<PAGE>
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
- --------------------------------------------------------------------------------
Gencor Industries, Inc.
- --------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
REVISED DEFINITIVE PROXY STATEMENT
----------------------------------
GENCOR INDUSTRIES, INC.
5201 NORTH ORANGE BLOSSOM TRAIL, ORLANDO, FLORIDA 32810
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 11, 1997
TO THE SHAREHOLDERS OF GENCOR INDUSTRIES, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Gencor
Industries, Inc., a Delaware corporation (the "Company"), will be held at the
Gencor Corporate Offices, 5201 North Orange Blossom Trail, Orlando, Florida, on
April 11, 1997 at 10:00 A.M., local time, for the following purposes, all of
which are more completely set forth in the accompanying Proxy Statement:
1. To elect five Directors of the Company Common Stock shareholders will elect
one Director, and Class B Stock Shareholders will elect four Directors.
2. To approve the Company's 1997 Stock Option Plan.
3. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized Common Stock from 5,000,000 to 15,000,000
and the number of authorized Class B Stock from 3,000,000 to 6,000,000.
4. To ratify the selection of Deloitte & Touche LLP, independent certified
public accountants, as auditors for the Company for the year ending
September 30, 1997.
5. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on February 14, 1997,
are entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. Shareholders should review the information provided herein in
conjunction with the Company's 1996 Annual Report which accompanies this Proxy
Statement.
The Company's Proxy Statement and proxy accompany this notice.
By order of the Board of Directors,
/s/ Jeanne M. Lyons
-----------------------------------
Jeanne M. Lyons, Secretary
Orlando, Florida
Date: March 3, 1997
Enclosures
****YOUR VOTE IS IMPORTANT****
YOU ARE URGED TO DATE, SIGN, AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF
THE NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF
ADDITIONAL PROXY SOLICITATION. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.
<PAGE>
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 11, 1997
This Proxy Statement is furnished in connection with the Annual
Meeting of Shareholders of Gencor Industries, Inc. (the "Company") to be held
April 11, 1997, at 10:00 a.m. local time, or any adjournments thereof at the
Gencor Corporate Offices, 5201 North Orange Blossom Trail, Orlando, Florida.
This Proxy Statement and accompanying proxy are first being mailed to
shareholders on or about March 3, 1997.
SOLICITATION AND REVOCATION OF PROXY
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of the Company to be used at the Annual
Meeting of the holders of the Company's Common Stock, par value $.10 per share,
and Class B Stock, par value $.10 per share (hereinafter referred to as "Common
Stock" and "Class B Stock," respectively) to be held April 11, 1997. The
enclosed proxy may be revoked at any time before it is exercised by attending
and voting in person at the meeting, by giving written notice of revocation to
the Secretary of the Company prior to the taking of the vote for which such
proxy has been given, or by delivery to the Secretary of the Company of a duly
executed proxy bearing a later date. Notice and delivery shall occur upon
actual receipt by the Secretary of the Company at its principal place of
business. The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally, by
telephone, or by telegraph by the Directors, Officers, and employees of the
Company, or by the Company's transfer agent. Also, the Company will make
arrangements with banks, brokerage houses, and other nominees, fiduciaries, and
custodians holding shares in their names or in those of their nominees to
forward proxy materials to the beneficial owners of shares, and the Company will
upon request, reimburse such entities for their reasonable expenses in sending
the proxy materials. All properly executed unrevoked proxies received in time
for the meeting will be voted as specified. If no other indication is made, the
proxies will be voted for the election of Directors shown as nominees and as
recommended by the Board of Directors with regard to all other matters.
VOTING SECURITIES
At the close of business on February 26, 1997, there were 1,902,870
shares of Common Stock and 441,532 shares of Class B Stock outstanding and
entitled to vote at the Annual Meeting.
The holders of such shares are entitled to one vote for each share of
stock held by them on any matter to be presented at the Annual Meeting,
including the election of Directors. The holders of Common Stock and Class B
Stock will vote separately as a class on the election of Directors. Only
shareholders of record at the close of business on February 26, 1997, are
entitled to vote at the Annual Meeting and any adjournment thereof. Although
the Company has not polled its Directors and Executive Officers, management
expects that the Directors and Executive Officers will vote for the nominees and
proposals as shown herein.
The presence at the Annual Meeting, in person or by proxy, of a
majority of the outstanding shares of each class of Common Stock and Class B
Stock will constitute a quorum.
<PAGE>
PROPOSALS TO SHAREHOLDERS
1. ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides that 75% (calculated to
the nearest whole number, rounding a fractional number of five-tenths (.5) to
the next highest whole number) of the members of the Board shall be elected by
Class B shareholders. voting separately as a class. The Company anticipates
that the Class B Directors will be elected.
Pursuant to the Company's Bylaws, the Board of Directors has fixed the
number of Directors at five. The Board of Directors has selected the following
persons as nominees for election as Directors at the 1997 Annual Meeting of
Shareholders:
To be elected by the Class B shareholders:
E.J. Elliott
Constantine L. Corpas
John E. Elliott
Peter Kourmolis
The affirmative vote of shareholders holding a majority of the Company's
issued and outstanding Class B Stock in attendance at the meeting, either in
person or by proxy, is required to approve this proposal. Abstentions and
broker non-votes will have no effect.
To be elected by Common Stock shareholders:
Larry H. Pitsch
The affirmative vote of shareholders holding a majority of the Company's
issued and outstanding Common Stock in attendance at the meeting, either in
person or by proxy, is required to approve this proposal. Abstentions and
broker non-votes will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE NOMINEES.
Each of the nominees for the Board of Directors is presently serving as a
Director of the Company. Each Director elected at the Annual Meeting shall hold
office until his respective successor has been elected and qualified, or until
such individual's earlier resignation or removal.
It is the intention of the persons named in the accompanying form of proxy
to nominate and, unless otherwise directed, vote such proxies for the election
of the nominees named above as Directors. The Board of Directors knows of no
reason why any nominee for Director would be unable to serve as a Director. If
any nominee should for any reason become unable to serve, the shares represented
by all valid proxies will be voted for the election of such other person as the
Board of Directors may designate, or the Board of Directors may reduce the
number of Directors to eliminate the vacancy.
DIRECTORS AND EXECUTIVE OFFICERS
The following table lists each Director and Executive Officer of the
Company and each nominee by class of stock for election as Director. The table
also includes the age, principal occupation and business experience for the past
five years, positions and offices held with the Company, and period of service
as a Director or Executive Officer.
-2-
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION EXECUTIVE DIRECTOR
NAME AND POSITIONS HELD AND BUSINESS EXPERIENCE OFFICER OF OF COMPANY
WITH THE COMPANY DURING PAST FIVE YEARS COMPANY SINCE SINCE
DIRECTORS TO BE ELECTED BY CLASS B STOCK SHAREHOLDERS:
<S> <C> <C> <C>
E.J. Elliott Chairman of the Board 1968 1968
Chairman of the Board and President; and President of the Company
Director(1)(4)
Constantine L. Corpas Attorney, Corpas & Pahys -- 1968
Director(1)(2)(3)
John E. Elliott Executive Vice President of the Company 1985 1985
Executive Vice President, Secretary since 1989
Director(2)(4) 1985
Peter Kourmolis Investor -- 1968
Director(3)
DIRECTORS TO BE ELECTED BY COMMON STOCK SHAREHOLDERS:
Larry H. Pitsch President, California Pellet Mill Company -- 12/1996
Director since December 1996
Group President of Ingersoll-Rand
Company, 1985 - 1996
EXECUTIVE OFFICERS OTHER THAN DIRECTORS(5):
Alan Dawes Managing Director, General Combustion, 1985 --
Ltd. since 1992; Technical Director of
General Combustion, Ltd. 1985 - 1992
David F. Brashears Senior Vice President, Technology, since 1978 --
1993; Vice President of Engineering,
1978 - 1993
D. William Garrett Vice President, Sales since 1991. 1991 --
Between 1985 and 1991, he served in
several sales and marketing positions
with Company and its subsidiaries
Marc G. Elliott(4) Vice President, Marketing since 1993. 1993 --
He previously served in various
marketing positions since he joined the
Company in 1988.
Russell R. Lee, III Treasurer of the Company since 1995. 1995 --
Corporate Controller, 1990 - 1995
Jeanne M. Lyons Secretary of the Company since August 1996, 8/1996 --
Administrative Assistant since June 1995.
For the past ten years, Ms. Lyons has
worked as an Administrative Assistant.
</TABLE>
(1) Member of the Executive Committee.
-3-
<PAGE>
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) E.J. Elliott is the father of John E. Elliott and Marc G. Elliott.
(5) Each executive officer holds office until his successor has been elected
and qualified, or until his earlier resignation or removal.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES OF THE BOARD
During the twelve months ended September 30, 1996, the Board of Directors
of the Company held four meetings. All directors attended more than 75% of the
meetings. The Board of Directors of the Company has a standing Audit Committee
which met once during fiscal 1996. The Compensation Committee met once during
fiscal 1996, to discuss executive performance. During fiscal 1996, stock options
were granted to several Executive Officers/Directors as described in this proxy
statement and one Executive Officer received a salary increase during fiscal
1996.
The Compensation Committee endeavors to ensure that the compensation
program for executive officers of the Company is effective in attracting and
retaining key executives responsible for the success of the Company and in
promoting its long-term interests and those of its stockholders. The committee,
without applying any specific quantitative formulas, considers such factors as
net income, earnings per share, duties and scope of responsibility, industry
standards and comparable salaries for the geographic area, corporate growth,
profits goals and market share increases. The functions of the Compensation
Committee include establishment of compensation plans for Gencor's executive
officers and administration of certain of Gencor's employee benefit and
compensation programs.
The members of these committees are indicated by footnotes to the table
under "Directors and Executive Officers of the Company" above. The Company
does not have a Nominating Committee.
The Audit Committee's responsibilities include selecting the Company's
auditors and reviewing the Company's audit plan, financial statements and
internal accounting and audit procedures.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors,
officers and certain stockholders to file with the Commission an initial
statement of beneficial ownership and certain statements of changes in
beneficial ownership of equity securities of the Company. Based solely on its
review of such forms received by it, the Company is unaware of any instances of
noncompliance, or late compliance, with such filings during the fiscal year
ended September 30, 1996, by its officers, directors or stockholders.
DIRECTORS FEES
Directors fees are paid by the Company to non employee directors, at the
rate of $1,000 per quarter and $750 per meeting attended. During the twelve
months ended September 30, 1996, the Company paid Directors' fees in the
aggregate amount of $15,750.
EXECUTIVE COMPENSATION
The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during the fiscal years ended September 30, 1994, 1995 and 1996 for
(i) the President of the Company and (ii) each of the other most highly
compensated executive officers of the
-4-
<PAGE>
Company (determined as of the end of the last fiscal year) whose total annual
salary and bonus exceeded $100.000 (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION: AWARDS:
Underlying All other
Name and Principal Position Year Salary(1) Bonus Options Compensation(2)
- --------------------------- ---- ----------- ------ ------------------- ---------------
<S> <C> <C> <C> <C> <C>
E.J. Elliott 1996 $300,000 -- 100,000 shares/(3)/ $3,029
President and Chairman of the Board 1995 300,000 -- 95,000 shares 2,596
1994 232,521 -- -- 2,192
John E. Elliott 1996 $125,000 -- 54,500 shares/(4)/ $ 0
Executive Vice President 1995 120,000 -- 50,000 shares 0
1994 60,000 -- -- 0
D. William Garrett 1996 $110,000 $7,087 10,000 shares /(5)/ $1,851
Vice President, Sales 1995 110,000 -- -- 1,586
1994 110,000 -- -- 2,010
</TABLE>
(1) Does not include an amount for incidental personal use of business
automobiles furnished by the Company to certain of its Named Executive
Officers. The Company has determined that the aggregate incremental cost of
such benefits to the Named Executive Officers does not exceed, as to any
named individual, the lesser of $50,000 or 10% of the cash compensation
reported for such person.
(2) The Compensation reported under All Other Compensation represents
contributions to the Company's 401(K) Plan on behalf of the Named Executive
Officers to match 1994-1996 pretax executive contributions (included under
salary) made by each executive officer to such plan.
(3) Includes 50,000 options granted pursuant to the Company's 1997 Stock Option
Plan (the "1997 Plan"), subject to shareholder approval at the Company's
1997 Annual Meeting.
(4) Includes 35,000 options granted pursuant to the Company's 1997 Plan, subject
to shareholder approval at the Company's 1997 Annual Meeting.
(5) Includes 10,000 options granted pursuant to the Company's 1997 Plan, subject
to shareholder approval at the Company's 1997 Annual Meeting.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows all grants of options to the Named Executive
Officers of the Company in 1996. The options were granted as individual grants
and/or under a stock option plan. Pursuant to Securities and Exchange
Commission (the "SEC ") rules, the table also shows the value of the options
granted at the end of the option terms (ten years) if the stock price were to
appreciate annually by 5% and 10%, respectively. There is no assurance that the
stock price will appreciate at the rates shown in the table. The table also
indicates that if the stock price does not appreciate, there will be no increase
in the potential realizable value of the options granted.
-5-
<PAGE>
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
Number of Percent
Securities of Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/SH) Date 0% 5% 10%
- -------------------- ----------- ---------------- ----------- ---------- - ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
E.J. Elliott 50,000 41.7% $7.75 07/24/01 0 107,000 236,500
50,000/(1)/ 33.9%/(1)/ $7.75/(1/ 07/24/01 107,000 236,500
John E. Elliott 19,500 16.3% $ 7.75 07/24/01 0 41,730 92,235
35,000/(1)/ 18.5%/(1)/ $7.75/(1)/ 07/24/01 0 74,900 165,550
D. William Garrett 0 0 ----- 07/24/01 0 0 0
10,000/(1)/ 3.3%/(1)/ $7.75/(1)/ 07/24/01 0 21,400 47,300
</TABLE>
(1) Represents options granted pursuant to the 1997 Plan, subject to
shareholder approval at the Company's Annual Meeting.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
The following table provides information as to options exercised by each of
the Named Executive Officers of Gencor during 1996 and the value of options held
by such officers at year end measured in terms of the closing price of Gencor
Common Stock on September 30, 1996.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-The-Money Options
Acquired on Value Options at FY-End At FY-End ($)
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------- ------------ ------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
E.J. Elliott 0 0 145,000 0 812,500 0
195,000/(1)/ 0/(1)/ 1,150,000/(1)/ 0/(1)/
John E. Elliott 7,500 0/(2)/ 69,500 0 381,625 0
104,500/(1)/ 0/(1)/ 617,875/(1)/ 0/(1)/
William Garrett 15,000 196,875/(3)/ 0 0 0 0
10,000/(1)/ 0/(1)/ 67,500/(1)/ 0/(1)/
</TABLE>
(1) Includes options granted under the Company's 1997 Plan, subject to
shareholder approval.
(2) Value realized upon exercise is based upon the difference between the last
sales price of the Common Stock on November 15, 1995 the date on which the
options were exercised ($7.50) and the option exercise price ($7.50) times
the number of options exercised (7,500).
(3) Value realized upon exercise is based upon the difference between the last
sales price of the Common Stock on September 12, 1996, the date on which the
options were exercised ($15.875) and the option exercise price ($2.75) times
the number of options exercised (15,000).
-6-
<PAGE>
STOCK OPTION PLANS
1992 STOCK OPTION PLAN
In May of 1992, the Company's Board of Directors adopted the Gencor
Industries, Inc. 1992 Stock Option Plan (the "1992 Plan") which authorizes the
granting of options to Directors, officers and key employees of the Company or
any of its present or future subsidiaries. Up to 100,000 shares of the
Company's Common Stock, 100,000 shares of the Company's Class B Stock and
fifteen percent (15%) of the authorized Common Stock of any Company subsidiary
are subject to the 1992 Plan. Shares are no longer available for grant under
the 1992 Plan since all options authorized under the Plan have been granted.
1997 STOCK OPTION PLAN
In July 1996, to Company's Board of Directors, subject to the approval of its
shareholders, adopted the Gencor Industries, Inc. 1997 Stock Option Plan (the
"1997 Plan") which provides for the issuance of incentive stock options with the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and non-qualified stock options, to purchase an aggregate of up to
300,000 shares of the Company's Common Stock, 300,000 shares of the Company's
Class B Stock and up to fifteen percent (15%) of the authorized Common Stock of
any subsidiary. The 1997 Plan permits the grant of option to officers,
directors and key employees of the Company. See Proposal No. 2 - Approval of
Gencor Industries, Inc. 1997 Stock Option Plan for additional information
concerning the 1997 Plan.
STOCK OPTION AWARDS
Contemporaneously with the adoption of the 1992 Plan, the Board of Directors
authorized a stock option bonus for E.J. Elliott which would grant Mr. Elliott
fifteen percent (15%) of the outstanding shares of stock of Thermotech Systems
Corporation, a subsidiary of the Company. The terms and conditions for the
issuance of such shares have not been finalized, and no shares or options with
regard to Thermotech Systems Corporation have been issued to Mr. Elliott.
In July 1996, the Company awarded a total of 89,000 options to management, at
an exercise price of $7.75 per share and an expiration date of July 24, 2001.
REPORT OF THE COMPENSATION COMMITTEE
GENERAL
The Compensation Committee (the "Committee") of the Board of Directors
consists of Constantine L. Corpas and Peter Kourmolis, each of whom is a non
employee director of the Company. The Compensation Committee administers the
Company's executive compensation program, monitors corporate performance and its
relationship to compensation for executive officers, and makes appropriate
recommendations concerning matters of executive compensation.
COMPENSATION PHILOSOPHY
The Committee has developed and implemented a compensation program that is
designed to attract, motivate, reward and retain the broad based management
talent required to achieve the Company's business objectives and increase
stockholder value. There are two major components of the Company's compensation
program: base salary, and incentives, each of which is intended to serve the
overall compensation philosophy.
BASE SALARY
The Company's salary levels are intended to be consistent with competitive pay
practices and level of responsibility, with salary increases reflecting
competitive trends, the overall financial performance and resources of the
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<PAGE>
Company, general economic conditions as well as a number of factors relating to
the particular individual, including the performance of the individual
executive, and level of experience, ability and knowledge of the job.
INCENTIVES
Incentives consist of stock options and, to a lesser extent, cash awards.
The Committee strongly believes that the pay program should provide employees
with an opportunity to increase their ownership and potentially gain financially
from Company stock price increases. By this approach, the best interests of
shareholders, executives and employees will be closely aligned. Therefore,
executives and other employees are eligible to receive stock options, giving
them the right to purchase shares of the Company at a specified price of the
future. The grant of options is based primarily on a key employee's potential
contribution to the Company's growth and profitability, based on the market
value of the Company's Common Stock and will only have value if the Company's
stock price increases. The granting of cash awards is discretionary and is not
dependent on any one factor.
1996 EXECUTIVE COMPENSATION
Base salaries were increased for certain executive officers to maintain an
externally competitive rate of pay. With respect to Mr. E.J. Elliott, the
Committee determined that a base salary increase should be foregone in favor of
increased long term incentive opportunities. Mr. Elliott's base salary of
$300,000 has remained the same for the past two years.
To ensure long term retention and to continue to focus the executives on
the importance of stockholder returns, the Committee granted stock options to
many of its executive officers. All stock options have an exercise price that
is equal to the fair market value of the stock on the date of grant. In making
these grants, the Committee considered competitive norms, individual
contributions and responsibilities and the Company's performance. Mr. Elliott
was granted options to purchase 50,000 shares of the Company's Class B Stock at
an exercise price of $7.75 per share.
Compensation Committee
----------------------
Constantine L. Corpas
Peter Kourmolis
FIVE YEAR TOTAL RETURN COMPARISON
The following graph compares the cumulative total return of the Company's
stock with the Wilshire Small Capitalization Index and the Dow Jones Heavy
Machinery Index for the period 12/31/91 through 9/30/96. The Company's fiscal
year ended 9/30/96. These calculations assume the value of investment in
Company stock, the Wilshire Index, and the Heavy Machinery Index was $100 on
12/31/91. These calculations assume reinvestment of dividends in the Wilshire
Index and the Heavy Machinery Index. A ten percent (10%) stock dividend was
declared on November 16, 1994, payable December 30, 1994, to shareholders of
record, on November 16,1994. A five cent ($0.05) per share cash dividend was
declared on December 1, 1995, payable January 5, 1996, to shareholders of record
on December 18, 1995. A five cent ($0.05) per share cash dividend was declared
on November 21, 1996, payable January 4, 1997 to shareholders of record on
December 18, 1996.
-8-
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG GENCOR,
WILSHIRE SMALL CAP INDEX, AND DOW JONES HEAVY MACHINERY INDEX
<TABLE>
<CAPTION>
Wilshire Small Dow Jones Heavy
Gencor Cap Index Machinery
------ -------------- ---------------
<S> <C> <C> <C>
12/31/91 100 100 100
12/31/92 183 115 108
9/30/93 142 131 165
9/30/94 204 130 174
9/30/95 171 149 207
9/30/96 258 169 276
</TABLE>
CERTAIN TRANSACTIONS WITH MANAGEMENT
The Company leases vehicles from Marcar Leasing Corporation ("Marcar"),
a corporation engaged in general leasing to the public of machinery, as well as
vehicles, owned by members of E.J. Elliott's immediate family, including John E.
Elliott and Marc G. Elliott. The terms of the leases are established based on
the rates charged by independent leasing organizations and are believed by the
Board of Directors to be more favorable than those generally available from
independent third parties. Leases between the Company and Marcar generally
provide for equal monthly payments over either thirty-six months or forty-eight
months. During fiscal 1996, the Company made lease payments to Marcar in the
aggregate amount of $185,906.
On September 9, 1995, the Callie A. Elliott Trust Fund ("Trust Fund")
made a $325,000 loan to the Company. The loan was evidenced by a demand note
which was callable at any time by the Company. The interest on the notes is 9.5%
per annum. On September 13, 1996, the Trust Fund made an additional loan to the
Company in the amount of $1,000,000. This loan was also evidenced by a demand
note and the interest rate was 9.5% per annum. The loans were repaid on December
10, 1996.
OWNERSHIP OF SECURITIES BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 1,
1997, with respect to (i) each person known to management to be the beneficial
owner of more than 5% of the Company's Common Stock or Class B Stock, (ii) each
Director of the Company, and (iii) the current Directors and Executive Officers
of the Company as a group. Except as otherwise noted, each named beneficial
owner has sole voting and investment power over the shares shown.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP[1] PERCENT OF CLASS[1]
---------------------------- ---------------------
NAME AND ADDRESS OF COMMON CLASS B COMMON CLASS B
BENEFICIAL OWNER STOCK STOCK STOCK STOCK
<S> <C> <C> <C> <C>
E.J. ELLIOTT 254,000 [2] 544,324 [3] 15.6% 85.5%
5201 N. Orange Blossom Trail
Orlando, Florida 32810
CONSTANTINE L. CORPAS 32,500 [4] 27,500 2.0% 6.2%
5201 N. Orange Blossom Trail
Orlando, Florida 32810
JOHN E. ELLIOTT 117,024 [5] 123,880 [6] 7.2% 22.7%
5201 N. Orange Blossom Trail
Orlando, Florida 32810
PETER KOURMOLIS 26,703 [7] -- 1.6% --
5201 N. Orange Blossom Trail
Orlando, Florida 32810
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP[1] PERCENT OF CLASS[1]
---------------------------- ---------------------
NAME AND ADDRESS OF COMMON CLASS B COMMON CLASS B
BENEFICIAL OWNER STOCK STOCK STOCK STOCK
<S> <C> <C> <C> <C>
DAVID A. AIR 2,600 [8] -- * --
5201 N. Orange Blossom Trail
Orlando, Florida 32810
HARVEY HOUTKIN 306,893 [9] -- 18.9% --
78 Lafayette Avenue, Suite 207
Suffern, NY 10901
KENNEDY CAPITAL 128,918 [10] -- 7.9% --
MANAGEMENT, INC.
425 New Ballas Road, Suite 181
St. Louis, MO 63141
All Directors & Executive 473,452 [11] 812,084 [12] 28.6% 96%
Officers as a Group [11 Persons]
</TABLE>
* Percentage ownership is less than 1%
[1] In accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as
amended, shares that are not outstanding, but that are subject to option,
warrants, rights or conversion privileges exercisable within 60 days have
been deemed to be outstanding for the purpose of computing the percentage
of outstanding shares owned by the individual having such right but have
not been deemed outstanding for the purpose of computing the percentage for
any other person.
[2] Includes 30,000 shares owned jointly with John Elliott and 30,000 shares
owned jointly with Marc Elliott.
[3] Includes options to purchase 195,000 shares of Class B Stock (50,000
options were granted under the 1997 Plan and are subject to shareholder
approval).
[4] Includes options to purchase 15,000 shares of Common Stock.
[5] Includes 30,000 shares owned jointly with E. J. Elliott.
[6] Includes options to purchase 104,500 shares of Class B Stock. (35,000
options were granted under the 1997 Plan and are subject to shareholder
approval.)
[7] Includes options to purchase 14,500 shares of Common Stock.
[8] Includes options to purchase 1,500 shares of Common Stock.
[9] Based on a Schedule 13D dated August 14, 1996 filed by Harvey Houtkin with
the Securities and Exchange Commission. Includes 126,098 shares
individually owned by Mr. Houtkin and subject to sole voting and
dispositive power. Also includes the following shares with Mr. Houtkin as
control person subject to shared voting and dispositive power: 27,833
shares owned by All-Tech Investment Group Inc., a 100% owned subsidiary of
Rushmore Financial Services, Inc. ("Rushmore") and 34,617 shares owned by
Rushmore. Rushmore is owned 50% by Mr. Houtkin and Mark Shefts, who is Mr.
Houtkin's brother-in-law.
[10] Based on a letter dated December 27, 1995, for Kennedy Capital Management,
Inc.
[11] Includes options to purchase 61,000 shares of Common Stock (30,000 options
are subject to shareholder approval).
[12] Includes options to purchase 404,000 shares of Class B Common Stock
(120,000 options are subject to shareholder approval).
2. PROPOSED ADOPTION OF THE COMPANY'S 1997 STOCK OPTION PLAN
On July 24, 1996, the Board of Directors of the Company adopted, subject to
shareholder approval at the 1997 Annual Meeting of Shareholders, the Company's
1997 Stock Option Plan ("Plan").
The Company's Board of Directors believes the Plan will enhance the
Company's ability to attract, motivate and retain key personnel and will thereby
serve the best interests of the Company and its shareholders.
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<PAGE>
The following summary describes the principal features of the Plan and is
qualified in its entirety by reference to such Plan, a copy of which is attached
hereto as Exhibit A.
The purpose of this Plan is to provide an incentive for persons who are
granted options to exert maximum efforts for the Company's success, and to
reward such efforts by enabling such persons to participate in such success
through growth in the value of the stock subject to the option granted.
ADMINISTRATION
The 1997 Plan may be administered by (i) the Board of Directors of the
Company or (ii) any duly constituted committee of the Board of Directors
consisting of at least two members of the Board of Directors, all of whom shall
be Non-Employee Directors as defined in Rule 16(b)-3 under the Exchange Act.
The administering party is referred to herein as the "Committee."
The Committee selects the participants to whom options are to be granted
and, with respect to each option, determines the number of shares covered
thereby and the exercise price of the option. The Committee also resolves all
questions of application or interpretation of the 1997 Plan.
GRANTS
Grants under the Plan may consist of: (i) options intended to qualify as
incentive stock options ("ISOs") within the meaning of the Code, (ii) so-called
"non-qualified stock options" that are not intended to so qualify ("NQSOs"), or
(iii) a combination thereof.
SHARES SUBJECT TO THE PLAN
The maximum number of shares which may be issued pursuant to options
granted under the Plan shall be as follows: (i) 300,000 shares of the Company's
Common Stock, (ii) 300,000 shares of the Company's Class B Stock; and (iii)
fifteen percent (15%) of the authorized common stock of any subsidiary of the
Company (collectively, the "Shares").
ELIGIBILITY
Options may be granted only to persons who are either directors, officers
or key employees of the Company or any of its present or future subsidiaries.
OPTIONS
The Plan permits the Committee to grant plan options either as ISOs or as
NQSOs, and allows the Committee to establish, as to any participant, the number
of options, exercise price, exercise term (subject to a maximum of ten years),
and other terms and conditions. Subject to the foregoing, the option exercise
price for each Share covered by an option may not be less than 100% of the fair
market value of a Share on the date of grant of such option; however, in the
case of an ISO, the price shall be no less than 100% of the fair market value of
a Share at the time such option is granted; and in the case of an ISO granted to
a ten percent shareholder, the exercise price will be no less than 110% of the
fair market value of the Share on the date of grant. The optionee may pay the
exercise price by (i) cash (or its equivalent), (ii) loans from the Company,
(iii) payroll deductions, (iv) surrender of previously-owned shares having an
aggregate fair market value equal to the total purchase price, (v) the
withholding of shares granted pursuant to the option exercise having an
aggregate fair market value equal to the total purchase price or (vi) any other
medium approved by the Committee.
AMENDMENT AND TERMINATION OF THE PLAN
The Committee may amend or terminate the Plan at any time; provided,
however, that the Board may not, without the approval of shareholders, amend the
Plan in any manner that requires such shareholder approval pursuant to the
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<PAGE>
Internal Revenue Code of 1986, as amended or pursuant to the Exchange Act or
Rule 16b-3 thereunder, and the terms and conditions of any awards to directors
shall not be amended more than once every six months, other than to comply with
changes in the Code or the Employee Retirement Income Security Act of 1974, as
amended. According to its terms, the Plan will terminate 10 years from the
effective date.
ADJUSTMENT PROVISIONS
In the event of a stock split, stock dividend, recapitalization or similar
transaction, an appropriate adjustment shall be made to the number of Shares
which are subject to options (and the exercise price per Share). In the event
of a reorganization, reclassification, merger, consolidation, exchange or
similar event, the Committee shall set forth in the option agreement the effect
on the class of Shares issuable pursuant to options not yet exercised.
TAX IMPLICATIONS
The following discussion is intended only as a brief summary of the federal
income tax rules relevant to options or shares issued under the 1997 Plan, as
based on the Code currently in effect. This summary is not meant to be
exhaustive and, among other things, does not describe state, local or foreign
and other tax consequences. An optionee will not realize taxable income upon
the grant of an option. In general, the holder of an NQSO (within the meaning
of Section 422 of the Code) will realize ordinary income when the option is
exercised equal to the excess of the value of the stock over the exercise price
(i.e., the option spread), and the Company receives a corresponding deduction,
subject to the executive compensation deduction limitations of Section 162(m) of
the Code. (If the optionee is subject to the six-month restrictions on sale of
Common Stock under Section 16(b) of the Exchange Act, the optionee generally
will recognize ordinary income on the date the restrictions lapse, unless an
early income recognition election is made.) Upon a later sale of the stock, the
optionee will realize capital gain or loss equal to the difference between the
selling price and the value of the stock at the time the option was exercised.
The holder of an ISO will not realize taxable income upon the exercise of
the option (although the option spread is an item of tax preference income
potentially subject to the alternative minimum tax). If the stock acquired upon
exercise of the ISO is sold or otherwise disposed of within two years from the
option grant date or within one year from the exercise date, then, in general,
gain realized on the sale is treated as ordinary income to the extent of the
option spread at the exercise date, and the Company receives a corresponding
deduction, subject to the executive compensation deduction limitations of
Section 162(m) of the Code. Any remaining gain is treated as capital gain. If
the stock is held for at least two years from the grant date and one year from
the exercise date, then gain or loss realized upon the sale will be capital gain
or loss and the Company will not be entitled to a deduction. A special basis
adjustment is applied to reduce the gain for alternative minimum tax purposes.
Special rules may apply in the case of an optionee who is subject to
Section 16 of the Exchange Act.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE COMPANY'S
1997 STOCK OPTION PLAN.
3. PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK AND CLASS B STOCK
The Company's Restated Certificate of Incorporation, as amended, (the
"Certificate of Incorporation") provides that the total number of shares of all
classes of stock which the Company shall have the authority to issue is
8,300,000 shares, consisting of 300,000 shares of Serial Preference Stock, par
value $0.10 per share; 5,000,000 shares of Common Stock, par value $0.10 per
share; and 3,000,000 shares of Class B Stock, par value $0.10 per share. The
Company's Board of Directors has adopted a resolution recommending that the
shareholders adopt an amendment to Article FOURTH of the Company's Certificate
of Incorporation in order to increase the authorized number of shares of the
Company's common stock from 5 million to 15 million and the authorized number of
shares of the Company's Class B Stock from 3 million to 6 million (the
"Amendment").
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If the Amendment is approved, Article FOUR of the Certificate of
Incorporation, which sets forth the Company's presently authorized capital
stock, will be amended by deleting Article FOUR, Section A in its entirety and
substituting the following therefor:
"FOURTH: Capital Stock.
A. Classes and Number of Shares. The total number of shares of all
classes of stock which the corporation shall have authority to issue is
Twenty-One Million Three Hundred Thousand (21,300,000) shares. The classes
and the aggregate number of shares of capital stock of each Class which the
corporation shall have authority to issue are as follows:
1. Three Hundred Thousand (300,000) shares of which shall be
preferred shares designated as Serial Preference Stock, par value $0.10 per
share (hereinafter called "Preferred Stock");
2. Fifteen Million (15,000,000) shares of which shall be designated
as Common Stock, par value $0. 1 0 per share (hereinafter called "Common
Stock"); and
3. Six Million (6,000,000) shares of which shall be designated as
Class B Stock, par value $0.10 per share (hereinafter called "Class B
Stock")."
The Board of Directors believes that the authorized number of shares of
stock should be increased to provide sufficient shares for such corporate
purposes as may be determined by the Board of Directors including, without
limitation; acquiring other businesses in exchange for shares of the Company's
stock; facilitating broader ownership of the Company's stock by effecting stock
splits or issuing a stock dividend; flexibility for possible future financings;
and attracting and retaining valuable employees and directors by the issuance of
additional stock options or awards. The Company at present has no commitments,
agreements or undertakings to issue any such additional shares. The Board of
Directors considers the authorization of additional shares of stock advisable to
ensure prompt availability of shares for issuance should the occasion arise. If
required by law or regulation, the Company will seek shareholder approval prior
to any issuance of shares
The Company intends to apply to the American Stock Exchange, on which the
shares of the Company's stock are currently listed, for the listing thereon of
additional shares to be issued and reserved for future issuance as a result of
the Amendment. Shares of the Company's stock, including the additional shares
proposed for authorization, do not have preemptive or similar rights. The
issuance of additional shares of stock could have the effect of diluting
existing shareholder earnings per share, book value per share and voting.
Adoption of this proposal requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
Annual Meeting and the affirmative vote of the holders of a majority of the
outstanding shares of Class B Stock entitled to vote at the Annual Meeting.
Shares not voted (whether by abstention, broker non-votes or otherwise) have the
effect of a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE
AUTHORIZED STOCK.
4. SELECTION OF AUDITORS
The Board of Directors has approved the Company's engagement of the firm of
Deloitte & Touche LLP as the Company's independent auditors. Deloitte & Touche
LLP has served as the Company's independent auditors for the last three fiscal
years, and is familiar with the Company's business and management. The Board of
Directors believes that Deloitte & Touche LLP has the personnel, professional
qualifications and independence necessary to act as the Company's independent
auditors.
Representatives of Deloitte & Touche LLP are expected to appear at the
Annual Meeting to make a statement, if they wish to do so, and to be available
to answer appropriate questions from shareholders at the time.
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While ratification by shareholders of this appointment is not required by
law or the Company's Certificate of Incorporation or Bylaws, management of the
Company believes that such ratification is desirable. In the event this
appointment is not ratified by an aFfirmative vote of shareholders holding a
majority of the Company's issued and outstanding Class B Stock and Common Stock,
together, in attendance at the meeting, either in person or by proxy, the Board
of Directors of the Company will consider that fact when it appoints independent
public accountants for the next fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND APPROVAL
OF ITS SELECTION OF DELOITTE & TOUCHE LLP AT THE 1997 ANNUAL MEETING.
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
action at the Annual Meeting other than as set forth in this Proxy Statement,
but if any other matters properly come before the meeting, it is the intention
of the persons named in the accompanying proxy to vote on such matters in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any proposal of a shareholder intended to be presented at the Company's 1998
Annual Meeting of Shareholders must be received by the President of the Company
for possible inclusion in the Company's Proxy Statement, and notice of meeting
relating to that meeting by December 15, 1997. Shareholder proposals must be
made in compliance with applicable legal requirements promulgated by the
Securities and Exchange Commission and be furnished to the President by
certified mail, return receipt requested.
YOU ARE URGED TO SIGN AND RETURN YOUR PROXY PROMPTLY TO MAKE CERTAIN YOUR
SHARES WILL BE VOTED AT THE 1997 ANNUAL MEETING. FOR YOUR CONVENIENCE, A RETURN
ENVELOPE IS ENCLOSED.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeanne M. Lyons
-----------------------------------
Jeanne M. Lyons, Secretary
Orlando, Florida
March 3, 1997
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<PAGE>
EXHIBIT A
GENCOR INDUSTRIES, INC.
1997 STOCK OPTION PLAN
1. Plan Adopted. Gencor Industries, Inc., hereinafter referred to as the
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"Company," hereby adopts a Stock Option Plan, hereinafter referred to as the
"Plan," pursuant to which certain directors, officers and key employees of the
Company and its subsidiaries may be granted options to purchase certain shares.
For purposes of the Plan, the term "subsidiary" shall mean any corporation,
fifty percent or more of which is owned, directly or indirectly, by the Company.
2. Purpose. The purpose of this Plan is to provide an incentive for
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persons who are granted options to exert maximum efforts for the Company's
success, and to reward such efforts by enabling such persons to participate in
such success through growth in the value of the stock subject to the option
granted.
3. Administration. The Plan shall be administered by the Company's Board
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of Directors. In the alternative, the Board may appoint a committee consisting
of not less than two members of the Board of Directors who are "Non-Employee
Directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act.") The administering party is herein
referred to as the "Committee." The Committee shall hold its meetings at such
times and places as it may determine and shall maintain written minutes of its
meetings. A majority of the members of the Committee shall constitute a quorum
at any meeting of the Committee. All determinations of the Committee shall be
made by the vote of a majority of the members who participate in a meeting. The
members of the Committee may participate in a meeting of the Committee in person
or by conference telephone or similar communications equipment by means of which
all members can hear each other, and any decision or determination by written
consent of all of the members of the Committee shall be as effective as if it
had been made by a majority of the members who participate in a meeting.
Subject to the provisions of the Plan, the Committee shall: (i) have
complete discretion with respect to the options granted; (ii) construe the
provisions of the Plan and the option agreements; (iii) prescribe, amend and
rescind rules and regulations relating to the Plan and the option agreements;
(iv) determine the terms and provisions (which need to be identical) of option
agreements; and (v) make all other determinations necessary or advisable with
respect thereto. The committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan, or in any option agreement in the
manner and to the extent it shall deem expedient. The Committee shall be the
sole and final judge of such expediency and its determinations shall be
conclusive. No member of the Committee shall be liable for any act or omission
in connection with the administration of this Plan, except for the member's
willful misconduct.
4. Eligibility. Options may be granted only to persons who are either
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directors, officers or key employees of the Company or any of its present or
future subsidiaries. Subject to the foregoing, the Committee shall have
absolute authority and power to select persons to whom options may be granted.
<PAGE>
5. Shares Subject to the Plan. Shares which may be issued pursuant to
--------------------------
this Plan include any regular or special class of common stock of the Company
and any regular of special class of common stock of any subsidiary of the
Company. Shares which may be issued pursuant to this Plan are herein referred to
as "Shares". The Committee shall have sole and absolute authority to determine
which Shares will be subject to option to purchase hereunder. The maximum number
of Shares which may be issued pursuant to options granted under the Plan shall
be as follows: (i) 300,000 shares of the Company's Common Stock; (ii) 300,000
shares of the Company's Class B Stock; and (iii) with respect to any subsidiary
of the Company, fifteen percent (15%) of the authorized common stock of such
subsidiary as of the date of the adoption of this Plan or, if the subsidiary is
not yet formed, as of the date of incorporation of such subsidiary; provided
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that the total number of Shares available under the Plan shall be subject to
adjustment upon the occurrence of any of the events and in the manner specified
in Section 7(k) hereof; provided, further, that if any event occurs pursuant to
-------- -------
which any class of shares outstanding having the same designation as Shares
which may be issued pursuant hereto are exchanged for shares of another
designation, then, in the Committee's sole discretion, the newly designated
class of shares shall be issuable pursuant to this Plan. If any option granted
under the Plan shall terminate or expire for any reason without having been
exercised in full, then the unpurchased Shares subject thereto shall again be
available for the purposes of the Plan. Shares forfeited pursuant to an option
agreement made pursuant hereto may also again be available, if the optionee
received no benefits from ownership of the Shares forfeited. The Shares which
are issued pursuant to options granted hereunder may be authorized but unissued
Shares or Shares which have been issued and reacquired.
6. Duration of Plan. The Plan shall commence effective as of the date of
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approval by the Board of Directors of the Company. Unless the Plan shall have
been previously terminated as hereinafter provided, the Plan shall terminate on
the tenth (10/th/) anniversary of the date of approval by the Company's Board of
Directors; provided, that the board of directors, in their sole and absolute
discretion, may extend the duration of the Plan until all Shares subject to
options issued under the Plan shall have been purchased pursuant to such
options. The Board of Directors of the Company, without further approval of the
Company's shareholders, may at any time, terminate the Plan and thereafter no
further options may be granted under the Plan. However, options previously
granted hereunder may continue to be exercised pursuant to the terms thereof and
the rights of the optionee shall not be adversely affected.
7. Option Agreements. Options granted under the Plan shall be evidenced
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by stock option agreements in form and substance acceptable to the Committee.
The provisions of the option agreements shall be in accordance with the
following:
a. Grant. The option agreement shall grant an option to purchase
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Shares. The Committee shall have sole discretion as to which Shares may be
purchased pursuant to an option. The date of grant of an option under this
Plan shall be the date the Committee approves the grant or such later date
as may be specified by the Committee as the date the option agreement will
become effective.
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b. Incentive Stock Option and Non-Qualified Stock Option Designation.
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The option agreement shall designate whether the option granted is an
incentive stock option (within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended) ("Incentive Stock Option") or a non-
qualified stock option within the contemplation of Section 83 of the
Internal Revenue Code of 1986, as amended (the "Code"). If the option is
designated as an Incentive Stock Option, then Section 12 of this Plan shall
apply.
c. Price. The purchase price for each Share deliverable upon the
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exercise of an option shall be determined by the Committee; provided
however, that in the case of an Incentive Stock Option, the purchase price
for each Share shall be not less than 100% of the "Fair Market Value " of
the Share on the date of the grant of the option. For purposes hereof,
"Fair Market Value " means: (i) if the Share is traded in a market on
which actual transactions are reported, the mean of the high and low prices
at which the Share is reported to have traded on the relevant date in all
markets on which trading in the Share is reported or, if there is no
reported sale of the Share on the relevant date, the mean of the highest
reported bid price and lowest reported asked price for the Share on the
relevant date; (ii) if the Share is publicly traded but only in markets in
which there is no reporting of actual transactions, the mean of the highest
reported bid price and the lowest reported asked price for the Share on the
relevant date; or (iii) if the Share is not publicly traded, the value as
determined by the Committee.
d. Number of Shares. The option agreement shall specify the number of
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Shares which may be purchased pursuant thereto, which number shall be
determined by the Committee.
e. Exercise Dates. The Shares subject to an option may be purchased
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only during the option period and only on such dates and at such times as
the Committee shall determine. By way of example and not by way of
limitation, the Committee may include provisions for immediate exercise,
scheduled exercise, contingent exercise, and acceleration or suspension of
exercise upon the occurrence of certain events such as public offerings,
sale of control, sale of substantially all assets, merger, dissolution, and
liquidation.
f. Option Period. The period during which an option may be exercised
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shall be determined by the Committee. An option period may be extended by
the Committee at any time during the option period; provided, however, that
no option shall be exercisable after the expiration of ten (10) years from
the date such option is granted. By way of example and not by way of
limitation, the Committee may provide for early termination of the option
period upon the occurrence of various events such as a public offering,
sale of control, sale of substantially all assets, merger, dissolution,
liquidation, termination of directorship, and termination of employment
(with cause, without cause, retirement, death, disability, leave of
absence), on such terms and conditions as the Committee shall deem
appropriate. The option period applicable under an option granted to an
officer or key employee shall not be affected by the reassignment of the
optionee to another position within the Company or any of its subsidiaries.
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g. Medium of Payment. Stock purchased pursuant to an option agreement
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shall be paid for by such medium as may be determined by the Committee
including, without limitation, such mediums as cash (or its equivalent),
loans from the Company, payroll deductions, surrender of previously owned
shares having an aggregated Fair Market Value equal to the total purchase
price, and withholding of Shares granted pursuant to the option exercise
having an aggregate Fair Market Value equal to the total purchase price.
h. Time of Payment. Payment of the purchase price for Shares acquired
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pursuant to an option exercise shall be made at such time(s) as the
Committee shall determine; provided, that if any payment of the purchase
price is permitted by the Committee to be made after the exercise of the
option, then the optionee shall, at the time of exercise, execute and
deliver such instruments and collateral as the Committee shall deem
appropriate.
i. Exercise Rate. The Committee shall determine the minimum and
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maximum number of Shares subject to an exercisable option which may be
purchased at any one time.
j. Method of Exercise. To exercise an option, the optionee must
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deliver to the Company, at its principal place of business, a notice which:
(1) states the election to exercise the option and the number of
Shares to be purchased;
(2) complies with such other requirements as may be set forth by
the Committee in the option agreement;
(3) is signed by the person or persons entitled to exercise the
option and, if the option is being exercised by any person
or persons other than the optionee, is accompanied by proof,
satisfactory to counsel for the Company, of the right of
such person or persons to exercise the option.
k. Recapitalization. If the Company or the subsidiary whose Shares are
----------------
subject to an option increases the number of outstanding shares of the
class of Shares issuable pursuant to such option through a stock dividend
or a stock split, or reduces the number of outstanding shares of the class
of Shares issuable pursuant to such option through a combination of shares
or similar recapitalization then, immediately after the record date for the
change; (i) the number of Shares issuable pursuant to the option shall be
increased in the case of a stock dividend or a stock split, or decreased in
the case of a combination or similar recapitalization by a percentage equal
to the percentage change in the number of outstanding shares of the class
of Shares issuable pursuant to the option; and (ii) the purchase price of
each Share shall be adjusted so that the total amount to be paid upon
exercise of the option in full will not change.
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<PAGE>
l. Corporate Transaction. The effect of any exchange of the
---------------------
outstanding shares of the class of Shares issuable pursuant to an option
not yet exercised due to any reorganization, reclassification, merger,
consolidation or exchange, or similar event ("Corporate Transaction") shall
be determined by the Committee and shall be set forth in the option
agreement. By way of example and not by way of limitation, such effect may
include any one or more of the following: (1) optionee may be entitled to
such number and kind of securities as optionee would have been entitled to
had optionee actually owned the stock subject to the option at the time of
the Corporate Transaction; (2) substitution of a new option, provided that
the excess of the aggregate Fair Market Value of the shares subject to
options immediately after such substitution over the price thereof is not
more than the excess of the aggregate Fair Market Value of the shares
subject to option immediately before such substitution over the purchase
price thereof; and/or (3) appropriate adjustment in purchase price per
Share without a change however, in the total purchase price for all shares
subject to the option. If any other event shall occur, prior to exercise of
an option granted hereunder, which the Committee, in its sole discretion,
shall determine equitably requires an adjustment in the number of shares
which the option holder should be permitted to acquire or the price for
which such shares should be acquired, such adjustment as the Committee
shall determine may be made, and when so made shall be effective and
binding for all purposes of the Plan.
m. Non-Assignability. During the optionee's lifetime, options may be
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exercised only by the optionee. Each option and all rights thereunder
shall be nonassignable and nontransferable other than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations
order as defined in the internal Revenue Code of 1986, as amended or Title
I of the Employee Retirement Income Security Act, or the rules thereunder,
if applicable. Specifically, but not by way of limitation, except as set
forth in the foregoing sentence, the option and any and all interests or
rights therein and parts thereof shall not be subject to the debts,
contracts or engagements of the optionee or to disposition by alienation,
anticipation, pledge, encumbrance, or any other means whether such
disposition is voluntary or involuntary or by operation of law or by
judgment, levy, attachment, garnishment or any other legal or equitable
proceeding (including bankruptcy) and any such unauthorized disposition
thereof shall be null and void and of no effect.
n. Restrictions on Transfer of Shares. Further, the Committee may, as
----------------------------------
it deems appropriate, provide for restrictions on the transferability of
Shares issued pursuant to an option. Such restrictions may include, without
limitation, a right of first refusal in favor of the Company upon the
transfer or other disposition of the Shares by the optionee.
o. Forfeiture of Shares. The Committee, as it deems appropriate, may
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provide for the forfeiture of Shares acquired pursuant to an option, upon
the occurrence of certain events.
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<PAGE>
p. Conversion of Shares. The option agreement may provide for the
--------------------
conversion of one class or series of Shares to another class or series of
Shares upon the occurrence of certain events, as the Committee shall deem
appropriate.
q. Withholding and Employment Taxes. The Committee shall determine the
--------------------------------
method of withholding and payment of employment taxes and such method shall
be set forth in the option agreement. By way of example and not by way of
limitation, the Committee may require the optionee to make payment in cash
at the time of exercise (or over a period of time through payroll deduction
or otherwise) in an amount sufficient to satisfy any federal, state or
local withholding tax requirements. Alternatively, the Committee may
permit the optionee to surrender Shares or other property to satisfy such
obligation. If (i) an optionee makes an election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, with regard to Shares issued
on exercise of an option which is subject to forfeiture when it issued, or
(ii) an optionee who exercised an Incentive Stock Option disposes of Shares
optionee acquired through exercise of that Incentive Stock Option either
(x) within two years after the date of grant of the Incentive Stock Option
or (y) within one year after the issuance of the Shares on exercise of the
Incentive Stock Option, then after each occurrence described in clause (i)
or (ii) above the optionee shall notify the Company of the occurrence of
the event and, if the event was a disposition of Shares acquired on
exercise of an Incentive Stock Option, the amount realized upon the
disposition. If, whether because of an election by an optionee under
Section 83(b) of the Code, a disposition of Shares acquired on exercise of
an Incentive Stock Option or Shares becoming no longer subject to
forfeiture, or otherwise, the Company becomes required to pay withholding
taxes to any Federal, state or other taxing authority and the optionee
fails to provide the Company with the funds with which to pay that
withholding taxes, the Company may withhold up to 50% of each payment of
salary or bonus to the optionee (which will be in addition to any other
required or permitted withholding), until the Company has been reimbursed
for the entire withholding tax it was required to pay.
r. Reload Options. Reload options may be granted, on such terms as the
--------------
Committee may deem appropriate, permitting an optionee who pays for the
exercise of an option hereunder by delivering already owned stock (i.e.,
the stock for stock exercise method) to receive back from the Company or
its subsidiary a new option (at the then current Fair Market Value) for the
same number of Shares delivered to exercise the option.
s. Compliance With Applicable Law and Governing Instruments. The
--------------------------------------------------------
options granted hereunder and Shares purchased pursuant to such options
shall be subject to all governing instruments of the issuing corporation
and all requirements of applicable laws, regulations and rules (including
exchange listing rules) including, without limitation, such laws and
regulations concerning requisite investment intent and restrictions on
resale. The Company may require assurances of compliance with governing
instruments and applicable laws, regulations and rules from a person
eligible to receive an option in connection with the grant of the option
6
<PAGE>
and from an optionee prior to delivery of Shares pursuant to exercise of
the option, as the Committee may deem appropriate. The Committee may impose
any additional conditions precedent to the consummation of the exercise of
an option that it may deem appropriate, including, without limitation, the
effectuation of any listing, registration or qualification and the
obtaining of any consent or approval that the Committee may deem desirable.
t. Rights as a Shareholder. The optionee shall have no rights as a
-----------------------
shareholder with respect to any Shares covered by the option until the date
of issuance of a stock certificate for such Shares, regardless of whether
the date of exercise is deemed to have occurred earlier in accordance with
Section 7(h).
u. Employment of Optionee. The option agreement shall include such
----------------------
provisions relating to the employment or other service of optionee, as the
Committee deems appropriate. By way of example and not by way of
limitation, the option agreement may contain an agreement to serve for a
period of time, non-compete provisions, confidentiality and trade secret
provisions, best efforts provisions, etc.
v. Incorporation by Reference. Each option agreement shall incorporate
--------------------------
this Plan by reference. In the event of an conflict between the terms of
this Plan and the terms of an option agreement, the terms of this Plan
shall control.
w. Miscellaneous. The option may contain such other provisions as the
-------------
Committee shall deem appropriate.
8. Reservation of Shares. The Company or its subsidiary, whichever the
---------------------
case may be, shall at all times keep reserved for issuance a number of
authorized but unissued or reacquired Shares equal to the maximum number of
Shares the Company and its subsidiaries may be required to issue on exercise of
outstanding options granted under this Plan.
9. Costs of Issuance. The Company shall pay all original issue and
-----------------
transfer taxes with respect to the issue and transfer of Shares pursuant to an
option and all other fees and expenses necessarily incurred by the Company in
connection therewith.
10. No Effect on Employment. Nothing contained in the Plan or in any option
-----------------------
agreement issued hereunder shall be construed to limit or restrict the right of
the Company or any subsidiary to terminate an optionee's employment at any time,
with or without cause, or to increase or decrease the optionee's compensation
from the rate in existence at the time the option is granted.
11. No Effect on Other Plans. The adoption of this Plan shall not affect
------------------------
any other stock option, incentive plan or other compensation plan in effect for
the Company or any subsidiary, nor shall this Plan prohibit the Company from
adopting any plan or other form of compensation or incentives.
12. Incentive Stock Options. The Committee may designate that any options
-----------------------
granted pursuant to the Plan shall be Incentive Stock Options; provided that
this Plan is approved by the shareholders of the Company within twelve (12)
7
<PAGE>
months before or after this Plan is adopted by the Company's Board of Directors.
Any designation of an option as an Incentive Stock Option and any related option
agreement shall be subject to and contain such terms and conditions as shall be
necessary to comply with all provisions of the Code (including any regulations
thereunder or interpretations thereof) which apply to Incentive Stock Options,
including, without limitation, the following terms and conditions:
(1) The optionee shall not dispose of any Share purchased pursuant to an
option within two (2) years from the date of the granting of the option nor
within one (1) year after the issuance of such Share to the optionee;
(2) At all times during the period beginning on the date of the granting
of the option and ending on the day three (3) months before the date of
such exercise, the optionee must have been an employee of the Company or a
subsidiary of the Company; and
(3) If the optionee, at the time the option is granted, owns more than ten
percent of the total combined voting power of the stock of the Company,
then (i) the purchase price of the Shares under the Incentive Stock Option
shall be at least 110 percent of the Fair Market Value of the Shares on the
date of grant; and (ii) the Incentive Stock Option by its terms shall not
be exercisable after the expiration of five (5) years from the date of
grant.
In addition, the Committee may, with respect to any option (and any related
option agreement) granted hereunder which is designated as an Incentive Stock
Option, correct any defect, supply any omission, reconcile any inconsistency
therein or adopt any amendment thereto which it may deem necessary or advisable
to comply with the provisions of the Code. To the extent that the aggregate
Fair Market Value of Shares with respect to which Incentive Stock Options are
exercisable for the 1/st/ time by any optionee during any calendar year (under
all plans of the optionee's employer corporation and its parent and subsidiary
corporations) exceeds $100,000, such options shall be treated as options which
are not Incentive Stock Options, as set forth in the Code.
14. Amendment of Plan. The Plan may at any time or from time to time, be
-----------------
modified or amended by the Board of Directors of the Company.
8
<PAGE>
COMMON SHAREHOLDER PROXY
GENCOR INDUSTRIES, INC.
THIS COMMON SHAREHOLDER PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 11, 1997
The undersigned hereby appoints E.J. Elliott, Russell R. Lee III, or any
of them, as proxies, each with the power to appoint his or her substitute, to
represent, and vote all shares of Common Stock of and on behalf of the
undersigned as designated on the reverse side at the Annual Meeting of
Shareholders of Gencor Industries, Inc., to be held April 11, 1997, and any
adjournments thereof, with all powers the undersigned would possess if
personally present and voting at such meeting. In their discretion, the proxies
are authorized to vote upon such other business as may properly come before the
meeting.
<PAGE>
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" Please mark
PROPOSALS 1,2,3, AND 4. your votes as [X]
indicated in
this example
1. ELECTION OF DIRECTORS Larry H. Pitsch
FOR nominee WITHHOLD (INSTRUCTION: To withhold authority
listed at right AUTHORITY to vote for any individual nominee,
(except as marked to vote for write that nominee's name in the
to the contrary at right) space provided below).
[ ] [ ]
------------------------------------
2. PROPOSAL TO ADOPT THE 1997 STOCK This Proxy, when properly
OPTION PLAN executed, will be voted in the manner
directed herein by the Undersigned
FOR AGAINST ABSTAIN shareholder. If no direction is
indicated, the Proxy will be vote FOR
[ ] [ ] [ ] Proposals 1, 2, 3 and 4.
PLEASE MARK ON THIS SIDE; THEN
3. PROPOSAL TO INCREASE AUTHORIZED SIGN, DATE AND RETURN THIS PROXY CARD
STOCK PROMPTLY IN THE ENCLOSED ENVELOPE.
FOR AGAINST ABSTAIN PLEASE SIGN EXACTLY AS NAME(S)
APPEAR(S) HEREON. If shares are held
[ ] [ ] [ ] in the name of two or more persons,
all must sign. When signing as
Attorney, Executor, Administrator,
Personal Representative, Trustee, or
4. PROPOSAL TO RATIFY THE SELECTION Guardian, give full title as such.
OF DELOITTE & TOUCHE LLP AS AUDITORS If signer is a corporation, sign full
corporate name by duly authorized
FOR AGAINST ABSTAIN officer.
[ ] [ ] [ ] THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
Date: , 1997
-------------------
-------------------------------------
Signature
-------------------------------------
Signature if held jointly
<PAGE>
CLASS B SHAREHOLDER PROXY
GENCOR INDUSTRIES, INC.
THIS CLASS B COMMON SHAREHOLDER PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 11, 1997
The undersigned hereby appoints E.J. Elliott, Russell R. Lee III, or any
of them, as proxies, each with the power to appoint his or her substitute, to
represent, and vote all shares of Class B Common Stock of and on behalf of the
undersigned as designated on the reverse side at the Annual Meeting of
Shareholders of Gencor Industries, Inc., to be held April 11, 1997, and any
adjournments thereof, with all powers the undersigned would possess if
personally present and voting at such meeting. In their discretion, the proxies
are authorized to vote upon such other business as may properly come before the
meeting.
<PAGE>
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" Please mark
PROPOSALS 1,2,3, AND 4. your votes as [X]
indicated in
this example
1. ELECTION OF DIRECTORS E.J. Elliott, John E. Elliott, Constantine L.
Corpas, Peter Kourmolis
FOR nominee WITHHOLD (INSTRUCTION: To withhold authority
listed at right AUTHORITY to vote for any individual nominee,
(except as marked to vote for write that nominee's name in the
to the contrary at right) space provided below).
[ ] [ ]
------------------------------------
2. PROPOSAL TO ADOPT THE 1997 STOCK This Proxy, when properly
OPTION PLAN executed, will be voted in the manner
directed herein by the Undersigned
FOR AGAINST ABSTAIN shareholder. If no direction is
indicated, the Proxy will be vote FOR
[ ] [ ] [ ] Proposals 1, 2, 3 and 4.
PLEASE MARK ON THIS SIDE; THEN
3. PROPOSAL TO INCREASE AUTHORIZED SIGN, DATE AND RETURN THIS PROXY CARD
STOCK PROMPTLY IN THE ENCLOSED ENVELOPE.
FOR AGAINST ABSTAIN PLEASE SIGN EXACTLY AS NAME(S)
APPEAR(S) HEREON. If shares are held
[ ] [ ] [ ] in the name of two or more persons,
all must sign. When signing as
Attorney, Executor, Administrator,
Personal Representative, Trustee, or
4. PROPOSAL TO RATIFY THE SELECTION Guardian, give full title as such.
OF DELOITTE & TOUCHE LLP AS AUDITORS If signer is a corporation, sign full
corporate name by duly authorized
FOR AGAINST ABSTAIN officer.
[ ] [ ] [ ] THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
Date: , 1997
-------------------
-------------------------------------
Signature
-------------------------------------
Signature if held jointly
