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JETRONIC INDUSTRIES, INC.
4200 Mitchell Street
Philadelphia, Pennsylvania 19128
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Jetronic Industries, Inc. (the "Company") will be held at Williamson's, Atop the
GSB Building, Belmont and City Line Avenues, Bala Cynwyd, Pennsylvania, on
September 25, 1997, at 1:00 p.m., for the purposes set forth below.
1. To elect two Directors, the term of such Director to be three
years.
2. To transact such other and further business as may properly
come before the meeting or any adjournment thereof.
A proxy statement and proxy are enclosed herewith. If you are unable to
attend the Annual Meeting in person you are urged to sign, date and return the
enclosed proxy promptly in the enclosed addressed envelope which requires no
postage if mailed in the United States.
By Order of the Board of Directors
Peter J. Kursman
President
Dated: Philadelphia, Pennsylvania
July 18, 1997
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JETRONIC INDUSTRIES, INC.
4200 Mitchell Street
Philadelphia, Pennsylvania 19128
--------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
--------------------
This proxy statement is furnished to the shareholders of Jetronic
Industries, Inc. (herein called the "Company") in connection with the Board of
Directors' solicitation of proxies to be used at the Annual Meeting of
Shareholders on September 25, 1997 or any adjournments thereof. This proxy
statement was first mailed to Shareholders of the Company on or about July 18,
1997, accompanied by the Company's Annual Report to Shareholders for the fiscal
year ended January 31, 1997.
Only holders of Common Stock of record on the books of the Company at
the close of business on July 3, 1997 (the "Record Date") will be entitled to
notice of and to vote at the Annual Meeting. On that date, there were 3,604,499
shares of Common Stock outstanding. Each holder of record of Common Stock of
the Company as of the Record Date will be entitled to one vote for each share of
stock standing of record in his name, except that for the election of directors
by Common Shareholders, shareholders shall be entitled to as many votes as shall
equal the number of shares standing in their names multiplied by the number of
directors to be elected, and they may cast all such votes for a single director
or may distribute them among the number to be voted for. The nominees receiving
the greatest number of votes cast at the Annual Meeting will be elected as
directors.
It is expected that the solicitation of proxies will be primarily by
mail. Proxies may be solicited personally and by telephone by officers,
directors or other representatives of the Company. The total expenses of
preparing, assembling and mailing the proxy statement and accompanying notice
and form of proxy, which are estimated to be $20,000, will be borne by the
Company. Such expenses may also include reimbursement for out-of-pocket
disbursements incurred by brokerage houses and other custodians, nominees or
other fiduciaries for forwarding such documents to shareholders.
Each proxy delivered pursuant to this solicitation is revocable by the
person giving it at any time before it is voted. Proxies may be revoked by
filing with the Secretary of the Company written notice of revocation bearing a
later date than the proxy, by duly executing a subsequent proxy relating to the
same shares of Common Stock or by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting will not in and of itself constitute
revocation of a proxy unless the shareholder votes his shares of Common Stock in
person at the Annual Meeting. Any notice revoking a proxy should be sent to the
Assistant Secretary of the Company, Leonard W. Pietrzak, 4200 Mitchell Street,
Philadelphia, Pennsylvania 19128.
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Proxies given in the form enclosed, unless previously revoked, will be
voted at the Annual Meeting in accordance with the instructions contained
therein and if no choice is specified, will be voted in favor of the nominees
for Director and the proposals set forth herein.
ELECTION OF DIRECTORS
Nominees for Election as Directors
The By-Laws of the Company were amended in 1975 to provide for a
classified Board of Directors consisting of approximate equal classes, each to
serve for a term of three years or until their successors shall have been
elected and qualified. The proxies will be voted for the election of the
following nominees. Should any nominee become unavailable for any reason before
the meeting (which is not anticipated) the proxies will be voted for a
substitute person to be selected by the Board of Directors of the Company.
Principal Occupation Director
Director Age During the Past Five Years Since
-------- --- -------------------------- -----
Peter J. Kursman ..... 44 President (formerly Vice President) 1982
William L. Weiss ..... 68 Attorney in private practice 1973
The other directors who are presently serving, and who were elected
previously for terms which have not expired are:
Term expires 1999
Daniel R. Kursman .... 71 Chairman of the Board and 1951
Treasurer
Leonard W. Pietrzak .. 57 Vice President - Finance 1994
INFORMATION ABOUT MANAGEMENT
Executive Officers
The following table contains information as to the Executive Officers
of the Company.
Officer
Individual Age Position Since
---------- --- -------- -----
Daniel R. Kursman (1) 71 Treasurer 1951
Peter J. Kursman (1) . 44 President 1978
Leonard W. Pietrzak .. 57 Vice President - Finance 1981
All Executive Officers have held their present positions with the
Company for at least five years, except for Peter J. Kursman who previously held
the position of Vice President.
- ----------
(1) Peter J. Kursman is the son of Daniel R. Kursman.
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Security Ownership
The following table contains information as to the number of shares of
the Company's Common Stock, owned as of May 1, 1997, by each Director and by all
Directors and Officers of the Company as a group. The information is based upon
information furnished by the persons concerned.
Individual or Number Shares of Company Stock Percentage
of Persons in Group Owned Beneficially of Class
-------------------- ----------------------- ----------
Daniel R. Kursman ............... 219,536 6.1%
William L. Weiss ................ 1,464 *
All Directors and Officers
as a group (two in group) ...... 221,000 6.1%
- ----------
* Less than 1%.
Management Remuneration
The following table contains information with respect to the aggregate
cash compensation paid by the Company during the fiscal year ended January 31,
1997 to the most highly compensated Executive Officers of the Company whose
total cash consideration exceeded $100,000.
All Other
Name & Principal Position (1) Year Salary Bonus Compensation (2)(3)
- ----------------------------- ---- ------ ----- -------------------
Daniel R. Kursman, Chairman
of the Board, Treasurer
and Director (4) 1997 104,703 1,461
1996 155,872 3,579
1995 174,945 2,934
Peter J. Kursman, President
and Director (5) 1997 155,951 64,072 1,796
1996 143,295 40,588 3,527
1995 142,622 31,616 2,957
(1) Does not include fees paid to William L. Weiss, general counsel to the
Company, in the amount of $40,000. Mr. Weiss is a Director of the
Company.
(2) Directors who are not employees of the Company receive $1,250 per
meeting and employee-Directors receive $700 per meeting.
(3) The Company has a defined contribution pension plan and a profit
sharing plan covering certain employees, including Officers (the
"Jetronic Industries, Inc. Retirement and Profit Sharing Plans").
Contributions to the Profit Sharing Plan are made at the discretion of
the Board of Directors and are limited to a maximum of 5.7% of eligible
compensation of participants. Company contributions to the defined
contribution pension plan are limited to .8% of a maximum of 4% of
eligible contributions. Contributions made for the account of each
individual during the fiscal year ended January 31, 1997 are included
in the amounts reflected.
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(4) Daniel R. Kursman is employed as Chairman of the Board under a contract
expiring on March 31, 2000, at a current annual salary of $100,000.
(5) Peter J. Kursman is employed as President under a contract expiring
February 1, 2001, at an annual salary of $150,000, plus a yearly bonus
of 4% of certain subsidiary and 3% of certain divisional pretax
earnings.
Compensation Committee Report
Decisions regarding compensation of the Company's executives are
generally made by the two-member Stock Option and Compensation Committee (the
"Compensation Committee") of the Company's Board of Directors.
The compensation of the Company's Chief Executive Officer and other
executive officers is comprised of annual salary and cash and stock incentives
based on annual and long-term results of the Company. Annual increases, if any,
are based on individual performance, level of responsibilities and the Company's
overall performance.
PERFORMANCE GRAPH
The following graph reflects a comparison of cummulative total returns
for the Company's Common Stock during the five year period ended January 31,
1997 with the Dow Jones Industrial Average and the Dow Jones Industry Group
Average for Diversified Technology.
250|------------------------------------------------------------------|
| |
| #&
| *
| & & |
200|------------------------------------------------------------------|
| |
| # |
| * |
| |
D 150|-------------------------#----------------------------------------|
O | |
L | # |
L | * * |
A | *# & |
R 100*#&----------------------------------------------------------------|
S | & |
| |
| |
| |
50|------------------------------------------------------------------|
| |
| |
| |
| |
0|------------------------------------------------------------------|
1992 1993 1994 1995 1996 1997
*=DJA #=Diversified Tech &=Jetronic Industries
DJA Diversified Tech Jetronic Industries
--- ----------------- -------------------
1992 100 100 100
1993 105 107 213
1994 126 154 213
1995 121 138 112
1996 170 184 87
1997 215 227 225
The above graph assumes $100 invested on January 31, 1992 in Jetronic
Industries, Inc. Common Stock, the Dow Jones Industrial Average and the Dow
Jones Industry Group Average for Diversified Technology.
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Certain Transactions
In March 1969, the Company loaned Daniel R. Kursman $50,000 at 7 1/2%
interest (the prime interest rate on that date) due on demand in order to
exercise stock options to purchase Common Stock of the Company. The loan is
collateralized by the 25,000 shares so acquired which had a market value of
$35,938 on May 1, 1997. In January 1972, the terms of this loan, together with
certain other advances made to Mr. Kursman which aggregated $4,500 were modified
to provide for repayment of the $54,500 in January 1973 at 6 1/4% interest (1%
above the prime rate on that date). In January 1972, the Company made further
personal advances to Mr. Kursman of $18,000 at 6% interest (1% above the prime
rate on that date) due in January 1973. During January 1973, the aggregate of
all such indebtedness amounting to $72,500 was consolidated with interest at the
rate of 7% and provision was made for payment in January 1974 and extended
annually to January 31, 1998. Consideration has been received and accrued
interest receivable reduced as follows: December 1975 - $10,000; March 1980 -
$16,152; December 1982 - $10,000. Payment of principal at January 31, 1997 in
the amount of $73,000 has been extended until February 1, 1998. At January 31,
1997, the Company's effective rate for short-term borrowings was 10.64%. The
differential between the rate charged and the Company's borrowing rate is not
included in the remuneration table above. Mr. Kursman has undertaken to satisfy
this obligation during the term of his current employment contract.
Board of Directors and Committees
During the year ended January 31, 1997, the Board of Directors of the
Company held one meeting. Every Director attended the meeting held in FY 1997.
Daniel R. Kursman and William L. Weiss constitute the audit committee of the
Board of Directors. The audit committee meets at least once a year and more
frequently if required. The audit committee acts as a liaison between the
Company's internal accounting staff and its independent accountants and reports
to the Board of Directors with respect to financial reporting, financial
practices and the adequacy of internal controls. William L. Weiss and Daniel R.
Kursman constitute the Stock Option and Compensation Committee. The Stock Option
and Compensation Committee determines to whom options will be granted under the
1990 Incentive Stock Option Plan and reviews executive salaries and bonus
awards.
CERTAIN SECURITY OWNERS
The following table sets forth information concerning each person who,
to the knowledge of the Company, was the owner on May 1, 1997 of more than 5% of
the outstanding shares of the Company's Common Stock.
Number
Title Name and Address Nature of of Percentage
of Class of Owner ownership Shares of Class
-------- ---------------- --------- ------ --------
Common Stock Robert L. Gipson Record and 426,517 11.8%
61 Broadway Beneficially
New York, NY
Common Stock Daniel R. Kursman Record and 219,536 6.1%
191 Presidential Boulevard Beneficially
Bala Cynwyd, PA
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SHAREHOLDER PROPOSALS
Shareholders who wish to submit proposals for inclusion in the Proxy
Statement for the Company's Annual Meeting must submit the same to the Company
on or before May 15 in the year in which the Shareholders' Meeting is to be
held.
INDEPENDENT ACCOUNTANTS
A representative of Asher & Company, Ltd., independent accountants for
the Company for the year ended January 31, 1997, will be present at the Annual
Meeting of Shareholders with the opportunity to make a statement if he so
desires and to respond to appropriate questions.
GENERAL
Management does not know of any other matters which may come before the
meeting. However, if any other business comes before the meeting or any
adjournment thereof, proxies will be voted in accordance with the discretion of
the persons named therein.
All shareholders are urged to complete, date and sign the accompanying
form of proxy and return it in the enclosed envelope which requires no postage
if mailed in the United States.
By Order of the Board of Directors
Peter J. Kursman
President
July 18, 1997
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JETRONIC INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter J. Kursman and Leonard W.
Pietrzak, and each of them, the attorneys and proxies of the undersigned, with
full power of substitution, to vote on behalf of the undersigned all of the
shares of Common Stock of Jetronic Industries, Inc., which the undersigned is
entitled to vote at the Annual Meeting of Shareholders thereof to be held
September 25, 1997, and at any and all adjournments thereof, upon the following
matters:
1. Election of Directors
FOR ALL Nominees listed below* WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) [ ] listed below [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee mark the
box next to the nominee's name below:
[ ] Peter J. Kursman [ ] William L. Weiss
2. Transaction of all such other business as may properly come before the
meeting or any adjournments thereof.
(Please see reverse side)
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*For election of Directors, shareholders are entitled to as many votes
as shall equal the number of shares of stock standing in their names multiplied
by the number of Directors. You may cast all such votes for a single Director
or may distribute them among the number to be voted for.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS (1) TO (2). IF NO
SPECIFICATION IS MADE, SUCH STOCK WILL BE VOTED FOR SAID ITEM.
Dated:_____________________________1997
________________________________________
Signature of Shareholder
________________________________________
Signature of Shareholder
Please sign exactly as
name appears. For joint
account, each joint owner
should sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY.