SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
ADVANCED TECHNICAL PRODUCTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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.
<PAGE>
[ ] 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:
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<PAGE>
April 28, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders (the "Annual Meeting") of Advanced Technical Products, Inc. (the
"Company"), which will be held on Thursday, May 14, 1998, beginning at 2:00 p.m.
local time, at the Swissotel located at 3391 Peachtree Road, Atlanta, Georgia
30326.
The official notice of meeting, proxy statement, form of proxy and 1997
annual report to stockholders are included with this letter. The matters listed
on the notice of meeting are described in detail in the proxy statement.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. Accordingly, after reading the
enclosed Notice of Annual Meeting and Proxy Statement, you are urged to sign and
date the enclosed proxy and return it in the enclosed addressed and stamped
envelope at your earliest convenience.
Very truly yours,
/s/ JAMES S. CARTER
James S. Carter
CHAIRMAN OF THE BOARD
Atlanta, Georgia
April 28, 1998
<PAGE>
ADVANCED TECHNICAL PRODUCTS, INC.
3353 PEACHTREE ROAD, SUITE 920
ATLANTA, GEORGIA 30326
----------------------------
NOTICE OF
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
----------------------------
The 1998 Annual Meeting of Stockholders (the "Annual Meeting") of Advanced
Technical Products, Inc., a Delaware corporation (hereinafter the "Company"),
will be held at the Swissotel, 3391 Peachtree Road, Atlanta, Georgia 30326, on
Thursday, May 14, 1998, at 2:00 p.m. local time to consider and act upon the
following matters:
1. The election of three Class I directors to serve until the Annual
Meeting of Stockholders to be held in 2001; and
2. The transaction of such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
Only holders of record of the common stock of the Company at the close of
business on April 6, 1998 are entitled to notice of, and to vote at, the Annual
Meeting or any adjournments thereof. A list of stockholders entitled to vote at
the Annual Meeting will be available at the Annual Meeting for examination by
any stockholder.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, IT IS REQUESTED THAT THE
ENCLOSED FORM OF PROXY BE PROPERLY EXECUTED AND PROMPTLY RETURNED TO THE COMPANY
IN THE ENCLOSED ADDRESSED AND STAMPED ENVELOPE. You may revoke the proxy at any
time before the proxy is exercised by delivering written notice of revocation to
the Secretary of the Company, by delivering a subsequently dated proxy or by
attending the Annual Meeting and withdrawing the proxy.
By Order of the Board of Directors,
/s/ JAMES P. HOBT
James P. Hobt
SECRETARY
Atlanta, Georgia
April 28, 1998
<PAGE>
ADVANCED TECHNICAL PRODUCTS, INC.
------------------------------
PROXY STATEMENT
------------------------------
FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of Advanced Technical
Products, Inc., a Delaware corporation ("ATP" or the "Company"), in connection
with the solicitation of proxies to be used at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on Thursday, May
14, 1998 beginning at 2:00 p.m. local time at the Swissotel, located at 3391
Peachtree Road, Atlanta, Georgia 30326, or at any adjournment or postponement
thereof. Only holders of ATP common stock, $0.01 par value per share (the
"Common Stock"), of record at the close of business on April 6, 1998 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. As
of the Record Date, there were 5,220,495 shares of Common Stock outstanding and
entitled to vote. Each share of Common Stock is entitled to one vote on each
matter properly brought before the Annual Meeting.
The accompanying proxy is being solicited by the Board of Directors of the
Company (the "Board"). The cost of soliciting your proxy will be borne entirely
by the Company and no other person or persons will bear such costs either
directly or indirectly. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone and telegram by directors and regular
officers and employees of the Company.
This Proxy Statement and the enclosed proxy form are first being sent to
stockholders of the Company on or about April 28, 1998.
VOTING OF PROXIES
Proxies in the form enclosed will be voted at the meeting if properly
executed, returned to the Company before the Annual Meeting and not revoked.
When stockholders have appropriately specified how their proxies should be
voted, the proxies will be voted accordingly. Unless the stockholder otherwise
specifies therein, the accompanying proxy will be voted (i) FOR the election as
directors of the nominees listed under "Election of Directors," and (ii) at the
discretion of the proxy holders, either FOR or AGAINST any other matter or
business that may properly come before the meeting. The Board of Directors does
not know of any such other matter or business.
Any proxy received by the Company may be subsequently revoked at any time
before it is actually voted. Proxies may be revoked by any of the following
actions: (i) filing a written notice of revocation bearing a date later than the
proxy with the Secretary of the Company at or before the Annual Meeting, but in
any event prior to the vote on the matter as to which revocation is sought; (ii)
duly executing and submitting, prior to the Annual Meeting, a subsequent proxy
relating to the Annual Meeting; or (iii) voting in person at the Annual Meeting
(although attendance at the Annual Meeting will not, in and of itself,
constitute a revocation of a proxy). Any written notice revoking a proxy should
be sent to the Secretary of the Company at the Company's executive offices, 3353
Peachtree Road, Suite 920, Atlanta, Georgia 30326
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<PAGE>
VOTES REQUIRED
In accordance with the Bylaws of the Company, the presence in person or by
proxy of the holders of a majority of the issued and outstanding shares of
Common Stock is necessary to constitute a quorum at the Annual Meeting. In
accordance with Delaware law and the Bylaws of the Company, a plurality of the
votes cast at a meeting at which there exists a quorum is required for the
election of directors. Accordingly, the three director nominees receiving the
most votes will be elected at the Annual Meeting. If any other matter should be
presented at the Annual Meeting upon which a vote may be taken, it is intended
that shares of Common Stock represented by Proxies in the accompanying form will
be voted with respect thereto in accordance with the judgment of the person or
persons voting such shares. James S. Carter and Garrett L. Dominy, or either of
them, each with full power of substitution, have been designated as proxies to
vote the shares of Common Stock solicited hereby. Under Delaware law, there are
no rights of appraisal or similar rights of dissenters with respect to the
matters under consideration at this Annual Meeting.
A broker non-vote occurs when a nominee holding shares of Common Stock for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to the particular item under
consideration and has not received instructions from the beneficial owner. Under
Delaware laws, abstaining votes (votes withheld by stockholders who are present
and entitled to vote) and broker non-votes are deemed to be present for purposes
of determining whether a quorum is present at a meeting. However, abstentions
and broker non-votes will not be included in the tabulation of the voting
results with respect to the election of directors and therefore will not have
any effect on such vote. With respect to any other matter properly brought
before the Annual Meeting, abstentions and broker non-votes are not deemed to be
votes duly cast, but abstaining votes are deemed to be entitled to vote while
broker non-votes are not deemed to be entitled to vote.
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation authorizes the Board to fix the
number of directors from time to time. The number of directors is currently
established at eight. The Restated Certificate of Incorporation also provides
for three classes of directors, designated Class I, Class II and Class III, each
currently having three-year terms of office. Each class of directors is to
consist of, as nearly as possible, one-third of the total number of directors
constituting the entire Board. Except for directors elected to fill vacancies on
the Board (whether created by death, resignation, removal or expansion of the
Board), the directors of each class will be elected for a term of three years
and until their successors have been elected and qualified. At the Annual
Meeting, three Class I directors, Mr. Alan W. Baldwin, Mr. Robert C. Sigrist and
Mr. Lawrence E. Wesneski, have been nominated for election to the Board to serve
for a three-year term.
If the enclosed proxy is signed and returned, it will be voted FOR the
election of Messrs. Baldwin, Sigrist and Wesneski as Class I directors to serve
until the 2001 Annual Meeting of Stockholders or until their successors have
been duly elected and qualified, unless contrary directions are given therein.
However, should any nominee become unavailable or prove unable to serve for any
reason, the proxy will be voted for the election of such other person as the
Board may select to replace such nominee, unless the Board instead fixes the
number of directors at less than eight. The Board has no reason to believe that
the nominees will not be available or prove unable to serve.
The following table sets forth certain information concerning each Class I
director nominee and the continuing Class II and Class III directors. Each of
the director nominees and continuing directors were designated as directors of
the Company effective October 31, 1997 in connection with the consummation of
the merger (the "Merger") of TPG Holdings, Inc. ("TPG") and Lunn Industries,
Inc. ("Lunn") under the name "Advanced Technical Products, Inc." The age of each
director nominee and continuing director, his positions
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<PAGE>
and offices with the Company, the year in which he first became a director of
the Company, his business experience during the past five years or more, and the
other directorships he holds are shown below. Similar information is provided
concerning executive officers who are neither directors nor nominees for
election as directors.
CLASS I NOMINEES TO SERVE UNTIL THE ANNUAL MEETING TO BE HELD IN 2001
ALAN W. BALDWIN, 61. Mr. Baldwin is a member of the Audit Committee. Mr.
Baldwin is currently the President and Chief Executive Officer of Batteries
Batteries, Inc. From March 1994 through October 31, 1997, Mr. Baldwin served as
the Chairman of the Board and Chief Executive Officer of Lunn. Mr. Baldwin was
Vice President of Lunn from December 1993 to March 1994 and was an independent
consultant from 1991 to March 1994. Mr. Baldwin served as a director of Lunn
since 1993.
ROBERT C. SIGRIST, 65. Mr. Sigrist is a member of the Nominating Committee.
Mr. Sigrist served as a director of TPG from August 1995 until October 1997.
Prior to that time, Mr. Sigrist served as the President of the Brunswick
Technical Group of Brunswick Corporation for seven years.
LAWRENCE E. WESNESKI, 50. Mr. Wesneski is a member of the Audit Committee and
Nominating Committee. Mr. Wesneski has been President and Chief Executive
Officer of Hoak Breedlove Wesneski & Co. since August 1996. Mr. Wesneski has
been engaged in the investment banking industry for approximately 21 years.
Prior to the formation of Hoak Breedlove Wesneski & Co., Mr. Wesneski was
president and managing director of Breedlove Wesneski & Co. for ten years. Mr.
Wesneski was formerly head of the Southwest Corporate Finance Department of Bear
Stearns & Co., Inc., a Managing Director of Corporate Finance at Eppler, Guerin
& Turner, Inc., and a member of the Corporate Finance Department at Dean Witter
Reynolds, Inc. Mr. Wesneski is a director of STB Systems, Inc. and TSC
Communications Corp. Mr. Wesneski served as a director of TPG from its inception
in 1995 until the Merger.
CLASS II CONTINUING DIRECTORS - TERMS EXPIRING 1999
GARRETT L. DOMINY, 52. Mr. Dominy has been Executive Vice President, Chief
Financial Officer, Assistant Secretary and Treasurer of the Company since
October 1997. Mr. Dominy served as the Chief Financial Officer, Executive Vice
President, Secretary and Treasurer of TPG from June 1995 until the Merger. Prior
to that time, Mr. Dominy was an audit partner of Arthur Andersen Worldwide. Mr.
Dominy is a Certified Public Accountant.
SAM P. DOUGLASS, 65. Mr. Douglass is a member of the Compensation Committee.
Mr. Douglass served as a director of TPG from its inception in 1995 until the
Merger. Mr. Douglass has been Chairman of the Board and Chief Executive Officer
of Equus Capital Corporation, the managing general partner of Equus Equity
Appreciation Fund L.P., since its formation in September 1983. Mr. Douglass has
also been Chairman of the Board and Chief Executive Officer of Equus II
Incorporated, an investment company that trades as a closed-end fund on the
American Stock Exchange, and Equus Capital Management Corporation, since their
formation in 1983. Since 1978, Mr. Douglass has served as Chairman and Chief
Executive Officer of Equus Corporation International, a privately owned
corporation engaged in a variety of investment activities.
CLASS III CONTINUING DIRECTORS - TERMS EXPIRING 2000
JAMES S. CARTER, 62. Mr. Carter is the Chairman of the Board, President and
Chief Executive Officer of the Company. Mr. Carter, served as the President and
Chief Executive Officer and as a director of TPG from its inception in 1995
until the Merger. Mr. Carter served as an industry consultant from 1993 to 1995
and Vice President and General Manager of the Composite Structures Division of
Alcoa Composites, Inc.
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<PAGE>
from 1989 to 1993. Prior to joining Alcoa Composites, Inc., Mr. Carter was
director of Composites with Northrop Corporation for the B-2 Aircraft Group from
1980 to 1989. Mr. Carter began his career in the aerospace industry with the
Brunswick Technical Group of Brunswick Corporation in 1956.
GARY L. FORBES, 54. Mr. Forbes is a member of the Audit Committee and the
Compensation Committee. Mr. Forbes served as a director of TPG from its
inception in 1995 until the Merger. Mr. Forbes has been a Vice President of
Equus Capital Corporation, the managing general partner of Equus Equity
Appreciation Fund L.P. since November 1991. He has been a Vice President of
Equus II Incorporated and Equus Capital Management Corporation since December
1991. Mr. Forbes is a director of Consolidated Graphics, Inc. (a NYSE
consolidator of commercial printing companies), Drypers Corporation (a Nasdaq
National Market manufacturer of disposable diapers), and NCI Building Systems,
Inc. (a Nasdaq National Market consolidator of pre-engineered metal building
manufacturers).
JOHN M. SIMON, 55. Mr. Simon is a member of the Compensation Committee. Mr.
Simon has been Managing Director of Allen & Company Incorporated for more than
five years. Mr. Simon is a director of Immune Response Corporation, Neurogen
Corporation and Batteries Batteries, Inc., all of which are Nasdaq National
Market companies. Mr. Simon was originally elected a director of Lunn in 1993.
EXECUTIVE OFFICERS
H. DWIGHT BYRD, 60. Mr. Byrd has been a Vice President of ATP and President
of the Marion Composites Division since the Merger. From April 1995 until the
Merger, Mr. Byrd served as a Vice President of TPG and President of the Marion
Composites Division. During the period from April 1992 to April 1995, Mr. Byrd
served as General Manager of Brunswick Corporation's Marion, Virginia division.
During 1991 to April 1992, Mr. Byrd served as Director of Manufacturing for
Brunswick's Mercury Marine Division in Stillwater, Oklahoma.
JAMES G. FULLER, 59. Mr. Fuller has been a Vice President of ATP and
President of Lincoln Composites Division since the Merger. From April 1995 until
the Merger, Mr. Fuller served as a Vice President of TPG and President of the
Lincoln Composites Division. Mr. Fuller was formerly with Brunswick Corporation,
where he served as the General Manager of Brunswick's operations in Lincoln,
Nebraska and Camden, Arkansas for over five years.
EDWARD KILEY, 47. Mr. Kiley has been President and General Manager of Alcore,
a wholly owned subsidiary of the Company, since May 1996. Mr. Kiley was Vice
President and General Manager of Alcore from October 1993 to May 1996. Mr. Kiley
was Vice President and General Manager of Lunn from January 1993 through October
1993. Prior to December 1992, Mr. Kiley was Director of Sales and Marketing of
Hexcel Corporation.
HENRY R. LATTANZI, 56. Mr. Lattanzi has been Vice President of ATP and
President of The Intellitec Division since the Merger. From April 1995 until the
Merger, Mr. Lattanzi served as a Vice President of TPG and President of the
Intellitec Division. Mr. Lattanzi served as Vice President of Brunswick
Technical Group of Brunswick Corporation and General Manager of its Deland,
Florida operations for the prior ten years.
MICHAEL KOHLER, 33. Mr. Kohler has been Vice President of ATP and President
of Lunn Industries since the Merger. From 1994 to 1997, Mr. Kohler served as
Director of Engineering for Lunn and, for over three years prior to 1994, served
as a quality assurance manager and quality engineer for Lunn.
4
<PAGE>
MEETINGS OF THE BOARD
The Board of Directors of the Company met seven times in 1997 prior to the
Merger and the average attendance at the aggregate number of Board and committee
meetings during such time was 95%. The Board of Directors of the Company met two
times in 1997 after the Merger, and the average attendance at the aggregate
number of Board and committee meetings of the Company during such time was 100%.
No Director attended fewer than 89% of the aggregate number of meetings of the
Board of Directors and the committees on which he or she served held during the
period for which he or she was a Director.
COMMITTEES OF THE BOARD
The Audit Committee, which is composed entirely of Directors who are not
officers or employees of the Company, reviews the Company's accounting
functions, operations and management and the adequacy and effectiveness of the
internal controls and internal auditing methods and procedures of the Company.
The Audit Committee recommends to the Board the appointment of the independent
public accountants for the Company. In connection with its duties, the Audit
Committee periodically meets privately with the independent public accountants.
The Audit Committee met once in 1997.
The Compensation Committee, which is composed entirely of Directors who are
not officers or employees of the Company, reviews and acts with respect to
pension, compensation and other employee benefit plans, approves the salary and
compensation of officers of the Company other than the five most highly
compensated officers and makes recommendations to the Board of Directors
concerning the salary and compensation of the Chairman of the Board, President
and Chief Executive Officer and any other officer who is or would be among the
five highest paid officers of the Company. The Compensation Committee met once
in 1997 prior to the Merger and once following the Merger.
The Nominating Committee advises and makes recommendations to the Board of
Directors on all matters concerning Board procedures and directorship practices.
The Nominating Committee reviews and makes recommendations to the full Board
concerning the qualifications and selection of candidates as nominees for
election as Directors. In recommending candidates, this committee seeks
individuals who possess broad training and experience in business, finance, law,
government, technology, education or administration and considers factors such
as personal attributes, geographic location and special expertise complementary
to the background and experience of the Board as a whole. The Nominating
Committee was formed on November 6, 1997 and did not meet in 1997.
The committee memberships of each nominee and continuing Director are set
forth in his or her biographical information above.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive $20,000 annually.
Additionally, non-employee directors who have not previously served on the Board
receive a grant under the Advanced Technical Products, Inc. Non-Employee
Director Stock Option Plan (the "Non-Employee Director Plan") of options to
purchase 7,500 shares of Common Stock upon commencement of their term, and
continuing non-employee directors receive a grant under the Non-Employee
Director Plan of options to purchase 1,000 shares of Common Stock immediately
following each annual meeting of the stockholders.
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<PAGE>
SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS
The record date for stockholders entitled to notice of, and to vote at, the
Annual Meeting is April 6, 1998. At the close of business on that date, the
Company had 5,220,495 shares of Common Stock issued and outstanding and entitled
to vote at the Annual Meeting.
The following table sets forth, as of April 20, 1998, the number of shares of
Common Stock and the 8% Cumulative Redeemable Preferred Stock, par value $1.00
per share, of the Company (the "Preferred Stock") beneficially owned by (1) each
person or group known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (2) each director and each nominee for
director, (3) the Company's Chief Executive Officer and each of the Company's
four other most highly compensated executive officers, and (4) all directors and
executive officers as a group. Except as otherwise indicated, each of the
persons or groups named below has sole voting power and investment power with
respect to such Common Stock and Preferred Stock.
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------- -------------------
NAME OF BENEFICIAL OWNER OR GROUP SHARES PERCENT SHARES PERCENT
--------------------------------- ------ ------- ------ -------
<S> <C> <C> <C> <C>
Equus Equity Appreciation Fund L.P.(1).. 2,484,612 47.59% 913,043 91.30%
Alan W. Baldwin(2)...................... 52,500 1.00% 0 0.00%
H. Dwight Byrd.......................... 197,191 3.78% 0 0.00%
James S. Carter......................... 295,787 5.67% 0 0.00%
Garrett L. Dominy....................... 157,753 3.02% 0 0.00%
Sam P. Douglass(1)(3)(4)................ 2,500 0.05% 0 0.00%
Gary L. Forbes(1)(3)(4)................. 2,500 0.05% 0 0.00%
Edward Kiley (5)........................ 30,000 0.57% 0 0.00%
Henry R. Lattanzi(6).................... 197,191 3.78% 0 0.00%
Robert C. Sigrist(3).................... 61,657 1.18% 21,739 2.17%
John M. Simon(7)........................ 2,000 0.04% 0 0.00%
Lawrence E. Wesneski(8)................. 61,657 1.18% 15,946 1.59%
All directors and executive officers
a group (13 persons)(1)(4)(9)........... 1,265,927 23.82% 37,685 3.77%
- ---------------
</TABLE>
(1) Sam P. Douglass is a general partner of Equus Equity Appreciation Fund
L.P. ("Equus") and Gary L. Forbes is a Vice President of the managing
general partner of Equus, Equus Capital Corporation. Accordingly, each may
be deemed to own all of the 2,484,612 shares of Common Stock and 913,043
shares of Preferred Stock owned by Equus. Messrs. Douglass and Forbes each
disclaim beneficial ownership of such shares.
(2) Includes 50,000 shares of Common Stock which may be acquired within 60
days of April 20, 1998 pursuant to options granted by Lunn, as well as
2,500 shares of Common Stock which may be acquired within 60 days of April
20, 1998 pursuant to the exercise of options granted under the
Non-Employee Director Plan.
(3) Includes 2,500 shares of Common Stock which may be acquired within 60 days
of April 20, 1998 pursuant to the exercise of options granted under the
Non-Employee Director Plan.
(4) Does not include 2,484,612 shares of Common Stock and 913,043 shares of
Preferred Stock owned beneficially and of record by Equus.
(5) Includes 22,500 shares of Common Stock which may be acquired within 60
days of April 20, 1998 pursuant to the exercise of options issued by Lunn.
(6) Shares held by Henry R. and Justine D. Lattanzi, Trustee for the Henry R.
and Justine D. Lattanzi Trust.
(7) Includes 2,000 shares of Common Stock which may be acquired within 60 days
of April 20, 1998 pursuant to the exercise of options granted under the
Non-Employee Director Plan.
(8) Includes 43,382 shares of Common Stock held directly by Mr. Wesneski
through a SEPIRA. Such amount does not include 98,595 shares held by Hoak
Breedlove Wesneski & Co., which Mr. Wesneski may be deemed to own as a
result of his position as President and Chief Executive Officer of such
corporation. Mr. Wesneski disclaims beneficial ownership of such shares.
(9) Includes 95,000 shares of Common Stock which may be acquired within 60
days of April 20, 1998 pursuant to the exercise of options.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid to the Company's Chairman of the Board, President and Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers (collectively, the "Named Executive Officers"), with respect to each of
the Company's last three fiscal years, based on salary and bonus earned during
each year.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- ------------------------------
SECURITIES
OTHER UNDER-
ANNUAL RESTRICTED LYING ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
SALARY BONUS SATION AWARD(S) SARS PAYMENTS SATION
NAME YEAR ($) ($) ($) ($) (#)(3) ($) ($) (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JAMES S. CARTER 1997 $ 246,400 $ 0 $ 0 41,500 $ 19,466
CHAIRMAN, PRESIDENT AND 1996 $ 226,884 $ 106,638 $ 0 0 $ 62,982
CHIEF EXECUTIVE OFFICER 1995 $ 147,948 $ 0 $ 0 0 $ 2,664
ALAN W. BALDWIN/CHAIRMAN 1997 $ 129,816 $ 0 $ 7,500 7,500 $ 427,442
AND CHIEF EXECUTIVE OFFICER OF 1996 $ 150,000 $ 75,000 $ 0 20,000 $ 7,154
LUNN (1) 1995 $ 150,000 $ 40,000 $ 0 10,000 $ 0
GARRETT L. DOMINY 1997 $ 193,259 $ 0 $ 0 37,000 $ 2,302
EXECUTIVE VICE PRESIDENT AND 1996 $ 170,673 $ 79,279 $ 0 0 $ 51,962
CHIEF FINANCIAL OFFICER 1995 $ 98,109 $ 0 $ 0 0 $ 840
H. DWIGHT BYRD 1997 $ 163,427 $ 0 $ 1,926 10,000 $ 2,851
VICE PRESIDENT 1996 $ 145,558 $ 69,778 $ 0 0 $ 3,906
1995 $ 91,970 $ 9,380 $ 0 0 $ 1,628
EDWARD KILEY 1997 $ 127,412 $ 62,750 $ 6,000 22,500 $ 2,405
VICE PRESIDENT 1996 $ 111,784 $ 37,500 $ 36,437 0 $ 1,054
1995 $ 98,389 $ 25,000 $ 7,500 0 $ 0
HENRY R. LATTANZI 1997 $ 175,156 $ 0 $ 2,184 0 $ 2,300
VICE PRESIDENT 1996 $ 163,172 $ 81,660 $ 0 0 $ 4,578
1995 $ 105,522 $ 10,385 $ 0 0 $ 2,127
</TABLE>
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(1)Mr. Baldwin served as Chairman and Chief Executive Officer of Lunn through
October 31, 1997, at which time his employment with the company terminated.
(2)"All other compensation" for 1997 for the Named Executive Officers is
comprised of the following: (a) company contributions to retirement savings
plans for Messrs. Carter ($950), Baldwin ($1,971), Dominy ($950), Lattanzi
($950), Byrd ($950) and Kiley ($1,803); (b) $420,000 of severance benefits to
mr. Baldwin; (c) the taxable amount of life insurance premiums paid by the
company for Messrs. Carter ($2,925), Baldwin ($5,471), Dominy ($912), Lattanzi
($1,350), Byrd ($1,901) and Kiley ($602); and (d) reimbursement of federal and
state income taxes paid in connection with relocation expenses for Messrs.
Carter ($15,591) and Dominy ($440).
(3)All of the options were granted under the Advanced Technical Products,
Inc. 1997 Stock Option Plan, except the options to acquire 7,500 shares of
common stock granted to Alan W. Baldwin, which were granted under the
Non-Employee Plan.
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OPTION GRANTS DURING 1997 FISCAL YEAR
The following table sets forth the options granted during 1997 to the Named
Executive Officers pursuant to the Advanced Technical Products, Inc. 1997 Stock
Option Plan. The Company did not grant any stock appreciation rights during
1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ---------------------------------------------------------------------------------------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS/
SECURITIES SARS EXERCISE
UNDERLYING GRANTED OF
OPTION/SARS TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JAMES S. CARTER....... 41,500 19.39% $ 15.00 11-6-07 $ 391,345 $ 992,099
H. DWIGHT BYRD........ 10,000 4.67% $ 15.00 11-6-07 $ 94,300 $ 239,060
GARRETT L. DOMINY..... 37,000 17.29% $ 15.00 11-6-07 $ 348,910 $ 884,522
EDWARD KILEY.......... 2,500 1.17% $ 15.00 11-6-07 $ 23,575 $ 59,765
EDWARD KILEY.......... 20,000 9.35% $ 8.13 02-5-02 $ 44,900 $ 99,200
</TABLE>
OPTION EXERCISES DURING 1997 FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth the aggregate dollar value of in-the-money,
unexercised options held at the end of 1997 by the Named Executive Officers.
There were no stock options exercised during 1997 by any of the Named Executive
Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS/SARS AT FISCAL THE-MONEY OPTIONS/SARS
SHARES VALUE YEAR-END (#) AT FISCAL YEAR-END ($)
ACQUIRED ON REALIZED ------------------------------------------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JAMES S. CARTER......... 0 0 0 41,500 $ 0 $ 0
ALAN W. BALDWIN......... 0 0 50,000 7,500 $ 305,000 $ 0
H. DWIGHT BYRD.......... 0 0 0 10,000 $ 0 $ 0
GARRETT L. DOMINY....... 0 0 0 37,000 $ 0 $ 0
EDWARD KILEY............ 0 0 22,500 2,500 $ 123,125 $ 0
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into three-year employment agreements with each of
James S. Carter and Garrett L. Dominy. Pursuant to the employment agreements,
Mr. Carter will serve as Chairman of the Board, President and Chief Executive
Officer of the Company and Mr. Dominy will serve as an Executive Vice President
and Chief Financial Officer of the Company. The employment agreements provide
for base salaries of $265,000 and $215,000 for Mr. Carter and Mr. Dominy,
respectively, subject to annual increases based, at a minimum, on the consumer
price index for the previous year. Mr. Carter and Mr. Dominy are also entitled
to receive, subject to the discretion of the Board, annual bonuses of up to 75%
of their then annual base salary. The employment agreements are terminable by
the Company with or without cause; provided that if the Company terminates the
employment of Mr. Carter or Mr. Dominy without cause, such executive will be
entitled to continue to receive his base salary and incentive bonus for
specified periods. The
8
<PAGE>
employment agreements also provide that if there is a "change in control" of the
Company or a constructive termination of the executive without cause, then the
executives are entitled to a lump-sum payment of a specified amount within 60
days of the effective date of termination. Following any termination of Mr.
Carter's or Mr. Dominy's employment for cause or upon such employee's breach of
the terms of his employment agreement, it is expected that such executive will
be subject to non-disclosure and non-competition covenants for up to two years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is responsible for
determining executive compensation. The Compensation Committee is currently
comprised of three non-employee directors, Mr. Douglass, Mr. Forbes and Mr.
Simon.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee"), which
consists of three independent outside directors, reviews and approves the
Company's total compensation philosophy and programs covering executive officers
and key management employees. The Committee reviews the performance levels of
executive officers and determines the annual base salaries and incentive awards
to be paid.
The Company's executive compensation program is designed to help the Company
attract, motivate and retain the executive resources that the Company needs in
order to maximize its return to stockholders.
Specifically, the goals of the Company's compensation program are to:
1. Align executive compensation with the interests of the stockholders;
2. Provide compensation packages that are consistent with competitive market
norms for companies similar in size, activity and complexity to the Company;
3. Link pay to Company, operating group and individual performance; and
4. Achieve a balance between incentives for short-term and long-term
performance.
The principal elements of compensation provided to executive and other
officers of the Company historically have consisted of a base salary, annual
incentives and stock option grants. The Committee estimates an executive's level
of total compensation based on information drawn from a variety of sources,
including proxy statements, special surveys and compensation consultants. Total
compensation is targeted to be competitive at the median level of a peer group
of comparable companies.
BASE SALARY. Salaries for executive officers are determined by the Committee
annually, based on review of each executive's level of responsibility,
experience, expertise and sustained corporate, business unit and individual
performance. The Committee exercises its judgment based upon the above criteria
and does not apply a specific formula or assign a weight to each factor
considered.
ANNUAL INCENTIVE COMPENSATION. Annual incentive awards are designed to focus
management's attention on the performance of the Company, particularly in the
short-term. At the beginning of each year, the Board of Directors establishes
performance goals of the Company for that year, which may include target
increases in sales, net income and earnings per share, as well as more
subjective goals. Incentive awards are based upon the achievement of one or more
of these goals.
9
<PAGE>
STOCK OPTION PROGRAM. Each executive officer is eligible to receive a grant
of stock options with an exercise price equal to the fair market value of the
stock on the grant date. Stock options are designed to focus executives on the
long-term performance of the Company by enabling executives to share in any
increases in value of the Company's stock. Accordingly, the Committee believes
that the grant of stock options is a significant method of aligning management's
long-term interests with those of the stockholders of the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Carter, the Chairman of the Board,
President and Chief Executive Officer of the Company, is entitled to receive a
minimum annual salary of $265,000 pursuant to his employment agreement with the
Company. Subject to this minimum, Mr. Carter's base salary rate may be adjusted
at the discretion of the Board of Directors based upon such factors as the Board
of Directors deems appropriate. Mr. Carter's base salary for fiscal 1997 was
$246,400. Additionally, Mr. Carter was awarded 41,500 stock options during 1997.
The Committee believes that Mr. Carter's total compensation is near the median
for the chief executive officers of the Company's peer group.
This report is submitted by the members of the Compensation Committee.
SAM P. DOUGLASS
GARY L. FORBES
JOHN M. SIMON
STOCK PERFORMANCE CHART
Set forth below is a graph comparing the cumulative total returns (assuming
an investment of $100 on December 31, 1992 and reinvestment of dividends) of the
Company, the Standard and Poor's 500 Composite Stock Index (the "S&P 500 Index")
and the Aerospace/Defense 500 Index (the "Aero/Def 500 Index"). The value of the
investment in the Company for the period reflected is based on the market price
of the stock of Lunn restated for the 10-to-1 reverse stock split effected by
the Merger.
<TABLE>
<CAPTION>
Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1997
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ATP 100.00 45.45 11.36 17.04 17.04 24.09
S&P 500 Index 100.00 110.03 111.53 153.30 188.40 251.17
Aero/Def 500 Index 100.00 129.97 140.57 232.34 310.56 319.52
</TABLE>
10
<PAGE>
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission (the "SEC") and the Nasdaq Stock Market. Such persons are
required by the SEC to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1997, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and persons who own more than 10% of a registered class of
the Company's equity securities have been complied with, except as follows: Mr.
Baldwin reported a transaction on a Form 5 filed on February 13, 1998 that
should have been reported on a Form 4 due on July 10,1997, Mr. Kiley reported a
transaction on a Form 5 filed on February 17, 1998 that should have been
reported on a Form 3 due on November 10, 1997, and Mr. Kohler reported a
transaction on a Form 5 filed February 17,1998 that should of been reported on a
Form 3 due on November 10, 1997.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP served as the independent auditors of the Company for
the fiscal year ended December 31, 1997 and has been selected to serve as the
independent auditor of the Company for the 1998 calendar year. A representative
of KPMG Peat Marwick LLP is expected to be present at the Annual Meeting and
will have the opportunity to make a statement. The representative will be
available to answer appropriate stockholder questions.
STOCKHOLDERS' PROPOSALS
Stockholders must submit their proposals to the Secretary of the Company,
3353 Peachtree Road, Suite 920, Atlanta, Georgia 30326, on or before December
28, 1998 to be considered for inclusion in the Company's 1999 proxy material.
MISCELLANEOUS
The Board of Directors knows of no business other than that set forth above
to be transacted at the Annual Meeting. If other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
Common Stock represented by the proxies in accordance with their judgment on
such matters.
The information contained in the Proxy Statement relating to the occupations
and security holdings of the directors and officers of the Company and their
transactions with the Company is based upon information received from the
individual directors and officers. All information relating to any beneficial
owner of more than 5% of the Common Stock is based upon information contained in
reports filed by such owner with the SEC.
11
<PAGE>
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's 1997 Annual Report to Stockholders, which includes a
copy of the Company's annual report on Form 10-K for the year ended December 31,
1997, accompanies this Proxy Statement.
Nothing contained in the Annual Report to Stockholders is to be regarded as
proxy soliciting material or as a communication by means of which a solicitation
of proxies is to be made.
By Order of the Board of Directors
/s/ JAMES P. HOBT
James P. Hobt,
Secretary
Atlanta, Georgia
April 28, 1998
12
<PAGE>
ADVANCED TECHNICAL PRODUCTS, INC.
3353 PEACHTREE ROAD, SUITE 920
ATLANTA, GEORGIA 30326
(404) 231-7272
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 14, 1998
The undersigned hereby appoints James S. Carter and Garrett L. Dominy, and each
of them, with full power of substitution, proxies to vote in respect of the
undersigned's shares of common stock of Advanced Technical Products, Inc., held
of record by the undersigned at the close of business on April 6, 1998, at the
Annual Meeting of Stockholders to be held on May 14, 1998 at 2:00 p.m., local
time, at the Swissotel, 3391 Peachtree Road, Atlanta, Georgia 30326, and at any
adjournment thereof, on the item of business set forth on the reverse side and
on such other business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF THE UNDERSIGNED
FAILS TO SPECIFY HOW THE PROXY IS TO BE VOTED, IT WILL BE VOTED FOR THE ELECTION
OF THE DIRECTORS SPECIFIED ON THE REVERSE SIDE.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE SIDE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING MATTERS:
1. To elect three Class I directors to serve until the 2001 Annual Meeting.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR all nominees WITHHOLD Nominees: Alan W. Baldwin, Robert C. Sigrist, and
listed to the right AUTHORITY Lawrence E. Wesneski
(except as marked to vote for all nominees
to the contrary) listed to the right
(Instruction: To withhold authority to vote for any
[ ] [ ] individual nominee, write that nominee's name on
the space provded below.)
---------------------------------------------------
2. To transact such other business as may properly come before the meeting or
any adjournment of the meeting.
SIGNATURE: ______________________________________ SIGNATURE: _________________________________DATE:___________
NOTE: (PLEASE SIGN YOUR NAME EXACTLY AS IT APPEARS ON THE PROXY. WHEN SIGNING AS ATTORNEY, AGENT, EXECUTOR, ADMINISTRATOR,
TRUSTEE, GUARDIAN OR CORPORATE OFFICER, PLEASE GIVE FULL TITLE AS SUCH. EACH JOINT OWNER SHOULD SIGN THE PROXY.)
</TABLE>
