SCHEDULE 14
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HANDEX CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
HANDEX CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions apply:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] 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>
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO BE HELD MAY 7, 1996
TO OUR STOCKHOLDERS:
The Annual Meeting of Stockholders (the Meeting) of Handex Corporation (the
Company) will be held at the Sheraton Eatontown Hotel and Conference Center, 6
Industrial Way East and Route 35, Eatontown, New Jersey, on Tuesday, May 7,
1996, at 10:00 a.m., EDT, to consider and act upon the following:
1. The election of two Directors whose three-year term of office will
expire in 1999;
2. A proposal to ratify the selection of KPMG Peat Marwick LLP as the
Company's independent auditors for 1996; and
3. The transaction of such other business as may properly come before
the Meeting or any adjournments thereof.
Holders of Common Stock of record at the close of business on March 29,
1996 are entitled to notice of and to vote at the Meeting.
Whether or not you expect to be personally present at the Meeting, please
be sure that the enclosed proxy is properly marked, signed and dated, and
returned without delay in the enclosed prepaid envelope. Such action will not
limit your right to vote in person or to attend the Meeting, but will ensure
your representation if you cannot attend.
By Order of the Board of Directors,
Stuart O. Smith
SECRETARY
April 5, 1996
<PAGE>
HANDEX CORPORATION
500 CAMPUS DRIVE
MORGANVILLE, NJ 07751
------------------------------------
PROXY STATEMENT
MAILED ON APRIL 5, 1996
------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 7, 1996
Proxies in the form enclosed with this Proxy Statement are solicited by the
Board of Directors of Handex Corporation, a Delaware corporation (the Company),
for use at the Annual Meeting of Stockholders to be held on Tuesday, May 7,
1996, and any adjournments thereof. The time, place and purposes of the Annual
Meeting are stated in the Notice of Annual Meeting which accompanies this Proxy
Statement.
Only stockholders of record as of March 29, 1996 will be entitled to vote
at the Meeting or any adjournments thereof. As of that date, 6,865,212 shares of
Common Stock, par value $.01 per share (the Common Stock), of the Company were
issued and outstanding. Each share of Common Stock outstanding as of the record
date will be entitled to one vote, and stockholders may vote in person or by
proxy. The Company's Certificate of Incorporation (the Certificate) does not
provide for cumulative voting rights. Execution of a proxy will not in any way
affect a stockholder's right to attend the Meeting and vote in person. Any
stockholder has the right to revoke a proxy by written notice to the Secretary
of the Company at any time before it is exercised, including by executing
another proxy, bearing a later date, or by attending the Meeting and voting in
person.
A properly executed proxy returned in time to be cast at the meeting will
be voted in accordance with the instructions contained thereon, if it is
returned duly executed and is not revoked. If no choice is specified on the
proxy, it will be voted FOR the election of both of the individuals nominated by
the Board of Directors and FOR the other proposal set forth in the Notice of
Annual Meeting.
At the Annual Meeting, in accordance with the Delaware General Corporation
Law and the Company's Certificate of Incorporation, the inspectors of election
appointed by the Board of Directors for the Annual Meeting will determine the
presence of a quorum and will tabulate the results of stockholder voting.
Pursuant to the Company's By-Laws, at the Annual Meeting the holders of a
majority of the outstanding shares of the Company's Common Stock entitled to
vote at the meeting, present in person or by proxy, constitute a quorum. The
shares represented at the Annual Meeting by proxies which are marked, with
respect to the election of Directors, as withheld or, with respect to any other
proposal, abstain, will be counted as shares present for purposes of determining
whether a quorum is present.
Under the rules of the New York Stock Exchange, brokers who hold shares in
street name for beneficial owners have the authority to vote on certain items
when they have not received instructions from such beneficial owners. Under
applicable Delaware law, if a broker returns a proxy and has not voted on a
certain proposal, such broker non-votes will count for purposes of determining
whether a quorum is present.
Pursuant to the Company's By-Laws, at the Annual Meeting, a plurality of
the votes cast is sufficient to elect a nominee as a Director. In the election
of Directors, votes may be cast in favor or withheld; votes that are withheld or
broker non-votes will have no effect on the outcome of the election of
Directors.
Pursuant to the Company's By-Laws, all other questions and matters brought
before the meeting will be decided by the vote of the holders of a majority of
the outstanding shares entitled to vote thereon present in person or by proxy at
the meeting, unless otherwise provided by law or by the Certificate. In voting
on matters other than the election of Directors, votes may be cast in favor,
against or abstained. Abstentions will count as present for purposes of the
proposal on which the abstention is noted and will have the effect of a vote
against the
<PAGE>
proposal. Broker non-votes, however, are not counted as present and entitled to
vote for purposes of determining whether a proposal has been approved and will
have no effect on the outcome of such proposal.
The cost of soliciting proxies in the form accompanying this Proxy
Statement will be borne by the Company. In addition to solicitation by mail,
proxies may be solicited by Directors, officers and regular employees of the
Company in person or by mail, telephone, or telegraph, following the original
solicitation.
SHARE OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth information with respect to Common Stock
owned on March 29, 1996 by each person known by the Company to own beneficially
more than 5% of the Company's outstanding Common Stock at such date, the number
of shares owned by each such person and the percentage of the outstanding shares
represented thereby. The table also lists beneficial ownership of Common Stock
by each of the Company's Directors, each nominee for election as a Director,
each executive officer named in the summary compensation table set forth in this
proxy statement, and all Directors and executive officers as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED CLASS
------------------- ------------------- ----------
<S> <C> <C>
Curtis Lee Smith, Jr....................................... 1,230,975 17.9%
500 Campus Drive
Morganville, NJ 07751
Stuart O. Smith............................................ 1,615,940 23.5%
500 Campus Drive
Morganville, NJ 07751
Gregory J. Reuter(1)....................................... 117,500 1.7%
Thomas J. Bresnan(2)....................................... 200,625 2.8%
David A. Goldfinger(3)..................................... 65,935 1.0%
John T. St. James(4)....................................... 34,750 *
Richard L. Osborne(1)...................................... 2,250 *
William H. Heller(5)....................................... 7,000 *
Scott R. Wilson(5)......................................... 6,000 *
Dimensional/Fund Advisor, Inc.(6).......................... 371,150 5.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
All Directors and Executive Officers as a Group
(11 persons)............................................. 3,294,975 45.5%
<FN>
- ---------------
* Less than 1%.
(1) Represents shares which may be acquired upon the exercise of immediately
exercisable options.
(2) Mr. Bresnan's ownership figure includes 193,000 shares which may be acquired
upon the exercise of immediately exercisable stock options.
(3) Mr. Goldfinger's ownership figure includes 12,500 shares which may be
acquired upon the exercise of immediately exercisable options.
(4) Mr. St. James' ownership figure includes 31,750 shares which may be acquired
upon the exercise of immediately exercisable options.
(5) Messrs. Wilson's and Heller's ownership figures include 5,000 shares each
which may be acquired upon the exercise of immediately exercisable option.
(6) Based solely upon information in a Schedule 13G filed with the Securities
and Exchange Commission on February 7, 1996.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. Each class
initially consisted of two Directors until July 1, 1992 when the membership of
the Board was expanded to seven members with the election of Mr. William H.
Heller as a Class I Director. The Board was further expanded to eight members on
May 11, 1993, with the election of Mr. Thomas J. Bresnan as a Class II Director.
Each class of Directors is elected to a three-year term. At the Annual Meeting,
the Class I Directors will be elected to a three-year term ending at the
2
<PAGE>
1999 Annual Meeting. Mr. Gregory J. Reuter, who is a Class I Director, and who
has served on the Board of Directors since March 1989, has decided not to stand
for reelection to another term. In the light of Mr. Reuter's decision, the Board
of Directors has decided to reduce its membership to seven members effective at
the Annual Meeting.
Unless otherwise directed, the persons named in the accompanying proxy will
vote for the election of the two nominees set forth in the table below as Class
I Directors of the Company for a three-year term. In the event of the death or
inability to act of either of the nominees, the proxies will be voted for the
election of such other person as the Board of Directors may recommend. The Board
of Directors has no reason, however, to anticipate that this will occur. In no
event will the accompanying proxy be voted for more than two nominees or for
persons other than those named below and any such substitute nominee for either
of them.
The following table lists the nominees for election at the Meeting, the
Directors who will continue in office subsequent to the Meeting, and certain
other information with respect to each individual.
NOMINEES FOR ELECTION FOR A THREE YEAR TERM ENDING IN 1999
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND HISTORY
---- --- --------------------------------
<S> <C> <C>
CURTIS LEE SMITH, JR.(1)(4) 68 CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND DIRECTOR
Mr. Smith has served as the Company's Chairman of the Board and Chief
Executive Officer and as a Director since its acquisition by NCS
Holding Corporation (NCS), in July 1986, and had the additional title
and duties of President from August 1989 through July 1992. Mr. Smith
served as President of National Copper & Smelting Co., a Cleveland,
Ohio-based manufacturer and distributor of copper products, from 1962
to 1985, and as President of NCS, a Cleveland, Ohio-based holding
company which operated a copper tubing importing and fabricating
business, from 1985 to 1988.
WILLIAM H. HELLER(1) 57 DIRECTOR
Mr. Heller was formerly a partner with the public accounting firm of
KPMG Peat Marwick LLP from February 1971 until December 1991, and
currently manages his own asset management firm, William H. Heller &
Associates. He was elected as a Director on July 1, 1992, and has
served as a member of the Company's Audit Committee during the term
of his directorship. Mr. Heller also serves as a Director of Capitol
American Financial Corporation, a Cleveland, Ohio-based specialty
insurance provider, Ohio Savings Financial Corporation, a Cleveland,
Ohio-based savings and loan holding company and Telarc International,
Inc. a Cleveland, Ohio-based distributor of phonograph records and
tapes.
DIRECTORS CONTINUING IN OFFICE
STUART O. SMITH(2)(4) 63 VICE CHAIRMAN OF THE BOARD, CHIEF
DEVELOPMENT OFFICER, SECRETARY AND DIRECTOR
Mr. Smith has served as a Director of the Company since its
acquisition by NCS in July 1986, as the Company's Secretary since
February 1989, as its Chief Development Officer since March 1990 and
as Vice Chairman of the Board since August 1992. Mr. Smith served as
a Vice President from July 1986 to August 1992. Mr. Smith also served
as Vice President of National Copper & Smelting Co. from 1962 to 1985
and as Vice President of NCS from 1985 to 1988.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND HISTORY
---- --- --------------------------------
<S> <C> <C>
THOMAS J. BRESNAN(2) 43 PRESIDENT, CHIEF
OPERATING OFFICER AND DIRECTOR
Mr. Bresnan joined the Company in August 1992 and has served as the
Company's President and Chief Operating Officer since that time. Mr.
Bresnan has served as the Chairman and Chief Executive Officer of New
Horizons Education Corporation since its acquisition by the Company
in August 1994. Prior to joining the Company, Mr. Bresnan served in
various executive, marketing, financial and administrative positions
for Capitol American Life Insurance Company, a Cleveland, Ohio-based
specialty insurance provider, from 1984 to 1991. Mr. Bresnan served
as President and Chief Operating Officer of Capital American Life
Insurance Company during 1991. From January to August 1992, Mr.
Bresnan was President and Chief Executive Officer of Glenbrook Group.
Inc. a Cleveland, Ohio-based company seeking acquisition
opportunities. Mr. Bresnan was elected a Director in May 1993.
SCOTT R. WILSON(2) 44 DIRECTOR
Mr. Wilson has served as principal outside legal counsel to the
Company since its acquisition by NCS in July 1986. Mr. Wilson has
been with the law firm of Calfee, Halter & Griswold, Cleveland, Ohio,
since 1977, and has been a partner in such firm since 1985. His
practice focuses on general corporate and tax law. He was elected a
Director in May 1991.
DAVID A. GOLDFINGER(3) 60 DIRECTOR
Mr. Goldfinger has served as a Director of the Company since its
acquisition by NCS Holdings Corporation (NCS) in July 1986. Mr.
Goldfinger served as President of U.S. Consolidated, Inc., a
Cleveland, Ohio-based manufacturers' representative agency, from 1966
to 1991. From January 1992 to the present, Mr. Goldfinger has served
as President of M.S.C.I. Holdings, Inc., a Tavernier, Florida-based
private consulting and investment corporation. Mr. Goldfinger has
served as a member of the Company's Compensation Committee and Audit
Committee during the term of his directorship.
RICHARD L. OSBORNE(3) 57 DIRECTOR
Mr. Osborne has served as a consultant to the Company since its
acquisition by NCS in July 1986, and was elected to the Company's
Board of Directors in January 1989. He has served as the Executive
Dean of the Weatherhead School of Management, Case Western Reserve
University, Cleveland, Ohio, since 1971. Mr. Osborne is also a
management consultant, and serves on the Board of Directors of
Capitol American Financial Corporation, a Cleveland, Ohio-based
specialty insurance provider, Myers Industries, Inc., an Akron,
Ohio-based manufacturer of plastic and rubber parts for the
automotive and other industries, NCS Health Care, Inc., a Cleveland,
Ohio-based provider of pharmacy services to long-term care
institutions and several privately held corporations, including a
Cleveland, Ohio-based savings and loan holding company. Mr. Osborne
has served as a member of the Company's Compensation Committee and
Audit Committee during the term of his directorship.
<FN>
- ---------------
(1) Term as Director expires in 1996; nominee for a three-year term expiring in
1999.
(2) Term as Director expires in 1997.
(3) Term as Director expires in 1998.
(4) Curtis Lee Smith, Jr., and Stuart O. Smith are brothers.
</FN>
</TABLE>
4
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has two standing Committees; the Audit Committee and
the Compensation Committee.
The Audit Committee, of which Messrs. David A. Goldfinger, Richard L.
Osborne and William H. Heller are members, oversees the accounting functions of
the Company, including matters related to the appointment and activities of the
Company's auditors. The Audit Committee met twice during the year ended December
30, 1995.
The Compensation Committee, of which Messrs. Curtis Lee Smith, Jr., David
A. Goldfinger and Richard L. Osborne are members, reviews and makes
recommendations, as well as certain decisions concerning executive salaries,
bonuses and the Company's stock option plans. The members of the Compensation
Committee have renounced their right to receive grants of options under any
stock option plan maintained by the Company during the period of their service
on the Compensation Committee and for a period of one year thereafter. The
Compensation Committee met four times during the year ended December 30, 1995.
The Board of Directors of the Company held ten meetings during 1995. All of
the Directors attended at least 85% of the meetings of the Board of Directors
and each Committee on which each served.
The Company pays a quarterly retainer of $1,000, plus $1,000 per Board
meeting attended, $1,000 for each Committee meeting which is not held in
conjunction with a Board meeting, and $250 for every meeting held via telephone,
to all Directors who are not employees of the Company. Directors who are
employees of the Company do not receive quarterly retainers or meeting fees.
In January 1989, the Compensation Committee granted Mr. Osborne and Mr.
Goldfinger options to acquire 6,250 shares of Common Stock and 12,500 shares of
Common Stock, respectively, under the Company's Outside Directors Stock Option
Plan. These options became exercisable on July 9, 1989 at an option price of
$11.20 per share. In 1992, Messrs. Wilson and Heller each were granted
immediately exercisable options to acquire 5,000 shares of Common Stock at an
option price of $6.50 per share. As of March 29, 1996, options granted to
individuals pursuant to the Outside Directors Plan were outstanding to purchase
24,750 shares of Common Stock at an average price of $9.30 per share.
Messrs. Heller and Osborne provide certain consulting services to the
Company. During 1995, the Company paid Messrs. Heller and Osborne $24,000 and
$30,000, respectively, in fees for such services. Mr. Wilson is a member of the
firm of Calfee, Halter & Griswold, which provides legal services to the Company
on an ongoing basis. Through January 1996, the Company leased its Mt. Dora,
Florida facilities from Xednah Investments, a general partnership whose partners
are Curtis Lee Smith, Jr. and Stuart O. Smith. The Company purchased these
facilities in January 1996 based upon an independent appraisal of the property.
The Company paid $36,000 in rent to Xednah Investments during fiscal 1995. The
Company believes that its transactions with Directors are on terms no less
favorable to it than those that would have been available in similar
transactions with unaffiliated third parties.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The table below shows information concerning the annual and long-term
compensation for services in all capacities to the Company for each of the past
three fiscal years, of all those persons, who were, (i) the Chief Executive
Officer, and (ii) the other four most highly compensated executive officers of
the Company (the Named Officers) during fiscal 1995:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION LONG TERM
------------------ COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER(1) OPTIONS/SARS COMPENSATION(2)
- --------------------------- ---- -------- ------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Curtis Lee Smith, Jr. 1995 $153,847 $ -- $ -- -- $ 10,601
Chairman of the Board, Chief 1994 163,077 -- -- -- 10,601
Executive Officer and Director 1993 155,428 -- -- -- 10,673
Stuart O. Smith 1995 144,231 -- -- -- 4,414
Vice Chairman of the Board, Chief 1994 152,885 -- -- -- 4,414
Development Officer, Secretary and Director 1993 146,889 -- -- -- 4,414
Thomas J. Bresnan 1995 216,346 35,000 -- 25,000 4,629
President, Chief Operating Officer 1994 208,173 -- -- 220,000 4,620
and Director 1993 194,039 -- -- 50,000 2,971
John T. St. James 1995 146,096 -- -- -- 2,337
Vice President, Chief Financial 1994 144,596 -- -- -- 2,358
Office and Treasurer 1993 130,976 -- -- -- 2,993
P. Craig Modesitt 1995 126,203 22,955 -- 5,739 3,764
Vice President, Sales and 1994 127,290 -- -- -- 1,731
Marketing 1993 45,433(3) -- -- -- --
<FN>
- ---------------
(1) No Named Officer received perquisites or other personal benefits having a
value exceeding the lesser of 10% of such executive salary and bonus for
1995, 1994, and 1993 or $50,000. Pursuant to the terms of Mr. Bresnan's
employment agreement, he received an interest free loan from the Company in
the amount of $250,000 payable on September 30, 1997. Had the loan carried a
market interest rate, Mr. Bresnan would have paid $16,655 in interest during
1995, $16,858 during 1994, and $17,046 in 1993. In 1995, the Company, in the
form of a bonus, forgave $35,000 of Mr. Bresnan's loan to the Company.
(2) Amounts of All Other Compensation reported for Curtis Lee Smith, Jr., and
Stuart O. Smith represent premiums paid by the Company on insurance policies
for the benefit of such persons. Amounts of All Other Compensation reported
for Messrs. Bresnan, St. James and Modesitt represent the Company's matching
contribution under its 401(k) Profit Sharing Plan. The Company currently
matches each participating employee's contributions to the Plan to the
extent of 50% of the participant's salary reduction up to the maximum
allowable under the Internal Revenue Code.
(3) Mr. Modesitt joined the Company in August 1993. His annualized salary for
1993 was $112,500.
</FN>
</TABLE>
6
<PAGE>
OPTION EXERCISES AND YEAR-END VALUES
The table below shows information with respect to the unexercised options
to purchase the Company's Common Stock granted in 1995 and prior years under the
Company's Key Employees Stock Option Plan (the Employees Plan) to the Named
Officers and held by them at December 30, 1995. None of the Named Officers
exercised any stock options during 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY-OPTIONS AT
DECEMBER 30, 1995 DECEMBER 30, 1995*
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Curtis Lee Smith, Jr....................................... -- -- $ -- $ --
Stuart O. Smith............................................ -- -- -- --
Thomas J. Bresnan.......................................... 193,000 232,000 -- --
John T. St. James.......................................... 31,750 17,000 -- --
P. Craig Modesitt.......................................... 8,000 17,739 -- --
<FN>
- ---------------
* Based on the difference between the exercise price of such options and the
closing price of a share of the Company's Common Stock on the NASDAQ National
Market System on such date ($5.125), which price was higher than the exercise
prices for the above options.
</FN>
</TABLE>
OPTION GRANTS
The table below shows additional information on stock options granted in
1995 under the Key Employees Stock Option Plan to the Named Officers. These
options are reflected in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUES
PERCENTAGE OF AT ASSUMED ANNUAL RATE OF
TOTAL OPTIONS STOCK PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM
EMPLOYEES BASE PRICE EXPIRATION ---------------------------
NAME GRANTED* IN 1995 (PER SHARE) DATE 5% 10%
- ---- -------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Curtis Lee Smith, Jr.............. -- -- $ -- -- $ -- $ --
Stuart O. Smith................... -- -- -- -- -- --
Thomas J. Bresnan................. 25,000 81% 6.00 4/27/05 94,335 239,055
John T. St. James................. -- -- -- -- -- --
P. Craig Modesitt................. 5,739 19% 6.00 4/27/05 21,656 54,877
<FN>
- ---------------
* Represents options awarded under the Company's Key Employees Stock Option Plan
(the Employees Plan). Such options vest at the rate of 20% per year commencing
on the first anniversary of the date of grant except for the options awarded
to Mr. Bresnan, which were immediately exercisable at grant date. All of the
above options were awarded at an exercise price equal to the fair market value
of a share of Common Stock on the date of the grant. The options expire upon
the tenth anniversary of the date of grant. In general, employees may exercise
vested options awarded under the Employees Plan for a period of three months
following the date of the cessation of their employment with the Company.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
The Company is a party to an employment agreement with Thomas J. Bresnan,
its President and Chief Operating Officer. Mr. Bresnan's employment agreement
was entered into when he joined the Company on August 3, 1992. The agreement
provides that Mr. Bresnan will receive a base salary, subject to annual review,
of $200,000 per year. In connection with the execution of the agreement, Mr.
Bresnan received options to purchase an aggregate of 130,000 shares of Common
Stock under the Employees Plan. Pursuant to the terms of Mr. Bresnan's
agreement, he also received a five-year interest-free loan of $250,000 towards
the purchase of a home in New Jersey. The loan is secured by a mortgage on Mr.
Bresnan's residence. In the event that Mr. Bresnan's employment is terminated by
the Company without cause during the three years subsequent to the date of the
employment agreement, the Company will be obligated to continue to pay his
salary for a period of one year subsequent to the date of such termination. The
agreement also obligates the Company to provide certain health insurance and
life insurance benefits for the duration of such agreement. At the time of
execution of his employment agreement, Mr. Bresnan also entered into an
agreement with the Company containing confidentiality and non-competition
provisions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors includes Curtis Lee
Smith, Jr., the Company's Chairman and Chief Executive Officer. Up until January
1996, the Company was leasing its main facility in Florida from Xednah
Investments, a general partnership whose partners were Curtis Lee Smith, Jr.,
and Stuart O.
7
<PAGE>
Smith. The Company paid $36,000 in rent to Xednah Investments during 1995. The
Company purchased this facility for $327,000, from the partnership based upon an
independent appraisal of the property.
During 1995, Mr. Curtis Lee Smith, Jr., obtained loans from the Company at
interest rates equivalent to the Company's cost of borrowing money. The
principal amounts on these loans totaled $233,610 at December 30, 1995. The
Company extended an additional loan of $100,000 to Mr. Smith in January 1996.
These loans are evidenced by demand notes and are secured by the proceeds from
certain life insurance policies on Mr. Curtis Lee Smith, Jr.
Richard L. Osborne, a member of the Compensation Committee of the Board of
Directors, provides certain consulting services to the Company. Mr. Osborne
received $30,000 in consulting fees from the Company during 1995.
The Company believes that these transactions were on terms no less
favorable than would have been available in similar transactions with
unaffiliated third parties.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The Company's compensation programs are intended to provided its executive
officers with a mix of salary, benefits and incentive compensation arrangements
that are: (i) consistent with the interests of stockholders; (ii) competitive
with the arrangements provided by other companies in the industry; (iii)
commensurate with each executive's performance, experience and responsibilities;
and (iv) sufficient to attract and retain highly qualified executives. In making
its recommendations concerning adjustments to salaries and awards under the
other compensation plans, the Committee considers the financial condition and
performance of the Company during the prior year and the Company's success in
achieving financial, operational and other strategic objectives. The Committee
also makes an assessment of the contributions of the individual executive
officer to the Company's performance and to the achievement of its objectives,
as well as the success of the executive in achieving objectives which may have
been set for such individual. In assessing individual performance, the Committee
also seeks to recognize individual contributions during periods when the Company
experienced adverse business or financial conditions.
For purposes of determining whether the Company's compensation packages are
competitive, the companies with which the Company compares itself are those
included in the peer group index set forth in the Stockholder Return Performance
Presentation contained elsewhere in this proxy statement. While the Committee
does not establish a targeted range for the Company's overall executive
compensation within the peer group, its review of publicly available information
for the years 1990 through 1994 indicates that the compensation level of the
Company's Chief Executive Office has historically been significantly below the
average compensation paid to Chief Executive Officers of peer group companies.
Such information also indicates that the base salary levels for the Company's
other executive officers have been generally comparable with those provided to
similar executives at peer group companies, while the overall amount of bonuses
paid to other executives by the Company have been equal to or lower than the
bonuses paid to peer group executives. Option awards to peer group executives
vary widely from company to company and from year to year, although the
Company's option awards to its executive officers are generally lower than
awards by members of the peer group. The Company's stock significantly
outperformed the peer group during the period prior to fiscal 1992; since that
time its performance has been below that of the peer group.
Each component of an executive's compensation package is intended to assist
in attaining one or more of the objectives outlined above. The Company attempts
to provide its executives with base salaries and benefits that are competitive
with those of comparable companies and commensurate with the performance,
experience and responsibilities of each executive. Through salary adjustments
and bonuses, the Company also seeks to provide its executives with incentives to
improve the Company's financial and operational performance by providing a
method for rewarding individual performance. Finally, the Company's Key
Employees' Stock Option Plan is intended to provide executive officers with an
opportunity to acquire a proprietary interest in the Company, thereby providing
these individuals with increased incentive to promote the long-term interests of
the Company's stockholders.
While the Committee seeks to assure that the Company's compensation
programs further the objectives described above and considers the various
factors outlined above in making compensation decisions, it does not take a
highly formalized or objective approach to determining compensation. Instead,
the Committee gives
8
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consideration to these various factors in subjectively evaluating the
compensation of each individual executive. While the subjective nature of the
Committee's decisions make it difficult to specifically identify the relative
importance of each of these various factors, in making compensation decisions
for fiscal 1995, the Committee generally gave greater weight to the Company's
performance, as measured by net income, and its subjective assessment of
individual performance, than to other factors.
In 1993, Congress adopted Section 162(m) of the Internal Revenue Code,
Section 162(m) limits the ability of public companies to deduct compensation in
excess of $1,000,000 paid to certain executive officers, unless such
compensation is performance based within the meaning of Section 162(m). While
the Committee believes it is essential that there be a correlation between the
Company's performance and the compensation of its executive officers, it
believes that the criteria under Section 162(m) necessary for compensation to
qualify as performance based unduly limits the Committee's flexibility in
determining compensation arrangements and in administering compensation
programs. Therefore, the Committee has determined not to make changes to the
Company's compensation programs or to the composition of the committee in
response to the adoption of Section 162(m).
1995 COMPENSATION DECISIONS
BASE SALARY AND BENEFITS. The base salaries and benefits provided to
executive officers who were not parties to employment contracts with the Company
for the 1995 fiscal year were established by the Committee in accordance with
the compensation philosophy discussed above. Since one executive was a party to
an employment agreement with the Company entered into prior to the 1995 fiscal
year, his minimum base salary level for 1995 was set by the terms of such
agreement. The Committee determined to make individual salary adjustments with
respect to certain executive officers of the Company, based on the Committee's
subjective evaluation of the executive's performance and the contribution to the
Company.
BONUSES. After considering the Company's performance and the various other
factors discussed above, the Committee forgave $35,000 of Mr. Bresnan's loan in
the form of a bonus. Mr. Modesitt was awarded a bonus based on the Company's
sales performance in 1994.
STOCK OPTIONS. During the 1995 fiscal year, the Company awarded options to
purchase an aggregate of 30,739 shares of Common Stock to certain executive
officers of the Company. The awards were made at the fair market value of a
share of Common Stock on the date of grant and become exercisable over a five
year period commencing on the first anniversary of the date of grant, except for
the award to one executive officer which was immediately exercisable. During the
1995 fiscal year, the Committee determined that it was desirable to increase the
long term incentives provided to two of the current executive officers. The
Committee based its decision primarily on its subjective assessment of the
individual's performance and its desire to reward this performance. The number
of shares subject to the option was determined on the basis of the Committee's
subjective assessment of the individual's contribution to the Company and the
appropriate level of his long-term incentive compensation. The executive's
current share ownership position and the number of options previously awarded to
him were considered by the Committee in determining the appropriate level of his
long-term incentive compensation. Mr. Modesitt's option award was based on the
Company's sales performance in 1994.
CHIEF EXECUTIVE OFFICER COMPENSATION
Curtis Lee Smith, Jr.'s compensation is determined on the basis of the
Committee's subjective assessment of his performance, measured by the Company's
financial condition, results of operations and success in achieving strategic
objectives. The Committee also considers the responsibilities associated with
Mr. Smith's position and the level of compensation provided to Chief Executive
Officers of other companies in the environmental remediation industry. Mr. Smith
does not participate in the Committee's actions with respect to his
compensation.
Although the Committee reviews Mr. Smith's compensation on an annual basis,
no adjustments were made to Mr. Smith's salary during 1995. Mr. Smith's base
salary was last adjusted in December 1990, at which time the Committee voted
(with Mr. Smith abstaining) to increase his salary from $175,000 to $200,000.
Mr. Smith declined this salary increase. In June 1992, Mr. Smith voluntarily
reduced his salary from $175,000 to $160,000 in connection with a restructuring
in the Company's business and related cost-cutting measures. As with the
Company's other executive officers, the Committee determined not to pay Mr.
Smith a bonus during 1995.
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Mr. Smith is the beneficial owner of approximately 18% of the issued and
outstanding Common Stock. As a consequence of his significant ownership interest
in the Company, Mr. Smith elected, at the time of the Company's initial public
offering, to renounce any rights that he might otherwise have to participate in
the Company's stock option plans. Accordingly, Mr. Smith did not receive any
option awards during fiscal 1995.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Richard L. Osborne
David A. Goldfinger
Curtis Lee Smith, Jr.
10
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STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing yearly percentage change in the
cumulative stockholder return on the Company's Common Stock against the
cumulative total return of the NASDAQ Market Index (U.S.), and a
Company-determined peer group for the period commencing January 1, 1991 and
ended December 30, 1995. The Companies included in the peer group are Canonie
Environmental Services, Inc., Groundwater Technology, Inc., Sevenson
Environmental, International Technology Corporation, and OHM Corporation. The
graph assumes that the value of the investment in the Company's Common Stock and
each index was $100 at January 1, 1991 and that all dividends, if any, were
reinvested.
COMPARISON OF TOTAL CUMULATIVE TOTAL RETURN
HANDEX COMMON STOCK, NASDAQ MARKET INDEX AND
COMPANY DETERMINED PEER GROUP INDEX
(PUT CHART HERE)
11
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RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has recommended that KPMG Peat Marwick LLP,
independent certified public accountants, serve as the Company's independent
auditors for the year ending December 28, 1996. Such firm has served as the
Company's auditors since 1986. It is expected that a member of the firm will be
present at the Meeting, will have an opportunity to make a statement if he
should so desire and will be available to respond to appropriate questions from
stockholders.
The Board of Directors recommends that you vote FOR ratification of its
appointment of KPMG Peat Marwick LLP as the Company's independent auditors for
the year ending December 28, 1996. If the stockholders reject the nominations of
KPMG Peat Marwick LLP, the Board of Directors will reconsider its selection.
OTHER MATTERS
The Board of Directors is not aware of any matter to come before the
Meeting other than those mentioned in the Notice of Annual Meeting of
Stockholders. If other matters, however, properly come before the Meeting, it is
the intention of the persons named in the accompanying proxy to vote in
accordance with their best judgment on such matters insofar as the proxies are
not limited to the contrary.
Any stockholder who wishes to submit a proposal for inclusion in the proxy
materials to be distributed by the Company in connection with its Annual Meeting
of Stockholders to be held in 1997 must do so no later than December 6, 1996. To
be eligible for inclusion in the 1997 proxy materials of the Company, proposals
must conform to the requirements set forth in Regulation 14A under the
Securities Exchange Act of 1934.
Upon the receipt of a written request from any stockholder, the Company
will mail, at no charge to the stockholder a copy of the Company's Annual Report
on Form 10-K, including financial statements and schedules required to be filed
with the Securities and Exchange Commission pursuant to Rule 13a-1 under the
Securities Exchange Act of 1934, for the Company's most recent year. Written
requests for such report should be directed to:
Investor Relations Department
Handex Corporation
500 Campus Drive
Morganville, NJ 07751
You are urged to sign and return your proxy promptly in the enclosed return
envelope to make certain your shares will be voted at the Meeting.
By order of the Board of Directors,
Stuart O. Smith
SECRETARY
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[X] PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Rayify the [ ] [ ] [ ]
Directors appointment of
(see KPMG Pete Marwick LLP
reverse) as independent audi-
tors of the company
For, except vote withheld from for 1996.
the following nominee(s):
3. In their discretion,
- ------------------------------- each proxy is
authorized to vote
upon such other
business as may
properly come before
the meeting.
Change [ ]
of
Address
Attend [ ]
Meeting
PLEASE, MARK, SIGN, DATE AND
RETURN THE PROXY CARD USING
THE ENCLOSED ENVELOPE.
SIGNATURE(S) DATE
------------------------ ------
SIGNATURE(S) DATE
------------------------ ------
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTHS HOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF
A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
<PAGE>
HANDEX CORPORATION
500 CAMPUS DRIVE
P MORGANVILLE, NJ 07751
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
Y The undersigned hereby appoints each of Curtis Lee Smith, Jr., Stuart O.
Smith and John T. St. James, as proxy, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote as
designated below, all shares of Common Stock of the Company held of record by
the undersigned on March 29, 1996, at the Annual Meeting of Stockholders to
be held on May 7, 1996, or any adjournment thereof.
Election of Directors, Nominees: (change of address)
Curtis Lee Smith, Jr. and William H. Heller -------------------------------
-------------------------------
-------------------------------
-------------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card.)
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
SEE REVERSE
SIDE
