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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
JETRONIC INDUSTRIES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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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 24, 1998, at 1:00 p.m., for the purposes set forth below.
1. To transact such 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 24, 1998
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JETRONIC INDUSTRIES, INC.
4200 Mitchell Street
Philadelphia, Pennsylvania 19128
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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 24, 1998 or any adjournments thereof. This proxy
statement was first mailed to Shareholders of the Company on or about July 27,
1998, accompanied by the Company's Annual Report to Shareholders for the
fiscal year ended January 31, 1998.
Only holders of Common Stock of record on the books of the Company at the
close of business on July 24, 1998 (the "Record Date") will be entitled to
notice of and to vote at the Annual Meeting. On that date, there were
3,664,499 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 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. There are no Directors proposed for election this year.
All directors who are presently serving, and who were elected previously
for terms which have not expired are:
Principal Occupation Director
Director Age During the Past Five Years Since
-------- --- -------------------------- -----
Term expires 1999
Daniel R. Kursman.......... 72 Chairman of the Board and 1951
Treasurer
Leonard W. Pietrzak........ 58 Vice President - Finance 1994
Term expires 2001
Peter J. Kursman........... 45 President (formerly Vice President) 1982
William L. Weiss........... 69 Attorney in private practice 1973
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)...... 72 Treasurer 1951
Peter J. Kursman (1)....... 45 President 1978
Leonard W. Pietrzak........ 58 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.
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(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, 1998, 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.................. 184,536 5.0%
William L. Weiss................... 1,464 *
All Directors and Officers
as a group (two in group)........ 186,000 5.1%
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* Less than 1%
Summary Compensation Table
The following table contains information with respect to the aggregate
cash and non-cash compensation paid by the Company during the three years
ended January 31, 1998 to the most highly compensated Executive Officers of
the Company whose salary and bonus exceeded $100,000 for 1998.
Long-Term
Compensation
Awards
Securities All other
Underlying Compensation
Name & Principal Position (1) Year Salary Bonus Options(#) (2)(3)
- ----------------------------- ---- ------ ----- ---------- ----------
Daniel R. Kursman, Chairman
of the Board, Treasurer
and Director (4) 1998 103,490 100,000 1,143
1997 104,703 1,461
1996 155,872 3,579
Peter J. Kursman, President
and Director (5) 1998 153,431 109,479 100,000 2,688
1997 155,951 64,072 1,796
1996 143,295 40,588 3,527
(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 covering certain
employees, including Officers (the "Jetronic Industries, Inc. Retirement
Savings Plan"). 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, 1998 are included in the amounts reflected.
(4) Daniel P. Kursman is employed as Chairman of the Board under a contract
expiring on March 31, 2000, at a current annual salary of $100,000.
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(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. In
conjunction with his employment agreement, Mr. Kursman was granted
360,000 options to acquire common stock at a price of $.375 exercisable
at the rate of 72,000 options per year, expiring in 2001.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Percent Realizable
of Total Value Rates
Number of Options of Stock
Securities Granted to Exercise Price
Underlying Employees or Base Appreciation
Options in Fiscal Price Expiration for Option
Name Granted Year ($/Sh) Date Term
---- ------- --------- ------ ---------- -----------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Daniel R. Kursman 100,000 22% $1.063 9/25/03 $1.357 $1.712
Peter J. Kursman 100,000 22% 1.063 9/25/03 1.357 1.712
Leonard W. Pietrzak 60,000 13% 1.063 9/25/03 1.357 1.712
William L. Weiss 60,000 13% 1.063 9/25/03 1.357 1.712
</TABLE>
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,
1998 with the Dow Jones Industrial Average and the Dow Jones Industry Group
Average for Diversified Technology.
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250 |-------------------------------------------------------------------------|
| & |
| & * |
200 |---------------------------------------------------------*-------------#-|
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| &* |
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| &* &* # |
100 |&*#------------#---------------------------------------------------------|
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0 |-------------------------------------------------------------------------|
1993 1994 1995 1996 1997 1998
& - DJA * - Diversified Tech # - Jetronic Industries
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DJA Diversified Tech Jetronic Industries
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1993 100 100 100
1994 120 120 100
1995 116 115 53
1996 163 155 41
1997 206 199 106
1998 239 219 212
The above graph assumes $100 invested on January 31, 1993 in Jetronic
Industries, Inc. Common Stock, the Dow Jones Industrial Average and the Dow
Jones Industry Group Average for Diversified Technology.
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
$67,200 on May 1, 1998. 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, 1999. 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, 1998 in the amount $73,000 has been extended until February 1,
1999. At January 31, 1998, the Company's effective rate for short-term
borrowings was 11.4%. 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, 1998, the Board of Directors of the
Company held one meeting. Every Director attended the meeting held in FY 1998.
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.
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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, 1998 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 579,764 15.8%
61 Broadway Beneficially
New York, NY
Common Stock Daniel B. Kursman Record and 184,530 5.0%
191 Presidential Boulevard Beneficially
Bala Cynwyd, PA
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, 1998, 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 24, 1998
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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 24,
1998, and at any and all adjournments thereof, upon the following matters:
1. Transaction of all such business as may properly come before the meeting
or any adjournments thereof.
For [ ] Against [ ]
(Please see reverse side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM (1). IF NO SPECIFICATION IS
MADE, SUCH STOCK WILL BE VOTED FOR SAID ITEM.
Dated: -------------------- ,1998
---------------------------------
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.
