SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ATHEY PRODUCTS CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) 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:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
ATHEY PRODUCTS CORPORATION
1839 South Main Street
Wake Forest, North Carolina 27587-9289
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 27, 1999
The 1999 Annual Meeting of the Stockholders of Athey Products Corporation
("Athey" or the "Company"), a Delaware corporation, will be held at the
executive offices of the Company located at 1839 South Main Street, Wake
Forest, North Carolina, on Thursday, May 27, 1999 at 11:00 A.M., for the
following purposes:
1. To fix the number of directors of the Company at five and to elect a
board of directors to hold office until the next annual meeting of
stockholders or until their respective successors have been elected
or appointed;
2. To ratify the appointment of the accounting firm of McGladrey &
Pullen, LLP as independent auditors for the Company for the current
year; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
These items are fully discussed in the following pages, which are made
part of this notice. Only stockholders of record on the books of the Company at
the close of business on April 12, 1999 will be entitled to notice of and to
vote at the annual meeting. A list of such stockholders entitled to vote will
be available at the Company's office at 1839 South Main Street, Wake Forest,
North Carolina 27587-9289, at the time and place of the meeting, and during the
ten days prior to the Annual Meeting.
Stockholders are requested to complete, date, sign and return the enclosed
proxy card as promptly as possible. The giving of such proxy will not affect
your right to vote in person should you decide to attend the Annual Meeting.
If you would like to attend the meeting and your shares are held by a
broker, bank or other nominee, you must bring to the meeting a recent brokerage
statement or a letter from the nominee confirming your beneficial ownership of
the shares. You must also bring a form of personal identification. In order to
vote your shares at the meeting, you must obtain from the nominee a proxy
issued in your name.
Whether or not you expect to attend, WE URGE YOU TO SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED.
By Order of the Board of
Directors
PHYLLIS C. PEARCE
Corporate Secretary
Wake Forest, North Carolina
April 27, 1999
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
ATHEY PRODUCTS CORPORATION
1839 South Main Street
Wake Forest, North Carolina 27587-9289
----------------
April 27, 1999
PROXY STATEMENT
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Athey Products Corporation ("Athey" or the
"Company") for use at the 1999 Annual Meeting of the Stockholders of the
Company to be held May 27, 1999, at 11:00 A.M., Eastern Time, at the Company's
offices located at 1839 South Main Street, Wake Forest, North Carolina, for the
purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
The shares represented by the accompanying Proxy will be voted if the
Proxy is properly signed and received by the Company prior to the time of the
meeting. Where a choice is specified on any Proxy as to the vote on any matter
to come before the meeting, the Proxy will be voted in accordance with such
specification. If no specification is made, the Proxy will be voted for the
nominees for director named herein and for all other proposals. Any stockholder
giving the accompanying Proxy has the right to revoke it by notifying the
Company, in writing at any time prior to the voting of the Proxy. A Proxy is
revoked if the person giving the Proxy attends the meeting and elects to vote
in person.
The cost of preparing, assembling and mailing this Proxy Statement and
form of Proxy, and the costs of soliciting proxies relating to the meeting,
will be borne by the Company. It is contemplated that the original solicitation
of proxies by mail will be supplemented by telephone, telegraph, and personal
solicitation by officers, directors and other regular employees of the Company,
and no additional compensation will be paid to such individuals. The Company
will also request brokers and other nominees or fiduciaries to forward proxy
soliciting material to the beneficial owners of shares which are held of record
by them. These materials are first being mailed to stockholders on or about
April 27, 1999.
ELECTION OF DIRECTORS
The By-Laws of the Company provide for a board of not less than three nor
more than ten directors, as from time to time shall be determined by a majority
of the votes to which all of the stockholders of the Company are at the time
entitled. The Board of Directors of the Company has recommended to the
stockholders that the number of directors be fixed at five (5), subject to the
approval of the stockholders at the 1999 Annual Meeting. Directors will be
elected at the meeting to serve until the next Annual Meeting of Stockholders
or until their successors are elected and shall have qualified. The affirmative
vote of a plurality of the votes cast is required to fix the number of
directors at five and to elect directors. Abstentions and broker non-votes will
not be counted in determining the number of shares voted for fixing the number
of directors at five and in favor of any nominee for director. The proxies
returned to the Board of Directors pursuant to this solicitation will be voted
by the persons named therein for fixing the number of directors at five and for
the election of the following persons as directors. The Board of Directors is
not aware of any other person intending to propose nominees for director.
Should any nominee be unable to accept the office of director (which is not
presently anticipated), it is intended that the persons named in the proxy will
vote for election of such other persons as they shall determine.
<PAGE>
The following table sets forth (i) the name, principal occupation, age,
length of service and ownership of Common Shares (as defined below) of the
Company (by number of shares and as a percentage of the total outstanding) of
each nominee for director and (ii) the Company's current executive officers and
directors as a group.
<TABLE>
<CAPTION>
Common Shares
Beneficially
Director Owned as of Percent
Name and Principal Occupation (1) Age Since March 19, 1999(2) of Class
- ------------------------------------- ----- ---------- ------------------- -----------
<S> <C> <C> <C> <C>
John F. McCullough (3) .............. 73 1975 1,597,726 41.99%
Chairman of the Board of the
Company and Chairman of
Orton/McCullough Crane Company, Inc.
Oak Brook, Illinois
Martin W. McCullough (3) ............ 41 1985 12,632 *
Director of the Company and
President
Orton/McCullough Crane Company, Inc.
Huntington, Indiana
Richard A. Rosenthal ................ 66 1977 5,691 *
Director of the Company and
Retired Director of Athletics
University of Notre Dame
South Bend, Indiana
Thomas N. Nelson .................... 61 1998 325 *
Director, President and Treasurer
of the Company
John P. Kelly (3) ................... 45 1997 100 *
Director of the Company and Partner
Mountcastle, Kelly and Dyer, P.C.
Wheaton, Illinois
Executive officers and directors as
a group(4) (6 persons) ............. 1,616,574 42.48%
</TABLE>
- ----------
* Less than one percent.
(1) Each executive officer's and director's principal occupation and employment
for each of Messrs. Kelly and Rosenthal for the last five years has been
listed above. Additional information in that regard for Messrs. John F.
McCullough, Martin W. McCullough and Thomas N. Nelson is set forth below.
For the three years prior to May 1997, Mr. John F. McCullough was Chairman
& President, and Mr. Martin W. McCullough was Vice-President and General
Manager of Orton/McCullough Crane Company, Inc. In May 1997, Mr. Martin W.
McCullough became President of Orton/McCullough Crane Company, Inc. and
Mr. John F. McCullough continued as Chairman. Prior to June 1996, Mr.
Nelson was Product Sales Manager for Bucyrus-Erie Company, South
Milwaukee, Wisconsin. From June 1996 to May 1998, Mr. Nelson was Director
of Sales & Marketing for the Company. Mr. Nelson was elected as Vice-
President, Sales & Marketing of the Company on May 11, 1998, and was
elected President and Treasurer on December 16, 1998. Mr. Rosenthal is a
director of the following companies: Advanced Drainage Systems, Inc.,
Columbus, Ohio; Beck Corporation, Elkhart, Indiana; CID Equity Partners,
Indianapolis, Indiana; LaCrosse Footwear, Inc., LaCrosse, Wisconsin; RFE
Investment Partners, New Canaan, Connecticut; and St. Joseph Capital
Corporation, Mishawaka, Indiana.
(2) Except as otherwise noted, the persons named in the table have sole voting
and investment power with respect to all shares shown as beneficially
owned by them.
(3) Common shares shown as owned by Mr. John F. McCullough are owned of record
by Orton/
McCullough Crane Company, Inc., of which Mr. John F. McCullough is an
officer and principal shareholder (see "Voting Securities and Principal
Stockholders" below). Mr. John F. McCullough disclaims beneficial ownership
of such shares. Mr. John F. McCullough is the father of Mr. Martin W.
McCullough and the father-in-law of Mr. John P. Kelly.
(4) Mr. Wes O. Brant is Vice-President, Chief Operating Officer and a director
of the Company. Mr. Brant beneficially owns 100 Common Shares which
constitute less than one percent of the outstanding Common Shares of the
Company.
2
<PAGE>
The term of office for all such directors elected would be until their
successors are elected and qualified, scheduled for the next annual meeting.
The Board of Directors of the Company has an audit committee consisting of
Messrs. John F. McCullough, Martin W. McCullough, John P. Kelly and Richard A.
Rosenthal. The audit committee, which held one meeting in 1998, recommends the
appointment of the Company's independent auditors, determines the scope of the
annual audit to be made, reviews the conclusions of such auditors and reports
the findings and recommendations thereof to the Board of Directors. There are
no nominating or compensation committees. The total number of meetings of the
Board of Directors during 1998 was four. During 1998, each director listed
attended at least 100% of the meetings of the Board and committees thereof.
The Board of Directors recommends a vote FOR fixing the number of
directors at five and the election of the above listed nominees for director.
RATIFICATION OF AUDITORS
The Board of Directors has appointed McGladrey & Pullen, LLP, independent
certified public accountants, to audit the books and accounts of the Company
for the fiscal year ended December 31, 1999, subject to the approval of the
Stockholders. A representative of McGladrey & Pullen, LLP will be present at
the meeting. He will have the opportunity to make a statement, if he so
desires, and will respond to appropriate questions which are raised orally at
the meeting or which are submitted in writing to the Company, before the
meeting. If the stockholders do not ratify the appointment of McGladrey &
Pullen, LLP the selection of other independent certified public accountants
will be considered by the Board of Directors.
During the fiscal year ended December 31, 1998, the only services rendered
by McGladrey & Pullen, LLP were auditing services, consisting of the annual
audit, reviews of the annual report on Form 10-K and the annual report to
stockholders, annual audit of the Company's 401(k) plan, consulting on
quarterly filings and other matters, and review of federal and state income tax
returns.
The affirmative vote of a majority of the shares voting at the meeting at
which a quorum is present is required to ratify the appointment of auditors.
Abstentions and broker non-votes will not be counted in determining the number
of shares voted for the proposal to appoint McGladrey & Pullen, LLP or for any
other proposal.
The Board of Directors recommends a vote FOR ratification of the
appointment of McGladrey & Pullen, LLP.
3
<PAGE>
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The Board of Directors has fixed the close of business on April 12, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting, and only holders of record of the common stock of
the Company, par value $2.00 per share (the "Common Shares"), at the close of
business on that date will be entitled to vote at the meeting or any
adjournment thereof. At the close of business on April 12, 1999, the record
date, there were outstanding 3,805,608 Common Shares.
Each Common Share is entitled to one vote on all matters. A majority of
the outstanding shares of the Company, represented in person or by proxy, shall
constitute a quorum at the meeting.
The following table sets forth information as of April 12, 1999, regarding
each person who was known by the Company to own beneficially more than 5% of
the outstanding Common Shares of the Company:
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Ownership
Name and Address of of Common Percent
Beneficial Owner Shares(3) of Class
- ---------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Orton/McCullough Crane Company, Inc. (1) ................ 1,597,726 41.99%
1244 East Market Street
Huntington, Indiana 46750
David L. Babson & Company, Inc .......................... 431,110 11.33%
One Memorial Drive
Cambridge, Massachusetts 02142-1300
Isometrics, Inc. (2) .................................... 247,372 6.50%
1266 North Scales Street
Post Office Box 660
Reidsville, North Carolina 27320
Franklin Resources, Inc ................................. 200,000 5.26%
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
Executive officers and directors as a group (4) ......... 1,616,574 42.48%
</TABLE>
- ----------
(1) Mr. John F. McCullough, an officer and principal shareholder of
Orton/McCullough Crane Company, Inc., may be deemed to share beneficial
ownership of the shares shown as beneficially owned by Orton/ McCullough
Crane Company, Inc., although he disclaims beneficial ownership of such shares.
(2) Mr. Dennis M. Bracy, the president, director and majority shareholder, of
Isometrics, Inc., may be deemed to share beneficial ownership of the
shares shown as beneficially owned by Isometrics, Inc.
(3) Shares shown as owned by Orton/McCullough Crane Company, Inc., David L.
Babson & Company, Inc., Isometrics, Inc. and Franklin Resources, Inc. are
as reported on the latest Schedule 13D or 13G filings by such entities,
respectively.
(4) Share amounts shown include those held by Orton/McCullough Crane Company,
Inc.
The Common Shares are the only class of outstanding voting securities of
the Company. Also, as of April 12, 1999, all executive officers and directors
of the Company owned of record and beneficially, 1,616,574 Common Shares, or
approximately 42.48% of the outstanding Common Shares, including the shares of
Orton/McCullough Crane Company, Inc. shown above.
It is the understanding of management that all officers and directors
intend to vote for the election of the directors nominated and for all
proposals.
4
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on review of reports furnished to
it, all Section 16(a) filing requirements applicable to its executive officers,
directors and more than 10% beneficial owners were complied with, except that
Messrs. Nelson and Brant and Ms. Phyllis Pearce each inadvertently filed late
their Form 3 initial statements of beneficial ownership of securities showing
their election as officers of the Company.
COMPENSATION AND RELATED MATTERS
Summary Compensation Table
The following table sets forth the aggregate compensation paid by the
Company for services rendered in all capacities to the Company during the
Company's last three fiscal years to all those individuals serving the Company
as President during 1998. No other executive officer of the Company was paid
compensation for 1998 in excess of $100,000.
<TABLE>
<CAPTION>
Annual
Compensation
------------------ Other Annual
Name and Salary Compensation
Principal Positions Year $ $
- ------------------------------------- ------ --------- ---------------
<S> <C> <C> <C>
Thomas N. Nelson(1) 1998 83,206 2,496(2)
President, Treasurer and Director 1997 80,000 2,400(4)
1996 48,666 30,202(3)
James H. Stumpo(7) 1998 73,264 1,465(4)
Former President, CEO and Director 1997 100,417 22,496(5)
1996 100,000 38,101(6)
</TABLE>
- ----------
(1) Prior to being elected President of the Company on December 16, 1998, Mr.
Nelson served as the Company's Vice-President of Sales and Marketing.
(2) Payments included in this amount for the fiscal year ended December 31,
1998 consist of: Company contributions of $2,496 to the Athey Products
Corporation Employees 401(k) Plan (the "401(k) Plan"), which is a defined
contribution salary reduction 401(k) Plan qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended.
(3) Mr. Thomas N. Nelson received $30,202 representing relocation expenses in
1996.
(4) The contributions made by the Company to the 401(k) plan accounts for
Messrs. Nelson and Stumpo for the year 1997 and 1998, respectively, were
omitted from the Company's Annual Report on Form 10-K for the year ended
December 31, 1998.
(5) Payments included in this amount for the fiscal year ended December 31,
1997 consist of:
(a) Company contributions of $2,175 to the 401(k) Plan.
(b) Company contributions of $20,321 to the 401(k) Plan from the
distribution of excess plan assets stemming from the termination of the
Company's non-contributing defined benefit pension plan.
(6) Mr. James H. Stumpo received $38,101 representing relocation expenses in
1996.
(7) Mr. James H. Stumpo resigned from his positions as President, Chief
Executive Officer and a director of the Company effective May 7, 1998. Mr.
Stumpo beneficially owns 2,000 Common Shares, which constitutes less than
1% of the outstanding Common Shares.
5
<PAGE>
Compensation Report
The Company's executive officer compensation program as in effect for 1998
consisted of (i) base salary established on the basis of non-quantitative
factors such as positions of responsibility and authority, years of service and
annual performance evaluations and (ii) a cash-based incentive bonus plan which
is based upon the Company's performance and profitability. Executive officers
(including the Chief Executive Officer) were also eligible in 1998 to
participate in various Company benefit plans, which are intended to provide a
safety net of coverage against various events, such as death, disability and
retirement.
The Board's compensation program objectives are designed to attract,
motivate, reward and retain qualified personnel for positions of substantial
responsibility. In keeping with this policy, additional compensation for
executive officers and managers is administered through a cash-based incentive
bonus plan which is based upon the Company's performance and profitability. No
bonuses were paid under the bonus plan for the past four years. The Company has
no long-term incentive or stock option plans or stock appreciation rights.
Mr. Nelson received $83,206 and $80,000 in base salary from the Company in
1998 and 1997, respectively, serving as Vice-President Marketing and Sales and
President of the Company. In 1996, he received $48,666 in base salary for that
portion of the year in which he served as Director of Sales & Marketing for the
Company. The Company contributed $2,496 and $2,400 to Mr. Nelson's 401(k) Plan
in 1998 and 1997, respectively.
Mr. Stumpo received $73,264 and $100,417 in base salary from the Company
in 1998 and 1997, respectively. The Company contributed $1,465 and $2,175 to
Mr. Stumpo's 401(k) Plan in 1998 and 1997, respectively.
Board of Directors
Wes O. Brant
John P. Kelly
John F. McCullough
Martin W. McCullough
Thomas N. Nelson
Richard A. Rosenthal
Director Compensation
Directors who are employees of the Company do not receive fees for
attendance at director's meetings, but directors are reimbursed for their
out-of-pocket expenses incurred in attending meetings of directors and
stockholders. Mr. John F. McCullough is paid $100,000 annually by the Company
for serving as Chairman of the Board of Directors. Directors who are not
employees of the Company are paid $18,000 a year by the Company for serving as
directors. No other remuneration was paid as directors fees in 1998. No
directors were paid additional compensation for committee participation or
special assignments in 1998.
6
<PAGE>
Common Stock Performance
The Securities and Exchange Commission requires a five-year comparison of
stock performance for the Company with stock performance of a broad equity
market index and either a peer company, or, if a peer company is not available,
a published industry or line-of-business index. The Company's stock is traded
on the NASDAQ National Market System and one appropriate comparison is with the
NASDAQ Total Return Index for U.S. companies. Additionally, the Company's
performance may be compared to the NASDAQ Transportation Stock Index
(specifically SIC Code 3711).
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
NASDAQ Total Return Index $100 $ 97 $136 $167 $204 $286
NASDAQ Transportation Stock Index $100 $ 88 $109 $121 $121 $131
Athey Products Corporation $100 $111 $ 73 $ 70 $ 71 $ 43
</TABLE>
(1) Assumes that the value of the investment in the Common Shares of Athey
Products Corporation, the NASDAQ Total Return Index for U.S. companies
and the NASDAQ Transportation Stock Index, was $100 on December 31, 1993
and that all dividends were reinvested.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Board of Directors as a whole (with the exception of the President)
establishes the compensation of the President and reviews and approves
compensation for all other officers based on the recommendation of the
President.
No director or nominee for director is a controlling person of the
Company, except for Mr. John F. McCullough, a director of the Company and a
principal stockholder of Orton/McCullough Crane Company, Inc., which owned
1,597,726 shares of the Company's common stock, or 41.99%, as of April 12,
1999.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the year ended December
31, 1998, including financial statements, accompanies this Proxy Statement.
However, no action is proposed to be taken at the meeting with respect to the
Annual Report, and it is not to be considered as constituting any part of the
proxy soliciting material.
STOCKHOLDER PROPOSALS
In order for stockholder proposals intended to be presented at the
Company's 2000 Annual Meeting of Stockholders to be eligible for inclusion in
the Company's proxy statement and form of proxy for such meeting, they must be
received by the Company at its office at 1839 South Main Street, Wake Forest,
North Carolina 27587-9289 by December 28, 1999. Any such proposal must be in
accordance with the provisions of Rule 14a-8 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended. It
is suggested that any such proposal be submitted by certified mail -- return
receipt requested.
OTHER MATTERS
Management knows of no other business likely to be brought before the
meeting. If, however, other matters do come before the meeting, the persons
named in the form of proxy or their substitutes will vote said proxy according
to their best judgment.
A copy of the Company's 1998 Form 10-K Report required to be filed with
Securities and Exchange Commission will be mailed to stockholders without
charge upon written request to: Athey Products Corporation, 1839 South Main
Street, Wake Forest, North Carolina 27587-9289. Such request must set forth a
good-faith representation that the requesting party was either a holder of
record or a beneficial owner of common stock of the Company on April 12, 1999.
By Order of the Board of Directors
PHYLLIS C. PEARCE
Corporate Secretary
Wake Forest, North Carolina
April 27, 1999
8
