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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
PML, INC.
(Name of Registrant as Specified In Its Charter)
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:
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<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 September 18, 2000
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., October 24, 2000, at 27120 S.W.
95th Avenue, Wilsonville, Oregon 97070.
Only stockholders of record at the close of business on September 11,
2000 (the "Record Date") will be entitled to vote at the meeting. At the close
of business on August 30, 2000, there were 1,785,441 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.
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The cost of this solicitation will be borne by the Company.
Solicitations 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, Computershare Investor
Services will receive approximately $700 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
Class Shares Outstanding as of
----- ------------------------
August 30, 2000
---------------
Common A 1,785,441
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 percent of any class of the Company's voting securities as of August
30, 2000:
<TABLE>
<CAPTION>
Amount and
Title of Name and Address Nature (1) of Percent
Class of Beneficial Owner Beneficial Interest of Class
-------- --------------------- ------------------- --------
<S> <C> <C> <C>
Class A A. Ron Torland 183,381 (2) 10.3%
Common 10595 SW Kiowa Street
Tualatin, OR 97062
Class A Julian G. Torland 144,705 8.1%
Common 11100 SW North Dakota Street
Tigard, OR 97223
Class A Douglas C. & Joanne E. Johnson 266,832 (3) 14.9%
Common 21860 SW 103rd Court
Tualatin, OR 97062
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Class A Craig S. Montgomery 167,243 (4) 9.4%
Common 12600 SE Rachella Court
Boring, OR 97009
Class A Marsha & Stan Drake 121,243 6.8%
Common 28890 S. Beavercreek Road
Mulino, OR 97042
Class A Mary Lou Ham 167,243 (5) 9.4%
Common 3363-B Blaine Road
Moscow, ID 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
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
</TABLE>
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.
3 Includes 96,743 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, two of the
Ham children are adults who own 47,000 of these shares, and Mary Lou Ham
disclaims any beneficial interest in these shares.
4
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The directors and officers of the Company, as a group, own 355,213
shares of Class A Common Stock, representing 19.9 percent of that class, 142,902
shares of Class B Common Stock, 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 those
persons who, at various times during that fiscal year, were directors, officers,
or beneficial owners of more than 10 percent of any class of equity securities
of the Company registered pursuant to Section 12 of the Securities Exchange Act
filed 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 been 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. The
Company was engaged in discussions with one purchaser concerning product quality
and had notified its product liability insurance carrier of those discussions.
To date, the Company has never paid a product liability claim.
Executive Compensation
----------------------
The following table sets forth the compensation of all executive
officers of the Company for the fiscal year ending May 31, 2000, who received
total annual salary and bonuses during that period in excess of $100,000:
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
---------------------------- ---- ---------------------------------------- -----------------------------------------------------
Name and principal position Year Annual Compensation Long Term Compensation
---------------------------------------- -----------------------------------------------------
Salary ($) Bonus ($) Other annual Awards Payouts All other
compensation ($) compensation ($)
---------------------------- ---------
Restricted Securities LTIP
stock underlying payouts
award(s) options/SARs (#) ($)
---------------------------- ---- ----------- --------- ---------------- ---------- ----------------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth L. Minton, CEO 1999 $150,026 - 0 - -- -- -- -- --
---------------------------- ---- ----------- --------- ---------------- ---------- ----------------- --------- ----------------
2000 $175,000 $100,000 -- -- -- --
---------------------------- ---- ----------- --------- ---------------- ---------- ----------------- --------- ----------------
Woody Streb, VP Marketing 1999 $97,920 $23,000 $6,000 -- -- -- --
---------------------------- ---- ----------- --------- ---------------- ---------- ----------------- --------- ----------------
2000 $99,126 $7,500 $6,000 -- -- -- --
---------------------------- ---- ----------- --------- ---------------- ---------- ----------------- --------- ----------------
</TABLE>
5
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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. 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 August 30, 2000. Kenneth L. Minton has an
employment agreement with the Company (the "Employment Agreement") that expires
on May 31, 2002. The Employment Agreement stipulates Mr. Minton's base salary
and any corresponding increases and sets forth his 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 Board does not presently have an audit committee, a compensation
committee, or a nominating committee.
Certain Relationships and Related Transactions
----------------------------------------------
The Company currently leases equipment from Arthur & Bessie Torland,
Julian Torland, and Ron Torland, some of whom hold more than ten percent of
certain classes of voting securities of the Company under two operating leases.
Total rental expense incurred under these two operating leases was approximately
$78,000 in both Fiscal 2000 and 1999. (See Note 12 on Notes to Consolidated
Financial Statements)
The Company has a Technology License Agreement with Definitive
Diagnostics, Inc. ("DDI"). See Patents and Licenses. Under the agreement, which
expires in July 2002, the Company manufactures and markets product developed by
DDI and pays a royalty based upon the number of units sold. Total royalties of
$19,901 were incurred in Fiscal 2000 and $11,414 in Fiscal 1999. DDI is owned by
Messrs. Arthur and Ron Torland, both shareholders owning more than ten percent
of a class of stock of the Company. Ron Torland is also a director of the
Company.
Joanne E. Johnson, wife of director Doug C. Johnson; Ron Torland, a
stockholder and director; Arthur & Bessie Torland, shareholders; and L. Bruce
Ham, brother-in-law of a director all have five year, six percent notes issued
in fiscal 1996. In fiscal 1996 this group of shareholders paid off a small group
of the Company's Accounts Payable vendors who would not accept the Company's
offer to exchange these liabilities for five year notes. Instead the Company
issued these notes to this group of shareholders and the notes now have a
balance of $23,164 at May 31, 2000.
There are no other transactions, or series of similar transactions,
involving amounts in excess of $60,000.
6
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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 percent of the Board of directors, and the holders of Class B Common
shares are entitled to elect 75 percent. For the fiscal year ended May 31, 2000,
the Company had four (4) regular meetings of the Board of Directors and two (2)
special meetings.
Nominees for Election of Directors by Shareholders
--------------------------------------------------
A. Ron Torland - Age 53. 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. In July 1999, Mr. Torland became Secretary of the Company.
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 50. 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 44. 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 five years ago after nine years in
Europe.
Craig S. Montgomery, Ph.D. - Age 46. 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.
7
<PAGE>
PROPOSAL 2
TO RATIFY THE SELECTION OF MOSS-ADAMS LLP
AS THE COMPANY'S AUDITORS
The Board of Directors has selected the firm of MOSS-ADAMS 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,
2001. 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, YOUR PROXY WILL BE VOTED FOR RATIFICATION OF THE SELECTION
OF MOSS-ADAMS 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 2000 Annual Report on Form 10-KSB is being mailed to
shareholders with this Proxy Statement. Additional copies of the Annual Report
may be obtained without charge from the Controller of PML, Inc., 27120 S.W. 95th
Avenue, Wilsonville, Oregon 97070. The Controller 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, 2001.
By order of the Board of Directors:
/s/A. Ron Torland
---------------------------
A. Ron Torland, Chairman
Dated: September 18, 2000
8
<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 (Common A and Preferred Shareholders)
[ ] FOR Kenneth L. Minton, the director proposed to be elected by the
holders of the Common Shares.
[ ] AGAINST Kenneth L. Minton for director.
[ ] 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
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