<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
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[ ] 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 240.14a-11(c) or 240.14a-12
Haskel International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
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(1) Title of each class of securities to which transaction applies:
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<PAGE> 2
[LOGO]
September 12, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of Haskel International, Inc. which will be held at the Red Lion Hotel, 100 West
Glenoaks Boulevard, Glendale, California 91202, on Friday, October 17, 1997 at
10:30 a.m. local time.
The Notice of Annual Meeting and Proxy Statement are included with this
letter. The matters listed in the Notice of Annual Meeting are more fully
described in the Proxy Statement.
It is important that your shares be represented at the Annual Meeting
whether or not you are personally able to attend. YOU ARE THEREFORE URGED TO
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE
AS PROMPTLY AS POSSIBLE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY, OF COURSE,
WITHDRAW YOUR PROXY SHOULD YOU WISH TO VOTE IN PERSON.
Thank you for your cooperation.
Sincerely,
Edward Malkowicz
Chairman of the Board
<PAGE> 3
HASKEL INTERNATIONAL, INC.
100 EAST GRAHAM PLACE
BURBANK, CALIFORNIA 91502
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 12, 1997
The Annual Meeting of Shareholders of Haskel International, Inc. will
be held on October 17, 1997 at 10:30 A.M. at the Red Lion Hotel, 100 West
Glenoaks Boulevard, Glendale, California 91202, for the following purposes:
1. Election of seven directors, consisting of three
Class A directors and four Class B directors, to
serve on the Company's Board of Directors until the
next Annual Meeting of Shareholders and until their
successors are duly elected and qualified;
2. Approval of merger of the Company's 1995 Incentive
Stock Option Plan and 1989 Incentive Stock Option
Plan;
3. Ratification of the selection of Deloitte & Touche
LLP as the Company's independent auditors; and
4. Such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Directors has fixed September 12, 1997 as the record date
for determining the shareholders entitled to receive notice of and to vote at
the meeting.
All shareholders are cordially invited to attend the meeting. Whether
or not you expect to attend the meeting, please mark, sign, date and return
promptly the enclosed proxy card in the stamped return envelope provided.
By Order of the Board of Directors,
Lonnie D. Schnell
Secretary
<PAGE> 4
HASKEL INTERNATIONAL, INC.
100 EAST GRAHAM PLACE
BURBANK, CALIFORNIA 91502
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 17, 1997
GENERAL INFORMATION
This proxy statement (the "Proxy Statement") and the enclosed proxy are
furnished in connection with the solicitation of proxies by the Board of
Directors of Haskel International, Inc., a California corporation (the
"Company"), for use at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held at the Red Lion Hotel, 100 West Glenoaks Boulevard, Glendale,
California, 91202 on October 17, 1997 at 10:30 a.m. local time and any
adjournments or postponements thereof. The Company's Annual Report to
Shareholders for the fiscal year ended May 31, 1997, including the Company's
Form 10-K and other information concerning the Company, is also enclosed for
your information. The Company anticipates that the Proxy Statement and the
enclosed proxy will first be mailed or given to its shareholders on or about
September 12, 1997.
A proxy may be revoked by filing with the Secretary of the Company a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Annual Meeting and voting in person. Attendance in person at
the Annual Meeting does not itself revoke an otherwise valid proxy; however, any
shareholder who attends the Annual Meeting may orally revoke his or her proxy at
the Annual Meeting and vote in person. All properly executed proxies received
prior to or at the Annual Meeting, and not revoked, will be voted at the Annual
Meeting with the instructions indicated on such proxies. If no instructions are
indicated, such proxies will be voted for the election of the three Class A and
four Class B nominees, as the case may be, as directors, and for Proposals 2 and
3. Management is not aware at the date hereof of any other matters to be
presented at the Annual Meeting; however, if any other matter is properly
presented, the proxyholders will vote in their sole discretion upon such other
matter.
The cost of this solicitation of proxies will be borne by the Company.
Proxies will be solicited by the Company principally through use of the mail,
but directors, officers and regular employees of the Company may solicit proxies
in person, by telephone, or by other means of communication. Such persons will
not be specially compensated for such services. The Company may reimburse
brokers, banks, custodians, nominees and other fiduciaries for their customary
and reasonable charges and expenses in forwarding proxy materials to beneficial
owners.
VOTING SECURITIES
Only shareholders of record at the close of business on September 12,
1997 will be entitled to vote at the Annual Meeting. On that date, there were
4,753,630 shares of the Company's Class A Common Stock and 40,000 shares of
Class B Common Stock outstanding. Each share of Common Stock is entitled to one
vote. The holders of a majority of the outstanding shares of Common Stock
present in person or by proxy and entitled to vote will constitute a quorum at
the Annual Meeting. Abstentions and shares held by brokers that are present but
not voted because the brokers had no discretionary authority with respect to
such shares (broker non-votes) will be counted as being present for purposes of
determining a quorum.
1
<PAGE> 5
PRINCIPAL SHAREHOLDERS
The following table sets forth information with respect to each person
who, as of August 18, 1997, is known by the Company to be the beneficial owner
of more than five percent (5%) of the Company's Common Stock:
<TABLE>
<CAPTION>
Class A Common Stock Class B Common Stock
----------------------------- ---------------------------
Amount and Amount and Percent of
Nature of Percent Nature of Percent Combined
Name and Address of Beneficial of Beneficial of Voting
Beneficial Owner Ownership Class1 Ownership Class1 Power2
- ------------------- ------------ ----------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C>
Hayman Family Trusts 1,584,4773 33.3% 40,0003 100.0% 33.9%
c/o Mellon Trust of California
400 S. Hope Street
Suite 400
Los Angeles, CA 90071
Maury S. Friedman 442,0004 9.3% -- -- 9.2%
29480 Bertrand Street
Agoura Hills, CA 91301
Haskel International, Inc. 259,607 5.5% -- -- 5.4%
Retirement Savings Plan
First Trust Corporation, Trustee
717 17th Street
Suite 2600
Denver, CO 80202-3323
</TABLE>
- -------------------------
1 Included as outstanding for purposes of these calculations with
respect to (i) the Class A Common Stock were 4,751,230 shares of Class A Common
Stock outstanding as of August 18, 1997 and (ii) the Class B Common Stock were
40,000 shares of Class B Common Stock outstanding as of August 18, 1997.
2 Represents the combined voting power of the shares of Class A Common
Stock and Class B Common Stock beneficially owned by the persons named as a
percent of the aggregate combined voting power of all outstanding shares of
Common Stock.
3 All of the shares shown are owned beneficially and of record by eight
irrevocable trusts. Sandra Nelson is the beneficiary of three of the trusts,
Sheryl L. Everett the beneficiary of three of the trusts, and Rick Meeker Hayman
the beneficiary of two of the trusts. The trustees of two of the trusts of which
Sandra Nelson is the beneficiary, two of the trusts of which Sheryl L. Everett
is the beneficiary and the two of the trusts of which Rick Meeker Hayman is the
beneficiary, are Mellon Trust of California ("Mellon Trust"), Sandra Nelson and
Sheryl L. Everett. Mellon Trust has one vote and the other trustees have one
vote in determining action to be taken by each of these six trusts with respect
to the shares held by each such trust. Mellon Trust is sole trustee for each of
the other two trusts, one of which Sandra Nelson is the beneficiary and one of
which Sheryl L. Everett is the beneficiary. Excludes 9,950 and 41,145 shares as
to which Sandra Nelson and Sheryl L. Everett, respectively, have sole voting and
dispositive power; and 41,145 shares which are held in trust by another trustee,
and with respect to which Rick Meeker Hayman is the beneficiary, and has sole
voting and dispositive power.
4 Includes 435,000 shares owned beneficially and of record by the
Friedman Family Trust, of which Maury S. Friedman and Lisa E. Friedman are
co-trustees, and 7,000 shares owned by Mr. Friedman as custodian for his minor
children.
2
<PAGE> 6
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of August 18, 1997, by (i)
each director and nominee for director, (ii) each of the executive officers
named in the Summary Compensation Table, and (iii) all directors and executive
officers as a group. Except as otherwise noted, and subject to applicable
community property and similar laws, each person named has sole voting and
investment power with respect to the Common Stock shown as beneficially owned.
<TABLE>
<CAPTION>
Class A Shares Percent
Beneficially of
Name and Address Title Owned Class
- ---------------- ----- -------------- -------
<S> <C> <C> <C>
R. Malcolm Greaves President, Chief Executive 127,200(1) 2.7%
100 East Graham Place Officer and Director
Burbank, CA 91502
Lonnie D. Schnell Chief Financial Officer and 13,500(2) *
100 East Graham Place Secretary
Burbank, CA 91502
Robert A. Smith Executive Vice President and 22,000(3) *
100 East Graham Place President - Industrial Products
Burbank, CA 91502
Henry Mason Managing Director of HESL 13,270(4) *
100 East Graham Place
Burbank, CA 91502
Edward Malkowicz Chairman of the Board and 27,800(5) *
100 East Graham Place Director
Burbank, CA 91502
Marvin L. Goldberger Director(6) 50,155(7) 1.1%
100 East Graham Place
Burbank, CA 91502
Stanley T. Myers Director 5,800(8) *
100 East Graham Place
Burbank, CA 91502
Terrence A. Noonan Director 3,000(9) *
100 East Graham Place
Burbank, CA 91502
John Vinke Director 3,100(9) *
100 East Graham Place
Burbank, CA 91502
W. Bradley Zehner II, Ph.D. Director(10) 100 *
100 East Graham Place
Burbank, CA 91502
Richard W. Detweiler Director(11) *
100 East Graham Place
Burbank, CA 91502
Marvin Goodson Director(12) 119,910(13) 2.5%
100 East Graham Place
Burbank, CA 91502
All directors and executive 385,835(14) 7.9%
officers as a group (12 persons)
</TABLE>
*Denotes beneficial ownership of less than 1%.
[Footnotes on next page]
3
<PAGE> 7
- --------------------------
1 Includes 123,200 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
2 Includes 12,000 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
3 Includes 22,000 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
4 Includes 13,270 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
5 Includes 12,800 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
6 Dr. Goldberger is not standing for re-election as a director at the
1997 Annual Meeting of Shareholders.
7 Includes 11,155 shares owned beneficially and of record by the Marvin
and Mildred Goldberger Family Trust, of which Dr. Goldberger is a
co-trustee; and 39,000 shares issuable upon exercise of options
exercisable within 60 days of August 18, 1997.
8 Includes 4,800 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
9 Includes 2,000 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
10 Dr. Zehner was appointed a director of the Company on August 25, 1997.
11 Mr. Detweiler resigned as a director of the Company on August 14, 1997.
12 Mr. Goodson resigned as a director of the Company on November 12, 1996.
13 Includes 23,800 shares owned beneficially and of record by the Goodson
and Wachtel Professional Corporation Profit Sharing Plan, of which Mr.
Goodson is a co-trustee; 81,110 shares owned beneficially and of record
by the Marvin and Mae Goodson Family Trust, of which Mr. Goodson is a
co-trustee; and 15,000 shares issuable upon exercise of options
exercisable within 60 days of August 18, 1997.
14 Includes 246,070 shares issuable upon exercise of options exercisable
within 60 days of August 18, 1997.
4
<PAGE> 8
PROPOSAL 1
ELECTION OF DIRECTORS
In accordance with the Company's Bylaws, at the Annual Meeting seven
directors are to be elected to serve until the next Annual Meeting of
Shareholders and until the election and qualification of their successors. Three
directors are elected by the holders of Class A Common Stock voting as a class
and four directors are elected by the holders of Class B Common Stock voting as
a class. Holders of Class A Common Stock may vote only for Class A nominees and
holders of Class B Common Stock may vote only for Class B nominees. The three
Class A nominees and the four Class B nominees receiving the highest number of
affirmative votes of the shares entitled to vote, for the respective class of
nominees, shall be elected directors. Abstentions and broker non-votes will have
no effect on the outcome of the vote. Unless otherwise instructed, the
proxyholders will vote the proxies received by them for the nominees of the
respective class named below, all of whom are currently directors of the
Company. If any of the listed nominees is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for such
person or persons as the proxyholders may designate. The Board of Directors has
no reason to believe that any of the nominees will be unable or decline to serve
as a director.
NOMINEES FOR ELECTION AS DIRECTOR
Set forth below is certain information as of August 18, 1997 with
respect to each director and each person nominated for election as a director.
<TABLE>
<CAPTION>
Name Age Position with Company
- ---- --- ---------------------
<S> <C> <C>
R. Malcolm Greaves * 58 President, Chief Executive Officer and Director
Edward Malkowicz * 57 Chairman of the Board and Director
Stanley T. Myers * 60 Director
Terrence A. Noonan ** 59 Director
John Vinke** 53 Director
W. Bradley Zehner II, Ph.D.** 53 Director
</TABLE>
* Nominee as Class A director
** Nominee as Class B director
R. Malcolm Greaves was appointed President and Chief Executive Officer
of the Company in February 1996. He joined Haskel Energy Systems, Ltd. ("HESL"),
a wholly owned subsidiary of the Company, as General Manager in January 1989 and
was appointed Managing Director of HESL in June 1990. Mr. Greaves has served as
a director of the Company since September 1990. Between January 1994 and
February 1995, he served as Executive Vice President in charge of worldwide pump
operations, after serving as Vice President, Chief Operating Officer for Europe,
the Middle East, India and Africa from April 1993.
Edward Malkowicz has been a director of the Company since November
1994. He was elected Chairman of the Board in April 1995. Mr. Malkowicz served
as the acting Chief Executive Officer of the Company from April 1995 to February
1996. Between 1992 and May 1995, Mr. Malkowicz taught business courses at
Riverside College in Riverside, California. In September 1987, Mr. Malkowicz was
employed as Senior Vice President of Finance and Administration for Turbo-tek
International, a manufacturer and distributor of packaged consumer goods, and
served as its President and Chief Operating Officer from June 1989 through
November 1990.
5
<PAGE> 9
Stanley T. Myers has been a director of the Company since November
1994. Mr. Myers is currently President of Semiconductor Equipment and Materials
International (SEMI). SEMI is an international trade association that serves
more than 2,000 corporate members involved in the semiconductor and flat panel
display equipment and materials industries. Prior to his appointment at SEMI,
Mr. Myers served in various capacities at Mitsubishi Silicon America Corporation
(formerly Siltec Corporation), a manufacturer of silicon wafers, including
President and Chief Executive Officer since November 1985. Mr. Meyers also
serves on the SEMI Board of Directors, a post to which he was elected in 1989
and he is chairman of Mitsubishi Silicon America Board of Directors.
Terrence A. Noonan has been a director of the Company since May 1996.
Since June 1991, Mr. Noonan has also served as President and Chief Operating
Officer of Furon Company, a manufacturing company specializing in polymer
components. He is also a member of the Board of Directors of Furon Company.
John Vinke was elected a director of the Company in October 1996. Mr.
Vinke has served as Vice President of Finance and Chief Financial Officer of
Special Devices, Inc. since April 1994. From January 1990 through March 1994,
Mr. Vinke served as Vice President of Finance and Chief Financial Officer of
Chalco Industries, Inc.
W. Bradley Zehner II, Ph.D. was appointed a director of the Company in
August 1997. Since 1989, Dr. Zehner has been an associate professor of business
strategy at Pepperdine University's MBA and executive MS in Technology
Management programs. Dr. Zehner also consults with a number of international
technology-based organizations. Dr. Zehner was formerly President - Worldwide
Sales and Marketing for John Brown Machinery Group; Managing Chairman of four
separate engineering/sales companies in the United States, England, France and
Hong Kong; and served as Vice President of Strategic Planning and Business
Development for John Brown PLC's Industrial Products Sector.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE CLASS A
NOMINEES BY THE HOLDERS OF CLASS A COMMON STOCK AND EACH OF THE CLASS B
NOMINEES BY THE HOLDERS OF CLASS B COMMON STOCK.
COMPENSATION OF DIRECTORS
Each of the Company's directors who is not an employee of the Company
receives an annual fee of $24,000, payable in monthly installments, except for
the Chairman, who receives annual compensation of $55,000. Non-employee
directors receive $500 for each committee meeting in which they participate,
except directors who chair a Board committee, who receive $750 per meeting. Each
director receives reimbursement for out-of-pocket expenses.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held eight meetings during fiscal
1997. All of the current directors attended at least 75% of the meetings of the
Board of Directors and each committee of the Board on which they served during
fiscal 1997.
During fiscal 1997, the Board of Directors of the Company had three
standing committees: the Audit Committee (comprised of Messrs. Greaves,
Malkowicz and Vinke), the Compensation Committee (comprised of Messrs.
Goldberger, Greaves, Myers and Noonan), and the Executive Committee (comprised
of Messrs. Greaves, Malkowicz, Noonan and Vinke). The Audit Committee held two
meetings, the Compensation Committee held two meetings, and the Executive
Committee held three meetings during fiscal 1997.
The Audit Committee reviews the independence, professional services,
fees, plans and results of the independent auditors' engagement and recommends
their retention or discharge to the Board of Directors.
6
<PAGE> 10
The Compensation Committee reviews and makes recommendations to the Board of
Directors regarding salaries, compensation, bonuses, benefits and option grants
for executive officers and key employees. The Executive Committee was formed to
expedite certain matters relative to the management of the Company in lieu of a
formal board meeting and has all of the authority of the Board of Directors
except with respect to (i) the approval of any action for which the General
Corporation Law or the Articles of Incorporation also require shareholder
approval; (ii) the filling of vacancies on the Board or in any committee; (iii)
the fixing of compensation of the directors for serving on the Board or on any
committee; (iv) the adoption, amendment or repeal of By-Laws; (v) the amendment
or repeal of any resolution of the Board; (vi) any distribution to the
shareholders; and (vii) the appointment of other committees of the Board or the
members thereof. The Executive Committee preliminarily reviews and has the
authority to approve acquisition proposals up to a maximum of $1,000,000 and
also performs searches and makes recommendations for nominations of new Board
members. Each committee makes recommendations to the Board of Directors for
further action by it.
EXECUTIVE OFFICERS
As of August 18, 1997, the executive officers of the Company were as
follows:
R. Malcolm Greaves, President, Chief Executive Officer and Director.
Biographical information regarding Mr. Greaves is set forth above under
"Nominees for Election as Director."
Lonnie D. Schnell, 48, joined the Company as Chief Financial Officer
and Secretary in November 1994. From August 1990 through October 1994, Mr.
Schnell was Vice President and Controller of Teleflex Control Systems, Inc., an
electromechanical actuator and cargo handling business.
Robert A. Smith, 56, joined the Company as President - Industrial
Products in February 1995 and has also served as Executive Vice President of the
Company since November 1995. Mr. Smith was employed by Puroflow, Inc. and its
affiliates, where he served as a Director, and as President of Puroflow
Corporation and Engineered Filtration Company (both affiliates of Puroflow,
Inc.) from February 1991 through January 1994. Mr. Smith also served as a
Director of Industrial Tools, Inc. from 1978 until February 1995 and served as
its President and CEO from January 1994 until February 1995. Mr. Smith is
currently Vice Chairman of the Board of Puroflow, Inc.
Henry Mason, 47, was appointed Managing Director of HESL in January
1997. He has been employed by HESL since its formation in the United Kingdom in
1978 where he held the position of Business Manager for its Mining Products
Division. In 1987, he was appointed Sales Manager for HESL and was appointed
Sales and Marketing Director in April 1993.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company incurred attorneys' fees in the amounts of approximately
$292,000 in fiscal 1997 in connection with services provided by the firm of
Goodson and Wachtel A Professional Corporation. That firm ceased to provide
legal services to the Company in November 1996. Marvin Goodson, a director
(until November 1996) and shareholder of the Company, is a principal with that
law firm. In addition, that firm represents the Hayman Family Trusts and served
as attorney for the Haskel International, Inc. Profit Sharing Plan up until
November 1996. (See "Principal Shareholders".)
7
<PAGE> 11
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten percent
of the Company's Common Stock are required to report their initial ownership of
the Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific filing deadlines of these reports
have been established and the Company is required to disclose in this Proxy
Statement any failure to file by these dates during the fiscal year ended May
31, 1997. Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during the fiscal year ended May 31, 1997 and Forms 5
and amendments thereto furnished to the Company with respect to the fiscal year
ended May 31, 1997, and written representations, all of these filing
requirements have been satisfied.
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid by the
Company, together with long term and other compensation, for each of the last
three fiscal years to its Chief Executive Officer and to each of its executive
officers whose total salary and bonus from the Company exceeded or equaled
$100,000 in fiscal 1997 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Annual Compensation
-------------------
Long-term
Compensation
Other Annual Awards - Stock All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($)(3) Options (#)(4) Compensation ($)(5)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Malcolm Greaves(1) 1997 $205,5002 $124,500 $1,960 -- $ 30,000
President and Chief Executive 1996 165,2002 110,000 -- 43,000 29,500
Officer 1995 151,6802 20,000 -- -- 34,900
Lonnie D. Schnell 1997 105,700 42,800 2,364 15,000 --
Chief Financial Officer and 1996 100,900 40,000 1,537 30,000 --
Secretary 1995 49,900 6,000 -- -- --
Robert A. Smith 1997 153,500 77,250 2,775 10,000 --
Executive Vice President and 1996 150,000 75,000 731 50,000 --
President - Industrial Products 1995 34,000 -- -- -- --
Henry Mason 1997 88,000 39,600 -- 10,000 17,000
Managing Director of HESL 1996 66,800 24,800 -- -- 15,500
1995 59,600 22,500 -- 10,000 14,800
</TABLE>
- --------------------------
1 Mr. Greaves was appointed President and Chief Executive Officer in
February 1996.
2 A portion of Mr. Greaves' salary in the amount of $114,480 in fiscal
1995, $111,600 in fiscal 1996, and $115,500 in fiscal 1997 was paid in
Pounds Sterling, and has been converted at the estimated average
exchange rate of pound sterling1 to $1.59 in effect during fiscal 1995,
$1.55 in effect during fiscal 1996, and $1.6036 in effect during 1997.
3 Automobile allowance.
4 Options granted under the Company's 1989 or 1995 Incentive Stock Option
Plan.
5 Company's contribution to HESL Pension Plan.
8
<PAGE> 12
EMPLOYMENT AGREEMENTS
The Company established, effective March 1, 1996, an Executive
Separation Pay Plan (the "Separation Pay Plan"), to establish a uniform basis
for providing separation allowances to certain executives when their positions
are eliminated or when they are terminated for reasons other than for cause. The
Separation Pay Plan is administered by the Compensation Committee. The Board of
Directors or the Compensation Committee has absolute discretion to designate
those executives who are covered by the Separation Pay Plan (a "Covered
Employee"). The amount of separation allowance which a Covered Employee is
entitled to receive is determined by the Board of Directors and specified as a
number of months of the Covered Employee's base salary as of the date of
termination of employment. Presently, the following Named Executive Officers are
the only executives designated as Covered Employees under the Separation Pay
Plan (specified period for separation allowance indicated in parentheses): R.
Malcolm Greaves, President and Chief Executive Officer (12 months); Robert A.
Smith, Executive Vice President and President-Industrial Products (10 months);
and Lonnie D. Schnell, Chief Financial Officer and Secretary (8 months).
With the exception of the employment agreements described above, the
Company has no employment agreements with any of the Named Executive Officers.
STOCK OPTION PLANS
1989 Incentive Stock Option Plan
The Haskel International, Inc. 1989 Incentive Stock Option Plan, as
amended (the "1989 ISO Plan") is administered by the Compensation Committee.
Subject to the terms of the 1989 ISO Plan, the Compensation Committee
establishes the terms and conditions applicable to option grants under said
Plan. The 1989 ISO Plan has a term of ten years and provides for the sale by the
Company of a maximum of 450,000 shares of Class A Common Stock, subject to
adjustments to reflect any future change in capitalization of the Company. As of
May 31, 1997, there were options granted and outstanding for 70,065 shares at an
exercise price of $9.46 per share, 38,086 shares at an exercise price of $7.18
per share, and 60,000 shares at an exercise price of $8.03 per share.
Nonqualified Stock Option Plan
The Haskel International, Inc. Stock Option Plan, as amended (the
"Nonqualified Plan"), is also administered by the Compensation Committee. The
Nonqualified Plan differs from the 1989 ISO Plan in that the 1989 ISO Plan is
qualified under the Internal Revenue Code as an Incentive Stock Option plan
entitling the optionee to certain income tax benefits, to which the optionee
under the Nonqualified Plan is not entitled. Subject to the terms of the
Nonqualified Plan, the Compensation Committee establishes the terms and
conditions applicable to option grants under said Plan. The Nonqualified Plan
has a term of ten years and provides for the sale by the Company of a maximum of
650,000 shares of Class A Common Stock, subject to adjustments to reflect any
future change in capitalization of the Company. As of May 31, 1997, there were
options granted and outstanding under the Nonqualified Plan for 87,500 shares at
an exercise price of $9.46 per share, 127,247 shares at an exercise price of
$7.18 per share, 92,667 shares at an exercise price of $7.00 per share, and
24,000 shares at an exercise price of $10.00 per share.
1995 Incentive Stock Option Plan
The Haskel International, Inc. 1995 Incentive Stock Option Plan (the
"1995 ISO Plan") permits certain employees of the Company and its subsidiaries
who are responsible for the management, growth and protection of the business of
the Company or its subsidiaries to be granted the right to purchase shares of
Class A Common Stock at the fair market value per share at the date of grant.
The 1995 ISO Plan is designed to assist the Company in securing and retaining
employees of outstanding ability and to motivate such individuals to exert their
best efforts on behalf of the Company. The 1995 ISO Plan is administered by the
Stock Option Committee of the Board of Directors, consisting of disinterested
directors as that term is
9
<PAGE> 13
defined by Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The
Committee selects employees who may purchase shares under the 1995 ISO Plan and
establishes, subject to the terms of the 1995 ISO Plan, the terms and conditions
applicable to such purchase. In order to purchase shares, an employee is
required to enter into a purchase agreement with the Company. The 1995 ISO Plan
has a term of ten years and provides for the grant of options to purchase an
aggregate of 240,000 shares of Class A Common Stock, plus the number of shares
available as a result of presently outstanding options which lapse because of
nonexercise under the 1989 ISO Plan. That additional number of shares cannot be
determined at this time, but cannot exceed the total number of 773,885 shares
subject to options which are currently outstanding and unexercised. The number
of shares is also subject to adjustments to reflect any future changes in the
capitalization of the Company. As of May 31, 1997, there were options granted
and outstanding for 100,000 shares at an exercise price of $5.375 per share,
43,000 shares at an exercise price of $6.50 per share, 5,000 shares at an
exercise price of $7.25 per share, 81,000 shares at an exercise price of $7.50
per share, 55,000 shares at an exercise price of $7.625 per share, 5,000 shares
at an exercise price of $9.00 per share, and 75,000 shares at an exercise price
of $10.00 per share.
1995 Formula Stock Option Plan
The Haskel International, Inc. 1995 Formula Stock Option Plan (the
"1995 Formula Plan") permits directors, who are not employees of the Company or
its subsidiaries ("Outside Directors"), and who have been granted options under
said Plan, the right to purchase shares of Class A Common Stock at the fair
market value per share at the date of the grant. Because the 1995 Formula Plan
operates by its own terms, and there are no discretionary decisions, there is no
committee needed to administer the 1995 Formula Plan. The 1995 Formula Plan is
designed to assist the Company in attracting and retaining high quality Outside
Directors. Every new Outside Director, upon becoming a director of the Company,
is granted an option to purchase 10,000 shares of Class A Common Stock. Such
options vest in equal amounts over five years, with the first installment
vesting on the first anniversary of the Outside Director's appointment as
director. Additional options are granted to each Outside Director if the
Company's performance exceeds certain benchmarks. All options granted under the
1995 Formula Plan become 100% vested in the event of a change in control of the
Company. The 1995 Formula Plan provides for grants of options to purchase an
aggregate of 40,000 shares of Class A Common Stock. The number of shares is also
subject to adjustments to reflect any future changes in the capitalization of
the Company. As of May 31, 1997, there were options granted and outstanding for
10,000 shares at an exercise price of $6.625 per share, 10,000 shares at an
exercise price of $8.00, and 10,000 shares at an exercise price of $9.00.
10
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding stock
options granted to the Named Executive Officers during fiscal 1997:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
---------------------------------
Potential Realizable Value
At Assumed Annual
Rates of Stock Price
Individual Grants Appreciation For Option Term
----------------- ----------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 0%($) 5%($) 10%($)
- ---- ----------- ------------ ------------ ----------- ----- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Lonnie D. Schnell 15,000 6.1% $ 10.00 5/28/07 $0 $ 244,334 $ 389,061
Robert A. Smith 10,000 4.1% $ 7.50 8/2/06 $0 $ 122,167 $ 194,530
Henry Mason 10,000 4.1% $ 7.625 12/19/06 $0 $ 124,203 $ 197,773
</TABLE>
STOCK OPTION EXERCISES AND OPTIONS OUTSTANDING
The following table provides certain information regarding outstanding
options held by the Named Executive Officers at May 31, 1997:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
------------------------------------------------
Shares Number of Securities Value of Unexercised
Acquired on Value Underlying Unexercised In-the-Money
Name Exercise (#) Realized ($) Options at May 31, 1997 (#) Options at May 31, 1997 ($)
- ---- -------------- ------------- ------------------------------ -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. Malcolm Greaves 0 $ 0 123,200 25,800 $ 296,880 $ 93,525
Lonnie D. Schnell 0 $ 0 12,000 33,000 $ 57,000 $ 87,375
Robert A. Smith 0 $ 0 20,000 40,000 $ 95,000 $ 168,750
Henry Mason 0 $ 0 11,270 16,000 $ 13,215 $ 37,570
</TABLE>
RETIREMENT PLANS
Haskel International, Inc. Profit Sharing Plan
The Haskel International, Inc. Profit Sharing Plan, as amended (the
"PSP"), covers all of Haskel International, Inc.'s employees and employees of
its U.S. subsidiaries, but not employees of HESL or its subsidiaries. The
purpose of the PSP is to enable participating employees of the Company to share
in a portion of the profits and in the growth and prosperity of the Company and
to provide them with the opportunity to accumulate capital for their future
economic security. Employees are entitled to 100% of their account balances upon
death or retirement. Generally, employees whose employment terminates for any
reason other than death or retirement are vested after five years of service.
The PSP is funded solely by the Company; individual contributions through
payroll deduction or otherwise are not permitted. The Company contribution is
determined annually by the Board of Directors of the Company. The PSP is
administered by a four-member administrative committee of employees (the
"Administrative Committee")
11
<PAGE> 15
appointed by the Board of Directors. The Board of Directors retains an
independent corporate trustee who holds all funds in trust and votes the Company
shares held by the PSP as directed by the Administrative Committee.
Effective June 1, 1997, the Company amended the PSP to adopt the Haskel
International, Inc. Retirement Savings Plan. The Company adopted the Plan to
meet the requirements of a qualified retirement plan pursuant to the provisions
of Section 401(k) of the Internal Revenue Code.
HESL Pension Plan
All of HESL's employees who work at least 16 hours per week, who are at
least 21 years of age, and have been with HESL for one year or more are covered
by the Haskel Retirement Benefits Plan, a contributory pension plan (the "HESL
Pension Plan"). Mr. Greaves and Mr. Mason are the only executive officers who
are currently participating in the HESL Pension Plan. Currently, the pension
costs are equivalent to 15% of the individual's pensionable salary (basic annual
salary or wages at the HESL Pension Plan anniversary, which is June 1 of each
year) and are borne 80% by HESL and 20% by the individual. The pension benefits
payable are on a final salary basis, i.e. pension benefits accrue at the rate of
1/60th of final pensionable salary for each complete year of service with HESL
less deductions to take into account the lower-level earnings and upper-level
earnings limits originally set down in SERPS (State Earnings Related Pension
Scheme). Pension benefits are subject to an annual cost-of-living increase of
not less than 3% nor more than 5%. Four directors of HESL have an enhancement to
their pension plan (the "Haskel Discretionary Benefits Scheme"), whereby pension
benefits accrue at the rate of 1/40th of pensionable salary but, again, subject
to the deductions described in the preceding sentence. The normal retirement age
for both men and women is 65 years. The HESL Pension Plan additionally provides
for a death-in-service lump sum payment of twice salary (in the case of the four
directors' pension enhancement scheme, four times salary) and a spouse's pension
of two-thirds the prospective pension at date of death of the employee. The
funds are held and invested by Norwich Union on behalf of the trustees of the
HESL Pension Plan, and HESL is assisted in its management of the HESL Pension
Plan by Sedgwick Noble Lowndes, who are pension advisers. The trustees
responsible for the HESL Pension Plan are HESL's secretary, a retired director
of HESL, an employee of HESL and a representative of HESL's legal counsel,
Dickinson Dees.
The following table sets forth annual pension benefits under the HESL
Pension Plan on a straight-life annuity basis for representative years of
service as defined in the HESL Pension Plan at an accrual rate of 1/60th of
final pensionable salary. Amounts shown assume retirement at age 65 on January
1, 1997. Other than the adjustment described in footnote 2 below, such benefits
are not subject to reduction for benefits and other offset amounts. As of May
31, 1997, Mr. Greaves and Mr. Mason had approximately 8 and 26 years of service,
respectively, credited under the HESL Pension Plan.
<TABLE>
<CAPTION>
HESL Pension Plan Table
-----------------------
Estimated Annual Retirement Benefit at Age 65 for Indicated Years of Credited Service(2)
----------------------------------------------------------------------------------------
Final Pensionable Salary1 5 10 15 20 25 30 35
- ------------------------- --- --------- --------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 4,167 $ 8,333 $12,500 $16,667 $20,833 $ 25,000 $ 29,167
75,000 6,250 12,500 18,750 25,000 31,250 37,500 43,750
100,000 8,333 16,667 25,000 33,333 41,667 50,000 58,333
125,000 10,417 20,833 31,250 41,667 52,083 62,500 72,917
150,000 12,500 25,000 37,500 50,000 62,500 75,000 87,500
200,000 16,667 33,333 50,000 66,667 83,333 100,000 116,667
</TABLE>
- --------------------------
1 Calculated based on highest average of three consecutive years'
pensionable salaries at June 1 during the 13-year or shorter period prior to
retirement.
2 Benefits under the HESL Pension Plan are reduced in an amount of
1/100th of the employee's earnings in excess of a lower earnings limit (as of
April 6, 1997, such limit was pound sterling3,224, subject to annual
adjustment), not to exceed an upper earnings limit (as of April 6, 1997, such
limit was pound sterling24,180, subject to annual increase) times the number of
years in service after April 6, 1978.
12
<PAGE> 16
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee reviews and makes recommendations to the
Board of Directors regarding salaries, bonuses, benefits and other compensation
for executive officers and key employees of the Company. This Compensation
Committee report discusses the components of the Company's executive officer
compensation policies and programs and describes the bases upon which
compensation is determined by the Compensation Committee with respect to the
executive officers of the Company, including the Named Executive Officers.
Compensation Philosophy. The compensation philosophy of the Company is
to link directly executive compensation to individual and team contributions,
continuous improvements in corporate performance and shareholder value. The
Compensation Committee has adopted the following objectives as guidelines for
compensation decisions:
- Display a willingness to pay levels of compensation that are
necessary to attract and retain highly qualified executives.
- Be willing to compensate executive officers in recognition
of superior individual performance, new responsibilities or new positions within
the Company.
- Take into account historical levels of executive
compensation and the overall competitiveness of the market for high quality
executive talent.
- Implement a balance between short and long-term compensation
to complement the Company's annual and long-term business objectives and
strategy and encourage executive performance in furtherance of the fulfillment
of those objectives.
- Provide variable compensation opportunities based on the
performance of the Company, encourage stock ownership by executives and align
executive remuneration with the interests of shareholders.
The Compensation Committee is aware of the $1,000,000 cap on deductions
for compensation imposed by the Internal Revenue Code. While that cap does not
have an impact on the Company at present, the Compensation Committee will take
appropriate steps to make the Company's compensation policy comply should
circumstances warrant in the future.
Compensation Program Components. The Compensation Committee regularly
reviews the Company's compensation program to ensure that pay levels and
incentive opportunities are competitive with the market and reflect the
performance of the Company. The particular elements of the compensation program
for executive officers are further explained below.
Base Salary. The Company's base pay levels for executive officers are
determined by the particular responsibilities of the position held and the
experience of the individual and by comparing the salary scale with companies of
similar size and complexity. Actual base salaries are kept within a competitive
salary range for each position that is established through job evaluation and
market comparisons.
Chief Executive Officer's Compensation. The Chief Executive Officer
("CEO") of the Company heads a group of senior management officers who
participate in a common set of compensation criteria linked to the performance
of the Company. The compensation of the CEO is determined by the Compensation
Committee and approved by the Board of Directors based upon its assessment of
the Company's financial performance and non-financial performance measured
against a background of factors which are critical to the success of the
business. The Compensation Committee exercises its judgment in weighting the
factors and evaluating performance. The CEO, who currently sits on the
Compensation Committee, does not participate in deliberations regarding his own
compensation.
Annual Bonus. The executive bonus program provides for the granting of
cash bonuses to the senior managers (including the Named Executive Officers) of
the Company. The objective of the bonus is to
13
<PAGE> 17
enhance management's contribution to shareholder value by providing competitive
levels of compensation for the attainment of financial objectives. In
particular, the executive bonus program focuses corporate behavior on consistent
and steady earnings growth by basing performance on a comparison of actual
results to the Company's annual budget. Actual bonuses are subject to decrease
or increase on the basis of the Company's performance and range up to 55% of
base salary for attaining goals. Based on the Company's performance during
fiscal year 1997, bonuses were paid to the Named Executive Officers and the
majority of the senior management.
Summary. After its review of all existing programs, the Compensation
Committee continues to believe that the total compensation program for
executives of the Company is focused on increasing values for shareholders and
enhancing corporate performance. The Compensation Committee believes that
executive compensation levels of the Company are competitive with the
compensation programs provided by other corporations with which the Company
competes. The foregoing report has been approved by all members of the
Compensation Committee.
COMPENSATION COMMITTEE
Stanley T. Myers, Chairman
R. Malcolm Greaves
Dr. Marvin Goldberger
Terrence A. Noonan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During fiscal 1997, Stanley T. Myers, R. Malcolm Greaves, Dr. Marvin
Goldberger and Terrence A. Noonan served as members of the Compensation
Committee of the Board of Directors, which determines salaries of the Company's
employees. Mr. Greaves, President and Chief Executive Officer of the Company,
did not participate in deliberations regarding his own compensation.
14
<PAGE> 18
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total
shareholders' return since the Class A Common Stock became publicly traded on
November 1, 1994, with the Nasdaq Stock Market (National Market) Index, the
Standard & Poor's 500 Index and with a peer group comprised of companies which
manufacture high-pressure equipment and with which the Company generally
competes. The peer group is comprised of the following companies: Flowserve
Corp., Flow International Corp., IDEX Corp., Oilgear Co. and Watts Industries
Inc. The graph and table assume that $100 was invested on November 1, 1994 in
the Company's Class A Common Stock, at the initial public offering price of
$10.00 per share, and in each of the indexes mentioned above, and that all
dividends were reinvested.
TOTAL SHAREHOLDER RETURN
[GRAPH]
<TABLE>
<CAPTION>
(IN DOLLARS)
11/1/94 Nov 94 Feb 95 May 95 Aug 95 Nov 95 Feb 96 May 96 Aug 96 Nov 96 Feb 97 May 97
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HASKEL INTL INC-CLA 100 100.00 95.69 68.49 58.93 56.38 66.87 74.25 92.34 82.33 96.70 111.16
S&P 500 INDEX 100 96.86 104.78 115.48 122.39 132.68 141.13 148.32 145.31 169.64 178.06 191.95
NASDAQ COMPOSITE 100 96.68 102.65 111.84 132.41 137.84 143.02 162.54 149.31 168.79 170.64 183.15
PEER GROUP 100 89.86 101.45 107.13 128.38 122.98 113.61 117.02 114.54 122.26 122.09 134.99
</TABLE>
15
<PAGE> 19
PROPOSAL NO. 2
MERGER OF 1995 INCENTIVE STOCK OPTION PLAN
AND 1989 INCENTIVE STOCK OPTION PLAN
Acting upon the recommendation of the Compensation Committee, on August
25, 1997, the Company's Board of Directors unanimously approved a proposal to
merge the Company's 1995 Incentive Stock Option Plan (the "1995 ISO Plan') and
the 1989 Incentive Stock Option Plan (the "1989 ISO Plan") by amending and
restating the 1995 ISO Plan and the 1989 ISO Plan into a single plan to be named
the Combined Incentive Stock Option Plan (the "Combined Plan") and directed that
the proposal be submitted for shareholder consideration and action at the annual
meeting. The resolutions proposed to be adopted at the annual meeting are
attached to this Proxy Statement as Appendix A. If approved by the Company's
shareholders at the annual meeting, the Combined Plan will replace the 1995 ISO
Plan and the 1989 ISO Plan, all future incentive stock option grants will be
made under the Combined Plan, and all outstanding grants made under the 1995 ISO
Plan and the 1989 ISO Plan will be governed by the Combined Plan. For a
description of the 1995 ISO Plan and the 1989 ISO Plan, see "Executive
Compensation - Stock Option Plans".
The Board of Directors have determined that the Combined Plan is in the
best interest of the Company and its shareholders. The Board of Directors
believes that the grant of stock options is an effective method to attract and
retain key employees and that the availability of shares for future grants under
the Combined Plan is important to the Company's business prospects and
operations. In the judgment of the Board of Directors, the merger of the 1995
ISO Plan and the 1989 ISO Plan will simplify the administration of the Company's
stock option plans and facilitate communication to the shareholders of the
Company's incentive stock option policies. In the 1997 fiscal year, the Company
granted options under the 1995 ISO Plan for the purchase of 127,000 shares over
the aggregate share limitations under the 1995 ISO Plan. Approval by the
shareholders of the merger of the 1995 ISO Plan and the 1989 ISO Plan into the
Combined Plan will consolidate the 690,000 shares of Class A Common Stock
authorized for issuance, in the aggregate, under the 1995 ISO Plan and the 1989
ISO Plan, and ratify the grant of options made in the 1997 fiscal year over the
limits permitted under the 1995 ISO Plan. The Combined Plan will also allow the
Company to conform its incentive stock option plans to recent changes in Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
The following discussion summarizes the principal features of the
Combined Plan. This discussion does not purport to be complete and is qualified
in its entirety by reference to the Combined Plan, a copy of which is attached
to this Proxy Statement as Appendix B.
The Combined Plan provides for the reservation of 690,000 shares of
Class A Common Stock of the Company for issuance upon the grant of options,
including shares of Class A Common Stock subject to outstanding grants made
previously under the 1995 ISO Plan and the 1989 ISO Plan.
The Combined Plan provides that an appropriate adjustment of shares
available under the Combined Plan may be made in the event of any change in the
number of outstanding shares of Common Stock of the Company resulting from
reorganizations, recapitalization, reclassification, stock dividends, stock
splits or other similar events. All employees (including employee-directors) of
the Company and its subsidiaries are eligible to be granted options under the
Combined Plan.
The Combined Plan will be administered by a Stock Option Committee
appointed by the Board of Directors. The Stock Option Committee has the
authority to (i) construe and interpret the Combined Plan, (ii) define the terms
used therein, (iii) prescribe, amend and rescind rules and regulations relating
to the Combined Plan, (iv) determine the individuals to whom and the time or
times at which options shall be granted, the number of shares to be subject to
each option, the terms of vesting of each option, and the duration of each
option, (v) amend the terms of any outstanding option, with the consent of the
option holder, and (vi) make all other determinations necessary or advisable for
the administration of the Combined Plan.
16
<PAGE> 20
The Combined Plan will become effective on October 17, 1997, the date of
approval by the shareholders of the Company (the "Effective Date"). The Combined
Plan will terminate on the tenth anniversary of the adoption of the 1989 ISO
Plan.
The exercise price of each option granted under the Combined Plan must
be at least 100 percent of the fair market value per share of the Class A Common
Stock on the date the option is granted, except that options granted to a
shareholder who owns stock possessing more than 10 percent of the combined
voting power of all classes of stock (a "Ten Percent Holder") shall be at an
exercise price no less than 110 percent of fair market value an the date of
grant. All options granted pursuant to the Combined Plan will expire no later
than ten years from their grant date, provided that any option granted to a Ten
Percent Holder shall be exercised within five years from the date of its grant
The Combined Plan provides that an optionee whose employment
relationship has terminated may exercise his or her outstanding options for a
period of three months from the date of such termination, or within one year if
permanently disabled. If an option holder dies, his or her personal
representative may exercise such outstanding options within three months after
the date of death unless the option by its terms expires sooner. No option is
transferable by the optionee other than by will or the laws of descent and
distribution.
The consideration to be received by the Company upon exercise of options
is to be paid (i) in cash, (ii) in the discretion of the Stock Option Committee,
in previously owned shares of Class A Common Stock (which the optionee, if a
director or executive officer, has held at least six months prior to delivery of
such shares and for which the optionee has good title free and clear of all
liens and encumbrances) having an equivalent fair market value determined as of
the date of exercise or (iii) in the discretion of the Stock Option Committee, a
combination of (i) and (ii), and by executing such documents as the Company may
reasonably request. No shares of Class A Common Stock shall be delivered until
the full purchase price therefor has been paid.
The Stock Option Committee may at any time suspend or terminate the
Combined Plan. The Stock Option Committee may also at any time amend or revise
the Combined Plan as it shall deem advisable, subject to any requirement of
shareholder approval required by applicable law, including Section 422 of the
Internal Revenue Code (the "Code"); provided, however, that no amendment shall
be made without shareholder approval if such amendment would (i) increase the
maximum number of shares of Class A Common Stock available under the Combined
Plan, (ii) reduce the minimum purchase price per share of Class A Common Stock
subject to an option, (iii) effect any change inconsistent with Section 422 of
the Code or (iv) extend the term of the Combined Plan or the maximum period
during which an option may be exercised; provided, further, that the Combined
Plan shall not be amended in a manner which fails to comply with Rule 16b-3
under the Exchange Act. No amendment may impair the rights of a holder of an
outstanding option without the consent of such holder.
The federal income tax consequences associated with incentive stock
options are generally more favorable to the optionee and less favorable to the
employer than those associated with stock options which are not incentive stock
options. Under current federal income tax law, the grant of an incentive stock
option does not result in income to the optionee or in a deduction for the
Company at the time of the grant. The exercise of an incentive stock option will
not result in income for the optionee if the optionee (i) does not dispose of
the shares within two years after the date of grant or within one year after
exercise and (ii) is an employee of the Company or any of its subsidiaries from
the date of grant until three months before the exercise date (one year if
disabled). If these requirements are met, the basis of the shares upon later
disposition would be the option price. Any gain will be taxed to the optionee as
long-term capital gain and the Company will not be entitled to a deduction. If
the optionee disposes of the shares prior to the expiration of either of the
holding periods described above, the optionee would have compensation taxable as
ordinary income, and the Company would be entitled to a deduction equal to the
lesser of the fair market value of the shares on the exercise date minus the
option price or the amount realized on disposition minus the option price. If
the price realized in any such premature sale of the shares exceeds the fair
market value of the shares on the exercise date, the excess will be treated as
long-term or short-term capital gain depending on the optionee's holding period
for the shares.
17
<PAGE> 21
Shareholders will be asked at the annual meeting to vote upon the
proposal to merge the 1995 ISO Plan and the 1989 ISO Plan into the Combined Plan
and to ratify the previous grant of options under the 1995 ISO Plan as though
made under the Combined Plan as described above.
Unless otherwise directed, the persons named in the enclosed Proxy
intend to vote in favor of the merger of the 1995 ISO Plan and the 1989 ISO Plan
into the Combined Plan and to ratify the grant of options heretofore.
An affirmative vote by the holders of a majority of the outstanding
shares of Class A Common Stock and Class B Common Stock, voting together,
present in person or represented by proxy at the meeting is required for
approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors recommends that shareholders vote to ratify the
appointment of Deloitte & Touche LLP as the Company's independent auditors for
the 1998 fiscal year. Deloitte & Touche LLP served as the Company's independent
auditors for the fiscal year ended May 31, 1997. Representatives of Deloitte &
Touche LLP are expected to be present at the meeting and will have an
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
An affirmative vote by the holders of a majority of the outstanding
shares of Class A Common Stock and Class B Common Stock, voting together,
present in person or represented by proxy at the meeting is required for
approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OTHER BUSINESS
The Company does not know of any other business to be presented to the
Annual Meeting and does not intend to bring any other matters before such
meeting. If any other matters properly do come before the Annual Meeting,
however, the persons named in the accompanying proxy are empowered, in the
absence of contrary instructions, to vote according to their best judgment.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
If a shareholder wishes to present a proposal at the next Annual
Meeting of Shareholders, such a proposal must be received by the Company at its
principal executive offices prior to May 31, 1998.
18
<PAGE> 22
AVAILABILITY OF REPORT ON FORM 10-K
A copy of the Company's Annual Report on Form 10-K for fiscal year 1997
as filed with the Securities and Exchange Commission is available upon written
request and without charge to any shareholder by writing to: Haskel
International, Inc., 100 East Graham Place, Burbank, CA 91502, Attn: Lonnie D.
Schnell, Secretary.
By Order of the Board of Directors,
Lonnie D. Schnell
Secretary
Burbank, California
September 12, 1997
PLEASE PROMPTLY DATE, SIGN AND RETURN THE ENCLOSED PROXY, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING. A RETURN ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED
STATES. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. AT
ANY TIME BEFORE A VOTE YOU MAY REVOKE YOUR PROXY BY (1) A LATER PROXY OR A
WRITTEN NOTICE OF REVOCATION DELIVERED TO THE INSPECTOR OF ELECTIONS OR (2)
ADVISING THE INSPECTOR OF ELECTIONS AT THE MEETING THAT YOU ELECT TO VOTE IN
PERSON. ATTENDANCE AT THE MEETING WILL NOT IN AND OF ITSELF REVOKE A PROXY.
19
<PAGE> 23
APPENDIX A
RESOLUTION REGARDING THE ADOPTION OF THE MERGER OF
1995 INCENTIVE STOCK OPTION PLAN AND 1989 INCENTIVE STOCK OPTION PLAN
RESOLVED that the 1995 Incentive Stock Option Plan of the Company and the 1989
Incentive Stock Option Plan of the Company are hereby amended and restated so as
to be merged into one plan, to be named the Combined Incentive Stock Option
Plan, with the terms and conditions as set forth in Appendix B to the Proxy
Statement delivered to the shareholders of the Company in connection with this
meeting.
RESOLVED that the granting heretofore during the fiscal year of the Company
ended May 31, 1997, of options for the purchase of 127,000 shares of the Class A
Common Stock of the Company pursuant to the 1995 Incentive Stock Option Plan of
the Company is hereby ratified, approved and confirmed.
20
<PAGE> 24
APPENDIX B
HASKEL INTERNATIONAL, INC.
COMBINED INCENTIVE STOCK OPTION PLAN
1. Purpose. This Combined Incentive Stock Option Plan is an amendment
to and a complete restatement of the 1989 Incentive Stock Option Plan ("1989 ISO
Plan") and the 1995 Incentive Stock Option Plan ("1995 ISO Plan"), both of which
were previously adopted by Haskel International, Inc. (the "Company"), were
approved by its shareholders and are now in place as a means by which to provide
selected employees of the Company and its subsidiaries with the opportunity to
purchase shares of the Class A Common Stock of the Company. As used herein, the
term "subsidiary" shall include all present and future subsidiaries of the
Company, as defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended from time-to-time (the "Code"). As amended and restated as provided
herein, both the 1989 ISO Plan and the 1995 ISO Plan shall hereinafter be
governed by this instrument and shall, except as otherwise provided herein, be
referred to as the Combined Incentive Stock Option Plan ("the Plan").
2. Types of Options. Options granted pursuant to this Plan ("Options")
shall be incentive stock options which meet the requirements of Section 422 of
the Code ("Incentive Stock Options").
3. Administration of the Plan. The Plan shall be administered by the
Stock Option Committee (the "Committee"), consisting of not less than two
members of the Board of Directors of the Company (the "Board"). Subject to the
terms of the Plan, the Committee shall have authority, in its sole discretion,
to determine all matters relating to the Options to be granted under this Plan,
including, but not limited to, the selection of the persons to whom Options
shall be granted, the number of shares covered by each Option, times at which
Options shall be granted, and the terms and provisions of the instruments by
which Options shall be evidenced and shall, in its sole discretion, have the
additional authority to modify outstanding Options by issuing new Options to
replace all or some of the existing Options, subject to new
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<PAGE> 25
and different terms. The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final. The
Committee may from time-to-time adopt such rules and regulations for carrying
out the Plan as it may deem best. No member of the Board or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Option granted under it.
The Committee may select one of its members as its Chairman, and shall
hold meetings at such times and places as it may determine. Acts by a majority
of the Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee without a meeting, shall be the valid acts of the
Committee.
4. Eligible Employees. Options may be granted to any employee of the
Company or any subsidiary, as determined by the Committee in its sole
discretion. The grant of any Option to any person shall neither entitle such
person to, nor disqualify such person from, participation in any other grant of
options.
5. Stock. The stock subject to the Options shall be authorized but
unissued shares of Class A Common Stock of the Company (the "Class A Stock"), or
shares of Class A Stock reacquired by the Company, including shares purchased in
the open market. The aggregate number of shares of Class A Stock which may be
issued pursuant to the Plan, which for purposes of this Section 5 shall include
shares subject to previous grants under both the 1989 ISO Plan and the 1995 ISO
Plan, shall be six hundred ninety thousand (690,000), subject to adjustment as
provided in Section 13 herein. In the event any Option granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available for grants of
Options under the Plan.
6. Granting of Options. Options may be granted under the Plan at any
time within ten years from the date the 1989 ISO Plan was originally adopted,
which date was July 28, 1989. The date of grant of an Option under the Plan
shall be the date specified by the Committee.
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<PAGE> 26
7. Forms of Option Agreements. Options granted under this Plan shall be
evidenced by written option agreements in such form not inconsistent with this
Plan as may be approved by the Committee from time-to-time, which agreement
shall contain such terms, conditions, limitations and restrictions as the
Committee shall deem advisable and which are not inconsistent with this Plan.
Such option agreements may differ among recipients even when made
simultaneously. The grant of an option pursuant to this Plan shall be
conditional on the execution of the applicable stock option agreement by the
recipient of such grant.
8. Purchase Price.
(a) General. The purchase price per share of Class A Stock
deliverable upon the exercise of an option shall be determined by the Committee
and set forth in the applicable option agreement, provided, however, that the
purchase price per share of Class A Stock shall be not less than 100% of the
fair market value of a share of Class A Stock, as determined by the Committee,
at the time of grant of such option (without regard to any restriction other
than a restriction which, by its terms, will never lapse), provided, however,
that in the case of options described in Section 12(b) herein, the purchase
price per share shall not be less than 110% of such fair market value, as so
determined.
(b) Payment of Purchase Price. Options granted under this Plan may
provide for the payment of the exercise price by delivery of cash or a certified
check to the order of the Company in an amount equal to the aggregate exercise
price of such options, or, to the extent provided in the applicable option
agreement, (i) by delivery to the Company of shares of Class A Stock already
owned by the optionee having a fair market value equal in amount to the
aggregate exercise price of the options being exercised, (ii) by any other means
(including, but not limited to, by delivery of a promissory note of the optionee
payable on such terms as are specified by the Committee) which the Committee
determines are consistent with the purpose of this Plan and with applicable laws
and regulations (including, but not limited to, the provisions of Rule 16b-3),
or (iii) by any combination of such methods of payment, provided, however, that
all shares issued upon any such exercise must constitute fully paid and
nonassessable shares under the General Corporation Law of the State of
California immediately upon issuance in exchange for such exercise price. The
fair market value of any shares of Class A Stock or other non-cash consideration
which may be delivered
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<PAGE> 27
upon exercise of an option shall be determined by the Committee.
9. Option Period. Each Option and all rights with respect thereto shall
expire on such date as shall be set forth in the applicable option agreement,
except that (a) such date shall not be later than ten years after the date on
which such Option is granted, (b) in the case of an Option described in Section
12(b) herein, such date shall not be later than five years after the date on
which such Option is granted, and (c) in all cases, Options shall be subject to
earlier termination as provided in this Plan or in the applicable option
agreement.
10. Exercise of Options. Each Option granted under this Plan shall
become exercisable either in full or in installments at such time or times and
during such period as shall be set forth in the optionee's applicable option
agreement, subject to the provisions of this Plan. The Committee shall have the
right, in its sole discretion, to accelerate the date or dates on which any
installment may be exercised. Anything in this Section 10 to the contrary
notwithstanding, no Option shall be exercisable by any optionee who is then
subject to Section 16 of the Exchange Act within the period ending six months
after the date the Option is granted; provided this six-month waiting period
shall not apply to the exercise of any Option by an optionee if the grant of
such Option to the optionee was approved in advance by the Board or, if the
Committee is then composed solely of two or more non-employee directors as that
term is defined by Rule 16b-3 under the Securities Exchange Act, as amended, by
the Committee, or was approved in advance or subsequently ratified not later
than the date of the next annual meeting of the Company's shareholders, by the
shareholders.
11. Nontransferability of Options. Options granted under this Plan, and
the rights and privileges conferred thereby, may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than (a) by will, or (b) by the applicable laws of descent and
distribution, and shall not be subject to execution, attachment, or similar
process. Any attempt to transfer, assign, pledge, hypothecate, or otherwise
dispose of any such Option or of any right or privilege conferred thereby,
contrary to this Plan, or the sale or levy or similar process upon the rights
and privileges conferred thereby, shall be null and void.
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<PAGE> 28
12. Incentive Stock Option Terms. Options granted under this Plan shall
be subject to the following terms and conditions:
(a) Express Designation. All Options granted under this Plan shall
be designated as Incentive Stock Options in the option agreement covering such
options.
(b) 10% Shareholder. If any employee to whom an Option is to be
granted under this Plan is, at the time of the grant of such Option, the owner
of stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (after taking into account the attribution of
stock ownership rules of Section 424(d) of the Code), then the purchase price
per share of the Class A Stock subject to such Option shall not be less than
110% of the fair market value of a share of Class A Stock at the time of grant.
(c) Dollar Limitation. For so long as the Code shall so provide,
Options granted to any employee under this Plan (and any other incentive stock
option plans of the Company) which are otherwise designated as Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any calendar
year for shares of Class A Stock with an aggregate fair market value (determined
as of the respective date or dates of grant) in excess of $100,000.00.
(d) Termination of Employment, Death or Disability. No Option may be
exercised unless, at the time of such exercise, the optionee is, and has been
continuously since the date of his or her Option, in the employment of the
Company, except that:
(1) Any Option may be exercised within the period of three
months after the date the optionee ceases to be an employee of the Company (or
within such lesser period as may be specified in the applicable option
agreement), provided, however, that the agreement with respect to such Option
may designate a longer exercise period and if such Option is exercised after
such three-month period the exercise of such Option shall be treated as the
exercise of a non-statutory option under this Plan;
(2) If the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code, or any successor provision thereto) while in the
employ of the Company, the Option may be exercised within the period of one year
after the date the optionee ceases to be such an employee because of such
disability (or within such lesser period as may be specified in the applicable
option agreement).
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<PAGE> 29
For purposes of this Plan, and any Option granted hereunder, "employment" shall
be defined in accordance with the provisions of Section 1.421-7(h) of the Income
Tax Regulations (or any successor regulations). Notwithstanding the foregoing
provisions, no Incentive Stock Option may be exercised after its expiration
date.
13. Additional Option Provisions. The Committee may, in its sole
discretion, include additional provisions in option agreements covering Options
granted under this Plan, provided, however, that such additional provisions
shall not be inconsistent with any other term or condition of this Plan and such
additional provisions shall not cause any Option granted under this Plan to fail
to qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.
14. General Restrictions.
(a) Investment Representations. The Committee may, in its sole
discretion, require any person to whom an Option is granted, as a condition of
exercising such Option, to give written assurances, in substance and form
satisfactory to the Committee, to the effect that such person is acquiring the
Class A Stock subject to the Option for his or her own account for investment,
and not with any present intention of selling or otherwise distributing the
same, and to such other effects as the Committee deems necessary or appropriate
in order to comply with federal and applicable state securities laws, or with
covenants or representations made by the Company in connection with any public
offering of its Class A Stock.
(b) Compliance with Securities Laws. Each Option shall be subject to
the requirement that if, at any time, counsel to the Company shall determine
that (i) the listing, registration or qualification of the Option and shares
subject to such Option upon any securities exchange or under any state or
federal law, (ii) the consent or approval of any governmental or regulatory
body, or (iii) the disclosure of non-public information or the satisfaction of
any other condition is necessary as a condition of, or in connection with, the
issuance or purchase of shares thereunder, such Option may not be exercised, in
whole or in part, unless such listing, registration, qualification, consent or
approval, or satisfaction of such condition, shall have been effected or
obtained on conditions acceptable to the Committee. Nothing contained herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or
26
<PAGE> 30
qualification, or to satisfy such condition.
15. Rights as a Shareholder. The holder of an Option shall have no
rights as a shareholder with respect to any shares covered by the Option
(including, but not limited to, any rights to receive dividends or non-cash
distributions with respect to such shares) until the date of issue of a stock
certificate to him or her for such shares. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
16. Adjustment Provisions for Recapitalizations and Related
Transactions.
(a) General. If, as a result of any merger, consolidation, sale of
all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar transaction, (i) the outstanding shares of Class A Stock
are increased, decreased, or exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Class A Stock or other securities, an
appropriate and proportionate adjustment may be made in (A) the maximum number
and kind of shares reserved for issuance under this Plan, (B) the number and
kind of shares or other securities subject to any then outstanding Options under
this Plan, and (C) the price for each share subject to any then outstanding
Options under this Plan, without changing the aggregate purchase price as to
which such Options remain exercisable. Notwithstanding the foregoing, no
adjustment shall be made pursuant to this Section 16 if such adjustment would
cause this Plan to fail to comply with Section 422 of the Code or with Rule
16b-3.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 16 will be made by the Committee, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under this Plan on account
of any such adjustments.
17. Merger, Consolidation, Asset Sale, Liquidation, Etc.
(a) General. In the event of a consolidation, merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Class A Stock are exchanged for securities,
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<PAGE> 31
cash, or other property of any other corporation or business entity, or in the
event of a liquidation of the Company, the Committee, or the Board of Directors
of any corporation assuming the obligations of the Company, may, in its sole
discretion, take any one or more of the following actions, as to outstanding
Options: (i) provide that such Options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), provided, that any such options substituted for Incentive
Stock Options shall meet the requirements of Section 424(a) of the Code, (ii)
upon written notice to the optionees, provide that all unexercised Options will
terminate immediately prior to the consummation of such transaction unless
exercised by the optionee within a specified period following the date of such
notice, (iii) in the event of a merger or consolidation under the terms of which
holders of the Class A Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the merger or consolidation
(the "Merger Price"), make or provide for a cash payment to the optionees equal
to the difference between (A) the Merger Price times the number of shares of
Class A Stock subject to such outstanding options (to the extent then
exercisable at prices not in excess of the Merger Price), and (B) the aggregate
exercise price of all such outstanding options in exchange for the termination
of such options, or (iv) provide that all or any outstanding options shall
become exercisable in full immediately prior to such event.
(b) Substitute Options. The Company may grant Options under this
Plan in substitution for options held by employees of another corporation who
become employees of the Company, or a subsidiary of the Company, as the result
of a merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute Options be granted on such terms and
conditions as the Committee considers appropriate in the circumstances
consistent with the provisions of this Plan.
18. No Special Employment Rights. Nothing contained in this Plan or in
any option shall confer upon any optionee any right with respect to the
continuation of his or her employment by the Company, or interfere in any way
with the right of the Company at any time to terminate such employment or
relationship, or to increase or decrease the compensation of the optionee.
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<PAGE> 32
19. Other Employee Benefits. Except as to plans which by their express
terms include such amounts as compensation, the amount of any compensation
deemed to be received by an employee as a result of the exercise of an Option or
the sale of shares received upon such exercise will not constitute compensation
with respect to which any other employee benefits of such employee are
determined, including, but not limited to, benefits under any bonus, pension,
profit-sharing, life insurance, or salary continuation plan, except as otherwise
specifically determined by the Committee.
20. Amendment of this Plan.
(a) The Committee may at any time, and from time-to-time, modify or
amend this Plan in any respect, except that, if at any time the approval of the
shareholders of the Company is required under Section 422 of the Code, or any
successor provision, such modification or amendment shall not become effective
until such approval is obtained.
(b) The termination or any modification or amendment of this Plan
shall not, without the consent of an optionee, affect his or her rights under an
Option previously granted to him or her. With the consent of the optionee,
however, the Committee may amend outstanding option agreements between the
Company and such optionee in a manner not inconsistent with this Plan. In
addition, the Committee shall in any event have the right to amend or modify (i)
the terms and provisions of this Plan and of any outstanding options granted
under this Plan to the extent necessary to qualify any or all such Options for
such favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded Incentive Stock Options under Section 422 of the
Code, and (ii) the terms and provisions of this Plan and of any outstanding
option to the extent necessary to ensure the qualification of this Plan under
Rule 16b-3.
21. Withholding.
(a) The Company shall have the right, in its discretion, to deduct
from payments of any kind otherwise due to the optionee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
shares issued upon exercise of Options under this Plan. Subject to the prior
approval of the Committee, which may be withheld by the Committee in its sole
discretion, the optionee may
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<PAGE> 33
elect to satisfy such obligations, in whole or in part, (i) by causing the
Company to withhold shares of Class A Stock otherwise issuable pursuant to the
exercise of an option or (ii) by delivering to the Company shares of Class A
Stock already owned by the optionee. The shares so delivered or withheld shall
have a fair market value equal to such withholding obligation. The fair market
value of the shares used to satisfy such withholding obligation shall be
determined by the Committee as of the date that the amount of tax to be withheld
is to be determined. An optionee who has made an election described above under
his or her option agreement with the Company, consistent with the terms of this
Section 21(a), may only satisfy his or her withholding obligation with shares of
Class A Stock which are not subject to any repurchase, forfeiture, unfulfilled
vesting, or other similar requirements.
(b) Notwithstanding the foregoing, in the case of a Director or
officer of the Company, no election to use shares for the payment of withholding
taxes shall be effective unless made in compliance with any applicable
requirements for the exemption of a discretionary transaction as defined in and
pursuant to Rule 16b-3.
22. Effective Date. This Plan, constituting an amendment and
restatement of the 1989 ISO Plan and the 1995 ISO Plan, shall become effective
upon adoption by the Company's Board of Directors and approval by the
shareholders of the Company.
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<PAGE> 34
PROXY
CLASS A COMMON STOCK
HASKEL INTERNATIONAL, INC.
100 EAST GRAHAM PLACE
BURBANK, CALIFORNIA 91502
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Edward Malkowicz, H. Malcolm Greaves
and Stanley T. Myers, or any of them, with full power of substitution, as
proxies, to appear and vote, as designated on the reverse side of this proxy
card, all shares of Class A Common Stock of Haskel International, Inc. which
the undersigned would be entitled to vote if then personally present, at the
1997 Annual Meeting of Shareholders to be held on Monday, October 17, 1997, at
10:30 a.m. (local time), upon such business as may properly come before the
meeting and any adjournments thereof.
This proxy may be revoked prior to the exercise of the powers conferred
by the proxy.
(CONTINUED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 35
/X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE CLASS NOMINEES NAMED
BELOW AND FOR PROPOSALS 2 AND 3.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
WITHHOLD AUTHORITY
FOR TO VOTE FOR ALL NOMINEES FOR AGAINST ABSTAIN
1. ELECTION OF / / / / NOMINEES: R. Malcolm Greaves 2. Merger of the Company's 1995 / / / / / /
DIRECTORS Edward Malkowicz Incentive Stock Option Plan
Stanley T. Myers and 1989 Incentive Stock
Option Plan.
(INSTRUCTIONS: To withhold authority to vote FOR any individual nominee, strike a line through the nominee's name in the list
above)
3. Ratification of Appointment / / / / / /
of Deloitte & Touche LLP as
Independent Auditors.
This proxy, when properly executed, will be voted in
the manner specified by the undersigned. Except as
otherwise specified, this proxy will be voted FOR
the election as directors of all Class A nominees
named above, FOR the merger of the Company's 1995
Incentive Stock Option Plan and the 1989 Incentive
Stock Option Plan and FOR the ratification of the
appointment of Deloitte & Touche LLP as the Company's
independent auditors.
PLEASE SIGN AND DATE THIS PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
</TABLE>
Signature(s) Dated: 1997
-------------------------------- -------------
Please sign name exactly as it appears hereon. If shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such.
