<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.
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(Name of Registrant as Specified in Its Charter)
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(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:
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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> 2
GARDNER
- ----------
DENVER
March 27, 1998
TO OUR STOCKHOLDERS:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders on Tuesday, May 5, 1998 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 by proxy. Your support is appreciated, and we hope that you will
be able to join us at the May 5 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,
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 1998 ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the 1998 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 5, 1998, at
1:30 p.m., for the following purposes:
1. To elect two directors for a three-year term each; and
2. To amend the Company's certificate of incorporation to change the
corporate name to "Gardner Denver, Inc."; and
3. 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 13, 1998, 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 27, 1998
RETURN OF PROXIES REQUESTED
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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 27, 1998. The record date for determining the
stockholders entitled to vote at the meeting was the close of business on
March 13, 1998 (the "Record Date"). On that date, the outstanding voting
securities of the Company were 16,004,753 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 with respect to items brought before the meeting, 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 with respect to items brought before
the meeting, 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 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 Bankers Trust Company, 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 or 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 paid 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
six, divided into three classes, with each class having two members. 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 5, 1998, the Board of Directors has approved the nominations of
Frank J. Hansen and Thomas M. McKenna, who are currently directors, each to
serve for a three-year term expiring in 2001. 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 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 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:
NOMINEES FOR ELECTION
FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] FRANK J. HANSEN, age 56, has been a director of Gardner
Denver since June 1997. He has been President, Chief
Operating Officer and a member of the Board of Directors of
IDEX Corporation ("IDEX"), a publicly held manufacturer of
proprietary fluid handling and industrial products, since
January 1998. Mr. Hansen was previously Senior Vice
President of IDEX from July 1994 until his promotion. From
June 1989 to July 1994, he was President of IDEX's Viking
Pump Business Unit. Mr. Hansen has a B.S. degree in
Business Administration from Portland State University.
[PHOTO] THOMAS M. MCKENNA, age 60, has been a director of Gardner
Denver since its spin-off from Cooper Industries, Inc.
("Cooper") in April 1994. He was President and Chief
Executive Officer of Moorman Manufacturing Company
("Moorman"), a privately held manufacturer of agricultural
supplies, from August 1993 until January 1998. 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. On
December 30, 1997, Moorman was acquired by Archer Daniels
Midland Company. 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.
2
<PAGE> 6
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE MEETING
TERMS EXPIRING AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] DONALD G. BARGER, JR., age 55, has been a director of
Gardner Denver since its spin-off from Cooper in April
1994. He has been Vice President, Chief Financial 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 engineered steel bars, aluminum
flat-rolled products, and engineered, fabricated-metal
products.
[PHOTO] MICHAEL J. SEBASTIAN, age 67, has been a director of
Gardner Denver since its incorporation in November 1993.
He was previously Executive Vice President of 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.
TERMS EXPIRING AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] ALAN E. RIEDEL, age 67, has been Chairman of the Board of
Directors of Gardner Denver since its incorporation in
November 1993. Mr. Riedel was previously Vice Chairman of
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; and The Standard Products
Company, a publicly held manufacturer of rubber and plastic
parts for the automotive industry. 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 1997 and continues to render such services
to the Company.
[PHOTO] ROSS J. CENTANNI, age 52, has been President and Chief
Executive Officer and a director of Gardner Denver since
its incorporation in November 1993. Prior to 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 Denman
Services, Inc., a privately held supplier of medical
products.
3
<PAGE> 7
COMMITTEES, COMPENSATION AND GOVERNANCE OF
THE BOARD OF DIRECTORS
The Company's Board of Directors held six meetings during 1997. The
Board has a standing Audit and Finance Committee and a standing Management
Development and Compensation Committee, each composed exclusively of
nonemployee directors. During 1997, each director attended at least 75% of
the meetings of the Board and 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, Frank J. Hansen and Michael J. Sebastian, held three
meetings during 1997. 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; 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; review
the scope and results of the Company's internal control activities; 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; hold conferences and reviews with the auditors as may be deemed
desirable by either the Audit and Finance Committee, the auditors or
management, and report to the Board the results of such reviews and
conferences; monitor compliance with the Company's Corporate Conflicts of
Interest and Ethical Conduct Policy; review information concerning
environmental, legal and other matters which may represent material financial
exposure; and 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 1997. 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; review and consult with the Chief Executive Officer concerning
the selection of officers of the Company and 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; administer the Incentive Plan, including amendments and
restatements as appropriate; and 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 $1,250 per meeting for board meetings and $1,000 per meeting for
committee meetings. Directors are also reimbursed for reasonable expenses
incurred in connection with attending board and committee meetings.
The Gardner Denver Machinery Inc. Phantom Stock Plan for Outside
Directors (the "Phantom Stock Plan") has been established 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 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
4
<PAGE> 8
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 13, 1998:
<TABLE>
<CAPTION>
PHANTOM STOCK
NAME UNITS
---- -------------
<S> <C>
Donald G. Barger, Jr. 560
Frank J. Hansen 133
Thomas M. McKenna 2,355
Alan E. Riedel 4,269
Michael J. Sebastian 441
-----
Total 7,758
</TABLE>
Under the Incentive Plan, each nonemployee director is automatically
granted options to purchase 3,000 shares of the Company's Common Stock on the
date immediately following the Annual Meeting of Stockholders. 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. Under the terms of the Incentive Plan, the size of the annual option
grant and outstanding awards were appropriately adjusted as a result of the
two-for-one split of the Company's Common Stock on January 15, 1997 and the
three-for-two split on December 29, 1997.
CORPORATE GOVERNANCE
The Company's Board of Directors has 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 CEO 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 13, 1998, 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 1997 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. 17,400 <F3>,<F4> <F*>
Ross J. Centanni 345,166 <F3>,<F5> 11,540 2.2%
Frank J. Hansen 900 <F*>
Thomas M. McKenna 15,300 <F3> <F*>
Alan E. Riedel 65,298 <F3>,<F6> <F*>
Michael J. Sebastian 35,469 <F3> <F*>
NAMED EXECUTIVE OFFICERS (NOT DIRECTORS)
J. Dennis Shull 119,026 <F3>,<F7> 4,881 <F*>
Philip R. Roth 20,000 <F3> 1,245 <F*>
David Brown -0- 137 <F*>
Roger A. Finnamore 107,663 <F3> 4,033 <F*>
All directors and executive officers
as a group 906,324 <F3>,<F4>,<F5>,<F6>,<F7> 28,701 5.6
<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 13, 1998, as follows:
15,000 shares for Mr. Barger; 285,601 shares for Mr. Centanni;
14,600 shares for Mr. McKenna; 3,000 shares for Mr. Riedel, 3,000
shares for Mr. Sebastian; 60,750 shares for Mr. Shull; 9,300
shares for Mr. Roth; 59,501 shares for Mr. Finnamore; and 583,527
shares for the group.
<F4> Includes 150 shares owned by Mr. Barger's son, as to which Mr. Barger
shares voting and investment power.
<F5> Includes 4,062 shares owned by Mr. Centanni's wife and children, as to
which Mr. Centanni shares voting and investment power.
6
<PAGE> 10
<F6> Includes 300 shares owned by Mr. Riedel's wife, as to which Mr. Riedel
shares voting and investment power and 7,000 shares held in an IRA/Keough
account.
<F7> Includes 684 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 1,869,675 <F1> 11.7%
437 Madison Avenue
New York, New York
Harris Associates L.P. 1,279,200 <F2> 8.0%
Two North LaSalle Street
Chicago, Illinois
Ira Sochet 1,081,494 <F3> 6.8%
9350 South Dixie Highway
Miami, Florida
<FN>
<F1> Based on Schedule 13G filing, dated as of February 9, 1998, made by
First Manhattan Company ("First Manhattan"). First Manhattan
reported that it has sole voting and sole investment powers with
respect to 217,800 shares, shared voting power as to 1,639,575 shares
and shared investment power as to 1,651,875 shares. Of the shares
beneficially owned, 505,200 shares are owned by family members of
General Partners of First Manhattan. With respect to these 505,200
shares, First Manhattan disclaims beneficial ownership as to 30,000
shares and disclaims investment power as to 475,200 shares.
<F2> Based on Schedule 13G filing, dated as of January 29, 1998, made by
Harris Associates, L.P. 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 1,279,200
shares.
<F3> Based on written confirmation dated as of February 3, 1998, made by
Mr. Ira Sochet. Mr. Sochet previously filed an amended Schedule 13D,
dated as of February 5, 1997, reporting that he has sole voting and
investment powers with respect to all shares of Common Stock
beneficially owned at that time.
</TABLE>
7
<PAGE> 11
EXECUTIVE MANAGEMENT COMPENSATION
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 1997.
<TABLE>
TABLE 1
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-----------------
NAME AND ANNUAL COMPENSATION SECURITIES
PRINCIPAL ------------------------ UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#)<F1> COMPENSATION ($)<F2>
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ross J. Centanni 1997 $325,833 $420,000 45,000 $31,313
President & CEO 1996 275,000 370,000 90,001 28,575
1995 250,000 360,000 135,001 16,650
Philip R. Roth 1997 185,000 150,000 15,001 13,275
Vice President, 1996 114,577 110,000 45,001 5,156
Finance & CFO <F3>
J. Dennis Shull 1997 150,000 140,000 11,251 11,925
Vice President & 1996 137,333 115,000 18,000 10,905
General Manager, 1995 128,283 105,000 45,000 7,213
Compressor & Pump Division
David Brown 1997 74,423 125,000 22,501 3,349
Vice President &
General Manager,
Blower Division <F3>
Roger A. Finnamore 1997 119,500 80,000 7,501 8,753
Vice President, 1996 114,000 75,000 18,000 9,180
Manufacturing Services 1995 108,600 90,000 45,000 6,173
& Technology
<FN>
<F1> The Company effected a two-for-one stock split of its Common Stock on
January 15, 1997, and a three-for-two stock split on December 29,
1997. Long term compensation awards have been restated to reflect
the effect of these stock splits.
<F2> Amounts under "All Other Compensation" reflect the Company's
contribution on behalf of each of the named executive officers to the
Savings Plan and the related Excess Defined Contribution Plan.
<F3> Mr. Roth became an executive officer when he joined the Company in May
1996. Mr. Brown became an executive officer when he joined the
Company in August 1997. In accordance with applicable SEC rules,
information is not provided for years prior to the years during which
these gentlemen became executive officers of the Company.
</TABLE>
8
<PAGE> 12
<TABLE>
TABLE 2
OPTION GRANTS IN 1997
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
- ---------------------------------------------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM <F4>
OPTIONS EMPLOYEES PRICE EXPIRATION -----------------------
NAME GRANTED (#) <F1>,<F2> IN 1997 ($/SH) <F2>,<F3> DATE <F1> 5% ($) 10% ($)
---- --------------------- ---------- ---------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ross J. Centanni 45,000 28% $16.79 03/03/02 $208,766 $461,318
Philip R. Roth 15,001 9 16.79 03/03/02 69,593 153,783
J. Dennis Shull 11,251 7 16.79 03/03/02 52,196 115,340
David Brown 22,501 14 22.44 08/04/02 139,485 308,226
Roger A. Finnamore 7,501 5 16.79 03/03/02 34,799 76,897
<FN>
<F1> These options have a five-year term from the date of grant and are
exercisable in increments of one-third each on the first, second and
third annual anniversary dates following the date of grant.
<F2> The Company effected a three-for-two split of its Common Stock on
December 29, 1997. The number of securities underlying options
granted and the exercise prices have been restated to reflect the
stock split.
<F3> The exercise price is equal to the average of the high and low price
of the Company's Common Stock on the respective date of grant.
<F4> Potential realizable value is based on an assumption that the market
price of the stock appreciates at the stated rate, compounded
annually, from the date of grant until the end of the five-year
option term. These values are calculated based on requirements
promulgated by the Securities and Exchange Commission and are not
intended to reflect future stock price appreciation for the Company's
Common Stock.
</TABLE>
<TABLE>
TABLE 3
AGGREGATED OPTION EXERCISES IN 1997
AND DECEMBER 31, 1997 OPTION VALUES<F1>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1997 (#) AT DECEMBER 31, 1997 ($) <F3>
SHARES ACQUIRED VALUE ------------------------- -----------------------------
NAME ON EXERCISE (#) RECEIVED ($)<F2> EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ross J. Centanni 5,400 $ 97,312 195,599 150,003 $4,039,282 $2,273,185
Philip R. Roth 6,900 81,218 8,100 45,002 125,550 584,398
J. Dennis Shull 1,500 33,875 88,500 38,251 1,873,126 599,540
David Brown -0- -0- -0- 22,501 -0- 52,034
Roger A. Finnamore 15,000 249,218 60,000 34,501 1,253,251 569,696
<F1> The Company effected a three-for-two split of its Common Stock on
December 29, 1997. The number of shares acquired on exercise, the
number of securities underlying unexercised options and the related
exercise prices have been adjusted to reflect the stock split.
<F2> The value received for shares acquired on exercise in 1997 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 price.
<F3> The value of the unexercised in-the-money options at December 31, 1997
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, 1997, 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. Annually,
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 Frederic W. Cook & Co., Inc. ("Cook & Co.")
in 1997 to review the Company's existing executive compensation practices and
mix of pay, i.e., salary, bonus and long-term incentive, for competitiveness
with peer companies and with a broad group of manufacturing companies. Cook
& Co. 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 establishes 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. In 1997, the Committee utilized four surveys
selected by its independent compensation consultant in determining the market
median salary levels for each executive officer. Cook & Co. also provided
specific comparisons of several peer companies' compensation practices for
each company's CEO and four most highly compensated officers.
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
of the annual cash bonus utilizes a target bonus concept, tempered by the
Committee's judgment. A target bonus, expressed as a percentage of annual
base salary, is specified for each executive officer, corresponding to median
cash bonus payments made by comparable companies included in the compensation
surveys utilized by the Committee.
Corporate performance was judged based on a combination of diluted
earnings per share (weighted at 60%) and the level of cash flow (weighted at
40%) generated by the Company in 1997. Both diluted earnings per share and
cash flow were adjusted to exclude extraordinary transactions such as the
financial effect of the acquisition completed in 1997 and cash spent on the
relocation of the centrifugal blower manufacturing operation from Syracuse,
New York to Peachtree City, Georgia, since these projects were not known at
the time bonus targets were determined. Diluted 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 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 acquisition completed
in 1997 and cash spent for the new manufacturing facility in Georgia. Bonus
payments increase as performance levels increase, and could range from zero
if cash flow was less than $16.5 million and diluted earnings per share was
less than $1.19, to a maximum payment if cash flow was at least $24.4 million
and diluted earnings per share was at least $1.67. The maximum bonus
payment, which is 250% of the median cash bonus payment for comparable size
companies, results in total cash compensation in the 75th percentile or
higher for the executive officers.
The bonus payments for 1997 would have provided market median
compensation if the Company had generated diluted earnings per share of $1.45
in 1997 and $18.5 million of free cash flow. Maximum bonus payments
resulted from the $1.69 diluted earnings per share (excluding the earnings
provided by the acquisition) and $28.9 million of
10
<PAGE> 14
cash flow (excluding funds utilized in completing the acquisition and capital
spent on the new manufacturing facility) achieved in 1997.
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 1997, the stock option grants
approximated the median grants for comparable companies. 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 1997, the Committee granted options with 5-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 1997 was determined as described above.
His annual bonus opportunity depended 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 diluted 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 implementation of SAP, an
enterprise-wide, fully integrated software system; integration of recent
acquisitions; 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 1997 stock option grant, the
Committee considered the median range of option grants for CEOs in comparable
independent companies as presented by Cook & Co. 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 1997 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 an annual basis through December 31, 1997 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 12/30/94 12/29/95 12/31/96 12/31/97
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gardner Denver $100 $100 $190 $342 $759
S&P 500 100 105 145 178 238
MidCap Specialized 100 95 116 148 165
- -------------------------------------------------------------------------
<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 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 Compensation Table)
benefits of the Savings Plan that cannot be provided by a qualified defined
contribution plan due to Code provisions.
12
<PAGE> 16
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 eight 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. Pension Plan
(the "Pension 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 Pension Plan.
Under the Pension 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 Pension 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
Pension Plan for service while employed by Cooper. Benefits for service
through December 31, 1993 were determined under the Cooper Salaried
Employees' Pension Plan then in effect and converted to initial balances
under the Pension 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 Pension 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. The
Excess Defined Benefit Plan is a nonqualified plan providing certain
employees, including those named in the Summary Compensation Table, Pension
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, 1997 base salary levels plus an annual cash bonus equal to the average
cash bonus received by each officer in 1997 and 1996, and an interest rate of
6.0%.
<TABLE>
<CAPTION>
YEARS OF
CREDITED YEAR
SERVICE AS OF INDIVIDUAL ESTIMATED ANNUAL
MARCH 13, 1998 REACHES AGE 65 BENEFIT AT AGE 65
-------------- -------------- -----------------
<S> <C> <C> <C>
Ross J. Centanni 18 2010 $177,624
Philip R. Roth 1 2016 75,972
J. Dennis Shull 22 2014 88,908
David Brown -0- 2013 28,824
Roger A. Finnamore 16 2009 53,424
</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 (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
13
<PAGE> 17
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.
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO
CHANGE THE COMPANY'S NAME
On March 3, 1998, the Board of Directors of the Company adopted,
subject to approval by the stockholders of the Company, a proposed amendment
to the Company's Certificate of Incorporation, changing the name of the
Company from "Gardner Denver Machinery Inc." to "Gardner Denver, Inc." (the
"Amendment"). The Certificate of Incorporation, as amended, would otherwise
remain unchanged from its current form.
The purpose of the Amendment is to simplify the Company's name and
emphasize the widely recognized and historically significant Gardner Denver
trade name. The Company was originally part of the Gardner-Denver Company, a
publicly held corporation with roots back to 1859. In 1979, Cooper acquired
the Gardner-Denver Company and in 1985 established the predecessor to the
Company, the Gardner-Denver Industrial Machinery Division. The Company has
been known as Gardner Denver Machinery Inc. since November 1993 when Cooper
incorporated the Division as the Company. The Board of Directors believes
that the Gardner Denver trade name is of significant value to the Company and
that changing the corporate name will strengthen the Company's association
with its historical accomplishments and the quality reputation of its
products.
Approval of the Amendment requires the affirmative vote of a majority
of all of the Company's issued and outstanding shares of Common Stock.
Dissenting votes do not give rise to appraisal or other similar rights on the
part of dissenting stockholders. Stockholders are strongly urged to return
their proxies since abstentions and non-votes (i.e., shares held by brokers,
fiduciaries or other nominees which are not authorized to vote on the
Amendment) will have the same effect as votes against the Amendment.
The Board of Directors believes that the adoption of the Amendment
will be in the best interests of the stockholders and, accordingly,
recommends a vote FOR this proposal, which is Item 2 on the proxy card.
Proxies received in response to the Board's solicitation will be voted FOR
approval of the Amendment if no specific instructions are included for Item
2.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company employed Arthur Andersen LLP ("Arthur Andersen") to
perform the annual audit and to render other services for 1997, and the Board
of Directors has reappointed Arthur Andersen to render these same services in
1998. 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 1997 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 1999 ANNUAL MEETING
Stockholders' proposals intended to be presented at the 1999 Annual
Meeting must be received by the Company at its principal executive offices
(Attention: Corporate Secretary) on or before November 27, 1998 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 27, 1998
14
<PAGE> 18
GARDNER DENVER MACHINERY INC.
COMMON STOCK
PROXY/VOTING INSTRUCTIONS SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1998
P The undersigned (the "stockholder"), having received the Notice and
R Proxy Statement for the Annual Meeting of Stockholders, appoints Ross J.
O Centanni, Philip R. Roth and Helen W. Cornell, and each or any of them,
X as proxies, with full power of substitution, to represent the
Y 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 5, 1998
at 1:30 p.m., local time, and any and all adjournments of the meeting,
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 CAN NOT BE VOTED.
Comments:
----------------------------------------------
---------------
-------------------------------------------------------- SEE REVERSE
SIDE
-------------------------------------------------------- ---------------
(If you have written in the above space, please mark the "comments" box
on the reverse side of this card.)
* DETACH PROXY CARD *
GARDNER
---------
DENVER
STOCKHOLDER INFORMATION
CORPORATE OFFICES
Gardner Denver Machinery Inc.
1800 Gardner Expressway
Quincy, Illinois 62301-9464
(217) 222-5400
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, NJ 07303-2500
(800) 519-3111
(201) 324-1225
(201) 222-4955 (for the hearing impaired)
Email address: [email protected]
NEWS RELEASES BY FAX
News releases, including the quarterly earnings release, are available by
fax, without charge, by calling (800) 758-5804, extension 303875, or by
visiting our homepage at http:/www.gardnerdenver.com.
<PAGE> 19
PLEASE MARK YOUR
/X/ VOTE AS IN THIS
EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" PROPOSAL 1 AND PROPOSAL 2.
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES AND "FOR"
PROPOSAL 2.
- -------------------------------------------------------------------------------
Two Directors are to be elected at the meeting.
The nominees of the Board of Directors are:
Frank J. Hansen and Thomas M. McKenna.
For Withhold
1. Election of
Directors / / / /
To withhold your vote for any nominee(s), write the name(s) here:
- -----------------------------------------------------------------
For Against Abstain
2. Approval of Amendment to
Certificate of Incorporation to / / / / / /
Change Corporate Name to
"Gardner Denver, Inc."
- -------------------------------------------------------------------------------
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
* FOLD AND DETACH HERE *
GARDNER DENVER MACHINERY INC.
ANNUAL MEETING OF STOCKHOLDERS
ADMISSION TICKET
MAY 5, 1998, 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
* Voting for Proposed Amendment to Certificate of Incorporation
* 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 said graph is depicted in the table that follows
the graph.
