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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ACME ELECTRIC CORPORATION
DAVID G. ANDERSON
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(j)(2).
[ ] $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:(1)
...................................................................
4) Proposed maximum aggregate value of transaction:
...................................................................
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
<PAGE>
LETTER OF SHAREHOLDERS
September 18, 1995
Dear Shareholder:
The Annual Meeting of Shareholders of Acme Electric Corporation will be held at
the Buffalo Hilton at 120 Church Street, Buffalo, New York, on Friday, October
27, 1995, at 11:00 a.m. Beverages and pastries will be served at 10:30 a.m.
prior to the Meeting.
We hope that you can attend the Meeting. However, whether or not you plan to
attend, please complete, sign, date and return the accompanying proxy card as
soon as possible. It is important that your shares be represented. The
enclosed envelope requires no postage when mailed in the United States. If you
attend the Meeting, you may revoke your proxy if you wish and vote personally.
I am pleased to report that the Company made important progress in a number of
areas during the 1995 fiscal year. Sales were up 20% to record levels, and we
returned to profitability for the year. AT&T, Sony, Phillips and Siemens have
been added as customers, and each represents significant opportunity for us in
the marketplace.
The formal Notice and the Proxy Statement which accompany this letter contain
details of the business to be conducted at the Meeting, including the election
of directors and ratification of the reappointment of Price Waterhouse as the
Company's independent auditors for 1996. We urge you to read carefully the
description of these proposals in the Proxy Statement and to vote for their
adoption.
Sincerely,
/s/
Robert J. McKenna
Chairman and CEO
<PAGE>
PROXY STATEMENT
ACME ELECTRIC CORPORATION (LOGO)
400 QUAKER ROAD
EAST AURORA, NEW YORK 14052
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 27, 1995
To the Shareholders of
ACME ELECTRIC CORPORATION
The Annual Meeting of Shareholders of Acme Electric Corporation will be
held at 11:00 a.m., Friday, October 27, 1995, at the Buffalo Hilton, 120 Church
Street, Buffalo, New York, for the following purposes:
1. To elect a board of seven directors;
2. To ratify the reappointment of Price Waterhouse LLP as
independent auditors of the Company for 1996; and
3. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
Shareholders of record at the close of business on September 12, 1995,
will be entitled to notice of, and to vote at, the Meeting or any adjournment
thereof.
The Board of Directors has authorized the solicitation of proxies. Unless
otherwise directed, the proxies will be voted for the election of the seven
persons listed in the attached proxy statement to form the Board of Directors
of the Company, subject to any changes in the nominees as set forth in the
proxy statement; for the ratification of the reappointment of independent
auditors; and on any other business that may properly come before the Annual
Meeting as the named proxies in their best judgment shall decide.
By Order of the Board of Directors
David G. Anderson, Secretary
September 18, 1995
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD, AND PROMPTLY
RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. IF YOU ATTEND THE MEETING IN
PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES DIRECTLY IF YOU SO
DESIRE.
<PAGE>
ACME ELECTRIC CORPORATION (LOGO)
400 QUAKER ROAD
EAST AURORA, NEW YORK 14052
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors of Acme
Electric Corporation for use at the Annual Meeting of its shareholders to be
held at the Buffalo Hilton, 120 Church Street, Buffalo, New York, at 11:00 a.m.
on Friday, October 27, 1995, and at any adjournment thereof. This proxy
statement and form of proxy are being mailed to shareholders beginning on
September 18, 1995.
A shareholder returning the enclosed proxy shall have the power to revoke
it in writing at any time before it is voted by notifying Robert J. McKenna,
Daniel K. Corwin or David G. Anderson at the offices of the Company at 400
Quaker Road, East Aurora, New York 14052, and any shareholder attending the
Meeting may vote in person whether or not he or she has filed a proxy. If not
revoked, the proxy will be voted in accordance with its terms.
Where a shareholder specifies a choice with respect to the propositions set
forth in the proxy, his or her shares will be voted in accordance with the
instructions given. If no specific instructions are given, his or her shares
will be voted FOR the election of the nominees for Director of the Company and
FOR the ratification of the reappointment of Price Waterhouse LLP as
independent auditors. In both cases, the shares will be counted for the
purpose of establishing a quorum. The named proxies may vote in their
discretion upon such other matters as may properly come before the Meeting. If
shares are not represented at the Meeting by proxy or in person, they will not
be counted for the purpose of a quorum nor toward the vote required for
approval of the proposals.
Proxies will be solicited by mail and may also be solicited by officers and
employees of the Company by telephone or telegraph, without additional
compensation. The Company will request persons, such as banks, brokers,
nominees and fiduciaries, holding stock in their names for others, to forward
proxy material to their principals and request authority for the execution of
the proxies. The Company will reimburse such persons and entities for their
expenses in so doing. The total cost of soliciting proxies will be borne by
the Company.
VOTING SECURITIES
Shareholders of record at the close of business on September 12, 1995, will
be entitled to vote at the Meeting. As of that date, there were outstanding
5,003,946 shares of the common stock. The holders of common stock are entitled
to one vote per share.
Proposal Number One
ELECTION OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors elected by the shareholders. The Board has
responsibility for establishing broad corporate policies and for the overall
performance of the Company rather than day-to-day operating details. Members
of the Board of Directors are kept informed of the Company's business by
various reports and documents sent to them monthly, as well as by reports
presented at meetings of the Board and its committees by officers and employees
of the Company and its subsidiaries.
A Board of seven Directors is to be elected to serve until the next annual
meeting of shareholders and until their successors have been elected and
qualified. Each nominee was selected on the recommendation of the Nominating
Committee of the Board. All nominees have expressed a willingness to serve as
a Director during the coming year.
All of the nominees named on the following pages were elected to the Board
of Directors at the annual meeting of shareholders held on October 28, 1994,
with the exception of Robert D. Batting and Randall L. Clark, who were elected
by the Board on May 5, 1995. Unless the proxy is otherwise marked, the proxy
shall be voted for election of these nominees. Directors shall be elected by a
plurality of the votes cast at the Annual Meeting. Broker non-votes will be
counted as being represented at the Meeting, but will not have an effect on the
outcome of the vote for the election of directors. Withholding an affirmative
vote from a particular nominee will not prevent that person from being elected
to the Board of Directors.
The Management has no reason to believe that any of the nominees will not
be available for election as a Director. However, should any nominees become
unavailable, the proxy may be voted for such other person or persons as shall
be nominated by the Board of Directors following recommendations by the
Nominating Committee.
The following information is presented with respect to the nominees for the
office of Director and for all Executive Officers and Directors as a group, as
of August 18, 1995.
NOMINEES FOR ELECTION AS DIRECTORS
Principal Occupation and Business
Experience During the Past Five Common Stock
Nominee Years and Other Directorships Beneficially Owned
-----------------------------------------------------------------------------
Robert D. Batting President, Clearing/Niagara, Sole Beneficial Ownership:
Age 54 Inc. a manufacturer of indus- 0 Shares
Director Since trial press equipment, Shared Beneficial Ownership:
May 1995 since 1991. Prior thereto, 0 Shares
Group Vice President, Right to acquire:
Textron, since 1989. Director 0 Shares
Kistler Instrument Corporation Percent of Class:
0
Robert T. Brady Director, President and Chief Sole Beneficial Ownership:
Age 54 Executive Officer, Moog Inc., 0 Shares
Director Since manufacturer of fluid Shared Beneficial Ownership:
1988 controls for military 300 Shares
and aerospace applications, Right to Acquire:
since March 1988. Director, 8,000 Shares
Astronics Corporation, First Percent of Class:
Empire State Corp., Seneca .18
Foods Corp.
Randall L. Clark Executive Vice President and Sole Beneficial Ownership:
Age 52 Chief Operating Officer, 0 Shares
Director Since Pratt & Lambert United, Shared Beneficial Ownership:
May 1995 Inc., since 1992. Prior 0 Shares
thereto, consultant to Right to Acquire:
Dunlop Tire Corporation, 0 Shares
since 1991. Prior thereto, Percent of Class:
Chairman and Chief Executive 0
Officer for North American
operations of Dunlop Tire
Corporation since 1986.
Director, Merchants Mutual
Insurance Company.
G. Wayne Hawk Retired Chairman, Acme Sole Beneficial Ownership:
Age 67 Electric Corporation, since 33,038 Shares
Director Since October 1994. Prior Shared Beneficial Ownership:
1980 thereto, Chairman, Acme 0 Shares
Electric Corporation, since Right to Acquire:
October 1993. Prior thereto, 0 Shares
Chairman and Chief Executive Percent of Class:
Officer since September .66
1992. Prior thereto,
President and Chief Executive
Officer since August 1991.
Prior thereto, President and
Chief Operating Officer since
since April 1991, and prior
thereto, President and Chief
Executive Officer. Director,
Comptek Research, Inc.
Terry M. Manon Vice President, Air Handling Sole Beneficial Ownership:
Age 44 Systems Division, Trane 0 Shares
Director Since Company, since 1987. Shared Beneficial Ownership:
August 1994 0 Shares
Right to Acquire:
0 Shares
Percent of Class:
0
Robert J. McKenna Chairman, President and Sole Beneficial Ownership:
Age 47 Chief Executive Officer of 4,056 Shares
Director Since Acme Electric Corporation, Shared Beneficial Ownership:
1993 since October 1994. Prior 0 Shares
thereto, President and Chief Right to Acquire:
Executive Officer, since 0 Shares
October 1993. Prior thereto, Percent of Class:
President and Chief Operating .08
Officer, since September
1992. Prior thereto, Group
Vice President of the
Diversified Products Group,
Aeroquip Corporation, since
April 1990.
James W. McLaughlin Retired Chairman, Acme Sole Beneficial Ownership:
Age 71 Electric Corporation, 570 Shares
Director Since since June 1992. Prior Shared Beneficial Ownership:
1971 thereto, Chairman of the 478 Shares
Board since August 1991. Right to Acquire:
Prior thereto, Chairman 0 Shares
of the Board and Chief Percent of Class:
Executive Officer since .02
April 1991, and prior thereto
Chairman of the Board.
All Executive Officers Sole Beneficial Ownership: 51,007 Shares
and Directors as a Shared Beneficial Ownership: 7,368 Shares
Group (13 Persons) Right to Acquire: 87,675*Shares
Percent of Class: 1.70
*Includes shares which are exercisable under the 1981 Incentive Stock Option
Plan and shares which are exercisable under the 1989 Stock Option Plan.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has appointed from its members Executive, Audit, Compensation and
Nominating Committees which have the responsibilities and authority described
below.
The Executive Committee has, during the interval between meetings of the
Board of Directors, the authority to exercise all the powers of the Board
delegated to it by the Board in the management and direction of the business
and affairs of the Company. One meeting of the Executive Committee was held in
fiscal year 1995. Members of this Committee are Messrs. Hawk, McKenna and
McLaughlin.
The Audit Committee has the responsibility, among other things, to (i)
recommend the selection of the Company's independent auditors, (ii) review the
adequacy of the audit by the independent auditors, (iii) review the financial
statements which are the subject of the independent auditors' certification,
and (iv) review the effectiveness of the Company's internal auditing
procedures. Members of this Committee are Messrs. W. Bennett Conner, Manon and
McLaughlin. Two meetings of the Audit Committee were held during fiscal year
1995.
The Compensation Committee has the responsibility, among other things, to
(i) review and make recommendations on the compensation rate for executive
officers of the Company, and (ii) review incentive compensation plans and make
recommendations as to the adoption of these plans. Members of this Committee
are Messrs. Brady, Conner and Manon. Two meetings of the Compensation
Committee were held during fiscal year 1995.
The Nominating Committee has the responsibility, among other things, to (i)
study and make recommendations as to the size and composition of the Board,
(ii) make nominations to the Board prior to the Annual Meeting, and (iii)
search for potential candidates and make recommendations as to candidates for
membership on the Board. Two meetings of the Nominating Committee were held
during fiscal year 1995. Members of this Committee are Messrs. Brady, Hawk and
McKenna. The Nominating Committee will consider nominees for the Board
recommended by shareholders. A shareholder wishing to recommend such nominees
for election at the 1996 annual meeting of shareholders should submit such
recommendation in writing to the Committee at the Company's address on or
before June 30, 1996.
Each non-employee member of the Board of Directors receives payments
pursuant to a standard arrangement. Under this arrangement, non-employee
directors are entitled to receive a retainer of $5,000 per annum and $525 for
each meeting of the Board or a committee of the Board attended.
During fiscal year 1995, the Board of Directors held four meetings. Each
Director attended 75% or more of the Board meetings and meetings of the
Committees of the Board on which such Director served.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is made up of only
outside directors and oversees the Company's executive compensation programs.
After consideration of the Committee's recommendations, the full Board of
Directors reviews and approves the salaries of all elected officers. Any
directors who are full-time employees are excused from voting on their own
compensation. The Committee also oversees the other elements of executive
compensation to include annual incentive awards and stock options.
GENERAL PHILOSOPHY
The philosophy of the Company is that annual compensation should adjust
to Company performance, and long-term incentives should align with creating
shareholder value. The Committee believes that operating criteria should
determine annual cash incentive compensation, and market-based criteria, as
measured by the market price of the Company's common stock, are better tied to
performance periods longer than a year. Individual compensation should reflect
operating unit performance for division executives and Company performance for
selected elected officers, with the purpose being to attract and retain
qualified executives.
SALARIES
Salaries are based upon a commercially available study of the durable
goods manufacturing sector for companies of a similar size. Salary payments
are primarily intended to reward current and past performance based upon job
experiences and comparison to peers both inside and outside the Company.
ANNUAL INCENTIVE AWARDS
Annual incentive awards are designed to motivate and reward the individu-
al for personal contributions to the success of the Company. The Executive
Incentive Plan (EIP) rewards selected elected officers based upon return on
equity. A minimum threshold based on recognized financial return rates, which
incorporate investment risk, must be met before any payments are made. A
percentage of pre-tax earnings above the threshold is distributed as a
percentage of base salary. The EIP has a maximum allowable payment of 60% of
salary.
The Board of Directors can also make individual awards based on their
assessment of contribution to the tactical and strategic goals set by the CEO
and approved by them at the beginning of the year.
The Management Incentive Plan (MIP) rewards key managers and officers
based upon their respective division's operating profit, net asset utilization
and sales growth. The MIP pays only for improvement over the previous year's
actual results and is distributed as a percentage of base salary. The MIP has
a maximum allowable payout of 40% of salary.
Every other non-union employee of the Company participates in an annual
incentive plan.
STOCK OPTIONS
Stock options accomplish the objective of further motivating executives
to create shareholder value. Options are reviewed on an annual basis. Options
are granted with an exercise price equal to the fair market value of Acme stock
on the day preceding the date of grant, creating recipient value only as the
stock increases in market price. Options accrue in equal amounts over a four-
year period and can be exercised over a ten-year period. An amendment of the
1989 Stock Option Plan was approved at the annual meeting of shareholders held
on October 28, 1994, to apply a formula for the award of further options after
each year of profitable operation and to increase the number of shares subject
to the Plan from 225,000 to 450,000. Options in accordance with the formula
were granted as of September 1, 1995.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer's salary was determined by the Committee, in
accordance with the above stated philosophy.
No incentive payments have been made to the CEO since the threshold on
beginning shareholder's equity was not attained.
Stock options to purchase 10,000 shares were granted to the CEO upon
joining the Company in 1992.
The Committee believes that both annual and long-term compensation for
the last three years reflects this statement on philosophy.
Submitted by the Compensation Committee
Robert T. Brady W. Bennett Conner Terry M. Manon
<PAGE>
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- ------------------ -------
Other Restricted
Fiscal Annual Stock LTIP All Other
Name and Year Salary Bonus Compensation(3) Award(s) Options(4) Payouts Compensation(5)
Principal Position End ($) ($) ($) ($) (#) ($) ($)
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R.J. McKenna 6/30/95 215,000 --- --- --- --- --- ---
Chairman/ 6/30/94 190,000 --- 36,096 --- --- --- ---
President/CEO 6/30/93 124,923 20,000 44,116 --- 10,000 --- ---
(1) (2)
D.K. Corwin 6/30/95 135,000 --- --- --- --- --- ---
Sr.V.P./CFO 6/30/94 118,000 --- --- --- --- --- ---
6/30/93 112,562 --- --- --- --- --- ---
J.E. Gleason 6/30/95 117,000 19,434 --- --- --- --- ---
V.President/GM 6/30/94 110,000 --- --- --- --- --- ---
Electronics Div. 6/30/93 90,830 --- 45,684 --- --- --- ---
D.J. Chesner 6/30/95 108,675 --- --- --- --- --- ---
V.President/GM 6/30/94 105,000 --- --- --- --- --- ---
Transformer Div. 6/30/93 88,400 --- --- --- --- --- ---
M. Anderman 6/30/95 107,000 --- --- --- --- --- ---
V.President/GM 6/30/94 100,173 --- --- --- --- --- ---
Aerospace Div. 6/30/93 85,077 --- --- --- --- --- ---
<FN>
(1) Reflects partial-year salary for Robert J. McKenna who joined the Company on September 21, 1992.
(2) The amount is a one-time award accrued for F/Y '93, which was negotiated upon joining the Company.
(3) The amounts reflected in this column are relocation expenses and subsequent increases equal to
resulting income tax expense paid during the year. No individual listed had other annual perquisites
with aggregate value exceeding 10 percent of salary, plus bonus.
(4) All grants were incentive stock options granted under the Company's 1989 Stock Option Plan.
(5) The Company has no defined contribution plans.
</FN>
/TABLE
<PAGE>
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
----------------------------------------------------------- -----------------------
% of Total
Options
Granted to Exercises
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#)(1) Year ($/Sh)(2) Date 5% ($) 10% ($)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R.J. McKenna None --- --- --- --- ---
D.K. Corwin None --- --- --- --- ---
J.E. Gleason None --- --- --- --- ---
D.J. Chesner None --- --- --- --- ---
M. Anderman None --- --- --- --- ---
<FN>
(1) The Company does not have a stock-appreciation-rights plan.
(2) The Company does not reprice stock options.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND F/Y-END OPTION VALUES
<CAPTION>
Shares Acquired Value Number of Unexercised Value of Unexercised In-the-Money
on Exercise Realized Options of F/Y-End (#) Options at F/Y-End ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
R.J. McKenna 2,500 18,439 0/5,000 $ 0/$134,375
D.K. Corwin 4,000 51,000 8,000/0 $208,500/$0
J.E. Gleason None --- 3,000/0 $ 78,188/$0
D.J. Chesner 3,329 18,447 0/0 $ 0/$0
M. Anderman 2,000 37,215 0/0 $ 0/$0
</TABLE>
1. Supplemental Requirement Information:
COMMON STOCK BENEFICIALLY OWNED
D.K. Corwin Sole Beneficial Ownership: 0 Shares
Shared Beneficial Ownership: 4,502 Shares
Right to Acquire: 8,000 Shares
Percent of Class: .25
J.E. Gleason Sole Beneficial Ownership: 8,645 Shares
Shared Beneficial Ownership: 0 Shares
Right to Acquire: 3,000 Shares
Percent of Class: .18
D.J. Chesner Sole Beneficial Ownership: 3,891 Shares
Shared Beneficial Ownership: 88 Shares
Right to Acquire: 0 Shares
Percent of Class: .08
M. Anderman Sole Beneficial Ownership: 1,868 Shares
Shared Beneficial Ownership: 0 Shares
Right to Acquire: 0 Shares
Percent of Class: .04
<PAGE>
<TABLE>
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
<CAPTION>
June 90 June 91 June 92 June 93 June 94 June 95
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PEER GROUP COMPANIES $100.00 $101.65 $112.47 $166.25 $167.76 $277.97
S & P 500 INDEX $100.00 $107.40 $121.80 $138.40 $140.35 $176.94
COMPANY $100.00 $ 45.31 $ 60.41 $102.71 $102.71 $368.53
</TABLE>
-------------------------------------------------------------------------------
Assumes $100 invested on July 1, 1990, with dividends reinvested monthly.
(1) Peer group companies include the S & P Electrical Equipment group with
General Electric excluded because of its weighted effect; the S & P Electronics
(Instrumentation) group; the S & P Electronics (Semiconductor) group and the S
& P Electronics (Defense) group.
PEER COMPANIES: Advanced Micro Devices Loral Corp.
AMP Inc. Motorola Inc.
E-Systems Inc.* Nat'l Semiconductor Corp.
EG&G Inc. Perkin-Elmer Corp.
Emerson Electric Co. Raychem Corp.
Grainger (W.W.) Inc. Tektronix Inc.
Hewlett-Packard Co. Texas Instruments Inc.
Honeywell Inc. Thomas & Betts Corp.
Intel Corp. Westinghouse Electric Corp.
* E-Systems Inc. was acquired by Raytheon 6/19/95 and,
therefore, drops out of the equation after the '94 return.
EMPLOYMENT AGREEMENTS
Mr. McKenna joined the Company on September 21, 1992, subject to an
agreement to provide a severance period of six months at full salary should his
employment be terminated, except for good cause. In addition, Messrs McKenna
and Corwin are subject to agreements providing for continuation of employment
in the event of a change of control for three and two years, respectively.
Under the agreements, Messrs McKenna and Corwin must preserve confidential
Company information and refrain from any activities that may compete with the
Company's business. The terms of these agreements are automatically extended
unless either party gives timely notice to the other of intent to not extend
each such agreement. Under the agreements, Messrs McKenna and Corwin receive a
base salary as determined by the Board of Directors plus bonus, which amounts
may not be reduced during the term of the agreements.
1981 INCENTIVE STOCK OPTION PLAN
On October 30, 1992, the Board of Directors approved the extension to a
ten-year life of all options granted to executive officers, directors and other
key employees. No further options may be granted under the Plan.
1989 STOCK OPTION PLAN
The 1989 Stock Option Plan (the "1989 Plan") was approved by the
shareholders at the Annual Meeting held on October 27, 1989. The 1989 Plan
supplements the 1981 Incentive Stock Option Plan.
Under the 1989 Plan, certain individuals are granted for a period of up
to ten years, beginning with the date of grant, options to purchase specified
amounts of the Company's Common Stock for 100% of the full market value of the
stock, subject to option, on the day preceding the grant. Individuals covered
by the Plan include executive officers, directors and other key employees
subject to review by the Board of Directors. The number of shares granted to
each individual is also subject to review by the Board of Directors. An
amendment to the 1989 Plan was approved at the annual meeting of shareholders
held on October 28, 1994, to apply a formula for the award of further options
after each year of profitable operation and to increase the number of shares
subject to the Plan from 225,000 to 450,000. Options in accordance with the
formula were granted as of September 1, 1995.
PENSION PLAN
Executive officers of the Company, including those named in the Summary
Compensation Table, are covered by the Company's Pension Plan for Salaried
Employees ("Salaried Plan"). Elected officers of the Company are also covered
by the Supplemental Executive Retirement Plan ("Supplemental Plan"). These
Plans provide for regular monthly payments to retirees. Normal retirement age
under the Plans is 65. The normal monthly retirement benefit under the
Salaried Plan is 1.0 percent of base salary for each year of credited service
at December 31, 1991, plus 1.5 percent of base salary earned in each year of
credited service after December 31, 1991. The Plans also provide for early and
disability retirement. The normal monthly retirement benefit is reduced by up
to one-half of one percent for each month between the date benefits begin and a
participant's normal retirement date in the event of early retirement. The
disability retirement benefit is the benefit accrued by a participant to the
disability retirement date. Benefits are not subject to any deduction for
Social Security or other payments. The cost of the Plans is borne by the
Company.
The table below illustrates the estimated amount of annual pension
payments under the Salaried Plan for an employee whose career average annual
compensation and years of service are as specified:
<TABLE>
<CAPTION>
CAREER
AVERAGE BASE 10 YEARS 20 YEARS 30 YEARS
SALARY OF SERVICE OF SERVICE OF SERVICE
------------ ---------- ---------- ----------
<C> <C> <C> <C>
$ 55,000 $ 6,716 $ 13,432 $ 20,148
90,000 11,168 22,336 33,504
140,000 17,528 35,056 52,584
190,000 23,888 48,200 71,664
250,000 31,520 63,040 94,560
300,000 37,880 75,760 113,640
</TABLE>
For the purpose of determining the pension benefits payable under the
Salaried Plan, estimated years of credited service as of the end of calendar
year 1994 covered by the Plans for officers are as follows: Mr. McKenna, 2
years; Mr. Corwin, 23 years; Mr. Gleason, 27 years, Mr. Chesner, 25 years and
Mr. Anderman, 7 years.
The normal monthly retirement benefit under the Supplemental Plan is one-
twelfth of the product of two percent of annual base salary at retirement
multiplied by years of credited service to a maximum of 30 years, less the
benefit payable under the Salaried Plan.
The table below illustrates the maximum total amount of annual pension
payments under both the Salaried Plan and the Supplemental Plan for an employee
whose annual base salary at retirement and years of service are specified:
<TABLE>
<CAPTION>
BASE SALARY 10 YEARS 20 YEARS 30 YEARS
AT RETIREMENT OF SERVICE OF SERVICE OF SERVICE
------------ ---------- ---------- ----------
<C> <C> <C> <C>
$ 55,000 $11,000 $ 22,000 $ 33,000
90,000 18,000 36,000 54,000
140,000 28,000 56,000 84,000
190,000 38,000 76,000 114,000
250,000 50,000 100,000 150,000
300,000 60,000 120,000 180,000
</TABLE>
Benefits are presently being paid under the Supplemental Plan. The
Company has purchased, and is the beneficiary of, insurance on the lives of
participants under the Supplemental Plan. Under the insurance program, if the
assumptions made as to mortality experience, policy dividends and other factors
are realized, the proceeds of the policies will reimburse the Company for all
costs, including benefits, insurance premiums and a factor for the use of the
Company's money. It is expected, therefore, that without additional costs to
the Company over the life of the Supplemental Plan, the Supplemental Plan will
aid the Company in continuing to attract, retain and motivate key employees.
Messrs. McKenna and Corwin are eligible to receive benefits under the
Supplemental Plan. For the purposes of the above tables, the term "base
salary" refers to the column of the Summary Compensation Table on page 8
labeled "Salary."
EMPLOYEE SAVINGS AND PROTECTION PLAN
Employees of the Company who have completed at least six months of
service are eligible to participate in the Company's Employee Savings and
Protection Plan. Under the Plan, participants may contribute up to twelve (12)
percent of their gross earnings for investment in cash, stock, mutual
investment funds and life
insurance. The Company bears the cost of operating the Plan, but does not make
matching contributions. Contributions to the Plan by executive officers are
included in the amounts shown as "Salary" in the Summary Compensation Table.
All directors and officers of the Company filed necessary disclosure
reports regarding transactions in the Company's stock during the 1995 fiscal
year. Mr. Anderman filed one Form 4, reporting the acquisition of shares of
Company stock, 60 days late. Mr. Chesner filed one Form 4, reporting the
acquisition of shares of Company stock, 90 days late.
PROPOSAL NUMBER TWO
REAPPOINTMENT OF INDEPENDENT AUDITORS
Subject to shareholder approval, the Board of Directors, upon
recommendation of the Audit Committee, has reappointed the firm of Price
Waterhouse LLP as independent auditors to examine the Company's financial
statements for its fiscal year ending June 30, 1996. Price Waterhouse LLP and
its predecessors have served as the Company's independent auditors for many
years.
As in prior years, a representative of Price Waterhouse LLP will be
present at the Meeting with the opportunity to make a statement and respond to
questions.
VOTE REQUIRED TO RATIFY APPOINTMENT
Ratification of the appointment of the independent auditors requires the
affirmative vote of a majority of the shares present in person or by proxy and
voting at the Meeting. If the shareholders should not ratify the appointment of
Price Waterhouse LLP, the Board of Directors will reconsider the appointment.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS OF THE COMPANY
FOR THE 1996 FISCAL YEAR. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
SO VOTED UNLESS SHAREHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
PROPOSALS BY SECURITY HOLDERS
Any proposals of shareholders intended to be presented at the 1996 Annual
Meeting of Shareholders must be received by the Company by May 19, 1996, in
order to be considered for inclusion in the proxy statement and form of proxy
for that meeting.
OTHER MATTERS
The Board of Directors and Management do not know of any other matters
that may properly come before the Meeting. If any other business is properly
presented at the Meeting for action, the persons named in the proxy will vote
thereon according to their best judgment of such matters.
Shareholders are urged to forward their proxies without delay. A prompt
response will be greatly appreciated.
East Aurora, New York By Order of the Board of Directors
September 18, 1995 David G. Anderson, Secretary
<PAGE>
PROXY CARD
(LOGO) PROXY
THIS PROXY SOLICITED BY
THE BOARD OF DIRECTORS
The undersigned hereby appoints ROBERT J. McKENNA, DANIEL K. CORWIN AND
DAVID G. ANDERSON, and each of them, the proxies of the undersigned with full
power of substitution, to vote all shares of stock which the undersigned may be
entitled to vote at the Annual Meeting of the Shareholders of ACME ELECTRIC
CORPORATION to be held Friday, October 27, 1995, at 11:00 a.m. at the Buffalo
Hilton, 120 Church Street, Buffalo, New York, and at any adjournment thereof,
for the following purposes:
(1) To elect a board of seven directors;
FOR all nominees listed below
(except as marked to the contrary below) / /
WITHHOLD authority to vote for all
nominees listed below / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Robert D. Batting Robert T. Brady Randall L. Clark
G. Wayne Hawk Terry M. Manon Robert J. McKenna
James W. McLaughlin
(2) To ratify the reappointment of
Price Waterhouse LLP as independent
FOR / / AGAINST / / ABSTAIN / /
auditors of the Company; and
(3) To transact such other business as may properly come before the meeting,
or any adjournment thereof, hereby giving to each of my said proxies,
power, authority and discretion to act as fully as I might do if
personally present. The named proxies, or any of them, shall have and
may exercise all powers hereunder.
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 ELECTION OF DIRECTORS AND FOR RATIFICATION OF THE
REAPPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
(PLEASE DATE AND SIGN ON THE REVERSE SIDE)
<PAGE>
(Continued From Other Side)
Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee, guardian, or corporation official, please
give full title. Each joint owner must sign proxy.
Signature _________________________________
Signature _________________________________
Dated______________________________________
