SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
LATSHAW ENTERPRISES, INC.
(Name of Registrant as Specified In Its Charter)
James S. Swenson
2420 Pershing, Suite 400
Kansas City, Mo. 64108
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(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
14-a(6)(i)(4) and O-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 O-11:*
4) Proposed maximum aggregate value of transaction:
*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 O-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Notes:
LATSHAW ENTERPRISES, INC.
2533 South West Street
Wichita, Kansas 67217
(316) 942-7266
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 6, 1995
The annual meeting of the stockholders of Latshaw
Enterprises, Inc., a Delaware corporation, will be held at the
1st Floor Conference Room, Air World's Ambassador II Building,
11020 Ambassador Drive, Kansas City, Missouri, on Friday,
October 6, 1995, at 10:00 A.M., C.D.T., for the following
purposes:
1. To consider and act upon a proposal to elect two
directors of the corporation as set forth in the
accompanying Proxy Statement.
2. To consider and act upon a proposal to ratify the
selection of Ernst & Young as independent auditors for
the corporation and its subsidiaries for the present
fiscal year.
3. To consider and transact such other business as may
properly come before the meeting.
Stockholders of record at the close of business on
September 1, 1995 are entitled to vote at the meeting.
TO INSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED
TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE AS SOON AS POSSIBLE. Sending in your Proxy now will not
interfere with your rights to attend the meeting or to vote your
shares personally at the meeting if you wish to do so.
All stockholders are cordially invited to attend the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Michael E. Bukaty
President and
Chief Operating Officer
DATE: September 11, 1995
Wichita, Kansas
LATSHAW ENTERPRISES, INC.
2533 South West Street
Wichita, Kansas 67217
September 11, 1995
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Latshaw
Enterprises, Inc. (the "Company"), for the annual meeting of
stockholders to be held on October 6, 1995.
If the accompanying Proxy is signed and returned the shares
represented by the Proxy will be voted in accordance with the
specifications thereon. If the manner of voting such shares is
not indicated on the Proxy, they will be voted for (a) the
nominees for directors named herein and (b) the ratification of
the selection of the independent auditors for the Company.
A stockholder may revoke his or her Proxy at any time before
it is voted by giving to the Secretary of the Company written
notice of revocation bearing a later date than the Proxy, by
submission of a later-dated Proxy, or by revoking the Proxy and
voting in person at the Annual Meeting. Attendance at the Annual
Meeting will not in and of itself constitute a revocation of a
Proxy. Any written notice revoking a Proxy should be sent to Mr.
David G. Carr, Secretary, Latshaw Enterprises, Inc., 2533 South
West Street, Wichita, Kansas 67217.
A copy of the Company's annual report for the fiscal year
ended October 29, 1994 is enclosed herewith. Such report is not
incorporated in this Proxy Statement and is not to be deemed a
part of the proxy soliciting material, except as expressly
provided herein.
VOTING
Stockholders of record at the close of business on
September 1, 1995, are entitled to notice of and to vote at the
meeting. There were 498,325 shares of common stock outstanding
at the close of business on that date.
Stockholders are entitled to vote cumulatively for the
election of directors, which means that each stockholder is
entitled to cast as many votes as shall equal the number of
shares held by him times the number of directors to be elected,
and such votes may all be cast for a single director or may be
distributed among the directors to be elected as the stockholder
wishes. Unless otherwise indicated on the Proxy, authority will
be granted to the persons named in the Proxy to vote the shares
represented by the Proxy cumulatively for the election of
directors in accordance with their discretion. Stockholders
are entitled to one vote per share on all other matters.
Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for
the transaction of business. In tabulating the votes cast on
proposals presented to stockholders, abstentions are counted and
broker non-votes are not counted for purposes of determining
whether a proposal has been approved.
PROPOSAL 1
ELECTION OF DIRECTORS
Two directors are to be elected at the meeting. The Board
of Directors presently consists of seven directors divided into
three classes, Class A consisting of three directors and Classes
B and C consisting of two directors each. One class of directors
is elected each year to hold office for a three-year term and
until the successors of such class are duly elected and
qualified, or until their earlier resignation or removal. The
terms of office of the Class B directors will expire upon the
election of their successors at the 1995 annual stockholders'
meeting.
The stockholders will be asked to elect each of the nominees
listed below as a Class B director for a term of three years and
until his or her successor is elected and qualified or until his
or her earlier resignation or removal. Management expects both
of such nominees to be available for election, but in the event
that either of them should become unavailable, the persons named
in the accompanying Proxy will vote for a substitute nominee or
nominees if so designated by the Board of Directors. The two
nominees receiving the greatest number of votes will be elected
directors at the meeting.
Percentage of
Outstanding
Shares of Shares of
A Common Stock Common Stock
Director Beneficially Beneficially
of the Owned Owned
Principal Company August 25, August 25,
Name Age Occupation(1) Since 1995(2)(3) 1995
NOMINEES FOR ELECTION AT ANNUAL MEETING
Constance H. 38 Private 1989 100 (*)
Latshaw Investor.(4)
(Class B)
David M. Pangrac 53 Consultant 1989 10 (*)
(Class B) employed by
Pangrac &
Associates
Consultants, Inc.,
network and
communications
consultants.(5)
DIRECTORS WHOSE TERMS EXPIRE IN 1996
Michael E. Bukaty 58 President and 1984 18,976(7) 3.7%
(Class C) Chief Operating
Officer of
the Company and
President and
Chief Executive
Officer of
Wescon Products
Company, a
wholly-owned
subsidiary of
the Company.(6)
John Latshaw 73 Chairman of the 1987 664,660(9) 69.2%
(Class C) Board of Directors,
Managing Director
and Chief
Executive Officer
of the Company,
and Chairman of
the Board of
Directors of Wescon
Products Company,
a wholly-owned
subsidiary of
the Company.(8)
DIRECTORS WHOSE TERMS EXPIRE IN 1997
James C. Gale 45 Managing Director 1987 2,700(11) (*)
(Class A) of Gruntal & Co.,
Inc., New York,
investment
bankers.(10)
Elizabeth A. 35 Self-Employed/ 1988 10 (*)
Reid-Scott Private
(Class A) Investor.(12)
L. Chandler Smith 75 Director of 1967 100 (*)
(Class A) Corporate
Development of
the Company.
(*) Denotes beneficial ownership of less than 1% of outstanding
common stock.
(1) Unless otherwise indicated, each of the directors has had
the same principal occupation during the last five years.
(2) Unless otherwise indicated, each director has sole voting
and investment power with respect to the shares listed.
(3) Shares owned by the Latshaw Enterprises, Inc. Employee Stock
Ownership Plan and Trust, which is administered by the ESOT
Administrative Committee of the Board of Directors of the
Company, are not included in the shares owned by individual
directors, except for shares allocated to the accounts of
individual directors which may be voted by such directors
under the terms of the Trust. See footnote (8) on page 8
hereof.
(4) Constance H. Latshaw has been self-employed as a private
investor during the past five years, and is the sister of
Elizabeth A. Reid-Scott and the daughter of John Latshaw.
(5) Mr. Pangrac was employed by TimeWarner Cable, a cable
television provider, as Vice President of Engineering from
1992 to 1994 and as Director of Engineering from 1990 to
1992. TimeWarner Cable was formerly known as American
Television and Communications Corp.
(6) Mr. Bukaty has also served since December 1993 as President
of Coast Wire & Plastic Tech, Inc., a wholly-owned
subsidiary of the Company and a cable and wire manufacturer.
(7) Includes 11,200 shares which Mr. Bukaty has the present
right to acquire upon conversion of Variable Interest Rate
Convertible Subordinated Debentures due November 8, 2022
owned by him, 3,000 shares which Mr. Bukaty has the present
right to acquire under the 1987 Employee Stock Benefit Plan
and 1,516 shares allocated to Mr. Bukaty's account in the
Company's Employee Stock Ownership Plan and Trust which
Mr. Bukaty has the right to vote.
(8) Mr. Latshaw has served as Chairman of the Board of Helton,
Inc., an 80% owned subsidiary of the Company and a
manufacturer of plastic products, since August 1993. Mr.
Latshaw has served since December 1993 as Chairman of the
Board and Chief Executive Officer of Coast Wire & Plastic
Tech, Inc., a wholly-owned subsidiary of the Company and a
cable and wire manufacturer. Mr. Latshaw served as Chairman
of the Board of Directors of Latshaw Garden & Leisure, Inc.,
a subsidiary of the Company and formerly a distributor of
consumer products and garden tools, from July 1989 until it
liquidated its inventory in 1992. Mr. Latshaw is the father
of Constance H. Latshaw and Elizabeth A. Reid-Scott,
directors of the Company.
(9) Includes 281,600 shares which Mr. Latshaw has the present
right to acquire upon conversion of Variable Interest Rate
Convertible Subordinated Debentures due November 8, 2022
owned by him, 3,000 shares which Mr. Latshaw has the present
right to acquire pursuant to the 1987 Employee Stock Benefit
Plan, 1,593 shares allocated to Mr. Latshaw's account in the
Company's Employee Stock Ownership Plan and Trust which
Mr. Latshaw has the right to vote and 266,000 shares owned
by Con-Lib Holding Company. See footnote (7) on page 7
hereof.
(10) From 1989 until 1992, Mr. Gale also served as Managing
Director of Maiden Lane Associates, Ltd., merchant bankers,
New York, New York. Mr. Gale also serves as a director of
Adage, Inc. and Prins Recycling Corp.
(11) Includes 2,500 shares which are held by a trust for Mr.
Gale's daughter. As trustee, Mr. Gale has sole voting power
with respect to such shares.
(12) Ms. Reid-Scott has been self-employed as a motion picture
screenwriter and private investor during the past five
years, except during the period from July, 1989 until
February, 1991, when she served as Vice President of Product
Development of Latshaw Garden & Leisure, Inc. Ms. Reid-
Scott is the sister of Constance H. Latshaw and the daughter
of John Latshaw.
There were three meetings of the Board of Directors during
the last fiscal year. The Board of Directors has an Executive
Committee and a Pension and Compensation Committee. The
Executive Committee met six times and the Pension and
Compensation Committee met one time during the last fiscal year.
All directors attended 75 percent or more of the total number of
all meetings of the Board and of committees of which they were
members during the last fiscal year, except that Mr. Gale was
unable to attend one of the Board meetings and one of the
committee meetings held during the last fiscal year.
The Executive Committee consists of Messrs. Latshaw,
Chairman, Bukaty and Smith. The Executive Committee has and
exercises all of the powers of the Board of Directors in the
management of the business of the Company in interim periods
between meetings of the Board of Directors, except as
specifically prohibited by the Bylaws of the Company. The
Pension and Compensation Committee consists of Messrs. Smith,
Chairman, Gale and Pangrac. The Pension and Compensation
Committee is authorized to review the compensation policies of
the Company and its subsidiaries and to make recommendations to
the Board of Directors and management, and has the authority to
grant stock options to employees and to interpret and administer
the 1987 Employee Stock Benefit Plan. The Company does not have
standing audit or nominating committees of the Board of Directors
or committees performing similar functions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
EACH OF THE NOMINEES FOR DIRECTOR PRESENTED IN PROPOSAL 1.
PROPOSAL 2
SELECTION OF AUDITORS
The Board of Directors has selected Ernst & Young to examine
the accounts of the Company and its subsidiaries for the current
fiscal year. Unless otherwise directed, the proxies will be
voted to ratify such selection.
Representatives of Ernst & Young are expected to be present
at the stockholders' meeting to make any statement they may
desire and to respond to appropriate questions concerning the
audit report.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" PROPOSAL 2 CONCERNING THE RATIFICATION OF THE APPOINTMENT
OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table shows as of August 25, 1995, unless
otherwise indicated, the total number of shares of common stock
of the Company beneficially owned by (i) persons known to be
beneficial owners of more than 5% of the outstanding common
stock, (ii) the executive officers listed in the Summary
Compensation Table on page 9 hereof, and (iii) all directors and
executive officers of the Company as a group. The beneficial
ownership of shares by individual directors is shown in the table
on pages 2 and 3 hereof and is incorporated herein by reference.
Percentage
Outstanding
Percentage Shares Bene-
Shares Outstanding cially Owned
Beneficial Owner Beneficially Shares Benefi- on a Fully-
Owned(1) cially Owned(2) Diluted
Basis(3)
Michael E. Bukaty 18,976(4) 3.7% 1.9%
2533 South West Street
Wichita, KS. 67217
David G. Carr 5,444(5) 1.1% 0.5%
2533 South West Street
Wichita, KS. 67217
Con-Lib Holding Company 266,000(6) 39.3% 26.3%
Gerard J. Mos III,
General Manager
No. 3 Dunford Circle
Kansas City, MO 64112
John Latshaw 664,660(7) 69.2% 65.8%
No. 3 Dunford Circle
Kansas City, MO 64112
Latshaw Enterprises, Inc. 96,014(8) 19.3% 9.5%
Employee Stock Ownership
Plan and Trust
P. O. Box 419226
Kansas City, MO 64141
Lazard Freres & Co., LLC 54,800(9) 11.0% 5.4%
One Rockefeller Plaza
New York, N.Y. 10020
All Directors and
Executive Officers of
the Company as a Group 784,061(10) 80.1% 77.6%
(1) Unless otherwise indicated, each person has sole voting and
investment power with respect to the shares listed.
(2) The calculation of the percentage of outstanding shares of
common stock beneficially owned by a beneficial owner or
group of beneficial owners, as the case may be, assumes that
only the currently exercisable stock options or convertible
securities held by that owner or group have been exercised
or converted into common stock and that no other outstanding
stock options or convertible securities have been exercised
or converted.
(3) The calculation of the percentage of outstanding shares of
common stock beneficially owned on a fully-diluted basis
assumes that all currently exercisable outstanding stock
options have been exercised and that all outstanding
convertible securities have been converted into common
stock.
(4) Includes 11,200 shares which Mr. Bukaty has the present
right to acquire upon conversion of Variable Interest Rate
Convertible Subordinated Debentures due November 8, 2022
owned by him, 3,000 shares which Mr. Bukaty has the present
right to acquire under the 1987 Employee Stock Benefit Plan
and 1,516 shares allocated to Mr. Bukaty's account in the
Company's Employee Stock Ownership Plan and Trust which
Mr. Bukaty has the right to vote.
(5) Includes 2,400 shares which Mr. Carr has the present right
to acquire upon conversion of Variable Interest Rate
Convertible Subordinated Debentures due November 8, 2022
owned by him, 1,500 shares which Mr. Carr has the present
right to acquire under the 1987 Employee Stock Benefit Plan
and 844 shares allocated to Mr. Carr's account in the
Company's Employee Stock Ownership Plan and Trust which
Mr. Carr has the right to vote.
(6) Con-Lib Holding Company is a Missouri general partnership
(the "Partnership") whose partners are John Latshaw, a trust
for the benefit of Elizabeth A. Reid-Scott and a trust for
the benefit of Constance H. Latshaw. Gerard J. Mos III
serves as the General Manager of the Partnership. As
General Manager, Mr. Mos has the power to vote and dispose
of the shares held by the Partnership except to the extent
Mr. Mos is instructed otherwise by a majority in interest of
the partners. Mr. Latshaw, as the holder of a 50.2%
interest in the Partnership, has the power to instruct Mr.
Mos as to the voting and disposition of the shares held by
the Partnership if he so chooses. Mr. Mos has no beneficial
interest in the shares held by the Partnership. Elizabeth
A. Reid-Scott and Constance H. Latshaw have no voting or
investment power with respect to the shares held by the
Partnership and disclaim beneficial ownership of such
shares. The amount of shares shown in the table includes
178,000 shares of common stock which the Partnership has the
present right to acquire upon conversion of Variable
Interest Rate Convertible Subordinated Debentures due
November 8, 2022 owned by it.
(7) Includes 281,600 shares which Mr. Latshaw has the present
right to acquire upon conversion of Variable Interest Rate
Convertible Subordinated Debentures due November 8, 2022
owned by him, 3,000 shares which Mr. Latshaw has the present
right to acquire pursuant to the 1987 Employee Stock Benefit
Plan, 1,593 shares allocated to Mr. Latshaw's account in the
Company's Employee Stock Ownership Plan and Trust which
Mr. Latshaw has the right to vote and 266,000 shares owned
by Con-Lib Holding Company. See footnote (6) above.
(8) Shares beneficially owned as of July 31, 1995. UMB Bank,
N.A., 10th and Grand Avenue, Kansas City, Missouri, serves
as Trustee of the Company's Employee Stock Ownership Plan
and Trust. The Trust is administered by the ESOT
Administrative Committee of the Board of Directors of the
Company, which Committee has the sole power to instruct the
Trustee with respect to the investment of the shares owned
by the Trust and with respect to the voting of 42,811 of the
shares. Participants have the right to instruct the Trustee
as to how to vote the remaining 53,203 shares to the extent
such stock is allocated to each such participant. Under the
terms of the Trust, if the Committee fails to instruct the
Trustee as to how to vote the 42,811 shares, the Trustee
shall vote such stock and if the Trustee abstains from
voting the 42,811 shares, the Trustee is required to vote
such stock in accordance with instructions received from
each participant to the extent such stock is allocated to
each such participant. To the extent voting instructions
are requested from participants and are not received by the
Trustee by a stated deadline, the Trustee shall vote such
stock as the Committee shall instruct and if the Committee
fails to instruct the Trustee as to how to vote such stock,
the Trustee shall vote such stock in the manner deemed
appropriate by the Trustee. As of July 31, 1995, the
members of the Committee were Mr. Pangrac, Chairman, and Mr.
Smith, both of whom are directors of the Company.
(9) Shares beneficially owned as of July 31, 1995, as reported
in a Schedule 13-G dated August 8, 1995, filed with the
Securities and Exchange Commission.
(10) Includes 295,200 shares which executive officers and
directors have the present right to acquire upon conversion
of Variable Interest Rate Convertible Subordinated
Debentures due November 8, 2022 owned by them, 7,500 shares
which executive officers and directors have a present right
to acquire under the 1987 Employee Stock Benefit Plan, 2,500
shares held by a director as trustee for a family member,
266,000 shares held by Con-Lib Holding Company and 96,014
shares held by the Company's Employee Stock Ownership Plan
and Trust.
During the 1994 fiscal year, John Latshaw filed late one
Form 4 reporting a single transaction and Con-Lib Holding Company
filed late one Form 3.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table provides certain summary
information concerning compensation paid or accrued by the
Company to or on behalf of (i) the Company's Chief Executive
Officer and (ii) each executive officer of the Company during the
fiscal year ended October 29, 1994 who received compensation in
excess of $100,000 for services rendered in all capacities to the
Company and its subsidiaries during the fiscal year.
Annual Compensation Long-Term All
Compensation Other
Name and Fiscal Compensation
Principal Position Year No. of Shares $
Underlying
Stock Options
Salary Bonus Granted
($) ($) (#)
John Latshaw 1994 $166,000 $56,000 0 $5,824(1)
Chairman of the 1993 165,250 50,000 10,000 6,328
Board, Managing 1992 148,500 0 0 4,527
Director and Chief
Executive Officer
Michael E. Bukaty 1994 $166,000 $56,000 0 $6,098(1)
President and 1993 155,250 50,000 10,000 5,598
Chief Operating 1992 148,500 6,000 0 4,573
Officer
David G. Carr 1994 $ 92,500 $24,000 0 $3,699(1)
Senior Vice Presi- 1993 88,000 21,000 5,000 3,203
dent and Chief 1992 85,000 4,000 0 2,419
Financial Officer
(1) The amounts shown consist of (i) Company
contributions under the Company's Employee Stock Ownership Plan
and Trust allocated during fiscal year 1994 to Mr. Latshaw's
account in the amount of 193 shares of common stock valued at
$1,641, to Mr. Bukaty's account in the amount of 188 shares
valued at $1,598 and to Mr. Carr's account in the amount of 99
shares valued at $842 and (ii) 50% matching contributions by the
Company during fiscal year 1994 under the Company's 401(k) salary
reduction plan in the amount of $4,183 to the account of
Mr. Latshaw, $4,500 to the account of Mr. Bukaty and $2,857 to
the account of Mr. Carr under the Plan.
AGGREGATE OPTION EXERCISES AND
FISCAL YEAR-END OPTION VALUE TABLE
The following table shows the number and value of shares of
Common Stock represented by outstanding stock options held by
each of the named executive officers as of October 29, 1994. No
options were exercised during the 1994 fiscal year.
Number of Shares of Value of Unexercised
Common Stock Underlying In-the-Money
Unexercised Options at Options at
October 29, 1994(#) October 29, 1994($)
Options Options Options Options
Name Exercisable Unexercisable Exercisable Unexercisable
John
Latshaw 8,500 9,000 3,500 31,500
Michael E.
Bukaty 1,000 9,000 3,500 31,500
David G.
Carr 3,000 4,500 1,750 15,750
PENSION PLAN TABLE
The following table shows the estimated annual straight life
annuity benefits payable upon retirement to participants in the
Company's retirement income plan, based upon specified base
salary and years of service classifications.
Annual
Base
Salary Years of Service at age 65
5 10 15 20 25 30 & Over
$ 75,000 $ 4,082 $ 8,163 $ 12,245 $ 16,326 $ 20,408 $ 24,490
100,000 5,748 11,497 17,245 22,993 28,741 34,490
125,000 7,415 14,830 22,245 29,660 37,075 44,490
150,000 9,082 18,163 27,245 36,326 45,408 54,490
175,000 10,748 21,497 32,245 42,993 53,741 64,490
200,000 12,415 24,830 37,245 49,660 62,075 74,490
The retirement income plan is available to salaried
employees of the Company and salaried employees of Wescon
Products Company and Helton, Inc., two subsidiaries of the
Company. The Company makes such contributions to the plan as are
actuarially determined to be necessary to provide for plan
funding. The plan provides for an annual straight life annuity
payments after 30 years of service at age 65 equal to 40% of the
employee's average base salary for the five highest consecutive
years of salary during the last fifteen years of employment,
reduced by 40% of the employee's annual primary social security
benefit. The pension is reduced proportionately for less than 30
years of service and is actuarially reduced for retirement before
age 65. The plan provides that, commencing in 1994, covered
compensation per year for purposes of the plan may not exceed
$150,000. The amount of compensation of Messrs. Latshaw, Bukaty
and Carr covered under the plan is their salary as set forth in
the Summary Compensation Table, excluding for Messrs. Latshaw and
Bukaty compensation received for service as directors of the
Company, and subject to the $150,000 limit described above. The
amount of covered compensation for fiscal year 1994 was $150,000
for Mr. Latshaw, $150,000 for Mr. Bukaty and $92,500 for
Mr. Carr. Mr. Latshaw has six years of service, Mr. Bukaty has
fourteen years of service and Mr. Carr has eleven years of
service under the plan.
PENSION AND COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Pension and Compensation
Committee are L. Chandler Smith, Chairman, James C. Gale and
David M. Pangrac.
L. Chandler Smith is a consultant to the Company, and holds
the title of Director of Corporate Development of the Company.
Mr. Smith served as Chairman of the Executive Committee of the
Board of Directors of the Company from September, 1987 until
November, 1989, was Chairman of the Board of Directors of the
Company prior to September, 1987, and was Chief Executive Officer
of the Company prior to March, 1984. Mr. Smith is a director of
Helton, Inc., an 80% owned subsidiary of the Company, and served
as Chairman of the Board of Helton, Inc. until August, 1993. Mr.
Smith received no compensation for such service. David G. Carr,
Senior Vice President, Chief Financial Officer and Secretary of
the Company, serves as a director of Helton, Inc. and a director
of Coast Wire & Plastic Tech, Inc. During the last fiscal year,
the Company made payments totalling $92,971 to Mr. Smith and a
corporation wholly-owned by Mr. Smith. The amount paid includes
$50,971 paid to Mr. Smith under a supplemental retirement
agreement. Such agreement provides for payments to Mr. Smith
during his lifetime of $4,248 per month, with $3,186 per month to
be paid to his present wife during her lifetime in the event of
his death. The agreement requires Mr. Smith to render consulting
services to the Company and not to compete with the Company. An
additional amount of $30,000 was paid under an agreement between
the Company and a corporation wholly-owned by Mr. Smith pursuant
to which the corporation is to be paid a specified amount per
month, currently $2,500, plus incidental expenses, for exploring
prospective acquisitions for the Company. The agreement may be
terminated by either party as of the end of any calendar month by
giving the other party notice prior to the end of the preceding
calendar month. In addition, Mr. Smith was paid $6,000 as
compensation for his services as a director and a member of the
Executive Committee of the Board of Directors of the Company and
a $6,000 bonus for services rendered to the Company.
COMPENSATION OF DIRECTORS
Directors of the Company receive compensation of $4,000 per
annum, plus $500 and out-of-pocket traveling expenses for
attendance at each Board meeting. Directors who are members of
the Executive Committee also receive $1,000 per annum.
PENSION AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered
by the Pension and Compensation Committee, a Committee of the
Board of Directors composed of the non-employee directors listed
at the end of this report (the "Committee"). All issues
pertaining to executive compensation are reviewed by the
Committee and recommendations are submitted by the Committee to
the full Board of Directors for approval.
Compensation Policy.
The Company's executive compensation policy is designed to
promote the short-term and long-term performance of the Company.
In furtherance of this policy, three principal elements of
executive compensation -- base salary, annual bonuses, and stock
options -- are used to motivate and reward the accomplishment of
annual corporate objectives, to provide variability in individual
awards based on contributions to business results, and to
maintain a competitive compensation package to attract, retain
and motivate individuals of the highest professional quality.
Base Salary.
The Committee generally reviews the base salary levels of
executive officers at the end of each fiscal year. In
determining its recommendations to the Board, the Committee
examines the financial condition and the operating results over
the last fiscal year of the Company and/or the subsidiary
employing the executive, the level of fringe and other benefits
currently provided to the executive by the Company and the
individual performance of the executive. The Committee's
recommendations are based upon its subjective review of these
factors, and is not based upon any specific criteria or financial
performance measure.
In October 1993, due to the improved profitability of the
Company in fiscal year 1993, the Committee recommended that the
executive officers receive increases in base salary for fiscal
year 1994 in amounts ranging from 9 to 11%. The Board of
Directors approved this recommendation.
Key Management Bonus System and Annual Bonuses.
Upon the recommendation of the Committee, the Company
adopted for the 1994 fiscal year a Key Management Bonus System
for Wescon Products Company ("Wescon"), its principal subsidiary.
The bonus plan for the 1994 fiscal year was substantially the
same as that approved for the 1993 fiscal year. Under the bonus
plan, Michael E. Bukaty, President and Chief Operating Officer of
the Company and President and Chief Executive Officer of Wescon,
had the opportunity to receive a cash bonus award based upon the
level of the "Corporate return on investment". The Corporate
return on investment was defined as Wescon's consolidated pre-tax
annual operating profit for fiscal year 1994 divided by the
monthly average of total assets of Wescon less liabilities of
Wescon to outside third parties. The Bonus System provided for
no bonus up to a 12% return on investment and an increasing bonus
for returns of 12-21% up to a maximum possible bonus of $56,000
for Mr. Bukaty. Under the plan, a cash bonus award equal to
approximately 113% of Mr. Bukaty's bonus would also be allocated
for discretionary distribution by Mr. Bukaty in amounts and to
employees of the Company and Wescon of his choice. Payment was
to be made based upon audited financial results. The Company has
adopted a similar plan for the 1995 fiscal year.
The Company also pays discretionary annual bonuses to
executive officers and key employees of the Company and its
subsidiaries on an irregular basis upon the recommendation of the
Committee. In making determinations as to recommended bonuses,
the Committee reviews the same factors considered in determining
base salary, as described above. The Committee's recommendations
are based upon its subjective review of these factors, and is not
based upon any specific criteria or financial performance
measure. As described below, the Committee recommended a bonus
of $56,000 to John Latshaw in October 1994.
Stock Options.
The Committee, as well as the Board of Directors, believes
that stock ownership through stock options by key employees is a
major incentive in aligning the interests of employees and
stockholders, because value is only provided if the stock price
increases and because stock options have an effective long-term
reward and retention function.
The Committee administers the Company's 1987 Employee Stock
Benefit Plan. Under the Plan, the Committee may grant options
for up to 60,000 shares of the common stock of the Company to key
employees who are in positions in which their decisions, actions
and counsel have a significant impact upon the profitability and
success of the Company or any subsidiary. Options granted under
the Plan may be either Incentive Stock Options, which qualify for
special tax treatment under the Internal Revenue Code, or Non-
Qualified Stock Options, which do not so qualify. Under the
Plan, the purchase price of the common stock subject to each
option is determined by the Committee at the time that such
option is granted and the price may not be less than 100 percent
of the fair market value of the common stock on the date of
grant. The Committee meets on an irregular basis to consider the
granting of options under the Plan.
No options were granted under the Plan during the 1994
fiscal year. Most executive officers and key employees have been
granted options under the Plan. All of the options granted under
the Plan have been five-year options vesting over a four-year
period.
Compensation of Chief Executive Officer.
John Latshaw is Chairman of the Board, Managing Director and
Chief Executive Officer of the Company. In October 1993, due to
the improved profitability of the Company in fiscal year 1993,
the Committee recommended that Mr. Latshaw's base salary for
fiscal year 1994 be increased by 10.3%, from $145,000 to
$160,000. The Board of Directors approved this recommendation.
Mr. Latshaw does not participate in the Key Management Bonus
System, and receives bonuses at the end of each fiscal year to
the extent recommended by the Committee and approved by the Board
of Directors. In determining whether to recommend a bonus for
Mr. Latshaw for a fiscal year, the Committee considers the extent
to which bonuses were paid out to other executive officers under
the Key Management Bonus System, and reviews the factors
considered in determining base salary of executive officers
described above. Upon a review of the factors, the Committee
recommended a bonus of $56,000 to John Latshaw in October 1994.
The principal factors relied upon by the Committee in making its
decision were the financial condition and recent operating
results of the Company, the amount of the bonus earned by Mr.
Bukaty and Mr. Latshaw's job performance and contribution to
profits.
Deductibility Cap on Compensation Exceeding $1,000,000
The Committee does not believe that proposed Internal
Revenue Service regulations regarding non-deductibility of annual
compensation in excess of $1,000,000 will have any impact upon
the Company, given the current salary and bonus levels of
officers of the Company and given the proposed treatment in the
regulations of compensation under the Company's stock option
plan. However, the Committee will continue to consider the
effect of the new regulations upon the Company's executive
compensation policies.
L. Chandler Smith, Chairman
James C. Gale
David M. Pangrac
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
Set forth below is a line graph comparing the Company's
cumulative total shareholder return on its common stock with the
cumulative total return of the Media General Composite Index and
a peer group constructed by the Company. The table assumes the
investment at the close of business on October 27, 1989 of $100
in the Company's common stock, the portfolio represented in the
Media General Composite Index and the portfolio consisting of
companies in the peer group, and assumes that all dividends were
reinvested. The returns of each corporation in the peer group
have been weighted according to the corporation's market
capitalization.
The peer group constructed by the Company consists of 32
companies in the database of Media General Financial Services,
Inc. which are included within the following Standard Industrial
Classifications: 3089 - Plastic Products, Not Elsewhere
Classified, 3524 - Lawn and Garden Tractors and Lawn and Garden
Equipment, and 3751 - Motorcycles, Bicycles and Parts. These
companies are: American Biltrite, Inc., American Filtrona
Corporation, Armstrong World Industries, Inc., Atlantis Plastics,
Inc., Calnetics Corporation, Cimco, Inc., Consolidated Mercantile
Corp., Decora Industries, Inc., Essef Corporation, Harley-
Davidson, Inc., Huffy Corporation, Illinois Tool Works Inc.,
Liqui-Box Corporation, Myers Industries, Inc., Park-Ohio
Industries, Inc., Portage Industries Corporation, Premark
International, Inc., PVC Container Corporation, Roadmaster
Industries, Inc., Ropak Corporation, Rotonics Manufacturing Inc.,
Rubbermaid Incorporated, Selfix, Inc., Sealed Air Corporation,
Sun Coast Plastics, Inc., Synetic, Inc., Thermal Industries,
Inc., The Toro Company, Tomkins PLC, Top Source Technologies,
Inc., Tredegar Industries, Inc. and Wedco Technology, Inc.
The following five companies were included in the peer group
for last year's proxy statement and are not included in this
year's peer group, because they no longer appear in the database
under the relevant Standard Industrial Classifications: American
Safety Closure Corp., Beres Industries, Inc., Diversified
Communications Industries, Ltd., International Container Systems,
Inc. and Kerr Group, Inc. In addition, six companies which did
not appear in last year's peer group are included in this year's
peer group because each is now included in the relevant Standard
Industrial Classifications. These companies are Atlantis
Plastics, Inc., Sealed Air Corporation, Synetic, Inc., Tomkins
PLC, Top Source Technologies, Inc. and Tredegar Industries, Inc.
Because of the number of different lines of business engaged
in by the Company, the nature of its competitors and its
relatively small size, the Company cannot construct a group of
truly comparable companies for its peer group. To construct its
peer group, the Company has selected all companies in the
database of Media General Financial Services, Inc. which are
included within certain Standard Industrial Classifications in
which the Company does business. This database includes
companies which are substantially larger than the Company and
companies whose common stock is substantially more actively
traded.
Comparison of Five Year Cumulative Total Return Among
Latshaw Enterprises, Inc., Media General Composite Index
and Peer Group Index
Note: The required performance graph is not included in this
electronic filing. The graph has been provided to stockholders
of the Company and has been filed separately in paper under cover
of Form SE to the Securities and Exchange Commission
Latshaw Media General Peer Group
Enterprises, Inc. Composite Index (1) Index (2)
10/27/89 100.0 100.0 100.0
11/02/90 40.72 91.24 85.22
11/01/91 23.27 119.37 169.80
10/30/92 23.27 125.17 206.61
10/29/93 34.90 151.31 268.06
10/28/94 49.44 157.51 311.55
(1) Index of approximately 7,000 companies prepared by Media
General Financial Services, Inc.
(2) The companies in the peer group are listed above on page 15.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
In November 1991, John Latshaw, Chairman of the Board,
Managing Director and Chief Executive Officer of the Company,
loaned approximately $93,200 to Latshaw & Company, Inc., a
wholly-owned subsidiary of the Company, pursuant to a
subordinated loan agreement. During fiscal year 1994, Latshaw &
Company, Inc. paid to Mr. Latshaw the full principal amount of
$93,200 owed to him plus interest accrued to the date of payment
of $2,904.
For a description of payments made by the Company to
L. Chandler Smith, a director of the Company, during fiscal year
1994, see "Pension and Compensation Committee Interlocks and
Insider Participation".
STOCKHOLDER PROPOSALS
Any appropriate stockholder proposal intended to be
presented for action at the 1996 annual stockholders' meeting
must be received by the Company by May 14, 1996 for inclusion in
the proxy material relating to such meeting.
GENERAL
Management knows of no matters which will be presented for
consideration at the meeting other than those stated in the
Notice of Annual Meeting which is part of the Proxy Statement.
If any other matters do properly come before the meeting, it is
intended that the persons named in the accompanying Proxy will
vote thereon in accordance with their judgment.
In addition to the solicitation of proxies from stockholders
by use of the mails, it is expected that a limited number of
employees of the Company, without additional compensation except
payment of out-of-pocket expenses, may solicit proxies from
stockholders by telephone, telegraph and personal visits. It is
expected that banks, brokerage houses and others will be
requested to forward the soliciting material to their principals
and obtain authorization for the execution of proxies. All costs
of solicitation, including the costs of preparing, assembling and
mailing this Proxy Statement and all papers which now accompany
or may hereafter supplement the same, as well as the reasonable
out-of-pocket expenses incurred by the above-mentioned banks,
brokerage houses and others, will be borne by the Company.
BY ORDER OF THE BOARD OF DIRECTORS
DATE: September 11, 1995 Michael E. Bukaty
President and
Chief Operating Officer
PROXY
The undersigned hereby appoints John Latshaw, Michael E. Bukaty
and David G. Carr, and each of them, with full power of
substitution, as proxies for the undersigned at the Annual
Meeting of Stockholders of Latshaw Enterprises, Inc., at the
First Floor Conference Room, Air World's Ambassador II Building,
11020 Ambassador Drive, Kansas City, Missouri on October 6, 1995,
at 10:00 A.M., C.D.T., and at any adjournment, to vote the shares
of stock the undersigned would be entitled to vote, if personally
present, upon the proposals below and any other matter brought
before the meeting, all as set forth in the September 11, 1995
Proxy Statement.
THE DIRECTORS RECOMMEND THAT THE FOLLOWING AUTHORITY BE
"GRANTED":
Proposal 1. Authority granted to or withheld from proxies to
vote for Constance H. Latshaw and David M. Pangrac
(or a substitute nominee or nominees designated by
the Board of Directors if either of them becomes
unavailable) as directors.
___ GRANTED ___ WITHHELD
THE DIRECTORS RECOMMEND A VOTE "FOR" APPROVAL OF THE FOLLOWING
PROPOSAL:
Proposal 2. Ratification of the appointment of Ernst & Young
as independent auditors for the Company.
___ FOR ___ AGAINST ___ ABSTAIN
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR
NOMINEE OR NOMINEES, YOU MAY DO SO BY STRIKING OUT THE NAME OF
SUCH NOMINEE(S) IN PROPOSAL 1 ABOVE.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE DEEMED MARKED
"GRANTED" ON PROPOSAL 1, MARKED "FOR" ON PROPOSAL 2,
AND VOTED ACCORDINGLY.
Please mark your Proxy, date and sign it on the other side and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
PROXY
For Annual Meeting of Stockholders of Latshaw Enterprises, Inc.,
October 6, 1995, at 10:00 A.M., C.D.T., First Floor Conference
Room, Air World's Ambassador II Building, 11020 Ambassador Drive,
Kansas City, Missouri.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Please mark your Proxy on the other side. Date and sign your
name below as it appears on the Proxy.
__________________________
Stockholder
__________________________
__________________________
Dated: ___________________, 1995
If shares are held jointly, every holder
should sign. If executed by a
corporation, an authorized officer should
sign. Executors, administrators and
trustees should so indicate when signing.
VOTING INSTRUCTIONS
TO: ESOT PARTICIPANTS AND BENEFICIARIES
FROM: ESOT ADMINISTRATIVE COMMITTEE OF THE LATSHAW ENTERPRISES,
INC. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
RE: VOTING SHARES OF LATSHAW ENTERPRISES, INC.
COMMON STOCK ALLOCATED TO ESOT ACCOUNTS
DATE: SEPTEMBER 11, 1995
Pursuant to Section 8.04 of the Company's Employee Stock
Ownership Plan and Trust (the "Plan"), you are entitled to direct
the Trustee of the Plan as to the manner in which certain shares
of the Latshaw Enterprises, Inc. common stock allocated to your
account in the Plan (or to the account with respect to which you
are a beneficiary) shall be voted with respect to various matters
described in the enclosed Proxy Statement.
The enclosed Proxy Statement and Notice of the Annual
meeting of the stockholders of the Company are identical to the
ones being sent to all stockholders of the Company to solicit
their vote with respect to various matters described in the
enclosed Proxy Statement. Please review them carefully before
you decide how to vote. Please indicate your vote on the
enclosed card and return it in the enclosed pre-addressed,
postage-paid envelope. The Trustee of the Plan will then vote
the shares allocated to your account in accordance with your
directions.
DIRECTIONS CONCERNING VOTE OF
ALLOCATED SHARES OF
LATSHAW ENTERPRISES, INC.
PURSUANT TO THE
LATSHAW ENTERPRISES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(THE "ESOP") AT THE
ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD OCTOBER 6, 1995
The undersigned hereby directs UMB Bank, N.A., Trustee of
the ESOP (the "Trustee"), to vote all shares of stock of Latshaw
Enterprises, Inc. (the "Company") which are allocated to the
undersigned's account under the ESOP at the Annual Meeting of the
Stockholders of the Company to be held at the First Floor
Conference Room, Air World's Ambassador II Building, 11020
Ambassador Drive, Kansas City, Missouri, on October 6, 1995,
commencing at 10:00 a.m. (Central Time) of that day and at any
adjournment or adjournments thereof, with respect to the
following and any other matter brought before the meeting, all as
set forth in the September 11, 1995 Proxy Statement.
THE DIRECTORS RECOMMEND THAT THE FOLLOWING AUTHORITY BE
"GRANTED":
Proposal 1. Authority granted to or withheld from proxies to
vote for Constance H. Latshaw and David M. Pangrac
(or a substitute nominee or nominees designated by
the Board of Directors if any of them becomes
unavailable) as directors
___GRANTED ___ WITHHELD
THE DIRECTORS RECOMMEND A VOTE "FOR" APPROVAL OF THE FOLLOWING
PROPOSAL:
Proposal 2. Ratification of the appointment of Ernst & Young
as independent auditors for the Company
___ FOR ___ AGAINST ___ ABSTAIN
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY PARTICULAR
NOMINEE OR NOMINEES, YOU MAY DO SO BY STRIKING OUT THE NAME OF
SUCH NOMINEE(S) IN PROPOSAL 1 ABOVE.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE DEEMED MARKED
"GRANTED" ON PROPOSAL 1, MARKED "FOR" ON PROPOSAL 2, AND VOTED
ACCORDINGLY.
Please mark your directions above, date and sign this card on the
other side and return it promptly in the accompanying envelope,
which requires no postage if mailed in the United States.
<PAGE>
If the undersigned fails to direct the Trustee, certain
shares allocated to the undersigned's account under the ESOP will
be voted by the Trustee in the manner directed by the ESOT
Administrative Committee of the Board of Directors of the
Company, and if the Committee fails to instruct the Trustee as to
how to vote such shares, the Trustee will vote such shares in the
manner deemed appropriate by the Trustee.
DATED: __________________, 1995 _____________________________
Signature
SSN:_________________________
NAME:________________________
(Please Print)
Please insert date of signing
and sign your full and correct
name and indicate your social
security number. Please also
print your name in the space
provided below your signature.
Executors, administrators and
trustees should so indicate
when signing. THE TRUSTEE MUST
RECEIVE YOUR DIRECTIONS BY
SEPTEMBER 29, 1995.
