<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/x/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
M.H. Rhodes, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 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:
----------------------------------------------------------------------
(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:
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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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<PAGE> 2
M. H. RHODES, INC.
99 Thompson Road, Avon, Connecticut 06001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
The Annual Meeting of the Stockholders of M. H. Rhodes, Inc. will be
held at the offices of the Company, 99 Thompson Road, Avon,
Connecticut 06001 on Friday, June 28, 1996 at 10:00 A.M. local time,
for the following purposes:
1. To elect a Board of Directors for the ensuing year.
2. To approve the selection of Riggs Mahoney & Sabol as
independent auditors to examine the Company's accounts
for the year ending December 31, 1996.
3. To transact such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on May 17, 1996
will be entitled to vote at the meeting. Stockholders who do not
expect to attend the meeting in person are urged to fill out, sign and
mail promptly, the enclosed proxy card in the enclosed envelope, which
requires no postage if mailed in the United States.
By Order of the Board of Directors
Sharon L. Vanasse
Corporate Secretary
May 31, 1996
PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies
by and on behalf of the Board of Directors of the Company for use at the annual
meeting of the stockholders on June 28, 1996 or any adjournment thereof, and was
first sent to stockholders on or about May 31, 1996. Solicitation expenses will
be borne by the Company. In addition to the use of the mails, proxies may be
solicited by directors, officers and ESOP committee members of the Company
without additional compensation, by personal interview, telephone, telegram or
otherwise. Arrangements also may be made with brokerage firms and other
custodians, nominees and fiduciaries who hold the voting securities of record
for the forwarding of solicitation material to the beneficial owners thereof.
The Company will reimburse such brokers, custodians, nominees and fiduciaries
for the reasonable out-of-pocket expenses incurred by them in connection
therewith. The total estimated amount to be spent is $4,500.00 and the amount
spent to date is $4,000.00. All proxies delivered pursuant to this solicitation
are revocable at any time by giving written notice to the Company or by voting
in person at the meeting.
VOTING PROCEDURES
A plurality of the votes cast at such meeting at which a quorum is present
is required for the election of a director. Votes will be counted manually.
Abstentions and no votes will not be counted. If no instructions are given,
shares will be voted for the election of directors.
<PAGE> 3
VOTING SECURITIES
Only stockholders at the close of business on May 17, 1996 (the "Record
Date") are eligible to vote at the meeting. On the Record Date there were
outstanding and entitled to vote 202,599 shares of common stock, each entitled
to one vote. Treasury shares are excluded from this total.
ELECTION OF DIRECTORS
At the meeting four directors are to be elected, each to serve for a term
of one year or until his successor is elected. Although the Company's By-laws
provide for up to nine directors, there are only four members of the Board of
Directors presently. The four nominees, for whom information is provided below
are the current members of the Board of Directors. The whole Board constitutes
the Nominating Committee and recommends the following slate of directors for
re-election.
<TABLE>
<CAPTION>
Year First
Name Age Elected Business Experience
---- --- ------- -------------------
<S> <C> <C> <C>
A. J. Campanelli 60 1978 Mr. Campanelli is the Director of Bank
Relations for Loan Guarantee Investment
Corporation. Previously he retired from
Shawmut National Bank in December, 1992,
where he had been a Senior Vice President
since 1977.
E. J. Doyle 75 1985 Mr. Doyle retired from the Company in
January, 1989. He stepped down as President
of the Company in January, 1987 and assumed a
position as one of the Company's Vice
Presidents as an Account Executive until his
retirement. He had served as President of
the Company since September, 1985.
Previously he had been Vice President of the
Company since May, 1953.
H. T. LeMay 79 1993 Mr. LeMay retired as the Vice President
of Industrial Relations and Personnel of
the Chandler Evans Division of Colt
Industries in 1984, a post which he had
held since 1962. The Chandler Evans
Division of Colt Industries manufactures
fuel control devices.
J. L. Morelli 65 1989 Mr. Morelli was appointed President and
Chairman of the Board in April, 1989.
Previously, since November, 1988, he had been
Acting General Manager, and prior to this, he
had been Vice President of Operations since
January, 1987. From 1985 to 1987, he was
Vice President of Operations with Rapid Power
Technologies, manufacturers of power supplies.
Between 1978 and 1985, he served as Executive
Vice President and Vice President of Operations
for Napco, Division of Thermo-Electron,
manufacturers of auto-plating equipment.
</TABLE>
- 2 -
<PAGE> 4
In the absence of contrary instructions, the proxies will be voted for the
nominees above named. All these nominees have consented to being nominated and
named herein, and to serve as directors if elected.
There are no standing audit, nominating or compensation committees of the
Board of Directors. The Board of Directors will consider nominees recommended by
security holders for the 1997 Annual Meeting if such recommendations are
received in writing by the Company before February 1, 1997.
The Board of Directors met three times in 1995. Each director attended all
three meetings during the period in which he served except for Mr. LeMay who
attended two.
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<PAGE> 5
INDEPENDENT ACCOUNTANTS
Riggs Mahoney & Sabol, the Company's Certified Public Accounting firm
audited the Company's financial records and prepared financial statements for
the year ended December 31, 1995. Between 1993 and 1994 Whittlesey & Hadley,
P.C. audited the Company's financial statements.
The Board of Directors recommends the appointment of Riggs Mahoney & Sabol
as the Company's Independent Accountants for 1996. A representative of Riggs
Mahoney & Sabol will also be available at the meeting to respond to questions or
make a statement if he/she desire's to do so.
The Board of Directors of M. H. Rhodes, Inc. approved the recommendation of
the Registrant's Officers to dismiss Whittlesey & Hadley, P.C., 147 Charter Oak
Avenue, Hartford, Connecticut, 06106 as its independent accountants and to
engage the accounting firm of Riggs Mahoney & Sabol, One State Street, Hartford,
Connecticut 06103 as independent accountants for the Registrant for 1995. The
engagement of Whittlesey & Hadley, P.C., 147 Charter Oak Avenue, Hartford,
Connecticut, 06106 ceased as of January 31, 1996.
Whittlesey & Hadley, P.C. served as auditors for the Registrant since 1993.
During none of the years for which Whittlesey & Hadley, P.C. served as
independent auditors for the Company nor for the subsequent interim period
preceding the replacement of Whittlesey & Hadley, P.C., were there any
disagreements between the Registrant and Whittlesey & Hadley, P.C. on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure that would have caused them to make reference in
their report to the subject matter of the disagreement. There were no
"reportable events" (within the meaning of the applicable rules and regulations
of the Securities and Exchange Commission) during the two years ended December
31, 1994 or the subsequent interim period.
Whittlesey & Hadley, P.C.'s report on the financial statements as of
December 1993 and 1994 for the years then ended was unqualified.
The registrant has requested that Whittlesey & Hadley, P.C. furnish it with
a letter addressed to the SEC stating whether it agrees with the above
statements. A copy of Whittlesey & Hadley, PC.'s letter to the SEC dated January
31, 1996 is filed as Exhibit 1 to the Form 8-K.
The Registrant's Audit Committee of the Board of Directors approved the
change in the accountants.
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<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to the beneficial ownership of the common stock of
the Company as of March 27, 1996 by each person who is known by the Company to
own beneficially more than 5% of the common stock, by each director of the
Company and by all officers and directors as a group, is set forth in the
following table.
<TABLE>
<CAPTION>
Amount and
Name of Nature of
Title of Beneficial Beneficial Percent of
Class Owner Ownership(1) Class
-------- ---------- ------------ ----------
<S> <C> <C> <C>
Common Stock M. H. Rhodes, Inc. Employee 102,924 50.80
Stock Ownership Trust For The
Non-Bargaining Unit Employee
Group(2)
Common Stock A. J. Campanelli - -
Common Stock E. J. Doyle 2,025 *
Common Stock H. T. LeMay - -
Common Stock J. L. Morelli 6,413 (3) 3.16
Common Stock All Officers and Directors (7)
as a group 27,256 (3) 13.45
</TABLE>
(1) Record ownership unless otherwise indicated.
(2) Mailing address: 99 Thompson Road, Avon, Connecticut, 06001
(3) Includes shares allocated to ESOP accounts respectively for Mr. Morelli
(6,413) and all other Officers and Directors as a group (23,731). See
"COMPENSATION - Employee Stock Ownership Plan."
(*) Less than 1%
COMPENSATION
Compensation - Executive Officers
No officer of the Company was paid cash compensation in excess of $100,000
in 1995. All executive officers as a group (4 persons) received $268,951 for the
year ended December 31, 1995. The information concerning Mr. Morelli's
compensation is required to be disclosed because of his position as Chief
Executive Officer, notwithstanding that his salary did not exceed $100,000.
- 5 -
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
Name and ------------------- All Other
Principal Position Year Salary($) Bonus($) Compensation(1)
------------------ ---- --------- -------- ---------------
<S> <C> <C> <C> <C>
Joseph L. Morelli 1995 $ 94,474 -0- $ 15,446
Chairman of the Board 1994 $ 90,240 -0- $ 14,858
and Chief Executive Officer 1993 $ 80,988 -0- $ 10,809
</TABLE>
(1) Includes amounts allocated under the Company's Employee Stock Ownership Plan
during 1995 as a result of Company contributions and interest earned on plan
assets including previously allocated shares of the Company. As of January
1, 1996 the vested interest for Mr. Morelli was 100%. See "COMPENSATION -
Employee Stock Ownership Plan".
Compensation - Employee Stock Ownership Plan
The Company has an Employee Stock Ownership Plan ("ESOP") for the benefit of
its non-bargaining unit employees with a related trust("ESOT"). The ESOP has one
trustee appointed by the Board of Directors. The ESOP is administered and
directed by a committee of five employees appointed annually by the Board of
Directors.
Each employee becomes a participant in the ESOP on the earlier January 1 or
July 1 as when such employee has both attained age 21 and completed twelve
months of service in which the employee worked not less than one thousand hours.
The ESOP is funded solely by contributions from the Company to the ESOT in
such amounts and at such frequency as the Board of Directors determines. The
trustee of the ESOP, upon the direction of the administrative committee of the
ESOP, invests ESOT funds primarily in Company stock. The trustee, upon the
direction of the administrative committee, is also authorized to borrow funds to
acquire stock. Shares acquired with loan proceeds are held in an ESOT suspense
account and only allocated to the various participants' accounts as Company
contributions are received by the ESOT and allocated to the participant's
accounts.
Account balances that are forfeited due to the departure of employees prior
to complete vesting are reallocated among the accounts of other participants.
Allocations of contributions and forfeitures are made as of December 31 to
participants employed on December 31 with 50% of such contributions and
forfeitures being apportioned pro rata and 50% being apportioned based upon the
ratio of the individual participant's compensation to total participant
compensation. The trust's net income or loss is allocated to each participant in
proportion to the participant's account balance.
Stock held in the ESOT is voted by the trustee. The trustee votes shares
that are allocated to participants in accordance with instructions from the
participants on the basis of the number of shares allocated to their accounts.
In the absence of instructions, shares are not voted. Unallocated shares are
voted in the same ratio as the voting instructions given by the participants.
Similar procedures govern the trustee's response in the event that there should
be a tender or exchange offer for Company stock.
- 6 -
<PAGE> 8
Presently a participant becomes fully vested after a period of seven years.
Upon expiration of 60 days following attainment of retirement age or death,
employees are entitled to receive the vested portion of the assets in their
accounts in payment of cash and/or Company stock over a period of ten years.
Employees terminating for other reasons are not entitled to a distribution until
after a one year break in service. 5,531 shares of the Company's common stock
was purchased by the Company from the ESOT during 1995.
In 1985, the ESOT purchased 96,461 shares from the estate of a former
principal stockholder, M. H. Rhodes, Jr. for $2,700,908. Of the Purchase Price,
$2,550,000 was provided by a loan to the ESOT from the Company. The loan matures
on December 1, 2000 and interest is to be paid on the loan by the ESOT at a rate
equal to that payable by the Company under a Loan Agreement, dated December 19,
1985 (the "Loan Agreement"), between the Company and Shawmut Bank (K/N/A Fleet)
pursuant to which the Company borrowed from Fleet Bank the funds lent by the
Company to the ESOT. The Loan Agreement provides that the loan from Fleet Bank
to the Company bears interest at a rate equal to 82.5% of the Bank's prime rate,
as such rate is announced from time to time. The Loan Agreement contains a
number of other covenants of the Company including one which requires the
Company to make additional payments to Fleet Bank if the bank is required to pay
any kind of tax on the portion of the interest being paid to it by the Company
that is now exempt from taxation pursuant to Internal Revenue Code Section 133.
The Fleet Bank loan is secured by a mortgage on the Company's real property in
Avon, Connecticut.
Director Compensation
Company employees serving as directors received no remuneration as
directors; all other directors received $400.00 for each board meeting attended.
Chief Executive Officer Compensation
The Board of Directors uses its best faith business judgment to establish
the Chief Executive Officer's compensation based on what it considers to be
reasonable for a person in this capacity, industry and geographic area.
- 7 -
<PAGE> 9
TOTAL MARKET RETURN
Set forth below is a line graph comparing the yearly percentage change and the
five-year cumulative total stockholder return on the Company's shares against
the cumulative total return of the S&P Composite -500 Stock Index. The changes
from year to year are based on estimated data supplied by brokerage firms that
follow the stock of the Company, as there is no generally recognized or
established public trading market for the stock of the Company.
A reasonable comparison cannot be made with a comparable company as there are
none.
[GRAPH]
<TABLE>
<CAPTION>
S&P 500 M.H. Rhodes, Inc.
------- -----------------
<S> <C> <C>
12/31/90 $100 $100
12/31/91 130 80
12/31/92 140 100
12/31/93 154 80
12/31/94 156 80
12/31/95 215 100
</TABLE>
STOCKHOLDER PROPOSALS
Stockholder proposals must be received before February 1, 1997 in order to
be included in the Company's 1997 proxy material.
ANNUAL REPORT
The Company's annual report to stockholders for the year ending December
31, 1995 is enclosed. On written request to Allan D. Springer, Vice President
Finance, M. H. Rhodes, Inc., 99 Thompson Road, Avon, CT 06001, shareholders may
receive a free copy of the Company's latest annual report submitted on Form
10-K, as filed with the Securities and Exchange Commission.
OTHER MATTERS
The Company is not aware of any other matters to be presented to the
meeting but if any other matters should properly come before the meeting, the
proxies will be voted by the persons named therein, in accordance with their
judgment.
By Order of the Board of Directors
Sharon L. Vanasse
Corporate Secretary
- 8 -
<PAGE> 10
[M.H. RHODES, INC. LETTERHEAD]
June 4, 1996
Dear Participant:
Under the terms of the M. H. Rhodes, Inc. Employee Stock Ownership Plan for
the Non-Bargaining Unit Employee Group, you have the right to instruct the
Trustee as to how to vote on matters coming before the Company's Stockholders.
I have enclosed a copy of the Proxy Statement for the M. H. Rhodes, Inc.
Annual Meeting. This is the same Proxy Statement sent to all of the Stockholders
of M. H. Rhodes, Inc. Please complete the enclosed Participant Instruction Form
after you have reviewed the Proxy Statement and return it immediately to me. I
will then vote the shares in accordance with your instructions.
Very truly yours,
/s/ Allan D. Springer
---------------------
Allan D. Springer
Trustee
<PAGE> 11
PARTICIPANT INSTRUCTION FORM
M. H. RHODES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
FOR THE NON-BARGAINING UNIT EMPLOYEE GROUP
PARTICIPANT INSTRUCTIONS TO TRUSTEE REGARDING
ANNUAL MEETING OF STOCKHOLDERS
JUNE 28, 1996
Participant's Name:___________________________________________________________
Number of Shares Participant May Instruct Trustee On:_________________________
THE SHARES REPRESENTED BY THIS PARTICIPANT INSTRUCTION FORM WILL BE VOTED
BY THE TRUSTEE AS DIRECTED BELOW. IF NO DIRECTION IS GIVEN, THE SHARES WILL BE
VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE PROPOSAL IN ITEM (2). UNLESS THE
"NO" BOX IS CHECKED AT ITEM (3), THE TRUSTEE WILL VOTE THE SHARES REPRESENTED
HEREBY IN THEIR DISCRETION WITH REGARD TO ANY OTHER BUSINESS WHICH MIGHT
PROPERLY COME BEFORE THE MEETING.
(1) For the election of A. J. Campanelli; E. J. Doyle; H. T. LeMay
and J. L. Morelli as directors. STOCKHOLDERS MAY WITHHOLD
AUTHORITY TO VOTE FOR ANY NOMINEE(S) BY LINING THROUGH OR
OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE(S).
(2) To approve the selection of Riggs Mahoney & Sabol as independent
auditors to examine the Company's accounts for the year ending
December 31, 1996.
____ Yes ____ No ____ Abstain
(3) Upon such other matters as may properly come before such meeting IN
ACCORDANCE WITH THE JUDGMENT OF THE TRUSTEE.
____ Yes ____ No
________________________________________ ___________________________
Signature Date
IMPORTANT: In signing this Participant Instruction Form, please sign your name
on the signature line above in the same way it is printed on the top of the
page. Please notify the Trustee of any change in address.
Please return promptly to Allan D. Springer.
If you attend the meeting and wish to change your instructions, you may do so in
writing at that time.
<PAGE> 12
M.H. RHODES, INC. PROXY
99 Thompson Road
Avon, CT 06001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J.L. Morelli, A.D. Springer and S.L.
Vanasse as Proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the shares of common stock of M.H. Rhodes, Inc. held of record by the
undersigned on May 17, 1996 at the annual meeting of shareholders to be held on
June 28, 1996 at the office of the Corporation, or any adjournment thereof.
(Continued and to be signed and dated on reverse)
- FOLD AND DETACH HERE -
<PAGE> 13
Please mark /x/
your vote as
indicated in
this example
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR ALL OF THE NOMINEES IN ITEM (1) AND FOR
THE PROPOSAL IN ITEM (2).
1. ELECTION OF DIRECTORS
A.J. Campanelli E.J. Doyle H.T. LeMay J.L. Morelli
FOR / / FOR / / FOR / / FOR / /
AGAINST / / AGAINST / / AGAINST / / AGAINST / /
2. PROPOSAL TO APPROVE THE APPOINTMENT OF RIGGS MAHONEY & SABOL as the
independent public accountants of the company.
FOR AGAINST ABSTAIN
/ / / / / /
3. TO ACT ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
IMPORTANT: In signing this proxy, please sign your name(s) on the signature
line below in the same way it is printed at left. Each joint tenant should
sign. When signing as Attorney, Executor, Administrator, Trustee or Guardian
please give full title as such. Please notify the Company of any change in
address.
________________________________________________________________________________
Signature
________________________________________________________________________________
Signature if held jointly
Dated: _______________________, 1996
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
- FOLD AND DETACH HERE -
