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 [ ]
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
STURM, RUGER & COMPANY, INC.
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(Name of Registrant as Specified In Its Charter)
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 2003
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders of
STURM, RUGER & COMPANY, INC. (the "Company") will be held at the Lake Sunapee
Country Club, 100 Country Club Lane, New London, New Hampshire 03257 on the 6th
day of May, 2003 at 10:30 a.m. to consider and act upon the following:
1. A proposal to elect eight (8) Directors to serve for the
ensuing year;
2. A proposal to approve the appointment of KPMG LLP as the
Company's independent auditors for the 2003 fiscal year; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
Only holders of record of Common Stock at the close of business on
March 19, 2003 will be entitled to notice of and to vote at the Annual Meeting
or any adjournment or postponement thereof. The complete list of stockholders
entitled to vote at the Annual Meeting shall be open to the examination of any
stockholder, for any purpose germane to the Annual Meeting, during ordinary
business hours, for a period of 10 days prior to the Annual Meeting, at the
Company's offices located at 411 Sunapee Street, Newport, New Hampshire 03773.
The Company's Proxy Statement is attached hereto.
By Order of the Board of Directors
/s/ Leslie M. Gasper
--------------------
Leslie M. Gasper
Corporate Secretary
Southport, Connecticut
March 26, 2003
All Stockholders are cordially invited to attend the Annual Meeting. If
you do not expect to be present, please date, mark and sign the enclosed form of
Proxy and return it to Computershare Investor Services LLC, P.O. Box A3800,
Chicago, Illinois 60690-9608. A postage-paid envelope is enclosed for your
convenience.
March 26, 2003
STURM, RUGER & COMPANY, INC.
LACEY PLACE, SOUTHPORT, CONNECTICUT 06890
PROXY STATEMENT
2003 ANNUAL MEETING OF THE STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Sturm, Ruger & Company, Inc. (the
"Company") for use at the 2003 Annual Meeting of Stockholders (the "Meeting") of
the Company to be held at 10:30 a.m. on May 6, 2003 at the Lake Sunapee Country
Club, 100 Country Club Lane, New London, New Hampshire 03257 or at any
adjournment or postponement thereof for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement and
enclosed proxy are first being sent to stockholders on or about March 26, 2003.
The mailing address of the principal executive office of the Company is
Lacey Place, Southport, Connecticut 06890.
If the enclosed proxy is signed and returned, it will be voted in
accordance with its terms. However, a stockholder of record may revoke his or
her proxy before it is exercised by (i) giving written notice to the Company's
Secretary at the Company's address indicated above, (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Company's
Secretary at or before the Meeting, or (iii) attending the Meeting and voting in
person (although attendance at the Meeting will not, in and of itself,
constitute revocation of a proxy). All expenses in connection with the
solicitation of these proxies will be borne by the Company.
The Annual Report of the Company for the year ended December 31, 2002,
including financial statements, is enclosed herewith.
Only holders of Common Stock, $1.00 par value, of the Company (the
"Common Stock") of record at the close of business on March 19, 2003 will be
entitled to vote at the Meeting. Each holder of record of the issued and
outstanding shares of voting Common Stock is entitled to one vote per share. As
of March 19, 2003, 26,910,720 shares of Common Stock were issued and outstanding
and there were no outstanding shares of any other class of stock. The
stockholders holding a majority of the issued and outstanding Common Stock,
either present in person or represented by proxy, will constitute a quorum for
the transaction of business at the Meeting. In accordance with the Company's
by-laws and applicable law, the election of Directors will be determined by a
plurality of the votes cast by the holders of shares present in person or by
proxy and entitled to vote. Consequently, the eight nominees who receive the
greatest number of votes cast for election as Directors will be elected. Shares
present which are properly withheld as to voting with respect to any one or more
nominees, and shares present with respect to which a broker indicates that it
does not have authority to vote ("broker non-votes") will be counted as being
present at the Meeting. However, these shares will not be counted as voting on
the election of Directors, with the result that such abstentions and broker
non-votes will have the same effect as votes against the election of Directors.
The affirmative vote of shares representing a majority of the shares present and
entitled to vote is required to approve the other proposal to be voted on at the
Meeting. Shares which are voted to abstain on these matters and broker non-votes
will be considered present at the Meeting but will not be counted as voting for
these matters, with the result that abstention and broker non-votes will have
the same effect as votes against the proposal.
1
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Eight Directors will be elected at the Meeting, each to hold office
until the next Annual Meeting of Stockholders and until his successor is elected
and has qualified, which shall be two fewer Directors than were elected at the
last Annual Meeting. William B. Ruger, founder of the Company and Chairman
Emeritus, passed away on July 6, 2002. In addition, Stanley B. Terhune, a
Director since 1975, has informed the Company of his decision to retire as a
Director effective May 6, 2003. On February 19, 2003, the Board amended the
Company's By-Laws to reduce the number of Directors to eight, effective on May
6, 2003.
All of the eight nominees for Director listed below were elected at the
last Annual Meeting. If no contrary instructions are indicated, proxies will be
voted for the election of the nominees for Director. Should any of the said
nominees for Director not remain a candidate at the time of the Meeting (a
condition which is not now anticipated), proxies solicited hereunder will be
voted in favor of those nominees for Director selected by management of the
Company. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the Meeting and entitled to vote on
the election of Directors.
The following table sets forth certain information concerning each
nominee's age, principal occupation, other directorships in publicly-held
corporations and the number and percentage of shares of Common Stock of the
Company beneficially owned by such nominee as of February 1, 2003.
BUSINESS EXPERIENCE FIRST SHARES PERCENT
DURING THE PAST FIVE YEARS AND BECAME A BENEFICIALLY OF
NAME AGE OTHER DIRECTORSHIPS DIRECTOR OWNED CLASS
---- --- ------------------- -------- ----- -----
William B. Ruger, Jr. 63 Chairman of the Board of Directors and Chief March, 5,272,000 (1) 19.45%
Executive Officer as of October 24, 2000. Prior 1970
thereto, Vice Chairman, Senior Executive Officer
from July 18, 1995, and President and Chief
Operating Officer from March 1, 1998. Governor,
Sporting Arms & Ammunition Manufacturers'
Institute, Trustee, St. Paul's School, the
Salisbury School, the Wildlife Management
Institute, and the Cody Firearms Museum of the
Buffalo Bill Historical Society.
Erle G. Blanchard 56 Vice Chairman, President, Chief Operating October, 167,000 (2) *
Officer and Treasurer as of October 24, 2000. 2000
Prior thereto, Vice President and Controller
from March 1, 1996. Previously Vice President
and Controller-Newport from March 11, 1993 to
March 31, 1995. Trustee, Sugar River Savings
Bank, Newport NH.
2
BUSINESS EXPERIENCE FIRST SHARES PERCENT
DURING THE PAST FIVE YEARS AND BECAME A BENEFICIALLY OF
NAME AGE OTHER DIRECTORSHIPS DIRECTOR OWNED CLASS
---- --- ------------------- -------- ----- -----
Stephen L. Sanetti 53 Vice Chairman, Senior Executive Vice President March, 192,000 (3) *
and General Counsel as of October 24, 2000. 1998
Prior thereto, Vice President and General
Counsel from March 11, 1993. Governor, National
Shooting Sports Foundation and Hunting &
Shooting Sports Heritage Foundation.
John M. Kingsley, Jr. 71 Director, Neurological Institute of New Jersey. April, 19,160 (4) *
Trustee, Brundge, Story and Rose Investment 1972
Trust. Retired as Executive Vice President of
the Company on December 31, 1996.
Townsend Hornor 76 Director and Audit Committee member, Nickerson April, 18,200 (5) *
Lumber Company. Chairman, The National Marine 1972
Life Center. Former Senior Securities Analyst
member of Boston and New York Societies of
Securities Analysts. First Vice President and
general partner of White Weld & Co., (investment
bankers) 1952 to 1978. Former Director and Audit
Committee member, Kollmorgen Corp. Former
Director, Simon & Schuster, Ealing Corp., and
Endevco Corp. Trustee or director of various
charitable organizations.
Richard T. Cunniff 80 Vice Chairman and Director of the Sequoia Fund, December, 40,500 (6) *
an investment company registered under the 1986
Investment Company Act of 1940. Vice Chairman
and Principal of Ruane, Cunniff & Co., Inc., an
investment advisor under the Investment Advisers
Act of 1940.
Paul X. Kelley 74 Chairman, American Battle Monuments Commission April, 17,000 (7) *
(independent agency of the Executive Branch of 1990
the Federal government.) Partner, J.F. Lehman &
Company (private investments). Former Vice
Chairman, Cassidy & Associates, Inc. (government
relations). Commandant of the United States
Marine Corps and member of the Joint Chiefs of
Staff from 1983 to 1987. Director, London Life
Reinsurance Company (reinsurance), Park Place
Entertainment Corporation (gaming hotels), Saul
Centers, Inc. (real estate investment trust),
and OAO Technology Solutions, Inc. (software
development.)
James E. Service 72 Consultant, Invesmart (investment management). July, 16,000 (8) *
Commander, United States Naval Air Force, 1992
Pacific Fleet, from 1985 to 1987. Director of
Wood River Medical Center, Ketchum, Idaho from
1992 to 1996.
3
* Beneficial owner of less than 1% of the outstanding Common Stock of the
Company.
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(1) Includes 4,272,000 shares of Common Stock held in the name of Ruger
Business Holdings, L.P., of which the William B. Ruger Revocable Trust
of 1988 is the sole limited partner and Ruger Management, Inc. is the
sole general partner. William B. Ruger, Jr. and Carolyn Ruger Vogel
(son and daughter of William B. Ruger) are co-trustees of the William
B. Ruger Revocable Trust of 1988. Ruger Management, Inc. is owned by
William B. Ruger, Jr. and Carolyn R. Vogel. Mr. Ruger, Jr. and Mrs.
Vogel have shared investment and voting control with respect to such
4,272,000 shares of Common Stock. Also includes 800,000 shares of
Common Stock owned directly by Mr. Ruger, Jr. Mr. Ruger, Jr. has sole
investment and voting control with respect to such 800,000 shares. Also
includes 200,000 shares of Common Stock subject to options currently
exercisable or which will become exercisable within 60 days of February
1, 2003 under the 1998 Stock Incentive Plan.
(2) Includes 7,000 shares of Common Stock held by Mr. Blanchard as trustee
of a revocable trust for the benefit of Mr. Blanchard and his spouse.
Also includes 160,000 shares of Common Stock subject to options
currently exercisable or which will become exercisable within 60 days
of February 1, 2003 under the 1998 Stock Incentive Plan.
(3) Includes 32,000 shares of Common Stock held directly by Mr. Sanetti.
Also includes 160,000 shares of Common Stock options currently
exercisable or which will become exercisable within 60 days of February
1, 2003 under the 1998 Stock Incentive Plan.
(4) Includes 4,160 shares of Common Stock held directly by Mr. Kingsley.
Also includes 15,000 shares of Common Stock subject to options
currently exercisable or which will become exercisable within 60 days
of February 1, 2003 under the 2001 Stock Option Plan for Non-Employee
Directors.
(5) Includes 3,200 shares of Common Stock held directly by Mr. Hornor. Also
includes 15,000 shares of Common Stock subject to options currently
exercisable or which will become exercisable within 60 days of February
1, 2003 under the 2001 Stock Option Plan for Non-Employee Directors.
(6) Includes 25,500 shares of Common Stock held directly by Mr. Cunniff.
Also includes 15,000 shares of Common Stock subject to options
currently exercisable or which will become exercisable within 60 days
of February 1, 2003 under the 2001 Stock Option Plan for Non-Employee
Directors. Does not include 25,500 shares of Common Stock owned by Mr.
Cunniff's wife as to which Mr. Cunniff disclaims beneficial ownership.
Mr. Cunniff is the Vice Chairman, a director and a principal
stockholder of Ruane, Cunniff & Co., Inc., which manages discretionary
accounts and which holds 121,344 shares of Common Stock. The firm of
Ruane, Cunniff & Co., Inc. is able to direct the sale or disposition of
the 121,344 shares; however, 3,200 shares may be voted by Ruane,
Cunniff & Co., Inc. and 118,144 shares may be voted only by their
beneficial owners. Mr. Cunniff disclaims beneficial ownership of such
121,344 shares.
(7) Includes 1,200 shares of Common Stock held directly by General Kelley
and 800 shares held in joint tenancy by General Kelley and his wife.
Also includes 15,000 shares of Common Stock subject to options
currently exercisable or which will become exercisable within 60 days
of February 1, 2003 under the 2001 Stock Option Plan for Non-Employee
Directors.
(8) Includes 1,000 shares of Common Stock held directly by Admiral Service.
Also includes 15,000 shares of Common Stock subject to options
currently exercisable or which will become exercisable within 60 days
of February 1, 2003 under the 2001 Stock Option Plan for Non-Employee
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED ABOVE.
4
THE BOARD OF DIRECTORS, ITS COMMITTEES AND
DIRECTOR COMPENSATION
BOARD OF DIRECTORS
The Company's business and affairs are under the direction of the Board
of Directors of the Company pursuant to the General Corporation Law of the State
of Delaware as in effect from time to time and the Company's By-Laws. Members of
the Board of Directors are kept informed of the Company's affairs through
discussions with the Company's executive officers, by careful review of
materials provided to them and by participating in meetings of the Board of
Directors and the committees of the Board of Directors.
The Board of Directors held five meetings during 2002. With the
exception if William B. Ruger, who did not attend the two Directors' meetings
held before his death, all Directors attended all meetings of the Board of
Directors.
During 2002, the Company paid each Director who was not also an officer
of the Company $20,000 in annual fees for services as a member of the Board of
Directors. Each Director who was also an officer received $6,000 in annual fees.
During 2002, each Director who was not also an officer of the Company
received an attendance fee of $1,500 per meeting, and each Director who was also
an officer received an attendance fee of $500 per meeting. All Directors were
reimbursed for out-of-pocket expenses related to attendance at meetings, and
each Director who was not also an officer of the Company and was a member of any
of the committees of the Board received $1,000 for each committee meeting
attended.
On January 5, 2001, each current non-employee member of the Board was
granted a non-qualified stock option to purchase 20,000 shares of Common Stock
at an exercise price of $9.875 per share under the 2001 Stock Option Plan for
Non-Employee Directors, which was approved by the stockholders of the Company on
May 3, 2001. These options vest and become exercisable in four equal annual
installments of 25% of the total number of options awarded, beginning on the
date of grant and on each of the next succeeding three anniversaries thereafter.
Stanley B. Terhune, a Director and former Vice President of the
Company, served as a consultant to the Company during 2002. For his services in
this capacity, Mr. Terhune received $100 per hour and during 2002 received a
total of $63,409 including bonuses.
AUDIT COMMITTEE
In 2002, the members of the Audit Committee of the Board of Directors
were Townsend Hornor, Richard T. Cunniff and Paul X. Kelley. Mr. Hornor served
as Chairman. Each of Messrs. Hornor, Cunniff and Kelley have no personal ties to
the Company (other than their compensation as a Director and equity ownership as
described in this annual Proxy Statement) and each is an "independent director"
as defined in Rule 4200(a)(15) of the National Association of Securities
Dealers, Inc. listing standards. The Audit Committee is governed by a written
charter that was adopted by the Board of Directors on May 11, 2000 and
reaffirmed on May 3, 2001 and May 9, 2002. A copy of the charter was included in
the Company's annual Proxy Statements in connection with the Annual Meetings
held in 2001 and 2002. The "Report of the Audit Committee" is included in this
annual Proxy Statement.
5
The Audit Committee held four meetings during 2002. In addition to
out-of-pocket expenses related to attendance at meetings, Messrs. Hornor,
Cunniff and Kelley each received $4,000 for services rendered on such Committee
in 2002. All Directors who served on the Audit Committee in fiscal 2002 attended
all meetings of the Audit Committee in fiscal 2002.
COMPENSATION COMMITTEE
In 2002, the members of the Compensation Committee of the Board of
Directors were Paul X. Kelley, Richard T. Cunniff and James E. Service. General
Kelley served as Chairman. Each of Messrs. Kelley, Cunniff and Service have no
personal ties to the Company (other than their compensation as a Director and
equity ownership as described in this annual Proxy Statement) and each is an
"independent director" as defined in Rule 4200(a)(15) of the National
Association of Securities Dealers, Inc. listing standards. The function of the
Compensation Committee is to administer the Company's equity incentive
compensation plans and establish the compensation of the executive officers and
Directors of the Company. The Compensation Committee held two meetings during
2002. The "Compensation Committee Report on Executive Compensation" is included
in this annual Proxy Statement.
In addition to out-of-pocket expenses related to attendance at
meetings, Messrs. Kelley and Service each received $2,000, and Mr. Cunniff
received $1,000, for services rendered on such committee in 2002. With the
exception of Mr. Cunniff, who did not attend one Compensation Committee meeting,
the Directors who served on the Compensation Committee in fiscal 2002 attended
all meetings of the Compensation Committee in fiscal 2002.
NOMINATION OF DIRECTORS
The Company does not have a nominating committee or a committee
performing a similar function. The Board of Directors as a whole performs the
function of a nominating committee.
6
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION*
Overall Policy
The Company's executive compensation program is designed to reflect
both corporate performance and individual responsibilities and performance. The
Compensation Committee administers the Company's overall compensation strategy
in an attempt to relate executive compensation appropriately to the Company's
overall growth and success and to the executive's duties and demonstrated
abilities. The objectives of this strategy are to attract and retain the best
possible executives, to motivate these executives to achieve the Company's
business goals and to provide a compensation package that recognizes individual
contributions as well as overall business results. The Compensation Committee
and the Board of Directors as a whole have ultimate responsibility for executive
compensation.
These reviews permit an ongoing evaluation of the relationship between
the size and scope of the Company's operations, its performance and its
executive compensation. The Compensation Committee also considers the legal and
tax effect (including, without limitation, the effects of Section 162(m) of the
Internal Revenue Code of 1986, as amended) of the Company's executive
compensation program in order to provide the most favorable legal and tax
consequences for the Company and its executive officers.
The Compensation Committee determines the compensation of the Company's
executive officers, including the individuals whose compensation is detailed in
this proxy statement. The key elements of the Company's executive compensation
consist of base salary, annual bonus and stock options, as discussed below.
Base Salaries
Base salaries for executive officers are determined by considering
historical salaries paid by the Company to officers having certain duties and
responsibilities and then evaluating the current responsibilities of the
position, the scope of the operations under management and the experience of the
individual. Salary adjustments are determined by evaluating on an individual
basis new responsibilities of the executive's position, changes in the scope of
the operations managed, the performance of such operations, the performance of
the executive in the position and annual increases in the cost of living.
Annual Bonus
The Company's executive officers are eligible for an annual cash bonus.
Annual bonuses are determined on the basis of corporate performance. The most
significant corporate performance measure for bonus payments is earnings of the
Company. In determining annual bonuses, the Compensation Committee considers the
views of the Chief Executive Officer and discusses with him the appropriate
bonuses for all officers.
-----------------------
* The report of the Compensation Committee not be deemed shall not be
deemed incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under either the
Securities Act of 1993, as amended, or the Exchange Act (together, this
"Acts"), except to the extent that the Company specifically
incorporates such report by reference; and further, shall not otherwise
be deemed filed under the Acts.
7
Stock Options
Under the Company's 1998 Stock Incentive Plan, stock options may be
granted to the Company's executive officers. The Compensation Committee sets
guidelines for the size of stock option awards based on factors similar to those
used to determine base salaries and annual bonuses. Stock options are designed
to align the interests of executives with those of the stockholders.
Under the 1998 Stock Incentive Plan, stock options are typically
granted with an exercise price equal to the market price of the Company's common
stock on the date of grant and vest over time. This approach is designed to
encourage the creation of stockholder value over the long term since the full
benefit of the compensation package cannot be realized unless stock price
appreciation occurs over time.
Chief Executive Officer's Compensation
Following William B. Ruger, Jr.'s appointment as Chief Executive
Officer on October 24, 2000, the Compensation Committee reviewed Mr. Ruger,
Jr.'s compensation as well as the compensation of the Company's other executive
officers who had been assigned positions of increased responsibility. Based on
the Committee's recommendations as a result of this review, the Board of
Directors approved an increase to William B. Ruger, Jr.'s base salary from
$225,000 per year to $400,000. Mr. Ruger, Jr.'s base salary has not increased
since October 24, 2000. Prior thereto, Mr. Ruger, Jr.'s base salary had not
increased since January 1, 1998.
Conclusion
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance. The Compensation Committee intends to continue the policy of
linking executive compensation to corporate and individual performance,
recognizing that the ups and downs of the business cycle from time to time may
result in an imbalance for a particular period.
COMPENSATION COMMITTEE
Paul X. Kelley, Committee Chairman
Richard T. Cunniff
James E. Service
January 31, 2003
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors for the year 2002 were those named above in the Compensation Committee
Report on Executive Compensation. No member of the Committee was at any time
during the year 2002 or at any other time an officer or employee of the Company.
No executive officer of the Company has served on the board of directors or
compensation committee of any other entity that has or has had one or more
executive officers serving as a member of the Board of Directors.
8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to the
compensation for calendar years 2002, 2001 and 2000 for the Company's Chief
Executive Officer and the other executive officers of the Company.
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- -------------
OTHER ALL
ANNUAL OTHER
COMPEN- COMPEN-
NAME AND SALARY (1) BONUS SATION(2) SATION(3),(4)
PRINCIPAL POSITION YEAR $ $ $ $
------------------ ---- ---------- --------- --------- -------------
William B. Ruger, Jr. - 2002 $ 408,500 $ 39,500 $ 22,310 $ 60,792
Chairman of the Board of Directors 2001 408,000 52,000 25,657 60,792
and Chief Executive Officer. 2000 265,813 129,000 10,203 43,220
Director.
Erle G. Blanchard - 2002 $ 283,500 $ 32,000 $ 30,677 $ 42,697(5)
Vice Chairman, President, 2001 283,000 32,700 30,677 81,734(5)
Chief Operating Officer and 2000 167,500 79,000 23,105 64,508(5)
Treasurer. Director.
Stephen L. Sanetti - 2002 $ 283,500 $ 32,000 $ 36,801 $ 42,457
Vice Chairman, Senior Executive 2001 283,000 39,000 36,801 41,526
Vice President and General 2000 202,167 99,000 27,047 30,154
Counsel. Director.
Leslie M. Gasper - 2002 $ 97,500 $ 12,000 $ 13,048 $ 14,805
Corporate Secretary 2001 91,250 10,800 12,212 13,868
2000 77,875 26,000 10,847 11,861
-----------------------
(1) Includes Director's Fees.
(2) The amounts set forth in this column represent "gross-ups" for taxes
incurred on benefits received pursuant to the Company's Supplemental
Executive Profit Sharing Plan (the "Supplemental Plan").
(3) The amounts set forth in this column represent benefits received by
pursuant to the Company's Salaried Employees' Profit Sharing Plan,
Supplemental Plan, and taxable premiums paid by the Company for group
term life insurance for the named individuals, respectively, as
follows: William B. Ruger, Jr. 2002 - $30,000, $30,000 and $792, 2001 -
$25,500, $34,500 and $792, 2000 - $25,500, $13,172 and $792; Erle G.
Blanchard, 2002 - $0, $41,250 and $516, 2001 - $0, $41,250 and $436,
2000 - $0, $24,881 and $276; Stephen L Sanetti, 2002 - $0, $41,250 and
$276, 2001 - $0, $41,250 and $276, 2000 - $0, $29,125 and $276; Leslie
M. Gasper, 2002 - $0, $14,625 and $180, 2001 - $0, $13,688 and $180,
2000 - $0, $11,681 and $180.
(4) The amounts set forth in this column also include the taxable value and
"gross-ups" for taxes for Company products given to the named
individuals respectively as follows: William B. Ruger, Jr., 2002 - $0
and $0, 2001 - $0 and $0, 2000 - $2,650 and $1,106; Erle G. Blanchard,
2002 - $931 and $0, 2001 - $0 and $0, 2000 - $497 and $256; Stephen L.
Sanetti, 2002 - $931 and $0, 2001 - $0 and $0, 2000 - $497 and $256;
Leslie M. Gasper, 2002 - $0 and $0, 2001 - $0 and $0, 2000 - $0 and $0.
(5) The amounts set forth in this column for Erle G. Blanchard also include
the taxable value of moving expenses and "gross-ups" for taxes related
to moving expenses reimbursed to Mr. Blanchard, respectively, as
follows: 2002 - $0 and $0, 2001 - $31,005 and $9,043, 2000 - $29,800
and $8,798.
9
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding stock
options and Stock Appreciation Rights ("SARs") granted during fiscal 2002 by the
Company to the executive officers named in the Summary Compensation Table.
POTENTIAL REALIZABLE VALUE AT
ASSUMED INTEREST RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM (3)
----------------------------- -------------------------------
PERCENT OF
TOTAL
OPTIONS
NUMBER OF GRANTED
SECURITIES TO
UNDERLYING EMPLOYEES
OPTIONS IN FISCAL EXERCISE OR
GRANTED(1) YEAR BASE PRICE (2) EXPIRATION @5% @10%
NAME # % $ / SHARE DATE $ $
------------------- ------------ ----------- -------------- ---------- --------------- ------------
William B. Ruger Jr. 0 0.0% n/a n/a n/a n/a
Erle G. Blanchard 0 0.0% n/a n/a n/a n/a
Stephen L. Sanetti 0 0.0% n/a n/a n/a n/a
Leslie M. Gasper 0 0.0% n/a n/a n/a n/a
-----------------------
(1) All options granted under the Company's 1998 Stock Incentive Plan vest
in five equal annual installments.
(2) The exercise price for options granted under the Company's 1998 Stock
Incentive Plan is the closing price of the Common Stock as of the date
of grant.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed annual rates of share price appreciation
mandated by the Securities and Exchange Commission of 5% and 10% of the
fair value of the Common Stock on the date of grant of the options,
compounded annually from the date of the grant to the option expiration
date. The gains shown are net of the option exercise price, but do not
include deductions for taxes or other expenses associated with the
exercise. Actual gains, if any, are dependent upon the performance of
the Common Stock and the date on which the option is exercised. There
can be no assurance that the values reflected will be achieved.
10
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth certain information regarding stock
options and SARs granted which were exercised during fiscal 2002 by the
executive officers of the Company named in the Summary Compensation Table.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS/SARs AT MONEY OPTIONS/SARs AT
ACQUIRED FISCAL YEAR-END FISCAL YEAR-END
ON EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE(2)
NAME # $ # $
---- -------------------------------------------------------------------------------------------------
William B. Ruger Jr. 0 $0.00 200,000 / 50,000 $0 /$0
Erle G. Blanchard 0 0.00 160,000 / 40,000 0 / 0
Stephen L. Sanetti 0 0.00 160,000 / 40,000 0 / 0
Leslie M. Gasper 0 0.00 40,000 / 10,000 0 / 0
-----------------------
(1) Stock options awarded December 31, 1998 under the 1998 Stock Incentive
Plan at an exercise price of $11.9375 per share.
(2) The closing price of the Common Stock on December 31, 2002, $9.57, was
less than the exercise price on the date of grant.
11
PENSION PLAN TABLE
Estimated Amounts of Annual Pension Payable from the
Salaried Employees' Retirement Income Plan
for the Participant's Life,
Commencing During 2002 at Age 65
YEARS OF CREDITED SERVICE
-------------------------
HIGHEST 60-CONSECUTIVE-MONTH
AVERAGE ANNUALIZED BASE PAY 15 YEARS 20 YEARS 25 YEARS
---------------------------- -------- -------- --------
$75,000 $11,154 $14,872 $18,590
100,000 16,154 21,539 26,924
125,000 21,154 28,206 35,257
150,000 26,154 34,872 43,590
175,000 31,154 41,539 51,924
200,000 36,154 48,205 60,257
All of the Company's salaried employees participate in the Sturm, Ruger
& Company, Inc. Salaried Employees' Retirement Income Plan (the "Pension Plan"),
which in general provides annual pension benefits at age 65 in an amount equal
to: (i) 1-1/3% of the participant's final average salary (highest
60-consecutive-month average annualized base pay during the last 120 months of
employment) less 0.65% of the participant's Social Security covered
compensation, multiplied by (ii) the participant's years of credited service up
to a maximum of 25 years.
The pensions listed in the table above are not subject to any offset or
deduction for Social Security or any other benefits.
As of December 31, 2002, William B. Ruger, Jr. and Leslie M. Gasper
each had more than 25 years of credited service, and Erle G. Blanchard and
Stephen L. Sanetti each had 22 years of credited service.
An indication of the average annualized base pay under the Pension Plan
for these individuals can be found in the Salary column of the Summary
Compensation Table.
12
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE
Estimated Amounts of Annual Plan Benefit Payable from the
Supplemental Executive Retirement Plan
for the Participant's Life,
Commencing During 2002 at Age 65
YEARS OF CREDITED SERVICE
-------------------------
AVERAGE ANNUAL COMPENSATION 15 YEARS 20 YEARS 25 YEARS
--------------------------- -------- -------- --------
$125,000 $ 3,926 $11,874 19,823
150,000 7,926 17,208 26,490
175,000 11,926 22,541 33,156
200,000 15,926 27,874 39,823
225,000 19,926 33,208 46,490
250,000 23,926 38,541 53,156
300,000 33,926 51,875 69,823
400,000 63,926 91,875 119,823
The Sturm, Ruger & Company, Inc. Supplemental Executive Retirement Plan
(the "SERP") is a nonqualified supplemental retirement plan for certain senior
executives of the Company. Three of the executive officers who appear in the
Summary Compensation Table, William B. Ruger, Jr., Erle G. Blanchard and Stephen
L. Sanetti participate in the SERP. The SERP provides an annual benefit
beginning at age 65 in an amount equal to 2% of the participant's average annual
compensation for each complete year of service with the Company up to a maximum
of 50% of such average compensation. The annual benefit is reduced by the amount
the participant is entitled to receive under the Pension Plan, and is further
reduced by the amount of Social Security benefit the participant is entitled to
receive commencing at age 65. The SERP benefit is payable as an annuity over the
life of the participant, with 50% to continue for the life of the participant's
surviving spouse after the participant's death.
The average annual compensation shown in the above table includes the
participant's base pay, bonuses and other compensation for the participant's
highest consecutive 36 months of service (or, if the participant's service was
less than 36 months, then for the entire period of service) as reported in the
Summary Compensation Table, except that benefits received under the Salaried
Employees' Profit Sharing Plan and taxable premiums paid by the Company for
group term life insurance are excluded from the SERP compensation formula. The
annual compensation upon which the SERP benefit is calculated is limited to
$400,000. As of December 31, 2002, William B. Ruger, Jr. had more than 25 years
of credited service, and Erle G. Blanchard and Stephen L. Sanetti each had 22
years of credited service. The estimated amounts presented above assume that the
participant attained age 65 in 2002.
John M. Kingsley, Jr., a Company Director who retired as Executive Vice
President of the Company on December 31, 1996, received $139,200 in benefits
from the SERP during 2002.
13
The SERP provides that in the event of a change in control of the
Company participants in pay status shall be entitled to receive a lump-sum
payment equal to the present value of the participant's benefit. Those not in
pay status shall become fully vested and generally, if terminated within three
years of a change in control, become entitled to a lump-sum payment. The payment
shall be computed based upon the participant's average compensation and years of
service with the Company on the date of change in control (provided, however,
that in the event of a change in control, the participant's years of service
with the Company for purposes of computing the benefit amount shall not be less
than ten). A change in control is defined to mean the effective date of one of
the following events: (i) sale or exchange of substantially all of the capital
stock of the Company; (ii) sale of substantially all of the assets of the
Company; (iii) sale of substantially all of the capital stock of the Company
owned of record and beneficially held by members of the William B. Ruger family;
or (iv) the merger or consolidation of the Company with or into one or more
other corporations; and, in each of such four cases, the sale of stock or assets
is to, or the exchange of stock is with, or the merger or consolidation is with
or into one or more persons, firms or corporations which does not own at least
10% of the capital stock of the Company.
14
COMPANY STOCK PRICE PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Sturm, Ruger & Company, Inc., Standard & Poor's 500 and Value Line Recreation
Industry Index
(Performance Results Through December 31, 2002)
[COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN GRAPH]
Assumes $100 invested at the close of trading 12/97 in Sturm, Ruger & Company,
Inc. Common Stock, Standard & Poor's 500 and Value Line Recreation Industry
Index.
*Cumulative total return assumes reinvestment of dividends.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
----------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------
Sturm, Ruger & Company, Inc. 100.00 68.15 54.94 61.62 84.48 70.64
----------------------------------------------------------------------------------------
Standard & Poor's 500 100.00 126.71 151.56 136.20 118.43 90.76
----------------------------------------------------------------------------------------
Value Line Recreation Industry 100.00 120.86 155.51 160.00 226.72 229.15
----------------------------------------------------------------------------------------
The peer group in the above graph is the Value Line Recreation Industry.
15
PRINCIPAL STOCKHOLDERS
The following table sets forth as of February 1, 2003 the ownership of
Common Stock by each person of record or known by the Company to own
beneficially more than 5% of such stock.
NAME AND ADDRESS AMOUNT AND NATURE OF
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
-------------- ------------------------ -------------------- ----------------
Common Stock William B. Ruger, Jr.
P.O. Box 293 5,272,000 (1) 19.45%
Newport, NH 03773
Common Stock Carolyn R. Vogel
P.O. Box 906 5,022,000 (2) 18.66%
Harrisville, NH 03450
Common Stock Ruger Business Holdings, L.P.
Lacey Place 4,272,000 (3) 15.87%
Southport, CT 06890
Common Stock Ruger Management, Inc.
Lacey Place 4,272,000 (3) 15.87%
Southport, CT 06890
Common Stock Royce & Associates, LLC
1414 Avenue of the Americas 1,678,300 6.24%
New York, NY 10019
-----------------------
(1) Includes 4,272,000 shares of Common Stock held in the name of Ruger
Business Holdings, L.P., of which the William B. Ruger Revocable Trust
of 1988 is the sole limited partner and Ruger Management, Inc., is the
sole general partner. William B. Ruger, Jr. and Carolyn Ruger Vogel
(son and daughter of William B. Ruger) are co-trustees of the William
B. Ruger Revocable Trust of 1988. Ruger Management, Inc., is owned by
William B. Ruger, Jr. and Carolyn R. Vogel. Mr. Ruger, Jr. and Mrs.
Vogel have shared investment and voting control with respect to such
4,272,000 shares of Common Stock. Also includes 800,000 shares of
Common Stock owned directly by Mr. Ruger, Jr. Mr. Ruger, Jr. has sole
investment and voting control with respect to such 800,000 shares. Also
includes 200,000 shares of Common Stock subject to options currently
exercisable or which will become exercisable within 60 days of February
1, 2003 under the 1998 Stock Incentive Plan.
(2) Includes 4,272,000 shares of Common Stock as disclosed in footnote (1)
above. Also includes 750,000 shares of Common Stock owned directly by
Mrs. Vogel. Mrs. Vogel has sole investment and voting control with
respect to such 750,000 shares.
(3) Represents the 4,272,000 shares of Common Stock disclosed in footnote
(1) above.
16
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of February 1,
2003 as to the number of shares of Common Stock beneficially owned by the Chief
Executive Officer of the Company and the other executive officers of the
Company, and all Directors and executive officers of the Company as a group. See
ELECTION OF DIRECTORS above for such information with respect to each Director
of the Company.
AMOUNT AND NATURE OF
--------------------
TITLE OF CLASS NAME OF BENEFICIAL OWNER * BENEFICIAL OWNERSHIP PERCENT OF CLASS
-------------- -------------------------- --------------------- ----------------
Common Stock William B. Ruger, Jr. 5,272,000(1) 19.45%
Common Stock Erle G. Blanchard 167,000(2) **
Common Stock Stephen L. Sanetti 192,000(3) **
Common Stock Leslie M. Gasper 40,049(4) **
Common Stock Directors and executive
officers as a group (6
non-officer Directors, 3
Directors who were also 5,787,709 21.01%
executive officers during
2002 and 1 other executive
officer)
-----------------------
* The address of each of the executive officers named in this Security
Ownership of Management table is c/o Sturm, Ruger & Company, Inc.,
Lacey Place, Southport, Connecticut 06890.
** Beneficial owner of less than 1% of the outstanding Common Stock of the
Company.
(1) Includes 4,272,000 shares of Common Stock held in the name of Ruger
Business Holdings, L.P., of which the William B. Ruger Revocable Trust
of 1988 is the sole limited partner and Ruger Management, Inc. is the
sole general partner. William B. Ruger, Jr. and Carolyn Ruger Vogel
(son and daughter of William B. Ruger) are co-trustees of William B.
Ruger Revocable Trust of 1988. Ruger Management, Inc. is owned by
William B. Ruger, Jr. and Carolyn R. Vogel. Mr. Ruger, Jr. and Mrs.
Vogel have shared investment and voting control with respect to such
4,272,000 shares of Common Stock. Also includes 800,000 shares of
Common Stock owned directly by Mr. Ruger, Jr. Mr. Ruger, Jr. has sole
investment and voting control with respect to such 800,000 shares. Also
includes 200,000 shares of Common Stock subject to options currently
exercisable or which will become exercisable within 60 days of February
1, 2003 under the 1998 Stock Incentive Plan.
(2) Includes 7,000 shares of Common Stock held by Mr. Blanchard as trustee
of a revocable trust for the benefit of Mr. Blanchard and his spouse.
Also includes 160,000 shares of Common Stock subject to options
currently exercisable or which will become exercisable within 60 days
of February 1, 2003 under the 1998 Stock Incentive Plan.
(3) Includes 32,000 shares of Common Stock held directly by Mr. Sanetti.
Also includes 160,000 shares of Common Stock options currently
exercisable or which will become exercisable within 60 days of February
1, 2003 under the 1998 Stock Incentive Plan.
(4) Includes 49 shares of Common Stock held under the CT Gift to Minors Act
for the benefit of Ms. Gasper's two minor daughters. Also includes
40,000 shares of Common Stock options currently exercisable or which
will become exercisable within 60 days of February 1, 2003 under the
1998 Stock Incentive Plan.
17
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and Directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Officers, Directors and greater than
ten percent stockholders are required by Securities and Exchange Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of
the Section 16(a) report forms furnished to the Company and written
representations that no other reports were required, that with respect to the
period from January 1, 2002 through December 31, 2002, all such forms were filed
in a timely manner by the Company's officers, Directors and greater than ten
percent beneficial owners.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William B. Ruger, Chairman Emeritus of the Board of Directors and
former Chief Executive Officer, served as a consultant to the Company until his
death on July 6, 2002. For his services in this capacity, Mr. Ruger received
$20,000 per month and during 2002 received a total of $140,000.
During 2002, the Company paid Newport Mills, of which William B. Ruger,
Jr. is the sole proprietor, $206,250 for storage rental. During 2002, the
Company also paid Mr. Ruger, Jr. $16,500 for the rental of office space owned by
Mr. Ruger, Jr. in Newport, New Hampshire.
Stanley B. Terhune, a Director and former Vice President of the
Company, served as a consultant to the Company during 2002. For his services in
this capacity, Mr. Terhune received $100 per hour and during 2002 received a
total of $63,409 including bonuses.
18
REPORT OF THE AUDIT COMMITTEE*
During fiscal 2002, Townsend Hornor, Richard T. Cunniff and Paul X.
Kelley served on the Audit Committee (the "Committee"), with Mr. Hornor serving
as Chairman. Each of Messrs. Hornor, Cunniff and Kelley is an "independent
director" as defined in Rule 4200(a)(15) of the National Association of
Securities Dealers, Inc. listing standards. Under the guidance of a written
charter adopted by the Board of Directors, the Committee oversees the Company's
financial reporting process on behalf of the Board of Directors. Management has
the primary responsibility for the financial statements and the reporting
process including the systems of internal controls. In fulfilling its oversight
responsibilities, the Committee reviewed the audited financial statements in the
Annual Report with management, including a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements.
The Committee reviewed with the independent auditors, who are
responsible for expressing an opinion of the conformity of those audited
financial statements with accounting principles generally accepted in the United
States, their judgments as to the quality, not just the acceptability, of the
Company's accounting principles and such other matters as are required to be
discussed with the Committee by Statement on Auditing Standards No. 61
(Communication with Audit Committees). In addition, the Committee has discussed
with the independent auditors the auditors' independence from management and the
Company including the matters in the written disclosures required by
Independence Standard Board Standard No. 1 (Independence Discussions with Audit
Committees), and considered the compatibility of non-audit services with the
auditors' independence.
The Committee discussed with the independent auditors the overall scope
and plans for their audit. The Committee met with the independent auditors, with
and without management present, to discuss the results of their examinations,
their evaluations of the Company's internal controls, and the overall quality of
the Company's financial reporting. The Committee held four meetings during
fiscal 2002.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
December 31, 2002 for filing with the Securities and Exchange Commission. The
Committee and the Board have also recommended, subject to shareholder approval,
the selection of the Company's independent auditors.
AUDIT COMMITTEE
Townsend Hornor, Committee Chairman
Richard T. Cunniff
Paul X. Kelley
March 25, 2003
-----------------------
* The report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this
Proxy Statement into any filing under either the Securities Act of
1933, as amended, or the Exchange Act (together, the "Acts"), except to
the extent that the Company specifically incorporates such report by
reference; and further, such report shall not otherwise be deemed filed
under the Acts.
19
PROPOSAL NO. 2
APPROVAL OF INDEPENDENT AUDITORS
Effective August 27, 2001, the Audit Committee of the Company dismissed
Ernst & Young LLP and appointed KPMG LLP as its independent auditors. The
stockholders of the Company ratified KPMG LLP as the Company's independent
auditors at the Company's Annual Meeting held in May, 2002. This change was the
result of an extensive search made at the request of the Audit Committee to
review the services and costs associated with the external audit function.
Subject to the ratification of the stockholders, the Board of Directors has
reappointed KPMG LLP as the Company's independent auditors for the 2003 fiscal
year.
Ernst & Young LLP's report on the Company's financial statements for
fiscal years 1999 and 2000 did not contain an adverse opinion, disclaimer of
opinion, or qualification or modification as to uncertainty, audit scope, or
accounting principles.
During fiscal years 1999 and 2000 and the subsequent interim period
preceding August 27, 2001, there were no disagreements with Ernst & Young LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused it to make reference to the
subject matter of the disagreement in connection with its report.
The Company (or someone on its behalf) did not consult KPMG LLP during
fiscal years 1999 and 2000 and the subsequent interim period preceding August
27, 2001 regarding the application of accounting principles to a specified
transaction or the type of audit opinion that might be rendered on the Company's
financial statements.
Audit Fees
KPMG LLP's aggregate fees, including expenses reimbursed, for
professional services rendered for the audit of the Company's financial
statements for 2002 and the reviews of the Company's quarterly financial
statements for the year 2002 were $204,750.
Audit Related Fees
Ernst & Young LLP's aggregate fees, including expenses reimbursed, for
audit related services for the year 2001 to August 27, 2001, which were charged
in the year 2002, were $7,500.
KPMG LLP's aggregate fees, including expenses reimbursed, for audit
related services for the year 2002 were $ 45,000, and included audits of certain
employee benefit plan financial statements.
Financial Information Systems Design and Implementation Fees
KPMG LLP did not provide services related to financial information
systems design and implementation to the Company for the year 2002.
20
All Other Fees
KPMG LLP's aggregate fees, including expenses reimbursed, for services
rendered to the Company other than for services described above, including tax
compliance services, for the year 2002 were $18,150.
The Company's Audit Committee has considered whether the provision of
the non-audit related services provided by KPMG LLP to the Company is compatible
with maintaining the independence of KPMG LLP.
Representatives of KPMG LLP will be present at the Meeting, will have
the opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 2.
21
STOCKHOLDER PROPOSALS FOR 2004
In order to be included in the proxy materials for the Company's next
Annual Meeting of Stockholders, stockholder proposals must be received by the
Company on or before November 26, 2003.
OTHER MATTERS
Management of the Company does not intend to present any business at
the Meeting other than as set forth in Items 1 and 2 of the attached Notice of
Annual Meeting of Stockholders, and it has no information that others will
present any other business at the Meeting. If other matters requiring the vote
of the stockholders properly come before the Meeting, it is the intention of the
persons named in the proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
The Company, upon written request, will provide without charge to each
person entitled to vote at the Meeting a copy of its Annual Report on Securities
and Exchange Commission Form 10-K for the year ended December 31, 2002,
including the financial statements and financial statement schedules. Such
requests should be directed to Leslie M. Gasper, Corporate Secretary, Sturm,
Ruger & Company, Inc., Lacey Place, Southport, Connecticut 06890.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Leslie M. Gasper
--------------------
Leslie M. Gasper
Corporate Secretary
Southport, Connecticut
March 26, 2003
22
DIRECTIONS TO THE
STURM, RUGER & COMPANY, INC.
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 6, 2003 AT 10:30 A.M.
LAKE SUNAPEE COUNTRY CLUB
100 COUNTRY CLUB LANE
NEW LONDON, NEW HAMPSHIRE 03257
(603) 526-6040
FROM NEW YORK (APPROXIMATELY 5 HOURS BY CAR) -
1) Take Interstate 95 North to Interstate 91 North in New Haven,
Connecticut.
2) Follow I-91 through Massachusetts to Interstate 89 at White
River Junction, Vermont.
3) Take I-89 South to Exit 11. Turn left at end of ramp, go
straight 1 1/2 miles to 2nd flashing light. Fairway Motel and
entrance to Lake Sunapee Country Club is on the right.
4) Turn right into entrance; proceed approximately 1/4 mile to
LAKE SUNAPEE COUNTRY CLUB INN.
FROM BOSTON (APPROXIMATELY 1 3/4 HOURS BY CAR) -
1) Take Interstate 93 North from Boston to Interstate 89 North in
Concord, New Hampshire.
2) In Concord, take I-89 North to Exit 11. Turn right at end of
ramp, go straight 1 1/2 miles to 2nd flashing light. Fairway
Motel and entrance to Lake Sunapee Country Club is on the
right.
3) Turn right into entrance; proceed approximately 1/4 mile to
LAKE SUNAPEE COUNTRY CLUB INN.
FROM MANCHESTER AIRPORT (APPROXIMATELY 1 HOUR BY CAR) -
1) When leaving Manchester Airport, turn right onto Brown Street
(residential). Go right onto Route 293/101 East, then left to
Interstate 93 North toward Concord, New Hampshire.
2) In Concord, take Interstate 89 North to Exit 11. Turn right at
end of ramp, go straight 1 1/2 miles to 2nd flashing light.
Fairway Motel and entrance to Lake Sunapee Country Club is on
the right.
3) Turn right into entrance; proceed approximately 1/4 mile to
LAKE SUNAPEE COUNTRY CLUB INN.
--------------------------------------------------------------------------------
PROXY
PROXY
STURM, RUGER & COMPANY, INC.
LACEY PLACE, SOUTHPORT, CONNECTICUT 06890
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 6, 2003
The undersigned hereby appoints William B. Ruger, Jr., Erle G.
Blanchard and Leslie M. Gasper as Proxies, each with the full power to appoint
his or her substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of Common Stock of Sturm, Ruger & Company, Inc.
(the "Company"), held of record by the undersigned on March 19, 2003 at the
Annual Meeting of Stockholders to be held on May 6, 2003 or any adjournment or
postponement thereof.
The 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" the election of all directors and "FOR" Proposal 2. Please sign
exactly as name appears on other side of this proxy form.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
--------------------------------------------------------------------------------
STURM, RUGER & COMPANY, INC.
PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER USING DARK INK ONLY [ X ]
[ ]
A. ELECTION OF DIRECTORS
1. The Board of Directors unanimously recommends a Vote FOR the election of
eight Directors:
FOR WITHHOLD FOR WITHHOLD
William B. Ruger, Jr. [ ] [ ] Townsend Hornor [ ] [ ]
Erle G. Blanchard [ ] [ ] Paul X. Kelley [ ] [ ]
Stephen L. Sanetti [ ] [ ] John M. Kingsley, Jr. [ ] [ ]
Richard T. Cunniff [ ] [ ] James E. Service [ ] [ ]
B. ISSUES
The Board of Directors unanimously recommends a Vote:
FOR AGAINST ABSTAIN
2. FOR The approval of the appointment of [ ] [ ] [ ]
KPMG LLP as the independent auditors
of the Company for the 2003 fiscal year.
FOR AGAINST ABSTAIN
3. In their discretion, the Proxies are authorized [ ] [ ] [ ]
to vote upon such other business as may
properly come before the meeting.
Dated: , 2003
----------------------------------------
Signature(s):
----------------------------------------
----------------------------------------
When shares are held by joint tenants, both
should sign. When signing as an attorney, as
executor, administrator, trustee or
guardian, please give your 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.
--------------------------------------------------------------------------------