<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the Appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ELECTRONIC FAB TECHNOLOGY CORP.
(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 transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or Schedule and the date of its filing.
1) Amount Previously Paid: [ ]
2) Form Schedule or Registration Statement No.: [ ]
3) Filing Party: [ ]
4) Date Filed: [ ]
<PAGE> 2
ELECTRONIC FAB TECHNOLOGY CORP.
7251 WEST 4TH STREET, GREELEY, COLORADO 80634
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 1997
You are cordially invited to attend the annual meeting of shareholders
(the "Meeting") of Electronic Fab Technology Corp. (the "Company"), which will
be held at the EFTC cafeteria in Building I, 7251 West 4th Street, Greeley,
Colorado 80634 on May 28, 1997 at 10:00 a.m. local time, for the following
purposes:
1. To elect five Class III directors to serve until the 2000 annual
meeting of shareholders, to elect one Class I director to serve until
the 1998 annual meeting of shareholders and to elect two Class II
directors to serve until the 1999 annual meeting of shareholders;
2. To amend the Company's Articles of Incorporation to change the
Company's name to "EFTC Corporation";
3. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the Company for the fiscal year ending December 31, 1997;
and
4. To transact such other business as may properly come before the
Meeting.
Shareholders of record at the close of business on April 7, 1997 are
entitled to vote at the Meeting or any postponements or adjournments thereof.
A list of such shareholders will be available for examination by any
shareholder for any purposes germane to the Meeting, during normal business
hours, at the principal office of the Company, 7251 West 4th Street, Greeley,
Colorado 80634, for a period of ten days prior to the Meeting.
It is important that your shares be represented at the Meeting
regardless of the size of your holdings. Whether or not you intend to be
present at the meeting in person, we urge you to please mark, date and sign the
enclosed proxy and return it in the envelope provided for that purpose, which
does not require postage if mailed in the United States.
/s/ Lloyd A. McConnell
-----------------------------------
Lloyd A. McConnell
Secretary
Greeley, Colorado
April 29, 1997
YOU ARE URGED TO MARK, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY. THE PROXY IS
REVOCABLE AT ANY TIME PRIOR TO ITS USE.
<PAGE> 3
ELECTRONIC FAB TECHNOLOGY CORP.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1997
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Electronic Fab Technology Corp., a Colorado
corporation (the "Company" or "EFTC"), of proxies for use at the annual meeting
of shareholders of the Company (the "Meeting") to be held at the EFTC cafeteria
in Building I, 7251 West 4th Street, Greeley, Colorado 80634 at 10:00 a.m.,
Mountain Time, on May 28, 1997, and at any postponement or adjournment thereof.
The Company's executive offices are located at 7251 West 4th Street,
Greeley, Colorado 80634 (telephone (970) 353-3100). This Proxy Statement and
the accompanying form of proxy are being first mailed to shareholders on or
about April 29, 1997.
SHARES OUTSTANDING AND VOTING RIGHTS
The Company's Board of Directors (the "Board") has fixed the close of
business on April 7, 1997 as the record date (the "Record Date") for the
determination of shareholders entitled to notice of and to vote at the Meeting.
The only outstanding voting stock of the Company is its Common Stock, $.01 par
value per share (the "Common Stock"), of which 5,928,410 shares were
outstanding as of the close of business on the Record Date. Each share of
outstanding Common Stock is entitled to one vote.
Votes cast in person or by proxy at the Meeting will be tabulated by
the election inspectors appointed for the Meeting. The presence, in person or
by proxy, of the holders of a majority of the outstanding shares of Common
Stock entitled to vote at the Meeting is necessary to constitute a quorum. The
affirmative vote of the majority of the shares of Common Stock represented at
the Meeting will be required to ratify or approve a proposal. As a result, an
abstention or broker non-vote will have the same effect as a vote against a
proposal. A proxy submitted by a shareholder may indicate that all or a
portion of the shares represented by such proxy are not being voted by such
shareholder with respect to a particular matter. This could occur, for
example, when a broker is not permitted to vote shares held in street name on
certain matters in the absence of instructions from the beneficial owner of the
shares. The shares subject to any such proxy that are not being voted with
respect to a particular proposal may be considered present and entitled to vote
for other purposes and will count for purposes of determining the presence of a
quorum. (Shares not being voted as to a particular matter, and directions to
"withhold authority" to vote for directors, will be considered as abstentions.)
With respect to election of Directors, shareholders of the Company may
vote in favor of the nominees, may withhold their vote for the nominees, or may
withhold their vote as to specific nominees. Directors will be elected by a
plurality of the votes of the shares present or represented
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<PAGE> 4
by proxy at the Meeting. Shareholders of the Company may vote in favor of or
against each of the other proposals.
Proxies properly executed and returned in a timely manner will be
voted at the Meeting in accordance with the directions noted thereon. Any
shareholder giving a proxy has the power to revoke it any time before it is
voted, either by delivering to the Secretary of the Company a signed notice of
revocation or a later dated signed proxy or by attending the Meeting and voting
in person. Attendance at the Meeting will not in itself constitute the
revocation of a proxy. Any written notice of revocation or subsequent proxy
should be sent so as to be delivered to the Company, Attention: Secretary, or
hand delivered to the Secretary of the Company at the address of the Company's
executive offices, at or before the vote to be taken at the Meeting.
If no specific instructions are given with respect to the matters to
be acted upon at the Meeting, shares of Common Stock represented by a properly
executed proxy will be voted FOR (1) the election of all eight nominees listed
under the caption "Election of Directors," (2) the amendment of the Company's
Articles of Incorporation to change the Company's name to "EFTC Corporation",
and (3) the ratification of the appointment of KPMG Peat Marwick LLP to serve
as independent auditors for the Company for the year ending December 31, 1997.
The cost of solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, officers and regular employees of the Company
may solicit proxies by telephone, telegram or by personal interviews.
Brokerage houses, nominees, fiduciaries and other custodians will be requested
to forward soliciting material to the beneficial owners of shares held of
record by them and will be reimbursed for their reasonable expenses.
ANNUAL REPORT
A copy of the Company's Annual Report, which includes the consolidated
financial statements of the Company for the year ended December 31, 1996, is
being mailed with this Proxy Statement to all shareholders entitled to vote at
the Meeting. The Annual Report to shareholders does not form any part of the
materials for the solicitation of proxies.
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<PAGE> 5
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of April 7,
1997, as to the beneficial ownership of Common Stock by certain beneficial
owners of more than five percent of the Company's Common Stock, each director,
certain executive officers and by all directors and executive officers as
group:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Common Stock(1)
------------------------ ---------------------- ---------------
<S> <C> <C>
Gerald J. Reid 600,000 10.1%
Lucille A. Reid 600,000 10.1%
Jack Calderon 62,500 (2) *
Lloyd A. McConnell 587,250 (3) 9.9%
Stuart W. Fuhlendorf 25,850 (4) *
James A. Doran 7,464 (5) *
Richard L. Monfort 140,264 (5)(6) 2.4%
David W. Van Wert 54,484 (5)(7) *
Darrayl Cannon -- --
Robert K. McNamara -- --
Masoud Shirazi 30,064 (5) *
Charles Hewitson 660,000 11.1%
Gregory Hewitson 660,000 11.1%
Matthew Hewitson 660,000 11.1%
August Bruehlman 28,000 (8)
All directors and executive officers as a 4,115,876 (9) 69.4%
group, including persons named above (15 =========
persons)
---------------------
</TABLE>
* Less than one percent.
(1) Based solely upon reports of beneficial ownership required filed with the
Securities and Exchange Commission pursuant to Rule 13d-1 under the
Securities and Exchange Act of 1934, the Company does not believe that
any other person beneficially owned, as of April 7, 1997, greater than
five percent of the outstanding Common Stock of the Company.
(2) Includes 50,000 shares of Common Stock subject to currently exercisable,
non-qualified options granted in connection with the commencement of Mr.
Calderon's employment and 10,000 shares of Common Stock subject to
currently exercisable options granted pursuant to the Company's Equity
Incentive Plan.
(3) Includes 2,000 shares of Common Stock subject to currently exercisable
options granted under the Company's Equity Incentive Plan, 70,000 shares
of Common Stock that are beneficially owned by Mr. McConnell and are held
in the August 1994 McConnell Charitable Remainder Trust and 250 shares of
Common Stock owned by Mr. McConnell's wife.
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<PAGE> 6
(4) Includes 18,500 shares of Common Stock subject to currently exercisable
options granted under the Company's Equity Incentive Plan and 7,200
shares of Common Stock subject to options that are exercisable under the
Company's 1993 Stock Option Plan.
(5) Includes 6,764 shares of Common Stock that are subject to currently
exercisable options under the Company's Stock Option Plan for
Non-Employee Directors. Options held by such director for an additional
208 shares vest each month until March 1998 under such plan.
(6) Includes 100,000 shares of Common Stock owned by a partnership in which
Mr. Monfort is the principal investor and 14,000 shares of Common Stock
owned by two of Mr. Monfort's minor children.
(7) Includes 15,720 shares of Common Stock owned jointly with Sally B. Van
Wert, Mr. Van Wert's wife.
(8) Includes 15,500 shares subject to currently exercisable options granted
under the Company's Equity Incentive Plan and 12,000 shares subject to
currently exercisable options granted under the Company's 1993 Stock
Option Plan.
(9) Of such 4,115,876 shares, as of April 7, 1997, an aggregate of 3,966,412
shares were outstanding and held of record by directors and officers of
the Company and the remaining 149,464 represent shares of Common Stock
subject to options that are currently exercisable or, within 60 days of
April 7, 1997, will become exercisable.
PROPOSAL 1 - ELECTION OF DIRECTORS
The number of members of the Company's Board of Directors is currently
fixed at 14. The Company's Amended and Restated Articles of Incorporation
provide for a classified Board of Directors. For purposes of determining the
directors' terms of office, directors are divided into three classes.
The Class I directors, whose terms expire at the 1998 annual meeting
of shareholders, except as described below, include Lucille A. Reid, James A.
Doran, Richard L. Monfort and Gregory C. Hewitson.
The Class II directors, whose terms expire at the 1999 annual meeting
of shareholders, include Jack Calderon, Darrayl Cannon, Lloyd A. McConnell,
David W. Van Wert and Matthew J. Hewitson.
The Class III directors whose terms expire at the Meeting include
Gerald J. Reid, Masoud S. Shirazi, Stuart W. Fuhlendorf, Robert McNamara and
Charles E. Hewitson.
Acting pursuant to the Bylaws of the Company, (a) the Board elected
Jack Calderon as a Class II director on August 14, 1996 in connection with the
commencement of his service as President, Chief Executive Officer and Director
of the Company, and (b) the Board also elected Charles E. Hewitson, Gregory C.
Hewitson and Matthew J. Hewitson as Class III, Class I and Class II directors,
respectively, on February 24, 1997. In connection with the consummation of the
Company's acquisition of Current Electronics, Inc., which was owned by the
Hewitsons, the Company agreed to use its best efforts to cause Charles E.
Hewitson, Gregory C. Hewitson and Matthew J. Hewitson to be elected to serve as
directors until the Meeting, the 1998 annual meeting and the 1999 annual
meeting, respectively. The Company's Bylaws provide that the initial terms of
Jack Calderon, Gregory C. Hewitson and Matthew J. Hewitson expire at the
Meeting.
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<PAGE> 7
Each director serves for a term ending on the date of the third annual
meeting of shareholders after his or her election or until his or her earlier
resignation or removal, except (a) Gregory C. Hewitson, who upon election at
the Meeting will serve until the 1998 annual meeting of shareholders, at which
he will stand for election with the other Class I directors, and (b) Jack
Calderon and Matthew J. Hewitson, who upon election at the Meeting will serve
until the 1999 annual meeting of shareholders, at which they will stand for
election with the other Class II directors.
Gerald Reid and Lucille Reid are married. The Hewitsons are brothers.
Otherwise, there are no family relationships among any of the directors and
executive officers of the Company.
The Company is soliciting proxies in favor of the reelection of each
of the Class III directors identified above, the election of Gregory C.
Hewitson to serve as a Class I director until the 1998 annual meeting of
shareholders and the election of Jack Calderon and Matthew J. Hewitson to serve
as Class II directors to serve until the 1999 annual meeting of shareholders.
The Company intends that the proxies will be voted for these eight nominees
unless otherwise specified. If any of them should be unable to serve as a
director, an event that the Company does not presently anticipate, it is
intended that the proxies will be voted for the election of such other person,
if any, as shall be designated by the Board of Directors.
INFORMATION CONCERNING THE NOMINEES
CLASS III DIRECTORS
Gerald J. Reid, 56, a founder of the Company, has been Chairman of the
Board since October 1990. Mr. Reid also periodically served as the Company's
Manufacturing Manager since that time and has served as President of the
Company from August 1995 to August 1996. From August 1981 until October 1990,
Mr. Reid was President and Chief Executive Officer of the Company. Before
founding the Company in 1981, he held a number of manufacturing-related
managerial positions over a 19-year career with Hewlett Packard Company ("HP"),
including Future Information Systems Task Force Manager, Production Control
Manager, Production Section Manager and Technical Supervisor. At the time Mr.
Reid left HP to found EFTC, he held the position of Division Materials Manager.
Mr. Reid has been a director of the Company since its inception.
Masoud S. Shirazi, 46, has been the owner of Shirazi & Associates,
P.C., an insurance brokerage firm located in Greeley, Colorado, since 1976.
Mr. Shirazi has been a director of the Company since 1992.
Stuart W. Fuhlendorf, 34, has been the Company's Chief Financial
Officer since January 1993. From 1989 until 1991, Mr. Fuhlendorf held a number
of financial management positions with Martin Marietta Corporation. From 1991
to 1992, Mr. Fuhlendorf was the controller of The Rohling Inn, a casino in
Black Hawk, Colorado, and an independent financial consultant for the Colorado
gaming industry. Mr. Fuhlendorf has been a director of the Company since
October 1995.
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<PAGE> 8
Robert K. McNamara, 43, has served since August 1995 as a Managing
Director for Broadview Associates, LLC, a merger and acquisition advisor
serving the global information technology industry. Before joining Broadview,
Mr. McNamara spent 10 years with Salomon Brothers Inc., most recently as vice
president and head of its technology group. From September 1981 to June 1985
Mr. McNamara worked at Smith Barney, Harris Upham & Co., Inc. as vice
president, focusing on the telecommunications equipment, computer peripherals
and computer retailing market segments. From September 1976 to June 1979 Mr.
McNamara served in the international Banking Group of Chemical Bank, Brussels,
Belgium. Mr. McNamara has been a director of Nam Tai Electronics, Inc., a
contract manufacturer which makes consumer electronics products with operations
in Shenzhen, China since 1996. Mr. McNamara has been a director of the Company
since February 1996.
Charles E. Hewitson, 47, currently serves as President of OnCourse,
Inc., a private consulting firm through which Mr. Hewitson provides certain
consulting services to EFTC, and is a director of EFTC. From 1984 to February
1997, Mr. Hewitson served as Vice President and director, and was a principal
shareholder, of Current Electronics, Inc. ("CEI"), with responsibility for
human resources, finance, accounting and manufacturing. In addition, Mr.
Hewitson served as Vice President of Current Electronics (Washington), Inc.
("CEWI"), from 1994 to February 1997. CEI and its affiliate CEWI were acquired
by EFTC in February 1997, at which time Mr. Hewitson was appointed to the
Board.
CLASS I DIRECTOR
Gregory Hewitson, 49, currently serves as President of Corporate
Solutions, Inc., a private consulting firm through which Mr. Hewitson provides
certain consulting services to EFTC and is a director of EFTC. From 1984 to
February 1997, Mr. Hewitson served as President, and was a principal
shareholder, of CEI, with responsibility for developing and leading a sales and
marketing team, directing a leadership team which dealt with daily operational
issues and developing strategic plans for the growth of CEI. CEI and its
affiliate CEWI were acquired by EFTC in February 1997, at which time Mr.
Hewitson was appointed to the Board.
CLASS II DIRECTORS
Jack Calderon, 44, has been the Company's President and Chief
Executive Officer since August 1996. From January 1996 to August 1996, Mr.
Calderon was President of Sales Management International, a private consulting
firm through which Mr. Calderon provided strategic consulting to executive
officers of various high-technology companies. From 1992 to 1995, Mr. Calderon
worked for Group Technologies, an electronic contract manufacturing company.
Mr. Calderon held several management positions at Group Technologies, most
recently as its Vice President and General Manager of International Operations,
before leaving to form his own consulting firm. Mr. Calderon currently authors
a column on electronic contract manufacturing for Circuitree Magazine and is on
the Board of Directors of Interconnecting and Packaging Electronic Circuits, a
trade association for electronic contract manufacturing companies. Mr.
Calderon has been a director of the Company since August 1996.
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<PAGE> 9
Matthew Hewitson, 46, currently serves as President of Matt Hewitson
Consulting, Inc., a private consulting firm through which Mr. Hewitson provides
certain consulting services to EFTC, and is a director of EFTC. From 1984 to
February 1997, Mr. Hewitson served as Secretary and Treasurer, and was a
principal shareholder, of CEI, with responsibility for engineering, facilities,
manufacturing and equipment. CEI and its affiliate CEWI were acquired by EFTC
in February 1997, at which time Mr. Hewitson was appointed to the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Lucille A. Reid, 57, a founder of the Company, served as the Company's
Customer Support/Manufacturing Specifications Manager from October 1990 to
August 1995 when she became Director of Manufacturing. From 1982 to 1990 Mrs.
Reid served as the Company's Manufacturing Manager. Before founding the
Company in 1981, Mrs. Reid held various positions for 14 years at HP, her last
position being Manufacturing Specifications Supervisor. Mrs. Reid's other
positions at HP included Project Coordinator, Production Control Supervisor and
Production Supervisor. Mrs. Reid has been a director of the Company since its
inception.
James A. Doran, 42, has been a senior audit manager with Hein &
Associates, LLP, a public accounting firm, since July 1994. From 1993 to 1994
Mr. Doran was Vice President and Chief Financial Officer of Gerrity Oil & Gas
Corporation, an independent oil and gas operator in Denver, Colorado, whose
stock is listed on the New York Stock Exchange. Prior to joining Gerrity, Mr.
Doran was a shareholder of Williams, Richey & Co., P.C., an accounting and
consulting firm in Denver, Colorado, and before that was a Senior Manager with
Coopers & Lybrand. Mr. Doran has been a director of the Company since 1993.
Richard L. Monfort, 43, served as President and Chief Operating
Officer of ConAgra Red Meat Companies from July 1989 to June 1995. From 1983
until 1989, he was President of Monfort, Inc., which was subsequently acquired
by ConAgra, Inc. Mr. Monfort recently joined the board of the University of
Colorado Hospital Authority. Mr. Monfort has been a director of Famous Dave's
of America, Inc., an owner and operator of restaurants, since March 1997. Mr.
Monfort has been a director of the Company since 1993.
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Lloyd A. McConnell, 44, is the Company's Director of Engineering and
has been the Company's Secretary and a Vice President since May 1994. Mr.
McConnell served as the Company's Applications Engineering Coordinator from
March 1993 to July 1995 and as Manager of the Engineering Department from July
1995 to October 1995. From March 1991 to March 1993, Mr. McConnell was the
Company's Quality Assurance Manager. Mr. McConnell served from 1987 to 1991 as
the Company's Engineering Manager and from 1982 to 1987 as Sales Manager.
Prior to 1982, Mr. McConnell was employed in a variety of manufacturing
engineering positions with
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<PAGE> 10
Eisenman Enterprises, Raincat Irrigation Systems and the U.S. Navy. Mr.
McConnell has been a director of the Company since 1984.
David W. Van Wert, 58, is President and Chief Executive Officer of Van
Wert Associates Consulting, Inc., a management consulting firm he founded.
From June 1993 to August 1995, Mr. Van Wert was President and Chief Operating
Officer of Townsends, Inc., a poultry processing company in Millsboro,
Delaware. In addition to founding and running his management consulting firm,
Mr. Van Wert has held a variety of executive positions for 31 years in the meat
and poultry processing industries. Mr. Van Wert has been a director of the
Company since 1989.
Darrayl F. Cannon, 49, has served as Vice President of Operations for
Dialogic Corporation, a leading computer telephony company, since September
1995. Mr. Cannon has a total of 27 years experience in the computer industry.
Mr. Cannon served from 1989 to 1995 in several positions at McDATA Corporation,
a data communications company and subsidiary of EMC Corporation, including,
Vice President Quality Assurance & Manufacturing, Vice President Development &
Production and Business Unit Manager. From 1975 to 1989, Mr. Cannon held a
variety of positions at NCR Corporation, including Director of NCR Power
Systems, Director of Operations and Director of Manufacturing. Prior to 1975,
Mr. Cannon was a design and manufacturing engineer for Magnavox Corporation.
Mr. Cannon has been a director of the Company since May 1996.
OTHER EXECUTIVE OFFICERS AND KEY EMPLOYEES
August P. Bruehlman, 41, has been the Company's Chief Administrative
Officer since August 1996. Mr. Bruehlman joined the Company in 1988 and has
held several management positions, most recently as Director of Human
Resources. Mr. Bruehlman's current responsibilities at the Company include
corporate facilities, human resources and information systems. Prior to 1988,
subsequent to pursuing advanced degrees, he managed electronics and computer
training in the private and public sectors.
The Company's executive officers are Messrs. Calderon, Fuhlendorf and
Bruehlman.
COMMITTEES AND MEETINGS
The Board of Directors has established three standing committees: an
Audit Committee, a Compensation Committee and an Executive Committee.
Audit Committee. The Audit Committee consists of four independent
directors who are not employees of the Company. Messrs. Doran, McNamara,
Shirazi and Van Wert currently serve as the members of the Audit Committee.
The Audit Committee met once during 1996. The functions of the Audit Committee
are to recommend to the Board of Directors the appointment of independent
auditors, to review the plan and scope of any audit of the Company's financial
statements and to review the Company's significant accounting policies and
other related matters.
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<PAGE> 11
Compensation Committee. The Compensation Committee consists of five
non-employee directors: Messrs. Cannon, McNamara, Monfort, Shirazi and Van
Wert. The Compensation Committee met once during 1996. The functions of the
Compensation Committee are to make recommendations to the Board of Directors
regarding the compensation of executive officers and to administer the
Company's Equity Incentive and Stock Option plans. It also makes
recommendations to the Board of Directors with respect to the compensation of
the Chairman of the Board and the Chief Executive Officer and approves the
compensation paid to other senior executives.
Executive Committee. The Executive Committee consists of Gerald Reid,
Lucille Reid and Stuart Fuhlendorf. The Executive Committee did not meet in
1996. The Executive Committee possesses the powers and discharges the duties
of the Board of Directors between meetings of the full Board.
During 1996, the Board of Directors met eight times and various
committees of the Board met a total of five times. Attendance at Board
meetings averaged 100% and attendance at committee meetings averaged 100%.
Each incumbent director attended more than 75% of the Board meetings and
meetings of Board committees on which the director served.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Under Section 16 of the Securities Exchange Act of 1934, the Company's
directors and certain of its officers, and persons holding more than ten
percent of the Company's Common Stock are required to file forms reporting
their beneficial ownership of the Company's Common Stock and subsequent changes
in that ownership with the Securities and Exchange Commission. Such persons
are also required to furnish the Company copies of forms so filed. Based upon
a review of copies of such forms filed with the Company, the following
directors or officers were late in filing reports on Forms 3, 4 or 5: Mr.
Bruehlman did not timely file a Form 3; Mr. Calderon did not timely file a Form
3 and a Form 4; Mr. Fuhlendorf did not timely file two Forms 4; Thomas Johnson
did not timely file a Form 3; Mr. Hofmeister did not timely file a Form 4; Mr.
Monfort did not timely file Forms 4 reporting six acquisitions of Common Stock;
Mr. Reid did not timely file a Form 4; Mrs. Reid did not timely file a Form 4;
Brian Tracey did not timely file a Form 3 and Mr. Van Wert did not timely file
a Form 4. In each case, an appropriate form was subsequently filed with the
Commission.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
Directors who are not also employees of the Company receive $1,000 for
each quarter in which the director attended a meeting in person and $250 per
additional Board or committee meeting attended in person, unless such committee
meeting is held in conjunction with a meeting of the full Board of Directors.
Directors who are also employees of the Company receive no additional
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<PAGE> 12
compensation for serving as directors. The Company reimburses all of its
directors for reasonable travel and out-of-pocket expenses in connection with
their attendance at meetings of the Board or committees of the Board. The
Company has established a Stock Option Plan for Non-Employee Directors (the
"Director Plan"). Under the Director Plan, the Company makes initial grants of
stock options to purchase 10,000 shares of Common Stock to new directors.
Options granted under the Director Plan have an exercise price equal to the
fair market value of the Common Stock on the date of grant, are subject to
certain vesting periods and expire 10 years following the date of grant.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding the
compensation paid in the last three fiscal years to each executive officer of
the Company who received total cash compensation of more than $100,000.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Name and ------------------- Awards All Other
Principal Position Year Salary($) Bonus($) Options(#) Compensation($)
- ------------------ ---- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Gerald J. Reid 1996 $104,723 $175 -0- $161,874(1)
Chairman of the Board 1995 $138,005 -0- -0- $2,711
1994 $131,793 -0- 20,000(2) $2,647
Jack Calderon 1996(3) $79,923 $-0- 200,000(4) $20,000(5)
President and Chief
Executive Officer
- --------------------
</TABLE>
(1) Includes the book value ($8,749.08) of an automobile previously owned by
the Company transferred to Mr. Reid upon the termination of his employment,
consulting fees ($35,416.70), fees in respect of Mr. Reid's service as
Chairman of the Board ($17,708.31) and a payment of $100,000 in connection
with the cessation of Mr. Reid's service as an employee of the Company.
See "Certain Relationships and Related Transactions--Employment
Agreements."
(2) Options granted pursuant to the Employee Plan.
(3) Mr. Calderon has served as President and Chief Executive Officer of the
Company since August 1996.
(4) Non-qualified options granted in connection with the commencement of Mr.
Calderon's employment.
(5) Represents a lump-sum payment of $20,000 to defray moving expenses related
to Mr. Calderon's relocation to Greeley, Colorado in connection with the
commencement of his employment with the Company.
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<PAGE> 13
OPTIONS GRANTED
The following table sets forth information concerning options granted
in 1996 to the Company's executive officers named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Percent of Total
Options Granted to
Options Employees Exercise Price Expiration
Name Granted(#) During 1996 per Share Date
- ---- ---------- --------------------- ---------------- -----------
<S> <C> <C> <C> <C>
Gerald J. Reid -0- -- -- --
Jack Calderon 200,000 53.3% $4.125 (1)
</TABLE>
_______________
(1) Vested exercisable options are exercisable up to 3 months following the
cessation of Mr. Calderon's employment with the Company other than
termination for cause.
OPTION EXERCISES AND YEAR END OPTION VALUES
The following table sets forth information concerning options
exercised in 1996 and outstanding options held by the Company's executive
officers named in the Summary Compensation Table as of December 31, 1996, the
end of the Company's last fiscal year.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired on Value December 31, 1996(#) at December 31, 1996($)
Name Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald J. Reid -0- -0- -0-/-0- -0-/-0-
Jack Calderon -0- -0- 50,000/150,000 $25,000/$75,000
</TABLE>
COMPENSATION COMMITTEE REPORT
The report of the Compensation Committee of the Board of Directors
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Compensation Policies. The Company's executive compensation policies
are implemented by the Compensation Committee of the Board of Directors (the
"Committee"). The Company is committed to providing an executive compensation
program that promotes and supports the
11
<PAGE> 14
Company's goals and its long-term business objectives. The Company's
compensation programs are intended to provide executives with incentives to
contribute to the Company's successful financial performance and to enable the
Company to attract, retain and reward highly skilled executive officers who
contribute to the long-term success of the Company. The Company has designed
its executive compensation program to implement the above policies. The
Company's executive compensation program is comprised of three elements, each
of which is determined in part by corporate performance. These elements
consist of base salary, annual bonus and equity incentive compensation.
Base Salary Compensation. The Committee evaluates and establishes the
base salary levels of the President, Chief Executive Officer, the Vice
President, Chief Financial Officer, and the Vice President, Chief
Administrative Officer of the Company. The Committee's determinations are
based on certain factors, none of which are given more weight than any other
factor, including, a survey of compensation levels for companies with market
valuations, lines of business and/or revenues comparable to the Company, level
of responsibility, performance of the Company, including its stock price
performance, and individual performance of the executive officer.
Annual Bonus Compensation. The Company has established a Management
Bonus Plan. The following bonuses were paid to executives from the Bonus Plan
in 1996: Mr. Calderon was paid $40,000, Mr. Fuhlendorf was paid $8,500, and
Mr. Bruehlman was paid $7,800. The Committee has determined that for 1997, in
accordance with the Company's executive compensation policies, a bonus plan
based on corporate earnings per share will provide an incentive to executives
to enhance the financial performance of the Company. The 1997 Bonus Plan will
provide the President, Chief Executive Officer, the Vice President, Chief
Financial Officer and the Vice President, Chief Administrative Officer with the
opportunity to receive cash bonuses for specified increases in corporate
earnings per share as determined by the Committee.
Equity Incentive Compensation. Long-term management incentives are
provided by periodically granting stock options to executives and other
directors and managers under the Company's Equity Incentive Plan. The
Committee uses specific criteria to determine such stock option grants. In
granting stock options, the Committee considers factors that are generally the
same as those used in determining base salaries and annual bonuses. The
Committee also considers the number of options previously awarded to and held
by executive officers in determining current option grants.
Compensation of Chief Executive Officer. Compensation for Gerald
Reid, the Company's President during the first half of 1996 was determined in
accordance with the criteria set forth above. In addition, in connection with
the cessation of his employment by the Company as President, Mr. Reid and the
Company entered into a consulting agreement pursuant to which Mr. Reid received
additional compensation. The Committee believes that Mr. Reid's aggregate 1996
compensation was appropriately based on the Company's financial performance.
During the first half of 1996, the Company was engaged in a search for a new
Chief Executive Officer ("CEO"). The Company hired Mr. Jack Calderon as the
new President and CEO on August 5, 1996. In connection with his employment,
the Company and Mr. Calderon negotiated an employment agreement. Pursuant to
12
<PAGE> 15
such agreement, Mr. Calderon's base salary is $200,000 per year and he is
entitled to receive bonuses each year, in amounts determined by the Board of
Directors up to 50% of Mr. Calderon's base salary.
COMPENSATION COMMITTEE
David W. Van Wert, Chair
Darrayl Cannon
Robert K. McNamara
Richard L. Monfort
Masoud S. Shirazi
STOCK PRICE PERFORMANCE GRAPH
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The graph below compares the cumulative return of the Company's Common
Stock against the Nasdaq Composite Index and the Nasdaq Electronic Component
Index, a published industry index. The cumulative return depicted is based
upon an initial investment of $100 over the period March 3, 1994 through
December 31, 1996 and the last reported sale price of the Common Stock as
reported on the Nasdaq National Market March 03, 1994 ($7.88), the first day on
which the Common Stock was traded, and on the last trading day of each year
ended thereafter, including December 30, 1994 ($7.63), December 29, 1995
($4.00) and December 30, 1996 ($4.63).
13
<PAGE> 16
<TABLE>
<CAPTION>
March 3, 1994 December 30, 1994 December 29, 1995 December 30, 1996
<S> <C> <C> <C> <C>
Nasdaq Composite
Index 100 96.78 136.87 168.35
Nasdaq Electronic
Component 100 100.43 166.36 287.48
Electronic Fab
Technology Corp. 100 96.83 50.79 58.73
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain of its
employees, including Messrs. Calderon and Fuhlendorf. Mr. Calderon's agreement
provides for him to be employed in his current position for a term of two years
ending July 1998. Mr. Fuhlendorf's agreement provides for him to be employed
in his current capacity, for an initial term of three years ending in March
1997, automatically extended for 90-day periods until terminated. The Company
may terminate such employment agreements with or without cause. In case of a
termination without cause, however, the Company must continue the terminated
employee's salary and benefits for a "Severance Period." The Severance Period
is the greater of one year (two years if a change in control of the Company has
occurred) or the remaining term of the employment agreement immediately prior
to such termination. The employment agreements also provide for the employee's
salary and benefits to continue for six months after termination of employment
if the employment agreement expires, the parties do not enter into a new
employment agreement and the employee does not remain an employee of the
Company for at least six months after such expiration. Mr. Calderon's
Agreement also provides that the Company shall grant to Mr. Calderon
non-qualified stock options to purchase 200,000 shares of Common Stock at an
exercise price of $4.125. Of such 200,000 options, 50,000 vested upon the
commencement of Mr. Calderon's employment and the remaining options will vest
and become exercisable (i) upon the occurrence of a change in control, (ii) at
the end of seven continuous years of employment or (iii) in increments upon the
Common Stock of the Company achieving certain trading levels from $6.00 per
share to $12.00 per share.
CONSULTING AGREEMENTS
On August 23, 1996, the Company, in connection with the cessation of
Mr. Gerald J. Reid's services as an employee of the Company, entered into a
consulting agreement with Mr. Reid for a term of one year, renewable for three
additional one-year terms. The consulting agreement shall terminate (i) upon
the death of Mr. Reid, (ii) six months after such time as the closing sale
price of the Company's Common Stock is $8.00 per share or higher for a
specified period, (iii) thirty days after Mr. Reid or his wife sell 500,000 or
more shares of Common Stock and (iv) in the event of a change in control of the
Company. Pursuant to this agreement, he has received a payment of $100,000 and
an automobile previously owned by the Company. In addition, the Company will
pay
14
<PAGE> 17
Mr. Reid a retainer of $100,000 per year, subject to certain adjustments. The
portion of such retainer accrued in 1996 was $35,416.70. The consulting
agreement also provides that Mr. Reid will not compete with the Company,
directly or indirectly, by participating in the business of electronic contract
manufacturing during the term of the consulting agreement and for one year
thereafter.
On February 24, 1996, the Company entered into five-year consulting
agreements with Messrs. Charles E. Hewitson, Matthew J. Hewitson and Gregory
C. Hewitson. Each of these consultants will be paid approximately $160,000 per
year and reimbursed his out-of-pocket expenses associated with the performance
of his duties. Each has agreed to devote sufficient working time, attention
and energies to the business of the Company, but not in excess of 80% of the
equivalent of being engaged on a full-time basis. The Consulting Agreements
prohibit the consultant from providing services to, or owning 5% or more of the
outstanding stock of, a competitor of the Company during the term of his
engagement and for two years after the termination of his engagement.
PROPOSAL 2 - CHANGE OF THE COMPANY'S NAME
The Board of Directors has determined that it is in the best interests
of the Company to amend the Company's Articles of Incorporation to change the
Company's name to "EFTC Corporation" and has recommended that such name change
be submitted to the shareholders for approval. The Board and Management
believes that both the Company's customers and suppliers prefer to use the
shortened version of the Company name and that the shortened version of the
Company's name is better recognized in the marketplace for the Company's
products.
If the change is approved, a Certificate of Amendment of the Company's
Articles of Incorporation will be filed to give effect to the change of name as
promptly as practical following the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL 2 TO
APPROVE THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED ARTICLES OF
INCORPORATION TO CHANGE THE COMPANY'S NAME TO EFTC CORPORATION.
PROPOSAL 3 - APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP
as independent auditors to audit the financial statements of the Company for
the year ending December 31, 1997.
Representatives from KPMG Peat Marwick LLP are expected to be present
at the Meeting and shall have the opportunity to make a statement, if they
desire to do so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL TO RATIFY
THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
15
<PAGE> 18
SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be presented at the 1998
annual meeting of shareholders must be received by the Company on or before
December 21, 1997 to be included in the proxy materials of the Company relating
to such Meeting.
OTHER BUSINESS
The Company does not anticipate that any other matters will be brought
before the Meeting. However, if any additional matters shall properly come
before the Meeting, it is intended that the persons authorized under proxies
may, in the absence of instructions to the contrary, vote or act thereon in
accordance with their best judgment.
BY THE BOARD OF DIRECTORS
/s/ LLOYD A. McCONNELL
--------------------------
Lloyd A. McConnell
Secretary
Greeley, Colorado
April 29, 1997
16
<PAGE> 19
- --------------------------------------------------------------------------------
ELECTRONIC FAB TECHNOLOGY CORP.
7251 W. 4TH STREET
GREELEY, CO 80634
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 28, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jack Calderon and Stuart W. Fuhlendorf, or
either of them, with full power of substitution, as a proxy or proxies to
represent the undersigned at the Annual Meeting of Shareholders to be held on
May 28, 1997 or any adjournment thereat ("Annual Meeting") and to vote thereof,
as designated below, all the shares of common stock of Electronic Fab Technology
Corp. held of record by the undersigned at the close of business on April 7,
1997, with all the power that the undersigned would possess if personally
present, in accordance with the instructions noted hereon, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE
LISTED NOMINEES AND APPROVAL OF ITEMS 2 AND 3, IF NOT OTHERWISE SPECIFIED. THIS
PROXY WILL BE VOTED PURSUANT TO THE BOARD OF DIRECTORS' RECOMMENDATIONS.
1. PROPOSAL TO ELECT ONE CLASS I DIRECTOR to serve until the 1998 Annual Meeting
of Shareholders, TO ELECT TWO CLASS II DIRECTORS to serve until the 1999
Annual Meeting of Shareholders and TO ELECT FIVE CLASS III DIRECTORS to serve
until the 2000 Annual Meeting of Shareholders.
[ ] For all nominees listed (except as marked to the contrary) [ ] WITHHOLD
AUTHORITY to vote for all nominees listed
<TABLE>
<S> <C> <C>
Nominees: CLASS I DIRECTORS: Gregory C. Hewitson
CLASS II DIRECTORS: Jack Calderon and Matthew J. Hewitson
CLASS III DIRECTORS: Gerald J. Reid, Masoud S. Shirazi, Stuart W. Fuhlendorf,
Robert McNamara and Charles E. Hewitson
</TABLE>
2. PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION to change the
Company's name to "EFTC CORPORATION".
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE> 20
- --------------------------------------------------------------------------------
3. PROPOSAL TO RATIFY THE SELECTION OF KPMG Peat Marwick LLP as the independent
auditors to audit the financial statements of the Company for the fiscal year
ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as directed by the
shareholder. In his discretion, either named proxy may vote on such other
business as may properly come before the Annual Meeting or any adjournments or
postponements thereof.
This proxy revokes all proxies with respect to the Annual Meeting and may be
revoked prior to exercise. Receipt of the notice of Annual Meeting and the Proxy
Statement relating to the Annual Meeting is hereby acknowledged.
Please mark, sign, date and return
the proxy card promptly, using the
enclosed envelope.
Date
-----------------------------------
Signature
-----------------------------------
Signature if
held jointly
-----------------------------------
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please sign
in full corporate name by President
or other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
- --------------------------------------------------------------------------------
