<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MEDAR, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
MEDAR, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Medar, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of Medar,
Inc., a Michigan corporation, will be held at the corporate offices, 38700 Grand
River Avenue, Farmington Hills, Michigan 48335, on Wednesday, May 31, 1995, at
4:00 p.m. local time for the following purposes, all of which are more
completely set forth in the accompanying proxy statement.
1. To elect eight directors;
2. To authorize an amendment to the Articles of Incorporation of the
Company increasing the Company's authorized shares of common stock from
10,000,000 to 15,000,000;
3. To approve a new stock option plan authorizing shares on which qualified
and nonqualified options may be granted in the amount of 500,000 shares
of common stock of the Company; and
4. To transact such other business as may properly come before the meeting.
In accordance with the Bylaws of the Company and a resolution of the Board
of Directors, the record date for the meeting has been fixed at April 3, 1995.
Only Shareholders of record at the close of business on that date will be
entitled to vote at the meeting.
By Order of the Board of Directors
Max A. Coon
Secretary
Farmington Hills, Michigan
April 26, 1995
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE AND SIGN THE ENCLOSED PROXY FORM, INDICATE YOUR CHOICE
WITH RESPECT TO THE MATTERS TO BE VOTED UPON, AND PROMPTLY RETURN YOUR PROXY SO
THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT
THE PRESENCE OF A QUORUM MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY,
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING
THE EXPENSE OF ADDITIONAL PROXY SOLICITATION. THE GIVING OF SUCH PROXY DOES NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING.
<PAGE> 3
PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies
on behalf of the Board of Directors of Medar, Inc. (the Company) for use at the
Annual Meeting of Shareholders of the Company to be held on May 31, 1995 at 4:00
p.m., or any adjournments thereof. This Proxy Statement is being mailed on or
about April 26, 1995 to all holders of record of common stock of the Company as
of the close of business on April 3, 1995.
PURPOSE OF THE MEETING
The purpose of this Annual Meeting of Shareholders shall be to elect
directors, to authorize an amendment to the Articles of Incorporation increasing
the authorized common stock to 15,000,000 shares, to approve a new stock option
plan and to transact such other business as may properly come before the
meeting.
VOTING
Common Stock with no par value is the only voting stock of the Company.
Holders of record at the close of business on April 3, 1995 are entitled to one
(1) vote for each share held. As of April 3, 1995, the Company had 8,663,869
shares outstanding. Holders of stock entitled to vote at the meeting do not have
cumulative voting rights with respect to the election of directors.
In elections of directors where the number of nominees is equal to the
number of positions to be filled, the vote required to elect each director is
equal to the majority of the votes cast in such election. Actions other than
elections of directors are also authorized by a majority of the votes cast.
Although state law and the articles of incorporation and bylaws of the Company
are silent on the issue, it is the intent of the Company that proxies received
which contain abstentions or broker non-votes as to any matter will be included
in the calculations as to the presence of a quorum, but will not be counted as
votes cast in such matter in the calculation as to the needed majority vote.
All shares represented by proxies shall be voted "FOR" each of the matters
recommended by management unless the Shareholder, or his duly authorized
representative, specifies otherwise or unless the proxy is revoked. Any
Shareholder who executes the proxy referred to in this statement may revoke it
before it is exercised, provided written notice of such revocation is received
at the office of the Company in Farmington Hills, Michigan at least twenty-four
(24) hours before the commencement of the meeting, or provided the grantor of
the proxy is present at the meeting and, having been recognized by the presiding
officer, announces such revocation in open meeting. All Shareholders are
encouraged to date and sign the enclosed proxy form, indicate your choice with
respect to the matters to be voted upon and return it to the Company.
ELECTION OF DIRECTORS
It is the intention of the persons named in the proxy to vote for election
of the following nominees to the Board of Directors to hold office until the
next Annual Meeting or until their successors are elected. In the event any
nominee should be unavailable, which is not anticipated, the shares may, in the
discretion of the proxy holders, be voted for the election of such persons as
the Board of Directors may submit. Directors are elected for a term of one (1)
year and until their successors are elected and qualified. Proxies will be voted
only to the extent of the number of nominees named. The Directors have submitted
only eight nominations to fill the nine positions on the Board of Directors. The
ninth position is being left open in order to allow the selection of a qualified
individual, who will be appointed at a later date by the Board.
2
<PAGE> 4
The following information is furnished concerning the nominees, all of whom
have been nominated by the Board of Directors and, with the exception of
Frederico P.M.P.D. de Magalhaes, are presently directors of the Company.
<TABLE>
<CAPTION>
PRESENT POSITION WITH THE SERVED AS
NAME COMPANY AND PRINCIPAL OCCUPATION AGE DIRECTOR SINCE
- ----------------------- -------------------------------------------------- --- --------------
<S> <C> <C> <C>
Max A. Coon............ Secretary and Vice Chairman of the Board of MEDAR, 60 1978
INC.; President and Chairman of the Board of
Maxco, Inc.
Charles J. Drake....... President and Chairman of the Board of MEDAR, INC. 54 1978
Frederico P.M.P.D.
de Magalhaes......... Managing Director of Integral Vision Limited, a 35
wholly owned subsidiary of MEDAR, INC. located in
Bedford, England, which develops and manufactures
machine vision solutions for industrial
applications
Stephan Sharf.......... President of SICA Corp., a Michigan based 74 1986
automotive industry consulting firm
Vincent Shunsky........ Treasurer of MEDAR, INC.; Director, Treasurer and 46 1978
Vice President of Finance of Maxco, Inc.
Gerald R. Smith........ Vice President of Finance and Operations of MEDAR, 38 1989
INC.
William B. Wallace..... Senior Managing Director of Equity Partners Ltd., 50 1990
a Troy, Michigan based private investment banking
and business management consulting firm
Stephen R. Zynda....... General Counsel of Midwest Bridge Company, 43 1993
a Williamston, Michigan based bridge and road
building contractor
</TABLE>
All of the foregoing directors and nominees have been engaged in the
principal occupation specified for the previous five (5) years with the
exception of the following:
Frederico P.M.P.D. de Magalhaes is the co-founder and has served as
managing director of Integral Vision Limited, a corporation located in Bedford,
England, since 1988. Integral Vision designs, develops, manufactures and
supplies machine vision solutions for industrial applications in Europe and the
United States. Prior to founding Integral Vision, Mr. de Magalhaes was a
lecturer in Robotics and Automation at Cranfield Institute of Technology,
Cranfield, England from 1984 to 1988 and served as Computer and Automation
Systems Manager for Ozonair Engineering Co. Ltd, a manufacturer of industrial
air handling equipment located in Maidstone, England, from 1981 to 1984. Medar
acquired all of the stock of Integral Vision Limited, effective January 1, 1995.
Gerald R. Smith has served as Vice President of Finance and Operations
since January 1, 1991. He joined Medar in September 1988 as Vice President of
Finance.
William B. Wallace has served as a director of the Company since 1990. Mr.
Wallace has been the Senior Managing Director of Equity Partners Ltd. since
1987. Equity Partners is a private investment banking and business management
consulting firm. Prior to founding Equity Partners, Mr. Wallace was a partner
with Ernst & Young, a certified public accounting firm. Mr. Wallace was an
executive officer of a privately-owned holding company, the principal asset of
which is a 49% interest in a subsidiary. In 1992, in connection with litigation
with the 51% owner of the subsidiary, the holding company filed a petition in
bankruptcy. The bankruptcy case was dismissed in September 1994, and the
proceeds from the settlement of the underlying litigation and sale of the
subsidiary were distributed to the holding company shareholders. Due to, among
other things, the tactical nature of the petition, the Company does not believe
this action is material to an evaluation of Mr. Wallace's abilities as a
director of the Company.
3
<PAGE> 5
Messrs. Coon, Drake and Shunsky are also directors of Maxco, Inc., Messrs.
Coon and Shunsky are directors of FinishMaster, Inc., and Mr. Coon is
additionally a director of Spartan Motors, Inc., all of whose stocks are traded
over-the-counter.
The Board of Directors has established a Compensation Committee whose
members are Max A. Coon and Vincent Shunsky. The Compensation Committee is
responsible for establishing compensation for the President, approving executive
compensation levels of all other executives and authorizing the levels and
timing of bonus payments. In addition, this committee is responsible for
administering the Company's Stock Option Plans, including designating the
recipients and terms of specific option grants. The Compensation Committee met
twelve times during the period ended December 31, 1994 to grant options on
40,700 shares and to establish compensation criteria and levels. The Audit
Committee, whose members are William B. Wallace, Charles J. Drake and Stephan
Sharf, met three times in 1994. The Audit Committee is responsible for
discussing the scope and timing of independent audit work, selecting independent
auditors, discussing problems and experience in completing audit work, reviewing
audited financial statements, discussing findings and recommendations of
independent auditors, monitoring the system of internal control and overseeing
conflict of interest and related party transaction policies. The Company does
not have a standing nominating committee.
During the period ended December 31, 1994, there were a total of nine (9)
meetings of the Board of Directors. No directors attended fewer than 75% of the
meetings held during the period.
DIRECTOR COMPENSATION
Directors who are not officers of the Company receive $200 for each meeting
attended. In addition, Messrs. Sharf and Wallace each have consulting agreements
with the Company pursuant to which they have agreed to provide consulting
services to the Company for so long as they hold office as directors. The
Company paid both Mr. Sharf and Mr. Wallace $9,600 for such consulting services
during the fiscal year.
4
<PAGE> 6
EXECUTIVE OFFICERS
The following table sets forth information concerning the executive
officers of the Company.
<TABLE>
<CAPTION>
PRESENT POSITION WITH THE SERVED AS
NAME COMPANY AND PRINCIPAL OCCUPATION AGE OFFICER SINCE
- ------------------------- ------------------------------------------------- --- -------------
<S> <C> <C> <C>
Charles J. Drake......... President and Chairman of the Board of MEDAR,
INC. 54 1978
Lyle D. Harbin........... Vice President of Marketing, Welding Products of
MEDAR, INC. 61 1985
Gerald R. Smith.......... Vice President of Finance and Operations and
Director of MEDAR, INC. 38 1988
Mark R. Doede............ Vice President of Engineering of MEDAR, INC. 37 1989
Arthur D. Harmala........ Vice President of Marketing, Vision Products of
MEDAR, INC. 51 1995
Gary G. Wagner........... Vice President of Sales, Vision Products of
MEDAR, INC. 44 1995
Max A. Coon.............. Secretary and Vice Chairman of the Board of
MEDAR, INC.; President and Chairman of the Board
of Maxco, Inc. 60 1978
Vincent Shunsky.......... Treasurer and Director of MEDAR, INC.; Treasurer,
Vice President of Finance and Director of Maxco,
Inc. 46 1978
</TABLE>
All of the foregoing officers of the Company have been engaged in the
principal occupations specified above for the previous five years except as
stated above and as follows.
Arthur D. Harmala was appointed as Vice President of Marketing, Vision
Products in March 1995. He has been Vice President, Sales and Marketing for the
Company's wholly owned subsidiary, Automatic Inspection Devices, Inc., since
1989 and was previously employed by the Company since 1985 as Director of
Marketing for Medar's line of vision products. Mr. Harmala previously worked in
sales management positions at Allen-Bradley Company, Inc., a manufacturer of
programmable controllers, and at Perceptron, Inc., a manufacturer of non-contact
gauging products.
Gary G. Wagner joined the Company as Vice President of Vision Sales in
March 1995. He previously served as Director of Marketing from 1988 to 1991, and
then Vice President of Marketing from 1991 to 1994, of Automatix Incorporated, a
corporation specializing in industrial vision applications located in Billerica,
Massachusetts. In 1994, when Automatix merged with another vision manufacturer
to form Acuity Imaging Inc., Mr. Wagner became Vice President of Marketing for
that company. Acuity Imaging Inc., located in Nashua, New Hampshire, develops
and markets machine vision systems for factory automation and image processing
software for various industrial and scientific applications.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors (the "Committee")
consists of Max A. Coon and Vincent Shunsky. Messrs. Coon and Shunsky, although
officers of the Company, are also officers and directors of Maxco, Inc., are
paid by Maxco, Inc. and receive no compensation from the Company. Mr. Charles J.
Drake, the Company's Chief Executive Officer, is additionally a director of
Maxco, Inc.
5
<PAGE> 7
OVERVIEW AND PHILOSOPHY
The Committee is responsible for developing and making recommendations to
the Board with respect to the Company's executive compensation policies. In
addition, the Compensation Committee, pursuant to authority delegated by the
Board, determines on an annual basis the compensation to be paid to the Chief
Executive Officer and each of the other executive officers of the Company.
The objectives of the Company's executive compensation program are to:
-- Support the achievement of desired Company performance.
-- Provide compensation that will attract and retain superior talent and
reward performance.
-- Align the executive officers' interests with the success of the Company
by placing a portion of pay at risk, with payout dependent upon
corporate performance, and through the granting of stock options.
The executive compensation program provides an overall level of
compensation opportunity that is competitive with companies of comparable size
and complexity. The Compensation Committee will use its discretion to set
executive compensation where in its judgment external, internal or an
individual's circumstances warrant it.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of base
salary, annual cash incentive compensation, long-term incentive compensation in
the form of stock options, and various benefits, including medical and deferred
compensation plans, generally available to employees of the Company.
BASE SALARY
Base salary levels for the Company's executive officers are competitively
set relative to other comparable companies. In determining salaries the
Committee also takes into account individual experience and performance.
ANNUAL INCENTIVE COMPENSATION
The Company's annual incentive program for executive officers and key
managers provides direct financial incentives in the form of an annual cash
bonus to executives to achieve the Company's annual goals. Goals for Company
performance are set at the beginning of each fiscal year. In 1994, the following
measures of Company performance were selected: corporate revenue, corporate
earnings, new product development, market penetration, and customer
satisfaction.
Specific individual performance was also taken into account in determining
bonuses, including meeting department goals, attitude, dependability,
cooperation with co-workers, and creativity or ideas that benefit the Company.
In addition, significant individual effort in dealing with specific issues and
the overall hours worked were taken into consideration.
STOCK OPTION PROGRAM
The stock option program is the Company's long-term incentive plan for
executive officers and key employees. The objectives of the program are to align
executive and shareholder long-term interests by creating a strong and direct
link between executive pay and shareholder return, and to enable executives to
develop and maintain a significant, long-term stock ownership position in the
Company's common stock.
In March 1983, the Company adopted its first Stock Option Plan, which was
subsequently amended by the Shareholders to allow the Company to issue options
on up to 500,000 shares of common stock. A second Stock Option Plan allowing the
issuance of options on up to 300,000 shares of common stock was approved by the
Shareholders in August 1986. These stock option plans provide for the grant of
both options intended to qualify as "incentive stock options" within the meaning
of Section 422A of the Internal Revenue Code, as
6
<PAGE> 8
amended, and nonstatutory stock options which do not qualify for such treatment.
A nonqualified plan under which 200,000 shares of stock may be issued was also
approved in August 1986.
The stock option plans authorize a committee of directors to award
executive and key employee stock options. Stock options are granted at an option
price equal to the fair market value of the Company's Common Stock on the date
of grant, have ten year terms and can have exercise restrictions established by
the Compensation Committee. Awards are made at a level calculated to be
competitive with companies of comparable size and complexity.
Options have been granted on all shares authorized under the above plans.
However, a new stock option plan authorizing options on 500,000 shares of common
stock of the Company on substantially the same terms is proposed to be approved.
See "Proposed Stock Option Plan."
DEFERRED COMPENSATION
Effective July 1, 1986, the Company adopted a 401(k) Employee Savings Plan.
The 401(k) is a "cash or deferred" plan under which employees may elect to
contribute a certain portion of their compensation which they would otherwise be
eligible to receive in cash. The Company has agreed to make a matching
contribution of 20% of the employees' contributions of up to 6% of their
compensation. In addition, the Company contributes .5% of compensation for each
employee, or more or less at the discretion of the Board. All full time
employees of the Company or its U.S. subsidiaries who have completed six months
of service are eligible to participate in the plan. Participants are immediately
100% vested in all contributions. The plan does not contain an established
termination date and it is not anticipated that it will be terminated at any
time in the foreseeable future.
BENEFITS
The Company provides medical benefits to the executive officers that are
generally available to Company employees. The amount of perquisites, as
determined in accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not exceed 10% of salary for
any executive officer for fiscal 1994.
CHIEF EXECUTIVE OFFICER
Charles J. Drake has served as the Company's Chief Executive Officer since
1978. His base salary for the 1994 year was $160,000. Mr. Drake's bonus for 1994
was $100,000.
The factors discussed under "Annual Incentive Compensation", above, were
also applied in establishing the amount of Mr. Drake's bonus. Significant
factors in establishing Mr. Drake's compensation were the Company's 40% growth
in sales, the 20% increase in earnings and the 22% increase in the market price
for the Company's stock at December 31, 1994 compared to December 31, 1993. In
addition, the Committee considered the successful development and introduction
of several new products and the successful public offering of the Company's
common stock.
The Committee believes Mr. Drake managed the Company well in a challenging
business climate and has achieved above-average results in comparison to others
in the resistance welding control and machine vision industries.
THE COMPENSATION COMMITTEE
Max A. Coon
Vincent Shunsky
7
<PAGE> 9
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and to the two other executive officers whose
compensation exceeded $100,000:
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION ----------------------
------------------- ALL OTHER
NAME AND SALARY BONUS OPTIONS COMP(1)
PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- ---------------------------------------------- ---- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C>
Charles J. Drake.............................. 1994 160,000 100,000 0 750
Chief Executive Officer 1993 160,000 124,000 50,000 1,179
1992 166,154 45,000 0 1,144
Lyle D. Harbin................................ 1994 100,000 115,068(2) 0 2,550
Vice President of Marketing 1993 100,000 73,081(2) 0 2,075
1992 100,385 21,179(2) 0 1,599
Gerald R. Smith............................... 1994 105,380 23,000 5,000 1,947
Vice President of Finance and Operations 1993 100,000 22,000 5,000 1,606
1992 103,846 7,000 5,000 1,663
</TABLE>
- -------------------------
(1) Compensation in this category represents the Company's 20% match of employee
deferrals of currently earned income into the 401(k) Employee Savings Plan
and a profit sharing contribution made by the Company for all of its
employees to the 401(k) Employee Savings Plan at the rate of .5% of
compensation, up to $150,000 of compensation.
(2) The compensation reported for Mr. Harbin in this category includes sales
commissions.
OPTIONS
The following table summarizes option grants during 1994 to the executive
officers named in the Summary Compensation Table above, and the potential
realizable value of such options at assumed rates of appreciation.
OPTION GRANTS DURING 1994
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
------------------------------------------------------- RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------ ------- ------------ ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Charles J. Drake.............. 0
Lyle D. Harbin................ 0
Gerald R. Smith............... 5,000 12.29% 9.25 08-05-04 29,086 73,711
</TABLE>
8
<PAGE> 10
The following table summarizes the value of the options held by the
executive officers named in the Summary Compensation Table above at the end of
1994. No options were exercised by such persons during 1994.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END(#) FY-END($)
------------- ----------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------- ------------- ----------------
<S> <C> <C>
Charles J. Drake........................................... 400,000/0 3,777,662/0
Lyle D. Harbin............................................. 50,000/0 427,258/0
Gerald R. Smith............................................ 30,000/5,000 276,250/22,500
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Charles J. Drake, the Chairman and CEO of the Company, was indebted to the
Company during 1994, with the largest aggregate amount of such indebtedness
being $213,996. This debt was incurred by Mr. Drake in order to exercise options
to purchase 150,000 shares of the Company's common stock and to satisfy certain
personal obligations and is evidenced by promissory notes bearing interest at
9%. At March 31, 1995, the amount of this indebtedness was $218,745.
COMPLIANCE WITH REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers or beneficial owners of over 10% of any class
of the Company's equity securities to file certain reports regarding their
ownership of the Company's securities or any changes in such ownership. During
the year ended December 31, 1994, all of such individuals filed the required
reports on a timely basis.
9
<PAGE> 11
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the last five years with the cumulative total
return on (1) the CRSP Total Return Index for the NASDAQ Stock Market (US
Companies) and (2) the Dow Jones Industrial Technology Index over the same
period, assuming the investment of $100 in the Company's Common Stock, the
NASDAQ Index and the Industrial Technology Index on December 31, 1989, and
reinvestment of all dividends.
COMPARATIVE STOCK PERFORMANCE GRAPH DATA
PROXY STATEMENT
MEDAR, INC.
1994
<TABLE>
<CAPTION>
DOW JONES
INDUSTRIAL
MEASUREMENT PERIOD TECHNOLOGY
(FISCAL YEAR COVERED) MEDAR, INC. NASDAQ U.S. INDEX
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 42.857 84.918 96.343
1991 160.714 136.277 138.001
1992 200.000 158.579 140.325
1993 321.429 180.933 138.171
1994 392.857 176.916 146.111
</TABLE>
- -------------------------
(1) The CRSP Total Return Index for the NASDAQ Stock Market (US Companies) is
composed of all domestic common shares traded on the NASDAQ National Market
and the NASDAQ Small-Cap Market.
(2) The Dow Jones Industrial Technology Index is composed of companies whose
technology and high-tech products are primarily directed toward industrial
production and/or quality control.
10
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 31, 1995 regarding
the beneficial ownership of the Company's common stock by (i) the principal
Shareholder (Maxco, Inc.), (ii) the only other beneficial owners of more than 5%
of the Company's outstanding stock that are known to the Company, (iii) each of
the Company's directors and nominees, (iv) each of the Company's executive
officers listed in the Summary Compensation Table, above, and (v) all officers
and directors of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED
-------------------------
SHARES PERCENT
--------- -------
<S> <C> <C>
Maxco, Inc......................................................... 1,737,405 20.1%
1118 Centennial Way
Lansing, MI 48917
Scudder, Stevens & Clark, Inc...................................... 503,300(1) 5.8%
345 Park Avenue
New York, NY 10154
Putnam Investments, Inc............................................ 831,970(2) 9.6%
One Post Office Square
Boston, MA 02109
Charles J. Drake................................................... 480,378(3) 5.3%
Max A. Coon........................................................ 5,000(4) *
Lyle D. Harbin..................................................... 50,180(5) *
Frederico P.M.P.D. de Magalhaes.................................... 163,357 1.9%
Stephan Sharf...................................................... 6,000(6) *
Vincent Shunsky.................................................... 19,850(4) *
Gerald R. Smith.................................................... 35,285(7) *
William B. Wallace................................................. 24,000(8) *
Stephen R. Zynda................................................... 2,000(9) *
All Directors and Officers as a Group,............................. 862,286(10) 9.4%
(12 persons)
</TABLE>
- -------------------------
* Beneficial ownership does not exceed 1%.
(1) Information obtained from Schedule 13G dated February 3, 1995, filed with
the Securities and Exchange Commission by Scudder, Stevens & Clark, Inc.
and sent to the Company pursuant to Section 13(d) of the Securities
Exchange Act of 1934.
(2) Information obtained from Amendment No. 1 to Schedule 13G dated March 8,
1995, filed with the Securities and Exchange Commission by Putnam
Investments, Inc. and sent to the Company pursuant to Section 13(d) of the
Securities Exchange Act of 1934.
(3) Includes 400,000 shares on which Mr. Drake holds options which he is
eligible to exercise.
(4) Does not include shares of the Company held by Maxco, Inc., of which Mr.
Coon is the President and Chairman of the Board and the owner of 22.7% of
its common stock, or shares of the Company held by the Maxco, Inc. Employee
Profit Sharing Plan of which Messrs. Coon and Shunsky are trustees.
(5) Includes 41,000 shares subject to options which Mr. Harbin is presently
eligible to exercise.
(6) Includes 2,000 shares subject to options which Mr. Sharf is presently
eligible to exercise.
(7) Includes 30,000 shares subject to options which Mr. Smith is presently
eligible to exercise.
(8) Includes 7,000 shares subject to options which Mr. Wallace is presently
eligible to exercise.
(9) Represents shares subject to options which Mr. Zynda is presently eligible
to exercise.
(10) Includes 513,000 shares subject to options which eight officers or
directors are eligible to exercise.
11
<PAGE> 13
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION
The Company proposes to amend its Articles of Incorporation to increase the
number of authorized shares of common stock from 10,000,000 to 15,000,000. As
the following table demonstrates, the 10,000,000 shares of common stock
presently authorized are almost all currently outstanding or reserved for
issuance pursuant to the Company's current or proposed stock option plans.
<TABLE>
<S> <C>
Shares Outstanding at 3-31-95............................... 8,663,869
Shares Reserved for Outstanding Options..................... 630,100
Shares Reserved for Proposed Option Plan.................... 500,000
---------
Total Committed Shares...................................... 9,793,969
Total Available Shares...................................... 206,031
</TABLE>
While there are no immediate plans for issuance of any additional shares of
common stock, it is anticipated that the availability of these shares will
afford the Company added flexibility in raising capital or in future
acquisitions when such opportunities present themselves.
PROPOSED STOCK OPTION PLAN
The Company proposes to adopt a new Stock Option Plan under which options
to purchase five hundred thousand (500,000) shares of the Company's common stock
may be granted to officers and other employees of the Company, and to
non-employee directors, advisors and consultants who may be in a position to
contribute materially to the welfare of the Company. Option recipients and the
level of the award will be determined by the Compensation Committee of the Board
of Directors on the basis of the recipient's services and value to the Company.
The Stock Option Plan provides for the grant of both incentive stock options
intended to qualify for preferential tax treatment under Section 422 of the
Internal Revenue Code of 1986, as amended, and nonqualified stock options which
do not qualify for such treatment. Stock options are granted at an option price
equal to the fair market value of the Company's common stock on the date of
grant, have ten year terms and can have exercise restrictions established by the
Compensation Committee. On April 3, 1995, the fair market value of the Company's
common stock was $10.1875 per share.
In the case of incentive stock options, there is no tax liability to the
recipient upon either grant or exercise of the options. Upon sale of the
security, the recipient is taxed at capital gains rates on the difference
between the sales price and the amount paid for the option. There is no tax
consequence to the Company with regard to issuance, exercise or sale of the
option.
At the time a nonqualified option is exercised, the option holder must
recognize compensation income in the amount of the spread between the option
price and the fair market value at date of exercise. The Company is entitled to
a corresponding tax deduction.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Ernst & Young served as auditors for the Company for the year
ended December 31, 1994.
The Company periodically evaluates its external audit requirements. The
Audit Committee of the Board of Directors will make a decision as to the
selection of external auditors for the year ending December 31, 1995 based on
cost, response time and quality of services available.
A representative of Ernst & Young is expected to be present at the Annual
Meeting of Shareholders, will be available to respond to appropriate questions,
and will have the opportunity to make a statement if he desires to do so.
12
<PAGE> 14
SHAREHOLDER PROPOSALS
Any proposals which Shareholders of the Company intend to present at the
next annual meeting of the Company must be received by the Company by February
1, 1996, for inclusion in the Company's proxy statement and proxy form for that
meeting. Proposals should be directed to the attention of Robin Hembree at the
offices of the Company, 38700 Grand River Avenue, Farmington Hills, Michigan
48335.
OTHER BUSINESS
The management knows of no other matters that will come before the meeting.
However, if other matters do come before the meeting, the proxy holders will
vote in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitations by use of the mails, officers and regular employees of
the Company may solicit proxies by telephone or in person.
By Order of the Board of Directors
Max A. Coon
Secretary
13
<PAGE> 15
<TABLE>
<S><C>
MEDAR, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 31, 1995.
The undersigned hereby constitutes and appoints Max A. Coon and Charles J. Drake, and each or any of them, attorney and
proxy for and in the names and stead of the undersigned, to vote all stock of Medar, Inc. (Medar) on all matters unless the contrary
is indicated herein at the Annual Meeting of Shareholders to be held at the corporate offices, 38700 Grand River Avenue, Farmington
Hills, Michigan on May 31, 1995, at 4:00 p.m. local time or at any adjournments thereof, according to the number of votes that the
undersigned could vote if personally present at said meeting. The undersigned directs that this proxy be voted as follows:
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned Shareholder. If no direction is
made, this proxy will be voted for Proposals 1, 2, 3, and 4.
NOTE: When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Comments/Address Change:
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE MARK VOTES AS
[X] IN THIS EXAMPLE
With- For All With-
For hold Except For hold
1. Election of Directors [ ] [ ] [ ] 2. Approval of Amendment to [ ] [ ]
the Articles of Incorporation
M. COON F. DE MAGALHAES V. SHUNSKY W. WALLACE increasing the authorized
C. DRAKE S. SHARF G. SMITH S. ZYNDA Common Stock of Medar,
Inc.
If you do not wish your shares voted "FOR" a particular nomi-
nee, mark the "For All Except" box and strike a line through 3. Approval of Stock Option [ ] [ ]
the nominee(s) name. Your shares will be voted for the remaining Plan authorized to grant
nominee(s). options on 500,000 shares
of common stock of Medar,
Inc.
4. In their discretion, the [ ] [ ]
Proxies are authorized to
vote upon such other
business as may come
before the meeting.
Mark box at right if comments or address [ ]
change have been noted on the reverse side
of this card.
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
</TABLE>
