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<PAGE>
Section 240.14a-101 Schedule 14A.
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 Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SEQUA CORPORATION
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
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[Logo]
SEQUA CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1999
------------------
The annual meeting of stockholders of SEQUA CORPORATION (the 'Company')
will be held in Conference Room A on the 11th floor, 270 Park Avenue, New York,
New York, on Thursday, May 6, 1999, at 11 A.M., for the following purposes:
1. To elect directors;
2. To consider and vote on a proposal to amend the Sequa Corporation
Restated Certificate of Incorporation, as amended, to increase the number
of shares of Class A Common Stock that the Company is authorized to issue
from 25,000,000 to 50,000,000 and to increase the number of shares of
Class B Common Stock that the Company is authorized to issue from 5,000,000
to 10,000,000;
3. To ratify the appointment of Arthur Andersen LLP, independent
public accountants; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 18, 1999 are
entitled to notice of and to vote at the meeting and any adjournment thereof. A
list of stockholders will be available for examination by any stockholder, for
any purpose germane to such meeting, during the ten days prior to the meeting
date at the Company's address set forth above.
By order of the Board of Directors,
Steven R. Lowson
Secretary
New York, N.Y.
March 25, 1999
IMPORTANT
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN THE ENCLOSED POSTPAID WHITE ENVELOPE WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON. IF YOU ARE PLANNING TO ATTEND THE MEETING, YOU
MUST RETURN THE ENCLOSED POSTPAID ATTENDANCE CARD AS QUICKLY AS POSSIBLE.
NO ONE WILL BE ADMITTED WITHOUT AN ATTENDANCE CARD.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
<PAGE>
SEQUA CORPORATION
200 PARK AVENUE
NEW YORK, NEW YORK 10166
ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1999
PROXY STATEMENT
PERSONS MAKING THE SOLICITATION
The accompanying proxy is being solicited by the Board of Directors of
Sequa Corporation (the 'Company') for use at the annual meeting of stockholders
to be held on Thursday, May 6, 1999, or any adjournment thereof. If such proxy
is properly signed and returned prior to the meeting, the shares with respect to
which the proxy is given will be voted as indicated thereon; provided, however,
that a stockholder may revoke his proxy at any time prior to its use at the
meeting, either by giving written notice addressed to the Secretary of the
Company, at its executive offices located at 200 Park Avenue, New York, New York
10166, or by withdrawing his proxy and voting in person at the meeting. The
entire cost of soliciting proxies will be borne by the Company. Proxies will be
solicited principally through the use of the mails but directors, officers and
regular employees of the Company, without additional compensation, may use their
personal efforts by telephone or otherwise to obtain proxies. The Company will
also request banks, brokers and other nominee holders of the Company's shares to
forward proxy materials to their principals or customers who are beneficial
owners of such shares and will reimburse such holders for their reasonable
expenses incurred in doing so. The Company anticipates that mailing of proxy
material to stockholders will commence on or about March 31, 1999.
VOTING SECURITIES AND OWNERSHIP THEREOF
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Only stockholders of record at the close of business on March 18, 1999, the
record date with respect to this solicitation, will be entitled to notice of,
and to vote at, the meeting. On the record date, there were outstanding
7,034,893 shares of the Company's Class A Common Stock, no par value ('Class A
Common Stock'), 3,329,772 shares of the Company's Class B Common Stock, no par
value ('Class B Common Stock'), and 412,815 shares of the Company's $5.00
Cumulative Convertible Preferred Stock, par value $1.00 per share ('Preferred
Stock'), which constitute the only outstanding voting securities. Each share of
Class B Common Stock is convertible at any time into one share of Class A Common
Stock, and each share of Preferred Stock is convertible at any time into 1.322
shares of Class A Common Stock, subject to certain adjustments. Each share of
Class A Common Stock and each share of Preferred Stock have one vote and, with
respect to all matters to come before the meeting, will vote with the Class B
Common Stock, which has ten votes per share. The presence in person or by proxy
of stockholders of record representing in the aggregate a majority of the
combined outstanding voting rights of all classes of stock of the Company
entitled to vote shall constitute a quorum for the transaction of business.
Broker non-votes and abstentions are counted in determining the existence of a
quorum. Proxies marked as abstentions, or to withhold a vote from a nominee as a
director in the case of the election of directors, will have the effect of a
negative vote. Broker non-votes (where a nominee
<PAGE>
<PAGE>
holding shares for a beneficial owner has not received voting instructions from
the beneficial owner with respect to a particular matter and such nominee does
not possess or choose to exercise his discretionary authority with respect
thereto) will be considered as present at the meeting but not entitled to vote
with respect to the particular matter and will therefore have no effect on the
vote. Directors shall be elected by a plurality of votes cast. The affirmative
vote of the holders of shares of stock representing a majority of the combined
voting rights of all eligible classes of stock present or represented at the
meeting is required for approval of all other matters to be presented at this
meeting. Votes are counted preliminarily by the Company's transfer agent through
its automated system and, finally, at the Annual Meeting of Stockholders, by the
Inspectors of Election.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
The table below sets forth information with respect to any person (other
than the Company's directors) known to the Company to be the beneficial owner of
more than five percent of any class of the Company's outstanding voting
securities as of March 1, 1999. Except to the extent indicated in the footnotes,
sole voting and investment power with respect to the shares shown is held by the
owner named.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
OF CLASS A PERCENT OF AGGREGATE
NAME AND ADDRESS COMMON STOCK CLASS VOTING POWER
- --------------------------------------------------------- ---------------- ---------- ------------
<S> <C> <C> <C>
Gabelli Funds, Inc. ..................................... 1,322,631(1) 18.77(1) 3.25(1)
(and affiliates)
One Corporate Center
Rye, NY 10580-1434
Sequa Corporation Master Trust .......................... 544,800(2) 7.73 1.34
(for participating pension plans)
c/o The Bank of New York
(as Master Trustee)
One Wall Street
New York, NY 10286
<CAPTION>
NUMBER OF SHARES PERCENT OF
OF CLASS B PERCENT OF AGGREGATE
COMMON STOCK CLASS VOTING POWER
---------------- ---------- ------------
<S> <C> <C> <C>
Gabelli Funds, Inc. ..................................... 980,900(1) 29.46(1) 24.07(1)
(and affiliates)
One Corporate Center
Rye, NY 10580-1434
<CAPTION>
NUMBER OF PERCENT OF
SHARES OF PERCENT OF AGGREGATE
PREFERRED STOCK CLASS VOTING POWER
---------------- ---------- ------------
<S> <C> <C> <C>
Gabelli Funds, Inc. ..................................... 166,500(1) 40.33(1) (3)
(and affiliates)
One Corporate Center
Rye, NY 10580-1434
Forest Investment Management LLC ........................ 109,700 26.57 (3)
(and affiliates)
53 Forest Avenue
Old Greenwich, CT 06870
</TABLE>
(footnotes on next page)
2
<PAGE>
<PAGE>
(footnotes from previous page)
(1) Gabelli Funds, Inc. and GAMCO Investors, Inc. (and affiliates)
(collectively, the 'Gabelli Companies') own beneficially all classes of the
Company's stock. Pursuant to Rule 13d-3(d)(1) under the Securities Exchange
Act of 1934, as amended, the total of the Gabelli Companies' Class A Common
Stock, Class B Common Stock (if converted into Class A Common Stock) and
Preferred Stock (if converted into Class A Common Stock) would give the
Gabelli Companies aggregate holdings of 2,523,710 shares of Class A Common
Stock, or 30.60 percent of that class. This would represent 7.89 percent of
the total votes then outstanding (after conversions to Class A of all
Gabelli Companies' stock) in all classes. If no conversions were done, the
total current holdings of all three classes of stock by the Gabelli
Companies gives them 27.73 percent of the aggregate voting power of all
Company stock. Of the Preferred Stock, the Gabelli Companies have shared
voting power with respect to 28,000 shares and no voting power with respect
to 3,400 shares. In connection with their shares of Class B Common Stock,
the Gabelli Companies have shared voting power with respect to 194,500
shares and no voting power with respect to 10,500 shares. The data as to
holdings of the Gabelli Companies is based on their most recent filings made
with the Securities and Exchange Commission (November 9, 1998: Class A
Common Stock; May 28, 1998: Class B Common Stock; May 5, 1998: Preferred
Stock).
(2) All of the shares of Class A Common Stock held by the Sequa Corporation
Master Trust (the 'Trust') are voted by the Trust's Investment Committee,
composed of certain officers of the Company. Such committee also makes
decisions regarding acquisitions and dispositions of Company stock for the
Trust.
(3) Less than 1%.
SECURITY OWNERSHIP BY MANAGEMENT
The following table provides information as to the Company's voting
securities beneficially owned as of March 1, 1999, by the Company's directors,
the named executive officers of the Company and by all such directors and
executive officers as a group. None of the Company's executive officers or
directors is the beneficial owner of any Preferred Stock (with the exception of
400 shares owned by a trust in which the children of an executive officer have a
partial remainder interest, and as to which the executive officer, who is the
trustee, disclaims beneficial ownership). Except to the extent indicated in the
footnotes, sole voting and investment power with respect to the shares shown is
held by the owner named.
<TABLE>
<CAPTION>
PERCENT
NUMBER OF NUMBER OF OF
SHARES OF PERCENT SHARES OF PERCENT AGGREGATE
CLASS A OF CLASS B OF VOTING
COMMON STOCK CLASS COMMON STOCK CLASS POWER
------------ ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Norman E. Alexander............... 2,164,024(a)(b)(c) 30.71 1,946,647(d) 58.46 53.07
Leon Black........................ 603 -- None -- --
Alvin Dworman..................... 1,163 (e) None -- (e)
David S. Gottesman................ 8,147 (e) None -- (e)
Gerald S. Gutterman............... 19,748(c) (e) 13,585 (e) (e)
Stuart Z. Krinsly................. 62,357(a)(c) (e) 65,933(d) 1.98 1.77
Donald D. Kummerfeld.............. 200 (e) None -- (e)
</TABLE>
(table continued on next page)
3
<PAGE>
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
PERCENT
NUMBER OF NUMBER OF OF
SHARES OF PERCENT SHARES OF PERCENT AGGREGATE
CLASS A OF CLASS B OF VOTING
COMMON STOCK CLASS COMMON STOCK CLASS POWER
------------ ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Richard S. LeFrak................. 2,647 (e) 500 (e) (e)
John J. Quicke.................... 21,000(f)(g) (e) None -- (e)
Michael I. Sovern................. 1,000 (e) None -- (e)
Fred R. Sullivan.................. 2,323(h) (e) 648(h) (e) (e)
Gerald Tsai, Jr................... 500 (e) None -- (e)
Martin Weinstein.................. 21,991(a) (e) None -- (e)
All executive officers and
directors as a group (13 persons
consisting of the above)........ 2,305,803(a)(b)(c)(f) 32.72 2,025,410(d) 60.83 55.35
</TABLE>
- ------------
(a) Includes certain shares held for the benefit of the named executive officer
in the Company's 401-K Plan.
(b) Includes 37,415 shares of Class A Common Stock owned by the Norman and
Marjorie Alexander Foundation, as to which Mr. Alexander disclaims
beneficial ownership.
(c) Does not include shares held by the Sequa Corporation Master Trust (see
'Security Ownership by Certain Beneficial Owners,' above), of which
Messrs. Alexander, Krinsly and Gutterman are members of its Investment
Committee.
(d) Includes 1,903 shares of Class B Common Stock held in trust for the benefit
of Mr. and Mrs. Alexander and Mr. Alexander's estate. Mr. Krinsly and
another individual share voting and investment power with respect to such
shares, and Mr. Alexander retains the sole right to remove such shares from
the trust at any time and replace them with other property. In the sum of
shares held by all directors and executive officers, these trust holdings
are counted only once.
(e) Less than 1%.
(f) Includes shares of Class A Common Stock which may be obtained upon the
exercise, within sixty days of the date of this Proxy Statement, of stock
options by Mr. Quicke -- 8,500; and by all executive officers as a
group -- 8,500.
The stock options owned by Mr. Quicke have an exercise price of $24.75 and
expire in 2000. The closing price of the Class A Common Stock on March 18,
1999 was $46.6875.
(g) Includes 400 shares of Class A Common Stock owned by minor children of Mr.
Quicke, as to which he disclaims beneficial ownership.
(h) Includes 1,209 shares of Class A Common Stock and 198 shares of Class B
Common Stock owned by Mrs. Fred R. Sullivan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each director and officer of the Company who is subject to Section 16 of
the Securities Exchange Act of 1934, as amended (the 'Exchange Act') is required
to report to the Securities and Exchange Commission by a specified date his or
her beneficial ownership of, or transactions in, the Company's securities.
Reports received by the Company indicate that all such directors and officers
have filed all requisite reports with the SEC on a timely basis during or with
respect to 1998.
4
<PAGE>
<PAGE>
ELECTION OF DIRECTORS
DIRECTORS
At the meeting, eleven directors are to be elected to hold office until the
next annual meeting and until their successors shall have been elected. If no
other instructions are given, the persons named in the enclosed form of proxy
will vote for the election of the nominees named in the table below. In case any
such nominee should become unavailable for any reason, an event not now
anticipated, the proxy holders reserve the right to substitute another person of
their choice in his place. Each of the nominees has previously been elected by
the stockholders.
<TABLE>
<CAPTION>
PRESENT OCCUPATION AND
NAME AND AGE OTHER INFORMATION
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Norman E. Alexander ...................... Chairman of the Board and Chief Executive Officer of the Company
Age 84 since 1975. Served as President and Chief Executive Officer from
1957 to 1975 and as President from 1982 to 1983. Has been a
director of the Company since 1957 and is a member of the Executive
Committee. May be deemed to be a control person of the Company (see
'Voting Securities and Ownership Thereof by Certain Beneficial
Owners and Management'). Also a director and Chairman of the Board
of Chock Full O' Nuts Corporation and a director of Richton
International Corporation.
Leon Black ............................... Principal and Founding Partner, Apollo Management, L.P. (since 1995),
Age 47 Apollo Advisors, L.P. (since 1990) and related entities (private
investment firms). Has been a director of the Company since
December 1997. Also a Trustee of Mt. Sinai Hospital, Prep for Prep,
Converse, Inc., Samsonite Corporation, Telemundo Group, Inc.,
United Rentals, Inc., Vail Resorts, Inc., The Jewish Museum,
Cardozo School of Law, Vail Valley Foundation and the Museum of
Modern Art.
Alvin Dworman ............................ Chairman, ADCO Group (a financial services, merchant banking and real
Age 73 estate company) since 1981; also, Chairman, Lee National Corp. (a
financial services, merchant banking and real estate company) since
the late 1960's. Has been a director of the Company since 1987 and
is a member of the Audit Committee.
David S. Gottesman ....................... Managing Partner, First Manhattan Co. (an investment management
Age 72 company) since 1964. Has been a director of the Company since 1982
and is Chairman of the Nominating Committee.
</TABLE>
5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT OCCUPATION AND
NAME AND AGE OTHER INFORMATION
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Stuart Z. Krinsly ........................ Senior Executive Vice President and General Counsel of the Company
Age 81 since 1982; from 1978 to 1982, served as Executive Vice President
and has been the Company's General Counsel since 1965. Has been a
director and officer of the Company since 1957 and is a member of
the Executive Committee. Also a director of Chock Full O' Nuts
Corporation.
Donald D. Kummerfeld ..................... President, Magazine Publishers of America (a publishing trade
Age 64 organization) since 1987 and Chairman, Kummerfeld Associates (an
investment banking and financial advisory firm) since 1985. From
1978 to 1985, was President and Chief Operating Officer, News
America Publishing, Inc. Has been a director of the Company since
1983 and is a member of the Compensation Committee.
Richard S. LeFrak ........................ President, Lefrak Organization, Inc. (a diversified, privately held
Age 53 company active in major residential and commercial real estate
development projects, oil and gas exploration, finance and
entertainment production) since 1975. Has been a director of the
Company since 1986 and is a member of the Nominating Committee.
John J. Quicke ........................... President and Chief Operating Officer of the Company since March
Age 49 1993. Served as Senior Executive Vice President, Operations, of the
Company from June 1992 to March 1993; from February 1991 to June
1992, served as Vice President, Financial Services, of the Company;
from 1987 to February 1991, served as Vice President, Financial
Projects, of the Company. Held various offices and positions in
Chromalloy American Corporation (which became a subsidiary of the
Company in 1986) from 1979 to 1987. Has been a director of the
Company since 1993 and is a member of the Executive Committee.
Michael I. Sovern ........................ Chancellor Kent Professor of Law and President Emeritus of Columbia
Age 67 University since 1993; President of Columbia University from 1980
to 1993; President of the Shubert Foundation since 1996. Served as
Advisor to the Board of Directors of the Company from 1990 to May
1996, when he was elected to serve as a director, and is a member
of the Nominating Committee. Also a director of AT&T, Warner-
Lambert and the Shubert Organization.
</TABLE>
6
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT OCCUPATION AND
NAME AND AGE OTHER INFORMATION
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Fred R. Sullivan ......................... Chairman of the Board and Chief Executive Officer, Richton
Age 84 International Corporation (a diversified service company) since
1989. From 1987 to 1990, served as Chairman of the Board and
President, Interim Systems Corporation (a temporary personnel and
health care service company). Prior to 1987, served as Chairman of
the Board and President, Kidde, Inc. (a multi-market manufacturing
and service company). Has been a director of the Company since 1962
and is a member of the Audit Committee.
Gerald Tsai, Jr. ......................... Private investor. From February 1993 to October 1997, served as
Age 70 Chairman, President and Chief Executive Officer, Delta Life
Corporation (an insurance company); private investor from 1991 to
1993; Chairman of the Executive Committee of the Board of
Directors, Primerica Corporation (a diversified financial services
company) from 1988 to 1991; from 1987 to 1988, was Chairman and
Chief Executive Officer of Primerica; and from 1982 to 1987, held
several other offices at Primerica. Has been a director of the
Company since 1976 and is Chairman of the Compensation Committee
and of the Audit Committee. Also a director of the Meditrust
Companies, Rite Aid Corporation, Saks Incorporated, Triarc
Companies, Inc., United Rentals, Inc. and Zenith National Insurance
Corp. Also a Trustee of Boston University, Mount Sinai - NYU
Medical Center and NYU School of Medicine Foundation.
</TABLE>
During 1998, the Company's Board of Directors held nine regularly scheduled
meetings. All of the directors, except for Mr. Black, attended at least 75% of
the aggregate of regularly scheduled Board meetings and meetings of committees
of which they are members, respectively.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE 'FOR' THE
ELECTION OF THE ABOVE NOMINEES FOR DIRECTOR.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's standing committees are Executive, Audit, Compensation and
Nominating. During 1998, membership on those committees consisted of the
following: Executive Committee: Messrs. Alexander, Dworman, Krinsly, Quicke and,
until May 7, 1998, Mr. A. Leon Fergenson; Audit Committee: Messrs. Dworman,
Sullivan and Tsai; Compensation Committee: Messrs. Kummerfeld, Tsai and, until
May 7, 1998, Mr. Fergenson; and Nominating Committee: Messrs. Gottesman, LeFrak
and Sovern. Mr. Fergenson did not stand for reelection at the 1998 Annual
Meeting and became an honorary director on May 7, 1998. The Executive Committee
acts in place of the full Board of Directors between meetings thereof, evaluates
a variety of projects of the Company and makes recommendations to the Board. The
Executive Committee held two meetings during 1998. The activities of the Audit
Committee include a review with the independent auditors of the plans and
results of the audit engagement; conferring with respect to audit activities;
consideration of the independence of the auditors; review of the auditors' fees
and the recommendation to the Board as to the engagement of the
7
<PAGE>
<PAGE>
auditors. During 1998, the Audit Committee held two meetings. The Compensation
Committee recommends to the Board the compensation arrangements for directors
and officers. During 1998, the Compensation Committee held two meetings. The
Nominating Committee selects candidates for election to the Board of Directors
or to fill vacancies thereon, after consideration of nominees proposed to it in
writing, provided that such nominees have agreed in writing to be candidates for
the Board of Directors. The Nominating Committee did not meet during 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with Mr. Quicke's relocation to New York, the Company made a
$300,000 interest-free loan in 1993, payable on demand, and secured by a second
mortgage on his home. Since 1996, Mr. Quicke has repaid an aggregate of $225,000
of this loan. Accordingly, the principal balance of his loan has been reduced to
$75,000.
Alex Alexander, brother of Norman E. Alexander (Chairman, Chief Executive
Officer and a director of the Company), performs a variety of real estate and
marketing services for Chromalloy Men's Apparel Group Inc. (a subsidiary of the
Company), including participating in sales force performance and budget reviews
and leasing and acquisition matters. He is compensated at an annual rate of
$80,340 plus certain employee benefits. This arrangement commenced in early
1994, and the aggregate cost to the Company of such payments and benefits in
1998 was $90,391.
The Sequa Corporation Master Trust for participating pension plans (the
'Trust') is a limited partner in Apollo Investment Funds, L.P., in which Mr.
Leon Black, a director of the Company, is a general partner. The Trust has
committed an aggregate of $12.5 million to these funds, less than half of which
had been invested by December 31, 1998. The remainder could be called during
1999 or thereafter. The Trust's capital contributions to date and unfunded
commitments represent approximately 5.0% of the total assets of the Trust.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company received an annual
retainer of $35,000 for 1998 and $500 for each meeting attended. Non-employee
members of the Executive Committee, Audit Committee, Nominating Committee and
Compensation Committee receive an additional annual fee of $5,000, $3,500,
$2,500 and $3,500, respectively, and $500 for each committee meeting attended.
The Company also reimburses its non-employee directors for travel, lodging and
related expenses they may incur in attending Board and Committee meetings. Each
director who is not an employee of the Company may elect to participate in the
1998 Directors' Stock Compensation Plan, whereby the participating director
receives his annual retainer and meeting fees in the form of restricted shares
of the Company's Class A Common Stock, in lieu of cash.
8
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid for services rendered
in all capacities to the Company and its subsidiaries with respect to 1996, 1997
and 1998 to the Chief Executive Officer of the Company and to the next four most
highly compensated executive officers.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
---------------------------------------- ------------
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL BONUS COMPENSATION OPTIONS/ COMPENSATION
POSITION YEAR SALARY ($)(1) ($) SARS(#) ($)
- --------------------------------------- ---- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Alexander ................... 1998 $1,277,610 $1,210,209 -- 15,000 $ 4,800(2)
Chairman and Chief Executive Officer 1997 1,173,581 1,152,563 -- -- 4,750(2)
1996 1,131,491 378,979 -- -- 4,500(2)
John J. Quicke ........................ 1998 513,065 437,325 -- 12,000 5,579(2)
President and Chief Operating Officer 1997 449,842 250,154 -- -- 6,313(2)
1996 428,820 188,236 -- -- 5,864(2)
Stuart Z. Krinsly ..................... 1998 683,338 597,481 -- 12,000 4,935(2)
Senior Executive Vice President and 1997 627,703 569,041 -- -- 5,034(2)
General Counsel 1996 605,193 187,123 -- -- 4,776(2)
Gerald S. Gutterman ................... 1998 414,651 361,931 -- -- 5,446(2)
Executive Vice President, Finance and 1997 384,481 347,981 -- -- 6,021(2)
Administration 1996 373,330 115,432 -- -- 5,741(2)
Martin Weinstein ...................... 1998 465,795 448,110 -- 12,000 4,800(2)
Senior Vice President, Gas Turbine 1997 425,750 385,650 -- -- 4,750(2)
Operations 1996 438,440(3) 170,529 -- -- 4,500(2)
</TABLE>
- ------------
(1) Bonuses are paid in the first quarter of the year following the year with
respect to which they have been earned (i.e., bonuses earned with respect to
1998 are paid in the first quarter of 1999; these bonuses are reported in
the Summary Compensation Table, above, on the 1998 Bonus line).
(2) These amounts consist of a matching contribution by the Company under the
respective 401-K Plan in which each executive officer participates ($4,500
as to each named executive officer in 1996, $4,750 in 1997, and $4,800 in
1998), plus (i) with respect to Mr. Quicke, $1,364, $1,563 and $779 for
executive term life insurance premiums in 1996, 1997 and 1998, respectively;
(ii) with respect to Mr. Krinsly, $276, $284 and $135 for executive term
life insurance premiums in 1996, 1997 and 1998, respectively; and (iii) with
respect to Mr. Gutterman, $1,241, $1,271 and $646 for executive term life
insurance premiums in 1996, 1997 and 1998, respectively.
(3) This amount includes $81,000 for additional compensation in connection with
Mr. Weinstein's management of another Chromalloy Gas Turbine operation,
Chromalloy New York (formerly, Chromalloy Research and Technology),
commencing in June 1993 and ending upon the termination of this temporary
assignment, which occurred on December 31, 1996. This amount reflects an
across-the-board three percent salary reduction at Chromalloy Gas Turbine
(terminated December 31, 1996).
9
<PAGE>
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth all stock options (there are no SARs)
granted to the Chief Executive Officer of the Company and to the next four most
highly compensated executive officers during 1998. All option grants are for
shares of Class A Common Stock.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SH) DATE PRESENT VALUE($)(2)
- ---------------------------- ------------- -------------- ----------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
Norman E. Alexander......... 15,000(3) 3.5% $ 58.00 9/24/2003 $ 222,000
Stuart Z. Krinsly........... 12,000(4) 2.8 58.00 9/24/2003 177,600
John J. Quicke.............. 12,000(4) 2.8 58.00 9/24/2003 177,600
Gerald S. Gutterman......... -- -- -- -- --
Martin Weinstein............ 12,000(4) 2.8 58.00 9/24/2003 177,600
</TABLE>
- ------------
(1) No stock appreciation rights ('SARs') were granted during 1998. The options
vest in three equal annual installments, commencing on the first anniversay
of the date of grant.
(2) Grant Date Present Value is determined using the Black-Scholes option
pricing model based on the following assumptions: (a) an expected option
term of four years which reflects a reduction of the actual five year term
of an option based on historical data regarding the average length of time
an optionee holds an option before exercising; (b) a risk-free rate of
return of 4.55%, the yield of a five-year U.S. Government bond; (c) stock
price volatility of 22.2%; and (d) an expected dividend yield of 0%. The
Grant Date Present Values set forth in the table are only theoretical values
and may not accurately determine present value. The actual value, if any, to
be realized by an optionee will depend on the excess of the market value of
the Class A Common Stock over the exercise price on the date the option is
exercised.
(3) This option grant consists entirely of a non-qualified option.
(4) These option grants consist of incentive stock options ('ISOs') with respect
to 5,172 shares and non-qualified options with respect to the balance.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES TABLE
The following table shows the number of shares of Class A Common Stock
acquired on exercise and the value realized by each of the named executive
officers, and the number of shares of Class A
10
<PAGE>
<PAGE>
Common Stock represented by outstanding unexercised stock options (there are no
SARs) held by each of the named executive officers as of December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Norman E. Alexander......... 15,000 $ 377,813 -- 15,000 -- $28,125
John J. Quicke.............. 8,000 208,300 8,500 12,000 $ 298,563 22,500
Stuart Z. Krinsly........... 12,500 314,844 -- 12,000 -- 22,500
Gerald S. Gutterman......... 5,000 131,563 -- -- -- --
Martin Weinstein............ 11,000 347,875 -- 12,000 -- 22,500
</TABLE>
PENSION PLANS
The following tables show the estimated annual pension benefits payable to
each covered participant at normal retirement age under the Company's qualified
defined benefit pension plans, taking into account any applicable nonqualified
supplemental pension plans that provide benefits that would otherwise be denied
participants by reason of certain Internal Revenue Code limitations on qualified
plan benefits and any existing individual agreements, based on remuneration that
is covered under the plans and agreements and years of service with the Company
and its subsidiaries. There are separate pension plans within the Company for
various subsidiaries.
PENSION PLAN TABLE -- A
<TABLE>
<CAPTION>
YEARS OF SERVICE
PLAN --------------------------------------------------
COMPENSATION 30 35 40 45
- --------------------------------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 400,000.............................. $191,762 $ 223,722 $ 255,683 $ 287,643
600,000............................. 291,762 340,389 389,016 437,643
800,000............................. 391,762 457,056 522,349 587,643
1,000,000............................. 491,762 573,722 655,683 737,643
1,200,000............................. 591,762 690,389 789,016 887,643
1,400,000............................. 691,762 807,056 922,349 1,037,643
1,600,000............................. 791,762 923,722 1,055,683 1,187,643
1,800,000............................. 891,762 1,040,389 1,189,016 1,337,643
</TABLE>
Table A applies to Messrs. Alexander, Krinsly and Gutterman.
Mr. Alexander is required to be paid $243,779 annually from the qualified
defined benefit portion of the aggregate benefit shown in Table A. Mr. Krinsly's
pension benefit is subject to actuarial increases for commencement after age 65.
As of January 1, 1999, his total annual pension including actuarial increases is
$1,219,048. This increased benefit replaces the lower amount shown in Table A
for Mr. Krinsly. Effective January 1, 1998, Mr. Krinsly elected to begin
receiving $650,998 annually from the qualified defined benefit portion of his
total annual pension. As a result of that election, there will be no further
actuarial increases in Mr. Krinsly's total pension after December 31, 1997.
11
<PAGE>
<PAGE>
PENSION PLAN TABLE -- B
<TABLE>
<CAPTION>
YEARS OF SERVICE
PLAN --------------------------------
COMPENSATION 30 35 40
- --------------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
$300,000................................................. $129,049 $150,557 $164,057
400,000................................................. 174,049 203,057 221,057
500,000................................................. 219,049 255,557 278,057
600,000................................................. 264,049 308,057 335,057
700,000................................................. 309,049 360,557 392,057
800,000................................................. 354,049 413,057 449,057
</TABLE>
Table B applies to Mr. Quicke.
PENSION PLAN TABLE -- C
<TABLE>
<CAPTION>
YEARS OF SERVICE
PLAN --------------------------------
COMPENSATION 30 35 40
- --------------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
$400,000................................................. $217,162 $237,672 $258,182
500,000................................................. 273,564 299,202 324,839
600,000................................................. 329,967 360,732 391,497
700,000................................................. 386,369 422,262 458,154
</TABLE>
Table C applies to Mr. Weinstein.
Compensation covered by the plans is total pay for services, including
elective deferrals to qualified plans, but excluding severance payments, expense
reimbursements, and other non-wage items. With respect to Messrs. Alexander,
Krinsly and Gutterman, benefits are based on their respective highest average
annual compensation in any five consecutive years of employment with the
Company. With respect to Mr. Quicke, benefits are based on his average
compensation for all years after 1989. With respect to Mr. Weinstein, benefits
are based on his average compensation for all years after 1979.
The credited years of service and plan compensation for the named executive
officers are:
<TABLE>
<CAPTION>
ESTIMATED
CREDITED YEARS PLAN
OF SERVICE* COMPENSATION
-------------- ------------
<S> <C> <C>
Alexander..................................................... 42 $1,532,346
Krinsly....................................................... 42 800,990
Quicke........................................................ 34 467,134
Gutterman..................................................... 34 493,686
Weinstein..................................................... 32 514,287
</TABLE>
With respect to Mr. Gutterman, service is limited to 30 years by the terms
of the plan.
Benefits shown are computed as a straight life annuity beginning at age 65*
and are offset by a portion of estimated Social Security benefits, if
applicable.
- ------------
* At normal retirement age or current age if older.
12
<PAGE>
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has entered into employment agreements with the named executive
officers listed below (supplementary retirement agreements with any of the named
executive officers are accounted for in the foregoing section, 'Pension Plans').
<TABLE>
<CAPTION>
TERM OF ANNUAL
NAME TITLE AGREEMENT COMPENSATION
- ------------------------ --------------------------------------------- ----------------------- ------------
<S> <C> <C> <C>
John J. Quicke.......... President and Chief Operating Officer 1/1/95 - 12/31/2002(1) $560,000(2)
Martin Weinstein........ Senior Vice President, Gas Turbine Operations 6/1/96 - 12/31/2002(1) $530,700(2)
</TABLE>
- ------------
(1) The term may be extended or terminated prior to expiration under certain
circumstances (including death, disability and for cause).
(2) These amounts reflect March 1, 1999 salaries and do not include additional
incentive compensation which may be payable.
13
<PAGE>
<PAGE>
STOCK PERFORMANCE GRAPH -- 5 YEAR CUMULATIVE INDEX
The graph set forth below compares the annual percentage change in the
cumulative total shareholder return on an investment of $100 in the Company's
Common Stock, on an indexed basis, with the S&P 500 Stock Index and the S&P
Aerospace/Defense Index, for the period of five years ended December 31, 1998.
TOTAL RETURN TO SHAREHOLDERS
REINVESTED DIVIDENDS
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
INDEXED RETURNS
Years Ending
Base Period
Company/Index Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SEQUA CORP -CL A 100 80.00 93.85 120.77 200.19 184.23
SEQUA CORP -CL B 100 82.24 122.01 154.44 230.12 227.03
S&P 500 INDEX 100 101.32 139.40 171.40 228.59 293.91
AEROSPACE/DEFENSE-500 100 108.17 179.00 239.44 246.34 188.83
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD ON EXECUTIVE COMPENSATION
The Company's executive compensation program is developed and implemented
by the Company's Human Resources Department in conjunction with the Compensation
Committee of the Board of Directors. The Compensation Committee, which is
composed of two non-employee directors, approves all elements of the program,
which is then ratified by the full Board of Directors. This program is based
upon objectives that seek to attract and retain key executives critical to the
success of the Company, and to reward and motivate executives for performance
that maximizes Company success and shareholder value. In order to accomplish
these goals, the Company has designed a competitive base salary program and
annual incentive cash bonus plans which are predominantly geared toward
achievement of stated financial goals. In addition, stock option grants may be
awarded from time to time in order to emphasize stockholder returns and focus on
long-term goals.
14
<PAGE>
<PAGE>
Base salaries for executive officers of the Company are intended to
maintain competitive rates of pay for executives in relation to the market. The
Company competes for executive talent across a broad range of industrial and
non-industrial industry segments. The Company's Human Resources Department
collects and analyzes competitive salary data from a comprehensive group of
surveys produced by leading human resource/compensation consulting firms. In
1998, these surveys included those published by Towers Perrin, Hewitt
Associates, the Conference Board, William M. Mercer, Inc. and the American
Compensation Association, among others. These surveys disclose compensation
levels for executives at corporations comparable to the Company in size and
industry mix, including firms classified as 'S&P 500.' The Human Resources
Department does not limit its comparative analyses to companies classified as
'Aerospace/Defense,' since it believes that the Company competes for executive
talent beyond these industries.
This analysis is presented to the Compensation Committee in the form of an
'Officer Salary Survey.' In the officers' survey, particular reliance is placed
on the findings of Towers Perrin and Hewitt Associates. Here, definitions of
survey positions, company size and industry mix most closely align with the
actual responsibilities of Sequa's executive officer group. The base salary
levels for certain of Sequa's executive officers fall at the high end of survey
ranges, although these levels are disproportionately affected by salaries paid
to those executives with extensive years of service.
The Compensation Committee's review of the competitive market resulted in
salary increases of 5.0% being awarded to Messrs. Alexander and Krinsly and 6.6%
to Messrs. Quicke and Weinstein in March 1999. The executive officers were
granted the foregoing increases as a result of the Compensation Committee's
determination that these adjustments were required in order to maintain
competitive, yet reasonable, salary levels. In all cases, there was a desire to
maintain the high level of motivation and contribution associated with these
executives. The Compensation Committee's conclusions were based upon the
detailed comparisons described above with respect to Company size, complexity
and industry mix, overlaid by the performance, experience and tenure of the
Company's executive officers.
The Company's annual incentive bonus plans seek to motivate and reward
executives by recognizing the impact their individual accomplishments have had
on the financial performance of the Company or of a particular division during
the previous year. The named executive officers are measured by the Company's
Management Incentive Bonus Plan for Corporate Executive Officers (the 'Plan').
Three of the five corporate executive officers earned bonuses for 1998 based
solely on the Company's having achieved in excess of certain target levels of
primary earnings per share from continuing operations, before extraordinary
items ('EPS'), which target is determined by the Compensation Committee each
year: the Chairman/Chief Executive Officer was awarded a bonus of $1,210,209;
the Senior Executive Vice President/General Counsel was awarded $597,481; and
the Executive Vice President/Finance and Administration was awarded $361,931.
The bonus opportunity for the Chairman/Chief Executive Officer is calculated at
32.5% of his base compensation if the Company achieves its 'Minimum' EPS; up to
65% of base compensation at 'Par' EPS; and up to 97.5% of base compensation at
'Outstanding' EPS. The bonus opportunity for the Senior Executive Vice
President/General Counsel and the Executive Vice President/Finance and
Administration is calculated at 30%, up to 60% and up to 90% of their respective
base compensation, depending upon whether 'Minimum,' 'Par' or 'Outstanding' EPS,
respectively, has been achieved.
15
<PAGE>
<PAGE>
For the President/Chief Operating Officer, 33.3% of bonus opportunity is
based upon Company EPS, with the other 66.6% dependent upon actual operating
income and return on net assets ('RONA') results, as compared against budgeted
results, for the operations which are under his direction (all non-gas turbine
operations). This provision was designed so that the Plan would reflect the
contributions made by Mr. Quicke not only to the Company as a whole but also to
the operations he directs. Accordingly, Mr. Quicke was awarded a bonus of
$437,325, based upon both the Company EPS component of his bonus formula, as
well as the 1998 operating income and RONA, as compared against budgeted
results, of the operations under his direction.
For the Senior Vice President, Gas Turbine Operations, 33.3% of his bonus
opportunity is based upon Company EPS and 66.6% on actual operating income and
RONA results (before major litigation expenses), as compared against budgeted
results, for the gas turbine operations which are under his supervision.
Accordingly, Mr. Weinstein was awarded a bonus of $448,110, based upon both the
Company EPS component of his bonus formula, as well as the 1998 operating income
and RONA, as compared against budgeted results, of the gas turbine operations.
The Plan was initially approved by shareholders in 1994 to comply with
Section 162(m) of the Internal Revenue Code. That section provides that
compensation of an executive officer who is required to be listed in the Summary
Compensation Table of the Proxy Statement is not tax deductible by the Company
to the extent that it exceeds $1.0 million, unless certain criteria (including
shareholder approval) have been met. Thus, bonuses (but not salaries) payable to
Corporate Executive Officers under the Plan (which complies with the
requirements of Section 162(m)) are tax deductible by the Company even if they
raise the total compensation of any such officer above $1.0 million. While the
terms of the Plan provide that it cannot be substantively amended without
shareholder approval (or it will no longer be in compliance with Section
162(m)), the Compensation Committee always retains discretion to impose more
restrictive, although not more generous, criteria under the Plan. The terms of
the original 1994 Plan provided for achievement of budgeted EPS levels of 85%
(Minimum), up to 100% (Par) and up to 115% (Outstanding). The Compensation
Committee adjusted these bonus levels for 1998 for achievement of budgeted EPS
levels of 85% (Minimum) and up to 100% (Par). In addition, they adjusted the
bonus level for 1998 for achievement of budgeted EPS to 125% (Outstanding).
While the 1998 percentages were lower than those of the previous year, the
budgeted EPS for 1998 was three times higher than that set for 1997.
Consequently, the bonus thresholds were, in fact, more difficult to achieve in
1998 than in 1997.
It is the belief of the Compensation Committee that long-term compensation
awards in the form of stock options remain a significant part of an overall
executive compensation package. Accordingly, approval for the 1998 Key
Employees' Stock Option Plan (which provides for maximum aggregate grants to any
one employee of no more than 50,000 shares of stock during the term of said
plan) was obtained at the 1998 Annual Meeting of Stockholders.
The performance of the Company improved substantially in 1998, largely due
to the continued recovery at the gas turbine operation, the substantial
turnaround at MEGTEC, and continued strong performance at several other
operating units of the Company. Although the outlook for the aerospace industry
and other key markets served by Sequa businesses appears to be favorable,
unforeseen events, such as the recent turmoil in Asia, can affect performance.
The Compensation Committee is confident, however, that Sequa's executive officer
group is fully equipped to meet whatever challenges are
16
<PAGE>
<PAGE>
encountered in the course of directing the Company's operations. The
Compensation Committee believes that the total compensation packages provided to
the Company's executive officers are competitive without being excessive and are
appropriate to assure the retention and motivation of this highly skilled and
experienced segment of the Sequa workforce.
Compensation Committee
Gerald Tsai, Jr., Chairman
Donald D. Kummerfeld
A. Leon Fergenson*
* Mr. Fergenson was a member of the Compensation Committee through May 7, 1998.
PROPOSED AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED NUMBER OF SHARES
The Company's Restated Certificate of Incorporation, as amended on
December 19, 1986 and further amended on May 7, 1987 (the 'Certificate of
Incorporation') currently authorizes 31,825,000 shares of Capital Stock, of
which 25,000,000 shares are Class A Common Stock, 5,000,000 shares are Class B
Common Stock and 1,825,000 shares are Preferred Stock. Of the 25,000,000 shares
of Class A Common Stock authorized, as of March 1, 1999, 7,046,193 shares were
outstanding, 228,971 shares were held in the Company's treasury, 528,367 shares
were reserved for issuance under the Company's benefit plans, 3,329,790 shares
were reserved for issuance upon the conversion of any shares of Class B Common
Stock and 545,742 shares were reserved for issuance upon the conversion of any
of the Company's $5.00 Cumulative Convertible Preferred Stock. Of the 5,000,000
shares of Class B Common Stock authorized, as of March 1, 1999, 3,329,790 shares
were outstanding and 397,283 shares were held in the Company's treasury. Of the
1,825,000 shares of Preferred Stock authorized, as of March 1, 1999, 412,815
shares were outstanding and 383,990 shares were held in the Company's treasury.
The Board of Directors has determined that it is in the best interests of
the Company's stockholders to increase the number of shares of Class A Common
Stock which the Company is authorized to issue from 25,000,000 to 50,000,000
shares and to increase the number of Class B Common Stock which the Company is
authorized to issue from 5,000,000 to 10,000,000. No increase in the number of
shares of authorized Preferred Stock is being proposed at this time.
The Board of Directors believes that the proposed increase in the number of
authorized shares of Class A Common Stock and Class B Common Stock will benefit
the Company by improving its flexibility in responding to future business needs
and opportunities. The additional authorized shares could be used for possible
future acquisitions, financings, stock dividends and other proper corporate
purposes. Pursuant to provisions in the Company's Certificate of Incorporation,
shares of Class B Common Stock can be issued only in the form of a distribution
or distributions pursuant to a stock dividend on, or a split-up of, the shares
of Class B Common Stock and only to the then holders of the outstanding shares
of Class B Common Stock in conjunction with and in the same ratio as a stock
dividend on, or split-up of, the shares of Class A Common Stock.
Within the limits imposed by applicable law and the rules of the New York
Stock Exchange, described below, shares of Class A Common Stock and, subject to
the above-mentioned restrictions in
17
<PAGE>
<PAGE>
the Company's Certificate of Incorporation, shares of Class B Common Stock could
be issued in one or more transactions. Depending upon the nature and terms
thereof, such a transaction or transactions could make a takeover of the Company
more difficult and, therefore, less likely. An issuance of additional shares of
Class A or Class B Common Stock would have the effect of diluting the earnings
per share and book value per share of existing shares of Class A or Class B
Common Stock and could dilute the stock ownership of persons seeking to obtain
control of the Company. The Board of Directors, however, has no present plans,
understandings or agreements to issue the additional shares to be authorized
except pursuant to the Company's benefit plans and its convertible securities.
The Board of Directors does not currently intend to propose any amendments
to the Company's Certificate of Incorporation which might be deemed to have the
effect of discouraging transactions that might lead to a change of control of
the Company, although such amendments or other programs may be considered by the
Board in the future if it believes the interests of the stockholders would be
protected thereby.
The New York Stock Exchange, on which the Class A Common Stock, Class B
Common Stock and Preferred Stock are listed, currently requires stockholder
approval as a prerequisite to listing shares in several instances, including
acquisition transactions where the number of shares of common stock to be issued
is or will be equal to or in excess of 20% of the number of shares outstanding
before such issuance.
Except for the increase of the number of authorized shares, the proposed
amendment would not change any of the provisions of the Company's Certificate of
Incorporation. All shares of Class A Common Stock, Class B Common Stock and
Preferred Stock, including the additional shares of Class A Common Stock and
Class B Common Stock that would be authorized if the proposed amendment is
adopted, which are not issued and outstanding would be issuable at any time or
from time to time by action of the Board of Directors without further
authorization from stockholders, except to the extent that such further
authorization is required by the rules of the New York Stock Exchange, the terms
of any series of the Company's Preferred Stock, the terms of the Company's
Certificate of Incorporation, the terms of any agreements or securities the
Company may hereafter enter into or issue, or applicable law.
The additional shares of Class A Common Stock and Class B Common Stock
which would be authorized by the proposed amendment would have the same rights
and privileges as and otherwise be identical to the shares of Class A Common
Stock or Class B Common Stock, as the case may be, currently authorized and
outstanding. The Certificate of Incorporation empowers the Board of Directors to
determine the relative rights and limitations of series of Preferred Stock,
including, among other things, dividend rights, conversion prices, voting
rights, redemption prices and the preferences, if any, of such series over
shares of Class A and Class B Common Stock as to dividends or distributions of
assets of the Company. It is possible that the future issuance of Preferred
Stock having dividend and liquidation preferences could affect amounts that
might otherwise be available to holders of Class A and Class B Common Stock as
dividends or upon liquidation. Holders of the Company's shares have no
preemptive rights and, as a result, existing stockholders would not have any
preferential right to purchase any of the additional shares of Class A Common
Stock or Class B Common Stock when issued.
18
<PAGE>
<PAGE>
In order to improve the Company's flexibility in responding to future
business needs and opportunities, the Company's stockholders are accordingly
being asked to adopt an amendment to the Company's Certificate of Incorporation
to increase the aggregate number of shares which the Company is authorized to
issue from 31,825,000 shares, of which 25,000,000 shares are Class A Common
Stock, 5,000,000 are Class B Common Stock and 1,825,000 shares are Preferred
Stock, to 61,825,000 shares, of which 50,000,000 shares shall be Class A Common
Stock, 10,000,000 shares shall be Class B Common Stock and 1,825,000 shares
shall be Preferred Stock.
The Board of Directors recommends that the stockholders approve the
amendment to the Company's Certificate of Incorporation, and intends to
introduce at the forthcoming Annual Meeting the following resolution:
'RESOLVED, that as proposed and declared advisable by the Board of
Directors, Article FOURTH, Paragraph A of the Certificate of Incorporation of
the Company be amended to read in its entirety as follows:
`A. Classes and Number of Shares. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is
61,825,000 shares. The classes and the aggregate number of shares of stock
of each class which the Corporation shall have authority to issue are as
follows:
50,000,000 shares of Class A Common Stock, no par value (the
'Class A Common Stock');
10,000,000 shares of Class B Common Stock, no par value (the
'Class B Common Stock'); and
1,825,000 shares of Preferred Stock, one dollar ($1.00) par value
(the 'Preferred Stock').' '
The affirmative vote of holders of shares of stock representing a majority
of the combined voting rights of all eligible classes of stock present or
represented at the meeting is necessary for the adoption of this Proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' THE PROPOSAL TO AMEND THE
COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The stockholders will be asked to ratify the appointment of Arthur Andersen
LLP as independent public accountants of the Company for the fiscal year 1999.
Arthur Andersen LLP has been regularly employed as the independent auditors for
the Company since 1940. Representatives of the firm are expected to be present
at the stockholders' meeting with the opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU
VOTE 'FOR' RATIFICATION OF THE APPOINTMENT OF THE ABOVE AUDITORS.
19
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<PAGE>
OTHER MATTERS
The management of the Company knows of no business other than that referred
to herein to be presented for action at the meeting. If, however, any other
business should properly come before the meeting or any adjournment thereof, it
is intended that all proxies will be voted with respect to such business in
accordance with the best judgment of the persons named in said proxies.
PROPOSALS OF STOCKHOLDERS FOR THE 2000 ANNUAL MEETING
Proposals by stockholders intended to be presented for action at the 2000
annual meeting of stockholders must be received by the Company at its principal
executive offices, 200 Park Avenue, New York, New York 10166, not later than
November 19, 1999. It is suggested that such proposals be submitted by Certified
Mail-Return Receipt Requested. The SEC has amended Rule 14a-4(c) under the
Exchange Act which governs the Company's use of discretionary proxy voting
authority with respect to shareholder proposals that are not being included in
the Company's proxy solicitation materials pursuant to Rule 14a-8 of the
Exchange Act. Therefore, in the event a stockholder does not notify the Company
at least 45 days before the date the Company mailed its proxy material for the
prior year's annual meeting of stockholders (which date would be February 14,
2000 for the Company's 2000 Annual Meeting) of an intent to present such a
proposal at the Company's 2000 Annual Meeting, the Company's management proxies
will have the right to exercise their discretionary authority in connection with
the matter submitted by the stockholder, without discussion of the matter in the
Proxy Statement.
March 25, 1999
20
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[Logo]
Printed on Recycled Paper
<PAGE>
<PAGE>
APPENDIX 1
ADMISSION TICKET
SEQUA CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
May 6, 1999 11:00 a.m.
270 Park Avenue
Conference Room A, 11th Floor
New York, New York
If you plan to attend the Annual Meeting, please mark
the notification box on the bottom of this card.
YOU MUST PRESENT THIS PORTION OF THE CARD IN ORDER TO BE
ADMITTED TO THE SEQUA CORPORATION ANNUAL MEETING ON MAY 6, 1999.
Please note: The number(s) specified
above refer(s) to the number of votes,
not the number of shares. Class A
Common Stock and $5.00 Cumulative
Convertible Preferred Stock are each
entitled to one vote per share.
PLEASE DETACH HERE Class B Common Stock is entitled to
ten votes per share.
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<TABLE>
<S> <C> <C>
[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES IN ITEM 1 AND FOR ITEMS 2 AND 3.
1. Election of Director Nominees: Messrs. Alexander, Black, Dworman, Gottesman, Krinsly,
Kummerfeld, LeFrak, Quicke, Sovern, Sullivan and Tsai
FOR all nominees [ ] WITHHOLD authority [ ] *EXCEPTIONS [ ]
listed above to vote for all nominees
listed above
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions __________________________________________________________________
FOR AGAINST ABSTAIN
2. Approval of an amendment to the [ ] [ ] [ ]
Company's Certificate of
Incorporation to increase the
number of authorized shares of
Class A and Class B Common Stock.
FOR AGAINST ABSTAIN
3. Appointment of Arthur Andersen [ ] [ ] [ ]
LLP as independent auditors for
1999.
I plan to attend
the Annual Meeting. [ ]
Address Change and/or [ ]
Comments Mark Here
NOTE: Please sign as name appears hereon. When signing as attorney, executor,
administrator, trustee, guardian, please give full title as such. If the signer
is a corporation, please sign the full corporate name, by duly authorized
officer. If shares are held jointly, each stockholder named should sign.
Dated:_____________________________________ , 1999
___________________________________________
Signature(s)
___________________________________________
Votes MUST be indicated (x) in black or blue ink. [X]
(PLEASE SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE.)
PLEASE DETACH HERE
YOU MUST DETACH THIS PORTION OF THE PROXY CARD
BEFORE RETURNING IT IN THE ENCLOSED ENVELOPE
</TABLE>
<PAGE>
<PAGE>
SEQUA CORPORATION
SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING OF
STOCKHOLDERS OF SEQUA CORPORATION--MAY 6, 1999
The undersigned hereby appoints Norman E. Alexander and Stuart Z. Krinsly,
or either of them, attorneys and proxies, with full power of substitution and
revocation in each, for and on behalf of the undersigned, and with all the
powers the undersigned would possess if personally present, to vote at the above
Annual Meeting to be held at 270 Park Avenue, Conference Room A, 11th Floor, New
York, New York at 11:00 AM and any adjournment or postponement thereof all
shares of Common and Preferred Stock of Sequa Corporation that the undersigned
would be entitled to vote at such meeting.
This proxy, when properly executed, will be voted as directed by the
stockholder. If no direction is given, when the duly executed proxy is returned,
the shares represented by this proxy will be voted FOR all nominees in Item 1
and FOR Items 2 and 3. In their discretion, the proxies are authorized to vote
upon such other matters as may properly come before the meeting or any
adjournment or postponement thereof.
(Continued, and to be signed and dated, on the reverse side.)
SEQUA CORPORATION
P.O. BOX 11180
NEW YORK, N.Y. 10203-0180
<PAGE>
<PAGE>
APPENDIX 2
ATTENDANCE CARD
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
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BUSINESS REPLY MAIL
FIRST CLASS PERMIT NO. 2596 NEW YORK, N.Y.
POSTAGE WILL BE PAID BY ADDRESSEE
SEQUA CORPORATION
ATTN: CORPORATE SECRETARY
200 PARK AVENUE
NEW YORK, NY 10164-1882
<PAGE>
<PAGE>
SEQUA CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
May 6, 1999 11:00 a.m.
270 Park Avenue
Conference Room A, 11th Floor
New York, New York
If you plan to attend the Annual Meeting, please sign and return the
self-addressed, postage paid portion of this card.
You will need to present this portion of the card in order to be admitted to the
Sequa Annual Meeting on May 6, 1999.
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I plan to attend the Annual Meeting of Stockholders of
Sequa Corporation on May 6, 1999.
- ------------------------------------------------------------------------
Signature
- ------------------------------------------------------------------------
Please print/type full name as it appears on proxy card
Address:
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Stock Ownership: Class A________ Class B__________ Preferred_________
- ------------------------------------------------------------------------
Please check all that apply
<PAGE>
