SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-12
NATIONAL PRESTO INDUSTRIES
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(Name of Registrant as Specified in Its Charter)
NATIONAL PRESTO INDUSTRIES
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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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:
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NATIONAL PRESTO INDUSTRIES, INC.
EAU CLAIRE, WISCONSIN 54703
SEPTEMBER 2, 2005
Dear Shareholder:
Enclosed with this letter you will find the notice of our Annual Meeting
of Stockholders, which will be held at our offices in Eau Claire on October 18,
2005.
We sincerely hope that you will be able to be present to meet the
management of your company, see the new products that will be displayed at the
meeting, and cast your vote for the proposed amendment to the Restated Articles
of Incorporation and the election of directors. If, however, you find that you
are unable to attend the meeting in person, we urge that you participate by
voting your stock by proxy. You may cast your vote by signing and returning the
enclosed proxy card.
On March 31, 2005, we mailed you our annual report for 2004, which
contained a description of our business and also included audited financial
statements for that year. If you did not receive a copy of the 2004 annual
report, you may do so by contacting the Secretary of the Company at
715-839-2119. Enclosed with this letter is a proxy statement which contains
information regarding the annual meeting and the business to be conducted
thereat.
It is with great reluctance we announce that Michael J. O'Meara has
decided not to stand for re-election to the Board. Mike has served as a Director
for the past nine years. His keen insight and business acumen have had a
significant positive impact on Board decisions during his tenure. Mike's
contributions will be sorely missed by those of us who continue on the Board.
The Nominating/Corporate Governance Committee has recommended and the full
Board has nominated Joseph G. Stienessen, who is a CPA and principal with
Larson, Allen, Weishair and Company, LLP, a certified public accounting firm, to
fill Mike's vacancy on the Board. If elected, Joe will be designated the Audit
Committee financial expert, where his extensive accounting experience for
business clients will prove to be a valuable asset to the Board and the Audit
Committee.
We are always pleased to hear from our shareholders, and if you cannot be
present in person at the meeting, we would be happy to have your letters
expressing your viewpoints on our products and businesses or to answer any
questions that you might have regarding your company.
/s/ MARYJO COHEN
Chair of the Board and President
NATIONAL PRESTO INDUSTRIES, INC.
3925 NORTH HASTINGS WAY
EAU CLAIRE, WISCONSIN 54703
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF NATIONAL PRESTO INDUSTRIES, INC.:
The Annual Meeting of Stockholders of National Presto Industries, Inc.,
will be held at the offices of the Company, 3925 North Hastings Way, Eau Claire,
Wisconsin 54703, on Tuesday, October 18, 2005, at 2:00 p.m. (CDT), for the
following purposes:
(1) to elect two directors for three year terms ending in 2008 and
until their successors are elected,
(2) to consider a proposal to amend Article 6 (A) of the Restated
Articles of Incorporation, and
(3) to transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on August 10, 2005, will
be entitled to vote at the meeting and any adjournment thereof.
James F. Bartl
Secretary
September 2, 2005
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE REQUESTED TO
SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS. PLEASE USE THE ENCLOSED ENVELOPE IN RETURNING YOUR PROXY.
NATIONAL PRESTO INDUSTRIES, INC.
3925 NORTH HASTINGS WAY
EAU CLAIRE, WI 54703
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 18, 2005
The accompanying proxy is solicited by the Board of Directors of National
Presto Industries, Inc. (the "Company"), for use at the Annual Meeting of
Stockholders to be held at 3925 North Hastings Way, Eau Claire, Wisconsin 54703
on October 18, 2005 at 2:00 p.m. (CDT) (the "Annual Meeting"), and any
adjournment thereof. When such proxy is properly executed and returned, the
shares it represents will be voted at the meeting and at any adjournment
thereof. Any stockholder giving a proxy has the power to revoke it at any time
before it is voted. Presence at the meeting of a stockholder who has signed a
proxy does not alone revoke that proxy; the proxy may be revoked by returning a
later dated proxy, giving written notice to the Secretary of the Company, or
attending the Annual Meeting and voting in person.
At the Annual Meeting stockholders will be asked to:
(1) elect two directors for three year terms ending in 2008 and
until their successors are elected,
(2) consider a proposal to amend Article 6 (A) of the Restated
Articles of Incorporation, and
(3) transact such other business as may properly come before the
meeting.
Only stockholders of record as of the close of business on August 10,
2005, will be entitled to vote at the Annual Meeting. The presence in person or
by proxy of holders of a majority of the shares of stock entitled to vote at the
Annual Meeting shall constitute a quorum for the transaction of business.
Abstentions and proxies submitted by brokers who do not have authority to vote
on certain matters will be considered "present" at the Annual Meeting for
purposes of determining a quorum. The approximate date on which this proxy
statement and form of proxy were first mailed to stockholders is September 2,
2005.
Directors are elected by a plurality of the votes cast, which means the
individuals who receive the largest number of votes will be elected as directors
up to the maximum number of directors to be chosen in the election. Therefore,
shares voted as "withhold authority to vote" will have no effect on the election
of directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The Company has outstanding only common stock of which 6,826,185 shares
were outstanding and entitled to vote as of the close of business on the record
date, August 10, 2005. Each of the 6,826,185 outstanding shares of common stock
is entitled to one vote and there is no cumulative voting.
1
The following table sets forth information provided to the Company as to
beneficial ownership of the Company's common stock as of the record date by (i)
the only shareholders known to the Company to hold 5% or more of such stock,
(ii) each of the directors and executives of the Company named in the Summary
Compensation Table, and (iii) all directors and officers as a group. Unless
otherwise indicated, all shares represent sole voting and investment power.
AMOUNT AND NATURE PERCENT OF
BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP COMMON STOCK
------------------------------- ----------------------- --------------
Maryjo Cohen 1,951, 157(1)(2) 28.6%
3925 N. Hastings Way
Eau Claire, WI 54703
Melvin S. Cohen 394,814(1)(3) 5.8%
3925 N. Hastings Way
Eau Claire, WI 54703
Dimensional Fund Advisors, Inc. 384,708(4) 5.6%
1299 Ocean Avenue
Santa Monica, CA 90401
Royce & Associates, LLC 730,700(4) 10.7%
1414 Avenue of the Americas
New York, NY 10019
Barclays Global Investors 342,032(4) 5.0%
45 Fremont Street
San Francisco, CA 94105
Gabelli Asset Management, Inc. 360,167(5) 5.3%
One Corporate Center
Rye, NY 10580-1435
James F. Bartl 16,532 --(6)
Donald E. Hoeschen 1,246 --(6)
Randy F. Lieble 1,506 --(6)
Lawrence J. Tienor 801 --(6)
Michael J. O'Meara 100 --(6)
Richard N. Cardozo -- --
Patrick J. Quinn 200 --(6)
All officers and directors as a 2,087,241(7) 30.6%
group (10 persons)
(1) Includes 104,625 shares owned by the L.E. Phillips Family Foundation, Inc.
(the "Phillips Foundation"), a private charitable foundation of which the
named person is an officer and/or director and as such exercises shared
voting and investment powers.
2
(2) Includes 1,669,664 shares held in a voting trust described in the section
below captioned "Voting Trust Agreement," for which Ms. Cohen has sole
voting power, and 175,554 shares owned by private charitable foundations
(other than the Phillips Foundation) and family member trusts of which
Ms. Cohen is a co-trustee, officer, or director, and as such exercises
shared voting and investment powers.
(3) Includes 290,189 shares owned by charitable trusts and private charitable
foundations (other than the Phillips Foundation) of which Mr. Cohen is a
co-trustee, officer, or director, and as such exercises shared voting and
investment powers. Does not include shares held in a voting trust
described in the section below captioned "Voting Trust Agreement," for
which Mr. Cohen holds voting trust certificates. Pursuant to the voting
trust, Mr. Cohen does not have the power to vote or dispose of such
shares.
(4) Based on February 2005 Schedule 13-G filing with the Securities and
Exchange Commission, Dimensional Fund Advisors, Inc. and Royce &
Associates, LLC held sole voting and dispositive power for all of their
beneficially owned shares; Barclays Global Investors held sole voting
power for 279,460 shares, sole dispositive power for 342,032 shares, and
no shared voting or dispositive power for its shares.
(5) Based on February 2005 Schedule 13-D filing with the Securities and
Exchange Commission, Gabelli Asset Management, Inc. held sole voting power
for 350,167 of its shares, sole dispositive power for all of its shares,
and no shared voting or dispositive power for its shares.
(6) Represents less than 1% of the outstanding shares of common stock of the
Company.
(7) Includes options for 750 shares currently exercisable by three officers
under the National Presto Industries, Inc. 1988 Stock Option Plan.
The information contained in the foregoing footnotes is for explanatory
purposes only, and the persons named in the foregoing table disclaim beneficial
ownership of shares owned or held in trust for any other person, including
family members, trusts, or other entities with which they may be associated.
Stock ownership information contained in this Proxy Statement was obtained from
the Company's shareholder records, filings with governmental authorities, or
from the named directors and officers.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3, 4 and 5 and any amendments thereto
pursuant to Section 16 of the Securities and Exchange Act of 1934, the Company
believes all such forms were filed on a timely basis by reporting persons during
the fiscal year ended December 31, 2004.
VOTING TRUST AGREEMENT
The first two individual beneficial owners listed in the foregoing table,
and eight other persons comprising extended family members and related trusts,
have entered into a voting trust agreement with respect to the voting of an
aggregate of 1,669,664 shares of common stock of the Company. The voting trust
agreement will terminate on December 4, 2009, unless sooner terminated by the
voting trustee or unanimous written consent of all the parties to the voting
trust agreement, or unless extended by unanimous written consent by all parties
to the agreement. The voting trustee under the agreement is Maryjo Cohen. Under
the agreement, the voting trustee exercises all rights to vote the shares
subject to the voting trust with respect to all matters presented for
shareholder action.
3
NOMINEES AND DIRECTORS
Two directors are to be elected at the Annual Meeting for a term of three
years. The Restated Articles of Incorporation and the Bylaws of the Company
currently provide for six directors, divided into three classes of two members
each. At each annual meeting, successors of the class whose term of office
expires in that year are elected for a three-year term. The two nominees who
receive the highest number of votes will be elected directors of the Company for
the three-year term commencing at the Annual Meeting. Upon recommendation of the
Nominating/Corporate Governance Committee, the Board of Directors propose as
nominees Mr. James F. Bartl, Senior Vice President and Secretary of the Company,
whose term expires at the meeting, and Mr. Joseph G. Stienessen, who is a CPA
and principal with Larson, Allen, Weishair and Company, a midwest based regional
certified public accounting firm. Each of the directors and nominees, except Mr.
Bartl, Mr. Cohen, and Ms. Cohen, has been determined by the Board of Directors
to qualify as an "independent director" as defined by the rules of the New York
Stock Exchange.
Unless otherwise directed, the proxies solicited by the Board of Directors
will be voted for the election as directors of the nominees named above. The
Company believes that each nominee named above will be able to serve; but should
any nominee be unable to serve as a director, the persons named in the proxies
have advised that they will vote for the election of such substitute nominee as
the Board may propose.
4
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following table provides information as to the directors
and nominees of the Company.
PRINCIPAL OCCUPATION; DIRECTOR'S
BUSINESS EXPERIENCE DIRECTOR TERM TO
DIRECTOR AGE PAST 5 YEARS SINCE EXPIRE
--------------------- ----- ----------------------------- -------- ----------
James F. Bartl* 65 Senior Vice President 1995 2005
and Secretary of the
Company
Joseph G. Stienessen* 60 Principal with Larson, Allen,
Weishair and Company, LLP,
an accounting firm; prior to
November 2003, CPA and
Managing Partner of
Stienessen, Schlegel and
Company, LLC
Melvin S. Cohen 87 Chairman Emeritus of the 1949 2006
Board of the Company
Maryjo Cohen 53 Chair of the Board, President 1988 2006
and Chief Executive
Officer of the Company(1)
Richard N. Cardozo 69 Professor Emeritus, Carlson 1998 2007
School of Management,
University of Minnesota;
Senior Scholar, Florida
International University
Patrick J. Quinn 55 Chairman and President, 2001 2007
Ayres Associates, an
engineering firm
*Nominee
(1) Ms. Cohen is the daughter of Mr. Cohen.
The Board of Directors recommends that shareholders vote "FOR" each
nominee listed.
VOTE REQUIRED AND OTHER INFORMATION
The affirmative vote of the holders of a plurality of the shares of the
common stock of the Company represented at the Annual Meeting in person or by
proxy is required for the election of the above nominees. Proxies solicited
herewith will be voted in accordance with instructions given. When specific
instructions are not given, such proxies will be voted "FOR" the election of the
above nominees.
5
During 2004 there were three Board of Directors meetings. Each of the
Directors attended all of the meetings of the Board of Directors and all
meetings of committees on which that director served, with the exception of Mr.
Cohen who missed two meetings. All Directors attended the 2004 Annual Meeting.
The attendance policy for members of the Board of Directors may be reviewed in
the corporate governance section of the Company's web site located at
www.gopresto.com. Directors of the Company, other than those who are also
executive officers, currently receive annual compensation of $25,000. This
amount includes $1,000 for each Board meeting and $500 for each Committee
meeting attended. Executive officers are not compensated for services as Board
members.
The Company has Audit, Compensation, and Nominating/Corporate Governance
Committees consisting of Messrs. O'Meara, Cardozo, and Quinn, each an
"independent director" as defined by the rules of the New York Stock Exchange.
The charters for each of these committees is posted on the Company's web site
located at www.gopresto.com. See the "Audit Committee Report" for a description
of the functions performed by the Audit Committee. During 2004, the Audit
Committee held five meetings. The Company has not yet designated an "audit
committee financial expert" as that term is defined in the Securities and
Exchange Commission's rules and regulations. However, if Mr. Stienessen is
elected as proposed, the Company intends to designate him as the Audit Committee
Financial Expert. The Compensation and Nominating/Corporate Governance
Committees were formed in October 2004 and had no meetings in 2004.
The Company's Board of Directors has established a process whereby
shareholders may send communications to the Board of Directors, as well as to
the presiding director of executive sessions attended by only non-management
directors. The manner in which shareholders can send communications to the Board
is set forth on the Company's web site located at www.gopresto.com in the
corporate governance section.
In identifying prospective director candidates, the Nominating/Corporate
Governance Committee (herein the "Nominating Committee") considers its personal
contacts, recommendations from shareholders, and recommendations from business
and professional sources, but does not pay a fee to any third party. The
Nominating Committee's policy is to consider qualified candidates for positions
on the Board recommended in writing by shareholders. Shareholders wishing to
recommend candidates for Board membership should submit the recommendations in
writing to the Secretary of the Company at least ninety (90) days prior to May
16, 2006, with the submitting shareholder's name and address and pertinent
information about the proposed nominee similar to that set forth for the
nominees named herein. When evaluating the qualifications of potential new
Directors, or the continued service of existing Directors, the Nominating
Committee considers a variety of criteria, including the individual's reputation
for honesty and integrity; respect from leaders and the general citizenry in the
community in which the individual resides; the individual's knowledge of
business principles and intellectual capacity to quickly grasp and understand
the intricacies of the Company's businesses; attainment of official status with
a leading company, agency, educational institution, or other form of enterprise;
accessibility geographically and otherwise for meetings; specialized skills or
expertise; diversity of background; independence; financial expertise; freedom
from conflicts of interest; ability to understand the role of a Director; and
ability to fully perform the duties of a Director. While candidates recommended
by shareholders will generally be considered in the same manner as any other
candidate, special consideration will be given to existing Directors desiring to
stand for re-election given their history of service and their knowledge of the
Company, as well as the Board's knowledge of
6
their level of contribution resulting from such service. Shareholders wishing to
recommend for nomination or nominate a director should contact the Company's
Secretary for a copy of the relevant procedure for submitting nominations and a
full delineation of the criteria considered by the Nominating Committee when
evaluating potential new Directors or the continued service of existing
Directors.
AUDIT COMMITTEE REPORT
Members of the Audit Committee are independent as defined by the rules of
the New York Stock Exchange and the Board of Directors has determined that no
member has a relationship to the Company that may interfere with the exercise
of their independence from management of the Company. It is the purpose of the
Audit Committee to assist the Board of Directors in fulfilling its oversight
responsibilities relating to: (1) the integrity of the Company's financial
statements, (2) the Company's compliance with legal and regulatory requirements,
(3) the independent auditor's qualifications and independence, and (4) the
performance of the Company's internal audit function and independent auditors.
Committee members have conducted an open and comprehensive dialogue with the
Company's auditors regarding the 2004 year-end audited financial statements and
have reviewed and discussed those statements with management.
The Audit Committee members reviewed, discussed and ratified the nature
and the extent of the services to be provided by Grant Thornton LLP, including
services rendered in 2004, the costs and fees for such services, and the effect
of such fee arrangements on the independence of the auditors. The Committee has
also discussed with the auditors matters related to SAS 61, received written
disclosures from the auditors required by ISB Standard No. 1, and discussed with
the auditors their independence. As a consequence of its evaluation and review,
the Committee recommended to the full Board that the audited financial
statements be included in the Company's annual report on Form 10-K for the 2004
calendar year based upon the aforementioned review and discussion.
Submitted by members of the Audit Committee:
Michael J. O'Meara Richard N. Cardozo Patrick J. Quinn
7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning annual
compensation paid by the Company to the Company's chief executive officer and
each of the four highest paid executive officers whose salary and bonus exceeded
$100,000 for the fiscal year ended December 31, 2004.
SUMMARY COMPENSATION/PENSION ACCRUED BENEFIT TABLE
ANNUAL COMPENSATION
------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
---------------------------------- ---- -------- --------- ---------------
Maryjo Cohen 2004 $ 64,000 $ 235,000 $ 149,675
Chair of the Board, President, 2003 64,000 226,000 4,000
Chief Executive Officer and Director 2002 64,000 216,000 4,000
James F. Bartl 2004 $ 44,600 $ 222,400 $ 344,680
Senior Vice President, Secretary, 2003 44,600 213,400 4,000
and Director 2002 44,600 204,400 4,000
Donald E. Hoeschen 2004 $ 41,370 $ 153,500 $ 221,545
Vice President-Sales 2003 41,370 147,500 3,657
2002 41,370 141,500 3,557
Randy F. Lieble 2004 $ 40,000 $ 145,000 $ 140,575
Vice President, Treasurer 2003 40,000 120,000 2,900
and Chief Financial Officer 2002 40,000 105,000 2,750
Lawrence J. Tienor 2004 $ 37,790 $ 108,710 $ 213,680
Vice President-Engineering 2003 37,790 98,710 2,629
2002 37,790 92,210 2,392
(1) The amounts shown in this column are matching contributions made by the
Company to the individual's 401(k) retirement plan account. Amounts for 2004
also include the accrued benefit paid October 1, 2004, as a result of
terminating the Company's defined benefit plan as of December 31, 2003.
Beginning as of January 1, 2004, the Company increased its annual
contribution to the 401(k) plan as a result of terminating the defined
benefit plan.
8
AGGREGATE OPTION EXERCISE
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------ ------------ ------------ ------------------------- -------------------------
Donald E. Hoeschen -0- -0- 250 / 500 2,246 / 4,493
Randy F. Lieble -0- -0- 250 / 0 1,028 / 0
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Melvin S. Cohen, Chairman Emeritus of the Company, was paid $30,000 for
consultation services in 2004. During the year, Mr. Cohen was consulted on a
variety of matters based upon his executive experience and knowledge of the
Company's operations. As of 2005, Mr. Cohen no longer is engaged by the Company
as a paid consultant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described below in the report on executive compensation, members of the
Board of Directors determined the compensation of the executive officers of the
Company last year. This included the compensation of those executive officers
who also serve as directors, namely, Maryjo Cohen, Chair of the Board,
President, and Chief Executive Officer, and James F. Bartl, Senior Vice
President and Secretary. Ms. Cohen and Mr. Bartl do not participate in any
decisions regarding their own compensation.
Executive officers of the Company, including Ms. Cohen and Mr. Bartl, also
serve as directors and executive officers of the Company's subsidiaries.
BOARD REPORT ON EXECUTIVE COMPENSATION
Decisions on executive compensation are made by the Board of Directors.
The Compensation Committee was formed in 2004, subsequent to the Board's
establishment of 2004 compensation. Consequently, this report is from the Board
of Directors. Salaries and bonus compensation are reviewed annually at or near
the end of the Company's fiscal year.
Historically the Company has maintained salaries at a level that is
considered to be below salaries for executives of comparable companies. This
provides a more conservative approach to base compensation if the Company
experiences significant adverse operating results that the Board of Directors,
in cooperation with the Compensation Committee, believes should result in a
reduction in total compensation. Salaries historically have been supplemented by
amounts characterized as bonus compensation, which is paid in cash as described
in the above Summary Compensation Table. The Board and Compensation Committee
consider, however, salaries and bonuses together to determine if total
compensation, irrespective of how characterized, is reasonably related to the
services
9
provided. As of January 1, 2005, the amount characterized as bonus compensation
was consolidated into the salary payments.
The Company has not relied upon stock incentives as a principal part of
its compensation program for its executives. However, the Company has made
available stock purchase arrangements for executive officers. The last such
arrangement for any of the executive officers named in the foregoing table was
in 1997.
The Board believes that the total salary and bonus compensation paid to
its executives is appropriate in relationship to the size and nature of the
Company's business, total compensation of other executives of similar
businesses, the longevity of such officers' service with the Company, the
limited number of senior executives employed by the Company, and the results
that have been achieved by its management group (the amounts previously
characterized as bonus compensation have not been based upon a percentage or
other formula utilizing revenues, income, or other financial data or measures of
Company performance as predicates). As of this time, no compensation or other
consultant has been retained by the Board or the Compensation Committee to
evaluate executive compensation. Consideration is given, however, to data
generally made available on executive compensation by such organizations.
The Company had been utilizing the salary and discretionary bonus approach
described above for more than 25 years. Because of their substantial stock
ownership, the interests of Ms. Cohen, the Company's senior officer, and Mr.
Cohen, Chairman Emeritus, are substantially related to the interests of all
stockholders. Mr. Bartl also has material stock interests in relation to his
compensation level.
The basis for the compensation of Ms. Cohen as Chair of the Board,
President and Chief Executive Officer is determined in the same manner as the
compensation for the other executive officers. In establishing Ms. Cohen's
compensation, consideration was given to her demonstrated competence over many
years, the scope of responsibilities assumed, and her expertise in a variety of
significant niches within the business. No specific weight was assigned to any
of these factors and, as in the case of other executives, no formula was
utilized for determining bonus compensation.
Section 162(m) of the Internal Revenue Code imposes an annual deduction
limitation of $1.0 million on the compensation of certain executive officers of
publicly held companies. The Board of Directors and Compensation Committee do
not believe that the Section 162(m) limitation will materially affect the
Company in the near future based on the level of the compensation of the
executive officers. If the limitation would otherwise apply, the Board of
Directors in cooperation with the Compensation Committee could defer payment of
a portion of the bonus to remain under the $1.0 million annual deduction
limitation.
Submitted by the Company's Board of Directors:
Melvin S. Cohen James F. Bartl Richard N. Cardozo
Maryjo Cohen Michael J. O'Meara Patrick J. Quinn
10
PERFORMANCE GRAPH
The performance graph below compares cumulative five-year shareholder
returns on an indexed basis with the Standard and Poor's 500 Composite Index
(the "S&P 500 Index") and a Peer Group comprised of small appliance industry
competitors (the "Peer Group"). The companies comprising the Peer Group are set
forth at the bottom of this page. The performance graph is not necessarily
indicative of future performance.
FIVE-YEAR TOTAL RETURN COMPARISON OF
NATIONAL PRESTO, S&P 500 INDEX, AND PEER GROUP
[LINE GRAPH]
DECEMBER 31,
-------------------------------------
1999 2000 2001 2002 2003 2004
----- ---- ---- ---- ----- -----
National Presto Industries, Inc. 100.0 92.2 89.0 97.3 123.8 160.5
S&P 500 Index 100.0 90.9 80.1 62.4 80.3 89.0
Peer Group 100.0 57.0 63.5 45.0 61.2 56.3
Assumes $100 invested on December 31, 1999, in National Presto Industries, Inc.
common stock, the S&P 500 Index, and the Peer Group. Total return assumes
reinvestment of dividends.
PEER GROUP COMPANIES: National Presto Industries, Inc., Salton, Inc., and
Applica, Inc.
The performance graph above shall not be deemed incorporated by reference by any
general statement incorporating this Proxy Statement into any filing under the
Securities Act of 1933 (the "1933 Act") and Securities Exchange Act of 1934 (the
"1934 Act"), except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under the
1933 or 1934 Act.
11
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
PROPOSED AMENDMENT
Management seeks approval by the stockholders of an Amendment to Article 6
(A) of the Restated Articles of Incorporation whereby the number of directors
will be reduced from six to five and the number of directors in one class will
be reduced to one. Immediately following the Annual Meeting, Melvin S. Cohen
will resign as a director resulting in a total of five directors, three of whom
will be outside, independent directors as required by the New York Stock
Exchange Corporate Governance Standards. In conjunction with and because of this
change stockholders will also be requested to amend the language in Article 6
(A) regarding the current classified board, whereby the classified board would
consist of two classes with two directors in each class and one class with one
director in that class (as compared to the current language that provides for
three classes of two directors in each class). In order to accomplish the
foregoing, stockholders will be asked to amend the first two sentences of
Article 6 (A), so that these sentences would read as follows:
Article 6 (A)
The number of directors which shall constitute the whole Board of
Directors of the Corporation shall be five. The Board of Directors shall
be divided into three classes with two classes of two directors and one
class of one director and the term of office of one class expiring each
year.
The Board of Directors must be comprised of a majority of outside,
independent directors to comply with the New York Stock Exchange Corporate
Governance Standards. As a consequence, management recommends to the
stockholders that they approve the proposed amendment.
GENERAL EFFECT AND PURPOSE OF THE AMENDMENT
Adoption of the amendment by the stockholders will coincide with the
resignation of Melvin S. Cohen as a director, thereby reducing the number of
directors to five and resulting in the three outside, independent directors
(Messrs. O'Meara, Cardozo, and Quinn), constituting a majority of the Board of
Directors. If Mr. Stienessen is elected by the stockholders to succeed Mr.
O'Meara, as proposed by the Company, the outside, independent directors will
continue to make up a majority of the Board. With a majority of the Board being
comprised of outside, independent directors, the Company will thereby be in
compliance with the New York Stock Exchange revised Corporate Governance
Standards. If the proposed amendment is not approved by the shareholders, the
Board will have a vacancy until such time the Restated Articles of Incorporation
can be amended. The Board of Directors recommends that shareholders vote "FOR"
amending Article 6 (A) of the Restated Articles of Incorporation.
VOTE REQUIRED
The affirmative vote of the holders of at least three-quarters (75%) of
the shares of common stock of the Company outstanding as of August 10, 2005, is
required to adopt the amendment. Proxies solicited herewith will be voted in
accordance with the instructions given. WHEN SPECIFIC INSTRUCTIONS ARE NOT
GIVEN, SUCH PROXIES WILL BE VOTED IN FAVOR OF APPROVAL OF THE AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION.
12
INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton LLP, Certified Public Accountants, was the independent
registered public accounting firm for the Company for the fiscal years ended
December 31, 2003 and 2004. It has been selected by the Audit Committee to be
the independent registered public accounting firm for the Company during the
fiscal year ending December 31, 2005. The Audit Committee meets with
representatives of Grant Thornton LLP to review its comments and plans for
future audits. It is not anticipated that any representative of such auditing
firm will be present at the Annual Meeting of Stockholders.
The following fees have been incurred by the company:
AUDIT FEES(1) AUDIT RELATED FEES(2) TAX FEES(3) ALL OTHER FEES(4)
------------- --------------------- ----------- -----------------
Year ended
December 31, 2003 $ 77,000 $ 25,000 $ 11,000 $ --
Year ended
December 31, 2004 267,000 11,000 13,000 --
(1) Includes audit fee for financial statement audits, 10Q reviews,
Sarbanes-Oxley 404 controls work and related expenses.
(2) Audit related fees include fees for consultation related to new accounting
standards, questions related to SEC filings and other accounting research.
(3) Tax fees consist of review of Federal and State income tax returns, and
advice related to various tax matters.
(4) There were no other fees.
Grant Thornton LLP did not provide any financial information, design or
implementation services for the Company during fiscal years ended December 31,
2003 and 2004.
In accordance with the Audit Committee charter, the Committee must review
and, in its sole discretion, pre-approve the independent auditors' annual
engagement letter and all audit, audit-related, tax and other permissible
services proposed to be provided by the independent auditor in accordance with
the applicable New York Stock Exchange listing standards and United States
Securities and Exchange Commission rules, and the fees for such services.
OTHER MATTERS
The cost of preparing, assembling, and mailing this proxy statement, the
notice, and form of proxy will be borne by the Company. The management has made
no arrangement to solicit proxies for the meeting other than by use of mail,
except that some solicitation may be made by telephone, facsimile, email, or
personal calls by officers or regular employees of the Company. The Company
will, upon request, reimburse brokers and other persons holding shares for the
benefit of others in accordance with the rates approved by the New York Stock
Exchange for their expenses in forwarding proxies and accompanying material and
in obtaining authorization from beneficial owners of the Company's stock to give
proxies.
13
The Board of Directors knows of no other matters to be brought before this
Annual Meeting. If other matters should come before the meeting, however, it is
the intention of each person named in the proxy to vote such proxy in accordance
with his or her judgement on such matters.
THE ANNUAL REPORT OF THE COMPANY FOR THE PAST FISCAL YEAR WAS MAILED TO
SHAREHOLDERS ON MARCH 31, 2005 AND CONTAINS THE COMPANY'S FINANCIAL STATEMENT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004. NATIONAL PRESTO INDUSTRIES, INC.
ANNUAL REPORT AND FORM 10-K ANNUAL REPORT ON FILE WITH THE SECURITIES AND
EXCHANGE COMMISSION MAY BE OBTAINED, WITHOUT CHARGE, UPON WRITTEN REQUEST TO
JAMES F. BARTL, SECRETARY, NATIONAL PRESTO INDUSTRIES, INC., 3925 NORTH HASTINGS
WAY, EAU CLAIRE, WISCONSIN 54703, PHONE NUMBER 715-839-2119. COPIES OF EXHIBITS
TO FORM 10-K MAY BE OBTAINED UPON PAYMENT TO THE COMPANY OF THE REASONABLE
EXPENSE INCURRED IN PROVIDING SUCH EXHIBITS.
SHAREHOLDER PROPOSALS
Any proposal intended to be presented for action at the 2006 Annual
Meeting of Stockholders of the Company (the "2006 Annual Meeting") by any
stockholder of the Company must be received by the Secretary of the Company at
3925 North Hastings Way, Eau Claire, Wisconsin 54703, not later than December 1,
2005, in order for such proposal to be included in the Company's proxy statement
and proxy relating to the 2006 Annual Meeting. Nothing in this paragraph shall
be deemed to require the Company to include in its proxy statement and proxy
relating to the 2006 Annual Meeting any stockholder proposal which does not meet
all of the requirements for such inclusion at the time in effect.
Pursuant to Rules 14a-4 and 14a-5(e) of the Securities and Exchange
Commission, as amended, which govern the use by the Company of its discretionary
voting authority with respect to certain shareholder proposals, should the
Company receive notice after February 14, 2006, of any such stockholder proposal
which will be circulated independent of the Company's proxy statement, the
persons named in proxies solicited by the Board of Directors of the Company for
its 2006 Annual Meeting may exercise discretionary voting power with respect to
any such proposal.
BY ORDER OF THE BOARD OF DIRECTORS
James F. Bartl, Secretary
14
PRESTO(R)
NOTICE OF
ANNUAL
MEETING
AND
PROXY
STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 18, 2005
Please sign and return the
enclosed proxy card promptly.
NATIONAL PRESTO INDUSTRIES, INC.
EAU CLAIRE, WISCONSIN 54703
NATIONAL PRESTO INDUSTRIES, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
Eau Claire,Wisconsin 54703 The undersigned hereby appoints Maryjo Cohen and James F.
Telephone (715) 839-2119 Bartl and each of them jointly and severally as proxies,
with the power to appoint substitutes, and hereby authorizes
them to represent and to vote as designated below, all the
shares of common stock of National Presto Industries, Inc.,
held of record by the undersigned on August 10, 2005, at the
Annual Meeting of Stockholders to be held on October 18,
2005 and any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" BOTH NOMINEES AND APPROVAL OF THE AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION.
1. ELECTION OF DIRECTORS FOR both nominees listed below WITHHOLD authority to vote
(except as marked to the contrary below) [ ] for both nominees listed below [ ]
James F. Bartl Joseph G. Stienessen
(INSTRUCTIONS: To vote against any individual nominee write that nominee's name in the space provided below.)
-----------------------------------------------------------------------------------------------------------------------
2. Proposal to amend Article 6 (A) of the Restated Articles of Incorporation.
[ ] For [ ] Against [ ] Abstain
3.In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Continued, and to be signed, on the other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" BOTH NOMINEES SPECIFIED IN ITEM 1 AND "FOR" THE PROPOSED AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION SPECIFIED IN ITEM 2.
Please sign exactly as name appears
below.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
DATED , 2005
-----------------------
Signature
-------------------------------------- ---------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. Signature if held jointly
-------------------------------------- -----------