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
[ ] Preliminary Additional Materials
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.149-11(c) or Section 240.14a-
12
FEDERATED PURCHASER, INC.
(Name of Registrant as Specified in its Charter)
GARRY ROGERS, ESQ.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j)(4) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
<PAGE>
5) Total fee paid:
[ ] 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 idenify 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:
<PAGE>
FEDERATED PURCHASER, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on March 19, 1997
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of FEDERATED PURCHASER, INC., a New York corporation (the
"Company"), will be held at the Company's executive offices, 268 Cliffwood
Avenue, Cliffwood, New Jersey, on March 19, 1997, at 10:00 a.m., for the
following purposes:
1. To elect four (4) directors to serve until the next Annual Meeting
and until their successors shall be duly elected and qualified;
2. To ratify the appointment of Bederson & Company LLP, independent
certified public accountants, as auditors for the Company's fiscal
year ending October 31, 1997; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment(s) thereof.
The Company's Board of Directors has fixed the close of business on
February 6, 1997 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting, and at any
adjournment(s) thereof.
A form of Proxy and Proxy Statement respecting the Annual Meeting, as
well as a copy of the Company's Annual Report to Shareholders, are enclosed.
You are cordially invited to attend the Annual Meeting in person.
Whether or not you plan to attend, you are urged to MARK, DATE, SIGN AND RETURN
THE ENCLOSED FORM OF PROXY in the accompanying envelope. Return of your proxy
will not deprive you of your right to vote your shares in person at the Annual
Meeting.
By Order of the Board of Directors
Harry J. Fallon
President
Federated Purchaser, Inc.
268 Cliffwood Avenue
Cliffwood, New Jersey 07721
February 19, 1997
<PAGE>
FEDERATED PURCHASER, INC.
268 CLIFFWOOD AVENUE
CLIFFWOOD, NEW JERSEY 07721
(908) 290-2900
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS ON MARCH 19, 1997
This Proxy Statement and the accompanying form of the proxy will be
mailed or delivered to the shareholders of Federated Purchaser, Inc. (the
"Company") on or about February 19, 1997 in connection with the solicitation of
proxies by the Board of Directors of the Company with respect to the Company's
Annual Meeting of Shareholders (the "Annual Meeting") to be held on March 19,
1997 at 10:00 a.m. at the Company's executive offices, 268 Cliffwood Avenue,
Cliffwood, New Jersey 07721, and any adjournment(s) of such Annual Meeting.
Any shareholder giving a proxy has the power to revoke it at any time before it
is exercised by filing with the Company an instrument revoking it or a duly
executed proxy bearing a later date; such proxy also will be revoked if the
person granting the proxy is present at the Annual Meeting and elects to vote
in person. The proxies hereby solicited vest in the proxy holders all voting
rights of the shareholders signing such proxies held as of the date of this
Proxy Statement.
All expenses incurred in connection with this solicitation of proxies
will be borne by the Company. In addition to the solicitation of proxies by
use of the mails, the directors, officers and regular employees of the Company
may solicit proxies by telephone or personal interview, but will not receive
any additional compensation therefor. The company will reimburse brokers,
banks and other nominees for their reasonable expenses incurred in forwarding
proxy materials.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Only shareholders of record at the close of business on February 6, 1997
will be entitled to notice of and to vote at the Annual Meeting and any
adjournment(s) thereof. As of such date, there were 1,611,317 shares of the
Company's Common Stock, par value $0.10 per share (the "Common Stock"),
outstanding.
The following table identifies those persons who are known by the Company
to own beneficially more than 5% of the company's Common Stock as of February
6, 1997:
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS
(1) OWNERSHIP (2)
<S> <C> <C>
Harry J. Fallon 304,285 18.9%
123 Milligan Place
South Orange, NJ 07079
Peter Manganiello 220,496 13.7%
21 Heath Drive
Bridgewater, NJ 08807
Edward A. Cantor 130,155 8.1%
1203 West St. George Ave.
Linden, NJ 07036
</TABLE>
______________________
(1) Mr. Manganiello disclaims beneficial ownership of 59,765 common shares.
Mr. Fallon and Mr.
Cantor have sole voting and investment power regarding their respective
shares.
(2) Based on information provided to the Company. To the knowledge of the
Company, no other person as of record date is the beneficial owner of
more than 5% of the Company's Common Stock.
The following table sets forth certain information respecting the number
of shares of the Company's Common Stock beneficially owned by each director and
nominee for director of the Company, the Chief Executive Officer and by all
directors and officers of the Company as a group, as of February 6, 1997:
<TABLE>
<CAPTION>
Name and Beneficial Owner AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS
OWNERSHIP (1)
<S> <C> <C>
Harry J. Fallon 304,285 18.9%
Edmund L. Hoener 2,538 *
Edwin S. Shortess 3,178 *
Jane A. Christy 11,921 *
ALL DIRECTORS AND OFFICERS AS A
GROUP (4 PERSONS) 321,922 20.0%
</TABLE>
_________________________
* Less than one percent of outstanding Common Stock.
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of four (4) members.
Accordingly, at the Annual Meeting the shareholders will elect four (4)
directors, each to hold office until the next Annual Meeting and until his or
her successor shall be duly elected and qualified. A plurality of the votes
cast at the Annual Meeting is required to elect directors, provided a quorum is
present. A quorum will require the presence (in person or by proxy) of the
holders of a majority of the shares entitled to vote at the Annual Meeting.
Each share of Common Stock is entitled to one vote.
Unless a contrary specification is indicated, it is the intention of the
persons named in the enclosed proxy to vote for the election of the nominees
for director named below. In the event that a nominee is not available by
reason of any unforeseen contingency, then the proxy will be voted for the
balance of the nominees and for such persons as shall be designated by the
remaining directors as a replacement nominee.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF THE DIRECTORS.
<PAGE>
The following table identifies each of the Board of Directors' nominees
for director of the Company, the nominee's age, the period during which the
nominee has served as a director, if any, the nominee's current position(s)
with the Company, if any, the nominee's principal occupation and any other
directorships held by the nominee in a company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934 or
subject to the requirements of Section 15(d) of such Act or in any company
registered as an investment company under the Investment Company Act of 1940:
<TABLE>
<CAPTION>
NOMINEE AGE DIRECTOR OF THE PRINCIPAL OCCUPATION
COMPANY SINCE
<S> <C> <C> <C>
Harry J. Fallon 70 1975 President of the Company
Edmund L. Hoener 66 1977 Former Vice President of the Howard Savings Bank;
Retired
Edwin S. Shortess 77 1989 Former President of Shortess-Rawson Associates;
Retired
Jane A. Christy 61 1989 Vice President/Operations of the Company
</TABLE>
Mr. Fallon, President of the Company since 1974, has been a director of
the Company since 1975. He is also a director of Hickok Electrical Instrument
Co., a manufacturer of electronic test equipment, located in Cleveland, Ohio.
After the death of the Company's Chairman of the Board, Arthur C. Kammerman, in
September 1992, Mr. Fallon served as acting Chairman of the Board of the
Company until the election of Mr. Zlotnick in 1993. Mr. Fallon has been
serving as acting Chairman of the Board since Mr. Zlotnick's resignation of
that position in May, 1996.
Mr. Hoener became a director of the Company in 1977. He was a Vice
President of the Howard Savings Bank from October 1983 until his retirement in
June 1990.
Mr. Shortess became a director of the Company in 1989. From 1969 until
his retirement in 1986, he was the founder and President of Shortess-Rawson
Associates, a distributor of primarily electronic instrumentation and
educational systems in the sciences and electronics.
Ms. Christy became a director of the Company in 1989. She is currently
Vice President of Operations of the Company and has been employed by the
Company in various executive positions and offices for more than five years.
None of the corporations or organizations with which Messrs. Hoener or
Shortess has been employed during the past five years is a parent, subsidiary
or other affiliate of the Company.
During the Company's last fiscal year, the Board of Directors held four
meetings; each director has attended at least 75% of the meetings of the Board
of Directors and the committees on which he or she served that were held during
the Company's last fiscal year.
The Audit Committee has the authority to make recommendations to the
Board of Directors concerning the selection of the Company's independent
auditors and to review with the independent auditors the scope and results of
the annual audit. The incumbent members of this Committee are Messrs. Hoener
and Fallon. During the last fiscal year, the Audit Committee held one meeting.
As a member of this Committee, Mr. Hoener receives $200 for each meeting he
attends. Mr. Fallon receives no remuneration for his activities as a Committee
member.
The Executive Committee has general authority over the supervision and
direction of the finances and business of the Company and has the power and
authority of the Board in the management of the business and affairs of the
Company between meetings of the Board. The incumbent members of this Committee
are Messrs. Shortess and Fallon. No meetings were held during the last fiscal
year.
The Company's Board of Directors has no standing nominating or
compensation committees. The functions of the compensation committee were
performed by the Board of Directors as a whole during the fiscal year ended
October 31, 1996. The Board of Directors has assigned the responsibilities
generally performed by the compensation committee to the Executive Committee
for the fiscal year ending October 31, 1997.
Each of the foregoing nominees for director was approved by the full
Board of Directors. If, at any time, a shareholder desires to recommend a
nominee for director, he or she may submit the nominee's name to the Company's
President, Mr. Fallon, or any other member of the Board, who will then bring
such recommendation to the attention of the full Board of Directors.
EXECUTIVE OFFICERS
The executive officers of the Company are set forth in the table below.
All executive officers are chosen at the annual meeting or interim meetings of
the Board of Directors and serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
Name AGE POSITION PERIOD SERVED
<S> <C> <C> <C>
Harry J. Fallon 70 President Since 1974
Jane A. Christy 61 Vice President/Operations Since 1976
Marie Santasiri 69 Secretary Since 1986
</TABLE>
All of the executive officers listed in the preceding table have been
employed by the Company in various executive positions and offices for more
than five years.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The Summary Compensation Table set forth below shows the compensation of
the Chief Executive Officer of the Company for the past three fiscal years.
The Chief Executive Officer is the only executive officer whose total annual
salary and bonus exceeds $100,000.
SUMMARY COMPENSATION TABLE
NAME AND PRINCIPAL POSITION YEAR SALARY
Harry J. Fallon, President and 1996 $125,000
Chief Executive Officer 1995 $125,000
1994 $125,000
<PAGE>
EMPLOYMENT CONTRACT
In April 1986, Mr. Fallon entered into an employment agreement with the
Company, the term of which commenced on November 1, 1986, expired on October
31, 1991 and was subsequently extended annually until October 31, 1995. The
employment agreement provided that, among other things, Mr. Fallon will receive
an annual salary in the amount of $125,000. Mr. Fallon has voluntarily
deferred the receipt of $20,000 of such annual salary for each of the years
ended October 31, 1995 and October 31, 1996. The Company and Mr. Fallon are
presently negotiating the terms of his employment arrangement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Fallon and Ms. Christy each served as a member of the Board of
Directors, which acted in the place of a compensation committee during the
fiscal year ended October 31, 1996. Mr. Fallon and Ms. Christy are also
executive officers of the Company.
During the fiscal year ended October 31, 1996, Mr. Fallon and Ms. Christy
participated in deliberations concerning executive officer compensation in
their capacities as members of the Board of Directors.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Company does not have a standing compensation committee. Decisions
regarding compensation of the Company's executive officers generally are made
by the Board of Directors as a whole. Pursuant to recently adopted rules
designed to enhance disclosure of companies' policies regarding executive
compensation, set forth below is a report submitted by Messrs. Fallon, Hoener,
Shortess, and Ms. Christy, as members of the Company's Board of Directors,
addressing the Company's compensation policies for 1995 as they affected Mr.
Fallon, in his capacity as Chief Executive Officer of the Company, and other
executive officers.
Mr. Fallon is the only officer of the Company whose total compensation
exceeded $100,000 during the fiscal year ended October 31, 1996.
Mr. Fallon's current employment arrangement was negotiated by the Company
on an arm's length basis and was designed to be competitive with compensation
packages offered to other chief executive officers of similarly situated
companies in the industry.
The Company and Mr. Fallon are presently negotiating the terms of his
employment arrangements.
During the fiscal year ending October 31, 1997, the Executive Committee
of the Board of Directors will perform the functions of the compensation
committee.
The foregoing report has been furnished by Messrs. Fallon, Hoener,
Shortess, and Ms. Christy.
PERFORMANCE GRAPH
The following line graph compares cumulative total shareholder return on
the Company's Common Stock since October 31, 1992, based on the market price
and assuming reinvestment of dividends, with the cumulative total return of
companies on Standard & Poor's Composite 500 Index and a peer group index
comprised of electronic parts distributors.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FEDERATED PURCHASER, INC., S&P 500 COMPOSITE INDEX AND
PEER GROUP INDEX OF ELECTRONIC PARTS DISTRIBUTORS
[graph illustrates relative performance
of Company shares]
<PAGE>
Assumes $100 invested on October 31, 1991, at the prior day's closing market
price in the Company's Common Stock, the S&P 500 Composite Index and a Peer
Group Index comprised of Electronic Parts Distributors.
<TABLE>
<CAPTION>
INDEXED RETURNS [10/31/91 = 100]
COMPANY/INDEX BASE YEAR 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
FEDERATED PURCHASER INC. 100.00 61.18 85.42 50.05 28.57 38.85
S&P 500 COMP-LTD 100.00 109.95 176.59 131.27 165.98 205.97
PEER GROUP(1) 100.00 140.67 168.76 167.15 215.54 197.41
</TABLE>
_______________________
(1) The Peer Group Index is comprised of the following:
PEER GROUP
All American Semiconductor Nu Horizons Electrs Corp.
Arrow Electronics Inc. Pioneer Standard Electronics
Avnet Inc. Premier Industrial CP.
Bell Industries Inc. Richardson Elec Ltd.
Electrocon Intl Inc. Southern Electronics Corp.
Jaco Electronics Inc. Sterling Electronics
Kent Electronics Corp. Western Micro Technology Inc.
Marshall Industries Wyle Laboratories
Milgray Electronics Inc. Zing Technologies, Inc.
Although the foregoing companies are all distributors of electronic parts
and may be considered to be in the same industry as the Company, each has
significantly greater revenues and assets. The Company is unable to
construct a peer group index comprised of companies in the industry with
similar financial characteristics because such companies are privately
held.
Because the Company was delisted by NASDAQ in July, 1992, data from that
time through October 31, 1996 are as reported by the National Quotation Bureau,
Inc. and are based upon the average of high and low bid prices.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 15, 1994, Federated sold 100% of the shares of Freedom
Electronics to Freedom's President, Steven J. Carbone. In consideration,
Federated received approximately $350,000, including $100,000 in cash, a
$210,000 promissory note and 88,889 shares of common stock of Federated
(representing 4.9% of the class outstanding) owned by Carbone. The promissory
note bears interest at 7% per annum and becomes payable in full in November,
1998. In addition, the parties entered into customary covenants not to
compete, pursuant to which Federated would become entitled to receive $90,000
over a period of four years. As part of this transaction, certain intercompany
indebtedness was satisfied for which Federated was paid an additional $656,000
in cash. The Company believes that the transaction is on terms no less
favorable than those which could reasonably have been obtained from
unaffiliated parties.
Prior to the transaction, Mr. Carbone served on the Board of Directors of
Federated. The transaction was approved by a unanimous vote of all of the non-
interested directors of Federated, all of whom also served on the Board of
Directors of Freedom.
INDEPENDENT PUBLIC ACCOUNTANTS
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF BEDERSON & COMPANY LLP
AS AUDITORS FOR THE 1997 FISCAL YEAR.
VOTING PROCEDURES
Each shareholder is entitled at each meeting to one vote for each share
of stock registered in the shareholder's name. Directors are elected by a
plurality of the votes cast by the holders of shares entitled to vote in the
election. All other corporate action is authorized by a majority of the votes
cast.
Under New York corporate law, any corporate action other than the
election of directors must be authorized by a majority of votes cast. An
abstention from voting on a matter by a stockholder at the Annual Meeting is
not considered to be a vote cast.
OTHER MATTERS
The Company's Board of Directors is aware of no other matters to be
presented to shareholders for formal action at the Annual Meeting. If,
however, any other matters should properly come before the Annual Meeting or
any adjournment(s) thereof, the proxies to which this statement relates will be
voted or acted upon in accordance with the judgment of the persons authorized
therein.
PROPOSALS FOR 1998 ANNUAL MEETING
Shareholder proposals for the 1998 Annual Meeting must be received at the
principal executive offices of the Company, 268 Cliffwood Avenue, Cliffwood,
New Jersey 07721, no later than October 17, 1997 for inclusion in the 1998
proxy statement and form of proxy relating to that Annual Meeting.
By Order of the Board of Directors
/S/ HARRY J. FALLON
Harry J. Fallon
PRESIDENT
Federated Purchaser, Inc.
268 Cliffwood Avenue
Cliffwood, New Jersey 07721
February 19, 1997
