This Proxy and the form of Proxy will be sent to the Shareholders
commencing approximately
SEPTEMBER 30, 1998
GYRODYNE COMPANY OF AMERICA, INC.
7 FLOWERFIELD, SUITE 28
ST. JAMES, NEW YORK 11780
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
OCTOBER 30, 1998
TO THE SHAREHOLDERS OF GYRODYNE COMPANY OF AMERICA, INC.
NOTICE IS HEREBY GIVEN, pursuant to the Bylaws, that the Annual Meeting of
the Shareholders of Gyrodyne Company of America, Inc. (the "Company"),
will be held at the Company's Flowerfield Complex, St. James, New York, on
Friday, October 30, 1998 at 11:30 o'clock in the forenoon for the following
purposes:
1. To elect three (3) Directors to serve for a term of three years, and
until their successors shall be elected and shall qualify; and
2. To ratify engagement of Holtz Rubenstein & Co., LLP, independent
accountants as auditors of the Company and its subsidiaries for the Fiscal
Year ending April 30, 1999, and
3. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
By order of the Board of Directors, only Shareholders of Record at the
close of business September 19, 1998 are entitled to notice of and to
vote at said Meeting, or any adjournment thereof.
We enclose in this mailing the Notice of 1998 Annual Meeting of
Shareholders, Proxy Statement and Proxy.
By Order of the Board of Directors
Peter Pitsiokos, Secretary
September 30, 1998
YOUR VOTE IS IMPORTANT
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE,
SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED,
WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES. GIVING
YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING, BUT WILL HELP ASSURE A QUORUM AND AVOID FURTHER PROXY SOLICITATION
COSTS. FOR IDENTIFICATION PURPOSES, "STREET NAME" SHAREHOLDERS WILL NEED
TO BRING A COPY OF A BROKERAGE STATEMENT REFLECTING STOCK OWNERSHIP AS OF
THE RECORD DATE.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
IN GENERAL
THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF
GYRODYNE COMPANY OF AMERICA, INC. (HEREINAFTER CALLED THE "COMPANY") FOR USE
AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 30, 1998 AT THE
FLOWERFIELD RECEPTION CENTER, ST. JAMES, NEW YORK 11780 AND AT ANY AND ALL
ADJOURNMENTS THEREOF. A shareholder giving a Proxy has the right to revoke
it at any time prior to its use. If a shareholder specifies how the Proxy is
to be voted with respect to any of the proposals for which a choice is
provided, the Proxy will be voted in accordance with such specifications.
If a shareholder fails to so specify with respect to such proposals, the
Proxy will be voted "FOR" proposals 1 and 2.
The cost of preparing, assembling, and mailing the Proxy material will be
borne by the Company. In addition to solicitation by mail, Officers,
Directors, and regular employees of the Company may, without compensation
other than their regular compensation, solicit Proxies by telephone, by fax
or in person. The Company is also supplying brokers, dealers, banks and
voting trustees, or their nominees, with additional copies of the Proxy
solicitation material and the Company's Annual Report for the fiscal year
ended April 30, 1998 for distribution to beneficial owners. Upon request,
the Company will pay such record holders' reasonable expenses for completing
the mailing.
VOTING
Only holders of Common Stock of record at the close of business on September
19, 1998 are entitled to vote at the Meeting. Shareholders do not have
cumulative voting rights in the election of Directors. Each share of Common
Stock is entitled to one vote. A majority of the shares present can elect all
the Directors. As of September 19, 1998 there were issued and outstanding
1,061,992 shares of the Common Stock of the Company.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of September 19, 1998 those persons known
by the Company to be Beneficial Owners of more than 5% of the Company's
Common Stock $1 PV, its only equity security.
<TABLE>
<CAPTION>
TYPE OF NUMBER OF SHARES OWNED PERCENT OF CLASS
NAME AND ADDRESS OWNERSHIP
<S> <C> <C> <C>
Gyrodyne Company of America, Inc.
St. James, NY 11780(A) Beneficial 78,346 7.38
Catherine Papadakos
Village of the Green
2481 Oakleaf Lane Beneficial 116,639 10.98
Unit C
Clearwater, FL 34623
Peter P. Papadakos
PO Box 3838 Beneficial 95,530 9.00
Reno, NV 89505
</TABLE>
(A) As the Company has the authority to direct the Chase Manhattan Bank &
Trust Co., the Trustee of the Gyrodyne Pension Plan, to vote the securities
of the Company held by the Pension Fund, Gyrodyne Company of America, Inc.
has been listed above as the beneficial owner of the 78,346 shares held by
the Chase Manhattan Bank and Trust Co. as Trustee for the Gyrodyne Pension
Fund. The Board of Directors intends to instruct the trustees of the Pension
Fund to vote "FOR" all of the proposals set forth in this Proxy statement.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The By-Laws of the Company provide that there shall be not less than three
(3), nor more than nineteen (19) directors. The number of directors of the
Company is presently fixed by resolution of the Board of Directors at nine
(9). There are three (3) classes of directors serving staggered terms of
office with each class to consist, as nearly as possible, of one-third of
the total number of directors constituting the entire Board of Directors.
Upon the expiration of the term of office for a class of directors, the
nominees for that class are elected for a three (3) year term to serve until
the election and qualification of their successors. Each properly executed
Proxy received will be voted for the election of the three (3) nominees named
below as directors to serve until the designated Annual Meeting of
Shareholders shown below or until their respective successors shall be
elected and shall qualify. Each of the nominees has consented to be named as
a nominee in the Proxy Statement and to serve as a director if elected.
Should any nominee become unable or unwilling to accept a nomination or
election, the persons named in the enclosed Proxy will vote for the election
of a nominee designated by the Board.
The following table, prepared from records of the Company and from
information furnished to it, sets forth, as of September 19, 1998, the name,
age and positions with the Company of each nominee for director of the
Company. The principal occupation of each nominee for director during at
least the past five years is shown in the last column of the table.
NOMINEES FOR DIRECTOR (TERM TO EXPIRE AT 2001 SHAREHOLDER MEETING)
<TABLE>
<CAPTION>
NAME AND POSITIONS WITH AGE FIRST BECAME A PRINCIPAL OCCUPATION DURING PAST FIVE YEARS
THE COMPANY DIRECTOR
<S> <C> <C> <C>
ROBERT F. FRIEMANN (A) 50 - PARTNER OF ALBRECHT, VIGGIANO, ZURECK
& COMPANY, P.C. (ACCOUNTANTS)
STEPHEN V. MARONEY, DIRECTOR (B) 56 1996 FORMER PRESIDENT OF EXTEBANK
PHILIP F. PALMEDO, DIRECTOR (C) 64 1996 CHAIRMAN OF INTERNATIONAL RESOURCES GROUP,
FORMER PRESIDENT OF LONG ISLAND
RESEARCH INSTITUTE
</TABLE>
(A) REPLACES RETIRING DIRECTOR JOSEPH L. DORN.
(B) MEMBER OF AUDIT COMMITTEE, MEMBER OF EXECUTIVE COMMITTEE.
(C) CHAIRMAN OF EXECUTIVE COMPENSATION COMMITTEE, MEMBER OF EXECUTIVE
COMMITTEE.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES
FOR DIRECTOR.
BENEFICIAL OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND NOMINEES
The following table sets forth as of September 19, 1998 the outstanding
voting securities beneficially owned by the directors, executive officers and
nominee(s), and the number of shares owned by directors, executive officers
and nominee(s) as a group.
<TABLE>
<CAPTION>
Name & Positions With Shares of stock Percentage of Common Stock
The Company Beneficially Owned Owned
<S> <C> <C>
Dimitri P. Papadakos President, CEO, Treasurer and Director 40,409(A) 3.81%
Peter Pitsiokos, Vice President, Secretary & General Counsel 5,138(C) (B)
Josef Markowski Vice President, Operations 728 (B)
Robert H. Beyer, Director 4,612(D) (B)
Joseph L. Dorn, Director 10,594 1.0%
Robert F. Friemann, Nominee 1,548 (B)
Nicholas T. Goudes, Director 6,564 (B)
Paul L. Lamb, Director 1,063(E) (B)
John H. Marburger III, Director 1695 (B)
Stephen V. Maroney, Director 9043 (B)
Philip F. Palmedo, Director 5427 (B)
Peter P. Papadakos, Director 95,530(F) 9.0%(B)
All Directors and Executive
Officers as a Group Eleven (11) Persons 182,351 17.17%
</TABLE>
(A) DOES NOT INCLUDE HIS WIFE'S AND ADULT CHILDREN'S OWNERSHIP OF 37,285
SHARES IN WHICH HE DENIES ANY BENEFICIAL INTEREST.
(B) LESS THAN 1%.
(C) DOES NOT INCLUDE HIS WIFE'S AND MINOR CHILDREN'S OWNERSHIP OF 447 SHARES
IN WHICH HE DENIES ANY BENEFICIAL INTEREST.
(D) DOES NOT INCLUDE HIS WIFE'S OWNERSHIP OF 1,638 SHARES IN WHICH HE DENIES
ANY BENEFICIAL INTEREST.
(E) MR. LAMB IS A TRUSTEE OF THE CAHN, WISHOD & LAMB, LLP 401(K) PROFIT
SHARING PLAN WHICH OWNS 6, 294 SHARES OF COMPANY STOCK. IN ADDITION, 535
SHARES OF COMPANY STOCK ARE HELD BY CAHN, WISHOD & LAMB, LLP WHICH THE
COMPANY UNDERSTANDS WILL BE CONTRIBUTED TO THE CAHN, WISHOD & LAMB, LLP 401(K)
PROFIT SHARING PLAN ON OR BEFORE APRIL 15, 1999.
(F) DOES NOT INCLUDE HIS WIFE'S OWNERSHIP OF 14 SHARES IN WHICH HE DENIES ANY
BENEFICIAL INTEREST.
DIRECTOR COMPENSATION
Effective July 13, 1996 the Directors annual fee was increased to $7,500 per
year plus attendance fees of one thousand dollars ($1,000.00) for each
meeting of the Board of Directors and five hundred dollars ($500.00) for each
committee meeting. All compensation was paid in stock. The Directors are
also reimbursed for travel and Company business related expenses. Directors
who are also employees of the Company do not receive any additional
compensation for their service as Directors. During Fiscal Year 1998,
Director Stephen V. Maroney was paid additional compensation of $79,999.92 in
his capacity as Director of Real Estate Development. There was no additional
compensation paid by the Company to any other Director for Fiscal Years 1997
or 1998.
BOARD MEETINGS, COMMITTEES AND MEMBERSHIP
There were six (6) Board of Directors meetings held during Fiscal Year 1998
(May 1, 1997 through April 30, 1998). Only Director Joseph L. Dorn attended
less than 75% of the aggregate number of meetings of the Board of Directors
of the Company. No other Director attended less than seventy five percent
(75%) of the aggregate number of meetings of the Board of Directors of the
Company. In July, 1996, the Board of Directors restructured its existing
Compensation and Incentive (Stock Option) Committees and established three
additional committees. The committees consist of an Audit Committee,
Executive Committee, Executive Compensation Committee, a Nominating Committee
and a Stock Option Committee.
The following directors presently serve on the Audit Committee: Joseph L.
Dorn, Paul L. Lamb and Stephen V. Maroney (Chairman). The primary functions
of the Audit Committee include recommendation of the independent accountants
to be appointed by the Board; approval of the scope of the accountants'
examination; review of financial statements, including auditors' opinions and
management letters and reporting to the Board the Committee's recommendation
with respect thereto; review of financial and/or fiscal policies and policy
decisions; determination of the duties and responsibilities of the officer
with internal auditing responsibility; monitoring of internal programs to
ensure compliance with laws, regulations and the Company's responsibilities
for financial reporting to the public. The following Directors presently
serve on the Executive Committee: John H. Marburger III, Stephen V. Maroney,
Philip F. Palmedo and Dimitri P. Papadakos (Chairman). The Executive
Committee has all the authority of the Board of Directors and acts between
meetings of the Board and upon matters specifically delegated by the Board,
except with respect to certain matters that by statute may not be delegated
by the Board of Directors. The following Directors presently serve on the
Executive Compensation Committee: Robert H. Beyer, John H. Marburger III and
Philip F. Palmedo (Chairman). The primary functions of the Executive
Compensation Committee include approval of salaries to be paid to senior
executive officers; approval of or delegation to the President of the
authority to approve the salaries of all other officers; and the annual review
of all significant financial relationships which directors and officers have
with the Company, directly or indirectly. The following Directors presently
serve on the Nominating Committee: Robert H. Beyer, Nicholas T. Goudes and
Dimitri P. Papadakos (Chairman). The primary functions of the Nominating
Committee include recommendation to the Board with respect to nominees for
election as directors and recommendation to the Board with respect to the
composition of all Committees of the Board other than the Executive and
Nominating Committees. The procedure for nomination of directors by security
holders is set forth in Article III, Section I of the Company's By-Laws.
The following Directors presently serve on the Stock Option Committee: Joseph
L. Dorn, Peter P. Papadakos and John H. Marburger III (Chairman). The
primary functions of the Stock Option Committee include the review and
administration of qualified employee stock option plans for the benefit of
officers and employees maintained by the Company, including the granting of
options and awards with respect thereto. The Audit Committee met once during
Fiscal Year 1998. The Executive Committee met four (4) times in Fiscal Year
1998. The Executive Compensation Committee met once during Fiscal Year 1998.
The Nominating Committee met once during Fiscal Year 1998. The Stock Option
Committee met once in Fiscal Year 1998.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
A review of all Forms 3 and 4 filed with the Company indicates that none of
the executive officers or directors were late in filing any required Forms 3
or Forms 4 with the Securities and Exchange Commission for fiscal year 1998.
A review of prior year filings indicates that no 10% holder of Gyrodyne
Common Stock $1 P.V. failed to file timely reports.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The goal of the Company's Executive Compensation Committee is to ensure that
an appropriate relationship exists between executive compensation and the
creation of shareholder value, while at the same time, motivating and
retaining key employees. The primary components of compensation, base salary
and stock option awards, in combination, are designed to accomplish this goal.
Land and property management constitute the major portion of the Company's
business activities. The potential for contractual aerospace royalties
remains intact for the future. With that in mind, the Committee evaluates
management primarily based on the former, but is also mindful of the specific
knowledge and expertise required to negotiate and administer existing and
emerging aerospace opportunities.
Comparisons of the Company's compensation levels with those of similar land
management and property rental organizations are extremely limited and
primarily based on estimates since most are privately owned and not required
to make public disclosures. In light of these estimations, it is the
Committee's opinion that the Company's level of overall compensation is
competitive and considered to be in the low to mid range on a comparative
basis. Additionally, because of the scarcity of general compensation data
and in an effort to create a system of checks and balances, the Board of
Directors established a separate Stock Option Committee to work in concert
with the Executive Compensation Committee.
It is the position of both these Committees that management's performance can
best be evaluated based on its ability to formulate, oversee and administer
corporate strategy, which itself is the product of Board action and direction.
For the foreseeable future, that strategy is to focus primarily on continued
progress in the real estate operation, principally the development of
Flowerfield.
In establishing the compensation for Mr. Papadakos, the Committee observes
the policy set forth above for Executive Officers. No specific weighting
is applied to the various factors in determining the Chief Executive
Officer's compensation.
Respectfully submitted,
Philip F. Palmedo, Chairman
John H. Marburger III
Robert H. Beyer
EMPLOYMENT CONTRACTS, OTHER COMPENSATION AND CERTAIN TRANSACTIONS
In 1997, the Company adopted the Non-Employee Director's Compensation Plan
(the "Compensation Plan"). The Compensation Plan allows outside Directors
to elect to receive all of their annual Director's fees and meeting fees in
shares of the Company's Common Stock. The Compensation Plan is administered
by the Non-Employee Director's Compensation Plan Committee. The following
individuals, who are not eligible to participate in the Compensation Plan,
serve on the Committee: Dimitri P. Papadakos, Chairman, Frank D'Alessandro,
Peter Pitsiokos. The Committee did not meet in Fiscal Year 1998.
During the fiscal year ended April 30, 1998 two Directors or Officers
received remuneration in excess of $100,000 in such capacity.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION Long Term Compensation
Name and Position Year Salary Bonus Other Restricted Securities LTIP All
($) ($) Annual stock Underlying Payout Other
Compensation award Options/LSARs ($) Compensation
($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dimitri P. Papadakos 1998 123,312 0 60,239(A) 0 23,350 0 0
President & CEO 1997 118,379 0 (A) 0 0 0 0
Stephen V. Maroney 1998 80,000 0 60,500(B) 0 4,250 0 0
Dir. of Real
Estate Devlp. 1997 72,308 0 43,255(B) 0 3,750 0 0
</TABLE>
(A) The Registrant has concluded that aggregate amounts of personal benefits
to any of the current executives does not exceed the lesser of $50,000 or 10%
of compensation and bonuses reported above for the named executive officers,
and that the information set forth in tabular form above is not rendered
materially misleading by virtue of the omission of such personal benefits.
The 1998 "Other Annual Compensation" for Dimitri P. Papadakos represents the
difference between the fair market value and the option price on the date of
grant for 7,157 shares exercised.
(B) Pursuant to his Consulting Agreement with the Company, Mr. Maroney
received stock payments in lieu of cash with a fair market value of $45,000
in FY98 and $34,500 in FY97. Mr. Maroney also received shares for his
services as Company Director with a fair market value of $15,500 in FY98
and $8,755 in FY97.
On July 15, 1993 effective as of June 28, 1993, the Board of Directors by its
Compensation Committee entered into a restrictive five year employment
contract with Dimitri P. Papadakos as President and CEO, at a salary of
$110,000 per year subject to annual cost-of-living increases commencing
July 1, 1994 based on the Consumer Price Index in effect for the month of May
preceding the July 1st in question for All-Urban Consumers for the New York,
New York and Northeastern New Jersey Region (all items) published by the
Bureau of Labor Statistics, United States Department of Labor. Based on the
foregoing, effective July 1, 1998 his salary was increased to $126,478.56.
He will also be eligible for all benefits offered to other executive
employees. The Company provides a $1,000,000 24-hour worldwide travel
accident policy and a $250,000 group travel accident policy with his estate
as beneficiary. The Company will also provide the employee with an automobile
and will pay or reimburse all operating costs associated therewith. The
contract also contains a provision requiring the employee not to compete with
the Company during the term of the contract or for a period of two years
following termination. In case of the employee's death or total
incapacitation during the contract period, the contract provides for
compensation to continue for the unexpired term of the employment period or
any renewal period. In case of termination as a result of change in control,
merger, change in make-up of Board of Directors or discharge of employee by
the Company for any reason other than death, incapacitation or cause, his
salary and all other ancillary benefits to which the employee is entitled,
shall be paid for a period of five full years to the employee or in case of
death, to his estate. Effective July 1, 1998 the Executive Compensation
Committee of the Board of Directors voted to extend the contract of Dimitri
P. Papadakos for a period of one year to expire July 15, 2003.
Effective June 1, 1996 and prior to his election to the Board of Directors,
the Company entered into a Consulting Agreement with Director Stephen V.
Maroney. Mr. Maroney, former President of Extebank, provides financial and
operational support services to the Company. As of July 1, 1998, the
Consulting Agreement provides for an annual consulting fee of eighty thousand
dollars ($80,000.00) and a stock award of shares under the Company's 1993
Stock Incentive Plan with a market value of forty-five thousand ($45,000.00)
dollars. The Agreement is terminable upon thirty (30) days notice.
Mr. Paul Lamb, a Director, is a partner in Cahn, Wishod & Lamb, LLP, a law
firm, which provides legal services to the Company. In Fiscal Year 1998,
total fees paid to Cahn, Wishod & Lamb, LLP were $65,579.09. Such fees were
paid 50% in cash, and the balance was paid in restricted Company stock.
STOCK OPTION PLAN
The Company adopted a Stock Incentive Plan to grant options to employees.
Under the plan, the Company may grant stock in the form of options, incentive
stock options (ISOs), non-qualified stock options with or without reload
options, stock appreciation rights (SARs) or limited stock appreciation
rights (LSARs), and stock awards to officers and other employees. SARs
entitle an optionee to surrender unexercised stock options equal to the
excess of the fair market value of the surrendered shares over the option
value of such shares if the stock has appreciated greater than 50% since the
date of the grant. Any shares that are available for awards that are not
utilized in a given year will be available for use in subsequent years. The
maximum number of shares that may be granted in Fiscal Year 1998 was 35,000
and 35,000 are available for grant in Fiscal Year 1999. Options generally
vest over a three to four year period and all options not exercised expire
five years from date of grant.
<TABLE>
<CAPTION>
STOCK STOCK
STOCK OPTIONS OPTIONS AWARDS TOTAL
<S> <C> <C> <C>
Available at April 30, 1996 44,662 6,935 51,597
Stock grants exercised - (3,080) (3,080)
Stock Options exercised at $9.89 per share (1,166) - (1,166)
------ ----- ------
Available at April 30, 1997 43,496 3,855 47,351
Stock grants awarded - 7,455 7,455
Stock options issued at $9.89 to $19.61 per share 45,657 - 45,657
Stock grants exercised - (5,460) (5,460)
Stock Options exercised at $9.89 per share (16,491) - (16,491)
------ ----- ------
Available at April 30, 1998 72,662 5,850 78,512
====== ===== ======
Exercisable at April 30, 1998 22,526 - 22,526
====== ===== ======
</TABLE>
On August 6, 1994 the Board of Directors authorized Stock Options or Awards
totaling 20,000 shares to ten (10) key employees and officers. No portion of
these restricted options were exercisable until August 6, 1995. As a result
of the seven for four stock split on January 20, 1995, there were Options and
Awards totaling 35,000 shares unexercised at April 30, 1995.
On August 26, 1995 the Board of Directors granted additional Stock Options or
Awards to eleven (11) key employees and Officers totaling 25,750 shares, no
portion of which could be exercised before August 26, 1996 or sold before
August 26, 1997.
There were no Stock Options or Awards granted in Fiscal Year 1997.
On July 19, 1997, the Board of Directors granted Stock Options or Awards to
twelve (12) key employees and officers totaling 32,000 shares, no portion of
which could be exercised or sold before July 19, 1998.
<TABLE>
<CAPTION>
OPTIONS/LSAR EXERCISED IN LAST FISCAL YEAR
NUMBER OF % OF TOTAL
OPTIONS/LSARS OPTIONS/LSARS EXERCISE EXPIRATION
NAME GRANTED GRANTED PRICE DATE
<S> <C> <C> <C> <C>
Dimitri P. Papadakos (CEO) 14,600 42% $17.256 7/19/02
Stephen V. Maroney - Director 3,600 9% $17.256 7/19/02
</TABLE>
AGGREGATED OPTION/LSAR EXERCISED IN LAST FISCAL YEAR
AND FY-END OPTION/LSAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED
SHARES OPTIONS/LSAR'S AT OPTIONS AT
ACQUIRED ON VALUE APRIL 30, 1998 4/30/97
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
<S> <C> <C> <C> <C>
Dimitri P. Papadakos (CEO) 7,157 $60,239 9,375/28,350 $70,781/$93,748
Stephen V. Maroney - Director - - 3,750/4,250 $32,575/$10,388
</TABLE>
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Company adopted a non-qualified stock option plan for all non-employee
Directors of the Company in October 1996. Each non-employee Director was
given initial option grants when the plan was adopted, which are exercisable
in three equal annual installments commencing on the first anniversary of
the grant. Each non-employee Director will also be given 1,250 option grants
(annual option grants) which are granted on January 1 for calendar year 1997
through 2000. Each option is exercisable on the anniversary of the grant.
Number Option
of Shares Prices
Total options outstanding at April 30, 1996 - -
Initial stock option grants 17,500 $11.82
Annual stock option grants 8,750 $11.80
------
Total options outstanding at April 30, 1997 26,250
Initial stock option grants 5,000 $11.82 - $21.01
Annual stock option grants 12,500 $19.98
Total options exercised (3,750) $11.80 - $11.82
------
Total options outstanding at April 30, 1998 40,000 $11.80 - $21.01
======
Shares reserved for future issuance at April 30, 1998 are comprised of the
following:
Shares issuable upon exercise of stock options under the
Company's Non-Employee Director Stock Option Plan 71,250
Shares issuable under the Company's Non-Employee
Director Stock Compensation Plan 34,873
Shares issuable upon excise of stock options under
the Company's stock incentive plan 227,412
Shares issuable under the Company's stock grant incentive plan 9,100
-------
342,635
=======
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL 2)
Holtz Rubenstein & Co., LLP of 125 Baylis Road, Melville, New York 11747,
independent accountants, have been engaged by the Board of Directors as
auditors of the Company and its subsidiaries for the current Fiscal Year, and
to perform such other professional services, if any, as may be required of
them. This firm has no financial interest in the Company or any connection
with the Company other than as auditors and independent public accountants.
The firm has been the Company's auditors since fiscal year 1990.
Representatives of Holtz Rubenstein & Co., LLP are expected to be present at
the annual shareholders meeting, will be given an opportunity to make a
statement if they desire to do so, and are expected to be available at a
designated time during the meeting to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE ENGAGEMENT OF HOLTZ RUBENSTEIN & CO., LLP AS AUDITORS FOR THE
CURRENT FISCAL YEAR UNDER PROPOSAL 2.
OTHER MATTERS
Management does not intend to bring any other matters before the meeting and
does not know of any other business that will be presented for consideration
at the meeting. If any other matters properly come before the meeting or any
adjournment thereof, the persons named in the enclosed Proxy will vote on such
matters in accordance with their discretion and best judgment insofar as such
proxies are not limited to the contrary.
FINANCIAL STATEMENTS
Accompanying this Proxy Statement is the Annual Report for the latest Fiscal
Year ended April 30, 1998 which includes an audited Balance Sheet for the year
then ended, and audited Statements of Income and Cash Flow for each of the two
most recent fiscal years.
1998 STOCKHOLDER'S PROPOSALS
Any Shareholder's proposal intended to be presented at the 1999 Annual Meeting
of Shareholders must, in accordance with Rule 14a-8 of the Proxy Rules of the
Securities and Exchange Commission, be received at the Company's principal
executive office on or prior to June 2, 1999, in order to be included in the
Company's Proxy Statement and Form of Proxy relating to such annual meeting.
