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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
GARDNER DENVER, INC.
..........................................................................
(Name of Registrant as Specified In Its Charter)
..........................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
.................................................................
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.:
.....................................................................
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[GARDNER DENVER LOGO]
March 24, 2000
TO OUR STOCKHOLDERS:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders on Tuesday, May 2, 2000 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, I 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. This year, three convenient ways to
vote your proxy are offered by Gardner Denver. If you are a
stockholder of record, you may use the toll-free telephone number on
the proxy card to vote your shares. You may also vote your shares
via the Internet by following the simple instructions on the proxy
card. If you prefer, simply complete, date, sign and return your
proxy card in the enclosed stamped and addressed envelope.
Regardless of your method of voting, you may revoke your proxy and
vote in person if you decide to attend the Annual Meeting. Your support
is appreciated, and we hope that you will be able to join us at the
May 2 meeting.
Cordially,
/s/ Ross J. Centanni
Ross J. Centanni
Chairman, President and
Chief Executive Officer
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GARDNER DENVER, INC.
1800 GARDNER EXPRESSWAY
QUINCY, ILLINOIS 62301
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
The 2000 Annual Meeting of Stockholders of Gardner Denver, Inc.
(the "Company") will be held at the Holiday Inn Quincy, 201 South
Third Street, Quincy, Illinois on Tuesday, May 2, 2000, at 1:30 p.m.
to elect three directors to serve for a three-year term each and
transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 10,
2000, are entitled to notice of and to vote at the meeting.
Stockholders of record may vote their proxy by completing the
enclosed proxy card, calling the toll-free number indicated on the
proxy card, or accessing the Internet website specified in the
instructions included on the proxy card. A stockholder may revoke a
proxy at any time before it is voted at the meeting by following the
procedures described in the attached Proxy Statement.
FOR THE BOARD OF DIRECTORS
Helen W. Cornell
Vice President, Corporate Secretary
Quincy, Illinois
March 24, 2000
RETURN OF PROXIES REQUESTED
--------------------------------------------------------
TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED
PROXY CARD, FOR WHICH A RETURN ENVELOPE IS
PROVIDED; CALL THE TOLL-FREE NUMBER INDICATED ON
THE ENCLOSED PROXY CARD; OR ACCESS THE INTERNET
WEBSITE SPECIFIED IN THE INSTRUCTIONS ON THE PROXY CARD.
--------------------------------------------------------
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GARDNER DENVER, INC.
1800 GARDNER EXPRESSWAY
QUINCY, ILLINOIS 62301
PROXY STATEMENT
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of
Gardner Denver, Inc. (the "Company" or "Gardner Denver") and will be
voted in accordance with the instruction given (either in a signed
proxy card or voted through the toll-free telephone or Internet
procedures described below) and 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. Two independent judges
from EquiServe, the Company's transfer agent, will tabulate the
votes cast at the Annual Meeting.
Stockholders of record may vote their proxy using the toll-free
number listed on the proxy card, via the Internet or they may
complete, sign, date and mail the enclosed proxy card in the postage
paid envelope provided. The telephone and Internet voting procedures
are designed to authenticate stockholders' identities. The
procedures allow stockholders to give their voting instructions and
confirm that their instructions have been properly recorded. The
Company has been advised by counsel that the procedures which have
been put in place are consistent with the requirements of applicable
law. Specific instructions to be followed by any stockholder of
record interested in voting by telephone or the Internet are set
forth on the enclosed proxy card.
This Proxy Statement and the enclosed proxy card were first
mailed to stockholders on or about March 24, 2000. The record date
for determining the stockholders entitled to vote at the meeting was
the close of business on March 10, 2000 (the "Record Date"). On that
date, the outstanding voting securities of the Company were
15,294,528 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, but will not be counted
as voting for or against the issue to which the abstention relates.
Brokers holding shares for beneficial owners must vote these
shares according to specific instructions received from the owner.
If specific instructions are not received, brokers may vote these
shares in their discretion on certain routine matters, such as the
election of directors. In certain instances, the New York Stock
Exchange rules preclude brokers from exercising their voting
discretion on certain proposals. In these cases, brokers may not
vote on the proposals when they do not receive specific instructions
from the beneficial owner, resulting in what is known as a "broker
non-vote." Any "broker non-vote" 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 card 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, Inc. Retirement Savings Plan (the
"Savings Plan"), the enclosed proxy card includes the number of
equivalent shares credited to your account. When your proxy is
returned properly signed, it will serve as direction to J.P.
Morgan/American Century(R) Retirement Plan Services, as Trustee (the
"Trustee") for the Savings Plan, to vote the shares held for your
account in accordance with your instructions. Your properly
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signed proxy will also serve as a direction to the Trustee to vote
all of the uninstructed shares credited to other participants'
accounts and shares not yet allocated to participants' accounts in
the same manner as you indicate. The Trustee will vote shares of
Common Stock for which no instructions are received and shares not
yet allocated to participants' accounts in the same proportion (for
or against) as the shares for which instructions are received from
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
Shareholder Communications 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.
ELECTION OF DIRECTORS
The authorized number of directors of the Company is presently
fixed at eight, divided into three classes, with two classes having
three members and one class having two members. 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 2, 2000, the Board of Directors has approved the
nominations of Ross J. Centanni, Alan E. Riedel and Richard L.
Thompson, who are currently directors, to serve for a three-year
term expiring in 2003. 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 vote your proxy through a signed proxy
card or by using the telephone or Internet procedures available, 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 any one 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 any 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
TERMS EXPIRING AT THE 2003 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] ROSS J. CENTANNI, age 54, has been President and Chief
Executive Officer and a director of Gardner Denver since its
incorporation in November 1993. He has been Chairman of
Gardner Denver's Board of Directors since November 1998.
Prior to Gardner Denver's spin-off from Cooper Industries,
Inc. ("Cooper"), he was Vice President and General Manager
of Gardner Denver's predecessor, the Gardner-Denver
Industrial Machinery Division (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 Esterline Technologies, a publicly held
manufacturer of components for avionics, propulsion and
guidance systems, and Denman Services, Inc., a privately
held supplier of medical products. He is also a member of
the Board of Trustees of Quincy University.
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[PHOTO] ALAN E. RIEDEL, age 69, has been a director of Gardner
Denver since its incorporation in November 1993 and served
as Chairman of the Board of Directors from November 1993
until November 1998. Mr. Riedel was previously Vice Chairman
of Cooper from August 1992 until his retirement in March
1994. From 1973 until 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 Factory Mutual Insurance Company and
Belden Inc., a publicly held manufacturer of electronic and
electrical wire and cable. 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
1999 and continues to render such services to the Company.
Mr. Riedel will retire from the Board of Directors on August
1, 2000, in accordance with the Company's retirement policy
for directors contained in its Corporate Governance policy.
[PHOTO] RICHARD L. THOMPSON, age 60, was elected to the Gardner
Denver Board of Directors in November 1998. Mr. Thompson is
a Group President and Executive Office Member of Caterpillar
Inc. ("Caterpillar"), with administrative responsibility for
the gas turbine and reciprocating engine business, as well
as corporate research and development activities. Mr.
Thompson has held advancing levels of responsibility within
Caterpillar since joining the company in 1983. Mr. Thompson
earned a B.S. in electrical engineering and an M.B.A. from
Stanford University and has completed the Caterpillar
Advanced Management Program. Mr. Thompson presently serves
on the Boards of Directors of Hindustan Powerplus Ltd.,
Lennox International, Inc. and Proctor Community Hospital.
He is also a member of the Russian Academy of
Transportation.
DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE MEETING
TERMS EXPIRING AT THE 2001 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] FRANK J. HANSEN, age 58, has been a director of Gardner
Denver since June 1997. He has been President and Chief
Executive Officer of IDEX Corporation ("IDEX"), a publicly
held manufacturer of proprietary fluid handling and indus-
trial products, since April 1999. Mr. Hansen was previously
Senior Vice President of IDEX from July 1994 until January
1998 when he was promoted to President and Chief Operating
Officer. Upon his promotion in 1998, Mr. Hansen was also ap-
pointed to the IDEX Board of Directors. 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, and also
serves as a director of the Oakton Community College
Educational Foundation.
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[PHOTO] THOMAS M. MCKENNA, age 62, has been a director of Gardner
Denver since its spin-off from Cooper in April 1994.
Mr. McKenna is the President of United Sugars Corporation, a
marketing cooperative which is one of the nation's largest
sugar marketers to both the industrial and retail markets, a
position he has held since December 1998. 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.
TERMS EXPIRING AT THE 2002 ANNUAL MEETING OF STOCKHOLDERS
[PHOTO] DONALD G. BARGER, JR., age 57, has been a director of
Gardner Denver since its spin-off from Cooper in April 1994.
He has held the position of Vice President and Chief
Financial Officer of Hillenbrand Industries Inc.
("Hillenbrand"), a publicly traded holding company serving
healthcare and funeral services, since March 1998. He served
as Vice President, Chief Financial Officer of Worthington
Industries, Inc. ("Worthington"), a publicly held
manufacturer of metal and plastic products and processed
steel products, from September 1993 until joining
Hillenbrand. From 1986 until joining Worthington in 1993,
Mr. Barger was Vice President-Controller of The BF Goodrich
Company, a publicly held manufacturer of aerospace and
specialty chemicals and plastics. 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] RAYMOND R. HIPP, age 57, has been a director of Gardner
Denver since November 1998. Mr. Hipp serves as Chairman,
President and CEO of Alternative Resources Corporation
("ARC"), a provider of information technology staffing and
component outsourcing, a position he has held since August
1998. From August 1996 until joining ARC, Mr. Hipp was the
President and CEO of ITI Marketing Services, Inc., a
teleservices provider. Mr. Hipp was President of Comdisco
Disaster Recovery Services, Inc., a wholly-owned subsidiary
of Comdisco, Inc. ("Comdisco"), from 1980 until 1994. From
1984 to 1992, Mr. Hipp also served as the Senior Vice
President of Comdisco. He was Executive Vice President and a
director of Comdisco from 1992 until 1994. Mr. Hipp has a
B.S. degree from Southeast Missouri State University and is
a director of ARC.
[PHOTO] MICHAEL J. SEBASTIAN, age 69, 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, centrifugal and gas compressors,
reciprocating engines and turbochargers, and Quanex.
Mr. Sebastian will retire from the Board of Directors on August
1, 2000, in accordance with the Company's retirement policy
for directors contained in its Corporate Governance Policy.
4
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COMMITTEES, COMPENSATION AND GOVERNANCE OF
THE BOARD OF DIRECTORS
The Company's Board of Directors (the "Board") held five
meetings during 1999. The Board has a standing Audit and Finance
Committee and a standing Management Development and Compensation
Committee, each composed exclusively of nonemployee directors.
During 1999, each director attended all 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, Raymond R. Hipp and Michael
J. Sebastian, held three meetings during 1999. 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; 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, Thomas M. McKenna and Richard
L. Thompson, held three meetings during 1999. 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; 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. Additionally, 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, 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 $7,000 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
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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, or in a single payment on a predetermined date within
one year after he ceases to be a director, 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 thirty 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 10, 2000:
PHANTOM STOCK
NAME UNITS
---- -------------
Donald G. Barger, Jr.................... 1,731
Raymond R. Hipp......................... 766
Frank J. Hansen......................... 594
Thomas M. McKenna....................... 5,611
Alan E. Riedel.......................... 8,089
Michael J. Sebastian.................... 902
Richard L. Thompson..................... 1,602
------
Total............................... 19,295
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 (or upon retirement, death or cessation of
service due to disability, if earlier), and expire five years from
the date of grant, subject to prior termination under the terms of
the Incentive Plan. The exercise price of these options is the fair
market value of the Common Stock on the date of grant.
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.
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SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The Company maintains Stock Ownership Guidelines for its
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
executive officer 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 ("Excess Defined Contribution Plan") are
considered in determining compliance with these guidelines.
The following table sets forth, as of March 10, 2000,
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 1999
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 December 31, 1999
(except as otherwise 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........................................ 23,400<F3>,<F4> <F*>
Ross J. Centanni............................................ 371,232<F3>,<F5> 16,251 2.5%
Frank J. Hansen............................................. 8,900<F3> <F*>
Raymond R. Hipp............................................. 6,000<F3> <F*>
Thomas M. McKenna........................................... 17,780<F3> <F*>
Alan E. Riedel.............................................. 71,298<F3>,<F6> <F*>
Michael J. Sebastian........................................ 41,619<F3> <F*>
Richard L. Thompson......................................... 4,200<F3> <F*>
NAMED EXECUTIVE OFFICERS (NOT DIRECTORS)
Philip R. Roth.............................................. 75,669<F3> 3,145 <F*>
David Brown................................................. 26,002<F3> 1,704 <F*>
J. Dennis Shull............................................. 109,194<F3>,<F7> 6,561 <F*>
Helen W. Cornell............................................ 85,024<F3> 4,301 <F*>
All directors and executive officers as a group............. 935,976<F3>,<F4>,<F5>,<F6>,<F7> 36,926 6.2%
<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, which is a 401(k)
plan, and the related 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 10, 2000, as follows: 15,000 shares
for Mr. Barger; 191,669 shares for Mr. Centanni; 6,000 shares for
Mr. Hansen; 3,000 shares for Mr. Hipp; 13,017 shares for Mr. McKenna;
6,000 shares for Mr. Riedel; 9,000 shares for Mr. Sebastian; 3,000 shares
for Mr. Thompson; 43,237 shares for Mr. Roth; 26,002 shares for Mr. Brown;
44,918 shares for Mr. Shull; 36,835 shares for Ms. Cornell; and 434,179
shares for the group.
<F4> Includes 150 shares owned by Mr. Barger's son, as to which Mr. Barger
shares voting and investment power.
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<F5> Includes 4,059 shares owned by Mr. Centanni's wife and children, as to
which Mr. Centanni shares voting and investment power.
<F6> Includes 300 shares owned by Mr. Riedel's wife and 3,000 shares held in a
non-profit charitable corporation, 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.
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
<S> <C> <C>
First Manhattan Company............ 2,047,065<F1> 13.4%
437 Madison Avenue
New York, New York
FMR Corporation.................... 1,335,555<F2> 8.7%
82 Devonshire Street
Boston, Massachusetts
Neuberger Berman, Inc.............. 1,150,831<F3> 7.5%
605 Third Avenue
New York, New York
Ira Sochet......................... 967,194<F4> 6.3%
9350 South Dixie Highway
Miami, Florida
<FN>
- -------
<F1> Based on Schedule 13G filing, dated as of February 9, 2000, made by First
Manhattan Company ("First Manhattan"). First Manhattan reported that it
has sole voting and sole investment powers with respect to 187,800 shares,
shared voting power as to 1,821,165 shares and shared investment power as
to 1,859,265 shares. Of the shares beneficially owned, 610,200 shares are
owned by family members of General Partners of First Manhattan. With
respect to these 610,200 shares, First Manhattan disclaims beneficial
ownership as to 135,000 shares and disclaims investment power as to
475,200 shares.
<F2> Based on Schedule 13G filing, dated as of February 14, 2000, 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 110,800 shares and shared voting power with respect to none of
the shares beneficially owned. FMR has sole investment power with respect
to all shares beneficially owned.
<F3> Based on Schedule 13G filing, dated as January 28, 2000, made by Neuberger
Berman, Inc. and Neuberger Berman, LLC (collectively, "Neuberger Berman").
Neuberger Berman reported that it has sole voting power with respect to
433,711 shares beneficially owned and shared voting power with respect to
706,620 shares. Neuberger Berman reported that it shares investment power
as to all shares beneficially owned.
<F4> Based on written confirmation received January 31, 2000, from 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. Mr. Sochet acknowledged in his written confirmation that he
continues to have sole voting and investment powers with respect to all
shares beneficially owned.
</TABLE>
8
<PAGE>
<PAGE>
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
1999.
<TABLE>
TABLE 1
SUMMARY COMPENSATION TABLE
<CAPTION>
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........................ 1999 $453,333 $175,000 70,000 $44,295
Chairman, President & CEO 1998 405,833 531,000 50,000 37,199
1997 325,833 420,000 45,000 31,313
Philip R. Roth.......................... 1999 205,000 50,000 17,000 17,505
Vice President, Finance & CFO 1998 195,000 184,000 15,000 15,525
1997 185,000 150,000 15,001 13,275
David Brown............................. 1999 193,333 50,000 17,000 13,875
Vice President & General Manager, 1998 184,167 115,000 8,000 13,913
Blower Division<F3> 1997 74,423 125,000 22,501 3,349
J. Dennis Shull......................... 1999 191,667 50,000 17,000 15,375
Vice President & General Manager, 1998 171,667 150,000 15,000 14,061
Compressor & Pump Division 1997 150,000 140,000 11,251 11,925
Helen W. Cornell........................ 1999 145,833 35,000 12,000 11,738
Vice President, Corporate Secretary 1998 132,500 115,000 11,000 9,149
& Treasurer 1997 108,000 70,000 7,501 7,110
<FN>
- -------
<F1> The Company effected a two-for-one stock split of its Common Stock on
January 15, 1997 and a three-for-two stock split on December 29, 1997.
Long term compensation awards have been restated to reflect the effect of
these stock splits.
<F2> Amounts under "All Other Compensation" reflect the Company's contribution
on behalf of each of the named executive officers to the Savings Plan and
the related Excess Defined Contribution Plan.
<F3> Mr. Brown became an executive officer when he joined the Company in August
1997.
</TABLE>
9
<PAGE>
<PAGE>
<TABLE>
TABLE 2
OPTION GRANTS IN 1999
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
---------------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM<F3>
OPTIONS EMPLOYEES PRICE EXPIRATION ---------------------
NAME GRANTED(#)<F1> IN 1999 ($/SH)<F2> DATE<F1> 5%($) 10%($)
---- -------------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ross J. Centanni................. 70,000 19% $12.625 03/01/09 $555,786 $1,408,470
Philip R. Roth................... 17,000 5 12.625 03/01/09 134,977 342,057
David Brown...................... 17,000 5 12.625 03/01/09 134,977 342,057
J. Dennis Shull.................. 17,000 5 12.625 03/01/09 134,977 342,057
Helen W. Cornell................. 12,000 3 12.625 03/01/09 95,278 241,452
<FN>
- -------
<F1> These options have a ten-year term from the date of grant and are
exercisable in increments of one-third each on the first, second and third
annual anniversary dates following the date of grant.
<F2> The exercise price is equal to the average of the high and low sales price
of the Company's Common Stock on the date of grant.
<F3> Potential realizable value is based on an assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant until the end of the ten-year option term. These values are
calculated based on requirements promulgated by the Securities and
Exchange Commission and are not intended to reflect future stock price
appreciation for the Company's Common Stock.
</TABLE>
<TABLE>
TABLE 3
AGGREGATED OPTION EXERCISES IN 1999
AND DECEMBER 31, 1999 OPTION VALUES<F1>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1999(#) AT DECEMBER 31, 1999($)<F3>
SHARES ---------------------- ---------------------------
ACQUIRED ON VALUE
NAME EXERCISE(#) RECEIVED($)<F2> EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- --------------- ------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Ross J. Centanni.......... 120,001 $1,347,984 136,668 118,333 $704,078 $273,441
Philip R. Roth............ 21,732 120,351 27,570 32,000 91,519 66,407
David Brown............... -0- -0- 17,668 29,833 -0- 66,407
J. Dennis Shull........... -0- -0- 75,500 30,751 723,474 66,407
Helen W. Cornell.......... -0- -0- 62,668 21,833 606,942 46,876
<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. The
number of shares acquired on exercise, the number of securities underlying
unexercised options and the related exercise prices have been adjusted to
reflect these stock splits.
<F2> The value received for shares acquired on exercise in 1999 is calculated
using the difference between the fair market value of the Company's Common
Stock, as indicated by the average high and low sales price of the Common
Stock on the exercise date, and the option exercise price.
<F3> The value of the unexercised in-the-money options at December 31, 1999 is
calculated using the difference between the fair market value of the
Company's Common Stock, as indicated by the average high and low sales
price of the Common Stock on December 31, 1999 ($16.5313), and the option
exercise prices.
</TABLE>
10
<PAGE>
<PAGE>
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 1999 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 within the 60th-65th percentile of salary market levels for
similar positions in independent manufacturing companies with annual
revenues generally comparable to those of the Company. The purpose
of the increase in base salaries, from market median levels in 1998,
was to position the Company for future growth, make the compensation
program more competitive and increase the Company's retention power.
In 1999, the Committee utilized three national surveys selected by
its independent compensation consultant in determining the market
salary level for each executive officer. This data was used in a
regression analysis to project the salary, bonus and total annual
cash compensation paid to executives of companies with annual
revenues of approximately $400 million. Cook & Co. also provided
specific comparisons of several peer companies' compensation
practices for each company's CEO and four most highly compensated
officers. The comparative data and results of the regression
analysis were combined to calculate competitive consensus data,
benchmark the compensation practices of the Company and develop
compensation recommendations for each of the executives for 1999.
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 and corporate performance during the bonus year,
and if applicable, division performance. 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 based upon the competitive consensus data for similar
positions.
Except for the Division General Managers, 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 1999. Both diluted earnings per share
and cash flow were adjusted to exclude extraordinary transactions,
such as the financial effect of the acquisitions completed in 1999,
which 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
acquisitions completed in 1999. 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 $1.61, to a maximum payment if cash flow was at least $21.9
million and diluted
11
<PAGE>
<PAGE>
earnings per share was at least $1.90. The maximum bonus payment,
which is 200% of the median bonus payment for comparable size
companies, results in total cash compensation for the executive
officers in the 75th percentile or higher of the competitive
consensus data.
The bonus payments for 1999 would have provided market median
compensation if the Company had generated diluted earnings per share
of $1.70 in 1999 and $19.0 million of free cash flow. As a result of
the diluted earnings per share and cash flow generated, bonus
payments for 1999 performance were awarded at approximately 50% of
target levels.
Bonus payments for the Division General Managers were determined
based on a combination of the corporate, division and individual
performance. Corporate performance was judged based on diluted
earnings per share (weighted at 40%). Division performance for each
General Manager was assessed based on the respective division's
earnings before interest, taxes, depreciation and amortization
(weighted at 40%) and annualized sales to new customers (weighted at
20%).
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 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 and Cook &
Co., 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 1999, stock options
were granted at the maximum of the range of median grants for the
competitive consensus data. 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 1999, the Committee granted options with ten-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.
12
<PAGE>
<PAGE>
COMPENSATION OF CEO
Mr. Centanni's base salary in 1999 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.
Updating the Company's Strategic Plan; further implementing SAP, an
enterprise-wide software system; integrating recent acquisitions;
ensuring no disruption to the Company's business as a result of Year
2000 issues; 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 1999 stock option
grant, the Committee considered the range of option grants for CEOs
in the competitive consensus data as presented by Cook & Co., and
set Mr. Centanni's grant at the maximum of the range of the option
grants presented.
OTHER
Section 162(m) of the Internal Revenue (the "IRS") Code of 1986,
as amended (the "Code"), limits the deductibility by public
corporations of compensation paid to specified executive officers.
All compensation paid in 1999 to the Company's executive officers,
including the compensation element of shares received under the
Company's Incentive Plan, qualified for deduction under Section
162(m).
Alan E. Riedel, Chairman
Thomas M. McKenna
Richard L. Thompson
13
<PAGE>
<PAGE>
STOCK PERFORMANCE GRAPH
The following table compares the cumulative total stockholder
return for the Company's Common Stock on an annual basis through
December 31, 1999 to the cumulative total returns for the same
periods of the (a) Standard & Poor's 500 Stock Index; (b) 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; and (c) Standard & Poor's
SmallCap 600, an industry index which includes the Company's Common
Stock as of August 26, 1998. All information presented assumes the
reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gardner Denver 100 190 343 759 443 501
S&P 500 100 138 169 226 290 351
MidCap Specialized 100 130 158 198 195 220
SmallCap 600 100 121 154 172 150 167
</TABLE>
14
<PAGE>
<PAGE>
EMPLOYEE AND EXECUTIVE BENEFIT PLANS
In addition to the Incentive Plan 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 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
greater than 3%, 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 the 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.
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 Gardner Denver Common
Stock.
RETIREMENT PLANS
The Company maintains the Gardner Denver, Inc. Pension Plan (the
"Pension Plan") and the Gardner Denver, 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 in excess of the Social Security
wage base, annually to each individual's account. For purposes of
the Pension Plan, total compensation is cash remuneration paid
during the year by the Company to or for the benefit of a
participant, including base salary for the current year and annual
cash bonus earned during the prior year but paid in the current year
for the executives named in the Summary Compensation Table.
Benefits at retirement are payable, as the participant elects,
in the form of a level annuity with or without survivorship or a
lump-sum payment. The Company will maintain the status of the plan
as a qualified defined benefit plan through sufficient contributions
to a trust fund to meet the minimum requirements under the Code.
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. Under the Excess Defined
Benefit Plan, the Company credits 12% of annual compensation paid in
excess of the IRS annual compensation limit for qualified retirement
plans to the individual accounts of the participating employees,
including those named in the Summary Compensation Table. The Excess
Defined Benefit Plan is funded through contributions by the Company
to a Rabbi Trust.
15
<PAGE>
<PAGE>
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, 1999 base
salary levels plus an annual cash bonus equal to the average cash
bonus received by each officer in 1999 and 1998, and an interest
rate of 6.35%.
<TABLE>
<CAPTION>
YEARS OF
CREDITED YEAR
SERVICE AS OF INDIVIDUAL ESTIMATED ANNUAL
MARCH 10, 2000 REACHES AGE 65 BENEFIT AT AGE 65
-------------- -------------- -----------------
<S> <C> <C> <C>
Ross J. Centanni.............. 20 2010 $252,039
Philip R. Roth................ 3 2016 121,253
David Brown................... 2 2013 70,448
J. Dennis Shull............... 24 2014 111,878
Helen W. Cornell.............. 11 2024 137,265
</TABLE>
STOCK REPURCHASE PROGRAM FOR EXECUTIVE OFFICERS
The Company has granted stock options under the Incentive Plan
to promote the Company's long-term interests and executive officers
have exercised a portion of such stock options in accordance with
the Incentive Plan and applicable stock option agreements. The
cumulative increase in the market price of the Company's Common
Stock since many of these stock options were granted resulted in the
imposition of significant alternative minimum taxes on these
employees. Therefore, the Company has established a Stock Repurchase
Program for its executive officers, to provide a means for them to
sell Gardner Denver Common Stock and obtain sufficient funds to meet
alternative minimum tax obligations which arise from the exercise of
incentive stock options. The program is intended to mitigate any
potential disruption to an orderly trading market in the Company's
Common Stock, which could result if the executives' trades were
effected through securities brokers, in the context of the Company's
relatively small average trading volume. The sales price under this
program is the average of the high and low sales prices of the
Company's Common Stock on the composite tape of the New York Stock
Exchange on the date of the repurchase. The determination to sell
shares under this program is final and must be submitted either on
the day of the sale or no later than prior to the initiation of
trading the following day.
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 the
officer's 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
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.
16
<PAGE>
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company employed Arthur Andersen LLP ("Arthur Andersen") to
perform the annual audit and to render other services for 1999, and
the Board of Directors has reappointed Arthur Andersen to render
these same services in 2000. 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 1999 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 2001 ANNUAL MEETING
Stockholders' proposals intended to be presented at the 2001
Annual Meeting must be received by the Company at its principal
executive offices (Attention: Corporate Secretary) on or before
November 27, 2000 for inclusion in the Company's proxy materials for
that meeting. Any stockholder proposal submitted other than for
inclusion in the Company's proxy materials for that meeting must be
received by the Company no later than March 3, 2001, or such
proposal will be considered untimely. If a stockholder proposal is
received after March 3, 2001, the Company may vote all of the shares
for which it has received proxies for the 2001 Annual Meeting in its
discretion as to the proposal.
GARDNER DENVER, INC.
Helen W. Cornell
Vice President, Corporate Secretary
March 24, 2000
17
<PAGE>
<PAGE>
GARDNER DENVER, INC.
COMMON STOCK
PROXY/VOTING INSTRUCTIONS SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 2000
The undersigned (the "stockholder"), having received the Notice
P and Proxy Statement for the Annual Meeting of Stockholders, appoints
each Ross J. Centanni and Philip R. Roth as proxies, with full power of
R substitution, to represent the stockholder and to vote all shares of
Common Stock of Gardner Denver, Inc. which the stockholder is entitled
O 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
X Tuesday, May 2, 2000 at 1:30 p.m., local time, and any and all
adjournments of the meeting, in the manner specified.
Y
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.
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 [Logo] STOCKHOLDER INFORMATION
CORPORATE OFFICES TRANSFER AGENT AND REGISTRAR
Gardner Denver, Inc. EquiServe
1800 Gardner Expressway P.O. Box 2500
Quincy, Illinois 62301-9464 Jersey City, New Jersey 07303-2500
(217) 222-5400 (800) 519-3111
E-mail address: (201) 324-1225
[email protected] (201) 222-4955
(for the hearing impaired)
E-mail address:
[email protected]
INTERNET ACCESS
For Internet access to information on your
Gardner Denver investment, contact our
transfer agent at (877) 843-9327 for a
personal identification number and visit
their website at http://www.equiserve.com
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 website at HTTP://WWW.GARDNERDENVER.COM.
<PAGE>
<PAGE>
X Please mark your
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.
- ----------------------------------------------------------------------------
For Withheld
1. Election of Three Directors are to be elected at the
Directors / / / / meeting. The nominees of the Board of
Directors are:
1) Ross J. Centanni, 2) Alan E. Riedel,
3) Richard L. Thompson
To withhold your vote for any nominee(s), write the 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
^ FOLD AND DETACH HERE ^
GARDNER DENVER, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 2000, 1:30 P.M.
HOLIDAY INN QUINCY
201 SOUTH THIRD STREET
QUINCY, ILLINOIS 62301
VOTE BY TELEPHONE OR INTERNET
QUICK - EASY - IMMEDIATE
Gardner Denver encourages you to take advantage of three convenient ways
to vote your shares.
You may now vote your proxy 24 hours a day, 7 days a week, using either
a touch-tone telephone or through the Internet. Your telephone or
Internet vote must be received by 12:00 midnight Eastern time on May 1,
2000. Voting electronically eliminates the need to return your proxy
card.
Your telephone or Internet vote authorizes the proxies named on the
above proxy card to vote your shares in the same manner as if you
marked, signed and returned your proxy card.
VOTE BY PHONE: ON A TOUCH-TONE TELEPHONE DIAL 1-877-PRX-VOTE
- -------------- (1-877-779-8683) FROM THE U.S. AND CANADA. You
will be asked to enter the VOTER CONTROL NUMBER
located in the box just below the perforation on
this proxy card.
This series of numbers is necessary to access both
the telephone and Internet voting system.
OR
VOTE BY INTERNET: POINT YOUR BROWSER TO THE WEB ADDRESS:
- ----------------- HTTP://WWW.EPROXYVOTE.COM/GDI.
You will be asked to enter the VOTER CONTROL NUMBER
located in the box just below the perforation on
this proxy card. Then follow the instructions.
OR
VOTE BY MAIL: Mark, sign and date your proxy card and return it
- ------------- in the postage-paid envelope. If you are voting by
telephone or the Internet, you do not need to
return your proxy card.
- ----------------------------------------------------------------------------
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 YOUR PROXY CARD, VOTE TELEPHONICALLY OR VIA THE
INTERNET BY FOLLOWING THE INSTRUCTIONS ABOVE. THANK YOU FOR VOTING.
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APPENDIX
Page 14 of the printed proxy statement contains a
Cumulative Total Return Graph. The information plotted
in the graph appears in the table following the graph.
