<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
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
Berger Holdings, Ltd.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
BERGER HOLDINGS, LTD.
805 Pennsylvania Boulevard
Feasterville, PA 19053
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 30, 1999
The Annual Meeting of Shareholders (the "Meeting") of Berger Holdings, Ltd.
(the "Company") will be held on Wednesday, June 30, 1999 at 10:00 a.m. local
time at the offices of the Company, 805 Pennsylvania Boulevard, Feasterville,
PA 19053, for the following purposes:
1. To elect three directors to hold office until their successors in
office have been duly elected and qualified; and
2. To transact such other business as may properly come before the
Meeting or any adjournment or postponement thereof.
The close of business on May 25, 1999 has been fixed as the record date for
the Meeting. All shareholders of record at that time are entitled to notice of
and to vote at the Meeting and any adjournment or postponement thereof. In the
event that the Meeting is adjourned for one or more periods aggregating at
least 15 days due to the absence of a quorum, those shareholders entitled to
vote who attend the adjourned meeting, although otherwise less than a quorum,
shall constitute a quorum for the purpose of acting upon any matter set forth
in this notice.
All shareholders are cordially invited to attend the Meeting. The Board of
Directors of the Company urges you to date, sign and return promptly the
enclosed proxy to give voting instructions with respect to your shares of
Common Stock. The proxies are solicited by the Board of Directors of the
Company. The return of the proxy will not affect your right to vote in person
if you do attend the Meeting. A copy of the Company's 1998 Annual Report to
Shareholders is also enclosed.
Joseph F. Weiderman
President, Chief Operating Officer
and Secretary
Feasterville, Pennsylvania
May 28, 1999
<PAGE>
BERGER HOLDINGS, LTD.
805 Pennsylvania Boulevard
Feasterville, PA 19053
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors (the "Board") of
Berger Holdings, Ltd. (the "Company"), a Pennsylvania corporation, for use at
the Annual Meeting of Shareholders (the "Meeting") to be held on Wednesday,
June 30, 1999 at 10:00 a.m. local time at the offices of the Company, 805
Pennsylvania Boulevard, Feasterville, PA 19053 and any adjournment or
postponement thereof. This proxy statement, the foregoing notice and the
enclosed proxy are first being mailed to shareholders on or about May 28,
1999.
The Board does not intend to bring any matters before the Meeting other than
the matters specifically referred to in the Notice of the Meeting, nor does
the Board know of any matter that anyone else proposes to present for action
at the Meeting. However, if any other matters properly come before the
Meeting, the persons named in the accompanying proxy or their duly constituted
substitutes acting at the Meeting will be deemed authorized to vote or
otherwise act thereon in accordance with their judgment on such matters.
In the absence of instructions, the shares of Common Stock (as defined
below) represented at the Meeting by the enclosed proxy will be voted "FOR"
the nominees of the Board in the election of a director. Any proxy may be
revoked at any time prior to its exercise by notifying the Secretary of the
Company in writing, by delivering a duly executed proxy bearing a later date
or by attending the Meeting and voting in person.
VOTING SECURITIES
At the close of business on May 25, 1999, the record date, the Company had
outstanding 5,405,265 shares of common stock, par value $0.01 per share (the
"Common Stock").
On all matters voted upon at the Meeting and any adjournment or postponement
thereof, each record holder of Common Stock as of the record date will be
entitled to one vote per share.
The presence, in person or by proxy, of shareholders entitled to cast at
least a majority of the votes that all shareholders, voting as a single class,
are entitled to cast on each matter to be acted upon at the Meeting shall
constitute a quorum for the purposes of consideration and action on that
matter. All shareholders vote as a single class as to all matters other than
the election of directors. Each matter to be voted on shall be authorized upon
receiving the affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon. An abstention will be counted as being
present for purposes of determining the presence or absence of a quorum with
respect to the applicable matter, but will not constitute a vote cast for or
against that matter. As to certain matters, brokers who hold shares in street
name for customers are not entitled to vote those shares without specific
instructions from such customers. Under applicable Pennsylvania law, a broker
non-vote will count as being present with respect to such matter for purposes
of determining the presence or absence of a quorum, but will not count as a
vote cast for or against the applicable matter. In the event that the Meeting
has been adjourned for one or more periods aggregating at least 15 days
because of an absence of a quorum, those shareholders entitled to vote who
attend the adjourned meeting, although less than a quorum as described above,
shall nevertheless constitute a quorum for the purpose of acting upon any
matter set forth in the foregoing notice.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1998, information with
respect to the securities holdings of (i) the Company's directors and
executive officers, (ii) all directors and executive officers as a group, and
(iii) all persons believed by the Company to beneficially own more than five
percent of the outstanding Common stock based upon filings with the Securities
and Exchange Commission (the "Commission"). Unless otherwise indicated, such
ownership is believed to be direct, with sole voting and investment power. The
address of each such person is 805 Pennsylvania Boulevard, Feasterville, PA
19053, unless a different address is indicated.
<TABLE>
<CAPTION>
Name and Address Shares Owned
of Outstanding Beneficially Percentage
Beneficial Owner and of Record of Shares
---------------- ------------- ----------
<S> <C> <C>
Theodore A. Schwartz................................. 465,692(1) 8.32%
Joseph F. Weiderman.................................. 388,090(2) 6.98%
Paul L. Spiese, III.................................. 344,726(3) 6.21%
Jacob I. Haft, M.D................................... 151,700(4) 2.83%
Larry Falcon......................................... 67,791(5) 1.27%
Dr. Irving Kraut..................................... 277,533(6) 5.16%
Jay Seid............................................. 26,500 *
John Paul Kirwin..................................... 5,000 *
Francis E. Wellock, Jr............................... 145,750(7) 2.69%
Tandem Capital....................................... 588,235(8) 9.99%
Argosy Investment Partners, L.P...................... 352,941(8) 6.24%
All Directors and Executive Officers as a group (9
persons)............................................ 2,813,491 38.45%
</TABLE>
- --------
* less than 1%
(1) Includes 1,500 shares of Common Stock registered to Mr. Schwartz as joint
tenant with Janice L. Bredt and options to purchase 290,000 shares of
Common Stock.
(2) Includes options to purchase 258,143 shares of Common Stock.
(3) Includes options to purchase 253,700 shares of Common Stock.
(4) Includes options to purchase 55,000 shares of Common Stock.
(5) Includes options to purchase 30,000 shares of Common Stock.
(6) Includes options to purchase 75,000 shares of Common Stock.
(7) Includes options to purchase 114,000 shares of Common Stock.
(8) Consists solely of shares of the Company's Series A Convertible Preferred
Stock, which are convertible into the indicated number of shares of Common
Stock.
ELECTION OF DIRECTORS AND CONTINUING DIRECTORS
The Board of Directors
The bylaws of the Company provide for a board of directors consisting of
three classes, with each class being as equal in number as possible. At each
annual meeting of shareholders, directors are elected for a full term of three
years to succeed directors whose terms are expiring. The Board has nominated
Joseph F. Weiderman, John Paul Kirwin, III and Jacob I. Haft, M.D. to serve as
directors until their respective successors in office have been duly qualified
and elected. Messrs. Weiderman and Kirwin and Dr. Haft are currently serving
as directors and each of them has indicated a willingness to continue to serve
as a director. In the event that Mr. Weiderman, Mr. Kirwin or Dr. Haft becomes
unavailable to accept nomination or election as a director, the persons named
in the enclosed proxy will vote the shares they represent for the election of
such other persons as the Board may recommend, unless the Board reduces the
number of directors.
Proxies for holders of Common Stock executed on the enclosed form will be
voted, in the absence of other instructions, "FOR" the election of Messrs.
Weiderman and Kirwin and Dr. Haft.
2
<PAGE>
Set forth below, with respect to each nominee for director and each director
continuing in office, is the name, age, the time period during which he has
served as a director of the Company and his principal occupation or employment
and business affiliations at present and during the past five years.
Nominees For Election as Director with Terms to Expire in 2002
JOSEPH F. WEIDERMAN, age 57, was elected a director of the Company on June
1, 1990, has served as Secretary and Treasurer of the Company since February
1990, served as Chief Financial Officer of the Company from June 1, 1990 to
August 19, 1996, was elected President of the Company on January 15, 1991 and
has served as Chief Operating Officer of the Company since June 1, 1990. Mr.
Weiderman holds a Bachelor of Science Degree in Accounting and a Master of
Business Administration Degree in Finance from LaSalle University. Prior to
his joining the Company, Mr. Weiderman served for over 14 years as the Chief
Financial Officer of Harry Levin, Inc., a multi-store retailer.
JACOB I. HAFT, M.D., age 62, was elected a director of the Company in
conjunction with the Company's acquisition of Berger Bros Company ("Berger
Bros") in 1989. Dr. Haft has practiced medicine, with a specialization in
cardiology, for over twenty-five years. Since 1974, Dr. Haft has been a
Cardiologist and from 1974 to 1998 was Chief of Cardiology at St. Michael's
Medical Center in Newark, New Jersey. In addition, Dr. Haft is currently a
Clinical Professor of Medicine at the New Jersey College of Medicine and
Dentistry and Professor of Medicine at the Seton Hall University Post Graduate
School of Medicine. Dr. Haft has several professional certifications, is a
member of various professional societies and associations and has published
many scholarly articles and books. Dr. Haft has served on the Cardiac Services
Committee of the New Jersey Department of Health.
JOHN PAUL KIRWIN, III, age 43, was elected as a director of the Company on
December 15, 1997. Mr. Kirwin is a principal in Argosy Investment Partners,
L.P., a small business investment company. Mr. Kirwin is also a principal in
Odyssey Capital Group, L.P., a private investment fund. Mr. Kirwin was a
corporate and securities attorney for 14 years, including six years as a
partner at McCausland, Keen & Buckman, until joining Odyssey full time in
January 1996. Mr. Kirwin holds a Juris Doctris, Order of the Coif, from the
National Law Center of George Washington University and a Bachelor of Arts
from Dickinson College.
Continuing Directors with Terms to Expire in 2000
Dr. IRVING KRAUT, age 81, has served as a director of the Company since July
1993. Dr. Kraut was a practicing orthodontist from 1948 to 1991. Since that
time, he has served as a consultant to orthodontists in his capacity as
President of Irving Kraut, D.D.S., P.A. Since 1978, Dr. Kraut has served as a
director of Princeton Research Lands, Inc., a private real estate company.
THEODORE A. SCHWARTZ, age 69, was elected a director of the Company
effective June 1987 and served as President of the Company from May 5, 1988 to
May 30, 1989 and from July 17, 1990 to January 15, 1991. From May 30, 1989 to
present, Mr. Schwartz has served as Chairman of the Board and Chief Executive
Officer of the Company. Mr. Schwartz holds a Bachelor of Science Degree in
Economics from the Wharton School of Finance. Prior to his joining the
Company, Mr. Schwartz spent 35 years in the investment banking and securities
industry.
JAY SEID, age 38, was elected as a director of the Company on December 15,
1997. Mr. Seid is a Vice President of Bachow & Associates, a venture capital
firm. Prior to joining Bachow & Associates in December 1992, Mr. Seid was
President and General Counsel of Judicate, Inc. Previously he was an attorney
specializing in corporate law at Wolf, Block, Schorr and Solis-Cohen LLP in
Philadelphia. Mr. Seid graduated with a B.A. from Rutgers University and
received a J.D. from New York University School of Law.
3
<PAGE>
Continuing Directors with Terms to Expire in 2001
PAUL L. SPIESE, III, age 46, was elected a director of the Company on March
30, 1991. Mr. Spiese joined Berger Bros as Plant Manager in 1985 and was named
Vice President--Manufacturing of the Company in July 1990. Previously, he was
employed by Hurst Performance, Inc. as Plant Manager.
LARRY FALCON, age 58, has served as a director of the Company since November
1985 and acted as Chairman of the Board from September 3, 1986 to June 1,
1987. He has served as President of the Residential Division of The Kaplan
Organization, a real estate developer, since 1985.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Audit Committee and a Compensation Committee. The Audit
Committee consists of Messrs. Haft, Kirwin and Seid. The functions of the
Audit Committee generally include reviewing with the independent auditors the
scope and results of their engagement and reviewing the adequacy of the
Company's system of internal accounting controls.
The Compensation Committee consists of Mr. Falcon and Dr. Kraut. The
Compensation Committee is responsible for establishing salaries, bonuses and
other compensation, and granting stock options, for the Company's executive
officers.
The Board held four meetings in 1998, the Audit Committee three meetings and
the Compensation Committee one meeting. In 1998, each director attended at
least 75% of the combined number of meetings of the Board and of the
Committees on which such director served.
COMPENSATION OF DIRECTORS
During 1998, members of the Board who were not also executive officers of
the Company were paid $250 for attendance at each meeting of the Board or a
Committee on which such director served.
PROCEDURES FOR SHAREHOLDER NOMINATIONS
Nominations for election of directors may be made by any shareholder
entitled to vote for the election of directors if written notice (the
"Notice") of the shareholder's intent to nominate a director at the Meeting is
given by the shareholder and received by the Secretary of the Company in the
manner and within the time specified below. The Notice shall be delivered to
the Secretary of the Company not less than 14 days nor more that 50 days prior
to any meeting of the shareholders called for the election of directors;
except that, if less than 21 days' notice of the meeting is given to
shareholders, the Notice shall be delivered to the Secretary of the Company
not later than the earlier of the seventh day following the day on which
notice of the meeting was first mailed to shareholders or the fourth day prior
to the meeting. In lieu of delivery to the Secretary of the Company, the
Notice may be mailed to the Secretary of the Company by certified mail, return
receipt requested, but shall be deemed to have been given only upon actual
receipt by the Secretary of the Company. These requirements do not apply to
nominations made by the Board.
The Notice shall be in writing and shall contain or be accompanied by the
name and residence address of the nominating shareholder, a representation
that the shareholder is a holder of record of voting stock of the Company and
intends to appear in person or by proxy at the meeting to nominate the person
or persons specified in the Notice, such information regarding each nominee as
would have been required to be included in a proxy statement filed pursuant to
Regulation 14A of the rules and regulations established by the Commission
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
had proxies been solicited with respect to such nominee by the management or
Board of the Company, a description of all arrangements or understandings
4
<PAGE>
among the shareholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are to
be made by the shareholders, and the consent of each nominee to serve as a
director of the Company if so elected.
EXECUTIVE COMPENSATION
The following table shows the annual compensation of each of the Company's
executive officers for the years 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
----------------------------------- ------------
Securities
Underlying All Other
Name & Principal Other Annual Options/ Compensation
Position Year Salary($) Bonus($) Compensation ($) SARs (#) ($)
---------------- ---- --------- -------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Theodore A. Schwartz.... 1998 $154,315 $12,500 0 -- 14,735(1)
Chairman & Chief 1997 131,561 10,000 0 -- 12,770
Executive Officer 1996 131,955 31,854 0 200,000 11,273
Joseph F. Weiderman..... 1998 $157,353 $22,500 0 -- 2,213(2)
President and Chief 1997 127,512 10,000 0 -- 2,507
Operating Officer 1996 118,435 42,470 0 200,000 2,242
Paul L. Spiese, III..... 1998 $114,950 $15,750 0 -- 1,939(3)
Vice President 1997 93,767 10,000 0 -- 1,879
1996 88,015 29,980 0 200,000 1,856
Francis E. Wellock, 1998 $ 96,597 $13,500 0 -- 533(4)
Jr..................... 1997 75,132 10,000 0 -- 514
Chief Financial Officer 1996 55,818 5,000 0 180,000 49
</TABLE>
- --------
(1) Represents premiums paid by the Company for life insurance for the benefit
of Mr. Schwartz.
(2) Represents premiums paid by the Company for life insurance for the benefit
of Mr. Weiderman.
(3) Represents premiums paid by the Company for life insurance for the benefit
of Mr. Spiese.
(4) Represents premiums paid by the Company for life insurance for the benefit
of Mr. Wellock.
The following table shows (1) the number and value of options exercised by
the Company's executive officers during 1998 and (2) the number and value of
unexercised options held by the Company's executive officers at the end of
1998:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised In
# of Unexercised Options the-Money Options/SARs
Shares Acquired at FY-End(#) at FY-End ($)
Name on Exercise (#) Value Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ----------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Theodore A. Schwartz.... 11,717 0 290,000/200,000 $525,625/$344,500
Joseph F. Weiderman..... 2,500 0 258,143/200,000 $467,534/$344,500
Paul L. Spiese, III..... 833 0 253,700/200,000 $459,831/$344,500
Francis E. Wellock,
Jr..................... 1,000 0 114,000/150,000 $206,625/$258,375
</TABLE>
5
<PAGE>
Employment Agreements and Arrangements
Pursuant to employment agreements amended as of December 15, 1997 and again
in 1998 (and with respect to Mr. Wellock, entered into as of such date)
(collectively, the "Employment Agreements"), Mr. Schwartz is employed by the
Company as its Chief Executive Officer, Mr. Weiderman as its President, Chief
Operating Officer and Treasurer, Mr. Spiese as its Vice President--
Manufacturing and Mr. Wellock as its Vice President of Finance and Chief
Financial Officer. Each of the Employment Agreements will expire on December
31, 2000, and is subject to extension if the executive and the Company so
agree. The salaries provided for by the Employment Agreements are set forth
therein; see the Summary Compensation Table above for the base salaries paid
in 1998, 1997 and 1996. The Employment Agreements provide that the executives
shall each be entitled to a bonus at the discretion of the Board, and that
during each of 1999 and 2000, each executive will be granted options to
purchase shares of the Common Stock.
Pursuant to the Employment Agreements, the Company and the executives have
agreed that if, at the end of the term of any Employment Agreement, the
Company and the applicable executive have not agreed to an extension of such
agreement for a minimum additional term of three years, the Company is
obligated to pay such officer an amount equal to 50% of his then annual salary
in weekly installments over a six month period (the "Severance Payment").
During the term of the applicable Employment Agreement, and so long as each
executive receives the Severance Payment, such executive is prohibited from
engaging directly or indirectly in any business which is the same as, similar
to or in competition with the business of the Company.
In the event that the applicable executive is unable to perform his duties
under the Employment Agreement due to disability for an aggregate period of
more than 180 days in any 365 day period, the Company may terminate such
executive's employment upon 90 days notice. In such event, the Company is
obligated to pay such executive his full salary for a period of 12 months. At
the end of such 12 month period, the Company is obligated to pay such
executive the sum of $1,000 per week, subject to certain reductions set forth
in the Employment Agreement, for a period of three years and then $500 per
week for the remainder of such executive's life. The Employment Agreements
also provide for the use of a car and for life insurance coverage.
Certain Relationships and Related Transactions
The Company holds promissory notes made by Messrs. Schwartz, Weiderman and
Spiese, the Company's Chief Executive Officer, President, Chief Operating
Officer and Treasurer, and Vice President--Manufacturing, respectively,
totaling $175,083, $152,000 and $100,833 (the "Notes") respectively, each of
which bears interest at a rate of six per cent per annum. The Notes require
that the principal and accrued interest to be paid on or before November 21,
2001. The proceeds of the Notes were used by Messrs. Schwartz, Weiderman and
Spiese to purchase securities of the Company in the Company's 1993 private
placement and in connection with the exercise of warrants to purchase shares
of the Common Stock in 1996. Securities purchased in the private placements
were on the same terms as those agreed to by other investors in the private
placements. The largest aggregate amount outstanding under the Notes during
1998 were $175,083, $152,000 and $100,833 respectively, all of which amounts
are currently outstanding. There are additional notes outstanding, which are
less than $50,000 each.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than ten percent of a registered class of
the Company's equity securities (collectively, the "Reporting Persons") to
file reports of ownership and changes in ownership with the Commission and to
furnish the Company with copies of these reports.
Based on the Company's review of the copies of the reports received by it,
the Company believes that all filing required to be made by the Reporting
Persons for the year ended December 31, 1998 were made on a timely basis,
except for a Form 4 filed by Mr. Weiderman in February 1999.
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of Berger Holdings, Ltd. (the "Committee") is
pleased to present its report on executive compensation. The report describes
the underlying philosophy and objectives of the Company's executive
compensation program, the various elements of the program, and the basis for
the compensation determinations made by the Committee with respect to
executive officers for 1998.
Executive Compensation Philosophy and Objectives
The Company endeavors to ensure that executive compensation is linked
directly to continuous improvements in corporate performance, the achievement
by officers of corporate objectives, and increases in long-term stockholder
value.
Compensation Program Elements for 1998
The Company's executive compensation is comprised of two components, as
described below. Each component is intended to serve the Company's
compensation philosophy and guidelines.
Base Salary/Option Grants: The base salaries of each of the executive
officers of the Company, as well as the terms of option grants to each of the
executive officers, have been established pursuant to employment agreements
between these executives and the Company. See "Employment Agreements and
Arrangements," above.
Annual Incentive Compensation: The executive officers of the Company are
eligible to receive annual incentive payments. The Compensation Committee
awards incentive compensation based on consideration of factors including the
following:
(1) Individual performance during the year;
(2) Progress made by the Company in product development, improvements in
customer service and sales of products and services; and
(3) Achievement in reaching Company goals for profitability.
Compensation of the CEO and Other Executive Officers
Mr. Schwartz's base salary is established pursuant to his employment
agreement. For 1998, the Committee awarded Mr. Schwartz incentive compensation
of $12,500. Mr. Schwartz's incentive compensation was determined based on an
assessment of the factors described above.
The Committee reviewed the performance of the other executive officers
against the same key elements that were considered significant in the
evaluation of the CEO. The executive officers were awarded incentive
compensation ranging from $13,500 to $22,500.
The Legislative Cap on Deductibility of Pay
The Internal Revenue Code of 1986, as amended (the "Code") imposes a $1
million dollar limit on the deductibility of pay for executives. The Company's
cash compensation level is far below the limit. Therefore, this legislation
will not impact current pay levels.
The Company believes that the stock options granted to their executives are
exempt from the limitations of the regulation, because they are a form of
"qualified performance-based compensation."
The foregoing report has been furnished by the members of the Committee who
are listed below. No member of the Committee is a current officer or employee
of the Company.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Larry Falcon Irving Kraut, D.D.S
February 5, 1999
7
<PAGE>
ADDITIONAL INFORMATION WITH RESPECT TO
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. Falcon and Dr.
Kraut. There were no relationships during 1998 that are required to be
disclosed under Item 401(j) of Regulation S-K promulgated by the Securities
and Exchange Commission.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG LLP performed the customary auditing services for the fiscal year ended
December 31, 1998. The Company has selected KPMG LLP as its independent
auditors to perform these services for the current fiscal year. A
representative of KPMG LLP is expected to be present at the Meeting. This
representative will be available to respond to questions from the floor and
will be afforded an opportunity to make any statement which he or she may deem
appropriate.
On November 20, 1998, the Company determined that in order to achieve its
goals it was more advantageous to retain a firm with a national presence and
not to renew the engagement of its previous independent accountant, Goldenberg
Rosenthal LLP ("Goldenberg"). At that time, the Company selected KPMG LLP as
its principal independent accountant and replacement for Goldenberg. The Audit
Committee recommended that KMPG LLP be engaged to replace Goldenberg, and the
Board of Directors approved this recommendation, effective November 20, 1998.
The reports of Goldenberg on the Company's consolidated financial statements
as of and for the years ended December 31, 1997 and December 31, 1996
contained no adverse opinion or disclaimer of opinion, nor were such financial
statements qualified or modified as to uncertainty, audit scope or accounting
principles.
During the Company's two most recent fiscal years and the subsequent interim
period preceding the replacement of Goldenberg, there were no disagreements
between the Company and Goldenberg on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which disagreement(s), if not resolved to the satisfaction of Goldenberg,
would have caused it to make a reference to the subject matter of the
disagreement(s) in connection with its report.
None of the "reportable events" described in Item 304(a)(1)(v) of Regulation
S-K promulgated by the Securities and Exchange Commission occurred with
respect to the Company within its two most recent fiscal years and the
subsequent interim period preceding the replacement of Goldenberg.
8
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following table compares the cumulative total stockholder return on the
shares of Common Stock for the period beginning December 31, 1993 and ending
December 31, 1998 with the cumulative total return on the NASDAQ Market Index
("NASDAQ Market") and the NASDAQ Non-Financial Index ("NASDAQ Non-Financial")
over the same period. Total return values for the NASDAQ Market, the NASDAQ
Non-Financial and the Common Stock were calculated based on cumulative total
return assuming the investment of $100 in the NASDAQ Market, the NASDAQ Non-
Financial and the Common Stock on December 31, 1993, and assuming reinvestment
of dividends in all cases. The stockholder return shown on the graph below is
not necessarily indicative of future performance.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND BROAD MARKET
---------------------FISCAL YEAR ENDING---------------------
COMPANY/INDEX/MARKET 1993 1994 1995 1996 1997 1998
Berger Holdings Inc. Ltd. 100.00 58.06 45.16 103.23 200.00 170.97
NASDAQ Non-Financials 100.00 96.16 134.03 162.84 191.05 279.82
NASDAQ Market Index 100.00 104.99 136.18 169.23 207.00 291.96
The NASDAQ Non-Financial (consisting of companies that have SIC codes 1
through 59 and 70 through 99) is maintained by the Center for Research in
Security Prices at the University of Chicago, is published daily and monthly,
and is based on the closing prices of the stock.
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
acts.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual Meeting of
Shareholders in 2000 must be received by March 2, 2000 in order to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to that meeting, or, at the discretion of the shareholder, to be
presented at the meeting but not included in the proxy materials. If notice of
any such proposal is not received by the Company at the address set forth on
the first page of this Proxy Statement by March 2, 2000, then such proposal
shall be deemed "untimely"
9
<PAGE>
for purposes of Rule 14a-4(c) promulgated under the Exchange Act and,
therefore, the Company will have the right to exercise discretionary voting
authority with respect to such proposal. Shareholder proposals should be
directed to Joseph F. Weiderman, President, Chief Operating Officer and
Secretary, at the address of the Company set forth on the first page of this
proxy statement.
SOLICITATION OF PROXIES
The accompanying form of proxy is being solicited on behalf of the Board.
The expenses of solicitation of proxies for the Meeting will be paid by the
Company. In addition to the mailing of the proxy material, such solicitation
may be made in person or by telephone or telegraph by directors, officers or
regular employees of the company or its subsidiaries.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, AS FILED WITH THE COMMISSION FOR THE COMPANY'S MOST RECENT
FISCAL YEAR. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO JOSEPH F. WEIDERMAN,
PRESIDENT, CHIEF OPERATING OFFICER AND SECRETARY, AT THE ADDRESS OF THE
COMPANY SET FORTH ON THE FIRST PAGE OF THIS PROXY STATEMENT.
10
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BERGER HOLDINGS, LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby constitute and appoint Theodore A. Schwartz and Joseph F. Weiderman
and each of them acting individually my true and lawful agents and proxies,
with full power of substitution in each, to vote all shares held of record by
me at the 1999 Annual Meeting of Shareholders of Berger Holdings, Ltd. to be
held on June 30, 1999 and any adjournments or postponements thereof. I direct
said proxies to vote as specified on the reverse side.
UNLESS OTHERWISE SPECIFIED, ALL SHARES WILL BE VOTED "FOR" THE ELECTION OF
ALL NOMINEES FOR DIRECTOR LISTED. THIS PROXY ALSO DELEGATES DISCRETIONARY
AUTHORITY TO VOTE WITH RESPECT TO ANY OTHER BUSINESS WHICH MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT OF POSTPONEMENT THEREOF.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY.
1. Election of Directors
FOR all nominees listed (except as indicated WITHHOLD AUTHORITY
to the contrary below) to vote for all nominees
[_] [_]
To withhold authority to vote for any individual nominee, strike a line
through the nominee's name listed below:
Joseph F. Weiderman John Paul Kirwin, III Jacob I. Haft, M.D.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.
<PAGE>
THE UNDERSIGNED HEREBY REVOKES ALL PREVIOUS PROXIES FOR THE MEETING AND
ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING, PROXY STATEMENT AND
ANNUAL REPORT OF BERGER HOLDINGS, LTD.
Date: _______________________ , 1999
____________________________________
Signature
____________________________________
NOTE: Please sign this proxy
exactly as name(s) appear in
address. When signing as attorney-
in-fact, executor, administrator,
trustee or guardian, please add
your title as such.
