RESERVE INDUSTRIES CORPORATION
Suite 308, 20 First Plaza
Albuquerque, New Mexico 87102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held Tuesday, November 21, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of RESERVE INDUSTRIES CORPORATION will be held at
the offices of the Company at Suite 308, 20 First Plaza,
Albuquerque, New Mexico, on Tuesday, November 21, 1995 at
10:00 a.m., Mountain Standard Time, for the following purposes:
1. To elect directors to hold office until the next annual
meeting of shareholders or until successors have been elected
and qualified;
2. To transact such other business as may properly come before
the meeting.
The Board has fixed October 10, 1995, at the close of
business, as the record date for determining shareholders
entitled to receive notice of and vote at this meeting.
If you are unable to be present at the meeting, please
complete, sign and return promptly the enclosed proxy.
BY ORDER OF THE BOARD OF DIRECTORS
BETTY T. SLAWSON, Secretary
Albuquerque, New Mexico
October 17, 1995
<PAGE>
RESERVE INDUSTRIES CORPORATION
(Executive Offices)
Suite 308, 20 First Plaza
Albuquerque, New Mexico 87102
(505) 247-2384
ANNUAL MEETING OF SHAREHOLDERS
To Be Held Tuesday, November 21, 1995
PROXY STATEMENT
The information contained in this Proxy Statement is furnished
with the solicitation, on behalf of the Board of Directors of
the Company, of proxies for the Annual Meeting of Shareholders
to be held Tuesday November 21, 1995 at 10:00 a.m. at the
offices of the Company at Suite 308, 20 First Plaza,
Albuquerque, New Mexico, and at any adjournment thereof. This
proxy statement is being mailed on or about October 17, 1995.
REVOCABILITY OF PROXY
A form of proxy for use at the meeting is enclosed and when it
is properly executed and returned, the shares it represents will
be voted at the meeting in accordance with any directions noted
thereon. Any shareholder who executes and delivers a proxy has
the right to revoke it at any time before it is voted. The
proxy can be revoked by notifying the Secretary in writing or by
subsequently executing a proxy which revokes any other proxy
previously executed by you.
SOLICITATION OF PROXY
The solicitation of proxies is through the mails and the cost
of solicitation will be borne by the Company. The Company will
request banks, brokerage houses and other custodians, nominees,
or fiduciaries to forward copies of proxy material to the
beneficial owners of shares or to request authority for the
execution of the proxies, and will reimburse these banks,
brokerage houses and other custodians, nominees, or fiduciaries
for their out-of-pocket expenses incurred in connection
therewith.
VOTING SECURITIES
October 10, 1995 was the record date for the determination of
shareholders entitled to vote at the meeting and at any
adjournment thereof. On that date, there were 3,147,333 shares
of Common Stock, par value $1.00 per share, outstanding. A
quorum of a majority of the outstanding shares is required to
hold the meeting. For the purposes of determining the quorum,
shares represented at the meeting will be considered to include
shares not voting on any issues as a result of proxies marked
"abstain".
<PAGE>
Proxies will be voted as specified by the shareholder. Where
specific choices are not indicated, proxies will be voted for
the directors nominated by management. A favorable vote of the
holders of a majority of shares of Common Stock voted at the meeting
is required for the election of the Directors.
ELECTION OF DIRECTORS
Shares represented by an executed proxy in the form enclosed
will be voted for the election of the nominees listed below as
directors of the Company to serve until the next Annual Meeting
of Shareholders or until their successors have been elected and
qualified.
All of these nominees presently serve as directors and the term
of office for which each was elected will expire at the Annual
Meeting of Shareholders. The Management does not believe that
any of the nominees named below will be unable to serve as
directors for another year, if elected. However, if at the time
of the meeting any of the nominees named below should be unable
to serve, it is the intention of the persons designated in the
form of proxy to vote, in their discretion, for such other
person, if any, as may be designated as a nominee by the Board
of Directors.
In January 1993 Mr. Bruce M. McIntyre and Mr. Harold K. Axness
retired as Directors of the Company after several years of
service. The Company is grateful for the time and effort these
Directors provided to the Company. At the time of their
retirement the board was reduced to three members and William J.
Melfi was elected to the Board. The other two Directors, James
J. Melfi, Jr. and Frank C. Melfi were elected at the last Annual
Meeting.
The following paragraphs list the names, ages and business
experience of the nominees for director.
Frank C. Melfi, age 58, is President of the Company, a position
he has held since December 1985. From 1976 through December
1985 he was Executive Vice President of the Company. He has
been a director of the Company since April 1985. Mr. Melfi is
the brother of James J. Melfi, Jr. and William J. Melfi.
James J. Melfi, Jr., age 67, is Chairman of the Board of the
Company. Mr. Melfi was elected Chairman of the Board in April
1985 and he was President from December 1975 to December 1985.
He has been a director of the Company since 1970.
William J. Melfi, age 52, is Vice President of Finance and
Administration, a position he has held since December 1985. He
has been a director of the Company since January 1993.
All of these directors have been with the Company for several
years and are knowledgeable about the Company's operations,
problems and opportunities.
<PAGE>
OWNERSHIP OF COMMON STOCK BY OFFICERS AND DIRECTORS
The ownership of Common Stock by officers and directors is set
forth in the table below. Included in the table are the
maximum number of shares of the Company's Common Stock which
might be deemed to be beneficially owned under the rules of the
Securities and Exchange Commission by each nominee and director
and by the officers and the directors of the Company as a group.
The number of shares beneficially owned by each individual and
such group includes shares subject to option to purchase and the
computation of the percentage owned assumes exercise of such
options. The text below the table sets forth certain
information as to the extent to which beneficial ownership
consists of the right to acquire the Company's Common Stock.
The information is as of October 10, 1995.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
<S> <C> <C>
James J. Melfi, Jr.(1) Direct, Indirect and Option
Suite 308, 20 First Plaza 243,190 7.6%
Albuquerque, New Mexico 87102
Frank C. Melfi (2) Direct, Indirect and Option
Suite 308, 20 First Plaza 255,240 8.1%
Albuquerque, New Mexico 87102
William J. Melfi (3) Direct, Indirect and Option
Suite 308 20 First Plaza 125,790 4.0%
Albuquerque, New Mexico 87102
Officers and Directors Direct, Indirect and Option
as a group (4) 626,120 19.5%
</TABLE>
(1) Reference is made to "Principal Shareholders" herein for
information regarding the shares of Common Stock of the Company
beneficially owned by James J. Melfi, Jr..
(2) Reference is made to "Principal Shareholders" herein for
information regarding the shares of Common Stock of the Company
beneficially owned by Frank C. Melfi.
(3) Included in the number of shares opposite Mr. William J.
Melfi's name in the table above are 6,500 shares subject to
purchase under an option held by him, 7,790 shares owned by his
wife for which beneficial ownership is disclaimed. Mr. Melfi
has sole voting and investment power with respect to the shares
owned by him. William J. Melfi and members of his immediate
family own 25 percent of the issued and outstanding stock of
Melfi Corporation, which owns 198,500 shares of Common Stock of
the Company, for which he may be deemed to share voting and
investment power. William J. Melfi is also an officer and
director of Melfi Corporation.
(4) Included in the number of shares owned by officers and
directors as a group in the table above are 22,500 shares
subject to purchase under options.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following text and tables provide information on the
compensation of the Chief Executive Officer and those officers
whose salary and bonus compensation equaled or exceeded $100,000
for the fiscal years ended November 30, 1994, 1993 and 1992.
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Principal Year Annual Compensation Long-Term Compensation All
Position Salary Bonus Other Restrict Options LTIP Other Compensation
Stock /SAR Payout Compen
Awards sation
$ $ $ $ # $ $
<C> <S> <S> <S> <S> <S> <S> <S> <S>
Frank C. Melfi 1994 135,000 27,000 752 0 0 0 0
CEO 1993 135,000 33,750 870 0 0 0 0
1992 120,960 24,192 870 0 0 0 0
James J. Melfi, Jr.1994 135,000 27,000 752 0 0 0 0
Chairman 1993 135,000 33,750 870 0 0 0 0
1992 120,960 24,192 870 0 0 0 0
William J. Melfi 1994 100,000 20,000 752 0 0 0 0
Vice President 1993 100,000 25,000 987 0 0 0 0
1992 86,400 17,280 987 0 0 0 0
</TABLE>
The amounts of salary and bonus stated for Mr. Frank C. Melfi,
Mr. James J. Melfi, Jr. and Mr. William J. Melfi represent the
amounts due to them and accrued by the Company during the year.
As part of the Company's program to conserve cash, all three
individuals accrued part of their annual compensation. Mr.
Frank C. Melfi, Mr. James J. Melfi, Jr. and Mr. William J. Melfi
were paid $46,032, $46,032 and $30,852, respectively of the
annual compensation due them in 1994.
The Company has two active stock option plans; the 1987
Incentive Stock Option Plan (1987 ISO Plan) and the 1987
Nonqualified Stock Option Plan (1987 Nonqualified Plan). The
1987 ISO Plan provides for the issuance of options to key
employees to purchase up to 90,000 shares in aggregate of the
Company's stock. The 1987 Nonqualified Plan provides for the
issuance of options to officers and directors, who can not
participate in the 1987 ISO Plan, to purchase up to 25,000
shares in aggregate of the Company's Common Stock. All option
plans provide that the option price must be equal to or greater
than the market price at the date of grant, the option can not
be exercised for one year and the option expires after ten
years.
<PAGE>
The Option/SAR Grants table is omitted because there was no
activity in the 1994 fiscal year.
<TABLE>
<CAPTION.
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR
Value Table.
Name Shares Value Number of Unexercised Value of
Acquuired Options/SARs Unexercised
at FY-End in-the-money
Exercisable/ Options/SAR at
Unexercisable FY-End ($)
Exer/Unexer Exercisable/
Unexercisable
<s. <C> <C> <C> <C> <C>
Frank C. Melfi 0 0 7,500/0 0
CEO
James J. Melfi, Jr. 0 0 7,500/0 0
Chairman
William J. Melfi 0 0 6,500/0 0
Vice President
</TABLE>
The Long-term Incentive Plan table is omitted because the
Company currently does not have a long-term incentive plan.
The Company did not pay any fees to directors, as it does not
have any directors who are not employees of the Company. During
1994, none of the outstanding Options were repriced.
Compensation Committee Report
The Board of Directors has appointed a Compensation Committee,
the members of which are Mr. Frank C. Melfi and Mr. James J.
Melfi, Jr. The Compensation Committee also acts as the Stock
Option Committee. During the year ended November 30, 1994, the
Compensation Committee held one meeting. The committee is
responsible for annually reviewing the compensation paid to all
of the officers of the Company. The committee develops
recommendations to the Board of Directors for adoption and/or
modification. In determining the compensation to be paid to the
executive officers, the Committee reviewed the experience and
performance of the individual executive officer. The Committee
has not adopted objective standards for determining salary and
bonuses for the executive officers but takes into consideration
all factors which it deems relevant in evaluating the executive
officer's performance.
November 21, 1994
Frank C. Melfi and James J. Melfi, Jr.
Performance Graph
Because the Company's stock is not traded in any identifiable
market and the Company can not determine a market price to
compare performance, the Company has not been able to prepare a
performance graph.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following tabulation sets forth the number of shares of
Common Stock held by each person who owned of record, or is
known by the Company to own beneficially, five percent (5%) or
more of the Company's Common Stock. Included in the table, for
certain individuals are the maximum number of shares of the
Company's Common Stock which might be deemed to be beneficially
owned under the rules of the Securities and Exchange Commission
by those individuals. The number of shares beneficially owned
by those individuals includes shares subject to option to
purchase and the computation of the percentage owned assumes
exercise of such options The information is as of October 10,
1995:
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
<S> <C> <C>
Northwest Alloys Inc. Direct
P.O. Box 115 500,000 15.9%
Addy, Washington 99101
Melfi Corporation Direct
Suite 308, 20 First Plaza 198,500 6.3%
Albuquerque, New Mexico 87102
James J. Melfi, Jr. (1) Direct, Indirect and Option
Suite 308, 20 First Plaza 243,190 7.6%
Albuquerque, New Mexico 87102
Frank C. Melfi (2) Direct, Indirect and Option
Suite 308, 20 First Plaza 255,240 8.1%
Albuquerque, New Mexico 87102
</TABLE>
To the best of the Company's knowledge, the principal
shareholders listed have sole voting and investment power with
respect to the shares of the Company's Common Stock owned by
such shareholders, except as noted below.
(1) Included in the number of shares opposite Mr. James J.
Melfi, Jr.'s name in the table above are 7,500 shares subject to
purchase under an option held by him and 26,700 shares owned by
his wife, for which beneficial ownership is disclaimed. Mr.
Melfi has sole voting and investment power with respect to the
shares owned by him. James J. Melfi, Jr. and members of his
immediate family own 25 percent of the issued and outstanding
stock of Melfi Corporation, which owns 198,500 shares of Common
Stock of the Company, for which he may be deemed to share voting
and investment power. James J. Melfi, Jr. is also an officer
and director of Melfi Corporation.
(2) Included in the number of shares opposite Mr. Frank C.
Melfi's name in the table above are 7,500 shares subject to
purchase under an option held by him. Mr. Melfi has sole voting
and investment power with respect to the shares owned by him.
Frank C. Melfi and members of his immediate family own 25
percent of the issued and outstanding stock of Melfi
Corporation, which owns 198,500 shares of Common Stock of the
Company, for which he may be deemed to share voting and
investment power. Frank C. Melfi is also an officer and
director of Melfi Corporation.
<PAGE>
RELATED TRANSACTIONS
The Melfi Family Trust, which is part of the estate of Mr.
James J. Melfi, Sr., loaned the Company $695,000 in 1991. These
funds were used by the Company to purchase 20% of the stock in
JPL Industries Pte. Ltd., a Singapore company organized in 1991.
The terms of the agreement between the Trust and the Company
call for a five year note at 10% interest, which was prime plus
0.5% at the time of the loan, and a warrant to purchase 60,000
shares of the common stock of the Company. The loan is secured
by the stock in JPL Industries, Reserve Minerals Corporation and
Industrial Mineral Products (Phil), Inc., the Company's wholly
owned Philippine subsidiary. In addition, several times during
1991 Ruth Ann Melfi lent the Company working capital. In order
to conserve cash the Company has not fully repaid this loan.
The outstanding balance at November 30, 1994 was $145,000 plus
accrued interest. The interest rate on this loan is 10% per
annum. The Company provided no additional security for these
loans.
On September 16, 1994, the Company issued 231,984 shares of the
common stock of the Company as payment for $231,984 of deferred
compensation accrued on the books of Company through July 31,
1994 and due to Ruth Ann Melfi, the widow of the Company's
former Chairman James J. Melfi, Sr., deceased. This obligation
arises pursuant to management contracts with James J. Melfi, Sr.
and provides for monthly deferred compensation payments to his
surviving widow. In order to conserve cash the Company had not
made payments on this obligation since November 1991. The stock
was issued at par value of $1.00 per share.
The Company also issued 110,306 shares of common stock to the
Melfi Family Trust as payment of $110,306 of interest accrued
through December 31, 1992 on a the loan from the Melfi Family
Trust to the Company. The stock was issued at par value of
$1.00 per share.
Prior to issuance of the stock the Company obtained an
independent opinion that the transaction was financially fair to
the shareholders of the Company.
One of the Company's subsidiaries L-Bar Products, Inc., which
is currently in Chapter 7 bankruptcy liquidation, had a supply
arrangement with Northwest Alloys, Inc., to process and market
certain waste products from Northwest Alloys' magnesium plant in
Addy Washington. Northwest Alloys lent funds to L-Bar for the
rehabilitation of L-Bar's Chewelah Washington facility. At
November 30, 1994, L-Bar Products owed Northwest Alloys $3.7
million plus accrued interest of approximately $1.17 million
(before any adjustments related to the bankruptcy).
<PAGE>
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen & Co. were the Company's independent certified
accountants for the fiscal year ended November 30, 1990. In
order to conserve cash the Company did not have its financial
statements audited for fiscal years 1991, 1992, 1993 and 1994.
The Company intends to have an audit performed at the time the
Company has sufficient resources to afford the audit.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors has no nominating committee or
committees performing similar functions. The Board of Directors
has an Executive Compensation Committee, the members of which
are Frank C. Melfi and James J. Melfi, Jr. The Executive
Compensation Committee recommends salary levels for executive
officers to the Board of Directors for approval. The Executive
Compensation Committee met one time during the fiscal year ended
November 30, 1994. The Board of Directors has a Stock Option
Committee, the members of which are James J. Melfi, Jr. and
Frank C. Melfi. The Stock Option Committee recommends stock
options to be granted under the 1987 Incentive Stock Option Plan
and the 1987 Nonqualified Stock Option Plan to the Board of
Directors for approval. The Stock Option Committee did not meet
during the fiscal year ended November 30, 1994. The Board of
Directors has an Audit Committee, the members of which are James
J. Melfi, Jr. and Frank C. Melfi. The Audit Committee reviews
the audit of the Company's financial statements for the Board of
Directors. The Audit Committee did not meet during the fiscal
year ended November 30, 1994. The Board of Directors met two
times during the fiscal year ended November 30, 1994. The Board
of Directors did not pass any resolutions by unanimous written
consent in lieu of a meeting during the fiscal year ended
November 30, 1994.
The identification of the executive officers of the Company is
contained in the Form 10KSB annual report for the fiscal year
ended November 30, 1994 and is incorporated by reference.
<PAGE>
SHAREHOLDERS' PROPOSALS
Under applicable regulations, any proposal which a shareholder
of the Company wishes to present at the Annual Meeting of the
Shareholders in 1996 must be received at the Company's general
offices not later than November 30, 1995.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THE COMPANY HAS FILED AN ANNUAL REPORT ON FORM 10-KSB WITH
THE SECURITIES AND EXCHANGE COMMISSION. ANY COMPANY SHAREHOLDER
WHO REQUESTS A COPY OF SUCH ANNUAL REPORT WILL BE FURNISHED WITH
A COPY WITHOUT CHARGE UPON RECEIPT BY THE COMPANY OF A WRITTEN
REQUEST FOR THE REPORT. COPIES OF THE REPORT MAY BE OBTAINED BY
WRITING TO MR. WILLIAM J. MELFI, THE COMPANY'S VICE PRESIDENT,
FINANCE AND ADMINISTRATION, AT SUITE 308, 20 FIRST PLAZA,
ALBUQUERQUE, NEW MEXICO 87102.
BY ORDER OF THE BOARD OF DIRECTORS.
Betty T. Slawson, Secretary
October 17, 1995
THIS IS THE FORM OF THE PROXY CARD - SIDE 1
PROXY
RESERVE INDUSTRIES CORPORATION
The undersigned shareholders(s) appoint(s) JAMES J. MELFI, JR.
and BETTY T. SLAWSON or either of them in the absence of the
other, with full power of substitution, to act as proxy for and
to vote the stock of the undersigned at the Annual Meeting of
Shareholders of Reserve Industries Corporation to be held at the
offices of the Company at Suite 308, 20 First Plaza,
Albuquerque, New Mexico on Tuesday November 21, 1995 at 10:00
am Mountain Standard Time, or at any adjournment thereof.
1. The election of directors ...FOR ALL NOMINEES O WITHHOLD AUTHORITY O
listed below (except to vote for all
as withheld in the nominees listed
space below) below
James J. Melfi, Jr. Frank C. Melfi William J. Melfi
(instruction: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME
IN THE SPACE PROVIDED BELOW)
_________________________________________________________
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. THE PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER SPECIFIED AND BY THE PERSONS NAMED ABOVE IN THEIR
DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS AND FOR
THE RATIFICATION OF THE STOCK ISSUANCE.
(Continued and to signed on the other side
THIS IS THE FORM OF PROXY CARD - SIDE 2
PROXY
RESERVE INDUSTRIES CORPORATION
The undersigned hereby acknowledge(s) receipt of the Notice of
Annual Meeting of Shareholders, November 21, 1995 and a copy of
the Proxy Statement and Annual Report furnished therewith.
Dated:_______________________, 1995 _____________________
Shareholder
_____________________
Shareholder
Please Print Name(s):
___________________________
___________________________ PLEASE DATE, SIGN AND RETURN THIS
PROXY PROMPTLY. This proxy should
be signed exactly as your name or
names appear on the common stock
certificate(s) that you hold. All
joint owners of shares should sign.
State full title when signing as
Executor, Administrator,Trustee,
Guardian, etc.
