<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
BUFFTON CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BUFFTON CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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)
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:
----------------------------------------------------------------------------
(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):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(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 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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Notes:
<PAGE>
BUFFTON CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 21, 1996
TO THE STOCKHOLDERS:
The Annual Meeting of the Stockholders of Buffton Corporation will be held in
the Niles City Room of the Stockyards Hotel, Main Floor, 109 East Exchange
Avenue, Fort Worth, Texas on March 21, 1996, at 10:00 o'clock a.m. (C.S.T.) for
the following purposes:
1. To elect two Directors to serve for a three-year term expiring in 1999, and
2. To transact such other business as may properly come before the Annual
Meeting or adjournment(s) thereof.
By resolution of the Board of Directors, only stockholders of record as of the
close of business on February 7, 1996 are entitled to notice of, and to vote at,
the Annual Meeting. The transfer books will not be closed. A copy of the Annual
Report for the fiscal year ended September 30, 1995 has been mailed to all
stockholders of the Company.
By Order of the Board of Directors,
Robert Korman
Secretary
Fort Worth, Texas
Dated February 15, 1996
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING, AND, IF YOU DO
NOT EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
<PAGE>
BUFFTON CORPORATION
226 Bailey Avenue, Suite 101
Fort Worth, Texas 76107
(817) 332-4761
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
March 21, 1996
SOLICITATION AND REVOCABILITY OF PROXY
The accompanying Proxy, first mailed to stockholders on February 15, 1996, is
solicited by the Board of Directors of Buffton Corporation (the ''Company'') for
use at the Annual Meeting of Stockholders of the Company to be held in the Niles
City Room of the Stockyards Hotel, Main Floor, 109 East Exchange Avenue, Fort
Worth, Texas, on March 21, 1996, or at any adjournment(s) thereof. Giving the
Proxy will not in any way affect the stockholder's right to attend the Annual
Meeting and to vote in person or his right to revoke the Proxy at any time
before it is exercised by requesting its return in writing to the Secretary of
the Company at the office of the Company prior to or at the Annual Meeting.
If the Proxy is revoked, the shares represented thereby will be voted at the
Annual Meeting. Discretionary authority is provided in the Proxy as to any
matters not specifically referred to therein. The management is not aware of any
other matters which are likely to be brought before the Annual Meeting. However,
if any such matters properly come before the Annual Meeting, it is understood
that the Proxy holder or holders are fully authorized to vote thereon in
accordance with his or their judgment and discretion. The costs of solicitation
of Proxies will be borne by the Company.
RECORD DATE AND VOTING SECURITIES
The Board of Directors of the Company has fixed the close of business on
February 7, 1996 as the record date for determination of stockholders entitled
to notice of and to vote at the Annual Meeting. As of the record date, there
were 6,706,878 shares of Common Stock of the Company issued and outstanding.
Each shareholder of Common Stock is entitled to one vote for each share held by
him. The Common Stock constitutes the only class of securities entitled to vote
at the Annual Meeting.
SECURITY OWNERSHIP
Ownership of Certain Beneficial Owners. The following table sets forth
information as of February 7, 1996, with regard to the persons known to
management of the Company to be beneficial owners of more than 5% of any class
of the Company's voting securities:
<TABLE>
<CAPTION>
Amount and Nature
of
Name and Address Beneficial Percent of
Title of Class of Beneficial Owner Ownership(1) Class
- -------------- -------------------- ------------ -----
<S> <C> <C> <C>
Common Stock Steel Partners II, L.P. 643,000(2) 9.59
750 Lexington Avenue
27th Floor
New York, New York 10022
Common Stock James Hillyer 525,000(3) 7.66(4)
3350 McCue, #2103
Houston, Texas 77056
Common Stock Robert H. McLean 404,831(5) 5.78(6)
227 Bailey Avenue
Suite 101
Fort Worth, TX 76107
</TABLE>
1
<PAGE>
- -------------------------------
(1) Shares are deemed to be "beneficially owned" by a person if such person,
directly or indirectly, has or shares (i) the voting power thereof, including
the power to vote or to direct the voting of such shares, or (ii) the investment
power with respect thereto, including the power to dispose or direct the
disposition of such shares. In addition, a person is deemed to beneficially own
any shares as to which such person has the right to acquire beneficial ownership
within 60 days. The number of shares shown represents sole voting and investment
power except as otherwise indicated in the footnotes below.
(2) This figure includes 534,500 shares owned of record by Steel Partners II,
L.P., a Delaware limited partnership, and 108,500 shares owned of record by a
foreign investment company that is managed on a discretionary basis by Steel
Partners Services, Ltd., an entity controlled by Warren G. Lichtenstein and
Lawrence Butler. Messrs. Lichtenstein and Butler are the sole officers,
directors and shareholders of Steel Partners, Ltd., a New York corporation, and
the general partner of Steel Partners II, L.P.
(3) This figure includes 375,000 shares owned of record by James Hillyer and
150,000 shares covered by currently exercisable stock options owned by Mr.
Hillyer.
(4) This percentage is calculated including the 150,000 shares covered by the
stock options owned by Mr. Hillyer.
(5) This figure includes 100,000 shares owned of record by Mr. McLean, 300,000
shares covered by currently exercisable stock options owned by Mr. McLean and
4,831 shares owned by the Company's Employee Stock Ownership Plan which are
voted by Mr. McLean pursuant to such plan.
(6) This percentage is calculated including the 300,000 shares covered by the
stock options owned by Mr. McLean.
No written or oral agreement or other arrangement exists between any of the
above-named individuals or companies and the Company regarding the manner in
which the shares of the Company's Common Stock owned by each will be voted on
any issue or policy affecting the Company.
Ownership of Management. The table below reflects the shares of the
Company's Common Stock beneficially owned by the current Directors of the
Company and Executive Officers, as of February 7, 1995, and the number of shares
beneficially owned by all Directors and officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent
Title of Class Name of Beneficial Owner Ownership(1) of Class (6)
- -------------- ------------------------ ------------ ------------
<S> <C> <C> <C>
Common Stock John M. Edgar 10,040 .15
Common Stock Hampton Hodges 33,000 .49
Common Stock H. T. Hunnewell 108,151 1.61
Common Stock Robert H. McLean 404,831(2) 5.78
Common Stock Russell J. Sarno 17,614 .26
Common Stock Bruno V. D'Agostino 30,000 .45
Common Stock Robert Korman 112,354(3) 1.65
Common Stock Walter D. Rogers, Jr. 152,225(4) 2.24
All current Directors and
Officers as a group
(8 in number) 868,215(5) 12.05
- --------------
</TABLE>
(1) Shares are deemed to be "beneficially owned" by a person if such person,
directly or indirectly, has or shares (i) the voting power thereof, including
the power to vote or to direct the voting of such shares, or (ii) the investment
power with respect thereto, including the power to dispose or direct the
disposition of such shares. In addition, a person is deemed to beneficially own
any shares as to which such person has the right to acquire beneficial ownership
within 60 days. The number of shares shown represents sole voting and investment
power except as otherwise indicated.
(2) This figure includes 300,000 shares of the Company's common stock issuable
to Mr. McLean pursuant to non-qualified stock options which are currently
exercisable. This figure also includes 4,831 shares which are owned by the
Employee Stock Ownership Plan and are voted by Mr. McLean pursuant to the plan.
2
<PAGE>
(3) This figures includes 100,000 shares of the Company's common stock
issuable to Mr. Korman pursuant to non-qualified stock options which are
currently exercisable. This figure also includes 2,354 shares which are owned
by the Employee Stock Ownership Plan and are voted by Mr. Korman pursuant to the
plan.
(4) This figure includes 100,000 shares of the Company's common stock issuable
to Mr. Rogers pursuant to non-qualified stock options which are currently
exercisable. This figure also includes 2,125 shares which are owned by the
Employee Stock Ownership Plan and are voted by Mr. Rogers pursuant to the plan.
(5) This figure includes the 500,000 shares of the Company's common stock
issuable pursuant to the non-qualified stock options described in notes 2, 3 and
4 hereinabove.
(6) This percentage is calculated including the 500,000 shares of the
Company's common stock issuable pursuant to the non-qualified stock option
described in notes 2, 3 and 4 hereinabove, and all percentages are rounded to
the nearest one-hundredth of a percent.
ELECTION OF DIRECTORS
Nominees for Election as Directors
The Company's Certificate of Incorporation provides that the Company's
Board of Directors shall be divided into three classes, as nearly equal in size
as possible, each of which is to serve for a term of three years.
The nominees for Director are H. T. Hunnewell and Russell J. Sarno. The
nominees have been nominated for re-election by the Board of Directors to serve
for a three-year term expiring in 1999. The nominees are currently serving as
Directors and have consented to serve for the new term.
The following table reflects the name and age of the nominee, the position and
office with the Company currently held by the nominee, the period of service as
Director of the Company, and the term for which such nominee will serve, if
elected.
<TABLE>
<CAPTION>
Position Held Term to
Nominee's Name Age With the Company Director Since Expire
- -------------- ---------------- -------------- ------
<S> <C> <C> <C> <C>
H. T. Hunnewell 69 Director January 1981 1999
Russell J. Sarno 60 Director May 1984 1999
</TABLE>
The following table reflects the name and age of each of the continuing
Directors whose terms are not expiring, including the name and age of each
continuing Director, the positions and offices with the Company currently held
by each continuing Director, the period of service as a Director of the Company,
and the year in which such continuing Directors' terms will expire.
<TABLE>
<CAPTION>
Position Held Term to
Director's Name Age With the Company Director Since Expire
- --------------- --- ---------------- -------------- ------
<S> <C> <C> <C> <C>
Bruno V. D'Agostino 53 Director December 1991 1998
John M. Edgar 52 Director September 1987 1998
Hampton Hodges 58 Director December 1980 1997
Robert H. McLean 54 President, Chief January 1981 1998
Executive Officer
and Chairman of the
Board of Directors
Walter D. Rogers, Jr. 51 Director, President February 1995 1997
and Chief Executive
Officer of Current
Technology, Inc.
</TABLE>
To be elected as Director, each nominee must receive the favorable vote of a
plurality of the shares represented and entitled to vote at the Annual Meeting.
The persons named in the enclosed form of Proxy,
3
<PAGE>
unless otherwise directed therein, intend to vote such Proxy FOR the election of
the nominee named herein as Director of the Company. If any nominee becomes
unavailable for any reason, the persons named in the form of Proxy are expected
to consult with management of the Company in voting the shares represented by
them. The management of the Company has no reason to doubt the availability of
the nominee to serve and no reason to believe that the nominee will be
unavailable or unwilling to serve if elected to office. To the knowledge of
management, the nominee intends to serve the term for which election is sought.
The Board of Directors recommends a vote for the nominee.
Business Experience. The following is a brief summary of the business
experience of each of the nominees for election as Director and of each of the
continuing Directors for the past five years.
Nominees
H. T. HUNNEWELL serves as President of Twin Montana, Inc., an oil and gas
exploration and development company located in Graham Texas. Prior to October
1991, Mr. Hunnewell was Vice President of Twin Montana, Inc. Mr. Hunnewell is
also a director of Pyramid Oil Company. Mr. Hunnewell received a B.S. degree in
Petroleum Engineering and a B.S. degree in Geology from Texas A&M University in
1950.
RUSSELL J. SARNO, since January 1, 1995, has served as President of Flo
Control, Inc., a California Corporation and manufacturer of specialty fluid
control devices located in Burbank, California. For ten years prior to January
1, 1995, Mr. Sarno served as President of Flo Control, Inc., a Delaware
corporation, then a wholly-owned subsidiary of the Company. See "Transactions
with Management and Others."
Continuing Directors
BRUNO V. D'AGOSTINO served from 1978 to 1987 as Senior Vice President of
Benjamin Thompson & Associates, a firm specializing in marketplace architecture.
In August 1987, Bruno D'Agostino became a founding partner of D'Agostino Izzo
Quirk Architects, and he continues to serve in that capacity, directing urban
design projects throughout the United States. Mr. D'Agostino received a B.A.
degree in Architecture from the University of Cincinnati in 1964, and a Masters
degree in Architecture and Urban Design from Harvard University in 1969.
JOHN M. EDGAR has been engaged in the private practice of law in Kansas City,
Missouri since 1968. Mr. Edgar is currently the managing partner of the Kansas
City offices of the law firm of Bryan Cave LLP, and a member of such firm's
Management Committee. Mr. Edgar received a B.S. degree in Business
Administration and Accounting from the University of Kansas in 1965, and a J.D.
degree, with honors, from the University of Missouri at Kansas City in 1968.
HAMPTON HODGES serves as President of Cottonwood Properties, a commercial real
estate company located in Paris, Texas. Mr. Hodges received a Bachelor of
Science degree from the United States Military Academy at West Point in 1961.
ROBERT H. McLEAN co-founded the Company in 1980 and has served as the Chairman
of the Board, President and Chief Executive Officer of the Company since
February 1989. Mr. McLean received a B.B.A. in Business Administration from the
University of Texas at Austin in 1963 and an L.L.B. from the University of Texas
School of Law in 1966.
WALTER D. ROGERS, JR. has served as President of Current Technology, Inc.
since May 1992. Mr. Rogers served as Executive Vice President of Current
Technology from October 1990 to May 1992 and served as Vice President of the
Company between March 1988 and October 1990. Mr. Rogers received a B.S. degree
in Business Administration and Accounting from the University of Alaska in 1972.
Relationships. There is no family relationship between any of the Directors of
the Company.
4
<PAGE>
Meetings and Committees. For the fiscal year 1995, the Board of Directors of
the Company met six times with four of the meetings being regularly scheduled
and two of the meetings being special meetings. All of the Directors serving on
the Board during such period attended at least 75% of the meetings held while
each served as a Director during fiscal year 1995, except for Mr. D'Agostino,
who attended 50% of the meetings.
The Board of Directors does not have a standing Nominating Committee or a
standing Compensation Committee.
The Board of Directors has an Audit Committee presently composed of the
following Directors: Hampton Hodges, H.T. Hunnewell and John M. Edgar. In fiscal
year 1995, the Audit Committee met one time. The Audit Committee generally
assists the Board of Directors in fulfilling its responsibilities relating to
the Company's accounting policies, financial reporting practices, and
communication with the independent accountants. The members of the Audit
Committee are selected at the regularly scheduled meeting of the Board of
Directors immediately following each Annual Meeting of Stockholders.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company, their respective ages, positions held,
and tenure with the Company are as follows:
<TABLE>
<CAPTION>
Position Held Officer of the
Name Age Within the Company Company Since
- ---- --- ------------------- -------------
<S> <C> <C> <C>
Robert H. McLean 54 President,Chief Executive
Officer and Chairman of
the Board of Directors 1985
Robert Korman 48 Vice President,Treasurer,
Chief Financial Officer
and Secretary 1982
Walter D. Rogers, Jr. 51 Director, President of
Current Technology, Inc. 1988
</TABLE>
Business Experience of Executive Officers. Information concerning the business
experience of Messrs. McLean and Rogers is provided under "Election of
Directors" on page 5 herein.
ROBERT KORMAN, a Certified Public Accountant, has served as Vice President,
Treasurer, and Chief Financial Officer of the company since February 1989. Mr.
Korman served as the Treasurer of the Company from December 1982 to February
1989. Mr. Korman was elected as the Secretary of the Company February 1994.
Terms of Office; Relationship. The officers of the Company are elected
annually by the Board of Directors of the Company at the Annual Meeting of
Directors held immediately following each Annual Meeting of Stockholders, or as
soon thereafter as necessary and convenient in order to fill vacancies or newly
created offices. Each officer holds office until his successor is duly elected
and qualified or until his death, resignation or removal, if earlier. Any
officer or agent elected or appointed by the Board of Directors of the Company
may be removed by the Board of Directors whenever, in its judgment, the best
interests of the Company will be served thereby, but such removal shall be
without prejudice to the contractual rights, if any, of the person so removed.
There are no family relationships among the executive officers of the Company.
There are no arrangements or understandings between any officer and any other
person pursuant to which that officer was elected.
5
<PAGE>
EXECUTIVE COMPENSATION
Executive Compensation
The following table sets forth the compensation paid or accrued by the Company
and its subsidiaries for services rendered during the last three fiscal years to
(i) the Company's Chief Executive Officer, and (ii) each of the most highly
compensated executive officers of the Company whose cash compensation exceeds
$100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
------------------------
Awards Payouts
----------------------- --------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted
Annual Stock Options/ LTIP All Other
Compensation Award(s) SARs Payouts Compensation
Name and Principal Salary Bonus ------------ ($) (#) ($) ------------
Position Year ($)(A) ($)(A) ($) ------------- ------------ ---------- ($)
- -------------- ---- ------ ------ --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H. McLean 1995 250,000 75,000 -- 140,650 300,000 -- 4,500(B)
Chief Executive Officer 1994 250,000 225,000 -- -- -- -- 1,613(B)
1993 215,000 -- -- -- -- -- 1,688(B)
Walter D. Rogers, Jr. 1995 148,333 90,000 -- 56,890 100,000 -- 4,150(B)
President of Current 1994 135,833 60,000 -- -- -- -- 964(B)
Technology, Inc. 1993 106,250 20,000 -- -- -- -- 865(B)
Robert Korman 1995 125,000 40,000 -- 13,750 100,000 -- 2,172(B)
Chief Financial Officer 1994 125,000 80,000 -- -- -- -- 368(B)
1993 122,200 21,000 -- -- -- -- 267(B)
- --------------
</TABLE>
(A) The amounts shown represent cash compensation earned by executive officers.
(B) Contributions by the Company to its 401(k) Profit Sharing Plan on behalf of
the named executive officers.
Options Granted
The following table sets forth the options granted during the last completed
fiscal year to (i) the Company's Chief Executive Officer, and (ii) each of the
most highly compensated executive offices of the Company whose cash compensation
exceeds $100,000.
6
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options/
Underlying SARs
Options Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
---- ---------- ---------- -------- ---------- ------- -------
Robert H. 250,000 43.10 1.50 2/3/2000 478,600 603,950
McLean
Chief
Executive
Officer
Robert H. 50,000 8.62 1.50 8/2/2000 95,720 120,790
McLean
Chief
Executive
Officer
Walter D. 100,000 17.24 1.50 2/3/2000 191,440 241,580
Rogers, Jr.
President
Current
Technology,
Inc.
Robert 100,000 17.24 1.50 2/3/2000 191,440 241,580
Korman
Chief
Financial
Officer
</TABLE>
Options Exercised and Year-End Value Table
There were no stock options exercised by any named executive officer of the
Company during the last fiscal year.
7
<PAGE>
Long Term Incentive Plan Awards
The Company did not make any awards to the Company's CEO or any of its most
highly compensated executive officers during the year ended September 30, 1995
under any Long Term Incentive Plan. The stock awarded such officers was
restricted by their agreement not to sell such stock while employed by the
Company or any affiliates of the Company, but otherwise such officers are fully
vested in their ownership of such stock.
Board of Directors' Report on Compensation
The following is a report of the Board of Directors regarding actions taken
with respect to executive compensation during the fiscal year ended September
30, 1995. Please note that the Company does not intend for this information to
be incorporated by reference in any previous or subsequent SEC filing by the
Company.
The Board of Directors' Report on Compensation
for
Fiscal Year September 30, 1995
Compensation policies and annual compensation applicable to the Company's
executive officers are the responsibility of and established by the Board of
Directors. Executive officers who also serve on the Board do not participate in
establishing their own compensation. The Board of Directors' overall policy
regarding compensation of the Company's executive officers is to provide salary
levels and compensation incentives that attract and retain qualified individuals
in key positions; that recognize individual performance and the Company's
performance; and that support the Company's objective of achieving sustained
improvement in its financial condition and operating results. To achieve these
objectives, the Company's executive compensation policies integrate annual base
compensation with bonuses based on a combination of overall corporate
performance and individual initiatives and performance. Annual cash
compensation, together with the payment of long term equity based incentive
compensation through stock options and other equity based awards, is designed to
attract and retain qualified executives and to insure that such executives have
a continuing stake in the long term success of the Company. The Board of
Directors has access to compensation packages made available to executive
officers of competing companies, as well as companies of a similar size and
nature, but also uses its discretion to set executive compensation at levels
warranted in its judgment by external, internal and individual circumstances.
Base Salary:
-----------
Subject to the provisions of any applicable employment agreements, in fiscal
1995, base salary levels for the Company's executive officers, including the
Chief Executive Officer, were competitively set relative to competing companies,
as well as companies of a similar size and nature. In determining salaries, the
Board of Directors took into account individual experience and performance and
specific issues particular to the Company.
Annual Incentive Compensation:
-----------------------------
Executive officers who have operating responsibility received cash bonuses
based on performance goals established at the beginning of the fiscal year, by
contract and at the discretion of the Board of Directors. The restricted stock
awards granted to executive officers of the Company, including the CEO, were
awarded at the discretion of the Board of Directors and were based on various
objective and subjective factors, and were conditioned upon such Executive
Officer's agreement not to sell such stock for so long as such Executive Officer
is employed by the Company or any affiliate of the Company.
Stock Option Plan:
-----------------
The Equity Participation Plan, as amended, has been the Company's primary long
term incentive plan for key executive officers since 1989. The options granted
under the Company's Equity Participation Plan are generally for five year
periods. Consequently, by fiscal 1995, all options previously granted to key
executives
8
<PAGE>
under the Equity Participation Plan had lapsed, and options covering 500,000
shares of the Company's common stock were available for re-grant. In
furtherance of the Company's compensation policy, all of the options available
under the Equity Participation Plan were granted to key executive officers of
the Company during the fiscal 1995, including options covering 300,000 shares to
the Company's Chief Executive Officer.
CEO Compensation:
----------------
In accordance with the policies described above in this report, the fiscal
1995 base salary for Mr. McLean, who served as Chairman of the Board, President
and Chief Executive Officer of the Company, was established at an annual rate of
$250,000.00. The Board of Directors considered that this salary was within the
range of salaries paid to Chief Executive Officers of comparable companies, and
that Mr. McLean is a capable and experienced executive who would continue to
make substantial contributions to the Company's growth and success. The
restricted stock awards made to Mr. McLean during the fiscal 1995 were in
furtherance of the Company's policy of providing long term equity based
incentive compensation to its employees, and were based on a combination of
objective and subjective factors, and took into account the Company's continued
return to profitability, the substantial reduction in the Company's debt over
prior years, the significant progress continuing to be made through Mr. McLean's
effort to obtain an expedited remedial solution at the Company's Vestal, New
York Superfund site and were designed to provide incentives for continued
performance. Mr. McLean agreed, as a condition to receiving such restricted
stock, that he would not sell such stock for so long as he is employed by the
Company. The stock options granted Mr. McLean during the fiscal 1995 were in
furtherance of the Company's policy to encourage and facilitate personal stock
ownership by officers and key employees, including the CEO, thus strengthening
their commitment to the Company and encouraging a longer term perspective to
their responsibilities. Additionally, these options were granted to replace
options covering 300,000 shares which had lapsed by fiscal 1995.
THE BOARD OF DIRECTORS
Bruno V. D'Agostino
John M. Edgar
Hampton Hodges
H. T. Hunnewell
Robert H. McLean, Chairman
Walter D. Rogers, Jr.
Russell J. Sarno
Compensation of Directors
For the 1995 fiscal year the outside members of the Board of Directors were
issued shares of the Company's common stock in lieu of cash compensation for
director's fees. As a result, Mr. D'Agostino, Mr. Edgar, Mr. Hodges and Mr.
Hunnewell, as non-employee Directors, received 20,000 shares of the Company's
common stock. Mr. Sarno became a non-employee Director effective January 1, 1995
and received 15,000 shares of the Company's common stock. The Company
reimburses the Directors for expenses in connection with meetings, and otherwise
does not incur any cash outlays with respect to Director expenses.
Employment Agreements
Mr. McLean has an Employment Agreement with the Company providing for an
annual salary of $250,000.00, a term of thirty-six (36) months beginning October
1, 1995 and contains a non-competition provision. This Employment Agreement has
an automatic renewal feature which operates to insure that the term of the
Employment Agreement is never less than twenty-four (24) months, nor more than
thirty-six (36) months. Mr. McLean also has a Change in Control Agreement, with
the same term as his Employment
9
<PAGE>
Agreement, which provides that if Mr. McLean's employment with the Company is
terminated within two years following a Change in Control, unless such
termination is because of his death or disability or by the Company for cause,
Mr. McLean shall be entitled to receive a lump sum payment equal to three times
his base amount as that term is defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), subject to reduction in order to avoid
the payment of an "excess parachute payment" as that term is defined in Section
280G of the Code.
Mr. Rogers has an Employment Agreement with the Company providing for an
annual salary of $175,000.00, term of thirty-six (36) months beginning June 1,
1995 and contains a non-competition provision. This Employment Agreement has an
automatic renewal feature which operates to insure that the term of the
Employment Agreement is never less than twenty-four (24) months, nor more than
thirty-six (36) months. Mr. Rogers' Employment Agreement also provides that if
Mr. Rogers' employment with the Company is terminated within twenty-four (24)
months after a Change in Control, unless such termination is because of his
death or disability or by the Company for cause, Mr. Rogers shall be entitled to
receive a lump sum payment eqult to three times his base amount as that term is
defined in Section 280G of the Code, subject to reduction in order to avoid the
payment of an "excess parachute payment" as that term is defined in Section 280G
of the Code.
Mr. Korman has an Employment Agreement with the Company providing for an
annual salary of $125,000.00, with a term of twelve (12) months beginning August
1, 1995. This Employment Agreement has an automatic renewal feature which
operates to insure that the term of the Employment Agreement is always twelve
(12) months. Mr. Korman's Employment Agreement also has a Change in Control
provision which provides that if Mr. Korman's employment with the Company is
terminated within twenty-four (24) months following a change in control, unless
such termination is because of his death or disability, or by the Company for
cause, Mr. Korman shall be entitled to receive a lump sum payment equal to his
salary for the remaining balance of his employment term.
For purposes of the Employment Agreements and the Change in Control agreement
referred to immediately above, a "Change in Control" is defined as having
occurred upon any of the following events:
(i) the acquisition directly or indirectly, by any person (as such
terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended), other than Company, any of its subsidiaries or
any employee benefit plan maintained by Company or any such subsidiary, of
beneficial ownership of securities of Company representing fifteen percent
(15%) or more of the combined voting power of Company's then outstanding
securities (with the terms used herein and in Sections 13(d) and/or 14(d)
of the Securities Exchange Act of 1934, as amended, having the meanings of
such terms in such Sections);
(ii) if the stockholders of Company approve a merger of consolidation, a
sale or disposition of all or substantially all of Company's assets or a
plan of liquidation or dissolution of Company;
(iii) the election during any period of twenty-four (24) months or less
of a member or members of Company's Board of Directors without the approval
of the election or nomination for election of such new member or members by
a majority of the members of the Board who were members at the beginning of
the period, or members of the Board thereafter recommended to succeed such
original members (or their successors hereunder) by a majority of the
members of the Board who were members at the beginning of the period (or
their successors hereunder); or
(iv) any person (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) other than Company, any of its
subsidiaries or any employee benefit plan maintained by Company or any such
subsidiary, makes a tender or exchange offer for any shares of Company's
outstanding voting securities at any point in time, pursuant to which any
such shares are purchased.
Unless, the Continuing Board of Directors of Company (as hereinafter defined)
determines that the happening of any of the foregoing events in a particular
case should not be deemed a Change in Control. The "Continuing Board of
Directors of Company" shall mean (i) the members of Company's Board of Directors
in
10
<PAGE>
office immediately prior to the Change in Control, excluding any who initiate a
Change in Control or are affiliated with one who initiates a Change in Control,
and (ii) any subsequent directors who may be selected, nominated or approved by
a majority of the other Continuing Board of Directors of Company.
Stock Price Performance
The following table compares the total shareholder returns over the last five
years to the American Stock Exchange Market Value Index and the Multi Industry
Group Index. The Company is listed on the American Stock Exchange and has
multiple industries. The shareholder return shown below is not necessarily
indicative of future performance.
1996 THIS YEAR'S PLOT POINTS
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
- ------------------------------FISCAL YEAR ENDING--------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY 1990 1991 1992 1993 1994 1995
BUFFTON CP 100 112.50 81.25 125.00 162.50 206.25
INDUSTRY INDEX 100 117.20 128.91 159.40 159.92 198.48
BROAD MARKET 100 119.92 125.15 146.91 149.73 180.41
</TABLE>
Note: The above paragraph shows stock price performances assuming dividend
reinvestment.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In a transaction effective January 1, 1995, Flo Control, Inc., a Delaware
corporation (Seller), a wholly-owned subsidiary of the Company, sold
substantially all of its operating assets to Flo Control, Inc., a California
corporation (Buyer) owned by Russell J. Sarno, a stockholder and Director of the
Company. The purchase price for the assets was $3,100,000 in cash, plus the
assumption of $800,000 of liabilities. As a condition of the sale, Buyer was
required to purchase for $150,000 in cash the Seller's undivided ninety-five
percent (95%) joint venture interest in Florida Realty Joint Venture. The
purchase price for the assets sold was determined by the disinterested members
of the Company's Board of Directors to be reasonable and fair in view of the
financial statements of the operations being sold, through discussions with
several independent third parties familiar with the assets being sold, including
companies engaged in the same industry, through the solicitation of purchase
offers from third parties and in view of the fact that the Buyer was required to
acquire Seller's interest in Florida Realty Joint Venture, which resulted in the
removal of approximately $2,300,000 in debt from the Company's consolidated
balance sheet and eliminated cash outlays of approximately $30,000 per month for
the next two years.
Pursuant to the terms of a Letter Agreement dated February 2, 1995, in the
event Current Technology, Inc. ("Current Technology") is sold while Mr. Rogers
is still employed by Current Technology, Mr. Rogers is entitled to receive a sum
equal to 25% of the purchase price for Current Technology in excess of book
value of Current Technology, not to exceed the sum of $500,000.00.
11
<PAGE>
TIMELINESS OF CERTAIN SEC FILINGS
The Company has no knowledge of any officer, director or beneficial owner of
more than ten percent of the Company's common stock having failed to file on a
timely basis any report required by Section 16(a) of the Exchange Act during the
most recent fiscal year.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Price Waterhouse as
independent accountants to audit the books, records and accounts of the Company
for fiscal year 1996. Price Waterhouse has served as the Company's independent
accountants since the inception of the Company, and is therefore familiar with
the affairs and financial procedures of the Company. To the knowledge of
management of the Company, neither such firm nor any of its members has any
direct or material indirect financial interest in the Company, nor any
connection with the Company in any capacity other than as independent
accountants.
Audit and audit related services were performed by Price Waterhouse during the
fiscal year ended September 30, 1995 and included the audit of the annual
financial statements and Form 10-K of the Company.
A representative of Price Waterhouse is expected to be present at the Annual
Meeting to answer questions and will be afforded an opportunity to make any
statement he wishes to make regarding the financial statements of the Company.
EXPENSE OF SOLICITATION
The cost of preparing, assembling and mailing this Proxy Statement, the notice
of Annual Meeting of Stockholders and the enclosed Proxy is to be borne by the
Company. The Company has retained the Beacon Hill Partners, Inc. to assist it in
connection with the solicitation of proxies. In connection therewith, the
Company will pay Beacon Hill Partners, Inc. $1,000.00 plus expenses.
In addition to the solicitation of proxies by use of the mails, the Company
may also utilize the services of some of its officers and regular employees (who
will receive no compensation therefor in addition to their regular salaries) to
solicit proxies personally and by telephone and telegraph. The Company requests
banks, brokers, and other custodians, nominees and fiduciaries to forward copies
of the proxy material to their principals and to request authority for the
execution of proxies. The Company may reimburse such persons for the expenses in
so doing.
VOTING PROCEDURES
Each holder of common stock is entitled to one vote for each share held by
him. The presiding officer of the meeting will appoint two independent election
judges to count votes at the annual meeting. One of the two judges shall be a
representative of the Company's Registrar and Transfer Agent. The Company's
Bylaws provide that Directors shall be chosen by a plurality of the votes cast
by the holders of shares entitled to vote and represented in person or by proxy
at an annual meeting at which a quorum is present, and that the majority of the
shares entitled to vote constitutes a quorum. If a shareholder abstains from
voting by not attending the annual meeting in person or by proxy, the effect of
that abstention would be to reduce the number of shares present at the annual
meeting for the purposes of determining whether a quorum exists. After a quorum
is found to exist, abstentions by those represented in person or by proxy at the
meeting and broker non-votes are treated as failures to vote. Since Director
nominees are elected by a plurality of the votes cast, an abstention or broker
non-vote has no effect upon the outcome of an election. The Company Bylaws are
consistent with Delaware laws; therefore, the effect of abstentions and broker
non-votes is the same under either.
12
<PAGE>
INFORMATION CONCERNING 1997 ANNUAL MEETING
The 1997 Annual Meeting of Stockholders of the Company is expected to be held
on or about March 20, 1997, with the mailing of Proxy materials for such Meeting
to be made on or about February 14, 1997. If a stockholder intends to submit a
nomination for Director or propose any other item of business, notice of such
nomination or such item of business must be received by the Company at its
executive offices pursuant to its Bylaws not less than 120 days nor more than
180 days prior to the anniversary date of the Company's proxy statement released
to stockholders in connection with the immediately preceding Annual Meeting;
provided, however, that in the event that the date of the Annual Meeting is more
than 30 days prior to or more than 60 days after the anniversary date of the
preceding year's annual meeting of stockholders, notice by the stockholder to be
timely must be so delivered a reasonable time before proxy materials are
prepared and distributed to stockholders. Such notice to the Secretary must
provide certain information with respect to the nominee or the proposed item of
business to be considered, and information as to the name and address of the
stockholder making such proposal and the number of shares held by such
stockholder. Additional information about stockholder proposals may be obtained
from the Company. Assuming the 1997 Annual Meeting is held as now intended, a
stockholder notice relating to this must be received by October 18, 1996.
Any proposals of stockholders to be presented at the Annual Meeting to be held
in 1997 that are eligible for inclusion in the Company's proxy statement for the
meeting under applicable rules of the Securities and Exchange Commission must be
received by the Company no later than October 18, 1996.
GENERAL
The Company is furnishing to each person whose Proxy is being solicited a copy
of the Annual Report of the Company on Form 10-K for the fiscal year ended
September 30, 1995, as filed with the Securities and Exchange Commission,
including the financial statements and schedules thereto. Such report was filed
with the Securities and Exchange Commission on December 27, 1995. Requests for
additional copies of such report should be directed to Buffton Corporation,
Corporate Secretary, 226 Bailey Avenue, Suite 101, Fort Worth, Texas 76107.
Please date, sign and return the enclosed Proxy at your earliest convenience
in the enclosed envelope. No postage is required for mailing in the United
States. A prompt return of your Proxy will be appreciated as it will save the
expense of further mailing.
13
<PAGE>
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BUFFTON CORPORATION FOR ANNUAL MEETING TO BE
HELD MARCH 21, 1996
The undersigned hereby appoints Robert H. McLean, Robert Korman, and
Anthony Haas, and each of them, proxies of the undersigned, with full
power of substitution for and in the name, place and stead of the
undersigned to appear and act for and to vote all shares of Buffton
P Corporation standing in the name of the undersigned or with respect to
which the undersigned is entitled to vote and act at the Annual Meeting
of Stockholders of said Company to be held in Fort Worth, Texas on
R March 21, 1996 at 10 A.M., C.S.T., or at any adjournments or
postponements thereof, with all the powers the undersigned would
possess if then personally present, and especially, but without limiting
O the foregoing, to vote:
1. For the Election of Directors.
X
[_] FOR the two nominees listed below (except as marked to the
contrary below).
Y
[_] WITHHOLD AUTHORITY to vote for the two nominees listed below.
H. T. Hunnewell and Russell J. Sarno
NOTE: If you desire to withhold authority to vote for one or more,
but not all of the above named nominees, check the box "FOR" and
indicate your desire to withhold such authority by drawing a line
through the name(s) of such nominee(s).
2. Upon such other matters as may properly come before the meeting.
[_] FOR [_] AGAINST [_] ABSTAIN
The shares of the undersigned are to be voted in accordance with the
specifications made with respect to Items 1 and 2. If no specification
is made as to any one or all of the Items, this Proxy shall be deemed to
confer discretionary authority as to such item, or items, and shall in
each such case be voted FOR the election or FOR the proposal as the case
may be.
PROXY SOLICITATED BY THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON,
DATE AND MAIL IN ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BUFFTON CORPORATION FOR ANNUAL MEETING TO BE
HELD MARCH 21, 1996
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and accompanying Proxy Statement and of the Company's 1995
Annual Report and ratifies and confirms all that any of the said proxy
holders or their substitutes may lawfully do or cause to be done by
P virtue hereof.
DATED: ______________________, 1996
R
___________________________________
Stockholder's Signature
O
___________________________________
Signature if Held Jointly
X
Please sign exactly as name
appears hereon. Joint owners
Y should each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such.
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