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 Rule 14a-11(c) or Rule 14a-12
Andersen Group, Inc.
...............................................................................
(Name of Registrant as Specified in Its Charter
...............................................................................
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
<PAGE>
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:
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<PAGE>
ANDERSEN GROUP
Notice of
Annual Meeting
and
Proxy Statement
1996
The annual meeting
of the shareholders of
Andersen Group, Inc.
will be held on Monday,
June 17, 1996 at 11:15 a.m.
at the principal subsidiary
of the Company,
The J.M. Ney Company,
Ney Industrial Park,
Bloomfield, Connecticut.
<PAGE>
<PAGE>
ANDERSEN GROUP, INC.
Ney Industrial Park
Bloomfield, Connecticut 06002
(860) 242-0761
Notice of Annual Meeting of Shareholders
To Be Held June 17, 1996
To the Shareholders of Andersen Group, Inc.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Shareholders (the "Annual
Meeting") of Andersen Group, Inc. (the "Company") will be held on June 17,
1996 at 11:15 a.m. local time at the principal subsidiary of the Company, The
J.M. Ney Company, Ney Industrial Park, Bloomfield, Connecticut, for the
following purposes:
1. To elect a Board of Directors for the ensuing year; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only holders of record of outstanding shares of the Common Stock, without
par value, of the Company (the "Common Stock") at the close of business on
April 26, 1996 will be entitled to notice of, and to vote at, the Annual
Meeting or any adjournment or postponement thereof.
Prior to the actual voting thereof, a proxy may be revoked by the person
executing such proxy by filing with the Secretary of the Company an
instrument of revocation, by a duly executed proxy bearing a later date, or
by voting in person at the Annual Meeting.
By Order of the Board of Directors
Susan B. Logie
Secretary
Bloomfield, Connecticut
May 10, 1996
YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
<PAGE>
ANDERSEN GROUP, INC.
Ney Industrial Park
Bloomfield, Connecticut 06002
(860) 242-0761
Proxy Statement
Annual Meeting of Shareholders
This Proxy Statement is being furnished to holders of Common Stock,
without par value, of the Company (the "Common Stock") in connection with the
solicitation of proxies by the Board of Directors of the Company (the
"Board") for use at the Annual Meeting of Shareholders to be held on June 17,
1996, at 11:15 a.m., at the principal subsidiary of the Company, The J.M. Ney
Company, Ney Industrial Park, Bloomfield, Connecticut 06002 and at any
adjournment or postponement thereof (the "Annual Meeting").
At the Annual Meeting, shareholders will be asked to consider and vote
upon the election of directors for the ensuing year, and upon such other
matters as may properly come before the meeting. The Board has fixed the
close of business on April 26, 1996 as the record date for determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting. As of
April 26, 1996, 1,934,205 shares of Common Stock were issued and outstanding,
each entitled to one vote per share.
Votes are counted by tellers of the Company's transfer agent. These
tellers will canvas the shareholders present at the Annual Meeting, count
their votes and count the votes represented by proxies presented. Abstentions
and broker nonvotes are counted for purposes of determining the number of
shares represented at the Annual Meeting but broker nonvotes are deemed not
to have voted on the proposal. Broker nonvotes occur when a broker nominee
(which has voted on one or more matters at the Annual Meeting) does not vote
on one or more other matters at the Annual Meeting because it has not
received instructions to so vote from the beneficial owner and does not have
discretionary authority to vote.
Proxies received by the Company in the proper form will be voted at the
Annual Meeting and at any adjournments or postponements thereof, as specified
therein by the shareholders executing such proxies. Any proxy that does not
specify to the contrary will be voted in favor of the election of the Board's
nominees for director as set forth in this Proxy Statement.
A shareholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by filing with the Secretary of the Company,
at Ney Industrial Park, Bloomfield, Connecticut 06002, a written revocation
or a duly executed proxy bearing a later date or by voting in person at the
Annual Meeting.
Under the terms (the "Preferred Stock Terms") of the Company's Series A
Cumulative Convertible Preferred Stock (the "Preferred Stock") if and
whenever six quarterly dividends (whether or not consecutive), payable on the
Preferred Stock shall be in arrears, whether or not earned or declared, the
number of directors then constituting the Board shall be increased by one and
the holders of Preferred Stock voting together as a class, are entitled to
elect one additional director. As of the date hereof, no such additional
director has been proposed by any holder of Preferred Stock. The Company has
advised holders of Preferred Stock that they may wish to consider such
election at a special meeting to be called in accordance with the Preferred
Stock Terms. See "Shareholder Proposals".
<PAGE>
The cost of the solicitation of proxies by the Board from the shareholders
will be borne by the Company. Proxies may be solicited by additional mailings
or communications, personal interviews, telephone and telegram by the
directors, officers, and employees of the Company at no additional
compensation. Upon request, the Company will reimburse brokers, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by
them in forwarding proxy materials to beneficial owners of each share of
Common Stock.
The date of this Proxy Statement is May 10, 1996. The Proxy Statement and
the related form of Proxy are first being mailed to shareholders on or about
May 10, 1996.
The Company will provide, without charge, to each person to whom this
Proxy Statement is delivered, upon written or oral request of such person and
by first class mail or other equally prompt means, a copy of the Company's
Annual Report on Form 10-K for its fiscal year ended February 29, 1996,
including the financial statements and schedules thereto, as filed with the
Securities and Exchange Commission. Requests should be directed to Susan B.
Logie, Secretary, Andersen Group, Inc., Ney Industrial Park, Bloomfield,
Connecticut 06002-3690, (860) 242-0761.
2
<PAGE>
ELECTION OF DIRECTORS
The holders of 33-1/3% of the outstanding shares of Common Stock entitled
to vote, present in person or represented by proxy, will constitute a quorum
for the transaction of business. Each share represented is entitled to one
vote on all matters properly brought before the Annual Meeting. The approval
of the election of directors requires the affirmative vote of a majority of
the outstanding shares of Common Stock. For purposes of determining whether a
proposal has received a majority vote, abstentions will be included in the
vote totals with the result that an abstention will have the same effect as a
negative vote.
Six directors are to be elected at the Annual Meeting for a term of one
year and until their successors shall be elected and qualified. Unless
authority is withheld, it is intended that votes will be cast pursuant to the
enclosed proxy for the election of the six nominees set forth below. All of
the nominees are presently members of the Board and have agreed to serve as a
director if so elected. In the event that any of the nominees should become
unable or unwilling to serve as director, a contingency which management has
no reason to expect, it is intended, except when authority has been withheld,
that the proxy will be voted FOR the election of such person, if any, as
shall be designated by the Board. The names of, and certain information with
respect to, the persons nominated for election as directors are as follows:
OLIVER R. GRACE, JR., age 42, has been a Director of the Company since
1986 and Chairman since March 29, 1990. He has also been President of AG
Investors, Inc., one of the Company's subsidiaries, since 1992. Mr. Grace,
Jr. is a General Partner of The Anglo American Security Fund L.P., and serves
as a Director of Republic Automotive Parts, Inc. Mr. Grace, Jr. is the
brother of John S. Grace.
FRANCIS E. BAKER, age 66, has been a Director of the Company and President
and Chief Executive Officer of the Company since 1959. Mr. Baker also serves
as a Director of Connecticut Water Services, Inc. and Fresenius USA, Inc.
PETER N. BENNETT, age 59, has been a Director of the Company since 1992.
He is a private investor and financial consultant.
3
<PAGE>
JOHN S. GRACE, age 38, has been a Director of the Company since 1990. Mr.
Grace has also been an employee of AG Investors, Inc., one of the Company's
subsidiaries, since 1992. He is the Chairman and President of Sterling Grace
Corporation, which is General Partner of The Anglo American Security Fund
L.P. John S. Grace is the brother of Oliver R. Grace, Jr.
LOUIS A. LUBRANO, age 63, has been a Director of the Company since 1983
and is Managing Director of Stires and Company, Inc., a position he has held
since 1991. Mr. Lubrano was previously the Director of the NASDAQ Forum from
March 1990 to March 1991 and Managing Director of Home Group Capital Markets,
Inc. from February 1989 to February 1990. He also served as President of the
investment banking firm of Gabelli & Company, Inc. from April 1986 to
February 1989. Mr. Lubrano also serves as a Director of Graham-Field Health
Products, Inc.
JAMES J. PINTO, age 45, has been a Director of the Company since 1988. He
is currently Chairman and a Director of National Capital Management
Corporation, and President of the Private Finance Group Corporation a
position he has held since 1989. Mr. Pinto also serves as a Director of
Biscayne Holdings, Inc., Electrostar Inc. and President of the Private
Finance Group Corporation.
4
<PAGE>
BOARD MEETINGS AND COMMITTEES OF THE BOARD
During the period March 1, 1995 to November 16, 1995 (the date of the 1995
Annual Meeting of Shareholders), the Board consisted of ten members as
follows: Oliver R. Grace, Jr., Francis E. Baker, Peter N. Bennett, John S.
Grace, Edward K. Conklin, Gwendolyn Grace, Joseph F. Engelberger, Louis A.
Lubrano, Richard H. Gordon and James J. Pinto (collectively the "Former
Board"). At the 1995 Annual Meeting of Shareholders only six directors stood
for re-election. Accordingly, for the period November 16, 1995 to February
29, 1996 the Board consisted of the following six members: Oliver R. Grace,
Jr., Francis E. Baker, Peter N. Bennett, John S. Grace, Louis A. Lubrano and
James J. Pinto (collectively the "Current Board"). The Former Board and the
Current Board are sometimes referred to herein as the Board.
During the fiscal year ended February 29, 1996 the Board of Directors held
three regular meetings and two special meetings. During the term of the
Former Board there were two regular meetings and two special meetings. During
the term of the Current Board there was one regular meeting. All the
incumbent directors attended all of the meetings of the Board and the
meetings of the committees of the Board on which each served.
The Board has an Executive Committee comprised of Messrs. Grace, Jr.
(Chairman), Baker and John S. Grace. The responsibilities of the Executive
Committee include selection of potential nominees for director and the
recommendation of nominees to the full Board, monitoring the Company's
management resources, structure, succession planning, development and
performance of key executives and review and recommendation of new business
opportunities to the entire Board. There were three meetings of the Executive
Committee during the fiscal year ended February 29, 1996.
The Board does not have a Nominating Committee. The Executive Committee
considers the qualifications of persons to be recommended to the Board and
shareholders for election as directors of the Company. Such recommendations
must be accompanied by appropriate background information and documentation.
The Board has an Audit Committee comprised of Messrs. Lubrano (Chairman) and
John S. Grace. Mr. Gordon was a member of this Committee during the term of
the Former Board. This Committee is primarily concerned with the
effectiveness of the audits of the Company by its internal staff and the
Company's independent certified public accountants. Among other things, its
duties include: recommending the selection of independent certified public
accountants; reviewing the scope of the audit to be conducted by them, as
well as the results of their audit; reviewing the organization and scope of
the Company's internal system of financial controls; evaluating the Company's
financial reporting activities (including its Proxy Statement and Annual
Report) and the accounting standards and principles followed by the Company;
and examining other reviews covering compliance by employees with important
Company policies. There was one meeting of the Audit Committee during the
fiscal year ended February 29, 1996.
The Board has a Compensation Committee comprised of Messrs. Pinto (Chairman)
and Lubrano, each of whom are independent, non-employee directors. Mr.
Engelberger (Chairman) and Mr. Gordon were also members of this Committee
during the term of the Former Board. This Committee reviews and recommends
executive compensation, including changes therein, and administers the
Company's stock option plans. There were three meetings of the Compensation
Committee during the fiscal year ended February 29, 1996. During the term of
the Former Board there was one meeting and during the term of the Current
Board there were two meetings.
The Board also has a Pension Committee. This Committee is presently
comprised of Messrs. Grace, Jr., Baker and Ms. Susan B. Logie, with Ms.
Logie in her capacity as Secretary of the Company. Mr. Dahl in his former
capacity as Secretary of the Company and Mr. Franklin R. Stoner in his former
capacity as Director of Human Resources and Administration also served on this
Committee during the fiscal year. There was one meeting of the Pension Committee
during the fiscal year ended February 29, 1996.
5
<PAGE>
The Board also has an Independent Committee comprised of Messrs. Lubrano
(Chairman) and Baker. Messrs. Conklin and Gordon were members of this
Committee during the term of the Former Board. This Committee considers and
reviews any and all transactions with affiliates of the Company. There were
no meetings of the Independent Committee during the fiscal year ended
February 29, 1996. Any transactions with affiliates of the Company during
fiscal 1996 were reviewed with and approved by the entire Board.
6
<PAGE>
EXECUTIVE COMPENSATION
The following information is provided regarding the annual and long-term
compensation paid or to be paid to the Chief Executive Officer and the two
other most highly compensated executive officers of the Company with respect
to the fiscal years 1996, 1995 and 1994. No other executive officers of the
Company received annual compensation in excess of $100,000. Pursuant to the
Securities and Exchange Commission (the "Commission") regulations,
information is also provided with respect to Mr. Wolfe, Jr., who served as
President of Ney Dental International, Inc. until its assets were sold in
November 1995, and with respect to Mr. Volinski, who served as Chief
Financial Officer of the Company for the first seven months of fiscal year
1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
--------------------------- ----------- -------
Securities
Underlying LTIP All Other
Name and Fiscal Salary(1) Bonus Options/SAR's Payouts Compensation(2)
Principal Position Year ($) ($) (#) ($) ($)
- -------------------------- ---- ------ --------- ----------- ------ -------------
<S> <C> <C> <C> <C> <C> <C>
Francis E. Baker 1996 196,831 100,000(3) -- -- 2,206
President and Chief 1995 235,978 -- -- -- 51,352(4)
Executive Officer 1994 243,665 -- -- -- 53,164(4)
Oliver R. Grace, Jr. 1996 85,000 75,000(5) -- -- 1,430
Chairman of the Board 1995 98,750 50,000(5) -- -- 665
and President of AG 1994 149,037 -- -- -- 1,921
Investors, Inc.
Ronald N. Cerny(6) 1996 121,843 36,150 -- -- 2,379
President, The J.M. Ney 1995 108,718 21,000 -- -- 729
Company 1994 94,620 10,000 5,000 -- 41,944
H. George Wolfe, Jr.(7) 1996 96,307 -- -- -- 64,317
President, Ney Dental 1995 124,324 6,000 -- -- 1,780
International, Inc. 1994 108,105 13,390 -- -- 1,293
Jack E. Volinski(8) 1996 69,050 -- -- -- 925
Chief Financial Officer 1995 98,521 4,969 -- -- 1,229
1994 93,872 4,778 -- -- 1,171
</TABLE>
- -------------
7
<PAGE>
(1) Includes amounts of compensation deferred, at the employees' option,
pursuant to the Company's 401(k) plan.
(2) Consists of contributions made by the Company in respect of its money
purchase pension plan, 401(k) plan and The J.M. Ney Company Profit
Sharing Plan. For 1996, 1995 and 1994, no contributions were made by the
Company in respect of the money purchase pension plan or The J.M. Ney
Company Profit Sharing Plan. Contributions by the Company in respect of
its 401(k) plan for 1996, 1995 and 1994, respectively, were: $2,206,
$1,352 and $3,164 for Mr. Baker; $1,430, $665 and $1,921 for Mr. Grace,
Jr.; $2,379, $729 and $0 for Mr. Cerny; $1,697, $1,780, and $1,293 for
Mr. Wolfe, Jr.; and $925, $1,229 and $1,171 for Mr. Volinski.
(3) Of the total bonus earned by Mr. Baker, as described in the Compensation
Committee Report on Executive Compensation, $50,000 is to be paid in cash
and $50,000 was contributed to Mr. Baker's Special Executive Retirement
Plan.
(4) Includes a contribution made by the Company in respect of a Special
Executive Retirement Plan in the amount of $50,000.
(5) As described in the Compensation Committee Report on Executive
Compensation, Mr. Grace, Jr. was awarded two bonuses in fiscal 1996
totalling $125,000. Of this amount, $50,000 is attributable to Mr.
Grace's work in connection with the sale of the Company's cellular
telephone partnership investments in fiscal 1995 and is therefore
reported in the above table on the row for 1995. The remaining $75,000 is
attributable to Mr. Grace's work during fiscal 1996, in connection with
a) the sale of the assets of Ney Dental International, Inc. and b)
completion of the Company's tender offer for preferred stock.
(6) Mr. Cerny joined the Company on April 23, 1993. All Other Compensation
for Mr. Cerny in 1994 includes $39,379 of relocation expenses.
(7) Mr. Wolfe, Jr., served as president of Ney Dental International, Inc.
until its assests were sold on November 28, 1995. All Other Compensation
for Mr. Wolfe, Jr. in 1996 includes $62,620 in respect of the payout of
his stock option for shares of Ney Dental International, Inc.
(8) Mr. Volinski resigned from the Company on September 22, 1995. He had been
Chief Financial Officer of the Company since June 24, 1993. Previously,
he was Chief Financial Officer for The J.M. Ney Company.
8
<PAGE>
OPTIONS GRANTED IN FISCAL 1996
No stock options were granted in fiscal 1996 to the individuals named in
the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options At Options At
Shares Fiscal Year Fiscal Year
Acquired Value End (#) End ($)
On Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexerciseable
- --------------------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Francis E. Baker -- -- 20,000/0 --
Oliver R. Grace, Jr. -- -- 5,000/0 --
Ronald N. Cerny -- -- 3,334/1,666(1) --
</TABLE>
- ---------
(1) Options became exercisable on April 27, 1996.
Compensation Committee Interlocks and Insider Participation
James J. Pinto, Chairman of the Compensation Committee received compensation
of $100,000 in respect of his performance of certain services related to the
sale of the Company's Dental Division in November 1995. See "Certain
Relationships and Related Transactions".
Compensation Committee Report on Executive Compensation
As discussed earlier in this Proxy Statement under the heading Board
Meetings and Committees of the Board, the Compensation Committee of the
Board is responsible for reviewing the Company's executive compensation programs
and policies each year and determining the compensation of the senior executive
officers. The Committee's determination on compensation of the Chief Executive
Officer and other executive officers is reviewed with and approved by the entire
Board.
The fiscal year 1996 base pay of each of the Company's executive officers
is determined on the basis of the individual's responsibilities and
performance and a comparison with salaries paid by competitors of the
Company; the bonus component of executive compensation is directly related to
corporate and business unit performance. The Committee's overall policy
regarding compensation of the Company's executive officers is to provide
competitive salary levels and compensation incentives that attract and retain
individuals of outstanding ability in key positions that recognize individual
performance and the performance of the Company relative to the performance of
other companies of comparable size, complexity and quality, and that support
both the short-term and long-term goals of the Company. The executive
compensation program includes elements which, taken together, constitute a
flexible and balanced method of establishing total compensation for senior
management.
Compensation paid to the Company's executive officers for fiscal year 1996
consisted primarily of salary, bonus and contributions made by the Company in
respect of its 401(k) plan. With respect to Mr. Baker, a portion of his
fiscal 1996 bonus was paid to his Special Executive Retirement Plan.
For fiscal year 1996, the Committee established the compensation of
Francis E. Baker, the President and Chief Executive Officer of the Company,
using the same criteria used to determine compensation for other executive
officers. Mr. Baker's fiscal year 1996 base pay was determined based upon the
Committee's overall assessment of Mr. Baker's performance and competitive
market data on salary levels. Using competitive market data, and because of
the consummation
9
<PAGE>
of the sale of the Company's Dental Division and completion of the tender
offer for shares of the Company's preferred stock, the Committee awarded Mr.
Baker a bonus of $100,000; $50,000 of which was paid to Mr. Baker's Special
Executive Retirement Plan.
Effective January 1, 1996, in an effort to reduce expenses and in light of
the fact that with the sale of the Dental Division there would be less
demands placed on the Chief Executive Officer, Mr. Baker has agreed to reduce
his base salary to $150,000 from $200,000.
For fiscal 1996, the committee established the compensation of Oliver R.
Grace, Jr., the Chairman of the Board and President of AG Investors, Inc.,
using the same criteria used to determine compensation for other executive
officers. Mr. Grace's fiscal year 1996 salary and Director's fee of $85,000
was determined based upon the Committee's overall assessment of Mr. Grace's
performance and competitive market data on salary levels. This figure is
unchanged from the prior fiscal year. Using competitive market data, the
Committee awarded Mr. Grace two bonuses: $50,000 for the successful
completion of the divestiture of the cellular telephone partnerships in
fiscal 1995, and $75,000 for the divestiture of the Company's Dental Division
and completion of the Tender Offer for the Company's preferred stock in
fiscal 1996.
It is the opinion of the Committee that the aforementioned compensation
structures provide features which properly align the Company's executive
compensation with corporate performance and the interests of its shareholders
and which offer competitive opportunities in the marketplace.
The Compensation Committee
James J. Pinto, Chairman
Louis A. Lubrano
10
<PAGE>
Performance Graph
The following graph compares the performance of the Company ("AGI") for the
periods indicated with the performance of the National Association of
Securities Dealers Automated Quotation ("NASDAQ") Composite Stock Index (the
"NASDAQ Composite") and the performance of the NASDAQ Industrial Composite
Stock Index (the "Peer Group"). The comparative five year total returns
assume a $100 investment made on February 28, 1991 with dividends reinvested.
The Andersen Group, Inc. stockholder return shown on the following graph is
not necessarily indicative of future stock performance.
Comparative Five-Year Total Returns
Andersen Group, Inc., NASDAQ Composite, Peer Group (NASDAQ Industrials)
(Performance results through February 29, 1996)
[TABULAR REPRESENTATION OF LINE CHART]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
AGI $100.00 $ 75.27 $ 75.27 $ 45.70 $ 32.26 $ 40.32
NASDAQ Composite $100.00 $139.82 $148.06 $174.93 $173.34 $242.81
Peer Group $100.00 $142.97 $138.07 $165.29 $153.87 $199.27
</TABLE>
11
<PAGE>
Pension Benefits
The following tables set forth the estimated aggregate annual benefit
payable upon retirement or at normal retirement age for each level of
remuneration specified at the listed years of service. The pension benefits are
based on calendar year earnings and are payable in the form of a life annuity.
For calendar 1995, the maximum annual compensation limit for determining pension
benefits was $150,000.
Table I is applicable only to employees of The J.M. Ney Company ("Ney")
who had made prior contributions to the pension plan and were considered
active participants prior to February 28, 1991.
Table II is applicable to all other employees of the Company and its
subsidiaries including employees of Ney who did not make prior contributions
to the pension plan and were not considered active participants prior to
February 28, 1991.
TABLE I
<TABLE>
<CAPTION>
Years of Service
-----------------------------------------------------------
Remuneration 5 10 15 20 25 30
- ------------- ------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 6,250 $12,500 $18,750 $25,000 $31,250 $ 37,500
125,000 7,813 15,625 23,438 31,250 39,063 46,875
150,000 9,375 18,750 28,125 37,500 46,875 56,250
175,000 12,813 23,750 34,688 45,625 56,563 67,500
200,000 14,375 26,875 39,375 51,875 64,375 76,875
225,000 15,938 30,000 44,063 58,125 72,188 86,250
250,000 17,500 33,125 48,750 64,375 80,000 95,625
275,000 19,063 36,250 53,438 70,625 87,813 105,000
</TABLE>
An individual's pension benefits are equal to the greater of the following
two calculations: (A) 1.25% of final average earnings (average annual
earnings for the five consecutive years of highest earnings in the employee's
last 10 years of employment), determined on the earlier of February 28, 1997
or the date of such member's termination of employment, or (B) the sum of the
individual's accrued pension benefit at 12/31/93 calculated pursuant to (A)
above and the individual's compensation for the year (up to a maximum of
$150,000) multiplied by 1.25% multiplied by the number of years of service
since 12/31/93.
For calendar year 1995, compensation taken into account under the
qualified pension plan for any individual in any year was limited to
$150,000.
Pension benefits are not reduced on account of social security benefits
received by the employee. Average earnings is the sum of the amounts shown in
the columns labeled "Salary" and "Bonus" in the Summary Compensation Table.
The executive officers named in the Summary Compensation Table have the
following years of credited service for pension plan purposes: Mr. Wolfe,
Jr.--10 years.
TABLE II
<TABLE>
<CAPTION>
Years of Service
----------------------------------------------------------
Remuneration 5 10 15 20 25 30
- ------------- ------ ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
$100,000 $ 5,170 $10,340 $15,510 $20,680 $25,850 $31,020
125,000 6,733 13,465 20,198 26,930 33,663 40,395
150,000 8,295 16,590 24,885 33,180 41,475 49,770
175,000 11,517 21,374 31,232 41,089 50,947 60,804
200,000 13,079 24,499 35,919 47,339 58,759 70,179
225,000 14,642 27,624 40,607 53,589 66,572 79,554
250,000 16,204 30,749 45,294 59,839 74,384 88,929
275,000 17,767 33,874 49,982 66,089 82,197 98,304
</TABLE>
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<PAGE>
An individual's pension benefits are equal to the greater of the following
two calculations: (A) .75% of final average earnings (average annual earnings
for the five consecutive years of highest earnings in the employee's last 10
years of employment), plus .50% of final average earnings in excess of
covered compensation (average of Social Security wage base) multiplied by the
employee's years of service as a qualified employee (up to a maximum of 40
years), or (B) the sum of the individual's accrued pension benefit at
12/31/93 calculated pursuant to (A) above and the individual's compensation
for the year (up to a maximum of $150,000) multiplied by the percentages in
(A) above multiplied by the number of years of service since 12/31/93.
During calendar year 1995, compensation taken into account under the
qualified pension plan for any individual in any year was limited to
$150,000.
Pension benefits are not reduced on account of social security benefits
received by the employee. Average earnings is the sum of the amounts shown in
the columns labeled "Salary" and "Bonus" in the Summary Compensation Table.
For purposes of this table, the amount used for covered compensation is the
average of the covered compensation for each of the individuals named in the
Summary Compensation Table. The executive officers named in the Summary
Compensation Table have the following years of credited service for pension
plan purposes: Mr. Baker- 10 years; Mr. Grace, Jr.- 3 years; Mr. Cerny- 2
years and Mr. Volinski- 4 years.
Director Compensation
All non-employee directors receive $6,000 per year, plus $500 for attendance
at each Board meeting, and a reimbursement of their expenses for attendance
at the meetings. Effective January 1, 1996, the non-employee Director's fee
has been increased to $12,000 per year. All non- employee directors that
serve as Chairpersons of committees of the Board receive compensation of
$2,000 per year. In addition, Mr. John S. Grace, an employee of one of the
Company's subsidiaries, receives compensation of $15,000 annually.
Employment Agreements
Mr. Cerny has an employment agreement which, among other things, provides
for severance pay in the event of involuntary termination for other than
cause. In such case, the Company, at its option, will provide Mr. Cerny with
twelve months of notice or salary and fringe benefits or any combination
thereof. In the event of a change in control of The J.M. Ney Company, the
Company has agreed to provide Mr. Cerny with two years severance including
fringe benefits.
Certain Relationships and Related Transactions
Digital GraphiX Offering
On May 2, 1995 the Company's subsidiary, Digital GraphiX, Incorporated
(formerly known as New Microtime Inc.) ("DGI") closed an offering ( the
"Offering") for the sale of 64,800 shares of its common stock to certain
securityholders of the Company (the "AGI Securityholders"), and to employees
of DGI, in each case subject to compliance with state securities law and
regulation, at a price of $5.00 per share (the "Offering Price"). DGI
develops, manufactures and markets professional character generators and
titling systems for the broadcast and video post-production markets.
As a result of the Offering, the Company's ownership percentage in DGI has
been reduced from 100% to 19%. At the completion of the Offering, three
affiliates of the Company, Francis E. Baker, who is President and Chief
Executive Officer of the Company and a director of DGI, Oliver R. Grace, Jr.,
who is Chairman of the Company and a director of DGI, and Peter N. Bennett, a
director of the Company, or their affiliates, owned 3,581, 4,774 and 4,799,
respectively, of the common shares of DGI, or approximately 4.5%, 6.0% and
6.0%, respectively.
At March 1, 1995, DGI was indebted to the Company in the amount of
approximately $2.9 million arising out of the conversion of an intercompany
receivable to a promissory note ("Note A")
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<PAGE>
in January, 1995. On February 28, 1996, $2.2 million of the principal amount
of Note A was forgiven and the Company realized an income tax benefit. During
the period from March 1, 1995 until May 2, 1995 (the date the DGI Offering
was closed, as referenced above), the Company advanced certain funds to or
for the benefit of DGI in the amount of $237,568. In addition, during the
period subsequent to the Offering date, the Company performed certain
services for DGI at market rates. As a result of these transactions, Note A
was cancelled, the balance remaining under Note A, together with certain
accrued and unpaid interest and amounts due for services performed by the
Company through the end of fiscal year 1996 were rolled into a note in the
amount of $1,021,281 due in October, 1997 ("Note B"). In addition, DGI
executed another note to the Company in the amount of $237,568, due February
1999 ("Note C") for the pre-Offering amounts advanced as described above. All
of these notes are specified at an interest rate of 7.5 percent.
Sale of Dental Division
In connection with the sale of the Dental Division and pursuant to an
agreement between the Company and Mr. Pinto, a Director of the Company, the
Company paid Mr. Pinto contingent upon consummation of the sale of the Dental
Division $100,000 in respect of his performance of certain services related
to the sale of the Dental Division.
Investment in Institute for Automated Systems
During fiscal 1996 the Company made an investment of approximately $640,000
in a joint venture which invests in a Russian telecommunications company that
has agreements to develop a data transmission network throughout the
Commonwealth of Independent States. Oliver R. Grace, Jr., the Company's
Chairman, and John S. Grace, a Director of the Company, are also among a
group of investors in the joint venture.
Other
Francis E. Baker, the Company's President and Chief Executive Officer, is
indebted to the Company in the amount of $223,487. Mr. Baker purchased the
Company's interest in a split dollar life insurance policy, insuring Mr.
Baker's life, and for which the Company was the beneficiary, in exchange for
Mr. Baker's non-interest bearing promissory note due December 2000. The note
is secured by the policy. The consideration paid approximated the amount of
premiums that the Company paid into the policy and represented the Company's
book value at the date of transaction.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of its
Common Stock ("Insiders"), to file reports of ownership and changes in
ownership with the Commission and the National Association of Securities
Dealers, Inc. Insiders are required by the regulations of the Commission to
furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it or
written representations from certain reporting persons that no such forms
were required for those persons, the Company believes that during fiscal year
1996 all filing requirements applicable to insiders were complied with.
14
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Stock, as of April 26, 1996 by each director, by each
named executive officer of the Company described in "Executive Compensation",
by persons who beneficially own 5% or more of the outstanding shares of
Common Stock, and by all directors and officers of the Company as a group.
The beneficial ownership information described and set forth below is based
on information furnished by the specified persons and is determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. It does not constitute an admission of beneficial ownership for any
other purpose.
<TABLE>
<CAPTION>
Number and Nature of
Shares Percent of
Name Beneficial Ownership Class
- ----------------------------------------- ----------------------- ---------------
<S> <C> <C>
Francis E. Baker 155,039(1) 7.9
8356 Sego Lane
Vero Beach, Florida
Estate of Oliver R. Grace, Sr. 101,596(2) 5.3
49 Cove Neck Road
Oyster Bay, New York
Lorraine G. Grace 131,317(3) 6.7
49 Cove Neck Road
Oyster Bay, New York
Oliver R. Grace, Jr. 126,790(4) 6.2
32 Wellington Road
Locust Valley, New York
John S. Grace 122,525(5) 6.0
55 Brookville Road
Glen Head, New York
Peter N. Bennett 165,065(6) 7.9
6 Battersea High St.
London SW11 3RA, England
The Ney Profit Sharing Savings Plan Trust 183,333(7) 9.5
c/o Fleet Bank, N.A., Trustees
One Constitution Plaza
Hartford, Connecticut
Bank of Butterfield 296,575(8) 15.1
Rose Bank Center
14 Bermudiana Road
Hamilton, Bermuda
First United Securities Limited 150,340(9) 7.7
Exchange House
P.O. Box 16
54-58 Athol Street
Douglas, Isle of Man
Louis A. Lubrano 6,855(10) (11)
James J. Pinto 13,000(12) (11)
Ronald N. Cerny 5,000(13) (11)
All directors and officers as a group (10
Persons including certain of the above-
named individuals) 498,326 22.0
</TABLE>
- -----------
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<PAGE>
(1) Francis E. Baker owns 120,001 shares of Common Stock directly. The
figure set forth in the above table includes 10,400 shares of Common
Stock with respect to which Mr. Baker has shared voting power as
co-trustee under the Oliver Grace Grandchildren Trust U/R dated December
27, 1976 and 4,638 shares which such Trust owns by virtue of its ability
to convert $75,000 principal amount of convertible subordinated
debentures to Common Stock within a 60-day period. Mr. Baker disclaims
beneficial ownership of such shares held in trust. Also included in the
figure set forth in the above table are 20,000 shares of Common Stock
which may be issued to Mr. Baker within 60 days hereof upon the exercise
of his existing exercisable stock options. In addition to the shares
reported above, Mr. Baker is the settlor of four irrevocable trusts
dated March 31, 1970 and created for the benefit of certain of his
children. Fleet Bank (as successor to Shawmut Bank, N.A.) acts as
trustee under each of these trusts, which hold an aggregate of 68,306
shares of Common Stock. Mr. Baker does not exercise any control over
these four trusts and disclaims beneficial ownership.
(2) The Estate of Oliver R. Grace, Sr. has direct beneficial ownership of an
aggregate of 101,596 shares of Common Stock.
(3) Lorraine G. Grace has beneficial ownership of 131,317 shares of Common
Stock. Of this amount, 13,638 shares are held by Mrs. Grace directly;
2,475 shares are held by Mrs. Grace, as trustee of a trust for the
benefit of her children; 13,608 shares are held by virtue of the ability
of Mrs. Grace to convert $220,000 principal amount of convertible
subordinated debentures to Common Stock within a 60-day period; and
101,596 shares are held by virtue of Mrs. Grace's appointment as
executrix of the Estate of Oliver R. Grace, Sr.
(4) Oliver R. Grace, Jr. has beneficial ownership of an aggregate of 126,790
shares of Common Stock. Of this amount, 56,054 shares are held by Oliver
R. Grace, Jr. directly, including 40,144 shares by virtue of Mr. Grace's
ability to convert $649,000 principal amount of convertible subordinated
debentures to Common Stock within a 60-day period and 11,610 shares by
virtue of Mr. Grace's ability to convert 6,000 shares of Series A
Cumulative Convertible Redeemable Preferred Stock of the Company,
without par value (the "Preferred Stock") to Common Stock within a
60-day period; 7,592 shares are held by Carolyn Grace, the spouse of
Oliver R. Grace, Jr., of which 7,112 shares are held by Mrs. Grace by
virtue of her ability to convert $115,000 principal amount of
convertible subordinated debentures within a 60-day period; and 58,144
shares are held by virtue of the ability of The Anglo American Security
Fund L.P. (of which Oliver R. Grace, Jr. is a general partner) to
convert $940,000 principal amount of convertible subordinated debentures
to Common Stock within a 60-day period. Mr. Grace, Jr. has stock options
to acquire an additional 5,000 shares of Common Stock. Oliver R. Grace,
Jr. disclaims beneficial ownership of all shares owned by him as trustee
for the benefit of family members and by The Anglo American Security
Fund, L.P. described herein.
(5) John S. Grace has beneficial ownership of 122,525 shares of Common
Stock. Of this amount, 17,706 are held by John S. Grace directly,
including 1,856 shares held by virtue of Mr. Grace's ability to convert
$30,000 principal amount of convertible subordinated debentures to
Common Stock within a 60-day period; 58,144 shares are held by virtue of
the ability of The Anglo American Security Fund L.P. (of which John S.
Grace is a general partner) to convert $940,000 principal amount of
convertible subordinated debentures to Common Stock within a 60-day
period; and 43,675 shares are held by virtue of the ability of Sterling
Grace Capital Management, L.P. (John S. Grace is Chairman and President
of Sterling Grace Corporation, General Partner of Sterling Grace Capital
Management, L.P.) to convert 22,571 shares of the Preferred Stock to
Common Stock within a 60-day period. Mr. Grace has a stock option to
acquire an additional 3,000 shares of Common Stock. John S. Grace
disclaims beneficial ownership of all shares held by trustees for the
benefit of members of his family and The Anglo American Security Fund
L.P.
16
<PAGE>
(6) Peter N. Bennett owns 300 shares of Common Stock directly. The figure
set forth in the table includes shares held by virtue of the ability of
Mr. Bennett to convert 85,150 shares of the Preferred Stock to 164,765
shares of Common Stock within a 60-day period. The 85,150 shares
referenced herein includes 35,042 shares held by Mr. Bennett as
beneficiary of the estate of Bert Ney Lukens.
(7) The Ney Profit Sharing Savings Plan Trust owns 183,333 shares of Common
Stock directly.
(8) The Bank of Butterfield (the "Bank") has beneficial ownership of an
aggregate 296,575 shares of Common Stock as trustee of various trusts.
Of this amount, 263,945 shares are held by the Bank directly and 32,630
shares are held by virtue of the Bank's ability, as trustee, to convert
16,863 shares of the Preferred Stock to Common Stock within a 60-day
period.
(9) First United Securities Limited ("FUSL") has beneficial ownership of an
aggregate of 150,340 shares of Common Stock as trustee of various
trusts. Of this amount, 139,206 shares are held directly and 11,134
shares are held by virtue of the ability of FUSL to convert $180,000
principal amount of convertible subordinated debentures to Common Stock
within a 60-day period.
(10) Louis A. Lubrano has beneficial ownership of 6,855 shares of Common
Stock of which 1,855 shares are held by virtue of Mr. Lubrano's ability
to convert $30,000 principal amount of convertible subordinated
debentures to Common Stock within a 60-day period. Mr. Lubrano has stock
options to acquire 5,000 shares of Common Stock within a 60-day period.
(11) Represents less than one percent (1%) of the Common Stock.
(12) James J. Pinto has beneficial ownership of 13,000 shares of Common
Stock, of which 8,000 shares are held directly. Mr. Pinto has stock
options to acquire 5,000 shares of Common Stock within a 60-day period.
(13) Ronald N. Cerny does not own any shares of Common Stock directly. The
figure set forth in the table represents a stock option to acquire 5,000
shares of Common Stock within a 60-day period.
17
<PAGE>
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP is the Company's independent public accounting firm
and has been since September 1974. Representatives of KPMG Peat Marwick LLP
are expected to be present at the Annual Meeting. They will be given the
opportunity to make a statement and will be available to respond to appropriate
questions.
---------------
SHAREHOLDER PROPOSALS
Under the terms (the "Preferred Stock Terms") of the Company's Series A
Cumulative Convertible Preferred Stock (the "Preferred Stock") if and
whenever six quarterly dividends (whether or not consecutive), payable on the
Preferred Stock shall be in arrears, whether or not earned or declared, the
number of directors then constituting the Board of Directors of the Company
shall be increased by one and the holders of Preferred Stock voting together
as a class, are entitled to elect one additional director. As of the date
hereof, no such additional director has been proposed by any holder of
Preferred Stock. The Company has advised holders of Preferred Stock that they
may wish to consider such election at a special meeting to be called in
accordance with the Preferred Stock Terms.
In order to be considered for inclusion in the Proxy Statement relating to
the 1997 Annual Meeting of Shareholders, any proposal by a record holder of
Common Stock, or Preferred Stock as provided above, must be received by the
Company at its principal offices in Bloomfield, Connecticut on or before
January 17, 1997. A proponent of such a proposal must comply with the proxy
rules under the Securities Exchange Act of 1934, as amended.
---------------
OTHER MATTERS
As of the date of this Proxy Statement, the Board and Management do not
intend to present and have not been informed that any other person intends to
present any matter for action at the Annual Meeting other than as discussed
in this Proxy Statement. If any other matters properly come before the
meeting, it is intended that the holders of the proxy will act in accordance
with their best judgment.
By Order of the Board of Directors
Susan B. Logie
Secretary
18
