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 toss.240.14a-12
PRAB, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -----------------------------------------------------------------------------
(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)(1)
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 (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:
____________________________________________
2. Form, Schedule or Registration Statement No.:
____________________________________________
3. Filing Party:
____________________________________________
4. Date Filed:
____________________________________________
PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
(616) 382-8200
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 23, 2000
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 23, 2000, 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 consider and act upon a proposal to adopt the Prab, Inc.
2000 Stock Option Plan.
3. To ratify the appointment of Plante & Moran, LLP,
Certified Public Accountants, as independent public accountants
for the Company.
4. 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, 2000, 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 15, 2000
Kalamazoo, Michigan
PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
February 15, 2000
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., a
Michigan corporation (the "Company"), from the holders of the common stock,
$0.10 par value, of the Company (the "Common Stock") for use at the Annual
Meeting of Shareholders to be held on Thursday, March 23, 2000, 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 15, 2000, accompanied by the Company's annual report for the fiscal
year ending October 31, 1999.
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,
2000, are entitled to notice of and to vote at the meeting. On such date
1,757,339 shares of Common Stock having one vote each were outstanding.
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.
1
Directors and Executive Officers. The directors of the Company are
as follows (all of whom are nominees for election by the holders of Common
Stock, except Mr. Wallace who has declined to be nominated due to
retirement):
Present Principal Occupation,
Director Director Business Experience, and
Name Age Since Certain Other Information
-------- --- -------- -----------------------------
Gary A. Herder(1) 52 1991 Chairman of the Board of the Company since
March 1999; 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 53 1993 President and Founder of Summit Polymers,
Inc., a plastic injection molding company,
since 1972.
Eric V. Brown, Jr. 59 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.
John W. Garside 60 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 59 1996 Retired-President of Harborlite
Corporation, a manufacturer of industrial
minerals, from 1969 to 1996.
Frederick J.
Schroeder, Jr.(2) 65 1999 Partner in Cooney, Schroeder & Co., an
investment banking firm specializing in
mergers and acquisitions, since 1996.
John J.
Wallace (3) 84 1961 Chairman of the Board of the Company from
1974 to March, 1999; Chief Executive
Officer from 1974 to December, 1988;
President from 1961 to 1982 and from July,
1990 to June, 1991.
- -------------
(1) Mr. Herder and Robert W. Klinge are the only executive officers of the
Company. Mr. Klinge, age 50, is Vice President of Finance, Chief
Financial Officer and Treasurer of the Company and has held such
positions since 1999. Mr. Klinge joined the Company in 1985 and
previously served as the Controller of the Company.
(2) Mr. Schroeder was appointed to the Board of Directors on July 28, 1999
when the Board was expanded to seven directors.
(3) As a result of retirement, Mr. Wallace has declined to be nominated for
election as a director at the 2000 Annual Meeting of Shareholders.
Meetings and Committees of the Board of Directors. The Board of
Directors has a standing Audit Committee, which during fiscal year 1999,
consisted of Eric V. Brown, Jr., John W. Garside, James H. Haas, and William
G. Blunt. In addition, Frederick W. Schroeder, Jr. was appointed to the Audit
Committee on September 21, 1999. The Audit Committee met once during the last
fiscal year. Its principal functions are to recommend to the full Board of
Directors 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
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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 1999
consisted of Eric V. Brown, Jr., 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, Mr.
Klinge 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 eight times.
For the fiscal year, no incumbent director 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), except John W. Garside and John J. Wallace.
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 John J. Wallace failed to
timely file, on Form 4, a statement of change in beneficial ownership
regarding one sale and one gift of certain shares of the Company's Common
Stock.
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 Securities
Principal Compensation Underlying All Other
Position Year Salary Bonus (1) Options Compensation
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary A. Herder, 1999 $154,502 $28,061 $6,000 0 $7,333(2)
Chairman, 1998 $150,010 $49,254 $6,000 4,000 $11,115
President and 1997 $145,353 $48,903 $6,000 0 $10,799
Chief Executive
Officer
<FN>
- -----------
(1) Represents annual car allowance paid to Mr. Herder.
(2) Represents: $2,038 Company match under the Company's 401(k) Plan;
$1,200 Company contribution under the Company's 401(k) Plan; $3,816
Company contribution under the Company's Profit Sharing Plan; and $279
Company payment for life insurance to fund the Company's obligations
under its deferred compensation agreement with Mr. Herder.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values. The following table provides information on the value of
options held by the
3
Chief Executive Officer of the Company at October 31, 1999 measured in terms
of the average of the bid and ask prices of the Company's common stock on
that day. There were no options exercised by an officer during the fiscal
year ended October 31, 1999.
Number of Unexcercised Value of Unexcercised
Options at In-the-Money Options at
October 31, 1999 (#) October 31, 1999 ($)
-------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Gary A. Herder 82,500 -0- $37,500 -0-
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. The directors are eligible to
receive stock options under the Prab, Inc. 1999 Stock Option Agreement and,
subject to approval by the shareholders as described below, the directors
will be eligible to receive stock options under the Prab, Inc. 2000 Stock
Option Plan.
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. Frederick J. Schroeder, Jr., director of the Company,
is a partner in Cooney, Schroeder & Co., which firm provides investment
banking services to the Company.
Security Ownership Of Certain Beneficial Owners and Management. The
following table sets forth certain information as of December 31, 1999,
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.
Name and Address of
Beneficial Owner or Amount of Percentage
Identity of Group Beneficial Ownership Ownership
------------------- -------------------- ----------
John J. Wallace 283,457(1) 16.1%
3003 W. Gull Lake Drive
Richland, Michigan
Patricia deBlank Klink 272,263(2) 15.5%
1187 Coast Village Road
Suite 10M
Montecito, California
Gary A. Herder 318,368(3)(4) 17.5%
89885 Shorelane Dr.
Lawton, Michigan
William G. Blunt 21,206(3) 1.2%
963 Reed Lane
Vicksburg, Michigan
Eric V. Brown, Jr. 20,631(3)(5) 1.2%
444 W. Michigan Avenue
Kalamazoo, Michigan
4
John W. Garside 22,183 1.3%
309 E. Michigan
Kalamazoo, Michigan
James H. Haas -- --
7177 E. U.V. Avenue
Vicksburg, Michigan
Frederick J. Schroeder, Jr. -- --
Fisher Mews
377 Fisher Road
Grosse Pointe, MI 48230
Gary A. Herder and Robert W. Klinge, 220,321(3) 12.5%
Co-Trustees
5944 E. Kilgore Road
Kalamazoo, Michigan
Robert W. Klinge 254,852(3)(6) 14.3%
120 S. Patterson
Wayland, Michigan
Estate of Henry Penn Wenger, Deceased 129,100 7.3%
Tammy Williams, Personal Rep.
C/O Register & Company P.A.
255 Alhombra Circle, Suite 550
Coral Gables, Florida 33134
All executive officers and directors 700,376(3) 38.0%
as a group (8 persons)
- -----------------
(1) Includes 272,263 shares held in a revocable trust of which Mr. Wallace
is the grantor and beneficiary. Mr. Wallace has the right, at any time,
to revoke the trust and obtain sole voting and investment power for
such shares.
(2) The shares indicated are held by Ms. Klink as trustee of the trust
described in footnote 1 above and she holds sole voting and investment
power for such shares. Such shares are also included in the amounts and
percentages set forth in the table regarding Mr. Wallace.
(3) Gary A. Herder and Robert W. Klinge are the Co-Trustees of the
Company's profit sharing plan. This plan holds 220,321 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. The
members of the Administrative Committee are William G. Blunt 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. Blunt 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.
(4) Includes 64,000 shares with respect to which Mr. Herder has the right
to acquire beneficial ownership pursuant to the Company's Stock Option
Plans and 220,321 shares as to which Mr. Herder shares voting power.
(5) Includes 10,980 shares as to which Mr. Brown shares voting and
investment power as co-trustee of a trust.
5
(6) Includes 24,000 shares with respect to which Mr. Klinge has the right
to acquire beneficial ownership pursuant to the Company's Stock Option
Plans and 220,321 shares as to which Mr. Klinge shares voting power.
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. PROPOSAL TO ADOPT THE PRAB, INC. 2000 STOCK OPTION PLAN
On January 18, 2000, the Board of Directors adopted, subject to
shareholder approval, the Prab, Inc. 2000 Stock Option Plan (the "2000
Plan"). The text of the 2000 Plan is set forth in the Appendix to this Proxy
Statement. The following summary is subject to, and qualified in its entirety
by reference to the Appendix.
The Company has had stock option plans in effect since 1982 in order
to provide key employees with a personal and financial interest in the
success of the Company and to enable the Company to compete with others for
the services of new employees. Stock option plans have been adopted by the
Board of Directors and shareholders in 1982, 1985, 1988 and 1999. Under the
1999 stock option plan, non-employee directors are also eligible to receive
stock options. Management believes that these plans have been helpful in
attracting and retaining skilled personnel. Pursuant to the terms of the
1982, 1985 and 1988 stock option plans, no additional options may be granted
as the plans have expired. Pursuant to the terms of the 1999 stock option
plan, as of February 1, 2000, the following stock option grants had been made
(all of which were granted on January 18, 2000):
<TABLE>
<CAPTION>
No. of Shares
Underlying Options Exercise Price
Name and Title Granted ($/Sh) Expiration Date
-------------- ------------------ -------------- ---------------
<S> <C> <C> <C>
William G. Blunt, Director 4,000 $1.7813 January 18, 2010
Eric V. Brown, Jr., Director 4,000 $1.7813 January 18, 2010
Joseph Durlach, Vice President of Sales and 4,000 $1.7813 January 18, 2010
Marketing-Hapman
John W. Garside, Director 4,000 $1.7813 January 18, 2010
James H. Haas, Director 4,000 $1.7813 January 18, 2010
Gary A. Herder, President, Chairman of the 4,000 $1.7813 January 18, 2010
Board, Chief Executive Officer and Director
Robert W. Klinge, Vice President of Finance, 4,000 $1.7813 January 18, 2010
Chief Financial Officer and Treasurer
Robert Meyer, Vice President of Sales and 4,000 $1.7813 January 18, 2010
Marketing-Prab
Frederick W. Schroeder, Jr., Director 4,000 $1.7813 January 18, 2010
Edward Thompson, Vice President of Operations 4,000 $1.7813 January 18, 2010
</TABLE>
Pursuant to the terms of the 1999 stock option plan, as of February
1, 2000, options for 10,000 shares remain available for grants to employees
and directors. The Board of Directors has recommended that the shareholders
authorize the continuation and expansion of the stock option program by
adopting the 2000 Plan.
6
The 2000 Plan provides for the grant of options covering up to
100,000 shares of Common Stock, which may be authorized but unissued shares
or shares acquired by the Company. If any option granted under the 2000 Plan
is canceled or expires for any reason prior to being exercised in full, the
unpurchased shares may again be subjected to an option under the 2000 Plan.
The 2000 Plan contains an anti-dilution provision, which provides for
adjustment in the number of shares in the event of stock splits, stock
dividends and the like.
Options may be granted under the 2000 Plan to any employee or
director of the Company and its subsidiaries. As of December 31, 1999, there
were approximately 91 employees and 7 directors of the Company and its
subsidiaries, all of whom would be eligible to receive options under the 2000
Plan if approved by the shareholders of the Company. The persons to whom
options will be granted and the terms thereof will be determined by the Board
of Directors.
The Board of Directors is authorized to prescribe the times at which
an option may be exercised and the number of shares as to which an option may
be exercised at such times. However, no option may be exercised before the
expiration of one year from the date of grant, except in the case of the
merger, consolidation, sale of assets or dissolution of the Company, or more
than ten years after the date of grant, and no option may be granted after
January 17, 2010. Under the 2000 Plan, the option price cannot be less than
100% of the fair market value of the Common Stock on the date the option is
granted. The option price may be paid in cash, shares of Common Stock of the
Company valued at the fair market value thereof on the date of exercise or
any combination of cash and Common Stock. The average of the bid and ask
prices of the Company's Common Stock on February 2, 2000 was $1.8125 per
share.
Options under the 2000 Plan are exercisable during the optionee's
lifetime only by the optionee and may not be transferred except by will or
the laws of descent and distribution. The options terminate one month after
the optionee ceases to be an employee or director, except that in the case of
termination of employment or service as a director because of death or
disability, the options terminate one year thereafter and in the case of
termination of employment or service as a director because of retirement, the
option terminates three months thereafter. In the case of termination because
of death, disability, retirement or otherwise, an option may be exercised
during the applicable period following termination with respect to only such
number of shares of Common Stock as to which the right of exercise had
accrued on or before the last day on which the grantee was either an employee
or director of the Company or any subsidiary.
The Board of Directors may terminate or amend the 2000 Plan, but the
Board may not, without shareholder approval, increase the number of shares
covered by the 2000 Plan, reduce the minimum purchase price or extend the
term of the 2000 Plan or the maximum term of any option granted thereunder.
The following paragraphs contain a summary under current federal
income tax law of federal income tax consequences that generally will arise
with respect to options granted under the 2000 Plan and with respect to the
sale of stock acquired pursuant to the 2000 Plan.
Options granted under the 2000 Plan will be designated to be either
"nonstatutory stock options" or "incentive stock options" under Section 422
of the Internal Revenue Code of 1986, as amended. The grant of an option will
have no immediate tax consequences to the optionee or the Company.
The exercise of a nonstatutory stock option will generally require
an optionee to include in income, as compensation, the amount by which the
fair market value of the acquired shares on the exercise date exceeds the
option price. The Company will be entitled to a deduction at the same time
and in the same amount as the optionee is taxed on income in connection with
the exercise of a nonstatutory stock option. Upon a subsequent sale or
taxable exchange of shares acquired upon exercise of a
7
nonstatutory stock option, an optionee will recognize long or short-term
capital gain or loss equal to the difference between the amount realized on
the sale and the tax basis of such shares.
If the optionee exercises an incentive stock option and does not
dispose of the acquired shares within two years after the date of grant of
the option nor within one year after the date of the transfer of such shares
to him (a "disqualifying disposition"), the optionee will realize no
compensation income and any gain or loss that the optionee realizes on a
subsequent disposition of such shares will be treated as long-term capital
gain or loss. For purposes of computing the alternative minimum tax, however,
the option generally will be treated as if it were a nonstatutory stock
option. If an optionee makes a disqualifying disposition, the optionee will
be required to include in income, as compensation, the lesser of (i) the
difference between the option price and the fair market value of the acquired
shares on the exercise date or (ii) the amount of gain realized on such
disposition. In addition, depending on the amount received as a result of
such disposition, the optionee may realize long or short-term capital gain or
loss. The Company will be entitled to a deduction at the same time and in the
same amount as the optionee is taxed on compensation income as a result of a
disqualifying disposition. If there is no disqualifying disposition, no
deduction will be available to the Company.
Approval of the 2000 Plan requires the affirmative vote of a
majority of the votes cast by the holders of shares at the Annual Meeting.
The Board of Directors recommends that shareholders vote FOR the adoption of
the 2000 Plan.
3. SELECTION OF AUDITORS
The Board of Directors has, subject to ratification by the
affirmative 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, 1999.
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 2001 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 Annual Meeting and have the opportunity to make a statement and respond
to appropriate questions.
4. OTHER MATTERS
The Board of Directors had not received notice by January 4, 2000
and does not know, of any other matters which may come before the meeting.
However, if any other matters are properly presented to the meeting, it is
the intention of the holders of the proxies to vote, or otherwise to act, in
accordance with their judgment on such matters.
2001 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 2001 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's proxy statement,
they must be received
8
by the Company at its principal office, 5944 E. Kilgore Road, P.O. Box 2121,
Kalamazoo, Michigan 49003, on or before October 17, 2000. The proxy for the
2001 Annual Meeting of Shareholders may confer discretionary authority to the
proxy holders for that meeting with respect to voting on any shareholder
proposal received by the Secretary of the Company after January 1, 2001,
which is eligible for consideration at the meeting.
By Order of the Board of Directors,
Eric V. Brown, Jr.
Secretary
9
APPENDIX
PRAB, INC.
2000 STOCK OPTION PLAN
1. Purpose. The purpose of the Prab, Inc. 2000 Stock Option Plan
(this "Plan") is to advance the interests of Prab, Inc., a Michigan
corporation (the "Corporation"), and its subsidiaries by providing a larger
personal and financial interest in the success of the Corporation and its
subsidiaries to employees and directors upon whose judgment, interest and
special efforts the Corporation and its subsidiaries are dependent for the
successful conduct of its and their operations and to enable the Corporation
and its subsidiaries to attract and retain key employees and directors.
2. Participants. Options may be granted under this Plan to any
employee or director of the Corporation and its subsidiaries. The employees
and directors of the Corporation and its subsidiaries to whom options are
granted and the terms of such options shall be determined by the Board of
Directors. A grantee may hold more than one option. Nothing contained in this
Plan, nor in any option granted pursuant to this Plan, shall confer upon any
employee or director any right to the continuation of his or her employment
or directorship nor limit in any way the right of the Corporation or its
subsidiaries to terminate such employment or directorship at any time. As
used herein, the term "subsidiary" shall mean any present or future entity
that is controlled by the Corporation, directly or through one or more
intermediaries.
3. Effectiveness and Termination of Plan. This Plan shall become
effective upon approval thereof by the shareholders of the Corporation at a
meeting held, among other things, for such purpose. The adoption date of this
Plan shall be January 18, 2000, the date of its adoption by the Board of
Directors of the Corporation. This Plan shall terminate on the earliest of:
(i) ten (10) years from its adoption date; (ii) when all shares of Common
Stock (as defined in Section 4 hereof) that may be issued under this Plan
shall have been issued through exercise of options granted under this Plan;
or (iii) at any earlier time that the Board of Directors may determine. Any
option outstanding under this Plan at the time of its termination shall
remain in effect in accordance with its terms and conditions and those of
this Plan.
4. Common Stock. The aggregate number of shares of common stock,
$0.10 par value per share, of the Corporation (the "Common Stock") that may
be issued under this Plan shall consist of 100,000 shares, subject to further
adjustment as provided in Section 7 hereof. Such number of shares may be set
aside out of the authorized but unissued shares of Common Stock of the
Corporation not reserved for any other purpose or out of shares of Common
Stock acquired by the Corporation. All or any shares of Common Stock
subjected under this Plan to an option that, for any reason, is canceled,
terminates, lapses or expires unexercised as to such shares may again be
subjected to an option under this Plan.
5. Types of Options and Terms and Conditions.
(a) Options granted under this Plan shall be in the form of: (i)
incentive stock options ("Incentive Stock Options") as defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"); or (ii)
options not qualifying under Section 422 of the Code ("Nonstatutory Stock
Options").
(b) Options may be granted at any time and from time to time
prior to the termination of this Plan. Except as hereinafter provided, all
options granted pursuant to this Plan shall be subject to the following terms
and conditions:
(i) Price. The purchase price of the shares of Common Stock
issuable upon exercise of options granted under this Plan shall be
not less than 100% of the fair market value of the Common Stock on
the date of the grant of the option. For purposes of this Plan,
"fair market value" of the Common Stock shall mean: (A) the mean
between
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the closing high bid and low asked prices as reported by the
National Association of Securities Dealers Automated Quotation
System (or, if not so reported, by the system then regarded as the
most reliable source of such quotation); or (B) if the Common Stock
is quoted in the domestic over-the-counter market, but there are not
reported quotations on the given date, the value determined pursuant
to (A) above using the reported quotations on the last previous date
on which so reported; or (C) if neither of the foregoing clauses
apply, the price determined in good faith by the Board of Directors.
The purchase price shall be paid in full at the time of
such purchase, in: (A) cash; (B) shares of Common Stock of the
Corporation valued at the fair market value of the Common Stock on
the date of purchase; or (C) any combination of cash and Common
Stock. Notwithstanding the foregoing, the Board of Directors may, in
order to prevent any possible violation of law, require the purchase
price to be paid in cash and further provide that the right to
deliver Common Stock in payment of the purchase price may be limited
or denied in any Option Agreements (as defined in Section 11
hereof). The purchase price shall be subject to adjustment, but only
as provided in Section 7 hereof.
(ii) Duration and Exercise of Options. Options may be
granted for terms of up to but not exceeding ten (10) years from the
date the particular option is granted. Options shall be exercisable
as provided by the Board of Directors at the time of grant thereof.
(iii) Termination of Employment or Service as a Director.
Upon the termination of the grantee's employment or service as a
director, his or her rights to exercise an option shall be only as
follows:
(1) Death, Disability or Retirement. If the grantee's
employment or service as a director is terminated by reason of death
or disability (as described in Section 22(e)(3) of the Code), the
grantee or the grantee's estate may, within one (1) year following
such termination, exercise the option with respect to only such
number of shares of Common Stock as to which the right of exercise
had accrued on or before the last day on which the grantee was
either an employee or director of the Corporation or any subsidiary.
If the grantee's employment or service as a director is terminated
by reason of retirement, the grantee or the grantee's estate (in the
event of the grantee's death after such termination) may, within
three (3) months following such termination, exercise the option
with respect to only such number of shares of Common Stock as to
which the right of exercise had accrued on or before the last day on
which the grantee was either an employee or director of the
Corporation or any subsidiary. For purposes of this Plan,
"retirement" shall mean termination of employment or service as a
director with the Corporation and/or its subsidiaries on or after
the grantee's 65th birthday or the grantee's 60th birthday if the
grantee has completed ten (10) years of service with the Corporation
and/or its subsidiaries.
(2) Other Reasons. If the grantee ceases to be an employee
or director for any reason other than those provided above under
"Death, Disability or Retirement," the grantee or the grantee's
estate (in the event of the grantee's death after such termination)
may, within the one (1) month period following such termination,
exercise the option with respect to only such number of shares of
Common Stock as to which the right of exercise had accrued on or
before the last day on which the grantee was either an employee or
director of the Corporation or any subsidiary.
(3) General. Notwithstanding the foregoing, no option shall
be exercisable in whole or in part: (A) after the termination date
provided in the option; or (B) except as provided in the second
paragraph of Section 10, for one (1) year following the date the
option was granted. A grantee's "estate" shall mean the grantee's
legal representatives upon the grantee's death or any person who
acquires the right under the laws of descent and distribution to
exercise an option by reason of the grantee's death.
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(iv) Transferability of Option. Except as otherwise
provided herein, options shall be transferable only by will or the
laws of descent and distribution and shall be exercisable during the
grantee's lifetime only by him or her. An option and all rights
thereunder shall terminate immediately if the holder attempts to or
does sell, assign, transfer, pledge, hypothecate or otherwise
dispose of the option or any rights thereunder to any person except
as permitted herein.
(v) Other Terms and Conditions. Options may also contain
such other provisions, which shall not be inconsistent with any of
the foregoing terms, as the Board of Directors shall deem
appropriate.
(c) Incentive Stock Options granted pursuant to this Plan
shall be subject to all the terms and conditions included in subsection (b)
and to the following terms and conditions:
(i) No Incentive Stock Option shall be granted to an
individual who is not an employee of the Corporation or a
"subsidiary corporation" as defined in Section 424(f) of the Code;
(ii) No Incentive Stock Option shall be granted to an
employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation
unless the grant complies with the requirements of Section 422(c)(5)
of the Code;
(iii) The aggregate fair market value (determined as of the
date the option is granted) of the shares of Common Stock with
respect to which Incentive Stock Options are exercisable for the
first time by any grantee during any calendar year (under all plans
of the Corporation) shall not exceed $100,000 or such other amount
as may subsequently be specified by the Code; provided that, to the
extent that such limitation is exceeded, any excess options (as
determined by the Code) shall be deemed to be Nonstatutory Stock
Options; and
(iv) No Incentive Stock Option may be granted under this
Plan if such grant, together with any applicable prior grants that
are Incentive Stock Options within the meaning of Section 422(b) of
the Code, would exceed any maximum established under the Code for
incentive stock options that may be granted to an individual
employee.
6. Rights of a Shareholder. A recipient of an option shall have no
rights as a shareholder with respect to any shares issuable or transferable
upon exercise thereof until the date of issuance of a stock certificate for
such shares. Except as otherwise provided pursuant to Section 7 hereof, no
adjustment shall be made for dividends or other rights for which the record
date is prior to the date of such stock certificate.
7. Adjustment of and Changes in Common Stock. In the event that the
shares of Common Stock of the Corporation, as presently constituted, shall be
changed into or exchanged for a different number or kind of shares of stock
or other securities of the Corporation or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares, or otherwise) or if the number of such
shares of Common Stock shall be increased through the payment of a stock
dividend or a dividend on the shares of Common Stock of rights or warrants to
purchase securities of the Corporation shall be made, then there shall be
substituted for or added to each share of Common Stock theretofore
appropriated or thereafter subject or that may become subject to an option
under this Plan, the number and kind of shares of stock or other securities
into which each outstanding share of Common Stock of the Corporation shall be
so changed, or for which each such share shall be exchanged, or to which each
such share shall be entitled, as the case may be, and references herein to
the Common Stock shall be deemed to be references to any such stock or other
securities as appropriate. Outstanding options shall also be appropriately
amended as to price and other terms as may be necessary to reflect the
foregoing events. In the event there shall be any other change in the number
or kind of the outstanding shares of the Common Stock of the Corporation, or
of any stock or other securities into which such Common Stock shall have been
changed or for which it shall have
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been exchanged, then if the Board of Directors shall, in its sole discretion,
determine that such change equitably requires an adjustment in any option
theretofore granted or that may be granted under this Plan, such adjustments
shall be made in accordance with such determination. Fractional shares
resulting from any adjustment in options pursuant to this Section 7 may be
settled in cash or otherwise as the Board of Directors shall determine.
Notice of any adjustment shall be given by the Corporation to each holder of
an option that shall have been so adjusted and such adjustment (whether or
not such notice is given) shall be effective and binding for all purposes of
this Plan. Any options granted or which may be granted pursuant to this Plan,
and which such options are or are intended to be Incentive Stock Options
within the meaning of Section 422 of the Code, shall, to the extent it is
reasonably feasible to do so (determined in the sole discretion of the Board
of Directors), be adjusted or modified pursuant to this Section 7 in a manner
which will allow such options to continue to be classified as Incentive Stock
Options within the meaning of Section 422 of the Code or successor
legislation.
8. Securities Act Requirements. No option granted pursuant to this
Plan shall be exercisable in whole or in part, and the Corporation shall not
be obligated to sell any shares of Common Stock subject to any such option,
if such exercise and sale would, in the opinion of counsel for the
Corporation, violate the Securities Act of 1933 (or other Federal or State
statutes having similar requirements), as in effect at that time. Each option
shall be subject to the further requirement that, if at any time the Board of
Directors shall determine in its discretion that the listing or qualification
of the shares of Common Stock subject to such option under any securities
exchange requirements or under any applicable law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the issue of shares thereunder, such option may
not be exercised in whole or in part unless such listing, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Board of Directors.
9. Withholding. Appropriate provision (which may, in accordance with
rules determined by the Board of Directors, include the election by the
grantee to have the Corporation withhold from the Common Stock to be issued
upon exercise of an option a number of shares having an aggregate fair market
value that would satisfy the withholding amount due or to deliver to the
Corporation shares of Common Stock already owned having such aggregate fair
market value to satisfy the withholding amount) shall be made for all taxes
required to be withheld from shares of Common Stock issued under this Plan
under the applicable laws or other regulations of any governmental authority,
whether federal, state or local, and domestic or foreign. To that end, the
Corporation may at any time take such steps as it may deem necessary or
appropriate (including sale or retention of shares) to provide for payment of
such taxes.
10. Administration and Amendment of Plan. The Board of Directors
from time to time may adopt rules and regulations for carrying out this Plan.
The interpretation and construction by the Board of Directors of any
provision of this Plan or any option granted pursuant hereto shall be final
and conclusive. No member of the Board of Directors shall be liable for any
action or determination made in good faith with respect to this Plan or any
option granted pursuant thereto. The Board of Directors may from time to time
make such changes in and additions to this Plan as it may deem proper and in
the best interests of the Corporation, without further action on the part of
the shareholders of the Corporation except as required by law, regulation or
by the rules of the principal trading market of the Corporation's Common
Stock at that time; provided, however, that, unless the shareholders of the
Corporation shall have first approved thereof: (i) except as provided in
Section 7 hereof, the total number of shares of Common Stock subject to this
Plan shall not be increased and the minimum purchase price shall not be
changed; (ii) no option shall be exercisable more than ten (10) years after
the date it is granted; and (iii) the expiration date of this Plan shall not
be extended.
The Board of Directors shall have the power, in the event of any
disposition of substantially all of the assets of the Corporation, its
dissolution or of any consolidation or merger of the Corporation with and
into any other corporation, to amend all outstanding options to permit the
exercise of all such options prior to the effectiveness of any such
transaction and to terminate such options as of such effectiveness. If the
Board of
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Directors shall exercise such power, all options then outstanding and subject
to such requirement shall be deemed to have been amended to permit the
exercise thereof in whole or in part by the grantee at any time or from time
to time as determined by the Board of Directors prior to the effectiveness of
such transaction and such options shall be deemed to terminate upon such
effectiveness.
11. Miscellaneous.
(a) Separate Plan. This Plan is separate and independent from
any other stock option plan or similar plan of the Corporation.
(b) Option Agreements. Options granted hereunder shall be
evidenced by option agreements ("Option Agreements") containing such terms
and conditions as the Board of Directors shall establish from time to time
consistent with this Plan. Option Agreements need not be identical but each
Option Agreement shall contain, without limitation, language including the
substance of the following provisions:
(i) Number of Shares and Exercise Price. Each Option Agreement
shall state the number of shares to which it pertains and the
exercise price therefor.
(ii) Exercise of Options. Options may be exercised only in
accordance with the terms of each Option Agreement which shall
include the period of time during which the option may be exercised.
(iii) Method of Exercise and Payment of Purchase Price. An
option may be exercised, as to all or part of the shares covered by
the option, by the grantee delivering to the Board of Directors: (A)
a written notice identifying the option being exercised, stating the
number of shares being purchased and enclosing payment to the
Corporation of the purchase price for the number of shares being
exercised; and (B) such items as the Corporation may reasonably
request. If the option is being exercised by any person or persons
other than the grantee, the written notice exercising the option
shall be accompanied by appropriate proof of the right of such
person or persons to exercise the option.
(iv) Additional Terms and Conditions. The Board of Directors
may specify such additional terms and conditions as it deems
appropriate.
(c) Loans. Subject to the sole discretion of the Board of
Directors, the Corporation may loan the grantee funds to finance the exercise
of any option.
(d) Governing Law. This Plan and the Option Agreements shall
be interpreted and enforced in accordance with the laws of the State of
Michigan.
IN WITNESS WHEREOF, this Plan has been executed by the Corporation
on the 4th day of February, 2000.
PRAB, INC.
By: /s/ Gary A. Herder
------------------
Gary A. Herder
Its: President
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PROXY PRAB, INC.
The Shareholder whose signature appears hereon appoints Gary A. Herder,
Eric V. Brown, Jr., and Robert W. 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 23, 2000 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 PROPOSALS 2
and 3.
1. Election of Directors FOR all nominees (except __________________
as noted below)
WITHHOLD AUTHORITY ________________________
to vote for all nominees
Nominees: Gary A. Herder, James H. Haas, Eric V. Brown, Jr., John W.
Garside, William G. Blunt and Frederick J. Schroeder, Jr.
[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. Approval of adoption of the Prab, Inc. 2000 Stock Option Plan.
FOR AGAINST ABSTAIN
-------- --------- -----------
3. Selection of Plante & Moran, LLP as independent public accountants.
FOR AGAINST ABSTAIN
-------- --------- -----------
(Continued and to be signed on other side)
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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 PROPOSALS
2 and 3. The undersigned revokes all proxies heretofore given to vote at such
meeting and all adjournments.
Dated: __________________________________
_________________________________________
_________________________________________
(Please sign here)
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.
If you plan to personally attend the Annual Meeting of Shareholders, please
check the box below and list names of attendees on reverse side. Return this
stub in the enclosed envelope with your completed proxy card.
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