JOULE INC.
1245 U.S. Route 1 South
Edison, New Jersey 08837
----------------------------
Notice of Annual Meeting of Stockholders
To be held February 7, 2001
----------------------------
The Annual Meeting of Stockholders of Joule Inc. will be held on Wednesday,
February 7, 2001, at 10:30 a.m. at The Pines Manor, Route 27, Edison, New
Jersey, for the following purposes:
1. To elect six directors;
2. To consider and act upon adoption of the 2001 Stock Option Plan; and
3. To transact such other business as may properly come before the meeting.
All stockholders are cordially invited to attend the meeting. Only holders
of record of Common Stock at the close of business on December 15, 2000 are
entitled to notice of and to vote at the meeting. If you attend the meeting, you
may vote in person if you wish, even though you previously have returned your
proxy.
A copy of the Company's 2000 Annual Report is enclosed.
STOCKHOLDERS ARE URGED TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE.
January 9, 2001 By Order of the Board of Directors
Bernard G. Clarkin
Secretary
<PAGE>
JOULE INC.
1245 U.S. Route 1 South
Edison, New Jersey 08837
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Joule Inc. of proxies to be used at the Annual Meeting
of Stockholders of the Company to be held on February 7, 2001, and at all
adjournments thereof. The solicitation will begin on or about January 9, 2001.
All shares represented by a properly executed proxy will be voted unless it
is revoked and, if a choice is specified with respect to any matter to be acted
upon, will be voted in accordance with such specification. If no choice is
specified, the proxies will be voted for the election of six directors, unless
authority to do so is withheld with respect to one or more of the nominees, and
for the adoption of the 2001 Stock Option Plan. In addition, the proxy will be
voted in the discretion of the proxyholders with respect to such other business
as may properly come before the meeting. A stockholder may revoke a proxy at any
time prior to the voting thereof.
Brokers holding shares of Common Stock for beneficial owners must vote
those shares according to specific instructions they receive from the owners. If
instructions are not received, brokers may vote those shares at their discretion
except on matters, such as the adoption of the 2001 Stock Option Plan, as to
which the rules of the American Stock Exchange preclude brokers from exercising
their voting discretion. On such matters, the absence of instructions results in
a "broker non-vote."
Directors will be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote thereon.
Votes that are withheld will be excluded entirely from the calculation and will
have no effect on the outcome of the election of directors. Adoption of the 2001
Stock Option Plan will require a majority of the votes cast. Abstentions and
broker non-votes will have the effect of reducing the number of required
affirmative votes.
There were outstanding as of the close of business on December 15, 2000,
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting, 3,677,000 shares of Common Stock of the Company. Each
share of Common Stock is entitled to one vote on each matter brought before the
meeting.
BENEFICIAL OWNERSHIP OF MORE THAN 5%
OF THE OUTSTANDING COMMON STOCK
The following table sets forth information regarding the beneficial
ownership of Common Stock by each person known to management of the Company to
own beneficially 5% or more of the issued and outstanding Common Stock as of
December 15, 2000:
Beneficial Ownership (a)
-----------------------------
Number of
Name (b) Shares Percent
------------------------- ------------- -------
Emanuel N. Logothetis 1,167,722 (c) 31.8%
Helen Logothetis 1,167,722 (d) 31.8
Nick M. Logothetis 506,722 13.8
Steven Logothetis 476,622 13.0
Julie Logothetis 493,348 13.4
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(a) As used in this Proxy Statement, "beneficial ownership" means the sole or
shared power to direct the voting and/or disposition of shares of Common
Stock.
(b) Emanuel N. Logothetis is the husband of Helen Logothetis. They are the
parents of Nick M. Logothetis, Steven Logothetis and Julie Logothetis. The
address of the members of the Logothetis family is 1245 U.S. Route 1 South,
Edison, New Jersey 08837.
(c) Consists of 807,100 shares of Common Stock as to which Mr. Logothetis has
sole voting and disposition power and the 370,622 shares referred to in (d)
below that are beneficially owned solely by Helen Logothetis, as to which
shares he disclaims beneficial ownership.
(d) Consists of 370,622 shares of Common Stock as to which Mrs. Logothetis has
sole voting and disposition power and the 807,100 shares referred to in (c)
above that are beneficially owned solely by Emanuel N. Logothetis, as to
which shares she disclaims beneficial ownership.
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<PAGE>
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth certain information, as of December 15,
2000, with respect to the ownership of shares of Common Stock by (i) the current
directors of the Company and nominees for election as directors, (ii) the Named
Executives referred to under "Compensation of Executive Officers--Certain
Transactions," and (iii) all directors and executive officers of the Company as
a group:
Number of Shares of
Common Stock and Percent of
Name Class Beneficially Owned (a)
--------------------------------- ----------------------------
Richard Barnitt --
Bernard G. Clarkin 5,525
Stephen Demanovich 10,025
Robert W. Howard 9,200
Emanuel N. Logothetis 1,167,722 (31.8%)
Nick M. Logothetis 506,722 (13.8%)
Steven Logothetis 476,622 (13.4%)
John Porch --
Andrew G. Spohn 1,700
John G. Wellman, Jr. 54,075 (b)
Directors and Executive
Officers as a group (13 persons) 2,231,591 (60.7%)
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(a) Except for the 370,622 shares of Common Stock owned by his wife and
attributed to Emanuel N. Logothetis, as more fully set forth under
"Beneficial Ownership Of More Than 5% Of The Outstanding Common Stock,"
such person has sole voting and disposition power with respect to the
shares shown in this column. Includes 5,000 shares for Mr. Clarkin, 10,000
shares for Mr. Demanovich, 40,000 shares for Mr. Wellman and 55,000 shares
for all directors and executive officers as a group that may be acquired
within 60 days after December 15, 2000 upon exercise of options. Unless
otherwise indicated, beneficial ownership of any named individual does not
exceed 1% of the outstanding shares.
(b) Mr. Wellman holds 3,050 shares as trustee of a trust for his children.
ELECTION OF DIRECTORS--DIRECTOR COMPENSATION
Six directors are to be elected to serve until the next Annual Meeting of
Stockholders and until their successors shall have been duly elected and
qualified. All of the nominees listed below are currently members of the Board
of Directors. The nominees for directors have consented to serve if elected, and
the Company has no reason to believe that any of the nominees will be unable to
serve. Should any nominee become unavailable for any reason, proxies will be
voted for the alternate candidate, if any, chosen by the Board of Directors.
The following information respecting the nominees has been furnished by
them.
<TABLE>
<CAPTION>
Principal Occupation Director
Name Age or Employment Since
--------------------- --- --------------------------------------------- --------
<S> <C> <C> <C>
Richard Barnitt 62 Financial Consultant (a) 1996
Robert W. Howard 58 Chairman, Reisen Lumber Industries, Inc. (b) 1988
Emanuel N. Logothetis 70 Chairman of the Board and Chief Executive 1965
Officer of the Company (c)
Nick M. Logothetis 48 President, Chartwell Consulting Group 1980
Steven Logothetis 46 Attorney (d) 1981
Andrew G. Spohn 56 Business Consultant (e) 2000
</TABLE>
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(a) Mr. Barnitt has served as a financial consultant to various companies,
including the Company (since 1989), since his retirement in 1988 from Kidde
Inc., where he had been employed since 1963, most recently as Senior Vice
President and Chief Financial Officer.
(b) Mr. Howard served as Executive Vice President of Reisen Lumber and Millwork
Company from 1981 to April 1986 when he was made President of Reisen Lumber
Industries. He was named Chairman of the Board of Reisen in 1995.
(c) Emanuel N. Logothetis founded the Company in 1965 and was President and
Chief Executive Officer until August 10, 1987, when he was elected Chairman
of the Board. He was reelected President on August 3, 1988 and served in
such capacity until February 3, 1999.
(d) Steven Logothetis is an attorney and investor.
(e) Mr. Spohn is a business consultant focusing on strategic planning and human
resources. Previously he was Chief Executive Officer of Singer Asset
Finance Company, L.L.C., a wholly owned subsidiary of Enhance Financial
Services Group, from 1997 to 1999. He was Managing Partner of New Jersey
Title Insurance Company from 1993 to 1997.
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<PAGE>
The Board of Directors held four meetings during the 2000 fiscal year.
Directors who are not employees of the Company receive directors' fees of $500
for each day that they attend meetings of the Board or a committee thereof and
are reimbursed for their out-of-pocket expenses incurred in connection with
their activities as directors. Also, such directors receive a monthly retainer
of $400. During fiscal 2000, Richard Barnitt and Andrew G. Spohn received fees
of $12,000 and $4,000, respectively, for their services as consultants to the
Company. They are continuing to provide consulting services to the Company in
fiscal 2001.
The Board of Directors has designated from among its members an Audit
Committee, which consisted of Robert W. Howard and Richard Barnitt. See "Audit
Committee." The Audit Committee met with the Company's independent accountants
two times during fiscal 2000. Andrew G. Spohn and Nick M. Logothetis served on
the Compensation Committee that reviews executive compensation on an annual
basis. The Compensation Committee did not meet during fiscal 2000. The Board of
Directors has not designated a nominating committee or other committee
performing a similar function.
COMPENSATION OF EXECUTIVE OFFICERS--CERTAIN TRANSACTIONS
Executive Compensation
Set forth below is certain summary information with respect to the
compensation of the Company's Chief Executive Officer and each other executive
officer whose salary and bonus for the fiscal year ended September 30, 2000
exceeded $100,000 (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Shares of
Annual Compensation Common Stock All Other
Name and ------------------- Underlying Compensation
Principal Position Year Salary ($) Bonus ($) Options (#) ($) (1)
----------------------------- ---- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Emanuel N. Logothetis 2000 $220,000 $ 27,600 -- $ --
Chairman of the Board 1999 191,826 54,800 -- --
and Chief Executive Officer 1998 129,160 121,300 -- --
John G. Wellman, Jr. 2000 220,000 -- 50,000 1,710
President and Chief 1999 204,230 -- -- 2,500
Operating Officer (2) 1998 102,309 -- 100,000 15,327
Bernard G. Clarkin 2000 115,000 7,622 -- (5) 1,839
Vice President and 1999 100,000 12,500 -- 1,707
Chief Financial Officer (3) 1998 100,000 20,000 5,000 1,875
Stephen Demanovich 2000 100,000 48,673 5,000 (5) 1,387
Vice President 1999 100,000 41,217 -- 1,207
1998 100,000 25,740 5,000 1,886
John Porch 2000 95,638 21,578 -- (5) 1,626
Vice President (4)
</TABLE>
----------
(1) Represents the Company's matching of voluntary contributions by such person
under its 401-k Plan. In addition, in the case of Mr. Wellman, the 1998
amount includes $13,758 that the Company paid to him to cover moving and
other expenses related to his acceptance of employment with the Company and
relocation to New Jersey.
(2) Mr. Wellman joined the Company as Executive Vice President and Chief
Operating Officer in March 1998 and was elected President on February 3,
1999.
(3) In the event Mr. Clarkin's employment is actually or constructively
terminated following an acquisition, merger or change in control of the
Company, he would be entitled to receive two years' compensation and his
unvested options would automatically vest.
(4) Mr. Porch was elected a Vice President in August 2000.
(5) See "Stock Options" below for information regarding performance options
granted to such officer that did not vest until fiscal 2001.
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<PAGE>
Stock Options
The following table contains information covering options to purchase
shares of the Company's Common Stock granted to the Named Executives in fiscal
2000 pursuant to the Company's 1991 Stock Option Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock Percent of Total
Underlying Options Granted Exercise Grant Date
Option Granted to Employees Price Expiration Present Value
Name (#) (1) in 2000 ($/Sh) Date (#) (2)
-------------------- -------------- ---------------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Stephen Demanovich 5,000 9% 2.00 January 10, 2010 $ 9,350
John G. Wellman, Jr. 50,000 91% 2.00 January 14, 2010 93,500
</TABLE>
(1) Such options were granted at 100% of fair market value on the date of
grant. The options granted to Mr. Demanovich become exercisable on January
10, 2001. The options granted to Mr. Wellman become exercisable as to 20%
of the shares covered thereby on each of the first five anniversary dates
of the date of grant.
(2) The Grant Date Present Value has been calculated using the Black-Scholes
option pricing model and assumes a risk-free rate of return of 6%, an
option term of ten years, a dividend yield of 0% and a stock volatility of
92%. No adjustment was made for nontransferability or forfeitures. Such
assumptions are based upon historical experience and are not a forecast of
future stock price performance or volatility or of future dividend policy.
Such information, which is presented in accordance with the requirements of
the Securities and Exchange Commission, is not necessarily indicative of
the actual value that such options will have to the Named Executives, which
will be dependent upon market prices for the Common Stock.
In addition, Mr. Clarkin, Mr. Demanovich and Mr. Porch were granted
performance options at the beginning of fiscal 2000. The actual number of
options granted was not determined until after September 30, 2000 when actual
performance for fiscal 2000 was measured against targets provided in the option
grant. As a result, options for 2,250 shares, 5,625 shares and 2,813 shares of
Common Stock vested in Mr. Clarkin, Mr. Demanovich and Mr. Porch, respectively,
in fiscal 2001.
The following table sets forth information with respect to unexercised
options held by the Named Executives at September 30, 2000.
FISCAL YEAR END OPTIONS VALUES
<TABLE>
<CAPTION>
Number of Shares of
Common Stock Value of Unexercised
Underlying In-the-Money
Unexercised Options at Options at
September 30, 2000 (#) (1) September 30, 2000 ($) (1), (2)
-------------------------- -------------------------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
------------------- -------------------------- -------------------------------
<S> <C> <C>
Bernard G. Clarkin 5,000/0 $0/0
Stephen Demanovich 10,000/5,000 0/0
John G. Wellman, Jr. 40,000/110,000 0/0
</TABLE>
----------
(1) Excludes the performance options discussed above that did not vest until
after September 30, 2000.
(2) Calculated by determining the difference between the exercise price and the
closing price of the Company's Common Stock on the American Stock Exchange
for September 30, 2000.
-4-
<PAGE>
Report of the Compensation Committee
The Compensation Committee administers the compensation program for the
executive group. Included in this group are the Chairman/Chief Executive
Officer, President/Chief Operating Officer, other corporate officers and
selected key managers. The committee is composed of directors who are not
employees of the Company.
The annual base salary paid to the Chairman/Chief Executive Officer, in
fiscal 2000, was $220,000, and he received a bonus of $27,600. The
Chairman/Chief Executive Officer is not eligible to receive options under the
terms of the Company's Stock Option Plan. In determining whether changes in the
compensation level of the Chairman/Chief Executive Officer would be appropriate,
the Compensation Committee considers the overall performance of the Company for
the prior year.
Salary levels for the other members of the senior management group have
been established and are based on external salary information. The information
gathered is evaluated by the Compensation Committee in light of the current
responsibilities of the individuals involved and serves as the basis for the
establishment of salary ranges and also in recommending salary changes. The
basis for determining payment of a bonus to an individual is based on a
subjective evaluation of the individual's performance as well as overall
corporate performance. Any compensation change made to members of the senior
management group will have the approval of the Committee and the Chairman/Chief
Executive Officer.
Compensation Committee
Andrew G. Spohn
Nick M. Logothetis
Compensation Committee Interlocks and Insider Participation
Nick M. Logothetis, a member of the Compensation Committee, served as
President of the Company from August 1987 to August 1988. Prior thereto, he was
Executive Vice President of the Company from March 1980.
-5-
<PAGE>
Performance Graph
Set forth below is a graph comparing the total returns (assuming
reinvestment of dividends) of the Company, the American Stock Exchange Market
Index and a Peer Group Index comprised of companies engaged in the help supply
services business. The graph assumes $100 invested on October 1, 1995 in the
Company and each of the indices and reinvestment of any dividends.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG JOULE INC.,
AMEX MARKET INDEX AND SIC CODE INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIALS.]
(FIGURES IN DOLLARS)
<TABLE>
<CAPTION>
Fiscal Year Ended
-------------------------------------------------------------------------------------------------------
Company/Index/Market 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99 9/30/00
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joule Inc. 100.00 121.13 118.31 67.61 45.07 33.80
Help Supply Services 100.00 129.44 163.81 120.89 131.14 137.91
AMEX Market Index 100.00 104.08 126.56 110.55 128.74 153.97
-------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
Certain Transactions
The Company provided temporary office services to Symphony Suites, a
company owned by Nick M. Logothetis. Billing rates are comparable to those used
for other customers; amounts charged during fiscal 2000 were $420,000 and
$53,000 was outstanding at September 30, 2000. The highest amount outstanding
during fiscal 2000 was $93,000.
The Company's Board of Directors has approved the transactions outlined
above. Any substantial change in the terms of any such transactions and any
additional transactions with affiliates of the Company will be submitted to the
Board for approval.
AUDIT COMMITTEE
The Board of Directors has adopted and approved a formal written charter
for the Audit Committee, a copy of which is attached to this Proxy Statement as
Appendix A. The Board of Directors has determined that the members of the Audit
Committee are "independent," as defined in the corporate governance listing
standards of the American Stock Exchange relating to audit committees, meaning
that they have no relationships to the Company that may interfere with the
exercise of their independence from management and the Company.
Report of the Audit Committee
The Audit Committee of the Board of Directors oversees the Company's
financial reporting process on behalf of the Board of Directors. It meets with
management and the Company's independent public accountants throughout the year
and reports the results of its activities to the Board of Directors. In this
connection, the Audit Committee has done the following:
o reviewed and discussed the audited financial statements for the fiscal year
ended September 30, 2000 with the Company's management;
o discussed with Arthur Andersen LLP, the Company's independent public
accountants, those matters required to be discussed by SAS 61 (Codification
of Statements on Auditing Standards); and
o received the written disclosure and the letter from Arthur Andersen LLP
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and has discussed with Arthur Andersen
LLP its independence.
Based on the foregoing, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2000.
Audit Committee
Richard Barnitt
Robert W. Howard
ADOPTION OF 2001 STOCK OPTION PLAN
The Company has had stock option plans in effect since 1988 in order to
establish incentives designed to attract and retain key employees and directors
with outstanding ability and experience and to encourage the efforts and
performance of those persons by increasing their proprietary interest in the
Company. Management believes that these plans have been helpful in achieving
this objective. No options may be granted under the Company's 1991 Stock Option
Plan after December 4, 2001. Excluding options that were canceled or expired,
options covering an aggregate of 232,688 shares have been granted under the 1991
Stock Option Plan that is currently in effect. At the date hereof, 267,312
shares of Common Stock are reserved for future grants of options under the 1991
Stock Option Plan. The Board of Directors has authorized the continuance of the
stock option program by adopting, subject to ratification by the stockholders, a
new plan entitled the 2001 Stock Option Plan (the "Plan"). A copy of the Plan
will be sent to stockholders upon request.
The Plan provides for the grant of options covering up to an aggregate of
500,000 shares of Common Stock, which may consist of authorized but unissued
shares or treasury shares or a combination thereof. If any option granted under
the Plan is canceled or expires for any reason prior to being exercised in full,
the unpurchased shares may again be subjected to an option under the Plan. The
Plan contains an antidilution provision, which provides for adjustment in the
number of shares in the event of stock splits, stock dividends and the like.
-7-
<PAGE>
The directors, officers and key employees of the Company and its
subsidiaries to whom options are granted under the Plan, and the number of
shares covered by such options, are determined by a Stock Option Committee
appointed by the Board of Directors consisting of two or more directors who are
"non-employee directors," as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, and "outside directors," as defined in Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").
Emanuel N. Logothetis, Chairman of the Board and Chief Executive Officer of the
Company, and Nick M. Logothetis and Steven Logothetis, who are directors of the
Company and members of the immediate family of Mr. Logothetis, are not eligible
to receive options under the terms of the Plan. The number of shares subject to
stock options that may be granted to any employee or director in any calendar
year is limited to 100,000. This limitation is intended to ensure that the gain
recognized on the exercise of stock options by the Company's highest paid
executive officers will be treated as performance-based compensation and,
therefore, not subject to the $1 million limitation on the deductibility of
executive compensation imposed by Section 162(m) of the Internal Revenue Code.
The Stock Option Committee is authorized to prescribe the times at which an
option may be exercised and the number of shares as to which an option may be
exercised at such times. If an option provides that it is not exercisable for a
minimum period after grant, such limitation shall not apply if the optionee
ceases to be an employee or director by reason of death or, with the approval of
the Stock Option Committee, because of disability or otherwise. In addition, in
the event of a merger, consolidation, sale of assets or dissolution of the
Company, the Stock Option Committee may amend outstanding options to permit
their exercise prior to the effectiveness of any such transaction and to
terminate them as of such effectiveness. No option may be exercised more than
ten years after the date of the grant, and no option may be granted after
February 7, 2011. Under the Plan, the option price cannot be less than 100% of
fair market value of the Common Stock on the date of the option is granted. The
option price may be paid in cash, shares of Common Stock valued at the fair
market value thereof on the date of exercise or any combination of cash and
Common Stock. In addition, if the Stock Option Committee so provides, payment of
the exercise price may be made by delivering the exercise notice together with
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the exercise price in full. The
closing price of the Common Stock on the American Stock Exchange on December 19,
2000 was $1 3/16.
The Plan permits the Stock Option Committee to adopt rules and regulations
for its administration. The Board of Directors may terminate the Plan or amend
the Plan, but the Board may not, without stockholder approval, increase the
number of shares covered by the Plan or the limitation on the number of shares
subject to options granted to any person in a calendar year, reduce the minimum
purchase price or extend the term of the Plan or of any option granted
thereunder.
Options under the Plan are exercisable during the optionee's lifetime only
by the optionee and may not be transferred except by will or the laws of descent
and distribution. The options terminate one month after termination of the
optionee's employment or service as a director, except that in the case of
termination with the approval of the Stock Option Committee because of
disability or otherwise, the options terminate three months thereafter and, in
the case of termination by death, one year thereafter.
Options granted under the Plan will be designed to be "non-qualified stock
options" or "incentive stock options" under Section 422 of the Internal Revenue
Code. The grant of an option will have no immediate tax consequences to the
optionee or the Company.
The exercise of a non-qualified stock option will require an optionee to
include in income, as compensation, the amount by which the fair market value of
the acquired shares on the exercise date exceeds the option price. Upon a
subsequent sale or taxable exchange of shares acquired upon exercise of a
non-qualified stock option, an optionee will recognize long or short-term
capital gain or loss equal to the difference between the amount realized on the
sale and the tax basis of such shares. The Company will be entitled to a
deduction at the same time and in the same amount as the optionee is in receipt
of income in connection with the exercise of a non-qualified stock option.
If the optionee exercises an incentive stock option and does not dispose of
the acquired shares within two years after the grant of the option nor within
one year after the date of the transfer of such shares to the optionee (a
"disqualifying disposition"), the optionee will realize no compensation income
and any gain or loss that the optionee realizes on a subsequent disposition of
such shares will be treated as long-term capital gain or loss. For purposes of
computing the optionee's alternative minimum taxable income, however, the option
generally will be treated as if it were a non-qualified stock option. If an
optionee makes a disqualifying disposition, the optionee will be required to
include in income, as compensation, the lesser of (i) the difference between the
option price and the fair market value of the acquired shares on the exercise
date or (ii) the amount of gain realized on such disposition. In addition,
depending on the amount received,
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<PAGE>
as a result of such disposition, the optionee may realize long or short-term
capital gain or loss. The Company will be entitled to a deduction at the same
time and in the same amount as the optionee is in receipt of compensation income
as a result of a disqualifying disposition. If there is no disqualifying
disposition, no deduction will be available to the Company.
Approval of the adoption of the Plan requires a majority of the votes cast.
The Board of Directors recommends that stockholders vote in favor of adoption of
the Plan.
MISCELLANEOUS
Relationship with Independent Accountants
The Board of Directors has appointed Arthur Andersen LLP, independent
public accountants, to audit the accounts of the Company and its subsidiaries
for the fiscal year ending September 30, 2001. Arthur Andersen LLP has acted in
this capacity since 1994. Arthur Andersen LLP has advised the Company that
neither the firm nor any of its members or associates has any direct financial
interest or any material indirect financial interest in the Company or any of
its affiliates other than as accountants. A representative of Arthur Andersen
LLP is expected to be at the meeting.
Other Action
The management has at this time no knowledge of any matters to be brought
before the Annual Meeting other than those referred to above. If any additional
matters should properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote said proxy in accordance with their
judgment on such matters.
Stockholder Proposals
Any proposal that a stockholder desires to present to the 2002Annual
Meeting must be received by the Company at the above address on or prior to
September 11, 2001 in order for such proposal to be considered for inclusion in
the proxy statement and form of proxy for such meeting.
Expenses of Solicitation
The cost of this solicitation will be borne by the Company. In addition to
solicitation by mail, proxies may be solicited by officers, directors and
regular employees of the Company personally or by telephone or other means of
communication. The Company will, upon request, reimburse brokers and other
nominees for their reasonable expenses in forwarding proxy material to the
beneficial owners of the stock held of record for such persons and seeking
instructions with respect thereto.
By Order of the Board of Directors
Bernard G. Clarkin
Secretary
--------------------------------------------------------------------------------
10-K REPORT
Upon written request, the Company will provide, without charge, a copy of
its Annual Report on Form 10-K, including the financial statements and the
financial statement schedules thereto, but without exhibits, as filed with the
Securities and Exchange Commission, for the fiscal year ended September 30,
2000. Copies of the exhibits will be furnished at the Company's cost for the
reproduction, postage and handling thereof. Letters requesting the Form 10-K
should be addressed to the Secretary, Joule Inc., 1245 U.S. Route 1 South,
Edison, New Jersey 08837.
--------------------------------------------------------------------------------
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<PAGE>
APPENDIX A
AUDIT COMMITTEE CHARTER OF JOULE INC.
Organization
There shall be an Audit Committee of the Board of Directors (the "Board of
Directors") of Joule Inc. (the "Company") initially composed of two or more
directors, as the Board of Directors may determine from time to time, each of
whom shall be financially literate and shall otherwise comply with the
independence requirements of the American Stock Exchange. On or before June 14,
2001, the membership of the Audit Committee shall be increased to three or more
directors. In addition, at least one member of the Audit Committee must have
accounting or related financial management expertise and one of the members of
the Audit Committee shall be elected Committee Chairman by the Board of
Directors.
Statement of Policy
The Audit Committee shall assist the Board of Directors in fulfilling its
oversight responsibility to the stockholders, potential stockholders, investment
community and others relating to the Company's accounting and reporting
practices and the quality and integrity of its financial reports. The Audit
Committee shall endeavor to maintain free and open communication between the
Board of Directors, the independent auditors and the management. In discharging
its role, the Committee is empowered to investigate any matter brought to its
attention within the scope of its duties, with full access to all books,
records, facilities and personnel of the Company and power to retain
professional advice for this purpose if, in its judgment, that is appropriate.
The Committee should have a clear understanding with the independent
auditors that the independent auditors must maintain an open and transparent
relationship with the Committee and that the independent auditors are ultimately
accountable to the Board of Directors and the Audit Committee.
Responsibilities
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board of Directors and
report the results of its activities to the Board. While the Audit Committee has
the responsibilities and powers set forth in this Charter, it is not the duty of
the Audit Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles. This is the responsibility of
management and the Company's independent auditors. Nor is it the duty of the
Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditors or to assure compliance with
laws and regulations.
The Audit Committee's policies and procedures should remain flexible in
order to best react to changing conditions and to help ensure that the Company's
accounting and reporting practices accord with all requirements and are of the
highest quality.
In carrying out its responsibilities, the Audit Committee shall:
o Review and reassess this Charter at least annually and obtain the approval
of the Board of Directors.
o Meet at least two times a year, or more often if circumstances so require.
The Committee Chairman shall prepare and/or approve an agenda in advance of
each meeting.
o Inquire as to the independence of the independent auditors and obtain from
the independent auditors, on a periodic basis, a formal written statement
delineating all relationships between the independent auditors and the
Company. In addition, the Audit Committee shall review the extent of
non-audit services provided by the independent auditors in relation to the
objectivity needed in the independent audit and recommend that the Board of
Directors take appropriate action in response to the independent auditors'
written statement to satisfy the Board of Directors as to the independent
auditors' independence.
o Annually review and recommend to the Board of Directors the independent
auditors to be selected to audit the Company's financial statements. The
Board of Directors have the ultimate authority and responsibility to
select, evaluate and, where appropriate, replace the independent auditors.
o Approve the fees and other significant compensation to be paid to the
independent auditors.
o Meet with the independent auditors and the financial management to review
the scope of the audit proposed for the current year and the audit
procedures to be utilized and, at its conclusion, review such audit. Upon
completion of the audit and following each interim review of the Company's
financial statements, the Audit Committee should also discuss with the
independent auditors all matters required to be communicated to the Audit
Committee under generally accepted auditing standards, including AICPA SAS
61.
o Consider the judgments of the independent auditors with respect to the
quality and appropriateness, not just the acceptability, of the Company's
accounting principles and underlying estimates as applied in the financial
statements.
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o Review with the independent auditors and the financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the Company, and elicit any recommendations for improvement or
particular areas where augmented controls are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any activity that might be unethical or otherwise improper.
o Review the financial statements to be contained in the annual report to
stockholders with management and the independent auditors prior to filing
or distribution to determine that the independent auditors are satisfied
with the disclosure and content of the financial statements. Any
year-to-year changes in accounting principles or practices should be
reviewed.
o Review with the independent auditors any problems or difficulties they may
have encountered in the audit or any interim review and any management
letter provided by the independent auditors and the Company's response to
that letter.
o Review the interim financial statements with management and the independent
auditors prior to filing or distribution and discuss the results of the
quarterly review. The Chairman may represent the entire Committee for the
purpose of this review.
o Provide sufficient opportunity at each meeting for the independent auditors
to meet with the committee without management present. Among the items to
be discussed in these meetings are the independent auditors' evaluation of
the Company's financial and accounting personnel and their cooperation
during the audit and review process.
o Maintain minutes of meetings and periodically report to the Board of
Directors on results of the foregoing activities.
JOULE INC.
1245 U.S. Route 1 South
Edison, New Jersey 08837
