<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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
TOOTSIE ROLL INDUSTRIES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
TOOTSIE ROLL INDUSTRIES, INC.
7401 SOUTH CICERO AVENUE, CHICAGO, ILLINOIS 60629
March 30, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
your Company to be held on Monday, May 1, 1995, at 9:00 A.M., Eastern Daylight
Savings Time, in Room 1200, Mutual Building, 909 East Main Street, Richmond,
Virginia.
At the meeting, you will be asked to consider and vote upon the election of
five directors and a proposal to ratify the appointment of Price Waterhouse LLP
as independent auditors of the Company.
The formal Notice of the Annual Meeting of Shareholders and the Proxy
Statement follow. It is important that your shares be represented and voted at
the meeting, regardless of the size of your holdings. Accordingly, please
promptly mark, sign and date the enclosed proxy and return it in the enclosed
envelope, whether or not you intend to be present at the Annual Meeting of
Shareholders.
Sincerely,
<TABLE>
<S> <C>
Melvin J. Gordon Ellen R. Gordon
CHAIRMAN OF THE BOARD AND PRESIDENT AND
CHIEF EXECUTIVE OFFICER CHIEF OPERATING
OFFICER
</TABLE>
<PAGE>
TOOTSIE ROLL INDUSTRIES, INC.
7401 SOUTH CICERO AVENUE, CHICAGO, ILLINOIS 60629
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 1, 1995
To the Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of TOOTSIE
ROLL INDUSTRIES, INC. will be held in Room 1200, Mutual Building, 909 East Main
Street, Richmond, Virginia, on Monday, May 1, 1995, at 9:00 A.M., Eastern
Daylight Savings Time, for the following purposes:
1. To elect the full board of five directors;
2. To consider and act upon ratification of the appointment of Price
Waterhouse LLP as independent auditors for the Company for the fiscal
year ending December 31, 1995; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on March 10, 1995 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournments
thereof. The relative voting rights of the Company's Common Stock and Class B
Common Stock in respect of the Annual Meeting and the matters to be acted upon
at such meeting are described in the accompanying Proxy Statement.
Your attention is directed to the accompanying Proxy, Proxy Statement and
1994 Annual Report of Tootsie Roll Industries, Inc..
By Order of the Board of Directors
William Touretz, Secretary
Chicago, Illinois
March 30, 1995
NOTE: PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED.
<PAGE>
TOOTSIE ROLL INDUSTRIES, INC.
7401 SOUTH CICERO AVENUE
CHICAGO, ILLINOIS 60629
---------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- MAY 1, 1995
------------------------
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Tootsie Roll Industries, Inc. of the accompanying proxy
for the Annual Meeting of Shareholders of the Company to be held on Monday, May
1, 1995, and at any adjournments thereof. The purpose of the meeting is for the
shareholders of the Company to: (1) elect five directors to terms of office
expiring at the 1996 Annual Meeting of Shareholders; (2) consider and act upon a
proposal to ratify the appointment of Price Waterhouse LLP as independent
auditors of the Company for the fiscal year ending December 31, 1995; and (3)
transact such other business as may properly come before the meeting and any
adjournments thereof.
Proxies in the accompanying form, properly executed and received by the
Company prior to the meeting and not revoked, will be voted as directed therein
on all matters presented at the meeting. In the absence of a specific direction
from the shareholder, proxies will be voted for the election of all named
director nominees and for ratification of the appointment of Price Waterhouse
LLP as the Company's independent auditors. The Board of Directors does not know
of any other matters to be brought before the meeting; however, if other matters
should properly come before the meeting it is intended that the persons named in
the accompanying proxy will vote thereon at their discretion. Any shareholder
may revoke his or her proxy by giving written notice of revocation to the
Secretary of the Company at any time before it is voted, by executing a
later-dated proxy or by attending the meeting and voting his or her shares in
person.
The Board of Directors has fixed the close of business on March 10, 1995 as
the record date for the determination of shareholders of the Company entitled to
receive notice of and to vote at the Annual Meeting of Shareholders to be held
on May 1, 1995, and at any adjournments thereof. As of the close of business on
March 10, 1995, there were outstanding and entitled to vote 7,315,110 shares of
Common Stock and 3,529,353 shares of Class B Common Stock. Each share of Common
Stock is entitled to one vote and each share of Class B Common Stock is entitled
to ten votes, and therefore the Common Stock will be entitled to a total of
7,315,110 votes and the Class B Common Stock will be entitled to a total of
35,293,530 votes. The Common Stock and the Class B Common Stock will vote
together as a single class with respect to the election of directors and all
other matters submitted to the Company's shareholders at the meeting. This Proxy
Statement and the enclosed form of proxy are being mailed to shareholders of the
Company on or about March 30, 1995.
The entire cost of soliciting proxies in the accompanying form will be borne
by the Company. Proxies will be solicited by mail, and may be solicited
personally by directors, officers or regular employees of the Company who will
not receive special compensation for such services. Upon request, the Company
will reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of shares of the Company's Common Stock and Class B Common Stock.
VOTING INFORMATION
A shareholder may, with respect to the election of directors (i) vote for
the election of all named director nominees, (ii) withhold authority to vote for
all named director nominees or (iii) vote for the election of all named director
nominees other than any nominee with respect to whom the shareholder withholds
authority to vote by so indicating in the appropriate space on the proxy. A
shareholder may, with respect to the proposal to ratify the appointment of Price
Waterhouse LLP as the Company's independent auditors (i) vote "FOR"
ratification, (ii) vote "AGAINST" ratification or (iii) "ABSTAIN" from voting on
the proposal. Proxies properly executed and received by the Company prior to the
meeting and not revoked, will be voted as directed therein on all matters
presented at the meeting. In the absence of a specific direction from the
shareholder, proxies will be voted for the election of all named director
nominees and for
1
<PAGE>
ratification of the appointment of Price Waterhouse LLP as the Company's
independent auditors. If a proxy indicates that all or a portion of the votes
represented by such proxy are not being voted with respect to a particular
matter, such non-votes will not be considered present and entitled to vote on
such matter, although such votes may be considered present and entitled to vote
on other matters and will count for purposes of determining the presence of a
quorum.
The affirmative vote of a plurality of the votes present in person or by
proxy at the meeting and entitled to vote in the election of directors is
required to elect directors. Thus, assuming a quorum is present, the five
persons receiving the greatest number of votes will be elected to serve as
directors. Withholding authority to vote for a director(s) and non-votes with
respect to the election of directors will not affect the outcome of the election
of directors. If a quorum is present at the meeting, in order to ratify the
appointment of Price Waterhouse LLP as the Company's independent auditors, the
number of votes cast favoring the action must exceed the number of votes cast
opposing the action. Accordingly, non-votes and abstentions with respect to such
matter will not affect the determination of whether such matter is approved.
ELECTION OF DIRECTORS
It is the intention of the persons named in the accompanying proxy to vote
for the election of each of the five persons named in the table below as a
director of the Company to serve until the 1996 Annual Meeting of Shareholders
and until his or her successor is duly elected and qualified. All of such
nominees are now directors of the Company, having been previously elected as
directors by the shareholders of the Company. In the event any of the nominees,
all of whom have expressed an intention to serve if elected, fail to stand for
election, the persons named in the proxy presently intend to vote for a
substitute nominee designated by the Board of Directors. The information
concerning the nominees and their shareholdings has been furnished by them to
the Company.
The following table sets forth information with respect to the five nominees
for election as directors:
<TABLE>
<CAPTION>
NAME, AGE AND OTHER POSITIONS, IF ANY,
WITH COMPANY PERIOD SERVED AS DIRECTOR AND BUSINESS EXPERIENCE DURING PAST 5 YEARS
--------------------------------------- ------------------------------------------------------------------------
<S> <C>
Melvin J. Gordon, 75; Chairman of the Director since 1952; Chairman of the Board since 1962; Director and
Board and Chief Executive President of HDI Investment Corp., a family investment company.
Officer(1)(2)
Ellen R. Gordon, 63, President and Director since 1969; President since 1978; Director and Vice- President
Chief Operating Officer(1)(2) of HDI Investment Corp., a family investment company; director of CPC
International since 1991.
Charles W. Seibert, 80(3) Director since 1978; retired; Vice-President of Citibank through
February, 1974 and consultant to several banks since 1974.
William Touretz, 80, Secretary(1) Director since 1974; Treasurer 1969-79; Secretary since 1978; part-time
consultant to Company and subsidiaries since 1980.
Lana Jane Lewis-Brent, 48(3) Director since 1988; President of Paul Brent Designer, Inc. since 1992
(art publishing); former President of Sunshine-Jr. Stores, Inc.
(convenience stores).
<FN>
------------------------
(1) Member of the Executive Committee. When the Board of Directors is not in
session, the Executive Committee has the powers of the Board in the
management of the business and affairs of the Company, other than certain
actions which under the laws of the State of Virginia must be approved by
the Board of Directors. The Executive Committee held four meetings in 1994.
(2) Melvin J. Gordon and Ellen R. Gordon are husband and wife. Mr. and Mrs.
Gordon may be deemed to be control persons of the Company.
(3) Member of the Audit Committee. The Audit Committee (a) annually recommends
to the Board of Directors the appointment of independent public accountants
for the Company and subsidiaries; (b) reviews the scope of audits; (c)
approves the non-audit services of the independent public accountants for
the Company and subsidiaries and their fees for audit and non-audit
services; and (d) receives, reviews and takes action deemed appropriate
with respect to audit reports submitted. The Audit Committee held two
meetings during 1994.
</TABLE>
The Company does not have a nominating committee or compensation committee.
2
<PAGE>
The Board of Directors held five meetings during 1994. Mr. and Mrs. Gordon
do not receive fees for their service on the Board of Directors or committees.
Other directors receive an annual fee of $16,000 plus $1,250 per meeting
attended for service on the Board of Directors. Each member of the Audit
Committee receives $1,000 per meeting attended. Mr. Seibert, as the Chairman of
the Audit Committee, receives an additional annual fee of $5,500. Additionally,
William Touretz receives an annual fee of $3,000 for service on the Executive
Committee. During 1994, all of the directors attended at least 75 percent of the
meetings of the Board of Directors and (if they were members of the Executive
Committee or Audit Committee) the Executive Committee and Audit Committee.
OWNERSHIP OF COMMON STOCK AND CLASS B COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 10, 1995, information with
respect to the beneficial ownership of the Company's Common Stock and Class B
Common Stock by each person known to the Company to be the beneficial owner of
more than five percent of such Common Stock or Class B Common Stock. The
information has been furnished to the Company by such persons or derived from
filings with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK AND
CLASS B COMMON STOCK
OWNED BENEFICIALLY
AND NATURE OF
BENEFICIAL PERCENTAGE OF
OWNERSHIP (1) OUTSTANDING
--------------------- SHARES OF
NAME DIRECT INDIRECT CLASS
------------------------------------ --------- ---------- --------------
<S> <C> <C> <C> <C>
Melvin J. Gordon.................... Common 224,817 -- 3.1%
..................... Class B 224,817 -- 6.4%
Ellen R. Gordon..................... Common 1,444,133 6,831(2) 19.8%
..................... Class B 1,444,133 6,831(2) 41.1%
Melvin J. Gordon
and Ellen R. Gordon,
jointly as fiduciaries............. Common -- 908,564(3) 12.4%
..................... Class B -- 908,564(3) 25.7%
Leigh R. Weiner..................... Common 310,762 71,370(4) 5.2%
..................... Class B 381,098 82,908(4) 13.1%
<FN>
------------------------
The address of Mr. and Mrs. Gordon is c/o Tootsie Roll Industries, Inc.,
7401 South Cicero Avenue, Chicago, Illinois 60629. The address of Mr.
Weiner is c/o Becker Ross Stone DeStefano & Klein, 317 Madison Ave., New
York, New York 10017-5372.
(1) The persons named in the above table have sole investment and voting power
over the shares indicated therein as being owned directly and share
investment and voting power over the shares indicated therein as being
owned indirectly.
(2) Held as co-trustee of the Company's pension plan.
(3) Includes 808,398 shares each of Common Stock and Class B Common Stock held
by Mr. and Mrs. Gordon as fiduciaries for their children and 100,166 shares
each of Common Stock and Class B Common Stock owned by a charitable
foundation in which members of the Gordon family are interested.
(4) Includes 13,215 shares of Common Stock and 8,096 shares of Class B Common
Stock held by Mr. Weiner's wife (of which he disclaims beneficial
ownership), 31,877 shares of Common Stock and 24,644 shares of Class B
Common Stock held Mr. Weiner or by his wife as custodian for their children
and 26,278 shares of Common Stock and 50,168 shares of Class B Common Stock
held by a charitable foundation in which Mr. Weiner and members of his
family are interested.
</TABLE>
3
<PAGE>
OWNERSHIP OF COMMON STOCK AND CLASS B COMMON STOCK BY MANAGEMENT
The following table sets forth as of March 10, 1995 information with respect
to the beneficial ownership of the Company's Common Stock and Class B Common
Stock by each director, by each executive officer who is named in the summary
compensation table included in this proxy statement, and by all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK
AND CLASS B
COMMON STOCK
OWNED
BENEFICIALLY AND
NATURE OF
BENEFICIAL PERCENTAGE OF
OWNERSHIP (1) OUTSTANDING
---------------- SHARES OF
NAME DIRECT INDIRECT CLASS
------------------------------------------ ------ -------- --------------
<S> <C> <C> <C> <C>
Melvin J. Gordon.......................... Common (2) (2) (2)
........................... Class B (2) (2) (2)
Ellen R. Gordon........................... Common (2) (2) (2)
........................... Class B (2) (2) (2)
Charles W. Seibert........................ Common 231 -- (3)
........................... Class B 231 -- (3)
William Touretz........................... Common -- -- (3)
........................... Class B 631 1,465 (3)
Lana Jane Lewis-Brent..................... Common 761 2,292 (3)
........................... Class B -- -- (3)
John W. Newlin, Jr........................ Common 2,082 259 (3)
........................... Class B 2,082 259 (3)
Thomas E. Corr............................ Common -- -- (3)
........................... Class B -- -- (3)
G. Howard Ember Jr........................ Common -- -- (3)
........................... Class B -- -- (3)
All directors and executive officers as a
group (9 persons)........................ Common 1,672,024 917,946 35.4%
........................... Class B 1,671,894 917,119 73.4%
<FN>
------------------------
(1) The persons named in the above table have sole investment and voting power
over the shares indicated therein as being owned directly and share
investment and voting power over the shares indicated therein as being
owned indirectly.
(2) See the table under the caption "Ownership of Common Stock and Class B
Common Stock by Certain Beneficial Owners" above for shareholdings of Mr.
and Mrs. Gordon.
(3) Less than 1% of the outstanding shares.
</TABLE>
SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of the
Company's Common Stock or Class B Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and New York
Stock Exchange. Such persons are also required to furnish the Company with
copies of all such reports.
Based solely on its review of the copies of such reports received by the
Company, and written representations from certain reporting persons, the Company
is pleased to note that its directors, executive officers and greater than ten
percent shareholders filed all required reports during or with respect to fiscal
year 1994.
4
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following summary compensation table sets forth the compensation for the
last three calendar years of the Chairman and Chief Executive Officer of the
Company and the four other most highly compensated executive officers of the
Company serving at the end of 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
AWARDS
ANNUAL COMPENSATION ------------------------ PAYOUTS
-------------------------------------- RESTRICTED -------
NAME AND PRINCIPAL OTHER ANNUAL STOCK LTIP ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION(1)(2)
---------------------- ---- -------- -------- ------------ ---------- ------------ ------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Melvin J. Gordon 1994 $670,000 $415,000 $ 0 $ 0 0 $ 0 $ 562,244(3)
Chairman and CEO 1993 610,000 360,000 0 0 0 0 394,281(3)
1992 555,000 300,000 0 0 0 0 347,224
Ellen R. Gordon 1994 $605,000 $410,000 $ 0 $ 0 0 $ 0 $ 542,884(3)
President and Chief 1993 545,000 355,000 0 0 0 0 374,921(3)
Operating Officer 1992 490,000 295,000 0 0 0 0 308,324
John W. Newlin, Jr. 1994 $358,000 $140,000 $ 0 $ 0 0 $ 0 $ 149,743
Vice President/ 1993 327,000 120,000 0 0 0 0 122,044
Manufacturing 1992 297,000 100,000 0 0 0 0 108,848
Thomas E. Corr 1994 $305,000 $146,000 $ 0 $ 0 0 $ 0 $ 126,050
Vice President/ 1993 277,000 122,000 0 0 0 0 108,972
Marketing and Sales 1992 252,000 101,000 0 0 0 0 95,150
G. Howard Ember Jr. 1994 $206,000 $ 92,000 $ 0 $ 0 0 $ 0 $ 82,082
Vice President/ 1993 187,000 70,000 0 0 0 0 68,342
Finance 1992 170,000 48,000 0 0 0 0 57,140
<FN>
------------------------------
(1) "All Other Compensation" includes (i) contributions to the Company's
pension, profit-sharing and excess benefit plans, (ii) annual awards to the
Company's Career Achievement Plan ("CAP") in the form of deferred
compensation with vesting and forfeiture provisions and (iii) benefits
under the Company's split dollar life insurance plan (see note 3 below).
(2) For 1994, (i) contributions to the Company's pension, profit-sharing and
excess benefit plans, (ii) CAP awards and (iii) split dollar life insurance
benifits were, respectively, as follows: $140,596, $0 and $421,648 for
Melvin J. Gordon; $121,236, $0 and $421,648 for Ellen R. Gordon; $58,722,
$73,000 and $18,021 for John W. Newlin, Jr.; $52,135, $67,000, and $6,915
for Thomas E. Corr; and $32,502, $45,000 and $4,580 for G. Howard Ember Jr.
(3) In 1993 the Board of Directors approved a split dollar life insurance plan
for Melvin J. Gordon and Ellen R. Gordon that replaced benefits that were
already earned under the Company's CAP and previous split dollar insurance
programs pursuant to which Mr. and Mrs. Gordon received awards during the
years 1982 through 1992. The 1993 split dollar life insurance plan also
provides additional benefits. Although the Company will fully recover all
premiums paid for the split dollar life insurance after 15 years, the plan
includes a compensation element for the additional benefits attributable to
the Company's cost for advancing the premium payments. The compensation
element represents the total expected cost of the benefits provided
allocable to the service provided by Melvin J. Gordon and Ellen R. Gordon
during the year. The increase in the 1994 compensation element is
attributable to the increased cost for the time value of money due to
higher interest rates in 1994 compared to 1993.
</TABLE>
REPORT ON EXECUTIVE COMPENSATION
The entire Board of Directors is responsible for determining the
compensation structure and amounts for the executive officers of the Company.
This report describes the policies and rationale for the Board in establishing
the principal components of compensation for the executive officers during 1994.
EXECUTIVE COMPENSATION POLICY
The Company's compensation program is designed to encourage and reward both
individual effort and teamwork leading to improvement in the Company's financial
performance and attainment of the Company's principal long-term objective of
profitably building the Company's well-known brands. The Company's executive
officer compensation program is balanced between short-term and long-term
compensation and incentives. The program is comprised of base salary, annual
cash incentive bonuses, annual awards to the Company's Career Achievement Plan
("CAP"), split-dollar insurance plans, and pension, profit-sharing and excess
benefit plans generally available to employees of the Company. The Board of
Directors believes that this program will lead to increased shareholder value on
a long-term basis.
5
<PAGE>
BASE SALARY
The Board of Directors annually reviews each executive officer's salary. The
Board considers the following with respect to the determination of an individual
executive officer's base salary:
- Performance and contribution to the Company, including length
of service in the position;
- Comparative compensation levels of other companies, including
periodic compensation studies performed by independent
compensation and benefit consultants;
- Overall competitive environment for executives and the level of
compensation considered necessary to attract and retain
executive talent; and
- Historical compensation and performance levels for the Company.
Companies used in comparative analyses for the purpose of determining each
executive officer's salary are selected periodically with the assistance of
professional compensation consultants. Selection of such companies is based on a
variety of factors, including market capitalization and industry classification.
The companies used in these comparative analyses include some of the companies
in the Peer Group used in the Performance Graph, as well as other companies. The
Board of Directors believes that the Company's primary competitors for executive
talent are companies with a similar market capitalization and, accordingly,
relies on a broad array of companies in various industries for comparative
analyses.
ANNUAL INCENTIVES AND OTHER AWARDS
Annual incentive bonuses and CAP and split-dollar insurance awards are made
at the discretion of the Board of Directors to executive corporate officers in
order to recognize and reward each individual executive officer's contribution
to the Company's overall performance in terms of both financial results and
attainment of individual and Company goals.
The annual cash incentive bonus is designed to reward executives, as well as
other management personnel, for their contributions to the Company's financial
performance during the recently completed year.
The annual CAP award and split dollar life insurance program is principally
designed to provide an incentive to executive corporate officers to achieve both
short-term and long-term financial and other goals, including strategic
objectives. These programs are also designed to provide an incentive for the
executive to remain with the Company on a long-term basis. These awards are
determined by the Board of Directors based on the performance of the Company and
the executive's contribution to the growth and success of the Company.
The Board of Directors considers both achievement of strategic objectives
and financial performance measures in determining compensation levels. Although
the Board of Directors does not use a fixed formula for determining annual
incentive and other awards, the following measures of Company performance were
considered in the determination of 1994 bonuses and awards:
- Earnings per share;
- Return on assets;
- Return on equity; and
- Net earnings as a percentage of sales.
The awards for 1994 recognize the Company's achievement of record
profitability for the year and the high level of achievement on other measures
of financial performance.
RATIONALE OF CEO COMPENSATION
The Board of Directors established the compensation of Melvin J. Gordon,
Chairman of the Board of Directors and Chief Executive Officer, using the same
criteria that were used to determine the other executive officers' compensation
as discussed above. In addition, the Board considered Mr. Gordon's leadership of
the Company in achieving the Company's strategic and long-term objectives. A
substantial portion of his compensation was at risk, in the form of annual cash
incentive bonus. It is the Board's opinion that Mr. Gordon's compensation
package was based on an appropriate assessment of the Company's performance, his
individual performance and competitive standards.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Internal Revenue Code limits the tax deductibility of executive
compensation in certain circumstances. In the event a portion of executive
compensation were not tax deductible, the Board of Directors
6
<PAGE>
may require the executive to defer the non-deductible portion of compensation
until such time the compensation may be deductible by the Company. Mr. and Mrs.
Gordon elected to defer a portion of their 1994 bonus to 1995 so that all of
their 1994 salary and bonus compensation may be deducted by the Company.
The foregoing report has been approved by the Board of Directors, the
members of which are:
Melvin J. Gordon
Ellen R. Gordon
Charles W. Seibert
William Touretz
Lana Jane Lewis-Brent
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As indicated above under "Report on Executive Compensation," the Board of
Directors of the Company is responsible for determining the compensation of the
executive officers of the Company. Mr. Gordon is the Chairman of the Board and
Chief Executive Officer of the Company, Mrs. Gordon is President and Chief
Operating Officer of the Company, and Mr. Touretz is the Secretary of the
Company. As described above under "Election of Directors," Mr. and Mrs. Gordon
each serves as a director and executive officer of HDI Investment Corp. ("HDI"),
a family investment company. The board of directors of HDI is responsible for
determining the compensation of the executive officers of HDI, two of whose
executive officers (Mr. and Mrs. Gordon) serve on the Board of Directors of the
Company.
PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative total
shareholder return on the Company's Common Stock for a five-year period
(December 31, 1989 to December 31, 1994) with the cumulative total return of
Standard & Poor's 500 Stock Index ("S&P 500") and the Dow Jones Industry Food
Index ("Peer Group", which includes the Company).
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Tootsie Roll 100.00 115.68 215.50 235.36 223.16 200.44
S&P 500 100.00 96.89 126.42 136.05 149.76 151.74
Peer Group 100.00 108.72 152.80 154.02 143.31 152.77
<FN>
------------------------
* Assumes (i) $100 invested on December 31, 1989 in each of the Company's
Common Stock, S&P 500 and the Dow Jones Industry Food Index and (ii) the
reinvestment of dividends.
</TABLE>
7
<PAGE>
RATIFICATION OF THE APPOINTMENT OF
PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS
The Board of Directors has appointed Price Waterhouse LLP, independent
public accountants, as the independent auditors for the Company for the fiscal
year ended December 31, 1995. Price Waterhouse LLP has been the Company's
independent auditors since 1968. Although not required by the Company's articles
of incorporation or bylaws, the Board of Directors deems it to be in the best
interest of the Company to submit to the shareholders a proposal to ratify the
appointment of Price Waterhouse LLP and recommends a vote in favor of such
ratification. It is not expected that representatives of Price Waterhouse LLP
will attend the Annual Meeting.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials for
the 1996 Annual Meeting of Shareholders, any shareholder proposals should be
addressed to Tootsie Roll Industries, Inc., 7401 South Cicero Avenue, Chicago,
Illinois 60629, Attention: Ellen R. Gordon, President, and must be received no
later than December 1, 1995.
GENERAL
The Board of Directors does not know of any matters other than the foregoing
that will be presented for consideration at the Annual Meeting. However, if
other matters should be properly presented at the Annual Meeting, it is the
intention of the persons named in the accompanying proxy to vote thereon in
accordance with their best judgment pursuant to the discretionary authority
granted in the proxy.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1994 is being mailed herewith.
A COPY OF THE COMPANY'S 1994 ANNUAL REPORT ON FORM 10-K WITHOUT EXHIBITS MAY
BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO TOOTSIE ROLL INDUSTRIES,
INC., 7401 SOUTH CICERO AVENUE, CHICAGO, ILLINOIS 60629, ATTENTION: G. HOWARD
EMBER JR., VICE PRESIDENT/FINANCE. A REASONABLE CHARGE WILL BE MADE FOR
REQUESTED EXHIBITS.
By Order of the Board of Directors
William Touretz
SECRETARY
Chicago, Illinois
March 30, 1995
8
<PAGE>
PROXY
TOOTSIE ROLL INDUSTRIES, INC.
ANNUAL MEETING OF SHAREHOLDERS--MAY 1, 1995
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of TOOTSIE ROLL INDUSTRIES, INC. (the
"Company") hereby appoints ELLEN R. GORDON, WILLIAM TOURETZ, MICHAEL L. SOFFIN
and AUGUSTUS C. EPPS, JR., and each of them, as the undersigned's proxies (with
the power of substitution) to vote all the shares of Common Stock and/or Class B
Common Stock of the Company which the undersigned would be entitled to vote at
the annual meeting of shareholders of such Company to be held on May 1, 1995 at
9:00 A.M. (EDST) and any adjournment thereof, on the matters set forth on the
reverse side hereof.
This Proxy will be voted in accordance with instructions specified on the
reverse side, but in the absence of any instructions will be voted "FOR" Items
(1), (2) and (3). If any other business is presented at the meeting, the
proxies are authorized to vote thereon in their discretion. The undersigned
hereby revokes any proxy heretofore given.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
A RETURN ENVELOPE IS ENCLOSED.
<PAGE>
The Board of Directors recommends a vote FOR the Board of Directors'
nominees and FOR the Proposals listed below.
PROXY /X/
Please Mark your votes as this example
_________________ ____________________
COMMON CLASS-B COMMON
(1)--Election of Directors: Melvin J. Gordon, Ellen R. Gordon, Lana Jane
Lewis-Brent, Charles W. Siebert, William Touretz.
FOR all nominees listed above (except as marked to the contrary above)
WITHHOLD AUTHORITY to vote for all nominees listed above
(Instructions: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list above.)
(2)--Proposal to ratify the appointment of Price Waterhouse LLP as auditors for
the fiscal year 1995.
FOR
AGAINST
ABSTAIN
(3)--In their discretion in the transaction of any other business that may
properly come before such meeting.
FOR
AGAINST
ABSTAIN
The undersigned hereby revokes any proxy heretofore given. This proxy will be
voted in accordance with instructions specified above, but in the absence of any
instructions will be voted "FOR" Items (1), (2) and (3). If any other business
is presented at the meeting, the proxies are authorized to vote thereon in their
discretion.
DATED:____________________________________________________________________, 1995
_______________________________________________________________________________
_______________________________________________________________________________
Signature(s) of Shareholder
PLEASE MARK YOUR CHOICE LIKE THIS / / IN BLUE OR BLACK INK
Please date and sign exactly as name appears hereon. Executors, administrators,
Trustees, etc. should so indicate when signing. If shares are held jointly,
both shareholders should sign.
