SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Environmental Tectonics Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),14a-6(i)(1), or
14a-6(i)(2).
[ ] 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: n/a
2) Aggregate number of securities to which transaction
applies: n/a
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: n/a
5) Total fee paid: n/a
[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
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:
________________________
/1/ Set forth the amount on which the filing fee is calculated
and state how it was determined.
<PAGE>
ENVIRONMENTAL TECTONICS CORPORATION
_________________________________________
Notice of Annual Meeting of Shareholders
September 17, 1997
_______________________________________
The Annual Meeting of the Shareholders of Environmental Tectonics
Corporation will be held at the offices of the Company, County
Line Industrial Park, Southampton, Pennsylvania on Wednesday,
September 17, 1997, at 10:00 a.m. (eastern time) for the
following purposes:
1. To elect five directors to serve until their successors have
been elected and qualified.
2. To transact such other business as may properly come before
the meeting.
The record date for determination of shareholders entitled to
notice of and to vote at the meeting is August 20, 1997.
By Order of the Board of Directors
ANN M. ALLEN, Secretary
________________________
Whether or not you expect to attend the meeting, please sign and
date the enclosed proxy and return it promptly in order that your
stock may be voted. If you attend the meeting, you may withdraw
your proxy and vote in person.
<PAGE>
ENVIRONMENTAL TECTONICS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
September 17, 1997
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Environmental Tectonics
Corporation, a Pennsylvania corporation (the "Corporation" or the
"Company"), of proxies in the accompanying form for use at the
Annual Meeting of Shareholders to be held at 10:00 a.m. (eastern
time) on Wednesday, September 17, 1997, at the Company's
executive offices at County Line Industrial Park, Southampton,
Pennsylvania 18966 and at any adjourned meeting thereof (the
"Annual Meeting"). This Proxy Statement and accompanying form of
proxy are being first sent or given to security holders on or
about August 25, 1997. In addition to the use of the mails,
directors, officers and employees of the Corporation may solicit
proxies personally or by telephone. The expense of soliciting
proxies will be borne by the Company.
ACTION TO BE TAKEN UNDER THE PROXIES
When a proxy in the enclosed form is properly executed and
returned in the envelope provided, the shares represented thereby
will be voted at the Annual Meeting in accordance with the
instructions specified therein. Absent clear instructions to the
contrary, such shares will be voted "FOR" the election, as
directors, of the Board of Directors' nominees. Any such proxy
may be revoked at any time before its exercise by (i) executing
and delivering a later dated proxy to the Secretary of the
Corporation, (ii) giving written notice of revocation to the
Secretary of the Corporation, or (iii) by voting in person at the
Annual Meeting. The mailing address of the Corporation is County
Line Industrial Park, Southampton, Pennsylvania 18966.
VOTING SECURITIES AND RECORD DATE
The close of business on August 20, 1997, has been fixed as
the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting. On the record date,
the Corporation had outstanding 3,001,326 shares of Common Stock,
$.10 par value per share ("Common Stock") and 25,000 shares of
Series A Convertible Preferred Stock ("Series A Preferred
Stock"). The holders of Series A Preferred Stock shall vote
together with holders of the Common Stock as a single class for
all matters submitted to a vote of the shareholders of the
Company. The holders of Series A Preferred Stock shall also vote
as a class to elect one director (the "Preferred Director") in
addition to the four directors elected by holders of Series A
Preferred Stock and holders of the Common Stock voting as a
single class. Each share of Common Stock is entitled to one vote
on all matters coming before the Annual Meeting, however, the
holders of Common Stock are not entitled to cumulate votes in
elections of directors. Each share of Series A Preferred Stock
is entitled to that number of votes which equals the number of
shares of Common Stock into which each share of Series A
Preferred Stock may be converted (the "Conversion Ratio") which
number shall be calculated by dividing $100 by the Conversion
Price then in effect. Such Conversion Price is currently $7.50,
however this amount shall be subject to adjustment upon the
occurrence of certain events. Holders of Series A Preferred
Stock are entitled to cumulative dividends ("Preferred
Dividends") of $11.00 annually (to be paid before any dividends
are paid to the holders of Common Stock) which is to be paid in
an amount of $2.75 per share on the first of each of February,
May, August and November ("Dividend Payment Dates").
The presence, in person or by proxy, of shareholders
entitled to cast a majority of the votes which all shareholders
are entitled to cast shall constitute a quorum at the Annual
Meeting. Abstentions with respect to one or more proposals voted
upon at the Annual Meeting will be included for purposes of
determining a quorum for the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of August 20, 1997 the
number of shares and percentage of the Company's Common Stock
owned beneficially by each director, each nominee for director,
each named executive officer set forth in the Summary
Compensation Table and each person holding, to the Company's
knowledge, more than 5% of the outstanding Common Stock. The
table also sets forth the holdings of all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Beneficial of Common
Name and Address of Beneficial Owner Ownership Stock
<S> <C> <C>
William F. Mitchell (1) 933,949 26.6%
c/o Environmental Tectonics
Corporation
County Line Industrial Park
Southampton, PA 18966
Pete L. Stephens, M.D. (2) 319,875(3) 9.1%
1150 Eleni Lane
West Chester, PA 19382
Richard E. McAdams (4) 21,526(5) *
c/o Environmental Tectonics
Corporation
County Line Industrial Park
Southampton, PA 18966
Michael A. Mulshine (6) 0(7) *
Osprey Partners
2517 Route 35
Manasquan, NJ 08736
Philip L. Wagner, Ph.D. (8) 6,000(9) *
Chadds Ford Technologies, Inc.
P.O. Box 377
Chadds Ford, PA 19317
Craig MacNab 499,660(10) 14.2%
c/o Tandem Capital
500 Church Street Suite 200
Nashville, TN 37219
Sirrom Capital Corporation 499,660(10) 14.2%
500 Church Street, Suite 200
Nashville, TN 37219
All directors and executive
officers as a group (7 persons) 1,786,385(11) 50.9%
* less than 1%
____________________
</TABLE>
(1) Chairman of the Board, President and Director of the
Corporation. Shares of Common Stock include 2,065 held
jointly with spouse.
(2) Director of the Corporation.
(3) Includes 8,975 shares of Common Stock held by or for the
benefit of Dr. Stephens' wife and two of his children.
(4) Director of the Corporation.
(5) Includes options to purchase 2,000 shares of Common Stock
held under the Company's Incentive Stock Option Plan of
which 500 are presently exercisable.
(6) Director of the Corporation.
(7) Does not include warrants to purchase 125,000 shares of
Common Stock that are exercisable only upon completion of
certain activities under a separate consulting agreement.
The consulting agreement was terminated on April 25, 1997
and the warrants expire on April 25, 1998.
(8) Director of the Corporation.
(9) Includes 4,000 shares of Common Stock held by or for the
benefit of Dr. Wagner's wife.
(10) Shares listed for Craig MacNab and Sirrom Capital
Corporation are the shares beneficially owned by Sirrom
Capital Corporation. These shares include 333,250 shares of
Common Stock underlying 25,000 shares of Series A Preferred
Stock that are presently convertible and 166,410 shares of
Common Stock underlying a presently exercisable warrant to
purchase 166,410 shares of Common Stock.
(11) Includes options to purchase 7,375 shares of Common Stock
held under the Company's Incentive Stock Option plan that
are presently exercisable.
<PAGE>
ELECTION OF DIRECTORS
The Bylaws of the Corporation provide that the Board of
Directors of the Corporation shall consist of not less than three
nor more than ten directors. Within the foregoing limits, the
Board of Directors may from time to time fix the number of
directors. The Board of Directors of the Corporation has fixed
the number of directors at five directors until the next annual
meeting.
At the 1997 Annual Meeting of Shareholders, five directors
shall be elected to serve for a one-year term and until their
successors are elected and qualified.
Unless otherwise instructed, the Board of Directors'
proxyholders will vote the proxies received by them for the
election of the four nominees named below and the proxies of the
holders of the Series A Preferred Stock shall be voted for the
election of the Preferred Director as previously discussed
herein. If any nominee should become unable to serve for any
reason, proxies will be voted in favor of a substitute nominee as
the Board of Directors of the Corporation shall determine. The
Board of Directors has no reason to believe that any of the
nominees named will be unable to serve, if elected.
There is no cumulative voting for the election of directors.
Each share of Common Stock is entitled to cast one vote for each
nominee; however, each share of Series A Preferred Stock is
entitled to vote that number of shares of Common Stock which
equals the Conversion Ratio. In the event that either (i) the
Company fails to pay the Preferred Dividend on six consecutive
Dividend Payment Dates or the aggregate amount of accumulated
Preferred Dividends totals $16.50 per share, the holders of the
Series A Preferred Stock shall have the right immediately to
elect that number of members to the Board of Directors as shall
constitute a majority of the Board of Directors.
The holders of Series A Preferred Stock shall vote with the
holders of Common Stock as a class for the election of the
remaining directors so long as there are no more than six
directors. The four nominees who receive the highest number of
votes cast at the Annual Meeting will be elected as directors in
addition to the director who shall be elected as the Preferred
Director. Abstentions and broker non-votes will not constitute
or be counted as votes cast for purposes of the Annual Meeting.
The following table sets forth certain information with
respect to the Board of Directors' nominees for director
including the Preferred Director. Each of the following nominees
presently serves as a director of the Corporation.
<TABLE>
<CAPTION>
Principal
Occupations
Served as and Position
Director and Offices
Name Age Since with the Company
<S> <C> <C> <C>
William F. Mitchell(1) 55 1969 Chairman of the
Board, President and
Director
Richard E. McAdams(2) 61 1985 Executive Vice
President and
Director
Philip L. Wagner, Ph. D.(3) 61 1993 Director
Pete L. Stephens, M.D.(4) 59 1974 Director
Craig MacNab(5) 41 1997 Director
(Preferred Director)
____________________
</TABLE>
(1) Mr. Mitchell has been Chairman of the Board, President and
Chief Executive Officer of the Company since 1969, except
for the period from January 24, 1986 through January 24,
1987, when he was engaged principally in soliciting sales
for the Company's products in the overseas markets.
(2) Mr. McAdams has been with the Company since 1970. He became
a Vice President in 1978, and an Executive Vice President in
1990, with responsibility for contract administration.
(3) Dr. Wagner is an organic chemist with over 30 years of
diversified experience managing research and development and
new business development at E.I. du Pont de Nemours &
Company. In November 1992, he founded Chadds Ford
Technologies, Inc., a consulting firm. He is currently
President of Chadds Ford Technologies, Inc.
(4) Dr. Stephens has been a physician engaged in the private
practice of medicine for over 30 years.
(5) Craig MacNab, 41, has served as Director of the Company
since June 1997. Since January 1997, Mr. MacNab has been
the President of Tandem Capital, Inc. which makes
investments in micro-cap public companies. From 1993 to
1996, Mr. MacNab served as the general partner of MacNiel
Advisors, Inc., the general partner of three private funds
that invested in the publicly traded securities of small
public companies. From 1987 to 1993, Mr. MacNab was a
partner of J.C. Bradford & Co., a regional brokerage firm,
jointly responsible for the merger and acquisition
department and a private mezzanine capital fund. From 1981
to 1987, Mr. MacNab was employed by Lazard Freres & Co.
Mr. MacNab is also a director of JDN Realty, Smart Choice
Automotive Group and Teltronics, Inc.
During the year ended February 28, 1997, the Company had an
Audit Committee consisting of three independent outside
directors; Messrs. Michael A. Mulshine, Pete L. Stephens, and
Philip L. Wagner. These three independent outside directors also
served on the Company's Compensation Committee during the year
ended February 28, 1997. The Audit Committee is charged with
reviewing and overseeing the Company's financial systems and
internal control procedures and conferring with the Company's
independent accountants with respect thereto. The Compensation
Committee is charged with reviewing the compensation of officers
and key personnel. The Company does not have a standing
nominating committee.
During the year ended February 28, 1997 the Board of
Directors held six meetings and the Audit and Compensation
Committees each held one meeting. All Members of the Board
attended all of the meetings of the Board held while they were
members of the Board. All Members of the Audit and Compensation
Committees attended all meetings of the Committees held while
they were members thereof.
REMUNERATION OF DIRECTORS AND OFFICERS
The following table sets forth compensation paid by the
Company to the Chief Executive Officer for services rendered
during fiscal years 1997, 1996 and 1995. There are no other
executive officers whose total annual salary and bonus exceeds
$100,000. The footnotes to the table provide additional
information concerning the Company's compensation and benefit
programs.
SUMMARY COMPENSATION TABLE
Annual Compensation
Other
Name and Annual All Other
Principal Fiscal Compensation Compensation
Position Year Salary($) Bonus($) ($)(1) ($)(2)
[S] [C] [C] [C] [C] [C]
William F. 1997 $113,780 0 0 $2,731
Mitchell 1996 119,531 0 0 2,473
President and 1995 131,568 0 0 1,154
Chief Executive
Officer
___________________
[/TABLE]
(1) The Company's executive officers receive certain
perquisites. For fiscal years 1997, 1996 and 1995, these
perquisites received by Mr. Mitchell did not exceed the
lesser of $50,000 or 10% of his salary and bonus.
(2) These amounts represent the Company's contribution to the
Retirement Savings Plan.
Directors of the Company who are not officers of the Company
are paid $600 for Board of Directors meetings which they attend.
Additional compensation is not paid for committee meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 20, 1994, the Company and Mr. Mulshine entered
into a Consulting Agreement, pursuant to which the Company has
issued warrants to Mr. Mulshine to purchase 125,000 shares of the
Company's common stock at an initial exercise price of $4.75 in
consideration for Mr. Mulshine providing certain consulting
services to the Company. The warrants are exercisable only upon
the occurrence of certain events, including consummation of a
strategic alliance with another company engaged in the same or
similar business. In view of the recapitalization of the
Company, which was completed on March 27, 1997, the Company is
not pursuing any such strategic alliance and, therefore, the
Company has terminated the consulting agreement. The warrants
expire by their terms on April 25, 1998.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities 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 ("SEC") 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. The rules of the SEC regarding the filing of such
statements require that "late filings" of such statements be
disclosed in the Company's proxy statement.
Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting
persons that no Forms 5 were required for those persons, the
Company believes that, during the fiscal year ended February 28,
1997, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were
complied with, except that late reports for Statement of Changes
in Beneficial Ownership for Mr. Deaner, Mr. Russell and
Mr. McAdams, respectively, were filed on Form 4.
THE CORPORATION'S AUDITORS
Under the Corporation's Bylaws and the governing law,
authority to select the Corporation's independent accountants
rests with the Board of Directors. Such selection is made
through formal act of the Board of Directors. It has not been
and is not the Corporation's policy to submit selection of its
auditors to the vote of the shareholders because there is no
legal requirement to do so. Grant Thornton LLP was the Company's
auditors for the fiscal years ended February 23, 1996 and
February 28, 1997. Auditors have not been selected for the
current fiscal year. A representative of Grant Thornton is
expected to be present at the Annual Meeting and will be given an
opportunity to make a statement to the shareholders, if he
desires to do so. Such representative will also be available to
answer appropriate questions from shareholders.
SOLICITATION OF PROXIES
The Company has provided proxy materials to brokers,
custodians, nominees, and fiduciaries and requested that such
materials be forwarded to the beneficial owners of stock
registered in the names of such brokers, custodians, nominees,
and fiduciaries. In addition, solicitation of proxies may be
made by officers, directors, and regular employees of the Company
by personal interview, mail, telephone, and telegraph. The cost
of soliciting proxies and related services will be borne by the
Company.
SHAREHOLDER PROPOSALS
Proposals which shareholders desire to have included in the
Proxy Statement for the 1998 Annual Meeting of Shareholders must
be received at the Corporation's executive offices, County Line
Industrial Park, Southampton, Pennsylvania 18966 on or before
April 27, 1998.
OTHER MATTERS
The Company knows of no other business which will be
presented for consideration at the meeting. However, if other
matters come before the meeting, it is the intention of the
proxyholders to vote upon such matters as they, in their
discretion, may determine.
The Company's Annual Report to the Shareholders for the year
ended February 28, 1997, is enclosed. Each person solicited
hereunder can obtain a copy of the Corporation's Annual Report on
Form 10-K for the year ended February 28, 1997, as filed with the
Securities and Exchange Commission, without charge, except for
exhibits to the report, by sending a written request to
Environmental Tectonics Corporation, County Line Industrial Park,
Southampton, Pennsylvania 18966, Attention: Ann M. Allen,
Secretary.
By Order of the Board of Directors
ANN M. ALLEN, Secretary
___________________________
<PAGE>
ENVIRONMENTAL TECTONICS CORPORATION
ANNUAL MEETING TO BE HELD ON SEPTEMBER 17, 1997
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints
Pete L. Stephens and Philip L. Wagner, or either of them, with
full power of substitution, as the undersigned's proxies to vote
at the Annual Meeting of Shareholders called for September 17,
1997 and at any adjournments thereof:
1. Election of Directors by holders of Common Stock and
Convertible Series A Preferred Stock:
[ ] For all nominees listed below (except as marked to
the contrary) or
[ ] Withhold the vote for all nominees.
Instruction: To withhold authority to vote for any individual
nominee, strike out his name below:
Richard E. McAdams, William F. Mitchell, Pete L. Stephens,
Philip L. Wagner
2. Election of Director by holders of Convertible Series A
Preferred Stock:
[ ] For Craig MacNab or
[ ] Withhold the vote for Craig MacNab.
3. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting.
This Proxy, when property executed, will be voted in the
manner designated herein by the undersigned shareholder. In the
absence of designation, this Proxy will be voted "FOR" the
election of all of the Board of Directors' nominees as directors.
IN WITNESS WHEREOF, the undersigned has set his hand and
seal.
Dated:________________, 1997 ____________________________(SEAL)
Shareholder's signature
____________________________(SEAL)
Shareholder's signature
Please sign exactly as name appears
herein. When signing as attorney,
executor, administrator, trustee,
guardian, etc., please give full
title as such.
[ ] I plan to attend the Annual
Meeting on September 17, 1997.
