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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CROWN ANDERSEN INC.
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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NOTICE OF
1999 ANNUAL MEETING
AND
PROXY STATEMENT
CROWN ANDERSEN, INC.
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CROWN ANDERSEN INC.
306 DIVIDEND DRIVE
PEACHTREE CITY, GEORGIA 30269
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 10, 1999
NOTICE HEREBY IS GIVEN that the 1999 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 10, 1999, at
10:00 a.m., local time, for the purposes of considering and voting upon:
(1) A proposal to elect eight 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 amend the Company's 1998 Directors Warrant Plan to
increase the aggregate number of shares available under the Plan from
100,000 shares to 300,000 shares
(3) A proposal to amend the Company's 1998 Incentive Stock Option Plan to
increase the aggregate number of shares available for issuance under the
Plan from 100,000 shares to 300,000 shares.
(4) A proposal to amend the Certificate of Incorporation to increase the
number of authorized Common Shares from 5,000,000 to 20,000,000
shares.
(5) A proposal to ratify the appointment of BDO Seidman, LLP as
independent accountants of the Company for the fiscal year ending
September 30, 1999.
(6) 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 4, 1999
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 4, 1999
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 10, 1999
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 1999 Annual Meeting of Stockholders
(the "Annual Meeting") and at any adjournments thereof. The Annual Meeting will
be held on Wednesday, February 10, 1999 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 4, 1998.
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 4, 1999. On the record date, 1,815,551
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, approve the amendment to both the 1998 Directors Warrant
Plan and the 1998 Incentive Stock Option Plan, and approve the amendment to the
Certificate of Incorporation. 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, THE AMENDMENT OF BOTH THE 1998 DIRECTORS WARRANT PLAN AND THE 1998
INCENTIVE STOCK OPTION PLAN, THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION,
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.
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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, 1999 (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>
NAME SHARES BENEFICIALLY OWNED (1) PERCENT OF CLASS
<S> <C> <C>
Jack D. Brady 112,254 (2) 5.61%
306 Dividend Drive
Peachtree City, GA. 30269
Michael P. Marshall 300,000 (4) 15.00%
P.O. Box 25121
Jackson, WY 83001
All directors and officers as 463,244 (3) 24.17%
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 President, Chairman of the Board and Chief Executive
Officer of the Company. See "Election of Directors-Nominees." The shares
shown include 100,254 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 12,000 shares
which may be acquired by Mr. Brady upon the exercise of outstanding stock
options.
(3) The shares shown include 76,790 shares which may be acquired upon the
exercise of outstanding stock options and warrants. See Note (2) above
and Notes (2) and (4) on page 5.
(4) Mr. Marshall is a member of the Board of Directors of the Company. He
purchased the 300,000 shares in a private placement.
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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 eight persons
named below to serve as directors until the next Annual Meeting of Stockholders
or until their earlier death, resignation or removal from office. All of the
eight nominees are presently members of the Board of Directors and have
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 one unfilled director position, the Company's Bylaws and
Delaware law (under which the Company is organized) provide that this position
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 candidate for this position, but may do so prior to
the 1999 Annual Meeting. Proxy cards for the 1999 Annual Meeting may not be
voted for more than eight nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE PROPOSAL
TO ELECT THE EIGHT NOMINEES LISTED BELOW AS DIRECTORS OF THE COMPANY.
The following table sets forth certain information as of January 1, 1999
about each of the nominees.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
NAME AND AGE INFORMATION ABOUT NOMINEES (PERCENT OF CLASS)(1)
- -------------------------- -------------------------------------------------------- --------------------------
<C> <S> <C>
Richard A. Beauchamp Director of the Company since 1985; Retired; 13,200(2)
(58) President and CEO of Refrigeration Division of (*)
Ameri-truck Distribution Corp. from 1995 through
1998; President of C.M.S. Transportation Services
Inc. from 1987 through 1998; 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 Transportation 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 Executive Officer 112,254(3)(4)
(56) as of January 3, 1999 of the Company since 1985; President of the (5.61%)
Company since 1994; Chairman of the Board of
Andersen since 1984; President and Treasurer of
Andersen from 1978 through 1997; 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; President
of Griffin Environmental Co., Inc. (new company
subsidiary) since December 1998.
</TABLE>
3
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<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
NAME AND AGE INFORMATION ABOUT NOMINEES (PERCENT OF CLASS)(1)
- -------------------------- -------------------------------------------------------- --------------------------
<C> <S> <C>
Rene C. W. Francken Director of the Company since December 1998.
(40) Manager of Sales and Administration at Montair
Andersen b.v. since May 1988.
Jack C. Hendricks Vice Chairman of the Board and Director of the 11,000(2)
(63) Company since December 1994; President of the (*)
Company from 1985 to 1994; Chairman of the Board
of Crown Rotational Molded Products, Inc.
("Crown") from 1986 through 1994: Vice President
of Crown from 1977 until 1981; Director of Crown
from 1986 through 1994; Director of Andersen 2000
Inc since 1986; Director and Executive Vice
President of Roanoke Industries, Inc., a wholly-
owned subsidiary of Crown, from September 1991 to
June 1994; Vice President of Struthers from 1990
until 1992; and Director of Struthers from 1987 until
1992.
Michael P. Marshall Director of the Company since October 1998. 300,000
(56) President of Marshall and Co., a private investment (15.00%)
company since 1983.
Ruyintan (Ron) Mehta Director of the Company since December 1998. 14,000
(50) President of Mehta Associates, a private equity (*)
investment and venture capital firm in Watchung,
New Jersey. Non-executive Chairman of Bach
Plastic Works, Inc, a plastic company, since 1998.
Previously owned Crystal Clear Inc., a plastics
blowmolding company, merged with Reid Plastics,
Inc. in 1995.
L. Karl Legatski Director of the Company since March 5, 1997; 2,700
(54) President of CelTech, Inc. (private corporation (*)
involved in development and application of
membrane technology for liquid separations) since
1990.
Thomas Van Remmen Director of the Company since March 5, 1997; 20,500 (4)
(41) President and Chief Operating Officer of Andersen (1.03%)
2000 Inc. since December 2, 1996; General Manager
of the Cleaver-Brooks incineration and industrial
watertube boiler division of Aqua-Chem Inc. from
1986 until 1996.
</TABLE>
______________________________
* Less than 1%.
(1) See Note (1) on page 2 hereof.
(2) Mr. Beauchamp holds vested warrants for the purchase of 7,000 shares of
Common Stock of the Company, Mr. Hendricks holds vested warrants for the
purchase of 6,000 shares of Common Stock of the Company, and Mr. Legatski
holds vested warrants for the purchase of 2,000 shares of Common Stock of
the Company, under the 1985 and 1998 Directors Stock Warrant Plans. See
"Director Compensation-1985 and 1998 Directors Stock Warrant Plans"
below.
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(3) See Note (3) on page 2 hereof.
(4) Under the 1985 and 1998 Incentive Stock Option Plans, Mr. Brady holds
options for the purchase of 12,000 shares of Common Stock of the Company
and Mr. Van Remmen holds options to purchase 20,000 shares of Common Stock.
See "Executive Compensation - Incentive Stock Option Plans" below.
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, and an Equities Committee which has
subgroups, including 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 was composed of Messrs. Brady, Dressler, and Hendricks until Mr.
Dressler's retirement from the Board in October 1998, and is now composed os
Messrs. Brady, Francken, Mehta and Van Remmen.
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 was composed of Messrs. Beauchamp,
Dressler and Legatski until Mr. Dressler's retirement from the Board in October
1998, and is now composed of Messrs. Beauchamp, Hendricks, Legatski and
Marshall.
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, Hendricks and Legatski.
The Equities Committee is responsible for administering all stock related
programs of the Company, including Options, Warrants, Preferred Stock, Private
Placements and New Offerings. The subgroups administer the Option and Warrant
Plans. The Committee is composed of Messrs. Brady, Francken, Marshall, Mehta and
Van Remmen.
The Warrant Committee subgroup is responsible for administering the Company's
1985 and 1998 Directors Stock Warrant Plans and is composed of Messrs. Brady,
Francken and Van Remmen.
The Option Committee is responsible for administering the Company's 1985 and
1998 Incentive Stock Option Plans and was composed of Messrs. Beauchamp,
Dressler and Van Remmen until Mr. Dressler's retirement in October of 1998, and
is now composed of Messrs. Marshall and Mehta.
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 1999 Annual Meeting" below.
During the fiscal year ended September 30, 1998, 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.
5
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DIRECTOR COMPENSATION
DIRECTOR FEES. Non-employee directors are paid $2,500 , and employee
directors are paid $1,000, for each day of attendance at meetings of the full
Board of Directors. In addition, non-employee directors are paid $500 per hour
for any special work requested by Crown Andersen management beyond normal
meetings. Directors also are reimbursed for travel expenses incurred in
attending meetings.
DIRECTOR CONSULTING AGREEMENT. On October 30, 1998, the Company signed a
consulting agreement with Mr. Michael P. Marshall, director and owner of 300,000
shares of Company stock acquired in a private placement. This agreement has a
term of five years. Under this agreement Mr. Marshall will be paid a monthly fee
of $5,000 or 0.5% of the market value of the 300,000 of Crown Andersen's Common
Stock, whichever is greater. Mr. Marshall will advise the Company on growth by
acquisition and merger and will advise the Company on enhancing shareholder
value and on improving relations with the investment community, institutional
investors, specific investors and market makers.
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 1998, Messrs. Dressler (who has now retired from the
Board) and Legatski (non-employee directors) each deferred directors fees of
$7,500, which resulted in a credit of 1,768 stock units to each of their
accounts
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at a value of $4.24 per stock unit. Messrs. Brady and Van Remmen (employee
directors) each deferred directors fees of $3,000, which resulted in a credit of
707 stock units to each of their accounts at a value of $4.24 per stock unit.
During the fiscal year ended September 30, 1997, Messrs. Hendricks, Yonker
(former director) and Beauchamp (non-employee directors) each deferred directors
fees of $2,500, which resulted in a credit of 444 stock units to each of their
accounts at a value of $5.63 per stock unit. Messrs. Dressler and Legatski, also
non-employee directors, each deferred directors fees of $5,000, which resulted
in a credit of 829 units for Mr. Dressler at a value of $6.03 per unit and a
credit of 755 units at a value of $6.62 per unit for Mr. Legatski. Messrs. Brady
and Van Remmen (employee directors) deferred fees of $3,000 and $2,000,
respectively, which resulted in credits of 480 stock units at a value of $6.25
for Mr. Brady and 302 stock units at a value of $6.62 for Mr. Van Remmen. On
retirement from the Board, Mr. Dressler was paid $57,617 for his deferred
director fees.
1998 DIRECTORS STOCK WARRANT PLAN. The Company's 1998 Directors Stock Warrant
Plan (the "Warrant Plan") became effective upon approval by the stockholders of
Crown Andersen during the 1998 Annual Meeting. The Warrant Plan is administered
by the Warrant Committee of the Board of Directors.
From the 1985 Directors Stock Warrant Plan which preceded the 1998 Plan,
warrants of 10,000 shares were purchased (5,000 shares by Mr. Beauchamp at a
price of $2.13 and 5,000 shares by Mr. Hendricks at a price of $7.50) and are
exercisable on or before January 4, 2004.
The purpose of the Warrant Plans 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
continued success and progress. There are currently four non-employee directors
of the Company who are eligible to 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 Warrant Plan is 100,000 shares, and each eligible director may acquire
warrants for the purchase of a maximum 20,000 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 4,000 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. 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 exercised under the Warrant Plan after January 31,
2008.
Warrants are not transferable except by will or the laws of descent and
distribution. If the holder of 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, if 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 a 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.
As a general rule, no federal income tax gain or loss shall be recognized if
common stock in a corporation is exchanged solely for common stock in the same
corporation. 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
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<PAGE>
warrant being exercised. For the Company's tax year which ends in the calendar
year in which the director exercise warrants, the Company will have 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 the
director 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, and the rulings thereunder,
and no gain or less 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 non-stock consideration tendered.
The maximum aggregate number of shares of Common Stock which may be issued
under the proposed Warrant Plan is 100,000, and the maximum number of shares
that may be issued to each eligible director under the proposed Warrant Plan is
20,000.
In June 1998, warrants to purchase 40,000 shares of common stock at an
average price of $4.23 were purchased by Messrs. Hendricks, Dressler, Beauchamp
and Legatski. In December 1998, the Company repurchased Mr. Dressler's warrants
to purchase 10,000 shares upon his retirement from the Board.
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, 1998 exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
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 1998 149,967 0 9,901 0 0 -
Officer of the 1997 150,000 24,000 9,856 0 0 -
Company; Chairman of 1996 146,250 14,514 12,456 0 0 -
the Board of Andersen
Thomas Van Remmen
Director of the 1998 92,273 16,200 4,360 0 0 -
Company; President of 1997 89,482 13,950 3,776 0 0 -
Andersen 2000 Inc.
</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.
RESTRICTED STOCK AWARDS - The Company does not have a plan for granting
Restricted Stock Awards.
LTIP PAYOUTS - None paid. No plan in place.
8
<PAGE>
OPTIONS. The following table sets forth the details of options
granted to the individuals listed in the Summary Table during fiscal year 1998.
The second table in this section shows value of unexercised options.
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS TABLE
Option/SAR Grants In Last Fiscal Year
-------------------------------------
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERMS
-------------------------------------------- ------------------
% OF TOTAL
OPTIONS/SARS
NAME AND OPTIONS/ GRANTED TO EXERCISE
PRINCIPAL SARS EMPLOYEES IN PRICE EXPIRATION
POSITION GRANTED FISCAL YEAR $/SHARE DATE 5%-$ 10%-$
- -------------------------- -------- ------------ -------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Brady 10,000 10.0 4.25 6/11/03 11,742 25,946
Chairman of the Board
and Chief Executive
Officer of the Company;
Chairman of the Board,
President
Thomas Van Remmen 20,000 20.0 4.25 6/11/03 23,484 51,893
Director of the Company;
President of Andersen
</TABLE>
Options were granted under "Incentive Stock Option Plan" described on Page 14
of this Proxy Statement and may be exercised at any time for a period of five
years.
OPTION/SAR GRANTS TABLE
Option/SAR Grants In Last Fiscal Year
-------------------------------------
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
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 12,000 / 0 $0 / 0
Thomas Van Remmen 0 0 20,000 / 0 $0 / 0
</TABLE>
All options held by the named individuals were exercisable at September 30,
1998. Market price exceeded option price at September 30, 1998.
9
<PAGE>
EMPLOYMENT AGREEMENTS. On October 1, 1997. Mr. Brady entered into an
employment agreement with Andersen for a term of four years expiring on
September 30, 2001. Mr. Brady's agreement provided for a salary of $160,000 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, 1998
and 1997 were $1,030,000 and $1,100,000, respectively. 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. This
agreement replaced a five-year agreement with similar terms which expired on
September 30, 1997. The expired agreement provided for a base annual salary of
$135,000. Mr. Brady's last salary under this agreement was $150,000 per year.
The Company entered into an employment agreement with Mr. Thomas Van Remmen
for a period of three years commencing April 15, 1996. This agreement provides
for an annual base salary of $87,500, a car expense allowance and severance
compensation of six months of the annual salary. A new Employment Agreement was
entered into on January 1, 1999 for a term of three years, expiring on December
31, 2001. This Agreement provided for an annual salary of $97,060, subject to
annual salary adjustments in accordance with Company policy, and other
conditions similar to Mr. Brady's contract.
COMPENSATION COMMITTEE REPORT.
The Compensation Committee is composed of Jack C. Hendricks, who is a retired
president of the Company, L. Karl Legatski, who is currently president of a
private corporation in the United States, and Richard A. Beauchamp, who is a
retired 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. 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, earnings growth, and domestic revenue 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.), Tom Van Remmen (president of
Andersen 2000 Inc.), 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's. The Committee has also been asked to review Mr. Rene Francken's annual
compensation for future years (Mr. Francken reports to Mr. Wagemans in Holland).
For fiscal 1998, 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 90% weighting of Montair Andersen b.v. results and 10%
weighting of consolidated results for the Company. Mr. Van Remmen's bonus was
based on 90% weighting of Andersen 2000 Inc. results and 10% weighting of
consolidated results for the Company. Mr. Emmanuelli's bonus was based 100% on
consolidated results for the Company. The target performance levels for the
various subsidiaries and consolidated operations ranged from 10% to 27% cash
flow as a percentage of capital employed, 10% to 20% return on capital employed
(after tax), 6% to 15% pre-tax income as a percentage of revenues, 10% to 50%
net income growth from fiscal 1997, and 20% to 100% domestic revenue growth.
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,
10
<PAGE>
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. Van Remmen earned a bonus of $16,200 in
1998. None of the other Plan participants earned bonuses in 1998.
Mr. Brady is a substantial shareholder in the Company and is 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 1998 when compared with all others in similar positions
in companies of the same size. They were not overcompensated and have not been
during the Committee's tenure. A substantial portion of their income has always
been dependent on the Company's financial 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 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 1992, 1993, and 1994, the Company
used the NASDAQ Industrial Index for comparison in its Proxy Statement. In
1995, the Company switched to a "peer group" comparison to attempt to more
closely portray comparative stock performance. Because this comparison has only
been made for seven years in the Proxy Statement, during which time the
environmental businesses of the peer group companies have experienced little or
no growth and lackluster market performance, 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. In fact, in 1996, 1997 and 1998, when Company stock traded at
levels below book value, the "peer group" company stocks showed either declining
or flat P/E ratios, suggesting that all of the stocks as a group encountered an
unfavorable market perception during an otherwise upward market trend period.
It is hoped that the "peer" comparison will ultimately 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 should ultimately become 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 1998 or fiscal 1999.
Compensation Committee: Jack C. Hendricks, Chairman; Richard A. Beauchamp; L.
Karl Legatski.
December 15, 1998
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 Laidlaw - 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 Company industries (good indicator of
general health of Company industries).
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
Company supplied systems in its plants. This was projected as one of the faster
growth areas in the Company's industry, so Ogden should be a good indicator of
demand for the Company's products. A much larger company than Crown Andersen.
11
<PAGE>
Laidlaw - Operator of hazardous waste incineration plants which use the
Company's incineration and air pollution control equipment. Much larger company
than Crown, but representative of how the Company's 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 the
Company's industries.
Peerless - Air pollution control and oilfield products - somewhat related to our
air pollution control product lines -somewhat larger company size. Good direct
comparison.
12
<PAGE>
COMPARISON OF FIVE-YEAR TOTAL RETURN
AMONG CROWN ANDERSEN INC. PEER GROUP AND NASDAQ COMPOSITE INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD CROWN NASDAQ
(FISCAL YEAR ENDED) ANDERSEN PEER GROUP COMPOSITE INDEX
<S> <C> <C> <C>
Measurement Point
Oct 1, 1993 100 100 100
September 30, 1994 94 103 104
September 30, 1995 127 109 134
September 30, 1996 101 117 161
September 30, 1997 127 131 241
September 30, 1998 38 120 242
</TABLE>
Note To Graph Above: Assumes $100 invested on October 1, 1993 in Crown
Andersen Common Stock, and an identical amount in the NASDAQ Composite Index
or the Peer Group.
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.
1998 INCENTIVE STOCK OPTION PLAN. The Company's 1998 Incentive Stock Option
Plan (the "ISO Plan") became effective upon approval by stockholders of Crown
Andersen at the 1998 Annual Meeting.
From the 1985 Incentive Stock Option Plan which preceded the 1998 Plan,
options to purchase 44,000 shares remain outstanding, including 2,000 shares
granted to Mr. Brady at $7.50 per share.
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 ISO Plan provides for the grant of options intended to quality as
"incentive stock options" within the meaning of Section 422 of the Code.
Subject to the anti-dilution provisions of the ISO Plan, a maximum of 100,000
shares of the Company's Common Stock will be reserved for issuance under the ISO
Plan upon adoption by the shareholders.
13
<PAGE>
The persons who shall be eligible to receive ISOs are key executive employees
of the Company as the Board of Directors may select from time to time. ISOs may
be granted to no more than fifteen (15) persons. The option price for each ISO
is determined in two ways. If the recipient of the ISO owns 10% or less of the
total combined voting power of outstanding stock of the Company at the time the
ISO is granted, the option price is an amount equal to the fair market value of
the stock as determined in the plan. If the recipient owns more than 10% of the
total combined voting power of outstanding stock of the Company at the time the
ISO is granted, the option price is an amount equal to 100% of the fair market
value of the stock as determined in the plan.
The fair market value per share of common stock of the Company for purposes
of issuing ISOs shall be the closing price of the stock on NASDAQ on the date
the ISO is granted.
Each option agreement executed provides certain steps for exercising the
options. Should an ISO holder choose to do so, the holder may exercise less than
the number of shares of stock subject to the ISO, but not less than 25% of the
number of shares of stock initially subject to such ISO. No ISO is exercisable
after a period of five years from the date upon which the ISO was granted.
Certain requirements concerning status of employment with the Company, and
outstanding unexercised previous options, are also included in the plan.
Payment for stock purchased no 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. ISO holders are required to agree to hold the ISOs
for investment purposes and not with a view to resell or distribute the ISOs to
the public. ISO holders must agree to make no disposition of the shares
acquired through the options within two years from the date of the grant of the
ISO, nor within one year after the transfer of such shares to the holder
resulting from the exercise of an incentive program.
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
quality as an "incentive stock option plan" pursuant to Section 422 of the
Internal Revenue 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 the holder 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.
The use of shares acquired upon exercise of an ISO to pay the exercise price
of another incentive stock option will be considered 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 acquire
pursuant to exercise of a nonqualified stock option or on the open market, the
holder generally will not recognize any income upon the exercise.
In June 1998, options to purchase 100,000 shares of Common Stock at a price
of $4.25 were granted to ten key employees, including 10,000 shares granted to
Mr. Brady and 20,000 shares granted to Mr. Van Remmen.
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.
14
<PAGE>
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 30% of the amount of the participant's
first 6% pre-tax contributions and 10% of the next 1% 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. Matching contributions were made in cash through
calendar year 1995. Commencing with calendar year 1996, matching contributions
have been made with Crown Andersen Inc. Common Stock, valued as of December 31
of each year.
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 with the SIP and the
Trust Agreement.
The following table shows Company contributions made to the accounts of Mr.
Brady, Mr. Van Remmen, Mr. Hendricks, all executive officers and all other
employees during the last five years:
<TABLE>
<CAPTION>
ALL ALL
--------- ---------
EXECUTIVE OTHER
--------- ---------
MR. BRADY MR. VAN REMMEN MR. HENDRICKS OFFICERS EMPLOYEES
--------- -------------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
1994 $1,638 - $1,543 $3,180 $15,454
1995 1,688 - 1,272 2,960 15,335
1996 2,514 - 0 4,967 16,430
1997 2,750 0 0 5,331 17,359
1998 2,042 0 0 4,934 15,531
</TABLE>
15
<PAGE>
OTHER EXECUTIVE COMPENSATION.
During fiscal 1998, 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 $4,135 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
There were no related party transactions during the year ended September 30,
1998.
16
<PAGE>
AMENDMENT OF 1998 DIRECTORS STOCK WARRANT PLAN
The Board of Directors of the Company has approved, subject to approval by
the stockholders at the Annual Meeting, an amendment to the Company's 1998
Directors Stock Warrant Plan (the "Warrant Plan") to increase the number of
shares of the Company's Common Stock which would be available for issuance under
the Warrant Plan. No other action or amendment is proposed with regard to the
Warrant Plan. A summary of the terms of the existing Warrant Plan, together
with information regarding all warrants owned and exercised by eligible
directors pursuant to the Warrant Plan, is set forth above in "Election of
Directors - Director Compensation - 1998 Directors Stock Warrant Plan." The
terms and effect of the proposed amendment are summarized below.
The Warrant Plan currently provides that the maximum aggregate number of
shares of Common Stock that may be issued under the Warrant Plan is 100,000 and
that the maximum number of shares of Common Stock that may be issued to each
eligible director is 20,000. As of January 1, 1998, warrants for the purchase
of a total of 30,000 shares were outstanding and held by eligible directors
under this Warrant Plan, and a predecessor Plan, resulting in a total of 70,000
shares remaining available for issuance under the Warrant Plan. The proposed
amendment would increase by an additional 200,000 the maximum aggregate number
of shares that could be issued upon the exercise of warrants granted under the
Warrant Plan and remove the limit for an individual director. Approval of the
proposed amendment would enable the Company to sell warrants for the purchase to
each of the four currently eligible directors and would enable the company to
continue to offer warrants to persons who may be elected as non-employee
directors of the Company in the future. The Company thereby will be able to
provide increased incentive compensation to its present and future non-employee
directors for their benefit as well as the benefit of the Company. See
"Election of Directors -Director Compensation - 1998 Directors Stock Warrant
Plan."
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSED AMENDMENT TO THE COMPANY'S 1998 DIRECTORS STOCK WARRANT PLAN TO
INCREASE THE MAXIMUM AGGREGATE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR
ISSUANCE UNDER THE PLAN FROM 100,000 SHARES TO 300,000.
17
<PAGE>
AMENDMENT OF 1998 INCENTIVE STOCK OPTION PLAN
The Board of Directors of the Company has approved, subject to approval by
the stockholders at the Annual Meeting, an amendment to the Company's 1998
Incentive Stock Option Plan (the "ISO Plan") to increase the number of shares of
the Company's Common Stock which would be available for issuance under the ISO
Plan. No other action or amendment is proposed with regard to the ISO Plan. A
summary of the terms of the existing ISO Plan, together with information
regarding all options issued and exercised pursuant to the ISO Plan during each
of the last three fiscal years by the executive officers named in the cash
compensation table and various other categories of employees who participate in
the ISO plan, is set forth above in "Election of Directors - Executive
Compensation - 1998 Directors Stock Option Plan." The terms and effect of the
proposed amendment are summarized below.
The ISO Plan currently provides that the maximum aggregate number of shares
of Common Stock that may be issued under the ISO Plan is 100,000. As of January
1, 1998, options for the purchase of a total of 100,000 shares had been issued
under the ISO Plan, and there are no shares remaining available for issuance
upon the exercise of options to be granted under the ISO Plan. The proposed
amendment would increase by an additional 200,000 the maximum aggregate number
of shares which could be issued upon the exercise of options granted under the
ISO Plan. Approval of the proposed amendment would enable the Company to
continue to provide increased incentive compensation to its eligible present and
future employees for their benefit as well as the benefit of the Company. See
"Election of Directors - Executive Compensation - 1998 Incentive Stock Option
Plan."
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSED AMENDMENT TO THE COMPANY'S 1998 INCENTIVE STOCK OPTION PLAN TO
INCREASE THE MAXIMUM AGGREGATE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR
ISSUANCE UNDER THE PLAN FROM 100,000 SHARES TO 300,000.
18
<PAGE>
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES
The Board of Directors recommends that the shareholders approve an amendment
to the Certificate of Incorporation of the Company, as permitted by the General
Corporation Law of the State of Delaware, to increase the number of authorized
Common Shares from 5,000,000 to 20,000,000 shares, while leaving the number of
authorized Preferred Shares at 5,000,000. The text of the proposed amendment is
as follows:
RESOLVED, that Article VI (a) of the Company's Articles of Incorporation is
hereby amended by deleting it in its entirety and replacing it with the
following:
VI. CAPITAL STOCK
"(A) THE TOTAL NUMBER OF SHARES OF ALL CLASSES OF STOCK WHICH THE CORPORATION
SHALL HAVE AUTHORITY TO ISSUE IS 25,000,000, OF WHICH 20,000,000 SHALL BE
COMMON STOCK, $0.10 PAR VALUE PER SHARE, AND 5,000,000 SHALL BE PREFERRED
STOCK, $0.10 PAR VALUE PER SHARE. SHARES OF COMMON STOCK AND PREFERRED
STOCK MAY BE ISSUED FOR SUCH CONSIDERATION AND FOR SUCH CORPORATE PURPOSES
AS THE BOARD OF DIRECTORS OF THE CORPORATION FROM TIME TO TIME MAY
DETERMINE, EXCEPT THAT SHARES OF COMMON STOCK AND PREFERRED STOCK MAY NOT
BE ISSUED FOR LESS THAN THE PAR VALUE OR STATED VALUE, RESPECTIVELY,
THEREOF."
The Company is currently authorized by its Articles of Incorporation to issue
5,000,000 Common Shares, $0.10 par value per share, and 5,000,000 Preferred
Shares, $0.10 par value per share. As of December 16, 1998, 1,815,551 shares of
Common Stock were issued and outstanding and 344,000 Common Shares are reserved
for issuance under the Company's Incentive Stock Option Plan and the Directors'
Warrant Plant. An additional 400,000 shares of Common Stock will be reserved
for issuance under the option and warrant plans if the proposed amendments to
these plans are approved by the shareholders. The Company has no plans,
understandings or negotiations underway at this time for the issuance of any
unissued Common or Preferred Shares. The Board of Directors believes that it is
desirable to have a sufficient number of Common Shares available, as the
occasion may arise, for possible future financing and acquisition transactions,
stock dividends or splits, stock issuances pursuant to employee benefit plans
and other proper corporate purposes. The Board of Directors accordingly
recommends the proposed increase. Having such additional shares available for
issuance in the future will give the Company greater flexibility by allowing
shares to be issued without incurring the delay and expense of a special
shareholders meeting.
EFFECT OF PROPOSED AMENDMENT
The additional Common Shares, together with other authorized and unissued
shares, generally would be available for issuance without any requirement for
further shareholder approval, unless shareholder action is required by
applicable law, the Company's governing documents, or by the rules of the
National Association of Securities Dealers, Inc. or any stock exchange on which
the Company's securities may then be listed.
Although the Board of Directors will authorize the issuance of additional
Common Shares only when it considers doing so to be in the best interests of
shareholders, the issuance of additional Common Shares may, among other things,
have a dilutive effect on the earnings and equity per Common Share and on the
voting rights of holders of Common Shares. The increase in the authorized
number of Common Shares also could be viewed as having anti-takeover effects.
Although the Board of Directors has no current plants to do so, Common Shares
could be issued in various transactions that would make a change in control of
the Company more difficult or costly and, therefore, less likely. For example,
Common Shares could be privately sold to purchasers favorable to the Board of
Directors in opposing a change in control or to dilute the stock ownership of a
person seeking to obtain control. The Company is not aware of any effort to
accumulate Common Shares or to obtain control of the Company by a tender offer,
proxy contest, or otherwise, and the Company has no present intention to use the
increased authorized Common Shares for anti-takeover purposes.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED COMMON SHARES FROM 5,000,000 TO 20,000,000 SHARES, AND THE
TOTAL NUMBER OF SHARES OF ALL CLASSES OF STOCK FROM 10,000,000 TO 25,000,000.
19
<PAGE>
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, 1999 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.
STOCKHOLDERS' PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1999 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 17, 1999 to be eligible for inclusion in the
Company's proxy statement and form of proxy card relating to that meeting.
20
<PAGE>
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 __, 1999
____________________
The Company's 1998 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.
21
<PAGE>
CROWN ANDERSEN INC.
THIS REVOCABLE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE 1999 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 1999 Annual
Meeting of Stockholders, to be held at the headquarters of the Company, 306
Dividend Drive, Peachtree City, Georgia, on Wednesday, February 10, 1999 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 eight 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
the contrary below) all nominees
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, Rene Francken, Jack C. Hendricks, Michael
P. Marshall, Ruyintan Mehta, Lester K. Legatski, Thomas Van Remmen
2. The amendment of the 1998 Directors Stock Warrant Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The amendment 1998 Incentive Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. The amendment of Certificate of Incorporation
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. The ratification of the appointment of BDO Seidman, LLP as independent
accountants of the Company for the fiscal year ending September 30, 1999.
[ ] 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, 3, 4, AND
5. 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 4, 1999).
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
---------------------------------------
Signature (if shares held jointly)
Date:
_____________________________, 1999
