SCHEDULE 14C INFORMATION
------------------------
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
___ Preliminary Information Statement
___ Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
_X_ Definitive Information Statement
Sierra Monitor Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
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_X_ No fee required.
___ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:_N/A______________________________
(4) Proposed maximum aggregate value of transaction:_N/A_________________
(5) Total fee paid:_N/A__________________________________________________
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by Exchange Act
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(1) Amount Previously Paid:_N/A__________________________________________
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<PAGE>
SIERRA MONITOR CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Sierra Monitor Corporation (the "Company") will be held at the Company's
principal executive offices located at 1991 Tarob Court, Milpitas, California
95035, on Wednesday, May 28, 1997, at 10:00 a.m. local time, for the following
purposes:
1. To elect directors to serve for the ensuing year and until
their successors are elected.
2. To ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the fiscal year
ending December 31, 1997.
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the
Information Statement accompanying this Notice and the Annual Report on Form
10-KSB mailed to shareholders on April 1, 1997.
Only shareholders of record at the close of business on April 1, 1997
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. All shareholders are cordially invited to attend the Annual
Meeting in person.
For the Board of Directors
SIERRA MONITOR CORPORATION
/s/ Gordon R. Arnold
GORDON R. ARNOLD
President
Milpitas, California
April 25, 1997
<PAGE>
SIERRA MONITOR CORPORATION
----------
INFORMATION STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 28, 1997
----------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
----------
The enclosed Information Statement has been prepared on behalf of the
Board of Directors of Sierra Monitor Corporation, a California corporation
("Sierra Monitor" or the "Company"), with respect to Sierra Monitor's Annual
Meeting of Shareholders (the "Annual Meeting") to be held on May 28, 1997, or at
any adjournment(s) or postponement(s) thereof, for the purposes set forth herein
and in the accompanying Notice of Annual Meeting of Shareholders.
Sierra Monitor's principal executive offices are located at 1991 Tarob
Court, Milpitas, CA 95035. The telephone number at that address is (408)
262-6611.
This Information Statement was mailed on or about April 25, 1997 to all
shareholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING VOTING
Record Date and Shares Outstanding
Shareholders of record at the close of business on April 1, 1997 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. At
the Record Date, Sierra Monitor had issued and outstanding 10,332,513 shares of
Common Stock.
Voting
Every shareholder voting for the election of directors may cumulate
such shareholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which the
shareholder's shares are entitled, or distribute such shareholder's votes on the
same principle among as many candidates as the shareholder may select, provided
that votes cannot be cast for more than the number of directors to be elected.
No shareholder, however, shall be entitled to cumulate votes for any candidate
unless (i) the candidate's name has been placed in nomination prior to the
voting and (ii) the shareholder, or any other shareholder, has given notice at
the meeting prior to the voting of the intention to cumulate the shareholder's
votes. On all other matters, each share has one vote. Votes against a particular
proposal are counted for purposes of determining the presence or absence of a
quorum and are also counted as having been "voted" with respect to the proposal
for purposes of determining whether the requisite majority of voting shares has
been obtained. While there is no definitive statutory or case law authority in
California as to the proper treatment of abstentions, the
<PAGE>
Company believes that abstentions should be counted for purposes of determining
whether a quorum is present at the Annual Meeting. The Company further believes
that abstentions should be counted as having been voted with respect to the
election of directors or the other proposals set forth herein for purposes of
determining whether the requisite majority of the shares has been obtained. In
the absence of controlling precedent to the contrary, the Company intends to
treat abstentions with respect to the election of directors and the proposals
set forth herein in this manner.
PROPOSAL ONE - ELECTION OF DIRECTORS
Nominees
A board of three directors is to be elected at the Annual Meeting. The
Board of Directors of Sierra Monitor has authorized the nomination at the Annual
Meeting of the persons named below as candidates. In the event that any such
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the shareholders may vote for any nominee who shall be designated by
the present Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director. The directors
elected will hold office until the next annual meeting of shareholders and until
their successors are elected and qualified.
<TABLE>
The names of the nominees and certain information about them are set
forth below:
<CAPTION>
Director
Name of Nominee Age Principal Occupation Since
- ---------------------- ---------- ---------------------------------------------- -------------
<S> <C> <C> <C>
Gordon R. Arnold 51 President, Chief Financial Officer, 1989
Secretary and Director of the Company
C. Richard Kramlich 61 General Partner, New Enterprise Associates - 1989
Venture Capital
Jay T. Last 67 President, Hillcrest Press 1989
</TABLE>
GORDON R. ARNOLD joined Sierra Monitor Corporation, a California
corporation ("Old Sierra"), in December 1979 as Operations Manager and Vice
President. He became President in 1984 and Chief Executive Officer in April
1985. In September 1989, Old Sierra merged into UMF Systems, Inc., a California
corporation ("UMF"), and UMF changed its name to "Sierra Monitor Corporation."
Mr. Arnold has served as the Company's President and Chief Financial Officer
since the merger and as the Company's Secretary since February 1993. Mr. Arnold
was also a director of Old Sierra from 1984 until the merger with UMF.
C. RICHARD KRAMLICH became a director of Old Sierra in February 1980
and remained a director of the Company following the merger between Old Sierra
and UMF. Since 1978, he has been a General Partner of New Enterprise Associates,
a venture capital firm. Mr. Kramlich is also a director of Ascend
Communications, Chalone, Inc., Lumisys, Inc., Macromedia, Inc., Neopath, SyQuest
Technology, Inc., Silicon Graphics, Inc., and Graphix Zone.
-2-
<PAGE>
JAY T. LAST was a director of UMF from 1977 until September 1989 and
became a director of the Company following the merger of Old Sierra and UMF. Mr.
Last is the President of Hillcrest Press, a publishing company, and has been a
business and technical consultant for over five years.
Vote Required
The three nominees receiving the highest number of affirmative votes of
the shares entitled to vote shall be elected as directors of the Company. Votes
withheld from any directors are counted for purposes of determining the presence
or absence of a quorum but have no other legal effect under California law.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR the
re-election of the above-named directors to the Board of Directors of the
Company.
PROPOSAL TWO - RATIFICATION OF APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board of Directors of Sierra Monitor has appointed KPMG Peat
Marwick LLP, independent public accountants, to audit the financial statements
of Sierra Monitor for the current fiscal year ending December 31, 1997. It is
expected that a representative of KPMG Peat Marwick LLP will be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to answer any appropriate questions.
Required Vote
Approval of the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1997
requires the affirmative vote of the holders of a majority of the shares present
and voting at the meeting. In the event of a negative vote on such ratification,
the Board of Directors will reconsider such appointment.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR the
ratification of the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1997.
-3-
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
<TABLE>
The following table sets forth the shares of Common Stock beneficially
owned as of the Record Date by the following persons known to the Company to be
the beneficial owners of more than 5% of the Company's outstanding Common Stock,
by each director of the Company, by the Chief Executive Officer of the Company,
by the other executive officers of the Company, and by all directors and
officers of the Company as a group:
<CAPTION>
Shares
Beneficially Owned (2)
------------------------------------
Five-Percent Shareholders, Directors, Executive Officers(1) Number Percent
- ------------------------------------------------------------------------------------ ------------------ ----------------
<S> <C> <C>
Five-Percent Shareholders:
Shires Investments plc. ........................................................... 1,549,134 15.0%
c/o Glasgow Investment Partners
29 St. Vincent Place
Glasgow, Scotland G1-2DR
Crosspoint Ventures Partners....................................................... 1,022,110 9.9%
One First Street
Los Altos, CA 94022
Directors and Executive Officers:
C. Richard Kramlich(3)............................................................. 1,720,494 16.7%
Jay T. Last........................................................................ 1,723,942 16.7%
Gordon R. Arnold(4)................................................................ 902,342 8.7%
Michael C. Farr(5)................................................................. 155,250 1.5%
Stephen R. Ferree(6)............................................................... 156,250 1.5%
All officers and directors as a group (5 persons)(2)-(7)........................... 4,658,278 45.1%
<FN>
- ----------
(1) Unless otherwise indicated, the business address of each of the beneficial
owners listed in this table is: c/o Sierra Monitor Corporation, 1991 Tarob
Court, Milpitas, California 95035.
(2) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(3) Includes 100,000 shares held by Pamela P. Kramlich, Mr. Kramlich's wife.
(4) Includes 170,833 shares of Common Stock issuable upon exercise of options
which are exercisable within 60 days of the Record Date.
(5) Includes 111,250 shares subject to stock options exercisable within 60 days
of the Record Date.
(6) Includes 111,250 shares subject to stock options exercisable within 60 days
of the Record Date.
(7) Includes 393,333 shares subject to stock options exercisable within 60 days
of the Record Date.
</FN>
</TABLE>
-4-
<PAGE>
MANAGEMENT
Executive Officers
The executive officers of the Company and their ages are as follows:
Name of Nominee Age Position
----------------------- ----------- -----------------------------------------
Gordon R. Arnold 51 President, Chief Financial Officer and
Secretary
Michael C. Farr 39 Vice President, Operations
Stephen R. Ferree 49 Vice President, Marketing
Executive officers hold office until their successors are chosen,
subject to early removal by the Board of Directors.
There are no family relationships between any of the directors or
executive officers of the Company.
Board Meetings and Committees
The Board of Directors held two meetings during the fiscal year ended
December 31, 1996. Each current Director attended all of the meetings of the
Board of Directors held during the last fiscal year. The Board of Directors does
not have a standing audit, nominating or compensation committee or other any
other committees performing similar functions.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
<TABLE>
The following table sets forth the cash compensation, including
bonuses, paid to the Chief Executive Officer of the Company and the next most
highly paid executive officers for the three years ended December 31, 1996. No
other executive officer of the Company received more than $100,000 in
compensation during fiscal 1996.
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Awards
-----------------
Annual Compensation Securities
--------------------------- Underlying All Other
Salary Bonus Options Compensation
Name and Principal Position ($) ($) (#) ($)
- ------------------------------------ ------------ ----------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Gordon R. Arnold................... 1996 72,019 0 200,000 51,835 (1)
Chief Executive Officer 1995 68,000 0 200,000 49,211 (2)
1994 66,000 20,000 150,000 44,081 (3)
Michael C. Farr.................... 1996 84,048 0 140,000 32,747 (4)
Vice President, Operations 1995 77,200 0 140,000 27,435 (5)
1994 78,016 14,000 90,000 22,051 (6)
Stephen R. Ferree.................. 1996 77,007 0 140,000 29,445 (7)
Vice President, Marketing 1995 77,000 0 140,000 24,726 (8)
1994 76,942 4,000 90,000 21,099 (9)
<FN>
- ----------
(1) Represents $49,208 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $238 life insurance premium, and $2,139 under the
Company's medical insurance plan paid in fiscal 1996.
(2) Represents $46,345 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $234 life insurance premium, and $2,382 under the
Company's medical insurance plan paid in fiscal 1995.
(3) Represents $41,363 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $150 life insurance premium, and $2,318 under the
Company's medical insurance plan paid in fiscal 1994.
(4) Represents $28,506 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $274 life insurance premium, and $3,717 under the
Company's medical insurance plan paid in fiscal 1996.
(5) Represents $23,382 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $234 life insurance premium, and $3,569 under the
Company's medical insurance plan paid in fiscal 1995.
(6) Represents $17,203 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $150 life insurance premium, and $4,448 under the
Company's medical insurance plan paid in fiscal 1994.
(7) Represents $23,590 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $277 life insurance premium, and $5,328 under the
Company's medical insurance plan paid in fiscal 1996.
(8) Represents $19,081 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $234 life insurance premium, and $5,161 under the
Company's medical insurance plan paid in fiscal 1995.
(9) Represents $16,070 paid in commission, a $250 contribution by the Company
under its 401(k) plan, $180 life insurance premium, and $4,629 under the
Company's medical insurance plan paid in fiscal 1994.
</FN>
</TABLE>
Compensation of Directors
Directors of the Company who are not employees receive a fee of $100
for each Board meeting which they attend. Directors receive no other fees.
<PAGE>
EMPLOYEE BENEFIT PLANS
The 1986 Incentive Stock Option Plan (the "1986" Option Plan" under
which officers and directors of the Company received benefits during the fiscal
year ended December 31, 1995, expired by its terms on February 24, 1996. The
Board and Shareholders have approved and adopted the 1996 Stock Plan to replace
the expired 1986 Option Plan.
<TABLE>
The following table sets forth the number and terms of options granted to the
executive officers named in the Summary Compensation Table during the year ended
December 31, 1996:
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
- -------------------------------------------------------------------------------- Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options Price Appreciation
Options Granted to Exercise for Option Term (2)
Granted Employees in Price Expiration ------------------------
Name (#) Fiscal Year (1) ($/Share) Date 5% ($) 10% ($)
- --------------------------- -------------- ----------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gordon R. Arnold.......... 0 0 - - - -
Michael C. Farr........... 0 0 - - - -
Stephen R. Ferree......... 0 0 - - - -
<FN>
- ----------
(1) The Company did not grant any options to employees during 1996 pursuant to
the Company's 1996 Stock Plan.
(2) The assumed 5% and 10% compound rates of annual stock appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future Common Stock
prices. Assuming a ten year term of the option, the total calculated
compounded amount of stock appreciation is 63% (at 5% per year) and 159%
(assuming 10% per year).
</FN>
</TABLE>
<TABLE>
The following table provides the specified information concerning
exercises of options to purchase the Company's Common Stock and the fiscal
year-end value of unexercised options held by each of the executive officers
named in the Summary Compensation Table during the year ended December 31, 1996.
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Value of Unexercised
Number of Securities --------------------------------
Underlying Unexercised In-the-Money Options
Options at at
Shares Value FY End (#): FY End ($):
Acquired on Realized -------------------------------- --------------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
--------------------- --------------- ------------ -------------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Gordon R. Arnold.... 164,583 35,417 38,406 5,593
Michael C. Farr..... 105,625 34,375 23,089 5,411
Stephen R. Ferree... 20,000 1,500 105,625 34,375 23,089 5,411
<FN>
- ----------------
(1) Represents the market value of the securities underlying the options at
the fiscal year end, less the exercise price of "in-the-money" options.
The closing price of the Company's last reported sale of Common Stock on
December 31, 1996 was $0.375 per share. Includes incentive stock options
previously granted to employees under the Company's 1986 Option Plan with
exercise prices ranging from $0.10 to $0.22.
</FN>
</TABLE>
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors and persons who own more
than 10% of a registered class of the Company's equity securities during fiscal
year 1996 to file reports of initial ownership on Form 3 and changes in
ownership on Form 4 or 5 with the Securities and Exchange Commission (the
"SEC"). Such officers, directors and 10% shareholders are also required by SEC
rules to furnish the Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for such persons, the Company believes that, during the fiscal year
ended December 31, 1996, all Section 16(a) filing requirements applicable to its
officers, directors and ten-percent shareholders were complied with except that
in connection with C. Richard Kramlich's acquisition of additional shares of the
Company's Common Stock, his Form 4 was inadvertently filed late due to a
clerical error.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting.
For the Board of Directors
SIERRA MONITOR CORPORATION
/s/ Gordon R. Arnold
GORDON R. ARNOLD
President
Dated: April 25, 1997
