CONTROL CHIEF HOLDINGS, INC.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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
[X] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
Control Chief Holdings, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fees (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1 Title of each class of securities to which transaction applies:
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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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<TABLE>
<CAPTION>
Proxy Card/Definitive Copy
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<S> <S> <S> <S>
[X] PLEASE MARK VOTES CONTROL CHIEF HOLDINGS, INC.
AS IN THIS EXAMPLE The proxies are instructed With- For All
THIS PROXY IS SOLICITED ON BEHALF to vote as follows: For hold Except
OF THE BOARD OF DIRECTORS [ ] [ ] [ ]
1. Election of directors below.
The undersigned hereby appoints
Christopher G. Hauser and Arvid R. Douglas S. Bell, Robert E. Crofford,
Nelson as Proxies, each with the Christopher G. Hauser, Arvid R. Nelson,
power to appoint his substitute, C. Lawrence Shields, Patrick G. Shields,
and hereby authorizes them to re- Jon T. Wray
resent and to vote, as designated INSTRUCTION: To withhold authority to vote
below, all shares of common stock to vote for any individual nominee, mark "For
of Control Chief Holdings, Inc. of All Except" and write that nominee's name in
the undersigned on December 1, the space provided below.
1995 or any adjournment thereof.
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For Against Abstain
2. Proposal to approve the [ ] [ ] [ ]
appointment of Diefenbach, Delio, Kearney &
DeDionisio as independent public accountants
of Control Chief Holdings, Inc.
3. The Proxies are authorized to vote in their
discretion upon such other business as may
legally come before the meeting or any
adjournment thereof.
This Proxy, when properly exectued will be
------------ voted in the manner directed herein by the un-
Please be sure to sign and date Date dersigned stockholder. IF NO DIRECTION IS MADE,
this Proxy in the box below. THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
------------------------------- ------------ The Proxies will use their discretion with
respect to any matters referred to in item 3.
Please mark, sign exactly as name appears
--Stockholder sign above above, date and return Proxy Card promptly,
Co-holder(if any sign above) using the enclosed envelope. When shares are
held by Joint Tenants, or Guardian, please give
full title as such.
</TABLE>
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Detach above card, sign, date and mail in postage paid envelope provided.
CONTROL CHIEF HOLDINGS, INC.
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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Definitive Copy
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Bradford, Pennsylvania
November 10, 1995
TO THE SHAREHOLDERS OF CONTROL CHIEF HOLDINGS, INC.:
The Annual Meeting of Shareholders of Control Chief Holdings, Inc., a
New York Corporation, will be held at the Howard Johnson's Motor
Lodge, 100 Davis Street, Bradford, Pennsylvania on December 1, 1995,
at 10:00 a.m. for the following purposes:
(1) To elect seven Directors to hold office for a term expiring upon
the 1996 Annual Meeting of Shareholders or until their
successors shall have been duly elected and qualified;
(2) To approve the appointment of Diefenbach, Delio, Kearney &
DeDionisio as independent auditors of the Company for the fiscal
year ending, June 30, 1996;
(3) To transact such other business, if any, as may legally come
before the meeting or any adjournments thereof.
Reference is made to the accompanying Proxy Statement for more
complete information concerning the foregoing matters. A copy of the
Company's combined annual report and Form 10-KSB is also enclosed.
Only shareholders of record at the close of business on November 3,
1995 are entitled to vote at the Annual Meeting.
By Order of the Board of Directors
/Christopher G. Hauser/
Christopher G. Hauser
Secretary
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY
SHARES YOU OWNED ON THE RECORD DATE
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD,
DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS
ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
<PAGE>
CONTROL CHIEF HOLDINGS, INC.
200 Williams St. Bradford, Pennsylvania 16701 ... P.O. Box 141 .
Bradford, Pennsylvania 16701
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Control Chief Holdings, Inc. (the "Company")
of proxies for use at the Annual Meeting of Shareholders to be held at
the Howard Johnson's Motor Lodge, 100 Davis Street, Bradford,
Pennsylvania on December 1, 1995 at 10:00 a.m. and any adjournments
thereof. The matters to be considered and acted upon at such meeting
are referred to in the accompanying Notice of Annual Meeting and are
more fully discussed herein.
The record date for the determination of shareholders entitled to vote
at the meeting is the close of business on November 3, 1995. On that
date, 811,553 shares of Common Stock, par value $.50 per share (the
"Common Stock"), were issued and outstanding. Each share of Common
Stock is entitled to one vote. A quorum will consist of the holders of
not less than a majority of the shares entitled to vote, present either
in person or by proxy.
Shares represented by proxies will be voted in accordance with the
specifications made on the proxy card by the shareholder. Any proxy not
specifying to the contrary will be voted FOR all proposals.
A proxy may be revoked by a shareholder at any time prior to its use by
filing with the Company a duly executed proxy bearing a later date or by
giving written notice of such revocation to the Secretary of the
Company. A proxy is also subject to revocation if the person executing
the proxy is present at the meeting and chooses to vote in person.
This Proxy Statement and the form of proxy are being mailed to
shareholders on or about November 10, 1995.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, a Board of seven directors is to be elected.
Each director shall serve until the next Annual Meeting of
Shareholders and until his successor shall have been duly elected and
qualified. It is intended that the persons named in the proxies will
vote for the election of the seven directors named below, unless a
shareholder giving a proxy withholds authority to vote for one or more
of them. If any nominee is unable to serve, or for good cause
declines to serve, the shares represented by all valid proxies will be
voted for the election of such substitute as the Board of Directors
may recommend.
The Board of Directors conducts its business through meetings of the
Board and through an Executive Committee, a Compensation Committee, an
Audit Committee and a Long Range Planning Committee. The Board of
Directors of the Company held five meetings during the fiscal year
ended June 30, 1995. All directors attended at least 75% of the
meetings held by the Board of Directors and committees of the Board on
which they served.
During the intervals between meetings of the Board of Directors, the
Executive Committee may exercise all the powers of the Board (except
those powers specifically reserved by New York Law to the full Board
of Directors) in the management and direction of the business and
conduct of the affairs of the Company in all cases in which specific
directions have not been given by the Board. The Executive Committee
consisted of Arvid R. Nelson, Douglas S. Bell C. Lawrence Shields, and
Joseph F. Lamendola until June 5, 1995, at which time Mr. Lamendola
resigned from the Board. It met twice during the fiscal year ended
June 30, 1995.
The Compensation Committee is composed entirely of outside Directors,
was comprised of Arvid R. Nelson, C. Lawrence Shields, and Christopher
G. Hauser. The Compensation Committee sets the salaries of certain
executive officers of the Company. It did not meet during the fiscal
year ended June 30, 1995.
The Nominating Committee is comprised of Patrick G. Shields,
Christopher G. Hauser, and Jon T. Wray. The Nominating Committee
nominates a slate of directors for the ensuing fiscal year. The
Committee met one time and nominated Mr. Douglas S. Bell, Mr. Robert
E. Crofford, Mr. Christopher G. Hauser, Mr. Arvid R. Nelson, Mr. C.
Lawrence Shields, Mr. Patrick G. Shields and Mr. Jon T Wray. The
Committee will consider nominees submitted by security holders.
Nominations for director may be submitted to the Company in writing to
the attention of the Nominating Committee, and should be received at
least ninety days before the next Annual Meeting.
The Audit Committee is comprised of Patrick G. Shields, Christopher G.
Hauser, and Jon T. Wray The Audit Committee recommends to the Board
of Directors the engagement of the independent auditors of the Company
and reviews with the independent auditors the scope and results of the
Company's audits, the Company's internal accounting controls and the
professional services furnished by the independent auditors to the
Company. The Audit Committee met once with the Board of Directors
during the fiscal year ended June 30, 1995.
The Long Range Planning Committee, consisting of Douglas S. Bell, Jon
T. Wray, Robert E. Crofford, and Joseph F. Lamendola until June 5,
1995, at which time Mr. Lamendola resigned from the Board, prepares
and presents strategic business plans for the consideration of the
Board of Directors. The Long Range Planning Committee did not meet
during the fiscal year ended June 30, 1995.
The names and certain information concerning the nominees are set
forth below. The proxies will not be used for a greater number of
persons than the number so named. Under New York State law, the
affirmative vote of the holders of a plurality of the votes cast at
the Annual Meeting is required to elect a nominee as a Director.
Douglas S. Bell Age 46
Elected Chairman of the Board of Directors and President and
Chief Executive Officer of the Company in November of 1995.
Director of the Company since 1988. Mr. Bell has held various
executive positions of the Company's wholly owned subsidiary,
Bradford Classics Woodworking, Inc. since 1988 and is currently
serving as a Director and Executive Vice President. In 1978, he
joined Control Chief Corporation, a wholly owned subsidiary of
the Company, as Data Processing Manager. In 1983, he was named
Manufacturing Manager. In 1987, Mr. Bell was named Chief
Financial Officer. Mr. Bell is a graduate of Clarion University
of Pennsylvania and is the son-in-law of Mr. C. Lawrence Shields,
and the brother-in-law of Patrick G. Shields, both Directors of
the Company.
Robert E. Crofford Age 52
Elected Vice President of the Company in January of 1991. Vice
President of the Company's wholly owned subsidiary, Control Chief
Corporation since May 1988 and a Director since May 1990. From
1987 to 1988, Mr. Crofford held the position of Sales Manager with
Control Chief Corporation. Prior to Mr. Crofford's employment with
Control Chief Corporation, he held various sales positions with
Climatech, Inc., TSBA Controls, Inc., Voltec, Inc., Cambridge
Corporation and Honeywell, Inc.
Christopher G. Hauser Age 41
Director and Secretary of the Company since May 1994. Director and
Secretary of the Company's wholly owned subsidiary, Bradford
Classics Woodworking, Inc. since 1988. Partner in the law firm of
McDowell, Wick, Daly Gallup, Hauser & Hartle since 1985. Mr.
Hauser is a graduate of Washington & Jefferson College and The
Dickinson School of Law.
Arvid R. Nelson Age 68
Director of the Company since 1983. Former Director of Control
Chief Corporation. Since 1952, Mr. Nelson has been an insurance
broker. From 1982 to the present, Mr. Nelson has been a Director
and Vice President of Burns & Burns Associates, Inc., a general
insurance agency. Mr. Nelson is also a Director of Integra Trust
Company. Mr. Nelson is currently the Mayor of the City of
Bradford. He holds a B.S. in Business Administration from Upsala
College.
C. Lawrence Shields Age 68
Director of the Company since 1983. Chairman from 1986 to 1994.
From 1948 to 1962, Mr. Shields was a partner in several small
electronic businesses. From 1963 to 1971, Mr. Shields was an
engineer employed by, and the General Manager of, Ventron
Corporation. In 1971, Mr. Shields founded Control Chief
Corporation where he served as President and Director until May
1990. Mr. Shields is also a member of the advisory board of
Integra Bank. Mr. Shields is the father of Patrick G. Shields,
Director of the Company and father-in-law of Douglas S. Bell,
Chairman and Director of the Company.
Patrick G. Shields Age 47
Director of the Company since 1983. Served as Treasurer from 1983
until 1989 and President from 1984 until 1991. Since 1991, Mr.
Shields has been the President of SPC Technologies, Inc., a
corporation which acquired the assets of the Company's former weld
monitoring operation in Yorkville, New York. From 1966 to 1971,
Mr. Shields held various positions with Ventron Corporation. In
1971 he joined Control Chief Corporation, a wholly owned subsidiary
of the Company, as Vice President and Treasurer. Mr. Shields
attended the University of Pittsburgh where he majored in
Electrical Engineering. Mr. Shields is the son of C. Lawrence
Shields, Director of the Company and brother-in-law of Douglas S.
Bell, Chairman of the Company.
Jon T. Wray Age 46
Director of the Company since August 1994. President of the
Company's wholly owned subsidiary, Bradford Classics Woodworking,
Inc. since November of 1994. Vice President from January 1994
until November of 1994. From 1989 to 1994 Mr. Wray was General
Manager of Bradford Forest Products, a Division of David R. Webb.
During 1988 Mr. Wray was In-House Consultant for Steelcase Corp.
From 1982 to 1988 he was Vice President of Operations for Buskirk
Lumber and Conway Corp. From 1974 to 1982 Mr. Wray held various
positions with companies in the field of development and
operation of domestic sawmills and timber acquisition. Mr. Wray
is a graduate of Ohio State University with a B. S. in Forest
Industries Management.
<PAGE>
SECURITIES OWNED BY MANAGEMENT
The following table provides information regarding beneficial
ownership of the Company's Common Stock by each director and nominee,
the Company's Chief Executive Officer and any executive officer whose
annual aggregate remuneration exceeded $100,000 and by all executive
officers and directors as a group as of October 15, 1995. All persons
listed below have sole voting and investment power with respect to
their common stock unless otherwise indicated .
<TABLE>
<CAPTION>
Shares of Shares of Total Shares Percentage of
Name Stock Owned Stock Subject Beneficially Outstanding
to Options Owned Stock
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<S> <C> <C> <C> <C>
Douglas S. Bell (1) (2) 75,570 0 75,570 9.3%
Christopher G. Hauser (3) 0 300 300 0.0%
Robert E. Crofford (4) 0 5,000 5,000 0.6%
Arvid R. Nelson (4) 4,125 300 4,425 0.6%
C. Lawrence Shields (4) (5) 277,525 300 277,825 34.2%
Patrick G. Shields (4) 36,535 300 36,835 4.5%
Jon T. Wray (6) 1,310 0 1,310 0.2%
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All Directors, Officers and
Nominees as a group (8 persons
including those named above) 395,065 6,200 401,265 49.4%
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(1) Held with wife as joint tenants with rights of
survivorship.
(2) Includes 12,375 shares of common stock held by Mr. Bell as
trustee for custodial accounts for his minor children.
(3) Includes 300 shares of common stock subject to acquisition
by exercise of outstanding options granted in 1994.
(4) Includes 5,000 shares of common stock subject to
acquisition by exercise of outstanding options granted in 1984.
(5) Includes 481 shares of common stock held with wife as joint
tenants with rights of survivorship and 137,022 shares of common
stock held by the wife of Mr. Shields, individually, as to which
he disclaims any beneficial ownership.
(6) Shares held by wife of Mr. Wray, individually, as to which
he disclaims beneficial ownership.
</TABLE>
Executive Officers
The executive officers of the Company are set forth in the table below.
All executive officers are elected at the annual meeting or interim
meetings of the Board of Directors. No arrangements or understanding
exists between any executive officer and any other person pursuant to
which he was elected as an executive officer.
Name Age Position and Period Served
Douglas S. Bell 46 Director of the Company since 1989. Chairman
of the Board since August 1994. Elected
Senior Vice President of the Company in
January 1991. Director and an executive
officer with Bradford Classics Woodworking,
Inc. since 1989.
Robert E. Crofford 52 Elected Vice President of the Company in
January 1991. Vice President of Control
Chief Corporation since May 1988 and Director
since May 1990.
Stephen J. Pachla 44 Elected Treasurer of the Company in
November 1994. Treasurer and Director of
Control Chief Corporation Since November
1994.
Christopher G. Hauser 42 Director and Secretary of the Company
since May 1994. Director and Secretary of
Bradford Classics Woodworking, Inc. since
1988.
EXECUTIVE COMPENSATION/CASH COMPENSATION
The following table sets forth for the fiscal year ended June 30,1995
the remuneration of the Company's Chief Executive Officer and any
executive officer whose aggregate remuneration exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other
and Annual Restricted LTIP All Other
Principal Compensa- Stock Options Payouts Compensa-
Position Year Salary($) Bonus($) tion($) Award(s)($) /SARs(#) ($) tion($)
--------- ---- --------- -------- --------- ----------- ------- ------- ---------
Douglas S. 1995 70,000 0 0 0 0 0 1,085(1)
Bell 1994 70,000 5,000 0 0 0 0 808(2)
CEO 1993 55,000 0 0 0 0 0 1,822(3)
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(1) Payment made under the nondiscriminatory 401(K) feature of the
Profit Sharing Plan for fiscal year ended June 30, 1995.
(2) Payment made under the nondiscriminatory 401(K) feature of the
Profit Sharing Plan for fiscal year ended June 30, 1994
(3) Payment made under the nondiscriminatory Profit Sharing Plan for
the fiscal year ended June 30, 1993.
</TABLE>
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive compensation of $250.00
for each regular or committee meeting attended. Employee directors are
not paid any fees or additional compensation for service as members of
the Board or any of its committees. All directors are reimbursed for
expenses incurred in attending Board and committee meetings.
BENEFIT PLANS
1984 Stock Option Plan.
The Board of Directors and the shareholders of the Company approved
the 1984 Stock Option Plan (the "1984 Plan") providing for stock
options to key persons, including non-employees of the Company, deemed
by the Board to be in the position to contribute materially to the
success of the business and affairs of the Company. The 1984 Plan is
administered by the Board of Directors. An aggregate of 25,000 shares
were reserved for issuance pursuant to the 1984 Plan. Based on the
closing bid price for the Company's Common Stock as reported by the
National Association of Securities Dealers Automated Quotation System
(NASDAQ) at the close of business on June 30, 1995, the 25,000 shares
subject to the 1984 Plan would have a market value of $70,312. All
options will expire not more than ten years after the date of grant.
No options may be granted after August 17, 1994. During the 1995
fiscal no options were exercised. Options to purchase a total of
13,000 shares were granted under the 1984 Plan, and the average
exercise price per share with respect to such options was $2.38.
The exercise price for any option under the 1984 Plan is not less than
the fair market value of a share of common stock on the date of grant,
except that the exercise price of an option awarded to any shareholder
who owns 10% or more of the Company's Common Stock may not be less
than 110% of such fair market value. Generally, the option price is
payable in full in cash or by check upon the exercise of the option.
However, options granted may provide for the option holder to exercise
the option, in whole or in part, by surrendering outstanding shares of
common stock of the Company and receiving credit toward the purchase
price of option shares then being purchased in an amount equal to the
fair market value of the shares being surrendered.
Each option holder must continue in the service of the Company or any
one or more of its affiliates in the capacity of employee, agent,
consultant or director for one year from the day the option is granted
before the option holder can exercise such option in whole or in part.
The Board of Directors may, however, in its discretion reduce or
eliminate the above holding period with respect to the grant of one or
more options to a particular employee or director. If an employee,
agent, consultant or director terminates his relationship with the
Company for any reason other than death or permanent and total
disability, such option holder's option immediately terminates. If,
however, the termination is either with the consent of the Board of
Directors or pursuant to retirement under the provisions of a plan,
the options may be exercised within 90 days from the termination date
(or such earlier date as provided in the Option Agreement). If the
termination occurs due to death or permanent and total disability, the
options may be exercised within one year from the termination date (or
such earlier date as provided in the Option Agreement).
Under current federal income tax law, an option holder will not
realize taxable income on the grant of an option, but, upon the
exercise of the option, the excess of the fair market value over the
option price of the shares purchased will be treated as compensation
and taxable to the option holder at ordinary income tax rates. The
Company will be entitled to a tax deduction in the amount of any
compensation income realized by the option holder.
Profit Sharing Plan.
Effective January 1, 1976, as periodically amended, the Company
established a discretionary cash profit sharing plan ("Profit Plan")
which, subject to the achievement of profitability objectives,
authorizes discretionary cash contributions by the Company and/or
certain of its subsidiaries to the employees of the Company or such
subsidiaries, respectively. Only those employees who meet certain age
and service requirements are eligible to receive discretionary cash
contributions under the Profit Plan and upon the declaration of a
discretionary cash contribution, eligible employees' contribution is
distributed based on the ratio of each participant's compensation to
the total of all such participants' compensation for such year.
Each participant's share of the contribution is credited to an account
maintained for that participant and such amounts are invested by the
trustee of the Profit Plan and periodically credited to the
participant's account. For the fiscal year ended June 30, 1995, the
Board of Directors elected not to make a contribution.
The Board of Directors of the Company authorized the amendment and
restatement of the Profit Plan effective July 1, 1993 to incorporate
an employee savings plan in the form of tax-deferred contributions in
accordance with Section 401(k) of the Internal Revenue Code of 1986,
as amended. Under the terms of the Profit Plan eligible employees may
contribute, on a pre-tax basis, up to 15% of their compensation. The
Company matches each employee's contribution, at a discretionary rate,
currently to a maximum of 25% of the first 6% of compensation.
Employee and employer contributions are credited to the employee's
account and invested pursuant to the participating employee's
directions. All employee contributions are 100% vested immediately
and non-forfeitable. Employer contributions are vested at a rate of
20% per year following 2 years of service.
1994 Stock Option Plan.
The Board of Directors and the shareholders of the Company approved
the 1994 Stock Option Plan (the "1994 Plan") providing for stock
options to key persons, including directors, officers and employees.
The purpose of the 1994 Plan is to attract and retain the best
available personnel for positions of substantial responsibility and to
provide incentives to such key persons to promote the success of the
business of the Company and its subsidiaries. The 1994 Plan is
administered by a Committee of the Board of Directors. The maximum
number of shares of Common Stock which are subject to Awards granted
under the 1994 is 40,000, 7,200 shares of which are reserved for
issuance pursuant to Director's Options made available to non-employee
directors. Based on the closing bid price for the Company's Common
Stock as reported by the National Association of Securities Dealers
Automated Quotation System (NASDAQ) at the close of business on June
30, 1995, the 40,000 shares subject to the 1994 plan would have a
market value of $112,500. All options, with the exception of
Director's Options which shall expire five years from its date of
grant, will expire not more than ten years after the date of grant.
Options to purchase a total of 1,200 shares were granted to non
employee Directors under the 1994 Plan, and the average exercise price
per share with respect to such options was $3.19.
Stock options other than Director's options may be exercisable
immediately upon granting of the stock option or at such other time or
times as the Committee shall specify when granting the stock option.
As to Director's options, an option to purchase 300 shares of Common
Stock is granted upon the effective date of the election of each non
employee member of the Company's Board of Directors and option to
purchase an additional 300 shares of Common Stock is granted
automatically in each of the two succeeding years, immediately
following the annual meeting of the Company's shareholders, to each
Director who is a non employee Director at such time immediately
following such annual meeting. Director's options shall be
exercisable immediately upon grant. If an employee, agent, consultant
or director terminates his relationship with the Company for any
reason other than death or permanent and total disability, such option
holder's option immediately terminates. If the termination occurs due
to death or permanent and total disability, the options may be
exercised within one year from the termination date (or such earlier
date as provided in the Option Agreement).
The exercise price for any option under the 1994 Plan is not less than
the fair market value of a share of common stock on the date of grant,
except that the exercise price of an option awarded to any shareholder
who owns 10% or more of the Company's Common Stock may not be less
than 110% of such fair market value and the option is not exercisable
more than five years from the date it is granted. Generally, the
option price is payable in full in cash or by check upon the exercise
of the option. However, options granted may provide for the option
holder to exercise the option, in whole or in part, by surrendering
outstanding shares of common stock of the Company and receiving credit
toward the purchase price of option shares then being purchased in an
amount equal to the fair market value of the shares being surrendered.
Under current federal income tax law, employee Awards in the form of
non-qualified stock options and Director's Options, the optionee is
not taxed upon grant of the option. When the option is exercised, the
optionee is taxed at ordinary income tax rates on the difference
between the option price and the fair market value of the acquired
shares on the exercise date. The Company receives a deduction for
compensation expense for this full amount and there is a withholding
requirement on the exercise date. For incentive stock options, the
optionee does not receive taxable income upon the grant of the option
or when the option is exercised, provided he does not thereafter make
a disqualifying disposition. However, the excess of the fair market
value of the acquired shares as of the exercise date over the option
price may constitute income for the purpose of the participant's
alternative minimum tax computation. If the optionee holds the option
at least two years from the date of grant and holds the stock at least
one year from the date of transfer of the shares, the optionee is
taxed at the time of the disposition of the stock as a capital gain or
loss on the difference between the sale price and the option price.
Except for a disqualifying disposition of the stock acquired by
exercise of an incentive stock option, the Company will not be
entitled to a deduction for compensation expense as a result of the
grant, exercise or sale of incentive stock option shares by the
optionee. If the optionee disposes of the stock prior to expiration
of the holding period, he will generally recognize ordinary income in
the year of sale equal to the excess, if any, of (a) the lessor of (i)
the fair market value of the shares as of the exercise date or (ii)
the amount realized on the sale over (b) the option price. In this
case, the Company will be entitled to deduct the amount of ordinary
income recognized by the optionee with respect to the sale.
Stock Options
The following tabulation shows as to the named Executive Officer the
amount of options granted, the amount of shares acquired since that
date through the exercise of options granted since that date or prior
thereto and the amount of shares subject to all unexercised options
held as of June 30, 1995. During the fiscal year ended June 30, 1995
no options were granted.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
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Individual Grants
(a) (b) (c) (d) (e)
% of Total
Options/SARs
Options/ Granted to
SARs Employees in Exercise or Expiration
Name Granted(#) Fiscal Year Base Price($/Sh) Date
---- ---------- ------------ ---------------- ----------
Douglas S. 0 N/A N/A N/A
Bell
CEO
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options/SARS at Options/SARs at
Acquired on Value Fiscal Year End(#) Fiscal Year End ($)
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
Douglas S. 0 0 0 0 0 0
Bell
CEO
- --------------------------------------------------------------------------------
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For the fiscal year ended June 30, 1995, the Company and its
subsidiaries have, in the aggregate, paid to Burns & Burns Associates,
Inc. approximately $229,500 and it is estimated that $240,000 in
insurance premiums will be paid to that agency during the new fiscal
year. Mr. Arvid Nelson, a director of the Company, is an employee,
director and officer of Burns & Burns Associates, Inc. The Company and
its subsidiaries plan to continue placing insurance through Mr. Nelson
and Burns & Burns Associates, Inc. in similar amounts.
Mr. Christopher G. Hauser, a Director and Secretary of the Company,
received approximately $350 during the fiscal year ended June 30, 1995
from the Company as fees relating to general legal services provided
to the Company. These fees are based on standard rates for the type of
services provided to the Company. The Company plans to continue to use
the legal services of Mr. Hauser.
The Company leases from C. Lawrence Shields and Dorothy V. Shields its
20,000 square foot office building and approximately 2.5 acres of land
located at 200 Williams Street, Bradford, PA. For the fiscal year
ended June 30, 1995, the Company paid $94,933 in rental fees and real
estate taxes. C. Lawrence Shields and Dorothy V. Shields are
affiliates and principal holders of the Company's Common Stock with
beneficial ownership of approximately 34.2% of the outstanding shares
as of August 31, 1995. C. Lawrence Shields is a Director and past
Chairman of the Board of the Company.
At June 30, 1995, SPC Technologies, Inc. ("SPC"), a related party
through a common Director, Patrick G. Shields, owed the Company
$99,651 under a 10% interest bearing note. The note arose from the
February 1991 sale to SPC of the net operating assets of the Company's
automated weld monitoring business (formerly Digimetrics, Inc.). The
note is secured by a first security interest in substantially all of
the assets of SPC and a second position on the stock of the Company
held by Patrick G. Shields. The note is being repaid in monthly
installments of $957 with a balloon payment of $86,996 due on August
1, 2001.
During the fiscal year, SPC made payments under the terms of the note
amounting in total to $9,571. Patrick G. Shields, the sole officer,
director and shareholder of SPC, is a Director of the Company, and the
son of C. Lawrence Shields, a Director and the principal shareholder
of the Company, and brother-in-law of Douglas S. Bell, the Chairman
and a Director of the Company.
PRINCIPAL HOLDERS OF COMMON STOCK
Set forth below is information as of August 31, 1995 concerning
ownership of shares of the Company's Common Stock by all persons known
by the Company to own beneficially more than 5% of the Company's
Common Stock. All persons listed below have sole voting and investment
power with respect to their common stock unless otherwise indicated.
---------------------------------------------------------------------------
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership of Class
---------------------------------------------------------------------------
Douglas S. and Janine M. Bell 75,570(1) 9.3%
101 Russell Boulevard
Bradford, PA 16701
C. Lawrence and Dorthy V. Shields 277,825(2) 34.2%
64 Jackson Avenue
Bradford, PA 16701
Daniel J. and Diane L. Shields 61,820(1) 7.6%
17570 Montoya Circle
Morean Hill, CA 95037
- ----------------------------------------------------------------------------
(1) Held as joint tenants with rights of survivorship.
Includes 12,375 shares of common stock held as trustee for
custodial accounts for their minor children .
(2) Includes 481 shares of common stock held with wife as
joint tenants with rights of survivorship, 137,022 shares of
common stock held by the wife of Mr. Shields, individually, as
to which he disclaims any beneficial ownership, and 300 shares
of common stock subject to acquisition by exercise of
outstanding options granted in 1994.
PROPOSAL NO. 2
APPROVAL OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has approved the reappointment of Diefenbach,
Delio, Kearney & DeDionisio as the Company's independent accountants
for the fiscal year ended June 30, 1996. The Board seeks shareholder
approval of the selection.
It is anticipated that no representative of Diefenbach, Delio, Kearney
& DeDionisio will be present at the Annual Meeting. Diefenbach,
Delio, Kearney & DeDionisio have served as the Company's auditors
since September 14, 1987.
The Board recommends a vote FOR the approval of the appointment of
Diefenbach, Delio, Kearney & DeDionisio.
SHAREHOLDER'S PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for the 1996 Annual Meeting of Shareholders, any shareholder proposal
to take action at that meeting must be received at the Company's
principal executive offices by June 14, 1996.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at
the meeting other than those specifically referred to in this Proxy
Statement. However, if any other matters properly come before the
meeting, it is intended that the persons named in the enclosed proxy
will vote on such matters in accordance with their best judgment.
COST OF SOLICITATION
The cost of the solicitation of proxies is being paid by the Company.
In addition to the solicitation of proxies by use of the mail,
officers and other employees of the Company may, without extra
compensation, solicit proxies personally or by telephone or
telecopier. The Company will also request banks, brokers and others
who hold shares for the benefit of other persons to forward proxy
materials to such beneficial owners and will reimburse their expenses.
Shareholders are urged to sign, date and return the enclosed proxy in
the enclosed return envelope. Your prompt response will be
appreciated.
By Order of the Board of Directors
Christopher G. Hauser
/Christopher G. Hauser/
Secretary
Dated: November 10, 1995
