<PAGE>
SCHEDULE 14A
(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
<TABLE>
<S> <C> <C> <C>
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
/X/ Definitive Proxy Statement only (as permitted by Rule 14a-6(e)(2)
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ALLIED DEVICES CORPORATION
- --------------------------------------------------------------------------------
(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>
ALLIED DEVICES CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 31, 1998
------------------------
Baldwin, New York
March 12, 1998
To the Holders of Common Stock
of ALLIED DEVICES CORPORATION:
The Annual Meeting of the Stockholders of ALLIED DEVICES CORPORATION will be
held at the offices of Haythe & Curley, 237 Park Avenue, 20th Floor, New York,
New York 10017, on March 31, 1998 at 9:30 o'clock A.M. for the following
purposes, as more fully described in the accompanying Proxy Statement:
1. To elect directors of the Company for the ensuing year.
2. To consider and take action upon a proposal to ratify the Board of
Directors' selection of BDO Seidman to serve as the Company's independent
auditors for the Company's fiscal year ending September 30, 1998.
3. To consider and take action upon a proposal to amend the Company's 1993
Stock Option Plan to increase from 1,250,000 to 1,500,000 the number of shares
of Common Stock available for options under the Plan.
4. To transact such other business as may properly come before the Meeting
or any adjournment or adjournments thereof.
The close of business on March 3, 1998 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Meeting.
By Order of the Board of Directors,
Mark Hopkinson, Secretary
You are cordially invited to attend the Meeting in person. If you do not
expect to be present, please mark, sign and date the enclosed form of Proxy and
mail it in the enclosed return envelope, which requires no postage if mailed in
the United States, so that your vote can be recorded.
1
<PAGE>
PROXY STATEMENT
This Proxy Statement, which will be mailed commencing on or about March 12,
1998 to the persons entitled to receive the accompanying Notice of Annual
Meeting of Stockholders, is provided in connection with the solicitation of
Proxies on behalf of the Board of Directors of Allied Devices Corporation (the
"Company") for use at the Annual Meeting of Stockholders (the "Meeting") to be
held on March 31, 1998, and at any adjournment or adjournments thereof, for the
purposes set forth in such Notice. The Company's executive office is located at
2365 Milburn Avenue, Baldwin, New York 11510.
Any Proxy may be revoked at any time before it is exercised. The casting of
a ballot at the Meeting by a stockholder who may theretofore have given a Proxy
or the subsequent delivery of a Proxy will have the effect of revoking the
initial Proxy.
At the close of business on March 3, 1998, the record date stated in the
accompanying Notice, the Company had outstanding 4,619,942 shares of common
stock, $.001 par value ("Common Stock"), each of which is entitled to one vote
with respect to each matter to be voted on at the Meeting. The Company has no
class or series of stock outstanding other than the Common Stock.
Directors are elected by plurality vote. Adoption of proposals 2 and 3 will
require the affirmative vote of a majority of the shares of Common Stock present
and voting thereon at the Meeting. Abstentions and broker non-votes (as
hereinafter defined) will be counted as present for the purpose of determining
the presence of a quorum. For the purpose of determining the vote required for
approval of matters to be voted on at the Meeting, shares held by stockholders
who abstain from voting will be treated as being "present" and "entitled to
vote" on the matter and, thus, an abstention has the same legal effect as a vote
against the matter. However, in the case of a broker non-vote or where a
stockholder withholds authority from his proxy to vote the proxy as to a
particular matter, such shares will not be treated as "present" and "entitled to
vote" on the matter and, thus, a broker non-vote or the withholding of a proxy's
authority will have no effect on the outcome of the vote on the matter. A
"broker non-vote" refers to shares of Common Stock represented at the Meeting in
person or by proxy by a broker or nominee where such broker or nominee (i) has
not received voting instructions on a particular matter from the beneficial
owners or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on such matter.
I. ELECTION OF DIRECTORS
Five directors will be elected at the Annual Meeting of Stockholders to be
held on March 31, 1998, each to serve until the 1999 Annual Meeting of
Stockholders and until a successor shall have been chosen and qualified. It is
the intention of each of the persons named in the accompanying form of Proxy to
vote the shares of Common Stock represented thereby in favor of the nominees
listed in the following table, unless otherwise instructed in such Proxy. All of
such nominees are presently serving as directors. In case any of the nominees is
unable or declines to serve, such persons reserve the right to vote the shares
of Common Stock represented by such Proxy for another person duly nominated by
the Board of Directors in such nominee's stead. The Board of Directors has no
reason to believe that the nominees named will be unable or will decline to
serve.
<PAGE>
Certain information concerning the nominees for election as directors is set
forth below. Such information was furnished by them to the Company.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
OWNED BENEFICIALLY AS
OF PERCENT
NAME AND CERTAIN BIOGRAPHICAL INFORMATION JANUARY 15, 1998(1) OF CLASS
- ------------------------------------------------------------------------------- ----------------------- -----------
<S> <C> <C>
MARK HOPKINSON, age 50, has been Chairman of the Board since 1981, when he and 1,014,571(2)(7) 20.82%
Mr. Bartow organized the acquisition of the Company. He also served as
President of the Company from 1981 until March 1994. He is a graduate of the
University of Pennsylvania and of the Harvard Graduate School of Business
Administration. Prior to acquiring the Company, he was a management
consultant, working originally with Theodore Barry & Associates from 1977 to
1978 and later as an independent and with the Nicholson Group from 1978 to
1981. The focus of his work in the period leading up to 1981 was development
of emerging growth companies, both in the United States and in lesser
developed countries. He served as an officer in the United States Navy from
1969 to 1972.
P.K. BARTOW, age 50, has been President of the Company since March 1994. He 850,688(3)(7) 17.59%
also served as Vice President of the Company from 1981 until March 1994.
Prior to acquiring the Company, Mr. Bartow had joined the Nicholson Group in
1978, and performed facility and feasibility studies for emerging growth
companies. While at the Company, he has been the Director of Marketing from
1981 onwards, and in that capacity has established a network of independent
manufacturers' representatives across the United States and in the United
Kingdom, Israel and selected regions in Canada. He has also organized and
published the Company's 650+ page catalog. Mr. Bartow received a B.A. degree
from Williams College in 1970, and a M.Arch degree from the University of
Pennsylvania in 1974.
SALVATOR BALDI, age 76, was one of the original founders of the Company in 767,807(4)(7) 15.88%
1947. He has been a Director of the Company since February 1994. The business
was started as a general machine shop and developed through the years as a
supplier to certain principal competitors of the Company in the market for
standardized precision mechanical parts. By the late 1970's, the Company had
become a competitor, offering its own catalog of components. He and his
partners sold the Company to the investor group assembled by Mr. Hopkinson
and Mr. Bartow in October 1981, with Mr. Baldi remaining with the Company
under an employment contract. By the time his contract expired two years
later, Mr. Baldi had negotiated to repurchase an interest in the Company. He
currently works on an abbreviated work schedule.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
OWNED BENEFICIALLY AS
OF PERCENT
NAME AND CERTAIN BIOGRAPHICAL INFORMATION JANUARY 15, 1998(1) OF CLASS
- ------------------------------------------------------------------------------- ----------------------- -----------
<S> <C> <C>
CHRISTOPHER T. LINEN, age 50, became a Director of the Company during fiscal 40,000(5) 0.86%
1997. He is currently principal of Christopher Linen & Company, through which
he has invested in a series of early stage, internet and technology-related
enterprises. Prior to this, from 1975 until 1996, he was an executive with
Time Inc. (later Time Warner Inc.) where he managed a series of six
subsidiaries or divisions in Asia, Latin America, the United States, and
worldwide. Prior to that, he was Assistant Financial Director of the Italhai
Holding Company, Ltd. (Bangkok), during which tenure he was Publisher of the
Bangkok World, an English language daily newspaper. He is a director of
Starmedia Networks Inc., Chairman of NirvanaSoft Inc., and a Trustee of The
Family Academy, an experimental public school. He holds a B.A. from Williams
College and attended the Graduate School of Business Administration at New
York University.
MICHAEL MICHAELSON, age 75, has been a Director of the Company since 1990. He 225,084(6)(7) 4.72%
has been President and sole stockholder of Rainwater Enterprises, Ltd. since
1979, providing management and marketing consultation services to clients
principally in publishing and related industries. He is also on the board of
directors of Metro Tel Corp., a publicly held company in the
telecommunications field. From 1986 to 1989, he was Chairman of the Council
on Economic Priorities. From 1977 to 1979, he was co-founder and Chairman of
the Board of Games Magazine, which was sold to Playboy magazine in 1979. From
1970 to 1978, Mr. Michaelson worked for Publishers Clearing House, where he
was Senior Vice President. From 1968 to 1970, he was President and founder of
Campus Subscriptions, Inc. Mr. Michaelson served in the United States Army in
the South Pacific during World War II, where he was a Company Commander in
the 38th infantry, 25th division and received the Bronze Star and the Purple
Heart. He received a B.S. degree from New York University in 1948.
</TABLE>
- ------------------------
(1) Except as indicated hereafter, each of the nominees has sole voting and
investment power with respect to all shares shown in the table as
beneficially owned by him.
(2) Mark Hopkinson is General Partner of the Hopkinson Family Partnership (in
which he has exclusive management rights), which owns 700,000 of the shares
included herein. Mr. Hopkinson owns 51,911 shares in his own name. Also
included in Mr. Hopkinson's shareholdings are 5,660 shares represented by
warrants exercisable by Mr. Hopkinson until December 31, 1999 and 257,000
shares represented by currently exercisable options. Mr. Hopkinson disclaims
beneficial ownership of 15,700 shares owned by his wife.
(3) Included in Mr. Bartow's shareholdings are 1,722 shares represented by
warrants exercisable by Mr. Bartow until December 31, 1999 and 225,000
shares represented by currently exercisable options. Mr. Bartow disclaims
beneficial ownership of 15,000 shares owned by his immediate family.
(4) Included in Mr. Baldi's shareholdings are 898 shares represented by warrants
exercisable by Mr. Baldi until December 31, 1999 and 225,000 shares
represented by currently exercisable options.
(5) Included in Mr. Linen's shareholdings are 25,000 shares represented by
currently exercisable options.
3
<PAGE>
(6) Included in Mr. Michaelson's shareholdings are 52,584 shares represented by
warrants exercisable by Mr. Michaelson until December 31, 1999 and 110,000
shares represented by currently exercisable options. Mr. Michaelson owns
62,500 shares in his own name. Mr. Michaelson disclaims beneficial ownership
of 118,500 shares owned by his wife.
(7) As consideration for various services rendered to the Company in the period
1983 until 1990, the Company issued certain stockholders warrants to
purchase up to 340,000 shares of Common Stock at prices ranging from $.30
per share to $.70 per share. Certain of those warrants were exercised in
fiscal 1996 and fiscal 1997, prior to their expiration. 60,864 of these
warrants remained exercisable at September 30, 1997.
During the fiscal year ended September 30, 1997 the Board of Directors of
the Company met four times. Each of the persons named in the table above
attended at least 75% of the meetings of the Board of Directors which were held
during the time that such person served.
The Board has a Compensation Committee. The members of the Compensation
Committee are Michael Michaelson, who serves as Chairman, and Christopher T.
Linen. The Compensation Committee makes recommendations to the full Board as to
compensation of senior management and determines the executives who are to
receive options and the number of shares subject to each option. The
Compensation Committee did not meet during the fiscal year ended September 30,
1997.
The Board has an Audit Committee. The members of the Audit Committee are
Christopher T. Linen and Michael Michaelson. The Audit Committee meets at least
once per year in advance of the Annual Meeting of Stockholders of the Company
with the Company's independent auditors. The Audit Committee acts as a liaison
between the Board and the independent auditors and annually recommends to the
Board the appointment of the independent auditors. The Audit Committee reviews
with the independent auditors the planning and scope of the audits of the
financial statements, the results of those audits and the adequacy of the
Company's internal accounting controls.
The directors and officers of the Company, other than Messrs. Linen and
Michaelson, are active in its business on a day-to-day basis. No family
relationships exist between any of the directors and officers of the Company,
except that Philip Baldi, son of Salvator Baldi, a Director of the Company, is a
Vice-President and Manager of the Company.
The Company's Certificate of Incorporation contains a provision, authorized
by Nevada law, which eliminates the personal liability of a director of the
Company to the Company or to any of its stockholders for monetary damages for a
breach of his fiduciary duty as a director, except in the case where the
director breached his duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Nevada corporate law, or
obtained an improper personal benefit.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information for the fiscal years ended
September 30, 1997, 1996 and 1995 concerning the compensation paid or awarded to
the Chairman and Chief Executive Officer of the Company. No other executive
officer of the Company received fiscal 1997 salary and bonus compensation which
exceeded $100,000. The Company's Directors receive $1,250 per meeting for their
services as such and reimbursement for any expenses they may incur in connection
with their services as directors.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
FISCAL OTHER ANNUAL AWARDS-OPTIONS
NAME OF OFFICER AND PRINCIPAL POSITION YEAR SALARY COMPENSATION (#)
- --------------------------------------------------------------- ----------- --------- ----------------- ---------------
<S> <C> <C> <C> <C>
Mark Hopkinson,................................................ 1997 $ 97,221 $ 0 27,400
Chairman and Chief 1996 $ 98,098 $ 0 29,000
Executive Officer 1995 $ 90,116 $ 0 4,600
</TABLE>
Under the terms of the Company's 1993 Incentive Stock Option Plan, the
following options were granted to the Chief Executive Officer of the Company
during fiscal year 1997:
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE OR
UNDERLYING TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR ($/SH) DATE
- --------------------------------------------------- --------------- --------------------- ------------- -----------
<S> <C> <C> <C> <C>
Mark Hopkinson..................................... 10,250 9.8% $ 0.70 12/1/06
5,150 4.9% $ 0.67 2/15/07
12,000 11.5% $ 0.70 7/31/07
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS/
UNEXERCISED SARS
OPTIONS/SARS AT FY-END
AT FY-END (#) ($)
VALUE ------------- ------------
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------- ------------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Mark Hopkinson.......................................... -- $ -- 257,000/0 $99,585/$0
</TABLE>
- ------------------------
(1) In-the-money options are those for which the fair market value of the
underlying Common Stock exceeds the exercise price of the option. The value
of the in-the-money options is determined in accordance with regulations of
the Securities and Exchange Commission by subtracting the aggregate exercise
price of the option from the aggregate year-end value of the underlying
Common Stock.
No compensation to management has been waived or accrued to date.
Under the terms of its employee stock option plan (adopted in October 1993
and amended in December 1995), the Board of Directors is empowered at its
discretion to award options to purchase an aggregate of 1,250,000 shares of the
Company's Common Stock to key employees. Prior to fiscal 1997, the Company had
granted options to purchase an aggregate of 1,087,600 shares to key employees
and Directors, with exercise prices ranging from $0.35 to $3.25 per share.
During fiscal 1997, the Company granted options to purchase 104,400 shares of
the Company's Common Stock, at exercise prices ranging from $0.35 to $2.44, to
11 individuals (one non-management member of the Board of Directors, one
executive, and nine non-executive managers).
5
<PAGE>
STOCK OPTION PLAN
In October 1993, the Company adopted the 1993 Stock Option Plan (the
"Plan"), which empowers the Board of Directors at its discretion to award
options to purchase an aggregate of 1,000,000 shares of Common Stock to key
employees. In December 1995, the Board of Directors adopted an amendment to the
Plan, approved by the stockholders in March 1996, to increase the number of
shares of Common Stock available for options under the Plan to 1,250,000. In
January 1998, the Board of Directors adopted an amendment to the Plan, subject
to approval by the stockholders, to increase the number of shares of Common
Stock available for options under the Plan to 1,500,000. See "III. Approval of
Amendment to the 1993 Stock Option Plan" below.
The Compensation Committee of the Board of Directors determines the
executives who are to receive options and the number of shares to be subject to
each option. The Executive Committee determines the persons who are not
executives who are to receive options and the number of shares to be subject to
each option. In selecting individuals for options and determining the terms
thereof, the Compensation Committee and/or the Executive Committee may consider
any factors it deems relevant, including present and potential contributions to
the success of the Company. Options granted under the Plan must be exercised
within a period fixed by the Compensation Committee or the Executive Committee,
which may not exceed ten years from the date of the option or, in the case of
incentive stock options granted to any holder on the date of grant of more than
ten percent of the total combined voting power of all classes of stock of the
Company, five years from the date of grant of the option. Options may be made
exercisable in whole or in installments, as determined by the Compensation
Committee or the Executive Committee.
Options may not be transferred other than by will or the laws of descent and
distribution and, during the lifetime of an optionee, may be exercised only by
the optionee. The exercise price may not be less than the market value of the
Common Stock on the date of grant of the option. In the case of incentive stock
options granted to any holders on the date of grant of more than ten percent of
the total combined voting power of all classes of stock of the Company and its
subsidiaries, the exercise price may not be less than 110% of the market value
per share of the Common Stock on the date of grant. Unless designated as
"incentive stock options" intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended, options which are granted under the Plan are
intended to be "nonstatutory stock options". The exercise price may be paid in
cash, shares of Common Stock owned by the optionee, or in a combination of cash
and shares.
The Plan provides that in the event that any member of the Compensation
Committee is not a "disinterested person" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, as in effect at April 30, 1991, the
maximum number of shares of Common Stock which may be subject to options granted
to all directors is 950,000, and the maximum number of shares of Common Stock
which may be subject to options granted to each director who is an officer or
employee of the Company is 250,000.
The Plan provides that, in the event of changes in the corporate structure
of the Company or certain events affecting the Common Stock, the Compensation
Committee, or the Board of Directors in the case of options granted to
directors, may, in its discretion, make adjustments with respect to the number
of shares which may be issued under the Plan or which are covered by outstanding
options, in the exercise price per share, or both. The Compensation Committee
may in its discretion provide that, in connection with any merger or
consolidation in which the Company is not the surviving corporation or any sale
or transfer by the Company of all or substantially all its assets or any tender
offer or exchange offer for or the acquisition, directly or indirectly, by any
person or group of all or a majority of the then outstanding voting securities
of the Company, outstanding options under the Plan will become exercisable in
full or in part, notwithstanding any other provision of the Plan or of any
outstanding options granted thereunder, on and after (i) 15 days prior to the
effective date of such merger, consolidation, sale, transfer or acquisition or
(ii) the date of commencement of such tender offer or exchange offer, as the
case may be.
6
<PAGE>
Either authorized and unissued shares or treasury shares of Common Stock, or
both, may be used for purposes of the Plan. Shares covered by options which
terminate or expire prior to exercise will be available for further options
under the Plan.
For federal income tax purposes, an employee will not recognize income upon
the grant of a nonqualified stock option. However, except in the case of certain
employees who are subject to Section 16(b) of the Securities Exchange Act of
1934, an employee will recognize ordinary income upon the exercise of a
non-qualified stock option equal to the excess (if any) of the fair market value
of the shares purchased at the time of exercise over the exercise price. The
Company will be entitled to a tax deduction in the same amount at the same time
as the optionee realizes such income. Upon the sale of shares purchased, the
optionee will realize capital gain or loss measured by the difference between
the amount realized on the sale and the fair market value of the shares at the
time of exercise. Such capital gain or loss will be short-term or long-term,
depending upon the length of time the shares were held by the optionee.
An employee will not recognize income upon the grant of an incentive stock
option or, except as noted below, upon the exercise of an incentive stock option
and the Company will not be entitled to a deduction in respect thereof. Unless
shares acquired upon exercise are disposed of within two years of the date of
grant or within one year of exercise, upon the sale of such shares, the optionee
will realize capital gain or loss measured by the difference between the amount
realized on the sale and the price paid for the shares. If a sale is made prior
to either of such dates, an optionee will recognize ordinary income, and the
Company will be entitled to a deduction to the extent of the excess of the fair
market value of the shares at the time of exercise or the amount realized on the
sale (whichever is less) over the option price. The balance of any gain realized
will be treated as long-term or short-term capital gain, depending upon the
length of time the shares were held by the optionee.
The excess of the fair market value of incentive option stock at the time of
exercise over the option price may constitute an item of tax preference for
purposes of the alternative minimum tax. Thus, under certain circumstances, the
exercise of an incentive stock option may result in a tax at the time of
exercise. The basis of the shares is increased by the amount treated as a tax
preference item.
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
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common
Stock. Officers, directors and greater than ten percent stockholders are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during the fiscal year ended September 30, 1997 all Section 16(a)
filing requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1990, the Company granted Michael Michaelson, a Director, 50,000
warrants to purchase Common Stock in return for uncompensated service to the
Company. Each warrant is exercisable at a price of $.30 per warrant for one
share of Common Stock until April 15, 1998.
In August 1987, certain officers and stockholders purchased unsecured 10%
promissory notes from the Company in the aggregate amount of $157,680: including
Mark Hopkinson, $75,000; P.K. Bartow, $25,000; Salvator Baldi, $7,680; and
Michael Michaelson, $25,000. In December 1994, all such notes were retired by
paying 10% unsecured promissory notes due December 31, 1995, and granting
warrants to
7
<PAGE>
purchase Common Stock at the rate of one warrant per $20 of principal of the
notes being retired, as follows:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT NUMBER OF
CASH PAID OF NEW NOTES WARRANTS
------------ ---------------- -----------
<S> <C> <C> <C>
Salvator Baldi....................................................... $ 1,796.59 $ 16,169.32 898
P.K. Bartow.......................................................... $ 3,445.14 $ 31,006.25 1,722
Mark Hopkinson....................................................... $ 11,319.74 $ 101,877.69 5,660
Michael Michaelson................................................... $ 5,167.71 $ 46,509.37 2,584
</TABLE>
Each warrant is exercisable at a price of $2.00 per warrant for one share of
Common Stock until December 31, 1999. The notes were retired during fiscal 1996.
INFORMATION CONCERNING CERTAIN STOCKHOLDERS
The shareholdings of the persons (other than Mark Hopkinson (who is also the
only executive officer of the Company named in the Summary Compensation Table of
the Company), P.K. Bartow, Salvator Baldi and Michael Michaelson, each of whose
shareholdings are set forth above and each of whose address is 2365 Milburn
Avenue, Baldwin, New York 11510) who, to the knowledge of the Board of Directors
of the Company, owned beneficially more than five percent of any class of the
outstanding voting securities of the Company as of January 15, 1998, and all
directors and executive officers of the Company as a group, and their respective
shareholdings as of such date (according to information furnished by them to the
Company), are set forth in the following table. Except as indicated in the
footnotes to the table, all of such shares are owned with sole voting and
investment power.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK OWNED
NAME AND ADDRESS BENEFICIALLY PERCENT OF CLASS
- ----------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
All Executive Officers and 2,908,150(1) 52.56%
Directors as a Group (8 persons)...........................................
</TABLE>
- ------------------------
(1) See footnotes (2) through (7) on pages 3 and 4. Also includes 10,000 shares
represented by currently exercisable options held by Andrew J. Beck,
Assistant Secretary of the Company.
II. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected BDO Seidman to serve as
independent auditors for the Company for the fiscal year ending September 30,
1998. The Board of Directors considers BDO Seidman to be eminently qualified.
Although it is not required to do so, the Board of Directors is submitting
its selection of the Company's auditors for ratification at the Meeting, in
order to ascertain the views of stockholders regarding such selection. If the
selection is not ratified, the Board of Directors will reconsider its selection.
The Board of Directors recommends that stockholders vote FOR ratification of
the selection of BDO Seidman to examine the financial statements of the Company
for the Company's fiscal year ending September 30, 1998. It is the intention of
the persons named in the accompanying form of Proxy to vote the shares of Common
Stock represented thereby in favor of such ratification unless otherwise
instructed in such Proxy.
8
<PAGE>
A representative of BDO Seidman will be present at the Meeting, with the
opportunity to make a statement if such representative desires to do so, and
will be available to respond to appropriate questions.
III. APPROVAL OF AMENDMENT TO THE 1993 STOCK OPTION PLAN
There will be presented to the stockholders at the Meeting a proposal to
amend the Plan to increase from 1,250,000 to 1,500,000 the number of shares of
Common Stock available for options under the Plan by deleting the first sentence
of Section 3 and substituting in place thereof the following sentence:
"There shall be available for options under the Plan a total of
1,500,000 shares of Stock, subject to any adjustments which may be made
pursuant to Section 5(f) hereof."
As of January 15, 1998, options to purchase 1,150,400 shares of Common Stock
were outstanding under the Plan.
The Board of Directors believes that the future success of the Company
depends upon attracting and retaining qualified management and employees, and
that the foregoing amendment will assist the Company in attracting and retaining
persons of superior ability. The Board of Directors believes that the amendment
is in the best interests of the Company. See "I. Election of Directors" above
for additional information regarding the Plan.
The foregoing amendment has been adopted by the Board of Directors, subject
to stockholder approval. The amendment will not become effective unless approved
by a majority of the shares of Common Stock present and voting at the Meeting.
The Board of Directors recommends that the stockholders vote FOR adoption of the
amendment to the Plan. It is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented thereby FOR adoption
of the amendment to the Plan unless otherwise instructed therein.
IV. OTHER MATTERS
The Board of Directors of the Company does not know of any other matters
which may be brought before the Meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
V. MISCELLANEOUS
If the accompanying form of Proxy is executed and returned, the shares of
Common Stock represented thereby will be voted in accordance with the terms of
the Proxy, unless the Proxy is revoked. If no directions are indicated in such
Proxy, the shares represented thereby will be voted IN FAVOR of the nominees
proposed by the Board of Directors in the election of directors, FOR the
ratification of the Board of Directors' selection of independent auditors for
the Company and FOR the adoption of the amendment to the Plan.
All costs relating to the solicitation of Proxies will be borne by the
Company. Proxies may be solicited by officers, directors and regular employees
of the Company personally, by mail or by telephone or telegraph, and the Company
may pay brokers and other persons holding shares of stock in their names or
those of their nominees for their reasonable expenses in sending soliciting
material to their principals.
It is important that Proxies be returned promptly. Stockholders who do not
expect to attend the Meeting in person are urged to mark, sign and date the
accompanying form of Proxy and mail it in the enclosed return envelope, which
requires no postage if mailed in the United States, so that their votes can be
recorded.
9
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STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998 Annual Meeting of
Stockholders of the Company must be received by the Company by November 12, 1998
in order to be considered for inclusion in the Company's Proxy Statement
relating to such Meeting.
ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report on Form 10-KSB, including the
financial statements and financial statement schedules for the fiscal year ended
September 30, 1997, which has been filed with the Securities and Exchange
Commission, will be sent, without charge, to stockholders to whom this Proxy
Statement is mailed, upon written request to the Secretary, Allied Devices
Corporation, 2365 Milburn Avenue, Baldwin, New York 11510.
Baldwin, New York
March 12, 1998
10
<PAGE>
ALLIED DEVICES CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- MARCH 31, 1998
The undersigned, a stockholder of ALLIED DEVICES CORPORATION, does hereby
appoint MARK HOPKINSON and P.K. BARTOW, or either of them, his proxies, with
full power of substitution or resubstitution, to appear and vote all shares of
Common Stock of the Company which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held on Tuesday, March 31, 1998 at 9:30
A.M., local time, or at any adjournment thereof, upon such matters as may
properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby instructs said proxies or their substitutes to vote as
specified below on each of the following matters and in accordance with their
judgment on any other matters which may properly come before the Meeting.
<TABLE>
<S> <C> <C> <C>
1. Election of Directors, FOR all nominees WITHHOLD AUTHORITY / /
listed below / /
(except as marked to the contrary to vote for all nominees listed below
below)
Mark Hopkinson, P.K. Bartow, Salvator Baldi,
Christopher T. Linen and Michael Michaelson
(INSTRUCTION: To withhold authority to vote for any individual nominee write that nominee's name in the space provided below.)
- ------------------------------------------------------------------------------------------------------------------------
2. Ratification of appointment of BDO Seidman as independent auditors for the fiscal year ending September 30, 1998.
/ / FOR / / AGAINST / / ABSTAIN
(Continued and to be completed on the Reverse Side)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
(Continued From Other Side)
3. Amendment of the Company's 1993 Stock Option Plan to increase from 1,250,000 to 1,500,000 the number of shares of Common
Stock available for options.
/ / FOR / / AGAINST / / ABSTAIN
The Board of Directors favors a vote "FOR" each item.
</TABLE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED THEY WILL BE VOTED IN FAVOR OF THE ITEM(S) FOR WHICH NO DIRECTION
IS INDICATED.
IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) below exactly as shown thereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when signing.
Where shares are registered in the name of joint tenants or trustees, each joint
tenant or trustee should sign.
<TABLE>
<S> <C>
Dated: , 1998
(L.S.)
(L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
</TABLE>
