock during the ten trading days
immediately preceding the date the director ceases to be a director. The
following table summarizes the number of phantom stock units credited to each
nonemployee director as of March 14, 1997:
<TABLE>
<CAPTION>
PHANTOM STOCK
NAME UNITS
---- -------------
<S> <C>
Donald G. Barger, Jr............................... 213
Thomas M. McKenna.................................. 926
Alan E. Riedel..................................... 1,687
Michael J. Sebastian............................... 165
-----
Total.......................................... 2,991
</TABLE>
Under the Incentive Plan, each nonemployee director is automatically
granted options to purchase 2,000 shares of the Company's Common Stock on the
date immediately following the Annual Meeting of Stockholders. Prior to the
two-for-one split of the Company's Common Stock on January 15, 1997, this
annual stock option grant was for 1,000 shares. These options become
exercisable one year from the date of grant, at the fair market value of the
Common Stock on the date of the grant, and expire five years from the date of
grant, subject to prior termination, under the terms of the Incentive Plan. In
accordance with the Incentive Plan, on April 15, 1994, the record date of the
spin-off of Gardner Denver from Cooper, each nonemployee director was granted
an option for 2,000 shares of Common Stock at an exercise price equal to the
average closing price of the Company's Common Stock for the 30 trading days
beginning five days after April 15, 1994. These options became fully
exercisable on April 15, 1995, the first anniversary of the date of the grant,
and expire April 15, 1999. Under the terms of the Incentive Plan, outstanding
awards were appropriately adjusted as a result of the two-for-one split of the
Company's Common Stock on January 15, 1997.
CORPORATE GOVERNANCE
In 1997, the Company's Board of Directors adopted a policy regarding
Corporate Governance. The objective of this policy is to ensure that the Board
maintains its independence, objectivity and effectiveness in fulfilling its
responsibilities to the Company's stockholders. The policy describes the
criteria for selection and retention of outside directors; factors to ensure
the Board remains independent; administrative practices of the Board; and the
composition and compensation of the Board. The policy requires that the
majority of the Board be nonemployee directors, with varied and complementary
backgrounds. Directors may serve on the boards of directors of no more than
four for-profit organizations, including the Company, and interlocking
directorships are prohibited. The policy specifies that a nonemployee director
will retire at age 70 years and that, at any one time, at least 50% of the
number of nonemployee directors shall be actively employed.
5
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
In 1997, the Board of Directors adopted Stock Ownership Guidelines for the
Company's nonemployee directors, executive officers and other key employees.
Under these guidelines, each nonemployee director is expected to maintain an
equity interest in the Company equal to one times his annual retainer by the
end of his first year as a director and three times his annual retainer at the
end of five years of service on the Board. The guidelines also require that the
Chief Executive Officer maintain an equity interest equal to five times his
annual base salary and each Corporate Vice President maintain an equity
interest in the Company equal to three times his annual base salary. These
equity interests are to be achieved by the fifth anniversary of each
individual's appointment as an executive officer. Common Stock held directly by
the officer and indirectly for the benefit of the officer in the Savings Plan
and the related Supplemental Excess Defined Contribution Plan are considered in
determining compliance with these guidelines.
The following table sets forth, as of March 14, 1997, information with
respect to the beneficial ownership of the Company's Common Stock by (a) each
director, (b) each of the Company's four most highly compensated executive
officers in 1996 who is not a director and, (c) all directors and executive
officers as a group. A separate table is also included which sets forth each
person known by the Company to be the beneficial owner of more than 5% of the
Company's outstanding Common Stock as of the dates indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
------------------------------------------------
DIRECT EMPLOYEE PERCENT
NAME OF BENEFICIAL OWNERS OWNERSHIP<F1> 401(k) PLAN<F2> OF CLASS
------------------------- ------------- --------------- --------
<S> <C> <C> <C>
DIRECTORS
Donald G. Barger, Jr.................... 9,100<F3>,<F4> <F*>
Ross J. Centanni........................ 170,112<F3>,<F5> 6,625 1.8%
Thomas M. McKenna....................... 8,000<F3> <F*>
Alan E. Riedel.......................... 40,132<F3>,<F6> <F*>
Michael J. Sebastian.................... 21,646<F3> <F*>
NAMED EXECUTIVE OFFICERS (NOT DIRECTORS)
J. Dennis Shull......................... 67,110<F3>,<F7> 2,857 <F*>
Philip R. Roth.......................... 10,000<F3> 387 <F*>
Jay R. Buehler.......................... 51,100<F3> 1,630 <F*>
Roger A. Finnamore...................... 54,674<F3> 2,399 <F*>
All directors and executive officers as
a group................................. 522,696<F3>,<F4>,<F5>,<F6>,<F7> 17,959 5.3
<FN>
- --------
<F*> Less than 1%.
<F1> Each beneficial owner has sole voting and investment power with respect to
all shares except as indicated below.
<F2> Each beneficial owner has sole voting power, but limited investment power
with respect to all shares held in the Savings Plan, a 401(k) plan, and
the related Supplemental Excess Defined Contribution Plan ("Excess
Defined Contribution Plan").
<F3> Includes shares that could be acquired by the exercise of stock options
granted under the Incentive Plan that are currently exercisable or
exercisable within 60 days after March 14, 1997, as follows: 8,000 shares
for Mr. Barger; 134,000 shares for Mr. Centanni; 8,000 shares for Mr.
McKenna; 2,000 shares for Mr. Riedel; 2,000 shares for Mr. Sebastian;
60,000 shares for Mr. Shull; 10,000 shares for Mr. Roth; 24,000 shares for
Mr. Buehler; 50,000 shares for Mr. Finnamore; and 377,182 shares for the
group.
<F4> Includes 100 shares owned by Mr. Barger's son, as to which Mr. Barger
shares voting and investment power.
<F5> Includes 2,710 shares owned by Mr. Centanni's wife and children, as to
which Mr. Centanni shares voting and investment power.
6
<PAGE> 10
<F6> Includes 200 shares owned by Mr. Riedel's wife, as to which Mr. Riedel
shares voting and investment power.
<F7> Includes 8 shares owned by Mr. Shull's children, as to which Mr. Shull
shares voting and investment power.
</TABLE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
<S> <C> <C>
First Manhattan Company....................................... 1,297,520<F1> 13.1%
437 Madison Avenue
New York, New York
Ira Sochet.................................................... 651,496<F2> 6.6
9350 South Dixie Highway
Miami, Florida
FMR Corporation............................................... 594,970<F3> 6.0
82 Devonshire
Boston, Massachusetts
Harris Associates Investment Trust............................ 500,000<F4> 5.0
Two North LaSalle Street
Chicago, Illinois
<FN>
- --------
<F1> Based on Schedule 13G filing, dated as of January 30, 1997, made by First
Manhattan Company ("First Manhattan"). First Manhattan reported that it
has sole voting and sole investment powers with respect to 125,120 shares,
shared voting power as to 1,156,600 shares and shared investment power as
to 1,172,400 shares. Of the shares beneficially owned, 357,000 shares are
owned by family members of General Partners of First Manhattan. With
respect to these 357,000 shares, First Manhattan disclaims beneficial
ownership as to 52,200 shares and disclaims investment power as to 304,800
shares of Common Stock. All share amounts shown above have been adjusted
from the amounts shown in the Schedule 13G filed by First Manhattan in
order to reflect the two-for-one split of the Company's Common Stock on
January 15, 1997.
<F2> Based on Schedule 13D filing, dated as of February 12, 1997, made by Mr.
Ira Sochet. Mr. Sochet reported that he has sole voting and investment
powers with respect to all 651,496 shares of Common Stock beneficially
owned.
<F3> Based on Schedule 13G filing, dated as of February 14, 1997, made by FMR
Corporation and certain of its affiliates, one of which is an investment
advisor registered under the Investment Advisors Act of 1940
(collectively, "FMR"). FMR reported that it has sole voting power with
respect to 98,200 shares and sole investment power with respect to all
594,970 shares beneficially owned. All share amounts shown above have been
adjusted from the amounts shown in the Schedule 13G filed by FMR in order
to reflect the two-for-one split of the Company's Common Stock on January
15, 1997.
<F4> Based on Schedule 13G filing, dated as of February 3, 1997, made by Harris
Associates Investment Trust and certain of its affiliates, one of which is
an investment advisor registered under the Investment Advisors Act of 1940
(collectively, "Harris"). Harris reported that it has shared voting and
shared investment powers with respect to all 500,000 shares. All share
amounts shown above have been adjusted from the amounts shown in the
Schedule 13G filed by Harris in order to reflect the two-for-one split of
the Company's Common Stock on January 15, 1997.
</TABLE>
7
<PAGE> 11
EXECUTIVE MANAGEMENT COMPENSATION
Gardner Denver was incorporated in November 1993 and became a wholly-owned
subsidiary of Cooper at that time. Messrs. Centanni and Shull assumed their
identified positions on January 1, 1994. Prior to that date these two officers
were employed by the predecessor of Gardner Denver, the Gardner-Denver
Industrial Machinery Division of Cooper. The following tables present
compensation earned by the Chief Executive Officer and the next four most
highly compensated executive officers of the Company for the years indicated
and information regarding stock option transactions by each officer in 1996. In
1994, compensation included compensation earned during the period prior to the
spin-off of the Company from Cooper.
<TABLE>
<CAPTION>
TABLE 1
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
---------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
--------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#),<F1> ($),<F2>
--------------------------- ---- --------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Ross J. Centanni............................................ 1996 $275,000 $370,000 60,000 $28,575
President and CEO 1995 250,000 360,000 90,000 16,650
1994 204,167 120,000 -0- 10,718
J. Dennis Shull............................................. 1996 137,333 115,000 12,000 10,905
Vice President, Sales and Marketing 1995 128,283 105,000 30,000 7,213
1994 109,267 32,000 -0- 5,322
Philip R. Roth.............................................. 1996 114,577 110,000 30,000 5,156
Vice President, Finance and CFO<F3>
Jay R. Buehler.............................................. 1996 154,667 55,000 12,000 11,685
Vice President, Manufacturing<F3> 1995 109,935 105,000 30,000 5,063
Roger A. Finnamore.......................................... 1996 114,000 75,000 12,000 9,180
Vice President, Engineering and Quality 1995 108,600 90,000 30,000 6,173
Assurance<F3>
<FN>
- --------
<F1> On January 15, 1997, the Company effected a two-for-one stock split of its
shares of Common Stock. Long term compensation awards have been restated
to reflect the effect of the stock split.
<F2> Amounts under "All Other Compensation" reflect the Company's
contribution on behalf of each of the named executive officers to the
Savings Plan, including contributions by Cooper prior to the spin-off, and
the related Excess Defined Contribution Plan.
<F3> Mr. Roth became an executive officer effective May 13, 1996. Mr. Buehler
became an executive officer effective April 10, 1995 and departed the
Company in January 1997 to pursue other interests. Mr. Finnamore became an
executive officer effective March 1, 1995. In accordance with applicable
SEC rules, information is not provided for years prior to the years during
which these gentlemen became executive officers of the Company.
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
TABLE 2
OPTION GRANTS IN 1996
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
- ----------------------------------------------------------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM<F4>
OPTIONS EMPLOYEES PRICE EXPIRATION -------------------
NAME GRANTED(#)<F1>,<F2> IN 1996 ($/SH)<F2>,<F3> DATE<F1> 5%($) 10%($)
---- ------------------- ---------- --------------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Ross J. Centanni.............. 60,000 24% $13.06 5/07/06 $492,896 $1,249,096
J. Dennis Shull............... 12,000 5 13.06 5/07/06 98,579 249,819
Philip R. Roth................ 30,000 12 13.88 5/13/06 261,777 663,395
Jay R. Buehler................ 12,000 5 13.06 5/07/06 98,579 249,819
Roger A. Finnamore............ 12,000 5 13.06 5/07/06 98,579 249,819
<FN>
- --------
<F1> These options have a ten-year term from the date of grant and are
exercisable in increments of one-third each on the first, second and third
annual anniversary dates following the date of grant.
<F2> On January 15, 1997, the Company effected a two-for-one stock split of its
shares of Common Stock. The number of securities underlying options
granted and the exercise price have been restated to reflect the stock
split.
<F3> The exercise price is equal to the average of the high and low price of
the Company's Common Stock on the respective date of grant.
<F4> Potential realizable value is based on an assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant until the end of the ten-year option term. These values are
calculated based on requirements promulgated by the Securities and
Exchange Commission and are not intended to reflect future stock price
appreciation for the Company's Common Stock.
</TABLE>
<TABLE>
<CAPTION>
TABLE 3
AGGREGATED OPTION EXERCISES IN 1996 AND DECEMBER 31, 1996 OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1996(#) AT DECEMBER 31, 1996($)<F2>
SHARES ------------------------- ---------------------------
ACQUIRED ON VALUE
NAME EXERCISE(#) RECEIVED($)<F1> EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Ross J. Centanni.............. 36,000 $293,500 84,000 120,000 $1,053,500 $963,750
J. Dennis Shull............... 4,000 21,500 46,000 32,000 577,750 287,750
Philip R. Roth................ -0- -0- -0- 30,000 -0- 101,250
Jay R. Buehler................ -0- -0- 10,000 32,000 115,000 280,250
Roger A. Finnamore............ 4,000 45,000 36,000 32,000 450,250 287,750
<FN>
- --------
<F1> The value received for shares acquired on exercise in 1996 is calculated
using the difference between the fair market value of the Company's Common
Stock, as indicated by the average high and low trading value of the
Common Stock on the exercise date, or if the Common Stock did not trade on
the exercise date, the average value on the last previous trading date,
and the option exercise prices.
<F2> The value of the unexercised in-the-money options at December 31, 1996 is
calculated using the difference between the fair market value of the
Company's Common Stock, as indicated by the average high and low trading
value of the Common Stock on December 31, 1996, and the option exercise
prices.
</TABLE>
9
<PAGE> 13
REPORT OF THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The goal of the Management Development and Compensation Committee (the
"Committee") is to compensate the executive officers of Gardner Denver based
on the scope of their responsibilities, the achievement of specific annual
objectives and the Company's annual and longer term performance. The Committee
reviews and establishes the compensation and benefits of the executives,
including base salaries, annual bonus opportunities and grants of awards under
the Incentive Plan. These elements are blended to provide competitive pay,
reward achievement of financial and strategic objectives and align the
interests of the Company's executives with those of the Company's stockholders.
The Company maintains a compensation plan for executives that consists of
(i) base salary, (ii) annual incentive compensation through bonus opportunities
and (iii) long-term incentives, currently in the form of stock option grants.
The Company hired Towers Perrin in 1996 to review the Company's existing
executive compensation practices, and following such review, Towers Perrin
confirmed to the Company that such practices were consistent with the Company's
goal of attracting and retaining the best qualified executives.
BASE SALARY
The Committee established a base salary for each executive officer at
approximately the market median salary level for similar positions in
independent manufacturing companies with annual revenues generally comparable
to those of the Company. The Committee utilized four surveys selected by its
independent compensation consultant in determining the market median salary
levels and evaluated the job scope and content of each executive officer's
responsibilities. In some situations, general industrial companies were also
considered if their inclusion provided a more accurate comparison of job scope
for the executives.
ANNUAL INCENTIVE COMPENSATION
An annual cash bonus opportunity is awarded at the discretion of the
Committee. This bonus is designed to relate the executive's annual compensation
to overall corporate and individual performance. The bonus award is based on
goals established by the Committee that combine personal performance as well as
corporate performance during the bonus year. These goals are determined in the
first quarter of the bonus year. The calculation for the annual cash bonus
utilizes pooling and distribution formulas, tempered by the Committee's
judgment.
Corporate performance was judged based on a combination of earnings per
share (weighted at 60%) and the level of cash flow (weighted at 40%) generated
by the Company in 1996. Both earnings per share and cash flow were adjusted to
exclude extraordinary transactions such as the financial effect of the
acquisitions completed in 1996. Earnings per share was included in the
benchmark to reflect the effect of management's performance on stockholder
return. Free cash flow was utilized in the benchmark due to the continued
importance of cash flow in decreasing the financial leverage of the Company and
in providing funds to pursue the Company's growth strategies. Free cash flow
was defined as the sum of the Company's net cash provided by operating
activities and net cash used for investing activities, excluding any cash
related to the acquisitions completed in 1996. Two separate bonus pools were
generated, with the total bonus payment provided by the sum of the earnings per
share bonus pool and the cash flow bonus pool. Total pool outcomes accelerated
as performance levels increased, ranging from zero if cash flow was less than
$11.2 million and earnings per share was less than $1.13, to a maximum pool if
cash flow was at least $21.5 million and earnings per share was at least $1.50.
A distribution formula was used to allocate pool amounts to participants,
based on a share of the pool for each participant. The distribution formula was
derived from market median compensation data that reflects the median cash
bonus levels for executives at various levels of responsibility. Pooling and
distribution formulas are calibrated each year. The pooling and distribution
formulas for 1996 would have provided market median bonus payments if the
Company generated earnings per share of $1.32 in 1996 and $14.6 million of free
cash flow. Bonus payments at the 75th percentile of comparable companies
resulted from the $1.55 earnings per share (excluding the earnings provided by
the acquisitions) and $30.5 million of cash flow (excluding funds utilized in
completing the acquisitions) achieved in 1996.
10
<PAGE> 14
The Committee has the ability to vary formula outcomes to further reflect
the degree of achievement of personal performance goals and overall perceived
contributions by each participant. In reviewing individual contributions, the
Committee evaluated the performance of each executive against specific,
predetermined goals that had been agreed upon with respect to that executive.
This process did not involve the use of specific formulas or the assignment of
weights to specific factors. In making its determinations for executives other
than Mr. Centanni, the Committee also considered the advice and recommendation
of Mr. Centanni.
LONG-TERM INCENTIVES
Under the Incentive Plan, designated employees are eligible from time to
time to receive awards in the form of stock options, stock appreciation rights,
restricted stock grants or performance shares, as determined by the Committee.
The purpose of these awards is to promote the long-term financial interests of
the Company by encouraging employees to acquire an ownership position and to
provide incentives for specific employee performance. In selecting the
recipients and the size of awards, the Committee views each recipient's
opportunity for significant contribution to the Company's future growth and
profitability.
The Committee currently utilizes stock options to provide the named
executives and other key employees with incentives that are related to the
long-term performance of the Company. The specific number of stock options
granted to an executive is determined by the Committee, with the advice and
counsel of Mr. Centanni, based upon the individual's level of responsibility
and a subjective judgment by the Committee of the executive's contribution to
the financial performance of the Company. In 1996, the stock option grants fell
between the median and 75th percentile of grants for comparable companies in
recognition of a continued, but diminished, high leverage situation and to
provide higher payouts as stockholders achieve similar gains. Options are
granted at the average market price for the Common Stock on the date of grant
and have value only if the market price of the underlying Common Stock
appreciates. In 1996, the Committee granted options with 10-year terms.
Furthermore, since options are exercisable in cumulative increments of
one-third each year over a three-year period, the Committee believes options
provide an appropriate long-term incentive for those receiving grants, as well
as stability in the work force.
COMPENSATION OF CEO
Mr. Centanni's base salary in 1996 was determined as described above. His
annual bonus opportunity depends upon the corporate and his individual
performance. In considering Mr. Centanni's individual performance for purposes
of the annual bonus, the Committee considered the degree of achievement of
earnings per share and free cash flow goals established by the Committee as
well as individual goals agreed upon between the Committee and Mr. Centanni.
The completion of the acquisition of NORAMPTCO, Inc. and TCM Investments, Inc.,
new product development, and related achievements were carefully considered by
the Committee. The Committee did not assign weights or apply any formula to
these factors. In determining the 1996 stock option grant, the Committee
considered the median range of option grants for CEOs in comparable independent
companies as presented by Towers Perrin and set Mr. Centanni's grant between
the 50th and 75th percentile of the option grants presented.
OTHER
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the deductibility by public corporations of compensation paid
to specified executive officers. All compensation paid in 1996 to the Company's
executive officers qualified for deduction under Section 162(m).
Alan E. Riedel, Chairman
Thomas M. McKenna
11
<PAGE> 15
STOCK PERFORMANCE GRAPH
The Common Stock of the Company was registered under the Securities
Exchange Act of 1934 effective March 31, 1994 and trading of such Common Stock
began April 18, 1994, on a when-issued basis. The following table compares the
cumulative total stockholder return for the Company's Common Stock on a
quarterly basis through December 31, 1996 to the cumulative total returns for
the same periods of (a) the Standard & Poor's 500 Stock Index; and (b) the
Standard and Poor's MidCap Index for Manufacturing (Specialized Industries), a
pre-established industry index believed by the Company to have a peer group
relationship with the Company. All information presented assumes the
reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
03/31/94 06/30/94 09/30/94 12/31/94 03/31/95 06/30/95 09/30/95 12/31/95 03/31/96 06/30/96 09/30/96 12/31/96
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gardner Denver $100 $88 $96 $100 $112 $175 $170 $190 $237 $264 $305 $342
S&P 500 $100 $100 $105 $105 $116 $127 $137 $145 $153 $160 $164 $178
MidCap Specialized $100 $93 $96 $95 $104 $110 $115 $116 $124 $128 $134 $148
<FN>
<F1> The cumulative total return on the Company's Common Stock is reflected to
begin as of the effective date of its registration under the Securities
Exchange Act of 1934, March 31, 1994, but is based on the closing price of
the first date of trading, April 18, 1994. Comparative cumulative total
return data is calculated based on an investment on April 1, 1994.
</TABLE>
EMPLOYEE AND EXECUTIVE BENEFIT PLANS
In addition to the Incentive Plan discussed elsewhere in this Proxy
Statement and the group health, hospitalization and life insurance plans
generally available to all employees, the Company also provides the following
plans for the benefit of employees and executive officers.
SAVINGS PLAN
The Savings Plan, which is intended to qualify under Section 401(k) of the
Code, is administered by the Management Development and Compensation Committee
of the Board of Directors. All employees, including officers of the Company,
are eligible to participate in the Savings Plan, except that employees covered
by a collective bargaining agreement may participate only if such agreement
specifically provides for participation in the Savings Plan. Under the Savings
Plan, each participating employee may elect to reduce his or her salary by up
to 16%, subject to certain limitations set forth in the Code, and have such
amount contributed to the Savings Plan. The Company makes matching
contributions to the Savings Plan in an amount equal to 100% of each such
participant's elective contributions up to 3% of such participant's
compensation, and in an amount equal to 50% of each participant's elective
contributions over 3% and up to 6% of the participant's annual compensation.
Contributions by participants in excess of 6% of annual compensation are not
matched by the Company. The Company maintains a Supplemental Excess Defined
Contribution Plan that provides to certain employees (including those named in
the Summary
12
<PAGE> 16
Compensation Table) benefits of the Savings Plan that cannot be provided by a
qualified defined contribution plan due to Code provisions.
A participant's elective contributions and the Company's matching
contributions are fully vested when they are made. Participants are able to
direct the investment of their contributions among four investment funds, while
the Company's matching contributions must be invested in Common Stock of the
Company.
RETIREMENT PLANS
The Company maintains the Gardner Denver Machinery Inc. Retirement Plan
(the "Retirement Plan") and the Gardner Denver Machinery Inc. Supplemental
Excess Defined Benefit Plan (the "Excess Defined Benefit Plan") for the
benefit of all salaried employees and certain hourly employees as defined in
the Retirement Plan.
Under the Retirement Plan, the Company credits 4% of total compensation
paid up to the Social Security wage base for the year, plus 8% of total
compensation paid exceeding the Social Security wage base, annually to each
individual's account. For this purpose, total compensation is cash remuneration
paid during the year by the Company to or for the benefit of a participant in
the Gardner Denver Retirement Plan, including base salary for the current year
and annual cash bonus earned during the prior year but paid in the current
year.
Employees who were formerly employees of Cooper were credited in the
Retirement Plan for service while employed by Cooper. Benefits for service
through December 31, 1993 were determined under the Cooper Salaried Employees'
Retirement Plan then in effect and converted to initial balances under the
Retirement Plan. Funds equal to the actuarial value of accrued liabilities for
all participants plus a pro rata portion of the Cooper plan excess assets were
transferred from the Cooper pension trust to a trust established by Gardner
Denver for the Retirement Plan. Benefits at retirement are payable, as the
participant elects, in the form of an escalating annuity, a level annuity with
or without survivorship, or a lump-sum payment. The Company will contribute to
a trust fund sufficient to meet the minimum requirements under the Code to
maintain the status of the plan as a qualified defined benefit plan.
The Company also maintains the Excess Defined Benefit Plan which is a
nonqualified plan providing certain employees, including those named in the
Summary Compensation Table, Gardner Denver Retirement Plan benefits that cannot
be paid from a qualified, defined benefit plan due to provisions of the Code.
The Excess Defined Benefit Plan is funded through contributions by the Company
to a Rabbi Trust.
For each of the individuals shown in the Summary Compensation Table, the
following table shows current credited years of service, the year each attains
age 65, and the projected annual pension benefit (including amounts payable
under the Excess Defined Benefit Plan) at age 65. The projected annual pension
benefit assumes that benefits will be paid on a straight-life annuity basis,
compensation for each executive officer continues at December 31, 1996 base
salary levels plus an annual cash bonus equal to the average cash bonus
received by each officer in 1996 and 1995, and an interest rate of 6.0%.
<TABLE>
<CAPTION>
YEARS OF
CREDITED YEAR
SERVICE AS OF INDIVIDUAL ESTIMATED ANNUAL
MARCH 1, 1997 REACHES AGE 65 BENEFIT AT AGE 65
------------- -------------- -----------------
<S> <C> <C> <C>
Ross J. Centanni............................... 17 2010 $150,780
J. Dennis Shull................................ 21 2014 76,488
Philip R. Roth................................. 0 2016 46,344
Jay R. Buehler................................. 1 2008 39,120
Roger A. Finnamore............................. 15 2009 50,112
</TABLE>
MANAGEMENT CONTINUITY AGREEMENTS
The Company has a Management Continuity Agreement (the "Agreement") with
each of the individuals named in the Summary Compensation Table. The purpose of
the Agreement is to encourage each of the executive officers to continue to
carry out his duties in the event of a possible change in control of the
Company.
Benefits are payable under the Agreement only if a "Change of Control"
has occurred and within two years the officer's employment is terminated (a) by
the Company or its successor for reasons other than "cause," or
13
<PAGE> 17
(b) voluntarily by the officer for "good reason," in each case as defined in the
Agreement. A "Change of Control" will be deemed to have occurred if either
(i) any person or group acquires beneficial ownership of 20% of the voting
securities of the Company, (ii) there is a change in the composition of a
majority of the Board of Directors within any two-year period which change is
not approved by certain of the directors who were directors at the beginning of
such two-year period, or (iii) a change in control (as such term is used in
Schedule 14A promulgated under the Securities Exchange Act of 1934) otherwise
occurs. The principal benefits to be provided to the officers under the
Agreements are (i) a lump sum payment equal to a year's compensation (base
salary and incentive compensation) multiplied by a factor of two, and (ii)
continued participation in the Company's other employee benefit programs for two
years following termination, but not beyond age 65.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company employed Arthur Andersen LLP ("Arthur Andersen") to perform
the annual audit and to render other services for 1996, and the Board of
Directors has reappointed Arthur Andersen to render these same services in
1997. Representatives of Arthur Andersen will be present at the meeting and
will be available to answer questions and discuss matters pertaining to the
Report of Independent Public Accountants contained in the 1996 Annual Report to
Stockholders, which accompanies this Proxy Statement. Representatives of Arthur
Andersen will have the opportunity to make a statement, if they desire to do
so.
STOCKHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
Stockholders' proposals intended to be presented at the 1998 Annual Meeting
must be received by the Company at its principal executive offices (Attention:
Corporate Secretary) on or before November 26, 1997 for inclusion in the proxy
statement and the form of proxy for that meeting. Such proposals may be made
only by persons who are stockholders, beneficially or of record, on the date
the proposal is submitted and who continue in such capacity through the meeting
date, of at least 1% or $1,000 in market value of securities entitled to be
voted at the meeting, and have held such securities for at least one year.
GARDNER DENVER MACHINERY INC.
Helen W. Cornell
Vice President, Corporate Secretary
March 26, 1997
14
<PAGE> 18
GARDNER DENVER MACHINERY INC.
COMMON STOCK
PROXY/VOTING INSTRUCTIONS SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1997
The undersigned (the "stockholder"), having received the Notice and Proxy
Statement for the Annual Meeting of Stockholders, appoints Ross J. Centanni,
Philip R. Roth and Helen W. Cornell, and each or any of them, as proxies with
full power of substitution, to represent the stockholder and to vote all
shares of Common Stock of Gardner Denver Machinery Inc. which the stockholder
is entitled to vote at the Annual Meeting of Stockholders of the Company, to
be held at The Holiday Inn Quincy, 201 South Third Street, Quincy, Illinois
on Tuesday, May 6, 1997 at 1:30 p.m., local time, and any and all
adjournments of the meetings, in the manner specified.
Should any other matter requiring a vote of the stockholders arise, the proxies
named above are authorized to vote in accordance with their best judgment in
the interest of the Company. The Board of Directors is not aware of any matter
which is to be presented for action at the meeting other than as set forth
on this card.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR OTHERWISE TO P.O. BOX 8615, EDISON, NEW JERSEY,
08818-9123. IF YOU DO NOT SIGN AND RETURN A PROXY OR ATTEND THE MEETING AND
VOTE BY BALLOT, YOUR SHARES CANNOT BE VOTED.
Comments:
--------------------------------------------
- -----------------------------------------------------
- ----------------------------------------------------- -----------
(If you have written in the above space, please mark the SEE REVERSE
"comments" box on the reverse side of the card.) SIDE
-----------
- --------------------------------------------------------------------------------
[ARROW] DETACH PROXY CARD [ARROW]
Gardner
--------- [LOGO]
Denver
<PAGE> 19
/X/ PLEASE MARK YOUR 2656
VOTE AS IN THIS
EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" PROPOSAL 1.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES.
- -------------------------------------------------------------------------------
1. Election of FOR WITHHELD Two Directors are to be elected at the
Directors. / / / / meeting. The nominees of the Board of
Directors are:
Ross J. Centanni and Alan E. Riedel.
To withhold your vote for any nominee(s), write name(s) here:
- ------------------------------------------------------------
- -------------------------------------------------------------------------------
Comments (see reverse) / /
I plan to attend the annual / /
meeting.
Please sign exactly as name or names appear
on this proxy card. Executors, administrators,
trustees, or other representatives should so
indicate when signing. If a corporation,
please sign in corporate name by president or
other authorized officer.
---------------------------------------------
---------------------------------------------
Signature(s) of Stockholder(s) Date
- --------------------------------------------------------------------------------
[ARROW] FOLD AND DETACH HERE [ARROW]
GARDNER DENVER MACHINERY INC.
ANNUAL MEETING OF STOCKHOLDERS
ADMISSION TICKET
MAY 6, 1997, 1:30 P.M.
HOLIDAY INN QUINCY
201 SOUTH THIRD STREET
QUINCY, ILLINOIS 62301
================================================================================
AGENDA
* Call to order
* Introduction of Directors and Officers
* Nomination and Voting for Directors
* President's Report
* General Question and Answer Period
================================================================================
THIS IS YOUR PROXY. YOUR VOTE IS IMPORTANT. IT IS IMPORTANT THAT YOUR SHARES ARE
REPRESENTED AT THIS MEETING, WHETHER OR NOT YOU ATTEND THE MEETING IN PERSON. TO
MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU TO COMPLETE AND MAIL THE
PROXY CARD ABOVE.
<PAGE> 20
Appendix
Page 12 of the printed proxy contains a stock performance
graph. The information contained in the graph is depicted in the
table that immediately follows the graph.
