<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MAGNETIC TECHNOLOGIES CORPORATION
---------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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> 2
[MAGNETIC TECHNOLOGIES CORPORATION LOGO]
MAGNETIC TECHNOLOGIES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 14, 1995
The Annual Meeting of the Stockholders of Magnetic Technologies
Corporation will be held at the Industrial Management Council in the Hutchison
House, 930 East Avenue, Rochester, New York, on Thursday, December 14, 1995, at
11:00 A.M., for the following purposes:
1. Election of five Directors.
2. Such other matters as may properly come before the meeting.
All stockholders of record at the close of business on November 1, 1995,
will be entitled to vote at the meeting.
Susan M. Weise
Secretary
November 10, 1995
PLEASE SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE IN
PERSON IF YOU SO DESIRE.
<PAGE> 3
[MAGNETIC TECHNOLOGIES CORPORATION LOGO]
MAGNETIC TECHNOLOGIES CORPORATION
PROXY STATEMENT
GENERAL
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Magnetic Technologies Corporation ("the
Company") for use at the Annual Meeting of Stockholders to be held on December
14, 1995, at 11:00 A.M., at 930 East Avenue, Rochester, New York, and any
adjournments thereof. The proxy materials and the Company's Annual Report
for the fiscal year ended July 31, 1995 (fiscal 1995), are first being mailed
on or about November 10, 1995 to stockholders of record as of the close of
business on November 1, 1995 ("the Record Date").
A stockholder giving a proxy has the power to revoke it at any time prior to
its exercise by written revocation, by submission of a later- dated proxy or by
the stockholder's attendance and vote at the meeting. The cost of solicitation
of proxies will be borne by the Company. In addition to solicitation by mail,
officers of the Company may solicit proxies by telephone or personal
interviews. Arrangements may also be made with banks, brokerage firms and
others to forward proxy materials to beneficial owners of the Company's Common
Stock at the Company's expense.
VOTING SECURITIES
As of the Record Date, there were outstanding and entitled to vote
approximately 2,786,650 shares of Common Stock of the Company, $.15 par value
("Common Stock"), each of which will be entitled to one vote on each matter
submitted to the stockholders for voting at the meeting. The election of
Directors and all other matters submitted to a vote at the meeting will be
decided by the vote of a majority of all votes cast in person or by proxy at
the meeting. Abstentions will be treated as shares present and entitled to
vote for purposes of determining the presence of a quorum.
The following table sets forth, as of September 10, 1995, the number of
shares of the Company's Common Stock held by, or issuable to, (a) each Director
and Director nominee, (b) each Executive Officer, (c) all Directors and
Executive Officers as a group and (d) each person known by the Company to be
the beneficial owner of more than 5% of the Company's Common Stock:
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<PAGE> 4
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (a)
---------------------------------------------- -------------------- ----------
<S> <C> <C>
Named Directors and Executive Officers:
John B. Biemiller 63,062 2.3
12 Creekside Lane
Rochester, NY 14618
G. Thomas Clark 42,375(b) 1.5
360 Bonnie Brae Avenue
Rochester, NY 14618
Isadore Diamond 304,312(c) 10.9
7811 NW 85th Avenue
Tamarac, FL 33321
Bernard Kozel 5,000(d) 0.2
1 Woodbury Place
Rochester, NY 14618
Gordon H. McNeil 363,280(e) 12.1
44 Oak Meadow Trail
Pittsford, NY 14534
Jerry D. McKibben -- --
6579 Woodland Trail
Canandaigua, NY 14424
Directors and Executive Officers as a Group 778,029 25.7
Other 5% Beneficial Owners:
Richard Hall 250,541 9.0
280 Estrellita
Ft. Myers Beach, FL 33931
Elliott Landsman 187,500 6.7
3 Townline Circle
Rochester, NY 14623
<FN>
(a) Based, in each case, upon the Company's current outstanding shares plus
that number of shares which the named person or group has the right to
acquire (that is, options which are exercisable within 60 days).
(b) Includes an option to purchase 7,500 shares at $2.55 per share expiring
September 1997.
(c) Includes 8,250 shares held by Mr. Diamond's wife (in which shares he
disclaims beneficial interest).
(d) Includes an option to purchase 5,000 shares at $4.63 per share expiring
March 2000.
(e) Includes 67,500 shares held by Mr. McNeil's wife plus 15,375 shares held by
his wife as custodian for their two minor children (in all of which shares
he disclaims beneficial interest). Includes an option to purchase 150,000
shares at $2.33 per share expiring in May 1997. Includes 75,000 shares of
an option to purchase 112,500 shares at $2.50 per share expiring in January
2003 (the 37,500 share balance will vest in January 1996).
</TABLE>
3
<PAGE> 5
ELECTION OF DIRECTORS
At the meeting, five Directors will be elected to hold office until their
successors are elected and qualify. Unless authority is withheld with respect
to any individual nominee or all of the nominees, the enclosed proxy will be
voted for the election of the five Director candidates set forth below. In the
event that any of the nominees unexpectedly becomes unavailable for election,
the proxy will be voted for the election of such substitute nominee as the
proxy holders in their discretion shall determine.
Following is information about each Director, Director nominee and Executive
Officer of the Company as of October 1, 1995, as well as the recent business
experience of each:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE SINCE CURRENT COMPANY OFFICES
- ---------------------------- ----- ----------- ----------------------------------------
<S> <C> <C> <C>
Director Nominees:
John B. Biemiller 58 1986 None (a)
G. Thomas Clark 57 1992 None (b)
Isadore Diamond 76 1969 Chairman of Board and Treasurer (c)
Bernard Kozel 74 1994 None (d)
Gordon H. McNeil 54 1974 President and CEO (c)
Other Executive Officers:
Jerry D. McKibben 47 N/A Vice President and General Manager of the
Austro Mold Group (e)
<FN>
(a) A former commercial bank Vice President, Mr. Biemiller is now Chairman and
CEO of the Hebert Companies, Rochester, New York.
(b) Mr. Clark is Senior Vice President Finance, Secretary and Treasurer of
Paychex, Inc. He is also a member of its Board of Directors.
(c) Mr. Diamond served as Chief Executive Officer of the Company until Mr.
McNeil assumed that position in 1985. Based upon their joint management of
the Company for more than two decades and their aggregate beneficial
ownership of 23% of the Company's Common Stock (see table on page 3), they
could be considered to be "control persons" or "parents" with respect to
the Company.
(d) Mr. Kozel is President of KG Capital Corporation, a venture capital
company. He was the founder and Chairman of Kayex Corporation prior to its
sale to General Signal Corporation.
(e) Mr. McKibben joined the Company in August 1994. He was previously the
Manager of the Plastics Division of Wynn's Precision, Inc. in Lebanon,
Tennessee.
</TABLE>
The Board of Directors has an Audit Committee consisting of Messrs.
Biemiller, Clark and Kozel, and a Compensation Committee consisting of the same
Directors and Mr. Diamond. The Audit Committee has the function of
recommending selection of the Company's auditors, negotiating the audit fee,
interacting with the auditors with respect to the auditor's report and making
recommendations to the Board with respect to financial matters. The
Compensation Committee has the function of making recommendations to the Board
with respect to Executive Officer compensation. The Board has no standing
Nominating Committee nor any committee performing similar functions.
During fiscal 1995, there were held four meetings of the Board of Directors,
and one meeting each of the Audit Committee and of the Compensation Committee.
Each Director attended at least 75% of the total meetings of the Board and of
committees on which he served during fiscal 1995.
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TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
The Company subleases a building to house its main plant and offices at 770
Linden Avenue, Rochester, New York, at a rent of $30,468 per month through
October 2000. The sublessor of the premises is Linden Properties, a New York
general partnership in which the two principal partners are Isadore Diamond,
who is a Director, Executive Officer and owner of more than 5% of the
Company's Common Stock, and Elliott Landsman, who is also an owner of more than
5% of the Company's Common Stock. During fiscal 1995 and 1994, Mayzon
Corporation, a property management company owned by Mr. Landsman, performed
construction work on the Company's premises for which the Company paid $68,000
and $21,000, respectively.
During fiscal 1989, the Company acquired a machining center, consisting of
approximately $750,000 of equipment, through a lease with Linden Properties,
the partnership referred to above which is the sublessor of the building
comprising the Company's plant and offices. Bank financing of the equipment
was unavailable to the Company at the time, and the terms of the equipment
lease were more favorable to the Company than any other financing which it
could obtain. The lease was for a one-year term with the right to renew for
four successive one-year periods. The Company subsequently exercised its right
to renew the lease for each of the fiscal years through fiscal 1993. The
Company paid a rental of $20,000 per month under the lease. During fiscal
1994, as a result of negotiations with Linden Properties and the Company's
bank, the Company purchased the equipment, financing it through its bank under
a five-year capital lease with a lower monthly rent based upon an independent
appraisal of the equipment.
EXECUTIVE COMPENSATION
THREE-YEAR COMPENSATION SUMMARY. The following table summarizes the Company's
compensation of its Executive Officers for the past three fiscal years:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ($) AWARDS ALL
------------------------------------- --------------------- OTHER
NAME AND OTHER ANNUAL SECURITIES UNDERLYING COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(a) OPTIONS/SARS (#) SATION($)(b)
------------------- ------ --------- -------- ---------------- --------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Gordon H. McNeil 1995 $218,623 -- -- -- $ 5,609
President and 1994 $196,883 -- -- -- $ 11,583
Chief Executive 1993 $217,600 $10,000 $ 53,125 (c) 112,500 shares (d) $ 14,075
Officer
Isadore Diamond 1995 $132,000 -- -- -- --
Chairman of Board 1994 $132,000 -- -- -- --
and Treasurer 1993 $132,000 -- $154,063 (c) -- $ 1,093
<FN>
(a) Does not include certain perquisites and other personal benefits the value of which in each case did
not exceed the lesser of $50,000 or 10% of the Executive Officer's total salary and bonus in the fiscal
year.
(b) Includes insurance premiums paid by the Company on policies in which the executive or his estate is the
beneficiary.
(c) Represents the difference between the conversion price of former debentures and the closing bid price of
the Company's Common Stock on the date on which the debentures were converted into Common Stock.
(d) Converted into current shares reflecting a subsequent stock split.
</TABLE>
5
<PAGE> 7
OPTION/SAR GRANTS IN LAST FISCAL YEAR. No stock options or stock appreciation
rights ("SARs") were granted by the Company to Executive Officers during fiscal
1995. There are no outstanding SARs.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES. No stock options were exercised by any of the Company's
Executive Officers during fiscal 1995. The following table sets forth
information concerning the amounts and values of unexercised stock options as
of the end of fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FY-END (#) OPTIONS/SARS AT FY-END ($) (a)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------- ----------------------------- -------------------------------
<S> <C> <C>
Gordon H. McNeil 225,000 / 37,500 $728,625 / $117,188
Isadore Diamond -- / -- -- / --
<FN>
(a) Figures represent the difference between the $5.625 average of the bid
and asked prices of the Company's Common Stock as of July 31, 1995 and
the exercise prices of the outstanding options.
</TABLE>
LONG-TERM INCENTIVE PLANS. During fiscal 1995, the Company made no awards to
Executive Officers of long-term plans providing compensation intended to serve
as incentive for performance.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS. The Company has no employment contracts with any of its
Executive Officers. The Company has no pension plan, nor any severance plan,
salary continuation policy, "golden parachute" plan, or any other plan or
arrangement pertaining to the resignation, retirement or termination of any
Executive Officer's employment or any change of control of the Company.
COMPENSATION OF DIRECTORS. Executive Officers are not separately compensated
by the Company for services rendered in their capacity as Directors or members
of any committee of the Board of Directors. Other Directors ("outside
Directors"), consisting of Messrs. Biemiller, Clark and Kozel, are compensated
at the rate of $1,250 per Board meeting and $750 per committee meeting
attended. In addition, Mr. Clark holds an option, which was granted to him
upon becoming a Director, to purchase 7,500 shares of the Company's Common
Stock at a price of $2.55 per share. Mr. Kozel holds an option, which was
granted to him upon becoming a Director in fiscal 1995, to purchase 5,000
shares of the Company's Common Stock at a price of $4.63 per share. Mr.
Biemiller formerly held two options to purchase a total of 18,750 shares of the
Company's Common Stock, which options he exercised during fiscal 1994 and
fiscal 1995.
SECURITIES REPORTING REQUIREMENTS
Based upon a review of Forms 3, 4 and 5 furnished to the Company by
Directors, Officers and beneficial owners of more than 10% of the Company's
Common Stock during, and with respect to, fiscal 1995, to the best of the
Company's knowledge, no person subject to Section 16 of the Securities Exchange
Act of 1934 failed to file such reports on a timely basis during fiscal 1995 as
required by that Act.
INDEPENDENT PUBLIC ACCOUNTANTS
Price Waterhouse LLP has been the Company's independent auditor since 1988.
The Board of Directors selects the auditor each year. No selection has yet
been made for fiscal 1996 because the decision is normally made after the prior
year's audit report has been reviewed by the Audit Committee. Representatives
of Price Waterhouse LLP are expected to be present at the Meeting to respond to
appropriate questions and to make a statement to stockholders if they desire to
do so.
6
<PAGE> 8
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Any proposal which a stockholder wishes to be presented at the Annual
Meeting of Stockholders following fiscal 1996 must be received by the Secretary
of the Company prior to July 31, 1996, in order to be placed before the
stockholders.
The Board of Directors knows of no other matters which may be presented for
consideration at the Meeting. However, if any other matters come before the
Meeting, the persons named as proxy holders in the enclosed proxy will have
discretionary authority to vote the shares represented thereby in accordance
with their judgment.
By Order of the Board of Directors
Susan M. Weise
Secretary
November 10, 1995
ENCLOSED WITH THIS PROXY STATEMENT IS THE ANNUAL REPORT TO STOCKHOLDERS FOR
FISCAL 1995, INCLUDING THE FORM 10-KSB AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION WHICH IS INCORPORATED HEREIN BY REFERENCE. THE COMPANY
WILL FURNISH A COPY OF THE EXHIBITS TO THE FORM 10-KSB WITHOUT CHARGE TO ANY
STOCKHOLDER SUBMITTING A WRITTEN REQUEST ADDRESSED TO SUSAN M. WEISE, SECRETARY
OF THE COMPANY, AT 770 LINDEN AVENUE, ROCHESTER, NY 14625.
7
<PAGE> 9
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
MAGNETIC TECHNOLOGIES CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- DECEMBER 14, 1995
The undersigned hereby appoints ISADORE DIAMOND and GORDON H. McNEIL,
and each of them, proxies for the undersigned, with full power of substitution,
to vote as designated below all the shares of Common Stock of MAGNETIC
TECHNOLOGIES CORPORATION which the undersigned would be entitled to vote at the
Annual Meeting of Stockholders to be held at the Industrial Management Council
in the Hutchison House, 930 East Avenue, Rochester, New York, on Thursday,
December 14, 1995, at 11:00 A.M., and at all adjournments thereof, on the
following matters:
(1) ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below, except as deleted.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME BELOW.
J. Biemiller G.T. Clark I. Diamond B. Kozel G. McNeil
[ ] WITHHOLD AUTHORITY to vote for the nominees as a group.
(2) OTHER BUSINESS: In their discretion, upon such other matters as
may come before the meeting.
THIS PROXY WILL BE VOTED AS DIRECTED ABOVE. UNLESS AUTHORITY TO VOTE
FOR ONE OR MORE OF THE NOMINEES IS WITHHELD PURSUANT TO ABOVE INSTRUCTIONS,
THIS PROXY WILL BE VOTED FOR EACH OF THE DIRECTOR NOMINEES.
(continued, and to be signed, on the other side)
(continued from the other side)
The undersigned acknowledges receipt of the Annual Meeting Notice, Proxy
Statement and 1995 Annual Report.
Dated:__________________________________, 1995
______________________________________________
Signature of Stockholder
______________________________________________
Signature of Co-Owner
Please date this Proxy and sign exactly as your
name appears hereon. For a joint account, all
co-owners must sign. When signing as attorney,
executor, administrator, trustee, guardian or
officer of a corporation, please use full
title.
