<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
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Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
WPI GROUP, INC.
(Name of Registrant as Specified In Its Charter)
WPI GROUP, INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which 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:
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<PAGE> 2
[WPI LOGO] GROUP, INC.
The WPI Family of Companies
1155 ELM STREET
MANCHESTER, NH 03101
USA
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 12, 1997
TO THE SHAREHOLDERS:
The annual meeting of shareholders of WPI Group, Inc. will be held at the
Company's corporate headquarters at 1155 Elm Street, Manchester, New Hampshire,
on Wednesday, February 12, 1997 at 10:00 a.m., local time, for the following
purposes:
1. To elect seven directors to the Board of Directors.
2. To transact such other business as may properly come before the Annual
Meeting and any adjournment thereof.
The Board of Directors has fixed December 5, 1996 as the record date for
determining the holders of Common Stock entitled to notice of and to vote at the
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Michael B. Tule, Secretary
December 12, 1996
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YOUR VOTE IS IMPORTANT
ON BEHALF OF THE BOARD OF DIRECTORS WE URGE YOU TO PROMPTLY MARK, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE EVEN IF YOU PLAN TO
ATTEND THE MEETING. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON, BUT WILL
ASSURE THAT YOUR VOTE IS COUNTED IF YOU ARE UNABLE TO ATTEND THE MEETING.
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<PAGE> 3
WPI GROUP, INC.
PROXY STATEMENT
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of WPI Group,
Inc., 1155 Elm Street, Manchester, New Hampshire 03101 (the "Company"). Copies
of this Proxy Statement and the accompanying proxy are being mailed on or about
December 12, 1996 to the holders of record of the Common Stock on December 5,
1996 (the "Record Date"). The proxy may be revoked by a shareholder at any time
prior to its use by giving notice of such revocation to the Secretary of the
Company, by appearing at the meeting and voting in person or by returning a
later dated proxy. The expense of this solicitation shall be paid by the
Company. Some of the officers and regular employees of the Company may solicit
proxies personally and by telephone.
Proxies will be voted in accordance with stockholders' directions. If no
directions are given, proxies will be voted in favor of the seven persons named
as nominees under the caption "Election of Directors". There is no reason to
believe that any nominee for director will not be a candidate or unwilling to
serve, but if either event occurs it is intended that the shares represented by
the proxies will be voted for any substitute nominee designated by the Board of
Directors.
At the meeting, each stockholder will be entitled to one vote for each share of
stock standing in his or her name on the books of the Company at the close of
business on the Record Date.
The Company had 5,952,922 shares of Common Stock outstanding on the Record Date.
The presence at the meeting in person or by proxy of the holders of a majority
of the shares of Common Stock outstanding on the Record Date will constitute a
quorum.
BOARD OF DIRECTORS
The Board of Directors held eight meetings during the last fiscal year. Each of
the directors attended 75% or more of the aggregate total number of Board
meetings and total number of meetings of Committees on which the director
served. There are two committees of the Board, the Audit Committee and the Stock
Option/Compensation Committee. The Audit Committee, consisting of Peter D.
Danforth, Paul G. Giovacchini and Robert C. McCray held three meetings during
the last fiscal year. The Audit Committee reviews the scope of and the results
of the audit by the independent public accountants, makes recommendations to the
Board as to the selection of independent public accountants for each fiscal
year, and reviews the adequacy of the Company's internal accounting and
financial controls. The Stock Option/Compensation Committee, consisting of Paul
G. Giovacchini, Irving Gutin and Bernard H. Tenenbaum held four meetings during
the last fiscal year. The Stock Option/Compensation Committee is responsible for
reviewing and making recommendations to the Board on matters concerning the
administration of the employee incentive plans and the compensation of executive
officers of the Company. The Company does not have a nominating committee.
Directors serve for one year and thereafter until their successors are duly
elected and qualified. Directors who are not employees of the Company receive an
annual fee of $14,000 and $250 for each committee meeting attended; committee
chairmen receive an additional $500 annual fee for each committee they chair.
Officers serve at the discretion of the Board of Directors. Mr. Foster and Mr.
Deegan do not receive any directors' fees.
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MANAGEMENT AND PRINCIPAL SHAREHOLDERS
<TABLE>
The following table sets forth certain information regarding beneficial ownership of the Common Stock as of
December 5, 1996 by (i) each person who is known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock; (ii) each of the Company's directors; and (iii) all directors and
officers of the Company as a group:
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED PERCENTAGE BENEFICIALLY OWNED
- ---------------- ------------------ -----------------------------
<S> <C> <C>
Michael Foster (1) 653,506 11%
1155 Elm Street
Manchester, NH 03101
Dennis M. Deegan (2) 71,000 1.2%
1155 Elm Street
Manchester, NH 03101
Paul G. Giovacchini (3) 181,254 3%
55 Ferncroft Road
Danvers, MA 01923
Peter D. Danforth -- --
21 Old Coach Road
New London, NH 03257
Robert C. McCray (4) 51,340 *
Pine Valley Mill Building
Box 130
Milford, NH 03055
Irving Gutin 7,140 *
One Tyco Park
Exeter, NH 03833-1108
Bernard H. Tenenbaum 1,820 *
2530 U.S. Highway 130
Cranbury, NJ 08512
All executive officers and directors 1,010,574 17%
as a group
(11 persons) (5)
<FN>
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* Less than one percent
(1) Includes 41,110 shares of the Company's common stock which Mr. Foster has the right to acquire within
60 days of the date hereof pursuant to the exercise of stock options.
(2) Includes 55,000 shares of the Company's common stock which Mr. Deegan has the right to acquire within
60 days of the date hereof pursuant to the exercise of stock options.
(3) Mr. Giovacchini may be deemed the beneficial owner of these shares as a result of his position as
Senior Investment Manager of Signal Capital Corporation. However, Mr. Giovacchini disclaims beneficial
ownership of such shares.
(4) Includes 3,300 shares owned by Mr. McCray's wife. Mr. McCray disclaims beneficial ownership of such
shares.
(5) Includes 115,610 shares of the Company's Common Stock which certain officers and directors have a right
to acquire within 60 days of the date hereof pursuant to the exercise of stock options are deemed to be
outstanding for the purpose of computing the percentage ownership of officers and directors as a group.
</TABLE>
3
<PAGE> 5
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY)
Seven directors are to be elected at the Meeting to serve one-year terms until
the 1998 annual meeting of shareholders and until their respective successors
are elected and shall qualify. The persons named in the accompanying proxy
intend to vote for the election of Michael Foster, Dennis M. Deegan, Peter D.
Danforth, Paul G. Giovacchini, Irving Gutin, Robert C. McCray and Bernard H.
Tenenbaum unless authority to vote for one or more of such nominees is
specifically withheld in the proxy. The Board of Directors is informed that all
nominees are willing to serve as directors, but if any of them should decline to
serve or become unavailable for election as a director at the meeting, the
persons named in the proxy will vote for such nominee or nominees as may be
designated by the Board of Directors, unless the Board of Directors reduces the
number of directors accordingly.
The following table sets forth, as of December 5, 1996, information as to the
nominees, including their recent employment, positions with the Company, other
directorships and age.
OFFICER OR
NAME AGE DIRECTOR SINCE POSITION WITH THE COMPANY
- ---- --- -------------- -------------------------
Michael Foster 61 1988 Chairman of the Board of
Directors and Chief Executive
Officer
Dennis M. Deegan 52 1996 Director, President and
Chief Operating Officer
Peter D. Danforth 63 1990 Director
Paul G. Giovacchini 39 1990 Director
Irving Gutin 64 1994 Director
Robert C. McCray 70 1988 Director
Bernard H. Tenenbaum 41 1994 Director
Michael Foster, Chairman of the Board of Directors and Chief Executive Officer
of the Company since 1988, led the management buy-out of the Company from Walker
Magnetics Group, Inc. in October 1988.
Dennis M. Deegan has been a Director of the Company, and has been President and
Chief Operating Officer since June 1996. Mr. Deegan served as Executive Vice
President, Treasurer and Chief Financial Officer of the Company from 1988 to
June 1996.
Peter D. Danforth has been a Director of the Company since August 1990. Mr.
Danforth is the founder and proprietor of Danforth & Company, a New
Hampshire-based investment advisory firm and is a general partner of Kearsarge
Ventures, Ltd., a New Hampshire based investment limited partnership.
Paul G. Giovacchini has been a Director of the Company since September 1990. Mr.
Giovacchini has been a Senior Investment Manager for Signal Capital Corporation,
a Massachusetts-based investment firm, since August 1990. Since 1995, Mr.
Giovacchini has also been a partner of Seacoast Capital Partners, L.P., a
federal licensee under the Small Business Investment Act of 1958.
Irving Gutin has been a Director of the Company since February 1994. Mr. Gutin
has been Senior Vice President of Tyco International, Ltd., formerly Tyco
Laboratories, Inc., a New Hampshire-based international manufacturer of fire
protection and flow control products, electronic and electrical components and
packaging materials since 1988.
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<PAGE> 6
Bernard H. Tenenbaum has been a Director of the Company since July 1994. Since
1993, Mr. Tenenbaum has been Vice President, Corporate Development, of Russ
Berrie & Company, a New Jersey-based gift company. He is also President and CEO
of R.B.T. Company, a division of Russ Berrie & Company. From 1988 to 1992, he
was a Founding Director and Professor of Entrepreneurial Studies at the George
Rothman Institute of Entrepreneurial Studies, Fairleigh Dickinson University.
Mr. Tenenbaum has been a Director of Russ Berrie & Company since 1988.
EXECUTIVE COMPENSATION
<TABLE>
The following table sets forth information concerning the compensation for
services in all capacities to the Company for the fiscal years ended September
29, 1996, September 24, 1995 and September 25, 1994 of those persons who were at
September 29, 1996 (i) the Chief Executive Officer and (ii) each of the most
highly compensated executive officers of the Company, (with the Chief Executive
Officer, collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION (1) ALL OTHER (2)
----------------------- -------------
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)
- --------------------------- ---- ---------- --------- ----------------
<S> <C> <C> <C> <C>
Michael Foster 1996 280,317 213,000 18,050
Chairman and CEO
1995 260,000 -- 17,800
1994 209,971 52,000 16,000
Dennis M. Deegan 1996 153,257 84,000 14,230
President and COO
1995 130,000 -- 5,400
1994 109,743 26,000 4,300
Dr. John K. Allen 1996 123,380 20,000 10,025
Group Vice President,
Power Solutions 1995 72,150 -- 5,850
1994 -- -- --
Timothy G. Jones 1996 124,738 20,000 8,913
Group Vice President,
Information Solutions 1995 -- -- --
1994 -- -- --
<FN>
(1) Excludes perquisites and other personal benefits, the aggregate annual
amount of which was less than the lesser of $50,000 or 10% of the total of
annual salary and bonus reported.
(2) Includes term life insurance premiums paid by the Company and the Company's
contribution match to its 401(k) Plan.
</TABLE>
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<PAGE> 7
OPTION GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
<TABLE>
The following table contains information concerning the grant of stock options under the Company's
1995 Stock Option Plan to the Named Officers during the Company's last fiscal year.
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES EXERCISE EXPIRATION
NAME OPTIONS GRANTED IN FISCAL 1996 PRICE ($) DATE
---- --------------- -------------- --------- ----
<S> <C> <C> <C> <C>
Michael Foster 43,230 (1) 22.8% 6.00 12/11/05
Chairman, CEO
Dennis M. Deegan -- -- -- --
President, COO
John K. Allen -- -- -- --
Group Vice President
Power Solutions
Timothy G. Jones 5,000 (2) 2.6% 3.00 10/09/05
Group Vice President
Information Solutions
<FN>
(1) Options granted under the WPI Group, Inc. 1995 Stock Option Plan at an exercise price
equal to 177.8% of the fair market value of the Company's Common Stock on the date of
grant. The option vests in 1/3 increments on 10/1/96, 10/1/97 and 10/1/98.
(2) Options granted under the WPI Group, Inc. 1995 Stock Option Plan at an exercise price
equal to the fair market value of the Company's Common Stock on the date of grant. The
option vests in 1/2 increments on 9/1/96 and 9/1/97.
</TABLE>
OPTION EXERCISES AND FISCAL YEAR END VALUES
<TABLE>
The following table contains information with respect to aggregate stock options exercised by the Named Officers during
fiscal 1996 as well as unexercised options to purchase the Company's Common Stock granted through September 29, 1996 under
the Company's 1995 Stock Option Plan to the Named Officers and held by them at that date.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
-------------------------------------------------------------------------------------
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT SEPTEMBER 29, 1996 AT SEPTEMBER 29, 1996 ($)(1)
----------------------------- ---------------------------------
COMMON STOCK COMMON STOCK
SHARES ACQUIRED VALUE ------------ ------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------ ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael Foster -- -- 13,350 69,930 16,688 87,412
Dennis M. Deegan 15,000 58,950 45,000 20,000 195,875 81,750
John K. Allen -- -- 5,000 6,000 21,875 26,250
Timothy G. Jones -- -- 2,500 2,500 10,625 10,625
<FN>
(1) Based on the difference between the exercise price of each grant and the closing price of the Company's Common Stock as
quoted on the NASDAQ/NMS on September 29, 1996, which was $7.25.
</TABLE>
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<PAGE> 8
All options granted in 1996 were granted under the 1995 Stock Option Plan (the
"Plan"). The 1995 Stock Option Plan is administered by the Stock
Option/Compensation Committee, which consists of not less than three directors,
each of whom is a disinterested person under the provisions of Rule 16b-3 of the
Securities Act of 1934. The Committee determines the key employees to whom, and
the time or times at which, options will be granted, the number of shares
subject to each option and the terms upon which each option may be granted.
CHANGE IN CONTROL PLAN
The Board of Directors has adopted a Change in Control Plan covering certain
officers and key employees ("Covered Individuals"). The provisions of the Plan
only become effective upon the occurrence of an event constituting a change in
control of the Company. Under the Plan, a Change in Control shall be deemed to
have occurred if any Change in Control of a nature required to be reported in
response to Item 1(a) of Form 8-K occurs. A Change in Control shall not be
deemed to have occurred if such Change in Control results from a distressed sale
of the Company due to the Company's material default with respect to any
applicable debt covenants with its lender.
In relevant part, the Plan provides that if, within one (1) year after a Change
of Control of the Company, a Covered Individual is discharged without Cause (as
defined in the Plan) or has resigned for reasons relating to a diminution of
responsibilities, compensation or benefits or relocation of place of employment,
the Company shall pay to such individual a lump sum severance benefit.
Currently, Covered Individuals would receive between six and eighteen months of
base salary, plus bonus, depending upon the Covered Individual's years of
service and status with the Company. At the discretion of the Board of
Directors, the vesting of options may be accelerated in the event of a Change in
Control. A Covered Individual may resign at any time within one year of a change
in control and receive the base salary component only of the lump sum benefit.
There are currently seven Covered Individuals under the Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that each director
and certain officers of the Company file reports of initial beneficial ownership
and changes in beneficial ownership of the Company's Common Stock with the
Securities and Exchange Commission. To the Company's knowledge, during 1996 all
directors and officers filed such required notices except that the reports
listed below were filed after the due date: Dr. Allen - one report; Mr. Deegan -
five reports relating to the grant of incentive stock options and the purchase
of shares; Mr. Foster - three reports relating to gifts of shares and the grant
of incentive stock options; Mr. Danforth - one report relating to a gift of
shares; Mr. Jones - one report; Ms. Hebert - one report. The Company has
redoubled its efforts to prevent future late filings by putting its existing
Section 16 compliance assistance program under the direction of its General
Counsel.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
selected the firm of Arthur Andersen LLP, independent public accountants, to
audit the financial statements of the Company for the fiscal year ending
September 28, 1997. Arthur Andersen LLP acted as the Company's independent
public accountants for the fiscal year ended September 29, 1996. Representatives
of Arthur Andersen LLP will attend the Annual Meeting, will have an opportunity
to make a statement if desiring to do so and will be available to answer any
pertinent questions.
DEADLINE FOR SHAREHOLDERS' PROPOSALS
The Company must receive any proposal which a shareholder wishes to submit to
the 1998 Annual Meeting of shareholders before August 15, 1997 if the proposal
is to be considered by the Board of Directors for inclusion in the proxy
materials for that meeting.
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<PAGE> 9
OTHER MATTERS
Management knows of no matters to be presented at the meeting other than those
set forth in the accompanying proxy. However, if other matters are properly
presented for action, it is the intention of the persons named in the proxy to
vote upon such matters in accordance with their best judgment.
AVAILABILITY OF FORM 10-KSB
A copy of the Company's Annual Report for the last fiscal year filed on Form
10-KSB with the Securities and Exchange Commission will be furnished to
stockholders without charge upon written request to Michele M. Normandin,
Investor Relations, WPI Group, Inc., 1155 Elm Street, Manchester, New Hampshire
03101.
BY ORDER OF THE BOARD OF DIRECTORS
Michael B. Tule, Secretary
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<PAGE> 10
WPI GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 12, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints Michael Foster and Dennis M. Deegan, and
each of them, with power of substitution, as proxies, to vote the Common Stock
of the undersigned at the Annual Meeting of Shareholders of the Company to be
held on February 12, 1997, and at any adjournment thereof. The matters listed on
the back of this card are described in the proxy statement.
The proxies will vote: (1) as you specify on the reverse side, (2) as the
Board of Directors recommends if you do not specify a choice on the matters
listed on the reverse side, and (3) according to their best judgment upon any
other business which may properly come before the meeting or any adjournment
thereof.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(Please sign your name exactly as it appears on this proxy. When signing as
attorney, executor, administrator, trustee, guardian, or officer of a
corporation, state capacity in which you are signing.)
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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<PAGE> 11
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. Election of Directors. FOR ALL EXCEPT
NOMINEES:
Michael Foster, Dennis M. Deegan,
Peter D. Danforth, Paul G. Giovacchini, [ ] [ ]
Irving Gutin, Robert C. McCray and
Bernard H. Tenenbaum.
-----------------------------
FOR WITHHOLD
2. In their discretion, the proxies
are authorized to vote upon any [ ] [ ]
other business which may properly
come before the meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through that nominee's name from the list
above.
RECORD DATE SHARES:
----------------------------------------------------------
Please be sure to sign and date this Proxy.
Mark box at right if comments
or address change have been [ ]
noted on the reverse side of
card.
Shareholder sign here Date
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Co-owner sign here Date
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DETACH CARD
