<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
K-TRON INTERNATIONAL, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
K-TRON INTERNATIONAL, INC.
Routes 55 & 553
P.O. Box 888
Pitman, New Jersey 08071-0888
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 6, 1995
----------------------------------------
To Our Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of
K-Tron International, Inc. (the "Company") will be held on October 6, 1995 at
11:00 a.m., local time, at the Company's principal executive offices at Routes
55 and 553, Pitman, New Jersey for the following purposes:
(1) To elect one director to Class II of the Board of Directors, to
serve for a four-year term and until the election and qualification of his
successor; and
(2) To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on August 11,
1995 are entitled to notice of the Annual Meeting and to vote at the Annual
Meeting and any adjournments thereof. The transfer books will not be closed.
By Order of the Board of Directors,
Edward B. Cloues, II
Secretary
August 21, 1995
YOUR PROXY VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE,
SIGN AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
--------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 6, 1995
--------------------------------------
This Proxy Statement is being furnished to the shareholders of K-Tron
International, Inc. (the "Company") in connection with the Annual Meeting of
Shareholders of the Company to be held on October 6, 1995 and any adjournments
thereof (the "Annual Meeting"). This Proxy Statement and the enclosed Proxy
Card are being mailed to shareholders on or about August 21, 1995.
Execution and return of the enclosed Proxy Card are being solicited by
and on behalf of the Board of Directors of the Company for the purposes set
forth in the foregoing notice of meeting. The costs incidental to the
solicitation and obtaining of proxies, including the cost of reimbursing banks
and brokers for forwarding proxy materials to their principals, will be borne
by the Company. Proxies may be solicited, without extra compensation, by
officers and employees of the Company by mail, telephone, telefax, personal
interviews and other methods of communication.
The Annual Report to Shareholders for the fiscal year ended December
31, 1994, including consolidated financial statements and other information
with respect to the Company and its subsidiaries, is being mailed to
shareholders with this Proxy Statement. Such Annual Report is not part of this
Proxy Statement.
VOTING AT THE MEETING
RECORD DATE; PROXIES
Only shareholders of record at the close of business on August 11,
1995 are entitled to notice of the Annual Meeting and to vote at the Annual
Meeting and any adjournments thereof. As of that date, the Company had
outstanding 3,103,573 shares of Common Stock. The holders of a majority of the
outstanding shares of Common Stock, represented in person or by proxy, shall
constitute a quorum at the Annual Meeting. Each shareholder entitled to vote
shall have the right to one vote for each share of Common Stock outstanding in
his, her or its name.
The shares of Common Stock represented by each properly executed Proxy
Card will be voted at the Annual Meeting in the manner directed therein by the
shareholder signing such Proxy Card. The Proxy Card provides a space for a
shareholder to withhold authority to vote for the nominee for the Board of
Directors. The nominee is to be elected by a plurality of the votes cast at
the Annual Meeting. For purposes of determining the
<PAGE> 4
number of votes cast with respect to any voting matter, only those cast "for"
or "against" are included. If a signed Proxy Card is returned and the
shareholder has given no direction with respect to a voting matter, the shares
will be voted with respect to that matter by the proxy agents as recommended by
the Board of Directors or its Executive Committee. Execution and return of the
enclosed Proxy Card will not affect a shareholder's right to attend the meeting
and vote in person. Any shareholder giving a proxy has the right to revoke it
by giving notice of revocation to the Secretary of the Company at any time
before the proxy is voted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 31, 1995
(or as of such other date as may be noted below) with respect to shares of
Common Stock of the Company beneficially owned by each person believed by the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock, by each director of the Company, by each executive officer of the
Company who was serving as such on December 31, 1994 and by all current
directors and executive officers of the Company as a group. Except as
indicated below, the Company understands that the shareholders listed in such
table have sole voting and investment power with respect to the shares owned by
them. The number of shares indicated in the table below includes shares
issuable upon the exercise of outstanding stock options held by the persons or
the group to the extent that such options are exercisable on or within 60 days
after July 31, 1995. In the case of directors and executive officers, the
information below has been provided by them at the request of the Company.
<TABLE>
<CAPTION>
Number of Shares Percent of Common
Name of Individual or Identity of Group of Common Stock Stock Outstanding
--------------------------------------- --------------- -----------------
<S> <C> <C>
Estate of Dr. Mario Gallo(1) . . . . . . . . . . . . . . . 457,400 14.7
David L. Babson & Company, Inc.(2) . . . . . . . . . . . . 346,200 11.2
Johannes Wirth(3) . . . . . . . . . . . . . . . . . . . . . 307,400 9.9
T. Rowe Price Associates, Inc.(4) . . . . . . . . . . . . . 200,000 6.4
Dimensional Fund Advisors Inc.(5) . . . . . . . . . . . . . 162,400 5.2
Kenneth W. Bullivant(6) . . . . . . . . . . . . . . . . . . 102,200 3.3
Leo C. Beebe(7)(8) . . . . . . . . . . . . . . . . . . . . 61,964 2.0
Edward B. Cloues, II(7). . . . . . . . . . . . . . . . . . 37,000 1.2
Marcel O. Rohr(9) . . . . . . . . . . . . . . . . . . . . . 20,478 *
Dr. Hans-Jurg Schurmann(7) . . . . . . . . . . . . . . . . 16,000 *
Robert L. Weinberg(7)(10) . . . . . . . . . . . . . . . . . 14,003 *
Norman Cohen(7) . . . . . . . . . . . . . . . . . . . . . . 12,219 *
Jean Head Sisco(7) . . . . . . . . . . . . . . . . . . . . 9,500 *
Richard J. Pinola(7) . . . . . . . . . . . . . . . . . . . 5,000 *
Martin W. Schuler . . . . . . . . . . . . . . . . . . . . . 2,770 *
All current directors and executive officers
as a group (8 persons)(11) . . . . . . . . . . . . . . . . 463,086 14.7
------------------
</TABLE>
* Less than 1%.
(1) As reflected in a Schedule 13G dated January 27, 1982, except that Dr.
Gallo is deceased and the Company believes the shares are now held by
Dr. Gallo's estate. The most recent address known to the Company for
the Estate of Dr. Gallo was c/o Burckhardt, Treuhand & Revisions AG,
Postfach, Scheideggstrasse 73, CH-8038, Zurich, Switzerland.
-2-
<PAGE> 5
(2) As reflected in a Schedule 13G dated February 10, 1995. According to
David L. Babson & Company, Inc. ("Babson"), it (i) is a registered
investment adviser under the Investment Advisers Act of 1940, (ii) has
the sole power to dispose or to direct the disposition of all of such
shares and (iii) has the sole power to vote or direct the vote as to
51,100 shares and shared power to vote or to direct the vote as to
95,100 shares. The principal address of Babson is One Memorial Drive,
Cambridge, Massachusetts 02142- 1300.
(3) The address of Mr. Wirth is Sonnenbergstrasse 55, CH-8032, Zurich,
Switzerland.
(4) As reflected in Amendment No. 2 to Schedule 13G dated February 14,
1995. According to T. Rowe Price Associates, Inc. ("Price
Associates"), these shares are all owned by T. Rowe Price Small Cap
Value Fund, Inc., a registered investment company, for which Price
Associates, a registered investment adviser under the Investment
Advisers Act of 1940, serves as investment adviser with power to
direct investments and/or shared power to vote the shares. For
purposes of the reporting requirements of the Securities Exchange Act
of 1934, Price Associates is deemed to be a beneficial owner of such
shares; however, Price Associates expressly disclaims that it is, in
fact, the beneficial owner of such shares. The principal address of
Price Associates is 100 East Pratt Street, Baltimore, Maryland 21202.
(5) As reflected in Amendment No. 5 to Schedule 13G dated January 31,
1995. According to Dimensional Fund Advisors Inc. ("Dimensional"), a
registered investment adviser under the Investment Advisers Act of
1940, it was deemed to have beneficial ownership of 162,400 shares as
of December 31, 1994, all of which shares were held in portfolios of
DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in a series of the DFA Investment Trust Company, a
Delaware business trust company, or the DFA Group Trust and the DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, as to all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such
shares. Dimensional has a principal business address at 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401.
(6) Includes 52,000 shares owned by Mr. Bullivant's wife, as to which Mr.
Bullivant disclaims beneficial ownership.
(7) Includes with respect to Mr. Beebe 7,000 shares, Mr. Cloues 10,000
shares, Dr. Schurmann 5,000 shares, Mr. Weinberg 9,500 shares, Mr.
Cohen 10,000 shares, Mrs. Sisco 7,500 shares and Mr. Pinola 5,000
shares, all of which shares are subject to presently exercisable
installments of options.
(8) Includes 54,964 shares as to which Mr. Beebe shares investment and
voting power with his wife.
(9) Includes 20 shares owned of record by Mr. Rohr as custodian for his
son. Mr. Rohr disclaims beneficial ownership as to all such shares.
(10) Includes 2,000 shares owned by Mr. Weinberg's wife, as to which Mr.
Weinberg disclaims beneficial ownership.
(11) Includes 54,000 shares subject to presently exercisable installments
of options.
-3-
<PAGE> 6
MATTERS CONCERNING DIRECTORS
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven directors and is
classified with respect to terms of office into four classes. The Class II
director elected at the Annual Meeting will serve until the 1999 annual meeting
of shareholders and until such director's successor has been elected and
qualified, except in the event of such director's earlier death, resignation or
removal. The terms of office of the Class I, Class III and Class IV directors
will expire at the annual meetings to be held in 1998, 1996 and 1997,
respectively, upon the election and qualification of their successors.
The Board of Directors, acting on the recommendation of the Chairman
of its Nominating Committee (Mr. Wirth being the other member), has nominated
Mr. Johannes Wirth for election as the Class II director.
The persons named as proxy agents in the enclosed Proxy Card intend
(unless instructed otherwise by a shareholder) to vote for the election of Mr.
Wirth as the Class II director. In the event that the nominee should become
unable to accept nomination or election (a circumstance which the Board of
Directors does not expect), the proxy agents intend to vote for any alternate
nominee designated by the Board of Directors or its Executive Committee or, in
the discretion of the Board or its Executive Committee, the position may be
left vacant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE CLASS II NOMINEE.
Set forth below is certain information with respect to the nominee for
director and each other person currently serving as a director of the Company
whose term of office will continue after the Annual Meeting, including the
class and term of office of each such person. This information has been
provided by each director at the request of the Company.
Class I--Directors with Terms Continuing until 1998
DR. HANS-JURG SCHURMANN. Dr. Schurmann has been a director since
November 1993 and was most recently reelected at the 1994 annual meeting of
shareholders. Dr. Schurmann is a senior partner in the law firm of Schurmann,
Rausch & Rohrer in Zurich, Switzerland, and has been a partner in that firm
since 1979. Dr. Schurmann serves on the boards of numerous European companies,
including Ascent Holding AG (Luxembourg), Bellaplast Holding AG (Switzerland)
and Discorack-NCO AG (Switzerland). Dr. Schurmann is 50 years of age.
JEAN HEAD SISCO. Mrs. Sisco has been a director since September 1993
and was most recently reelected at the 1994 annual meeting of shareholders.
Since 1979, Mrs. Sisco has been a partner in Sisco Associates, a management
consulting firm based in Washington, D.C. which specializes in international
risk and trade analysis. Mrs. Sisco serves as a director of Textron, Inc.,
Santa Fe Pacific Corporation, Santa Fe Pacific Gold Corporation, Chiquita
Brands International, The Neiman-Marcus Group, Washington Mutual Investors Fund
and American Funds Tax-Exempt Series II. She is also the Chairman of the
National Association of Corporate Directors and was the first woman director of
the Metropolitan Washington Board of Trade. Mrs. Sisco is 69 years of age.
Class II--Nominee for Term Continuing until 1999
JOHANNES WIRTH. Mr. Wirth has been a director since May 1978 and was
most recently reelected at the 1991 annual meeting of shareholders. Since
1983, he has been an owner and Managing Director of Wirth Gallo Messtechnik AG,
a Swiss research firm specializing in weighing and measuring techniques. He
has also served as a consultant to the Company since April 1991. (see "Matters
Concerning Directors - Other Compensation Arrangements"). Mr. Wirth is 64
years of age.
-4-
<PAGE> 7
Class III--Directors with Terms Continuing until 1996
NORMAN COHEN. Mr. Cohen has been a director since 1974 and was most
recently reelected at the 1992 annual meeting of shareholders. He was Chairman
of the Board of Edward Burton Limited, a clothing manufacturer, from 1986 until
1991, a consultant in the clothing business from 1991 until 1993, and since
1993 has been Chairman and Chief Executive Officer of Creative Contracting
Associates, Inc., a clothing manufacturer. Mr. Cohen filed a petition under
chapter 7 of the federal Bankruptcy Code in the United States Bankruptcy Court
for the Middle District of Florida in September 1993, and was discharged in
January 1994. Mr. Cohen is 69 years of age.
RICHARD J. PINOLA. Mr. Pinola has been a director since January 1994
when he was appointed by the Board of Directors to fill a Board vacancy. Since
January 1994, Mr. Pinola has served as Chairman and Chief Executive Officer of
Right Management Consultants, Inc., a publicly-held human resource consulting
and career management firm, and from July 1992 through December 1993 he was
President and Chief Executive Officer of that company. Prior to joining Right
Management Consultants, Mr. Pinola was President and Chief Operating Officer of
Penn Mutual Life Insurance Company from March 1988 through September 1991 and a
consultant from September 1991 until July 1992. Mr. Pinola is also a director
of Right Management Consultants, Inc. and Robec, Inc. Mr. Pinola is 49 years
of age.
Class IV--Directors with Terms Continuing until 1997
LEO C. BEEBE. Mr. Beebe has been a director since June 1976 and
Chairman of the Board of Directors and of the Executive Committee since January
1985, and he was most recently reelected as a director at the 1993 annual
meeting of shareholders. Mr. Beebe has been the Chief Executive Officer of the
Company since June 30, 1995 and also served as Chief Executive Officer from
July 1985 until August 1992. He was Dean of the School of Business
Administration of Glassboro State College, Glassboro, New Jersey from July 1977
to July 1985 and a Professor of Marketing at Glassboro State College from 1972
to July 1985. Prior to that time, Mr. Beebe served at Ford Motor Company for
27 years in various capacities in the United States and foreign countries,
including as General Marketing Manager of Ford's Lincoln-Mercury Division, Vice
President of Marketing and Planning and a director of Ford Motor Company of
Canada, and Executive Vice President and General Manager of the Consumer
Products Division and a director of Philco Ford Corporation. Mr. Beebe is 78
years of age.
EDWARD B. CLOUES, II. Mr. Cloues has been a director since July 1985
and was most recently reelected at the 1993 annual meeting of shareholders. He
has served as Secretary of the Company since May 1985 and was Vice Chairman of
the Board of Directors from August 1988 until November 1994. Mr. Cloues is a
senior partner in the law firm of Morgan, Lewis & Bockius, which serves as the
Company's general counsel, and has been a partner in that firm since 1979. Mr.
Cloues is also a director of AMREP Corporation. Mr. Cloues is 47 years of age.
COMMITTEES AND MEETINGS
The Board of Directors has an Executive Committee, an Audit and
Finance Committee, a Compensation and Human Resources Committee, a Nominating
Committee and a Stock Option Committee. During fiscal year 1994, the Board of
Directors held seven meetings, the Executive Committee held one meeting, the
Audit and Finance Committee held five meetings, the Compensation and Human
Resources Committee held six meetings, the Nominating Committee held two
meetings and the Stock Option Committee held two meetings. Each director
attended at least 75% of the aggregate of the meetings of the Board of
Directors held during the period for which he or she was a director during such
fiscal year and the committee or committees on which he or she served during
such period. The Executive Committee is empowered to exercise all powers of
the Board of Directors, except action on dividends and certain other matters
which cannot by law be delegated by the Board, during the periods between
regular Board meetings. The Audit and Finance Committee is responsible for
recommending to the Board the firm to be employed by the Company as its
independent accountants and
-5-
<PAGE> 8
auditors, consulting with such firm as to the annual audit and the adequacy of
internal controls, reviewing the accounting controls, practices and policies of
the Company and reviewing budgets, cash and debt management and financial
matters generally. The Compensation and Human Resources Committee recommends
to the Board the compensation of the Company's chief executive officer, reviews
and takes action on the chief executive officer's recommendations as to the
appropriate compensation of the Company's other officers and key personnel,
approves the granting of any bonuses to officers, reviews other compensation
and personnel development matters generally and recommends to the Board the
compensation of non-management directors. The Nominating Committee's duties
are to evaluate Board performance and recommend to the Board nominees for
election as directors, to recommend to the Board the membership of Board
committees and to recommend to the Board a successor to the chief executive
officer when a vacancy occurs. The Stock Option Committee is responsible for
administering the Company's 1986 Stock Option Plan. The current members of the
Executive Committee are Messrs. Beebe (Chairman), Cloues and Cohen; of the
Audit and Finance Committee, Messrs. Cloues (Chairman) and Pinola, Dr.
Schurmann and Mrs. Sisco; of the Compensation and Human Resources Committee,
Messrs. Cohen (Acting Chairman) and Pinola and Mrs. Sisco; of the Nominating
Committee, Messrs. Cloues (Chairman) and Wirth; and of the Stock Option
Committee, Messrs. Cohen and Pinola and Mrs. Sisco.
STANDARD COMPENSATION ARRANGEMENTS
Directors who are not employees of the Company receive an annual
retainer of $12,500, a $2,000 annual retainer for each membership on any of the
Audit and Finance Committee, the Compensation and Human Resources Committee and
the Nominating Committee, a $1,000 annual retainer for membership on the
Executive Committee, $1,000 for each Board meeting attended and $750 for each
Executive Committee meeting attended provided that, in the case of Executive
Committee meetings, such meetings either require substantial preparation or
last two hours or more. All retainers are paid on a prorated bi-monthly basis.
Directors generally do not receive compensation for their participation in
telephone meetings or for attendance at other committee meetings. Non-employee
directors are also eligible to receive a bonus in an amount which would be a
percentage of each such director's compensation for the year in question and
would be determined by the Compensation and Human Resources Committee at the
same time that executive bonuses, if any, are determined by that Committee. It
is contemplated that any such director bonuses would thus be related to
corporate performance on a basis similar to that used by the Compensation and
Human Resources Committee to relate senior executive bonuses to corporate
performance. No bonuses were paid to non-employee directors for fiscal year
1994. Furthermore, as of March 1, 1995, the Board agreed to forego all
retainer fees until otherwise determined by the Board. Finally, under the
Company's 1988 Non-Employee Directors Stock Option Plan (the "1988 Plan"), each
director of the Company who is neither an employee of the Company nor the
beneficial owner of 3% or more of its outstanding Common Stock receives, upon
the later of the adoption of the 1988 Plan or his or her election as a
director, a single non-qualified stock option to purchase 10,000 shares of
Common Stock during the ten-year term of the option at an exercise price equal
to the fair market value of such stock as of the date of option grant. The
1988 Plan was approved at the 1989 annual meeting of shareholders and replaced
the Company's prior non-employee directors stock option plan without affecting
options previously granted thereunder.
OTHER COMPENSATION ARRANGEMENTS
Since April 1991, Mr. Wirth, who is also a principal shareholder of
the Company, has been retained as a consultant by the Company. Under this
arrangement, he provides technical assistance and advice on such matters as are
referred to him by the chief executive officer of the Company, and from April
1991 through February 28, 1995, he devoted approximately 1,000 hours per year
to such work. During 1994, Mr. Wirth received a consulting fee for these
services of Sfr. 100,000 plus Sfr. 10,000 for travel expenses (an aggregate of
$80,000 at an exchange rate of $.73 per Sfr., which was the average $/Sfr.
exchange rate for 1994). Effective March 1, 1995, Mr. Wirth will receive a
reduced annual consulting fee of Sfr. 50,000 plus Sfr. 5,000 for travel
expenses, with a commensurate reduction in his hourly consulting commitment to
approximately 500 hours per year.
-6-
<PAGE> 9
REQUIREMENTS FOR ADVANCE NOTIFICATION OF NOMINATIONS
Article Ninth of the Restated Certificate of Incorporation of the
Company provides that no person may be nominated for election as a director by
a shareholder at an annual or special meeting unless written notice of such
shareholder's intent to make such nomination has been given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Company at the principal executive offices of the Company not later than (i)
with respect to an election to be held at an annual meeting of shareholders, 90
days in advance of such meeting, and (ii) with respect to an election to be
held at a special meeting of shareholders for the election of directors, the
close of business on the seventh day following the date on which notice of such
meeting is first given to shareholders. Each such notice shall set forth: (a)
the name and address of the shareholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
shareholder is a holder of record of stock of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the shareholder; (d) such other
information regarding each nominee proposed by such shareholder as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been nominated, or
intended to be nominated, by the Board of Directors; and (e) the consent of
each nominee to serve as a director of the Company if so elected. The chairman
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedure.
-7-
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION
The following table provides information concerning the annual and
long-term compensation during fiscal years 1994, 1993 and 1992 of those persons
who were at any time during the last completed fiscal year the chief executive
officer and who were at December 31, 1994 the other executive officers of the
Company, for services rendered by them to the Company and its subsidiaries in
all capacities.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation(1)
------------------------------------------ ---------------
Other Annual Securities
Name and Compensation Underlying All Other
Principal Position Year Salary Bonus (2)(3) Options Granted Compensation(2)(4)
-------------------------- ---- ---------- -------- --------------- --------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Marcel O. Rohr(5) . . . . 1994 $250,000 $0 $ 502 15,000 $19,970
President and Chief 1993 $250,000 $0 $ 671 -0- $ 8,236
Executive Officer; 1992 $205,235 $60,000 $ 168 10,000 $10,650
Director
Leo C. Beebe(6) . . . . . 1994 $200,000 $0 $1,956 -0- $18,163
Chairman of the 1993 $200,000 $0 $3,513 -0- $11,671
Board of Directors 1992 $258,333 $60,000 $1,556 -0- $27,521
Kenneth W. Bullivant(7) . 1994 $148,000 $0 $ 646 1,000 $13,986
Executive Vice President 1993 $148,000 $0 $1,309 -0- $10,262
and Chief Technical 1992 $141,500 $15,000 $ 663 -0- $22,881
Officer
Robert L. Weinberg . . . 1994 $135,000 $0 $1,010 7,500 $14,189
Senior Executive Vice 1993 $121,500 $0 $2,046 3,000 $16,564
President, Chief 1992 $110,250 $17,000 $1,035 -0- $22,782
Financial
Officer and Treasurer
Martin W. Schuler(8) . . 1994 $124,800 $0 $0 3,500 $ 648
Senior Vice President and
Controller - European
Operations
</TABLE>
----------------
(1) The Company has never made any restricted stock awards and its 1986
Stock Option Plan is its only long-term incentive plan.
(2) In fiscal years 1994, 1993 and 1992, no executive officer received
perquisites or other personal benefits, securities or property which
exceeded the lesser of $50,000 or 10% of such executive officer's
salary and bonus.
-8-
<PAGE> 11
(3) The amounts disclosed in this column represent the amounts reimbursed
to each executive officer for income taxes incurred with respect to
additional group term life insurance purchased on behalf of such
executives.
(4) The amounts disclosed in this column include:
(a) Company contributions under the Company's 401(k) Profit-Sharing
and Thrift Plan on behalf of the following executive officers of the
Company: For fiscal year 1994 - Mr. Rohr $9,000, Mr. Beebe $9,000,
Mr. Bullivant $8,880 and Mr. Weinberg $8,100. For fiscal year 1993 -
Mr. Rohr $4,497, Mr. Beebe $4,497, Mr. Bullivant $4,497 and Mr.
Weinberg $4,155. For fiscal year 1992 - Mr. Rohr $4,166, Mr. Beebe
$21,272, Mr. Bullivant $17,911 and Mr. Weinberg $12,495.
(b) Credits under the Company's unfunded Supplemental Executive
Retirement Plan on behalf of Mr. Bullivant: For fiscal year 1994 -
$97; fiscal year 1993 - $89; and for fiscal year 1992 - $83.
(c) Company payments of premiums for supplemental health insurance on
behalf of the following executive officers of the Company: For fiscal
year 1994 - Mr. Rohr $9,950, Mr. Beebe $4,675, Mr. Bullivant $3,569
and Mr. Weinberg $3,839. For fiscal year 1993 - Mr. Rohr $2,719, Mr.
Beebe $2,819, Mr. Bullivant $4,236 and Mr. Weinberg $10,159. For
fiscal year 1992 - Mr. Rohr $6,144, Mr. Beebe $1,584, Mr. Bullivant
$3,199 and Mr. Weinberg $8,037.
(d) Company payments of premiums for additional group term life
insurance on behalf of the following executive officers of the Company
and, in the case of Mr. Bullivant, also for split-dollar whole-life
coverage in 1993 and 1992, as follows: For fiscal year 1994 - Mr.
Rohr $1,020, Mr. Beebe $4,488, Mr. Bullivant $1,440, Mr. Weinberg
$2,250 and Mr. Schuler $648. For fiscal year 1993 - Mr. Rohr $1,020,
Mr. Beebe $4,355, Mr. Bullivant $1,440 and Mr. Weinberg $2,250. For
fiscal year 1992 - Mr. Rohr $340, Mr. Beebe $4,665, Mr. Bullivant
$1,688 and Mr. Weinberg $2,250.
(5) Mr. Rohr resigned as President and Chief Executive Officer and also as
a director of the Company on June 30, 1995. Prior to serving as
President and Chief Executive Officer of the Company, Mr. Rohr served
as President and Chief Operating Officer until August 1992. Mr.
Rohr's salary was calculated in Swiss francs prior to June 1992 and in
U.S. dollars thereafter, and the salary amount included in the table
for 1992 is expressed in U.S. dollars using the average $/Sfr.
exchange rate for 1992. Bonus payments to Mr. Rohr were awarded in
U.S. dollars. The table does not reflect payments to the K-Tron Soder
Pension Plan on behalf of Mr. Rohr made in accordance with applicable
Swiss law.
(6) Mr. Beebe became Chief Executive Officer of the Company on June 30,
1995 when Mr. Rohr resigned as Chief Executive Officer, a position
which he previously held from July 1985 until August 1992. From
August 1992 until June 30, 1995, Mr. Beebe served as the Company's
full-time Chairman of the Board of Directors, and he continues as its
Chairman. While not an executive officer under the Company's By-Laws
from August 1992 until June 30, 1995, the Company believes that Mr.
Beebe would have been considered an executive officer of the Company
under the applicable regulations adopted by the Securities and
Exchange Commission. On February 3, 1995, Mr. Beebe assumed active
responsibility for the Company's operations other than at its
Colortronic GmbH subsidiary in Germany and voluntarily reduced his
salary from $200,000 to $1 per year, effective March 1, 1995. Mr.
Beebe will continue to receive this $1 per year salary while serving
as the Company's Chief Executive Officer. While serving for this
nominal salary, Mr. Beebe will continue to receive his health, life
insurance and other benefits.
(7) Mr. Bullivant was Executive Vice President and Chief Technical Officer
until February 1995, when he became Technical Consultant to the
Company. He resigned from the Company on July 7, 1995. Mr. Bullivant
ceased being an executive officer of the Company in February 1995.
-9-
<PAGE> 12
(8) Mr. Schuler resigned as Senior Vice President and Controller -
European Operations on June 23, 1995. Mr. Schuler's salary was
calculated and paid in Swiss francs, and the salary amount included in
the table for 1994 is expressed in U.S. dollars using the average
$/Sfr. exchange rate for 1994 ($.73/Sfr.). Mr. Schuler became an
executive officer of the Company in 1994; therefore his compensation
for 1993 and 1992 are not required to be disclosed.
CERTAIN EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
Messrs. Rohr, Bullivant, Weinberg and Schuler were employed by the
Company during fiscal year 1994 under employment agreements with the Company
effective January 1, 1992, as amended (collectively, the "Employment
Agreements"). Under these Employment Agreements, Messrs. Rohr, Bullivant,
Weinberg and Schuler are entitled to receive a base salary, which may be
increased from time to time by the Board of Directors, and such additional
compensation and bonus payments as may be awarded to them by the Board. These
base salaries for Messrs. Rohr, Bullivant, Weinberg and Schuler were $250,000,
$148,000, $135,000 and Sfr. 171,000 (approximately $124,800), respectively, as
of January 1, 1995. In all cases, the Company's obligation to pay such base
salaries is subject to the Company's right to reduce them in the event
reductions are generally being made for other officers of the Company or its
subsidiaries holding comparable positions. As of March 1, 1995, the base
salaries for Messrs. Rohr, Bullivant and Weinberg were reduced to $225,000,
$133,200 and $121,500, respectively. In June 1995, each of Messrs. Rohr and
Schuler resigned their positions with the Company and, in July 1995, Mr.
Bullivant resigned his position with the Company. As a result of such
resignations, the Company's obligations to each of Messrs. Rohr, Bullivant and
Schuler under their Employment Agreements terminated. On July 17, 1995, Mr.
Weinberg's base salary was reinstated to $135,000.
Each of the Employment Agreements provides or provided that either the
Company or the employee may terminate the employment term thereunder upon not
less than one year's prior notice (two years in the case of Mr. Rohr). Such
employment terms are or were also subject to termination by reason of the
employee's death or disability or by the Board of Directors at any time for
"cause" as specified in such Employment Agreements. In addition, in the case
of the Employment Agreements involving Messrs. Bullivant, Weinberg and Schuler,
the Company has or had the right to terminate the employee at any time without
cause by paying the employee a lump sum amount equal to 100% of the employee's
then-annual base salary or, if the previously described one-year notice of
termination has or had already been given by the Company to the employee, the
portion thereof relating to the balance of the employment term.
The Employment Agreements with Messrs. Rohr and Bullivant included
provisions relating to a termination of employment upon a change in control.
For purposes of these Employment Agreements, a change of control was defined to
mean either (i) an acquisition by any person (including affiliates and
associates) of beneficial ownership of more than 20% of the Company's
outstanding Common Stock (unless the Board of Directors within 30 days after
learning thereof determines that this should not be considered a change of
control) or (ii) a change in the composition of the Board of Directors during
any two-year period such that the directors in office at the beginning of the
period no longer constitute a majority of the directors in office (unless the
election or nomination of at least two-thirds of the new directors was approved
by at least two-thirds of the directors in office at the time of such election
or nomination who were directors at the beginning of such period). These
Employment Agreements applied to a termination of employment upon or within two
years after a change of control which, if such termination was initiated by the
Company, was for any reason other than death, disability or "cause" (as
specified in such Employment Agreements) or which, if such termination was
initiated by the employee, was upon (i) a significant reduction in such
employee's authority, duties or responsibilities, (ii) a significant breach by
the Company of its obligations under such employee's Employment Agreement,
(iii) any removal from or failure to reelect such employee to the director and
executive officer positions held by him, except in connection with promotion to
higher office, (iv) a reduction in such employee's base salary, (v) a transfer
of such employee without his consent to a location which is outside the general
metropolitan area in which his principal place of business immediately
preceding such transfer was located or which is otherwise an unreasonable
commuting distance from his principal residence or (vi) the Company's
-10-
<PAGE> 13
requirement that the employee undertake business travel to an extent that is
substantially greater than is reasonable and customary for the position he
holds.
In the event of the termination of employment of Messrs. Rohr and
Bullivant upon a change of control, the Employment Agreements provided that,
subject to certain limitations, the Company would pay the employee (i) an
amount equal to two times such employee's base salary in effect either
immediately prior to the termination of employment or immediately prior to the
change of control, whichever was higher, and (ii) an amount equal to the spread
(the excess of market value over exercise price) on any stock options held by
such employee whether or not such options were exercisable at the date of
termination.
Under the Employment Agreements, if the employment of Messrs. Rohr and
Bullivant had been terminated on March 1, 1995 upon or following a change of
control, the Company would have been obligated to pay them $450,000 and
$266,400, respectively.
In May 1994, the Company and Mr. Rohr entered into an agreement
providing for the reimbursement by the Company of certain tax liabilities, if
any, incurred by Mr. Rohr upon a future Forced Sale (as hereinafter defined) of
15,839 shares of Company Common Stock acquired by him while a resident of
Switzerland (the "Swiss Shares"). The agreement arose out of Mr. Rohr's
promotion to Chief Executive Officer of the Company in 1992 and the requirement
that Mr. Rohr move from Switzerland to the United States. As a U.S. resident,
Mr. Rohr may be subject to certain U.S. federal, state and local income taxes
in respect of a sale or other disposition of the Swiss Shares. Had Mr. Rohr
remained in Switzerland, he would not have been subject to such taxes. The
agreement provides that in the event that the Swiss Shares are sold,
transferred, exchanged or otherwise disposed of through a Forced Sale during
any taxable year in which Mr. Rohr is employed by the Company at the time of
the Forced Sale and is subject to any U.S. federal, state or local income tax
with respect to the disposition of the Swiss Shares, the Company will pay Mr.
Rohr an amount which will, on an after-tax basis, leave him in the same
financial position after payment of all taxes as if such taxes with respect to
the aggregate Offshore Gain (as hereinafter defined) had never been imposed.
The agreement defines a "Forced Sale" as any transaction with a third party not
initiated or caused by Mr. Rohr in his capacity as a shareholder of the Company
in which the Swiss Shares are sold, exchanged, transferred, converted or
otherwise disposed of in a situation where there will be a change in control of
the Company. Examples of a Forced Sale would include a share exchange, merger,
consolidation, other transaction having a similar effect or tender offer, in
each case where there is a change in control. "Offshore Gain" is defined as
that amount of capital gain realized by Mr. Rohr which is attributable to that
portion of the appreciation of the Swiss Shares, if any, up to an amount which
does not exceed the difference between Mr. Rohr's tax basis in such shares for
U.S. federal income tax purposes and $13.50 (which was approximately the per
share price of the Company's Common Stock when Mr. Rohr moved to the United
States). Under this agreement, had Mr. Rohr disposed of the Swiss Shares in a
Forced Sale on March 1, 1995, the Company would have been obligated to
reimburse Mr. Rohr $5,248. As of June 30, 1995, the Company was no longer
obligated to reimburse Mr. Rohr under this agreement.
-11-
<PAGE> 14
OPTION GRANTS
The following table provides additional information concerning grants
of stock options during fiscal year 1994 under the Company's 1986 Stock Option
Plan, which is the only stock option plan of the Company under which executive
officers may receive stock option grants. No stock appreciation rights have
been granted by the Company nor is the grant of such rights currently provided
for in the Company's 1986 Stock Option Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percentage of Potential Realizable Value at
Number of Total Options Assumed Annual Rates of Stock
Securities Granted to Price Appreciation for
Underlying Employees in Option Term (2)(3)
Options Fiscal Year Exercise Price Expiration ----------------------------
Name Granted(1) 1994 (per share) Date 0% 5% 10%
--------------------- ---------- -------- ----------- ---------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Marcel O. Rohr . . . 15,000 24.8% $11.50 7/15/2004 -0- $108,484 $274,920
Leo C. Beebe . . . . -0- -0- -0- -0- -0- -0- -0-
Kenneth W. Bullivant 1,000 1.7% $11.50 7/15/2004 -0- $ 7,232 $ 18,328
Robert L. Weinberg . 7,500 12.4% $11.50 7/15/2004 -0- $ 54,242 $137,460
Martin W. Schuler . . 3,500 5.8% $11.50 7/15/2004 -0- $ 25,313 $ 64,148
</TABLE>
----------------
(1) Under the Company's 1986 Stock Option Plan, the Board of Directors
retains discretion, subject to plan limits, to alter, amend,
discontinue or terminate the plan, provided that no such action may
adversely affect previously granted options.
(2) The potential realizable values shown in these columns illustrate the
results of hypothetical annual rates of appreciation compounded
annually from the date of grant until the end of the option term,
assuming an initial investment equal to the aggregate exercise price
shown for the option grant. These amounts are reported net of the
option exercise price (which may be paid by delivery of already- owned
shares of Common Stock), but before any taxes associated with the
exercise or subsequent sale of the underlying stock.
(3) The dollar amounts in these columns are based on the hypothetical
annual rates of appreciation noted and are therefore not intended to
forecast possible future appreciation, if any, of the price of the
Company's Common Stock. Alternative formulas for determining
potential realizable value have not been utilized because the Company
is not aware of any formula which will determine with reasonable
accuracy a present value based on future unknown or volatile factors.
There can be no assurance that the dollar amounts reflected in these
columns will be achieved. Actual gains, if any, on stock option
exercises are dependent on the future performance of the Common Stock
and overall market conditions, as well as the executive officer's
continued employment through the vesting period.
-12-
<PAGE> 15
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information concerning unexercised stock
options granted in fiscal year 1994 and prior years under the Company's 1986
Stock Option Plan. None of the executive officers exercised any stock options
during fiscal year 1994. No stock appreciation rights have been granted by the
Company nor is the grant of such rights currently provided for in the Company's
1986 Stock Option Plan.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1994 December 31, 1994(1)
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Marcel O. Rohr . . . . . . . . . . . . . . . 25,500 24,500 $30,875 $12,375
Leo C. Beebe . . . . . . . . . . . . . . . . 7,000 -0- $10,500 $ 0
Kenneth W. Bullivant . . . . . . . . . . . . 9,500 2,500 $13,625 $ 4,125
Robert L. Weinberg . . . . . . . . . . . . . 9,500 9,000 $ 8,625 $ 4,125
Martin W. Schuler . . . . . . . . . . . . . . 2,500 6,500 $ 4,750 $ 2,750
</TABLE>
----------------
(1) Based on the closing price of the Company's Common Stock as reported
on the National Market segment of The Nasdaq Stock Market on December
30, 1994 ($10.75), net of the option exercise price.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOLLOWING REPORT OF THE
COMPENSATION AND HUMAN RESOURCES COMMITTEE AND THE PERFORMANCE GRAPH
ON PAGE 15 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, AS AMENDED, OR UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT
THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE,
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
REPORT OF THE COMPENSATION
AND HUMAN RESOURCES COMMITTEE
As members of the Compensation and Human Resources Committee (the
"Compensation Committee"), it is our duty to review the compensation of all
executive officers of the Company, to recommend to the Board the base salary of
the Company's chief executive officer, to approve the base salaries of all
other executive officers and to approve all bonuses and other compensation
granted to executive officers. These duties and the other responsibilities of
the Compensation Committee are more fully described on page 5 of this Proxy
Statement under the caption "Matters Concerning Directors - Committees and
Meetings." In fulfilling these duties and responsibilities, it is the
Compensation Committee's goal to have a policy that will enable the Company to
attract, retain and reward executive officers who contribute to both its
short-term and long-term success.
The Company's compensation policy for executives is to pay
competitively and to be fair in the administration of pay. This is the same
policy applicable to all employees of the Company. The Company
-13-
<PAGE> 16
seeks to balance the compensation paid to a particular individual with the
compensation paid to other executives holding comparable positions both inside
the Company and at other similar companies. An informal bonus program is used
to align the total annual compensation of executives with Company performance,
individual performance and the achievement of financial and other business
objectives, and the payment of bonuses is entirely at the discretion of the
Compensation Committee. With respect to salaries, bonuses and other
compensation, the decisions of the Compensation Committee are subjective and
are not based on any list of specific criteria.
We believe that the compensation received by each of the executive
officers for 1994 was reasonable in view of their contributions to the Company
in 1993. 1994 was a very difficult year for the Company, particularly in
Germany, France and Asia, and no bonuses were awarded to any executive officer
for fiscal year 1994.
The Company's President and Chief Executive Officer, Marcel Rohr, had
a base salary for 1994 of $250,000, which was unchanged from 1993. Mr. Rohr's
salary was reduced by 10% to $225,000 on March 1, 1995, which was a response to
the Company's poor performance in the fourth quarter of 1994. Salaries of
certain other executive officers were similarly reduced. Mr. Beebe, the
Company's full-time Chairman who replaced Mr. Rohr as Chief Executive Officer
on June 30, 1995, voluntarily reduced his annual salary from $200,000 to $1.00
on March 1, 1995.
The Company also has a stock option plan which is administered by a
committee selected by the Board. The members of the Compensation Committee
served as the three members of the Stock Option Committee at the time all stock
option grants were made in 1994. The purpose of stock option grants is to
provide an additional incentive to key employees to work to maximize
shareholder value, and vesting periods are utilized to encourage such employees
to remain with the Company. During 1994, stock options were granted by the
Stock Option Committee to Messrs. Rohr (15,000), Bullivant (1,000), Weinberg
(7,500) and Schuler (3,500). The Company does not use restricted stock or
stock appreciation rights as a compensation vehicle, nor does it have any
long-term incentive compensation plans. Stock option grants are entirely at
the discretion of the Stock Option Committee, including their timing, the
recipients thereof and the number of shares underlying any particular grant.
Payments during 1994 to the Company's executives as discussed above
were made with regard to the provisions of section 162(m) of the Internal
Revenue Code of 1986, as amended, which became effective on January 1, 1994.
Section 162(m) limits the deduction that may be claimed by a "public company"
for compensation paid to certain individuals to $1 million except to the extent
that any excess compensation is "performance-based compensation." It is the
Committee's intention that no compensation will be limited as to its
deductibility under Section 162(m).
COMPENSATION AND HUMAN RESOURCES COMMITTEE
Norman Cohen
Richard J. Pinola
Jean Head Sisco
July 14, 1995
-14-
<PAGE> 17
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock for the past
five fiscal years with the cumulative total return of the Standard & Poor's 500
Stock Index (the "S&P 500"), the Dow Jones Factory Equipment Industry Group,
described more fully below (the "Factory Equipment Group"), and a peer group of
companies described more fully below (the "Old Peer Group") which, until this
year, was used by the Company for purposes of the comparison. The Company has
chosen to change the performance index from that used in the Company's 1994
Proxy Statement, the Old Peer Group, to the Factory Equipment Group because it
believes that the Factory Equipment Group represents a broader group of
comparable companies. Three of the six companies in the Old Peer Group are
also included in the Factory Equipment Group. Dividend reinvestment has been
assumed and, with respect to companies in each of the Factory Equipment Group
and the Old Peer Group, the returns of each such company have been weighted at
each measurement point to reflect relative stock market capitalization. There
can be no assurance that the performance of the Company's Common Stock will
continue in a manner similar to the trend depicted on the graph.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG K-TRON INTERNATIONAL, INC., S&P 500 INDEX,
FACTORY EQUIPMENT GROUP AND OLD PEER GROUP*
<TABLE>
<CAPTION>
FY end FY end FY end FY end FY end FY end
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
K-Tron International $100.00 $76.32 $ 84.21 $132.21 $107.89 $113.16
S&P 500 Index $100.00 $96.88 $126.42 $136.08 $149.80 $151.78
Factory Equipment $100.00 $83.82 $108.68 $120.86 $136.93 $129.70
Old Peer Group $100.00 $70.93 $ 97.42 $ 92.62 $106.31 $100.28
</TABLE>
----------
* Assumes $100 invested on December 31, 1989 in K-Tron International, Inc.
Common Stock, the S&P 500 Index, the Factory Equipment Group and the Old
Peer Group.
-15-
<PAGE> 18
The Dow Jones Factory Equipment Industry Group is not a "published
industry or line-of-business index" as that terms is defined by SEC
regulations. Accordingly, the Factory Equipment Group is considered a "peer
index" and the identity of the issuers used in the index is as follows:
Acme-Cleveland Corp., American Vanguard Corporation, Autoclave Engineers, Inc.,
Baldwin Technology Company, Inc., Bethlehem Corp., Binks Mfg. Co., Brown &
Sharpe Mfg. Co., Calnetics Corp., Chicago Rivet & Machine Co., Cincinnati
Milacron Inc., Data Measurement Corp., Flow International Corp., Giddings &
Lewis, Inc., Gleason Corporation, Gorman-Rupp Co., Hurco Companies Inc., IMO
Industries Inc., Impact Systems, Inc., Innovex Inc., The Interlake Corporation,
K-Tron International, Inc., Katy Industries, Inc., Ketema, Inc., Keystone
International Inc., Kulicke & Soffa Industries, Inc., Lynch Corp., McClain
Industries, Inc., Met-Coil Systems Corp., The Middleby Corporation, Monarch
Machine Tool Co., Moore Products Co., Paul Mueller Co., Nordson Corp., Noxso
Corp., Oilgear Co., Orbotech Ltd., Publishers Equipment Corp., Puroflow
Incorporated, Quipp Inc., Regal-Beloit Corporation, Safetytek Corp., Salem
Corporation, Secom General Corp., Selas of America, Shelter Components, Corp.,
S I Handling Systems, Inc., L.S. Starrett Co., Summa Industries, Taylor
Devices, Inc., Thermo Process Systems Inc., Twin Disc Inc., Utilx Corporation,
Wedco Technology Inc. and Weldotron Corp.
The Old Peer Group is comprised of the Company and five other
companies which operate in the same Standard Industrial Classification industry
segment (Industrial Instruments for Measurement, Display and Control of Process
Variables and Related Products). The Company believes that the other companies
in the Old Peer Group are comparable to the Company in terms of size and
capitalization. The companies included in the Old Peer Group are Autoclave
Engineers, Inc., Badger Meter, Inc., K-Tron International, Inc., Moore Products
Co., MTS Systems Corp. and TSI Inc. Prior to this year's Proxy Statement, the
Old Peer Group also included Fischer & Porter Co. which merged into a
subsidiary of Elsag Bailey Process Automation N.V. on August 10, 1994.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since April 1991, Johannes Wirth, a director and principal shareholder
of the Company, has been retained as a consultant by the Company. See "Matters
Concerning Directors -- Other Compensation Arrangements."
INDEPENDENT PUBLIC ACCOUNTANTS
On July 29, 1994, the Board of Directors of the Company appointed the
accounting firm of Arthur Andersen LLP as the Company's independent public
accountants and auditors. Arthur Andersen LLP has been selected to continue in
such capacity for the current year. A representative of that firm is expected
to be present at the Annual Meeting with the opportunity to make a statement if
he or she desires to do so and to be available to respond to appropriate
questions.
On July 29, 1994, the Company dismissed Deloitte & Touche LLP as the
Company's independent public accountants and auditors, a capacity in which that
firm had served for many years. The decision to change the Company's
accountants and auditors was recommended by the Audit and Finance Committee of
the Board of Directors and approved by the full Board.
At its meeting on May 12, 1994, the Board of Directors determined that
it would be appropriate to investigate whether the normal auditing and tax
services required by the Company could be obtained on a more cost effective
basis by means of a fixed fee arrangement for a three-year period. Accordingly,
the Board directed management to solicit requests for proposals from several
major accounting firms, including Deloitte & Touche LLP, for audit and tax
services. Management did so and then gave careful consideration to proposals
received from five major accounting firms. After discussions with management
and a meeting with representatives of Arthur Andersen LLP, the Audit and
Finance Committee recommended to the Board of Directors that the Board appoint
Arthur Andersen LLP to serve as the Company's independent public accountants to
audit the consolidated financial statements of the Company and its subsidiaries
for 1994. On July 29, 1994, the Board of Directors made such appointment.
-16-
<PAGE> 19
During the fiscal year ended January 1, 1994 and the subsequent period
through July 29, 1994, the date on which Deloitte & Touche LLP was dismissed as
the Company's independent public accountants and auditors, there were no
disagreements between the Company and Deloitte & Touche LLP on any matter
relating to accounting principles or practices, financial statement disclosure,
or auditing scope or procedures which disagreements, if not resolved to
Deloitte & Touche LLP's satisfaction, would have caused them to make reference
in connection with their reports to the subject matter of the disagreement. In
addition, Deloitte & Touche LLP's reports on the Company's financial statements
for the fiscal year ended January 1, 1994 contained no adverse opinions or
disclaimers of opinion nor were such reports qualified as to uncertainty, audit
scope or accounting principles. As discussed in Note 2 to the consolidated
financial statements previously filed by the Company with its Annual Report on
Form 10-K for the fiscal year ended January 1, 1994, in the fiscal year ended
January 1, 1994, the Company changed its method of accounting for certain costs
of inventory and for income taxes.
With respect to Item 304(a)(v)(A) of Regulation S-K, by letter dated
March 11, 1994, Deloitte & Touche LLP advised the Company of a material
weakness in its internal control structure. In response, the Company has taken
corrective actions.
SHAREHOLDER PROPOSALS--1996 ANNUAL MEETING
Shareholders may submit proposals on matters appropriate for
shareholder action at annual meetings in accordance with regulations adopted by
the Securities and Exchange Commission. Any proposal which an eligible
shareholder desires to have presented at the 1996 annual meeting of
shareholders (which is expected to be held on or about May 10, 1996) concerning
a proper subject for inclusion in the proxy statement and for consideration at
the annual meeting, will be included in the Company's proxy statement and
related proxy card if it is received by the Company no later than December 29,
1995.
OTHER MATTERS
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the directors and certain officers of the Company, and persons who own
more than ten percent of the Company's Common Stock, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of such Common Stock. Such directors, officers and more
than ten percent shareholders are required by regulation to furnish the Company
with copies of all Section 16(a) forms which they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all fiscal year 1994 Section 16(a) filing requirements
applicable to its directors, officers and more than ten percent shareholders
were complied with. In addition, while an annual statement on Form 5 under
Section 16(a) is not required to be filed if there are no previously unreported
transactions or holdings to report, nevertheless the Company is obligated to
disclose the names of directors, covered officers and more than ten percent
shareholders who did not file an annual statement on Form 5 unless the Company
received a written statement that no such filing was required. As of August
11, 1995, the Company had not received either an annual statement on Form 5 for
fiscal year 1994 or such a written statement from the Estate of Dr. Mario
Gallo, a more than ten percent shareholder.
The Board of Directors of the Company does not intend to bring any
other matters before the Annual Meeting and has no reason to believe any other
matters will be presented. If, however, other matters properly do come before
the meeting, it is the intention of the persons named as proxy agents in the
enclosed Proxy Card to vote upon such matters in accordance with their
judgment.
By Order of the Board of Directors,
Edward B. Cloues, II
Secretary
August 21, 1995
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<PAGE> 20
K-TRON INTERNATIONAL, INC. PROXY
ROUTES 55 & 553
P.O. BOX 888
PITMAN, NEW JERSEY 08071-0888
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
hereby appoints LEO C. BEEBE and NORMAN COHEN, or either of them acting singly
in the absence of the other, each with the power to appoint his substitute, the
Proxy Agents of the undersigned to attend the Annual Meeting of Shareholders of
K-Tron International, Inc. (the "Company") to be held October 6, 1995, and any
adjournments thereof, and, with all powers the undersigned would possess if
personally present, to vote upon the following matters as indicated below.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTOR FOR: WITHHOLD AUTHORITY
TO VOTE FOR:
CLASS II Johannes Wirth / / Johannes Wirth / /
</TABLE>
2. In their discretion, the Proxy Agents are authorized to vote upon such other
business as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 21
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NOMINEE FOR ELECTION AS THE CLASS II DIRECTOR. The undersigned hereby
acknowledges receipt of the Notice of the Annual Meeting of Shareholders and the
related Proxy Statement.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partnership, please sign in the partnership name by an authorized person.
------------------------
Signature
------------------------
Signature if held
jointly
DATED: , 1995
PLEASE MARK, SIGN AND
DATE THIS PROXY CARD AND
PROMPTLY RETURN IT USING
THE ENCLOSED ENVELOPE.
