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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 30, 1999, 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 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 23, 1999
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JETRONIC INDUSTRIES, INC.
4200 Mitchell Street
Philadelphia, Pennsylvania 19128
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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
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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 30, 1999 or any adjournments thereof. This proxy
statement was first mailed to Shareholders of the Company on or about July 28,
1999, accompanied by the Company's Annual Report to Shareholders for the fiscal
year ended January 31, 1999.
Only holders of Common Stock of record on the books of the Company at
the close of business on July 23, 1999 (the "Record Date") will be entitled to
notice of and to vote at the Annual Meeting. On that date, there were 3,701,999
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.
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.
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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.
See "Certain Transactions" concerning rights of Preferred Shareholders.
<TABLE>
<CAPTION>
Principal Occupation During Director
Director Age the Past Five Years Since
-------- --- ------------------- -----
<S> <C> <C> <C>
Daniel R. Kursman....... 73 Chairman of the Board and Treasurer 1951
Leonard W. Pietrzak..... 59 Vice President - Finance 1994
The other directors who are presently serving, and who were elected
previously for terms which have not expired:
Term expires 2001
Peter J. Kursman........... 46 President (formerly Vice President) 1982
William L. Weiss.......... 70 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).... 73 Treasurer 1951
Peter J. Kursman (1)....... 46 President 1978
Leonard W. Pietrzak....... 59 Vice President - Finance 1981
</TABLE>
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.
Security Ownership
The following table contains information as to the number of shares of
the Company's Common Stock, owned as of May 1, 1999, by each Director and by all
Directors and Officers of
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the Company as a group. The information is based upon information furnished by
the persons concerned:
<TABLE>
<CAPTION>
Individual or Number Shares of Company Stock Percentage
of Persons in Group Owned Beneficially of Class
-------------------- ------------------------ -----------
<S> <C> <C>
Daniel R. Kursman................... 184,536 5.0%
William L. Weiss.................... 1,464 o
All Directors and Officers
as a group (two in group)....... 186,000 5.0%
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o 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, 1999 to the most highly compensation Executive Officers of the
Company whose salary and bonus exceeded $100,000 for 1999.
Long-Term
Compensation
Awards
Securities All other
Underlying Compensa-
Name & Principal Position (1) Year Salary Bonus Options(#) tion (2) (3)
- ----------------------------- -------------------------------------------------- -------------
Daniel R. Kursman, Chairman
of the Board, Treasurer and
Director (4) 1999 $103,940 $2,633
1998 103,490 100,000 1,143
1997 104,703 1,461
Peter J. Kursman, President
and Director (5) 1999 $165,524 $140,325 $3,507
1998 153,431 109,479 100,000 2,688
1997 155,951 64,072 1,796
Leonard W. Pietrzak,
Vice President - Finance
and Director (6) 1999 $ 79,542 $ 40,000 $2,633
1998 79,450 20,000 60,000 1,126
1997 80,941 1,347
</TABLE>
(1) Does not include fees paid to William L. Weiss, general counsel to the
Company, in the amount of $50,000. 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 20% of a maximum of 4% of eligible contributions.
Contributions made for the account of each individual during the fiscal year
ended January 31, 1999 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, 2006, at an annual salary of $165,500, 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 2006.
(6) Leonard W. Pietrzak is employed as Vice President - Finance under a contract
expiring February 1, 2002, at an annual salary of $75,000.
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 cumulative total returns
for the Company's Common Stock during the five year period ended January 31,
1999 with the Dow Jones Industrial Average and the Dow Jones Industry Group
Average for Diversified Technology.
DJA Diversified Tech Jetronic Industries
--- ---------------- -------------------
1994 100 100 100
1995 97 96 53
1996 136 129 41
1997 171 166 106
1998 199 182 212
1999 235 189 106
The above graph assumes $100 invested on January 31, 1994 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 connection with and in consideration of the extension of the
maturity date for indebtedness due under and pursuant to the Company's
subordinated debentures from December 21, 1999 until January 1, 2003, the
Company agreed to issue to its debentureholders warrants to acquire at an
exercise price of $.10 per share, 440,000 shares of the Company's preferred
stock which are convertible into a like amount of shares of the Company's common
stock. To date, warrants for 327,032 shares of preferred stock have been
exercised by Ingalls & Snyder Value Partners L.P. Robert L. Gipson is a general
partner of Ingalls & Snyder Value Partners L.P. See "Certain Security Owners"
for information concerning Mr. Gipson's common stock holdings.
The majority of the preferred shareholders, voting as a class, have the
right so long as any shares of the preferred stock remain issued and
outstanding, to elect three members of a six member Board of Directors of the
Company. Upon payment in full of the indebtedness due on the subordinated
debentures, the Company has the right to acquire all of their outstanding shares
of preferred stock for $1.00 per share.
The consent of a majority of preferred shareholders, voting as a class,
is required for the adoption of any plan of merger, consolidation, exchange,
asset transfer, division, conversion or dissolution to which the Company is a
party, including the sale, assignment or transfer of any material asset,
subsidiary or division of the Company and any amendment to the Company's
Articles of Incorporation.
The preferred shareholders have advised the Company that they intend to
exercise their right to elect three directors and upon such election the Board
will be reconstituted to provide for a six member Board, of which three
directors will be designated by the preferred shareholders and three directors
will be designated by the holders of the Company's common stock.
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
$26,600 on April 30, 1999. 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
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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 February 1, 2000. 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, 1999 in the amount of $72,500 has been extended until February 1,
2000. At January 31, 1999, the Company's effective rate for short-term
borrowings was 9.1%. 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, 1999, the Board of Directors of the
Company held three meetings. Every Director attended the meetings held in FY
1999. 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, 1999 of more than 5% of
the outstanding shares of the Company's Common Stock or shares convertible into
Common Stock.
<TABLE>
<CAPTION>
Title of Name and Address Nature of Number Percentage
Class of Owner Ownership of Shares of Class
----- -------- --------- --------- --------
<S> <C> <C> <C> <C>
Common Stock Robert L. Gipson Record and 330,000 9.0%
61 Broadway Beneficially
New York, NY
Common Stock Ingalls & Snyder Record and 65,286 1.8%(2)
Value Partners L.P.(1) Beneficially
61 Broadway
New York, NY
Preferred Stock Ingalls & Snyder Record and 306,493 70.0%(2)
Value Partners L.P.(1) Beneficially
61 Broadway
New York, NY
</TABLE>
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(1) Mr. Gipson is a general partner of Ingalls & Snyder Value Partners L.P. and
shares voting power with Ingalls & Snyder Value Partners L.P.
(2) Upon conversion, would amount to 9% of the total of the issued and
outstanding shares of Common Stock.
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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, 1999, 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 23, 1999
<PAGE>
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 30, 1999, 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
contrary below [ ] nominees listed below [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee mark the
box next to the nominee's name below:
[ ] Daniel R. Kursman [ ] Leonard W. Pietrzak
2. Transaction of all such other business as may properly come before the
meeting or any adjournments thereof.
*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.
(Please see reverse side)
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM (1). IF NO SPECIFICATION IS
MADE, SUCH STOCK WILL BE VOTED FOR SAID ITEM
Dated:________________________,1999
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(Signature of Shareholder)
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(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.
