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 | |
Check the Appropriate Box:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
| X| Definitive Proxy Statement
| | Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PML, INC.
---------
(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
| | $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
N/A.
2) Aggregate number of securities to which transaction applies: N/A.
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A.
4) Proposed maximum aggregate value of transaction: N/A.
5) Total Fee Paid.
None.
| | Fee paid previously be written 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: N/A
2) Form Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE>
PML, INC.
27120 S.W. 95th Avenue
Wilsonville, Oregon 97070
PROXY STATEMENT
This Proxy Statement and the accompanying proxy/voting instruction card
(proxy card) are being mailed to security holders beginning October 24, 1998 in
connection with the solicitation of proxies by the Board of Directors of PML,
Inc. (the "Company") for the Annual Meeting of Shareholders in Wilsonville,
Oregon. The meeting will be held at 4:00 p.m., December 3, 1998, at 27120 S.W.
95th Avenue, Wilsonville, Oregon 97070.
Only stockholders of record at the close of business on October 20,
1998 (the "Record Date") will be entitled to vote at the meeting. At the close
of business on October 7, 1998, there were 1,780,441 outstanding shares of the
Company's Class A Common Stock (the "Class A Common Stock"). Each share of Class
A Common Stock not in the treasury is entitled to one vote. There is no
provision in the Company's Amended and Restated Articles of Incorporation for
cumulative voting.
If shares are not voted in person, they cannot be voted on your behalf
unless a signed proxy is given. Even if you expect to attend the Annual Meeting
in person, in order to ensure your representation please complete, sign and date
the enclosed proxy and mail it promptly in the enclosed envelope. A stockholder
giving a proxy pursuant to the present solicitation may revoke it at any time
before it is exercised by giving a subsequent proxy or by delivering to the
Secretary of the Company a written notice of revocation prior to the voting of
the proxy at the Annual Meeting. If you attend the Annual Meeting and inform the
Secretary of the Company in writing that you wish to vote your shares in person,
your proxy will not be used. If you receive two or more proxy cards, please
complete, sign, date and return each to complete your representation. All shares
represented by each properly executed and unrevoked proxy, in the accompanying
form, will be voted unless the proxy is mutilated or otherwise received in such
form or at such time as to render it unusable.
Votes cast at the Annual Meeting will be tabulated by the persons
appointed by the Company to act as inspectors of election for the Annual
Meeting. Shares represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the meeting, but with respect to which such broker or nominee is not empowered
to vote on a particular proposal) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum. However,
for purposes of determining the outcome of any proposal as to which proxies
reflect abstentions or broker non-votes, shares represented by such proxies will
be treated as not present and not entitled to vote with respect to that
proposal. No dissenters' rights apply to any matter to be acted upon at this
meeting.
<PAGE>
The cost of this solicitation will be borne by the Company.
Solicitation will be made by mail, by telegraph and telephone, and personally by
certain officers and regular employees of the Company who will not receive
additional compensation for solicitation. In addition, American Securities
Transfer & Trust, Inc. will receive approximately $600 to solicit proxies on
behalf of the Company. Brokers, nominees and fiduciaries will be reimbursed for
out-of-pocket expenses incurred in obtaining proxies or authorizations from the
beneficial owners of the Class A Common Stock.
The purpose of the meeting and the matters to be acted upon are set
forth in the foregoing Notice of Annual Meeting of Stockholders which
accompanies this Proxy Statement. As of the date of this Proxy Statement,
management knows of no other business which will be presented for consideration
at the Annual Meeting. However, if any other business shall properly come before
the meeting, votes will be cast pursuant to the proxies in respect of any such
other business in accordance with the best judgment of the persons acting under
the proxies.
CLASS OF VOTING SECURITIES
Shares Outstanding as of
------------------------
Class October 7, 1998
----- ---------------
Common A 1,780,441
Common B 211,551
Convertible Preferred A 4,950
Security Ownership of Certain Beneficial Owners and Management.
- --------------------------------------------------------------
The following table sets forth information with respect to the
ownership of issued and outstanding shares of the Company by each director,
executive officer, and person known to the Company to be the beneficial owner of
more than 5% of any class of the Company's voting securities as of October 7,
1998:
Amount and
Title of Name and Address Nature1 of Percent
Class of Beneficial Owner Beneficial Interest of Class
- -------- ------------------- ------------------- --------
Class A A. Ron Torland 157,381(2) 8.8%
Common 10595 SW Kiowa Street
Tualatin, OR 97062
Class A Arthur N. Torland 146,392 8.2%
- ----------
(1) Except as otherwise indicated, the amounts set forth below include all
shares owned directly by the named individuals, by the individuals indirectly
through a trust or corporation, or by the individuals' spouses and minor
children over which the individual exercises sole or shared voting and
investment power.
(2) Includes 1,000 shares owned by Janice Torland, Ron Torland's wife.
Also includes 23,500 shares owned by Kris Torland, Ron Torland's daughter.
Kris Torland lives at home, but is an adult and Ron Torland disclaims any
beneficial interests in those shares.
<PAGE>
Common 10755 SW Lucas
Tualatin, OR 97062
Class A Julian G. Torland 267,900 15.1%
Common 11100 SW North Dakota Street
Tigard, OR 97223
Class A Douglas C. & Joanne E. Johnson 240,832(3) 13.5%
Common 8728 SW Pamlico Court
Tualatin, OR 97062
Class A Craig S. Montgomery 141,243(4) 7.9%
Common 12600 SE Rachella Court
Boring, OR 97009
Class A Marsha & Stan Drake 95,243 5.3%
Common 28890 S. Beavercreek Road
Mulino, OR 97042
Class A Mary Lou Ham 141,243(5) 7.9%
Common 3363-B Blaine Road
Moscow, Idaho 83843
Class B A. Ron Torland 142,902 67.5%
Common 10595 SW Kiowa Street
Tualatin, OR 97062
Class B Julian G. Torland 68,649 32.5%
Common 11100 SW North Dakota Street
Tigard, OR 97223
Class A Arthur N. & Bessie M. Torland 2,750 55.6%
Convertible Preferred 8520 SW Avery Street
Tualatin, OR 97062
- ----------
(3) Includes 70,743 shares owned by Joanne Johnson, Doug Johnson's wife,
and 70,500 shares owned by the Johnson children.
(4) Includes 70,500 shares owned by the Montgomery children.
(5) Includes 70,500 shares owned by the three Ham children. However, one of
the Ham children is an adult who owns 23,500 of these shares, and Mary Lou
Ham disclaims any beneficial interest in the shares owned by that person.
<PAGE>
Class A Julian G. Torland 700 14.1%
Convertible Preferred 11100 SW North Dakota Street
Tigard, OR 97223
Class A Douglas C. & Joanne E. Johnson 1,500 30.3%
Convertible Preferred 8728 SW Pamlico Court
Tualatin, OR 97062
The directors and officers of the Company as a group own 539,456 shares
representing 30.3 percent of the Company's outstanding Class A Common Stock.
Additionally, these persons as a group own 142,902 shares of Class B Common
Stock of the Company, representing 67.5 percent of that class, and 1,500 shares
of Class A Convertible Preferred Stock, representing 30.3 percent of that class.
There are no arrangements which may result in a change of control of the
Company.
Based upon a review of forms filed with the registrant and amendments
thereto during the most recent fiscal year, the Company believes that certain
persons who, at various times during that fiscal year, were directors, officers,
beneficial owners of more than ten percent of any class of equity securities of
the Company registered pursuant to Section 12 of the Securities Exchange Act may
have failed to file on a timely basis reports required by Section 16(a) of the
Exchange Act during the most recent fiscal year and prior fiscal years.
Legal Proceedings.
- -----------------
The Company occasionally has made a party to incidental suits or other
legal actions arising in the ordinary course of its business. To the best
knowledge of Management, the Company is not currently subject to any pending
litigation that would have a material adverse affect upon its operations. To
date, the Company has never paid a product liability claim. The Company is
currently engaged in discussions with one purchaser concerning product quality
and has notified its product liability insurance carrier of these discussions.
<PAGE>
Executive Compensation.
- ----------------------
The following table sets forth the compensation of all executive
officers of the Company for the fiscal year ending May 31, 1998 who received
total annual salary and bonuses during that period in excess of $100,000:
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Name and principal Year Annual Compensation Long Term Compensation
position
---------- ---------- ----------------- ---------------------------- --------- -----------------
Other annual All other
Salary Bonus ($) compensation Awards Payouts compensation ($)
($) ($)
----------- ---------------- ---------
Restricted Securities LTIP
stock underlying payouts
award(s) options/SARs ($)
(#)
- --------------------- ------ ---------- ---------- ----------------- ----------- ---------------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth L. Minton, 1997 $150,023 66,389 -- -- -- -- --
CEO
- --------------------- ------ ---------- ---------- ----------------- ----------- ---------------- --------- -----------------
1998 $150,026 - 0 - -- -- -- -- --
- --------------------- ------ ---------- ---------- ----------------- ----------- ---------------- --------- -----------------
Woody Streb, VP 1997 $92,447 $25,000 -- -- -- -- --
Marketing
- --------------------- ------ ---------- ---------- ----------------- ----------- ---------------- --------- -----------------
1998 $103,025 $8,000 -- -- -- -- --
- --------------------- ------ ---------- ---------- ----------------- ----------- ---------------- --------- -----------------
</TABLE>
No officer, director or employee was beneficiary of any long-term
compensation or other compensation in excess of the dollar values reflected in
item 402(b)(2)(iii)(c) of Regulation S-B. Kenneth L. Minton has an employment
agreement with the Company (the "Employment Agreement") that expires on May 31,
2002. The Employment Agreement provides for an increase in compensation
beginning on June 1, 1999, and sets forth Mr. Minton's bonus structure and stock
option vesting schedule. The Employment Agreement contains a for-cause
termination provision, and provides for payment upon termination other than for
cause equal to the compensation payable under the remaining contract term.
There were no other compensatory plans or arrangements that would
result in a payment in excess of $100,000 to any named executive officer as a
result of a change in control. No director received compensation for services as
a director. The Company does not presently have an audit committee, a
compensation committee, or a nominating committee.
<PAGE>
Options were granted in fiscal year 1998 to certain executive officers
and directors, as set forth below.
<TABLE>
<CAPTION>
- ------------------------ -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Individual Granted
[Date of Grant]
- ------------------------ -------------------------- ----------------------------- ----------------------------------
Date of Grant Number Exercise Price
- ------------------------ -------------------------- ----------------------------- ----------------------------------
Kenneth L. Minton August 8, 1996 100,000 $0.375
- ------------------------ -------------------------- ----------------------------- ----------------------------------
July 23, 1997 40,000 0.625
- ------------------------ -------------------------- ----------------------------- ----------------------------------
James N. Weider August 1, 1995 40,000 0.50
- ------------------------ -------------------------- ----------------------------- ----------------------------------
Woody Streb May 31, 1996 60,000 0.375
- ------------------------ -------------------------- ----------------------------- ----------------------------------
July 23, 1997 20,000 0.59375
- ------------------------ -------------------------- ----------------------------- ----------------------------------
Timothy Schroeder September 3, 1996 50,000 0.53
- ------------------------ -------------------------- ----------------------------- ----------------------------------
</TABLE>
No options were exercised by any of the executive officers. The
exercise price of options issued in previous years currently held by officers
and directors was not in excess of the fair market value of the underlying
security as of October 7, 1998.
Certain Relationships and Related Transactions.
- ----------------------------------------------
The Company currently leases equipment and formally leased laboratories
and office facilities from Arthur and Bessie Torland, Julian Torland and Ron
Torland, some of whom hold more than 10 percent of certain classes of voting
securities of the Company. Total rental expense incurred under these three
operating leases was approximately $80,500 and $150,000 in fiscal years 1998 and
1997, respectively. (See Note 11 on Notes to Consolidated Financial Statements).
The Company has entered into a Technology License Agreement with
Definitive Diagnostics, Inc. ("DDI"). The Technology License Agreement carries a
six-year term, during which the Company will manufacture and market products
developed by DDI and will pay a royalty based upon the number of units sold.
Total royalties of $11,403 were incurred in fiscal year 1998, compared to
royalties of $28,855 in fiscal year 1997. DDI is owned by Messrs. Arthur Torland
and Ron Torland, both of whom are shareholders of the Company owning more than
10 percent of one or more classes of the Company's capital stock. Additionally,
Mr. Ron Torland is a director of the Company.
Certain shareholders and relatives of shareholders have made loans to
the Company in exchange for five year promissory notes carrying an interest rate
of 6 percent, issued by the Company in fiscal year 1996. These persons include
Joanne E. Johnson, wife of director Douglas C. Johnson; Ron Torland, a
shareholder and director; Arthur & Bessie Torland, shareholders; and L. Bruce
Ham, brother-in-law of director Ron Torland. These notes were issued when the
above-named individuals paid off certain accounts payable vendors of the Company
who had declined other alternative payment arrangements proposed by the Company.
As of September 30, 1998, the balance owing on the notes, in the aggregate, was
$66,837.
There are no other transactions or series of similar transactions
involving amounts in excess of $60,000.
<PAGE>
PROPOSAL 1
TO ELECT DIRECTORS
The Company's Bylaws currently provide that no fewer than 3 and no more
than 7 directors be elected each year. Each director shall serve for a period of
one year, until his or her successor shall be elected, or until removed by a
vote of the holders of the majority of the shares entitled to vote at an
election of directors. The Board of Directors currently consists of four (4)
members. Pursuant to the Company's Articles of Incorporation, holders of common
shares, together with the issued and outstanding preferred shares, are entitled
to elect 25% of the Board of directors, and the holders of Class B Common shares
are entitled to elect 75%. For the fiscal year ended May 31, 1998, the Company
had four (4) regular meetings of the Board of Directors and no special meetings.
Nominees for Election of Directors by Shareholders
- --------------------------------------------------
A. Ron Torland - Age 51. Mr. Torland has been employed by the Company or its
predecessors since 1970. He became Chairman of the Board in 1988, and prior to
that time had been Chief Executive Officer from 1988 to 1996 and President from
1982 to 1988. Mr. Torland also was Treasurer of the Company from 1972 to 1996
and has been a member of the Board of Directors since the Company was
incorporated in 1972. Mr. Torland holds a Bachelor of Science degree in Business
Administration, and served in the United States Army from 1968 to 1970.
Kenneth L. Minton - Age 48. Mr. Minton was hired as the Company's President and
Chief Executive Officer in April 1996, and was elected to the Board of Directors
in November 1997. Before joining PML, he was President and Chief Operating
Officer of Hind, Inc., a manufacturer and distributor of high-end sports apparel
from 1993 to 1996. Prior to that time, Mr. Minton had been a Vice President of
Microwave Applications Group, an electronics manufacturer, from 1985 to 1993.
Prior to 1985, Mr. Minton had extensive experience in operations, finance, sales
and marketing in several industries. Mr. Minton holds a Bachelors degree in
Business Administration.
Douglas C. Johnson - Age 42. Mr. Johnson has been a Director of the Company
since March 1996. He holds a Bachelor of Arts degree in Music from Fort Wright
College in Spokane, Washington and a Masters degree from the University of
Southern California. Mr. Johnson has been a professional opera singer for 13
years, and returned to the United States four years ago after nine years in
Europe.
Craig S. Montgomery, Ph.D. - Age 44. Dr. Montgomery has been a Director of the
Company since March 1996. He is a licensed clinical psychologist and, from 1983
to 1991, he was Program Director of New Day Center in Portland, Oregon. New Day
Center is a residential and outpatient facility for chemical dependency
treatment. From 1991 to 1993, Dr. Montgomery was Clinical Supervisor of New Day
Center and at the Dual Diagnosis Program at Portland Adventist Hospital and
Caremark Behavioral Health Services. Dr. Montgomery now is in private practice.
He holds a Masters degree from Pepperdine University and a Ph.D. from the
California School of Professional Psychology in San Diego, California.
No Director of the Company is a director in any other reporting company
under the Securities Exchange Act.
<PAGE>
PROPOSAL 2
TO RATIFY THE SELECTION OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY'S AUDITORS
The Board of Directors has selected the firm of PriceWaterhouseCoopers LLP to
conduct an audit in accordance with generally accepted auditing standards of the
Company's consolidated financial statements for the fiscal year ending May 31,
1999. A representative of that firm is expected to be present at the annual
meeting to respond to appropriate questions and will be given an opportunity to
make a statement if he or she so desires. Neither the firm nor any partners of
the firm has any direct financial interest in the Company or any of its
subsidiaries other than as independent auditors. This selection is being
submitted for ratification at the meeting. If not ratified, this selection will
be reconsidered by the Board, although the Board of Directors will not be
required to select different independent auditors for the Company. UNLESS
OTHERWISE INSTRUCTED, PROXY WILL BE VOTED FOR RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP.
OTHER BUSINESS
As of the date of this Proxy Statement management knows of no other
business which will be presented for action at the meeting. If any business
requiring a vote of the stockholders should come before the meeting, the persons
named in the enclosed form of proxy will vote or refrain from voting in
accordance with their best judgment.
INFORMATION AVAILABLE TO SHAREHOLDERS
The Company's 1998 Annual Report is being mailed to shareholders with
this Proxy Statement. Additional copies of the Annual Report may be obtained
without charge from James N. Weider, Chief Financial Officer, PML, Inc., 27120
S.W. 95th Avenue, Wilsonville, Oregon 97070. Mr. Weider may be reached by
telephone at (503) 570-2500.
PROPOSALS OF SECURITY HOLDERS
Any proposal of a security holder intended to be presented at the next annual
meeting of the Company must be received by the Company for inclusion in the
Company's proxy statement by June 1, 1999.
By order of the Board of Directors:
----------------------------------
A. Ron Torland, Chairman
Dated: October 22, 1998
<PAGE>
PROXY
In order that your vote may be properly tabulated, please complete the
below listed items and return this Proxy to the Secretary of the Company in the
envelope provided.
Election of Directors.
[ ] FOR Kenneth L. Minton, the director proposed to be elected by the holders
of the Common Shares.
[ ] AGAINST all proposed directors.
[ ] Abstain.
Ratification of Accountants.
[ ] FOR ratification.
[ ] AGAINST ratification.
[ ] Abstain.
Other Matters.
[ ] VOTE my shares in accordance with the Board's determination.
[ ] WITHHOLD my vote on any matters not set forth above.
In order to ensure proper tabulation, please sign, print your name, and
date this Proxy in the spaces provided.
SHAREHOLDER
- ------------------------------------
Signature
- ------------------------------------
Printed Name
- ------------------------------------
Date
<PAGE>
PML, Inc.
27120 S.W. 95th Avenue
Wilsonville, Oregon 97070
October 22, 1998
Dear Shareholders:
A regular meeting of the shareholders of PML, Inc. (the "Company") will be held
at 4:00 p.m. on December 3, 1998 at the offices of the Company, 27120 S.W. 95th
Avenue, Wilsonville, Oregon 97070. At the meeting, the shareholders will elect
directors and will consider a proposal to ratify the Board of Directors'
selection of PriceWaterhouseCoopers as the Company's accountants. Management and
the Board of Directors have proposed a slate of directors, and recommend that
you vote FOR the proposed directors and FOR the ratification of accountants.
Whether or not you plan to attend the meeting, it is important that you sign,
date and return the enclosed Proxy as soon as possible. A prepaid return
envelope is provided for this purpose. If you do attend the meeting and wish to
vote personally, you may withdraw your proxy and vote in accordance with your
wishes.
If you have shares registered in more than one name, or if your shares are held
in more than one way, for example in joint tenancy with your spouse, you may
receive multiple copies of the proxy materials. If so, please sign and return
each Proxy you receive so that all of your shares may be voted.
Best Regards,
James N. Weider
Secretary
