<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 / /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
EDAC TECHNOLOGIES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $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
EDAC TECHNOLOGIES CORPORATION
1806 New Britain Avenue
Farmington, CT 06032
(860) 677-2603
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Edac Technologies Corporation will
be held at the Farmington Country Club, 806 Farmington Avenue, Farmington,
Connecticut, on May 23, 1997, at 9:00 a.m. Eastern Daylight Time for the
following purposes:
(1) to elect seven directors; and
(2) to transact such other business as may properly come before the
meeting and any adjournment thereof.
Shareholders of record at the close of business on April 14, 1997 are
entitled to receive notice of and to vote at the meeting. All shareholders are
cordially invited to attend the meeting in person. Shareholders who are unable
to be present in person are requested to execute and return promptly the
enclosed proxy, which is solicited by the Board of Directors of the Company.
A copy of the 1996 Annual Report to Shareholders and a Proxy Statement
accompany this Notice.
EDAC TECHNOLOGIES CORPORATION
/s/ Ronald G. Popolizio
------------------------------
Ronald G. Popolizio
Secretary
Farmington, Connecticut
April 23, 1997
<PAGE> 3
EDAC TECHNOLOGIES CORPORATION
1806 New Britain Avenue
Farmington, CT 06032
(860) 677-2603
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
ON MAY 23, 1997
SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Edac Technologies Corporation (the
"Company") to be voted at the Annual Meeting of Shareholders to be held at the
Farmington Country Club, 806 Farmington Avenue, Farmington, Connecticut, on May
23, 1997 at 9:00 a.m. Eastern Daylight Time, and at any ajournments thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting. The
mailing to shareholders of this Proxy Statement and accompanying form of proxy
will take place on or about April 22, 1997.
If the enclosed form of proxy is executed and returned, it nevertheless
may be revoked at any time before it has been voted by a later dated proxy or a
vote in person at the Annual Meeting. Shares represented by properly executed
proxies received on behalf of the Company will be voted at the Annual Meeting
(unless revoked prior to their vote) in the manner specified therein. If no
instructions are specified in a signed proxy returned to the Company, the
shares represented thereby will be voted in FAVOR of the election of the
directors listed in the enclosed proxy.
Each shareholder of record at the close of business on April 14, 1997
is entitled to one vote for each share of common stock registered in such
shareholder's name in regard to each proposal put to shareholders at the
meeting. On that date, there were 3,778,875 shares of common stock
outstanding, the Company's only class of stock outstanding. Assuming a quorum
is present, the directors to be elected to the Board are elected by plurality,
meaning the seven directors receiving the most votes will be elected. All
other matters which are properly brought before the meeting will be approved
upon the affirmative vote of a majority of the shares represented and voted at
the meeting. Accordingly, abstentions and broker non-votes will have no
effect. The Company knows of no other matter which will be brought before the
meeting other than the election of directors.
The expense of printing and mailing the Notice and Proxy Statement,
including forwarding expense to beneficial owners of common stock held in the
name of another, will be borne by the Company.
1
<PAGE> 4
ELECTION OF DIRECTORS
The Company's Bylaws provide for at least five and no more than nine
directors to be elected at each Annual Meeting of Shareholders, to hold office
until the next succeeding Annual Meeting and until their successors are duly
elected. In acordance with the Bylaws, the Company has set the number of
directors for the 1997 fiscal year at seven. The following table sets forth
certain information about each person nominated for election as a director and
each current director:
NOMINEES:
<TABLE>
<CAPTION>
Director
Name (and age) Since Principal Occupation (1)
- -------------- ----- ------------------------
<S> <C> <C>
John DiFrancesco (71) 1989 Chairman of the Company
(2)(3)
William J. Gallagher (69) 1986 President, William J.
(2)(3) Gallagher Company
Edward J. McNerney (52) 1997 Chief Executive Officer
of the Company
Lee Morris (52) - Chairman and Chief Executive
Officer of The Robert E.
Morris Company (distributor of machine
tools)
Francis W. Moskey (65) 1989 Vice-President of the
Company
Arnold J. Sargis (61) - President, A.J. Sargis and
Associates (consulting firm)
Stephen G.W. Walk (45) 1985 President, Blanche P. Field
(2)(3) (custom lamp manufacturer)
</TABLE>
(1) The principal occupation of each director during the past five years was
that shown in the table, except that: (1) Mr. DiFrancesco was Manager
of the General Motors Sandusky, Ohio plant until his retirement in 1986.
During Mr. DiFrancesco's retirement he did consulting work for MPB Corp.
of Keene, N.H.(Precision ball and roller bearing manufacturer); (2) Mr.
McNerney was North America Manufacturing Manager for Torrington Bearing,
an Ingersoll Rand Company from 1994 to 1996. Prior to that he was
President and Chief Operating Officer of MRMC, Inc., a Rostra holding
company;(3) Mr. Sargis was Continuous Improvement Manager at Wiremold
Corporation until 1995;
2
<PAGE> 5
(4) Mr. Walk was President and majority shareholder of Viscom
International, Inc. from 1989 until 1993;
(2) Member of the Audit Committee, which held one meeting during 1996. The
Audit Committee meets annually to consider the report and recommendation
of the Company's independent public accountants and is available for
additional meetings upon request of such accountants. The Audit
Committee's functions also include making recommendations to the Board of
Directors regarding the engagement or retention of such accountants,
adoption of accounting methods and procedures, public disclosures required
for compliance with securities laws and other matters relating to the
Company's financial accounting.
(3) Member of the Compensation Committee, which held four meetings during
1996. The Compensation Committee sets the compensation for the executive
officers of the Company.
The Board of Directors held nine meetings during 1996 of which five were
telephonic. No director attended fewer than 75% of the total number of
meetings of the Board of Directors and each Committee on which he served.
DIRECTOR'S FEES
In 1996 the Company paid directors who are not officers or employees of
the Company a $5,000 annual retainer and $750 for each Board of Directors or
Committee meeting, other than telephonic, attended. Commencing in 1997 the
Company will pay directors who are not officers or employees of the Company a
$10,000 annual retainer and $1,000 for each Board of Directors or Committee
meeting, other than telephonic, attended.
EXECUTIVE OFFICERS
The following table lists the names, ages and offices held by each
executive officer of the Company:
<TABLE>
<CAPTION>
Name Age Office
---- --- ------
<S> <C> <C>
Edward J. McNerney 52 President and Chief Executive
Officer
Francis W. Moskey 65 Vice President
Ronald G. Popolizio 38 Vice President-Finance, Secretary
</TABLE>
3
<PAGE> 6
Mr. McNerney became President and Chief Executive Officer of the Company
on January 1, 1997.
Mr. Moskey joined the Company in 1951. He steadily rose through
management becoming President in May 1989. On January 1, 1997 he became Vice
President.
Mr. Popolizio joined the Company in February 1997 as Vice
President-Finance and Secretary.
Officers are elected annually by and serve at the discretion of the Board
of Directors.
EXECUTIVE COMPENSATION
The following table sets forth summary information with respect to all
compensation, including stock options granted and all cash bonuses and accrued
deferred compensation, incurred by the Company during the last three fiscal
years to or on behalf of the Chief Executive Officer and other senior executive
officers of the Company whose total annual salary and bonus during fiscal 1996
exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term All Other
Annual Compensation Compensation Compensation (2)
------------------- ------------ ----------------
Awards ($)
------
Other Securities
Annual Underlying
Compen- Options/
Name and Principal Salary Bonus sation SARs
Position Year ($) ($) ($)(1) (#)
- ------------------ ---- ------ ----- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Robert T. Whitty 1996 125,465 - 101 - 4,748
Chief Executive 1995 99,669 - 10,120 - 16,430
Officer (3) 1994 36,650 60,000 22,924 100,000 24,508
Edward J. McNerney 1996 31,781 - 32,087 - 7,500
(4) 1995 - - - - -
1994 - - - - -
John J. DiFrancesco 1996 98,642 - 27 - -
Chairman 1995 - - - - -
1994 - - - - -
</TABLE>
(1) Reflects amounts reimbursed for payment of taxes due on life insurnace
payments and fringe benefits. The amount for Mr. McNerney also includes
$25,000 paid upon becoming employed by the Company.
4
<PAGE> 7
(2) Includes $4,748 paid for defined contribution plan contributions for Mr.
Whitty and $7,500 paid for life insurance for Mr. McNerney.
(3) Mr. Whitty served as Chief Executive Officer of the Company from February
28, 1995 through December 31, 1996.
(4) On January 1, 1997, Mr. McNerney became Chief Executive Officer.
The following table reflects all stock options granted to the Named
Executive Officers of the Company during the 1996 fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent
of Tota Potential
Options Realizable Value
/SARs at Assumed Annual
Number of Granted Rates of Stock
Securities to Exer- Price Appreciation
underlying Employ- cise or For Option Term
option/SARs ees in Base Expir- ------------------
Granted Fiscal Price ation 5% 10%
Name (#) Year ($/Sh) Date ($) ($)
- ----------------- ----------- ------ ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert T. Whitty 2,000 2 1.375 12/31/99 593 1,276
Edward J. McNerney 100,000 96 1.00 10/13/01 27,628 61,051
John J. DiFrancesco 2,000 2 1.375 5/22/01 760 1,679
</TABLE>
(1) Mr. McNerney's options vest at the rate of 40%, 30% and 30% on October 14,
1997, 1998 and 1999, respectively. Options granted to Messrs. DiFrancesco and
Whitty become exercisable on May 23, 1997.
5
<PAGE> 8
The following table reflects stock options exercised for the named
executive officers during the 1996 fiscal year:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY-End ($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Robert T. Whitty - - 75,000/ 107,813/
27,000 37,188
Edward J. McNerney - - - / - /
100,000 100,000
John J. DiFrancesco 5,000 5,625 6,666/ 5,000/
5,334 3,751
</TABLE>
EMPLOYMENT AGREEMENTS
Mr. McNerney. Pursuant to an employment agreement with the Company, Mr.
McNerney is entitled to a minimum annual salary of $165,000 plus an annual
incentive bonus determined by the Board of Directors with a guaranteed one time
minimum bonus of $30,000 payable in January 1998. Mr. McNerney also received
a one time sign-up payment of $50,000 payable in $25,000 installments on
October 14, 1996 and July 1, 1997. The agreement provided for the grant on
October 14, 1996 of options to purchase 100,000 shares of the Company's common
stock at an exercise price of $1.00 per share which was the fair market value
of the underlying common stock on the date of grant. The options are
exercisable in annual installments of 40%, 30% and 30%. The agreement also
provides for a relocation allowance to cover closing and moving costs. In
addition, upon termination of employment for any reason other than for cause,
or upon involuntary termination of employment due to a change in ownership of
the Company, Mr. McNerney will receive one year of base compensation. In the
event of a change in ownership, previously granted stock options also become
immediately exercisable.
Mr. DiFrancesco. Pursuant to an employment agreement with the Company,
Mr. DiFrancesco was actively employed fulltime as Chairman of the Company for a
period of nine months commencing April 1, 1996. The agreement provided for a
weekly salary of $2,500 of which $780 per week was deferred and paid at the end
of the contract. This contract terminated on December 31, 1996. Mr.
DiFrancesco remains Chairman of the Company but is not actively employed.
6
<PAGE> 9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of the Company's outside directors.
Mr. DiFrancesco, upon becoming an employee of the Company, resigned as a member
of the Compensation Committee in March 1996. Upon completion of his employment
contract on December 31, 1996, Mr. DiFranceso was again appointed to serve on
the Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The Committee has initiated compensation policies to enhance the financial
performance of the Company. In 1996, the Committee developed incentive plans
to include all employees which is explained below.
The Chief Executive Officer, Mr. R. T. Whitty, received a salary of
$125,465 in 1996. This amount was paid under the terms of an employment
contract Mr. Whitty executed with the Company in 1994. No amount of Mr.
Whitty's salary was predicated on his or the Company's performance in 1996.
As was reported in October 1996, Mr. Whitty opted not to renew his
contract with the Company when it expired on December 31, 1996. The Board
retained a search firm to find a qualified Chief Executive Officer and
presented several candidates to be considered. The Board selected Mr. Edward
J. McNerney because of his experience in contemporary manufacturing and track
record in his prior areas of employment. Based on his compensation at his last
place worked, and a study of compensation packages for similar jobs and
industry, Mr. McNerney was hired at an annual salary of $165,000 per year, is
eligible to participate in the Company's bonus plan starting in 1997 and was
granted options on 100,000 shares, to vest over three (3) years, at an exercise
price equal to the fair market value of the Company's common stock at the time
of the award.
The Compensation Committee decided not to pay any bonuses in 1996
given the financial results of the Company for the year. The Committee
intends to resume paying bonuses at the end of 1997 if there is a
substantial improvement in the financial performance of the Company.
As mentioned earlier, the Company adopted a profit sharing plan for all
employees. Pursuant to the plan 5% of operating profit (profit before interest
and taxes) which exceeds $200,000 will be shared equally by all employees based
on length of employment for the year.
Compensation Committee Members
John J. DiFrancesco
William J. Gallagher
Stephen G.W. Walk
7
<PAGE> 10
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following performance graph compares the five year cumulative return
from investing $100 on December 31, 1991 in the Company's common shares to the
Total Return Index for The Nasdaq Stock Market (US Companies) and the Total
Return Index for Nasdaq Trucking and Transportation Stocks.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
EDAC COMMON, TOTAL RETURN INDEX FOR THE NASDAQ STOCK MARKET
AND TOTAL RETURN INDEX FOR NASDAQ TRUCKING AND TRANSPORTATION STOCKS
[GRAPH]
8
<PAGE> 11
DATA FOR GRAPH INFORMATION STATEMENT TO SHARHOLDERS
APRIL 1997
<TABLE>
<CAPTION>
NASDAQ EDAC
NASDAQ(US) TRANSPORTAION TECHOLOGIES
YEAR INDEX INDEX INDEX
<S> <C> <C> <C>
1991 100.000 100.000 100.000
1992 116.378 122.375 342.857
1993 133.595 148.676 157.143
1994 130.587 134.816 92.857
1995 184.674 157.209 142.857
1996 227.164 173.495 228.571
</TABLE>
<PAGE> 12
PRINCIPAL SECURITY HOLDERS AND
SECURITY HOLDINGS OF MANAGEMENT
The following table reflects the beneficial ownership of the outstanding
common stock of the Company as of April 18, 1997, by each person known to the
Company to own beneficially more than 5% of such stock outstanding, each
director and nominee, each Named Executive Officer and all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Number of Shares
and Nature of Percent
Beneficial of
Name Ownership (1) Class
- ---- ---------------- -------
<S> <C> <C>
FMR Corporation 235,000 6.2%
Edac Technologies Corporation
Employee Stock Ownership Plan
and Trust (2) 946,099 25.0%
John J. DiFrancesco (3) 33,000 0.9%
William J. Gallagher (3)(4) 150,090 4.0%
Edward J. McNerney (2) 946,099 25.0%
Lee Morris - -
Francis W. Moskey (2) 1,034,265 27.4%
Ronald G. Popolizio (2) 946,099 25.0%
Glenn L. Purple (2)(3) 982,624 26.0%
Arnold Sargis 9,950 0.3%
Gerald C. Smith 390,881 10.3%
Stephen G.W. Walk (3) 22,000 0.6%
Robert T. Whitty (3) 108,892 2.8%
All Directors and Executive
Officers as a group
(8 persons) (2)(3) 1,256,355 32.9%
</TABLE>
(1) Except as otherwise indicated, the specified persons have sole voting
and investment power as to all the shares indicated.
9
<PAGE> 13
(2) The number of shares includes 946,099 shares owned by the Edac Employee
Stock Ownership Plan ("ESOP"). The shares are voted by the Trustees of the
Edac ESOP (subject to direction by participants for allocated shares).
The Trustees of the ESOP are as follows:
Edward J. McNerney Ronald G. Popolizio
Francis W. Moskey Glenn L. Purple
(3) The number of shares shown includes the following shares which may be
acquired by exercise of options: 75,000 as to Mr. Whitty; 12,000 each as
to Messrs. DiFrancesco, Gallagher and Walk; 3,000 as to Mr. Purple; and
36,000 as to all executive officers and directors as a group.
(4) Includes 16,500 shares held directly by a company wholly-owned by Mr.
Gallagher, and 7,030 shares held in that company's profit sharing trust.
The address of each of the current directors of the Company and the Edac
ESOP is the principal business address of the Company. The address of FMR
Corporation is 82 Devonshire Street, Boston, MA 02109. The address of Mr.
Morris is P.O. Box 487, Farmington, CT 06034. The address for Mr. Sargis is
716 Lower Lane, Berlin, CT 06037.
The above beneficial ownership information is based upon information
furnished by the specified persons and is determined in accordance with SEC
Rule 13d-3, as required for purposes of this Proxy Statement. It is not
necessarily to be construed as an admission of beneficial ownership for other
purposes and includes shares as to which beneficial ownership is disclaimed.
SHAREHOLDER PROPOSALS
Shareholders proposals must be received by the Company no later than
December 23, 1997, in order to be considered for inclusion in next year's
Annual Meeting Proxy.
AUDIT MATTERS
Representatives of Arthur Andersen LLP, the Company's independent public
accountants, will be present at the annual meeting to respond to questions and
to make a statement, if they so desire. As of the date of this Proxy
Statement, the Company has not yet selected its auditors for 1997, but
presently expects to appoint Arthur Andersen LLP.
10
<PAGE> 14
OTHER MATTERS
At the date of this Proxy Statement the Company has not been informed and
is not aware that any other matters will be brought before the meeting.
EDAC TECHNOLOGIES CORPORATION
/s/ Ronald G. Popolizio
------------------------------
Ronald G. Popolizio
Secretary
Farmington, Connecticut
April 23, 1997
<PAGE> 15
EDAC TECHNOLOGIES CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - MAY 23, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Ronald G. Popolizio and Daniel J. Brink the proxies
(with full substitution) of the undersigned to attend the annual meeting of
shareholders of Edac Technologies Corporation (the "Company") to be held on May
23, 1997 at 9:00 a.m. Eastern Daylight Time, at the Farmington Country Club,
806 Farmington Avenue, Farmington, Connecticut and any adjournment thereof and
to vote all shares of stock of the Company held by the undersigned on April 14,
1997, as specified below and on any other matters that may properly come before
said meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY APPOINTMENT WILL
BE VOTED FOR ITEM 1.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
- --------------------------------------------------------------------------------
EDAC TECHNOLOGIES CORPORATION 1997 ANNUAL MEETING
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR ITEM 1
1. ELECTION OF DIRECTORS
1 - John J. DiFrancesco 2 - William J. Gallagher
3 - Edward J. McNerney 4 - Lee Morris
5 - Francis W. Moskey 6 - Arnold J. Sargis
7 - Stephen W. Walk [ ] FOR all nominees listed to the
left (except as specified below).
[ ] WITHHOLD AUTHORITY
to vote for all nominees listed
to the left.
(Instructions: To withhold authority to
vote for any indicated nominee, write [ ]
the numbers(s) of the nominees(s) in the
box provided to the right.)
Address Change? Date_________________ NO. OF SHARES
Mark Box [ ]
Indicate changes below
[ ]
[ ]
[ ]
Signature(s) in Box
Please sign exactly as your name
appears on this Proxy. 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.
