<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement.
|X| Definitive proxy statement.
|_| Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
|_| Definitive additional materials.
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
ASAHI/AMERICA, 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.
|_| 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 transactions 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):
---------------------------------------------------------------
<PAGE>
(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:
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(4) Date Filed:
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<PAGE>
ASAHI/AMERICA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1999 - 10:00 A.M.
You are hereby notified that the Annual Meeting of Stockholders of
Asahi/America, Inc. will be held on Wednesday, May 26, 1999 at 10:00 A.M., at
the offices of Gadsby & Hannah LLP, 225 Franklin Street, 22nd Floor, Boston,
Massachusetts, to consider and act upon the following matters:
1. To elect two (2) Directors, with their terms to expire at the 2002
Annual Meeting of Stockholders;
2. To ratify the action of the Directors reappointing Arthur Andersen LLP
as auditors for the Company for the fiscal year ending December 31, 1999;
and
3. To transact such other business as may properly come before the meeting.
If you are unable to attend the meeting personally, please be sure to date,
sign and return the enclosed proxy in the envelope provided to: Boston EquiServe
Limited Partnership, 150 Royall Street, Canton, Massachusetts 02021.
Only stockholders of record on the books of the Company at the close of
business on April 12, 1999, are entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
Burton Winnick, Clerk
Dated: April 23, 1998
<PAGE>
ASAHI/AMERICA, INC.
EXECUTIVE OFFICES:
35 GREEN STREET
MALDEN, MASSACHUSETTS 02148
PROXY STATEMENT
VOTING PROCEDURES
This proxy statement and the accompanying proxy card are first being mailed
to stockholders commencing on or about April 23, 1999. The accompanying proxy is
solicited by the Board of Directors of Asahi/America, Inc. (the "Company" or
"Asahi"), for use at the Annual Meeting of Stockholders to be held on May 26,
1999, and any adjournment or adjournments thereof (the "Meeting"). The cost of
soliciting proxies will be borne by the Company. Directors, officers and
employees of the Company may assist in the solicitation of proxies by mail,
telephone, facsimile and personal interview without additional compensation.
When a proxy is returned properly signed, the shares represented thereby
will be voted by the persons named as proxies in accordance with the
stockholder's directions. You are urged to specify your choices on the enclosed
proxy card. If a proxy is signed and returned without specifying choices, the
shares will be voted "FOR' proposals 1 and 2 and in the discretion of the
persons named as proxies in the manner they believe to be in the best interests
of the Company as to other matters that may properly come before the Meeting. A
stockholder giving a proxy may revoke it at any time before it is voted at the
Meeting by written notice to the Company, by oral notice to the Clerk at the
Meeting or by submitting a later dated proxy.
The Board of Directors has fixed April 12, 1999 as the record date for the
Meeting. Only stockholders of record on the record date are entitled to notice
of and to vote at the Meeting. On the record date, there were 3,405,000 shares
of Common Stock of the Company ("Common Stock") issued and outstanding. The
holders of Common Stock do not have cumulative voting rights.
For all Items on the agenda, the holders of a majority in interest of Common
Stock issued and outstanding and entitled to vote and present in person or
represented by proxy, will constitute a quorum. Shares represented by all
proxies received, including proxies that withhold authority for the election of
Directors and/or abstain from voting on an Item, as well as "broker non-votes,"
discussed below, count toward establishing the presence of a quorum.
Assuming the presence of a quorum, Directors of the Company are elected by
majority vote of the Common Stock present in person or represented by proxy and
voting in the election of Directors. Shares may be voted for or withheld from
each nominee for election as a Director. Shares for which the vote is withheld
and "broker non-votes" will be excluded entirely and will have no effect on the
election of Directors of the Company.
Assuming the presence of a quorum, Item 2 must be approved by affirmative
vote of a majority of the shares of Common Stock present, in person or
represented by proxy and voting on such matter. Shares represented by proxies
which are marked "abstain" for Item 2 on the proxy card and proxies which are
marked to deny discretionary authority on other matters will not be included in
the vote totals for those items and, therefore, will have no effect on the votes
for Items 1 or 3.
Under applicable rules, brokers who hold shares of the Company's Common
Stock in street name have the authority to vote the shares in the broker's
discretion on "routine" matters if they have not received specific instructions
from the beneficial owner of the shares. Item 1, the uncontested election of
<PAGE>
Directors, and Item 2, the ratification of independent accountants are "routine"
matters for this purpose. With respect to matters which are determined by the
appropriate broker-dealer regulatory organization to be "non-routine", brokers
may not vote shares held in street name without specific instructions from the
beneficial owner. If a broker holding shares in street name submits a proxy card
on which the broker physically lines out the matter (whether it is "routine" or
"non-routine") or does not indicate a specific choice "for," "against" or
"abstain" on a matter that is "non-routine," that action is called a "broker
non-vote" as to that matter. Broker "non-votes" with respect to "routine"
matters such as Items 1 and 2 on the agenda for this meeting, or "non-routine"
matters, are not counted in determining the number of votes cast with respect to
the matter. If a broker submits a proxy but does not indicate a specific choice
on a "routine" matter, the shares will be voted as specified in the proxy card.
At the Meeting, shares represented by such proxy card would be voted for the
election of the Director nominees and for the ratification of the independent
accountants.
ELECTION OF DIRECTORS
ITEM 1 ON PROXY CARD
The Board of Directors currently consists of seven members, divided as
nearly as possible into three classes each having an equal number of Directors,
with the terms of each class staggered so that the term of one class expires at
each annual meeting of the stockholders.
Nominees Masahiro Inoue and Martin J. Reid, the Directors whose terms expire
at the 1999 Annual Meeting, are both currently members of the Board. Unless
otherwise instructed in the proxy, all proxies will be voted for the election of
each of the nominees to a three-year term expiring at the 2002 Annual Meeting,
with each to hold office until his successor has been duly elected and
qualified. Stockholders who do not wish their shares to be voted for a
particular nominee may so indicate by striking out the name of the nominee(s) on
the proxy card. Management does not contemplate that any of the nominees will be
unable to serve, but in that event, proxies solicited hereby will be voted for
the election of another person or persons to be designated by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES.
2
<PAGE>
INFORMATION REGARDING NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
The following table and biographical descriptions set forth information
regarding the principal occupation, other affiliations, committee memberships
and age, for the nominees for election as a Director, each Director continuing
in office and the executive officers of the Company who are not Directors, based
on information furnished to the Company by each Director and officer. The
following information is as of March 31, 1999 unless otherwise noted.
<TABLE>
<CAPTION>
TERM AS
NAME AGE POSITION WITH COMPANY A DIRECTOR ENDS
- ---------------------------------------------------------- --- ------------------------------ -----------------
<S> <C> <C> <C>
NOMINEES FOR ELECTION:
Masahiro Inoue.......................................... 45 Director 2002*
Martin J. Reid.......................................... 57 Director 2002*
DIRECTORS CONTINUING IN OFFICE:
Samuel J. Gerson........................................ 56 Director (1) (2) 2001
Nannette S. Lewis....................................... 49 Director 2001
Masashi Uesugi.......................................... 57 Director (1) (2) 2001
Leslie B. Lewis......................................... 58 Chairman of the Board,
President and Chief
Executive Officer 2000
Jeffrey C. Bloomberg.................................... 50 Director (1) (2) 2000
</TABLE>
- ------------------------
* Assuming election at this Annual Meeting.
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
NOMINEES FOR ELECTION AS DIRECTORS
MASAHIRO INOUE has served as a Director of the Company since March 1998.
Since April 1999, Mr. Inoue has been General Manager of the Plastics Department
of Nichimen America Inc. He was previously a Manager in the Plastics Department
(Industrial Materials) of Nichimen Corporation since 1993. Prior thereto, Mr.
Inoue was the Manager of the Plastics Department of Nichimen America Inc.'s New
York office since 1988, and in the Plastics Sales Department from 1978 to 1988.
Mr. Inoue began his career with Nichimen Corporation in the Plastics Department
Delivery Section in 1976, after graduating from Niigata University in Japan.
MARTIN J. REID has been a Director of the Company since April 1998. Mr. Reid
is President, Chief Executive Officer and a Director of Ibis Technology
Corporation, a publicly held corporation that supplies technology for computer
and related semiconductor integrated circuits. Prior to joining Ibis in 1997,
Mr. Reid served as a Strategy and Technology Consultant (from 1996 to 1998),
President and Chief Executive Officer (from 1985 to 1991) and as a Director
(from 1985 to 1998) of Alpha Industries, Inc., a publicly held worldwide
supplier of telecommunications components to the wireless cellular and personal
communications services markets.
3
<PAGE>
DIRECTORS CONTINUING IN OFFICE
LESLIE B. LEWIS has served as President and Chief Executive Officer of the
Company since November 1989. Prior thereto, for more than 20 years, he served in
various executive management positions with the Company. Mr. Lewis has been a
Director of the Company since 1977. He was elected Chairman of the Board in
October 1996. Mr. Lewis is also the Chairman of Quail Piping Products, Inc., a
wholly owned subsidiary of the Company. Mr. Lewis is a Director of Ibis
Technology Corporation, as to which Martin Reid is President and Chief Executive
Officer.
JEFFREY C. BLOOMBERG has been a Director of the Company since the closing of
the Company's public offering in May 1996. Mr. Bloomberg is the President and
principal of Bloomberg Associates, Inc., a private investment banking firm that
he founded in January 1994. For 14 years prior thereto, Mr. Bloomberg was
associated with the investment banking firm of Bear, Stearns & Co., Inc.,
including as a Senior Managing Director from 1985 through November 1993, and as
a General Partner of its predecessor.
SAMUEL J. GERSON has been a Director of the Company since the closing of the
Company's public offering in May 1996. Mr. Gerson has been Chairman of the Board
and Chief Executive Officer of Filene's Basement, Inc. since January 1984. He is
a Director of Bon Ton Stores, Inc. and Allmerica Financial.
NANNETTE S. LEWIS has been a Director of the Company since 1989. Mrs. Lewis
has been the President and principal of Nannette Lewis Interiors, Inc., which
has been engaged in providing commercial and residential interior design
services for more than ten years.
MASASHI UESUGI has been a Director of the Company since 1997. Since April
1997, Mr. Uesugi has been the Executive Vice President of Nichimen America Inc.,
a United States subsidiary of Nichimen Corporation. Since July 1998 Mr. Uesugi
has been a Director of Nichimen Corporation. Prior thereto, since 1964 Mr.
Uesugi was continuously employed by Nichimen Corporation in a number of
managerial capacities, last as Deputy Senior General Manager of the Plastic
Division.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
KOZO TERADA has served in his current positions as Vice President, Treasurer
and Chief Financial Officer since May 1993, and served as a Director from May
1993 until March 1996. Prior to assuming his positions with the Company, he held
various management positions with Nichimen Corporation for more than 24 years,
last as a manager in the Plastics Division.
PETER SCHWARTZ has served as a Senior Vice President since May, 1998. Prior
thereto Mr. Schwartz was the Director of Sales and Marketing of Fireye, Inc. in
Derry, New Hampshire since 1997. Fireye is a division of Williams Holding (UK)
and a worldwide manufacturer of flame safeguard equipment for the combustion
marketplace. Prior thereto Mr. Schwartz was a partner in Harrison Hurley & Co.
in Providence, Rhode Island during 1995 and 1996 and President of Apogee Golf a
manufacturer and marketer of golf equipment from 1990 through 1995. He holds a
B.S. in Management Engineering from Worcester Polytechnic Institute.
RONALD J. RICHARDS has been Vice President of Sales of the Company since
September 1997. Prior thereto Mr. Richards was the Company's National Sales
Manager from 1995 until 1997, and he started with the Company as Western
Regional Sales Manager in 1991.
4
<PAGE>
ROBERT B. LEWIS has served as a Vice President and General Manager since
September 1997. Mr. Lewis was an Assistant Vice President of Marketing and Sales
of the Company from 1995 to August 1997, and served as Customer Service Manager
from 1993 to 1995. Mr. Lewis started with the Company in 1990 as a Customer
Service Representative, in which capacity he served until 1993. Mr. Lewis holds
a B.A. degree from Colby College and a Masters in Business Administration from
Northeastern University.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company's Board of Directors held 10 meetings, including 7 actions by
unanimous written consent, during fiscal year 1998. The Audit Committee, which
held 1 meeting in fiscal year 1998, meets with the Company's auditors and
principal financial personnel to review the results of the annual audit. The
Audit Committee also reviews the scope of, and establishes fees for, audit and
non-audit services performed by the independent accountants, reviews the
independence of the independent accountants and the adequacy and effectiveness
of the Company's internal accounting controls. The Audit Committee consists of
three members, currently Messrs. Uesugi, Bloomberg and Gerson, and is
reconstituted annually.
The Compensation Committee, which held 2 meetings, in fiscal year 1998,
recommends to the Board of Directors the compensation of the Company's executive
officers. It also administers the Company's 1996 Equity Incentive Plan and 1996
Employee Stock Purchase Plan. The Compensation Committee consists of three
members, currently Messrs. Uesugi, Bloomberg and Gerson, and is reconstituted
annually.
All Directors attended at least 75% of the meetings of the Board and of the
committees of which they are members.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee has interlocking or other
relationships with other compensation committees or boards that would call into
question his or her independence as a Committee member.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or affiliated with or related
to a principal stockholder of the Company receive a quarterly fee of $1,875 for
serving on the Board and a fee of $500 for each Board or Committee meeting
attended, plus reimbursement of out-of-pocket expenses for attendance at such
meetings.
Under a formula-based stock option plan for independent Directors (the
"Directors' Plan"), each current Director who is not an employee or affiliated
with or related to a principal stockholder of the Company as of the adoption of
the Directors' Plan or first elected after the effective date of the Directors'
Plan receives, upon his or her election to the Board, a one-time grant of an
option to purchase 10,000 shares of the Company's Common Stock. Each such option
has an exercise price per share equal to the fair market value of a share of
Common Stock on the date of election to the Board, is fully vested when granted,
and is exercisable for a period of 5 years.
5
<PAGE>
RATIFICATION OF CHOICE OF INDEPENDENT ACCOUNTANTS
ITEM 2 ON PROXY CARD
The Board of Directors has reappointed the firm of Arthur Andersen LLP,
independent accountants to audit the books, records and accounts of the Company
and its subsidiaries for the fiscal year ending December 31, 1999. In accordance
with a resolution of the Board of Directors, this selection is being presented
to the stockholders for ratification at the Meeting.
Arthur Andersen LLP has no direct or indirect material financial interest in
the Company or its subsidiaries. Representatives of Arthur Andersen LLP are
expected to be present at the Meeting and will be given the opportunity to make
a statement on behalf of Arthur Andersen LLP if they so desire. The
representatives also will be available to respond to appropriate questions
raised by those in attendance at the Meeting.
Proxies solicited by management will be so voted unless stockholders specify
otherwise. Ratification by the stockholders is not required. If the proposal is
not approved by the stockholders, the Board of Directors will not change the
appointment for fiscal 1999, but will consider the stockholder vote in
appointing auditors for fiscal 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE REAPPOINTMENT OF
ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 1999.
OTHER BUSINESS
In addition to the business described above, there will be remarks by the
Chairman of the Board and Chief Executive Officer and a general discussion
period during which stockholders will have an opportunity to ask questions about
the Company.
As of the date of this proxy statement, the management of the Company knows
of no matter not specifically referred to above as to which any action is
expected to be taken at the meeting of stockholders. It is intended, however,
that the persons named as proxies will vote the proxies, insofar as they are not
otherwise instructed, regarding such other matters and the transaction of such
other business as may be properly brought before the meeting, as seems to them
to be in the best interest of the Company and its stockholders.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Prior to the Company's public offering in May 1996 and the concurrent
election of the Company's Compensation Committee, the Board of Directors
determined the compensation and benefits of all executive officers of the
Company. With the election of the Compensation Committee (the "Committee"), the
Board delegated that task to the Committee and charged the Committee with the
task of reviewing general policy matters relating to compensation and benefits
of employees of the Company, and making recommendations concerning these matters
to the Board of Directors. The Committee also administers the Company's 1996
Equity Incentive Plan.
6
<PAGE>
The compensation policy of the Company for its executive officers is based
on the following principles:
- The compensation program should support the strategic and financial
objectives of the Company by rewarding its executive officers for regular
and significant improvement in earnings and increase in the value of the
Company's Common Stock;
- The compensation program should reflect the highly competitive nature of
the industry in which the Company operates; and
- An important part of the compensation program is to provide
performance-based incentives to executive officers by way of equity
ownership so that, with successful performance and the consequent increase
in the value of the Company, their interests become more and more aligned
with those of the owners of the Company's Common Stock.
The Company markets and sells thermoplastic valves, piping systems and
components for use in a variety of environmentally sensitive and industrial
applications, including, semiconductor manufacturing, chemical processing, waste
treatment processing and pharmaceutical manufacturing. The Company also
manufactures pneumatic and electric actuators and controls, double containment
piping systems, flow meter devices, industrial filtration equipment and related
products. The industrial valve, pipe and fittings market is very fragmented,
with many manufacturers and suppliers. The Company estimates that there are more
than 100 suppliers of metal valves and at least a dozen suppliers of
thermoplastic valves. The Company believes that there are two companies which
have significant shares of both markets, one additional significant competitor
in the valve market and three additional significant competitors in the pipe
market.
The executive officers' salaries, bonuses and, when granted, options to
purchase stock of the Company, have been determined based on the subjective
evaluation of a variety of factors, each of which is weighted, again
subjectively, by each member of the Board or Committee (as the case may be)
according to his or her own experience and background. Among the criteria used
in making such evaluation of the appropriate compensation of each executive
officer are:
- his influence on the performance of the Company through his management,
financial and/or sales skills;
- his ability to work with other executive officers in carrying out
corporate policies;
- his ability to work with, influence and effectuate the policies of the
Board of Directors;
- his skill in long range planning for the Company's future growth and
activities; and
- the manner in which he positions the Company to succeed in what has been
in recent years a very competitive market.
These criteria are used in determining each element of compensation. Except
for the bonus determination with respect to the Chief Executive Officer and the
determination of the pool, if any, to be available for the Company's profit
sharing plan, there is no specific relationship between the performance of the
Company and the compensation of the executive officers. With respect to bonuses
for officers other than the Chief Executive Officer, however, performance of the
Company is given more weight than the other criteria.
7
<PAGE>
The salary shown in the Summary Compensation Table represents the fixed
portion of compensation for each named executive officer for the year.
Mr. Lewis' employment agreement with the Company which was amended and
restated in December 1997 and amended further in April 1999, automatically
extends from year to year unless either party gives the appropriate notice of
non-renewal forty-five days prior to the end of a term. Mr. Lewis' agreement
provides for an annual base salary of $330,000. Mr. Lewis is also eligible to
receive an annual bonus equal to the sum of (i) $100,000 multiplied by a
fraction (not greater than one), the numerator of which is the Company's net
operating income ("NOI") for such year and the denominator of which is the
Company's target net operating income ("Target NOI") specified in the agreement
for that year plus (ii) an amount equal to 10% of the amount by which NOI for
the year exceeds Target NOI for the year. For purposes of the agreement, NOI is
the Company's net income before taxes, depreciation, amortization and certain
other defined expenses. To the extent that NOI exceeds Target NOI for any year,
it is Mr. Lewis' option to include such excess in the calculation of the Target
NOI for the given year or to carry forward the amount and add it to NOI in the
following year. Pursuant to the agreement, the Company is obligated to maintain
Key Man life insurance on Mr. Lewis in the amount of $5 million, and if Mr.
Lewis is still employed with the Company at the end of ten years (December 31,
2005), to use the accumulated cash surrender value of the policy, if any, in
excess of total premiums paid (which will be refunded to the Company) to fund a
retirement benefit for Mr. Lewis, and he has the right thereafter to designate
the beneficiary under the policy. In the event that Mr. Lewis leaves the employ
of the Company without cause or due to a Change in Control (both as defined in
the agreement) within the 10 year period, the Company is obligated to continue
to maintain the policy thereafter at the Company's expense. Following such an
event, in the event of Mr. Lewis' death the Company would receive payment in the
aggregate amount of all premiums paid by it and the remainder of the proceeds
would be payable to Mr. Lewis' designated beneficiaries. Mr. Lewis' rights
relative to the policy are to be secured by an interest in the policy.
In the event Mr. Lewis' employment is terminated without cause or he resigns
for "Good Reason" (as defined in the agreement), Mr. Lewis is entitled to
severance pay consisting of his base salary at the time of termination for a
period of twenty-four months, including bonus and other benefits. In addition,
if there is a termination of Mr. Lewis in connection with a "Change in Control",
Mr. Lewis is entitled to receive a sum equal to 2.99 times his "base amount"
within the meaning of Section 280G(b)(3) of the Internal Revenue Code.
The Company's employment agreement with Mr. Terada was amended and restated
effective January 1, 1999 and terminates on December 31, 1999. The agreement
automatically extends from year to year unless either party gives the
appropriate notice of non-renewal forty-five days prior to the end of the term.
Under the agreement, Mr. Terada is entitled to base compensation of $155,000.
Mr. Terada will be entitled to receive bonuses at such times and in such amounts
as the Committee may determine in its discretion.
The Company's 1996 Equity Incentive Plan ("Equity Plan") was adopted by the
Board of Directors and stockholders of the Company on March 11, 1996. A total of
330,000 shares of Common Stock have been reserved for awards under the Equity
Plan. The Equity Plan is intended to be an incentive to the key employees of,
and persons who provide services to, the Company by enabling them to acquire or
increase their proprietary interest in the Company. The Committee may make
awards under the Equity Plan in the form of stock options (both qualified and
non-qualified), stock appreciation rights, performance shares, restricted stock
or stock units. The Committee has complete authority to designate persons to
receive awards, to grant the awards, to determine the form of the award and to
fix all terms of any awards granted. Qualified stock options (which are intended
to qualify as incentive stock options under Section 422 of the
8
<PAGE>
Internal Revenue Code) may be granted only to employees of the Company and must
have an exercise price of not less than 100% of the fair market value of the
Company's Common Stock on the date of grant (110% for qualified options granted
to any 10% stockholder of the Company). The aggregate exercise price of the
shares as to which a qualified stock option becomes exercisable in any year may
not exceed $100,000. The term of qualified stock options may not exceed ten
years (five years in the case of options granted to any 10% stockholder of the
Company). Non-qualified stock options and other stock awards may be granted on
such terms (as to date of grant, vesting, number of shares, exercise price in
the case of options, purchase price, restrictions on transfer, forfeiture and
other provisions) as the Committee may determine. The Equity Plan may be
suspended or discontinued by the Board and may be amended by the Board, except
that the stockholders of the Company must approve any amendment if such approval
is required to comply with any applicable tax or regulatory requirement.
Executive officers currently hold options for an aggregate of 99,000 shares. All
executive officers other than Leslie B. Lewis received their options at the time
the Company closed its initial public offering, or if later named an executive
officer, at such time. Mr. Lewis was granted options to purchase 30,000 shares
on March 31, 1999 at $7.50 per share. In granting these options, the Committee
took into account his duties and responsibilities, including the start-up of
Quail Piping, Mr. Lewis' years of service to the Company, the fact that Mr.
Lewis did not receive options upon the Company's initial public offering along
with other executive officers, the number of outstanding options, the size of
prior awards and the desire to further provide incentive to Mr. Lewis relative
to the growth of the Company.
The Committee has reviewed the potential consequences for the Company of
Section 162(m) of the Internal Revenue Code, which imposes a limit on tax
deductions for annual compensation in excess of one million dollars paid to any
of the five most highly compensated executive officers of the employing company.
Based on such review, the Compensation Committee believes that the limitation
had no effect on the Company in 1998 nor will it have any effect on the Company
in 1999.
Respectfully submitted,
JEFFREY C. BLOOMBERG
SAMUEL J. GERSON
MASASHI UESUGI
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation paid
or accrued by the Company during the fiscal years ended December 31, 1996, 1997
and 1998, to or for the Company's Chief Executive Officer and its four other
most highly compensated executive officers for fiscal year 1998 (the "named
executive officers").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------- SECURITIES
OTHER UNDERLYING
YEAR SALARY BONUS ANNUAL OPTIONS
NAME AND PRINCIPAL POSITION ($) ($) ($) COMPENSATION($) (#)
- -------------------------------------------- --------- --------- --------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Leslie B. Lewis, Chairman,.................. 1998 300,000 68,069 93,789(1) --
Chief Executive Officer 1997 300,000 108,718 54,023(1) --
and President 1996 300,000 100,000 65,692(1) --
Kozo Terada,................................ 1998 150,000 -- 23,525(2) 25,000
Vice President, Treasurer 1997 145,000 25,000 25,370(2) --
and Chief Financial Officer 1996 128,673 -- 22,788(2) --
Ronald J. Richards.......................... 1998 115,200 -- 15,610(3) 9,000
Vice President Sales 1997 109,857 13,110 28,751(3) --
1996 99,750 19,483 9,236(3) --
Robert B. Lewis............................. 1998 90,010 -- 26,925(4) 25,000
Vice President and 1997 71,446 15,000 29,949(4) --
General Manager 1996 64,770 15,000 30,243(4) --
Peter Schwartz.............................. 1998 89,288(5) -- 18,419(6) 10,000
Senior Vice President
</TABLE>
- ------------------------
(1) Includes non-accountable travel expense allowance, disability insurance, tax
return preparation fee, payment of health care expenses not covered by the
Company's employee health care plan, $9,999, $9,500 and $9,500 for 1998,
1997 and 1996 respectively contributed by the Company for Mr. Lewis under
the Company's 401(k) plan, $-0-, $5,459 and $5,460 for 1998, 1997 and 1996
respectively contributed by the Company for Mr. Lewis pursuant to the
Company's Profit Sharing Plan, $17,674, $11,068 and $15,522 for 1998, 1997
and 1996 respectively for car lease, insurance and repair expenses and
$40,742, $5,769 and $-0- for 1998, 1997 and 1996 respectively for the buy
out of accrued but unused vacation time. Does not include any amount related
to a ten-year fixed premium Key Man life insurance policy on the life of Mr.
Lewis as to which the Company is the owner and currently the beneficiary
(See "Employment Agreements" for additional information relative to the
policy.)
(2) Includes non-accountable travel expense allowance, disability insurance,
payment of health care expenses not covered by the Company's health care
plan, of $9,999 $9,483 and $5,000 in 1998, 1997 and 1996 respectively
contributed by the Company for Mr. Terada pursuant to the Company's 401(k)
plan, $-0-, $4,816 and $4,816 in 1998, 1997 and 1996 respectively
contributed by the Company for Mr. Terada under the Company's Profit Sharing
Plan and $7,805, $7,427 and $9,537 in 1998, 1997 and 1996 respectively for
car lease and insurance payments.
(3) Includes disability insurance, car lease and insurance payments, and $-0-,
$3,293 and $3,418 in 1998, 1997 and 1996 respectively contributed by the
Company for Mr. Richards under the Company's Profit
10
<PAGE>
Sharing Plan and $5,000 in 1998 contributed by the Company for Mr. Richards
pursuant to the Company's 401(k) plan. Includes one-time payments by the
Company of $11,306 in 1997 in relocation expenses, $9,987 for a relocation
incentive bonus in 1997, and $6,517 in moving expenses in 1998.
(4) Includes non-accountable travel expense allowance, disability insurance,
payment of health care expenses not covered by the Company's health care
plan, $5,000 in each of 1998, 1997 and 1996 contributed by the Company for
Mr. Robert Lewis pursuant to the Company's 401(k) plan, $-0-, $1,924 and
$2,792 in 1998, 1997 and 1996 respectively contributed by the Company for
Mr. Robert Lewis under the Company's Profit Sharing Plan, $8,630, $10,352
and $12,174 in 1998, 1997 and 1996 respectively for car lease and insurance
payments and $5,800 in each of 1998, 1997 and 1996 respectively paid by the
Company for Mr. Robert Lewis' life insurance.
(5) Mr. Schwartz joined the Company in May, 1998 and his annual compensation is
based on the period of May through December 1998.
(6) Includes non-accountable travel expense allowance, payment of health care
expenses not covered by the Company's health care plan, $5,000 contributed
by the Company for Mr. Schwartz pursuant to the Company's 401(k) plan and
$8,107 for car lease and insurance payments.
1998 OPTION/SAR GRANTS TABLE
Set forth below is an Option/SAR Grants table concerning individual grants
of stock options and SARs made during the last completed fiscal year to each of
the named executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------ VALUE AT
NUMBER OF PERCENT OF TOTAL ASSUMED ANNUAL
SECURITIES OPTIONS/SARS RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION
OPTIONS/SARS EMPLOYEES IN EXERCISE OR FOR OPTION TERM(1)
GRANTED FISCAL YEAR(2) BASE PRICE EXPIRATION ---------------------
NAME (#) (%) ($/SH) DATE(3) 5%($) 10%($)
- ----------------------------------------- ------------- ----------------- ------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leslie B. Lewis.......................... -0- -- -- -- -- --
Kozo Terada.............................. -0- -- -- -- -- --
Peter Schwartz........................... 10,000 38.46 7.125 4/30/08 $ 44,809 $ 113,551
Ronald Richards.......................... -0- -- -- -- -- --
Robert Lewis............................. -0- -- -- -- -- --
</TABLE>
- ------------------------
(1) The dollar gains under these columns result from calculations assuming
hypothetical growth rates as set by the Commission and are not intended to
forecast price appreciation of the Common Stock.
(2) In fiscal 1998, options to purchase a total of 26,000 shares of Common Stock
were granted to employees of the Company and its subsidiary.
(3) These options vest in three (3) equal annual installments beginning one year
from the date of grant. These options are subject to earlier termination
upon certain events related to termination of employment.
11
<PAGE>
1998 FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL YEAR AT FISCAL YEAR
END(#) END($)
-------------- -----------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------- -------------- -----------------
<S> <C> <C>
Leslie B. Lewis.................................................................... 0 --
Kozo Terada........................................................................ 16,666/8,334 0/0
Ronald J. Richards................................................................. 6,000/3,000 0/0
Robert B. Lewis.................................................................... 16,666/8,334 0/0
</TABLE>
There were no option exercises by the named executive officers in 1998.
PERFORMANCE GRAPH
The following graph compares the annual percentage change in the Company's
cumulative total stockholder return on its Common Stock during a period
commencing on May 15, 1996 (the date of the Company's initial public offering)
and ending December 31, 1998 (as measured by dividing (i) the sum of (A) the
cumulative amount of dividends for the measurement period; assuming dividend
reinvestment, and (B) the difference between the Company's share price at the
end and the beginning of the measurement period; by (ii) the share price at the
beginning of the measurement period) with the cumulative total return during
such period of The NASDAQ Stock Market Index and a Peer Issuer Index which
consists of the performance of the securities of MFRI, Inc., a company engaged
in a similar industry as the Company, assuming a $100 investment on May 15,
1996. It should be noted that the Company has not paid any dividends on the
Common Stock, and no dividends are included in the representation of the
Company's performance. The stock price performance on the graph below is not
necessarily indicative of future price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ
<S> <C> <C> <C>
Measurement Period Peer Group Stock Market
(Fiscal Year
Covered) Asahi/America, Inc. Index Index
5/15/96 $100.00 $100.00 $100.00
12/31/96 $87.84 $117.59 $102.89
12/31/97 $65.54 $125.92 $125.86
12/31/98 $32.43 $74.07 $177.52
DOLLARS
</TABLE>
<TABLE>
<CAPTION>
NASDAQ
MEASUREMENT PERIOD PEER STOCK MARKET
(FISCAL YEAR COVERED) ASAHI/AMERICA, INC. ISSUER INDEX INDEX
- ---------------------------------------------- ------------------- ------------- -------------
<S> <C> <C> <C>
05/15/96...................................... 100.00 100.00 100.00
12/31/96...................................... 87.84 117.59 102.89
12/31/97...................................... 65.54 125.92 125.86
12/31/98...................................... 32.43 74.07 177.52
</TABLE>
12
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Lewis which was amended and
restated in its entirety in December 1997 and further amended in April 1999. The
agreement is for an initial term of three years, which commenced on January 1,
1996, and which is automatically extended for additional one year periods
thereafter unless either party gives the appropriate notice of non-renewal
forty-five days prior to the end of a term. Mr. Lewis' agreement provides for an
annual base salary of $300,000 ($330,000 during any extension period commencing
with 1999). Mr. Lewis is also eligible to receive an annual bonus equal to the
sum of (i) $100,000 multiplied by a fraction (not greater than one), the
numerator of which is the Company's net operating income ("NOI") for such year
and the denominator of which is the Company's target net operating income
("Target NOI") specified in the agreement for that year plus (ii) an amount
equal to 10% of the amount by which NOI for the year exceeds Target NOI for the
year. For purposes of the agreement, NOI is the Company's net income before
taxes, depreciation, amortization and certain other defined expenses. To the
extent that NOI exceeds Target NOI for any year, it is Mr. Lewis' option to
include such excess in the calculation of the Target NOI for the given year or
to carry forward the amount and add it to NOI in the following year. Pursuant to
the agreement, the Company is obligated to maintain Key Man life insurance on
Mr. Lewis in the amount of $5 million, and if Mr. Lewis is still employed with
the Company on December 31, 2005, to use the accumulated cash surrender value of
the policy, if any, in excess of total premiums paid (which will be refunded to
the Company) to fund a retirement benefit for Mr. Lewis, and he has the right
thereafter to designate the beneficiary under the policy. In the event that Mr.
Lewis leaves the employ of the Company without cause or due to a Change in
Control (both as defined in the agreement) within the 10 year period, the
Company is obligated to continue to maintain the policy thereafter at the
Company's expense. Following such an event, in the event of Mr. Lewis' death the
Company would receive payment in the aggregate amount of all premiums paid by it
and the remainder of the proceeds would be payable to Mr. Lewis' designated
beneficiaries. Mr. Lewis' rights relative to the policy are to be secured by an
interest in the policy. In the event Mr. Lewis' employment is terminated without
cause or he resigns for "Good Reason" (as defined in the employment agreement),
Mr. Lewis is entitled to severance pay consisting of his base salary at the time
of termination for a period of twenty-four months, including bonus and other
benefits. In addition, if there is a termination of Mr. Lewis in connection with
a "Change in Control" (as such events are defined in Mr. Lewis' agreement), Mr.
Lewis is entitled to receive a sum equal to 2.99 times his "base amount" within
the meaning of Section 280G(b)(3) of the Internal Revenue Code.
The Company's employment agreement with Mr. Terada was amended and restated
effective January 1, 1999 and terminates on December 31, 1999. Under the
agreement, Mr. Terada is entitled to base compensation of $155,000. Mr. Terada
will be entitled to receive bonuses at such times and in such amounts as the
Committee may determine in its discretion. The agreement is automatically
extended for additional one year periods thereafter unless either party gives
appropriate notice of non-renewal at least forty-five days prior to the end of a
term. In the event Mr. Terada's employment is not extended, or his employment is
otherwise terminated for reasons other than death, disability or "cause" as
defined in the agreement Mr. Terada shall be entitled to severance benefits
consisting of his base salary at the time of termination for twelve months.
STOCK OPTION PLANS
1996 EQUITY INCENTIVE PLAN. The Company's 1996 Equity Incentive Plan
("Equity Plan") was adopted by the Board of Directors and stockholders of the
Company on March 11, 1996, and was effective as of
13
<PAGE>
May 15, 1996. A total of 330,000 shares of Common Stock have been reserved for
awards under the Equity Plan. The Equity Plan is intended to be an incentive to
the key employees of, and persons who provide services to, the Company by
enabling them to acquire or increase their proprietary interest in the Company.
The Equity Plan is administered by the Compensation Committee of the Company's
Board of Directors ("Committee"). The Committee may make awards under the Equity
Plan in the form of stock options (both qualified and non-qualified), stock
appreciation rights, performance shares, restricted stock or stock units. The
Committee has complete authority to designate persons to receive awards, to
grant the awards, to determine the form of the award and to fix all terms of any
awards granted. Qualified stock options (which are intended to qualify as
incentive stock options under section 422 of the Internal Revenue Code) may be
granted only to employees of the Company and must have an exercise price of not
less than 100% of the fair market value of the Company's Common Stock on the
date of grant (110% for qualified options granted to any 10% stockholder of the
Company). The aggregate exercise price of the shares as to which a qualified
stock option becomes exercisable in any year may not exceed $100,000. The term
of qualified stock options may not exceed ten years (five years in the case of
options granted to any 10% stockholder of the Company). Non-qualified stock
options and other stock awards may be granted on such terms (as to date of
grant, vesting, number of shares, exercise price in the case of options,
purchase price, restrictions on transfer, forfeiture and other provisions) as
the Committee may determine. The Equity Plan may be suspended or discontinued by
the Board and may be amended by the Board, except that the stockholders of the
Company must approve any amendment if such approval is required to comply with
any applicable tax or regulatory requirement.
INDEPENDENT DIRECTORS' STOCK OPTION PLAN. The Board of Directors adopted an
Independent Directors' Stock Directors' Stock Option Plan which was approved by
the Company's stockholders on March 11, 1996, effective as of the closing of the
Company's public offering. The Plan was amended by the Board of Directors in
1998 to provide that an aggregate of 30,000 shares of Common Stock shall be
reserved under the Plan. The Plan authorizes the issuance of an option to each
Director who is neither an employee of the Company nor the holder of, or
affiliated with a holder of, five percent or more of the Company's Common Stock,
to purchase up to 10,000 shares of the Company's Common Stock at a purchase
price equal to the fair market value of the Common Stock on the date of election
to the Board of Directors. Pursuant to the plan, each of Messrs. Bloomberg and
Gerson received a five-year fully vested option to purchase 10,000 shares of
Common Stock upon the Company's public offering. Mr. Reid received a five-year
fully vested option to purchase 10,000 shares of Common Stock upon his election
to the Board of Directors in April 1998.
14
<PAGE>
OWNERSHIP OF COMPANY COMMON STOCK
The following table sets forth certain information as of March 31, 1998,
with respect to the Company's Common Stock owned by (i) each Director of the
Company, (ii) all executive officers who are not Directors, (iii) all Directors
and executive officers of the Company as a group, and (iv) each person who is
known by the Company to beneficially own more than five percent of the Company's
capital stock. Unless otherwise indicated in the footnotes to the table, all
stock is owned of record and beneficially by the persons listed in the table.
<TABLE>
<CAPTION>
NAME AND, WITH RESPECT TO OWNER
OF MORE THAN 5%, ADDRESS NUMBER PERCENT(1)
- ----------------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C>
Leslie B. Lewis (2)...................................................................... 931,030 27.3%
President, Chief Executive Officer
and Chairman of the Board
C/O ASAHI/AMERICA, INC.
35 GREEN STREET
MALDEN, MA 02148
Nannette S. Lewis, Director (3).......................................................... 932,530 27.4%
Jeffrey C. Bloomberg, Director (4)....................................................... 17,500 *
Samuel J. Gerson, Director (5)........................................................... 15,000 *
Masashi Uesugi, Director................................................................. --
Masahiro Inoue, Director................................................................. --
Martin J. Reid, Director (5)............................................................. 10,000 *
Kozo Terada, Vice President, Treasurer (6)............................................... 28,320 *
and Chief Financial Officer
Peter Schwartz (7)....................................................................... 3,333 *
Ronald J. Richards, Vice President Sales (8)............................................. 11,319 *
Robert B. Lewis, Vice President.......................................................... 26,540 *
and General Manager (9)
Asahi Organic Chemicals.................................................................. 491,470 14.4%
Industry Co., Ltd.
15-9, UCHIKANDA 2 CHOME
CHIYODAKU, TOKYO JAPAN
Nichimen Corporation (10)................................................................ 491,470 14.4%
1-23, SHIBA 4-CHOME
MINATO-KU, TOKYO 108 JAPAN
Nichimen America Inc. (10)............................................................... 147,585 4.3%
1185 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
David Baker (11)......................................................................... 207,257 6.1%
Wellington Trust Company, N.A. (12)...................................................... 268,000 7.9%
75 STATE STREET
BOSTON, MA 02109
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NAME AND, WITH RESPECT TO OWNER
OF MORE THAN 5%, ADDRESS NUMBER PERCENT(1)
- ----------------------------------------------------------------------------------------- ---------- -------------
<S> <C> <C>
Wellington Management Company LLP (12)................................................... 268,000 7.9%
75 STATE STREET
BOSTON, MA 02109
All Directors and executive.............................................................. 1,037,032 29.7%
officers as a group (11 persons)
</TABLE>
- ------------------------
* Less than one percent.
(1) Percentage ownership of Common Stock is based on 3,405,000 shares issued and
outstanding plus 92,333 shares subject to options exercisable within sixty
(60) days of March 31, 1999 held by the stockholder or group.
(2) Leslie B. Lewis and Nannette S. Lewis are husband and wife. Includes 207,257
shares owned by David Baker. Pursuant to a voting trust, Mr. Lewis has
voting control over the shares, and he also holds a currently exercisable
option and right of first refusal to purchase the shares. Does not include
approximately 968 shares held in Mr. Lewis' 401(k) account.
(3) Represents shares beneficially owned by Mrs. Lewis' spouse, Leslie B. Lewis
and 1,500 shares owned by Mrs. Lewis' son as to which she is custodian.
(4) Includes 2,500 shares for which Mr. Bloomberg serves as custodian pursuant
to the terms of a gift to his children under the Uniform Gift to Minors Act
and includes 10,000 shares of Common Stock subject to currently exercisable
options.
(5) Includes 10,000 shares of Common Stock subject to currently exercisable
options owned by Mr. Gerson and Mr. Reid respectively.
(6) Includes 25,000 shares of Common Stock subject to options owned by Mr.
Terada and exercisable within 60 days of March 31, 1999.
(7) Includes 3,333 shares of Common Stock subject to options owned by Mr.
Schwartz and exercisable within 60 days of March 31, 1999.
(8) Includes 9,000 shares of Common Stock subject to options owned by Mr.
Richards and exercisable within 60 days of March 31, 1999. Does not include
approximately 174 shares held in Mr. Richards' 401(k) account.
(9) Includes 25,000 shares of Common Stock subject to options owned by Robert
Lewis and exercisable within 60 days of March 31, 1999. Does not include
approximately 870 shares held in Mr. Lewis' 401(k) account.
(10) All Nichimen Corporation amounts and percentages include shares owned by
Nichimen America Inc. as Nichimen Corporation may be deemed to be the
beneficial owner of such shares.
(11) Pursuant to a voting trust, Leslie B. Lewis has voting control over the
207,257 shares owned by David Baker, and Mr. Lewis also holds a currently
exercisable option and right of first refusal to purchase the shares.
(12) Both Wellington Trust Company, N.A. and Wellington Management Company LLP
have shared voting and dispositive power over 268,000 shares which are owned
of record by their respective clients who have the right to receive or the
power to direct the receipt of, dividends from or the proceeds from the sale
of such shares.
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Asahi Organic Chemicals Industry Co., Ltd. ("AOC"), a principal stockholder
of the Company has been the principal supplier of valves to the Company for more
than 20 years. The Company purchased a total of approximately $10.4 million,
$9.7 million and $10.3 million of valves from AOC in the years ended December
31, 1996, 1997 and 1998 respectively. The Company purchases products from AOC at
AOC's list price. Under its contract with the Company, AOC has the right to
revise the price list "in good faith."
Since August 1992, the Company has purchased valves from AOC through
Nichimen Corporation and Nichimen America Inc. The two latter companies are
responsible for all export (from Japan) and import (into the United States)
arrangements, including all documentation, transportation arrangements and
custom clearance in Japan and in the United States, and Nichimen America Inc.
sells the valves to the Company on open account up to $8,000,000, eliminating
the costly letter of credit arrangements previously required in connection with
direct purchases from AOC. Prior to this arrangement with Nichimen Corporation
and Nichimen America Inc., the Company had been required to pay for
substantially all shipments from AOC with irrevocable letters of credit, which
the Company financed with bank borrowing. For their services, Nichimen
Corporation and Nichimen America Inc. are paid by AOC a combined mark-up of
approximately 8% of the invoiced price of the Company's purchases from AOC. For
the years ended December 31, 1996, 1997 and 1998, the total mark-up was
approximately $830,000, $775,000 and $824,000, respectively. Nichimen
Corporation and Nichimen America Inc. are parties to the Company's
Distributorship Agreement with AOC.
Mr. Leslie B. Lewis, President and Chief Executive Officer of the Company,
was indebted to the Company in the amount of $157,500 as of December 31, 1998.
The original loan to Mr. Lewis of $350,000, which was made to him in October
1991, is evidenced by an amended loan agreement dated March 31, 1993. Under the
amended loan agreement, interest began to accrue on January 1, 1996, at prime
plus one percentage point. The principal is payable in equal quarterly
installments plus accrued interest through the first quarter of 2001.
Mr. Bloomberg is a shareholder and a Director of New England Audio Company,
Inc., of which his brother is the Chief Executive Officer, and which sold the
Company approximately $82,291 in videocamera equipment in fiscal 1997 related to
a sales promotion program run by the Company. The Company engaged Mr. Bloomberg
during 1998 to provide merger and acquisition consulting services. He was paid
$11,593 for such services.
In connection with the Company's recent purchase and renovation of a
facility adjacent to its headquarters and the correlated renovations to its
existing facility, the Company retained Nannette Lewis Interiors, Inc. ("NLI")
to perform interior design services. The Company paid NLI approximately $11,295
in 1997 for products and services. Nannette Lewis, a Director of the Company, is
the sole stockholder of NLI.
Mr. Leslie B. Lewis, Chairman of the Board of Directors, President and Chief
Executive Officer of the Company, is married to Nannette Lewis, a Director of
the Company, and is the father of Robert B. Lewis, a Vice President and General
Manager of the Company.
17
<PAGE>
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders of the Company (including director nominations)
intended to be presented at the 2000 Annual Meeting of Stockholders must be
received by the Company not later than December 30, 1999 to be included in the
Company's proxy statement and form of proxy relating to the 2000 Annual Meeting
of Stockholders. Nominations and proposals of stockholders may be submitted to
the Company for consideration at the 2000 Annual Meeting of Stockholders if
certain conditions set forth in the Company's By-laws are satisfied, although
such nominations and proposals will not be included in the proxy statement and
form of proxy relating to that annual meeting unless submitted in accordance
with the time limits and other requirements set forth above and in the related
rules of the Securities and Exchange Commission. See "Election of Directors--The
Board of Directors and Its Committees."
ADDITIONAL INFORMATION
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers and Directors, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and The Nasdaq Stock Market. Officers,
Directors and greater than 10% stockholders are required to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company
and written representations that no other reports were required during the
fiscal year ended December 31, 1998, all Section 16(a) filing requirements
applicable to its executive officers, Directors and greater than 10% beneficial
owners were satisfied, with the exception of the late filing of a Form 5 by
Nannette S. Lewis with respect to 1,500 shares of Common Stock acquired by her
son, and as to which she is custodian.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR 1998 MAY BE OBTAINED WITHOUT CHARGE
UPON WRITTEN REQUEST TO THE CHIEF FINANCIAL OFFICER, ASAHI/AMERICA, INC., 35
GREEN STREET, MALDEN, MASSACHUSETTS 02148.
18 151+PS99
<PAGE>
PROXY
ASAHI/AMERICA, INC.
36 Green Street
Malden, Massachusetts 02148
Annual Meeting of Stockholders - May 26, 1999
Proxy Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints Leslie B. Lewis
and Kozo Terada as Proxies, with full power of substitution to each, to vote
for and on behalf of the undersigned at the 1999 Annual Meeting of
Stockholders of Asahi/America, Inc. to be held at the offices of Gadsby &
Hannah LLP, 225 Franklin Street, 22nd Floor, Boston, Massachusetts 02110, on
Wednesday, May 26, 1999, at 10:00 a.m., and at any adjournment or
adjournments thereof. The undersigned hereby directs the said proxies to vote
in accordance with their judgment on any matters which may properly come
before the Annual Meeting, all as indicated in the Notice of Annual Meeting,
receipt of which is hereby acknowledged, and to act on the following matters
set forth in such notice as specified by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- -------------- --------------
/ SEE REVERSE / CONTINUED AND TO BE SIGNED ON REVERSE SIDE / SEE REVERSE /
/ SIDE / / SIDE /
- -------------- --------------
<PAGE>
ASAHI/AMERICA, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and operation
of your Corporation that require your Corporation that require your immediate
attention and approval. These are discussed in detail in the enclosed proxy
materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares. Please mark the boxes on this proxy card to indicate how
your shares will be voted. Then sign the card, detach it and return your
proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, to be
held on Wednesday, May 26, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Asahi/America, Inc.
DETACH HERE
/X/ Please mark
votes as in
this example.
1. Election of Directors to terms expiring at the 2002 Annual Meeting of
stockholders.
Nominees: Masahiro Inoue and Martin J. Reid
FOR WITHHELD
/ / / /
/ / ______________________________________
For all nominees except as noted above
2. Ratification of the appointment of Arthur Andersen LLP as Independent
Auditors of the Company.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting or any adjournment(s)
thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees, custodians, and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If the stockholder is a
corporation, the signature should be that of an authorized officer who should
indicate his or her vote.
Signature:_________________ Date:______ Signature:________________ Date: ______
