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:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SCIENCE DYNAMICS CORPORATION
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(Name of Registrant as Specified In Its Charter)
SCIENCE DYNAMICS CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(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 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:*
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4) Proposed maximum aggregate value of transaction:
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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
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>
SCIENCE DYNAMICS CORPORATION
CHERRY HILL, NEW JERSEY
_______________________________
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 12, 1996
_______________________________
This statement is furnished in connection with the solicitation by the
Board of Directors of Science Dynamics Corporation (herein called the
"Company") of proxies for use at the annual meeting of stockholders to be
held on June 12, 1996, and at any adjournment thereof. Any proxy given
pursuant to this solicitation may be revoked at any time prior to the
voting thereof either by appearing in person at the meeting or by notice in
writing received by the Secretary of the Company or by execution and
presentation of a proxy bearing a later date.
A proxy statement and proxy forms will be mailed to stockholders on or
about May 15, 1996. The address of the principal executive office of the
Company is 1919 Springdale Road, Cherry Hill, New Jersey 08003-1609.
The Company had outstanding on April 1, 1996, the record date for the
meeting, 7,922,978 shares of common stock. Each stockholder of record on
the record date is entitled to one vote for each share held without right
of cumulation.
The following tables and text set forth information regarding stock
ownership as of December 31, 1995, of the principal shareholders, of each
director and/or officer, and of all officers and directors and all persons
owning five percent or more of the Company's $0.01 per share par value
common stock (its sole present class of security).
PRINCIPAL STOCKHOLDERS
Percent of
Name and Address of Outstanding
Beneficial Owner Number of Shares Shares1
Lyndon A. Keele 775,0342 9.78%
701 Garwood Road
Moorestown, NJ 08057
Reynolds E. Moulton, Jr. 761,000 9.61%
54 Washington Street
Marblehead, MA 01945
<<PAGE>>
SECURITY OWNERSHIP OF MANAGEMENT
The following information table sets forth information as to the shares and
percentages of common stock of the Company beneficially owned by the
Directors of the Company, and by all Officers and Directors of the Company
as a group, as of December 31, 1995.
Percent of
Name Number of Shares Outstanding Shares(1)
Lyndon A. Keele 775,034(2) 9.78%
(President, Chairman
of the Board, Director,
and Treasurer)
Russell R. Angely 11,000 .14%
(Vice President)
Joy C. Hartman 1,000(2) .01%
(Vice President, Secretary,
Director)
Kenneth P. Ray 6,000(3) .08%
(Director)
Sheldon C. Hofferman 365,533(4) 4.61%
(Director)
All Directors and
Officers as a Group(5) 1,158,567 14.63%
____________________
1 Based upon a total number of 7,922,978 shares outstanding as of
December 31, 1995.
2 Includes 12,000 shares owned by Mr. Keele's daughter and 300
shares owned by Ms. Hartman's children. The daughter of Mr. Keele has
sole voting and investment power with respect to her shares and Mr.
Keele has sole voting and investment power with respect to all other
shares in this total.
3 Has sole voting power and sole investment power with respect to
the shares owned by such person.
4 The total includes 266,133 shares owned by Golden Phoenix,L.P.,
of which Mr. Hofferman is the general partner.
5 The above list excludes J. Cox, an outside Company Director, who
holds incentive options that would permit him to later acquire 20,000
shares. Mr. Cox has requested that he not be renominated for election
to the Board due to other business pursuits. In addition to the 6,000
shares owned by K. Ray, an outside Company Director, Mr. Ray holds
incentive options to acquire 20,000 shares.
______________________
Section 16(a) of the Securities and Exchange Act of 1934 requires that the
Company's executive officers, directors and persons beneficially owning in
<<PAGE>>
excess of ten percent of the Company's outstanding shares file initial
reports of ownership and reports of any ensuing changes in ownership with
both the Securities and Exchange Commission as well as with N.A.S.D. All
such persons are required in addition to furnish the Company with copies of
all such forms.
Based upon a review of the forms so furnished to the Company, the Company
believes that during the fiscal year 1995, no Section 16(a) requirements
appear to have been duly required.
The Company, therefore, does not believe that any officer, director, or
principal shareholder is or has been delinquent in the filing of any
required report forms (Forms 3, 4, or 5) as required by the recent
Amendments to Section 16 of the Securities Exchange Act, Item 4 or 5 of
Regulation S-B (228.405). In order to ensure compliance with such
disclosure requirements, all officers, directors, or principal shareholders
are supplied with a detailed and comprehensive memorandum setting forth all
disclosure and reporting rules. In addition, before any affected party can
acquire or dispose of any interest of any nature in any Company securities
or any derivative rights in such securities such as options or warrants,
they are required to consult with both senior management and Company
counsel.
In addition, management periodically reviews public reports of securities
transactions and Company's Transfer Agent also advises the Company of any
pending transfers of securities.
There were four director's meetings in 1995. All directors attended each
meeting with the exception that Mr. Cox was absent from one meeting.
ELECTION OF DIRECTORS
The Board of Directors has authorized, as in prior years, the provision for
four director positions. Four directors are to be elected who will serve
until the next annual meeting of stockholders or until their respective
successors shall be elected and qualified. Unless a stockholder expressly
indicates otherwise on his/her or their proxy, all proxies will be voted
for the election as directors those persons named in the following table
and upon the enclosed proxy ballot form. If any shareholder expressly
abstains from voting, such shares will not be counted except for
determination of the presence of a quorum. If any such nominee shall be
unable or shall fail to act as such by virtue of any unexpected occurrence,
proxies will be voted for such other person(s) as shall be determined by
the proxy holder(s) in his (their) discretion. The Board of Directors may
also, in its own discretion, alternatively reduce the number of directors
to be elected. No nominee for director has any direct personal interest in
any matter to be voted upon at the 1996 meeting. There are no rights to
cumulatively vote any shares. The election of directors will be determined
by a simple majority vote.
<TABLE>
<CAPTION>
Principal Occupation
Nominees Age and Directorships
<S> <C> <C>
Lyndon A. Keele 67 Chairman of the Board of Directors and
President since June 1973, Treasurer
since December 1980, and Director
since April 1973.
Kenneth P. Ray 62 Incumbent Director.
Joy C. Hartman 47 Executive Vice President Administration
and incumbent Director.
Sheldon C. Hofferman 51 Incumbent Director
</TABLE>
<<PAGE>>
EXPERIENCE AND BACKGROUND OF DIRECTORS AND OFFICERS
The general background, business experience, and other directorships of
nominees for the Board of Directors and of the Company's Executive Officers
for the past five years is as follows:
LYNDON A. KEELE is the founder of the Company and has been active as
Chairman of its Board of Directors and President from June of 1973 and as
its Treasurer since December of 1980. From April of 1973 to August of 1977
he managed his own investments and served as a consultant to a number of
companies involved in the electronics industry. Prior to 1973, Mr. Keele
served for five years as a Principal and Executive Vice President of
TeleSciences, Incorporated, a company engaged in design and manufacture of
telephone support equipment. He theretofore served as a Program Manager
for multimillion dollar programs involving data and circuit switching
systems at ITT Federal Laboratories. From 1958 to 1962, he was employed by
GTE's Sylvania Electronics Systems Division in various management
positions, including Program Manager of data processing and cryptographic
communications Projects and Programs. He was awarded a B.B.A. by the
University of Texas in 1951.
KENNETH P. RAY is President of DelRay, Inc., an active telecommunications
consulting firm. From 1964 to 1987 he was associated with ITT in various
responsible positions and in 1976 became Vice President of ITT
Telecommunications, with responsibility for engineering, marketing and
sales departments. In 1981 he became Vice President and Director of
Operations for the Transmission Division of ITT Space Communications. In
January, 1987, ITT's telecommunications group was acquired by Alcatel and
Mr. Ray became Vice President of Marketing and Development for Alcatel
Network Systems. From 1988 to 1991, he was Vice President for Technology
and Business Development for Alcatel North America, a telecommunications
company. Mr. Ray received a BSEE from Polytechnic Institute of New York in
1954 and a Masters in Economics from North Carolina State University in
1970.
SHELDON C. HOFFERMAN, has been an Attorney and Private Investor since 1971.
Mr. Hofferman graduated from the University of Pennsylvania in 1966 and
Temple University Law School in 1971. He was in private law practice in
Washington, D.C., specializing in communications law, from 1971 to 1974.
He served as Senior Trial Attorney for the Federal Trade Commission from
1974 to 1983, and re-entered private law practice thereafter. Mr.
Hofferman has also served as General Partner of Golden Phoenix Limited
Partnership, an investment concern, since 1983.
JOY C. HARTMAN, Executive Vice President, was employed by the Company in
January 1982, and is responsible for General Corporate Administration
including the functions inherent in comptrollership, personnel, employee
benefits, and insurance activities. Her prior experiences included MSA, a
marketing research company, TeleSciences, Incorporated, and Peat Marwick-
Mitchell. Ms. Hartman is a graduate of the Wharton School of Business of
the University of Pennsylvania.
COMMITTEES OF THE BOARD
The Company's Board of Directors has no salary or nominating committees.
Its sole committees are a Stock Option Committee and an Audit Committee.
The Stock Option Committee oversees the Company's Incentive Stock Option
Plan. During the past year, Lyndon A. Keele and Joy C. Hartman served on
this committee.
<<PAGE>>
In addition, the Company organized and instituted an Audit Committee in
1987 whose members during 1995 included John E. Cox and Kenneth P. Ray.
There was one formal meeting of the Audit Committee during 1995 and one
meeting of the Stock Option Committee. Peter Cosmas of Nemiroff, Cosmas
and Company (the Corporation's public auditors) normally participates in
the Audit Committee meeting but does not serve or act as a member of this
Committee.
APPROVAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO
AUTHORIZE AN INCREASE IN COMMON SHARES AND A NEW CLASS
OF PREFERRED STOCK
To approve an amendment to the Company's Certificate of Incorporation to
authorize a common stock increase from the present 10,000,000 shares to
13,500,000 shares. In addition, to establish a new class of preferred
stock in the amount of 2,000,000 shares. While the Company has no
present plans to issue such stock, should future events present
advantageous situations, the Company will be in a position to accomplish
that action.
In order to create more flexibility for financing opportunities, the
Company desires to have greater flexibility in offering equity
securities to the investment community other than common stock.
Therefore, the Company is requesting the shareholders to approve an
Amendment to the Company's Certificate of Incorporation to authorize a
new class of 2,000,000 shares of Preferred Stock. The Board of
Directors will have the authority to issue the Preferred Stock in one or
more classes or series and to fix the rights, preferences, privileges
and restrictions thereof, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption, redemption
prices, liquidation preferences and the number of shares constituting
any classes or series of the designation of such classes or series,
without further vote or action by the shareholders. The Company intends
that its Board of Directors will exercise its authority under the
proposed Amendment, if adopted, to authorize a newly created class of
Preferred Stock to effectuate any future financing.
EXECUTIVE OFFICERS
All Company Officers are elected yearly by the Board of Directors at its
annual organizational meeting immediately following each annual
stockholder's meeting. The officers during 1995 and as of the date of this
Proxy Statement, include Lyndon A. Keele, age 67, President, Chairman of
the Board and Treasurer; Joy C. Hartman, age 47, Executive Vice President,
and Russell R. Angely, age 57, Vice President of Sales and Marketing.
REMUNERATION OF OFFICERS AND
DIRECTORS AND CERTAIN TRANSACTIONS
The following table sets forth all remuneration for services in all
capacities to the Company during the year ended December 31, 1995, for the
Company's Chief Executive Officer and for each executive officer and/or
director who received more than $100,000.00 from the Company during such
year. No director receives any compensation or payment of any nature for
his services as director other than for an honorarium of Two Hundred Fifty
Dollars ($250.00) paid to outside directors for each meeting attended.
<<PAGE>>
<TABLE>
<CAPTION>
Annual Compensation Long term compensation
------------------------ -------------------------------
Name and Year Salary Bonus Other Awards
Principal Annual Restrict- Options LTIP All
Position Compen- ed Stock Pay- Other
sation outs Compensation
- - ---------- ---- ------ ----- ---------- --------- ---------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lyndon A.
Keele, CEO 1995 132,538 -0- -0- -0- -0- -0- -0-
Joy C.
Hartman,
EVP 1995 105,179* -0- -0- -0- -0- -0- -0-
Russell
R. Angley,
VP 1995 85,938 -0- 17,808 -0- 10,000 -0- -0-
</TABLE>
*Ms. Hartman's base salary of $101,000 was supplemented by a one time
payment of $4,179 for accrued vacation. Mr. Angely's other compensation
resulted from sales commissions.
There were no other such compensated executive officers or directors during
the calendar year 1995, and there are no others as of the date of this
Statement.
The Company presently has no standing plans or arrangements for contingent
forms of compensation such as bonuses, commissions, executive stock
options, stock appreciation rights, profit sharing, pension, retirement
plans or other like benefit programs, except for the past and present
Incentive Stock Option Plan as hereafter described. No officer, director,
or other employee consequently received or was entitled to any form of non-
cash compensation under any form of plan described or included within
Regulation S-B, Section 402(b)(1), Reg. 228.402, Section (b)(1).
The Shareholders approved an initial Incentive Stock Option Plan on April
22, 1982, including 162,000 shares, which was amended by the shareholders
on April 24, 1984, to include an additional 200,000 shares. This Plan
expired on April 27, 1992. The shareholders approved a successor Incentive
Stock Option Plan encompassing 290,950 shares of the authorized previously
unissued $0.01 per share par value stock of the Company. This included
90,950 shares allocated to the initial Plan that had never been awarded and
200,000 newly allocated shares. During the year 1992, 50,000 shares were
made subject to awards by the Committee to officers and directors,
including 10,000 shares each to all directors except for Mr. Keele who has
never received any option awards of any nature. Options can be and are
awarded under the Plan only to key engineering, design, manufacturing,
sales, or management personnel and all are granted at the then fair market
value of the Company's stock. In the event any option would be awarded to
a person holding directly or beneficially in excess of ten percent of the
Company's stock, such award must be made at 110% of the then fair market
value of the Company's stock. In all other respects, the Plan conforms to
all provisions of Section 422 of the Internal Revenue Service Code and has
been granted authority from time to time to enact amendments to bring the
Plan into conformity with any amendments to the Code. The shares allocated
to the successor Plan were subject to an S-8 Registration Statement filed
with the Securities and Exchange Commission on or about June 5, 1992.
There have been no changes of any nature in any of the substantive
provisions or procedures of this Plan since adoption. Awards under this
Plan have been made by a committee of the Board (which, during 1995,
consisted of Lyndon A. Keele and Joy C. Hartman) and are based solely upon
individual performance and are within the discretion and judgment of the
Committee. While Ms. Hartman holds options on certain shares of the
Company under this Plan, all of the same predate her membership on this
Committee. Neither she nor Mr. Keele nor any other prior member of this
Committee have ever nor will any successor member receive any option grants
while serving on this Committee other than for the 10,000 shares awarded to
all directors (except Mr. Keele) on both May 9, 1990, and on July 8, 1992.
The Plan has involved no assets or payments other than the award of options
which are required to be made at full market price on the date of the
award.
<<PAGE>>
All options have always been granted at the then current market price of
the Company's shares and at values ranging from $8.00 per share to $1.25
per share as of the date of the statement. No options have ever been
awarded at less than market value. In addition, no option shares have ever
been awarded to the principal shareholders of the Company. With respect to
principal employees and directors, as of the date of the statement, Ms.
Hartman has options for 35,500 shares; Mr. Angely, options for 20,000
shares; and Mr. Ray, options for 20,000 shares.
The Company maintains no other compensation awards which are granted in
conjunction or in tandem with such options and the Company further
maintains no other pension, thrift, profit sharing or other options or
similar extraordinary compensation plans of any nature.
There are no standing plans or present proposals for specific payment of
any bonuses, commissions (other than regular sales commissions), awards of
other option rights or other remuneration within the terms of Section
402(b)(1), Reg. 228.402(b)(1), other than salaries as the latter are now
and will hereafter from time to time be fixed by the Board of Directors.
Bonuses, commissions, options awards and other similar special payments as
well as salaries will continue to be fixed from time to time in the
discretion of the Option Committee and the Board of Directors, as
circumstances and performance shall indicate.
During 1995 there were two transactions with an officer and a director.
Mr. Sheldon Hofferman, a Company Director, purchased additional restricted
stock in the amount of $100,000. Mr. Lyndon A. Keele, President and a
Director, converted the Company's $188,600 indebtedness to him into common
stock. There have been no other transactions resulting in any payment or
grant or conveyance of other properties or rights other than direct salary
payments or sales commissions made solely in exchange for actual services
rendered in the normal course of business.
~ RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Nemiroff, Cosmas and Company (formerly Nemiroff, Cosmas, Titus and
Cochamiro) have served as public auditors for the Company during the entire
calendar year 1995, having been re-engaged as Company auditors on December
21, 1990, succeeding Coopers & Lybrand (which had been the Company auditors
from 1985 until December 17, 1990). Nemiroff, Cosmas and Company
previously served as public auditors for the Company from 1981 through
1985. The Board of Directors has voted unanimously to re-engage Nemiroff,
Cosmas and Company as public auditors for the Company for the current year
and will request the shareholders to ratify such selection at the annual
meeting of shareholders to be held on June 12, 1996. This proposal will be
determined by a simple majority vote.
Representatives of Nemiroff, Cosmas and Company will be present at the
meeting of stockholders to assist shareholders and to answer any questions
that may arise as to the current financial statements and reports and to
make any statement the auditor may desire to present.
Nemiroff, Cosmas and Company has not rendered any services nor has it made
any claim for payment of compensation for any non-auditing services. It
has no interest of any nature in the Company other than for its present
professional engagement. No member or affiliate of the firm has ever had
any business dealings or family relationships with any officers, directors,
or principal shareholders of the Company.
<<PAGE>>
ANNUAL REPORT
The Company has mailed its 10-KSB Report and Annual Report for the year
ended December 31, 1995, under identical cover with this Proxy Statement to
all stockholders. Reference may be made to that report for financial and
other information about the Company. ADDITIONAL COPIES OF THE FORM 10-KSB
OR ANY FORM 8-K PREVIOUSLY FILED AND/OR ALL EXHIBITS NOTED ON THE 10-KSB OR
OF THE SUCCESSOR INCENTIVE STOCK OPTION PLAN WILL BE MADE AVAILABLE TO
STOCKHOLDERS AT NO COST UPON REQUEST TO THE COMPANY'S SECRETARY, 1919
SPRINGDALE ROAD, CHERRY HILL, NEW JERSEY 08003, WHICH SHOULD INCLUDE THE
PRECISE ADDRESS WHERE SUCH MATERIALS ARE TO BE SHIPPED.
STOCKHOLDERS PROPOSALS
No stockholder proposals have been received for submission at the June 12,
1996, meeting. Any stockholder proposal appropriate for shareholder
consideration and any action that a shareholder may desire to be considered
for inclusion in proxy material for the Company's annual meeting of
stockholders in 1997 must be received at the principal executive offices of
the Company no later than 120 days prior to the date in 1997 when the proxy
materials will have been distributed for the 1997 annual meeting of
shareholders which, at the time of preparation of this statement, is
estimated to be on or about June 1, 1997.
Any shareholder desiring to submit a proposal at any time is entitled to
have access to the relevant shareholders list. Requests for the same
should be submitted in writing to the Company's Secretary at 1919
Springdale Road, Cherry Hill, New Jersey 08003.
GENERAL
Proxies are being solicited by mail. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the soliciting
material to the beneficial owners of stock held of record by such persons,
and the Company will reimburse them for their expenses in doing so.
THIS SOLICITATION OF PROXIES IS MADE FOR AND BY MANAGEMENT OF THIS COMPANY
AND THE ENTIRE COST OF THIS SOLICITATION WILL BE BORNE BY THE COMPANY.
Management does not intend to present and does not have any reason to
believe that others will present any proposal or item of business at the
annual meeting other than those set forth in the notice of the meeting and
within the present Proxy Statement. If any other matters are properly
presented for a vote, the proxies will be voted for such matters in
accordance with the best judgment of the person designated as proxy on the
proxy card. Any shareholder may attend the meeting in person, regardless
of whether a proxy has been previously executed. Attendance and voting in
person as well as subsequent execution of a latter written proxy will
automatically revoke any prior proxy not coupled with an interest.
By Order of the Board of Directors:
/s/ Joy C. Hartman
Joy C. Hartman, Secretary
Cherry Hill, New Jersey
April 18, 1996
