SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by registrant [x] Filed by a party other than the
registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Advanced Deposition Technologies, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Advanced Deposition Technologies, Inc.
- - --------------------------------------------------------------------------------
(Name of Person[s] Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it was
determined.
[ ] 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:
<PAGE>
ADVANCED DEPOSITION TECHNOLOGIES, INC.
580 MYLES STANDISH BOULEVARD
TAUNTON, MASSACHUSETTS 02780
DEAR STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of Stockholders of
ADVANCED DEPOSITION TECHNOLOGIES, INC. (the "Company") to be held at 10:00 a.m.
on Friday, May 31, 1996 at the Holiday Inn, 700 Myles Standish Boulevard,
Taunton, Massachusetts 02780.
At the Annual Meeting, you will be asked (i) to elect two Class III
Directors of the Company, (ii) to approve an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock from 5,500,000 to 10,000,000, (iii) to approve an increase in the
number of shares of Common Stock reserved for issuance pursuant to the Company's
1993 Stock Option Plan from 300,000 to 800,000, and (iv) to ratify the selection
of the Company's independent auditors for the year ending December 31, 1996.
Details of the matters to be considered at the Annual Meeting are contained
in the enclosed Proxy Statement that we urge you to consider carefully. The
Company's 1995 Annual Report, which is not part of the Proxy Statement, is also
enclosed and provides additional information regarding the financial results of
the Company in 1995. Holders of the Company's Common Stock are entitled to vote
at the Annual Meeting on the basis of one vote for each share held.
Whether or not you plan to attend the Annual Meeting, please complete, date,
sign and return your proxy promptly in the enclosed envelope, which requires no
postage if mailed in the United States. If you attend the Annual Meeting, you
may vote in person if you wish, even if you have previously returned your proxy.
Sincerely,
/s/ GLENN J. WALTERS
GLENN J. WALTERS
President
Taunton, Massachusetts
May 3, 1996
ADVANCED DEPOSITION TECHNOLOGIES, INC.
580 MYLES STANDISH BOULEVARD
TAUNTON, MASSACHUSETTS 02780
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ADVANCED
DEPOSITION TECHNOLOGIES, INC. (the "Company"), a Delaware corporation, will be
held on Friday, May 31, 1996 at 10:00 a.m. at the Holiday Inn, 700 Myles
Standish Boulevard, Taunton, Massachusetts 02780 for the following purposes:
1. To elect two (2) Class III Directors;
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company's Common
Stock from 5,500,000 to 10,000,000;
3. To approve an increase in the number of shares of the Company's Common
Stock reserved for issuance pursuant to the Company's 1993 Stock
Option Plan from 300,000 to 800,000;
4. To ratify the selection of Arthur Andersen LLP as independent auditors
for the Company for the fiscal year ending December 31, 1996; and
5. To consider and act upon any matters incidental to the foregoing and
any other matters that may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on Wednesday, April
10, 1996, as the record date for the determination of Stockholders entitled to
notice of and vote at the meeting and any adjournment or adjournments thereof.
We hope that all Stockholders will be able to attend the meeting in person.
In order to assure that a quorum is present at the meeting, please date, sign
and promptly return the enclosed Proxy whether or not you expect to attend the
meeting. A postage prepaid envelope, addressed to American Securities Transfer,
Incorporated, the Company's transfer agent and registrar, has been enclosed for
your convenience. If you attend the meeting, your Proxy will, at your request,
be returned to you and you may vote your shares in person.
By Order of the Board of Directors
MARK R. THOMAS
Secretary
Taunton, Massachusetts
May 3, 1996
ADVANCED DEPOSITION TECHNOLOGIES, INC.
580 MYLES STANDISH BOULEVARD
TAUNTON, MASSACHUSETTS 02780
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PROXY STATEMENT
--------
MAY 3, 1996
The enclosed Proxy is solicited by the Board of Directors of ADVANCED
DEPOSITION TECHNOLOGIES, INC. (the "Company"), a Delaware corporation, for use
at the Annual Meeting of Stockholders to be held on Friday, May 31, 1996 at
10:00 a.m. at the Holiday Inn, 700 Myles Standish Boulevard, Taunton,
Massachusetts 02780, and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on April 10, 1996, will be
entitled to vote at the Annual Meeting or any adjournment thereof. On that date,
3,169,870 shares of Common Stock, $.01 par value, of the Company (the "Common
Stock") were issued and outstanding. Each share of Common Stock entitles the
holder to one vote with respect to all matters submitted to Stockholders at the
Annual Meeting. There are no other outstanding voting securities of the Company.
The presence of the holders of a majority of the issued and outstanding
shares of Common Stock entitled to vote at the Annual Meeting, either in person
or represented by a properly executed proxy, is necessary to constitute a quorum
for the transaction of business at the Annual Meeting.
The election of Directors will be determined by a plurality of the votes
cast. The proposal to amend the Company's Articles of Incorporation requires the
vote of two-thirds of the Company's outstanding shares of Common Stock. The
other proposals to be voted upon by the Stockholders of the Company require the
votes of a majority of the shares of Common Stock present at the Annual Meeting
for passage. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum at the Annual Meeting.
Abstentions are counted in tabulation of the votes cast on proposals presented
to Stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
The Directors and officers of the Company as a group own or may be deemed to
control approximately 28% of the outstanding shares of Common Stock of the
Company. Each of the Directors and officers has indicated his intent to vote all
shares of Common Stock owned or controlled by him in favor of each item set
forth herein.
Execution of a Proxy will not in any way affect a Stockholder's right to
attend the Annual Meeting and vote in person. The proxy may be revoked at any
time before it is exercised by written notice to the Secretary prior to the
Annual Meeting, or by giving to the Secretary a duly executed proxy bearing a
later date than the proxy being revoked at any time before such Proxy is voted,
or by appearing at the Annual Meeting and voting in person. The shares
represented by all properly executed proxies received in time for the Annual
Meeting will be voted as specified therein. In the absence of a special notice,
shares will be voted in favor of the election of Directors of that person named
in this Proxy Statement and in favor of all other items set forth herein.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter should be presented at the meeting upon
which a vote may be taken, such shares represented by all proxies received by
the Board of Directors will be voted with respect thereto in accordance with the
judgment of the persons named as attorneys in the Proxies. The Board of
Directors knows of no matter to be acted upon at the Annual Meeting that would
give rise to appraisal rights for dissenting security-holders.
An annual report containing financial statements for the year ended December
31, 1995 is being mailed herewith to all Stockholders entitled to vote. This
Proxy Statement and the accompanying Proxy were first mailed to Stockholders on
or about May 3, 1996.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Directors constituting approximately one-third of the Board of Directors are
elected each year for a period of three years at the Company's Annual Meeting of
Stockholders and serve until their successors are duly elected by the
Stockholders. The terms of Messrs. John M. Buckley and John J. Moroney expire in
1997 (the "Class I Directors"); the terms of Dr. Charles R. Buffler and Mr.
Robert M. Pozzo expire in 1998 (the "Class II Directors"); and the terms of
Messrs. Glenn J. Walters and Gordon E. Walters expire in 1996 (the "Class III
Directors"). The Board of Directors has nominated Messrs. Glenn Walters and
Gordon Walters to serve for three-year terms to expire at the 1999 Annual
Meeting of Stockholders and until their successors are chosen and have
qualified. Vacancies and newly created directorships resulting from any increase
in the number of authorized Directors may be filled by a majority vote of
Directors then remaining in office. Officers are elected by and serve at the
discretion of the Board of Directors.
Shares represented by all proxies received by the Board of Directors and not
so marked so as to withhold authority to vote for Messrs. Glenn Walters and
Gordon Walters will be voted (unless Glenn Walters and Gordon Walters are
unwilling to serve) for the election of Messrs. Glenn Walters and Gordon
Walters. The Board of Directors knows of no reason why either of Messrs. Glenn
Walters and Gordon Walters should be unwilling to serve, but if such should be
the case, proxies will be voted for the election of some other person or for
fixing the number of Directors at a lesser number.
The following table sets forth the age, the year elected, the positions and
offices currently held, and the Class of each Director or Director Nominee. For
information about the ownership of the Company's voting securities held by each
Director or Director Nominee, see "BENEFICIAL OWNERSHIP OF COMMON STOCK."
<TABLE>
<CAPTION>
DATE INDIVIDUAL
FIRST BECAME
NAME AGE DIRECTOR POSITION CLASS
<S> <C> <C> <C> <C>
Gordon E. Walters* 64 1985 Chairman of the Board of III
Directors
Glenn J. Walters* 41 1985 Chief Executive Officer, III
President, Treasurer
and Director
John M. Buckley 56 1993 Director I
Charles R. Buffler 62 1993 Director II
John J. Moroney 42 1995 Director I
Robert M. Pozzo 68 1986 Director II
* Nominee for election at this Annual Meeting.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and Directors, and persons who beneficially own more than ten
percent (10%) of the Company's stock, to file initial reports of ownership on
Form 3 and reports of changes in ownership on Form 4 with the Securities and
Exchange Commission and any national securities exchange on which the Company's
securities are registered. Executive officers, Directors and greater than ten
percent (10%) beneficial owners are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and Directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, Directors and greater than ten percent (10%) beneficial
owners were satisfied, with the exception of the following filings, which were
filed late, on behalf of Glenn J. Walters: a Form 4 for the month of September
1995 which reported the sale of 6,000 shares of the Company's Common Stock by
Mr. Walters' wife; a Form 4 for the month of October 1995 which reported the
sale of 15,000 shares of the Company's Common Stock by Mr. Walters' wife; and a
Form 5 which reported a gift by Mr. Walters of 13,000 shares of the Company's
Common Stock. A Form 5 was also filed late on behalf of Gordon Walters. This
Form 5 reported a gift of 85,000 shares of the Company's Common Stock.
2
COMMITTEES
The Board of Directors established an Audit Committee and a Compensation
Committee in October 1993. Members of the Audit Committee are Charles R. Buffler
and Robert M. Pozzo. The Audit Committee is concerned primarily with (i)
reviewing the Company's financial results and recommending the selection of the
Company's independent auditors; (ii) reviewing the effectiveness of the
Company's accounting policies and practices, financial reporting and internal
controls; (iii) reviewing the scope of independent audit coverages, the fees
charged by the independent auditors, any transactions which may involve a
potential conflict of interest, and internal control systems. The Audit
Committee met one time in the year ended December 31, 1995.
The Compensation Committee consists of Robert M. Pozzo and Glenn J. Walters.
The Compensation Committee is responsible for negotiating and approving
compensation arrangements for officers, employees, consultants and Directors of
the Company, including, but not limited to, the granting of options to purchase
the Company's Common Stock pursuant to the Company's 1993 Stock Option Plan (the
"1993 Plan") or otherwise. The Compensation Committee did not meet in 1995;
rather, the Board of Directors as a whole addressed compensation matters of the
Company.
The Company does not have a standing nominating committee or a committee
performing similar functions.
The Board of Directors met formally seven times during 1995. Dr. Buffler and
Mr. Pozzo attended five of the seven meetings that they were eligible to attend.
Mr. Moroney attended two of the four meetings that he was eligible to attend
following his election to the Board of Directors. Messrs. Gordon Walters, Glenn
Walters and Buckley attended at least 75% of meetings of the Board of Directors
in 1995.
With the exception of Gordon E. Walters and Glenn J. Walters, who are father
and son, respectively, no Director or executive officer is related to any other
Director or executive officer by blood or marriage.
BACKGROUND
The following is a brief summary of the background of each Director and
Director Nominee of the Company:
GORDON E. WALTERS, Chairman of the Board of Directors. Mr. Walters
co-founded the Company in 1983 and has served as its Chairman of the Board of
Directors since the Company's incorporation in 1985 and as its Chief Executive
Officer from 1986 until March 1996. From 1971 to 1983, Mr. Walters founded and
served as President of Steinerfilm, Inc., a privately held manufacturer of
metallized film to the electronic capacitor market. Mr. Walters holds a Bachelor
of Science degree in Engineering from Worcester Polytechnic Institute. Mr.
Walters is the father of Mr. Glenn J. Walters, the Chief Executive Officer,
President and Treasurer of the Company.
GLENN J. WALTERS, Chief Executive Officer, President and Treasurer. Mr.
Walters co-founded the Company in 1983 and has served as its President,
Treasurer and a Director since the Company's incorporation in 1985, and as its
Chief Executive Officer since March 1996. From 1977 to 1983, Mr. Walters served
as General Manager of Steinerfilm, Inc. From July 1991 to the present, Mr.
Walters has served on the Board of Governors of the International Microwave
Power Institute, a non-profit trade association, and as President of the
Microwave Food Technology and Applications section of this association. Mr.
Walters holds a Bachelor of Science degree in Mechanical Engineering and in
Management from Worcester Polytechnic Institute. Mr. Walters is the son of Mr.
Gordon E. Walters, the Chairman of the Board of Directors of the Company.
JOHN M. BUCKLEY, Director. Mr. Buckley has served as a Director of the
Company since July 1993. Mr. Buckley also served as the Company's Chief
Financial Officer from June 1991 through June 1993, and from August 1994 until
October 1995. From 1989 to the present, Mr. Buckley has been an independent
financial and management consultant. Mr. Buckley holds a Bachelor of Science
degree in Physics from Worcester Polytechnic Institute and a graduate degree in
Finance from the American Graduate School of International Finance.
3
CHARLES R. BUFFLER, Director. Dr. Buffler has served as a Director of the
Company since October 1993. From 1993 to the present, Dr. Buffler has served as
the Vice President of the Microwave Research Center, a privately held company
which specializes in microwave consulting, design and engineering. From 1987 to
1993, Dr. Buffler served as a Microwave Technology Specialist for Kraft General
Foods, a publicly held food manufacturer and distributor. Additionally, from
1984 to 1993, Dr. Buffler was the President of Associated Sciences Research
Foundation, a privately held consulting company that provided consulting
services to the industrial, scientific and medical microwave communities in
non-food technologies. Dr. Buffler holds a Bachelor of Science Degree in Physics
from the University of Texas and a Master of Science Degree and a Ph.D., both in
Engineering and Applied Physics, from Harvard University.
JOHN J. MORONEY, Director. Mr. Moroney has served as a Director of the
Company since May 1995. From 1992 to the present, Mr. Moroney has served as the
President of Fourth Shift -- New England, a subsidiary of Fourth Shift, Inc., a
publicly traded company that provides client/server manufacturing and enterprise
resource planning systems to manufacturing companies. In 1990, Mr. Moroney
founded Manufacturing Systems Partners, a consulting and sales organization that
was purchased by Fourth Shift, Inc. in 1992. From 1987 to 1990, Mr. Moroney
served as Director of U.S. Operations for Thompson Financial Networks, a
subsidiary of Thompson Corporation, a provider of financial consulting services.
Mr. Moroney holds a Bachelor of Science Degree in Electrical Engineering from
Worcester Polytechnic Institute and a Master of Business Administration from
Babson College.
ROBERT M. POZZO, Director. Mr. Pozzo has served as a Director of the Company
since 1986. From 1985 to 1991, Mr. Pozzo served as a venture advisor to Zero
Stage Capital Corp., a venture capital company which is a stockholder of the
Company. Mr. Pozzo holds a Bachelor of Science degree in Marine Engineering from
the U.S. Merchant Marine Academy, a Bachelor of Science degree in Metallurgy
from the Colorado School of Mines and a Master of Business Administration from
Harvard Business School.
EXECUTIVE OFFICERS
The executive officers of the Company, their ages and positions held in the
Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Glenn J. Walters 41 Chief Executive Officer, President, Treasurer
and Director
Stephen M. Maughan 50 Vice President of Operations
Mark R. Thomas 42 Chief Financial Officer
John A. McCormick 48 Vice President of Technology
</TABLE>
The following is a brief summary of the background of Messrs. Maughan,
Thomas and McCormick, whose backgrounds are not summarized above.
STEPHEN M. MAUGHAN, Vice President of Operations. Mr. Maughan has served as
the Vice President of Operations for the Company since September 1995, and as
its Director of Manufacturing from July 1994 until September 1995. Prior to
joining the Company, Mr. Maughan served from 1987 to 1994 as the General Manager
of General Vacuum Equipment, a supplier of vacuum processing equipment and a
division of Atlas Converting.
MARK R. THOMAS, Chief Financial Officer. Mr. Thomas has served as the Chief
Financial Officer of the Company since October 1995, and served as Controller of
the Company from April 1995 through September 1995. Prior to joining the
Company, Mr. Thomas served as the Controller of each of the Ruland Manufacturing
Company, Inc. and Videocraft Productions, Inc. Mr. Thomas holds a Bachelor of
Arts degree from Stonehill College, a Master of Business Administration from
Northeastern University and a Certificate in Management Accountancy.
4
JOHN A. MCCORMICK, Vice-President of Technology. Mr. McCormick has served as
Vice President of Technology for the Company since September 1992. From August
1990 to September 1992, Mr. McCormick worked as a consultant to the food
packaging industry. From June 1986 to August 1990, Mr. McCormick served as
Technical Director of Micro Match Packaging Systems, a microwave packaging
project within Alcan Foil Products, a division of Alcan Aluminum Ltd. Mr.
McCormick holds a Bachelor of Science degree in Mathematics and Physics from
Royal Military College and a Master of Engineering degree from Carlton
University.
CERTAIN TRANSACTIONS
In September 1992, the Company entered into three agreements (the
"Agreements") with Printpack Enterprises, Inc. and its affiliates ("Printpack"),
a privately held flexible packaging converter that holds of record 297,610
shares of the Company's Common Stock.
The Agreements include (a) a Purchase and Tolling Agreement, pursuant to
which Printpack has had the exclusive right to sell certain of the Company's
products within North America; (b) an Equipment Lease Agreement, pursuant to
which the Company has leased from Printpack a high capacity vacuum metallizer;
and (c) a Securities Purchase Agreement, pursuant to which Printpack purchased
297,610 shares of Common Stock for $250,000 (approximately $0.84 per share),
which the Company believes reflected the fair market value of the Common Stock
on the date of the purchase. In 1995, the Company and Printpack agreed in
principle to terminate the Agreements. On March 25, 1996, the Company and
Printpack entered into a written agreement setting forth the terms of the
termination of the Agreements. The new agreement calls for Printpack to (a)
relinquish all of its exclusive rights to sell certain of the Company's
products; (b) transfer to the Company title to the metallizer it had been
leasing to the Company; and (c) return to the Company the 297,610 shares of the
Company's Common Stock. The Company will (a) pay to Printpack $1,000,000; (b)
grant Printpack options to purchase 200,000 shares of the Company's Common Stock
at $4.00 per share; and (c) agree not to pursue any claims the Company may have
had pursuant to the terms of the Agreements.
In June 1993, the Company formalized an agreement with Centro Tecnologie Del
Vuoto (CTDV), which is 90% owned by Galileo, which provided CTDV with a
perpetual right to use technology related to an in-process coating measuring
system, pursuant to which CTDV paid the Company $250,000 in 1993. Pier
Guarguaglini, a director of the Company from 1987 to May 1995, is Chairman of
Galileo.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of April 10, 1996, the ownership of the
Company's Common Stock by (i) each person who is known by the Company to own of
record or beneficially more than 5% of the Company's Common Stock, (ii) each of
the Company's Directors or Director Nominees and (iii) all Directors, Director
Nominees and officers as a group. Except as otherwise indicated, the
stockholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED OF CLASS(2)(3)
<S> <C> <C>
Glenn J. Walters(4) 465,093 14.31%
Gordon E. Walters(5) 322,947 10.00
Printpack Enterprises, Inc. 297,610 9.39
Officine Galileo 202,375 6.38
Robert M. Pozzo(6) 95,990 3.02
John M. Buckley(7) 17,865 *
Charles R. Buffler(8) 2,000 *
John J. Moroney(9) 1,000 *
All Directors, Director Nominees and Officers as a group
(9 persons)(4)(5)(6)(7)(8)(9)(10) 930,544 28.48%
- - --------
* Less than 1%
5
(1) The address for all of individuals, except for Printpack and Galileo is c/o
Advanced Deposition Technologies, Inc., 580 Myles Standish Industrial Park,
Taunton, Massachusetts 02780. The address for Printpack is 4335 Wendell
Drive, Atlanta, Georgia 30378. The address for Galileo is Via Albert
Einstein, 35, 50013 Campi Bisenzio, Florence, Italy.
(2) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown in the
table.
(3) Does not include up to 725,000 shares of Common Stock issuable upon
exercise of (i) the Company's redeemable common stock purchase warrants
sold in the Company's initial public offering (the "Redeemable Warrants"),
(ii) warrants (the "Representative's Warrants") issued to Schneider
Securities, Inc. (the "Representative"), and (iii) Redeemable Warrants
subject to the Representative's Warrants.
(4) Includes 20,000 redeemable warrants to purchase 10,000 shares of Common
Stock. Excludes (i) 129,000 shares owned by Ruth D. Walters, Mr. Glenn
Walters' wife, in which Mr. Glenn Walters disclaims any beneficial
interest; (ii) 60,000 shares held by trusts for the benefit of Mr. Glenn
Walters' children, in which Mr. Glenn Walters disclaims any beneficial
interest; and (iii) 382,911 shares of Common Stock owned by Mr. Walters'
siblings or by his father, Mr. Gordon Walters, in which Mr. Glenn Walters
disclaims any beneficial interest.
(5) Includes 60,000 shares underlying stock options at an exercise price of
$2.00. Does not include 515,057 shares of Common Stock owned by the
children of Mr. Walters, including those owned by Mr. Glenn Walters, as to
which Mr. Gordon Walters disclaims any voting or disposition control.
(6) Includes (i) 10,667 shares underlying an option to purchase up to 16,000
shares of Common Stock at $2.00 per share, and (ii) an option to purchase
up to 1,000 shares of Common Stock at $2.38 per share.
(7) Includes (i) an option to purchase up to 8,435 shares of Common Stock at
$.53 per share, and (ii) an option to purchase up to 1,000 shares of Common
Stock at $2.38 per share.
(8) Comprised of (i) 1,000 shares underlying an option to purchase up to 1,500
shares of Common Stock at $5.44 per share, and (ii) an option to purchase
up to 1,000 shares of Common Stock at $2.38 per share.
(9) Comprised of 1,000 shares underlying an option to purchase up to 1,500
shares of Common Stock at $2.38 per share.
(10) Includes (i) 12,649 shares held by Mr. John McCormick, the Company' Vice
President of Technology, (ii) 1,000 shares underlying an option to purchase
up to 20,000 shares of Common Stock at $2.00 per share granted to Mr. Mark
R. Thomas, the Company's Chief Financial Officer, and (iii) 12,000 shares
underlying an option to purchase up to 40,000 shares of Common Stock at
$2.00 per share granted to Mr. Stephen Maughan, the Company's Vice
President of Operations.
</TABLE>
COMPENSATION OF OFFICERS AND DIRECTORS
EXECUTIVE OFFICERS' COMPENSATION
The following tables set forth the compensation paid to Mr. Glenn Walters,
the Company's Chief Executive Officer, President and Treasurer, with respect to
services rendered to the Company during the years ended December 31, 1995, 1994,
and 1993. No other executive officer earned in excess of $100,000 during the
periods presented.
6
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
(A) (B) (C) (D) (E)
SECURITIES
NAME AND UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#)
<S> <C> <C> <C> <C>
Glenn J. Walters.............................. 1995 $137,967(1) 0 0
Chief Executive Officer, 1994 143,040(1) 0 0
President, and Treasurer
1993 113,055 5,000 0
(1) Approximately $20,000 and $15,000 of Mr. Walters' salary for 1995 and 1994,
respectively, represents cash received in lieu of certain benefits.
</TABLE>
In 1995 no options were granted to Mr. Walters and no options were exercised
by Mr. Walters. In addition, no options were outstanding for Mr. Walters as of
the end of 1995.
COMPENSATION OF DIRECTORS
Since September 10, 1993, the date of the Company's initial public offering
("IPO"), the Company has agreed to compensate each non-employee Director $500
per year and $200 for each Board Meeting attended.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Effective as of July 1, 1993, the Company entered into an employment and
non-competition agreement (the "Agreement") with Mr. Glenn Walters, which
expires on December 31, 1996. Mr. Glenn Walters serves as the principal
executive officer of the Company. The Agreement provides for a salary of
$137,500 per annum plus cost-of-living increases and such other bonuses as may
be determined by the Company's Board of Directors as well as benefits offered to
the Company's employees generally. Mr. Glenn Walters is also entitled to the use
of a Company-leased car and severance benefits equal to 200% of his salary,
payable in a lump sum if (i) the Company or a substantial portion of the Company
is acquired without the Board of Directors' approval, (ii) his employment is
terminated without cause, (iii) his salary is reduced without his consent, (iv)
there is a substantial change in his position or authority within the
corporation without his consent, (v) there is a change in his principal place of
employment from the greater Boston, Massachusetts area without his consent, or
(vi) his employment agreement is not renewed without his consent.
The Agreement provides for a renewal for successive one-year periods after
the expiration of the initial term and contains a provision prohibiting Mr.
Glenn Walters from competing with the Company for a two-year period following
the termination of his employment. Glenn Walters consented to be included in a
salary reduction plan effective January 1, 1995 and, as a result, received a
salary, exclusive of benefits, of $116,875 in 1995.
Mr. Gordon Walters has entered into a consulting agreement with the Company
which expired on December 31, 1995 and pursuant to which he devoted no less than
26 hours per week to the Company's business. Mr. Gordon Walters continues to be
a consultant to the Company and is primarily responsible for marketing and
product development within the electronic capacitor market. Mr. Gordon Walters
receives a consulting fee of $97,750 per year and is prohibited from competing
with the Company for a period of two years after the agreement terminates.
Gordon Walters consented to be included in a salary reduction plan effective
January 1, 1995 and, as a result, received a consulting fee of $60,000 in 1995.
7
PRICE RANGE OF COMMON STOCK
The Company's Common Stock has been traded on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") and the Boston Stock
Exchange ("BSE") since the Company's IPO on September 10, 1993.
As of April 10, 1996, there were 68 record holders of the Common Stock.
Management believes there are approximately 400 beneficial holders of the
Company's Common Stock.
The following table sets forth the high and low bid prices for the Common
Stock as reported by NASDAQ for the periods indicated. Such quotations represent
interdealer quotations without adjustment for retail markups, markdowns or
commissions and may not represent actual transactions.
<TABLE>
<CAPTION>
HIGH BID LOW BID
<S> <C> <C>
1994
First Quarter $4.875 $4.125
Second Quarter 4.125 3.125
Third Quarter 7.125 2.315
Fourth Quarter 7.00 3.00
1995
First Quarter $3.875 $2.125
Second Quarter 3.125 1.75
Third Quarter 3.375 2.00
Fourth Quarter 3.375 2.375
1996
First Quarter $6.625 $2.375
Second Quarter (through April 3, 1996) 6.375 5.875
</TABLE>
DIVIDENDS
The Company has not paid dividends on its Common Stock since its inception
and has no intention of paying any dividends to its stockholders in the
foreseeable future. The Company currently intends to reinvest earnings, if any,
in the development and expansion of its business. The declaration of dividends
in the future will be at the election of the Board of Directors and will depend
upon the earnings, capital requirements and financial position of the Company,
general economic conditions and other pertinent factors. The Company's credit
agreement with its bank prohibits the payment of cash dividends.
PROPOSAL NO. 2
AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
GENERAL
On March 22, 1996, the Board of Directors adopted a resolution proposing
that the Company's Certificate of Incorporation be amended to increase the total
number of shares of Common Stock, $.01 par value per share, that the Company is
authorized to issue from 5,500,000 shares to 10,000,000 shares.
PURPOSES
The additional authorized shares will benefit the Company by providing
flexibility to the Board of Directors without further action or authorization by
stockholders (except as required by law), in responding to business needs and
opportunities as they arise, and for other corporate purposes. These corporate
purposes might include the obtaining of capital funds through public and private
offerings of
8
shares of Common Stock or of securities convertible into shares of Common Stock
or the acquisition of businesses, technologies or other assets. In addition, the
Board of Directors may deem it appropriate to issue shares of Common Stock for
distribution to the Company's stockholders in the event of a stock dividend or
stock split, or for distributions pursuant to employee benefit plans. If such
additional authorized shares of Common Stock are subsequently issued to other
than existing stockholders, the percentage interest of existing stockholders in
the Company will be reduced. The issuance of any additional shares will be on
terms deemed by the Board of Directors to be in the best interests of the
Company and its stockholders.
In addition, the Company continues to actively seek to raise additional
capital and the Board of Directors believes that it is prudent to have
additional shares of Common Stock available for such purpose and for general
corporate purposes, including acquisitions, equity financings, grants of stock
options and recapitalizations, which can be done expediently if the proposal to
amend the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock of the Company is approved by holders of at
least two-thirds of the issued and outstanding shares of Common Stock. The Board
of Directors will determine whether, when and on what terms the issuance of
shares of Common Stock may be warranted in connection with any of the foregoing
purposes. On April 11, 1996 the Board of Directors authorized the Company to
issue one Class B redeemable common stock purchase warrant (a "Class B Warrant")
to holders of the Company's outstanding redeemable common stock purchase
warrants (the "IPO Warrants") for each IPO Warrant that is exercised within 30
days following the effectiveness of a registration statement filed by the
Company with the Securities and Exchange Commission. The Class B Warrants will
only become exercisable if the stockholders of the Company vote in favor of this
proposal to amend the Company's Certificate of Incorporation. If this proposal
is approved by the stockholders of the Company, then the existence of the Class
B Warrants and the possible issuance of additional securities of the Company
would dilute the ownership interest of the Company's existing stockholders.
Each Class B Warrant will be exercisable, subject to stockholder approval of
this proposal, at $5.00 per share for a period of two years beginning on the
date the above-referenced registration statement is declared effective by the
Securities and Exchange Commission. Although up to 1,250,000 Class B Warrants
may be issued by the Company upon exercise of the IPO Warrants, no Class B
Warrants are outstanding as of May 3, 1996. A registration statement relating to
the securities underlying the IPO Warrants has been filed with the Securities
and Exchange Commission but has not yet become effective. These securities may
not be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This Proxy Statement shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there by any sale of
these securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state.
The Board of Directors believes that the proposed increase in the number of
authorized shares of Common Stock will give the Company greater flexibility by
allowing shares of Common Stock to be issued by the Board of Directors without
the delay and expense of a special meeting of stockholders. For example, the
Board of Directors may deem it appropriate to make a private or public offering
of the Company's Common Stock, or to issue the Common Stock to finance possible
future acquisitions, or for distribution to the Company's stockholders in the
event of a stock dividend or stock split, or for distribution pursuant to
employee benefit plans. At this time, however, the Board of Directors has not
proposed any plans for any such financings, acquisitions, dividends or
distributions, other than in connection with the issuance of the Class B
Warrants.
As of April 10, 1996, the Company had 3,169,870 shares of Common Stock
outstanding and (i) 395,922 shares of Common Stock issuable under options that
have been or may be granted under all of the Company's stock option plans, of
which options to purchase approximately 277,122 shares were outstanding, and
(ii) 725,000 shares of Common Stock issuable upon exercise of outstanding
warrants.
9
IMPLEMENTATION
If the proposed Amendment is adopted by the stockholders, it will become
effective upon the filing and recording of a Certificate of Amendment as
required by the General Corporation Law of the State of Delaware.
PROPOSAL NO. 3
APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK
RESERVED FOR ISSUANCE PURSUANT TO THE COMPANY'S 1993 STOCK OPTION PLAN
GENERAL
On March 22, 1996, the Board of Directors adopted a resolution proposing
that the number of shares of Common Stock reserved for issuance pursuant to the
Company's 1993 Stock Option Plan (the "Plan") be increased from 300,000 shares
to 800,000 shares.
PURPOSES
The purpose of the Plan is to encourage and enable employees, consultants,
directors and others who are in a position to make significant contributions to
the success of the Company to acquire a closer identification of their interests
with those of the Company by providing them with opportunities to purchase stock
in the Company, and thereby stimulate their efforts on behalf of the Company and
strengthen their desire to remain involved with the Company.
The Plan was previously adopted by the Board of Directors and the
stockholders of the Company in July 1993. As originally adopted, the Plan
reserved a total of 300,000 shares of Common Stock for issuance pursuant to the
Plan. As of April 10, 1996, options to purchase up to an aggregate of 224,200
shares of Common Stock pursuant to the Plan have been issued. As a result,
options to purchase up to an aggregate of 74,800 remain available for issuance.
In addition, options to purchase up to 1,000 shares of Common Stock under the
Plan have been exercised to date.
The Board of Directors has deemed that it is in the best interests of the
Company to increase the number of shares reserved for issuance pursuant to the
Plan in order to further enable the Company to utilize stock options as a form
of non-cash compensation to incentivize those employees and others who are in a
position to assist the Company in accomplishing its goals as well as to benefit
from the other purposes of the Plan, as summarized above. If the Plan is not
amended to increase the number of shares reserved for issuance thereunder, then
the Company will not be able to issue any additional options under the Plan
after options to purchase up to 74,800 shares of Common Stock have been issued
in the future.
IMPLEMENTATION
If the proposed amendment to the Plan is adopted by the stockholders, it
will become effective immediately and be reflected in the amended Plan, which
will be filed in the Company's minute book.
PROPOSAL NO. 4
ACCOUNTING MATTERS AND RATIFICATION OF AUDITORS
The persons named in the enclosed proxy will vote to ratify the selection of
Arthur Andersen LLP as auditors for the fiscal year ending December 31, 1996
unless otherwise directed by the Stockholders. A representative of Arthur
Andersen LLP is expected to be present at the meeting of Stockholders, and will
have the opportunity to make a statement and answer questions from Stockholders
if he or she so desires.
10
VOTING AT MEETING
The Board of Directors has fixed Wednesday, April 10, 1996, as the record
date for the determination of Stockholders entitled to vote at this meeting. At
the close of business on that date, there were outstanding and entitled to vote
3,169,870 shares of Common Stock.
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by mail, officers and employees of the
Company may solicit in person or by telephone. The Company may reimburse brokers
or persons holding stock in their names, or in the names of their nominees, for
their expenses in sending proxies and proxy material to beneficial owners.
REVOCATION OF PROXY
Subject to the terms and conditions set forth herein, all proxies received
by the Company will be effective, notwithstanding any transfer of the shares to
which such proxies relate, unless prior to the meeting the Company receives a
written notice of revocation signed by the person who, as of the record date,
was the registered holder of such shares. The Notice of Revocation must indicate
the certificate number or numbers of the shares to which such revocation relates
and the aggregate number of shares represented by such certificate(s).
STOCKHOLDER PROPOSALS
In order to be included in Proxy material for the 1997 Annual Meeting,
tentatively scheduled for May 22, 1997, Stockholders' proposed resolutions must
be received by the Company on or before December 22, 1996. The Company suggests
that proponents submit their proposals by certified mail, return receipt
requested, addressed to the Secretary of the Company.
ANNUAL REPORT
THE COMPANY IS PROVIDING TO EACH STOCKHOLDER, WITHOUT CHARGE, A COPY OF THE
COMPANY'S ANNUAL REPORT, INCLUDING THE FINANCIAL STATEMENTS AND RELATED
SCHEDULES FOR THE YEAR ENDED DECEMBER 31, 1995.
MISCELLANEOUS
The Management does not know of any other matters which may come before this
meeting. However, if any other matters are properly presented to the meeting, it
is the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgement on such matters.
By Order of the Board of Directors
MARK R. THOMAS
Secretary
Taunton, Massachusetts
May 3, 1996
THE MANAGEMENT HOPES THAT THE STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
11
ADVANCED DEPOSITION TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 16, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED hereby appoints Glenn J. Walters and Gordon E. Walters as
Proxies, with full power of substitution to each, to vote for and on behalf of
the undersigned at the Annual Meeting of Stockholders of ADVANCED DEPOSITION
TECHNOLOGIES, INC. to be held on Friday, May 31, 1996 at 10:00 a.m. at the
Holiday Inn, 700 Myles Standish Boulevard, Taunton, Massachusetts 02780, and at
any adjournment or adjournments thereof, upon and with respect to all shares of
the Common Stock of the Company to which the undersigned would be entitled to
vote and act if personally present. The undersigned hereby directs the said
Glenn J. Walters and Gordon E. Walters to vote in accordance with their judgment
on any matters which may properly come before the meeting, all as indicated in
the Notice of the meeting, receipt of which is hereby acknowledged, and to act
on the following matters set forth in such Notice as specified by the
undersigned:
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF DIRECTORS
IDENTIFIED BELOW AND FOR PROPOSALS 2, 3 AND 4.
(1) Proposal to elect two (2) Class III Directors:
Class III Director: Mr. Glenn J. Walters [ ] FOR [ ] WITHHOLD
Class III Director: Mr. Gordon E. Walters [ ] FOR [ ] WITHHOLD
(2) Proposal to approve the amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of Common Stock
from 5,500,000 shares to 10,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve the amendment to the Company's 1993 Stock Option Plan,
to increase the number of shares of Common Stock reserved for issuance
thereunder from 300,000 shares to 800,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to ratify the selection of Arthur Andersen LLP as independent
auditors for the Company for the fiscal year ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) IN THEIR DISCRETION TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR AND IN FAVOR OF THE
ITEMS SET FORTH ABOVE UNLESS A CONTRARY SPECIFICATION IS MADE.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as name appears below.
Dated: , 1995
---------------------------------
---------------------------------------------
Signature
---------------------------------------------
Signature if held jointly
---------------------------------------------
Printed Name
---------------------------------------------
Address
NOTE: When shares are held by joint tenants,
both should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If the person
named on the stock certificate has died,
please submit evidence of your authority. If a
corporation, please sign in full corporate
name by the President or authorized officer
and indicate the signer's office. If a
partnership, please sign in the partnership
name by authorized person.
