NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS To Be Held
May 12, 2000
To The Shareholders of Mestek, Inc:
Please take notice that the Annual Meeting of the Shareholders of
Mestek, Inc. (the "Company") will be held at the Reed Institute, 152 Notre Dame
Street, Westfield, Massachusetts adjacent to the Company's headquarters, on
Friday, May 12, 2000 at 11:00 a.m. local time, for the following purposes:
1. To elect a Board of nine (9) Directors for one-year terms,
each to hold office until his or her successor is elected and
qualified or he or she shall resign or be removed.
2. To approve the appointment by the Board of Directors of Grant
Thornton as independent accountants to audit the books of the
Company for the year ending December 31, 2000.
3. To transact such other business as may properly come before
the Annual Meeting or any postponement or adjournment thereof.
Pursuant to the By-Laws of the Company, the Board of Directors has, by
resolution, fixed the close of business on March 31, 2000 as the record date for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any postponement or adjournment thereof. Enclosed is your
copy of the Proxy Statement and the Annual Report of the Company, including the
financial statements for the year ended December 31, 1999 which has been mailed
to all shareholders. Please refer to it for information concerning the affairs
of the Company. The Annual Report does not constitute proxy soliciting material.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE SIGN THE
ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL NOT LIMIT YOUR RIGHT TO VOTE
IN PERSON AT THE ANNUAL MEETING.
By Order of the Board of Directors
Mestek, Inc.
R. BRUCE DEWEY, Secretary
260 North Elm Street
Westfield, Massachusetts
March 31, 2000
<PAGE>
MESTEK, INC.
GENERAL OFFICES
260 North Elm Street
Westfield, Massachusetts 01085
March 31, 2000
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
May 12, 2000
Friday
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Mestek, Inc., hereinafter referred to as "Mestek" or the "Company".
The cost of the solicitation of proxies will be borne entirely by the Company.
Regular employees of the Company may solicit proxies by personal interview, mail
or telephone and may request brokerage houses and other custodians, nominees and
fiduciaries to forward soliciting material to the beneficial owners of the stock
held of record by such persons.
If a proxy in the accompanying form is duly executed and returned, the
shares represented will be voted at the Annual Meeting and where a choice is
specified, will be voted in accordance with the specification made. Proxies may
be revoked at any time prior to voting by (1) executing and delivering a new
proxy to the Secretary of the Company at or before the Annual Meeting, (2)
voting in person at the Annual Meeting or (3) giving written notice of
revocation to the Secretary of the Company at or before the Annual Meeting.
VOTING RIGHTS
The shareholders entitled to vote at the Annual Meeting will be those
whose names appeared on the records of the Company as holders of its Common
Stock at the close of business on March 31, 2000, the record date. As of such
date, there were issued and outstanding 9,610,135 shares of Common Stock of the
Company, 8,743,103 of which are entitled to vote. The Company is not entitled to
vote the 867,032 shares of Common Stock held in the treasury, 500,000 of which
are reserved for the Mestek, Inc. 1996 Stock Option Plan.
Shareholders are entitled to one vote for each share held on all
matters to be considered and acted upon at the Annual Meeting, except that, with
respect to the election of directors, cumulative voting is permitted. Cumulative
voting means that each shareholder is entitled to as many votes as are equal to
the number of shares which the shareholder owns multiplied by the number of
directors to be elected in the same election and that the shareholder may cast
all of such votes for a single nominee for director or may distribute them among
two or more nominees, as the shareholder may see fit. There are nine (9)
directors to be elected at the Annual Meeting to be held May 12, 2000.
Discretionary authority to cumulate votes is solicited by the Board of Directors
with respect to the election of directors in those cases in which no direction
is made on the proxy card. Therefore, in such elections, unless otherwise
indicated on the proxy cards, the votes represented by such proxies will be
voted in favor of the nominees listed thereon (unless otherwise indicated) and
in favor of Proposal 2.
FINANCIAL STATEMENTS
The Company's audited consolidated financial statements and notes
thereto, including selected financial data and management's discussion and
analysis of financial condition and results of operations for the year ended
December 31, 1999, are included in the Company's 1999 Annual Report to
Shareholders, which was mailed concurrently with this proxy statement to all
shareholders of record. The Annual Report does not constitute proxy soliciting
material.
SHAREHOLDER PROPOSALS
Proposals which shareholders wish to present for consideration at the
Annual Meeting to be held in 2001 must be received at the Company's General
Offices no later than December 31, 2000 in order to be included in the Company's
proxy statement relating to such meeting.
EXECUTIVE OFFICERS
The executive officers of the Company in addition to Mr. J.E. Reed,
whose biography appears in the section entitled "ELECTION OF DIRECTORS" below,
are the following:
James A. Burk Age 54 Vice President since 1986
Prior to the merger of Mestek, Inc. and Reed National Corp., Mr. Burk
had been a Vice President of Reed since 1975. Mr. Burk had been employed in a
number of manufacturing management positions by Reed since 1965. Mr. Burk is the
son of E. Herbert Burk, Director of the Company.
R. Bruce Dewey Age 48 Senior Vice President since 1994
and Secretary since 1992.
Mr. Dewey was General Counsel prior to 1999 and Vice President-
Administration prior to 1994. Prior to joining Mestek in 1990, Mr. Dewey was an
attorney in private practice in Seattle, Washington most recently with
Cairncross, Ragen & Hempelmann from 1987 to 1990. Prior to the merger of
Mestek, Inc. and Reed National Corp., Mr. Dewey had been Assistant to the
President of Reed from 1979 to 1983 and had been affiliated with the
Cooper-Weymouth, Peterson division of Reed from 1975 to 1979. Since
September 9, 1999, Mr. Dewey has been spending 75% of his time as CEO and a
Director of Simione Central Holdings, Inc., an investment of the Company
recently merged with MCS, Inc., formerly a wholly-owned subsidiary of the
Company.
William S. Rafferty Age 48 Senior Vice President of Sales
and Marketing since 1991.
Mr. Rafferty was Vice President of Marketing prior to 1991. Prior to
joining Mestek in 1990, Mr. Rafferty was Senior Vice President of Sales and
Marketing of Taco, Inc., from 1984 to 1990, and held a number of sales and
marketing management positions with The Trane Company from 1974 to 1984. As of
March 24, 2000, Mr. Rafferty is on a medical leave of absence from the Company.
Stephen M. Shea Age 43 Senior Vice President-Finance since 1994
and Chief Financial Officer since 1990.
Mr. Shea was Vice President-Finance prior to 1994. Mr. Shea was
Controller of the Company from 1987 to 1990 and was Manager of Corporate
Planning from 1986 to 1987, holding the same position at Reed National Corp.
from 1985 to 1986. Prior to joining Reed in 1985, Mr. Shea was a Certified
Public Accountant with the Hartford, Connecticut accounting firm of Spitz,
Sullivan, Wachtel & Falcetta from 1979 to 1985.
EXECUTIVE COMPENSATION
Consistent with the revised proxy rules on executive compensation
adopted by the Securities and Exchange Commission, there is shown below,
information concerning the annual compensation (salary, bonus and other) for
services in all capacities to the Company and its subsidiaries for the fiscal
years ended December 31, 1999, 1998 and 1997, of those persons who were at
December 31, 1999 (a) the Chief Executive Officer of the Company and (b) the
other four most highly compensated executive officers of the Company who were
serving in such capacity at December 31, 1999, as determined by the Directors.
<PAGE>
SUMMARY COMPENSATION TABLE
Under the revised proxy rules on executive compensation adopted by the
Securities and Exchange Commission, all suggested columns and headings relating
to forms of compensation not offered by the Company have been omitted for
presentation in the Summary Compensation Table below.
<PAGE>
NAME AND ANNUAL LONG-TERM
PRINCIPAL POSITION COMPENSATION COMPENSATION
Securities
Underlying
Options
Granted All Other
Fiscal Salary Bonus Other (Shares) Compensation
Yr. ($) ($)(1) (2) (3) ($) (4)
------ ------ ------ ------ ------ ------------
John E. Reed 1999 262,000 662,600 - - 7,626
Chairman of the 1998 262,000 668,000 - - 7,656
Board, President 1997 262,000 623,000 - - 7,740
and Chief Executive
Officer (5)
William S. 1999 159,710 131,510 - 25,000 27,671
Rafferty, Senior 1998 149,635 98,750 - - 28,013
Vice President- 1997 130,000 138,540 - - 23,863
Marketing
R. Bruce Dewey 1999 163,000 108,390 - 25,000 23,667
Senior Vice 1998 149,635 100,200 - - 23,995
President (6) 1997 124,875 115,950 - - 22,939
James A. Burk 1999 109,070 132,810 - 5,000 28,643
Vice President 1998 105,800 115,650 - - 28,901
1997 102,350 163,350 - - 28,478
Stephen M. Shea 1999 129,620 72,600 - 15,000 17,439
Senior Vice 1998 119,890 66,800 - - 17,525
President-Finance 1997 108,000 77,300 - - 16,494
<PAGE>
NOTES TO SUMMARY COMPENSATION TABLE
(1) Certain executive officers whose corporate responsibilities are applicable
to all segments of the Company's business historically have been paid, and in
some cases are contractually entitled to be paid, bonuses based on the
company-wide profits during each fiscal year (the "Executive Officer Bonus
Policy"). Under the Executive Officer Bonus Policy the bonus for an eligible
executive officer is equal to the sum of percentages (which may be different for
each participant) of the Company's operating profits in excess of a specified
return on tangible net worth plus borrowed capital as of January 1 of the fiscal
year, after deduction for all other bonuses on the first $5,000,000 of operating
profits for the first tier and in excess of $5,000,000 of operating profits for
the second tier. Messrs. J.E. Reed, S.M. Shea and R.B. Dewey were the only
participants in the Executive Officer Bonus Policy for 1999 and they are the
only executive officers of Mestek eligible to participate under such Policy for
2000. Mr. J.E. Reed is contractually entitled to participate in the Executive
Officer Bonus Policy. In 1999, Mr. J.E. Reed was entitled to receive ten percent
(10%) under the first tier bonus and five percent (5%) under the second tier
bonus. All officers of Mestek, other than those participating under the
Executive Officer Bonus Policy in a given year, and certain other key employees
involved in the Company's operations, historically have been paid annual bonuses
based on the profitability of the individual business units (termed "profit
centers" by the Company) to which such persons are assigned and for which they
have specific responsibility (the "Key Employee Bonus Policy"). Under the Key
Employee Bonus Policy, the bonus for an eligible executive officer is equal to a
percentage (which may be different for each participant) of the amount by which
the operating profits of such employee's profit centers for such fiscal year
exceed a specified return on the average tangible net assets employed by such
profit centers. Messrs. Rafferty and J.A. Burk were awarded bonuses under the
Key Employee Bonus Policy for 1999 and they are the only executive officers
anticipated to be awarded bonuses under such Policy for 2000.
(2) In accordance with the revised proxy rules on executive officer compensation
adopted by the Securities and Exchange Commission, amounts of Other Annual
Compensation for 1997, 1998 and 1999, which would include the incremental costs
to the Company of perquisites and personal benefits paid to any executive
officer, are excluded because they are less than $50,000 or less than 10% of the
total annual salary and bonus compensation for each of such individuals in the
Summary Compensation Table. Such perquisites may include, among others, the
compensation attributable to the personal use of a Company automobile and
compensation attributable to personal use of club memberships.
(3) In 1996, the Board of Directors recommended, and the shareholders approved,
the Mestek, Inc. 1996 Stock Option Plan which provides for the award of up to
500,000 shares of the Company's Common Stock to eligible individuals at the
discretion of the Board of Directors. Pursuant to the Plan, several key
employees of the Company were awarded stock options under the Plan. Among the
executive officers of the Company, Messrs. S.M. Shea, W.S. Rafferty and R.B.
Dewey received awards of stock options for 25,000 shares each in 1996. In
January 1999, the Board granted stock options for 25,000 shares to each of
Messrs. Rafferty and Dewey and for 15,000 shares to Mr. Shea. In March 1999, the
Board granted stock options for 5,000 shares to Mr. J.A. Burk. After the first
year of the awards, the stock options vest over a five year period in equal
increments of 20% of the total stock option amount, and expire after ten years.
All stock options are exercisable at the applicable option price which is equal
to the price of the Common Stock as of the grant date, which for the awards in
1996 is $13.75 per share and for the awards in 1999 is $20.00 per share.
(4) In accordance with the revised proxy rules on executive officer compensation
adopted by the Securities and Exchange Commission, amounts of All Other
Compensation for 1997, 1998 and 1999 include the cost of premiums for life
insurance and AD&D having a benefit in excess of $50,000 to which individuals
other than the Company are beneficiaries, the costs to the Company of the
contributions by the Company to each executive officer under the Company's
401(k) Plan whereby the Company matches each $1.00 of employee contribution with
$0.25 up to the first 6% of salary and bonus, the Company's contributions on
behalf of each executive officer to the Mestek, Inc. Profit Sharing Plan,
whereby the Company contributes three percent (3%) of annual base salary up to
the OASDI maximum of $72,600 and six percent (6%) of annual base salary for
amounts of compensation in excess of the OASDI maximum of $72,600 (as limited in
accordance with the Employee Retirement Income Security Act), and premiums paid
by the Company to fund a Supplemental Executive Retirement Plan whereby eligible
participants, if they have not forfeited their rights by failing to continue
employment with the Company until attaining age 65 (subject to certain change of
control provisions), receive (i) a retirement benefit equal to $3,000 or $2,500
(depending upon eligibility) per month for life after retirement from the
Company, (ii) a "monthly survivor annuity" benefit upon death equal to half the
amount payable under the retirement benefit or (iii) a disability benefit equal
to the retirement benefit.
(5) Mr. J.E. Reed is employed under an agreement with the Company which is
automatically extended for one-year periods unless either party gives the other
sixty (60) days' notice of termination. The contract specifies a certain base
salary to be reviewed annually by the Board of Directors of the Company. The
base salary under this contract for 1999 was $262,000. The contract provides for
continuation of salary for six (6) months in the case of death and for twelve
(12) months, with the contractual bonus, described above, in the case of
incapacitation. The contract provides for Mr. J.E. Reed to be furnished with the
use of a Company automobile and to be reimbursed for legitimate business
expenses.
(6) On September 9, 1999, Mr. Dewey was appointed President and Chief Executive
Officer of Simione Central Holdings, Inc., a company into which MCS, Inc., a
wholly-owned subsidiary of the Company was merged on March 7, 2000. The Company,
its directors and executive officers have approximately 56% of the voting
control of all classes of Simione stock. Mr. Dewey will spend approximately 75%
of his time handling Simione matters and 25% of his time on those of the
Company. Simione reimbursed Mestek approximately $41,000 for the services
performed by Mr. Dewey in 1999. In addition, Simione granted Mr.Dewey an option
to purchase 30,000 shares (adjusted for a one for five reverse stock split) of
Simione common stock.
<PAGE>
OPTION GRANTS IN 1999
Percentage
Number of of Total
Securities Options Grant
Underlying Granted to Exercise Date
Options Employees Price Expiration Present
Name Granted(1) in 1999 ($/Share) Date Value (2)
- ---- ----------- ---------- --------- ---------- ---------
John E. Reed - - - - -
William S. Rafferty 25,000 29.4% $20.00 1/03/09 $236,000
James A. Burk 5,000 5.9% $20.00 3/28/09 $47,200
R. Bruce Dewey 25,000 29.4% $20.00 1/03/09 $236,000
Stephen M. Shea 15,000 17.7% $20.00 1/03/09 $141,600
(1) The options listed were granted at an exercise price equal to the fair
market value of the Company's Common Stock on the date of the grant, January 4,
1999 or March 29, 1999, pursuant to the Mestek, Inc. 1996 Stock Option Plan.
Each of the grants vest in five equal annual amounts beginning one year from the
date of grant, January 4, 2000 and March 29, 2000 respectively. As of December
31, 1999 none of the grants had vested.
(2) Options are valued using a Black-Scholes option pricing model which assumes
a historic three-year average volatility of 23.75%, the average dividend yield
for the three years ended December 31, 1999 of 0%, a 4.81% risk-free rate of
return (based on the ten-year U.S. Treasury note yield for the month of grant),
and an expected option life of 10 years. No adjustments are made for risk of
forfeiture or non-transferability. Options will have no actual value unless, and
then only to the extent that, the Common Stock price appreciates from the grant
date to the exercise date. If the grant date present values are realized, total
shareowner value will have appreciated since the date of grant by approximately
$83.39 million, and the value of the granted options reflected in the table will
be approximately 0.8% of the total shareowner appreciation.
DIRECTORS COMPENSATION
Directors of Mestek who are not employees or former employees of the
Company were paid in 1999 an annual retainer of $6,000 (paid quarterly), a fee
of $1,500 for each Board Meeting attended (including subsidiary boards) and a
fee of $500 for each meeting of each Committee of the Board of Directors and
each Special Assignment attended, or a fee of $1,500 if such Committee meeting
or Special Assignment attended is not held in conjunction with a Board Meeting.
Mr. Burk and Mr. S.B. Reed, directors and former officers of the Company,
received $24,000 and $120,000 respectively for consulting services performed for
the Company in 1999. Certain members of Mestek's Board of Directors are also
members of one or more of the subsidiary Boards.
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report of the Compensation Committee of the Board of Directors of
the Company shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934, and
shall not otherwise be deemed filed under such Acts. No members of the
Compensation Committee are officers or employees of the Company or any of its
subsidiaries. The Compensation Committee furnished the following report on
Executive Compensation as required under the revised proxy rules on executive
compensation adopted by the Securities and Exchange Commission.
REPORT
The Compensation Committee of the Board of Directors (the "Committee"),
which consists entirely of non-employee Directors, annually reviews the
Company's executive officer compensation program, as well as the levels of
compensation to be paid to the Chief Executive Officer and other executive
officers, and makes recommendations to the entire Board of Directors regarding
compensation to be paid or awarded. The Committee is dedicated to the belief
that the compensation of the Company's senior executives must be directly and
objectively based on the Company's performance while under their stewardship.
Through the establishment and refinement of a pay-for-performance program for
executive compensation, utilizing a compensation package including base pay and
significant incentive pay programs, the Company has to a large extent
accomplished the goals of aligning the financial and long-term interests of the
Company's shareholders with the financial interest of its senior executives.
The Company's compensation program for executive officers consists of
the following elements: payments of annual salary, payment of annual
performance-based cash bonus based on the financial results of the Company as
measured against its pre-established business plans, long-term incentives and
certain other benefits, including a supplemental retirement program.
Base salary. The Compensation Committee annually reviews the annual
base salary of the Chief Executive Officer and the recommendations of the Chief
Executive Officer of the annual base salary of the Company's other executive
officers. The factors upon which the base salary of the Chief Executive Officer
and the Company's other senior executive officers are set include the prior
performance in meeting or exceeding pre-established business plan goals, the
level of responsibility within the Company, and the contributions of the Chief
Executive Officer and each of the Company's executive officers which will
enhance the long range prospects of the Company, but which may not be
immediately apparent. In particular, the major factor in assessing the annual
base salary of the Chief Executive Officer is the accomplishment of the sales,
profitability and other goals set forth in the business plan of the Company. In
1999 the annual base salary and performance-based cash bonuses of the Chief
Executive Officer remained unchanged despite the strong financial results of the
Company in the previous years.
Annual Bonus Plan. The bonus policies under which the Compensation
Committee makes its recommendations to the full Board of Directors regarding
performance-based cash bonuses are the Executive Officer Bonus Policy and the
Key Employee Bonus Policy.
The Compensation Committee annually determines the eligible executive
officers of the Company for participation in the Executive Officer Bonus Policy.
The Compensation Committee also establishes the targets by which the Company's
financial performance will be measured for purposes of the Executive Officer
Bonus Policy, utilizing a specified rate of return on the Company's net
investment in its businesses. There are two separate tiers in the Executive
Officer Bonus Policy for each executive officer participating therein, based on
the operating profits of the Company. The first $5,000,000 of operating profits
constitute the first tier, and amounts in excess of $5,000,000 of operating
profits constitute the second tier. Each executive officer is assigned a
percentage by the Committee in both the first and second tier based on their
respective levels of performance and responsibility. The percentage of each
participating executive officer is applied to the amounts by which the Company's
operating profits exceed the specified targets of return on tangible net worth
plus borrowed capital as of January 1st of the fiscal year, after deduction for
all other bonuses and goodwill which are eliminated from net worth for this
purpose. The specified return target for the Executive Officer Bonus Policy for
1999 was a fifteen percent (15%) return. The percentages assigned to the Chief
Executive Officer are determined by an employment contract that is reviewed
annually by the Committee for renewal. In 1999, the Chief Executive Officer was
entitled to receive ten percent (10%) under the first tier bonus, and five
percent (5%) under the second tier bonus. The other executive officers who
participated in the Executive Officer Bonus Policy in 1999 were R. Bruce Dewey
and Stephen M. Shea. Messrs. Reed, Dewey and Shea are the only executive
officers entitled to participate in the Executive Officer Bonus Policy in 2000.
The Compensation Committee, based on the recommendations of the Chief
Executive Officer, also selects executive officers eligible to participate in
the Key Employee Bonus Policy, and establishes their respective participation
percentage, as well as the targets for the specified return on tangible net
assets employed. Each of the executive officers' respective participation
percentage is established by reference to his or her level of performance,
responsibility and contribution to the profitability of the various business
units in which the executive officer is involved. The participation by executive
officers in the Key Employee Bonus Policy is based on their participation
percentage in the operating profits of the Company's individual business units
in excess of a specified return on tangible net assets employed in such business
unit. The specified return targets for the Key Employee Bonus Policy for 1999
vary by business unit, but were generally a twenty percent (20%) return. In
1999, William S. Rafferty and James A. Burk were the executive officers
participating in the Key Employee Bonus Policy and they are the only executive
officers eligible to participate in 2000.
As demonstrated in the Summary Compensation Table, the
performance-based cash bonuses paid to the Company's executive officers in 1999
are a major portion of their respective total compensation and thus the
Compensation Committee's objective, of directly and objectively binding the
compensation of the executive officers to the Company's financial performance,
has been achieved.
Other Compensation. The Compensation Committee also relies on several
other compensation methods to retain executive talent critical to the Company's
operations by granting the opportunity to acquire a proprietary interest in the
Company to selected senior executives under the Mestek 1996 Stock Option Plan;
by providing a supplemental retirement plan which provides a fixed retirement
benefit payable for the life of the participant after he or she reaches age 65,
with payments to any surviving spouse or dependent at 50% of the amounts payable
during the life of the participant and through a long-term disability benefit;
and by providing individual policies for long-term disability insurance under
which each of the executive officers may receive a benefit of $3,000 or $2,500
per month (depending upon eligibility) until age 65 in the event of a
disability, subject to certain conditions including continued employment with
the Company.
Stock Options granted under the Mestek Inc. 1996 Stock Option Plan,
(which has previously been approved by the shareholders) provide incentives to
the senior executives receiving such options in maximizing stock price
appreciation of the Company's common stock and thereby closely aligning their
interests with the long-term interests of the shareholders, and also serves to
retain senior executives by vesting in them a proprietary interest in the
Company. Option exercise prices are set at 100% of the fair market value on the
date of the grant. The options vest in 20% increments annually after one year
from the date of the grant, and thereafter expire in ten years. The number of
shares in each particular stock option is at the discretion of the Compensation
Committee and upon the recommendation of the Chief Executive Officer. However,
the total aggregate amount of stock options granted under the Mestek, Inc. 1996
Stock Option Plan is limited to 500,000 shares. Options to acquire 90,000 shares
under the Plan were granted in 1996. Options to acquire 70,000 shares under the
Plan were granted to senior executives Messrs. J.A. Burk, R.B. Dewey, W.S.
Rafferty and S.M. Shea in 1999 and options to acquire an additional 15,000
shares were granted to other officers in 1999.
After considering all of the factors and making recommendations upon
the annual base compensation and bonus formulae and percentage participations
for the Chief Executive Officer and each of the other executive officers of the
Company, the Compensation Committee presents this report to the full membership
of the Board of Directors at its December meeting each year. The recommendations
of the Compensation Committee for each of 1997, 1998 and 1999 were presented,
discussed and voted upon, and approved in an Executive Session of the Board of
Directors of the Company held on December 14, 1999, Mr. J.E. Reed abstaining.
In addition, each year the entire Board of Directors, based upon the
recommendation of the Compensation Committee considers the percentage
participation of all employees (including the Chief Executive Officer and the
other executive officers of the Company) in the Company's Profit Sharing Plan.
For the fiscal year ended December 31, 1999, the Compensation Committee
recommended and the Board of Directors voted a Company contribution of three
percent (3%) of annual base salary for all eligible employees up to the OASDI
maximum of $72,600 and a Company contribution of six percent (6%) of annual base
salary for all eligible employees for amounts in excess of the OASDI maximum of
$72,600 (as limited in accordance with the Employee Retirement Income Security
Act).
DAVID W. HUNTER, Chairman, A. WARNE BOYCE, WILLIAM J. COAD, Members
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
This Shareholder Return Performance Presentation shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, and shall not otherwise be deemed filed
under such Acts. Set forth below is a line graph comparing the yearly percentage
change in the cumulative total shareholder return on the common stock of Mestek
against the cumulative total return of the S&P Composite 500 Stock Index and our
"Peer Group", the S&P Building Materials Index for the period of five (5) fiscal
years commencing December 31, 1994 and ended December 31, 1999. It assumes $100
invested at the close of trading on the last trading day preceding the first day
of the fifth preceding fiscal year in Mestek Common Stock, S&P 500, and S&P
Building Materials. Cumulative total return assumes reinvestment of dividends.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
Mestek, Inc., S&P 500, S&P Building Materials
(Performance results through 12/31/99)
[OBJECT OMITTED]
Company/Index Dec94 Dec95 Dec96 Dec97 Dec98 Dec99
MESTEK INC 100 120.51 169.23 192.31 205.13 207.69
S&P 500 INDEX 100 137.58 169.17 225.60 290.08 351.12
BUILDING MATERIALS-500 100 135.45 161.66 196.75 209.14 167.18
WESTFIELD, MASSACHUSETTS. Mestek leases several parcels of property and
office space in Westfield, Massachusetts from Sterling Realty Trust, as
described below. Mestek's corporate headquarters and commercial products
manufacturing facilities are leased under two leases corresponding to the two
major buildings on the north side of Notre Dame Street, one at a net annual
rental of $192,000, which expired on December 31, 1999 and is presently
continuing on a month-to-month basis pending approval and execution of a new
lease, and the other at a net annual rental of $76,800, which expires on June
30, 2003. Both leases are payable monthly. Mestek leases its South Complex,
including its advertising facility, the Reed Institute training facility and the
baseboard manufacturing facility pursuant to a lease which expires December 31,
2008 at a net annual rental of $256,800, payable monthly. Mestek also leases
office space for its gas products group and for its controls and software group
under two leases in an office building on North Elm Street; one lease which
expires on June 30, 2004 at an annual rental of $75,504 and an annual buildout
amortization of $51,564, payable monthly and the other lease is on a
month-to-month term at an annual rental of $18,720. Sterling Realty Trust is a
Massachusetts business trust of which John E. Reed is the sole trustee and of
which Mr. Reed and a Reed family trust are the sole beneficiaries. Mestek
formerly leased certain equipment used in the Westfield facilities pursuant to a
lease from Sterling Realty Trust for an annual rental of $24,360. Mestek
acquired the equipment as of January 1, 1999. Mestek also leased certain
equipment used in the Westfield facilities pursuant to a lease from the
Elizabeth C. Reed Trust for an annual rental of $3,600, and Mestek also acquired
the equipment as of January 1, 1999. Mr. Reed is the trustee of the Elizabeth C.
Reed Trust and his daughter is the sole beneficiary. Mestek also leased certain
equipment pursuant to a lease from Machinery Rental Company for an annual rental
of $24,888 that expired December 31, 1999, and Mestek acquired the equipment as
of January 1, 2000. John E. Reed is the sole proprietor of Machinery Rental
Company.
FARMVILLE, NORTH CAROLINA. Mestek leases its Farmville, North Carolina
production facility from Rudbeek Realty Corp. ("Rudbeek") pursuant to an amended
lease for an annual minimum net base rental of $408,000, payable monthly.
Rudbeek is owned by James A. Burk (Mr. E. H. Burk's son and Vice President of
the Company) and certain other members of the Burk family, and a family trust
for which John E. Reed, a director of the Company, serves as trustee and of
which Stewart B. Reed (Mr. Reed's son and a director of the Company), is a
beneficiary. Mestek leased certain equipment for use at the Farmville facility
pursuant to a lease from Sterling Realty Trust for an annual rental of $5,700
and pursuant to a lease from the Elizabeth C. Reed Trust for an annual rental of
$3,000. Mestek acquired the equipment from both Trusts as of January 1, 1999.
Mestek also leases certain equipment pursuant to a lease from Machinery Rental
Company for an annual rental of $132,360 which equipment was acquired by Mestek
as of January 1, 2000.
WRENS, GEORGIA. Mestek leased certain equipment used in its Wrens,
Georgia facility pursuant to a lease from Sterling Realty Trust for an annual
rental of $10,440 and pursuant to a lease from the Elizabeth C. Reed Trust for
an annual rental of $11,940. Mestek acquired the equipment from both Trusts as
of January 1, 1999. Mestek also leased certain equipment pursuant to a lease
from Machinery Rental Company for an annual rental of $16,032 which equipment
was acquired by Mestek as of January 1, 2000.
SOUTH WINDSOR, CONNECTICUT. Mestek leases its South Windsor,
Connecticut facility from MacKeeber Associates Limited Partnership
("MacKeeber"), a Connecticut limited partnership, pursuant to an amended lease
for a net annual base rental of $324,600, payable monthly. Such lease expires on
December 31, 2004. MacKeeber is owned by John E. Reed, Stewart B. Reed, E.
Herbert Burk and David R. Macdonald, all directors of the Company, as limited
partners and John E. Reed as the sole general partner. In 1984, the Connecticut
Development Authority issued an Industrial Development Bond in the principal
amount of $3,500,000, bearing interest at 72% of the prime rate, with final
maturity in 2004. Of the proceeds of issuance of such Bond, $2,650,000 were lent
by the Authority to MacKeeber (the proceeds of which loan were used to acquire
the South Windsor facility) and $850,000 were lent by the Authority to a former
subsidiary of the Company (the proceeds of which loan were used to acquire
certain machinery and equipment for use at the South Windsor facility). The
Company and MacKeeber have agreed to an unconditional guaranty of the payment of
each other's note under the loan agreement. The obligations of the Company under
its note have been paid in full. Mestek leased certain equipment for use at the
South Windsor facility pursuant to a lease from Machinery Rental Company for an
annual rental of $24,000 which equipment was acquired by Mestek as of January 1,
2000.
LOS ANGELES, CALIFORNIA. Pacific/Air Balance, Inc., a wholly-owned
subsidiary of the Company, rents a facility at 13516 Desmond Street, Los
Angeles, California, from Production Realty, Inc., pursuant to a written lease
for an amount equivalent to an annual rental of $120,000 payable monthly. The
lease was renewed and will expire on December 31, 2000. The Company has plans to
move its operations to another nearby facility, and the lease will not be
renewed beyond its expiration date. Stewart B. Reed, a director of the Company,
is the sole shareholder of Production Realty, Inc.
OTHER CONSIDERATIONS AND RELATIONSHIPS. Mestek retained the law firm
of Baker & McKenzie during 1999 and proposes to retain that firm during 2000.
David R. Macdonald, a director of the Company, retired as a partner in the
Washington, D.C. office of Baker & McKenzie in June, 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
Under the proxy rules of the Securities and Exchange Commission, a
person who directly or indirectly has or shares voting power and/or investment
power with respect to a security is considered a beneficial owner of the
security. Shares as to which voting power and/or investment power may be
acquired within 60 days are also considered as beneficially owned under these
proxy rules. The information set forth in this proxy statement concerning
beneficial ownership of shares of the common stock of the Company has been
received from or on behalf of the persons named. The only persons known by the
Company to be the beneficial owners of more than five percent (5%) of the common
stock of the Company as of March 31, 2000 are John E. Reed and Stewart B. Reed,
both of whom are directors of the Company. The address of each of Messrs. J.E.
Reed and S.B. Reed is 260 North Elm Street, Westfield, Massachusetts 01085. The
amount and nature of their beneficial ownership is included in the table below.
The directors of the Company and the executive officers and directors
as a group beneficially owned shares of the Company's outstanding Common Stock
as follows on March 30, 2000:
Amount and nature of Percent
Name and beneficial beneficial ownership of Class
- ------------------- -------------------- --------
Directors:
A. Warne Boyce 3,200 *
E. Herbert Burk 360,200 (1) 4.12%
William J. Coad 3,200 *
Winston R. Hindle, Jr. 9,000 *
David W. Hunter 13,330 (2) *
David M. Kelly 4,000 *
David R. Macdonald 8,000 *
John E. Reed 3,297,993 (3) 37.72%
Stewart B. Reed 2,210,387 (4) 25.28%
Executive Officers:
James A. Burk 34,594 (5) *
R. Bruce Dewey 25,307 (6) *
William S. Rafferty 26,000 (6) *
Stephen M. Shea 26,000 (7) *
All executive officers and
directors as a group
(13 persons) 6,021,211 68.29%
* less than 1%
(1) Excludes 137,500 shares of common stock held by a spousal trust, to
which he disclaims ownership.
(2) Excludes 9,500 shares of common stock held by his spouse to which he
disclaims ownership.
(3) Excludes 13,307 shares of common stock held by his wife and 13,307
shares of common stock held by a family trust for which he is not
trustee, to which he disclaims ownership. Excludes 1,712,691 shares of
common stock held by John E. Reed as trustee for various family trusts,
but for which he disclaims beneficial ownership. 1,325,833 of such
common shares are, however, included in the shares listed as
beneficially owned by Stewart B. Reed per note (4) below. Includes
524,994 shares of common stock owned by Sterling Realty Trust, a
Massachusetts business trust of which John E. Reed is the trustee and
of which he and a family trust are the beneficiaries.
(4) Includes 1,325,833 shares of common stock owned by the Stewart B. Reed
Trust, of which Stewart B. Reed is the beneficiary and John E. Reed is
the trustee.
<PAGE>
(5) Includes 1,000 shares of common stock granted under the Mestek, Inc.
1996 Stock Option Plan underlying options exercisable within 60 days of
March 31, 2000.
(6) Includes 25,000 shares of common stock granted under the Mestek, Inc.
1996 Stock Option Plan underlying options exercisable within 60 days of
March 31, 2000.
(7) Includes 23,000 shares of common stock granted under the Mestek, Inc.
1996 Stock Option Plan underlying options exercisable within 60 days of
March 31, 2000.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
certain officers of the Company, as well as persons who own more than ten
percent (10%) of a registered class of the company's equity securities, to file
reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission. To the Company's knowledge, based solely on
its review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the year ended
December 31, 1999, all applicable Section 16(a) filing requirements were
satisfied except Jack E. Nelson, Stewart B. Reed and A. Warne Boyce.
MATTERS TO BE ACTED UPON
1. Election of Directors
In accordance with the By-Laws of the Company, the Board of Directors
consists of not less than seven (7) nor more than fourteen (14) members, as set
forth from time to time by the Board of Directors, elected by the shareholders
annually. The Board of Directors has set the number of members at nine (9). Nine
(9) of the current directors will stand for election at the Annual Meeting on
May 12, 2000. The Board of Directors recommends the election of the nine (9)
nominees identified below. The proxies named in the accompanying proxy card
intend, subject to the discretionary authority to cumulate votes described
above, to vote for the nine (9) persons named below, unless otherwise directed
by the shareholder on the proxy card. The Board of Directors knows of no reason
why any nominee will be unavailable or unable to serve. If any nominee is unable
to serve or for good cause will not serve, the persons named as proxies will
vote for such other persons as they shall deem to be in the best interest of the
Company.
Nominees to be Elected
A. Warne Boyce Age 70 Director of Mestek from
1983 to 1986 and since 1990
Mr. Boyce has been Chairman and Chief Executive Officer of Microbac
Laboratories, Inc., Pittsburgh, Pennsylvania, since 1989 and President since
1969. He is President of an affiliated company Orbeco Analystical Systems,
Inc., of Long Island, NY, and Vice Chairman of Southern Testing and Research
Laboratories, Inc. of Wilson, NC, also an affiliated company. Mr. Boyce was a
Director of Chester Environmental, Inc., a former subsidiary of the Company,
from 1985 until 1990. He is a Trustee of the Rhodes Charitable Trust of
Pittsburgh, Pennsylvania.
E. Herbert Burk Age 81 Director of Mestek since 1986
Mr. Burk retired on July 31, 1987 as Senior Vice President of the
Company, an office he had held since 1986. Prior to the merger of Mestek, Inc.
and Reed National Corp. on July 31, 1986, Mr. Burk had been a Director and Vice
President of Reed since 1969 and a Senior Vice President of Reed since 1975.
He had been employed by Reed since 1948. Mr. Burk is the father of James A.
Burk, who is a Vice President of the Company.
William J. Coad Age 68 Director of Mestek since 1986
Mr. Coad has been President and Chairman of the Board of The McClure
Corporation, St. Louis, Missouri, mechanical and electrical engineering
consultants, since 1984, and from 1968 until 1984 he served as its Vice
President and Director. He was an affiliate Professor of Mechanical Engineering
at Washington University in St. Louis, Missouri until his retirement from that
position in January 1989. Mr. Coad is also a Director of Mechanical Engineering
Data Service, Inc., St. Louis, Missouri, and Exergen Corporation, Natick,
Massachusetts. Prior to the 1986 merger of Mestek, Inc. and Reed National
Corp., Mr. Coad had been a Director of Reed since 1985.
Winston R. Hindle, Jr. Age 69 Director of Mestek since 1994
Mr. Hindle was Senior Vice President of Digital Equipment Corporation,
Maynard, Massachusetts, prior to his retirement in July, 1994. In his 32 years
with Digital, he managed both corporate functions and business units and was a
member of the Company's Executive Committee. Mr. Hindle is a member of Mestek's
Executive Committee. Mr. Hindle serves as a Director of National Northeast
Corporation, a subsidiary of the Company and as a designee of Mestek on the
board of Simione Central Holdings, Inc. Mr. Hindle is also a director of
Keane, Inc., of Boston, Massachusetts and CP Clare Corporation of Beverly,
Massachusetts.
David W. Hunter Age 71 Director of Mestek since 1985
Mr. Hunter has been Chairman of Hunter Associates, Inc., an investment
banking firm in Pittsburgh, Pennsylvania since 1992. From 1990 to 1992 he was
Chairman Emeritus of Parker/Hunter, Inc., an investment banking firm in
Pittsburgh, Pennsylvania, where he was Chairman from 1978 until 1990.
Mr. Hunter is also a Director of Lockhart Companies, Kiene Diesel Accessories,
Inc., Justifacts, Quanterra, Inc. and U.S. Tool & Die Corporation. He served as
Chairman of the Board of Governors of the National Association of Securities
Dealers, Inc. from 1986 to 1987. Mr. Hunter also serves as a designee of Mestek
on the Board of Directors of Simione Central Holdings, Inc.
David M. Kelly Age 58 Director of Mestek since 1996
Mr. Kelly is currently the Chairman of the Board and Chief Executive
Officer of Matthews International Corporation, located in Pittsburgh,
Pennsylvania, and also served as President and Chief Operating Officer of
Matthews International since 1995. Prior to his employment with Matthews
International, Mr. Kelly was employed by Carrier Corporation for 22 years where
he held a variety of executive positions, in the United States and in Asia, in
Marketing, Manufacturing and Operations. Mr. Kelly received a Bachelor of
Science in Physics from Boston College in 1964, a Master of Science degree in
Molecular Biophysics from Yale University in 1966, and a Master of Business
Administration from Harvard Business School in 1968. Mr. Kelly also serves as a
Director of various subsidiaries of Matthews International, Elliott Corporation
and the United Way of Allegheny County.
David R. Macdonald Age 69 Director of Mestek since 1986
Mr. Macdonald is Chairman and Chief Executive Officer of the David R.
Macdonald Foundation. In June, 1996, he retired as a partner in the Washington,
D.C. office of the law firm of Baker & McKenzie. Between 1981 and 1983, Mr.
Macdonald served as Deputy United States Trade Representative, with the rank of
Ambassador. Between 1977 and 1981, Mr. Macdonald was engaged in private law
practice with the firm of Baker & McKenzie in Chicago, Illinois. Before 1977,
Mr. Macdonald served as Under Secretary of the Navy and as Assistant Secretary
of the Treasury for Enforcement, Operations and Tariff Affairs. Prior to the
merger of Mestek, Inc. and Reed National Corp., Mr. Macdonald had been a
Director of Reed since 1983.
John E. Reed Age 84 Director of Mestek since 1986
Mr. J.E. Reed has been Chairman of the Board, President and Chief
Executive Officer of the Company since 1989, is a member of the Executive
Committee and serves on the Boards of the Company's subsidiaries and as a
designee of Mestek on the board of Simione Central Holdings, Inc. From 1986
until 1989 he was President and Chief Executive Officer and prior to the 1986
merger of Mestek, Inc. and Reed National Corp., had been President and Chief
Executive Officer of Reed since he founded it in 1946. Mr. Reed is also a
Director of Wainwright Bank & Trust Co., Boston, Massachusetts. Mr. Reed is the
father of Stewart B. Reed, a director of the Company.
Stewart B. Reed Age 52 Director of Mestek since 1986
Through April 1996, Mr. S.B. Reed was employed as the Executive Vice
President of the Company and now serves as a consultant to the Company. He is a
member of the Executive Committee and serves as a director of National Northeast
Corporation, a subsidiary of the Company and as a designee of Mestek on the
board of Simione Central Holdings, Inc. Prior to the 1986 merger of Mestek, Inc.
and Reed National Corp., Mr. Reed had been Executive Vice President of Reed in
charge of corporate development. Mr. Reed had been employed by Reed since 1970.
Mr. Reed is the son of John E. Reed, Chairman of the Board, President and Chief
Executive Officer of the Company.
<PAGE>
BOARD MEETINGS AND COMMITTEES
During the calendar year of 1999 the Board of Directors held four (4)
meetings. All directors were present at the meetings, except Mr. Burk who was
excused from one meeting due to illness.
The Board of Directors has four (4) standing committees: Audit,
Compensation, Executive and Nominating.
Audit Committee
The Audit Committee's responsibilities include (a) reviewing and
evaluating the work and performance of the Company's independent accountants and
making recommendations to the Board of Directors regarding the selection of such
independent accountants, (b) conferring with the Company's independent
accountants and its financial officers to evaluate the Company's internal
accounting methods and procedures and to recommend changes in such methods and
procedures, (c) reviewing and making recommendations on all related party
transactions and the Company's conflict of interest policy, (d) directing the
tasks of the internal auditor of the Company, and (e) reviewing and overseeing
the organization and operation of the financial operations of the Company. The
Audit Committee held three (3) meetings and consulted with each other and
management as necessary to discharge its duties throughout 1999. The current
members of the Audit Committee are Messrs. Kelly (Chairman), Hindle and
Macdonald.
Compensation Committee
The Compensation Committee is responsible for reviewing the salary of
the Chief Executive Officer and the executive officers of the Company and
recommending to the Board of Directors the amount of salary to be paid, the
bonus formulae and other compensation for the Chief Executive Officer and the
executive officers of the Company. Please see the report of the Compensation
Committee above. The Compensation Committee met in December, 1999 to consider
and recommend compensation matters to the Board of Directors. The current
members of the Compensation Committee are Messrs. Hunter (Chairman), Coad and
Boyce.
Executive Committee
To the extent permitted by the laws of the Commonwealth of
Pennsylvania, the Executive Committee has and may exercise all the powers and
authorities of the Board of Directors as follows: (a) to take action on behalf
of the Board of Directors during intervals between regularly scheduled meetings
of the Board of Directors if it is impracticable to delay action on a matter
until the next regularly scheduled meeting of the Board of Directors, and (b) to
take action on all matters of the Company that have been delegated for action by
the Board of Directors. The Executive Committee meets from time to time,
irregularly, and consults with each other and management as necessary to
discharge its duties. The current members of the Executive Committee are Messrs.
J.E. Reed (Chairman), S.B. Reed and Hindle.
<PAGE>
Nominating Committee
The Nominating Committee's responsibilities include (a) evaluating and
recommending nominees for election as directors to the Board of Directors, (b)
recommending to the Board of Directors criteria for membership on the Board, and
(c) proposing nominees to fill vacancies on the Board of Directors as they
occur. The Nominating Committee consulted with each other and management as
necessary to discharge its duties during the last twelve months. The current
members of the Nominating Committee are Messrs. Boyce (Chairman), Hunter and
Burk. In selecting candidates for election to the Board of Directors at future
annual meetings of shareholders, the Nominating Committee will consider
prospective candidates whose names have been submitted by shareholders. Such
submissions should be in writing and directed to the Secretary of the Company at
260 North Elm Street, Westfield, Massachusetts 01085.
2. Approval of Appointment of Independent Public Accountants
The Board of Directors of the Company has voted to appoint the
accounting firm of Grant Thornton as independent public accountants to audit the
financial statements of the Company for the year ending December 31, 2000 and
recommends that the shareholders of the Company approve such appointment at the
Annual Meeting of the Company. Although approval by the shareholders of the
appointment of independent public accountants is not required, the Company has
followed the practice of submitting such appointment for approval by the
shareholders. The persons named in the accompanying proxy intend, subject to the
discretionary authority above, to vote FOR the Approval of the Appointment of
Grant Thornton. If such approval is not obtained, the Board of Directors of the
Company will reconsider its appointment of Grant Thornton. A representative of
Grant Thornton has been invited and is expected to be present at the Annual
Meeting where he or she will have an opportunity to make a statement if he or
she desires, and he or she will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THIS PROPOSAL.
3. Other Matters
No business other than that set forth in the attached Notice of Annual
Meeting is expected to be acted upon, but should any other matters requiring a
vote of shareholders be properly brought before the Annual Meeting or any
postponement or adjournment thereof, the persons named in the accompanying proxy
will vote thereon according to their best judgment in the interest of the
Company.
VOTE REQUIRED
The Company's By-Laws provide that the presence of the holders of a
majority of the issued and outstanding stock of the Company entitled to vote at
the Annual Meeting, present in person or represented by a proxy, shall
constitute a quorum for the Annual Meeting and that the vote of the shareholders
who hold a majority of the voting power present in person or represented by
proxy at the Annual Meeting and entitled to vote will decide any question
brought before the Annual Meeting, unless otherwise provided by statute or the
Company's Restated Articles of Incorporation or By-Laws.
The nominees for election as directors of the Company at the Annual
Meeting who receive the greatest number of votes cast will be elected as
directors for the nine (9) positions on the Board of Directors of the Company to
be filled. The appointment of the independent accountants will be approved by
the affirmative vote of a majority of the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote thereon.
Where the quorum requirement set forth above is met, broker non-votes
will have no effect on the outcome of the election of directors or the
ratification of the appointment of the independent accountants because the
matters to be acted upon are routine matters for which brokers have the
discretion to vote on behalf of beneficial owners in the absence of instructions
from beneficial owners. Abstentions will have no effect on the outcome of such
election, but will have the same effect as a negative vote with respect to the
ratification of the appointment of the independent accountants.
March 31, 2000 MESTEK, INC.
