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:
____ Preliminary Proxy Statement
____ Confidential, for Use of the Commission Only (as permitted by
____ Rule 14a-6(e)(2))
_X__ Definitive Proxy Statement
_X__ Definitive Additional Materials
____ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WILLIAMS CONTROLS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than 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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule O-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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
Williams Controls, Inc.
Notice of Annual Meeting of Stockholders
to be held on February 28, 1997
The Annual Meeting of Stockholders of Williams Controls, Inc. (the "Company")
will be held at the Best Western Executive Suites located at 31525 West Twelve
Mile Road, Farmington Hills, Michigan on Friday, February 28, 1997 at 10:00 a.m.
Eastern Standard Time, for the following purposes:
1. To elect one Class II director for a three year term expiring in 2000.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Stockholders holding shares of Common Stock of record at the close of business
on January 24, 1997, will be entitled to receive notice of and vote at the
meeting.
Stockholders, whether or not they expect to be present at the meeting, are
requested to sign and date the enclosed proxy and return it promptly in the
envelope enclosed for that purpose. Any person giving a proxy has the power to
revoke it at any time by following the instructions provided in the Proxy
Statement.
By Order of the Board of Directors,
Dale J. Nelson
Secretary
January 27, 1997
Portland, Oregon
<PAGE>
Proxy Statement
for 1997 Annual Meeting of Stockholders
General Information
This Proxy Statement is furnished to stockholders of Williams Controls, Inc.
(the "Company") in connection with the solicitation of proxies by and on behalf
of the Company's Board of Directors (the "Board") for use at the Annual Meeting
of Stockholders of the Company (the "Meeting") to be held on Friday, February
28, 1997 at the Best Western Executive Suites located at 31525 West Twelve Mile
Road, Farmington Hills, Michigan at 10:00 a.m., Eastern Standard Time, for the
purposes set forth in the Notice of Annual Meeting of Stockholders. The Notice
of Annual Meeting, this Proxy Statement and the accompanying proxy card
(collectively, the "Proxy Materials") will be first sent to stockholders on or
about January 31, 1997.
As of the close of business on January 24, 1997, the record date for entitlement
to notice of and vote at the Annual Meeting, the Company had outstanding
17,739,787 shares of common stock, $.01 par value per share (the "Common
Stock"). The presence, in person or by proxy, of holders of one-third of the
shares of Common Stock entitled to vote at the Meeting constitutes a quorum for
the transaction of business at the Meeting.
Each share of Common Stock outstanding on the record date is entitled to one
vote on each matter presented at the Meeting. Directors are elected by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote on the election of directors.
Abstentions will be treated as shares present or represented and entitled to
vote for purposes of determining the presence of a quorum, but will not be
considered as votes cast in determining whether a matter has been approved by
the stockholders. As to any shares a broker indicates on its proxy that it does
not have the authority to vote on any particular matter because it has not
received direction from the beneficial owner thereof, those shares will not be
counted as voting on the particular matter.
A stockholder who gives his proxy may revoke it at any time before it is voted
by giving notice of the revocation thereof to the Secretary of the Company, by
filing another proxy with said Secretary or by attending the Meeting and voting
in person. All properly executed and unrevoked proxies delivered pursuant to
this solicitation, if received in time, will be voted in accordance with the
instructions of the beneficial owners contained thereon.
The Company will bear the cost of the solicitation. In addition to solicitation
by mail, the Company will request banks, brokers and other custodian nominees
and fiduciaries to supply proxy materials to the beneficial owners of the
Company's Common Stock for whom they hold shares and will reimburse them for
their reasonable expenses in so doing.
<PAGE>
Proposal 1 - Election of Directors
The Company's Certificate of Incorporation provides for three classes of
directors with staggered terms of office. Nominees of each class serve for terms
of three years and until the election and qualification of their successors or
until their resignation, death, disqualification or removal from office.
The Board of Directors consists of four members, including two Class I directors
whose terms expire in 1998, one Class II director whose term expires in 1997 and
one Class III director whose term expires in 1999. At the Meeting, one Class II
director will be elected to serve a three-year term expiring in 2000. The
nominee for Class II director is Timothy S. Itin who presently serves on the
Board of Directors of the Company.
Directors are elected by a plurality of the votes cast. Unless you withhold
authority to vote for a nominee, your proxy will be voted for the election of
Mr. Itin.
If Mr. Itin becomes unavailable to serve as a director, discretionary authority
may be exercised by the proxy holders named in the accompanying proxy card to
vote for a substitute nominee proposed by the Board of Directors. Neither
management nor the Board of Directors knows of any reason why Mr. Itin would be
unavailable to serve on the Board of Directors.
First Year
Position and Elected
Name Age Offices with Company Director
- ---- --- -------------------- --------
NOMINEE:
Class II
Term Expires 1997
Timothy S. Itin 38 Director 1994
<PAGE>
First Year
Position and Elected
Name Age Offices with Company Director
- ---- --- -------------------- --------
CONTINUING DIRECTORS:
Class I
Term Expires 1998
Thomas W. Itin 62 President, Chairman of 1988
the Board, Chief Executive
Officer and Treasurer
H. Samuel Greenawalt 67 Director 1994
Class III
Terms Expire 1999
R. William Caldwell 79 Director 1994
Timothy S. Itin has served as a director of the Company and a member of the
Audit and Compensation Committees of the Board of Directors since March 1994.
Since January 1996 Mr. Itin has been a General Partner in the investment banking
firm Volpe, Welty & Company located in San Francisco, California. From 1991
through 1995, Mr. Itin was a managing director of Jensen Securities, a Pacific
Northwest institutional brokerage firm located in Portland, Oregon, and he
served on Jensen's management committee. From 1989 to 1991, he was employed by
Laurel Management Partners, a money management affiliate of Montgomery
Securities. From 1983 to 1989, Mr. Itin was a limited partner of Montgomery
Securities and worked in the field of investment banking, institutional trading
and full service brokerage in San Francisco. Mr. Itin is a candidate for
Chartered Financial Analyst (CFA). Mr.
Itin received a B.A. degree in economics from Dartmouth College.
Thomas W. Itin has been Chairman of the Board and Chief Executive Officer of the
Company since March 1989 and a Director since inception of the Company in
November 1988. In addition, Mr. Itin was elected President and Treasurer of the
Company in June 1993. Mr. Itin has been Chairman, President and owner of TWI
International, Inc. ("TWI") since he founded that entity in 1967. TWI acts as
consultant for mergers, acquisitions, financial structuring, new ventures and
asset management. Mr. Itin also is the owner and principal officer of Acrodyne
Corporation. In addition, Mr. Itin is Chairman of the Board and President of LBO
Capital Corp. and Ajay Sports, Inc., both of which are publicly-held
corporations. Mr. Itin was co-founder of RDM Sports Group, Inc. (previously
known as Roadmaster Industries, Inc.) in 1987 and served as a director thereof
from October 1987 until June 1993. From December 1987 until October 1993, Mr.
Itin was an officer and director of CompuSonics Video Corporation From 1957 to
1962 Mr. Itin was employed by Mobil Oil Corporation in New York and overseas.
Mr. Itin received a B.S. degree from Cornell University and was awarded a
Masters of Business Administration degree from New York University.
<PAGE>
H. Samuel Greenawalt has served as a director of the Company and a member of the
Audit Committee of the Board of Directors since March 1994. From 1987 until his
retirement in June 1994, Mr. Greenawalt served as Senior Vice President,
Business Development, for Michigan National Bank in Detroit, Michigan. Mr.
Greenawalt continues to provide consulting services to Michigan National Bank.
From 1958 to 1987, Mr. Greenawalt served in various commercial lending
capacities at Michigan National Corporation. From 1954 to 1958, he was with the
investment firm of McNaughton-Greenawalt Company. Since June 1993, Mr.
Greenawalt has served as a director of Enercorp, Inc., a publicly traded
business development company which owns approximately 10.6% of the common stock
of the Company. Mr. Greenawalt received a bachelor of science degree from the
Wharton School of the University of Pennsylvania, and is a graduate of the
University of Wisconsin Banking School.
R. William Caldwell has been a director of the Company and a member of the Audit
and Compensation Committees of the Board of Directors since March 1994. Mr.
Caldwell has been retired since 1975. He presently serves as a director of the
Michigan State University Foundation, a director and secretary/treasurer of
Neogen Corporation of East Lansing, Michigan, a limited partner of Doan
Associates of Midland, president and a director of Dow Consultants and a
director of the Chemical Bank and Trust Company of Midland. From 1963 until 1967
Mr. Caldwell served in a variety of positions with Dow Corning Corporation, a
multibillion dollar worldwide chemical company, including director of Toray
Silicone Company, Ltd, Tokyo, Japan, Societe Industrgrielle des Silicones,
Paris, France, and Midland Silicones, London, United Kingdom; chairman of
Molykote, GmbH, Munich, Germany and Arnet Industries, Ltd., Canada; president
and chairman of Dow Corning Silicones. Ltd., Canada; chairman of Dow Corning
International, Ltd.; and corporate vice president of Dow Corning Corporation,
Midland, Michigan. From 1967 to 1968 he served as the assistant general manager,
Pharmaceutical, Agricultural and Consumer Product Department, Dow Chemical, in
Midland, Texas. From 1968 to 1974 he served as director of Dow Chemical, SpA,
Milan, Italy, president and director A.P.E.S.A., Luxembourg, president and
director of Worldwide Operations, Gruppo Lepetit, SA, Italy. From 1974 until his
retirement in 1975 he served as executive vice president of Dow Lepetit, Ltd.,
Milan, Italy and Midland, Texas. Mr. Caldwell received a bachelor of science
degree in Chemical engineering from Michigan State University and graduated from
the Harvard School of Business Administration, Advance Management Program.
<PAGE>
During the fiscal year ended September 30, 1996, the Board of Directors held a
total of six meetings and acted by unanimous written consent three times. The
Board of Directors maintains an Audit Committee and a Compensation Committee.
There is no standing nominating or similar committee of the Board of Directors.
The members of the Audit Committee are H. Samuel Greenawalt, R. William Caldwell
and Timothy S. Itin. The Audit Committee primarily reviews internal accounting
procedures and oversees the review and engagement of the Company's independent
accountants. The Audit Committee met two times during the year. The members of
the Compensation Committee are R. William Caldwell and Timothy S. Itin. The
Compensation Committee primarily reviews and sets compensation paid to the
Company's executive officers and directors and administers the Company's 1993
Stock Option Plan. The Compensation Committee met two times during the year.
Each director attended more than 75% of the meetings of the Board of Directors
and the Audit and Compensation Committees during the period which he served.
Timothy S. Itin is the son of Thomas W. Itin. There are no other family
relationships between any director, executive officer or nominees for director
of the Company.
Executive Officers of the Company
The following table sets forth, as of January 5, 1997, the names and ages of the
Company's executive officers, including all positions and offices held by each
such person. These officers serve at the pleasure of the Board of Directors.
Name Age Position
- ---- --- --------
Thomas W. Itin 62 President, Chairman of
the Board, Chief Executive
Officer and Treasurer
Dale J. Nelson 35 Chief Financial Officer,
Controller and Secretary
For information regarding Mr. Itin see his biography above.
Dale J. Nelson has been Chief Financial Officer, Controller and Secretary of the
Company since October 1991. From December 1990 to October 1991, Mr. Nelson
served as Assistant Controller of the Company. From 1984 to 1989 Mr. Nelson was
employed by KPMG Peat Marwick in the Portland, Oregon office as a senior
accountant. Mr. Nelson received a B.S. degree from the University of Idaho and
an MBA degree from Portland State University. Mr. Nelson is a member of the
American Institute of Certified Public Accountants and the Oregon Society of
Certified Public Accountants.
<PAGE>
Executive Compensation
Summary Compensation Table
The table below sets forth the compensation received by the Chief Executive
Officer of the Company for the past three fiscal years. No other executive
officer of the Company received compensation in excess of $100,000 during the
fiscal year ended September 30, 1996. The Company has no restricted stock award
or long-term incentive plans.
Annual Compensation
Securities
Other Annual Underlying All Other
Name and Salary Bonus Compensation Options Compensation
Principal Position Year ($) ($) ($) (#) ($)
- ------------------ ---- ------ ----- ------------ ----------- ------
Thomas W. Itin 1996 150,000 -- -- -- --
Chief Executive 1995 150,000 -- -- -- --
Officer 1994 150,000 100,000 -- 150,000(1) --
- ----------
(1) These options were issued to Acrodyne Corporation, a company owned by Mr.
Itin.
Options/SAR Grants Table
During 1996, no options or stock appreciation rights were granted to the
executive officer named in the Summary Compensation Table.
Aggregated Option Exercises and Fiscal Year-End Option Value Table
The table below summarizes year-end option values of the executive officer named
in the Summary Compensation Table.
Value of
Number of Securities Unexercised
Underlying In-the-Money
Shares Unexercised Options Options at
Acquired Value at Year-end (#) Year-end ($)
--------------- ------------
on Exercise Realized Exercisable/ Exercisable/
Name # ($) Unexercisable Unexercisable
- ---- ---------- ------- ------------------ ------------
Thomas W. Itin -- -- 262,500(1)/37,500 351,500/-0-
(1) These options were issued to Acrodyne Corporation, a company owned
by Mr. Itin.
<PAGE>
Compensation of Directors
The non-employee directors of the Company are paid $500 for each Board of
Directors Meeting attended and are reimbursed reasonable costs incurred to
attend the meetings.
In February 1996, R. William Caldwell, H. Samuel Greenawalt and Timothy S. Itin,
the non-employee directors of the Company, each received non-statutory stock
options exercisable for ten years to purchase up to 10,000 shares of Common
Stock for $3.66 per share. These stock options were automatically granted under
the 1995 Stock Option Plan for Non-Employee Directors at 100% of the fair market
value of the Common Stock on the date of grant.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
In 1994, the Company entered into a five-year employment contract with Mr. Itin
under which he serves as Chief Executive Officer at a minimum salary of $150,000
per year. Under this arrangement, the Company may terminate Mr. Itin's
employment only for cause. There is no written agreement related to this
employment arrangement.
Board Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the Company's compensation policies and the compensation
paid to executive officers.
The Company's compensation philosophy is designed to achieve long-term growth in
stockholder value. The Company's compensation policies are intended to attract,
retain and motivate highly qualified executives who support a
performance-oriented environment that rewards achievement based upon the
Company's performance and the individual's contribution and performance.
There are three main components in the Company's executive compensation program:
base salary, annual bonus incentive and long-term incentive.
Base Salary. The base salary of each executive officer of the Company is
measured against the median base pay level for positions with comparable
functional responsibilities at companies with sales that are comparable in size
to the Company's sales. Executive salaries are reviewed but not necessarily
increased annually. Salary adjustments may be made by the Committee to recognize
individual contribution and performance or to reflect an increased scope of
responsibilities.
Annual Incentive. Annual incentive bonuses for executive officers are intended
to reflect the Committee's belief that a significant portion of the annual
compensation of each executive officer should be contingent upon the performance
of the Company, as well as the individual contribution of each officer.
<PAGE>
The Company has implemented an annual incentive bonus which provides executive
officers and other key management employees the opportunity to earn annual
incentive bonuses. As a pay-for-performance plan, the annual incentive bonus is
intended to motivate and reward executive officers and other key employees by
directly linking the amount of any cash bonus to two performance components: (1)
corporate and/or operating unit financial performance (specific measurements are
defined each year and threshold and payout levels are established to reflect the
Company's objectives); (2) management's overall assessment of the executive
officer/key employee performance. These criteria are reviewed and approved by
the Committee. Under the guidelines adopted by the Committee, executive officers
are eligible to receive up to 75% of their salary as an annual bonus, depending
on actual earnings performance compared to target earnings goals.
Long-Term Incentive. The Company utilizes stock options as a long-term incentive
to reward and retain employees. The Committee believes that these programs serve
to link management and stockholder interest and to motivate executive officers
to make long-term decisions that are in the best interest of the Company and the
stockholders. The Committee also believes that executive officers and other key
employees should have significant ownership of the Company stock. As a group,
executive officers and directors own approximately 27% of the outstanding common
stock. In particular, Mr. Itin, the Company's Chairman and Chief Executive
Officer, owns approximately 26% of the outstanding shares.
The Committee believes that stock option grants provide an incentive that
focuses the executive's attention on managing the Company from the perspective
of an equity owner in the business. Stock options are granted from time-to-time,
generally on an annual basis, based upon recommendations from management and the
Committee. In general, stock options vest over five years and employees must be
employed by the Company in order to exercise the options. As the stock options
are granted at the fair market value on the date of grant, the Company's stock
options are tied to the future performance of the Company's stock and will
provide value to the recipient only when the price of the Company's stock
increases above the option grant price.
It is the opinion of the Committee that the aforementioned compensation program
provides features which appropriately align the Company's executive compensation
with corporate performance and the interest of its stockholders.
For the fiscal year ended September 30, 1996, the Company's Chief Executive
Officer was paid only the base annual salary provided for under his employment
agreement with the Company. None of the Company's executive officers or key
employees received bonuses for 1996 based on the Company's actual earnings
performance.
R. William Caldwell
Timothy S. Itin
<PAGE>
Performance Graph
The graph below compares the percentage changes in the Company's cumulative
stockholder return on its Common Stock for the five-year period ended September
30, 1996, with the cumulative total return of the NASDAQ Stock Market (US
Companies) and a peer index of the NASDAQ Stocks - Motor Vehicles and Motor
Vehicle Equipment companies.
Comparison of Five Year-Cumulative Total Returns
Performance Graph for Williams Controls, Inc.
Prepared by the Center for Research in Security Prices
Produced on 01/08/97 including data to 09/30/96
CRSP Total Returns Index 9/30 9/30 9/30 9/30 9/29 9/30
for: 1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Williams Controls, Inc. 100.0 89.2 485.7 894.7 957.3 787.3
NASDAQ Stock Market (US 100.0 112.1 146.8 148.0 204.4 242.6
Companies)
NASDAQ Stocks (SIC 3710- 100.0 121.5 171.7 167.4 171.6 194.5
3719 US Companies) Motor
Vehicles and Motor Vehicle
Equipment
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 09/30/91.
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth, as of January 23, 1997, the number of shares of
Common Stock beneficially owned by each director and named executive officer of
the Company individually, all executive officers and directors as a group and
all beneficial owners of more than five percent of the Common Stock. The
following stockholders have sole voting and investment power with respect to
their holdings unless otherwise noted.
Amount
Name and address beneficially Percent
of beneficial owner owned of class*
Thomas W. Itin (1)(2)(3) 4,682,100 26.0
7001 Orchard Lake Rd., Ste. 424
West Bloomfield, MI 48322-3608
Enercorp, Inc. (4) 1,903,750 10.6
7001 Orchard Lake Rd., Ste. 426
West Bloomfield, MI 48322-3608
Acrodyne Corporation (5) 1,200,000 6.7
7001 Orchard Lake Rd., Ste. 424
West Bloomfield, MI 48322-3608
R. William Caldwell (6) 20,000 **
515 McDonald Street
Midland, MI 48640
H. Samuel Greenawalt (3)(6) 220,500 1.2
7001 Orchard Lake Rd., Ste. 424
West Bloomfield, MI 48322-3608
Timothy S. Itin (6) 30,000 **
1 Maritime Plaza, 11th Floor
San Francisco, CA 94111
ll executive officers (7) 4,977,050 27.5
and directors as a group
(five persons)
- ----------
<PAGE>
* Based upon 17,739,787 shares outstanding.
** Less than one percent.
(1) Includes 112,500 shares of Common Stock issuable upon exercise of
presently exercisable stock options held by Mr. Itin. Also includes
1,524,000 shares of Common Stock and 150,000 shares issuable upon the
exercise of stock options beneficially owned by family members and
affiliates of Mr. Itin, including ownership of Acrodyne Corporation
and/or its affiliates which also is reported separately in this table.
Acrodyne Corporation is owned by TWI and TWI is owned by a Michigan
co-partnership of which Mr. Itin is the sole equity owner. Also
includes 390,600 shares owned by certain trusts for which Mr. Itin's
spouse serves as trustee. Neither Mr. or Mrs. Itin are beneficiaries
of these trusts, and they disclaim beneficial ownership of the 390,600
shares owned by the trusts.
(2) Includes 425,000 shares of Common Stock owned by the Company's
Employee Stock Ownership Plan Trust (the "ESOP"), of which Mr. Itin
and one other executive officer not named in this table are the
trustees. As the trustees, these officers share voting and dispositive
power over the securities owned by the ESOP. Both trustees disclaim
beneficial ownership of these shares.
(3) Does not include the ownership by Enercorp, Inc. as reported
separately in this table. Mr. Itin owns approximately 18.5% of the
outstanding voting securities of Enercorp, Inc.
(4) Includes 243,750 shares issuable upon exercise of stock options which
are exercisable within 60 days of the date of this table.
(5) See note (1) above regarding the ownership of Acrodyne Corporation.
Mr. Itin may be deemed to be a beneficial owner of the shares of
Common Stock owned by Acrodyne Corporation and its affiliates; and,
therefore, these shares are included in the ownership reported for Mr.
Itin in this table.
(6) Includes 20,000 shares issuable upon exercise of stock options which
are exercisable within 60 days of the date of this table.
(7) Includes 9,450 shares which had been allocated at December 31, 1996 to
participant accounts under the Company's 401(k) and employee stock
ownership plans to one executive officer not named in this table and
15,000 shares underlying currently exercisable stock options owned by
that officer.
Compliance with Section 16(a) of the
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than ten-percent shareholders are
required by the SEC regulation to furnish the Company with copies of Section
16(a) forms they file.
Based solely on review of the copies of such forms furnished to the Company, or
written representations of the reporting persons, the Company has determined
that all required reports were timely filed during the year, except one report
related to two transactions which was filed late by Enercorp, Inc.
<PAGE>
Certain Relationships and Related Transactions
Enercorp, Inc. is a publicly-held business development company which
beneficially owns approximately 10.6% of the Company's Common Stock. Enercorp
provides management consulting services to the Company on an as-needed basis for
which the Company reimburses Enercorp's reasonable costs related thereto. In
September 1996 the Company approved fees to Enercorp paid through the issuance
of 50,000 shares of Common Stock and granted an option exercisable for five
years to purchase up to 50,000 shares of Common Stock for $2.63 per share,
representing the market price of the Common Stock on the date of grant. These
securities were issued as compensation for management consulting services
provided to the Company in connection with acquisitions completed during 1996.
Thomas W. Itin, Chairman of the Board and Chief Executive Officer of the
Company, owns approximately 18.5% of the common stock of Enercorp.
During 1994 the Company provided a $7,000,000 revolving loan facility to Ajay
Sports, Inc. ("Ajay") for Ajay's operating subsidiary. Ajay manufactures and
distributes golf and billiard accessories primarily to retailers throughout the
United States. The loan to Ajay was recorded as a note receivable, affiliate in
the Consolidated Balance Sheets. In July 1995 Ajay obtained an $8,500,000 credit
facility from a bank which was used to pay off the revolving loan provided by
the Company. In October 1995 Ajay increased its bank line from $8,500,000 to
$13,500,000. The Company has guaranteed this loan up to $13,500,000 and is
charging Ajay a fee of 1/2 of 1% per annum of the outstanding loan amount for
providing this guaranty. At December 31, 1996, Ajay had outstanding
approximately $11,000,000 under its bank line. The Chairman and President of the
Company is also Chairman and President of Ajay, and has guaranteed Ajay's
obligation to the Company under the loan guaranty.
In exchange for the Company providing interim financing in 1994, the Company
received options to purchase up to 15,228,520 shares of Ajay common stock (which
would represent approximately 45% of Ajay's then outstanding common stock) and
received manufacturing rights in certain Ajay facilities through 2002 under a
joint venture agreement. In October 1994, the Company exercised options at $.34
per share to purchase 4,117,647 shares of Ajay common stock. At September 30,
1996 the Company has vested options to acquire 11,110,873 shares of Ajay common
stock at prices ranging from $.34 to $.50 per share.
<PAGE>
Independent Public Accountants
The Company's financial statements for the fiscal year ended September 30, 1996
were audited by Horwath Gelfond Hochstadt Pangburn & Co. ("Gelfond Hochstadt").
Representatives of Gelfond Hochstadt are expected to be present at the Meeting
and will have an opportunity to make a statement if they desire to do so, and to
be available to respond to appropriate questions.
Stockholder Proposals
All proposals of stockholders intended to be presented at the next annual
meeting of stockholders must be received at the Company's corporate offices at
14100 SW 72nd Avenue, Portland, Oregon 97224, Attention: Corporate Secretary, on
or before September 20, 1997, in order to be considered for inclusion in the
proxy statement for the 1998 meeting.
Other Business
Management does not know of any other business to be brought before the Meeting.
If any such matters are brought before the Meeting, the proxies named in the
enclosed form of proxy will vote proxies received by them as they deem best with
respect to all such matters.
Annual Report
The Company's 1996 Annual Report and its Annual Report on Form 10-K for the
fiscal year ended September 30, 1996 are being sent to all stockholders with
this Proxy Statement but are not incorporated herein by reference and are not to
be considered a part of the Proxy Materials.
By Order of the Board of Directors,
Dale J. Nelson
Secretary
<PAGE>
PROXY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
FEBRUARY 28, 1997
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned stockholder of WILLIAMS CONTROLS, INC. (the "Company")
hereby constitutes and appoints Thomas W. Itin and Dale J. Nelson as proxies,
each with the power to appoint his substitute, to appear, attend and vote all of
the shares of the Common Stock of the Company standing in the name of the
undersigned at the 1997 Annual Meeting of Stockholders of WILLIAMS CONTROLS,
INC. to be held at the Best Western Executive Suites, 31525 W. Twelve Mile Road,
Farmington Hills, Michigan, on February 28, 1997, at 10:00am (EST), and at any
postponements or adjournments thereof, upon the following matters:
1. ELECTION OF _____ Timothy S. Itin, for a _____ WITHHOLD AUTHORITY
ONE CLASS II three (3) year term to vote for the
DIRECTOR expiring in 2000 nominee
2. To transact such other business as may properly come before the meeting.
The proxy, when properly signed and delivered, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made, this
proxy will be voted FOR the election of director. This proxy will be voted in
accordance with the discretion of the proxies on any other business.
Please mark, date and sign your name exactly as it appears hereon and
return the Proxy in the enclosed envelope as promptly as possible. It is
important to return this Proxy properly signed in order to exercise your right
to vote if you do not attend the meeting and vote in person. When signing as
agent, partner, attorney, administrator, guardian, trustee or in any other
fiduciary or official capacity, please indicate your title. If stock is held
jointly, each joint owner must sign.
Date: _____________________________________, 1997
____________________________________________
Signature
Address if different from that on label:
_____________________________________________
Street Address
_____________________________________________
City, State and Zip Code
_____________________________________________
Number of Shares
Please check if you intend to be present at the meeting ______
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