-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TKxRKmPBniBifQ5YhFsFlwAEyyYeM38eAI3nTF0B3wW3vNSdOWGR0r0vMOZMSvR7 O48zxD+TDmWNKYFsFsV9Mw== 0000950152-96-005169.txt : 19961015 0000950152-96-005169.hdr.sgml : 19961015 ACCESSION NUMBER: 0000950152-96-005169 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961118 FILED AS OF DATE: 19961011 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANCASTER COLONY CORP CENTRAL INDEX KEY: 0000057515 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FROZEN & PRESERVED FRUIT, VEG & FOOD SPECIALTIES [2030] IRS NUMBER: 131955943 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-04065 FILM NUMBER: 96642261 BUSINESS ADDRESS: STREET 1: 37 W BROAD ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142247141 DEF 14A 1 LANCASTER COLONY CORP. DEFINITIVE 14A 1 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 Rule 14a-11(c) or Rule 14a-12
LANCASTER COLONY 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: Not Applicable 2 LANCASTER COLONY CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To be held November 18, 1996 The annual meeting of shareholders of Lancaster Colony Corporation (the "Corporation") will be held at 11:00 a.m., Eastern Standard Time, November 18, 1996, in the Legislative AB Meeting Room of the Hyatt on Capitol Square, 75 East State Street, Columbus, Ohio 43215. The meeting will be held for the following purposes: 1. To elect three directors for a term which expires in 1999. 2. To transact such other business as may properly come before the meeting or any adjournment or adjournments thereof. By action of the Board of Directors, only persons who are holders of record of shares of the Corporation at the close of business on September 20, 1996 will be entitled to notice of and to vote at the meeting. If you do not expect to attend the meeting, please sign, date and return the enclosed proxy. A self-addressed envelope which requires no postage is enclosed for your convenience in returning the proxy. Its prompt return would be appreciated. The giving of the proxy will not affect your right to vote in person should you find it convenient to attend the meeting. October 16, 1996 JOHN B. GERLACH, JR. President and Secretary 1 3 LANCASTER COLONY CORPORATION 37 West Broad Street, Columbus, Ohio 43215 PROXY STATEMENT GENERAL INFORMATION This Proxy Statement is furnished to the shareholders of Lancaster Colony Corporation (the "Corporation") in connection with the solicitation by the Board of Directors of the Corporation of proxies to be used in voting at the annual meeting of shareholders to be held November 18, 1996, in the Legislative AB Meeting Room, Hyatt on Capitol Square, 75 East State Street, Columbus, Ohio 43215, at 11:00 a.m., Eastern Standard Time (the "Annual Meeting"). The enclosed proxy, if completed and forwarded to the Corporation, will be voted in accordance with the instructions contained therein. The proposals referred to therein are described in this Proxy Statement. The proxy may be revoked by the person giving it any time before it is exercised. Such revocation, to be effective, must be communicated to the Secretary or Assistant Secretary of the Corporation. The presence of a shareholder at the Annual Meeting will not revoke the proxy unless specific notice thereof is given. The Corporation will bear the cost of solicitation of proxies, including any charges and expenses of brokerage firms and others for forwarding solicitation material to the beneficial owners of stock. In addition to the use of the mails, proxies may be solicited by personal interview, by telephone or through the efforts of officers and regular employees of the Corporation. The Board of Directors has fixed the close of business on September 20, 1996 as the record date for the determination of shareholders entitled to receive notice and to vote at the Annual Meeting or any adjournment thereof. At that date the Corporation had outstanding and entitled to vote 29,437,851 shares of Common Stock, each share entitling the holder to one vote. The Corporation has no other class of stock outstanding. This Proxy Statement is first being mailed to shareholders on or about October 16, 1996. NOMINATION AND ELECTION OF DIRECTORS The Board of Directors of the Corporation currently consists of ten members and is divided into three classes. The members of the three classes are elected to serve for staggered terms of three years. Pursuant to Section 2.04 of the Code of Regulations, the number of directors constituting each class will, as nearly as practicable, be equal. Thus, the Board of Directors of the Corporation currently consists of two classes of three members each and one class of four members. The names and ages of the "Nominees" and the "Continuing Directors," their principal occupations during the past five years and certain other information together with their beneficial ownership of the Corporation's Common Stock as of August 30, 1996, are listed below. As of August 30, 1996, the Corporation had outstanding and entitled to vote 29,467,851 shares of Common Stock. NOMINEES FOR TERM TO EXPIRE IN 1999
NAME; OFFICE WITH CORPORATION; DIRECTOR SHARES OWNED AT PERCENT OF PRINCIPAL OCCUPATION AGE SINCE AUGUST 30, 1996 CLASS - --------------------------------------------------------------------------------------------------------------------------- Robert L. Fox; Investment 47 1991 715,136 2.43% Executive for Advest, Inc. (stock brokerage firm) since 1978(1) John B. Gerlach, Jr.; 42 1985 1,930,921 6.55% President, Chief Operating Officer and Secretary of the Corporation (1)(2)(3) Edward H. Jennings; 59 1990 533 * President Emeritus and Professor of Finance at The Ohio State University; formerly President of The Ohio State University from 1981 to 1990(4)
_________________ * Less than 1% 2 4 (1) See footnotes 2 and 3 under "Continuing Directors" which explanation applies to Messrs. Fox and Gerlach, Jr. (2) See footnotes 1, 4 and 10 under "Continuing Directors" which explanations apply to Mr. Gerlach, Jr. (3) Mr. Gerlach, Jr. is also a director of The Cardinal Fund Inc. (4) Mr. Jennings is also a director of Borden Chemicals & Plastic Ltd. Partnership and Super Food Service, Inc. All the nominees have indicated a willingness to stand for election and to serve if elected. It is intended that the shares represented by the enclosed proxy will be voted for the election of the above named nominees. Although it is anticipated that each nominee will be available to serve as a director, should any nominee be unavailable to serve, the proxies will be voted by the proxy holders in their discretion for another person designated by the Board of Directors. CONTINUING DIRECTORS
NAME; OFFICE WITH CORPORATION; DIRECTOR TERM SHARES OWNED AT PERCENT OF PRINCIPAL OCCUPATION AGE SINCE EXPIRES AUGUST 30, 1996 CLASS - ------------------------------------------------------------------------------------------------------------------------- Frank W. Batsch; Retired; formerly 65 1963 1998 48,544 * Vice President of the Corporation(2)(5) John B. Gerlach; Chairman of the Board 69 1961 1998 5,503,912 18.68% and Chief Executive Officer of the Corporation(1)(2)(3)(4)(6)(10) Morris S. Halpern; Retired; 66 1963 1997 94,071 * formerly Vice President of the Corporation(2)(8) Robert S. Hamilton; 68 1985 1997 8,816 * Vice Chairman and Director of Liqui-Box Corporation (plastic packaging manufacturer)(2) Richard R. Murphey, Jr.; Of Counsel, law 71 1973 1998 51,236 * firm of Squire, Sanders & Dempsey(7) Henry M. O'Neill, Jr.; Chairman, 61 1976 1998 13,101 * Chief Executive Officer of AGT International, Inc. (voice response systems) since 1988; Chairman of the Board of Evergreen Quality Catering (mobile caterer) since 1987 David J. Zuver; Retired; 72 1966 1997 135,473 * formerly Vice President of the Corporation(2) All Directors and Executive Officers 6,834,274 23.16% as a group (12 Persons)(1)(9)
___________________________ * Less than 1% (1) Includes shares held by the Employee Stock Ownership Plan allocated to the accounts of Lancaster Colony Corporation employees. Employees have the right to direct the voting of such shares. (2) Holdings include shares owned by spouses, minor children and shares held in custodianship or as trustee. The following persons disclaim beneficial ownership in such holdings with respect to the number of shares indicated: Mr. Batsch, 2,570; Mr. Fox, 81,635; Mr. John B. Gerlach, 932,163; Mr. John B. Gerlach, Jr., 839,554; Mr. Halpern, 4,028; Mr. Hamilton, 2,683; and Mr. Zuver, 70,514. The holdings disclaimed by Messrs. Gerlach include those shares held in a trust referred to in footnote 10, below, in which Messrs. Gerlach have an undetermined beneficial interest. 3 5 (3) Messrs. John B. Gerlach and John B. Gerlach, Jr., trustees of Gerlach Foundation, Inc., and Mr. Fox, a trustee of Fox Foundation, Inc., share voting and investment power with their respective foundations, both of which are private charitable foundations. Gerlach Foundation, Inc. holds 339,955 shares and Fox Foundation, Inc. holds 61,338 shares. These shares are included in the above table. Gerlach Foundation, Inc. and Fox Foundation, Inc. together control an additional 413,415 shares held by Lehrs, Inc. The shares held by Lehrs, Inc. are also included in the total number of shares held by Messrs. Gerlach and Mr. Fox. The trustees each disclaim beneficial ownership of any of these shares. (4) Messrs. John B. Gerlach and John B. Gerlach, Jr. by virtue of their stock ownership and positions with the Corporation may be deemed "control persons" of the Corporation. John B. Gerlach is John B. Gerlach, Jr.'s father. (5) Mr. Batsch served as an officer of the Corporation until November 1992 and continues as a part-time consultant to the Corporation. See "Compensation of Directors" for further discussion. (6) Mr. John B. Gerlach is also a director of Drug Emporium, Inc., Huntington Bancshares Incorporated, M/I Schottenstein Homes, Inc., Scioto Downs, Inc. and Worthington Foods, Inc. (7) Mr. Murphey is Of Counsel to a law firm which the Corporation has retained from time to time during the last two full fiscal years and proposes to retain during the current year. (8) Mr. Halpern served as an officer of the Corporation until June 1992. The Corporation and Mr. Halpern have entered into a formal consulting agreement discussed under "Compensation of Directors." (9) Shares held include 45,666 shares subject to presently exercisable options. (10) John B. Gerlach is the Executor of the Estate of John J. Gerlach, Deceased. In order to partially fund the federal estate tax obligations of the estate, a trust which is the residuary legatee of the estate and presently holds 578,586 shares of the Common Stock of the Corporation sold the Corporation 250,000 shares of Common Stock of the Corporation on August 8, 1995. Such purchase was authorized by the Board of Directors on June 22, 1995. The purchase price of $35.81 per share was established by the Board of Directors based upon the average closing price of common shares of the Corporation during the first 20 of the 22 business days immediately preceding the date of such purchase. The Board of Directors has established an audit committee (the "Audit Committee") currently consisting of Messrs. Hamilton, Jennings and O'Neill. Mr. Hamilton serves as Chairman of the Audit Committee. The Audit Committee is charged with the responsibility of reviewing financial information (both external and internal) about the Corporation and its subsidiaries, so as to assure (i) that the overall audit coverage of the Corporation and its subsidiaries is satisfactory and appropriate to protect the shareholders from undue risks and (ii) that an adequate system of internal financial control has been implemented throughout the Corporation and is being effectively followed. The Audit Committee held three meetings during the fiscal year ended June 30, 1996 ("fiscal 1996"). The Board of Directors has established a compensation committee (the "Compensation Committee") currently consisting of Messrs. Hamilton, Jennings and O'Neill as its members. Mr. Jennings serves as Chairman of the Compensation Committee. The powers and duties of the Compensation Committee are to consider and formulate recommendations to the Board of Directors with respect to all aspects of compensation to be paid to the executive officers of the Corporation, to undertake such evaluations and make such reports as are required by the applicable rules of the Securities and Exchange Commission and to perform and exercise such other duties and powers as shall from time to time be designated by action of the Board of Directors. The Compensation Committee held one meeting during fiscal 1996. The Board of Directors does not have a Nominating Committee. In addition to the committee meetings previously mentioned, the Board of Directors held a total of four meetings during fiscal 1996. Each director attended at least 75% of the aggregate of all meetings of the Board of Directors and the committees on which they served during fiscal 1996, except Mr. Batsch, who attended 60% of such meetings. COMPENSATION OF DIRECTORS Except as noted below, directors who are not employees of the Corporation or any of its subsidiaries receive an annual fee of $10,000 plus $750 for each meeting attended. Directors who also serve on the Audit Committee and/or Compensation Committee receive $750 for each such committee meeting attended. The Corporation has a consulting agreement with Mr. Halpern pursuant to which Mr. Halpern has agreed to perform advisory and consulting services for an annual fee of $200,000 for calendar year 1993 and $150,000 for calendar years 1994 through 1996. If at December 31, 1996 Mr. Halpern has satisfied all the terms of the consulting agreement, he shall be entitled to receive additional consulting fees of $50,000 per year beginning in 1997 and terminating upon his death. Subject to an informal arrangement, effective January 1, 1993 the Corporation began paying Mr. Batsch as a part-time consultant based on an annual fee of $18,000. Additionally, postretirement benefits pursuant to an informal arrangement are 4 6 paid by the Corporation to Mr. Zuver of $30,000 annually. The payments to Messrs. Zuver, Halpern and Batsch also include their services as directors. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following individuals have beneficial ownership, directly or indirectly, of more than five percent of the outstanding Common Stock of the Corporation:
NATURE OF NAME AND BENEFICIAL AMOUNT PERCENT OF ADDRESS OWNERSHIP OWNED (1) OWNERSHIP - --------------------------------------------------------------------------------------------------------------------------- John B. Gerlach Direct and 5,503,912 18.68% Lancaster Colony Corporation Indirect 37 West Broad Street Columbus, Ohio 43215 John B. Gerlach, Jr. Direct and 1,930,921 6.55% Lancaster Colony Corporation Indirect 37 West Broad Street Columbus, Ohio 43215 - ---------------------------
(1) See footnotes 1, 2, 3, 4 and 10 under "Continuing Directors," which explanations apply to Messrs. Gerlach. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table summarizes compensation earned during the fiscal years ended June 30, 1996, 1995 and 1994 by those persons who were the Chief Executive Officer and the three other most highly compensated, reportable executive officers of the Corporation during fiscal 1996:
LONG-TERM ANNUAL COMPENSATION (1) COMPENSATION FISCAL ------------------------------ ------------------- ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) COMPENSATION(2) - --------------------------------------------------------------------------------------------------------------------------- John B. Gerlach; 1996 $550,000 $2,646 Chairman of the 1995 517,500 2,905 Board and Chief 1994 485,000 4,978 Executive Officer Larry G. Noble; 1996 $235,558 $272,000 $2,646 Vice President(3) 1995 228,267 272,000 15,000 2,905 1994 219,508 252,000 4,978 John B. Gerlach, Jr.; 1996 $364,583 $2,646 President, Chief 1995 345,833 2,905 Operating Officer 1994 297,083 4,978 and Secretary John L. Boylan; 1996 $130,000 $ 20,000 $2,562 Treasurer and 1995 118,750 15,000 4,000 2,436 Assistant Secretary 1994 110,000 2,216
- --------------------------- (1) The named executive officers received certain perquisites in 1996, 1995 and 1994, the amount of which did not exceed the reportable threshold of the lesser of $50,000 or 10% of any such officer's salary and bonus. (2) Approximate amounts contributed on behalf of such executive officer to the Employee Stock Ownership Plan (ESOP). (3) Bonus amounts listed as paid to Mr. Noble are discretionarily determined and relate to the preceding fiscal year. The bonus relating to fiscal 1996 has not yet been determined but is currently expected not to exceed that paid in fiscal 1996 for fiscal 1995. 5 7 STOCK OPTION EXERCISES AND HOLDINGS The following table sets forth certain information with respect to stock options exercised during fiscal 1996 by each of the executive officers named in the Summary Compensation Table and unexercised stock options held as of June 30, 1996 by such executive officers: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED UNDERLYING UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT OPTIONS VALUE FISCAL YEAR-END(#) FISCAL YEAR-END($)(2)(3) NAME EXERCISED (#) REALIZED ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - --------------------------------------------------------------------------------------------------------------------------- John B. Gerlach, Jr. 26,666(1) $796,647 Larry G. Noble 9,947 31,719 $88,388 $285,764 John L. Boylan 4,000 $16,000
(1) The actual number of shares received were less than indicated as Mr. Gerlach, Jr. elected to have shares withheld for the payments of the exercise price and withholding tax liability. (2) All values are shown pretax and are rounded to the nearest whole dollar. (3) Based on the 1996 fiscal year-end closing price of $37.375 per share. SEVERANCE AGREEMENT Mr. Boylan is a party to an agreement entitling him to severance benefits equal to (i) full salary paid through the date of his termination plus (ii) an amount equal to the lesser of (a) 100% of the highest annual rate of salary and highest annual bonus paid to Mr. Boylan during the three-year period prior to his date of termination, or (b) twice his annual compensation (salary plus bonus) paid for the full fiscal year immediately preceding the date of his termination, in the event that within a period of one year after a "change of control" (as defined in the agreement) his employment is terminated by the Corporation (other than for cause) or by Mr. Boylan (if there has been any material adverse change in the terms of his employment). REPORT ON EXECUTIVE COMPENSATION The Compensation Committee of the Board of Directors (the "Committee") consists entirely of outside, non-employee directors. The compensation of executive officers of the Corporation, other than the chief executive officer ("CEO") is established annually by the CEO in consultation with the Committee. In establishing the compensation of executive officers various factors are considered including the scope of responsibilities, the quality of the executive officer's performance in discharging those responsibilities, and in certain cases, the financial performance of the Corporation or of a particular division of the Corporation under that executive officer's supervision. The determination of the compensation of executive officers is essentially subjective and dependent upon the recommendation of the CEO, and no specific weight is given to any of the foregoing factors. The compensation of the CEO was based on the Committee's evaluation of his performance toward the achievement of the Company's financial, strategic and other goals and his length of service as CEO. In determining the CEO's compensation the Committee considered the CEO's hands-on oversight of all of the Corporation's operations, his attention to detail and his reputation as a business leader in the industries in which the Corporation operates as well as competitive chief executive officer pay information. The determination of the CEO's compensation was subjective, with no specific weight given to any particular factor. Edward H. Jennings, Chairman Robert S. Hamilton Henry M. O'Neill, Jr. 6 8 PERFORMANCE GRAPH COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN OF LANCASTER COLONY CORPORATION, S&P INDEX AND PEER INDUSTRY GROUP The graph set forth below compares the five-year cumulative total return from investing $100 on June 30, 1991 in each of the Corporation's Common Stock, the Standard and Poor's 500 Index and the S&P Conglomerates Index: Lancaster Colony S&P Corporation S&P 500 Conglomerates ----------- ------- ------------- 6/91 $100 $100 $100 6/92 218 113 112 6/93 384 129 157 6/94 481 131 155 6/95 493 165 193 6/96 525 208 233 7 9 OTHER TRANSACTIONS John B. Gerlach has a 50% interest in an accounting partnership known as John Gerlach & Co. ("the Firm") which, pursuant to an arrangement that was approved by the Audit Committee, provides internal auditing, accounting, tax and internal management advisory services of a type generally available from an independent accounting firm, including services relating to local taxation, mergers and acquisitions and pension matters. The fee paid to the Firm for its services is measured by the volume of work performed and is reviewed by the Audit Committee. The fees for services for the fiscal year ended June 30, 1996 were $428,760. The Corporation believes that the terms of the above transactions are as favorable to it as those which could have been obtained from independent parties. INDEPENDENT PUBLIC ACCOUNTANTS Deloitte & Touche LLP has acted as independent certified public accountants of the Corporation during the fiscal year ended June 30, 1996. Deloitte & Touche LLP is expected to have a representative present at the Annual Meeting who may make a statement, if desired, and will be available to answer appropriate questions. SHAREHOLDER PROPOSALS Shareholder proposals intended to be in the proxy statement for the 1997 Annual Meeting of Shareholders must be received by the Corporation at its principal executive offices no later than June 18, 1997. OTHER MATTERS As of the date of this statement, the Board of Directors knows of no other business that will come before the Annual Meeting. Should any other matter requiring the vote of the shareholders arise, the enclosed proxy confers upon the proxy holders discretionary authority to vote the same in respect to the resolution of such other matters as they, in their best judgment, believe to be in the interest of the Corporation. By Order of the Board of Directors October 16, 1996 JOHN B. GERLACH, JR. President and Secretary 8 10 LANCASTER COLONY CORPORATION PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS NOVEMBER 18, 1996 THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Robert S. Hamilton, Richard R. Murphey, Jr. and Henry M. O'Neill, Jr., or any of them, proxies of the undersigned, with power of substitution, to vote all shares of stock of the Corporation which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held November 18, 1996, or at any and all adjournment thereof, and to exercise all of the powers which the undersigned would be entitled to exercise as a shareholder if personally present upon the following matters: (TO BE CONTINUED AND SIGNED ON THE OTHER SIDE) - -------------------------------------------------------------------------------- A /X/ Please mark your vote as in this example. If no contrary specification is made, this proxy will be voted FOR proposal 1. FOR WITHHELD Nominees: For Term expiring 1999: 1. Election of / / / / Robert L. Fox Directors John B. Gerlach, Jr. Edward H. Jennings For, except vote withheld from the following nominee(s): _____________________________________________________ 2. The transaction of all other matters as may properly come before the meeting. (Continued from other side) SIGNATURE(S)________________________________________________DATE__________, 1996 SIGNATURE(S)________________________________________________DATE__________, 1996 NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. Please date, sign and mail this proxy in the enclosed envelope. No postage is required for mailing in the United States. -----END PRIVACY-ENHANCED MESSAGE-----