DRIVER-HARRIS COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 28, 2000
TO THE STOCKHOLDERS:
The Annual Meeting of the Stockholders of Driver-Harris Company will be held
at the New Jersey Historical Society, 52 Park Place, Newark, NJ on Wednesday,
June 28, 2000 at 10:30 A.M., for the following purposes:
1. to elect four directors;
2. to transact any and all other business that may properly come before the
meeting.
The transfer books will not be closed for the Annual Meeting. Only
stockholders of record at the close of business on May 25, 2000 will be
entitled to vote at the meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. It is important that your stock be represented at this meeting.
You are urged to mark, sign and date the enclosed proxy and return it as
promptly as possible in the postage pre-paid envelope
enclosed for that purpose whether or not you are able to attend.
By Order of the Board of Directors:
Lavinia Z. Emery
Secretary
Harrison, New Jersey
May 30, 2000
<PAGE>
DRIVER-HARRIS COMPANY
(Incorporated in New Jersey)
P R O X Y S T A T E M E N T
Annual Meeting of Stockholders to be held June 28, 2000
SOLICITATION AND REVOCABILITY OF PROXY
The accompanying proxy is solicited by order of the Board of Directors of
Driver-Harris Company, 600 Essex Street, Harrison, New Jersey, for use at
the Annual Meeting of Stockholders of the Company (the "Annual Meeting") to
be held on June 28, 2000 and any adjournment thereof. This Proxy Statement
and the enclosed form of proxy are first being mailed to stockholders of
this Company on or about May 30, 2000.
Execution of the Proxy will not in any way affect the stockholder's right
to attend the meeting and vote in person. In addition, a proxy may be
revoked by a stockholder at any time
prior to being voted by giving written notice of such revocation to the
Secretary of the Annual Meeting, or by filing with the Secretary another
proxy bearing a later date.
The Company will bear the cost of solicitation of proxies and will reimburse
persons holding stock in their names or those of their nominees for their
expenses in sending soliciting material to their principals. In addition to
the solicitation of proxies by use of the mails, proxies may also be
solicited by regularly engaged employees of the Company by telephone,
facsimile, cable and personal interview. It is not expected that any
solicitation will be made by specially engaged employees of the Company or
other paid solicitors.
VOTING SECURITIES
Only stockholders of record at the close of business on May 25, 2000 will
be entitled to vote at the Annual Meeting. The Company has only one class
of voting securities currently outstanding, its common stock, $.83 1/3 par
value (the "Common Stock") per share, of which 1,372,333 shares were
outstanding on May 25, 2000, the record date. Each stockholder is
entitled to one vote for each share of Common Stock held by him. The
presence, in person or by proxy, of the holders of a majority of the
outstanding shares is required for a quorum.
Under New Jersey Law, abstentions and broker non-votes (as hereinafter
defined) are counted as present for the purpose of determining the presence
or absence of a quorum for the transaction of business but otherwise do not
count. The approval of a specified percentage of shares voted at the
meeting, as set forth above, is required to approve a proposal and thus,
abstentions and broker non-votes have no effect on the outcome of the vote.
A "broker non-vote" refers to shares represented at the Meeting in person or
by Proxy by a broker or nominee where such broker or nominee (i) has not
received voting instructions on a particular matter from the beneficial
owner or persons entitled to vote; and (ii) the broker or nominee does not
have the discretionary voting power on such matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Ownership of shares of the Company's Common Stock by certain beneficial
owners as of March 22, 2000:
<TABLE>
Name and Address Amount and Nature of Percent of
Of Beneficial Owner Beneficial Ownership Class
<S> <C> <C>
Estate of Frank L. Driver Jr. 64,172* 4.7
c/o David A. Driver, Executor
10 High Street
Bristol, RI 02809
Estate of Frank L. Driver III 66,662** 4.9
33 Birdseye Glen
Verona, NJ
Frank L. Driver IV 111,540*** 7.8
100 Warren Street
Jersey City, NJ
</TABLE>
_____________________________
* All shares held of record and beneficially. As an executor of the Estate
of Frank L. Driver Jr., David A. Driver, Chairman of Driver-Harris Company,
holds voting rights to such shares.
** All shares held of record. Does not include 24,154 shares held by
Corinne F. Driver, his surviving spouse and the mother of Frank L. Driver IV,
who disclaims any beneficial interest in these shares. As an executor of
the Estate of Frank L. Driver III, Frank L. Driver
IV, Director and President, holds voting rights to such shares.
*** Includes 38,750 shares under options pursuant to the Driver-Harris
Employee Incentive Stock Option Plan, granted in 1990, 1991 and 1992, which
are fully exercisable, 3,000 shares granted in 1999 and 8,014 shares held in
the Driver-Harris Staff 401-K Benefit account.
(b) Security ownership of management as of March 22, 2000:
<TABLE>
Amount and Nature of Percent of
Title of Class Beneficial
Class
Ownership
Driver-Harris Company
<S> <C> <C>
Common Stock 342,494* 24.1%
</TABLE>
* Includes 50,250 shares under options pursuant to the 1983 and 1999 Driver-
Harris Employee Incentive Stock Option Plan and 8,014 shares held in the
Driver-Harris Staff 401-K Benefit account.
(c) Management is not aware of any arrangement which may result in a change
in control of the Company.
ELECTION OF DIRECTORS
Four directors are to be elected at the Annual Meeting to hold office until
the next annual meeting of the stockholders and until their respective
successors shall be elected and qualified.
All duly executed proxies will be voted for the election of the four
nominees named below unless, as is not anticipated, any one of the nominees
is unable or declines to serve, in which case such proxies will be voted for
the balance of the nominees and for substitute nominees, unless the Board
deems it advisable to amend the By-Laws so as to decrease the
number of directors to be elected. Directors shall be elected by a plurality
of the votes cast.
All nominees are presently directors of the Company.
The following table summarizes the principal occupations and business
experience during the past five years, as well as certain other information
as of March 22, 2000, for each nominee:
<TABLE>
Principal Occupation Company Common % of
During Last Five Stock Outstanding
Years and other Director Beneficially Common
Name Age Directorships Since Owned (1) Stock
Ralph T.
<S> <C> <S> <C> <C> <C>
Bartlett 75 Certified Public
Accountant. 1985 8,600 *
Until 1984, a partner of Deloitte
Haskins & Sells (now Deloitte
& Touche), NY.
H. L.
Biggerstaff 73 Retired. Until 1988,
President 1980 9,650 *
Arwood Die Casting Division
of Arwood Corp.
David A.
Driver 61 Chairman of the Board
of Directors 1977 45,720 3.3
of the Company.
President, Atlantic Alloys Inc.
Frank L.
Driver IV 39 President and Chief
Executive Officer 1993 111,540** 7.8
______________ of the Company.
</TABLE>
* Denotes less than 1% of the outstanding Common Stock.
** Includes 38,750 shares under options pursuant to the Driver-Harris Employee
Incentive Stock Option Plan, granted in 1990, 1991 and 1992, which are fully
exercisable, 3,000 shares granted in 1999 and 8,014 shares held in the
Driver-Harris Staff 401-K Benefit account.
(1) On March 22, 2000 all directors of the Company as a group (4) owned
beneficially 306,344 shares or 21.5% of the outstanding Common Stock. This
amount includes 38,750 shares under currently exercisable stock options and
3,000 shares granted in 1999 to Frank L. Driver IV; 1,500 shares each to
Ralph T. Bartlett, H. L. Biggerstaff and David A. Driver pursuant to the
Driver-Harris Employee Incentive Stock Option Plan. Also, Frank L. Driver IV
is an executor of the Estate of Frank L. Driver III, his father, which owns
66,662 shares or 4.9% of the outstanding common stock. In addition, David A.
Driver is an executor of the Estate of Frank L. Driver Jr., his father,
which owns 64,172 shares or 4.7% of the outstanding
Common Stock.
The Company has an Audit Committee and a Compensation Committee, it does not
have a Nominating Committee. The Audit Committee, which held two meetings
during 1999, is responsible for the Company's audit and financial controls.
Messrs. Ralph T. Bartlett, H. L. Biggerstaff and David A. Driver are members
of the Audit Committee.
The Compensation Committee met in March of 1999. Messrs. Ralph T. Bartlett,
H. L. Biggerstaff and David A. Driver are members of the Committee.
The Board of Directors held five meetings during 1999. The Board of Directors
recommends that Stockholders vote FOR the nominees for the Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
Long-Term
Annual Compensation
Compensation Awards
Securities Underlying All Other
Name and Principal Position Year Salary Options/SARs Compensation (a)
($) (#) ($)
<S> <S> <C> <C> <C> <C>
Frank L. Driver IV,
President 1999 90,000 0 0 (b)
and Chief
Executive
Officer 1998 90,000 0 6,231 (c)
1997 90,000 0 9,000
</TABLE>
(a) Amount represents the Company's portion of contributions to a 401(k) plan.
(b) The total amount accrued for 1999 was $9,000.
(c) A portion of his compensation has been accrued.
<TABLE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
Percent of Potential Realizable Value At
Number of Total Assumed Annual Rates Of
Securities Options/ Stock Price Appreciation For
Underlying SARs Option Term
Options/ Granted to
SARs Employees Exercise of -----------------------------
Granted In Fiscal Base Price Expiration
Name (#) Year ($/sh) Date 5% ($) 10% ($)
Frank
<S> <C> <C> <C> <C> <C> <C>
L. Driver IV 3,000 19% $3.937 9/13/09 $7,478 $18,825
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES
<TABLE>
Number of
Securities Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End(#) FY-End($)
---------------------- ---------------
Shares Acquired Exercisable (E) Exercisable (E)
Name On Exercise(#) Unexercisable (U) Unexerciseable (U)
Exercisable options:
<S> <S> <S> <C> <C> <S> <S>
Frank L. Driver IV 6,250 38,750 (E) -----
3,000 (U)
</TABLE>
PENSION PLANS
On November 21, 1986, the Company entered into a pension agreement with
Frank L. Driver III, under which Mr. Driver or his spouse would receive an
annual payment of $50,000 for a period of fifteen years after Mr. Driver's
retirement or death. On November 20, 1995, the Board of Directors approved
changing the period to twenty years and the addition of a contingent payment
to this agreement whereby in years where the profit of the Company
exceeds $500,000 before income taxes and before this payment, the $50,000
amount will be supplemented by an amount based on a formula encompassing
total retirement payments, adjusted annually for the Consumer Price Index.
This pension is now payable to Corinne F. Driver, spouse of Frank L. Driver
III, deceased. In 1997, $21,072 was paid as an additional
retirement payment to Corinne F. Driver. No additional payments were made
for 1999.
COMPENSATION OF DIRECTORS
During 1999, each Director, with the exception of Frank L. Driver IV, was
paid $600 per Board of Directors Meeting and $600 per Audit or Compensation
Committee Meeting. In addition, in 1999, Ralph Bartlett and H. L.
Biggerstaff received 3,500 shares and David Driver
received 4,000 shares of Common Stock, valued at $2.125 per share for a total
of $23,375.
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Company has a Compensation Committee of its Board of Directors.
Mr. David A. Driver, a member of the Committee is an uncle of Frank L. Driver
IV, President and Chief Executive Officer.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Board's Compensation Committee reviews the compensation of the executive
officers of the Company annually.
The Company's salary policy is to pay a "competitive salary" plus an
incentive bonus based on profit performance in relation to prior years and
in relation to annual budget profit targets. The Compensation Committee may
also take into consideration other factors including dedication to the job,
external factors beyond the control of management, etc. An
incentive bonus of 750 shares each of Common Stock was paid in 1999 to
Thomas J. Carey, and Lavinia Z. Emery.
Compensation Committee
David A. Driver Ralph T. Bartlett H. L. Biggerstaff
CUMULATIVE TOTAL SHAREHOLDER RETURN FIVE-YEAR COMPARISON
The following table compares the yearly percentage change in the cumulative
total shareholder return, on Driver-Harris (DRH) common stock, with that of
the cumulative total return of Standard & Poor's Smallcap 600 Index and a
Standard & Poor's Industry Index of companies, for a five-year measurement
period beginning December 31, 1994 and ending on
December 31, 1999.
<TABLE>
Dec.'94 Dec.'95 Dec.'96 Dec. '97 Dec.'98 Dec.'99
<S> <C> <C> <C> <C> <C> <C>
Driver-Harris Co. 100.00 114.63 171.94 200.00 70.73 63.41
S & P Smallcap 600 Index 100.00 129.96 157.67 198.01 195.42 219.66
Metal Fabricators-Small 100.00 138.76 146.96 185.94 130.55 158.65
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
David A. Driver, Chairman of the Company is the uncle of Frank L. Driver IV,
President.
In 1994, the Company restructured its operations and among other things,
became the owner of a fifty percent interest of HAI Holding Company Inc. and
indirectly of Harrison Alloys Inc. (Harrison). In conjunction with this
transaction, Messrs. F. L. Driver III and IV entered into consulting
agreements with Harrison for a five-year period under which each
would receive compensation of $25,000 per year. However, since September
1996, Frank L. Driver IV received no compensation from Harrison.
In October 1999, Harrison declared bankruptcy and in January 2000 was ordered
to liquidate its assets under the Federal Bankruptcy Code by March 31, 2000.
COMPLIANCE WITH SECTION 16(a) OF EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's Officers and Directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the
Securities and Exchange Commission and the American Stock Exchange.
Officers, directors and greater than ten-percent shareholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on review of the copies of such forms furnished to the Company,
or written representations that no Forms 5 were required, the Company
believes that during 1999 all Section 16(a) filing requirements applicable
to its officers, directors and greater than ten-percent shareholders were
complied with.
INDEPENDENT AUDITORS
The principal independent auditors of the Company for the year ended
December 31, 1999 were Ernst & Young LLP, who have been appointed by the
Board to act in that capacity again in 2000. Services rendered by Ernst &
Young LLP included an audit of the Company's consolidated financial
statements and the report thereon, meetings with the Audit Committee
and consultation in connection with various accounting and audit related
matters.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting with the opportunity to make a statement if he so desires and
to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting must be received by the Company on or before January 15, 2001 to be
considered for inclusion in the Company's proxy statement and form of proxy
relative to the meeting. Such proposals should be sent to Lavinia Z. Emery,
Secretary, Driver-Harris Company, 600 Essex Street,
Harrison, New Jersey.
OTHER MATTERS
Management is not aware of any matters, other than those referred to above,
that may come before the Annual Meeting. If any other matters are properly
presented at the Annual Meeting for action, it is intended that the persons
named in the proxies will have discretionary authority to vote on such
matters.
Enclosed herewith is the 1999 Annual Report of the Company, including
financial statements for the year ended December 31, 1999. The Annual Report
does not form part of the material for solicitation of proxies.
The Company's 1999 Annual Report on Form 10-K, including financial statements
and schedules thereto, but excluding exhibits, as filed with the Securities
and Exchange Commission, may be obtained without charge by any stockholder
upon written request to Lavinia Z. Emery, Secretary, Driver-Harris Company.
By Order of the Board of Directors
Harrison, New Jersey Lavinia Z. Emery
May 30, 2000 Secretary
<PAGE>
DRIVER-HARRIS COMPANY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
For Annual Meeting to be held on June 28, 2000 at 10:30 a.m.
The undersigned hereby appoints, Frank L. Driver and David A. Driver and
each or either of them, attorneys with powers the undersigned would possess
if personally present to vote all stock of the undersigned in Driver-Harris
Company at the Annual Meeting of its stockholders,
to be held June 28, 2000 and at any adjournment thereof:
(1) For the election of four directors, namely:
Messrs. Ralph. T. Bartlett, H. L. Biggerstaff, David A. Driver and Frank L.
Driver
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL
NOMINEES, PLACE A LINE THROUGH THE NOMINEE'S NAME.
(2) And upon such other matters which may properly come before the meeting.
Dated: _____________________, 2000 _________________________________
_________________________________
Please sign exactly as name appears on
record. If joint account, each joint owner
must sign.
Kindly check this box if planning to attend the Annual Meeting.
