<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:
[_] Preliminary Proxy Statement
[X] 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):
[_] $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.
[X] Fee Paid 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:
Notes:
<PAGE>
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, LLP 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
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 21, 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 1996
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, 30269 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, LLP 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 Vice Chairman of the Board and Director 11,000(2)
(60) of the Company since December 1994; (*)
President and Director of the Company since
from 1985 to 1994; 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 increased to
$2,500 for each day of attendance at meetings by the full Board.
-5-
<PAGE>
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 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.
-6-
<PAGE>
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
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.
-7-
<PAGE>
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 Compa- 1995 135,000 26,400 10,293 0 0 -
ny; Chairman of the 1994 135,000 31,637 9,359 0 0 -
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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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 UN- UNEXERCISED
EXERCISED OP- IN THE MONEY
TIONS/SARS AT OPTIONS/SARS
FY END-# SHARES AT 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 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
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<PAGE>
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. The six companies that form the "peer group" index were
selected because they represent a cross section of companies engaged in
closely related, but different "segments" within the environmental
industry, as indicated below:
BHA - Supplier of replacement parts to our industries (good indicator of
general health of our industries).
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<PAGE>
Farr - A competitor in the air pollution control industry, but also
involved in process air filtration, which the Company does not compete
in. A good indicator of how the overall air pollution control industry
is performing.
Ogden - Municipal waste-to-energy plant constructor and operator which
uses our systems in its plants. This was projected as one of the faster
growth areas in our industry, so Ogden should be a good indicator of
demand for our products. A much larger company than Crown Andersen.
Rollins - Operator of hazardous waste incineration plants which use our
indication and air pollution control equipment. Much larger company than
Crown, but representative of how our customers are performing.
Osmonics - Primarily drinking water treatment, which historically
performs somewhat differently from waste processing but uses similar
technology. This company was selected because it has previously
outperformed the remainder of our industry.
Peerless - Air pollution control - closely related to our air pollution
control product lines - similar company size. Good direct comparison.
For three years, the 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 COMPOSITE INDEX
[GRAPH APPEARS HERE]
NASDAQ
MEASUREMENT PERIOD CROWN COMPOSITE
(FISCAL YEAR ENDED) ANDERSEN PEER GROUP INDEX
Measurement Point
Oct 1, 1990 100 100 100
Sept 30, 1991 205 111 139
Sept 30, 1992 174 95 153
Sept 30, 1993 89 86 187
Sept 30, 1994 83 102 193
Sept 30, 1995 113 107 249
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 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]
NASDAQ NASDAQ
MEASUREMENT PERIOD CROWN COMPOSITE INDUSTRIAL
(FISCAL YEAR ENDED) ANDERSEN INDEX INDEX
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
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 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
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<PAGE>
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 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.
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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.
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.
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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 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
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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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RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of BDO Seidman,
LLP 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, LLP 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, LLP 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, LLP 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 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),
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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 aforesaid amendment to the Company's Certificate of Incorporation, if
approved, would in no way limit or restrict the shareholders' right to propose,
amend, or repeal the Company's bylaws under Delaware law. The Company is not
aware of any action or event that may cause the Company to indemnify any
director or officer.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO AMEND THE COMPANY'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 11, 1996
____________________
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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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, LLP 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 5, 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.
------------------------------------
Signature
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Signature (if shares held jointly)
Date: , 1996
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