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
(Amendment No. )
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[ ] Preliminary Proxy Statement
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Arguss Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
Arguss Holdings, Inc.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
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1) Title of each class of securities to which transaction applies:
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computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
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[ ] Check box if any part of the fee is offset as provided by
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the offsetting fee was paid previously. Identify the previous
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Arguss Holdings, Inc.
One Church Street
Rockville, Maryland 20850
________________________________________
Notice of Annual Meeting of Stockholders
To Be Held May 15, 1998
_________________________________________
To the Stockholders of Arguss Holdings, Inc.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of
Stockholders (the "Meeting") of Arguss Holdings, Inc. (the
"Company") will be held on May 15, 1998 at 11:00 a.m., local
time, in the Jaymont Auditorium at 780 Third Avenue, New York,
New York, for the following purposes:
1. To elect seven directors to serve for a term
ending at the 1999 Annual Meeting;
2. To amend the Arguss Holdings, Inc. 1991 Stock
Option Plan, as amended, to increase the number of shares of
Common Stock issuable thereunder from 1,200,000 to 2,400,000;
3. To ratify the selection of KPMG Peat Marwick LLP
as independent auditors for the Company for the fiscal year
ending December 31, 1998; and
4. To transact such other business as may properly
come before the Meeting or any adjournment or postponement
thereof.
Only holders of record of outstanding shares of Common Stock
of the Company at the close of business on March 27, 1998 will be
entitled to notice of, and to vote at, the Meeting or any
adjournment or postponement thereof.
By Order of the Board of Directors
/s/ H. Haywood Miller III
H. Haywood Miller III
Executive Vice President, Corporate
Affairs and Secretary
Rockville, Maryland
March 31, 1998
YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE MARK, SIGN
AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
Arguss Holdings, Inc.
One Church Street
Rockville, Maryland 20850
__________________________________
Proxy Statement For Annual Meeting of Stockholders
To Be Held May 15, 1998
___________________________________
INTRODUCTION
This Proxy Statement is being furnished to stockholders of
Arguss Holdings, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of
Stockholders to be held on Friday, May 15, 1998, at 11:00 a.m.,
local time, in the Jaymont Auditorium at 780 Third Avenue, New
York, New York, and any adjournment or postponement thereof (the
"Meeting").
At the Meeting, stockholders will be asked to consider and
vote upon three proposals: (1) the election of seven directors to
serve until the 1999 Annual Meeting (the "Election of
Directors"), (2) the amendment of the Arguss Holdings, Inc. 1991
Stock Option Plan, as amended (the "Stock Option Plan"), to
increase the number of shares of Common Stock, $.01 par value per
share (the "Common Stock"), issuable thereunder from 1,200,000 to
2,400,000 (the "Increase in Stock Options") and (3) the
ratification of the selection of the Company's independent
auditors (the "Ratification of Auditors").
This Proxy Statement is dated March 31, 1998 and is first
being mailed to stockholders along with the related form of proxy
on or about April 1, 1998.
If a proxy in the accompanying form is properly executed and
returned to the Company in time for the Meeting and is not
revoked prior to the time it is exercised, the shares represented
by the proxy will be voted in accordance with the directions
specified therein for the matters listed on the proxy card.
Unless the proxy specifies that it is to be voted against or is
an abstention on a listed matter, proxies will be voted FOR the
Election of Directors, FOR the Increase in Stock Options and FOR
the Ratification of Auditors and otherwise in the discretion of
the proxy holders as to any other matter that may come before the
Meeting.
Revocability of Proxy
Any stockholder of the Company who has given a proxy has the
power to revoke it at any time before it is voted either (i) by
filing a written revocation or a duly executed proxy bearing a
later date with H. Haywood Miller III, Executive Vice President,
Corporate Affairs and Secretary of the Company, at Arguss
Holdings, Inc., One Church Street, Rockville, Maryland 20850, or
(ii) by appearing at the Meeting and voting in person.
Attendance at the Meeting will not in and of itself constitute
the revocation of a proxy. Voting by those present during the
Meeting will be by ballot.
Record Date, Outstanding Securities and Votes Required
The Board of Directors of the Company has fixed the close of
business on March 27, 1998 as the record date (the "Record Date")
for determining holders of outstanding shares of Common Stock who
are entitled to notice of and to vote at the Meeting. As of the
Record Date, there were approximately 157 stockholders of record
and 10,552,735 shares of Common Stock issued and outstanding.
Each share of Common Stock is entitled to one vote on each of the
proposals.
Abstentions and broker non-votes are counted for purposes of
determining the number of shares represented at the Meeting, but
are deemed not to have voted on the proposals. Broker non-votes
occur when a broker nominee, holding shares in street name for
the beneficial owner thereof, has not received voting
instructions from the beneficial owner and does not have
discretionary authority to vote. Each proposal requires the
affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy and voting.
Accordingly, abstentions, broker non-votes or the failure to
either return a proxy or to attend the Meeting will be deemed not
to have voted on the Election of Directors, the Increase in Stock
Options and the Ratification of Auditors.
The officers and directors of the Company will vote the
shares of Common Stock beneficially owned or controlled by them
(representing approximately 16.8% of the shares of Common Stock
issued and outstanding) in favor of the Election of Directors,
the Increase in Stock Options and the Ratification of Auditors.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The directors of the Company are elected annually and hold
office until the next annual meeting of stockholders and until
their successors have been elected and shall have been qualified.
Vacancies and newly-created directorships resulting from any
increase in the number of authorized directors may be filled by a
majority vote of the directors then in office.
The Board of Directors presently consists of seven persons.
Each of the directors was elected as director of the Company at
the Company's 1997 Annual Meeting of Stockholders.
Unless a stockholder WITHHOLDS AUTHORITY, the holders of
proxies representing shares of Common Stock will vote FOR the
election of each of the nominees listed below. The Board of
Directors has no reason to believe that the nominees will decline
or be unable to serve as Directors of the Company. However, if
a nominee shall be unavailable for any reason, then the proxies
may be voted for the election of such person as may be
recommended by the Board of Directors.
The following table sets forth the age and title of each
nominee director and each executive officer of the Company who is
not a director, followed by descriptions of such person's
additional business experience during the past five years.
NOMINEES FOR ELECTION AS DIRECTOR
Name Age Position
Rainer H. Bosselmann 55 Chairman of the
Board, Chief Executive
Officer, President and Director
Garry A. Prime 55 Director
William A. Barker 54 Director
James D. Gerson 54 Director
Richard S. Perkins, Jr. 61 Director
John A. Rolls 56 Director
Peter L. Winslow 67 Director
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Name Age Position
H. Haywood Miller III 38 Executive Vice President,
Corporate Affairs and Secretary
Arthur F. Trudel, Jr. 48 Chief Financial Officer and Treasurer
RAINER H. BOSSELMANN. Mr. Bosselmann has been Chairman of
the Board, Chief Executive Officer and a Director of the Company
since October, 1996, and President of the Company since May,
1997. Since 1996, Mr. Bosselmann has served as a principal with
Holding Capital Group, Inc., a firm engaged in mid-market
acquisitions and investments. From 1991 through 1995, Mr.
Bosselmann served as the President of Jupiter National, Inc.
("Jupiter National"), a business development company traded on
the American Stock Exchange. Mr. Bosselmann was formerly Vice
Chairman of Johnston Industries, Inc. a publicly owned
diversified textile manufacturer, and Redlaw Industries, Inc. and
Galtaco Inc., both of which are publicly-held holding companies.
Mr. Bosselmann is a past director of Zoll Medical Corporation and
numerous private companies.
GARRY A. PRIME. Mr. Prime was Vice-Chairman of the Board of
the Company from 1996 to May, 1997, and a Director of the Company
since 1993. From 1993 through October, 1996, Mr. Prime served as
Chairman of the Board and Chief Executive Officer of the Company.
He has been President of Sontek Industries, Inc., a marketer of
medical devices, since 1986.
WILLIAM A. BARKER. Mr. Barker has served as a Director of
the Company since September, 1991. Since 1966, Mr. Barker has
held numerous management positions within Markem Corporation, a
privately-held manufacturer of in-plant product identification
machinery, where he is presently Systems Manufacturing Division
Manager.
JAMES D. GERSON. Mr. Gerson has served as a Director of the
Company since January, 1992. In October, 1995, Mr. Gerson became
Manager of the Hudson Capital Appreciation Fund, an affiliate of
Fahnestock & Co. Inc., an investment banking firm. In March,
1993, Mr. Gerson became a Senior Vice President of Fahnestock
Co., Inc. Mr. Gerson also serves as a director of the following
public companies: Ag Services of America, Inc., a distributor of
farm inputs; American Power Conversion Corp., a manufacturer of
uninterruptible power supplies; Hilite Industries, Inc., a
manufacturer of automobile components; Energy Research Corp., a
developer of advanced power generation systems; and Computer
Outsourcing Services, Inc., a provider of data processing
services.
RICHARD S. PERKINS, JR. Mr. Perkins has served as a
Director of the Company since September, 1993. Since 1988, Mr.
Perkins has served as a money manager at Reynders, Gray &
Company, Boston.
JOHN A. ROLLS. Mr. Rolls has served as a Director of the
Company since May, 1996. Since February, 1996, Mr. Rolls has
served as President and Chief Executive Officer of Thermion
Systems International, a heating systems company. Prior to that
time, from November, 1992 to February, 1996, Mr. Rolls was
President and Chief Executive Officer of Deutsche Bank North
America and from 1986 to 1992 Executive Vice President and Chief
Financial Officer of United Technologies Corporation.
PETER L. WINSLOW. Mr. Winslow has served as a Director of
the Company since December, 1996. Since 1992, Mr. Winslow has
been President and Chairman of Winslow, Evans & Crocker, Inc., a
brokerage and financial services company, and its holding
company. Mr. Winslow was also a director of Jupiter National
from 1991 to 1996.
H. HAYWOOD MILLER III. Mr. Miller has served as Executive
Vice President of the Company since February, 1997, and Executive
Vice President, Corporate Affairs and Secretary of the Company
since May, 1997. From 1990 to 1997, Mr. Miller was general
counsel and portfolio manager of Jupiter National.
ARTHUR F. TRUDEL, JR. Mr. Trudel has served as Chief
Financial Officer of the Company since March, 1997, and Treasurer
of the Company since May, 1997. From October, 1988 to March,
1997, Mr. Trudel was Senior Vice President and Chief Financial
Officer of JHM Capital Corporation.
Committees of the Board of Directors
The Board of Directors has established an Audit Committee,
the current members of which are Messrs. Barker, Gerson and
Rolls, a Compensation Committee, the current members of which are
Messrs. Perkins, Rolls and Winslow, and an Executive Committee,
the current members of which are Messrs. Bosselmann, Gerson and
Winslow. The Board of Directors has not established a Nominating
Committee.
The functions of the Audit Committee are to recommend
annually to the Board of Directors the appointment of the
independent certified public accountants for the Company, discuss
and review the scope and the fees of the prospective annual audit
and review the results thereof with the independent certified
public accountants, review and approve nonaudit services of the
independent certified public accountants, review compliance with
existing major accounting and financial policies of the Company,
review the adequacy of the financial organization of the Company,
and review management's procedures and policies relative to the
adequacy of the Company's internal accounting controls and
compliance with federal and state laws relating to accounting
practices.
The functions of the Compensation Committee are to review
and determine the appropriateness of the compensation
arrangements of the executive officers of the Company in light of
such factors as individual and Company performance, that of
executive officers of companies in similar industries and of
comparable size and general economic conditions.
The Executive Committee has been authorized to act on behalf
of the full Board of Directors in instances where the convening
of the entire Board of Directors is impractical or when the
matter at issue is considered not to require consideration of the
full Board.
During 1997, the Board of Directors held six meetings, and
one meeting of each of the Audit Committee and the Compensation
Committee were held. The Executive Committee did not meet during
1997. During 1997, each Director of the Company attended at
least 75% of the meetings of the Board of Directors and 75% of
the meetings of any committee upon which he served, except that
Mr. Rolls attended 50% of the meetings of the Board of Directors
and Mr. Barker attended 67% of the meetings of the Board of
Directors.
Compliance with Section 16(a) of the Exchange Act
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 its Common Stock, to file reports of
ownership and changes in ownership with the Securities and
Exchange Commission (the "Commission"). Officers, directors and
greater than ten percent stockholders are required by the
Commission to furnish the Company with copies of all Section
16(a) forms that they file.
Based solely on its review of the copies of such forms
received by it, the Company believes that during 1997 all filing
requirements applicable to its officers, directors and greater
than ten percent stockholders were complied with except that
reports on Forms 3 and 4, covering an aggregate of 12
transactions, were filed late by Messrs. Barker, Gerson, Miller,
Nolin, Perkins, Pouliotte, Rolls, Trudel and Winslow.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table sets forth the cash
compensation and certain other components of the compensation of
Rainer H. Bosselmann, the Chief Executive Officer of the Company,
and the other four most highly compensated executive officers of
the Company in 1997.
ANNUAL
COMPENSATION
NAME AND PRINCIPAL LONG TERM ALL OTHER
POSITION YEAR SALARY BONUS OTHER COMPENSATION COMPENSATION
AWARDS
SECURITIES
UNDERLYING
OPTIONS
RAINER H. 1997 $132,692 $100,000 - 50,000 -
BOSSELMANN 1996 $9,615 - - 150,000 -
CHAIRMAN OF THE 1995 - - - - -
BOARD AND CHIEF
EXECUTIVE
OFFICER(1)
H. HAYWOOD MILLER, 1997 $95,940 $80,000 - 30,000 -
III, EXECUTIVE 1996 6,079 - - 100,000 -
VICE PRESIDENT, 1995 - - - - -
CORPORATE AFFAIRS
AND SECRETARY(2)
ARTHUR F. TRUDEL, 1997 $73,595 $80,000 - 80,000 -
JR., CHIEF 1996 - - - -
FINANCIAL OFFFICER 1995 - - - - -
AND TREASURER(3)
(1) Mr. Bosselmann became Chairman of the Board and Chief
Executive Officer of the Company on October 7, 1996.
(2) Mr. Miller became Executive Vice President of the
Company in February 1997.
(3) Mr. Trudel became Chief Financial Officer of the
Company in March 1997.
Options Granted in 1997
The following table sets forth certain information regarding
stock options granted in 1997 to the three individuals named in
the Summary Compensation Table.
NAME NUMBER OF % OF TOTAL PER EXPIRATION MARKET
SECURITIES OPTIONS SHARE DATE PRICE
UNDERLYING GRANTED TO EXERC PER SHARE
OPTIONS EMPLOYEES ISE ON DATE
GRANTED IN PRICE OF
(1)(2) FISCAL GRANT
YEAR
RAINER H. 50,000 7.8% $13.00 December 31, $13.00
BOSSELMANN 2002
H. HAYWOOD 30,000 4.7% $13.00 December 31, $13.00
MILLER III 2002
ARTHUR F 50,000 7.8% $4.75 April 14, 2002 $6.75
TRUDEL 30,000 4.7% $13.00 December 31, $13.00
2002
(1) All options granted and reported in this table were made
pursuant to the Stock Option Plan and have the following material
terms: options may be either (i) "incentive stock options" under
Section 422 of the Internal Revenue Code of 1986, as amended, or
(ii) nonqualified stock options; all options expire not more than
ten years from the date of grant, or not more than five years
from the date of grant in the case of incentive stock options
granted to an employee holding 10% or more of the voting stock of
the Company.
(2) The value of unexercised options held by Messrs. Bosselmann,
Miller and Trudel at December 31, 1997 was $2,900,000, $1,885,000
and $1,160,000, respectively.
Directors' Compensation
Each non-employee director of the Company is entitled to
receive $500 for each meeting of the Board of Directors attended
plus expenses. Messrs. Bosselmann and Prime receive no
compensation for their services as Directors. The Directors
receive no compensation for attending Committee meetings.
Certain Relationships and Related Transactions
In connection with the issuance and sale by the Company of
4,000,000 shares of its Class A Common Stock in a private
offering completed in November 1996, the Company engaged Winslow,
Evans & Crocker, Inc. to act as the exclusive placement agent for
the Company. Peter L. Winslow, a Director of the Company, is the
President, Chairman and a significant shareholder of Winslow,
Evans & Crocker, Inc. The Company agreed to pay Winslow, Evans &
Crocker, Inc. a fee consisting of $200,000 and warrants to
purchase 100,000 shares of Common Stock. The warrants are
exercisable for four years at $3.00 per share of Common Stock.
Winslow, Evans & Crocker, Inc. subsequently engaged Holding
Capital Group, Inc. to act as a consultant with respect to the
private offering. Rainer H. Bosselmann, the Chairman of the
Board, Chief Executive Officer and a Director of the Company, is
a principal with Holding Capital Group, Inc. Upon completion of
the private offering, Winslow, Evans & Crocker, Inc. directed the
Company to pay to Holding Capital Group, Inc., out of the
consideration otherwise due to Winslow, Evans & Crocker, Inc.,
$170,000 and warrants to purchase 100,000 shares of Common Stock.
Mr. Bosselmann received the right to designate one additional
nominee to the Company's Board of Directors. In December 1996,
Mr. Bosselmann nominated Peter L. Winslow to the Company's Board
of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with
regard to the beneficial ownership of the Common Stock of the
Company as of January 26, 1998 by (i) each stockholder who is
known by the Company to beneficially own in excess of 5% of the
outstanding shares of Common Stock, (ii) each director, (iii) the
Company's Chief Executive Officer and the other three individuals
named in the Summary Compensation Table and (iv) the directors
and all executive officers as a group.
Number of Shares Percent of
Name and Address of Common
of Beneficial Common Stock Stock (2)
Owner(1) Beneficially
Owned
Rainer H. 816,670 (3) 7.8%
Bosselmann
Garry A. Prime 276,515 (4) 2.6%
Richard S. Perkins, 49,000 (5) *
Jr.
William A. Barker 1,000 *
James D. Gerson 495,696 (6) (7) 4.8%
John A. Rolls 6,000 *
Peter L. Winslow 41,067 (8) *
Dennis A. Nolin 785,663 7.6%
Ronald D. Pierce 1,500,000 14.5%
David A. Pouliotte 785,663 7.6%
H. Haywood Miller 150,334 (9) 1.9%
III
Arthur F. Trudel 50,500 (10) *
All Directors 1,886,782 (3) (4) 16.8%
and Executive (5)(6)(7)(8)(9)(10)
Officers as a group
(9 persons)
___________________________
*Less than 1%
(1) The address for Messrs. Bosselmann, Prime, Barker, Gerson,
Perkins, Rolls, Winslow, Nolin, Pierce, Pouliotte, Miller and
Trudel is c/o Arguss Holdings, Inc., One Church Street,
Rockville, Maryland 20850.
(2) Pursuant to the rules of the Securities and Exchange
Commission, shares of Common Stock which an individual or group
has a right to acquire within 60 days pursuant to the exercise of
options or warrants are deemed to be outstanding for the purpose
of computing the percentage ownership of that individual or
group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in
the table.
(3) Includes options to purchase 150,000 shares of Common Stock
held by Mr. Bosselmann which are presently exercisable. Does not
include options to purchase 50,000 shares of Common Stock held by
Holding Capital Group, Inc. which are presently exercisable and
of which Mr. Bosselmann is a principal.
(4) Includes 176,348 shares of Common Stock owned by Sontek
Industries, Inc., of which Mr. Prime is President, Director and a
significant shareholder. Includes options to purchase 77,500
shares of Common Stock which are presently exercisable.
(5) Includes 37,000 shares of Common Stock held of record by Mr.
Perkins' wife, in which Mr. Perkins disclaims any beneficial
interest.
(6) Excludes 3,000 shares of Common Stock held of record by Mr.
Gerson's wife, as custodian for two minor children, in which Mr.
Gerson disclaims any beneficial interest.
(7) Includes 176,348 shares of Common Stock held by Sontek
Industries, Inc., of which Mr. Gerson is a director and a
significant shareholder.
(8) Includes 1,502 shares of Common Stock held of record by Mr.
Winslow's spouse, in which Mr. Winslow disclaims any beneficial
interest.
(9) Includes options to purchase 100,000 shares of Common Stock
held by Mr. Miller which are presently exercisable.
(10) Includes options to purchase 50,000 shares of Common Stock
held by Mr. Trudel which are presently exercisable.
PROPOSAL NUMBER TWO
AMENDMENT TO STOCK OPTION PLAN
Background
On January 30, 1998, the Board of Directors adopted a
resolution, subject to stockholder approval, to amend the Stock
Option Plan to increase the number of shares issuable thereunder
from 1,200,000 to 2,400,000.
The Board of Directors believes that stock options are
valuable tools for the recruitment, retention and motivation of
qualified employees, including officers, and other persons who
can contribute materially to the Company's success. As of
January 30, 1998, only 90,000 of the 1,200,000 shares currently
available for issuance under the Stock Option Plan remained
available for issuance pursuant to new option grants and, in
addition, the Company has granted options for an additional
35,000 shares subject to the adoption of the proposed amendment
to the Stock Option Plan. The Company is currently pursuing a
strategic plan involving the diversification of its business
through business acquisitions and/or other investments.
Management of the Company believes that this diversification
strategy will provide the potential for growth and profit.
During 1997 and the first quarter of 1998, the Company acquired
White Mountain Cable Construction Corp., TCS Communications,
Inc., Rite Cable Construction Corp., Can Am Construction, Inc.
and Schenck Comunications, Inc. These acquisitions added
management and non-management employees to the Company's existing
workforce. In addition, the Company may add management and non-
management employees as a result of future business acquisitions
or otherwise. The Board of Directors believes that it is
important to have additional shares available under the Stock
Option Plan to provide adequate incentives to the Company's
workforce.
The material features of the Stock Option Plan, including
the proposed amendment, are outlined below. The following
summary is qualified in its entirety by reference to the full
text of the Stock Option Plan, a copy of which has been filed
with the Securities and Exchange Commission.
Purpose
The purpose of the Stock Option Plan is to continue to
provide an incentive to employees, directors, consultants and
others who are in a position to contribute materially to the long
term success of the Company, to increase such person's interest
in the Company's welfare and to aid in retaining individuals with
outstanding ability.
Administration
The Plan is administered by the Board of Directors of the
Company.
Eligibility
The Stock Option Plan currently provides for the grant to
employees, officers, directors and consultants of options to
purchase up to 1,200,000 shares of Common Stock. The proposed
amendment would increase the number of shares issuable upon
exercise of options to 2,400,000. Options may be either
"incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or
non-qualified options. Incentive stock options may be granted
only to employees of the Company (including directors who are
employees), while non-qualified options may be issued to
directors (whether or not an employee), consultants and other non-
employees of the Company. The Board of Directors of the Company
has the authority to determine those individuals who shall
receive options, the time period during which the options may be
partially or fully exercised, the number of shares of Common
Stock that may be purchased under each option and the option
price.
Terms of Options
The per share exercise price of the Common Stock subject to
an incentive stock option may not be less than the fair market
value of the Common Stock at the time the option is granted. The
per share exercise price of the Common Stock subject to a non-
qualified option may be established by the Board of Directors of
the Company. The aggregate fair market value (determined as of
the date the option is granted) of the Common Stock that first
becomes exercisable by any employee in any one calendar year
pursuant to the exercise of incentive stock options may not
exceed $100,000. No person who owns, directly or indirectly, at
the time of the granting of an incentive stock option to him, 10%
or more of the total combined voting power of all classes of
stock of the Company (a "10% Stockholder") shall be eligible to
receive any incentive stock options under the Plan unless the
option price is at least 110% of the fair market value of the
Common Stock subject to the option, determined on the date of
grant.
Options under the Plan must be granted no later than June
22, 2001. Incentive stock options granted under the Plan cannot
be exercised more than ten years from the date of grant except
that incentive stock options issued to a 10% Stockholder are
limited to five year terms. All options granted under the Plan
provide for the payment of the exercise price in cash or by
delivery to the Company of shares of Common Stock already owned
by the optionee having a fair market value equal to the exercise
price of the options being exercised, or by a combination of
those methods of payment. Therefore, an optionee may be able to
tender shares of Common Stock to purchase additional shares of
Common Stock and may theoretically exercise all of his stock
options with no additional investment other than his original
shares.
Transferability
No stock option may be transferred by an optionee other than
by will or the laws of descent and distribution, and, during the
lifetime of an optionee, the option will be exercisable only by
him or her.
Termination of Employment
In the event of termination of employment of an optionee
other than by death, the option shall be exercisable only to the
extent of the purchase rights which have accrued as of the date
of termination, provided that the Board of Directors may
determine that accrued purchase rights shall be deemed to include
additional shares of Common Stock covered by the option and,
provided further, that unless the Board of Directors shall
otherwise provide, the remaining purchase rights shall terminate
upon the earlier of the expiration of the original term or six
months after the termination. Upon termination of employment of
an optionee by reason of permanent total disability, his or her
option remains exercisable for one year thereafter to the extent
it was exercisable on the date of such termination.
In the event any options expire or terminate unexercised as
to any shares covered thereby, the shares shall become available
once again for the granting of other options under the Stock
Option Plan.
Amendment
The Board of Directors may at any time suspend or terminate
the Stock Option Plan. The Board may also amend the Stock Option
Plan at any time provided, however, that no such amendment,
without the approval of the stockholders, shall increase the
maximum number of shares which may be awarded under the Stock
Option Plan, modify the maximum term or minimum price of options
granted under the Stock Option Plan, modify the term of the Stock
Option Plan or change the eligibility requirements of the Stock
Option Plan.
Federal Income Tax Information
Options granted under the Stock Option Plan may be either
"incentive stock options," as defined in Section 422 of the Code,
or nonstatutory options.
If an option granted under the Stock Option Plan is an
incentive stock option, the optionee will recognize no income
upon grant of the incentive stock option and incur no tax
liability due to the exercise unless the optionee is subject to
the alternative minimum tax. The Company will not be allowed a
deduction for federal income tax purposes as a result of the
exercise of an incentive stock option regardless of the
applicability of the alternative minimum tax. Upon the sale or
exchange of the shares at least two years after grant of the
option and one year after transfer of the shares to the optionee
by the Company, any gain will be treated as long-term capital
gain. If these holding periods are not satisfied, the optionee
will recognize ordinary income equal to the difference between
the exercise price and the lower of the fair market value of the
stock at the date of the option exercise or the sale of the
stock. The Company will be entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Any
gain recognized on such a premature disposition of the shares in
excess of the amount treated as ordinary income will be
characterized as capital gain. Currently, the tax rate on net
capital gain (net long-term capital gain minus net short-term
capital loss) is capped at 28% (15% for individuals in the 15%
tax bracket) or, if the shares are held for in excess of 18
months, the tax rate is capped at 20% (10% for individuals in the
15% tax bracket). Capital losses are allowed in full against
capital gains plus $3,000 of other income.
All other options which do not qualify as incentive stock
options are referred to as nonstatutory options. An optionee
will not recognize any taxable income at the time he is granted a
nonstatutory option. However, upon its exercise, the optionee
will recognize ordinary income for tax purposes measured by the
then fair market value of the shares over the option price. The
income recognized by an optionee who is also an employee of the
Company will be subject to tax withholding by the Company by
payment in cash or out of the current earnings paid to the
optionee. Upon resale of such shares by the optionee, any
difference between the sales price and the exercise price, to the
extent not recognized as ordinary income as provided above, will
be treated as capital gain or loss. Currently, the tax rate on
net capital gain (net long-term capital gain minus net short-term
capital loss) is capped at 28% (15% for individuals in the 15%
tax bracket) or, if the shares are held for in excess of 18
months, the tax rate is capped at 20% (10% for individuals in the
15% tax bracket). Capital losses are allowed in full against
capital gains plus $3,000 of other income.
The Company will be entitled to a tax deduction in the same
amount as the ordinary income recognized by the optionee with
respect to shares acquired upon exercise of a nonstatutory
option.
The foregoing is only a summary of the effect of federal
income taxation upon the optionee and the Company with respect to
the grant and exercise of options under the Stock Option Plan,
does not purport to be complete and references should be made to
the applicable provisions of the Code. In addition, this summary
does not discuss the income tax laws of any municipality, state
or foreign country in which an optionee may reside.
Vote Required
To become effective the amendment to the Stock Option Plan
must be approved by the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy
and voting.
PROPOSAL NUMBER THREE
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The persons named in the enclosed proxy will vote to ratify
the selection of KPMG Peat Marwick LLP as the Company's
independent public accounting firm for the fiscal year ending
December 31, 1998 unless otherwise directed by the stockholders.
A representative of KPMG Peat Marwick is expected to be present
at the meeting, will have the opportunity to make a statement if
he or she desires to do so and is expected to be available to
respond to appropriate questions.
THE OFFICERS AND DIRECTORS OF THE COMPANY WILL VOTE THE
SHARES OF COMMON STOCK BENEFICIALLY OWNED OR CONTROLLED BY THEM
(REPRESENTING APPROXIMATELY 16.8% OF THE SHARES OF COMMON STOCK
ISSUED AND OUTSTANDING) IN FAVOR OF THE ELECTION OF DIRECTORS,
THE INCREASE IN STOCK OPTIONS AND THE RATIFICATION OF AUDITORS.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE ELECTION OF DIRECTORS, THE INCREASE IN STOCK OPTIONS
AND THE RATIFICATION OF AUDITORS.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Proxy
Statement relating to the 1999 Annual Meeting, any proposal by a
record holder of Common Stock must be received by the Company at
its principal offices in Rockville, Maryland on or before
December 1, 1998. A proponent of such a proposal must comply
with the proxy rules under the Securities Exchange Act of 1934,
as amended.
SOLICITATION
All costs and expenses associated with soliciting proxies
will be borne by the Company. In addition to the use of the
mails, proxies may be solicited by the directors, officers and
employees of the Company by personal interview, telephone or
telegram. Directors, officers and employees will not be
additionally compensated for such solicitation but may be
reimbursed for their out-of-pocket expenses. Arrangements will
also be made with custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of
Common Stock and the Company will reimburse custodians, nominees
and fiduciaries for their reasonable out-of-pocket expenses
incurred in connection therewith.
FINANCIAL STATEMENTS
The balance sheets of the Company as of December 31, 1997
and 1996, the related statements of operations, stockholders'
equity and cashflows and management's discussion and analysis of
financial condition and results of operation for the years then
ended, are incorporated herein by reference to the Company's 1997
Annual Report to Security Holders.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of
Directors is not aware of any other business or matters to be
presented for consideration at the Meeting other than as set
forth in the Notice of Meeting attached to this Proxy Statement.
However, if any other business shall come before the Meeting or
any adjournment or postponement thereof and be voted upon, the
enclosed proxy shall be deemed to confer discretionary authority
on the individuals named to vote the shares represented by the
proxy as to any such matters.
ANNUAL REPORT ON FORM 10-KSB
The Company will provide without charge to each beneficial
holder of its Common Stock on the Record Date, upon the written
request of any such person, copies of the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1997, as
filed with the Commission. Any such request should be made in
writing to Secretary, Arguss Holdings, Inc., One Church Street,
Rockville, Maryland 20850.
PROXY ARGUSS HOLDINGS, INC. PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 15, 1998
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints H. Haywood Miller III
and Rainer H. Bosselmann, and each of them, attorneys with full
power of substitution, to vote as directed below all shares of
Common Stock of Arguss Holdings, Inc. registered in the name of
the undersigned, or which the undersigned may be entitled to
vote, at the Annual Meeting of Stockholders to be held at 780
Third Avenue, New York, New York, on May 15, 1998, 11:00 a.m. and
at any adjournment or postponement thereof.
1. Election of FOR all nominees WITHHOLD AUTHORITY
Directors listed to vote
below (except as for all nominees
marked to the listed below
contrary below)
(Instruction: To withhold authority to vote for any Individual
nominee strike a line through the nominee's name in the list
below.)
Rainer H. Bosselmann, Garry A. Prime, William A. Barker, James D.
Gerson, Richard S. Perkins, Jr., John A. Rolls, Peter L. Winslow.
2. Approval of the Amendment to the Arguss Holdings, Inc. 1991
Stock Option Plan.
FOR AGAINST ABSTAIN
3. Approval of the ratification of auditors.
FOR AGAINST ABSTAIN
4. As such proxies may in their discretion determine in respect
of any other business properly to come before said meeting (the
Board of Directors knowing of no such other business).
The directors recommend a vote FOR items 1, 2, and 3.
(Continued on reverse side)
(Continued from other side)
UNLESS THE STOCKHOLDER DIRECTS OTHERWISE, THIS PROXY WILL BE
VOTED FOR ITEMS 1, 2, AND 3 AS PROPOSED.
PLEASE DATE, SIGN AND RETURN IN THE ENVELOPE PROVIDED.
(Please sign in the same form as name appears hereon. Dated
______________________________, 1998
Executors and other fiduciaries should indicate
their titles. If signed on behalf of a corporation,
_________________________________________
give title of officer signing).
_________________________________________
Signature
of Stockholder(s)
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15,
1998.
