<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
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
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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> 2
M. H. RHODES, INC.
99 Thompson Road, Avon, Connecticut 06001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 19, 1997
To the Stockholders:
The Annual Meeting (the "Annual Meeting") of the Stockholders of
M. H. Rhodes, Inc. (the "Company") will be held at the offices of
the Company, 99 Thompson Road, Avon, Connecticut 06001 on Thursday,
June 19, 1997 at 10:00 A.M. local time, for the following purposes:
1. To elect a Board of Directors for the ensuing year or
until their successors are elected and duly qualified;
2. To approve the selection of Riggs & Associates, LLP
as independent auditors to audit the Company's books
and accounts for the year ending December 31, 1997; and
3. To transact such other business as may properly come
before the meeting, or any adjournments or postponements
thereof.
Only stockholders of record at the close of business on May 20, 1997
will be entitled to vote at the Annual Meeting, or any adjournments or
postponements thereof. 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
Avon, Connecticut
May 23, 1997
PROXY STATEMENT
This statement and accompanying proxy card or participant instruction form
is furnished in connection with the solicitation of proxies by and on behalf of
the Board of Directors of M. H. Rhodes, Inc., a Delaware corporation, (the
"Company"), for use at the Annual Meeting of Stockholders on June 19, 1997 or
any adjournments or postponements thereof(the "Annual Meeting"), and was first
sent to stockholders on or about May 23, 1997. 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 $4,000.00 and the amount
spent to date is $3,000.00. All proxies delivered pursuant to this solicitation
are revocable at any time before they are exercised by submission of another
proxy bearing a later date, by attending the meeting and voting in person or by
giving written notice of the revocation to the Secretary of the Company.
<PAGE> 3
Management knows of no matters to be brought before the Annual Meeting
other than those referred to herein. If any other business should properly come
before the Annual Meeting, the persons named in the proxy will vote in
accordance with their best judgment.
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, the appointment of auditors and the
approval of such other business as may properly come before the Annual Meeting
or any adjournments or postponements thereof. Votes will be counted manually.
Abstentions and no votes will not be counted. If no instructions are given, all
shares represented by valid proxies will be voted FOR Proposal Nos. 1 and 2.
VOTING SECURITIES
Only holders of record of the outstanding shares of the common stock, $1.00
par value, at the close of business on May 20, 1997 (the "Record Date") are
entitled to notice of, and to vote at, the meeting. On the Record Date there
were outstanding and entitled to vote 196,736 shares of common stock, each
entitled to one vote. Treasury shares are excluded from this total. The
presence, in person or by proxy, of a majority of the aggregate number of shares
of common stock outstanding and entitled to vote on the Record Date is necessary
to constitute a quorum at the meeting.
NOMINEES FOR DIRECTOR
At the meeting five directors are to be elected, each to serve for a term
of one year or until his successor is elected and duly qualified. Although the
Company's By-laws provide for up to nine directors, there were only four members
of the Board of Directors at the time of Mr. LeMay's passing on March 27, 1997.
Pursuant to the By-laws, the remaining Board members, Mr. Campanelli, Mr. Doyle
and Mr. Morelli, recently elected Mr. Mayerhofer and Mr. Pogmore as successors.
The whole Board constitutes the Nominating Committee and recommends the
following slate of nominees for election as director.
<TABLE>
<CAPTION>
Year First
Name Age Elected Business Experience
---- --- ------- -------------------
<S> <C> <C> <C>
A. J. Campanelli 61 1978 Mr. Campanelli is the Director of
Business Development for Webster Bank.
Previously, he retired from Shawmut National
Bank in 1992, where he had been a Senior
Vice President since 1977.
E. J. Doyle 76 1985 Mr. Doyle retired from the Company in 1989.
He stepped down as President of the Company
in 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
1985. Previously, he had been Vice President
of the Company since 1953.
</TABLE>
-2-
<PAGE> 4
<TABLE>
<CAPTION>
Year First
Name Age Elected Business Experience
---- --- ------- -------------------
<S> <C> <C> <C>
J. T. Mayerhofer 52 1997 Mr. Mayerhofer has been a principal of J.T.M.
Associates, a Consulting Firm focused on small
company productivity and profit improvement,
since 1994. Prior to this, Mr. Mayerhofer was
President and Chief Executive Officer of Knowaste
North America, a start-up venture for the recycling
of personal care products between 1993 - 1994.
Before this, he was with The Dexter Corporation for
10 years. His last four being President and
Corporate Vice President for the Specialty Materials
and Services Group. This Group manufactured and
distributed nonwovens, magnetic material and water
treatment services.
J. L. Morelli 66 1989 Mr. Morelli was appointed President and
Chairman of the Board in 1989. Previously,
since 1988, he had been Acting General Manager,
and prior to this, he had been Vice President
of Operations since 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.
J. W. Pogmore 61 1997 Mr. Pogmore has been President of the Cramer
Company since 1989. Cramer is a major manufact-
urer of sub-fractional horsepower gear motors.
Prior to that, from 1985 to 1989, Mr. Pogmore
was President of Measurement Systems, Inc., a
leading manufacturer of electronic components
and controls serving primarily information
processing, medical and defense industries.
Before becoming President, he was Vice Pres-
ident of Marketing, directing world-wide sales
functions.
</TABLE>
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 at the Annual Meeting. In the
event that any nominee is unable to serve, the persons named in the proxy have
discretion to vote for other persons if such persons are designated by the Board
of Directors. The Board has no reason to believe that any of the nominees will
be unavailable for election.
There are no standing audit, nominating or compensation committees of the
Board of Directors. The Board of Directors will consider nominees recommended by
stockholders for the 1998 Annual Meeting if such recommendations are received in
writing by the Secretary of the Company before January 23, 1998.
The Board of Directors met four times in 1996. Each director attended all
four meetings during the period in which he served except for Mr. LeMay who
attended three.
- 3 -
<PAGE> 5
INDEPENDENT ACCOUNTANTS
Riggs & Associates, LLP, the Company's Certified Public Accounting firm
audited the Company's financial records and prepared financial statements for
the years ended December 31, 1996 and December 31, 1995. For the year ended
December 31, 1994, Whittlesey & Hadley, P.C. audited the Company's financial
statements.
The Board of Directors recommends the appointment of Riggs & Associates, LLP
as the Company's Independent Accountants for 1997. A representative of Riggs &
Associates, LLP will also be available at the meeting to respond to questions or
make a statement if he/she desires to do so.
The Board of Directors of M. H. Rhodes, Inc. approved the recommendation of
the Company'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 & Associates, LLP, One State Street,
Hartford, Connecticut 06103 as the Company's independent accountants for 1995.
The engagement of Whittlesey & Hadley, P.C., ceased as of January 31, 1996.
Whittlesey & Hadley, P.C. served as auditors for the Company for 1994.
Whittlesey & Hadley, P.C.'s report on the financial statements as of December
1994 for the year then ended was unqualified.
The Company's Audit Committee of the Board of Directors approved the change
in the accountants.
- 4 -
<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 May 20, 1997 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 97,061 49.33
Stock Ownership Trust For The
Non-Bargaining Unit Employee
Group(2)
Common Stock A. J. Campanelli - -
Common Stock E. J. Doyle 2,025 1.02
Common STock J. T. Mayerhofer - -
Common Stock J. L. Morelli 7,071 (3) 3.59
Common Stock J. W. Pogmore - -
Common Stock All Officers and Directors (8)
as a group 29,343 (3) 14.91
</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
(7,071) and all other Officers and Directors as a group (25,818). See
"COMPENSATION - Employee Stock Ownership Plan."
COMPENSATION
Compensation - Executive Officers
No officer of the Company was paid cash compensation in excess of $100,000
in 1996. All executive officers as a group (4 persons) received $277,564 for the
year ended December 31, 1996. 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 1996 $ 97,405 -0- $ 16,944
Chairman of the Board 1995 $ 94,474 -0- $ 15,446
and Chief Executive Officer 1994 $ 90,240 -0- $ 14,858
</TABLE>
(1) Includes amounts allocated under the Company's Employee Stock Ownership Plan
during 1996 as a result of Company contributions and interest earned on plan
assets including previously allocated shares of the Company. As of January
1, 1997 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 participants'
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. No shares of the Company's common stock was
purchased by the Company from the ESOT during 1996, however, during the second
quarter of 1997, 5,863 shares of the Company's common stock was purchased by the
Company from the ESOT and retired to Treasury.
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 Connecticut National Bank
(N/K/A Fleet Bank), now Wilshire Credit Corporation 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
loan was sold by Fleet Bank to Wilshire Credit Corporation in December, 1996.
The Wilshire Credit Corporation 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 a brokerage firm that
follows 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.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S&P 500 $100 $108 $ 118 $120 $165 $ 203
M.H. Rhodes $100 $125 $87.50 $125 $125 $87.50
</TABLE>
STOCKHOLDER PROPOSALS
Stockholder proposals must be received before January 23, 1998 in order to
be included, if appropriate, in the Company's 1998 proxy material.
ANNUAL REPORT
The Company's annual report to stockholders for the year ending December
31, 1996 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
PARTICIPANT INSTRUCTION FORM (PROXY)
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 19, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Participant's Name:
--------------------------------------------------------
Number of Shares Participant May Instruct Trustee (Proxy) On:
--------------
The Board of Directors recommends that you instruct the Trustee (Proxy) to vote
FOR each of Proposals 1 and 2, listed below.
THE SHARES REPRESENTED BY THIS PARTICIPANT INSTRUCTION FORM WILL BE VOTED
BY THE TRUSTEE (PROXY) 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).
(1) For the election of A. J. Campanelli; E. J. Doyle; J. T. Mayerhofer;
J. L. Morelli and J. W. Pogmore 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).
Yes No
--- ---
(2) To approve the selection of Riggs & Associates, LLP as independent
auditors to examine the Company's accounts for the year ending
December 31, 1997.
Yes No Abstain
--- --- ---
(3) In its discretion, the Trustee (Proxy) is authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof.
- -------------------------------------- ------------------------
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, M. H. Rhodes, Inc., 99 Thompson
Road, Avon, CT 06001.
If you attend the meeting and wish to change your instructions, you may do so in
writing at that time.
<PAGE> 11
M.H. RHODES, INC. PROXY
98 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 20, 1997 at the annual meeting of shareholders to be held on
June 19, 1997 at the office of the Corporation, or any adjournment thereof.
(Continued and to be signed and dated on reverse)
Please mark
your votes as [ X ]
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
<TABLE>
<CAPTION>
FOR AGAINST
<S> <C> <C>
A.J. Campanelli [ ] [ ]
E.J. Doyle [ ] [ ]
J.T. Mayerhofer [ ] [ ]
J. L. Morelli [ ] [ ]
J.W. Pogmore [ ] [ ]
</TABLE>
2. PROPOSAL TO APPROVE THE APPOINTMENT OF RIGGS & ASSOCIATES,
LLP as the independent public accountants of the company.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
[ ] [ ] [ ]
</TABLE>
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 ____________________________________________________________________, 1997
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
