-----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, QLQaWd2399qCTx9G/ikeQ7i3He9JkXmBxEY6C5SDlZijmmeeEmuxAlpNNDV2Z7r5 afC9J5+bhTV7U+Idka0ZPw== 0000716823-98-000003.txt : 19980330 0000716823-98-000003.hdr.sgml : 19980330 ACCESSION NUMBER: 0000716823-98-000003 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980327 FILED AS OF DATE: 19980327 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI MILACRON INC /DE/ CENTRAL INDEX KEY: 0000716823 STANDARD INDUSTRIAL CLASSIFICATION: MACHINE TOOLS, METAL CUTTING TYPES [3541] IRS NUMBER: 311062125 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-08485 FILM NUMBER: 98575132 BUSINESS ADDRESS: STREET 1: 4701 MARBURG AVE CITY: CINCINNATI STATE: OH ZIP: 45209 BUSINESS PHONE: 5138418100 MAIL ADDRESS: STREET 1: 4701 MARBURG AVE CITY: CINCINNATI STATE: OH ZIP: 45209 FORMER COMPANY: FORMER CONFORMED NAME: CINCINNATI MILACRON HOLDINGS INC DATE OF NAME CHANGE: 19830503 FORMER COMPANY: FORMER CONFORMED NAME: CINCINNATI MILLING MACHINE CO DATE OF NAME CHANGE: 19600201 DEF 14A 1 CINCINNATI MILACRON Cincinnati, Ohio 45209 ______________________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To be held April 28, 1998 The Annual Meeting of the Shareholders of Cincinnati Milacron Inc. (the "Company") will be held at the offices of the Company, 4701 Marburg Avenue, Cincinnati, Ohio 45209 on Tuesday, April 28, 1998, at 9:00 A.M., E.D.T., for the following purposes: 1. To elect three directors. 2. To confirm the appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year 1998. 3. To transact such other business as may properly come before the meeting. The Board of Directors has fixed the close of business on February 27, 1998, as the record date for determining the shareholders entitled to notice of and to vote with respect to this solicitation. The Annual Report of the Company for the year 1997, containing financial statements, is enclosed. PLEASE MARK, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. By order of the Board of Directors. Wayne F. Taylor, Vice President, General Counsel and Secretary The date of this Proxy Statement is March 27, 1998. Cincinnati Milacron Inc. 4701 Marburg Avenue Cincinnati, Ohio 45209 _______________________ PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 28, 1998 The Proxy Statement is furnished to shareholders on or about March 27, 1998, in connection with the solicitation by the Board of Directors of Cincinnati Milacron Inc., a Delaware corporation (the "Company"), 4701 Marburg Avenue, Cincinnati, Ohio 45209 of proxies in the accompanying form to be used at the Annual Meeting of Shareholders to be held on April 28, 1998, and any adjournment thereof. The shares represented by the proxies received pursuant to this solicitation and not revoked will be voted at the Annual Meeting. A shareholder who has given a proxy may revoke it by voting in person at the meeting, by giving a written notice of revocation to the Secretary of the Company at the address indicated above or by giving a later dated proxy at any time before voting. If a choice has been specified by a shareholder with respect to any matter by means of the ballot on the proxy, the shares represented by such proxy will be voted or withheld from voting accordingly. If no choice is so specified, the shares will be voted FOR the election of the nominees for Director set forth on the proxy, and FOR confirmation of Ernst & Young LLP as independent auditors of the Company for the fiscal year 1998. It is important that your shares be represented at the meeting. Whether or not you plan to attend the meeting, please sign and date the enclosed proxy and return it promptly in the accompanying envelope in order that your shares may be voted at the meeting. Shareholders of record of the Company's Common Stock, par value $1.00 per share ("Common Stock"), and of its 4% Cumulative Preferred Stock, par value $100 per share ("Preferred Stock"), at the close of business on February 27, 1998, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. On that date, there were outstanding 60,000 shares of Preferred Stock and 39,557,134 shares of Common Stock exclusive of 327,996 shares of Common Stock held in the treasury of the Company. Each share of Preferred Stock is entitled to 24 votes. The Company's Amended Certificate of Incorporation, subject to certain exceptions, provides that each share of Common Stock entitles the holder thereof to ten votes on each matter to be considered at the meeting, except that no holder shall be entitled to exercise more than one vote on any such matter in respect of any share of Common Stock with respect to which there has been a change of beneficial ownership after February 1, 1995. Based on the information with respect to beneficial ownership possessed by the Company at the date of this Proxy Statement, the holders of more than half of the shares of Common Stock will be entitled to exercise ten votes per share at the meeting and the holders of the remainder of the outstanding shares of Common Stock will be entitled to one vote per share. The actual voting power of each holder of Common Stock will be based on information possessed by the Company at the time of the meeting. Proxy cards, with text printed in black on white stock, are being furnished to individuals with this Proxy Statement to cover shares of Common Stock with respect to which the Company's records show beneficial ownership as of February 1, 1995, or thereafter. Each of these cards has at the upper center area of the signature side an indication of the total vote to which the respective individual holder is entitled. Shares of Common Stock held of record in the names of banks, brokers, nominees and certain other entities are covered by Proxy cards on white stock with a blue stripe. A shareholder who has been a continuous beneficial owner since February 1, 1995, is entitled to ten votes for each share of Common Stock PROVIDED the certification form on the Proxy card with the blue stripe is completed. If this certification is not completed, a change of beneficial ownership will, for purposes of this Annual Meeting, be deemed to have occurred after February 1, 1995, with respect to all the shares of Common Stock covered thereby, so that the holder will be entitled to only one vote per share for all such shares. For purposes of exercising the pass through voting rights for participants in the Company's employee benefit plans, each participant having shares of Common Stock credited to his or her account will receive a voting direction card on white stock with a pink stripe to be returned to the Trustee of those benefit plans with voting instructions. The holders of shares of Common Stock and Preferred Stock entitling them to exercise a majority of the total voting power of the Company's stock, present in person or by proxy, at the Annual Meeting shall constitute a quorum. Proxy Solicitation The expense of printing and mailing proxy material will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain Directors, officers and other employees of the Company in person, by telephone or fax. No additional compensation to such persons will be paid for such solicitation. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries to forward proxy solicitation material to certain beneficial owners of the Common Stock and Preferred Stock, and the Company will reimburse such brokerage firms, custodians, nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection therewith. In addition, the Company has retained D.F. King & Co., Inc. to aid in the solicitation of proxies for a fee estimated at $15,000, plus reasonable out-of-pocket expenses. ELECTION OF DIRECTORS The shares of the Preferred Stock and the shares of the Common Stock vote together as a single class for the election of Directors. The candidates receiving the greatest number of votes up to the number of directors to be elected will be elected. Votes withheld on directors as well as broker non-votes will be counted toward the establishment of quorum, but will have no effect on the election of directors. Under the Company's By-Laws, the Board of Directors is to consist of a number fixed by the Board, and is not to be less than nine nor more than fifteen members. Currently, the number of Board members is set at nine, divided among three classes. The persons named as proxies on the enclosed Proxy card (the "Proxy Committee") intend to vote (unless authority to do so is withheld) for the re-election for a three-year term of three Directors: Harry A. Hammerly, Daniel J. Meyer and Joseph A. Steger. The three nominees have consented to being named as such and to serve if elected. In the unexpected event that, prior to the election, any one or more of the nominees shall be unable to serve, the Proxy Committee will vote for the election of such substitute nominees, and for such term or terms as the Board of Directors may propose, and in no event may proxies be voted for more than three Directors. The following information is furnished with respect to each nominee for election as a Director and for each other person whose terms of office as a Director will continue after the meeting: __________________________________________________________________ DARRYL F. ALLEN Member: Audit Committee Director since 1993 Term expires 2000 Age 54 Mr. Allen is, and has been for more than the past five years, Chairman, President and Chief Executive Officer of Aeroquip- Vickers, Inc., Maumee, Ohio, a world-wide manufacturer and distributor of engineered components and systems for markets which include industrial, automotive, aerospace and defense. Director of Aeroquip-Vickers, Inc. and Fifth Third Bankcorp. __________________________________________________________________ NEIL A. ARMSTRONG Member: Executive Committee Director since 1980 Audit Committee Age 67 Term expires 1999 Mr. Armstrong is, and has been for more than the past five years, Chairman of AIL Systems, Inc., Deer Park, NY, manufacturer of electronic countermeasure systems. Director of The CINergy Co., Eaton Corporation, USX Corporation, Thiokol Corp. and RMI Titanium Co. __________________________________________________________________ BARBARA HACKMAN FRANKLIN Member: Audit Committee Director since 1996 Nominating and Age 57 Corporate Governance Committee Term expires 1999 Ms. Franklin is President and CEO of Barbara Franklin Enterprises, Washington, D.C., an international consulting and investment firm, and has served in that capacity since January, 1995. Prior thereto, she was an independent director, consultant and lecturer (1993-1995), and in 1992 she served as the 29th U.S. Secretary of Commerce. Director of Aetna, Inc., The DOW Chemical Company, AMP Inc. and MedImmune, Inc. __________________________________________________________________ HARRY A. HAMMERLY Member: Audit Committee Director since 1992 Nominating and Age 64 Corporate Governance Committee Term expires 1998, nominee for three year term Mr. Hammerly had served for more than five years, until his retirement in 1995, as Executive Vice President of 3M Company, St. Paul, Minnesota, a world-wide manufacturer serving industrial, commercial, health care and consumer markets. Director of Apogee Enterprises, Inc., BMC Industries, Inc., Brown & Sharpe Manufacturing Company and The Geon Company. __________________________________________________________________ DANIEL J. MEYER Member: Executive Committee Director since 1985 Term expires 1998, nominee for Age 61 three year term Mr. Meyer is, and has been for more than the past five years, Chairman and Chief Executive Officer of the Company. In January, 1998, he reassumed the additional office of President. Director of Star Banc Corp., The E.W. Scripps Company and Hubbell Incorporated. __________________________________________________________________ JAMES E. PERRELLA Member: Personnel and Director since 1993 Compensation Committee Age 62 Nominating and Corporate Governance Committee Term expires 2000 Mr. Perrella is Chairman, President and Chief Executive Officer of Ingersoll-Rand Company, Woodcliff Lake, New Jersey, a world- wide manufacturer of machinery and equipment for automotive, construction, energy and general industries, and has served in that capacity since November 1993. He was President of Ingersoll- Rand Company from 1992 to 1993. Director of Becton Dickinson and Company and Ingersoll-Rand Company. __________________________________________________________________ JOSEPH A. PICHLER Member: Personnel and Director since 1996 Compensation Committee Age 58 Term expires 1999 Mr. Pichler is, and has been for more than the past five years, Chairman of the Board and Chief Executive Officer of The Kroger Co., Cincinnati, Ohio, a food retailer and manufacturer. Director of The B. F. Goodrich Company, Federated Department Stores, Inc. and The Kroger Co. __________________________________________________________________ DR. JOSEPH A. STEGER Member: Executive Committee Director since 1985 Nominating and Age 61 Corporate Governance Committee Personnel and Compensation Committee Term expires 1998, nominee for three year term Dr. Steger is, and has been for more than the past five years, President, University of Cincinnati. Director of Crucible Materials, Inc. and Provident Bancorp, Inc. __________________________________________________________________ HARRY C. STONECIPHER Member: Personnel and Director since 1991 Compensation Committee Age 61 Term expires 2000 Mr. Stonecipher is President and Chief Operating Officer of The Boeing Company, Seattle, Washington, a producer of military and commercial jet aircraft and helicopters as well as missiles, space launch vehicles, and electronic systems, and has served in that capacity since August, 1997. He was President and Chief Executive Officer of McDonnell Douglas Corporation from 1994 to 1997, and Chairman, President and Chief Executive Officer of Sundstrand Corporation, from 1991 to 1994. Director of The Boeing Company, Computer Management Sciences Inc. and Sentry Insurance Co. BOARD OF DIRECTORS AND BOARD COMMITTEES Compensation and Benefits The Company compensates non-employee Directors by payment of an annual retainer of $30,000. All or a portion of this retainer may be deferred into a Company stock or a cash account under the terms of the Company's Plan for the Deferral of Directors' Compensation, with it being required that a minimum of $5,000 be payable in Company stock and credited to a deferred stock account under the plan. The Company also compensates non-employee Directors by payment of a fee of $1,500 for each Board and committee meeting attended and a fee of $1,000 for participation in each telephone meeting. Chairpersons of the Audit Committee, Nominating and Corporate Governance Committee and Personnel and Compensation Committee also receive an annual retainer of $2,000. In addition, the Directors may elect to be covered by $100,000 of group term life insurance. Awards of restricted shares and stock options to Directors are provided for in the 1997 Long-Term Incentive Plan. Ms. Franklin and Messrs. Allen, Armstrong, Hammerly, Perrella, Pichler, Steger and Stonecipher each received a stock option grant of 2,000 shares, and a grant of 1,000 shares of restricted stock under the Plan in fiscal year 1997. The Retirement Plan for Non-Employee Directors was closed on February 6, 1998 with respect to all non-employee Directors beginning their first term on the Board after said date. Current non-employee Directors were given the election to continue to participate in the plan, or receive a current lump sum benefit credited to a deferred stock account under the Company's Plan for the Deferral of Directors' Compensation. The retirement plan has a six year vesting requirement with monthly benefits paid for life. For Director's with ten or more years vested service, the benefit is equal to one hundred percent of the Director's base retainer as of the last day of service. A reduced benefit is payable for service less than ten years. Meetings and Committees The Board of Directors held six meetings in fiscal year 1997. Average attendance by Directors at the aggregate of the Board and committee meetings was 94%. No Director attended fewer than 75% of the aggregate of the meetings of the Board and the committees on which they served, except for Mr. Stonecipher who attended 70% of the aggregate of said meetings. The Board of Directors has established four committees with specific responsibilities. The Executive Committee is composed of three members, two non-employee Directors and one employee Director. The Committee meets only on call and may exercise, in the intervals between meetings of the Board, powers of the Board in the management of the business and affairs of the Company. The Committee held no meetings in fiscal year 1997. The Audit Committee is composed of four non-employee Directors. The Committee recommends to the Board of Directors the appointment of the independent auditors and meets with members of management, the independent auditors and the internal auditors, both together and privately, to review the annual financial statements, audit coverage and results, the adequacy of internal accounting controls and the quality of financial reporting. The Committee also oversees the Company's compliance with its policies regarding boycotts and questionable payments and practices. The Committee held two meetings in fiscal year 1997. The Personnel and Compensation Committee is composed of four non- employee Directors. The Committee recommends to the Board of Directors the compensation of the Chairman, reviews the compensation of all corporate officers, reviews management manpower planning and development programs and administers management incentive programs. The Committee held three meetings in fiscal year 1997. The Nominating and Corporate Governance Committee is composed of four non-employee Directors. The Committee recommends to the Board of Directors the names of possible nominees for election to the Board. The Committee will consider any recommendation by shareholders of possible Director nominees submitted in writing to the Committee in care of the Secretary of the Company no later than the close of business on the 10th day following the day on which notice of the date of the Annual Meeting of Shareholders was mailed. Biographical data and the proposed nominee's written consent to be named as a nominee must be included. The Committee also recommends the standing and special committees, considers matters relating to corporate governance, provides the Board with materials on matters of Board behavior (i.e., ethics and policies of public concern) and evaluates the performance and effectiveness of the Board as a whole. The Committee held two meetings in fiscal year 1997. Shareholder Meetings: Conducting Business and Notice At any meeting of the shareholders, only such business shall be conducted as shall have been brought before the meeting by or at the direction of the Board of Directors or by any shareholder who is entitled to vote with respect thereto and who has given timely notice thereof in writing to the Secretary of the Company not later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed. Notice requirements for shareholder proposals at the 1999 Annual Meeting are provided for on page 14. PRINCIPAL HOLDERS OF VOTING SECURITIES The following table gives information concerning the beneficial owners of more than five percent of the Company's outstanding shares of Common Stock and Preferred Stock as of February 27, 1998: Common Stock
Beneficial Owner Shares Percent of Outstanding None
Preferred Stock
Beneficial Owner Shares Percent of Outstanding State Street Bank and Trust Company 11,126 18.54 P.O. Box 351 Boston, MA 02101 Trustee - Cincinnati Milacron Employee Benefit Plans Chase Manhattan Bank, N.A. 6,962 11.60 1 Chase Manhattan Plaza New York, NY 10081 PNC Bank, National Association 5,791 9.65 51 Mercedes Way Edgewood, NY 11717 Bank of New York 4,403 7.34 One Wall Street New York, NY 10286 Cincinnati Milacron Foundation 3,913 6.52 Cincinnati, OH 45209 (D. F. Allen, N.A. Armstrong and D.J. Meyer, Trustees) James A.D. Geier 3,049(1) 5.08 529 Dragon Way Suite 11A Cincinnati, OH 45227
Unless otherwise noted, the above-named individuals or entities have sole voting and investment power. (1) Mr. Geier's beneficial ownership includes 2,821 preferred shares held in estates and trusts for the benefit of others with respect to which Mr. Geier is a fiduciary or has shared voting power, and with respect to which voting power may be delegated to the trustee. SHARE OWNERSHIP OF DIRECTORS AND OFFICERS Set forth in the following table is the beneficial ownership of Common Stock and Preferred Stock as of February 27, 1998 for each of the Directors and of the Officers named in the Summary Compensation Table. No Director or Officer owns more than one percent of the class shown, except as set forth in the footnotes below. Name Common Shares(1) Preferred Shares Darryl F. Allen(2) 13,950 0 Neil A. Armstrong 9,050 0 Barbara Hackman Franklin 6,327 0 Harry A. Hammerly(2) 13,479 0 Daniel J. Meyer(3) 746,664 380 James E. Perrella(2) 15,690 0 Joseph A. Pichler 7,100 0 Raymond E. Ross(4) 388,426 0 Joseph A. Steger 8,632 0 Harry C. Stonecipher 12,500 0 Ronald D. Brown 163,215 0 Harold J. Faig 208,544 0 Alan L. Shaffer 195,926 0 All Officers and Directors As a Group(5) 2,528,002 380 (1) The amounts shown include (a) the following shares that may be acquired within 60 days pursuant to outstanding option grants: Mr. Meyer, 565,380 shares, Mr. Ross, 345,512 shares, Mr. Brown, 130,368 shares, Mr. Faig, 172,486 shares, Mr. Shaffer, 149,356 shares, 7,000 shares each for Messrs. Allen, Armstrong, Hammerly, Perrella, Steger and Stonecipher, 4,000 shares each for Ms. Franklin and Mr. Pichler and 1,926,892 shares for all Directors and Officers as a group; (b) shares allocated to participant accounts under the Company's Performance Dividend and Savings Plan as of December 31, 1997, according to information furnished by the Plan Trustee; (c) shares with shared voting or investment power, and those held by certain members of the individuals' families as to which beneficial ownership is disclaimed, and (d) credits of stock units under the Company's deferred compensation plan as follows: Mr. Meyer, 18,086 units, Mr. Brown, 6,352 units, Mr. Faig, 7,546 units, and Mr. Shaffer, 7,728 units. (2) The amounts shown include credits of stock units under the Company's deferred compensation plan for non-employee Directors as follows: Mr. Allen, 5,450 units, Mr. Hammerly, 2,396 units and Mr. Perrella, 4,190 units. (3) Mr. Meyer's beneficial ownership is 1.87% of the common shares outstanding. (4) Mr. Ross retired on December 31, 1997. (5) Directors' and Officers' beneficial ownership as a group is 6.34% of the common shares (22 persons) and .63% of the preferred shares (1 person) outstanding. Certain Transaction During the period of fiscal 1997 and through February 27, 1998, the company had outstanding loans to executive officers under the Company's Employee Stock Loan Program for the purposes of exercising stock options and purchasing stock, and for paying related withholding taxes due as a result of such purposes or the lapse of restrictions on restricted stock, all under the Company's long-term incentive programs as follows: (1) five loans to Mr. D. J. Meyer, Chairman, President and Chief Executive Officer, carrying interest rates ranging from 5.8% to 7.91% with the largest aggregate amount of indebtedness outstanding at any time during such period and the principal balance of all such loans outstanding at the end of the period being $512,687; (2) two loans to Mr. R. E. Ross, President and Chief Operating Officer, carrying interest rates of 5.98% to 7.78% respectively, with the largest aggregates amount in indebtedness outstanding at any time during such period being $91,587, and all loans being paid off by Mr. Ross at his retirement on December 31, 1997; (3) two loans to Mr. A. L. Shaffer, Group Vice President, Industrial Products, carrying interest rates of 7.78% and 6.45%, respectively, with the largest aggregate amount of indebtedness outstanding at any time during such period being $108,584, and the principal balance of such loans outstanding at the end of the period being $97,580; and (4) two loans to Mr. H. J. Faig, Group Vice President, Plastics Technologies, carrying interest rates of 5.98% and 5.84%, respectively, with the largest aggregate amount of indebtedness outstanding at any time during such period and the principal balance of all such loans outstanding at the end of the period being $70,840. Stock Loan Programs The Employee Stock Loan Program, approved by the Board of Directors of the Company, is applicable to key employees who have received stock options or grants of restricted stock pursuant to the Company's Long-Term Incentive Plans. This loan program provides loans to employees up to the amount due in cash for the exercise price of the stock options, and/or any required withholding taxes as a result of exercising such options or the lapse of restrictions on restricted stock awards. These loans are to be repaid on terms of regular payments of not more than 10 years unless the related stock is divested by the employee prior to said time, in which case all amounts owing become payable. The interest rates for these loans are established from time to time by the Personnel and Compensation Committee in compliance with Internal Revenue Service guidelines. The interest rate is the applicable Federal rate in effect under Section 1274 (d) of the Internal Revenue Code of 1986, as amended, as of the day in which the loan is made. As of February 27, 1998, the interest rate was 5.84% per annum. Annual Retirement Benefits The calculation of estimated annual retirement benefits under the Company's regular retirement plan (the "Retirement Plan"), is based upon years of service and average earnings for the highest five consecutive years of service. Earnings include all cash compensation, including amounts received or accrued under the 1996 Short-Term Management Incentive Program, but exclude benefits or payments received under Long-Term Incentive Plans or any other employee benefit plan. The Retirement Plan is non- contributory and limits the individual annual benefit to the maximum level permitted under existing law. The credited years of service under the Retirement Plan for the executive officers named in the Summary Compensation Table set forth below are: 28 for Mr. Meyer, 29 for Mr. Ross, 17 for Mr. Brown, 31 for Mr. Faig and 25 for Mr. Shaffer. Directors who are not officers or employees of the Company are not eligible to participate in the Retirement Plan, but may be eligible to participate in the Director's Retirement Plan described above. The table below shows examples of pension benefits which are computed on a straight life annuity basis before deduction of the offset provided by the Retirement Plan, which depends on length of service and is up to one-half of the primary Social Security benefit:
Highest Consecutive Estimated Annual Pension for Five-Year Representative Years of Credited Service Average Compensation 10 15 20 25 30 35 or More $ 100,000 $ 15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 250,000 37,500 56,250 75,000 93,750 112,500 131,250* 500,000 75,000 112,500 150,000* 187,500* 225,000* 262,500* 750,000 112,500 168,750* 225,000* 281,250* 337,500* 393,750* 1,000,000 150,000* 225,000* 300,000* 375,000* 450,000* 525,000* 1,250,000 187,500* 281,250* 375,000* 468,750* 562,500* 656,250* 1,500,000 225,000* 337,500* 450,000* 562,500* 675,000* 787,500* 1,750,000 262,500* 393,750* 525,000* 656,250* 787,500* 918,750*
*Under existing law, payments of annual benefits in excess of $130,000 may not be made by the Retirement Plan, but may be paid directly by the Company as described in the following paragraph. In an effort to attract and retain experienced executives, the Board of Directors approved a program wherein certain officers are guaranteed annual pensions of not less than 52.5% and not more than 64.5% of their highest average pay in a consecutive five-year period (subject to deduction of one-half of the primary Social Security benefit and benefits, if any, from prior employers). Other officers are entitled upon retirement to a pension benefit of not less than that to which they normally would be entitled under the Retirement Plan if there were no cap under existing law and not more than 60% of their highest average pay in a consecutive three-year period. In both cases, such pensions include an amount payable under the Retirement Plan and are not subject to the maximum limitation imposed on qualified plans such as the Retirement Plan. PERSONNEL AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION To Our Shareholders The Company's Personnel and Compensation Committee of the Board of Directors (the "Committee") annually reviews and recommends to the full Board compensation levels for the officers of the Company. The Committee consists entirely of Board members who are not employees of the Company. The Committee's primary objective in establishing compensation opportunities for the Company's officers is to support the Company's goal of maximizing the value of shareholders' interest in the Company over a period of time. To achieve this objective, the Committee believes it is critical to: - Hire, develop, reward and retain the most competent executives, and to provide compensation opportunities for executives which are competitive in the marketplace, which includes selected companies in the Performance Graph on page 13 for the S&P 500 and the S&P Machinery (Diversified) Indexes. - Encourage decision-making that enhances shareholder value. The Committee believes that this objective is promoted by providing short-term and long-term incentive opportunities that are tied to performance measures which are payable in cash and/or shares of Company stock. - Provide incentive opportunities which link corporate performance and executive pay. The Committee believes in paying executives competitive levels of incentive compensation when annual results add economic value (EVA) to the Company and corporate financial performance expectations are met. - Promote a close identity of interests between management and the Company's shareholders by rewarding positive results through the payment of Company stock when appropriate. The Committee reviews the compensation for all corporate officers, including the individuals whose compensation is detailed in the proxy statement. This review is designed to ensure consistency throughout the compensation process. The Committee makes all decisions pertaining to the determination of the Company's executive compensation plans which promote the objectives detailed above. The Committee believes that the Company's current compensation programs support the Company's business mission and contribute to the Company's financial success. The Committee considers the entire pay package when establishing each component of pay. The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the Internal Revenue Code of 1986, as amended. Section 162(m) generally denies a publicly held corporation, such as the Company, a federal income tax deduction for compensation in excess of $1 million per year paid or accrued for each of its chief executive officer and four other most highly compensated executive officers. Certain "performance based" compensation is not subject to the limitation of deductibility provided that certain stockholder approval and independent director requirements are met. The Committee takes into account Section 162(m) of the Internal Revenue Code while reviewing its policies with respect to the qualifying compensation paid to its executive officers. COMPONENTS OF COMPENSATION Base Salary The Committee annually reviews each officer's base salary. The factors which influence Committee determinations regarding base salary include: job performance, level of responsibilities, breadth of knowledge, prior experience, comparable levels of pay among executives at regional and national market competitors, which includes selected companies in the Performance Graph on Page 13 for the S&P 500 and the S&P Machinery (Diversified) Indexes, and internal pay equity considerations. Base pay data is compared with survey information compiled by independent compensation consulting firms. Increases to salary levels are driven by individual performance. Base salaries are targeted at the market average, after adjusting for company size. Annual Incentive Compensation The Company's officers, including the CEO, are eligible for an annual cash bonus under its 1996 Short-Term Management Incentive Plan. The corporate and business unit performance measures for bonus payments are based on Economic Value Added (EVA) whereby return on capital must improve or exceed the cost of capital, thereby enhancing shareholder value at the corporate and/or business unit levels. The Committee, where appropriate and when EVA is achieved, also considers in its decision to award any annual cash bonus, the accomplishment of financial objectives as well as non-financial performance. The 1996 Short-Term Management Incentive Plan provides a balance between the short-term financial goals and long-term objectives of the Company. A corporate EVA bonus was paid for 1997 and each of the officers named in the Summary Compensation Table received bonuses. In addition, certain business units also met or exceeded their EVA performance objectives and officers specifically responsible for these operations received bonuses. Annual incentive compensation is targeted to the median of the companies surveyed. Long-Term Incentive Compensation The 1997 Long-Term Plan was approved by shareholders and gives the Personnel and Compensation Committee the authority and discretion to award stock options, restricted stock and performance share awards (collectively referred to as "Awards") to the Company's key employees. Awards are granted during the life of the Plan at the median range of the peer group and are designed to align the interests of executives with those of the shareholders. Under the 1997 Long-Term Incentive Plan, Awards were granted to the Company's key employees including its officers. Current stock and option holdings of the officers are not considered when Awards are granted. Stock options have an exercise price equal to the market price of the Common Stock on the date of grant and vest over five years. Restricted stock may not be sold or transferred for a period of three years and, as a general rule, the restricted stock is forfeited if the recipient does not remain in the employ of the Company during the entire three year term. Performance share grants are awarded in the form of restricted shares which may be forfeited or increased, with any increase paid in cash, depending on the growth rate of earnings per share during the three year measurement period. Performance share grants related to the three year performance period beginning in 1997 will be forfeited unless a growth rate in earnings per share of at least 12%, compounded annually, is achieved. Performance share grants awarded in 1997 will be increased by 50% or 100% if growth rates of basic earnings per common share of at least 15% or 18% respectively, compounded annually, are achieved. This approach to long term incentives was designed to focus executives on the creation of shareholder value over the long term since the full breadth of the compensation package cannot be realized unless basic earnings per common share and the price of Common Stock increase over a number of years. CEO Compensation The compensation of the CEO reflects the same elements as those used in determining the compensation of other corporate officers. The Committee also considers the leadership and effectiveness of the CEO in offering direction and strategic planning for the Company and in dealing with major corporate problems and opportunities. The CEO's base salary in 1997 was increased in conjunction with the Company's growth, the Company's progress in executing its strategic plan and the overall improvement of the Company's profitability and prospects for continued growth. In accordance with the respective terms of the 1996 Short-Term Management Incentive Plan, a bonus of $687,960 was paid for 1997. During fiscal 1997, a performance share grant of 30,977 shares and stock options for 60,000 shares were awarded to Mr. Meyer under the 1997 Long-Term Incentive Plan. The stock option grant was made on the basis of market practice as determined by independent consultants, as described above. The Personnel and Compensation Committee James E. Perrella Joseph A. Pichler Joseph A. Steger Harry C. Stonecipher
Summary Compensation Table Annual Compensation(1) Long Term Compensation Awards Payouts Shares Other Underlying Annual Restricted Stock LTIP All Other Name Principal Position Year Salary($) Bonus($) Comp.($) Stock($) Options Payouts($) Comp.($) D.J.Meyer Chief Executive Officer 1997 $661,500 $687,960 - $720,215(2) 60,000 $0 $0 Chief Executive Officer 1996 615,000 631,800 - 157,077 60,000 0 151,874(3) Chief Executive Officer 1995 565,117 582,500 - 143,685 60,000 0 140,030(3) R.E.Ross(4) Chief Operating Officer and President 1997 $430,500 $279,825 - $450,934(2)(4)40,000 $0 $0 Chief Operating Officer and President 1996 420,000 260,000 - 103,439 40,000 0 100,013(3) Chief Operating Officer and President 1995 369,042 220,000 - 93,884 40,000 0 91,492(3) A.L.Shaffer Group Vice President 1997 $280,100 $182,065 - $304,064(2) 23,000 $0 $0 Group Vice President 1996 264,600 169,871 - 67,588 25,000 0 65,349(3) Group Vice President 1995 242,670 156,163 - 61,645 25,000 0 60,063(3) H.J.Faig Group Vice President 1997 $280,100 $161,069 - $304,064(2) 23,000 $0 $0 Group Vice President 1996 264,600 146,089 - 67,588 25,000 0 65,349(3) Group Vice President 1995 241,336 154,430 - 60,950 25,000 0 59,397(3) R.D.Brown Chief Financial Officer 1997 $245,800 $159,770 - $267,980(2) 19,800 $0 $0 Chief Financial Officer 1996 226,800 145,600 - 57,939 25,000 0 56,020(3) Chief Financial Officer 1995 193,844 124,471 - 49,131 25,000 0 47,874(3) _______________________________________________________________________________________________________________
(1) Includes amounts earned in fiscal year. (2) On February 7, 1997, the Committee made awards of performance share grants in the form of restricted stock, pursuant to the 1997 Long-Term Incentive Plan which stipulates certain performance targets be met during the three year restriction period. Mr. Meyer was awarded 30,977 shares; Mr. Ross was awarded 19,395 shares; Mr. Shaffer was awarded 13,078 shares; Mr. Faig was awarded 13,078 shares; and Mr. Brown was awarded 11,526 shares. The value of these shares is based on a Fair Market Value of $23.25 (FMV on the date of the grant). Dividends are paid on the restricted shares at the same time and the same rate as dividends paid to the shareholders on unrestricted shares. The restricted stock will be forfeited unless the compounded annual growth rate of the Company's basic earnings per common share over the three year performance period commencing January 1, 1997 is at least 12%. The restricted stock grants awarded in 1997 will be increased by a cash payment equal to 50% or 100% of the value of the associated restricted stock grant at the end of the period if growth rates of basic earnings per common share of at least 15% or 18% respectively, compounded annually, are achieved. In the event that a change of control occurs during the performance period, the restricted stock will be forfeited, but the executive will receive a cash payment in an amount equal to 200% of the value of the restricted stock at the time of the change of control. (3) Represents aggregate market value of shares of Common Stock of the Company awarded as a result of the achievement of the performance goals specified in the Company's 1994 Long-Term Incentive Plan. The shares are deferred until the earlier of the officers' retirement or termination from the Company. (4) Mr. Ross retired on December 31, 1997 and, in accordance with the 1997 Long-Term Incentive Plan, 12,930 shares of restricted stock granted to Mr. Ross in 1997 (with the value of $300,622.50 on the date of the grant) were forfeited. Note: The total number of restricted shares held by the listed officers and the aggregate market value at the end of the Company's fiscal year are as follows: Mr. Meyer held 48,763 shares valued at $1,208,405; Mr. Ross held 31,140 shares valued at $771,686; Mr. Shaffer held 20,679 shares valued at $512,450; Mr. Faig held 20,502 shares valued at $508,064 and Mr. Brown held 17,776 shares valued at $440,510. Dividends are paid on the restricted shares at the same time and the same rate as dividends paid to the shareholders on unrestricted shares. Aggregate market value is based on a Fair Market Value of $24.7812 at December 26, 1997.
Option/SAR Grants in Last Fiscal Year Number of % of Total Securities Options Underlying Granted to Grant Date Options Employees in Exercise or Expiration Present Name Granted(1)(#) Fiscal Year(2) Base Price(3)($/SH) Date Value(4)($) ____________ _____________ ______________ ___________________ ______________ _______ D.J.Meyer 60,000 10.65% $23.25 2/07/07 $620,400 R.E.Ross 40,000 7.10% 23.25 2/07/07 413,600 A.L.Shaffer 23,000 4.08% 23.25 2/07/07 237,820 H.J.Faig 23,000 4.08% 23.25 2/07/07 237,820 R.D.Brown 19,800 3.51% 23.25 2/07/07 204,732
(1) Up to 25% of each stock option grant may be exercised beginning two years following the date of grant and an additional 25% may be exercised beginning in each subsequent year. The purchase price per share of common stock covered by an option is 100% of the fair market value on the grant date. Options expire 10 years after date of the grant. In the event of a "change of control" of the Company, all outstanding stock options become immediately exercisable in full. (2) Based on 563,600 options, net of 5,000 cancellations, granted to all employees in 1997. (3) Fair market value on the date of grant. (4) Black-Scholes Assumption Disclosure: The estimated grant date present value reflected in the above table is determined using the Black-Scholes model. The material assumptions and adjustments incorporated in the Black-Scholes model in estimating the value of the options reflected in the above table include the following: - - An exercise price on the option of $23.25, equal to the fair market value of the underlying stock on the date of grant; - - An option term of 10 years; - - An interest rate of 6.42% that represents the interest rate on a U.S. Treasury security on the date of grant with a maturity date corresponding to that of the option term; - - Volatility of 29.7% calculated using daily stock prices for the one-year period prior to the grant date; and - - Dividends at the rate of $0.36 per share representing the annualized dividends paid with respect to a share of common stock at the date of grant; The ultimate values of the options will depend on the future market price of the Company's stock, which cannot be forecast with reasonable accuracy. The actual value, if any, an optionee will realize upon exercise of an option will depend on the excess of the market value of the Company's common stock over the exercise price on the date the option is exercised.
Aggregated Option/SAR Exercises in Last Year and Fiscal Year-End Option/SAR Values Number of Securities Value(1) of Number of Underlying Unexercised Options Unexercised, In-the-Money Shares Acquired Value at Fiscal Year-End(#) Options Held at Fiscal Year-End ($) Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable($) Unexercisable($) D.J.Meyer 0 $ 0 320,348 195,000 $2,811,733 $316,624 R.E.Ross 0 0 215,512 130,000 2,155,458 211,083 A.L.Shaffer 0 0 52,394 76,750 306,634 125,486 H.J.Faig 0 0 73,560 76,750 624,779 125,486 R.D.Brown 0 0 37,190 73,550 238,736 120,586 ______________________________________________________________________________________________________________ (1) Based on a fair market value of company stock on December 26, 1997, of $24.7812.
PERFORMANCE GRAPH COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN(*) CINCINNATI MILACRON INC., S&P 500, S&P MACHINERY (DIVERSIFIED) INDEX (GRAPH) 12/92 12/93 12/94 12/95 12/96 12/97 Cincinnati Milacron 100 135.46 147.73 166.38 140.89 169.97 S&P 500 100 110.03 111.53 153.30 188.40 251.17 S&P Machinery 100 148.05 144.19 177.91 221.59 293.03 (Diversified) Index (*) Total return assumes reinvestment of dividends on a quarterly basis and market returns are adjusted for spin-offs and other special dividends for both the registrant and the peer group companies. INDEPENDENT AUDITORS The Board of Directors has appointed Ernst & Young LLP as independent auditors of the Company and its subsidiaries for the fiscal year 1998. While there is no legal requirement that the selection of auditors be submitted to a vote of the shareholders, such procedure has been recommended by the Board of Directors because it believes that the selection of auditors is of sufficient importance to justify shareholder ratification. In the event that the shareholders do not confirm the selection, the Board of Directors will reconsider its selection. Confirmation of the appointment will require the affirmative vote of the holders of shares of the Common Stock and the Preferred Stock entitled to cast a majority of the total number of votes represented by the shares of such stock, voting together as a single class. Votes withheld as well as broker non-votes will be counted toward the establishment of quorum, but will have no effect on the confirmation of the appointment of the auditors. THE BOARD OF DIRECTORS RECOMMENDS THAT THE SELECTION OF ERNST & YOUNG LLP BE CONFIRMED SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF SHAREHOLDERS In order for shareholder proposals for the 1999 Annual Meeting of Shareholders to be eligible for inclusion in the Company's proxy material, they must be received by the Company at its principal office in Cincinnati, Ohio, prior to November 25, 1998. OTHER MATTERS The Board of Directors does not intend to present any other business at the meeting and knows of no other matters which will be presented. However, if any other matters come before the meeting, it is the intention of the persons named as proxies to vote in accordance with their judgment on such matters. By order of the Board of Directors CINCINNATI MILACRON INC. Wayne F. Taylor Vice President, General Counsel and Secretary Cincinnati, Ohio March 27, 1998 APPENDIX I CINCINNATI MILACRON INC. PROXY FOR PREFERRED STOCK ONLY4701 Marburg Avenue This proxy is solicited onCincinnati, Ohio 45209 behalf of the Board of Directors Proxy for Annual Meeting of Shareholders To be Held April 28, 1998 Darryl F. Allen, Neil A. Armstrong, and Joseph A. Steger (each with power to act alone and power of substitution) are hereby authorized to represent and to vote all the shares of stock held of record by the undersigned at the Annual Meeting of Shareholders to be held April 28, 1998, and any adjournment thereof, on all business that may properly come before the meeting, including the election of directors and the confirmation of the appointment of auditors. Continued and to be signed on reverse This proxy when properly executed will be voted as directed by the undersigned shareholder. If no direction is made, this proxy will be voted "FOR" all the nominees for director listed in Item (1), and "FOR" Item (2) below. 1.-Election of Directors FOR all nominees WITHHOLD NOMINEES: Harry A. (except as marked to AUTHORITY for all Hammerly,Daniel J.Meyer the contrary) nominees and Joseph A. Steger (3 year term). (To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) ______________________ 2.-Confirm appointment of Ernst & Young as independent auditors FOR AGAINST ABSTAIN Dated:.................1998 ............................ Signature of Shareholder ............................ Signature of Shareholder (if held jointly) When signing as attorney, executor, administrator, trustee, or guardian,please give your full title as such. A proxy for shares held jointly by two or more persons should be signed by all. PLEASE SIGN, DATE, AND RETURN PROMPTLY IN ACCOMPANYING ENVELOPE. CINCINNATI MILACRON INC. Voting Direction for Annual Meeting of Shareholders to be held April 28, 1998 To: Putnam Fiduciary Trust Company, Trustee As a Participant in the Cincinnati Milacron Performance Dividend and Savings Plan, I hereby direct Putnam Fiduciary Trust Company, Trustee, to exercise the votes attributable to the shares of common stock allocated to my account in accordance with my directions on the reverse side, at the Annual Meeting of Shareholders to be held April 28, 1998, and any adjournment thereof, on all business that may properly come before the meeting, including the election of directors and the confirmation of the appointment of auditors. Continued, and to be signed and dated on reverse side This voting direction card, when properly executed Please x will be voted as directed by the undersigned mark your participant. If no direction is made, this direction votes as card will be voted "FOR" all the nominees for director indicated listed in Item (1) below and "FOR" Item (2) below. in this example VOTES 1.-Election of Directors NOMINEES: Harry A. Hammerly, Daniel J. Meyer and Joseph A. Steger (3-year term). FOR all nominees WITHHOLD (except as marked AUTHORITY for (To withhold authority to to the contrary) all nominees vote for any individual nominee, write that nominee's name on the space provided below.) ____________________________ 2.-Confirm appointment of Ernst & Young LLP as independent auditors. FOR AGAINST ABSTAIN Dated:................., 1998 .............................. Signature of Participant .............................. Please sign your name exactly as it appears hereon. PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE CINCINNATI MILACRON INC. PROXY 4701 Marburg Avenue This proxy is solicited on behalf of Cincinnati, Ohio 45209 the Board of Directors Proxy for Annual Meeting of Shareholders To Be Held April 28, 1998 Darryl F. Allen, Neil A. Armstrong and Joseph A. Steger (each with power to act alone and power of substitution) are hereby authorized to represent and to vote all the shares of stock held of record by the undersigned at the Annual Meeting of Shareholders to be held April 28, 1998, and any adjournment thereof, on all business that may properly come before the meeting, including the election of directors and the confirmation of the appointment of auditors. (Continued and to be signed on reverse side) This proxy when properly executed will be voted as Please x directed by the undersigned participant. If no direction mark your is made, this proxy will be voted "FOR" all the nominees votes as for director listed in Item (1) below and "FOR" Item (2) indicated below. in this example VOTES 1.-Election of Directors NOMINEES: Harry A. Hammerly, FOR all nominees WITHHOLD Daniel J. Meyer and (except as marked AUTHORITY for Joseph A. Steger (3- to the contrary) all nominees year term). (To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) __________________ 2.-Confirm appointment of Ernst & Young LLP as independent auditors. FOR AGAINST ABSTAIN Dated:.................., 1998 .............................. Signature of Shareholder .............................. Signature of Shareholder (if held jointly) Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If a corporation, please sign in full corporate name by authorized officer. If a partnership, please sign in partnership name by authorized person. A proxy for shares held jointly by two or more persons should be signed by all. PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE CINCINNATI MILACRON INC. PROXY 4701 Marburg Avenue This proxy is solicited on behalf of Cincinnati, Ohio 45209 the Board of Directors Proxy for Annual Meeting of Shareholders To Be Held April 28, 1998 Darryl F. Allen, Neil A. Armstrong and Joseph A. Steger (each with power to act alone and power of substitution) are hereby authorized to represent and to vote all the shares of stock held of record by the undersigned at the Annual Meeting of Shareholders to be held April 28, 1998, and any adjournment thereof, on all business that may properly come before the meeting, including the election of directors and the confirmation of the appointment of auditors. IMPORTANT VOTING INSTRUCTIONS: A shareholder who has been a continuous beneficial owner since February 1, 1995 is entitled to ten votes for each such share PROVIDED the following certification is completed. By signing, the undersigned: (A) instructs that this proxy be voted as marked and (B) certifies that beneficial ownership of Common Shares has been continuous as follows: Date Shares Acquired Number of Shares Prior to February 2, 1995 ________________ After February 1, 1995 ________________ TOTAL SHARES ________________ ________________ If no certification is made, it will be deemed that beneficial ownership of all Common Shares occurred after February 1, 1995. (Continued and to be signed on reverse side) This proxy when properly executed will be voted as Please x directed by the undersigned participant. If no mark your direction is made, this proxy will be voted "FOR" votes as all the nominees for director listed in Item (1) indicated below and "FOR" Item (2) below. in this example VOTES 1.-Election of Directors NOMINEES: Harry A. Hammerly, FOR all nominees WITHHOLD Daniel J. Meyer and (except as marked AUTHORITY for Joseph A. Steger (3- to the contrary) all nominees year term).(To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) __________________________ 2.-Confirm appointment of Ernst & Young LLP as independent auditors. FOR AGAINST ABSTAIN Dated:....................., 1998 ................................. Signature of Shareholder ................................. Signature of Shareholder (if held jointly) Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as such. If a corporation, please sign in full corporate name by authorized officer. If a partnership, please sign in partnership name by authorized person. A proxy for shares held jointly by two or more persons should be signed by all. PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE CINCINNATI MILACRON INC. Voting Direction for Annual Meeting of Shareholders to be held April 28, 1998 To: Vanguard Fiduciary Trust Company, Trustee As a Participant in the Aeroquip-Vickers Savings and Profit Sharing Plan, I hereby direct Vanguard Fiduciary Trust Company, Trustee, to exercise the votes attributable to the shares of common stock allocated to my account in accordance with my directions on the reverse side, at the Annual Meeting of Shareholders to be held April 28, 1998, and any adjournment thereof, on all business that may properly come before the meeting, including the election of directors and the confirmation of the appointment of auditors. Continued, and to be signed and dated on reverse side This voting direction card when properly executed Please x will be voted as directed by the undersigned participant. mark your If no direction is made, this direction card will be votes as voted "FOR" all the nominees for director listed in Item indicated (1) below and "FOR" Item (2) below. in this example VOTES 1.-Election of Directors NOMINEES: Harry A. Hammerly, FOR all nominees WITHHOLD Daniel J. Meyer and (except as marked AUTHORITY for Joseph A. Steger (3- to the contrary) all nominees year term).(To withhold authority to vote for any individual nominee, write that nominee's name on the space provided below.) __________________________ 2.-Confirm appointment of Ernst & Young LLP as independent auditors. FOR AGAINST ABSTAIN Dated:....................., 1998 ................................. Signature of Participant ................................. Please sign your name exactly as it appears hereon. PLEASE COMPLETE, DATE, SIGN, AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE APPENDIX II GRAPHIC AND IMAGE MATERIAL The following graphic and image material appear in the registrant's Proxy Statement in the sections designated: ELECTION OF DIRECTORS A photo of each director appears to the left of the printed information about that individual. PERFORMANCE GRAPH A line graph representing the values contained in the Performance Graph section appears above the values. -----END PRIVACY-ENHANCED MESSAGE-----