<PAGE>
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:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CROWN ANDERSEN, INC.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CROWN ANDERSEN, INC.
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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 ActRule 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:
- --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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:
Notes:
<PAGE>
PRELIMINARY PROXY STATEMENT
CROWN ANDERSEN INC.
306 DIVIDEND DRIVE
PEACHTREE CITY, GEORGIA 30269
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 21, 1996
NOTICE HEREBY IS GIVEN that the 1996 Annual Meeting of Stockholders of Crown
Andersen Inc. (the "Company") will be held at the headquarters of the Company,
306 Dividend Drive, Peachtree City, Georgia, on Wednesday, February 21, 1996, at
10:00 a.m., local time, for the purposes of considering and voting upon:
(1) A proposal to elect six directors of the Company to serve until the
next Annual Meeting of Stockholders and until their successors are duly
elected and qualified.
(2) A proposal to ratify the appointment of BDO Seidman as independent
accountants of the Company for the fiscal year ending September 30,
1996.
(3) A proposal to amend the Certificate of Incorporation of the Company.
(4) Such other business as properly may come before the Annual Meeting or
any adjournment thereof. The Board of Directors is not aware of any
other business to be presented to a vote of the stockholders at the
Annual Meeting.
Information relating to the above matters is set forth in the attached Proxy
Statement. Stockholders of record at the close of business on January 5, 1996
are entitled to receive notice of and to vote at the Annual Meeting and any
adjournments thereof.
By Order of the Board of Directors.
RANDALL H. MORGAN
Secretary
Peachtree City, Georgia
January 8, 1996
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN PROMPTLY COMPLETE, EXECUTE AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. YOU
CAN SPARE YOUR COMPANY THE EXPENSE OF FURTHER PROXY SOLICITATION BY RETURNING
YOUR PROXY CARD PROMPTLY.
<PAGE>
CROWN ANDERSEN INC.
306 DIVIDEND DRIVE
PEACHTREE CITY, GEORGIA 30269
PRELIMINARY PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 14, 1996
This Proxy Statement is furnished to the stockholders of Crown Andersen Inc.
(the "Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be voted at the 1995 Annual Meeting of Stockholders
(the "Annual Meeting") and at any adjournments thereof. The Annual Meeting will
be held on Wednesday, February 21, 1996 at the headquarters of the Company, 306
Dividend Drive, Peachtree City, Georgia, at 10:00 a.m., local time.
The approximate date on which this Proxy Statement and the accompanying
proxy card are first being sent or given to stockholders is January 8, 1996.
VOTING
GENERAL
The securities which can be voted at the Annual Meeting consist of Common
Stock of the Company, $.10 par value per share, with each share entitling its
owner to one vote on each matter submitted to the stockholders. The record date
for determining the holders of Common Stock who are entitled to notice of and to
vote at the Annual Meeting is January 5, 1996. On the record date, 1,561,635
shares of Common Stock were outstanding and eligible to be voted at the Annual
Meeting.
QUORUM AND VOTE REQUIRED
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock of the Company is necessary to constitute a quorum at the Annual
Meeting. The affirmative vote of the holders of a plurality of the shares of
Common Stock represented in person or by proxy at the Annual Meeting is required
to elect directors, and the affirmative vote of the holders of a majority of the
shares of Common Stock represented in person or by proxy at the Annual Meeting
is required to ratify the appointment of independent accountants. These matters
are described in the following sections of this Proxy Statement.
VOTING BY PROXY
In voting by proxy with regard to the election of directors, stockholders
may vote in favor of all nominees, withhold their votes as to all nominees or
withhold their votes as to specific nominees. Stockholders should specify their
choices on the accompanying proxy card. All properly executed proxy cards
delivered by stockholders to the Company and not revoked will be voted at the
Annual Meeting in accordance with the directions given. IF NO SPECIFIC
INSTRUCTIONS ARE GIVEN WITH REGARD TO THE MATTERS TO BE VOTED UPON, THE SHARES
REPRESENTED BY A SIGNED PROXY CARD WILL BE VOTED "FOR" THE ELECTION OF ALL
DIRECTORS AND TO RATIFY THE APPOINTMENT OF BDO SEIDMAN AS INDEPENDENT
ACCOUNTANTS. If any other matters properly come before the Annual Meeting, the
persons named as proxies will vote upon such matters according to their
judgment.
Any stockholder delivering a proxy has the power to revoke it at any time
before it is voted by giving written notice to the Secretary of the Company, by
executing and delivering to the Secretary a proxy card bearing a later date or
by voting in person at the Annual Meeting.
<PAGE>
In addition to soliciting proxies through the mail, the Company may solicit
proxies through its directors, officers and employees in person and by
telephone. Brokerage firms, nominees, custodians and fiduciaries also may be
requested to forward proxy materials to the beneficial owners of shares held of
record by them. All expenses incurred in connection with the solicitation of
proxies will be borne by the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of January 1, 1996 (except as
otherwise noted) regarding the ownership of the Company's Common Stock by each
person known to the Company to be the beneficial owner of more than 5% of the
Company's Common Stock and by all directors and officers of the Company as a
group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
NAME OWNED (1) PERCENT OF CLASS
- --------------------------- ------------------- -----------------
<S> <C> <C>
Jack D. Brady 118,254(2) 7.04%
306 Dividend Drive
Peachtree City, Ga. 30269
All directors and officers 171,244(3) 10.20%
as a group (8 persons)
</TABLE>
(1) The stock ownership information shown has been furnished to the Company by
the named persons. Beneficial ownership as reported in the table has been
determined in accordance with Securities and Exchange Commission
regulations and includes shares of the Company's Common Stock which may be
acquired within 60 days upon the exercise of outstanding stock options and
warrants. Except as otherwise stated in the footnotes below, the named
persons have sole voting and investment power with regard to the shares
shown as owned by such persons.
(2) Jack D. Brady is Chairman of the Board and Chief Executive Officer of the
Company. See "Election of Directors-Nominees." The shares shown include
88,982 shares owned jointly by Mr. Brady and his wife, 2,000 shares held
by Mr. Brady's wife in an Individual Retirement Account, 3,636 shares held
by Mr. Brady as custodian for their sons; 3,636 shares held by Mr. Brady's
wife as custodian for their sons; and 19,000 shares which may be acquired
by Mr. Brady upon the exercise of outstanding stock options.
(3) The shares shown include 58,288 shares which may be acquired upon the
exercise of outstanding stock options and warrants. See Note (3) above
and Notes (2) and (4) on page 6.
-2-
<PAGE>
ELECTION OF DIRECTORS
NOMINEES
Pursuant to the Bylaws, the authorized number of directors of the Company has
been set at nine. The Board of Directors has nominated the six persons named
below to serve as directors until the next Annual Meeting of Stockholders or
until their earlier death, resignation or removal from office. Each of the six
nominees is presently a member of the Board of Directors and has consented to
serve another term as a director if re-elected. If any of the nominees should
be unavailable to serve for any reason (which is not anticipated), the Board of
Directors may designate a substitute nominee or nominees (in which case the
persons named on the enclosed proxy card will vote all valid proxy cards for the
election of such substitute nominee or nominees), allow the vacancy or vacancies
to remain open until a suitable candidate or candidates are located, or by
resolution provide for a lesser number of directors.
With regard to the three unfilled director positions, the Company's Bylaws and
Delaware law (under which the Company is organized) provide that these positions
may be filled by the affirmative vote of a majority of the Company's directors
for a term of office continuing until the next election of directors by the
stockholders and until the election and qualification of the successors. The
Board has not selected any candidates for these positions, but may do so prior
to the 1996 Annual Meeting. Proxy cards for the 1996 Annual Meeting may not be
voted for more than six nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO
ELECT THE SIX NOMINEES LISTED BELOW AS DIRECTORS OF THE COMPANY.
The following table sets forth certain information as of January 1, 1996 about
each of the nominees.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
NAME AND AGE INFORMATION ABOUT NOMINEES (PERCENT OF CLASS)(1)
- ---------------------- ------------------------------------- ----------------------------
<S> <C> <C>
Richard A. Beauchamp Director of the Company since 1985; 8,000(2)
(55) President of C.M.S. Transportation (*)
Services Inc. since 1987; Chairman of
the Board and Chief Executive Officer
of Specialized Hauling, Inc. from 1987
until 1988; President of Chattahoochee
Outdoor Center (concessions for National
Park Service) from 1985 until 1991;
President and Director of RTC Transpor-
tation Inc. from 1966 until 1986; and
Director of Andersen 2000 Inc., a wholly-
owned subsidiary of the Company (Andersen),
from 1978 until 1986.
Jack D. Brady Chairman of the Board and Chief 118,254(3)(4)
(52) Executive Officer of the Company (7.04%)
since 1985; Chairman of the Board
of Andersen since 1984; President
and Treasurer of Andersen since
1978; Executive Vice President of
Andersen from 1975 until 1978;
Director of Andersen since 1975;
Director of Montair Andersen b.v.
("Montair Andersen"), Andersen's
Dutch subsidiary, since 1984.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
NAME AND AGE INFORMATION ABOUT NOMINEES (PERCENT OF CLASS)(1)
- ------------------- --------------------------------------- ----------------------------
<S> <C> <C>
J. Don Brock Director of the Company since 6,000(2)
(57) 1990; and Chairman of the Board, (*)
President and Chief Executive Officer
of Astec Industries, Inc. (manufacturer
of road construction machinery and com-
bustion and thermal waste processing
systems) since 1972.
Robert Dressler Director of the Company since 1985; 6,300(2)
(70) Senior Vice President-Corporate (*)
Finance of Raymond James & Assoc-
iates, Inc. (investment bankers) since
1987; President and Chief Executive
Officer of Crown Industries, Inc.
(building products manufacturer) from
1973 until 1987; and Director of Crown
Industries from 1973 until 1986.
Jack C. Hendricks President and Director of the Company 11,000(2)
(60) since 1985; Chairman of the Board of (*)
Crown since 1986; President of Crown
since 1981; Vice President of Crown from
1976 until 1981; Director of Crown since
1984; Director of Andersen since 1986;
Director and Executive Vice President of
Roanoke Industries, Inc., a wholly-owned
subsidiary of Crown, since September 1991;
Vice President of Struthers from 1990 until
1992; and Director of Struthers from 1987
until 1992.
M. Timothy Yonker Director of the Company since 1985; 12,000(2)
(53) President, Chief Executive Officer (*)
and Director of Portec Corp. (manufac-
turer of materials handling equipment
since 1988; and Vice President and General
Manager of the Drive Division of P.T. Com-
ponents, Inc. (manufacturer of large gear boxes)
from 1981 until 1988.
</TABLE>
_______________
* Less than 1%.
(1) See Note (1) on page 2 hereof.
(2) Mr. Beauchamp and Mr. Yonker each holds vested warrants for the purchase of
8,000 shares of Common Stock of the Company, Mr. Dressler holds vested
warrants for the purchase of 5,688 shares of Common Stock of the Company,
Mr. Brock holds vested warrants for the purchase of 6,000 shares of Common
Stock of the Company, and Mr. Hendricks holds vested warrants for the
purchase of 1,000 shares of Common Stock of the Company, under the 1985
Directors Stock Warrant Plan. See "Director Compensation-1985 Directors
Stock Warrant Plan" below .
(3) See Note (3) on page 2 hereof.
(4) Under the 1985 Incentive Stock Option Plan, Mr. Brady holds options for the
purchase of 18,000 shares of Common Stock of the Company. See "Executive
Compensation-1985 Incentive Stock Option Plan" below.
-4-
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
- -------------------------------------------------
The Board of Directors conducts its business through meetings of the Board
and through its committees. In accordance with the Bylaws of the Company, the
Board of Directors has established an Executive Committee, an Audit Committee, a
Compensation Committee, a Warrant Committee and an Option Committee.
The Executive Committee, during intervals between meetings of the Board, may
exercise the powers of the Board of Directors except with regard to a limited
number of matters which include amending the Certificate of Incorporation or
Bylaws of the Company and approving or recommending to the stockholders of the
Company a merger or consolidation of the Company, a sale, lease or exchange of
all or substantially all of the assets of the Company or the dissolution of the
Company. All actions of the Executive Committee are submitted to the full Board
for review and ratification. The Executive Committee is composed of Messrs.
Brady, Dressler, and Hendricks.
The Audit Committee reviews the audit plan with the Company's independent
accountants, the scope and results of their audit engagement and the
accompanying management letter, if any; reviews the scope and results of the
Company's internal auditing procedures; consults with the independent
accountants and management with regard to the Company's accounting methods and
the adequacy of its internal accounting controls; approves professional services
provided by the independent accountants; reviews the independence of the
independent accountants; and reviews the range of the independent accountants'
audit and non-audit fees. The Audit Committee is composed of Messrs. Beauchamp,
Dressler and Yonker.
The Compensation Committee is responsible for administering the Company's
employee benefit plans (other than stock option and stock warrant plans),
setting the compensation of the Chairman of the Board and the division
Presidents, reviewing the criteria that form the basis for management's officer
and employee compensation recommendations and reviewing management's
recommendations in this regard. The Compensation Committee is composed of
Messrs. Beauchamp, Brock and Hendricks.
The Warrant Committee is responsible for administering the Company's 1985
Directors Stock Warrant Plan and is composed of Mr. Brady (the only inside
director).
The Option Committee is responsible for administering the Company's 1985
Incentive Stock Option Plan and is composed of Messrs. Beauchamp, Brock and
Yonker.
The Board of Directors as a whole functions as a nominating committee to
propose nominees for director to the Board of Directors. The Board of Directors
will consider nominees recommended by stockholders, although it has not actively
solicited recommendations from stockholders for nominees nor has it established
any procedures for this purpose other than as set forth in the Bylaws. See
"Stockholder Proposals for 1996 Annual Meeting" below.
During the fiscal year ended September 30, 1995, the Board of Directors met
three times, and the Audit, Executive, Compensation, Option and Warrant
Committees each met one time. Each director attended all meetings of the Board
of Directors and the committees on which he served, except for Mr. Beauchamp and
Mr. Dressler, who attended two meetings.
DIRECTOR COMPENSATION
DIRECTOR FEES. Through December 31, 1991, non-employee directors were paid
$1,200, and employee directors were paid $850, for each day of attendance at
meetings of the full Board of Directors. Effective January 1, 1992, the
payments to non-employee directors were increased to $1,500 for each day of
attendance at meetings of the full Board. The payments to employee directors
were not changed. Effective January 1, 1995, the payments to non-employee
directors were increased to $2,000 for each day of attendance at meetings of the
full Board plus $500 per hour for any special work requested by Crown Andersen
management beyond normal meetings. Fees for employee directors were increased
to $1,000 for each day of attendance at meetings of the full Board. Directors
also are reimbursed for travel expenses incurred in attending meetings.
Effective January 1, 1996, the payment to non-employee directors was
-5-
<PAGE>
increased to $2,500 for each day of attendance at meetings by the full Board.
DEFERRED COMPENSATION PLAN FOR DIRECTORS. The Deferred Compensation Plan for
Directors (the "Deferred Compensation Plan") was established by the Board of
Directors of the Company effective August 6, 1990. The Deferred Compensation
Plan is administered by a committee of officers of the Company appointed by the
Board of Directors.
The purpose of the Deferred Compensation Plan is to permit all director fees
otherwise payable to participating directors for service on the Board of
Directors to be deferred. All directors of the Company are eligible to
participate in the Deferred Compensation Plan. Amounts deferred under the
Deferred Compensation Plan are invested in accordance with a "phantom stock
program." Under the phantom stock program, the deferred fees are treated as if
applied to purchase shares of Common Stock of the Company. A bookkeeping
account is established for each participant and is credited, as of the first
business day following each meeting for which director fees are earned, with a
number of "stock units" equal to the number of shares of Common Stock that could
have been purchased with the fees on the last business day prior to the date of
the meeting.
The number of stock units credited to the participant's account is adjusted
periodically to account for stock dividends, stock splits and other events
affecting the number of outstanding shares, as if the stock units were actual
shares of Common Stock of the Company. In addition, if cash dividends are paid
with respect to the Company's Common Stock, the number of stock units credited
to a participant's account will be increased as though a corresponding dividend
was paid with respect to his stock units and the dividend was used to purchase
additional stock units.
A participant will receive payment of his benefit under the Deferred
Compensation Plan in a single lump-sum distribution of cash. At the
commencement of participation in the Deferred Compensation Plan, each
participant elects to receive his distribution on the date he reaches age 65 or
at a later specified age; on the date he leaves the Board; the earlier of the
foregoing occurrences; or the later of the foregoing occurrences. If a
participant dies before receiving payment of his benefit under the Deferred
Compensation Plan, payment will be made in a single lump-sum payment to his
beneficiary as soon as practicable after the date of the participant's death.
Under certain limited circumstances, a participant may be permitted to make a
financial hardship withdrawal from his account.
A director will receive a cash distribution equal to the greater of (i) the
value of the stock units credited to his account on the date of valuation or
(ii) the total amount of fees deferred under the Deferred Compensation Plan plus
interest accrued at an annual compounded rate of 8% from the dates of deferral
through the date of valuation. The date of valuation is the date that precedes
the distribution date by five business days. Stock units under the Deferred
Compensation Plan are valued on the basis of the average of the closing bid and
closing asked prices of the Company's Common Stock as reflected in the NASDAQ
National Market System on the last business day that immediately precedes the
date of valuation.
During the fiscal year ended September 30, 1995, Messrs. Yonker and
Hendricks, as non-employee directors, each deferred director fees of $5,500,
which resulted in a credit of 767 stock units to each of their accounts at a
value of $7.17 per stock unit. Messrs. Beauchamp and Dressler (also non-
employee directors) each deferred directors fees of $3,500, which resulted in a
credit of 460 stock units to each of their accounts at a value of $7.60 per
stock unit. Mr. Brady, an employee director, deferred director fees of $2,850,
which resulted in a credit of 400 stock units to his account at a value of $7.12
per stock unit. During the fiscal year ended September 30, 1994, Messrs.
Beauchamp, Dressler and Yonker each deferred directors fees of $4,500, which
resulted in a credit of 712 stock units to each of their accounts at a value of
$6.32 per stock unit, and Messrs. Brady and Hendricks each deferred directors
fees of $2,550, which resulted in a credit of 404 stock units to each of their
accounts at a value of $6.32 per stock unit.
1985 DIRECTORS STOCK WARRANT PLAN. The Company's 1985 Directors Stock
Warrant Plan (the "Warrant Plan") was approved by the stockholders of Andersen
and Crown on January 28, 1986 and became effective on January 31, 1986 when the
Company acquired all of the outstanding stock of Andersen and Crown. The
Warrant Plan was amended at the 1992 Annual Meeting by the shareholders to
increase the
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<PAGE>
number of shares set aside for the Plan and to increase the number of warrants
which could be granted to each eligible director. The Warrant Plan is
administered by the Warrant Committee of the Board of Directors.
The purpose of the Warrant Plan is to provide additional incentive to those
members of the Board of Directors of the Company who are not employees of the
Company or any of its subsidiaries by encouraging them to acquire stock
ownership in the Company, thus giving them a proprietary interest in the
Company's business and providing them with a personal interest in the Company's
continued success and progress. There are currently four non-employee directors
of the Company, and all of them participate in the Warrant Plan.
Subject to the anti-dilution provisions of the Warrant Plan, the aggregate
number of shares of Common Stock of the Company for which warrants may be sold
under the amended Warrant Plan is 50,000 shares, and each eligible director may
acquire warrants for the purchase of a maximum of 10,000 shares. The purchase
price of the warrants is the fair market value of the warrants on the date of
purchase as determined by the Board of Directors. Warrants sold to
each director vest over a period of up to five years at the rate of 1,000
warrants per year. The exercise price per share is equal to the fair market
value of a share of Common Stock of the Company on the date of purchase of the
warrants ($21.25 per share on January 10, 1992). Payment for stock acquired
upon the exercise of warrants must be made in full at the time the warrant is
exercised and may be made in cash or in shares of Common Stock of the Company.
No warrants may be issued or purchased under the amended Warrant Plan after
January 31, 2003.
Warrants are not transferable except by will or the laws of descent and
distribution. If the holder of a warrant ceases to be a director of the Company
due to death or legal incapacity, the warrants may be exercised by the executors
or administrators of the holder's estate, by the holder's heirs or by the
holder's legal guardian, as applicable, at any time within one year after the
date of death or declaration of incapacity of the holder. If the holder of a
warrant ceases to be a director of the Company for any reason other than death
or legal incapacity, the Company is required to repurchase all unexercised
warrants of such holder within 60 days of the termination of the directorship if
so requested by the holder. The repurchase price per warrant is equal generally
to the purchase price per warrant paid by such director for such warrants plus
interest thereon at the rate of 8% per year. If no request for repurchase is
made, the warrants will expire at the end of such 60 day period. The shares of
stock subject to warrants held by former directors which are either repurchased
by the Company or expire after 60 days may again become issuable upon the
exercise of any additional warrants granted by the Company to any new non-
employee directors.
The Board of Directors may amend or terminate the Warrant Plan at any time,
except that no such amendment or termination may affect the rights of holders of
outstanding warrants without their consent.
Neither the Company nor the director will have any federal income tax
consequences upon the issuance and purchase of warrants. Generally, when a
director exercises warrants, the director recognizes ordinary income in the
amount by which the fair market value of the shares at the time of exercise
exceeds the total of the warrant exercise price paid for such shares and the
purchase price paid for the portion of the warrant being exercised. For the
Company's tax year in which ends the calendar year in which the director
exercises warrants, the Company will have a deduction in the same amount as the
ordinary income recognized by the director. If a director exercises warrants by
paying the exercise price with previously acquired Common Stock, the director
will recognize income (relative to the new shares he is receiving) in two steps.
In the first step, a number of new shares equivalent to the number of old shares
tendered (in payment of the exercise price) will be considered to have been
exchanged in accordance with Section 1036 of the Internal Revenue Code of 1986,
as amended (the "Code"), and the rulings thereunder, and no gain or loss will be
recognized. In the second step, with respect to the number of new shares
acquired in excess of the number of old shares tendered, the director will
recognize income on those new shares equal to their fair market value on the
date of exercise less any actual consideration tendered.
On January 31, 1986, warrants for the purchase of 5,000 shares of Common
Stock were purchased by each of the five then-eligible directors (including
Messrs. Beauchamp, Dressler and Yonker). These warrants are exercisable in
accordance with a vesting schedule which provides, with respect to each of these
-7-
<PAGE>
participants, for the vesting of warrants for 1,000 shares on December 31, 1986
and on each December 31 thereafter through 1990. On December 11, 1990, Mr.
Brock, as a newly elected non-employee director, also purchased warrants for
5,000 shares of Common Stock, 1,000 of which vested on each of December 31, 1990
and December 31, 1991, and 1,000 of which will vest on each December 31
thereafter through 1994. The exercise price of all of these warrants is $7.1375
per share. On November 1, 1991, Mr.Dressler exercised warrants for 2,312 shares
of Common Stock and paid the exercise price by delivery of 1,000 shares of
Common Stock owned by him. The net value of the transaction to Mr. Dressler
(market value of shares received less exercise price (i.e., market value of
shares surrendered)) was $21,648.
On December 17, 1992, additional warrants for the purchase of 5,000 shares of
Common Stock were purchased by each of the four eligible directors (Messrs.
Beauchamp, Brock, Dressler and Yonker). These warrants are exercisable in
accordance with a vesting schedule which provides, with respect to each of these
participants, for the vesting of warrants for 1,000 shares on December 31, 1993
and on each December 31 thereafter through 1997. The exercise price of all of
these warrants is $12.125 per share.
On December 19, 1994, Jack C. Hendricks purchased warrants for 5,000 shares
of Common Stock. These warrants vest at the rate of 1,000 per year commencing
on December 31, 1995 and on each December 31 thereafter through 1999. The
exercise price of these warrants is $7.25 per share.
The maximum aggregate number of shares of Common Stock which may be issued to
each eligible director under the Warrant Plan is currently 10,000. A total of
50,000 shares have been set aside for this purpose following stockholder
approval of an additional 25,000 shares at the 1992 Annual Meeting.
EXECUTIVE COMPENSATION
GENERAL. The following table sets forth the total annual compensation paid
or accrued by the Company to or for the account of each of the executive
officers of the Company whose total cash compensation for the fiscal year ended
September 30, 1995 exceeded $100,000.
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------- --------
OTHER (# OF SHARES) LTIP ALL
NAME AND ANNUAL RESTRICTED PAYOUTS OTHER
PRINCIPAL POSITION YEAR SALARY $ BONUS $ COMP. $ STOCK AWARDS $ COMP
- ------------------------ ---- -------- --------- ------- ------------ ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Jack D. Brady
Chairman of the Board
and Chief Executive
Officer of the 1995 135,000 26,400 10,293 0 0 -
Company; Chairman of 1994 135,000 31,637 9,359 0 0 -
the Board of Andersen 1993 135,000 15,187 9,065 0 0 -
</TABLE>
NOTES:
BONUS - This column includes bonuses paid to all recipients in accordance with a
Plan administered by the Compensation Committee of the Board of Directors which
provides incentives based on financial performance, including cash flow,
profitability, return on capital employed and growth of the various operating
units, and Company contributions to a 401(k) Savings Plan.
OTHER ANNUAL COMPENSATION - Includes directors fees, value of Company provided
automobiles, and life insurance premiums for Mr. Brady.
RESTRICTED STOCK AWARDS - The Company does not have a plan for granting
Restricted Stock Awards.
LTIP PAYOUTS - None paid. No plan in place.
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<PAGE>
OPTIONS. The following table sets forth the details of options granted to
the individuals listed in the Summary Table during fiscal year 1995. The second
table in this section shows value of unexercised options.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
Aggregated Option/SAR Exercises In Last Fiscal Year And Fy-End Option/SAR Value
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN THE MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY END-# SHARES FY END-$
--------------- ---------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE
NAME ON EXERCISE VALUE REALIZED $ UNEXERCISABLE UNEXERCISABLE
- --------------- --------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Jack D. Brady 0 0 19,000/ 0 $0 / 0
</TABLE>
All options held by the named individuals were exercisable at September 30,
1995 (option prices exceeded market prices at September 30, 1995).
EMPLOYMENT AGREEMENTS. On October 1, 1987, Mr. Brady entered into an
employment agreement with Andersen for a term of five years expiring on
September 30, 1992. Mr. Brady's agreement provided for a salary of $95,000 per
year, subject to increase on October 1st of each year during the term of the
agreement in the event that the Company's consolidated after-tax earnings for
the immediately preceding fiscal year met or exceeded a specified level. In
such event, the employee's annual salary was to be increased to 105% of the
annual salary that was in effect immediately prior to the increase. The after-
tax earnings thresholds for the fiscal years ended or ending September 30, 1990
and 1991 were $1,400,000 and $1,600,000, respectively. On December 10, 1990,
the Board of Directors, acting in its discretion, amended the employment
agreement, effective as of October 1, 1990, to increase Mr. Brady's base salary
to $106,400 per year, which reflected the adjustments to the salary of Mr. Brady
based on the Company's consolidated after-tax earnings for fiscal 1990. The
agreement also provided that Andersen should furnish the employee with a car for
business use and should pay the reasonable costs for the employee to join and
remain a member of a country club or social club. The employee also was
entitled under his agreement to participate in one of the Company's incentive
stock option programs which are described below. The agreement provided further
that (i) in the event employment was terminated by the employer at any time
during the term of the agreement for any reason other than an act of
disobedience, dishonesty, disloyalty or insubordination against the employer by
the employee or (ii) in the event the employee elected to terminate his
employment, or had his employment terminated, in connection with certain
dissolutions or transfers of ownership of the employer, then the employer should
pay the employee a lump sum equal to twice the annual salary in effect at the
time of termination. A new employment agreement effective October 1, 1992 was
entered into by Mr. Brady. Mr. Brady's 5-year agreement provides for a base
salary of $135,000 and annual increases of 5% if the consolidated net earnings
of the Company reach the levels of $1.7 million, $1.9 million, $2.0 million and
$2.2 million during the years 1993 through 1996, respectively. The agreement
contains conditions similar to those stated above except that it does not
provide for any incentive stock option program participation unless separately
acted upon by the Board of Directors.
COMPENSATION COMMITTEE REPORT.
The Compensation Committee is composed of Messrs. J. Don Brock, who currently
is chief executive officer of a public corporation in the United States, Jack C.
Hendricks, who is a retired president of the Company, and Mr. Richard A.
Beauchamp, who is currently chief executive officer of a private corporation in
the United States. The Committee has access to national compensation surveys
and regional compensation information on executives in companies both larger and
smaller than the Company. Furthermore, the
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<PAGE>
Company is one of 50 "high tech" public companies in the Atlanta, Georgia area
which is annually surveyed for executive compensation by the Georgia Institute
of Technology and the Atlanta Business Chronicle. All of these sources are used
by the Committee in reviewing compensation. Once each year since the
Committee's existence, the Committee has reviewed total compensation for the
executive officer named in this Proxy Statement. The Committee established a
long-term employment contract for this individual and the resultant contract is
discussed in the preceding section. This executive was paid compensation which
generally ranked him among the lower 30% of executives in similar positions for
corporations of similar size to the Company. The Compensation Committee then
structured cash bonus programs annually for this individual which were tied to
key financial performance indicators, including return on capital employed, cash
management, profitability, and earnings growth. The cash bonus allowed this
individual to increase his compensation to much more competitive levels with
others with similar responsibility in other public companies, but only if
favorable financial results are achieved. The Board of Directors also asked the
Committee to review total annual compensation of Mr. Ton Wagemans (managing
director of Montair Andersen b.v.), Mr. Gregory Kenith (president of Andersen
2000 Inc.), and Mr. Milton Emmanuelli (chief financial officer of the Company),
in addition to Mr. Brady, each year. The Committee agreed to do so annually and
started this additional review at the end of fiscal 1995. These three
additional individuals were also given an incentive bonus plan, similar to Mr.
Brady.
For fiscal 1995, Mr. Brady's available bonus portion of his compensation was
based on 100% weighting of consolidated results for the Company. Mr. Wagemans'
bonus was based on 5% consolidated results and 95% Montair Andersen b.v.
results. Mr. Kenith's bonus was based on 5% consolidated results and 95%
Andersen 2000 Inc. results. Mr. Emmanuelli's bonus was based on 70%
consolidated results, 20% Andersen 2000 Inc. and 10% Montair Andersen b.v.
results. The target performance levels for the various subsidiaries and
consolidated operations ranged from 6.8% to 13% cash flow as a percentage of
capital employed, 8.5% to 20% return on capital employed (after tax), 6% to 15%
pre-tax income as a percentage of revenues, and 10% to 50% net income growth
from fiscal 1994. These targets were weighted differently for each of the
individuals, depending upon what areas the Compensation Committee determined
needed specific management attention at each of the operations. The maximum
bonus achievable for any of the individuals was $60,000 and the minimum was
zero. The targets were considered by the Committee to be achievable, but to
require above average performance from each of the individuals included in the
plan. The targets have been adjusted annually by the Committee, as have the
weightings for the participants. Mr. Brady earned $26,400 in bonus under the
1995 plan, Mr. Kenith $11,520 in bonus, Mr. Wagemans earned 12,975 Dutch
guilders in bonus, and Mr. Emmanuelli earned $11,670 in bonus.
In addition, Mr. Brady is a substantial shareholder in the Company and was
thus motivated to act on behalf of all shareholders to optimize overall Company
performance. In the Committee's opinion, Mr. Brady and the three other named
officers were properly compensated in 1995 when compared with all others in
similar positions in companies of the same size. They were not overcompensated
and never have been during the Committee's tenure. A substantial portion of
their income has always been dependent on the Company's financial performance.
No member of the Committee is a former or current officer or employee of the
Company or any of its subsidiaries.
Compensation Committee: J. Don Brock, Chairman; M. Timothy Yonker; Richard
A. Beauchamp
December 21, 1995
COMMON STOCK PERFORMANCE: As part of the executive compensation information
presented in this Proxy Statement, the Securities and Exchange Commission
requires a five-year comparison of stock performance for the Company with stock
performance of appropriate similar companies. The Company's common stock is
traded over-the-counter in the NASDAQ system. NASDAQ furnishes the Company with
a "Peer Company" performance comparison on a quarterly basis. The peer
companies are Crown Andersen, BHA Group Inc. - a supplier of baghouse
accessories, Farr Company - a filter supplier, Ogden Corp. - an operator of
waste-to-energy plants, Osmonics - a water treatment company, Peerless
Manufacturing - a supplier of oil-gas separators, and Rollins - a hazardous
waste management company. For three years, the
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<PAGE>
Company has used the NASDAQ Industrial Index for comparison in its Proxy
Statement. This year, the Company has switched to a "peer group" comparison to
attempt to more closely portray comparative stock performance. Because this
comparison has only been made for four years in the Proxy Statement, the Company
has not yet been able to interpret how executive compensation, or even executive
performance, is directly related to the stock performance. To date, there has
been no obvious correlation. It is hoped that the new "peer" comparison will
reveal a trend in the future. Because Company executives are prohibited from
discussing non-public information with investors to prevent unusual influence on
stock price, the Company believes the stock price reflects an investor "report
card" for management which is hopefully related to revenues and earnings reports
periodically issued by the Company. Executive compensation has not previously
been tied to stock performance, but this can be a factor used by the
Compensation Committee and by management in the future in determining such
compensation. The Compensation Committee, however, does not yet feel there are
adequate historical data to rely on stock price as a determining factor for
executive compensation in 1995 or fiscal 1996.
As required, this Proxy Statement includes a performance graph on the old
basis - a comparison of the Company's stock performance with NASDAQ Industrial
and Composite Indices.
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<PAGE>
COMPARISON OF FIVE-YEAR TOTAL RETURN
------------------------------------
AMONG CROWN ANDERSEN INC. PEER GROUP AND NASDAQ INDUSTRIAL INDEX
[ GRAPH APPEARS HERE ]
<TABLE>
<CAPTION>
NASDAQ
MEASUREMENT PERIOD CROWN INDUSTRIAL
(FISCAL YEAR ENDED) ANDERSEN PEER GROUP INDEX
<S> <C> <C> <C>
Measurement Point
Oct 1, 1990 100 100 100
Sept 30, 1991 205 111 164
Sept 30, 1992 174 95 173
Sept 30, 1993 89 86 215
Sept 30, 1994 83 102 217
Sept 30, 1995 113 107 266
</TABLE>
Note To Graph Above: Assumes $100 invested on October 1, 1990 in Crown
Andersen Common Stock, and an identical amount in the NASDAQ Industrial
Index or the Peer Group.
GRAPH ON OLD BASIS - COMPARISON OF FIVE-YEAR TOTAL RETURN
AMONG CROWN ANDERSEN, NASDAQ COMPOSITE INDEX
AND NASDAQ INDUSTRIAL INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NASDAQ NASDAQ
MEASUREMENT PERIOD CROWN COMPOSITE INDUSTRIAL
(FISCAL YEAR ENDED) ANDERSEN INDEX INDEX
<S> <C> <C> <C>
Measurement Point
Oct 1, 1990 100 100 100
Sept 30, 1991 205 139 164
Sept 30, 1992 174 153 173
Sept 30, 1993 89 187 215
Sept 30, 1994 83 193 217
Sept 30, 1995 113 249 276
</TABLE>
Note To Graph Above: Assumes $100 invested on October 1, 1990 in Crown
Andersen Common Stock, and an identical amount in the NASDAQ Composite
Index or the NASDAQ Industrial Index.
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will not make nor endorse any predictions as to future stock
performance.
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<PAGE>
1985 INCENTIVE STOCK OPTION PLAN. The Company's 1985 Incentive Stock Option
Plan (the "ISO Plan") was approved by the stockholders of Andersen and Crown on
January 28, 1986 and became effective as of January 31, 1986 upon the
acquisition by the Company of the outstanding stock of Andersen and Crown. The
ISO Plan replaced the prior incentive stock option plans of Andersen and Crown.
In December 1987, the Board of Directors approved a First 1987 Amendment to the
ISO Plan to parallel amendments to Section 422 of the Code contained in the Tax
Reform Act of 1986. The Plan was again amended by shareholder approval at the
1992 Annual Meeting. The ISO Plan is administered by the Option Committee of
the Board of Directors.
The purpose of the ISO Plan is to provide additional incentive to eligible
employees of the Company by encouraging them to acquire stock ownership in the
Company, thus giving them a proprietary interest in the Company's business and
an incentive to remain in the employ of the Company.
The amended ISO Plan provides for the grant of options intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Code.
Subject to the anti-dilution provisions of the amended ISO Plan, a maximum of
200,000 shares of the Company's Common Stock has been reserved for issuance
under the ISO Plan. Incentive stock options may be granted prior to October 2,
1995 up to a maximum of 15 key executive employees of the Company, including
officers and directors who are key executive employees of the Company, as the
Option Committee of the Board of Directors may select from time to time. In
addition to options that may be granted under the ISO Plan to eligible employees
from time to time in the discretion of the Option Committee, the Board has
adopted two programs pursuant to which options may be granted under the ISO
Plan.
The first such program permitted Messrs. Brady and Hendricks to be granted
options under the ISO Plan if certain Company or subsidiary performance
objectives were met. If, for any of fiscal 1988, 1989 or 1990, the Company's
consolidated after-tax earnings equaled or exceeded $1,000,000 but were less
than $1,500,000, each participant was to be granted options to acquire 1,000
shares of Common Stock of the Company. If, for any of fiscal 1988, 1989 or
1990, consolidated after-tax earnings equaled or exceeded $1,500,000 but were
less than $2,000,000, each participant was to be granted options to acquire
3,000 shares; if consolidated after-tax earnings equaled or exceeded $2,000,000
but were less than $4,000,000, each participant was to be granted options to
acquire 5,000 shares; and if consolidated after-tax earnings were $4,000,000 or
greater, each participant was to be granted options to acquire 8,000 shares.
If, for fiscal 1991, consolidated after-tax earnings equaled or exceeded
$1,500,000, Mr. Brady was to be granted options to acquire a total of 15,000
shares and Mr. Hendricks was to be granted options to acquire a total of 10,000
shares. For fiscal year 1994, a special one-year option plan was adopted for
Messrs. Brady and Hendricks and for Mr. Ton Wagemans ( the new managing director
at Montair) and for Mr. Milton Emmanuelli, the Company's Chief Financial
Officer. This plan called for each of the four participants to be granted
options of 1,000 shares if after-tax fiscal year earnings in 1993 are $1.5
million; 2,000 shares if they are $1.6 million; 4,000 shares if they are $2.1
million; or 6,000 shares if they are $2.1 million or greater.
The second program adopted by the Board of Directors permitted key employees
of the Company's United States-based subsidiaries who occupied positions in
which they could directly influence the profitability of such subsidiaries to be
granted options under the ISO Plan if the Company achieved certain consolidated
after-tax earnings targets. Potential participants in the program were
recommended each year by the chief executive officer of the subsidiary by which
they were employed (such chief executive officers were not eligible to
participate in the program). The participants recommended by the chief
executive officers then were reviewed and approved by the Option Committee of
the Board of Directors for participation in the program. If, for any fiscal
year during which the program was in effect, the Company's consolidated after-
tax earnings equaled or exceeded $1,000,000 but were less than $1,500,000, each
participant was to be granted options to acquire 100 shares of Common Stock of
the Company. If consolidated after-tax earnings equaled or exceeded $1,500,000
but were less than $2,000,000, each participant was to be granted options to
acquire 300 shares. If consolidated after-tax earnings equaled or exceeded
$2,000,000 but were less than $4,000,000, each participant was to be granted
options to acquire 500 shares. If consolidated after-tax earnings were
$4,000,000 or greater, each participant was to be granted options to acquire 800
shares. Additionally, if for fiscal 1991 consolidated after-tax earnings
equaled or exceeded $1,500,000, the chief executive officers of the Company's
three operating subsidiaries were authorized to grant options to any or
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<PAGE>
all participants in the program for the purchase of an aggregate of up to 15,000
additional shares. If a sufficient number of options was not available under
the ISO Plan, options would be granted by the Board of Directors separate from
the ISO Plan. An extension of this plan was adopted by the Board of Directors
for the fiscal year 1994 for five selected employees.
Options granted under the ISO Plan represent rights to purchase shares of the
Company's Common Stock within a fixed period of time and at a specified price
per share (the "exercise price"). The exercise price is an amount equal to the
fair market value of the Company's Common Stock on the date the option is
granted, unless on such date the optionee owns more than 10% of the outstanding
Common Stock in which case the exercise price is equal to 110% of the fair
market value of the Common Stock at such time. No employee may be granted
incentive stock options under the ISO Plan to the extent that the total shares
of Common Stock underlying those options and any other incentive stock options,
all of which become exercisable in any calendar year, have a fair market value
greater than $100,000 (determined as of the date of grant of the option). The
market value of the Company's Common Stock on December 21, 1995 was $7.50 per
share. Options are not transferable except by will or the laws of descent and
distribution. The Company receives no monetary consideration for the granting
of stock options.
Options may be exercised during a period of up to five years after the date
of grant. Payment for stock purchased on the exercise of an option must be made
in full at the time the option is exercised and must be made in cash or in
shares of Common Stock of the Company. No incentive stock option may be
exercised, in whole or in part, except in certain circumstances, subsequent to a
date three months after termination of the optionee's employment with the
Company or subsidiary or five years from the date of grant of the option. No
optionee may sell or otherwise transfer any shares of Common Stock that he
obtains by exercising an incentive stock option under the ISO Plan within one
year after the date of exercise or within two years after the date of grant.
The Board of Directors may amend or terminate the ISO Plan at any time,
except that no such amendment or termination may affect the rights of holders of
outstanding options without their consent nor may any change in the ISO Plan be
made without the prior approval of the holders of a majority of the Company's
outstanding Common Stock if such change would cause the ISO Plan to fail to
qualify as an "incentive stock option plan" pursuant to Section 422 of the Code.
An option holder has no tax consequences upon issuance or, generally, upon
exercise of an incentive stock option. An option holder will recognize income
when he sells or exchanges the shares acquired upon exercise of an incentive
stock option. This income will be taxed at the applicable capital gains rate if
the sale or exchange occurs after the expiration of the requisite holding
periods as required by the ISO Plan. Generally, the requisite holding periods
expire two years after the date of grant of the incentive stock option and one
year after the date of acquisition of the Common Stock pursuant to exercise of
the incentive stock option.
The use of shares acquired upon exercise of an incentive stock option to pay
the exercise price of another incentive stock option will be considered a
disposition of the shares. If the option holder transfers any such shares after
holding them for the requisite holding periods required by the ISO Plan or
transfers shares acquired pursuant to exercise of a non-qualified stock option
or on the open market, he generally will not recognize any income upon the
exercise. Whether or not the transferred shares were acquired pursuant to an
incentive stock option and regardless of how long the option holder has held
such shares, the basis of the new shares received pursuant to the exercise will
be computed in two steps. In the first step, a number of new shares equal to
the number of old shares tendered (in payment of the exercise price) is
considered exchanged under Section 1036 of the Code and the rulings thereunder;
these new shares receive the same basis that the option holder had in the old
tendered shares and the amount of cash paid for the new shares, if any. In the
second step, the number of new shares received by the option holder in excess of
the old tendered shares receives a basis of zero.
Finally, the amount by which the fair market value of a share of the Common
Stock at the time of exercise of the incentive stock option exceeds the exercise
price will be included in determining an option holder's alternative minimum
taxable income and may cause the option holder to incur an alternative
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<PAGE>
minimum tax liability in the year of exercise.
There are no tax consequences to the Company upon issuance or, generally,
upon exercise of an incentive stock option.
As noted above, if a sufficient number of options is unavailable under the
ISO Plan to satisfy the obligations of the Company under the two programs
described above, the Board of Directors shall grant options separate from the
ISO Plan (i.e., non-qualified stock options). Neither the Company nor the
optionee will have any income tax consequences upon the issuance of non-
qualified stock options. Generally, when an optionee exercises non-qualified
stock options, the optionee recognizes ordinary income in the amount by which
the fair market value of the shares at the time of exercise exceeds the option
price for such shares. For the Company's tax year in which ends the calendar
year in which the optionee exercises the option, the Company generally will have
a deduction in the same amount as the ordinary income recognized by the
optionee. If an optionee exercises a non-qualified stock option by paying the
option price with previously acquired Common Stock, the optionee will recognize
income (relative to the new shares he is receiving) in two steps. In the first
step, a number of new shares equivalent to the number of old shares tendered (in
payment of the non-qualified stock option exercised) will be considered to have
been exchanged in accordance with Section 1036 of the Code and the rulings
thereunder, and no gain or loss will be recognized. In the second step, with
respect to the number of new shares acquired in excess of the number of old
shares tendered, the optionee will recognize income on those new shares equal to
their fair market value on the date of exercise less any taction consideration
tendered.
No options were granted or exercised under the ISO Plan during or for the
fiscal year ended September 30, 1989. During the fiscal year ended September
30, 1990, Jack C. Hendricks exercised options under the ISO Plan for the
purchase of 20,000 shares of Common Stock at an exercise price of $6.00 per
share. The net value of such options (market value less exercise price) to Mr.
Hendricks on the respective dates of exercise totaled $36,250. Also during
fiscal 1990, one non-executive employee exercised options under the ISO Plan for
the purchase of 6,000 shares of Common Stock at an exercise price of $6.00 per
share. The net value of such options on the date of exercise was $10,875. No
options were granted under the ISO Plan during the fiscal year ended September
30, 1990. On December 13, 1990, options for the purchase of 1,000 shares of
Common Stock of the Company at an exercise price of $7.50 per share were granted
under the first program described above to each of Messrs. Brady, Hendricks and
van Stratum, options for the purchase of 100 shares of Common Stock of the
Company at an exercise price of $7.50 per share were granted on such date under
the second program described above to one executive officer and options for the
purchase of a total of 600 shares of Common Stock of the Company at an exercise
price of $7.50 per share were granted on such date under the second program
described above to all other eligible employees as a group, in each case based
upon the Company's consolidated after-tax earnings in fiscal 1990.
On December 19, 1991, under the first program described above, options for
the purchase of 15,000 shares of Common Stock of the Company at an exercise
price of $12.875 per share were granted to Mr. Brady and options for the
purchase of 10,000 shares of Common Stock of the Company at an exercise price of
$12.875 per share were granted to Messrs. Hendricks and van Stratum based upon
the Company's consolidated after-tax earnings in fiscal 1991. Also on such
date, under the second program described above options for the purchase of 1,300
shares of Common Stock of the Company at an exercise price of $12.875 per share
were granted to the unnamed executive officer included in the group of executive
officers shown in the cash compensation table and options for the purchase of a
total of 14,800 shares of Common Stock of the Company at an exercise price of
$12.875 per share were granted to all other eligible employees as a group, in
each case based upon the Company's consolidated after-tax earnings in fiscal
1991.
On December 16, 1992, under the first program described above, options for
the purchase of 3,000 shares each of Common Stock of the Company at an exercise
price of $12.125 per share were granted to Messrs. Brady and Hendricks, based
upon the Company's consolidated after-tax earnings in fiscal 1992. Also on such
date, under the second program described above, options for the purchase of 300
shares each of Common Stock of the Company at an exercise price of $12.125 per
share were granted to ten eligible employees, in each case based upon the
Company's consolidated after-tax earnings in fiscal 1992.
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<PAGE>
On December 19, 1994, options for the purchase of 47,000 shares of Common
Stock of the Company at an exercise price of $6.125 per share were granted by
the Board of Directors to eleven eligible employees of the two continuing
operating divisions. Neither Mr. Brady nor Mr. Hendricks were included in this
group of eleven employees.
All of Mr. Hendricks' options were terminated on December 31, 1994, after the
sale of the plastics businesses.
On December 13, 1995, options to purchase 1,300 shares at $7.50 per share
expired, including options to purchase 1,000 shares granted to Mr. Brady.
On December 21, 1995, options to purchase 2,000 shares each of common stock
at a price of $7.50 were granted to seven individuals, including Mr. Brady, Mr.
Emmanuelli, Mr. Kenith, Mr. Wagemans, and three other employees.
As noted, the maximum aggregate number of shares of Common Stock which may be
issued under the ISO Plan currently is 200,000, and as of January 1, 1996,
125,000 shares remained available for issuance under the ISO Plan.
CASH INCENTIVE PROGRAM. In December 1987, the Board of Directors approved
the Crown Andersen Inc. Cash Incentive Program for Key Employees, which first
became effective for the fiscal year ended September 30, 1988. Pursuant to the
Cash Incentive Program, the Compensation Committee of the Board of Directors
annually selects key employees of the Company's subsidiaries, based on the
recommendation of the chief executive officer of the respective subsidiaries, to
participate in the Cash Incentive Program. Under the Cash Incentive Program, an
amount of cash is set aside following each fiscal year equal to 10% of the
amount by which the after-tax earnings, if any, of each subsidiary for the
fiscal year exceeded the target earnings for the subsidiary for such year as
established in advance by management. Each participating employee is then
eligible to receive a portion of such cash amount equal to the percentage which
such employee's earnings for the fiscal year bear to the earnings of all
participating employees of the subsidiary for the fiscal year.
SAVINGS INVESTMENT PLAN. The Crown Andersen Inc. Savings Investment Plan
(the "SIP") was adopted by the Board of Directors of the Company on May 9, 1988.
The purpose of the SIP is to provide eligible employees of the Company and its
subsidiaries with an opportunity to accumulate savings on a pre-tax basis for
their future security.
All employees (except leased employees or certain employees who are members
of a collective bargaining unit) of the Company and any subsidiaries of the
Company that have adopted the SIP (the Company and such subsidiaries are
referred to herein singularly as the "Participating Company" and collectively as
the "Participating Companies") who have satisfied certain standards as to hours
of service and who have completed a full year of service with the Participating
Companies are eligible to participate in the SIP. The SIP is a qualified,
contributory profit sharing plan.
A participant may contribute, on a pre-tax basis, up to 15% of his
compensation to the SIP. The Participating Companies will make an annual
matching contribution to the SIP equal to 27% of the amount of the participant's
pre-tax contributions, up to a maximum of 7% of a participant's compensation.
Any matching contribution will be allocated to the accounts of participants who
made pre-tax contributions. If necessary to maintain the SIP's qualified
status, the Participating Companies may make additional contributions to the
accounts of lower-paid participants, which will be allocated on a per capita
basis among such lower-paid participants.
All pre-tax contributions by participants and the Participating Companies'
additional contributions to the SIP are always 100% vested. The Participating
Companies' matching contributions become 50% vested as of the last day of the
plan year in which these contributions were made and become 100% vested if the
participant remains continuously employed with the Participating Companies for
one additional year (or in certain cases separates from service in the
additional year). The matching contributions credited to a
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<PAGE>
participant's account may become 100% vested prior to his completion of such
additional year if the Company terminates the SIP or if the participant reaches
age 65, has completed five years of service with a Participating Company, dies
or becomes eligible for long-term disability benefits from a Participating
Company while an employee thereof.
Except in certain limited circumstances, participants may not receive
distributions from the SIP until their death, disability or termination of
employment with the Participating Companies. Each distribution is made in the
form of a single lump sum cash payment.
Mr. Jack D. Brady is the Trustee of the trust maintained pursuant to the SIP
and Merrill Lynch is the custodian of the funds. The Trustee invests the
amounts credited to participants' accounts in accordance with the SIP and the
Trust Agreement. The SIP is administered by a committee elected by the Board of
Directors.
During the fiscal year ended September 30, 1989, the Company made matching
contributions to the SIP as follows: Mr. Brady - $1,370; Mr. Hendricks -
$1,207; all executive officers as a group - $3,515; and all other employees as a
group - $15,388. During the fiscal year ended September 30, 1990, the Company
made matching contributions to the SIP as follows: Mr. Brady - $1,662; Mr.
Hendricks - $1,294; all executive officers as a group - $3,781; and all other
employees as a group - $18,211. During the fiscal year ended September 30,
1991, the Company made matching contributions to the SIP as follows: Mr. Brady
- - $1,644; Mr. Hendricks - $1,201; all executive officers as a group - $3,706;
and all other employees as a group -$9,895. During the fiscal year ended
September 30, 1992, the Company made matching contributions to the SIP as
follows: Mr. Brady - $1,261; Mr. Hendricks - $1,106; all executive officers as
a group - $2,367; and all other employees as a group - $10,186. During fiscal
year ended September 30, 1993, the Company made matching contributions to the
SIP as follows: Mr. Brady - $1,748; Mr. Hendricks - $1,752; all executive
officers as a group - $3,500; and all other employees as a group - $17,494.
During fiscal year ended September 30, 1994, the Company made matching
contributions to SIP as follows: Mr. Brady - $1,637; Mr. Hendricks - $1,543;
all executive officers as a group - $3,180; and all other employees as a group -
$15,454. During fiscal year ended September 30, 1995, the Company made matching
contributions to SIP as follows: Mr. Brady - $1,688; Mr. Hendricks - $1,272;
all executive officers as a group - $2,960; and all other employees as a group -
$15,335.
OTHER EXECUTIVE COMPENSATION. During fiscal 1995, Andersen provided Mr.
Brady and two other officers of Andersen each with the use of a company owned
automobile. Andersen also paid an annual premium of $306 to maintain a $100,000
term insurance policy on Mr. Brady's life. The proceeds of this policy are
payable to Mr. Brady's estate. Andersen also paid an annual premium of $4,653
to maintain a $200,000 face amount whole life insurance policy on Mr. Brady's
life. The proceeds of the latter policy currently are also payable to Mr.
Brady's estate and Mr. Brady has the right to personally acquire the policy at
any time upon assumption by him of any unpaid premiums.
Except as described above, no executive officer named in the cash
compensation table nor the executive officers of the Company as a group received
from the Company or any of its subsidiaries personal benefits or any other
compensation which exceeded 10% of the compensation reported in the cash
compensation table above for such person or group.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended September 30, 1995, Andersen paid Astec
Industries, Inc. $2,092,332 for subcontract manufacturing for Andersen.
Andersen is committed to pay Astec approximately $1.2 million during fiscal
1996. J. Don Brock, who is a director of the Company, is Chairman of the Board,
President and Chief Executive Officer of Astec Industries, Inc.
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<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of BDO Seidman
to serve as independent accountants of the Company for the fiscal year ending
September 30, 1996 and has directed that such appointment be submitted to the
stockholders of the Company for ratification at the Annual Meeting. BDO Seidman
(formerly "Seidman & Seidman") has served as independent accountants of the
Company since its incorporation in 1985, of Andersen since 1978 and of Crown
since 1985 and is considered by management of the Company to be well qualified.
If the stockholders do not ratify the appointment of BDO Seidman, the Board of
Directors will reconsider the appointment.
Representatives of BDO Seidman will be present at the Annual Meeting. They
will have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO RATIFY THE APPOINTMENT OF BDO SEIDMAN AS INDEPENDENT ACCOUNTANTS OF THE
COMPANY.
DIRECTOR AND OFFICER INDEMNIFICATION
The indemnification by a corporation of its directors and officers is a
valuable incentive used to attract and maintain individuals of the highest
quality to serve as corporate directors and officers. At a regular meeting of
the Board of Directors held on December of 1994, the Executive Committee
directed Jack Brady to review the corporation's policies regarding the
indemnification by the corporation of its officers and directors for their
conduct arising out of their service to the corporation. It was suggested by
the corporation's legal counsel that the provisions of the corporate bylaws
regarding such indemnification be modified to reflect recent legal precedent
under Delaware law, and to provide for the broadest indemnification of corporate
officers and directors permissible under the General Corporation Law of the
State of Delaware. In May of 1995, at a regular meeting of the Board of
Directors, the corporation passed a resolution by which the Board would seek
Shareholder approval at the 1996 Annual Shareholders Meeting of its proposal to
amend the corporation's Certificate of Incorporation, pursuant to Section 242(a)
of the General Corporation Law of the State of Delaware, to add the following
provision to the Certificate of Incorporation:
XII. AMENDMENT OF BYLAWS
-------------------
The Board of Directors shall have the power to
adopt, amend, or repeal the corporation's Bylaws,
pursuant to Section 109 of the General Corporation
Law of the State of Delaware.
Pending shareholder approval of this proposal, the Board would, at the next
regularly scheduled meeting of the Board of Directors following the 1996 Annual
Shareholders Meeting, amend the Bylaws by replacing Article X, Section 1 of the
Bylaws with the following provision:
Section 1. The Corporation shall indemnify, in the manner and to the fullest
extent now or hereafter permitted by the General Corporation Law of the State of
Delaware, any person (or the estate of any person) who was or is a party to, or
is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether or not by or in the right of the
Corporation, and whether civil, criminal, administrative, investigative or
otherwise, by reason of the fact that such person is or was a director, officer
or General Counsel of the Corporation, or is or was serving at the request of
the Corporation as a director, officer or General Counsel of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnification provided herein shall be made if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been determined to be liable for gross negligence
or willful misconduct in the performance of his
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<PAGE>
duty to the Corporation. Such determination may be made by a majority of a
committee composed of the directors not involved in the matter in controversy
(whether or not a quorum). To the full extent permitted by law, the
indemnification provided herein shall include expenses (including reasonable
attorneys' fees), judgments, fines and amounts paid in settlement, and, in the
manner provided by law, any such expenses may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding. The
indemnification provided herein shall not be deemed to limit the right of the
Corporation to indemnify any other employee for any such expenses to the full
extent provided by the law, nor shall it be deemed exclusive of any other rights
to which any person seeking indemnification from the Corporation may be entitled
under any agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to act in another
capacity while holding such office. The Corporation may, to the fullest extent
permitted by law, purchase and maintain insurance on behalf of any such person
against any liability which may be asserted against him.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO AMEND THE CORPORATION'S CERTIFICATE OF INCORPORATION.
STOCKHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1997 Annual Meeting
of Stockholders should be submitted by certified mail, return receipt requested,
and must be received by the Company at its headquarters in Peachtree City,
Georgia on or before September 20, 1996 to be eligible for inclusion in the
Company's proxy statement and form of proxy card relating to that meeting.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Stockholders which
properly may come before the Annual Meeting. However, if any other matter
should be properly presented for consideration and voting at the Annual Meeting
or any adjournments thereof, it is the intention of the persons named as proxies
on the enclosed form of proxy card to vote the proxy cards in accordance with
their judgment of what is in the best interest of the Company.
By Order of the Board of Directors.
RANDALL H. MORGAN
Secretary
Peachtree City, Georgia
January , 1996
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____________________
The Company's 1995 Annual Report, which includes audited financial
statements, has been mailed to stockholders of the Company with these proxy
materials. The Annual Report does not form any part of the material for the
solicitation of proxies.
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<PAGE>
CROWN ANDERSEN INC.
THIS REVOCABLE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE 1996 ANNUAL MEETING
The undersigned hereby appoints Jack D. Brady and Milton Emmanuelli, and each
of them, proxies, with full powers of substitution, to act for and in the name
of the undersigned to vote all shares of Common Stock of Crown Andersen Inc.
(the "Company") which the undersigned is entitled to vote at the 1996 Annual
Meeting of Stockholders, to be held at the headquarters of the Company, 306
Dividend Drive, Peachtree City, Georgia, on Wednesday, February 21, 1996 at
10:00 a.m., local time, and at any and all adjournments thereof, as indicated
below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. The election as directors of the six nominees listed below to serve until
the next Annual Meeting of Stockholders and until their successors are elected
and qualified (except as marked to the contrary below).
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked to to vote for all nominees
the contrary below) listed below
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
Richard A. Beauchamp, Jack D. Brady, J. Don Brock, Robert
Dressler, Jack C. Hendricks, M. Timothy Yonker
2. The ratification of the appointment of BDO Seidman as independent
accountants of the Company for the fiscal year ending September 30, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The amendment of the Certificate of Incorporation of the Company to allow
Directors to amend the Bylaws.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any adjournments
thereof.
<PAGE>
THIS PROXY CARD WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY CARD WILL BE VOTED IN THE DISCRETION OF THE PROXIES "FOR"
THE ELECTION OF ALL NOMINEES NAMED IN PROPOSAL 1 AND "FOR" PROPOSAL 2 AND
PROPOSAL 3. If any other business is properly presented at the Annual Meeting,
this proxy card will be voted by the proxies in accordance with their judgment
of what is in the best interest of the Company. At the present time, the Board
of Directors knows of no other business to be presented to a vote of the
stockholders at the Annual Meeting.
If the undersigned elects to withdraw this proxy card on or before the time
of the Annual Meeting or any adjournments thereof and notifies the Secretary of
the Company at or prior to the Annual Meeting of the decision of the
undersigned to withdraw this proxy card, then the power of said proxies shall
be deemed terminated and of no further force and effect. If the undersigned
withdraws this proxy card in the manner described above and prior to the Annual
Meeting does not submit a duly executed and subsequently dated proxy card to
the Company, the undersigned may vote in person at the Annual Meeting all
shares of Common Stock of the Company owned by the undersigned as of the record
date (January 6, 1996).
Please mark, date and sign exactly as your
name appears on this proxy card. When shares
are held jointly, both holders should sign.
When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title. If the holder is a
corporation or partnership, the full corporate
or partnership name should be signed by a duly
authorized officer.
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Signature
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Signature (if shares held jointly)
Date: , 1996
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