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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a(c) or section 240.14a-12
PRAB, INC.
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Prab, Inc.
- ------------------------------------------------------------------------------
(Name of Persons(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 Rule 14-a6(i)(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:
______________________________________________________________________________
[ ] 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:
______________________________________________________________________________
2. Form, Schedule or Registration Statement no.:
______________________________________________________________________________
3. Filing Party:
______________________________________________________________________________
4. Date Filed:
______________________________________________________________________________
<PAGE>
PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
(616) 382-8200
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 28, 1996
TO: The Shareholders
Prab, Inc.
The Annual Meeting of Shareholders of Prab, Inc., a Michigan
corporation, of Kalamazoo, Michigan, will be held at the Holiday Inn-East,
3522 Sprinkle Road, Kalamazoo, Michigan, on Thursday, March 28, 1996, at 10:00
a.m. (EST). A form of Proxy and Proxy Statement for the meeting are furnished
herewith. The purpose of the meeting is to consider and vote on the following
matters.
1. To elect a Board of five (5) directors.
2. To ratify the appointment of Plante & Moran, LLP Certified Public
Accountants as independent public accountants for the Company.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on January 30,
1996, as the record date for determination of shareholders entitled to notice
of and to vote at the meeting.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD. YOU ARE INVITED TO ATTEND
THE MEETING IN PERSON, BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE,
DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
By order of the Board of Directors
Eric V. Brown, Sr.
Secretary
Date: February 21, 1996
Kalamazoo, Michigan
<PAGE>
PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
February 21, 1996
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of PRAB, INC. (the "Company") from
the holders of the common stock, $0.10 par value, of the Company for use at
the Annual Meeting of Shareholders to be held on Thursday, March 28, 1996, at
10:00 a.m. (EST), at Holiday Inn-East, 3522 Sprinkle Road, Kalamazoo,
Michigan. This Proxy Statement is being mailed to shareholders beginning on or
about February 21, 1996, accompanied by the Company's annual report for the
fiscal year ending October 31, 1995.
The cost of solicitation will be borne by the Company. In addition to
the use of the mails, these proxies may be solicited by persons regularly
employed by the Company, by personal interview, and by telephone. Arrangements
have been made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the beneficial
owners of stock.
The Board of Directors knows of no business which will be presented
at the meeting other than the matters referred to in the accompanying Notice
of Annual Meeting. However, if any other matters are properly presented at the
meeting, it is intended that the persons named in the proxy will vote upon the
same and act in accordance with their judgment. Shares represented by properly
executed proxies will be voted at the meeting in the manner specified therein.
If no instructions are specified in the proxy, the shares represented thereby
will be voted for the proposals referred to therein and the election as
directors of the nominees referred to below. Any proxy may be revoked by the
person giving it any time prior to being voted by giving a later dated proxy
or by attending the meeting, revoking the proxy and voting in person.
Only shareholders of record at the close of business on January 30,
1996, are entitled to notice of and to vote at the meeting. On such date: (i)
2,647,860 shares of common stock having one vote each were outstanding; and
(ii) 2,000,000 shares of Convertible Preferred Stock, $0.75 par value, having
one vote each for the election of one director (as described below) were
outstanding.
1. ELECTION OF DIRECTORS
Five directors are to be elected by the holders of Common Stock to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Except as otherwise specified in the
proxy, proxies will be voted for a Board of five directors and will be voted
for the election of the nominees named below, all of whom are now members of
the Board. If a nominee becomes unable or unwilling to serve, proxies will be
voted for such other person, if any, as shall be designated by the Board.
However, management now knows of no reason to anticipate that this will occur.
Directors are elected by a plurality of votes cast at the meeting
meaning that the five nominees receiving the highest number of votes will be
elected as directors. Abstentions and broker non-votes will have no effect on
the election of directors.
The holders of the Company's Convertible Preferred Stock have the
right to vote as a class to nominate and elect one member of the Board. The
holders of Convertible Preferred Stock have no other voting rights, except as
required by law. The Company has been advised that the State of Michigan
Retirement Systems ("SMRS"), the sole holder of the Company's Convertible
Preferred Stock, intends to nominate and elect Mr. Robert J. Skandalaris as
the sixth director at the meeting. Mr. Skandalaris has been a director since
March, 1993. Since 1993, Mr. Skandalaris, age 43, has been: the President and
Chief Executive Officer of Noble International, Ltd. a privately-held merchant
banking firm located in Bloomfield Hills, Michigan; and the Managing Director
of River Capital, Inc. an investment banking firm located in Bloomfield Hills,
Michigan. Prior thereto, Mr. Skandalaris was the President and Chief Executive
Officer of Acorn Asset Management Corporation, an investment advisory firm,
and Vice Chairman of the Oxford Investment Group, Inc., an acquisition and
investment banking firm.
Nominees for election by the holders of common stock are as follows:
<TABLE>
<CAPTION>
Director Present Principal Occupation, Business
Name Age Since Experience & Certain Other Information
- ---- --- ----- --------------------------------------
<S> <C> <C> <S>
John J. Wallace (1) 80 1961 Chairman of the Board of the Company
since 1974; Chief Executive Officer from
1974 to December, 1988; President from
1961 to 1982, and from July, 1990 to
June, 1991.
Gary A. Herder (1) 48 1991 President and Chief Executive Officer
since 1991; joined the Company in 1965,
previously served as Executive Vice
President, General Manager of Conveyors,
and Chief Engineer.
Eric V. Brown, Sr 82 1968 Attorney in private practice of law since
1937 and currently "of counsel" to the
law firm of Miller, Canfield, Paddock and
Stone; Secretary of the Company since
1975.
Robert J. Hamman 81 1976 Management consultant since 1975; prior
thereto, a vice president and director of
A. T. Kearney and Co., Inc.
James H. Haas 49 1993 President and Founder of Summit Polymers,
Inc., since 1972.
<FN>
- -----------------------------------
(1) Messrs. Wallace & Herder are the only executive officers of the Company.
</TABLE>
Meetings and Committees of the Board of Directors. The Board of
Directors has a standing Audit Committee, which during fiscal year 1995,
consisted of Eric V. Brown, Sr., Robert J. Hamman, James H. Haas, and Robert
J. Skandalaris. The Audit Committee met once during the last fiscal year. Its
principal functions are to recommend to the full Board the engagement or
discharge of independent auditors; to direct and supervise investigations into
matters relating to audit functions; to review with independent auditors the
plan and results of the audit engagement; to review the scope and results of
internal auditing procedures; to approve services performed by independent
auditors before such services are performed; to review the degree of
independence of the auditors; to consider the range of audit and non-audit
fees; and to review the adequacy of the Company's system of internal
accounting controls. The Board of Directors has a standing Compensation
Committee, which during fiscal year 1995, consisted of John J. Wallace, Eric
V. Brown, Sr., Robert J. Hamman and James H. Haas. The compensation committee
met once during the last fiscal year. Its principal functions are to review
the performance of Mr. Herder and certain other management personnel and to
make recommendations to the Board of Directors regarding the salary, bonuses
and other compensation to be paid to such individuals. The Board of Directors
does not have a standing nominating committee.
During the last fiscal year, the Board of Directors met six times.
All of the nominees set forth above held positions as directors during the
full fiscal year. Each incumbent director attended 75% or more of the
aggregate total number of meetings of the Board (held during the period for
which he was director) and the Committees on which he served (during the
period that he served), except Robert J. Skandalaris.
Section 16(a) Reports. Based solely upon a review of Forms 3 and 4
and amendments thereto furnished to the Company during the last fiscal year
and Form 5 and amendments thereto (together with written representations from
reporting persons that no Form 5 was required) furnished to the Company with
respect to the last fiscal year, the Company is not aware of any person who,
at any time during the last fiscal year, was a director, officer, or
beneficial owner of more than 10% of the Company's Common Stock, that failed
to file on a timely basis reports required by Section 16(a) of the Securities
Exchange Act of 1934 during the most recent fiscal year or prior years, except
that Robert J. Hamman failed to timely report, on Form 5, the acquisition of
1,850 shares of the common stock of the Company during fiscal year 1995.
EXECUTIVE COMPENSATION
The following table shows the total compensation received by the
Company's Chief Executive Officer for the last three fiscal years. No
executive officer of the Company, other than the Chief Executive Officer,
received total annual salary and bonus in excess of $100,000 during the last
fiscal year.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Annual Compensation Long Term Compensation
------------------------------------ -----------------------
Name and Other Annual
Principal Compensation Original All Other
Position Year Salary Bonus (1) Options Compensation
- -------------- ---- -------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gary A. Herder, 1995 $134,540 $29,172 $5,850 0 $9,841(2)
President and 1994 $128,928 $10,000 $5,100 30,000 $6,672
Chief Executive 1993 $115,400 $1,000 $5,100 0 $2,888
Officer
<FN>
- ---------------
(1) Represents annual car allowance paid to Mr. Herder.
(2) Represents: $1,637 Company match under the Company's 401(k) Plan; $1,637
Company contribution under the Company's 401(k) Plan; $5,978 Company
contribution under the Company's Profit Sharing Plan; and $589 Company
payment for life insurance to fund the Company's obligations under its
deferred compensation agreement with Mr. Herder.
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information regarding: (i) the number of
shares received and the aggregate dollar value realized upon exercise of
options by the Chief Executive Officer of the Company during the fiscal
year-ended October 31, 1995; and (ii) the value of options held by the Chief
Executive Officer of the Company at October 31, 1995 measured in terms of the
average of the bid and ask prices of the Company's common stock on that day.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
October 31, 1995 (#) October 31, 1995 ($)
Shares Value -------------------------- --------------------------
Acquired on Realized
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary A. Herder 30,000 $39,141 78,500 0 $41,250(1) 0
<FN>
(1) Options held by Mr. Herder for 18,500 shares have exercise prices which
exceed the fair market value of the Company's common stock on October 31,
1995.
</TABLE>
Compensation of Directors. The Company pays each of the outside
directors $500 plus traveling expenses in excess of $100 for each Board
meeting attended by them and $250 for each Committee meeting attended by them,
plus an additional $250 for each such meeting not held in conjunction with a
regularly scheduled Board meeting.
Certain Relationships and Related Transactions. Eric V. Brown, Sr.
Secretary and director of the Company is "of counsel" to the law firm of Miller,
Canfield, Paddock and Stone, which firm is general legal counsel to the Company.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of December 31,
1995, regarding each person known by the Company to own beneficially more than
5% of the Company's Common Stock, each director and nominee of the Company,
each executive officer named in the Summary Compensation Table above, and all
directors and executive officers of the Company as a group. Except as noted,
each person named below is the record owner of the shares indicated and
possesses sole voting and investment power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of
Beneficial Owner or Amount of Percentage
Identity of Group Beneficial Ownership of Ownership
----------------- -------------------- ------------
<S> <C> <C>
John J. Wallace 356,424(1)(6) 13.5%
3003 W. Gull Lake Drive
Richland, Michigan
Gary A. Herder 98,500(2) 3.6%
89885 Shorelane Dr.
Lawton, Michigan
Robert J. Hamman 11,790(3) *
1630 Sheridan Road, Apt. 1A
Wilmette, Illinois
Eric V. Brown, Sr 10,980(4)(6) *
2806 Taliesin
Kalamazoo, Michigan
Robert J. Skandalaris 25,000 *
2169 Tottenham
Bloomfield Hills, Michigan 48301
James H. Haas -- --
11912 Highview
Vicksburg, Michigan
State of Michigan Retirement Systems 3,066,667(5) 66.0%
All executive officers and 502,694(6) 18.4%
directors as a group (6 persons)
<FN>
- ---------------
* Shares indicated are less than 1% of the Company's outstanding common stock.
- ---------------
(1) Includes 345,230 shares held by Mr. Wallace as trustee of a trust of
which he is the grantor and beneficiary.
(2) Includes 78,500 shares with respect to which Mr. Herder has the right to
acquire beneficial ownership pursuant to the Company's stock option
plans.
(3) Shares indicated are held by Mr. Hamman as trustee of two trusts of
which he is the grantor and beneficiary.
(4) Shares indicated are held by Mr. Brown as trustee of a trust of which he
is the grantor and beneficiary.
(5) Includes 2,000,000 shares which the State of Michigan Retirement Systems
has the right to acquire pursuant to its rights as a holder of the
Company's Convertible Preferred Stock. The State of Michigan Retirement
Systems owns all of the Company's Convertible Preferred Stock,
(2,000,000 shares) and all of the Company's Non-Convertible Preferred
Stock (600,000 shares). On and after November 1, 1994, the Convertible
Preferred Stock may be converted to Common Stock at a ratio of one share
of Common Stock for each share of Convertible Preferred Stock.
(6) The Company's profit sharing plan holds 70,474 shares of the Company's
Common Stock (the "Plan Stock"). The Administrative Committee appointed
by the Board of Directors to administer this plan has the sole power to
direct the disposition of the Plan Stock. During the last fiscal year,
the members of the Administrative Committee were John J. Wallace, and
Eric V. Brown, Sr. The Plan Stock is not included in any of the amounts
or percentages set forth in the table regarding Messrs. Wallace and
Brown and all officers and directors as a group.
</TABLE>
Changes in Control of Registrant. On October 30, 1992, the Company
and the State of Michigan Retirement Systems ("SMRS") consummated a
restructuring of the $5,183,902.78 debt owed by the Company to SMRS. Under the
terms of the restructuring, the Company paid $400,000 in cash, and issued a
new long term note in the amount of $2,483,902.78 to SMRS. Also, SMRS
converted the $2,300,000 balance of its debt into 666,667 Common Shares
(valued at $500,000), 2,000,000 Convertible Preferred Shares (valued at
$1,500,000) and 600,000 Non-Convertible Preferred Shares (valued at $300,000).
The effect of the debt restructuring was to increase significantly
the stock ownership of SMRS, resulting in the dilution of the voting power and
percentage of ownership of all other shareholders of the Company's common
shares. Immediately prior to the debt restructuring, SMRS held 21% of the
common shares and all other shareholders held 79%. Immediately after the debt
restructuring, SMRS holds 41% of the common shares and all other shareholders
hold 59%. On and after November 1, 1994, the Convertible Preferred Stock may
be converted to Common Stock at a ratio of one share of Common Stock for each
share of Convertible Preferred Stock. If SMRS converts all of the Convertible
Preferred Shares to Common Shares, SMRS will hold 66% of the common shares.
SMRS, as the holder of the Convertible Preferred Shares has the right
to vote as a class to elect one member to the Board of Directors of the
Company. In addition, in the event the mandatory dividend is not paid to the
holders of the Non-Convertible Preferred Shares, then such holders will have
the right to elect two additional members to the Board of Directors.
For reference, all terms of the debt restructuring were presented to
the shareholders of the Company in the Proxy Statement dated October 20, 1992.
2. SELECTION OF AUDITORS
The Board of Directors has, subject to ratification by the vote of a
majority of the votes cast by the holders of shares at the Annual Meeting,
appointed the accounting firm of Plante & Moran, LLP (the "Auditing Firm"), as
the principal independent accountants for the Company for the current fiscal
year. Ratification of the appointment of auditors is being submitted to the
shareholders of the Company because Management believes it is an important
corporate decision in which shareholders should participate. The firm of
independent accountants is located in Kalamazoo, Michigan. The Company has
been informed that neither the Auditing Firm nor any of its partners has any
financial interest, direct or indirect, in the Company or in the securities of
the Company, and that no partner of the firm was connected with the Company as
promotor, underwriter, voting trustee, director, officer or employee during
the four years ended October 31, 1995. If the appointment is rejected, or if
the Auditing Firm shall decline to act, resign or otherwise become incapable
of acting, or if their employment is otherwise discontinued, the Board of
Directors will appoint other auditors for the period remaining until the 1997
Annual Meeting of Shareholders when employment of auditors shall be subject to
approval by the Shareholders at the Meeting.
Representatives of the Auditing Firm are expected to be present at
the Shareholders' Meeting and have the opportunity to make a statement and
respond to appropriate questions.
3. OTHER MATTERS
Management does not know of any matters to be presented at the Annual
Meeting other than those mentioned above. However, if any other matters
properly come before the meeting or any adjournment thereof, the holders of
the proxies are authorized to vote thereon in their discretion.
1997 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 1997 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's proxy statement,
they must be received by the Company at its principal office, 5944 E. Kilgore
Road, P.O. Box 2121, Kalamazoo, Michigan 49003, on or before October 24, 1996.
By Order of the Board of Directors,
Eric V. Brown, Sr.
Secretary
<PAGE>
PRAB, INC.
PROXY
The shareholder whose signature appears hereon appoints John J. Wallace, Eric
V. Brown, Sr., and Robert Klinge or any one of them, proxies with full power
of substitution, to vote all of the common stock of Prab, Inc., which the
Shareholder is entitled to vote at the Annual Meeting of Shareholders to be
held at Holiday Inn-East, 3522 Sprinkle Road, Kalamazoo, Michigan, on March
28, 1996 at 10:00 A.M. (EST), and at any adjournment thereof, with all the
powers the Shareholder would possess if personally present, upon the proposals
set forth below and in their discretion, upon any other business that may
properly come before said meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ALL NOMINEES AND FOR PROPOSAL 2.
1. Election of Directors FOR all nominees (except as noted below) _____
WITHHOLD AUTHORITY to vote for all _____
nominees
Nominees: John J. Wallace, Gary A. Herder, Eric V. Brown, Sr., Robert J.
Hamman and James H. Haas.
[INSTRUCTIONS: To withhold authority to vote for one or more individual
nominees, line through or otherwise strike the name(s) of
such nominee(s)].
...............................................................................
2. Selection of Plante & Moran, LLP as independent public accountants.
FOR ______ AGAINST ______ ABSTAIN ______
(Continued and to be signed on other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF NOT OTHERWISE
SPECIFIED ABOVE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES AND FOR PROPOSAL 2.
The undersigned revokes all proxies heretofore given to vote at such meeting
and all adjournments.
Dated: ____________________________
__________________________________________
__________________________________________
Please Sign Here
(To assist our planning, please check here if you plan to personally attend
the meeting _________). Please sign your name as it appears above. If
executed by a corporation, a duly authorized officer should sign. Executors,
administrators and trustees should so indicate when signing. If shares are
held jointly, EACH holder should sign.
