SI HANDLING SYSTEMS, INC.
600 Kuebler Road, Easton, Pennsylvania 18040
Telephone (610) 252-7321
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of SI Handling Systems, Inc., a
Pennsylvania corporation (the "Company"), will be held at the
Metropolitan Edison Building, 2121 Sullivan Trail, Easton, Pennsylvania
18040 on Tuesday, July 18, 1995, at 11:00 a.m., local time, for the
following purposes:
1. To elect five directors.
2. To transact such other business as may properly come before the
meeting.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
June 12, 1995 RONALD J. SEMANICK
Easton, Pennsylvania Secretary
<PAGE>
SI HANDLING SYSTEMS, INC.
600 Kuebler Road, Easton, Pennsylvania 18040
June 12, 1995
Proxy Statement
This Proxy Statement and the accompanying form of proxy are being
mailed on or about June 12, 1995 to the stockholders of SI Handling
Systems, Inc. (the "Company"). They are being furnished in connection
with the solicitation by the Board of Directors, by mail, of proxies to
be voted at the 1995 Annual Meeting of Stockholders to be held at the
Metropolitan Edison Building, 2121 Sullivan Trail, Easton, Pennsylvania
18040 on Tuesday, July 18, 1995 at 11:00 a.m., local time, and at any
adjournment thereof. The cost of such solicitation will be borne by the
Company.
Only the stockholders of record at the close of business on May 30,
1995, of the outstanding shares of Common Stock of the Company will be
entitled to vote at the meeting. A stockholder giving a proxy may
revoke it at any time by giving written notice of such revocation to the
Secretary of the Company, Ronald J. Semanick, before it is exercised.
A proxy may also be revoked by executing a later proxy or by attending
the meeting and voting in person, provided written notice of such
actions are given to the Secretary of the Company, Ronald J. Semanick,
before the enclosed proxy is exercised.
The voting securities entitled to vote at the meeting consist of
Common Stock of the Company with each share entitling its owner to one
vote. The Company's By-Laws provide that voting may not be cumulative
in the election of directors. At the close of business as of the above
record date, there were outstanding and entitled to vote 1,640,353
shares of the Company's Common Stock. This total does not include
38,781 treasury shares.
Directors are elected by a plurality of the votes cast. Votes may be
cast in favor or withheld; votes that are withheld will be excluded
entirely from the vote and will have no effect. The Company believes
that brokers that are member firms of the New York Stock Exchange and
who hold shares in street name for customers have the authority to vote
those shares with respect to the election of directors if they have not
received instructions from the beneficial owner. A failure by brokers
to vote those shares will have no effect on the outcome of the election
of directors, as directors are to be elected by a plurality of the votes
cast.
<PAGE>
Principal Stockholders
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth certain information as of May 30, 1995
(unless otherwise noted) regarding the ownership of Common Stock (i) by
each person known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock, (ii) by each director or
nominee of the Company, (iii) by the executive officer of the Company named
in the Summary Compensation Table included elsewhere in this Proxy Statement,
and (iv) by all current executive officers and directors of the Company as a
group. Unless otherwise stated, the beneficial owners exercise sole voting
and/or investment power over their shares.
RIGHT TO ACQUIRE
OWNERSHIP UNDER
OPTIONS
NUMBER OF SHARES EXERCISABLE PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED WITHIN 60 DAYS OF CLASS(1)
Woodstead Associates, L.P.(2).. 265,000 - 16.16%
1733 Woodstead Court
The Woodlands, Texas 77380
L. Jack Bradt (3) ............. 165,424 - 10.08%
10 Ivy Court
Easton, Pennsylvania 18045
Edward J. Fahey ............... 2,000 -
Leonard S. Yurkovic ........... 22,048 9,800 1.93%
John W. Adams.................. - -
Michael J. Gausling............ - -
Karl-Henry Bergkvist........... - -
All current directors and
executive officers as a
group (14 persons) (3) ...... 198,940 33,518 13.89%
___________________________
(1) The percentage for each individual, entity or group is based on the
aggregate number of shares outstanding as of May 30, 1995 (1,640,353)
and all shares issuable upon the exercise of outstanding stock options
held by each individual or group that are presently exercisable or
exercisable within 60 days after May 30, 1995. Percentages of less
than one percent are not shown.
(2) This information is presented in reliance on information disclosed in a
Schedule 13D filed with the Securities and Exchange Commission on
April 25, 1994. Mr. John W. Adams, President of Smith Management
Company and a director of the Company, is an officer of the general
partner of Woodstead Associates, L.P..
(3) Includes 29,378 shares held by members of Mr. Bradt's immediate family.
Mr. Bradt disclaims beneficial ownership of such shares.
<PAGE>
ELECTION OF DIRECTORS
At the meeting, five nominees will stand for election as directors of the
Company to hold office for a period of one year or until their successors have
been elected and qualify. Karl-Henry Bergkvist, a director of the Company since
1978, is retiring from the Board at the Company's Annual Meeting of
Stockholders. Michael J. Gausling has been nominated to take Mr. Bergkvist's
place on the Board of Directors.
If the enclosed proxy is duly executed and received in time for the meeting,
it is the intention of the persons named therein to vote the shares represented
thereby for the five persons nominated for election as directors unless
authority is withheld.
If any nominee should refuse or be unable to serve, the proxy will be voted
for such other person as shall be designated by the Board of Directors.
Management has no knowledge that any of the nominees will refuse or be unable
to serve.
Information concerning the nominees for election as directors is set forth
below:
Name, Other Positions or Offices
with the Company and Principal Director
Occupation for Past Five Years Since Age
John W. Adams.................... 1994 51
President of Smith Management
Company, a private investment
firm(1).
L. Jack Bradt.................... 1958 67
Northampton County Health and
Human Services Director,
Entrepreneur-in-Residence at
Lehigh University, and founder,
former CEO and Chairman of the
Board of the Company.
Edward J. Fahey.................. 1992 66
Chairman of the Board of the
Company, former Vice President
of Engineered Systems Company
(1989-1993), manufacturers of
aircraft arresting systems and
mid-air recovery equipment.
Michael J. Gausling.............. N/A 37
President, Chief Executive
Officer, and founder of SolarCare
Technologies Corporation, an
emerging growth manufacturer of
clinical diagnostic products.
Leonard S. Yurkovic.............. 1983 57
President and Chief Executive
Officer of the Company.
_____________________________
(1) Mr. Adams is director of Regency Health Services, Inc., a national
chain of nursing homes; Servico, Inc., a nationwide owner and manager
of hotels; and Harvard Industries, Inc., a manufacturer of automobile
parts.
<PAGE>
ADDITIONAL INFORMATION CONCERNING CERTAIN DIRECTORS AND COMMITTEES
There are two standing committees of the Board of Directors: the Audit
Committee and the Compensation Committee.
The Audit Committee reviews and discusses with the Company's external
auditors the scope of their annual audit and related fees as well as any
other services provided by them. It reviews with the auditors the results
of the audit and the year-end financial statements and recommends to the
Board of Directors matters related to the selection and engagement of the
independent auditors. The members of the Audit Committee during fiscal
year 1995 were Mr. Bradt, Chairman, and Messrs. Bergkvist, Fahey (until
his election as Chairman of the Board), and Mr. Adams, the latter having
been elected to the Board of Directors during fiscal year 1995.
The Compensation Committee reviews and recommends to the Board of Directors
matters with respect to the remuneration arrangements for officers and
directors of the Company including salaries and other direct compensation and
stock option awards. Mr. Fahey, elected as Chairman of the Board of
Directors during fiscal year 1995, was succeeded by Mr. Adams as Chairman of
the Compensation Committee. The other members of the Compensation Committee
during fiscal year 1995 were Messrs. Bergkvist and Bradt.
There was one meeting of the Audit Committee and one meeting of the
Compensation Committee during the recently ended fiscal year. The Board of
Directors met nine times during the year. Each director attended all the
meetings of the Board of Directors and committees of the Board of Directors
on which he served.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no additional remuneration
for their services as directors. The Chairman of the Board of Directors and
other non-employee directors receive an annual retainer of $12,000 and $6,000,
respectively; a fee of $1,200 for each Board meeting attended; and effective
October 6, 1994 a fee of $200 for each Board meeting held by telephone
conference. Members of the Special Committee, which was dissolved during
fiscal 1995, received fees of $600 per day for all activities undertaken in
that capacity. There are no additional directors' fees paid for serving on
the Audit and Compensation Committees of the Board of Directors. Directors
are also reimbursed for their customary and usual expenses incurred in
attending Board and Committee Meetings including those for travel, food, and
lodging.
The Company permits its directors, at their election, to defer receipt of
payment of directors' fees. During fiscal 1995, $43,500 of directors' fees was
deferred. Deferred directors' fees accrue interest at the prime rate of
interest charged by the Company's principal bank.
<PAGE>
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Securities and Exchange Commission has promulgated regulations requiring
Proxy Statements to contain more detailed and uniform reporting of executive
compensation and an explanation of the philosophy and methods used in
determining executive compensation.
Compensation Philosophy and Practices
It is the Company's policy to offer competitive compensation opportunities
for its employees based on a combination of factors, including corporate
performance and individual contribution to the business.
The Compensation Committee of the Company, whose members are identified
above, reviews and recommends compensation for the Company's executive
officers to the Board of Directors. A significant part of executive
officers' compensation is dependent upon the Company's annual financial
performance and return on equity.
There are four basic elements to executive officer compensation: salary,
bonus, auto allowance, and stock options granted at market value vesting over
a period of time, typically four years. The stock option program rewards
executive officers for successful long-term strategic management and
enhancement of shareholder value by providing an opportunity to acquire
equity ownership in the Company stressing both annual and long-term
performance and supporting a performance-oriented environment which allows
the Company to attract and retain qualified management personnel.
Salaries for executive officers are determined with reference to a position
rate for each officer. The position rates are determined annually by
evaluating the responsibilities of the position and taking into
consideration, among other things, salaries paid to other executives in
comparable positions in comparably-sized companies, levels of experience, and
job responsibilities. The Compensation Committee determines adjustments to
executive officer salary based on the recommendation of the Chief Executive
Officer. The salary adjustment recommendations are based on performance
criteria such as financial performance, strategic decisions, personnel
development, and individual performance.
The Compensation Committee awards bonuses to the Company's executive officers
and key employees pursuant to an existing Management Incentive Plan. The bonus
amounts and employees who will receive bonuses vary from year to year. The
bonus pool is calculated based on a formula tied principally to the Company's
profitability and return on equity. The pool is allocated by the Compensation
Committee, on the recommendation of the Chief Executive Officer, among the
executive officers and key employees, based on a series of factors, including
financial objectives, other business objectives, and assessment of personal
contribution.
The Compensation Committee may grant stock options each year to executive
officers and key employees based on a variety of factors, including the
financial performance of the Company and an assessment of personal
contribution. The options are granted with an exercise price equal to the
market price of the Company's Common Stock on the date of grant, vest over a
period of four years, and expire after five years. The options provide value
to the recipients as the price of the Company's stock appreciates from the
date when the options were granted. Historically, stock options have been
granted based on position rate. The size of previous option grants held by
an executive officer are considered in determining annual award levels. The
target is to provide executive officers with equity ownership in the Company.
<PAGE>
CEO Compensation
The Company's most highly compensated officer was Leonard S. Yurkovic,
President and CEO. Mr. Yurkovic's performance was reviewed by the
Compensation Committee and discussed with the Board of Directors and Mr.
Yurkovic. The Compensation Committee did not increase the Chief Executive
Officer's salary for fiscal 1995 because the Company's fiscal 1994 return on
equity and earnings from operations before income taxes were below
management's goals. However, the Compensation Committee granted 5,000 stock
options pertaining to the Company's Incentive Stock Option Plan to Mr.
Yurkovic as an incentive to promote long-term performance. The Compensation
Committee did not grant any bonuses pertaining to the Management
Incentive Plan for the fiscal year ended February 26, 1995.
No officer or director of the Company has an employment contract with the
Company.
Conclusion
The Company's executive compensation program is designed to link the
performance of management to accomplishing both short and long-term earnings
goals and building shareholder value. The individual elements are
understandable and together provide compensation that is well suited for a
Company of our size. The management team understands the linkage of
operating performance and their own compensation.
The foregoing constitutes the report of the Compensation Committee of the
Board of Directors for the Company's fiscal year ended February 26, 1995.
COMPENSATION COMMITTEE
John W. Adams, Chairman
Karl-Henry Bergkvist
L. Jack Bradt
Compensation
Set forth below is certain information relating to compensation received by
the Company's Chief Executive Officer (the "Named Executive Officer") whose
total annual salary and bonus for the fiscal year ended February 26, 1995
exceeded $100,000. No other officer of the Company received in excess of
$100,000 in total annual salary and bonus for fiscal 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
Long-
Term
Annual Compensation Comp.
Other Annual Stock All Other
Fiscal Salary Bonus Compensation Options Compensation
Name and Position Year ($)(1) ($) ($)(2) (#)(3) ($)(4)
<S> <C> <C> <C> <C> <C> <C>
Leonard S. Yurkovic 1995 $150,000 $ -0- $4,200 5,000 $5,538
President and Chief 1994 148,687 -0- 4,200 -0- 5,692
Executive Officer 1993 138,778 -0- 4,200 3,700 6,756
___________________
</TABLE>
(1) This column includes employee pre-tax contributions by Mr. Yurkovic to the
Company's 401(k) Retirement Savings Plan.
(2) This column consists of an auto allowance of $350 per month for the
business usage of his automobile.
(3) Options become exercisable in increments of 25% on the anniversary date
of the grant. Thus at the end of four years the options are fully
exercisable. Currently, all options have a term of five years. All
stock option figures have been adjusted to reflect stock dividends.
(4) This column includes the amounts expensed for financial reporting
purposes for Company contributions to the Company's 401(k) Retirement
Savings Plan pertaining to basic, matching, and profit sharing
contributions.
<PAGE>
Stock Options Granted to Named Executive Officer During Last Fiscal Year
The following table sets forth certain information regarding options for the
purchase of the Company's Common Stock that were awarded to the Named Executive
Officer during fiscal 1995.
<TABLE>
OPTION GRANTS IN FISCAL YEAR ENDED FEBRUARY 26, 1995
Potential
Realizable
% of Total Value at Assumed
Options Annual Rates
Granted to of Stock Price
Options Employees Exercise Appreciation for
Granted in Fiscal Price Expiration Option Term(2)
Name and Position (#)(1) Year ($/sh) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Leonard S. Yurkovic 5,000 27.4% $12.00 5/11/99 16,577 36,631
President and Chief
Executive Officer
______________________________________________________________________________
</TABLE>
(1) Options vest in one-quarter increments over the four year period
following the date of grant, with the first one-quarter of such
options vesting on May 11, 1995.
(2) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon the exercise of the
options immediately prior to the expiration of the term, assuming the
specified rates of appreciation on the Company's Common Stock over the
term of the options. These numbers do not take into account
provisions for termination of the option following termination of
employment or vesting over a period of four years. The dollar amounts
under these columns are the result of calculations at the 5% and 10%
rates required by the SEC and, therefore, are not intended to fore-
cast possible future appreciation of the stock price.
____________________________________________________________
Stock Options Exercised During Fiscal Year 1995 and Held by Named Executive
Officer as of February 26, 1995.
The following table sets forth certain information regarding options for the
purchase of the Company's Common Stock that were exercised and/or held by the
Company's Named Executive Officer during fiscal 1995.
<TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR ENDED FEBRUARY 26, 1995 AND FISCAL
YEAR END OPTION VALUES
Number of Value Of
Shares Covered Unexercised
# of By Unexercised In-The-Money
Shares Options at Options at
Acquired Feb. 26, 1995 Feb. 26, 1995
On Value Exercisable/ Exercisable/
Name and Position Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Leonard S. Yurkovic -0- -0- 6,525/7,950 $19,944/$4,325
President and Chief
Executive Officer
</TABLE>
<PAGE>
STOCK PERFORMANCE CHART
The following graph illustrates the cumulative total stockholder return on
the Company's (SIHS) Common Stock during the five fiscal years ended February
26, 1995 with comparison to the cumulative total return on the NASDAQ Stock
Market - US Index and a Peer Group of SIHS (depicting Conveyor and Conveying
Equipment Companies - SIC Code 3535). This comparison assumes $100 was
invested on February 23, 1990 in the Company's Common Stock and in each of
the foregoing indexes and assumes reinvestment of dividends.
<TABLE>
2/23/90 3/1/91 2/28/92 2/26/93 2/25/94 2/24/95
<S> <C> <C> <C> <C> <C> <C>
SI Handling Systems, Inc. 100 133 337 237 382 272
Peer Group(1) 100 74 106 70 59 48
NASDAQ Stock Market-US Index 100 103 160 170 199 203
</TABLE>
(1) The Peer Group of Conveyor and Conveying Equipment Companies (SIC Code 3535)
includes: Interlake Corp., Prab Robots, Inc., SI Handling Systems, Inc., and
Transact International, Inc. The total returns of each member of the Peer
Group were determined in accordance with Securities and Exchange Commission
regulations; i.e., weighted according to each such issuer's stock market
capitalization. The Company included the same members of the Peer Group in
constructing the stock performance chart as it did in the prior year, with the
exception of Apogee Robotics, Inc. which is currently in Chapter 11 bankruptcy.
INDEPENDENT ACCOUNTANTS
The Company's independent public accountants beginning in l968 and thereafter
have been KPMG Peat Marwick LLP, and such firm is expected to be the Company's
independent auditors for the current year. Representatives of that firm are
expected to be present at the stockholders' meeting and available for questions
and will be given an opportunity to make a statement if they so desire.
1996 STOCKHOLDER PROPOSALS
Appropriate stockholder proposals which are intended to be presented at the
l996 Annual Stockholders' Meeting must be received by the Company no later than
February 12, l996, in order to be included in the l996 proxy materials.
OTHER MATTERS
The Company may pay brokers, nominees, fiduciaries, or other custodians for
their reasonable expenses in sending proxy materials to, and obtaining
instructions from, persons for whom they hold stock of the Company. The
Company expects to solicit proxies primarily by mail, but directors, officers,
and regular employees of the Company may also solicit in person, by telephone,
telegraph, or telefax.
As of the date of this Proxy Statement, management has no knowledge of any
matters to be presented at the meeting other than those referred to above. If
any other matters properly come before the meeting, the persons named in the
accompanying form of proxy intend to vote such proxy in accordance with their
best judgement.
THE COMPANY WILL PROVIDE WITHOUT CHARGE, ON THE WRITTEN REQUEST OF ANY
STOCKHOLDER, A COPY OF ITS ANNUAL REPORT ON FORM 10-K, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED FEBRUARY 26,
1995. REQUESTS SHOULD BE DIRECTED TO THE SECRETARY OF THE COMPANY, 600
KUEBLER ROAD, EASTON, PENNSYLVANIA 18040.
<PAGE>
SI HANDLING SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward J. Fahey and Ronald J. Semanick, or
either of them acting in the absence of the other, as proxyholders, each with
the power to appoint his substitute, and hereby authorizes them to represent
and to vote, as designated on the reverse side, all shares of Common Stock of
SI Handling Systems, Inc., held of record by the undersigned on May 30, 1995,
at the Annual Meeting of Stockholders to be held on July 18, 1995, at 11:00
A.M., E.D.T., or at any adjournment thereof.
This proxy when properly executed will be voted in the manner directed on
the reverse side. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ELECTION OF DIRECTORS. This proxy may be voted, in the discretion of the
proxyholders, upon such other business as may properly come before the Annual
Meeting of Stockholders or any adjournment thereof. The Board of Directors
does not presently know of any other matters to be presented at the meeting.
Please vote and sign on the other side. No postage is required if this proxy
is returned in the enclosed envelope and mailed in the United States.
(To be Signed on Reverse Side)
(SEE REVERSE SIDE)
<PAGE>
Please mark your
vote as in this
example.
Election of FOR WITHHELD NOMINEES: John W. Adams
Directors L. Jack Bradt
Edward J. Fahey
Michael J. Gausling
Leonard S. Yurkovic
For, except vote withheld from
the following nominee(s):
(INSTRUCTION: To withhold authority
to vote for any individual nominee,
print that nominee's name on the
line below.)
___________________________________
SIGNATURE(S)__________________________________DATE__________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
