<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DYNAMIC MATERIALS CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
AMENDED
NOTICE OF ANNUAL MEETING TO BE HELD OCTOBER 24, 1996
To the Shareholders of
DYNAMIC MATERIALS CORPORATION
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of DYNAMIC
MATERIALS CORPORATION (the "Company") will be held at the Company's offices at
551 Aspen Ridge Drive, Lafayette, Colorado 80026 on Thursday, October 24, 1996
at 10:00 a.m., Mountain Time, or any adjournment or postponement thereof, for
the following purposes:
1. To elect six directors to hold office until the next
annual meeting of shareholders or until their successors are duly elected and
qualified.
2. To ratify the selection of Arthur Andersen LLP as
independent accountants for the current fiscal year.
3. To consider and vote upon an amendment to the 1992
Incentive Stock Option Plan to increase by 250,000 shares, from 300,000 to
550,000, the number of the Company's Commons Shares currently available for
issuance under the 1992 Incentive Stock Option Plan.
4. The transaction of such other business as may
properly come before the meeting.
The foregoing items of business are more fully described in the Proxy
Statement previously mailed on September 17, 1996 and in the accompanying
Supplement. The Board of Directors of the Company has fixed the close of
business on September 10, 1996 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting and at any
adjournment or postponement thereof. Consequently, only holders of the
Company's Common Stock at the close of business on September 10, 1996 will be
entitled to notice of and to vote at the Annual Meeting.
THE MANAGEMENT OF THE COMPANY HOPES THAT YOU WILL FIND IT CONVENIENT
TO ATTEND THE MEETING IN PERSON, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY TO MAKE SURE THAT YOUR
SHARES ARE REPRESENTED AT THE MEETING. SHAREHOLDERS WHO ATTEND THE MEETING MAY
REVOKE THEIR PROXIES AND VOTE THEIR SHARES IN PERSON.
By Order of the Board of Directors
PAUL LANGE
President, Chief Executive
Officer and Secretary
Lafayette, Colorado
October 7, 1996
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE SIX NOMINEES FOR
DIRECTOR, FOR THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS,
AND FOR THE AMENDMENT TO INCREASE THE NUMBER OF SHARES OF COMPANY COMMON STOCK
AVAILABLE FOR ISSUANCE UNDER THE 1992 INCENTIVE STOCK OPTION PLAN
<PAGE> 3
SUPPLEMENT DATED OCTOBER 7, 1996
TO
PROXY STATEMENT DATED SEPTEMBER 17, 1996
GENERAL INFORMATION
This Supplement to the Proxy Statement and an accompanying
Supplemental Proxy Card are being mailed to the holders of record of the
Company's Common Stock on or about October 7, 1996. The supplemental
materials relate to an additional matter to be presented to shareholders that
was inadvertently omitted from the Proxy Statement in the initial mailing.
Shareholders of the Company represented at the Annual Meeting will
consider and vote upon (i) the election of six directors to hold office until
the next annual meeting of shareholders or until their successors are duly
elected and qualified; (ii) the ratification of the selection of Arthur
Andersen LLP as independent accountants for the current fiscal year; (iii) the
amendment of the 1992 Incentive Stock Option Plan to increase the number of
shares available for issuance thereunder by 250,000 shares from 300,000 shares
to 550,000 shares; and (iv) such other business as may properly come before the
Annual Meeting. The Company is not aware of any other business to be presented
for consideration at the Annual Meeting.
If no direction is indicated, the shares will be voted FOR the
election of each of the nominees for director, FOR the selection of Arthur
Andersen LLP as the Company's independent accountants for the current fiscal
year, and FOR the amendment of the 1992 Incentive Stock Option Plan to increase
the number of shares available for issuance thereunder from 300,000 shares to
550,000 shares.
PROPOSAL 3 - AMENDMENT TO THE 1992 PLAN
THE 1992 INCENTIVE STOCK OPTION PLAN
The 1992 Incentive Stock Option Plan (the "1992 Plan") is intended to
afford a proprietary interest in the Company to key employees of the Company.
The Company believes that stock ownership by these persons provides added
incentives to continue employment with the Company and encourages increased
efforts to promote the Company's best interests. Currently, a maximum of
300,000 shares of the Company's Common Stock may be issued pursuant to the 1992
Plan, subject to adjustment by reason of stock dividends, stock splits or other
capitalization changes. The proposed amendment would increase this number by
250,000, to 550,000 shares. The following is a brief description of the
principal provisions of the 1992 Plan and is qualified in its entirety by
reference to the 1992 Plan.
The 1992 Plan is administered by the Board, if all Board members are
"disinterested" as defined in the 1992 Plan, or by a committee of two or more
disinterested members of the Board (the "Committee"). The Committee determines
the persons who receive stock options, the number of options to be granted and
the vesting schedule for the options granted. All options are granted with an
exercise price equal to 100% of the fair market value of the underlying Common
Stock at the date of grant. Outstanding options under the Plan have exercise
prices ranging from $1.625 to $3.125. The Company receives no consideration
upon the grant of options.
It is intended that options under the 1992 Plan will be incentive
stock options for federal income tax purposes. Under the Internal Revenue
Code, an employee generally is not subject to regular income tax upon the grant
or exercise of an incentive stock option. Instead, the employee is subject to
tax upon disposition of the stock held pursuant to the exercise of the option
(the "ISO Shares"). At that time, if the employee has held the ISO Shares for
at least (i) two years from the date of grant and (ii) one year from the date
of exercise (the
<PAGE> 4
"Required Holding Period"), the employee will have long-term capital gain (or
loss) equal to the difference, if any, between the amount realized from the
disposition and the employee's tax basis in the ISO Shares. However, if the
employee disposes of the ISO Shares prior to the Required Holding Period, a
portion (generally, the excess of the fair market value of the ISO Shares at
the date of exercise over the exercise price) of any gain realized would be
taxable to the employee as ordinary income.
All employees of the Company, including directors that are also
employees, are eligible to participate in the 1992 Plan. At September 30,
1996, the Company had approximately 100 employees. The 1992 Plan shall
terminate on, and no options may be granted after, May 1, 2002, ten years from
the date of shareholder approval of the 1992 Plan. Options having a term not
to exceed 10 years will be available to employees under the 1992 Plan.
Outstanding options have expiration dates ranging from June 4, 1998 to October
20, 2005. Options are not transferable except upon death and are exercisable
during the lifetime of an optionee only by the optionee. Shares issued to
officers of the Company on exercise of options may not be sold within six
months of the grant of the option.
Options that are exercisable at the time of termination of employment
for any reason other than disability remain exercisable for three months
following termination. If termination is due to disability, options remain
exercisable for a period of 12 months following termination. Shares subject to
options that are surrendered or expire unexercised may again be made subject to
options under the 1992 Plan.
In the discretion of the Board, the purchase price for shares may be
paid in cash, shares of Common Stock of the Company with a fair market value
equal to the purchase price, or both.
Notwithstanding any schedule for vesting of options contained in any
option agreement, all options granted under the 1992 Plan become immediately
exercisable if the Company enters into an agreement to sell all or
substantially all of its assets or stock by sale, liquidation, merger or
reorganization in which the Company is not the surviving corporation, unless
the Board of Directors has prescribed other terms or conditions to the exercise
of, or otherwise modified, the options.
The 1992 Plan can be amended by the Board of Directors, except that
shareholder approval is required for (i) a material increase in the number of
shares subject to options, (ii) a material increase in the benefits to
participants in the 1992 Plan, or (iii) a material modification to the
requirements as to eligibility for participation in the 1992 Plan.
PROPOSED AMENDMENT TO THE 1992 PLAN
As of September 30, 1996, options to purchase a total of 311,000
shares had been granted under the 1992 Plan, options to purchase 49,250 shares
had been cancelled as a result of surrender or expiration and options to
purchase 29,250 shares had been exercised, leaving outstanding options to
purchase 232,500 shares. The last sales price of the Company's Common Stock as
reported by NASDAQ on September 30, 1996 was $6.875 per share. Based on such
price, the market value of Common Stock underlying outstanding options at such
date was $1,598,438. Prior to the proposed amendment, there were available for
issuance options to purchase 38,250 shares of Common Stock. The Board plans to
continue the Company's intended objective of granting options to eligible
employees. In October 1995, to ensure the continued availability of the 1992
Plan to attract, motivate and retain employees, the Board approved an amendment
to the 1992 Plan to increase the number of shares issuable under the 1992 Plan
by 250,000 shares from 300,000 to 550,000, subject to shareholder approval.
The Compensation Committee has not allocated, and has no plans for the
allocation of, any of the additional options authorized to be issued. No
additional options would have been granted to any officer, director or employee
in the Company's last fiscal year if the amendment to the 1992 Plan had been in
effect.
<PAGE> 5
SUMMARY OF STOCK OPTION INFORMATION
The following table sets forth the options to purchase Common Stock
granted under the 1992 Plan to the Company's chief executive officer, all
current executive officers as a group, all directors as a group, each director
or nominee, and all employees (other than executive officers) as a group. No
associate of any such person has received options and no other person has
received 5% of the options.
1992 PLAN BENEFITS
OPTIONS GRANTED
<TABLE>
<CAPTION>
Options Number of Shares
Name and Position Options Granted Exercised Underlying Outstanding Options
- ----------------- --------------- --------- ------------------------------
<S> <C> <C> <C>
Paul Lange 111,000 - 111,000
President and CEO; Director
All current executive officers 170,000 - 170,000
as a group (3 persons)
All directors as a group(1) 13,000 1,000 12,000
All employees
(including non-executive officers) 78,750 28,250 50,500
</TABLE>
__________________________
(1) In addition to the 1992 Plan, the Company has a Nonemployee Director
Stock Option Plan. Options granted under this plan and otherwise to
current directors are as follows:
<TABLE>
<CAPTION>
Options Options Outstanding
Granted Exercised Options
------- --------- -----------
<S> <C> <C> <C>
Dean K. Allen 7,500 - 7,500
David E. Bartlett - - -
Michael C. Hone 7,500 - 7,500
Edward A. Keible 7,500 - 7,500
George W. Morgenthaler 7,500 - 7,500
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT OF THE
1992 INCENTIVE STOCK OPTION PLAN.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of August 31, 1996, Mr. Edward A. Keible, the Chairman of the
Company's Board of Directors, owned 41,250 shares of Common Stock, 1,250 of
which are the subject of presently exercisable stock options and 40,000 of
which are held in the Keible Living Trust, of which Mr. Keible and his wife are
Co-Trustees.
<PAGE> 6
[DMC DYNAMIC MATERIALS CORPORATION LETTERHEAD]
October 7, 1996
Dear Shareholder:
We are enclosing a Supplement to the Proxy Statement
previously mailed to you on September 17, 1996. This Supplement contains an
additional proposal that was inadvertently omitted from the original Proxy
Statement. The proposal relates to an amendment to the 1992 Incentive Stock
Option Plan to increase the number of shares issuable pursuant to this plan by
250,000 shares, from 300,000 shares to 550,000 shares. The Compensation
Committee has recommended that the increase be presented to shareholders at the
annual meeting. The Company believes that this aspect of executive
compensation is important and has therefore amended the proxy to include this
proposal.
The enclosed proxy card (which has been printed on blue paper)
includes both this new proposal relating to the amendment of the stock option
plan, and the two proposals previously submitted to shareholders, the election
of directors and selection of Arthur Andersen LLP as the Company's independent
auditors. WE ENCOURAGE YOU TO SUBMIT THIS PROXY WITH VOTES ON ALL THREE
PROPOSALS. If you have submitted the proxy previously provided and also submit
this proxy, the proxy bearing the latest date will be counted at the meeting.
Adoption of the proposal relating to amendment of the stock option plan requires
the approval of a majority of those present in person or by proxy at the
meeting. Consequently, if you have mailed the first proxy card and do not
submit this proxy, your failure to submit this proxy will be treated as a vote
against the stock option proposal.
We apologize for any inconvenience this may have caused.
Very truly yours,
Paul Lange
President and Chief Executive Officer
<PAGE> 7
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AMENDED
PROXY
DYNAMIC MATERIALS CORPORATION
551 ASPEN RIDGE DRIVE
LAFAYETTE, COLORADO 80026
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul Lange, Michael W. Beam and Edward G.
Reineke, and each of them, with full power of substitution, as proxy of the
undersigned to vote all shares of Common Stock of DYNAMIC MATERIALS CORPORATION
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of the corporation to be held at 551 Aspen Ridge Drive, Lafayette, Colorado
80026 on Thursday, October 24, 1996 at 10:00 a.m., Mountain Time, and at any
adjournment thereof, with the same force and effect as the undersigned might or
could do if personally present thereat:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS / / FOR all nominees (except as / / WITHHOLD AUTHORITY to vote
marked to the contrary below) for all nominees listed below
</TABLE>
George W. Morgenthaler, Michael C. Hone, Dean K. Allen, Paul Lange, Edward A.
Keible, David E. Bartlett.
INSTRUCTION: To withhold authority to vote for one or more individual nominees,
cross out such name or names above.
2. SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY
/ / FOR selection of Arthur Andersen LLP
/ / AGAINST selection of Arthur Andersen LLP
/ / ABSTAIN
3. APPROVAL OF AMENDMENT TO 1992 INCENTIVE STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES OF COMPANY COMMON STOCK ISSUABLE THEREUNDER BY 250,000
SHARES, FROM 300,000 TO 550,000
/ / FOR increase in number of shares
/ / AGAINST increase in number of shares
/ / ABSTAIN
4. THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
(Continued and to be signed on the reverse side)
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(Continued from other side)
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 (i) the nominated directors, (ii) the selection of Arthur Andersen
LLP as independent accountants, and (iii) the increase in the number of shares
issuable under the 1992 Incentive Stock Option Plan by 250,000 shares, from
300,000 to 550,000.
Please sign exactly as name
appears below. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee
or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
by president or authorized person.
If a partnership, please sign in
full partnership name by
authorized person.
Date , 1996
--------------------------------
Signature
--------------------------------
Signature (if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE NOMINEES,
THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY
FOR THE CURRENT FISCAL YEAR, AND FOR THE INCREASE IN THE NUMBER OF SHARES
ISSUABLE UNDER THE 1992 INCENTIVE STOCK OPTION PLAN.
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