WELDOTRON CORPORATION
1532 South Washington Avenue
Piscataway, New Jersey 08855
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 3, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of WELDOTRON
CORPORATION (hereinafter called the ("Corporation") will be held at the Holiday
Inn, 4701 Stelton Road, South Plainfield, New Jersey 07080 on Thursday, August
3, 1995 at 10:00 a.m. for the following purposes:
(1) To elect two Directors; and
(2) To transact such other business as may properly come before the meeting or
an adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 26, 1995 as the
record date for the determination of the shareholders entitled to receive
notice of and to vote at the meeting or any adjournment or adjournments
thereof. The stock transfer books will not be closed.
A copy of the Corporation's Annual Report to Shareholders for the year ended
February 28, 1995 is enclosed herewith.
SHAREHOLDERS ARE URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY. A RETURN
ENVELOPE, FOR WHICH NO POSTAGE NEED BE AFFIXED IF MAILED WITHIN THE UNITED
STATES, IS ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Directors
/s/ RICHARD C. HOFFMAN
Secretary
June 26, 1995
<PAGE>
PROXY STATEMENT
Annual Meeting Of Shareholders
August 3, 1995
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Weldotron
Corporation (the "Corporation") for use at the Annual Meeting of Shareholders to
be held at the Holiday Inn, 4701 Stelton Road, South Plainfield, New Jersey, on
Thursday, August 3, 1995 at 10:00 a.m. or at any adjournment or adjournments
thereof. It is anticipated that the mailing of this Proxy Statement will
commence on or about June 30, 1995.
The enclosed proxy, even though executed and returned, may be revoked at any
time prior to the meeting by either (i) attending the meeting and voting in
person; or (ii) giving written notice of revocation to Mr. Richard C. Hoffman,
Secretary of the Corporation, at Weldotron Corporation, 1532 South Washington
Avenue, Piscataway, New Jersey, 08855. The enclosed proxy may also be revoked
by a subsequently dated proxy received by the Corporation prior to
the voting of the previously dated proxy.
The cost of soliciting proxies will be borne by the Corporation. In addition to
solicitation by mail, directors, officers and employees of the Corporation may
solicit proxies by telephone or otherwise. The Corporation may reimburse
brokers or other persons holding stock in their names or in the names of their
nominees for their charges and expenses in forwarding proxies and proxy
materials to the beneficial owners of such stock.
A proxy which is properly signed and not revoked will be voted in accordance
with the instructions contained therein. If no instructions are given, the
persons named in the proxy intend to vote for the nominees for election as
Directors listed below.
If any such nominee should be unwilling or unable to serve (which is not
anticipated) the persons named in the proxy will vote the proxy for a substitute
nominee selected by them unless the number of Directors has been reduced to the
number of nominees willing and able to serve.
The Board of Directors does not know of any matter other than the election of
directors that is expected to be presented for consideration at the meeting.
However, if other matters properly come before the meeting, the persons named in
the accompanying proxy intend to vote thereon in accordance with their judgment.
VOTING SECURITIES OUTSTANDING: QUORUM
<PAGE>
Only shareholders of record at the close of business on June 26, 1995, the
record date for the meeting, will be entitled to notice of and to vote at the
meeting. On the record date the Corporation had outstanding 2,300,173 shares of
common stock (the "Common Stock") which are the only securities of the
Corporation entitled to vote at the meeting, each share being entitled to one
vote. As of June 26, 1995, no person was known to the Corporation to be the
beneficial owner of more than five per cent of the Common Stock except as
indicated under the caption "Principal Holders of Voting Securities". There are
no cumulative voting rights. The holders of a majority of the issued and
outstanding shares of Common Stock on the record date must be present in person
or by proxy to constitute a quorum at the Annual Meeting. Assuming the presence
of a quorum, the affirmative vote of the holders of a plurality of the votes
cast, in person or by proxy, at the Annual Meeting is necessary for the election
of Directors.
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Corporation provides for the division of
the Board of Directors of the Corporation into three classes. The By-Laws of
the Corporation provide that the Board of Directors may fix the number of
Directors to be not less than three or not more than nine. The Board of
Directors has decided that the number of Directors for the current fiscal year
shall be fixed at seven (7) Directors. The terms of two current Directors will
expire at the Annual meeting. Such Directors are nominees for a new three year
term each. Five current Directors will continue in office. Accordingly, two
Directors shall be elected at the Annual Meeting. The Board of Directors does
not have any present intention to propose any further increase or decrease in
the number of Directors prior to the next Annual Meeting of the Shareholders.
Mr. Martin Siegel, the founder and former Chairman of the Company resigned as a
member of the Board of Directors effective May 10, 1995 to pursue other
interests. Mr. Siegel's decision to resign did not involve any disagreement
with the Company regarding the operations, policies or practices of the Company.
Mr. George Beetle, a current member of the Board of Directors, is not standing
for re-election. At a meeting of the Board on June 21, 1995, the Board accepted
the recommendation of the nominating committee and voted to reduce the size of
the Board from nine to seven members. Mr. Beetle was not nominated to stand for
re-election by the nominating committee on a smaller Board. The decision not to
nominate Mr. Beetle did not involve any disagreement between Mr. Beetle and the
Company regarding its operations, policies or practices.
Following is the name, business experience during the past five years, age, and
other directorships held by each continuing Director and each nominee for
Director.
<TABLE>
First Year Present
Nominees for a Principal Occupation, Elected Term
Three Year Term Employment, etc. Director Expires
<S> <C> <C> <C>
Richard C. Hoffman Secretary and General Counsel of the Corporation; 1994 Aug.,
Attorney - President, InterUrban Management, Inc., 1995
a real estate brokerage and management company.
Currently practices law as Richard C. Hoffman P.C
in Connecticut. Age: 47.
Fred H. Rohn General Partner, North American Venture Capital 1992 Aug.,
Funds (since 1989). Age: 69 years. 1995
<PAGE>
First Year Present
Principal Occupation, Elected Term
Continuing Directors Employment, etc. Director Expires
Bryon P. Fusini Vice President, Investments at Smith Barney, Inc., 1994 Aug.,
a stock brokerage and financial services concern 1996
(since prior to 1989). Age: 41 years.
Marvin D. Kantor Chairman of Wendt-Bristol Health Care Services, 1992 Aug.,
operators of health care delivery services (since 1997
prior to June, 1989). Age: 67 years.
Richard L. Kramer Chairman of the Board of the Corporation (Since 1993 Aug.,
June, 1994); Chairman of the Board & Secretary 1997
of CPT Holdings, Inc., a NASDAQ Small Market
Cap company (since January 1992); Chairman of
the Board, Republic Properties Corp., a private real
estate investment company (since prior to 1989);
Chairman of the Board, Sunderland Industrial Holdings
Corporation, engaged in various industrial manufacturing
businesses (since prior to 1989); Chairman of the Board
(since November, 1994) and Director (since May, 1994),
Texfi Industries, Inc., manufacturing and marketing of
textiles and apparel. Age: 45 years.
John D. Mazzuto Chairman, Greystone Partners which provides 1994 Aug.,
investment banking services (since 1991). 1996
President/CEO North American Operations,
Asian Oceanic Group, an international merchant
bank (since prior to 1989 to 1991). Chairman,
Chester Holdings, Ltd., a NASDAQ Small Cap
company engaged in various retail operations;
Director, CPT Holdings, Inc. and Communications
Group, Inc., both publicly traded corporations;
Director, Texfi Industries, Inc., manufacturing and
marketing of textiles and apparel (since May, 1994).
Age: 46 years.
William L. Remley Vice Chairman of the Board, President and CEO of 1993 Aug.,
the Corporation (Since June, 1994); President and 1997
Treasurer, CPT Holdings, Inc. (January 1993 to present);
Vice Chairman, Sunderland Industrial Holdings Corp.
(since prior to 1989); Director, CPT Holdings, Inc.
(since Jan. 1992); CEO and President (Since November,
1994) and Director, (Since May, 1994) Texfi Industries, Inc.,
manufacturing and marketing of textiles and apparel.
Age: 44 years.
</TABLE>
<PAGE>
COMMITTEES
The Corporation has an Audit Committee of the Board of Directors, whose members
are George R. Beetle, Chairman, and Marvin D Kantor. The Committee held one
meeting during the fiscal year ended February 28, 1995. The Audit Committee
reviews and satisfies itself as to the adequacy of the structure of the
Corporation's financial organization and that the financial and accounting
policies of the Corporation are properly implemented. The Audit Committee
reviews with the Corporation's outside auditors the scope of the audit prior to
its commencement and the results of the audit prior to the publishing of the
Annual Report to Shareholders. Specifically, the Audit Committee (a) reviews
the Corporation's accounting and financial policies and procedures with emphasis
on any major changes during the year, (b) reviews the results of the audit for
significant items and inquires as to whether the outside auditors are completely
satisfied with the audit results, discussing any recommendations and comments
the auditors may have, (c) inquires as to the adequacy of the internal audit
functions and (d) ascertains the degree of cooperation of the Corporation's
financial and accounting personnel with the outside auditors.
The Corporation has a Compensation Committee of the Board of Directors, whose
current members are Fred H. Rohn, Chairman, Bryon P. Fusini and John D. Mazzuto.
The Committee held one meeting during the fiscal year ended February 28, 1995.
The Compensation Committee reviews and makes recommendations to the Board of
Directors with respect to ranges of compensation of all officers of the
Corporation, with respect to incentive program payments, and with respect to
the Corporation's Employee Benefit Plans. The Committee also functions as the
Stock Option Committee. (See Report of the Compensation Committee on Page 7).
The Company has an Executive Committee whose current members are William L.
Remley, Chairman, Richard L. Kramer, John D. Mazzuto, and Fred H. Rohn. The
functions of the Executive Committee are to act for the Board of Directors when
action is required between Board meetings, consult with and to advise management
on certain important proposals and policy matters, review and make
recommendations with respect to financial policy, and monitor management and
Company performance with respect to matters of public responsibility and make
recommendations thereon. The Executive Committee had one meeting during the
Fiscal Year.
The Corporation has a Nominating Committee whose current members are Marvin D.
Kantor, Chairman and Bryon Fusini. The nominating committee held one meeting
during the year. The functions of the nominating committee are to make
recommendations to the full Board of Directors on the appropriate size of the
Board for the current year and to nominate candidates (including current
Directors) to fill the terms of those Directors whose terms expire at the next
Annual Meeting of Shareholders. The nominating committee will consider nominees
for election as Directors recommended by shareholders which are submitted by
shareholders in writing to the Secretary of the Company at least ninety (90)
days prior to the Annual Meeting of Shareholders.
During the fiscal year ended February 28, 1995, the Board of Directors held
eight (8) meetings. No Director attended fewer than 75% of the total number of
meetings of the Board of Directors and each Committee meeting was attended by
all members of the Committee. Directors who are not officers or employees of
the Corporation each receive $6,000 per annum. plus a $500 attendance fee for
each meeting of the Board of Directors or of any committee meeting attended.
Directors who are paid officers or employees of the Corporation receive no
additional compensation for service on the Board of Directors or on any
committee.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Holdings of Management
The following table sets forth as of June 26, 1995, information concerning the
ownership of shares of Common Stock by each Director or nominee of the
Corporation individually and by all officers and Directors of the Corporation as
a group, and the percentage ownership of such outstanding Common Stock based on
information furnished by such individuals. Except for shares beneficially
owned by spouses or other family members, such officers and Directors have sole
voting power and sole investment power with respect to such shares.
<TABLE>
Amount and Nature
of Beneficial
Name of Director or Nominee Ownership of Percentage
or Identity of Group Common Stock of Class
<S> <C> <C>
George R. Beetle 100 *
Bryon P. Fusini 0 0%
Richard C. Hoffman 0 0%
Marvin D. Kantor 0 0%
Richard L. Kramer 0 0%
John D. Mazzuto 0 0%
Fred H. Rohn 0 0%
William L. Remley 0 (1) 0%
All executive officers and Directors 100 *%
as a group (8 persons)
</TABLE>
*Less than one percent.
1) Mr. Remley is the Chairman and President of Lyford Corporation, owner of
450,000 shares of Common Stock, as to which stock he disclaims beneficial
ownership.
Principal Holders of Voting Securities
The following table indicates the only persons known by the Board of Directors
to be the beneficial owners of more than five percent of Common Stock as of
June 26, 1995.
<TABLE>
Name and Address of Amount and Nature Percentage
or Beneficial Owner of Beneficial Ownership of Class
<S> <C> <C>
Lyford Corporation (1) 450,000 19.56%
1430 Broadway, l3th Floor
New York, NY 10018
<PAGE>
Walter J. Schloss Associates (3) 143,200 6.23%
Walter J. Schloss & Edwin W. Schloss
52 Vanderbilt Avenue
New York, NY 10017
Martin Siegel (2) 140,000 6.09%
26 Egan Place
Englewood Cliffs, NJ 07632
</TABLE>
1) Based upon information contained in the named Shareholder's Schedule 13D
dated October 22, 1993, as amended by Amendment No. 1 dated February 17, 1994,
filed pursuant to the Securities Exchange Act of 1934.
2) Based upon information, including information contained in the named
Shareholder's Schedule 13D dated April 19, 1979, as amended by Amendment No. 4
dated February 17, 1994, filed pursuant to the Securities Exchange Act of 1934.
3) Based upon information contained in the named Shareholder's Schedule 13D
dated October, 1990, as amended by Amendment No. 3 dated July 30, 1993, filed
pursuant to the Securities Exchange Act of 1934, which Schedule 13D as amended
also stated the named Shareholders had sole voting power with respect to 143,200
shares as follows: Associates-127,200 shares; Walter J. Schloss-10,000
shares and Edwin W. Schloss-6,000 shares and sole dispositive power with respect
to 143,200 shares hereinabove set forth.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
officers and Directors and persons who own more than ten percent of a registered
class of the Corporation's equity securities ("Reporting Persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the American Stock Exchange. The Reporting Persons are required
by SEC regulations to furnish the Corporation with copies of all Section 16(a)
forms 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 4 were
required for those persons, the Corporation believes that during the fiscal year
ended February 28, 1995, all filing requirements applicable to its Reporting
Persons were complied with on a timely basis.
EXECUTIVE COMPENSATION
The following table shows, as to the Chief Executive Officer and each of the two
other most highly compensated executive officers whose salary plus bonus
exceeded $90,000, information concerning compensation paid for services
to the Company in all capacities during the fiscal year ended February 28, 1995,
as well as the total compensation paid to each such individual for the Company's
previous two fiscal years (if such person was the Chief Executive Officer or an
executive officer, as the case may be, during any part of such fiscal year).
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
Other All
Annual Other
Name and Principal Position FY Salary Bonus Compensation (1) Compensation (2)
<S> <C> <C> <C> <C> <C>
Martin Siegel (3), (4) 1995 $ 138,090 -- $ 4,000 $ 32,581
Chairman of the Board 1994 200,000 -- 12,000 8,138
1993 193,060 -- 12,000 4,313
Albert W. Sanders 1995 $ 90,460 -- $ 910 $ 2,714
Executive Vice 1994 90,570 -- 910 2,713
President/Controller 1993 90,480 -- 910 2,932
</TABLE>
1) Includes amounts paid for car allowances.
2) Includes amount of matching contributions under the Company's 401(K) Plan,
which may be subject to vesting requirements.
3) Martin Siegel resigned as Chairman of the Board and Chief Executive
Officer on June 14, 1994. Thereafter and until November 3, 1994 he continued to
receive compensation under his Employment Agreement dated March 1, 1988, as
amended, when his employment was terminated by the Company.
4) Includes deferred compensation benefits pursuant to Employment Agreement
referred to in (3) above from November 4, 1994 through December 31, 1994. From
and after January 1, 1995 Mr. Siegel receives annual deferred compensation of
$100,000 for life pursuant to a Deferred Compensation Agreement dated as of
January 1, 1995 which was entered into as a result and in settlement of certain
litigation between Mr. Siegel and the Company.
No options were granted nor exercised by any of the named executive officers or
directors during the fiscal year. The Company has not granted any stock
appreciation rights.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The report of the Compensation Committee of the Board of Directors (the
"Committee") and the performance graph on page 9 shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The Committee's compensation philosophy is based on the belief that a link
should exist between executive compensation and the return on investment
provided to stockholders as reflected by the appreciation in the price of the
Company's stock. In applying this philosophy, the Committee continues the
process of developing and implementing a compensation policy which seeks to
attract and retain talented executives and to align the financial interests of
the Company's senior executives with those of its stockholders. The Company
attempts to realize these goals by providing competitive compensation and
permitting executive officers to take an ownership stake in the Company
commensurate with their relative levels of seniority and responsibility.
<PAGE>
In setting compensation for the Company's officers, the Committee believes that
compensation should reflect going market rates for seasoned executives with the
business experience and acumen necessary to develop and expand the Company and
should provide such individuals with the opportunity to participate in the
growth of the Company.
The Company's executive compensation is based on four components--salary,
incentive bonus, and equity-based incentives, and customary employee and
executive benefits. The Company paid no bonuses to its senior executives in
Fiscal 1995.
Compensation of the Chairman of the Board and CEO for Fiscal '95.
The salary of Mr. Martin Siegel, Chairman of the Board and CEO thru June 13,
1994, was based on his rights under his employment agreement entered into as of
March 1, 1988, and extending to July 31, 1997, which is described elsewhere in
this Proxy Statement under "Employment Contracts". Effective as of June 13,
1994, Mr. Siegel resigned as the Chairman of the Board and Chief Executive
Officer of the Company (see, "Employment Contracts"). Effective June 14, 1994,
the Company entered into a Management Advisory Services Agreement with Mentmore
Holdings Corporation, a Delaware corporation, to provide the Company with
executive management, strategic planning and other advisory services including a
Chief Executive Officer. (see "Certain Related Transactions").
The Compensation Committee will continue to evaluate the performance of the
executive officers of the Company during the current fiscal year with particular
reference to achieving a return to profitability for the Company and will make
recommendations to the Board for adjustments in salary levels consistent with
the level of improvement in the operations of the Company.
The Committee determines the number of stock options to be granted based on the
relative seniority, experience and compensation levels of key employees who are
recommended by management for option grants. The Committee also considers long-
term incentives granted to senior executives in the machinery manufacturing
industry. During Fiscal 1995 the Company did not grant any options to its
senior executives.
The Committee believes it is important to give executives a reasonable salary
commensurate with their position and opportunities for ownership and long-term
capital appreciation via stock options so their interests will coincide with
those of the Company's stockholders.
COMPENSATION COMMITTEE
/s/ Fred H. Rohn, Chairman
/s/ Bryon P. Fusini
/s/ John D. Mazzuto
June 1995
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATIONS AND CHANGE IN CONTROL AGREEMENTS
Martin Siegel was employed pursuant to an employment contract dated March 1,
1988, as amended, and extending to July 31, 1997. The Agreement provided for a
salary of $200,000 per annum. Upon Mr. Siegel's retirement or at the end of the
employment period, the Corporation shall pay to him $80,000 per annum as
deferred compensation. The employment agreement further provided that in the
event of his death during the employment period, the annual salary shall be paid
to his widow or children for the lessor of (a) the balance of the employment
period, or (b) for one year and thereafter additional monthly payments computed
at the rate of one-half of such annual salary shall be paid to his widow, if
any, for the balance of the employment period, if any. On November 3, 1994 the
Company terminated Mr. Siegel's employment agreement for cause. Thereafter, on
November 23, 1994, the Company was served with a lawsuit filed by Martin Siegel
in the Superior Court of New Jersey, naming the Company as a defendant. The
other defendants named were: William L. Remley and Richard C. Hoffman, officers
and directors of the Company; Richard L. Kramer, John D. Mazzuto, Bryon Fusini
and Fred H. Rohn, Directors of the Company; Lyford Corp., a major shareholder of
the Company; and Mentmore Holdings Corp. Mr. Siegel alleged, among other
things, that the Company breached its obligations to him under his employment
agreement by forcing his resignation as Chairman of the Board and Chief
Executive Officer, ceasing his regular salary and failing to fund a grantor
trust designed to secure Mr. Siegel's pension.
Effective April 13, 1995, the Company reached a full and final settlement with
Martin Siegel. Under the terms of the settlement, which was approved by the
Court: (1) all claims and counterclaims by, between and among Mr. Siegel, the
Company and the other parties to the litigation were dismissed, with prejudice,
(2) Mr. Siegel and the Company exchanged mutual releases, (3) Mr. Siegel's
Employment Agreement with the Company dated March 1, 1988, as amended, was
terminated, and (4) Mr. Siegel was awarded a lifetime annual deferred
compensation benefit of $100,000. The annual deferred compensation benefit is
an unsecured obligation of the Company.
The Corporation has entered into a Severance Pay Agreement, dated January
15, 1991, with Albert W. Sanders. The Agreement provides, in pertinent part,
that in the event such officer is involuntarily terminated from the employ of
the Corporation as a result of certain changes in control, the Corporation
will pay such officer a sum equal to 200% of his then current annual base
salary. A similar Agreement dated November 1, 1993, was entered into with
Varghese Reju, Treasurer & Chief Financial Officer.
<PAGE>
PERFORMANCE GRAPH
Assumes $100 invested on March 1, 1988. Assumes Dividend Reinvested.
Fiscal Year Ending February 28, 1995
Compare 5-Year Cumulative Total Return Among Weldotron Corporation, AMEX Market
Index and SIC Code Index
<TABLE>
Measurement Period Weldotron AMEX Peer
(Fiscal Year Covered) Corporation Market Index Group Index
<S> <C> <C> <C>
Measurement Pt.-3/1/88 $100 $100 $100
FYE 2/28/91 $90 $102 $ 99
FYE 2/29/92 $85 $120 $120
FYE 2/28/93 $60 $105 $117
FYE 2/28/94 $75 $125 $140
FYE 2/28/95 $30 $115 $150
</TABLE>
The stock price performance shown on the graph is not necessarily indicative of
future price performance. Peer Group is SIC Code Group 3569.
Assumes $100 invested on March 1, 1990
Assumes dividend reinvested
Fiscal Year Ending Feb. 28, 1995
CERTAIN RELATED TRANSACTIONS
Effective June 14, 1994 the Company entered into a Management Advisory Services
Agreement ("Management Agreement") with Mentmore Holdings Corporation, a
Delaware corporation. Richard L. Kramer and William L. Remley, the Chairman
of the Board and President, respectively, of the Company are the Chairman of the
Board and President respectively, of Mentmore Holdings Corporation. Pursuant to
the terms of the Management Agreement, Mentmore is to provide the Company with
executive management advisory services, strategic planning and counseling, and a
Chief Executive Officer. The Management Agreement is for a term of one year,
renewable annually with an annual fee of $300,000, payable in equal monthly
installments.
In order to meet the working capital requirements of the Company, on August 4,
1994 the Board of Directors approved a loan transaction in which the Company
borrowed Five Hundred Thousand ($500,000) Dollars from Lyford Corp. ("Lyford").
Lyford owns 19.65% of the stock of the Company. In consideration for the loan,
the Company executed and delivered to Lyford a promissory note, a security
agreement, and a common stock purchase warrant. The security agreement granted
to Lyford a junior lien on the Company's assets. The warrant granted to Lyford
the right to purchase 200,000 shares of the Company's common stock (the "Initial
Warrant Number") at a price of Two ($2.00) Dollars per share (the "Initial
Warrant Price"). The initial Warrant Number and the Initial Warrant Price are
subject to equitable adjustment in the event there is a merger or
recapitalization of the Company, or the Company declares a stock dividend.
<PAGE>
The Initial Warrant Number and the Initial Warrant Price are also subject to
adjustment by means of anti-dilution provisions. The warrant expires by its
terms on August 4, 2004.
On May 5, 1995, the Company concluded a loan transaction in which it borrowed
One Million ($1,000,000) Dollars from Lyford. This loan transaction
accomplished the extension of the maturity date of the Company's existing loan
from Lyford in the amount of Five Hundred Thousand Dollars ($500,000) which had
matured by its terms on February 28, 1995, and secured an additional advance in
the amount of Five Hundred Thousand Dollars ($500,000). The new obligation is
evidenced by a certain Amended, Extended and Restated Promissory Note dated as
of March 1, 1995. In consideration for the new loan, the Company executed and
delivered to Lyford the Restated Note and a Common Stock Purchase Warrant. The
new loan is secured by a junior lien on all of the Company's assets. The new
warrant grants to Lyford the right to purchase 1,000,000 shares of the Company's
common stock (the "Initial Warrant Number") at an initial exercise price of One
($1.00) Dollar per share (the "Initial Warrant Price"). The Initial Warrant
Number and the Initial Warrant Price are subject to equitable adjustment in the
event there is a merger or recapitalization of the Company, or the Company
declares a stock dividend. The Initial Warrant Number and the Initial Warrant
Price are also subject to adjustment by means of anti-dilution provisions. The
new warrant expires by its terms on April 12, 2005.
ACCOUNTANTS AND AUDITORS
The Corporation's independent public accountants are Deloitte & Touche, with
offices at Two Hilton Court, P. 0. Box 319, Parsippany, New Jersey 07054.
Deloitte & Touche has been retained by the Corporation as independent public
accountants for more than the past nine years, and the Corporation intends to
continue such relationship for the current fiscal year. The selection of
independent public accountants is made by the Board of Directors of the
Corporation. It is anticipated that a representative of Deloitte & Touche will
be present at the Annual Meeting of Shareholders and that such representative
will be afforded an opportunity to make a statement to the assembled
Shareholders, if desired. Such representative will also be available to respond
to appropriate questions during the meeting.
DEADLINE FOR SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1996 Annual Meeting
must be received at the principal executive offices of Weldotron Corporation for
inclusion in its proxy statement and form of proxy relating to that meeting by
February 26, 1996.
<PAGE>
OTHER MATTERS
The management knows of no other business to come before the meeting, but if any
other matters should properly come before the meeting or any adjournment or
adjournments thereof, the persons named as proxies will vote upon them in
accordance with their best judgment.
By Order of the Board of Directors
/s/ Richard C. Hoffman
Secretary
Piscataway, New Jersey
June 26, 1995
