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 ss.240.14a-11(c) or ss.240.14a-12
PRAB, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Persons(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box)
[ X ] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per Unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
(616) 382-8200
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 26, 1998
TO: The Shareholders
Prab, Inc.
The Annual Meeting of Shareholders of Prab, Inc., a Michigan
corporation, of Kalamazoo, Michigan, will be held at Holiday Inn-East, 3522
Sprinkle Road, Kalamazoo, Michigan, on Thursday, March 26, 1998, 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 six (6) 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
28, 1998, 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, Jr.
Secretary
Date: February 19, 1998
Kalamazoo, Michigan
<PAGE>
PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
February 19, 1998
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 26, 1998, 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 19, 1998, accompanied by the Company's annual
report for the fiscal year ending October 31, 1997.
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 of Shareholders. 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 28,
1998, are entitled to notice of and to vote at the meeting. On such date: (i)
1,757,339 shares of Common Stock having one vote each were outstanding; and
(ii) 366,667 shares of Convertible Preferred Stock, $0.75 par value, having
one vote each for the election of one director (as described below) were
outstanding.
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<PAGE>
1. ELECTION OF DIRECTORS
Six 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 six 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 six 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 waive its right to nominate and elect a director
at the 1998 Annual Meeting of Shareholders.
Nominees for election by the holders of Common Stock are as follows:
<TABLE>
<CAPTION>
Present Principal Occupation,
Director Business Experience, and
Name Age Since Certain Other Information
---- --- -------- -----------------------------
<S> <C> <C> <C>
John J. Wallace (1) 82 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) 50 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
James H. Haas 51 1993 President and Founder of Summit Polymers,
Inc., a plastic injection molding company,
since 1972
Eric V. Brown, Jr 57 1996 Attorney in private practice of law since
1965 and currently a senior principal in the
law firm of Miller, Canfield, Paddock and
Stone, P.L.C.; Secretary of the Company
since 1996.
-3-
<PAGE>
John W. Garside 58 1996 President of Woodruff Coal Company, a
diversified energy company, since 1980.
Director of Universal Forest Products,
Inc., a lumber products company.
William G. Blunt 57 1996 Retired-President of Harborlite Corporation,
a manufacturer of industrial minerals, from
1969 to 1996.
<FN>
- ---------
(1) Messrs. Wallace and 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 1997,
consisted of Eric V. Brown, Jr., John W.Garside, James H. Haas, and William
G. Blunt. 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 1997 consisted of John J. Wallace, John
W. Garside, James H. Haas, and William G. Blunt. 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.
For the fiscal year, no incumbent directors attended fewer than 75% 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).
Section 16(a) Beneficial Ownership Reporting Compliance. 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 Eric V.
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<PAGE>
Brown, Jr., John W. Garside and William G. Blunt failed to timely file, on
Form 3, their initial statements of beneficial ownership of the Company's
securities.
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
Long Term
Annual Compensation Compensation
-------------------------------------- --------------------------
Name and Other Annual
Principal Compensation Original All Other
Position Year Salary Bonus (1) Stock Options Compensation
- --------- ---- ------ ----- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gary Herder, 1997 $145,353 $48,903 $6,000 0 $10,799(2)
President and 1996 $137,976 $33,170 $6,000 0 $ 9,773
Chief Executive 1995 $134,540 $29,172 $5,850 0 $ 9,841
Officer
<FN>
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(1) Represents annual car allowance paid to Mr. Herder
(2) Represents: $1,863 Company match under the Company's 401(k)
Plan; $1,947 Company contribution under the Company's 401(k)
Plan; $6,227 Company contribution under the Company's Profit
Sharing Plan; and $762 Company payment for life insurance to
fund the Company's obligations under its deferred compensation
agreement with Mr. Herder.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values. The following table provides information on the value of
options held by the Chief Executive Officer of the Company at October 31,
1997 measured in terms of the average of the bid and ask prices of the
Company's common stock on that day. There were no options exercised by an
officer during the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at October 31, 1997 In-the-Money Options at
# October 31, 1997 ($)
--------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gary A. Herder 78,500 -0- $45,000(1) 0
-5-
<PAGE>
<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, 1997.
</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, Jr.
Secretary and director of the Company is a senior principal in the law firm
of Miller, Canfield, Paddock and Stone, P.L.C., which firm is general legal
counsel to the Company. During fiscal year 1997, the Company incurred $24,746
for legal services rendered by such firm.
On October 31, 1996, the Company purchased from the State of
Michigan Retirement Systems (the "SMRS") substantially all of the Company's
common and preferred stock owned by the SMRS. In connection with the
purchase, the Company borrowed $680,000 from certain individuals including
members of management of the Company and the Board pursuant to Subordinated
Capital Notes (the "Subordinated Capital Notes"). The Subordinated Capital
Notes in the aggregate principal amount of $680,000 provided for interest at
the rate of 12% per annum payable in quarter annual installments commencing
January 31, 1997 and for payment of all principal on October 31, 2001.
Payment of the Subordinated Capital Notes was subordinated to payment of: (i)
the Company's debt to Arcadia Bank (now known as The Huntington National
Bank) pursuant to certain Subordination Agreements executed by the payees of
the Subordinated Capital Notes in favor of such bank; and (ii) other
indebtedness and obligations of the Company. In consideration of the loans
evidenced by the Subordinated Capital Notes, the payees of such Notes were
issued warrants by the Company to purchase shares of the Company's Common
Stock for nominal value. All of such warrants were exercised on October 31,
1996. The following chart sets forth the names of the executive officers and
directors of the Company that held Subordinated Capital Notes, the principal
amount borrowed by the Company from each such individual, and the number of
shares of Common Stock issued to each such individual pursuant to his
exercise of the warrants issued in connection with the Subordinated Capital
Notes:
<TABLE>
<CAPTION>
Name Amount Loaned Number of Shares
---- ------------- ----------------
<S> <C> <C>
Gary A. Herder $ 77,500 14,047
Eric V. Brown, Jr. 53,250 9,651
William G. Blunt 117,000 21,206
John W. Garside 118,250 21,433
</TABLE>
Messrs. Brown, Jr., Blunt and Garside were appointed directors of
the Company effective November 26, 1996. In November 1997, the Company paid
all Subordinated Capital Notes in full using a combination of cash on hand
and drawing on its bank line of credit.
-6-
<PAGE>
Security Ownership of Certain Beneficial Owners and Management. The
following table sets forth certain information as of December 31, 1997,
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 Ownership
------------------- -------------------- ----------
<S> <C> <C>
John J. Wallace 314,424(1)(2) 17.9%
3003 W. Gull Lake Drive
Richland, Michigan
Gary A. Herder 279,216(2)(3) 15.2%
89885 Shorelane Dr.
Lawton, Michigan
William Blunt 21,206 1.2%
963 Reed Lane
Vicksburg, Michigan
Eric V. Brown, Jr. 20,631(2)(4) 1.2%
444 W. Michigan Avenue
Kalamazoo, Michigan
John Garside 22,183 1.3%
309 E. Michigan
Kalamazoo, Michigan
James H. Haas -- --
11912 Highview
Vicksburg, Michigan
Gary A. Herder and Robert Klinge, 162,669(2) 9.3%
Co-Trustees
5944 E. Kilgore Road
Kalamazoo, Michigan
Robert Klinge 201,950(2)(5) 11.3%
120 S. Patterson
Wayland, Michigan
Estate of Henry Penn Wenger, Deceased 132,600 7.5%
Tammy Williams, Personal Rep.
C/O Register & Company P.A.
255 Alhombra Circle, Suite 550
Coral Gables, Florida 33134
-7-
<PAGE>
State of Michigan Retirement 366,667(6) 17.3%
Systems
All executive officers and directors 657,660(2) 35.7%
as a group (6 persons)
<FN>
- -----------------
* Shares indicated are less than 1% of the Company's outstanding Common
Stock.
(1) Includes 303,230 shares held by Mr. Wallace as trustee of a
trust of which he is the grantor and beneficiary.
(2) Gary A. Herder and Robert Klinge are the Co-Trustees of The
Company's profit sharing plan. This plan holds 162,669 shares of
the Company's Common Stock (the "Plan Stock"). Messrs. Herder and
Klinge have the sole power to vote 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,
Jr. The Plan Stock is not included in any of the amounts or
percentages set forth in the table regarding Messrs. Wallace and
Brown. The Plan Stock is included in the amounts and percentages
set forth in the table regarding Messrs. Herder and Klinge and all
executive officers and directors as a group.
(3) Includes 82,500 shares with respect to which Mr. Herder has the
right to acquire beneficial ownership pursuant to the Company's
Stock Option Plans and 162,669 shares as to which Mr. Herder
shares voting power.
(4) Includes 10,980 shares as to which Mr. Brown shares voting and
investment power as co-trustee of a trust.
(5) Includes 24,750 shares with respect to which Mr. Klinge has the
right to acquire beneficial ownership pursuant to the Company's
Stock Option Plans and 162,669 shares as to which Mr. Klinge shares
voting power. Mr. Klinge is the Controller of the Company. Mr.
Klinge's shares are not included in the amount and percentage set
forth in the table regarding all executive officers and directors
as a group.
(6) The State of Michigan Retirement Systems has the right to
acquire the shares indicated pursuant to its rights as a holder
of the Company's Convertible Preferred Stock, (366,667 shares).
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.
</TABLE>
-8-
<PAGE>
Changes in Control of Registrant. The Company is not aware of any
arrangements which may result in a change in control of the Company.
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, 1997. 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 1999 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.
1999 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 1999 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 23,
1998.
By Order of the Board of Directors,
Eric V. Brown, Jr.
Secretary
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<PAGE>
PRAB, INC.
PROXY
The shareholder whose signature appears hereon appoints John J.
Wallace, Eric V. Brown, Jr., 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 26, 1998 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, Jr.,
John W. Garside, William G. Blunt 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)
<PAGE>
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.
