<PAGE>
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:
/ / Preliminary Proxy Statement
/ / Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
T.J.T., INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing party:
----------------------------------------------------------------------
(4) Date filed:
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<PAGE>
T.J.T., INC.
843 NORTH WASHINGTON
EMMETT, IDAHO 83617
January 22, 1999
Dear Shareholder:
You are invited to attend T.J.T., Inc.'s 1999 Annual Meeting of
Shareholders, which will be held at the Owyhee Plaza Hotel, in the Gallery Room,
on Tuesday, February 23, 1999, at 10:00 a.m. Mountain Standard Time. The Owyhee
Plaza Hotel is located at 11th and Main in Boise, Idaho.
The formal notice for the annual meeting follows on the next page. In
addition to the three items of business, we will also discuss T.J.T.'s 1998
performance and answer your questions. Enclosed with this proxy statement are
your proxy card, a postage-paid envelope to return your proxy card, and T.J.T.'s
1998 Annual Report.
Your vote is important. Please mail the enclosed proxy card in the
envelope provided, or if you prefer to vote in person at the annual meeting, you
may do so.
I look forward to seeing you at the meeting.
Sincerely,
TERRENCE J. SHELDON
CHAIRMAN OF THE BOARD,
PRESIDENT, CHIEF EXECUTIVE OFFICER,
AND CHIEF OPERATING OFFICER
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INFORMATION ABOUT T.J.T., INC. . . . . . . . . . . . . . . . . . . . . . . . 1
INFORMATION ABOUT PROXY SOLICITATION AND VOTING. . . . . . . . . . . . . . . 1
INFORMATION CONCERNING CHANGES TO THE BOARD OF DIRECTORS . . . . . . . . . . 4
BUSINESS AT THE ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . 4
ELECTION OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
MEETINGS, COMMITTEES AND COMPENSATION
OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . 6
RATIFICATION OF APPOINTMENT OF AUDITORS. . . . . . . . . . . . . . . . . . . 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EXECUTIVE COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. . . . . . . . . 16
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE>
T.J.T., INC.
____________________________________________
NOTICE OF THE 1999
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 23, 1999
____________________________________________
The Annual Meeting of Shareholders of T.J.T., Inc., a Washington
corporation, will be held on Tuesday, February 23, 1999, at 10:00 a.m., Mountain
Standard Time, in the Gallery Room of the Owyhee Plaza Hotel in Boise, Idaho
(the "Annual Meeting") for the following purposes:
1. To elect three Directors, each to serve until the Annual Meeting of
Shareholders in 2002 or until their successors are duly elected and
qualified;
2. To ratify the appointment of Balukoff Lindstrom & Co., P.A. as our
independent auditors for the 1999 fiscal year; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement of the Annual Meeting.
Shareholders of record at the close of business on Monday, December 21,
1998, are entitled to notice of and to vote at the Annual Meeting and at any
adjournments or postponements of the Annual Meeting. If you are unable to
attend the Annual Meeting in person, we urge you to sign, date and return the
enclosed proxy in the enclosed self-addressed stamped envelope, since it is
necessary that a majority of the shareholders' outstanding shares be present, in
person or by proxy, for a quorum at the Annual Meeting.
By Order of the Board of Directors
April L. Kierstead
SECRETARY
Emmett, Idaho
January 22, 1999
______________________________
T.J.T.'s 1998 Annual Report is enclosed with this Proxy Statement. The
Annual Report contains financial and other information about T.J.T., Inc., but
is not incorporated in the Proxy Statement and is not part of the proxy
soliciting material.
<PAGE>
INFORMATION ABOUT T.J.T., INC.
T.J.T., Inc. ("T.J.T.") is a purchaser and reconditioner of axles and tires
that have been used to transport manufactured homes from the factory to the home
site. Federal regulations require that these axles and tires be inspected,
refurbished and/or replaced after each trip. We also distribute vinyl siding,
skirting supplies, and other accessory products to the built-on-site housing
market and manufactured housing dealers. We operate in ten states in the western
and northwestern United States. We employ 180 people in this ten-state region.
Our executive office is located at 843 North Washington, Emmett, Idaho 83617.
Our telephone number is (208) 365-5321.
INFORMATION ABOUT PROXY SOLICITATION AND VOTING
GENERAL INFORMATION
We have sent you the enclosed proxy because T.J.T.'s Board of Directors is
soliciting your proxy to vote your shares at the Annual Meeting. This proxy
statement summarizes information that we are required to provide to you under
the rules of the Securities and Exchange Commission, and it is designed to
provide you information to assist you in voting your shares. The purpose of the
Annual Meeting is for the shareholders of T.J.T.'s common stock to consider and
vote on the following proposals:
1. To elect three Directors to serve until the 2002 Annual Meeting of
Shareholders or until their successors are duly elected and qualified
(see "PROPOSAL 1. ELECTION OF DIRECTORS");
2. To ratify the appointment of Balukoff Lindstrom & Co., P.A. as our
independent auditors for the 1999 fiscal year (see "PROPOSAL 2.
RATIFICATION OF AUDITORS"); and
3. To transact such other matters as may properly come before the Annual
Meeting or any adjournment or postponement of the Annual Meeting.
DATE, TIME AND PLACE OF ANNUAL MEETING
The Annual Meeting will be held on Tuesday, February 23, 1999, at 10:00
a.m., Mountain Standard Time, in the Gallery Room of the Owyhee Plaza Hotel at
11th and Main in Boise, Idaho.
T.J.T. intends to mail this Proxy Statement and accompanying proxy card on
or about January 22, 1999, to all shareholders entitled to vote at the Annual
Meeting. This Proxy Statement will be furnished to brokers, banks and similar
persons whose name or whose nominee's name appears on T.J.T.'s books and
records.
SOLICITATION OF PROXIES
T.J.T. will bear the entire cost for solicitation of proxies. Copies of
the solicitation materials will be furnished to banks, brokerage houses,
fiduciaries, and custodians holding in their names shares of T.J.T.'s common
stock beneficially owned by others to forward to such beneficial owners. T.J.T.
will reimburse such brokerage houses, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred in connection with the proxy
solicitation. Solicitation of proxies may be made in person or by mail,
telephone, telecopy or telegram. The directors, officers, employees and
representatives of T.J.T. may solicit proxies from its shareholders by
telephone, telecopy or telegram or in person. T.J.T.'s directors, officers and
employees will receive no additional compensation for this solicitation, but may
be reimbursed for out-of-pocket expenses they incur in connection with the proxy
solicitation.
RECORD DATE; SHARES ENTITLED TO VOTE
T.J.T.'s Board of Directors has fixed the close of business on Monday,
December 21, 1998, as the record date (the "Record Date") for determining
T.J.T.'s shareholders entitled to vote at the Annual Meeting. Only the holders
of record of T.J.T.'s common stock on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. At the close of business on December 21,
1998, T.J.T. had outstanding and entitled to vote 4,854,739 shares of common
stock.
<PAGE>
Each holder of record of T.J.T.'s common stock on the Record Date is
entitled to one vote for each share held on each of the matters to be voted on
at the Annual Meeting. On the Record Date, there were approximately 1,411
holders of record.
MARKET FOR T.J.T.'S COMMON STOCK
T.J.T.'s common stock is listed for quotation on the NASDAQ SmallCap Market
System under the symbol "AXLE." On the Record Date, the fair market value of
T.J.T.'s common stock as reported by the NASDAQ SmallCap Market System at the
close of trading was $1.19.
QUORUM; REQUIRED VOTE
As of the Record Date, T.J.T. had 4,854,739 shares of outstanding common
stock. You are entitled to one vote for each share of T.J.T.'s common stock
that you hold as of the Record Date on each of the matters to be voted on at the
Annual Meeting. You do not have cumulative voting rights. A quorum consisting
of at least 2,427,370 shares is necessary to hold a valid meeting. If holders
cast at least 2,427,370 shares of the total 4,854,739 shares entitled to vote at
the Annual Meeting, either in person or by proxy, a quorum will exist.
Abstentions are counted toward the quorum requirement, but they have no other
effect on voting for the election of directors or approval of auditors. Broker
non-votes are counted toward a quorum but are not counted in determining whether
a matter is approved.
If the shares held by the persons present or represented by proxy at the
Annual Meeting are less than 2,427,370 shares of T.J.T.'s common stock, the
Annual Meeting may be adjourned for the purpose of obtaining additional proxies,
votes or for any other purpose and, at any subsequent reconvening of the Annual
Meeting, all proxies will be voted in the same manner as the proxies would have
been voted at the original Annual Meeting (except for any proxies which have
since then effectively been revoked or withdrawn). See "Revocation of Proxies"
below.
SOLICITATION AND VOTING OF PROXIES
Please complete, date, sign and promptly return the enclosed proxy card in
the enclosed envelope. All shares of T.J.T.'s common stock represented by
properly executed proxies received in time for the Annual Meeting will be voted
in the manner specified at the Annual Meeting, or any adjournment or
postponement of the Annual Meeting. EXECUTED PROXIES THAT DO NOT CONTAIN VOTING
INSTRUCTIONS WILL BE VOTED (i) IN FAVOR OF THE ELECTION OF EACH OF THE THREE
NOMINEES FOR ELECTION TO OUR BOARD OF DIRECTORS, AND (ii) IN FAVOR OF THE
APPOINTMENT OF BALUKOFF LINDSTROM & CO., P.A. AS T.J.T.'S AUDITORS FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 1999. The Board does not know of any other
matters that will be presented at the Annual Meeting besides the two proposals
discussed in this proxy statement. However, if any other matters are properly
presented, the people named as proxies will vote in accordance with their
judgment on such matters.
REVOCATION OF PROXIES
You may revoke a proxy at any time before it is voted. You may revoke the
proxy by filing a written notice of revocation or a duly executed proxy bearing
a later date with the Secretary of T.J.T. at 843 North Washington, P.O. Box 278,
Emmett, Idaho 83617, or attending the Annual Meeting and voting in person. Your
attendance at the Annual Meeting will not, by itself, revoke a proxy.
SHAREHOLDER PROPOSALS AND NOMINATION OF DIRECTORS
T.J.T.'s Bylaws provide that in order for a shareholder to nominate a
candidate for election as a director at an annual meeting of shareholders or
propose business for consideration at such meeting, notice must be given in
writing to the Secretary of T.J.T. at T.J.T.'s executive offices not less than
120 days in advance of release of the proxy statement to shareholders in
connection with the previous year's annual meeting. Accordingly, a shareholder
nomination or proposal intended for consideration at the 2000 annual meeting
2
<PAGE>
must have been received by the Secretary prior to September 24, 1999.
T.J.T.'s Bylaws also provide details about the information that needs to be
included in each shareholder's proposal or nomination of a director. No
shareholder proposals or nominations have been made for consideration at the
Annual Meeting.
3
<PAGE>
INFORMATION CONCERNING CHANGES TO THE BOARD OF DIRECTORS
At the 1998 annual meeting, Douglas A. Strunk, Ulysses B. Mori, Scott M.
Hayes, Arthur J. Berry and B. Kelly Bradley were elected to the Board of
Directors to serve as Class II Directors until the year 2001.
Since the 1998 annual meeting, T.J.T.'s Board of Directors has experienced
other changes. In August 1998, Robert L. Burkhart, T.J.T.'s Manager of the
Idaho Plant since 1978, retired. Darle E. Lacey, T.J.T.'s Head of Purchasing of
the Dealer Sales Material at the Centralia, Washington facility, has decided not
to stand for re-election at the Annual Meeting. We are grateful to both
Mr. Burkhart and Mr. Lacey for their contributions to the success of T.J.T.
The Board of Directors has nominated Rick Treadwell, T.J.T.'s Senior Vice
President based in Dana Point, California, and Darren Bradley, the Assistant
Manager of T.J.T.'s Centralia, Washington facility, for election to the Board as
Class III Directors. Terrence J. Sheldon, T.J.T.'s President, Chief Executive
Officer, and Chief Operating Officer, will also stand for re-election to the
Board as a Class III Director. As a Class III Director, each man will serve
until 2002.
BUSINESS AT THE ANNUAL MEETING
PROPOSAL 1.
ELECTION OF DIRECTORS
T.J.T.'s Board of Directors is divided into three classes of directors who
serve staggered three-year terms. The term of one class of directors expires at
each annual meeting of shareholders. Each director serves on the Board of
Directors until he or she is succeeded by another qualified director who has
been elected.
The current classes of directors are as follows:
- Three Class I Directors: Scott Beechie,
John W. Eames III and Patricia I. Bradley.
The Class I Directors' term in office expires
at the 2000 annual meeting.
- Five Class II Directors: Douglas A. Strunk,
Ulysses B. Mori, Scott M. Hayes, Arthur J.
Berry, and B. Kelly Bradley. The Class II
Directors' term in office expires at the 2001
annual meeting.
- Three Class III Directors: Terrence J.
Sheldon, Darle E. Lacey, and Darren Bradley.
The Class III Directors' term in office
expires as of the Annual Meeting.
The current term for the Class III Directors, Terrence J. Sheldon, Darle E.
Lacey, and Darren Bradley, expires as of the Annual Meeting. Robert Burkhart, a
former Class III director, retired in August 1998 and Mr. Lacey has decided not
to stand for re-election at the Annual Meeting. The Nominees for Class III
Directors to be voted upon at the Annual Meeting are: Terrence J. Sheldon, who
has previously been elected and served on the Board, is standing for
re-election; Darren Bradley, who has served as an appointed member of the Board
of Directors since January 1997, is now standing for election to the Board; and
Rick Treadwell, who was appointed to the Board in August 1998, is now standing
for election to the Board. These Class III nominees will be elected to hold
office until T.J.T.'s annual meeting of shareholders in 2002. If any nominee is
unable to serve as a Director, the proxy holders may substitute a nominee and
vote for another person of their choice in that place, or the Board may reduce
the size of the Board of Directors prior to the Annual Meeting to eliminate the
position of any nominees.
4
<PAGE>
We intend for the proxy holders named on the enclosed proxy card to vote
for the three Class III nominees named below. This will decrease the number of
directors on T.J.T.'s Board of Directors from twelve to eleven. The following
information is furnished with respect to each nominee and continuing director:
CLASS III -- NOMINEES FOR ELECTION TO SERVE UNTIL THE 2002 ANNUAL MEETING OF
SHAREHOLDERS:
TERRENCE J. SHELDON, 57, was elected to the Board in 1977. Mr.
Sheldon is a founder and a major shareholder of T.J.T. Mr. Sheldon
has served as T.J.T.'s President since its inception, except from
January 1986 through October 1986, as Chief Executive Officer since
1994, and as Chief Operating Officer since December 1998. Mr. Sheldon
is the Chairman of the Board of Directors and the Executive
Compensation Committee.
DARREN BRADLEY, 37, was appointed to the Board in January 1997. As of
November 1996, Mr. Bradley was employed as Assistant Manager of
T.J.T.'s Centralia, Washington facility. Prior to that, Mr. Bradley
was involved with Bradley Enterprises, Inc. since 1984, and was
Assistant Manager since 1989. Mr. Bradley is the son of Patricia I.
Bradley and brother of B. Kelly Bradley, both members of T.J.T.'s
Board of Directors.
RICK K. TREADWELL, 50, was appointed to the Board in August 1998. In July
1998, Mr. Treadwell was appointed as a Senior Vice President of T.J.T.
From 1978 to June 1998, Mr. Treadwell served as the President of West
States Recycling, Inc.
CLASS I -- DIRECTORS ELECTED TO SERVE UNTIL THE 2000 ANNUAL MEETING OF
SHAREHOLDERS:
SCOTT BEECHIE, 40, was elected to the Board in February 1997.
Mr. Beechie is a CPA and has served as T.J.T.'s Vice President since
July 1996. He was appointed Chief Financial Officer in April 1997,
and Vice President and Treasurer in February 1998. Mr. Beechie was
also appointed as a member of T.J.T.'s Audit Committee in April 1997.
From 1990 to 1996, he served as Manager of Financial Reporting for
U.S. Bancorp (formerly West One Bancorp) in Boise, Idaho. Mr. Beechie
received a B.B.A. in Finance from Idaho State University in 1981.
JOHN W. EAMES III, 58, was elected to the Board in 1992. In June
1997, Mr. Eames was appointed Director of Governmental and Industrial
Affairs for T.J.T. Mr. Eames previously served as General Manager of
T.J.T.'s Oregon facility from 1991 to June 1997. From 1986 to 1991,
he was national sales manager for Lodge Logs, Inc., in Idaho.
PATRICIA I. BRADLEY, 54, was elected to the Board in February 1997.
Ms. Bradley was appointed Senior Vice President and General Manager of
T.J.T.'s Centralia, Washington facility in November 1996. In 1998,
Ms. Bradley was named Executive Vice President and T.J.T.'s Director
of Corporate Dealer Sales. Previously, Ms. Bradley was the owner and
Chief Executive Officer of Bradley Enterprises, Inc. Ms. Bradley is
the mother of Darren Bradley and B. Kelly Bradley, who are also
members of the Board of Directors.
CLASS II -- DIRECTORS ELECTED TO SERVE UNTIL THE 2001 ANNUAL MEETING OF
SHAREHOLDERS:
DOUGLAS A. STRUNK, 47, was elected to the Board in 1988. Mr. Strunk
has served as Sales Manager of T.J.T.'s Idaho facility since 1988.
Mr. Strunk received a vocational/technical certificate from College of
Southern Idaho in 1972.
ULYSSES B. MORI, 46, was elected to the Board in February 1998.
Mr. Mori was appointed as a Senior Vice President and Manager of
T.J.T.'s Woodland, California facility following T.J.T.'s merger with
Leg-it Tire Company, Inc. in 1997. In 1998, Mr. Mori was named
T.J.T.'s Director of New Business Development. Mr. Mori had
previously been the President and Chief Executive Officer of Leg-it
Tire Company, Inc. since 1980. Mr. Mori is a member of the National
Axles and Tires Association and the Transportation Task Force.
5
<PAGE>
SCOTT M. HAYES, 51, was elected to the Board in February 1998. Mr.
Hayes is a member of T.J.T.'s Executive Compensation and Audit
Committees. Currently, Mr. Hayes is a self-employed private investor
and consultant. He previously served as the Executive Vice President
and Chief Financial Officer of U.S. Bancorp (formerly West One
Bancorp).
ARTHUR J. BERRY, 47, was elected to the Board in 1995. For the past
five years, Mr. Berry has been the President and principal shareholder
of Arthur J. Berry & Company, a real estate development and business
brokerage firm located in Boise, Idaho. Mr. Berry received a degree
in Finance from Boise State University in 1973, a J.D. from the
University of Idaho in 1976, and an MBA from Boise State University in
1981. Mr. Berry is a member of T.J.T.'s Executive Compensation and
Audit Committees of the Board of Directors.
B. KELLY BRADLEY, 36, was elected to the Board in February 1998.
Mr. Bradley has been employed as the Manager of T.J.T.'s Centralia,
Washington facility. Mr. Bradley was previously employed by Bradley
Enterprises, Inc. from 1980 to 1996, and served as manager of various
operations from 1984. He served as Manager of Bradley from 1989 to
1996. Mr. Bradley is the son of Patricia I. Bradley, the Executive
Vice President and Director of Corporate Dealer Sales and a member of
the Board of Directors, and the brother of Darren Bradley, another
member of the Board of Directors.
MEETINGS, COMMITTEES AND COMPENSATION
OF THE BOARD OF DIRECTORS
The Board of Directors met five times during the fiscal year ended
September 30, 1998. In addition to the full Board meetings, some directors also
attended meetings of Board committees. The Board has an Audit Committee and an
Executive Compensation Committee.
EXECUTIVE COMPENSATION COMMITTEE. The Executive Compensation Committee reviews
and adjusts the salaries of T.J.T.'s principal officers and key executives. The
Executive Compensation Committee also administers T.J.T.'s executive
compensation and benefit plans. The three members of the Executive Compensation
Committee are Messrs. Sheldon (Chairman), Hayes, and Berry. The Executive
Compensation Committee met once during the 1998 fiscal year. See "Employment
Agreements" regarding Mr. Sheldon's employment arrangements with T.J.T.
AUDIT COMMITTEE. The Audit Committee's primary function is to facilitate
communications among outside auditors and the Board of Directors. The Audit
Committee also reviews financial statements, internal controls and procedures,
and the scope and results of audits. The three members of the Audit Committee
are Messrs. Beechie, Berry, and Hayes. The Audit Committee met once during the
1998 fiscal year.
During the fiscal year ended September 30, 1998, each of the directors attended
at least 75% of all of the meetings of the Board and those committees on which
he served during the fiscal year, except for Darren Bradley. Mr. Bradley was
unable to attend two of the Board meetings and as a result, he attended less
than 75% of the Board meetings.
DIRECTOR COMPENSATION
Directors who are T.J.T. employees receive no fees for their services as
directors. Non-employee directors receive a fee of $500 per meeting (plus
reasonable out-of-pocket expenses in a manner consistent with past practice) for
attending Board of Directors meetings. As of the date of this Proxy Statement,
only Messrs. Hayes and Berry are eligible to receive compensation for their
services to the Board. For the 1998 fiscal year, Messrs. Hayes and Berry each
received $2,500 for their services as directors.
On November 18, 1997, the Board of Directors adopted T.J.T.'s 1997 Director
Stock Option Plan ("Directors Plan") and on February 24, 1998, T.J.T.'s
shareholders approved the Directors Plan. The Directors Plan authorized the
issuance of a total of 50,000 shares of T.J.T.'s stock to directors who are not
employed by T.J.T.
6
<PAGE>
The option grants under the Directors Plan are non-discretionary grants
which are made when a non-employee director is elected to T.J.T.'s Board of
Directors. Each non-employee director elected receives an option grant to
purchase 5,000 shares of T.J.T.'s common stock. Twenty percent of the options
granted under the Directors Plan become exercisable immediately after the grant
is issued. Then the options become exercisable at a rate of 20% per year, on
the anniversary of the grant date, over a period of four years. The exercise
price of the options is 100% of the fair market value of T.J.T.'s common stock
on the NASDAQ SmallCap Market System on the last trading day prior to the grant
date. On November 18, 1997, Messrs. Hayes and Berry were each granted the
option to purchase 5,000 shares of T.J.T.'s common stock. As of the date of
this proxy statement, 2,000 of the 5,000 shares granted to both Messrs. Hayes
and Berry are exercisable. No stock options have been exercised under the
Directors Plan. No stock options were granted under the Directors Plan for the
fiscal year ended September 30, 1998. There are 40,000 shares remaining under
the Directors Plan.
EXECUTIVE OFFICERS
The following table describes certain information about T.J.T.'s executive
officers ("Executive Officers").
NAME AGE POSITION
Terrence J. Sheldon 57 President, Chief Executive Officer,
Chief Operating Officer, and
Chairman of the Board of
Directors
Patricia I. Bradley 54 Executive Vice President, Director
of Corporate Dealer Sales, and a
member of the Board of Directors
Ulysses B. Mori 46 Senior Vice President, Director of
New Business Development, and a
member of the Board of Directors
Rick K. Treadwell 50 Senior Vice President and a member
of the Board of Directors
Scott Beechie 40 Vice President, Treasurer, Chief
Financial Officer, and a member
of the Board of Directors
April L. Kierstead 43 Assistant Treasurer, Secretary, and
Controller
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE THREE NAMED
NOMINEES.
7
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PROPOSAL 2.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Balukoff, Lindstrom & Co., P.A. to
serve as the auditors of T.J.T. and to make an examination of T.J.T.'s
consolidated financial statements for the fiscal year ending September 30, 1999.
This firm of independent public accountants has served as T.J.T.'s auditors
since T.J.T.'s public offering in December 1995.
Representatives of Balukoff, Lindstrom & Co., P.A. will be present at the
Annual Meeting to respond to appropriate questions and to make a statement if
they desire to do so. In the absence of other instructions, shares represented
by properly executed proxies will be voted "For" the ratification of Balukoff,
Lindstrom & Co., P.A. as T.J.T.'s auditors for the fiscal year ending
September 30, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF PROPOSAL
2.
8
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This table details the amount of T.J.T.'s common stock the executive
officers and directors beneficially owned as of December 21, 1998. In general,
"beneficial ownership" includes those shares a director or executive officer has
the power to vote, or power to transfer, and stock options that are exercisable
currently or will become exercisable within 60 days. Except as set forth in the
footnotes below, the persons named in the table have sole voting and investment
power with respect to all shares shown as beneficially owned by them. An
asterisk in the column listing the percentage of class owned indicates the
person owns less than 1% of T.J.T.'s common stock as of the Record Date.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Number of Shares and
Nature of Beneficial
Ownership as of
December 21, 1998(1,2) Right to Acquire Percent
Name and Address (including Shares in Within 60 Days of
of Beneficial Owner Column (3)) of December 21, 1998 Class(3)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CERTAIN BENEFICIAL OWNERS:
Robert Rubin** 631,189 346,535 12.1
6060 Kings Gate Circle
Del Ray Beach, FL
DIRECTORS:
Terrence J. Sheldon(4) 1,004,598 37,620 20.5
Patricia I. Bradley(5) 624,110 15,000 12.8
Ulysses B. Mori 291,668 --- 6.0
Douglas A. Strunk 129,737 15,000 2.7
Robert L. Burkhart (Retired) 120,775 5,000 2.5
Darle E. Lacey 106,431 7,500 2.2
B. Kelly Bradley 82,778 --- 1.7
Darren M. Bradley 79,201 --- 1.6
Arthur J. Berry 72,000 2,000 1.5
Scott M. Hayes 27,000 2,000 *
Scott Beechie 20,221 6,000 *
John W. Eames III 18,039 10,000 *
Rick Treadwell(6) 1,600 --- *
EXECUTIVE OFFICERS:
April L. Kierstead 12,027 7,500 *
All Directors and Executive 2,590,185 107,620 53.35
Officers as a Group (14 persons)
</TABLE>
- -------------
SEE FOOTNOTES ON NEXT PAGE.
9
<PAGE>
(1) For purposes of this table, shares are considered to be "beneficially"
owned if the person directly or indirectly has the sole or shared power to
vote or direct the voting of the securities, or the sole or shared power to
dispose of or direct the disposition of the securities. "Beneficially"
owned also includes the person who has the right to acquire the beneficial
ownership of the shares within 60 days of December 21, 1998. Unless
otherwise indicated in these footnotes, each shareholder has sole voting
and investment power with respect to the shares beneficially owned.
(2) Includes shares of T.J.T.'s common stock held by the Trustee of T.J.T.'s
401(k) Profit Sharing Plan for the accounts of individuals as follows: Mr.
Sheldon - 176,843, Ms. Bradley - 4,410, Mr. Mori - 492, Mr. Strunk -
49,649, Mr. Lacey - 33,267, Mr. B.K. Bradley - 1,778, Mr. D. Bradley -
1,001, Mr. Beechie - 2,721, Mr. Eames - 8,039, and Ms. Kierstead - 1,647
shares. Also includes warrants and indirect shares held by the beneficial
owners. Mr. Sheldon has 17,620 warrants and Ms. Bradley has 15,000
warrants available. Mr. Sheldon also holds 2,263 shares indirectly.
(3) The percentages shown are calculated based upon the shares indicated in
column (2), as prescribed by the Securities and Exchange Commission's Rule
S-B 403.
(4) Mr. Sheldon has permanently assigned proxy voting power of 2,348 shares to
Jerry Radandt, Sr. Also, 2,263 shares are held by T.J.T. Enterprises, a
partnership in which Mr. Sheldon is a fifty (50) percent owner.
(5) Ms. Bradley shares voting and dispositive power as to such shares with her
husband.
(6) Mr. Treadwell shares voting and dispositive power as to such shares with
his wife.
* Represents less than 1% of the issued and outstanding shares of T.J.T.'s
common stock.
** This is the amount of shares held by Robert Rubin as of September 30, 1997,
which is T.J.T.'s latest information regarding the holdings of Mr. Rubin.
EXECUTIVE COMPENSATION
This table indicates all cash compensation T.J.T. paid, as well as certain
other compensation paid or accrued to Terrence J. Sheldon, the President, Chief
Executive Officer, Chief Operating Officer, and Chairman of the Board of T.J.T.,
and the executive officers of T.J.T. earning more than $100,000/year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
- ---------------------------------------------------------------------------------------------------
OTHER ANNUAL STOCK OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION(2) GRANTED(3)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Terrence J. Sheldon(5) 1998 $225,000 $47,036 ---
President, Chief Executive Officer, 1997 $225,000 $14,272 ---
Chief Operating Officer, and 1996 $225,000 $23,842 ---
Chairman of the Board of Directors
- ---------------------------------------------------------------------------------------------------
Patricia I. Bradley(6) 1998 $209,477 $2,900 ---
Executive Vice President and Director of 1997 $179,426 N/A N/A
Corporate Dealer Sales and Director 1996 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
Ulysses B. Mori(6) 1998 $162,162 $2,596 ---
Senior Vice President and Director of 1997 $34,038 N/A N/A
New Business Development and Director 1996 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
Rick K. Treadwell(6) 1998 $46,154(4) N/A N/A
Senior Vice President 1997 N/A N/A N/A
1996 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
(1) Excludes personal benefits and other forms of non-cash compensation that
did not in the aggregate exceed 10% of the aggregate amount of cash
compensation shown for the subject individuals.
(2) Includes participating contributions to T.J.T.'s 401(k) Plan on a calendar
year.
(3) Represents five-year stock options granted in October 1994 at $5.00 and
repriced as of September 1, 1995 at $4.00. See "1994 Stock Option Plan."
(4) Represents the amount earned by Mr. Treadwell from June 1, 1998 through
September 30, 1998, under his employment agreement with T.J.T.
(5) See "Employment Agreement with Chief Executive Officer" section.
(6) See "Other Employment Agreements" section.
EMPLOYMENT AGREEMENT WITH CHIEF EXECUTIVE OFFICER
Effective October 1, 1997, T.J.T. entered into a separate employment,
nondisclosure and noncompetition agreement with Mr. Sheldon for his services as
T.J.T.'s President and Chief Executive Officer. The term of his employment
agreement was through September 30, 1998. Mr. Sheldon received a minimum base
salary of $225,000, and benefits comparable to those provided to other T.J.T.
employees. The employment agreement required Mr. Sheldon to devote
substantially all of his business time to performing his duties and
responsibilities for T.J.T. The employment agreement prohibited Mr. Sheldon
from engaging in any competitive activities with T.J.T. during his employment.
Under the employment agreement, Mr. Sheldon was also prohibited from competitive
activities with T.J.T. for three years following his termination of employment
with T.J.T. This stipulation applied if Mr. Sheldon terminated his employment
or he was terminated for cause, as defined in the employment agreement. Any
increase in Mr. Sheldon's annual rate of compensation under the employment
agreement needed to be approved by a majority of both the disinterested
Directors and the Executive Compensation Committee.
In addition to his base salary, Mr. Sheldon was entitled to share in an
annual bonus, which certain executive officers receive. Although no
performance bonus was paid, Mr. Sheldon received a $30,000 bonus in 1998 for his
efforts in accomplishing T.J.T.'s strategic objectives during the 1997 fiscal
year.
Under the employment agreement, Mr. Sheldon had the right to elect, within
one year after any change in control of T.J.T., to terminate his employment upon
not less than 90 days' prior written notice. Mr. Sheldon was to continue to
receive his salary and benefits for a period of 18 months or until the scheduled
expiration date of the employment agreement, whichever was later. This salary
continuation applied if T.J.T. terminated Mr. Sheldon's employment for reasons
other than "for cause" within one year after any change in control of T.J.T.
For the purposes of this employment agreement, a "change in control" was defined
as occurring when a majority of the total outstanding votes which were eligible
to be voted for directors of T.J.T. were either legally or beneficially held by
any person or group of persons acting in concert who was not a T.J.T.
shareholder as of the date of the commencement of the agreement.
Following T.J.T.'s disappointing financial performance in the last quarters
of the 1998 fiscal year, Mr. Sheldon and the Board of Directors reviewed
Mr. Sheldon's salary and mutually agreed that it was in T.J.T.'s best interests
to reduce Mr. Sheldon's annual base compensation. Effective December 1, 1998,
Mr. Sheldon's base compensation was reduced from $225,000 to $175,000 annually.
Also, as of December 4, 1998, Mr. Sheldon's title was revised to include Chief
Operating Officer. T.J.T.'s Board of Directors and Executive Compensation
Committee are reviewing a new one-year employment agreement and bonus plan with
Mr. Sheldon, and they expect to finalize the terms of Mr. Sheldon's employment
agreement by the Annual Meeting.
11
<PAGE>
OTHER EMPLOYMENT AGREEMENTS
T.J.T. had three other employment agreements with Executive Officers in
effect during the 1998 fiscal year. These employment agreements were with
Patricia I. Bradley, Ulysses B. Mori and Rick K. Treadwell.
As of November 14, 1996, T.J.T. entered into a separate employment,
nondisclosure and noncompetition agreement with Patricia I. Bradley. The term
of her employment agreement was through December 31, 1998. Under the employment
agreement, Ms. Bradley served as the Senior Vice President and General Manager
of T.J.T.'s Centralia, Washington facility and as a Director of T.J.T.
Effective December 4, 1998, Ms. Bradley's titles were changed to Executive Vice
President and Director of Corporate Dealer Sales. Ms. Bradley received a base
salary of $209,477. Due to T.J.T.'s disappointing financial performance in the
last quarters of the 1998 fiscal year, Ms. Bradley and the Board of Directors
reviewed Ms. Bradley's salary. As a result, Ms. Bradley's annual base
compensation was reduced from $209,477 to $159,477 annually. T.J.T.'s Board of
Directors and Executive Compensation Committee are reviewing a new one-year
employment agreement and bonus plan with Ms. Bradley, and they expect to
finalize the terms of Ms. Bradley's employment agreement by the Annual Meeting.
As of June 24, 1997, T.J.T. entered into a separate employment,
nondisclosure and noncompetition agreement with Ulysses B. Mori. The term of
his employment agreement is through June 24, 2001. Mr. Mori currently serves as
a Senior Vice President, the Director of New Business Development for T.J.T.,
and as a Director of T.J.T. Mr. Mori receives a minimum base salary of
$150,000.
As of June 1, 1998, T.J.T. entered into a separate employment,
nondisclosure and noncompetition agreement with Rick Treadwell. The term of his
employment agreement is through May 31, 2002. Mr. Treadwell serves as a Senior
Vice President of T.J.T. and has been nominated for election to T.J.T.'s Board
of Directors. Mr. Treadwell receives a minimum base salary of $150,000.
Under their employment agreements, these Executive Officers are eligible
for other benefits. Ms. Bradley and Mr. Mori are entitled to an annual bonus
proportionate with their base salaries. Neither Ms. Bradley nor Mr. Mori
received a bonus in 1998. Under his employment agreement, Mr. Treadwell was not
eligible for a bonus in 1998. All three of these Executive Officers received
other benefits comparable to the benefits received by other T.J.T. employees.
1994 STOCK OPTION PLAN
On February 17, 1995, T.J.T.'s shareholders approved the 1994 Stock Option
Plan (the "Plan") at a special meeting. Under the Plan, T.J.T.'s officers,
directors, key employees, and consultants can receive incentive stock options
and non-qualified stock options to purchase up to an aggregate of 200,000 shares
of T.J.T.'s common stock. According to the Plan, no more than 100,000 shares
may be issued as incentive stock options and no more than 100,000 shares may be
issued as non-qualified stock options.
On October 1, 1994, the Board of Directors awarded the original
non-qualified stock options under the Plan for an aggregate of 100,000 shares,
at an original exercise price of $5.00 per share. On September 1, 1995, the
options were reissued at a price of $4.00 per share to more accurately reflect
the fair market value of T.J.T.'s common stock. This award issued all of the
non-qualified stock options available under the Plan.
During the 1997 fiscal year, the Board of Directors awarded incentive stock
options under the Plan for 15,000 shares. No incentive stock options were
granted during the 1998 fiscal year. No optionees have exercised their stock
options. The following table provides information as to options exercised by
each of T.J.T.'s Executive Officers during the fiscal year ended September 30,
1998. The value of options held by the Executive Officers at fiscal year end is
measured in terms of the last reported sale price reported on the NASDAQ
SmallCap Market System for T.J.T.'s common stock on September 30, 1998. The
value of T.J.T.'s stock on September 30, 1998 was $1.16.
12
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
- -----------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Acquired Options at FY-End (#)(1) at FY End ($)(1),(2)
Name on Exercise (#) Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Terrence J. Sheldon --- --- 20,000/0 ($56,800)/0
Scott Beechie(3) --- --- 6,000/9,000 ($28,320)/($42,480)(3)
Douglas A. Strunk --- --- 15,000/0 ($42,600)/0
John W. Eames III --- --- 10,000/0 ($28,400)/0
Darle E. Lacey --- --- 7,500/0 ($21,300)/0
April L. Kierstead --- --- 7,500/0 ($21,300)/0
Robert L. Burkhart --- --- 5,000/0 ($14,200)/0
Rick K. Treadwell --- --- 0/0 0/0
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
1 The table includes options vested under the 1994 Stock Option Plan.
2 Values in this table are the difference between the market price per share
of $1.16 on September 30, 1998, and the $4.00 exercise price on September
1, 1995. T.J.T. acknowledges that the market price of its common stock as
of September 30, 1998, is below the exercise price on September 1, 1995.
The value of the shares are not "In-the-Money."
3 Mr. Beechie was granted the option to purchase 15,000 shares of common
stock in the form of incentive stock options on November 21, 1996, at an
exercise price of $5.88 per share. The value of Mr. Beechie's exercisable
and unexercisable shares is the difference between the $5.88 exercise price
on November 21, 1996, and the market price of $1.16 on September 30, 1998.
401(k) PROFIT SHARING PLAN
As of September 30, 1998, T.J.T. maintained a 401(k) Profit Sharing Plan
(the "401(k) Plan") for its eligible employees. The 401(k) Plan is a
profit-sharing plan, including a cash or deferred arrangement according to
Section 401(k) of the Internal Revenue Code of 1986, as amended. T.J.T.
sponsors the 401(k) Plan to provide its eligible employees with the opportunity
to defer compensation and to have these deferred amounts contributed to the
401(k) Plan on a pretax basis, subject to certain limitations. Until August 1,
1996, T.J.T. made matching contributions to employee deferrals of 100% of
participants' contributions up to 6%. As of August 1, 1996, T.J.T. adjusted its
matching contributions to 50% of employees' wage contributions up to 3%.
During the fiscal year ended September 30, 1998, T.J.T. contributed $13,442
in matching contributions. Amounts contributed to the 401(k) Plan by Executive
Officers during the 1998 fiscal year totaled $31,546.
CERTAIN TRANSACTIONS
T.J.T. leases three pieces of property from T.J.T. Enterprises to form a
portion of its property in Emmett, Idaho. T.J.T. Enterprises is composed of two
general partners each of which has a one-half partnership interest:
Mr. Sheldon, T.J.T.'s President, Chief Executive Officer and Chief Operating
Officer, and Jerry Radandt, who has proxy rights to vote 2,263 shares of
Mr. Sheldon's T.J.T. common stock and has an outstanding loan from T.J.T., which
is described below. T.J.T. believes that these lease agreements contain
commercially reasonable terms and conditions no less favorable to T.J.T. than
could have been obtained from an unaffiliated party.
13
<PAGE>
T.J.T. has also extended loans to Jerry Radandt and J.R. Strunk.
J.R. Strunk is the brother of Douglas Strunk, a T.J.T. Board member. These
loans are secured by common stock in T.J.T. and other property. As of September
30, 1998, the total amount of these loans and the accrued interest was $57,872.
This amount was down from $72,106 as of September 30, 1997.
T.J.T. also entered into agreements with J.R. Strunk and Vance Strunk,
brothers of Douglas Strunk, a Director of T.J.T., to serve as independent buyers
for T.J.T. during 1997 and 1998. These buyers purchased used axles and tires
for T.J.T. in the amount of $910,436 in 1998 and $1,269,105 in 1997. In order
to facilitate transactions between T.J.T. and the buyers, T.J.T. advances cash
to the buyers. As of September 30, 1997, T.J.T. had outstanding advances of
$62,750 to the buyers. As of September 30, 1998, T.J.T. did not have any
outstanding advances to the buyers.
In addition, T.J.T. purchases piers and other materials used to set up
manufactured homes from SAC Industries, Inc., which is owned in part by
Ms. Bradley and Mr. Mori, who are both T.J.T. employees and members of the Board
of Directors. During 1998, T.J.T. purchased materials in the amount of $565,452
from SAC, which was up from $310,215 of materials purchased by T.J.T. in 1997.
T.J.T. purchases the materials from SAC at market rates.
EXECUTIVE COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION (1)
T.J.T.'s Executive Compensation Committee is comprised of Terrence J.
Sheldon, Scott M. Hayes and Arthur J. Berry. The Executive Compensation
Committee annually reviews the compensation of its Executive Officers . The
most recent review was conducted on November 25, 1998.
As noted above, Mr. Sheldon's employment contract with T.J.T. which began
on October 1, 1997, expired on September 30, 1998. The employment agreement
provided for base compensation, an auto allowance and a bonus. Although no
performance bonus was paid, Mr. Sheldon received a $30,000 bonus in 1998 for his
efforts in accomplishing T.J.T.'s strategic objectives during the 1997 fiscal
year.
Following T.J.T.'s disappointing financial performance in the last quarters
of the 1998 fiscal year, Mr. Sheldon and the Board of Directors reviewed
Mr. Sheldon's salary and mutually agreed that it was in T.J.T.'s best interests
to reduce Mr. Sheldon's annual base compensation. Effective December 1, 1998,
Mr. Sheldon's base compensation was reduced from $225,000 to $175,000 annually.
T.J.T.'s Board of Directors and Executive Compensation Committee are reviewing a
new one-year employment agreement and bonus plan with Mr. Sheldon, and they
expect to finalize the terms of Mr. Sheldon's employment agreement by the Annual
Meeting.
Due to T.J.T.'s disappointing financial performance in the last quarters of
the 1998 fiscal year, Ms. Bradley and the Board of Directors reviewed
Ms. Bradley's salary. As a result, Ms. Bradley's base compensation was reduced
from $209,477 to $159,477 annually. T.J.T.'s Board of Directors and Executive
Compensation Committee are reviewing a new one-year employment agreement and
bonus plan with Ms. Bradley, and they expect to finalize the terms of
Ms. Bradley's employment agreement by the Annual Meeting.
As detailed above, Ms. Bradley's, Mr. Mori's and Mr. Treadwell's employment
agreements with T.J.T. provided for base compensation and benefits as applicable
to other T.J.T. employees. Neither Ms. Bradley nor Mr. Mori received a bonus
in 1998.
- -------------
(1) The disclosure in this section of the Proxy Statement is not incorporated
by reference into any of T.J.T.'s filings under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended.
14
<PAGE>
Under his employment agreement, Mr. Treadwell was not eligible for a bonus
in 1998.
COMPENSATION POLICY APPLICABLE TO OFFICERS AND KEY EXECUTIVES. It is the
goal of the Executive Compensation Committee to create compensation packages for
officers and key executives which will attract, retain and motivate executive
personnel who are capable of achieving T.J.T.'s short and long-term financial
and strategic goals. Compensation packages are designed to combine a mixture of
short-term and long-term incentives tied to T.J.T.'s performance. In exercising
its responsibilities, the Executive Compensation Committee also seeks to
encourage management to maximize T.J.T.'s stock price to provide a long-term
value for its shareholders. Through implementing its compensation policies, the
Executive Compensation Committee believes it can motivate T.J.T.'s management
to strive to obtain T.J.T.'s objectives of strong financial performance and
stock price appreciation. The Executive Compensation Committee has not adopted
a policy in response to federal tax laws that limit the deductibility by T.J.T.
of compensation in excess of $1 million per employee per year for each of
T.J.T.'s most highly compensated executives. The total compensation paid to any
individual executive officer of T.J.T. does not now exceed the deductibility
levels. T.J.T. does not anticipate exceeding the deductibility levels in the
foreseeable future.
EXECUTIVE COMPENSATION POLICIES. T.J.T.'s executive compensation is made
up of three elements: (i) base salary, (ii) bonuses and (iii) grants of
equity-based compensation (e.g., stock options).
BASE SALARY. T.J.T. set base salary for officers and executives prior
to its initial public offering in December 1995. Consideration was given to
each person's job responsibilities, and the salaries paid to officers and
executives in comparable positions in similar-sized companies in the Emmett,
Idaho area. Effective January 1, 1995, the Executive Compensation Committee
established base salaries for all of T.J.T.'s executive officers. On
November 25, 1998, the Executive Compensation Committee reviewed the existing
salaries for its officers and executives and determined that the salaries were
reasonable and did not require adjustment.
BONUSES. In addition to base salary, Mr. Sheldon was eligible to
receive a bonus under T.J.T.'s Management Bonus Plan ("Plan") for the fiscal
year 1998. Although no performance bonus was paid, Mr. Sheldon received a
$30,000 bonus in 1998 for his efforts in accomplishing T.J.T.'s strategic
objectives during the 1997 fiscal year. Ms. Bradley and Mr. Mori were eligible
to receive a performance bonus under their employment agreements for the fiscal
year ended September 30, 1998, but no bonus was awarded. Under his employment
agreement, Mr. Treadwell was not eligible for a bonus in 1998.
STOCK OPTIONS. In addition to compensation through salary and
bonuses, T.J.T. adopted the 1994 Stock Option Plan (the "Plan"), which provides
long-term compensation of officers and key employees depending upon T.J.T.'s
financial performance. Under the Plan, officers, directors and key employees
are eligible to receive stock option awards. The number of stock options
granted to each executive officer is determined by a competitive compensation
analysis and each individual's salary and responsibilities. The Executive
Compensation Committee also considers the number and exercise price of options
and shares of restricted stock previously granted to individuals.
CEO'S COMPENSATION. Mr. Sheldon's minimum annual base salary was
established by the terms of his employment agreement with T.J.T. The term of
Mr. Sheldon's employment agreement was from October 1, 1997 through
September 30, 1998. Mr. Sheldon's base salary of $225,000 was based on his
responsibilities, knowledge of and experience in the axle and tire
reconditioning industry. Bonus amounts and stock option awards to Mr. Sheldon
were based on T.J.T.'s performance and Mr. Sheldon's level of responsibility and
experience. Following T.J.T.'s disappointing financial performance in the last
quarters of the 1998 fiscal year, Mr. Sheldon and the Board of Directors
reviewed Mr. Sheldon's salary and mutually agreed that it was in T.J.T.'s best
interests to reduce Mr. Sheldon's base salary compensation from $225,000 to
$175,000 annually. T.J.T.'s Board of Directors and Executive Compensation
Committee are reviewing a new one-year employment agreement and
15
<PAGE>
bonus plan with Mr. Sheldon, and they expect to finalize the terms of Mr.
Sheldon's employment agreement by the Annual Meeting. No stock options were
awarded to Mr. Sheldon during 1998.
Terrence J. Sheldon (Chairman)
Scott M. Hayes
Arthur S. Berry
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee consists of Mr. Sheldon and two
non-employee Directors, Messrs. Hayes and Berry. None of T.J.T.'s executive
officers serve as a director of another corporation in a case where an executive
officer of the other corporation serves as a Director of T.J.T.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Section 16(a) of the Exchange Act, as amended, requires T.J.T.'s Executive
Officers and Directors and persons who own more than 10% of T.J.T.'s common
stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission and NASDAQ SmallCap Market System and furnish T.J.T.
with copies.
OTHER MATTERS
The Board of Directors does not know of any other matters that will be
presented at the Annual Meeting besides the two proposals discussed in this
proxy statement. However, if any other matters are properly presented, the
people named as proxies will vote in accordance with their judgment on such
matters.
By Order of the Board of Directors
Emmett, Idaho April L. Kierstead
January 22, 1999 SECRETARY
THE COMPANY'S 1998 ANNUAL REPORT IS BEING MAILED TO SHAREHOLDERS WITH THIS PROXY
STATEMENT.
16
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
T.J.T., INC.
The undersigned hereby appoints Terrence J. Sheldon and April L. Kierstead
attorneys and proxies, each with power to act without the other and with power
of substitution, and hereby authorizes them to represent and vote, as designated
on the other side, all the shares of stock of T.J.T., Inc. standing in the name
of the undersigned with all powers which the undersigned would possess if
present at T.J.T., Inc.'s Annual Meeting of Shareholders to be held February 23,
1999, or any adjournments thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
^FOLD AND DETACH HERE^
ANNUAL MEETING OF
SHAREHOLDERS
T.J.T., INC.
FEBRUARY 23, 1999, 10:00 A.M.
OWYHEE PLAZA HOTEL
BOISE, IDAHO
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees listed below
/ / / /
NOMINEES: Terrence J. Sheldon
Darren Bradley
Rick Treadwell
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- ------------------------------------------------------------------------------
2. The appointment of Balukoff Lindstrom & Co., P.A. as T.J.T.'s independent
certified public accountants for the fiscal year ending September 30, 1999.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion upon such other business as may properly come before
the meeting.
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: , 1999
----------------------------------------------------------
- -----------------------------------------------------------------------------
(Signature)
- -----------------------------------------------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
^ FOLD AND DETACH HERE ^
ADMISSION TICKET
ANNUAL MEETING OF
SHAREHOLDERS
T.J.T., INC.
FEBRUARY 23, 1999 10:00 A.M.
OWYHEE PLAZA HOTEL
BOISE, IDAHO
AGENDA
* Election of Directors
* Ratification of Auditors
