SCHEDULE 14A INFORMATION
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 [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PRECISION STANDARD, INC.
(Name of Registrant as Specified in Its Charter)
GORSUCH KIRGIS LLP
(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:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PRECISION STANDARD, INC.
12000 E. 47th Avenue, Suite 400
Denver, Colorado 80239
(303) 292-6565
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1998
TO THE SHAREHOLDERS OF PRECISION STANDARD, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Precision Standard, Inc., a Colorado corporation (the "Company"), will be
held at the new offices of the Company at the Best Western Executive
Hotel, 4411 Peoria Street, Denver, Colorado 80239, on Tuesday, May 19,
1998, at 8:00 a.m. Mountain Daylight Time, and at any and all adjournments
thereof, for the purpose of considering and acting upon the following
matters:
1. The election of four (4) Directors of the Company to serve until
the next Annual Meeting of Shareholders and until their successors have
been duly elected and qualified;
2. The ratification of the appointment of Arthur Andersen LLP as
the independent public accountants of the Company for the calendar year
ending December 31, 1998; and
3. he transaction of such other business as properly may come
before the Meeting or any adjournment thereof.
A Proxy Statement explaining the matters to be acted upon at the
Meeting is enclosed. Please read it carefully.
Only holders of record of the $.0001 par value common stock of the
Company at the close of business on Friday, April 3, 1998, will be
entitled to notice of and to vote at the Meeting or at any adjournment or
adjournments thereof. The Proxies are being solicited by the Board of
Directors of the Company.
All Shareholders, whether or not they expect to attend the Annual
Meeting of Shareholders in person, are urged to sign and date the enclosed
Proxy and return it promptly in the enclosed postage-paid envelope which
requires no additional postage if mailed in the United States. The giving
of a Proxy will not affect your right to vote in person if you attend the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Denver, Colorado MATTHEW L. GOLD
April 21, 1998 PRESIDENT
PRECISION STANDARD, INC.
12000 E. 47th Avenue, Suite 400
Denver, Colorado 80239
(303) 292-6565
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1998
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Precision Standard, Inc., a Colorado corporation (the
"Company"), for use at the Company's Annual Meeting of Shareholders (the
"Meeting") to be held at the Best Western Executive Hotel, 4411 Peoria
Street, Denver, Colorado 80239, on Tuesday, May 19, 1998, at 8:00 a.m.,
Mountain Daylight Time, and at any adjournment thereof. It is anticipated
that this Proxy Statement and the accompanying Proxy will be mailed to the
Company's Shareholders on or about April 21, 1998.
Any person signing and returning the enclosed Proxy may revoke it at
any time before it is voted by (i) giving a later dated written revocation
of Proxy to the Company, or (ii) providing a later dated amended Proxy to
the Company, or (iii) voting in person at the Meeting. The expense of
soliciting Proxies, including the cost of preparing, assembling and
mailing this Proxy material to Shareholders, will be borne by the Company.
It is anticipated that solicitations of Proxies for the Meeting will be
made only by use of the mails; however, the Company may use the services
of its Directors, Officers and employees to solicit Proxies personally or
by telephone, without additional salary or compensation to them.
Brokerage houses, custodians, nominees and fiduciaries will be requested
to forward the Proxy soliciting materials to the beneficial owners of the
Company's shares held of record by such persons, and the Company will
reimburse such persons for the reasonable out-of-pocket expenses incurred
by them in that connection.
All shares represented by valid Proxies will be voted in accordance
therewith at the Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the
Company's $.0001 par value common stock ("Common Stock"). Only
Shareholders of record at the close of business on Friday, April 3, 1998,
are entitled to notice of and to vote at the Meeting or any adjournment
thereof. On April 3, 1998, the Company had 12,771,870 shares of Common
Stock outstanding, each share of which is entitled to one vote on all
matters to be voted upon at the Meeting, including the election of
Directors. Cumulative voting in the election of Directors is not
permitted. On April 15, 1998, the Shareholders of the Company approved a
4-for-1 reverse stock split effective on that date. In light of the
approval of the reverse stock split, the number of shares outstanding as
of April 15, 1998 became 3,692,993 shares. Because the April 3, 1998
record date for the Annual Meeting was before the effective date of the
reverse stock split, the vote at the Annual Meeting will taken on the
basis of the pre-split shares.
A majority of the Company's outstanding Common Stock represented in
person or by Proxy and entitled to vote will constitute a quorum at the
Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
the Company's Common Stock owned beneficially, as of April 3, 1998 (prior
to the proposed 4-for-1 reverse stock split) by any person who is known to
the Company to be the beneficial owner of 5% or more of such Common Stock,
and, in addition, by each Director and nominee for Director of the
Company, by certain named Executive Officers, and by all Directors and
Executive Officers of the Company as a group. Information as to
beneficial ownership is based upon statements furnished to the Company by
such persons. For purposes of this disclosure, the amount of the Company's
Common Stock beneficially owned is the aggregate number of shares of the
Common Stock outstanding on such date plus an amount equal to the
aggregate amount of Common Stock which could be issued upon the exercise
of stock options or warrants within 60 days of such date.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership of Class
- ------------------------ ----------------- --------
<S> <C> <C>
Matthew L. Gold 8,736,630 shares 57.1%
1225 17th Street, Suite 1800 directly and
Denver, Colorado 80202 indirectly(1)
Donald C. Hannah 73,125 shares *
6400 East Cactus Wren Road directly(2)
Paradise Valley, Arizona 85253
Admiral George E. R. Kinnear II 121,425 shares *
20 Roaring Rock Road directly(3)
York, Maine 03909
J. Ben Shapiro, Jr. 34,000 shares *
One Midtown Plaza, #1200 directly(4)
1360 Peachtree Street
Atlanta, Georgia 30309
General Thomas C. Richards 26,375 shares *
29688 Softwind Circle directly(5)
Fair Oaks Ranch, Texas 78015
Bank of America National 3,750,637.375 shares 22.9%
Trust and Savings Association directly(6)
315 Montgomery Street, 13th Floor
San Francisco, California 94104
All Directors and Executive 8,991,555 shares 58.1%
Officers as a Group directly and
(5 Persons) indirectly(7)
</TABLE>
(1) Includes 1,000,000 shares held by Arapaho Capital Management, Inc., a
corporation controlled by Mr. Gold. Includes options to purchase
520,000 shares. See "Executive Compensation."
(2) Consists of options to purchase 73,125 shares. See "Compensation of
Directors."
(3) Includes options to purchase 53,125 shares. See "Compensation of
Directors."
(4) Includes options to purchase 33,000 shares. See "Compensation of
Directors."
(5) Consists of options to purchase 26,375 shares. See "Compensation of
Directors."
(6) In March 1996, the Company renegotiated the Senior Subordinated Loan
which it had obtained from Bank of America in 1988 pursuant to which
the Company had granted to the Bank a warrant to purchase 4,215,753
shares of the Company's Common Stock. The warrant is now the subject
of a repurchase agreement over a period of six quarters ending
October 31, 1998. The Company has the right to repurchase the
warrant with cash or by the issuance of Common Stock with a value
equal to the difference between the approximate $0.24 warrant
exercise price and the fair market value of the Common Stock on
specified dates. To date the company has issued 2,169,730 shares of
Common Stock for the redemption of 2,634,845.625 warrants pursuant to
the repurchase agreement. The Company will redeem the remaining
1,580,907.375 warrants during the three quarters as specified in the
agreement.
(7) Includes options to purchase 705,625 shares.
*Less than one percent.
The following table sets forth the approximate number and percentage
of post-split shares of the Company's Common Stock owned beneficially as
of April 3, 1998 after giving effect to the reverse stock split which was
effective April 15, 1998, by any person who is known to the Company to be
the beneficial owner of 5% or more of such Common Stock, and, in addition,
by each Director and nominee for Director of the Company, by certain named
Executive Officers, and by all Directors and Executive Officers of the
Company as a group. Information as to beneficial ownership is based upon
statements furnished to the Company by such persons. For purposes of this
disclosure, the amount of the Company's Common Stock beneficially owned is
the aggregate number of shares of the Common Stock outstanding on such
date plus an amount equal to the aggregate amount of Common Stock which
could be issued upon the exercise of stock options or warrants within 60
days of such date.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner Ownership of Class
- ------------------------ ----------------- ---------
<S> <C> <C>
Matthew L. Gold 2,184,158 shares 57.1%
1225 17th Street, Suite 1800 directly and
Denver, Colorado 80202 indirectly(1)
Donald C. Hannah 18,281 shares *
6400 East Cactus Wren Road directly(2)
Paradise Valley, Arizona 85253
Admiral George E. R. Kinnear II 30,356 shares *
20 Roaring Rock Road directly(3)
York, Maine 03909
J. Ben Shapiro, Jr. 8,500 shares *
One Midtown Plaza, #1200 directly(4)
1360 Peachtree Street
Atlanta, Georgia 30309
General Thomas C. Richards 6,594 shares *
29688 Softwind Circle directly(5)
Fair Oaks Ranch, Texas 78015
Bank of America National 937,660 shares 22.9%
Trust and Savings Association directly(6)
315 Montgomery Street, 13th Floor
San Francisco, California 94104
All Directors and Executive 2,247,889 shares 58.1%
Officers as a Group directly and
(5 Persons) indirectly(7)
</TABLE>
(1) Includes 250,000 shares held by Arapaho Capital Management, Inc., a
corporation controlled by Mr. Gold. Includes options to purchase
130,000 shares. See "Executive Compensation."
(2) Consists of options to purchase 18,281 shares. See "Compensation of
Directors."
(3) Includes options to purchase 13,281 shares. See "Compensation of
Directors."
(4) Includes options to purchase 8,250 shares. See "Compensation of
Directors."
(5) Consists of options to purchase 6,594 shares. See "Compensation of
Directors."
(6) In March 1996, the Company renegotiated the Senior Subordinated Loan
which it had obtained from Bank of America in 1988 pursuant to which
the Company had granted to the Bank a warrant to purchase 1,053,938
shares of the Company's Common Stock. The warrant is now the subject
of a repurchase agreement over a period of six quarters ending
October 31, 1998. The Company has the right to repurchase the
warrant with cash or by the issuance of Common Stock with a value
equal to the difference between the approximate $0.96 warrant
exercise price and the fair market value of the Common Stock on
specified dates. To date the company has issued 542,433 shares of
Common Stock for the redemption of 658,711 warrants pursuant to the
repurchase agreement. The Company will redeem the remaining 395,227
warrants during the three quarters as specified in the agreement.
(7) Includes options to purchase 176,406.
*Less than one percent.
CHANGE IN CONTROL
As far as is known to the Board of Directors or the management of the
Company, there are no arrangements, including any pledge by any person of
securities of the Company, the operation of which might, at a subsequent
date, result in a change in control of the Company.
ELECTION OF DIRECTORS
The Board of Directors recommends the election as Directors of the
four (4) nominees listed below. The Board's recommendation as nominees
includes all of the Directors elected at the last annual meeting of
Shareholders, except for J. Ben Shapiro, Jr. who has informed the Company
that he has declined to stand for election as a Director at the Annual
Meeting. The four nominees, if elected, will hold office until the next
annual meeting of Shareholders and until their successors are elected and
qualified or until their earlier death, resignation or removal. IT IS
INTENDED THAT SHARES REPRESENTED BY PROXIES IN THE ACCOMPANYING FORM WILL
BE VOTED "FOR" THE ELECTION OF THE NOMINEES NAMED BELOW UNLESS A CONTRARY
DIRECTION IS INDICATED. If at the time of the Meeting any of the nominees
named below should be unable to serve, which event is not expected to
occur, the discretionary authority provided in the Proxy will be exercised
to vote for such substitute nominee or nominees, if any, as shall be
designated by the Board of Directors.
The following table sets forth the name and age of each nominee for
Director, indicating all positions and offices with the Company currently
held by him, and the period during which he has served as a Director:
<TABLE>
<CAPTION>
All Positions and Period Served
Offices Held With as Director
Name Age the Company of the Company
----- --- ----------------- --------------
<S> <C> <C> <C>
Matthew L. Gold 55 Chairman, President,
Chief Executive Officer
and Director Since 12/31/86
Donald C. Hannah 65 Director Since 2/15/91
Admiral George E.R.
Kinnear II 70 Director Since 3/2/93
General Thomas C.
Richards 68 Director Since 8/14/95
</TABLE>
Admiral George E. R. Kinnear II also serves as a Director of Compaq
Computer, a publicly held company engaged in the business of manufacturing
and marketing computers. Donald C. Hannah also serves as a Director of
Franchise Finance Company of America, a real estate investment trust
company, which is a publicly held company, and as a Director of Samoth
Capital, a merchant bank which is also a publicly held company. Except
for the foregoing, none of the nominees hold directorships in any other
company having a class of securities registered under the Securities
Exchange Act of 1934, as amended, or in any company registered as an
investment company under the Investment Company Act of 1940, as amended.
MEETINGS AND COMMITTEES OF THE BOARD
The Company has an Executive Committee which has as its primary
function director-level review and approval of non-routine matters of
significance during the periods between scheduled meetings of the Board of
Directors. During 1997 the Committee consisted of Matthew L. Gold,
Admiral George E.R. Kinnear II and J. Ben Shapiro, Jr. The Committee held
two meetings during the last calendar year.
The Company has an Audit Committee which during 1997 was comprised of
Donald C. Hannah, J. Ben Shapiro, Jr. and General Thomas C. Richards. The
Audit Committee oversees the accounting controls for the Company. This
Committee held two meetings during the last calendar year, one of which
was by unanimous written consent. Pursuant to the requirements of the
Company's Nasdaq SmallCap Market agreement, a majority of the Audit
Committee consists of outside Directors.
The Company also has a Compensation Committee, which Committee makes
recommendations on executive compensation and selects those persons
eligible to receive grants of stock, stock options and stock appreciation
rights under the Company's Incentive Stock Option and Appreciation Rights
Plan and its Nonqualified Stock Option Plan. The Committee is composed of
Donald C. Hannah, Admiral George E. R. Kinnear II and General Thomas C.
Richards. This Committee held five meetings during the last calendar
year, three of which were by unanimous written consent.
The Board of Directors held seven meetings during the last calendar
year, two of which were by unanimous written consent. There were no
incumbent Directors who during the last fiscal year attended fewer than
75% of the aggregate of all meetings of the Board and of all committees of
the Board on which he serves.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the names of all Directors and Executive Officers
of the Company, all positions and offices held by each such person, the
period during which he has served as such, and the principal occupations
and employment of such persons during the last five years:
MATTHEW L. GOLD. Mr. Gold has been Chairman, President and Chief
Executive Officer of the Company since December 1986. He has also been
Chairman of Pemco Aeroplex, Inc., Air International Incorporated and Space
Vector Corporation, wholly-owned subsidiaries of the Company, since
September 1988. He has also been President of the Company's subsidiaries,
Pemco Air Services System, Inc., Pemco Capital Corporation, Pemco Nacelle
Services, Inc. and Pemco World Air Services, Inc. since their inceptions
in November 1991, October 1992, January 1993 and April 1993, respectively.
From 1984 to 1986, he was President of Monarch Aviation, Inc., a company
primarily engaged in the business of modifying and maintaining large
transport aircraft, and later, Pemco Engineers, Inc., a company primarily
engaged in the business of manufacturing aircraft cargo systems, both of
which are predecessors of the Company.
DONALD C. HANNAH. Mr. Hannah was appointed as a member of the Board
of Directors in February 1991. He currently serves as Chairman and Chief
Executive Officer of U.S. Properties, Inc., a real estate acquisition and
marketing company, positions he has held since December 1992. Mr. Hannah
has been Chairman of the Board of Hannah Marine Corp. of Lemont, Illinois,
a marine transport company, since 1956. He serves on the Board of
Managers for American Bureau of Shipping, a classification society in the
marine industry, as Chairman of the Arizona Presidents Organization, and
as a Director of the Camper Clubs of America. He is also a Director of
two publicly traded companies, Franchise Finance Corporation of America, a
real estate investment trust company, and Samoth Capital Corporation, a
merchant bank.
GEORGE E. R. KINNEAR II. Admiral Kinnear was appointed as a member
of the Board of Directors in March 1993. He formed his own consulting
company, Kinnear & Associates, in January 1995. He was Chairman of the
Board and Chief Executive Officer of Energy Point, a gasoline servicing
company, from July 1992 until January 1995. He was Chairman of the Board
of The Retired Officers Association, a service company for retired
military officers, from October 1992 to October 1994. Prior to that time
he served briefly as Vice Chairman and Chief Executive Officer of New
England Digital, a computer company, from February 1992 to June 1992.
Admiral Kinnear was Executive Vice President and Interim President from
November 1988 to January 1992 of the University of New Hampshire. Before
that he was Senior Vice President and Vice President of Grumman Corp., an
aerospace company, from October 1982 to October 1988. He retired as a
four star Admiral from the U.S. Navy in September of 1982 after thirty-
seven years of service. Admiral Kinnear currently serves as a Director of
Compaq Computer, a publicly traded company which manufactures and markets
computers. He also serves as a Trustee of the Aerospace Corp., the Naval
Aviation Museum, the U.S. Navy Hermitage Foundation, the Strawbery Banke
Historical District, and the Center for the Study of the Presidency.
THOMAS C. RICHARDS. General Richards was appointed as a member of
the Board of Directors in August 1995. He was President of National
Security Industrial Association of Washington, D.C., a nonprofit
corporation, from September 1995 until March 1997. He served as a
consultant and as a member of the Board of Directors for each of First
American Bank of Bryan, Texas, Cubic Defense Systems of San Diego,
California and Mantech International of Fairfax, Virginia, the latter two
companies being involved in the aviation and defense industry, from
February 1992 to September 1995. Prior to that time, he was appointed by
the President as the Administrator of the Federal Aviation Administration
from May 1991 to January 1992, after having served on the Aviation
Security and Terrorism Commission which was formed by the President to
review the Pan Am 103 accident. General Richards retired as a four star
General from U.S. Air Force in November 1989 after 33 years of service,
the last three of which were spent commanding the day to day operations of
the U.S. European Command. He currently serves as a Trustee of the U.S.
Air Force Academy Falcon Foundation.
The Company's Executive Officers are elected by the Board of
Directors at the first meeting after each annual meeting of Shareholders,
and hold office until the next such meeting of Directors or their earlier
resignation or removal.
Other than the executive employment agreement with the Company's
President and Chief Executive Officer, there is no arrangement or
understanding between any Director or Executive Officer and any other
person or persons pursuant to which he was or is to be selected as a
Director or Executive Officer nor is there any family relationship between
or among any of the Company's Directors or Executive Officer. See
"Executive Compensation - Agreements with Executive Officers."
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the executive compensation of the
Company's Chief Executive Officer, together with the former Executive Vice
President, and former Vice President-Corporate Development for each of the
Company's last three fiscal years:
<TABLE>
<CAPTION>
Annual Compensation
Other
Annual
Name and Salary Bonus Compensation
Principal Position Year ($)(1) ($)(2) ($)(3)
- ------------------ ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Matthew L. Gold, 1997 $501,500 $ 0 $ 0
CEO 1996 506,500 200,000 0
1995 501,500 200,000 44,244(6)
Walter M. Moede, 1997 $ 16,143 $ 0 $ 0
Executive Vice 1996 266,500 100,000 $ 8,073(8)
President(7) 1995 262,500 100,000 33,802(6)
C. Fredrik Groth, 1997 $137,750 $ 0 $ 0
Vice President 1996 142,244 5,000 6,859(12)
Corporate 1995 131,200 20,000 0
Development(9)
</TABLE>
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
Securities
Restricted Underlying
Name and Stock Options/
Principal Position Year Award(s)($) SARs (#)(4)(5)
- ------------------ ---- ----------- ---------------
<S> <C> <C> <C>
Matthew L. Gold, 1997 $ 0 0
CEO 1996 0 220,000
1995 0 0
Walter M. Moede, 1997 $ 0 0
Executive Vice 1996 0 110,000
President(7) 1995 0 0
C. Fredrik Groth, 1997 $ 0 0
Vice President 1996 0 0
Corporate(9) 1995 0 2,500
</TABLE>
(1) The salaries for Messrs. Gold and Moede include Directors' fees as
follows: 1997, $21,500 and $1,000, 1996, $26,500 and $26,500, 1995,
$21,500 and $22,500, respectively.
(2) Of the cash bonuses awarded to Mr. Gold in 1995 and 1996, only
$50,000 of the 1995 bonus has been paid. The cash bonuses awarded to
Mr. Moede in 1995 and 1996 have not been paid.
(3) None of the named Executive Officers received perquisites or other
personal benefits the aggregate annual amount of which was the lesser
of either $50,000 or 10% of the total of annual salary and bonus
reported for such Executive Officers.
(4) Of Mr. Gold's grant for 1996, options to purchase 128,015 shares were
incentive stock options/SARs and options to purchase 91,985 shares
were nonqualified stock options. Of Mr. Moede's grant for 1996, all
of the options to purchase shares were incentive stock options/SARs.
(5) Mr. Groth's 1995 grant was for nonqualified stock options. Those
options will expire October 15, 1998.
(6) Messrs. Gold and Moede were reimbursed in the amounts shown for their
relocation expenses when the Company established executive offices in
Denver, Colorado in 1995.
(7) Mr. Moede resigned as Executive Vice President and Chief Financial
Officer and as a Director of the Company effective December 31, 1996.
The $16,143 shown for his 1997 salary reflects his receipt of wages
owed for unpaid vacation and director's fees and the pension benefits
he received in 1997.
(8) Consists of additional relocation expenses for which Mr. Moede was
reimbursed for when the Company established executive offices in
Denver, Colorado 1995.
(9) Mr. Groth's position and title was changed in May 1996 to Group Vice
President - Aircraft Maintenance and Modification at which time he
was no longer considered an Executive Officer. Mr. Groth resigned as
Group Vice President effective October 15, 1997.
(10) Mr. Groth was reimbursed in the amount shown for his relocation
expenses when he was relocated by the Company from Denmark to Denver,
Colorado in May 1996.
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
The following table sets forth information concerning each exercise
of stock options during the last fiscal year by each of the named
Executive Officers and the fiscal year end value of unexercised options:
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Shares Unexercised Options/SARs
Acquired on Value Options/SARs at at Fiscal
Name Exercise(#) Realized($) Fiscal Year-End(#) Year-End($)
Exercisable/ Exercisable/
Unexercisable Unexercisable
<S> <C> <C> <C> <C>
M.L. Gold 0 N/A 520,000/0(1) $0/$0
W.M. Moede 51,640 $59,681 0/0(2) $0/$0
C.F. Groth 0 $0 21,347/8,375(3) $0/$0
</TABLE>
(1) Of Mr. Gold's options, exercisable options to purchase 327,985 shares
represent nonqualified stock options, and the remaining options are
incentive stock options granted in tandem with SARs.
(2) All of Mr. Moede's options expired March 31, 1997. See "Agreements
with Executive Officers."
(3) All of Mr. Groth's options are nonqualified stock options.
PENSION PLANS
All of the Executive Officers named above are or were eligible
participants in the Pemco Aeroplex, Inc. Pension Plan (the "Pension
Plan"). Mr. Moede began drawing on his pension after resigning from the
Company. Although Mr. Groth has resigned from the Company, he will not be
able to draw on his pension until he reaches the proper age as specified
in the Pension Plan. The following table sets forth the annual retirement
benefits payable under the Pension Plan upon retirement at age 65 based on
an employee's assumed average annual compensation for the five-year period
preceding retirement and assuming actual retirement on January 1, 1998.
The Pension Plan is a tax qualified defined benefit plan and is subject to
certain maximum benefit provisions. The retirement plan benefit formula
is equal to (a) plus (b):
(a) Earnings portion of formula
-1% of the employee's final average compensation for the last five
years of benefit service not to exceed $160,000 for 1998, less
$6,600,
TIMES
-the employee's years of credited service (not to exceed 30 years),
PLUS
(b) $144 times the employee's years of credited service (not to exceed 30
years).
The compensation utilized for the Pension Plan formula benefit
includes base pay and does not consider bonuses.
<TABLE>
<CAPTION>
Remuneration Years of Service
15 20 25 30
<S> <C> <C> <C> <C>
$125,000 $19,920 $26,560 $33,200 $39,840
150,000 23,670 31,560 39,450 47,340
175,000 25,170 33,560 41,950 50,340
200,000 25,170 33,560 41,950 50,340
225,000 25,170 33,560 41,950 50,340
250,000 25,170 33,560 41,950 50,340
300,000 25,170 33,560 41,950 50,340
400,000 25,170 33,560 41,950 50,340
450,000 25,170 33,560 41,950 50,340
500,000 25,170 33,560 41,950 50,340
</TABLE>
Assumes: 1. Remuneration is latest 5-year average annual
salary.
2. Retirement is at age 65 or later.
3. No joint and survivor option elected.
To date, no Executive Officer has earned a material level of vested
benefits under the Pension Plan, although all three Executive Officers are
eligible to receive or are receiving benefits thereunder.
Certain amendments to the tax laws reduced the amount of benefits
available to some of the Executive Officers under the Pension Plan in plan
years beginning after December 1993. In recognition of these changes, the
Compensation Committee has agreed to adopt a supplemental pension plan for
the Executive Officers to compensate them for the lost benefits under the
Pension Plan. It is expected that such a plan will be adopted in 1998.
401(k) PLAN
On November 2, 1990, the Board of Directors adopted a 401(k) Savings
Plan for employees of the Company and its subsidiaries effective October
1, 1990 (the "401(k) Plan"), which is qualified under Subsection 401(k) of
the Internal Revenue Code. All employees of the Company and its
subsidiaries who (i) are not covered by any collective bargaining
agreement, (ii) have attained age 21, and (iii) have completed one year of
service, may join the 401(k) Plan. The 401(k) Plan provides a method for
employees to choose between receiving all their compensation now or
deferring some pre-tax income by investing in the 401(k) Plan until
retirement. Deferred amounts representing up to 15% of compensation per
calendar year (not to exceed $10,000 in 1998) are deposited into the Plan
where they may earn income tax-free until distribution. Although the
401(k) Plan allows for matching contributions by the Company, none have
been made as of the date of this Proxy Statement. The 401(k) Plan
currently is administered by an Administrative Committee composed of four
employees of the Company who are not Executive Officers or Directors of
the Company. Directors who are not also employees of the Company are not
eligible to participate. Mr. Gold is a participant in the 401(k) Plan and
his amounts of deferred compensation are included in the Summary
Compensation Table set forth above.
PERFORMANCE GRAPH
Set forth below is a line graph and a table comparing the yearly
percentage change in the cumulative total shareholder returns on the
Company's Common Stock with the cumulative total returns of the Standard &
Poor's 500 Stock Index, Standard & Poor's Aerospace/Defense Stock Index
and Standard and Poor's Airline Stock Index as prepared by Standard &
Poor's Compustat - Custom Business Unit. While the Securities and
Exchange Commission's rules only require the Company to provide a
comparison to a broad equity market index (Standard & Poor's 500) and a
published industry line of business index (Standard & Poor's Aerospace),
the Company believes that it is helpful to provide Shareholders with a
comparison to an index which reflects the business climate in which many
of the Company's customers operate (Standard & Poor's Airlines). The
Company's performance may be influenced by the airline industry and the
business environment surrounding such industry. The line graph and table
cover the five year period from January 1993 through December 1997 and
represents the total value of a $100 investment in each security/market
index on the last trading day of December, 1992. All dividends are
assumed to be reinvested.
COMPARATIVE FIVE YEAR TOTAL CUMULATIVE RETURNS
PRECISION STANDARD, S&P 500 INDEX,
S&P AEROSPACE/DEFENSE INDEX AND S&P AIRLINES INDEX
<TABLE>
<CAPTION>
Base Years Ending
Period
Company / Index Dec92 Dec93 Dec94 Dec95 Dec96 Dec97
<S> <C> <C> <C> <C> <C> <C>
PRECISION STANDARD
INC 100 379.11 168.49 84.25 115.84 47.35
AEROSPACE/DEFENSE
- -500 100 130.07 140.69 232.83 311.43 320.40
AIRLINES-500 100 105.00 73.27 107.01 117.31 197.44
S&P 500 INDEX 100 110.08 111.53 153.45 188.68 251.63
</TABLE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of
Directors of Precision Standard, Inc. (the "Company") is composed of
outside directors who are not employees of the Company and who qualified
as "disinterested persons" under former Rule 16b-3 adopted under the
Securities Exchange Act of 1934. At the direction of the Board of
Directors, the Committee prepared the following report on April 15, 1998
for inclusion in this Proxy Statement to comply with the rules of the
Securities and Exchange Commission.
The Company's executive compensation program has been designed to
enable the Company to attract, motivate, and retain key senior management
by providing a fully competitive total compensation package based on
performance. It is intended to reward the key executive for long-term
strategic planning and management, enhancement of shareholder value and
improving Company performance compared to performance levels of comparable
companies in the industry. Of equal importance, it is designed to attract
and retain those key executives who are critical to the long-term success
and competitiveness of the Company.
The key components of the executive compensation program are:
salary, which is based on the individual officer's level of responsibility
and comparisons to the executive positions in the Company, its
subsidiaries and comparable companies in the industry; cash bonus awards,
which are based on individual performance and the performance of the
Company for the year, measured primarily, but not exclusively, in the
profitability of the Company; equity incentive, in the form of stock
options, stock appreciation rights and stock grants, which are intended to
increase the motivation for the Company to improve its financial position
and long-term success as measured by the Company's share price and book
value per share; and employment agreements, which are designed to provide
long-term security to the key executive in exchange for long-term
commitments and agreements not to enter into competition with the Company.
The overall objective of the program is to provide rewards to the key
executives commensurate with the benefits received by the shareholders
from the efforts of those executives.
The Compensation Committee recognizes that, as a result of the
resignations of Messrs. Moede and Groth in late 1996 and October of 1997,
respectively, the Company's President and Chief Executive Officer, Matthew
L. Gold, has been forced to bear an inordinate share of the burden of
management of the Company, and that he has been required to do so in
unusually difficult circumstances which were not the result of his
actions. Those unusually difficult circumstances included continuation of
the Company's recent cash flow problems (largely generated by
extraordinary difficulties in dealing with the Government on some of the
Company's larger contracts), and successive work stoppages by the United
Auto Workers and the International Association of Machinists unions. The
Committee continues to believe, as it did in 1997, that Mr. Gold's efforts
for the last year were extremely valuable to the Company and its
shareholders. Nevertheless, as it did last year, the Committee believes
that it would be inappropriate to grant any cash bonuses to Mr. Gold at
this time, when the Company continues to report substantial losses and
suffer such a dramatic cash flow crisis that the bonuses declared to
Executive Officers in prior years have still not been paid. The Committee
again reserves the right, however, to revisit the question of cash bonuses
and stock options or grants for Mr. Gold on account of his exemplary
efforts on the Company's behalf in 1996 and 1997.
Dated: April 15, 1998 DONALD C. HANNAH
ADMIRAL GEORGE E.R. KINNEAR II
GENERAL THOMAS C. RICHARDS
COMPENSATION OF DIRECTORS
The Company currently has an arrangement whereby each Director earns
an annual retainer of $18,000, and $1,000 plus expenses for attendance at
each meeting of the Board of Directors and related activities. The
Directors also earn $1,000 plus expenses in connection with attendance at
each meeting of the Audit Committee, the Executive Committee and the
Compensation Committee, excepting when a Committee meets in conjunction
with a full Board meeting. Directors who are employees of the Company are
eligible to receive stock options under either of the Company's stock
option plans. Outside Directors are eligible to receive options under the
Company's Nonqualified Stock Option Plan (the "Nonqualified Plan") only.
Pursuant to the Nonqualified Plan, outside Directors receive fully
vested options on December 10 of each year. The number of shares subject
to options granted in any such year is equal to one share of Common Stock
for each two dollars of Director's base compensation (annual retainer plus
meeting fees for an assumed minimum of four meetings or, currently,
$22,000) paid to the Director during the calendar year in which the option
is granted.
In November 1990, the Board of Directors adopted a three-year
retirement benefit for the Directors of the Company, payable after they
retire or otherwise terminate their service as a Director of the Company.
In December 1993, the Board of Directors amended the retirement benefit.
Directors retiring from the Company after that date are entitled to
benefits as follows:
Retirement Under Five Five or More
Benefit Payable Years of Service Years of Service
- ------------------ ----------------------- ----------------
- -1st Year $4,500 $9,000
- -2nd Year $3,000 $6,000
- -3rd Year $1,500 $3,000
All current Directors, as well as two former Directors, Admiral
Wesley L. McDonald (who retired as a Director effective May 16, 1995) and
Walter M. Moede (who resigned as a Director effective December 31, 1996),
are currently entitled to or are eligible for benefits according to the
benefits schedule in effect at the time of such Director's retirement.
For purposes of entitlement to the benefits schedule shown above, Messrs.
Gold, Hannah and Kinnear have or are deemed to have five years of service.
Upon retirement, this benefit is paid to former Directors on a quarterly
basis for the three-year term of the benefit. The Board of Directors has
determined that Directors are asked to retire from the Board at age 70-1/2
years.
AGREEMENTS WITH EXECUTIVE OFFICERS
In 1993, the Company entered into employment agreements with each of
the individuals named in the Summary Compensation Table. Each of these
agreements includes payments to be received upon the voluntary or
involuntary termination of the Executive Officer's employment. The terms
and conditions of each of these agreements is described below.
Pursuant to an agreement effective June 1, 1993 and amended March 11,
1994, Mr. Gold is engaged as President, Chief Executive Officer and
Chairman of the Board for an initial term of five years commencing June 1,
1993. On each June 1 following 1993, the agreement is automatically
extended for an additional year unless the Company or Mr. Gold gives
notice more than ninety days before May 31 of such year. Because no such
notice was given in 1997, the agreement currently expires in 2002.
The agreement provides for an initial annual base salary of $440,000,
with the base salary for subsequent years to be determined by the Board of
Directors on the basis of merit and the Company's financial success and
progress, provided that the annual base salary in each year shall be at
least 5% higher than the previous year's annual base salary. Mr. Gold is
also entitled to bonuses as determined by the Board of Directors in its
sole discretion, and is entitled to vacation and other employee benefits
under the Company's employee benefit plans.
Under the agreement, Mr. Gold is entitled to various amounts on the
termination of his employment depending on the reasons for such
termination. Upon his death or disability Mr. Gold or his designated
beneficiary will be entitled to receive his then annual base salary for
the greater of two years or the remaining term of the agreement together
with any bonuses determined to be due and payable by the Board of
Directors. Upon Mr. Gold's voluntary or involuntary termination, he is
entitled to specified severance amounts. Upon voluntary termination
(i.e., resignation by Mr. Gold other than as a result of a change of
duties, compensation or benefits following a change in control of the
Company), Mr. Gold will be entitled to continue to receive his annual base
salary plus the average annual bonus awarded to him by the Board of
Directors during the three preceding years (the "Average Bonus") for a
period of one year. Upon involuntary termination (i.e. any termination
other than voluntary termination, termination by mutual agreement, or
termination as a result of death, disability or normal retirement), Mr.
Gold will be entitled to 2.99 times the sum of his then annual base salary
and the Average Bonus.
Pursuant to an agreement, effective June 1, 1993 and amended March
11, 1994, Mr. Moede was engaged as Executive Vice President and Chief
Financial Officer of the Company for an initial term of three years
commencing June 1, 1993. On each June 1 following 1993, the agreement was
automatically extended for an additional year unless the Company or Mr.
Moede gave notice more than ninety days before May 31 of such year. Mr.
Moede resigned as an Executive Officer and Director of the Company
effective December 31, 1996.
The agreement provided for an initial annual base salary of $220,000,
with the annual base salary for subsequent years to be determined by the
Board of Directors on the basis of merit and the Company's financial
success and progress, provided that the annual base salary in any
subsequent year would not be less than the initial base salary. Mr. Moede
was also entitled to bonuses as determined by the Board of Directors in
its sole discretion and was entitled to vacation and other employee
benefits under the Company's employee benefit plans.
Provisions of Mr. Moede's agreement regarding amounts payable upon
his death, disability or other termination of his employment with the
Company paralleled those of Mr. Gold's agreement described above.
Pursuant to the terms of his agreement, because Mr. Moede did not give six
months prior notice to the Company of his resignation, Mr. Moede was not
entitled to receive the benefits provided in his agreement for voluntary
termination. He is, however, entitled to receive the three year
retirement benefit for directors who have served for five or more years.
See "Compensation of Directors."
Pursuant to an agreement effective June 1, 1993, Mr. Groth was
engaged as Vice President - Corporate Development for an initial term of
three years commencing June 1, 1993. The agreement was automatically
extended for additional one-year periods unless the Company or Mr. Groth
gave notice more than ninety days before May 31, 1997 or May 1 of any
subsequent year for which the agreement had previously been extended. In
May of 1996, Mr. Groth was relocated by the Company from Denmark to the
Company's offices in Denver, Colorado and his title was changed to Group
Vice President - Commercial Aircraft Maintenance and Modification.
Although Mr. Groth's compensation continued to be governed by the
agreement, he was no longer considered an Executive Officer of the
Company. Mr. Groth resigned as Group Vice President effective October 15,
1997.
The agreement with Mr. Groth provided for an initial annual base
salary of $100,000, with the annual base salary for subsequent years to be
determined by the Chief Executive Officer of the Company and approved by
the Board of Directors on the basis of merit and the Company's financial
success and progress, provided that the annual base salary in any
subsequent year of the agreement would not be less than the initial base
salary. Mr. Groth was entitled to bonuses as determined by the Chief
Executive Officer and approved by the Board of Directors on the basis of
merit and the Company's financial success and progress, and was entitled
to vacation and other employee benefits under the Company's employee
benefit plans. Pursuant to the terms of his employment agreement,
Mr. Groth was entitled to a lump sum payment of $1,000 at the time of his
resignation.
Other than as described above, the Company has no compensation plan
or arrangement with any individual named in the Summary Compensation Table
above whereby the implementation of such plan or arrangement results or
would result from the resignation, retirement or other termination of that
individual's employment with the Company or from a change in control of
the Company.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company's Consolidated Tire subsidiary previously leased
warehouse and office facilities from Monarch Properties, a sole
proprietorship owned by Matthew L. Gold, the Company's Chairman, President
and Chief Executive Officer. This lease was cancelled in December 1990.
Although the lease was not due to expire until December 1992, Mr. Gold
agreed to accept $147,000 to cancel the remaining term, which amount
represented 80% of the present value of the remaining rental payments.
The Company paid $26,840 of this obligation in cash and reduced the amount
of indebtedness of Mr. Gold and Monarch Properties to the Company, as
described below. As additional consideration to the Company, Mr. Gold
also waived and released claims that he may have had against the Company
at that time for certain expenses or advances paid by him on behalf of the
Company.
Prior to the surrender and exchange of the Consolidated Tire
warehouse lease discussed above, Mr. Gold and Monarch Properties were
indebted to the Company in the amount of $132,947 and $167,037,
respectively. These debts had been incurred as a result of various
advances made by the Company, and were repayable in equal installments
over five years beginning in 1990. After the application of the remaining
$120,160 reduction attributable to the surrender of the Consolidated Tire
lease, the total debt was reduced to $179,824. In November of 1991, Pemco
Engineers, Inc. completed the 1988 sale of its Stanton, California
facility to Monarch Properties by delivering the September 26, 1988 deed
to Monarch Properties in exchange for a promise to pay $90,000. The
$90,000 sales price was the same as the purchase price paid by Pemco
Engineers in 1988 shortly before the September 26, 1988 deed to Monarch
Properties. As a result of this new obligation, the total indebtedness of
Monarch Properties and Mr. Gold to the Company and its subsidiaries
increased to $269,824 as of December 31, 1991. The obligation remains
outstanding as of the date hereof and the Company has no arrangement or
understanding with Mr. Gold as to the timing of any repayment thereof.
The Company has for the past several years owed Mr. Gold various amounts
as the result of cash bonuses which were granted by the Compensation
Committee but never paid. There are, however, no plans or agreements to
set off the unpaid bonuses against Mr. Gold's obligations to the Company
at this time.
On April 16, 1996, Mr. Gold and the Company entered into a standby
financing commitment which provided for the extension by Mr. Gold of up to
$2.0 million in short-term advances upon demonstration of certain need
factors by the Company. The commitment contained cross default provisions
to the Company's principal loan agreements and required the payment by the
Company of a commitment fee of 2%, or $40,000 to Mr. Gold. No advances
were made by Mr. Gold under the commitment, which expired in January 1997.
The Company believed that Mr. Gold's willingness to extend the commitment
under the then existing circumstances was of significant value to the
Company and its business and that the consideration paid to Mr. Gold for
the commitment was no more than would have been paid in an arms length
transaction with an unaffiliated third party (if any such third party
transactions had been available, which the Company considered unlikely
under the circumstances).
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As a result of a desire to compare the quality, timeliness and price
of the auditing services of Coopers & Lybrand L.L.P. ("C&L"), which had
served as the Company's independent auditors since 1988, with its
competitors, in 1996 the Audit Committee directed the officers of the
Company to solicit bids from several public accounting firms. C&L
declined to submit a bid and informed the Company of its decision by
letter dated December 30, 1996.
The reports of C&L on the financial statements of the Company for
each of the two fiscal years in the period ended December 31, 1995 did not
contain any adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting
principles.
In the opinion of management of the Company, the financial statements
contained in the Company's report on Form 10-Q for the third quarter of
1996 appropriately reflect all business transactions and all adjustment
necessary for a fair presentation of the financial position and the
results of operations of the Company for the periods presented.
During the Company's two audited fiscal years (1994 and 1995) and as
of December 30, 1996, the unaudited interim year (1996), there were no
"disagreements" (as that term is used in Item 304 of Regulation S-K)
between C&L and the Company on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
In a report on Form 8-K dated December 30, 1996 filed with the
Securities and Exchange Commission ("SEC"), the Company authorized C&L to
respond fully to the inquiries of the Company's successor accountant and
requested that C&L provide the Company with a letter addressed to the SEC,
as required by Item 304(a)(3) of Regulation S-K, so that the Company could
file such letter with the SEC within ten business days after the filing of
its report.
On January 3, 1997, the Company provided a draft of the December 30,
1996 Form 8-K to C&L. The draft of the Form 8-K provided to C&L was
identical to the Form 8-K filed with the SEC on January 6, 1997 except
that the final (a copy of which was provided to C&L on January 6, 1997)
included as an additional exhibit a copy of the letter dated December 20,
1996 from Matthew L. Gold, the President of the Company, to C&L soliciting
a bid for the annual audit for the year ending December 31, 1996. C&L's
response to the Form 8-K was made in a letter dated January 3, 1997, in
which C&L stated that it agreed with the statements made in the Form 8-K.
On January 14, 1997, after review of the bids solicited from several
public accounting firms, the Audit Committee of the Board of Directors of
the Company approved the engagement of Arthur Andersen LLP as the
Company's independent auditors for the year ended December 31, 1996 and
for the year ending December 31, 1997.
At the direction of the Board of Directors, the ratification of the
appointment of Arthur Andersen LLP for the year ending December 31, 1998
is being presented to the Shareholders for approval at the Meeting. It is
expected that a representative of Arthur Andersen LLP will be present at
the Meeting to respond to appropriate questions, and will be given the
opportunity to make a statement if he so desires.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE CALENDAR YEAR ENDING DECEMBER 31, 1998.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
REVERSE STOCK SPLIT
On January 27, 1998, the Board of Directors approved a 4-for-1
reverse stock split of the Company's Common Stock. Assuming that a
reverse stock split would cause the trading price of the Company's Common
Stock to increase in the same proportion as the amount of the split, a
reverse stock split would result in an increase in the quoted bid price of
the Common Stock to approximately $2.40 or more (based on the average of
the closing prices for the three month period ended March 10, 1998) and
thereby keep the Common Stock eligible to be quoted on The Nasdaq Stock
Market ("Nasdaq"). By a letter dated November 20, 1997, the Company was
notified by Nasdaq of its concern regarding the continued listing of the
Company on The Nasdaq National Market ("National Market") pursuant to the
National Market's corporate governance rules because of the Company's
failure, among other things, to maintain a minimum bid price of $1.00 per
share for the ten consecutive trading dates prior to the notice. After a
hearing on January 29, 1998, before a Nasdaq Listing Qualifications Panel
(the "Panel"), the Company was informed by the Panel that the Company
would be moved to The Nasdaq SmallCap Market and that it must effect a
reverse stock split sufficient to meet or exceed the $1.00 minimum bid
price requirement on or before April 15, 1998. Therefore, on January 30,
1998, the Board of Directors declared April 15, 1998 as the effective date
for the 4-for-1 reverse stock split and called for a special meeting of
the Shareholders to approve the reverse stock split for the same date. As
noted above, the reverse stock split was approved by the Shareholders and
became effective on April 15, 1998.
As a result of the 4-for-1 reverse stock split, each four issued
shares of the Company's Common Stock held on April 15, 1998 were
automatically converted into one share of Common Stock. No fractional
shares were issued and no cash was paid for fractional shares. Instead,
each fractional share was rounded up to a whole share.
EFFECT OF PRINCIPAL SHAREHOLDERS' AND MANAGEMENT'S VOTE
As of March 13, 1998, the record date for the special meeting, the
beneficial owners of five percent or more of the Company's Common Stock,
together with the Company's Executive Officers and Directors, had voting
control over 10,455,660 (2,613,916 post-split) shares of record (not
including options or warrants exercisable within 60 days of the record
date), or 70.8%, of the outstanding Common Stock. Accordingly, certain of
these principal shareholders and management exercised their voting control
and approved the reverse stock split as described above. Matthew L. Gold,
the Company's President and Chairman of the Board, held 8,216,630
(2,054,158 post-split) shares of record (not including options exercisable
within 60 days of the record date), or 55.6%, of the outstanding Common
Stock, which he voted in favor of the proposal. In addition, Bank of
America National Trust and Savings Association held 2,169,730 (542,433
post-split) shares of record (not including warrants exercisable within 60
days of the record date), or 14.7% of the outstanding Common Stock, which
it voted in favor of the proposal.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was
not aware of any other matter to be presented at the Meeting other than as
set forth herein. However, if any other matters are properly brought
before the Meeting, the shares represented by valid Proxies will be voted
with respect to such matters in accordance with the judgment of the
persons voting them.
Under Colorado law, for the election of directors, of the shares
represented in person or by proxy at the meeting and entitled to vote,
that number of candidates equalling the number of directors to be elected
having the highest number of votes cast in favor of their election, are
elected to the board of directors. For the ratification of the
independent public accountants, of the shares represented in person or by
proxy at the meeting and entitled to vote, the votes cast favoring the
ratification must exceed the votes opposing it. Abstentions and broker
non-votes will be counted for purposes of establishing a quorum only.
Only those votes cast for the election of directors and the proposal will
be counted as votes in favor or affirmative votes.
ANNUAL REPORT
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 accompanies this Proxy Statement. The audited financial
statements of the Company are included in such Form 10-K. Copies of the
exhibits to that Form 10-K are available from the Company upon written
request of a Shareholder and payment of the Company's out-of-pocket
expenses.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN MAY 1999
Any proposal from a Shareholder intended to be presented at the
Company's Annual Meeting of Shareholders to be held in May 1999, must be
received at the offices of the Company, 12000 E. 47th Avenue, Suite 400,
Denver, Colorado 80239 no later than December 21, 1998, in order to be
included in the Company's proxy statement and proxy relating to that
meeting.
MATTHEW L. GOLD
PRESIDENT
Denver, Colorado
April 21, 1998
APPENDIX
PRECISION STANDARD, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Matthew L. Gold and Kathleen Page,
each with the power to appoint his or her substitute, and hereby
authorizes them to represent and to vote as designated below, all the
shares of common stock of Precision Standard, Inc. held of record by the
undersigned on April 3, 1998, at the Annual Meeting of Shareholders to be
held on May 19, 1998 or any adjournment thereof.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below (except as marked to the
contrary)
[ ] WITHHOLD AUTHORITY to vote for all the nominees listed below
Matthew L. Gold Admiral George E.R. Kinnear II
Donald C. Hannah General Thomas C. Richards
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL
NOMINEE, CROSS OUT THAT NOMINEE'S NAME ABOVE.)
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE CALENDAR YEAR
ENDING DECEMBER 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the
Meeting.
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 AND 2. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT
THE TIME OF THE MAILING OF THE NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO
THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement furnished herewith.
Dated: , 1998
-------------------------------------
-------------------------------------
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s)
stenciled hereon. Executors, administrators,
trustees, guardians and attorneys should
indicate when signing. Attorneys should
submit powers of attorney.
PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING OR TO SUBMIT A LATER DATED REVOCATION OR
AMENDMENT TO THIS PROXY ON ANY OF THE ISSUES SET FORTH ABOVE.
