<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 14c-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BINKS SAMES CORPORATION
- -------------------------------------------------------------------------------
(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)(4) 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 (Set forth the amount on which the filing fee is
calculated and state how it was determined.)
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
<PAGE>
BINKS SAMES CORPORATION
9201 WEST BELMONT AVENUE
FRANKLIN PARK, ILLINOIS 60131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1999
TO THE STOCKHOLDERS OF
BINKS SAMES CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of BINKS
SAMES CORPORATION (the "Company") will be held at 222 North LaSalle Street, 4th
Floor Conference Room, Chicago, Illinois 60601, on Tuesday, April 27, 1999 at
10:00 a.m., for the purpose of considering and acting upon the following
matters:
1. The election of one director of the Company;
2. The approval of an amendment to Article First of the Company's
Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), to change the name of the Company to "Sames Corporation".
3. The ratification of KPMG LLP as the Company's independent accountants
for the fiscal year ending November 30, 1999; and
3. The transaction of such other business as may properly be brought
before the meeting.
Stockholders of record at the close of business on Friday, February 19,
1999 are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
Whether or not you expect to be present at the Annual Meeting, you are
requested to execute and return the enclosed proxy.
By order of the Board of Directors,
GUY E. SNYDER, SECRETARY
March 18, 1999
<PAGE>
BINKS SAMES CORPORATION
9201 WEST BELMONT AVENUE
FRANKLIN PARK, ILLINOIS 60131
PROXY STATEMENT
FOR
1999 ANNUAL MEETING OF STOCKHOLDERS
This proxy statement and the accompanying proxy are being furnished for the
solicitation of proxies by the Board of Directors of Binks Sames Corporation
(the "Company") for use at the Annual Meeting of Stockholders to be held on
Tuesday, April 27, 1999 at 10:00 a.m., Chicago time, at 222 North LaSalle
Street, 4th Floor Conference Room, Chicago, Illinois 60601, or any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. The proxy statement and accompanying proxy are being first sent
to stockholders on or about March 19, 1999. Solicitation will be by mail and may
also be by telephone, telegraph or in person by employees of the Company, who
will receive no additional compensation for such solicitation.
ANNUAL REPORT
The Annual Report on Form 10-K of Binks Sames Corporation for the fiscal
year ended November 30, 1998 is enclosed herewith.
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy may be revoked by a stockholder at any time prior to the
voting thereof by delivery of written notice of revocation to the Secretary of
the Company. It may also be revoked by a stockholder attending and voting in
person at the Annual Meeting or by delivery of a later dated proxy to the
Secretary of the Company prior to such voting.
VOTING SECURITIES
As of February 19, 1999, the record date for stockholders entitled to
notice of and to vote at the Annual Meeting (the "Record Date"), the outstanding
voting securities of the Company consisted of 2,963,835 shares of Capital Stock,
each share being entitled to one vote on each matter presented at the meeting.
- 1 -
<PAGE>
As of the Record Date, the following persons were believed by the Company
to beneficially own (as such term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) more than 5% of the
outstanding shares of Capital Stock of the Company:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES(1) OF CLASS
---------------- --------- --------
<S> <C> <C>
Kennedy Capital Management, Inc. 362,174(2) 12.22%
10829 Olive Blvd.
St. Louis, MO 63141
Harris Associates L.P. 328,033(3) 11.06
Harris Associates Inc.
Two North LaSalle Street
Suite 500
Chicago, IL 60602
Dimensional Fund Advisors, Inc. 218,230(4) 7.36
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Woodland Partners LLC 165,650(5) 5.59
60 South Sixth Street, Suite 3750
Minneapolis, MN 55402
</TABLE>
- ------------------------------------
(1) The nature of the beneficial ownership for shares shown in this column is
sole voting and investment power, except as set forth in the following
notes.
(2) According to a Schedule 13G filed with the SEC, dated January 19, 1999.
Kennedy Capital Management has sole dispositive power of all such shares.
It has sole voting power of 324,924 shares.
(3) According to a Schedule 13G filed with the Securities and Exchange
Commission (the "SEC"), dated January 19, 1999. Harris Associates L.P. and
its general partner, Harris Associates Inc. (collectively, "Harris"),
share voting and dispositive power with respect to 275,000 of the 328,033
shares, which are beneficially owned by Harris Associates Investment Trust
Series Designated The Oakmark Smallcap Fund. Harris shares voting power
of the remaining 53,033 shares with various clients to which Harris acts
as investment adviser. Harris has sole dispositive power with respect to
such 53,033 shares.
(4) According to a Schedule 13G filed with the SEC, dated February 11, 1999.
(5) According to a Schedule 13G filed with SEC, dated February 8, 1999.
Woodland Partners LLC has sole voting power of 143,150 of such shares.
Woodland Partners LLC shares voting power of 22,500 shares with various
clients for whom it manages accounts.
PROPOSAL 1. ELECTION OF DIRECTORS
INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
The Company presently has four directors who are divided into three classes
serving staggered three year terms. One director is to be elected at this Annual
Meeting to hold office for a term expiring at the Annual Meeting for the year
2002. George L. Joeckel, Jr. has been nominated to fill such position. Unless
otherwise specified in the proxy, it is the present intention of the persons
named in the accompanying form of proxy to vote such proxies for his election.
Fewer nominees for director are named herein than the maximum number permitted
by the Company's By-Laws. Additional nominees for director are not being sought
at this time. Proxies will not be voted for more than the one nominee for
director included in this Proxy Statement.
- 2 -
<PAGE>
Directors shall be elected by a plurality of the votes cast in the election
of directors. Under applicable Delaware law, in tabulating the vote, broker
non-votes will be disregarded and will have no effect on the outcome of the
vote.
Although it is not anticipated, if Mr. Joeckel is unable or unwilling to
serve as a director, proxies will be voted for such other person as the Board of
Directors may determine.
Information with respect to the nominee, continuing directors and certain
executive officers of the Company is shown below.
<TABLE>
<CAPTION>
CAPITAL STOCK OF THE
COMPANY
BENEFICIALLY OWNED ON
FEBRUARY 19, 1999(1)
---------------------------------------------
PERCENT OF
NUMBER OF CAPITAL STOCK
SHARES OUTSTANDING
------ -----------
NOMINEE FOR ELECTION AS DIRECTOR
<S> <C> <C>
GEORGE L. JOECKEL, JR., age 56, has served as 500 *
President and CEO of Prestolite Wire Corporation, a
tier one supplier to the automotive industry and a
supplier of telecommunications products, since January
1992. Prior to that, Mr. Joeckel was the manufacturing
manager for General Electric's Drive Systems
business.
CONTINUING DIRECTORS
ARNOLD H. DRATT, age 54, has been the President, 121,500(2) 4.1%
CEO and a director of the Company since October
1998. Mr. Dratt has served as President of the Dratt
Campbell Company, a management consulting firm, since
he co-founded it in 1991. In such capacity, Mr. Dratt
was a consultant to the Company from January 1998 until
September 1998. Mr. Dratt's present term of office
expires at the year 2001 Annual Meeting.
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
CAPITAL STOCK OF THE
COMPANY
BENEFICIALLY OWNED ON
FEBRUARY 19, 1999(1)
---------------------------------------------
PERCENT OF
NUMBER OF CAPITAL STOCK
SHARES OUTSTANDING
------ -----------
CONTINUING DIRECTORS
<S> <C> <C>
CLIFFORD J. VAUGHAN, age 64, has been a director of 7,500(4) *
the Company since August 1996. His present term of
office as a director expires at the year 2000 Annual
Meeting. Mr. Vaughan, now retired, was Group Vice
President of General Motors Corporation from 1983 to
1996.(3)
DR. WAYNE F. EDWARDS, age 64, has been a director 12,500(5) *
of the Company since August 1996 and Chairman of
the Board since August 1998. Dr. Edwards served as interim
President and CEO of the Company from August 1998 until the
appointment of Mr. Dratt as President and CEO in October
1998. His present term of office as director expires at the
year 2000 Annual Meeting. Mr. Edwards, now retired, was Vice
President and Chief Financial Officer of Crown Zellerbach
International, Inc. from 1975 to 1983.
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
CAPITAL STOCK OF THE
COMPANY
BENEFICIALLY OWNED ON
FEBRUARY 19, 1999(1)
---------------------------------------------
PERCENT OF
NUMBER OF CAPITAL STOCK
SHARES OUTSTANDING
------ -----------
NON-DIRECTOR NAMED EXECUTIVE OFFICERS
<S> <C> <C>
G. BRUCE BRYAN, JR., age 43, has been Vice 5,750(6) *
President - Engineered Systems since 1996. Mr. Bryan
joined the Company in 1993 as Manager of the North
American Powder Systems Group for the General
Industrial Market.
TODD A. VAUGHAN, age 40, has been an officer of the 5,000(7) *
Company since April 1997. Mr. Vaughan has been
employed by the Company since 1992 and is presently
Vice President of the Company and General Manager
of Sames North America, Inc. (formerly Sames
Electrostatic, Inc.).(3)
FORMER DIRECTORS AND NAMED EXECUTIVE OFFICERS
DORAN J. UNSCHULD, age 75, has been a director of 28,063(8) *
the Company since 1982, and served as President and
CEO of the Company from June 1996 until his retirement
in April 1998. Mr. Unschuld was employed by the Company
in various positions from 1952 until his retirement. He
served as a Senior Vice President from 1995 to 1996, a
Vice President from 1971 until 1995 and Secretary of the
Company from 1965 until 1996. Mr. Unschuld's present
term as a director expires at the 1999 Annual
Meeting of Stockholders and he has chosen not to stand
for re-election.
DR. DONALD G. MEYER served as Chairman of the 9,000(9) *
Board from February 1998, and President and CEO of
the Company from May 1998, until his death in August
1998. Dr. Meyer had been a director of the Company
since June 1996 and had previously served as a
director of the Company from 1990 to 1995. Dr.
Meyer was a Professor of Marketing of Loyola
University of Chicago from 1961 to 1997 and had been
Dean of the School of Business Administration from
1977 to 1995.
Directors and Executive Officers as a group (8 persons) 182,389(10) 6.2
</TABLE>
- 5 -
<PAGE>
- ------------------------------------
* Less than 1.0% of the Company's outstanding Capital Stock.
(1) The information contained in this column is based upon information
furnished to the Company by the individuals referred to above. The nature
of beneficial ownership for shares shown in this column is sole voting and
investment power.
(2) Includes 100,000 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
(3) Mr. Clifford J. Vaughan is the father of Mr. Todd A. Vaughan.
(4) Includes 5,500 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
(5) Includes 7,500 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
(6) Includes 4,250 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
(7) Includes 4,500 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
(8) Includes 23,000 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
(9) Includes 7,000 shares issuable to Dr. Meyer's estate upon the exercise of
outstanding stock options exercisable on the Record Date or within 60 days
thereafter.
(10) Includes 146,825 shares issuable upon the exercise of outstanding stock
options exercisable on the Record Date or within 60 days thereafter.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR THE
NOMINEE FOR DIRECTOR LISTED ABOVE.
DIRECTORS' FEES
Each outside director who is not also an employee receives a director's fee
of $24,000 per annum and $750 for each board meeting attended, plus
reimbursement of expenses relating to attendance at meetings. Non-employee
directors are also entitled to participate in the Company's 1996 Stock Option
Plan. The Chairman of the Board receives a director's fee of $24,000 per annum
and $1,250 for each board meeting attended, plus reimbursement of expenses.
Directors who perform services for the Company are compensated at a per diem
rate of $750 ($1,250 in the case of the Chairman of the Board).
INFORMATION REGARDING BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors of the Company (the "Board of Directors" or "Board")
held 18 meetings and took action by written consent on 7 occasions during fiscal
1998. The Board of Directors currently has two standing committees: the Audit
Committee and the Compensation Committee. During fiscal 1998, the Board of
Directors had two additional committees: the Nominating and Governance Committee
and the Executive Committee. In October 1998, the Company amended its By-laws
and eliminated both such committees. All directors attended at least 75% of the
meetings of the Board of Directors, and of committees on which they served,
during 1998.
The Audit Committee is responsible for recommending to the Board of
Directors the engagement of independent auditors for the Company and reviewing
with the independent auditors the plan for and results of the auditing
engagement. The Audit Committee met four times during fiscal 1998. The Audit
Committee of the Board consists of Dr. Edwards and Mr. Vaughan.
- 6 -
<PAGE>
The Compensation Committee is responsible for reviewing the compensation
arrangements in effect for the Company's executive officers and for
administering all the Company's employee benefit plans, including the Company's
1996 Stock Option Plan. The Compensation Committee took action by written
consent on two occasions during the last fiscal year. The Compensation Committee
currently consists of Dr. Edwards and Mr. Vaughan.
The Nominating and Governance Committee was responsible for nominating
persons for election as Directors of the Company and appointments to Committees.
This Committee held two meetings during the last fiscal year. The Nominating and
Governance Committee was made up of Dr. Edwards and Mr. Vaughan.
The Executive Committee, which was empowered to perform any duties which,
by law, did not require the full Board, did not meet separately during fiscal
1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Exchange Act, the Company's officers,
directors and holders of more than ten percent of the Company's Capital Stock
are required to file reports of their trading in equity securities of the
Company with the SEC, the Company, the American Stock Exchange and the Chicago
Stock Exchange. Based solely on its review of the copies of such reports
received by it, the Company believes that for fiscal 1998 all filing
requirements applicable to its officers, directors, and more than ten percent
stockholders were complied with, except that Mr. Vaughan and Drs. Meyer and
Edwards each failed to timely file a Form 5 covering an automatic grant of
options. Such reports are currently on file with the SEC.
- 7 -
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth separately, for the fiscal years
indicated, each component of compensation paid or awarded to, or earned by, (i)
the Chief Executive Officer ("CEO") of the Company serving at the end of the
last fiscal year, (ii) each of the most highly compensated executive officers
who were serving as executive officers at the end of the last fiscal year who
earned more than $100,000 in salary and other compensation, other than the CEO,
(iii) Mr. Doran J. Unschuld, who resigned as CEO and President of the Company in
April 1998, (iv) Dr. Donald G. Meyer, who served as President and CEO of the
Company from May 1998 until his death in August 1998, and (v) Dr. Wayne F.
Edwards, who served as President and interim CEO from August 1998 until October
1998 (collectively referred to herein as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
NAME AND -------------------------- ------------------ ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTION AWARDS (#) COMPENSATION($)
------------------ ---- --------- -------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Arnold H. Dratt 1998(2) $300,000(3) -- 100,000 --
President, Chief Executive 1997 -- -- -- --
Officer and Director 1996 -- -- -- --
Wayne F. Edwards 1998(4) 106,515(5) -- 6,000 --
Chairman of the Board and 1997 -- -- -- --
interim President and Chief 1996 -- -- -- --
Executive Officer
Donald G. Meyer 1998(6) 125,580(5) -- 3,000 --
Former Chairman of the 1997 -- -- -- --
Board, President and Chief 1996 -- -- -- --
Executive Officer
Doran J. Unschuld 1998(7) 191,297(5) -- 3,000 287,861(8)
Director and Former 1997 275,000 45,000 -- 113,104(8)
President and Chief 1996 191,444 15,789 20,000 65,857(8)
Executive Officer
G. Bruce Bryan, Jr. 1998 106,616 55,000(9) 3,000 --
Vice President - Engineered 1997 105,858 16,726 -- --
Systems 1996 90,550 4,269 2,500 --
Todd A. Vaughan 1998 132,724 66,362(9) 4,000 --
Vice President, Binks Sames 1997 131,000 18,155 -- --
Corporation and General 1996 110,000 21,754 1,000 --
Manager, Sames North
America, Inc.
- ------------------------------------
</TABLE>
- 8 -
<PAGE>
(1) Compensation paid to executive officers for the fiscal year ended November
30, 1998, other than salary, bonus, and other compensation reflected in the
table, does not exceed the minimum amounts required to be reported under
the SEC's rules.
(2) Mr. Dratt joined the Company on October 1, 1998. His salary is paid
pursuant to the terms of a Consulting Agreement dated October 1, 1998 by
and between the Company and The Dratt-Campbell Company, a consulting firm
of which Mr. Dratt is President and co-founder. Please see "Certain
Relationships and Related Transactions" for a discussion of this agreement.
(3) Mr. Dratt's salary is shown on an annualized basis.
(4) Dr. Edwards served as interim Chief Executive Officer from August 1998
until October 1998.
(5) Such amounts include director's fees received during fiscal 1998.
(6) Dr. Meyer was appointed President and Chief Executive Officer of the
Company in May 1998. He served as Chairman of the Board, President and CEO
until his death in August 1998.
(7) Mr. Unschuld retired as President and Chief Executive Officer of the
Company in April 1998. His present term of office as a director of the
Company expires at the 1999 Annual Meeting of Stockholders. Mr. Unschuld
has chosen not to stand for re-election as a director of the Company.
(8) Represents amounts expended with respect to post-retirement payments under
employment contracts between the Company and Mr. Unschuld.
(9) These amounts reflect payments made under Bonus Agreements between the
Company and certain executive officers providing for bonus payments payable
at certain dates if the individual remains continuously employed with the
Company through such dates.
- 9 -
<PAGE>
The tables below sets forth certain information with respect to options
held by the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF RATES OF STOCK PRICE
NUMBER OF TOTAL OPTIONS APPRECIATION
SECURITIES GRANTED TO EXERCISE OR FOR OPTION TERM ($)
UNDERLYING EMPLOYEES IN BASE EXPIRATION --------------------------
NAME OPTIONS FISCAL YEAR(%) PRICE ($/SH.) DATE 5% 10%
---- ------- -------------- ------------- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Arnold H. Dratt 100,000 64.5 17.25 9/28/08 1,084,842 2,749,205
Wayne F. Edwards 5,000 3.2 17.25 9/28/08 54,242 137,460
1,000 0.6 44.625 4/28/08 28,064 71,121
Donald G. Meyer 3,000 1.9 44.625 4/28/08 84,193 213,362
Doran J. Unschuld 3,000 1.9 17.25 9/28/08 32,545 82,476
G. Bruce Bryan, Jr. 3,000 1.9 12.125 10/28/08 22,876 57,972
Todd A. Vaughan 4,000 2.6 12.125 10/28/08 30,501 77,297
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS(#) OPTIONS/SARS($)
ACQUIRED ON VALUE -------------------------------- -----------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Arnold H. Dratt -- -- 100,000 -- -- --
Wayne F. Edwards -- -- 7,500 2,500 -- --
Donald G. Meyer -- -- 7,000 -- -- --
Doran J. Unschuld -- -- 23,000 -- -- --
G. Bruce Bryan, Jr. -- -- 4,250 1,250 8,625 --
Todd A. Vaughan -- -- 4,500 500 11,500 --
</TABLE>
- 10 -
<PAGE>
REPORT OF THE BOARD OF DIRECTORS
REGARDING EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The fundamental philosophy of the Company's compensation program is to
offer competitive compensation opportunities for all employees, including senior
management, which are based on the individual's contribution and personal
performance. The objectives of the Company's compensation program are to align
compensation with business goals and performance and to enable the Company to
attract and retain superior talent and reward performance.
The Company also believes it is important to align executive officers'
interests with the success of the Company by placing a portion of pay at risk,
thus making payment dependent upon corporate performance. The compensation of
the Company's CEO and Named Executive Officers is reviewed and approved annually
by the Board of Directors, and is linked to the Company's financial performance.
Fifteen percent or more of executive management's compensation may consist of a
bonus which is influenced by the Company's annual performance.
In determining compensation levels, salary and bonus components are
initially reviewed by the Compensation Committee of the Board of Directors,
which was created in June 1996 (prior thereto, compensation was initially
reviewed by the CEO of the Company). The Compensation Committee then makes its
recommendations to the full Board of Directors. The Board studies the
recommendations, along with other information on individual and corporate
performance, and votes on compensation levels for the next fiscal year. Only
those members of the Board of Directors who are not officers of the Company vote
on matters relating to the compensation of the CEO and Named Executive Officers.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's compensation program consists of cash salary, annual bonus
payments based upon performance and stock option grants. There are currently
three main components to the Company's executive compensation program, as
determined by corporate and individual performance:
- Base salary compensation
- Annual incentive compensation
- Stock option grants
In determining salaries, the Compensation Committee takes into account
individual experience, individual performance, total contribution to the
Company's long term success, and the results of the Company's performance. For
fiscal 1998, no bonuses were issued to any of the Named Executive Officers.
Stock option grants to executive officers are intended to promote the
success of the Company by aligning financial interests of executive officers
with stockholders and to provide each executive officer with a significant
incentive to manage the Company from the perspective of an owner with an equity
stake in the business. Stock option grants are based on various subjective
factors, primarily relating to the responsibilities of the individual officers,
and also to their expected future performance.
- 11 -
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
The salary of Mr. Arnold H. Dratt, the Company's CEO at the end of
fiscal 1998, was set at $25,000 per month for fiscal 1998. His salary was
determined based on a determination to align the CEO's interests with those
of the stockholders and was negotiated in connection with the Consulting
Agreement entered into between the Company and The Dratt-Campbell Company.
This alignment was created by the grant to Mr. Dratt of an option to purchase
100,000 shares of the Comany's Capital Stock at a per share price of $17.25,
and the purchase by Mr. Dratt, in open market transactions, of 21,500 shares
of Capital Stock. Please see "Certain Relationships and Related
Transactions" for a description of the Consulting Agreement.
COMPENSATION COMMITTEE
Clifford J. Vaughan
Wayne F. Edwards
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1998, decisions regarding executive compensation were
reviewed by the entire Board of Directors based upon the recommendations of
the Compensation Committee. Messrs. Unschuld and Dratt and Drs. Meyer and
Edwards were each CEO of the Company and each served on the Board of
Directors of the Company at various times in fiscal 1998. Although each of
Messrs. Unschuld and Dratt and Drs. Meyer and Edwards was present during
compensation discussions by the Board while serving as an executive officer,
none of them voted on decisions regarding his respective compensation.
AGREEMENTS WITH ARNOLD H. DRATT
Please see "Certain Relationships and Related Transactions" for a
discussion of certain agreements entered into with Mr. Dratt.
- 12 -
<PAGE>
PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Capital Stock of the Company for the last five fiscal years with the cumulative
total return on the S&P 500 Index and the S&P Machinery (Diversified) Index over
the same period (assuming the investment of $100 in the Company's Capital Stock,
the S&P 500 Index and the S&P Machinery (Diversified) Index on November 30,
1993, and reinvestment of all dividends).
[GRAPH]
<TABLE>
<CAPTION>
11/30/93 11/30/94 11/30/95 11/30/96 11/30/97 11/30/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Binks Sames Corporation $100.00 $85.40 $110.28 $128.20 $197.25 $69.17
S&P Machinery (Diversified)(1) 100.00 98.83 124.42 159.44 200.66 175.06
S&P 500(1) 100.00 101.05 138.41 176.99 227.45 281.27
</TABLE>
(1) The S&P 500 Index and the S&P Machinery (Diversified) Index were obtained
from Media General Financial Services, Inc.
- 13 -
<PAGE>
1996 STOCK OPTION PLAN
The Amended and Restated 1996 Stock Option Plan (the "1996 Stock Option
Plan") authorizes the granting of options to purchase up to 300,000 shares of
the Capital Stock of the Company to present and future executives, key
personnel, consultants and non-employee directors of the Company. Currently, the
Compensation Committee administers the 1996 Stock Option Plan. Pursuant to the
1996 Stock Option Plan, the Compensation Committee may award incentive stock
options ("ISOs") and nonqualified stock options ("NSOs"). ISOs may only be
granted to employees of the Company or its subsidiaries. NSOs may be granted to
all employees of and consultants who provide services to the Company or its
subsidiaries, including non-employee directors. However, no single person may
receive options covering more than 50,000 shares of the Capital Stock of the
Company in any single year. The exercise price of each option pursuant to the
1996 Stock Option Plan may not be less than the fair market value of the Capital
Stock on the date of grant. "Fair market value" on any given date is the closing
sales price for shares of Capital Stock of the Company traded on the American
Stock Exchange on such date. Absent a contrary provision in an award agreement,
each option may be exercised up to 25% in the first year following the grant
thereof, up to 50% in the second year, up to 75% in the third year, and after
the third year up to 100%. Unless otherwise specified in an award agreement,
options must be exercised within 10 years of the date of grant unless the period
is reduced due to death or termination of the optionee's employment.
401(k) PLAN
The Company maintains a 401(k) Plan, which is designed to be qualified
under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"). An employee is eligible to participate in the 401(k) Plan following
attainment of the age of 21 and the completion of one year of service with the
Company (1,000 hours within a twelve-month period). Under the 401(k) Plan, as
amended in 1997, subject to the limitations imposed under Section 401(k) and
Section 415 of the Code, a participant is able to elect to defer not more than
18% of his or her compensation by directing the Company to contribute such
amount to the 401(k) Plan on such employee's behalf. The Company may elect to
make matching contributions equal to a portion of the participating employee's
contribution, subject to a maximum matching contribution of no more than 6% of
the participant's salary.
Under the 401(k) Plan, a separate account is established for each employee.
Participants are 100% vested in the contributions and in the earnings thereon
and in the employer's contributions. Distributions from the 401(k) Plan are made
upon termination of service, disability or death in a lump sum or in annual
installments.
PROFIT SHARING PLAN
Prior to December 1, 1997, employees of the Company who were over age 21
and who completed one year of service with the Company were eligible to
participate in the John Francis Roche, Jr. Savings and Profit Sharing Fund (the
"Profit Sharing Plan"), a defined contribution retirement savings program.
Participants in the Profit Sharing Plan were required to contribute at least
2 1/2% but no more than 5% of their compensation, up to a limit of $200 per
year. The Company contributed to the Profit Sharing Plan each year the lesser
of (i) 15% of total compensation (as defined in the Profit Sharing Plan), (ii)
18% of the Company's adjusted net income or (iii) six times the total
participant contributions. The Profit Sharing Plan was terminated by the Board
of Directors on November 30, 1998 and the total value of all savings and vested
Company contributions are being paid out in full to the participants. GreatBanc
Trust Company is the trustee of the Profit Sharing Plan and is administering
the payment to the participants. There are 300 participants in the Profit
Sharing Plan, including executive officers. There were no Company contributions
to the Profit Sharing Plan for the year ended November 30, 1998.
- 14 -
<PAGE>
EXECUTIVE RETIREMENT INCOME CONTRACTS
The Company has entered into individual Executive Retirement Income
Contracts with certain executives in each case providing for payment of annual
retirement benefits to the executive (or his beneficiary in the event of his
death) based on a percentage of the executive's average annual salary (exclusive
of bonuses, profit sharing and other employee benefits) for the five years
preceding retirement, multiplied by the number of full fiscal years of service
in the employ of the Company. Retirement payments terminate a specified number
of years after retirement or in the event the executive engages in specified
competitive activities following retirement. In addition, no retirement benefits
are payable if the executive voluntarily resigns prior to age 65 without the
consent of the Company, or if he is dismissed by the Company for specified
cause. Mr. Doran J. Unschuld is currently receiving payments under his contract
following his retirement in April 1998 as an officer of the Company.
The following table shows the amount of annual retirement benefits payable
under these arrangements at various levels of final five year average salary and
for different years of service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------
REMUNERATION 5 15 25 35 45 50
------------ ------------ ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 7,500 $22,500 $ 37,500 $ 52,500 $ 67,500 $ 75,000
125,000 9,375 28,125 46,875 65,625 84,375 93,750
150,000 11,250 33,750 56,250 78,750 101,250 112,500
175,000 13,125 39,975 65,625 91,875 118,125 131,250
200,000 15,000 45,000 75,000 105,000 135,000 150,000
225,000 16,875 50,625 84,375 118,125 151,875 168,750
250,000 18,750 56,250 93,750 131,250 168,750 187,500
275,000 20,625 61,875 103,125 144,375 185,625 206,250
</TABLE>
As of November 30, 1998, the number of full fiscal years of service with
the Company for officers named in the Cash Compensation Table who are parties to
the above-described arrangements and the amount of salary paid to such officers
during the fiscal year ended November 30, 1998 are as follows: Doran J. Unschuld
- - 46 years, $191,297. Benefit amounts shown in this table are computed on a
straight line annuity basis and are not subject to any deduction for Social
Security benefits or other offsets.
CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into individual Employment Security Agreements with
certain executive officers and key employees in each case providing for
severance payments by the Company in the event that within three years after a
"change in control" (as defined) either the Company terminates the individual's
employment for other than "good cause" (as defined), disability, death, or
normal retirement, or the individual terminates his employment for "good reason"
(as defined). Subject to certain limitations, the amount of the severance
payment equals three (two for employees other than executive officers) times the
sum of (i) such employee's annual salary at the rate in effect at the time of
termination, plus (ii) the maximum bonus such employee could earn for the fiscal
year in which the termination occurs. A "change in control" will in general be
deemed to occur where a third person becomes the owner of 20% or more of the
Capital Stock of the Company or where a corporate transaction occurs, the effect
of which is that persons who were directors of the Company before the
transaction cease to constitute a majority of the Board of Directors.
The Company has also entered into Bonus Agreements with certain executive
officers and other key employees which provide for bonus payments (generally
equal to six months' salary) payable at certain dates if the individual remains
continuously employed by the Company through such dates (the "Stay Periods").
The agreements also provide
- 15 -
<PAGE>
for bonus payments (equal to six to twelve months' salary) payable if a change
of control of the Company occurs during a Stay Period. A "change in control"
will be deemed to occur when (a) the current stockholders of the Company cease
to be beneficial owners, directly or indirectly, of a majority of stock of the
Company, or any successor company, or (b) all or substantially all of the
Company's assets are sold or otherwise disposed of. The agreements are intended
to provide an incentive for the executive officers and key employees to remain
in the employment of the Company until a purchaser for the Company can be found.
The Company also entered into a Consulting Agreement with The
Dratt-Campbell Company providing for certain payments to Arnold H. Dratt in the
event of a change in control of the Company. Such agreement is discussed below.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AGREEMENTS WITH ARNOLD H. DRATT
The Company is a party to a Consulting Agreement (the "Consulting
Agreement") dated as of October 1, 1998 with The Dratt-Campbell Company, a
consulting company of which Mr. Dratt is the President and co-founder
("DrattCampbell"). Under the terms of the Consulting Agreement, Dratt-Campbell
shall make Mr. Dratt available for service as the Company's President and Chief
Executive Officer, and the Company shall pay to Mr. Dratt consulting fees of
$25,000 per month plus certain related expenses including monthly medical
premiums and automobile allowances. The Consulting Agreement also provides that
in the event of a "change in control" (as defined) the Company will pay Mr.
Dratt a lump sum amount equal to twelve (12) times the sum of (a) his monthly
consulting fee and (b) his related expenses. In the event that a change in
control occurs within the six month period following the termination of the
Consulting Agreement (i) by the Company other than for "cause" (as defined), or
(ii) by Mr. Dratt for "good reason" (as defined), the Company shall pay Mr Dratt
a lump sum amount equal to six (6) times the sum of (a) his monthly consulting
fee and (b) his related expenses. A "change in control" is defined in the
Consulting Agreement as (a) the merger, consolidation or reorganization of the
Company with or into another corporation or legal person, the result of such
merger, consolidation or reorganization being that less than 50% of the
outstanding voting securities of the surviving entity are owned in the aggregate
by stockholders of the Company; (b) the sale, transfer or conveyance by the
Company of all of its business or assets to another legal person, less than 50%
of the outstanding voting securities of which are owned by stockholders of the
Company; (c) the filing with the Securities and Exchange Commission of a
Schedule 13D, Schedule 14D-1, or other public announcement disclosing that any
person or group has become the beneficial owner of more than 50% of the
outstanding voting shares of the Company; (d) the failure of the members of the
"incumbent board" (as defined) to constitute a majority of the Board of
Directors during the term of the Consulting Agreement; or (e) the dissolution or
liquidation of the Company by its stockholders. The Consulting Agreement shall
terminate on October 1, 2000, unless earlier terminated or extended by written
agreement of the Company and Dratt-Campbell. During fiscal 1998, the Company
paid consulting fees of $50,000 in connection with the Consulting Agreement.
The Company was also party to an earlier consulting agreement with
Dratt-Campbell, pursuant to which Mr. Dratt provided consulting services to
the Company from January 1998 until October 1998. During fiscal 1998, the
Company paid consulting fees of $240,000 to Dratt-Campbell pursuant to the
terms of this agreement.
PROPOSAL 2: APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY TO "SAMES CORPORATION"
The Board of Directors has adopted, and is recommending to the stockholders
for their approval at the Annual Meeting, a resolution to amend Article First of
the Company's Restated Certificate of Incorporation to change the corporate
name. The applicable text of the Board's resolution is as follows:
"RESOLVED, that Article First of the Company's Restated Certificate of
Incorporation be amended to read in its entirety as follows:
FIRST: The name of the corporation is "SAMES CORPORATION."
- 16 -
<PAGE>
In the judgment of the Board of Directors, the change of corporate name is
desirable in view of the sale by the Company of certain assets related to its
standard products lines and its current focus on its electrostatic spray
finishing and coating lines, traditionally the business of its Sames' divisions.
If the amendment is adopted, stockholders will not be required to exchange
outstanding stock certificates for new certificates.
Approval of this Proposal 2 requires the affirmative vote of a majority of
the outstanding shares of capital stock of the Company entitled to vote at the
Annual Meeting. Abstentions and broker non-votes have the effect of a vote
against this Proposal 2. If approved by the stockholders, the amendment to
Article First will become effective upon filing with the Secretary of State of
Delaware a Certificate of Amendment to the Company's Restated Certificate of
Incorporation, which filing is expected to take place shortly after the Annual
Meeting. If this proposal is not approved by the stockholders, the Certificate
of Amendment will not be filed.
THE BOARD BELIEVES THAT THE PROPOSAL TO AMEND THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO CHANGE THE CORPORATE NAME IS IN THE BEST
INTEREST OF THE COMPANY AND RECOMMENDS A VOTE FOR APPROVAL OF PROPOSAL 2.
PROPOSAL 3: RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the shareholders to ratify the selection of KPMG LLP
("KPMG") as the Company's independent accountants for the fiscal year ending
November 30, 1999. The affirmative vote of a majority of the outstanding voting
shares of the Company present or represented and entitled to vote at the Annual
Meeting, is required to ratify the selection of KPMG. Abstentions will have the
effect of voting against this Proposal 3. Broker non-votes will have no effect
on the vote.
In the event the stockholders fail to ratify the appointment, the Board
of Directors will reconsider its selection. Even if the selection is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
stockholders' best interests.
Representatives of KPMG will be present at the Annual Meeting, will have
the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF KPMG TO SERVE AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING NOVEMBER 30, 1999.
OTHER MATTERS
Proxies will be voted for the election of the above named nominee as
director unless otherwise indicated on the proxy. Management does not know of
any other matters which are likely to be brought before the Annual Meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote such proxy in accordance with their
judgment on such matters.
- 17 -
<PAGE>
STOCKHOLDER PROPOSALS FOR
THE 2000 ANNUAL MEETING
NOMINATIONS FOR THE BOARD OF DIRECTORS
The Company's By-Laws provide that written notice of proposed stockholder
nominations for the election of directors at an Annual Meeting must be given to
the Secretary of the Company no earlier than February 1 and no later than
February 25 immediately preceding the meeting. Notice to the Company from a
stockholder who proposes to nominate a person for election as a director must
contain certain information about that person, including age, business and
residence addresses and such other information as would be required to be
included in a proxy statement soliciting proxies to nominate that person. If the
Chairman of the Annual Meeting determines that a person was not nominated in
accordance with the foregoing procedures, such person shall not be eligible for
election as a director.
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal to be considered for
action at the 2000 Annual Meeting of Stockholders and to be included in the
Company's proxy materials, the proposal must be in proper form and received by
the Secretary of the Company on or before November 19, 1999, for review and
consideration for inclusion in the Company's proxy statement and form of proxy
relating to that meeting. Any such proposal will be subject to 17 C.F.R. Section
240.14a-8 ("Rule 14a-8") of the Rules and Regulations promulgated under the
Securities Exchange Act of 1934, as amended.
In addition, the Company's By-Laws require that written notice of proposals
by stockholders to be presented at an Annual Meeting be delivered to the
Secretary of the Company no earlier than February 1 and no later than February
25 immediately preceding the meeting. Such notice to the Company must set forth
(i) a brief description of the business desired to be brought before the Annual
Meeting and the reasons for conducting such business at the Annual Meeting, (ii)
the name and record address of the stockholder proposing such business, (iii)
the number of shares beneficially owned by the stockholder and (iv) any material
interest of the stockholder in such business. Notice to the Company from a
stockholder who proposes to nominate a person for election as a director must
contain certain information about that person, including age, business and
residence addresses and such other information as would be required to be
included in a proxy statement soliciting proxies to nominate that person. These
requirements apply to any matter that a stockholder wishes to raise at an annual
meeting, including those matters raised other than pursuant to the procedures of
Rule 14a-8. Nothing in this paragraph shall be deemed to require the Company to
include in its proxy statement or the proxy relating to any annual meeting any
stockholder proposal which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is received.
By order of the Board of Directors,
GUY E. SNYDER, SECRETARY
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<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
PROXY BINKS SAMES CORPORATION PROXY
Proxy for Annual Meeting of Stockholders to be Held on April 27, 1999
This Proxy is Solicited on Behalf of the Board of Directors
Arnold H. Dratt and Wayne F. Edwards, or any of them, with full power of
substitution, are hereby authorized to vote the shares of Capital Stock of
Binks Sames Corporation (the "Company") which the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held at 222 North LaSalle
Street, 4th Floor Conference Room, Chicago, Illinois 60601, on April 27, 1999,
at 10:00 A.M., and at all adjournments thereof, as follows:
PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE HEREOF AND
RETURN PROMPTLY USING THE ENCLOSED envelope
<PAGE>
BINKS SAMES CORPORATION
Please mark vote in oval in the following manner using dark ink only
For Withhold For All
All All Except
1. ELECTION OF DIRECTOR / / / / / /
George L. Joeckel, Jr.
2. Approval of an amendment to Article For Against Abstain
First of the Company's Restated / / / / / /
Certificate of Incorporation, as
amended, to change the name of the
Company to "Sames Corporation".
3. Ratification of KMPG LLP as the For Against Abstain
Company's independent accountants / / / / / /
for the fiscal year ending
November 30, 1999.
4. In their discretion, the proxies
are authorized to vote upon such
other matters as may properly come
before the meeting.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS NOTED ABOVE.
Please sign your name or names on the
signature lines below in the exact form
appearing hereon.
Dated ____________________________ ,1999
________________________________________
(Signature(s) of Stockholder(s)
_______________________________________
(Signature(s) of Stockholder(s)
- FOLD AND DETACH HERE -
