ELECTRIC & GAS TECHNOLOGY, INC.
13636 Neutron Road
Dallas, Texas 75244-4410
972-934-8797
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 9, 1999
__________
To the Stockholders:
The Annual Meeting of the Stockholders of Electric & Gas
Technology, Inc. (the Company or ELGT) will be held on Friday,
April 9, 1999, at 4:30 p.m. CDST, at the Renaissance Dallas North
Hotel, 4099 Valley View Lane, Dallas, Texas 75244, for the
following purposes:
To elect six directors to serve until the next annual
meeting of stockholders or until their successors have
been duly elected and qualified.
To consider and act upon a proposal to ratify the
appointment of independent public accountants for
fiscal 1999.
To transact such other business as may
properly come before the meeting and all
adjournments thereof.
Only stockholders of record at the close of business on
February 26, 1999, will be entitled to notice of, and to vote at,
said meeting. The stock transfer books will not be closed. A
complete list of stockholders entitled to vote at the meeting
will be available for inspection at the meeting.
All stockholders are cordially invited to attend the meeting
in person; however, to assure your representation at the meeting,
you are urged to vote, sign, date and return the enclosed Proxy
as promptly as possible in the enclosed postage prepaid envelope.
Any stockholder attending the meeting may vote in person even if
a proxy has been submitted previously.
By order of the Board of Directors
Marie W. Pazol, Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES. IF YOU ATTEND THE MEETING, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC.
13636 Neutron Road
Dallas, Texas 75244-4410
972-934-8797
February 26, 1999
PROXY STATEMENT
___________
This proxy statement is furnished to stockholders of
Electric & Gas Technology, Inc. in connection with the
solicitation by the Board of Directors of proxies to be used at
the Annual Meeting of Stockholders of the Company to be held at
the Renaissance Dallas North Hotel, 4099 Valley View Lane,
Dallas, Texas 75244, on Friday, April 9, 1999, at 4:30p.m. CDST,
and all adjournments thereof. The Company's Annual Report for
its fiscal year ended July 31, 1998, including financial
statements, and this proxy statement and form of proxy/voting
instruction card ("proxy card" or "proxy") are being mailed to
the stockholders commencing March 3, 1999.
VOTING
Only stockholders of record at the close of business on
February 26, 1999 are entitled to notice of, and to vote at, the
meeting. At that date, there were outstanding 8,157,624 shares
of Common Stock, $.01 par value and 90,000 shares of 7%
Convertible Preferred Stock (Series A), $10.00 par value of ELGT.
Each share is entitled to one vote.
Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is voted by (1)
giving notice to ELGT of such revocation; (2) voting in person at
the meeting; or (3) executing and delivering a proxy bearing a
later date.
All properly executed proxies not revoked will be voted at
the meeting in accordance with the instructions contained
therein. Proxies containing no instructions specified in the
form of proxy will be voted in favor of management's nominees to
the Board of Directors and ratification of Jackson & Rhodes P.C.
as the Company's auditors. If any other matters are brought
before the meeting and submitted to a vote, all proxies will be
voted in accordance with the judgement of the persons voting the
proxies. A stockholder who has executed and returned a proxy may
revoke it at any time before it is voted, but only by executing
and returning a proxy bearing a later date, by giving written
notice or revocation to the Secretary of the Company, or by
attending the meeting and voting in person. Only votes cast in
person or by proxy will be counted at the meeting. Abstentions
will be reflected in the minutes of the meeting.
1
<PAGE>
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be paid by the Company.
Solicitation of proxies may be accomplished by use of mail,
telephone or telegraph by the directors, officers or regular
employees of ELGT. The Company may request persons holding stock
in their name for others, or in the names of nominees for others,
to obtain proxies from their principals and the Company will
reimburse such persons for their expenses in so doing. The cost
involving postage, telephone, legal, accounting, printing and
stock transfer requirements, for the solicitation of proxies is
estimated to be no greater than $10,000.
1. ELECTION OF DIRECTORS
The By-laws of the Company provide that the number of
Directors to be elected at any meeting of stockholders shall be
determined by the Board of Directors. The Board has determined
that six directors of which two are non-management nominees shall
be elected at the Annual Meeting.
The following six (6) persons are nominees for re-election
as Directors to serve until the next annual meeting of
stockholders or until their successors are duly elected and
qualified. Unless authority to vote at the election of Directors
is withheld, it is the intention of the persons named in the
enclosed form of Proxy to nominate and vote for the persons
named. The following sets forth the names of the nominees and
related information:
<TABLE>
<S> <C> <C> <C>
Name of Director
Nominee Age Principal occupation Since
S. Mort Zimmerman* 71 President and Chief Executive 1985
Officer of the Company
Daniel A. Zimmerman* 38 Senior Vice President of the 1989
Company
Edmund W. Bailey 56 Vice President and Chief 1994
Financial Officer of the Company
Fred M. Updegraff 64 Vice President and Treasurer 1987
of the Company
James J. Ling 76 Chairman and CEO Empiric Energy, 1996
Inc. and President, Hill
Investors, Inc.
Dick T. Bobbitt 74 Consultant 1996
</TABLE>
* S. Mort Zimmerman and Daniel A. Zimmerman are father and
son.
2
<PAGE>
S. Mort Zimmerman: Mr. Zimmerman is Chairman of the Board,
President and Chief Executive Officer of the Company since its
formation in March 1985.
After attending Georgia Institute of Technology and
Oglethorpe, Mr. Zimmerman graduated in 1958 with a Bachelor of
Science in Electrical Engineering from Pacific International
University. He established the first electronics subsidiary for
the predecessor corporation of LTV Corporation which was formed
to market a low cost television camera invented by Zimmerman and
for which he was awarded a United States Patent in 1958. Prior
to 1963 he participated in the engineering and installation of 18
television stations.
In 1965 Mr. Zimmerman formed the first "one-bank holding
company" of its kind in the United States and which later served
as a model from which many bank holding companies were formed.
He served as Chairman of the Board of four individual banking
institutions, three of which were located in Florida (Springs
National of Tampa, Metropolitan of Miami and Mercantile National
of Miami Beach) and New York City (Underwriters Trust). After
obtaining a public underwriting these banks were sold to others.
In 1967 Intercontinental Industries, Inc. was organized and Mr.
Zimmerman served as its Chairman and Chief Executive Officer.
This diversified holding company was primarily engaged in the
operations of Intercontinental Manufacturing Company, a weapons
manufacturer that was later sold. Through his research and
development in the field of video X-ray and imaging, Mr.
Zimmerman caused the organization of Video Science Technology,
Inc. in 1981 to exploit the inventions for which he was awarded
two U. S. Patents. Patents awarded include: Television Camera-
Video Amplifier and Blanking Circuits-1958, Electronic
Thermometer-1963, Video-X-Ray Imaging System and Method-1977,
Video System and Method for Presentation and Reproduction of X-
Ray Film Images-1977, Electromagnetic Radio Frequency Excited
Explosion Proof Lighting Method and System-1986, and Laser
Display of an Electronically Generated Image Signal-1987.
Recently, Mr. Zimmerman participated as a co-inventor on new
Electronic Refrigeration technology to which patents are pending.
Daniel A. Zimmerman: Mr. Zimmerman was elected Senior
Vice President in 1991 and was re-elected as a Director of the
Company in 1990 (Mr. Zimmerman served as a director from March,
1985 to January, 1988). Mr. Zimmerman is presently serving as
President and Director of Reynolds. He received his Liberal Arts
Degree from Austin College in Sherman, Texas in May, 1982.
Edmund W. Bailey, CPA: Mr. Bailey has served as Vice
President and Chief Financial Officer of the Company since March,
1992. He was elected a member of the Board of Directors May
1994. From January 1989 to March, 1992, Mr. Bailey was a
shareholder in the public accounting firm of Jackson & Rhodes
P.C., Dallas, Texas. From August, 1987 to December, 1988, Mr.
Bailey served as Vice President and Chief Financial Officer of
Southern Foods Group, Inc., an independent milk producer. From
May, 1986 to July, 1987, he was with the public accounting firm
of Pannell Kerr Foster, Dallas, Texas. Prior experience included
16 years in public accounting with Fox & Company and Arthur
3
<PAGE>
Young & Company (now Ernst & Young). Mr. Bailey earned a B.S.
degrees in Business from Monmouth College, West Long Branch, New
Jersey, and an M.B.A. degree from Southern Methodist University,
Dallas, Texas. Mr. Bailey is licensed in the State of Texas
as a Certified Public Accountant.
Fred M. Updegraff: Mr. Updegraff has served as Vice
President and Treasurer of the Company since 1985. He was
elected Treasurer and a member of the Board of Directors in May,
1987. Mr. Updegraff is also Vice President, Controller and
Director of DOL Resources which files reports under Section 13 of
the Securities Act of 1934. From 1976 to 1981, he was Vice
President of a manufacturing company engaged in the manufacture
of brass valves for the plumbing industry. Mr. Updegraff
graduated from Emporia State University with Bachelor Degrees in
Business Administration and Education.
James J. Ling: Mr. Ling is co-founder, chairman and chief
executive officer of Empiric Energy, Inc. since November 1992.
Mr. Ling founded Ling Electronics in 1955 and through a series of
mergers and acquisitions which includes, Temco Aircraft
Corporation, Chance-Vought, The Wilson Company, Braniff Airlines,
Jones & Laughlin and National Car Rental, guided the conglomerate
Ling-Temco-Vought (LTV) to a position among the largest companies
in the Nation with annual sales of $3.2 billion. Mr. Ling
resigned in 1971. Since 1985, Mr. Ling has been President of
Hill Investors, Inc., a company organized to hold oil and gas
investments and which also offers business consulting services.
Dick T. Bobbitt: Mr. Bobbitt has been president of VEC
Technology, Inc. (VEC) since August 1991. VEC is a consulting
firm involved in research and development of new products. Mr.
Bobbitt was one of the founders of American Technological
University and served as Chairman of the Board from 1973 to 1979.
Prior years were spent with RCA Corporation and Random House
Publishing Co.
THE BOARD OF DIRECTORS AND ITS COMMITTEE
The Board of Directors of the Company held Two meetings
during the fiscal year ended July 31, 1998. The all incumbent
directors attended all such meetings.
The Company's Audit Committee consist of the two outside
directors, Mr. James J. Ling (Chairman) and Mr. Dick T. Bobbitt
and Mr. Edmund W. Bailey. The Audit Committee held one meetings
during fiscal 1998. The Audit Committee recommends to the Board
of Directors the independent public accountants and reviews the
scope of the audit and the actual audit performed by them. It is
responsible for insuring that the financial statements present
fairly the financial condition of the Company.
There are no other standing committees.
4
<PAGE>
2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation from the Audit
Committee, has appointed Jackson & Rhodes P.C. as independent
public accountants of the Company with respect to its operations
for the fiscal year ended July 31, 1999, subject to ratification
by the holders of Common Stock of the Company. Jackson & Rhodes
P.C. has served the Company in this capacity since its original
retention for the fiscal year ended July 31, 1991. A
representative of the firm will be available at the Annual
Meeting to answer appropriate questions of stockholders.
SECURITY OWNERSHIP
The following table sets forth information regarding the
number of shares of Common Stock beneficially owned by the
executive officers and directors of the Company and shareholders
of the Company known to the Company to be the beneficial owners
of more than five (5%) percent of its Common Stock at February
26, 1999:
Amount and Nature of Percent of
Name and Address Beneficial Owner Class
S. Mort Zimmerman 833,545 (1) 9.70%
Chairman of the
Board & President
13636 Neutron Road
Dallas, Texas 75244-4410
Daniel A. Zimmerman(5) 397,381 (2) 4.63%
Sr. Vice President
and Director
13636 Neutron Road
Dallas, Texas 75244-4410
Edmund W. Bailey 79,471 (3) *
Vice President, Chief Financial
Officer and Director
13636 Neutron Road
Dallas, Texas 75244-4410
Fred M. Updegraff 99,574 (4) 1.16%
Vice President
Treasurer & Director
13636 Neutron Road
Dallas, Texas 75244-4410
5
<PAGE>
Amount and Nature of Percent of
Name and Address Beneficial owner Class
James J. Ling 10,000 (5) *
Director
13636 Neutron Road
Dallas, Texas 75244-4410
Dick T. Bobbitt 18,500 (6) *
Director
13636 Neutron Road
Dallas, Texas 75244-4410
All Officers &
Directors, as a
Group 1,468,082 17.09%
* Less than 1%
(1) Includes (i) 212,000 shares subject to options owned by
Mr. S. Mort Zimmerman; (ii) 82,888 shares of the
828,878 shares owned beneficially and of record by
Trans-Exchange Corporation, in which Mr. S. Mort
Zimmerman has a 10% beneficial interest; and (iii)
31,429 shares owned by Glauber Management Company, a
firm 42% owned by Mr. S. Mort Zimmerman and in which he
effectively controls the voting of the Company's stock
owned by such firm. Mr. S. Mort Zimmerman disclaims
any beneficial interest in the shares owned by his
wife's estate and their adult children.
(2) Includes 31,667 shares subject to options owned by Mr.
Zimmerman.
(3) Includes 36,666 shares subject to options owned by Mr.
Bailey.
(4) Includes 31,666 shares subject to options owned by Mr.
Updegraff.
(5) 10,000 shares subject to a option owned by Mr. Ling.
(6) Includes 12,000 shares subject to options owned by Mr.
Bobbitt.
(7) S. Mort Zimmerman and Daniel A. Zimmerman are father and
son.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation paid by the
Company for services rendered during its last three fiscal years
to S. Mort Zimmerman, the Company's Chief Executive Officer. S.
Mort Zimmerman, Fred M. Updegraff, Daniel A. Zimmerman and Edmund
W. Bailey, Directors, each participated in the actions of the
Board setting the compensation amounts paid to S. Mort Zimmerman.
No specific criteria was used except an evaluation by the Board
that his salary be comparable to the compensation paid to chief
executive officers of other public companies similar in size and
revenues to the Company.
Summary Compensation Table
Annual Compensation
Other
Annual
Name and Principal Position Year Salary Bonus Compensation
S. Mort Zimmerman 1998 $241,600(a) $30,000(b) $ -
Daniel A. Zimmerman 1998 $101,500 $20,000(b) $ -
Edmund W. Bailey 1998 $ 97,975 $20,000(b) $ -
Long Term Compensation
Awards Payouts
Restricted Number of Shares Long Term
Stock Covered By Incentive Plan
Awards Option Grant Payout All Other
Continued:
S. Mort Zimmerman - 212,000 - $ -
Daniel A. Zimmerman - 31,667 - $11,495(d)
Edmund W. Bailey - 36,666 - $ 1,260(c)
Annual Compensation
Other
Annual
Name and Principal Position Year Salary Bonus Compensation
S. Mort Zimmerman 1997 $239,760(a) $333,400(b) $ -
Daniel A. Zimmerman 1997 $ 97,596 $ 59,802(b) $ -
Edmund W. Bailey 1997 $108,000 $ 59,802(b) $ -
Long Term Compensation
Awards Payouts
Restricted Number of Shares Long Term
Stock Covered By Incentive Plan
Awards Option Grant Payout All Other
Continued:
S. Mort Zimmerman - 212,000 - $ -
Daniel A. Zimmerman - 31,667 - $19,629(d)
Edmund W. Bailey - 36,666 - $ 2,160(c)
Annual Compensation
Other
Annual
Name and Principal Position Year Salary Bonus Compensation
S. Mort Zimmerman 1996 $219,400(a) $ 14,166(b) $ -
Long Term Compensation
Awards Payouts
Restricted Number of Shares Long Term
Stock Covered By Incentive Plan
Awards Option Grant Payout All Other
Continued:
S. Mort Zimmerman - 232,000 - $ -
S. Mort Zimmerman-President and Chairman of the Board.
Daniel A. Zimmerman-Senior Vice President.
Edmund W. Bailey-Vice President and Chief Financial Officer.
(a) A portion of the payments were made to an affiliate of S. Mort Zimmerman
and includes accrued and unpaid compensation of $75,000 for fiscal year
1998, 1997 and 1996, respectively.
(b) Includes cash and bonus shares of Common Stock valued at $1.00, $1.69
and $1.25 per share in 1998, 1997 and 1996, respectively.
(c) Company match of 401 (K) employee contributions.
(d) Company match of 401 (K) employee contributions and expense allowances.
1998 Stock Option Grants
NONE
Aggregate Option Exercises and Year-end Option Values
Set forth below are the number of shares covered by
exercisable and unexercisable options held on July 31, 1998 and
the aggregate gains that would have been realized had these
options been exercised on July 31, 1998, even though these
options were not exercised, and the unexercisable options could
not have been exercised, on July 31, 1998.
7
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Number of Shares Value of Unexercised
Covered by Unexercised In-The-Money
Options on 7/31/98 Options as of 7/31/98
Name Exercisable Unexercisable Exercisable(a) Unexercisable
S. Mort Zimmerman 32,000 (a) 180,000 -0- $210,600
Daniel A. Zimmerman 6,667 (a) 25,000 -0- $30,500
Edmund W. Bailey 6,666 (a) 30,000 -0- $36,600
</TABLE>
(a) Market value of shares covered by in-the-money options on
July 31, 1998 less option exercise price. Options are in-the-
money if the market value of the shares covered thereby is
greater than the option exercise price.
8
<PAGE>
Performance Graph
The following line graph compares (A) the yearly percentage
change in the Company's cumulative total shareholder return on
Common Stock, measured by dividing (i) the difference between the
Company's share price at the end and beginning of each year by
(ii) the share price at the beginning of each year with (B) the
NASDAQ Stock Market - US Index and the NASDAQ Non-financial
Index.
Cumulative Total Return
YEAR 7/93 7/94 7/95 7/96 7/97 7/98
ELECTRIC & GAS TECHNOLOGY, INC. 100 27 40 19 27 29
NASDAQ STOCK MARKET (U.S.) 100 103 145 157 232 274
NASDAQ NON-FINANCIAL 100 101 145 154 224 262
9
<PAGE>
FILINGS UNDER SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in
ownership of such securities with the Securities and Exchange
Commission. Officers, directors and greater than ten-percent
beneficial owners are required by applicable regulation to
furnish the Company with copies of all section 16(a) forms they
file. The Company is not aware of any beneficial owner of more
than ten percent of its Common Stock.
Based solely upon a review of the copies of the forms
furnished to the Company, the Company believes that during the
1998 fiscal year all filing requirements applicable to its
officers and directors were complied with.
FINANCIAL INFORMATION
Fiscal year ended July 31, 1998 Annual Report and Form 10K
of the Company accompanies this proxy statement.
DEADLINE FOR STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the
annual meeting of the Company scheduled for March 2000 must be
received by the Company not later than November 1, 1999 for
inclusion in its proxy statement and form of proxy relating to
that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of
Directors is aware of no other matters, other than those
described herein, to be brought before the meeting. If any other
matter should come before the meeting, the persons named in the
enclosed form of Proxy or their substitutes will vote with
respect to such matters in accordance with their best judgement.
Marie W. Pazol, Secretary
Dallas, Texas
February 26, 1999
10
<PAGE>
ELECTRIC & GAS TECHNOLOGY, INC.
Proxy Solicited on Behalf of the Board of Directors of
the Company for the Annual Meeting of Stockholders April 9, 1999
The undersigned authorizes Fred M. Updegraff and Marie Pazol
and each of them as the Proxy to vote the common stock owned by
the undersigned upon the nominees for director, ratification of
the appointment of independent public accountants (as described
in the Proxy); and upon all other matters brought before the
Annual Meeting of Stockholders of Electric & Gas Technology, Inc.
and/or adjournment(s) thereof. Your shares cannot be voted by
the Proxy Committee unless your Proxy is SIGNED, DATED and
RETURNED timely.
You are encouraged to specify your choices by marking same
in the appropriate boxes, however, it is not necessary to mark
any box if you wish to vote in accordance with the
recommendations of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR Items 1 and 2.
Item 1 Election of Directors:
S. Mort Zimmerman
Daniel A. Zimmerman
Edmund W. Bailey
Fred M. Updegraff
James J. Ling
Dick T. Bobbitt
Item 2 Ratification of Engagement of Independent Public
Accountants-Jackson & Rhodes P.C.
