<PAGE>
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 Registrant [X]
Filed by a Party other than 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) and 0-11.
(1) Tile of each class of securities to which transaction applied:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
ANDERSEN GROUP
- --------------------------------------------------------------------------------
Notice of
Annual Meeting
and
Proxy Statement
1999
The annual meeting of the
stockholders of Andersen
Group, Inc. will be held on
Tuesday, June 22, 1999 at
11:15 a.m., at the
headquarters of the Company,
515 Madison Avenue, Suite
2000, New York, New York
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ANDERSEN GROUP, INC. 515 Madison Avenue, Suite 2000, New York, New York
10022
--------------------------------------------------------
Notice of
Annual Meeting
of Stockholders
To Be Held June 22, 1999
- --------------------------------------------------------
To the Stockholders of Andersen Group, Inc.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (the "Annual
Meeting") of Andersen Group, Inc. (the "Company") will be held on Tuesday, June
22, 1999 at 11:15 a.m., at the headquarters of the Company, 515 Madison Avenue,
Suite 2000, New York, New York, for the following purposes: 1. To elect a Board
of Directors for the ensuing year; 2. To transact such other business as may
properly come before the Annual Meeting or any adjournment or postponement
thereof. Holders of record of outstanding shares of the Common Stock, $.01 par
value, of the Company (the "Common Stock") at the close of business on May 7,
1999 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 /s/ Francis E. Baker Francis E. Baker Chairman and Secretary New
York, New York May 19,1999 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>
ANDERSEN GROUP, INC. 515 Madison
Avenue, Suite 2000, New York, New York 10022
----------------------------------------------------
Proxy Statement Annual Meeting of Stockholders
----------------------------------------------------
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Andersen Group, Inc., a Delaware corporation (the
"Company"), of proxies for use at the Annual Meeting of Stockholders of the
Company, or at any adjournment or postponement thereof (the "Annual Meeting"),
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. Proxies are being solicited from the holders of the Andersen
Group, Inc. Common Stock, $.01 par value (the "Common Stock"). THE ANNUAL
MEETING Time and Place; Purposes The Annual Meeting will be held on Tuesday,
June 22, 1999 at 11:15 a.m., at the headquarters of the Company, 515 Madison
Avenue, Suite 2000, New York, New York. At the Annual Meeting, stockholders will
be asked to consider and vote upon (i) the election of directors for the ensuing
year (the "Election of Directors"); and (ii) such other business as may properly
come before the Annual Meeting or any adjournment or postponement thereof. The
date of this Proxy Statement is May 19, 1999. The Proxy Statement and the
related form of Proxy are first being mailed to holders of the Common Stock on
or about May 19, 1999. Proxies received by the Company in the proper form will
be voted at the Annual Meeting and at any adjournment or postponement thereof,
as specified therein by the stockholders executing such proxies. Unless the
proxy specifies that it is to be voted against or is an abstention on a listed
matter, proxies will be voted FOR the Election of Directors and otherwise in the
discretion of the proxy holders as to any other matter that may come before the
Annual Meeting. Voting Rights; Votes Required For Approval The Board has fixed
the close of business on May 7, 1999 (the "Record Date") as the date for the
determination of holders of the Common Stock entitled to notice of, and to vote
at, the Annual Meeting. Only holders of record of such shares, at the close of
business on the Record Date, are entitled to notice of and to vote at the Annual
Meeting. As of the Record Date, there were 1,932,503 shares of Common Stock
outstanding. The holders of a majority 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 at the Annual Meeting. Each share of
Common Stock is entitled to one vote on the proposal set forth herein. Votes are
counted by tellers of the Company's transfer agent. These tellers will canvas
the stockholders present at the Annual Meeting, count their votes and count the
votes represented by proxies presented. The Election of Directors requires the
affirmative vote of a plurality of the votes cast by the shares entitled to vote
in the election at the Annual Meeting. A stockholder who has given a proxy may
revoke it at any time prior to its exercise at the Annual Meeting either by
filing with the Secretary of the Company, Andersen Group, Inc., 515 Madison
Avenue, Suite 2000, New York, New York 10022, a written revocation or a duly
executed proxy bearing a later date, or by voting in person at the Annual
Meeting. The cost of the solicitation of proxies by the Board from the
stockholders 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 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 28,
1999, including the financial statements and schedules thereto, as filed with
the Securities and Exchange Commission. Requests should be directed by mail to
Francis E. Baker, Secretary, Andersen Group, Inc., 515 Madison Avenue, Suite
2000, New York, NY 10022 or by phoning the Company at (212) 826-8942.
<PAGE>
BOARD MEETINGS AND COMMITTEES OF THE BOARD
During the fiscal year ended February 28, 1999, the Board of Directors held
four regular meetings. All of the directors attended at least seventy-five
percent (75%) of the aggregate of the meetings of the Board and of 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 no meetings of the
Executive Committee during the fiscal year ended February 28, 1999. The Board
does not have a Nominating Committee. The Executive Committee considers the
qualifications of persons to be recommended to the Board and stockholders 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), Pinto and John S. Grace. The
Committee is primarily concerned with the effectiveness of the audits of the
Company by 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
on Form 10-K) and the accounting standards and principles followed by the
Company; and examining other reviews covering compliance by employees with
important Company policies. There were two meetings of the Audit Committee
during the fiscal year ended February 28, 1999. The Board has a Compensation
Committee comprised of Messrs. Pinto (Chairman) and Lubrano, each of whom is an
independent, non-employee director. This Committee reviews and recommends
executive compensation, including changes therein, and administers the Company's
stock option plans. There was one meeting of the Compensation Committee during
the fiscal year ended February 28, 1999. The Board also has a Pension Committee.
This Committee is presently comprised of Messrs. Baker (Chairman) and Grace, Jr.
This Committee monitors the administration of the Company's and its subsidiary's
qualified retirement plans to ensure investment management is consistent with
the Committee's objectives. There was one meeting of the Pension Committee
during the fiscal year ended February 28, 1999. The Board also has an
Independent Committee comprised of Messrs. Baker (Chairman), Lubrano and Pinto.
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 28, 1999.
<PAGE>
ELECTION OF DIRECTORS
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. Each of the nominees
is presently a member of the Board and has 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 a 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:
Photo of Oliver R. Grace,
Jr. OLIVER R. GRACE, JR., age 45, has been a Director of the Company since 1986,
President and Chief Executive Officer since 1997, and was Chairman from 1990 to
1997. He has also been President and a Director of AG Investors, Inc., one of
the Company's subsidiaries, since 1992 and a Director of the Company's wholly
owned subsidiary, The J. M. Ney Company, since February 1997. Mr. Grace, Jr. is
a General Partner of The Anglo American Security Fund L.P. and Republic
Automotive Parts, Inc. Mr. Grace, Jr. is the brother of Director John S. Grace.
Photo of Francis E. Baker FRANCIS E. BAKER, age 69, has been Chairman and
Secretary of the Company since 1997, a Director since 1959, and President and
Chief Executive Officer of the Company from 1959 to 1997. Mr. Baker also serves
as a Director of The J.M. Ney Company, the Company's principal subsidiary and as
a Director of Connecticut Water Services, Inc. Photo of Peter N. Bennett PETER
N. BENNETT, age 62, has been a Director of the Company since 1992. He is a
private investor and financial consultant.
Photo of John S. Grace JOHN S. GRACE, age 41, has been a Director of the
Company since 1990. He is the Chairman of Sterling Grace Corporation, a General
Partner of The Anglo American Security Fund L.P and a Director of Annaly
Mortgage Management, Inc. Mr. Grace has been an employee of AG Investors, Inc.,
one of the Company's subsidiaries, since 1992. John S. Grace is the brother of
Oliver R. Grace, Jr.
Photo of Louis A. Lubrano LOUIS A. LUBRANO, age 65, has been a Director of
the Company since 1983. Mr. Lubrano is currently with Herzog, Heine, Geduld,
Inc., members of the New York Stock Exchange. Mr. Lubrano was formerly a
Managing Director of Stires and Company, Inc. from 1991 to 1996, and also serves
as a Director of Graham Field Health Products, Inc., a manufacturer and
distributor of medical products.
Photo of James J. Pinto JAMES J. PINTO, age 48, has been a Director of the
Company since 1988. He is currently President of the Private Finance Group
Corp., a merchant and venture capital firm, a position he has held since 1990.
Mr. Pinto also serves as a Director of Bristol Hotels and Resorts, Inc., Empire
of Carolina, Inc. and National Capital Management Corporation.
<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 three
other most highly compensated executive officers of the Company with respect to
the fiscal years 1999, 1998, and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
-----------------
Annual Compensation Awards
---------------------------------------- -----------------
Securities
Underlying All Other
Name and Fiscal Salary(1) Bonus Options/SARs(2) Compensation(3)
Principal Position Year
($) ($) (#) ($)
---- ---- ---- --- --------------------------------
<S> <C> <C> <C> <C> <C>
Oliver R. Grace, Jr............ 1999 85,000 - - 2,550
President and Chief Executive 1998 85,000 50,000(4) - 1,665
Officer 1997 85,000 25,000(4) 7,500 2,363
Francis E. Baker............... 1999 120,000 15,000 20,000 -
Chairman and Secretary 1998 75,000 75,000 - 875
1997 161,542 25,000(5) 10,000(6) 2,888
Ronald N. Cerny............... 1999 164,808 TBD(7) 5,000 4,987
President, The J.M. Ney Company 1998 155,000 40,000 - 2,673
1997 131,923 42,200 5,000 2,554
Andrew M. O'Shea............ 1999 112,209 TBD(7) - 4,283
Chief Financial Officer, The J. 1998 104,904 31,000 - 2,301
M. Ney Company 1997 100,056 11,000 10,000 444
- ------------
</TABLE>
(1) Includes amounts of compensation deferred by the employee pursuant to
the Company's 401(k) plan. (2) During fiscal years 1998 and 1997, Messrs. Cerny
and O'Shea received options to acquire shares of The J. M. Ney Company. These
grants are excluded from this table. (3) Consists of contributions made by the
Company in respect of its 401(k) plan and The J. M. Ney Company Profit Sharing
Plan. During fiscal years 1999 and 1998, there were no contributions made to The
J.M. Ney Company Profit Sharing Plan. For 1997, contributions in respect of The
J. M. Ney Company Profit Sharing Plan were $275, $549, and $502 for Messrs.
Grace, Jr., Baker, and Cerny, respectively. Contributions by the Company in
respect of its 401(k) plan for fiscal years 1999, 1998, and 1997, respectively,
were: $2,550, $1,665, and $2,363 for Mr. Grace, Jr.; $0, $875, and $2,888 for
Mr. Baker; $4,987, $2,673, and $2,554 for Mr. Cerny; and $4,283, $2,301, and
$444 for Mr. O'Shea. (4) At Mr. Grace's election, all of his bonuses have been
treated as deferred compensation and paid into the Company's Rabbi Trust for his
benefit. (5) At Mr. Baker's election, this bonus was treated as deferred
compensation and paid into the Company's Rabbi Trust for his benefit. (6) Mr.
Baker's previous grant of 10,000 shares terminated when in 1997 he ceased to be
an employee of the Company. (7) Bonus payments for fiscal year 1999 yet to be
determined.
<PAGE>
<TABLE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information relating to
option/SAR grants pursuant to the Company's Incentive Stock Option Plan in
fiscal year 1999 to the individuals named in the Summary Compensation Table.
Number of % of Total Potential Realizable
Securities Options/SARs Exercise Value at Assumed
Underlying Granted to or Base Annual Rates of
Options/SARs Employees in Price Expiration Stock Price Appreciate
Granted (#)(b) Fiscal Year ($/Sh) for Option Term
Name Date (a)
<S> <C> <C> <C> <C> <C>
Oliver R. Grace, Jr...... - - - - - -
Francis E. Baker(c)....... 20,000 54.1% $6.25 03/05/08 $78,612 $199,218
Ronald N. Cerny(d)....... 5,000 13.5% $6.25 03/05/03 $8,634 $19,078
Andrew M. O'Shea...... - - - - - -
</TABLE>
(a) The dollar amounts under these columns are the result of calculations
at assumed 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if any, of
the stock price of the Company. The total increase in value of all common shares
outstanding based upon a 10-year option term and 5% and 10% appreciation
assumptions above, would be $4,849,857 and $12,290,489, respectively. The total
increase in value of all common shares outstanding, based upon a 5-year option
term and 5% and 10% appreciation assumptions above, would be $2,130,605 and
$4,708,080, respectively. The named executive officers would realize
approximately 14.1% of the total shareholders' appreciation in value.
(b) Represents Andersen Group, Inc. Stock Options granted pursuant to the
Company's Incentive Stock Option Plan.
(c) A Non-Qualified Stock Option was granted to Francis E. Baker for shares
of Andersen Group, Inc. Common Stock in the amount of 20,000 shares at $6.25 per
share. This grant replaced Mr. Baker's previously unexercised options which
terminated on May 31, 1997, when he ceased to be an employee of the Company.
(d) A Stock Option was granted to Ronald N. Cerny for shares of Andersen
Group, Inc. Common Stock in the amount of 5,000 shares at $6.25 per share. The
grant replaces Mr. Cerny's previously expired Stock Option for 5,000 shares.
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth certain information with respect to
options/SARs exercised during fiscal year 1999 by the individuals named in the
Summary Compensation Table and unexercised options to purchase Andersen Group,
Inc. Common Stock granted under the Incentive Stock Option Plan to the
individuals named in the Summary Compensation Table.
<TABLE>
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options/SARs at
Shares Acquired Options/SARs at Fiscal Fiscal Year End($)
On Value Realized Year End(#) Exercisable/ Exercisable/
Exercise (#)
Name ($) Unexercisable Unexercisable
----- ---- -------------- -------------
<S> <C> <C> <C> <C>
Oliver R. Grace, Jr........ - - 9,500/0 $15,469/$0
Francis E. Baker........... - - 20,000(1) $0/$0
Ronald N. Cerny........... 2,000 - 3,000/5,000(2) $563/$0(2)
Andrew M. O'Shea........ - - 10,000/0 $1,875/$0
</TABLE>
1. Mr. Baker's previously unexercised options terminated on May 31, 1997, when
he ceased to be an employee of the Company. In March 1998, Mr. Baker was
awarded a non-qualified stock option for 20,000 shares at a market price of
$6.25 per share. Mr. Baker's unexercised stock options became exercisable
March 5, 1999.
2. Mr. Cerny's unexercisable stock options became exercisable on March 5, 1999.
Board 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 program and
policies each year and determining the compensation of the Company's senior
executive officers. The Committee's determination on compensation of the
Company's Chief Executive Officer and other executive officers is reviewed with
and approved by the entire Board.
The fiscal year 1999 base pay of each of the Company's executive
officers was 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
1999 consisted primarily of salary, bonus and contributions made by the Company
in respect of its 401(k) Plan.
For fiscal 1999, the Committee established the compensation of Oliver R.
Grace, Jr., the President and Chief Executive Officer of the Company, using the
same criteria used to determine compensation for other executive officers. Mr.
Grace's fiscal 1999 base pay was based upon the Committee's overall assessment
of Mr. Grace's performance and upon market data. The Committee kept Mr. Grace's
salary at $85,000 which was the same as the prior two years.
For fiscal 1999, the Committee established the compensation of Francis
E. Baker, the Company's Chairman and Secretary, using the same criteria used to
determine compensation for other executive officers. As Chairman, Mr. Baker
received a fee of $120,000 and a bonus of $15,000 based upon meeting certain
objectives. In addition, in March 1998, the Committee granted Mr. Baker a
non-qualified stock option to purchase 20,000 shares of the Company's Common
Stock at a market price of $6.25 per share.
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 stockholders
and which offer competitive opportunities in the marketplace.
Under Section 162(m) of the Internal Revenue Code and the regulations
promulgated thereunder, deductions for employee remuneration in excess of $1
million which is not performance based are disallowed for publicly traded
companies. The Committee has determined that it is unnecessary at this time to
seek to qualify the components of its compensation program within the meaning of
Section 162(m).
The foregoing report has been approved
by all members of the Compensation
Committee
James J. Pinto, Chairman
Louis A. Lubrano
<PAGE>
Performance Graph
The following graph compares the performance of the Company 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, 1994 with dividends reinvested. The stockholder
return shown for Andersen Group, Inc. ("AGI") on the following graph is not
necessarily indicative of future stock performance.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Comparative Five-Year Total Returns
Andersen Group, Inc., NASDAQ Composite and Peer Group
(Performance results through February 26, 1999)
<S> <C> <C> <C> <C> <C> <C>
1994 1995 1996 1997 1998 1999
-----------------------------------------------------------------------------------------------------------
AGI $100.00 $70.59 $88.24 $129.41 $138.35 $94.12
NASDAQ Composite $100.00 $99.09 $138.81 $165.17 $223.41 $288.71
Peer Group $100.00 $93.09 $120.56 $131.38 $157.04 $156.22
-----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Pension Benefits
The following table sets 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 in accordance with the
Company's defined benefit plan. The pension benefits are based on calendar year
earnings and are payable in the form of a life annuity. For calendar 1998, the
maximum annual compensation limit for determining pension benefits was $160,000.
<TABLE>
Pension Plan Table
Years of Service
------------- ------------- ------------- ------------- ------------- -------------
Remuneration 5 10 15 20 25 30
- ------------- ------------ ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
----- -
$100,000 $ 4,900 $ 9,799 $14,699 $19,599 $24,498 $29,398
125,000 6,462 12,924 19,386 25,849 32,311 38,773
150,000 8,025 16,049 24,074 32,099 40,123 48,148
160,000 10,255 18,904 27,554 36,203 44,853 53,503
</TABLE>
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 (covered compensation equals the average of the Social
Security wage base for the individual based upon his/her age) 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 December
31, 1993 calculated pursuant to (A) plus the individual's average compensation
for the years since December 31, 1993 (average compensation equals the highest
average annual earnings for the five consecutive years since December 31, 1993,
up to a maximum of $160,000) multiplied by the percentages in (A), multiplied by
the number of years of service since 12/31/93. Pension benefits payable upon
retirement are increased by a late retirement factor due to the delay in receipt
of benefits if the employee continues to work after attaining the age of 65.
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 the Pension Plan 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 under the Table: Mr. Grace, Jr. 6 years; Mr. Cerny 5 years; and Mr.
O'Shea 3 years. Mr. Baker's pension benefits have been computed in accordance
with (B) of the above formula and have been enhanced by the late retirement
factor pursuant to the Plan. The estimated aggregate annual benefit being paid
to Mr. Baker from the Company's defined benefit pension plan is approximately
$33,000.
Director Compensation
Each non-employee director received a fee of $12,000 per year, and $500
plus a reimbursement of expenses for each Board meeting attended. All
non-employee directors that serve as Chairpersons of committees of the Board
received additional compensation of $2,000 per year. In addition, Mr. John S.
Grace, an employee of one of the Company's subsidiaries, received a salary of
$15,000 annually, plus $6,000 annually for fees and $500 plus reimbursement of
expenses for each Board meeting attended.
<PAGE>
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
Investment in Institute for Automated Systems
The Company owns an investment in a joint venture, Treglos Investments,
LTD ("Treglos"), which owns an investment in the Institute for Automated Systems
("IAS"), a Russian telecommunications company that has plans to develop a data
transmission network throughout the Commonwealth of Independent States. At
February 28, 1997 and 1998 the Company owned 50% of Treglos and Oliver R. Grace,
Jr., the Company's President and Chief Executive Officer, and John S. Grace, a
Director of the Company, each owned directly and indirectly approximately 22% of
Treglos.
In connection with the above referenced investment in Treglos, the
Company and Messrs. Grace, Jr. and John S. Grace through entities they own or
control made advances to Treglos or on behalf of Treglos to pay for certain
expenses incurred in connection with Treglos' investment in IAS. In addition,
during fiscal 1999, the Graces reimbursed the Company approximately $129,000 for
their share of the advances made by the Company to or on behalf of Treglos
during the year. At February 28, 1999 the Graces owed the Company approximately
$12,563 for advances the Company made to or on behalf of Treglos during the
fiscal year. The Graces promptly repaid such amount in March 1999. Because
reimbursements of amounts advanced during fiscal 1999 occurred promptly,
interest was not charged by the Company or the Graces for any of the advances
made to or on behalf of Treglos. All advances made by the Company or the Graces
to or on behalf of Treglos were converted into capital in Treglos on a pro rata
basis such that all stockholders retained their respective ownership interests
as reflected above.
VSMPO
During fiscal 1998, the Company purchased shares of the common stock of
Avisma, a Russian titanium producer, for approximately $2,000,000, for its own
account and on behalf of certain members of the Company's Board of Directors.
Avisma was subsequently merged into VSMPO, a Russian titanium processing
company. The Company's portion of the investment is $1,225,000. Shares owned by
Messrs. Oliver R. Grace, Jr., Francis E. Baker, John S. Grace and James J. Pinto
are being held by the Company for administrative convenience.
Other
Francis E. Baker, the Company's Chairman and Secretary, 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 in the principal amount of $223,487, due
December 2000. The note is secured by a pledge of shares of the Company's Common
Stock owned by Mr. Baker that had a market value of approximately $200,000 at
February 28, 1999. The consideration paid approximated the cash surrender value
of the policy and equaled the Company's book value at the date of the
transaction.
Peter R. Barker, the Company's Vice President and Chief Financial
Officer effective January 11, 1999, is indebted to the Company in the aggregate
amount of $250,000 in the form of a two-year promissory note due January 2001
with interest payable quarterly at 7%, and a $50,000 demand note. Such
liabilities were incurred in connection with the sale to Mr. Barker of 62,500
shares of the Company's Common Stock. Mr. Barker was also granted an Incentive
Stock Option to purchase 10,000 shares of the Company's Common Stock at a price
of $6.4375 per share.
Section 16(a) Beneficial Ownership Reporting Compliance
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 Securities and Exchange 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 1999
all filing requirements applicable to its directors, officers and persons who
own more than ten percent of the Company's Common Stock were satisfied.
<PAGE>
PRINCIPAL STOCKHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT OF THE COMPANY
The following table sets forth information regarding the beneficial
ownership of Common Stock, as of April 16, 1999 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 executive 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>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
Preferred Common Preferred Common
<S> <C> <C> <C> <C>
Francis E. Baker(1).............................. 0 208,044 0 10.7
8356 Sego Lane
Vero Beach, Florida
Estate of Oliver R. Grace, Sr.(2).............. 0 156,360 0 8.1
c/o Lorraine G. Grace, Executrix
49 Cove Neck Road
Oyster Bay, New York
Lorraine G. Grace(3).............................. 0 184,844 0 9.5
49 Cove Neck Road
Oyster Bay, New York
Oliver R. Grace, Jr. (4)........................... 6,000 257,578 2.3 12.4
55 Brookville Road
Glen Head, New York
John S. Grace(5).................................. 22,571 130,063 8.8 6.4
55 Brookville Road
Glen Head, New York
Peter N. Bennett(6)............................... 85,150 168,065 33.2 8.0
6 Batersea High St.
London SW11 3RA, England
The Bank of Butterfield(7)....................... 16,863 331,675 6.6 16.9
Rose Bank Centre
14 Bermudiana Road
Hamilton, Bermuda
First United Securities Limited(8)............. 0 136,731 0 7.1
Exchange House
P.O. Box 16, 54-58 Athol Street
Douglas, Isle of Man
Louis A. Lubrano(9)............................... 0 8,000 0 (13)
James J. Pinto(10)................................. 0 53,515 0 2.8
Ronald N. Cerny(11).............................. 0 10,884 0 (13)
Andrew M. O'Shea(12)........................... 0 12,901 0 (13)
Alldirectors and executive officers as a group (3 (Preferred) and 9 (Common)
persons including certain of the above-
named individuals)............................ 113,721 859,203 44.4 37.0
</TABLE>
<PAGE>
(1) Francis E. Baker has beneficial ownership of an aggregate of 208,044
shares of Common Stock and no shares of Preferred Stock. Of the Common
Stock amount 125,001 shares are owned directly. The figure set forth in
the table includes 58,900 shares of Common Stock with respect to which
Mr. Baker has shared voting power as co-trustee under the Oliver R.
Grace Grandchildren Trust U/R dated December 27, 1976 and 4,143 shares
which such Trust owns by virtue of its ability to convert $67,000
principal amount of the Company's 10.5% Convertible Subordinated
Debentures due 2007 (the "Debentures") to Common Stock within a 60-day
period. Mr. Baker also holds a stock option to acquire an additional
20,000 shares of Common Stock which may be issued to him within a 60-day
period. Mr. Baker disclaims beneficial ownership of such shares held in
trust. In addition to the shares reported in the table, Mr. Baker is the
settlor of four irrevocable trusts dated March 31, 1970 created for the
benefit of certain of his children. Fleet National Bank acts as trustee
under each of these trusts, which hold an aggregate of 63,506 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., c/o Lorraine G. Grace, Executrix,
has direct beneficial ownership of an aggregate of 156,360 shares of
Common Stock and no shares of Preferred Stock.
(3) Lorraine G. Grace has beneficial ownership of 184,844 shares of Common
Stock and no shares of Preferred Stock. Of the Common Stock 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;
12,371 shares are held by virtue of the ability of Mrs. Grace to convert
$200,000 principal amount of the Debentures to Common Stock within a
60-day period; and 156,360 shares are held by virtue of Mrs. Grace's
appointment as executrix of the Estate of Oliver R. Grace, Sr. Lorraine
G. Grace is the mother of Directors Oliver R. Grace, Jr. and John S.
Grace.
(4) Oliver R. Grace, Jr. has beneficial ownership of an aggregate of 257,578
shares of Common Stock and 6,000 shares of Preferred Stock. Of the
Common Stock amount, 45,980 shares are held by Oliver R. Grace, Jr.
directly, including 36,680 shares by virtue of Mr. Grace's ability to
convert $593,000 principal amount of the Debentures to Common Stock
within a 60-day period; 11,610 shares are held by virtue of Mr. Grace's
ability, as custodian for the benefit of his children, to convert 6,000
shares of the Company's Preferred Stock to Common Stock within a 60-day
period; 6,665 shares are held by Carolyn Grace, the spouse of Oliver R.
Grace, Jr., of which 6,185 shares are held by Mrs. Grace by virtue of
her ability to convert $100,000 principal amount of the Debentures to
Common Stock within a 60-day period; 52,267 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 $845,000 principal amount of
the Debentures to Common Stock within a 60-day period; 37,000 shares are
held by a corporation owned by members of Mr. Grace's family and 94,556
shares are held in an individual retirement account for the benefit of
Mr. Grace. Mr. Grace, Jr. also holds stock options to acquire an
additional 9,500 shares of Common Stock which may be issued to him
within a 60-day period. Oliver R. Grace, Jr. disclaims beneficial
ownership of all shares owned by his spouse, by him as trustee for the
benefit of family members, by his children, and by The Anglo American
Security Fund, L.P. described herein.
(5) John S. Grace has beneficial ownership of 130,063 shares of Common Stock
and 22,571 shares of Preferred Stock. Of the Common Stock amount, 17,396
shares are owned by John S. Grace directly, including 1,546 shares held
by virtue of Mr. Grace's ability to convert $25,000 principal amount of
the Debentures to Common Stock within a 60-day period; 52,267 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 $845,000
principal amount of the Debentures to Common Stock within a 60-day
period; 1,670 shares are held by virtue of the ability of Florida & Asia
Consulting, Inc. (Lola Grace, the spouse of John S. Grace, is the sole
stockholder of Florida & Asia Consulting, Inc.) to convert $27,000
principal amount of the Debentures to Common Stock within a 60-day
period; 43,675 shares are held by virtue of the ability of Sterling
Grace Capital Management, L.P. (John S. Grace is Chairman of Sterling
Grace Corporation, the 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 and 9,055 shares are held in an
individual retirement account for Mr. Grace's benefit. Mr. Grace also
holds stock options to acquire an additional 6,000 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.
(6) Peter N. Bennett has beneficial ownership of 168,065 shares of Common
Stock and 85,150 shares of Preferred Stock. Of the Common Stock amount,
300 shares of Common Stock are owned 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. Also included in the figure set
forth in the table are 3,000 shares of Common Stock which may be issued
to Mr. Bennett within 60 days hereof upon the exercise of his existing
exercisable stock option.
(7) The Bank of Butterfield (the "Bank") has beneficial ownership of an
aggregate 331,675 shares of Common Stock and 16,863 shares of Preferred
Stock as trustee of various trusts. Of the Common Stock amount 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.
(8) First United Securities Limited ("FUSL") has beneficial ownership of an
aggregate of 136,731 shares of Common Stock, as trustee of various
trusts, and no shares of Preferred Stock. Of the Common Stock amount
10,021 shares are held by virtue of the ability of FUSL to convert
$162,000 principal amount of the Debentures to Common Stock within a
60-day period.
(9) Louis A. Lubrano has beneficial ownership of 8,000 shares of Common
Stock and no shares of Preferred Stock. Mr. Lubrano's ownership is
represented by stock options to acquire 8,000 shares of Common Stock
within a 60-day period.
(10) James J. Pinto has beneficial ownership of 53,515 shares of Common Stock
and no shares of Preferred Stock. Of the Common Stock amount, 45,515
shares are held directly. Also included in the figure set forth in the
table are stock options to acquire 8,000 shares of Common Stock within a
60-day period.
(11) Ronald N. Cerny has beneficial ownership of 10,884 shares of Common
Stock and no shares of Preferred Stock. Of the Common Stock amount,
2,000 shares are held directly and 884 shares are held in the Company's
401(k) Plan. Also included in the figure set forth in the table are
stock options to acquire 8,000 shares of Common Stock within a 60-day
period.
(12) Andrew M. O'Shea has beneficial ownership of 12,901 shares of Common
Stock and no shares of Preferred Stock. Of the Common Stock amount,
1,000 shares are held directly, 901 shares are held in the Company's
401(k) Plan and 1,000 shares are held by Moira L. O'Shea, the spouse of
Andrew M. O'Shea. Also included in the figure set forth in the table are
stock options to acquire 10,000 shares of Common Stock within a 60-day
period.
(13) Represents less than one percent (1%) of the Common Stock.
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP is the Company's independent accounting firm and has been
since December 1997.
In December 1997, the Company's former auditors, KPMG Peat Marwick, City Place
II, Hartford, CT 06103, were dismissed by the Company for the fiscal year ended
February 28, 1997. KPMG Peat Marwick rendered an unqualified opinion with
respect to the Company's consolidated financial statements for all years covered
by reports filed during that period. The dismissal of KPMG Peat Marwick was
approved by the Audit Committee of the Company's Board of Directors.
During the fiscal year ended February 28 1997, and the interim period through
December 23, 1997, there were no disagreements with KPMG Peat Marwick on any
matter of accounting principles or procedures, financial statements disclosures
or auditing scope or procedures.
Effective December 23, 1997, upon the recommendation of the Audit Committee of
the Company's Board of Directors, the firm of Deloitte & Touche, LLP, City
Place, Hartford, CT 06103 was retained to perform an examination on and render
an opinion with respect to the Company's consolidated financial statements as of
and for the year ending February 28, 1998. During the past two fiscal years the
Company has not consulted with Deloitte & Touche regarding the application of
accounting principles or the type of audit opinion that might be rendered on the
Company's financial statements. Furthermore, no written report or oral advice
was provided by Deloitte & Touche that was an important factor in reaching a
decision as to an accountant, auditor or financial report issue. Deloitte &
Touche was not consulted on any matter which would be viewed as being the
subject of a disagreement or reportable event.
Representatives of Deloitte & Touche will not be present at the Annual Meeting.
STOCKHOLDER PROPOSALS
No Stockholder proposals were received by the Company during Fiscal
1999.
In order to be considered for inclusion in the Proxy Statement relating
to the 2000 Annual Meeting of Stockholders, any proposal by a record holder of
Common Stock, or a record holder of the Preferred Stock pursuant to the
Preferred Stock Terms, must be received by the Company at its principal offices
on or before December 1, 1999. A proponent of such a proposal must comply with
the proxy rules under the Securities Exchange Act of 1934, as amended. Any such
proposals which are to be presented to the 2000 Annual Meeting of Stockholders
but are not to be included in the Proxy Statement for such meeting must be
received by the Company at its principal offices on or before April 4, 2000.
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
/s/ Francis E. Baker
Francis E. Baker
Chairman and Secretary
<PAGE>
REVOCABLE PROXY
ANDERSEN GROUP, INC.
PLEASE MARK VOTES
AS IN THIS EXAMPLE [ X ]
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JUNE 22, 1999 SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF ANDERSEN GROUP, INC. (the "Company")
The undersigned hereby appoints Francis E. Baker, Louis A. Lubrano, and
Oliver R. Grace, Jr. as Proxies, with full power to act without the other and
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all shares of the Company's Common
Stock, $.01 par value, (the "Common Stock"), held of record by the undersigned
on May 7, 1999 at the Annual Meeting of Stockholders to be held on June 22, 1999
or any adjournment thereof.
1. The Election of Directors (except as marked to the contrary below):
Francis E. Baker, Peter N. Bennett, John S. Grace, Oliver R. Grace, Jr., Louis
A. Lubrano, and James J. Pinto. [ ] For [ ] Withhold [ ] For All Except
Instruction: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder.
The directors recommend a vote FOR Item 1 as proposed.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEM 1.
Please be sure to sign and date Date: ___________________
this Proxy in the box below.
----------------------------- -------------------------------
Stockholder Sign Above Co-holder (if any) sign above Please sign exactly as
name appears hereon. When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Detach above card, sign, date and mail in postage paid envelope provided.
ANDERSEN GROUP, INC.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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