<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by 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
/X/ Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
Mity-Lite, Inc.
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee required
<PAGE> 2
/ / 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> 3
[LOGO]
MITY-LITE, INC.
1301 West 400 North
Orem, Utah 84057
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 20, 1998
NOTICE IS HEREBY GIVEN that an Annual Meeting of Shareholders of Mity-Lite,
Inc., a Utah corporation (the "Company"), will be held at the University
of Utah, Olpin Union Building, 200 South Central Campus Drive, Salt Lake City,
Utah 84112, on Thursday, August 20, 1998, at 2:00 p.m., local time, for the
following purposes:
1. To elect four (4) directors for the ensuing year or until
their successors are elected;
2. To approve an amendment to the Company's 1997 Stock Incentive
Plan increasing the number of shares reserved for issuance upon exercise
of stock options granted thereunder to 500,000; and
3. To transact such other business as may properly come before
the meeting or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on June 19, 1998,
as the record date for determining shareholders entitled to notice of, and to
vote at, the annual meeting and any postponement or adjournments thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
AS PROMPTLY AS POSSIBLE. ANY SHAREHOLDER ATTENDING THE MEETING MAY VOTE IN
PERSON EVEN IF SUCH SHAREHOLDER HAS PREVIOUSLY RETURNED A PROXY.
By Order of the Board of Directors
Bradley T Nielson
Corporate Secretary
Orem, Utah, July 13, 1998
<PAGE> 4
MITY-LITE, INC.
1301 West 400 North
Orem, Utah 84057
--------------------
PROXY STATEMENT
Information Concerning Solicitation and Voting
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Mity-Lite, Inc. (the "Company") for use at its Annual Meeting of Shareholders
to be held Thursday, August 20, 1998, at 2:00 p.m. local time, or at any
adjournment(s) thereof. The purposes of the meeting are set forth herein and
in the accompanying Notice of Annual Meeting of Shareholders. The Annual
Meeting will be held at the University of Utah, Olpin Union Building, 200
South Central Campus Drive, Salt Lake City, Utah 84112. The Company will bear
the cost of this solicitation.
RECORD DATE
Shareholders of record at the close of business on June 19, 1998, are
entitled to notice of and to vote at the meeting. At the record date,
3,259,934 shares of the Company's Common Stock, $.01 par value, were issued
and outstanding and entitled to be voted at the meeting.
REVOCATION OF PROXIES
Shareholders may revoke any appointment of proxy given pursuant to this
solicitation by delivering to the Company a written notice of revocation or a
duly executed proxy bearing a later date or by attending the meeting and
voting in person. An appointment of proxy is revoked upon the death or
incapacity of the shareholder if the Secretary or other officer of the Company
authorized to tabulate votes receives notice of such death or incapacity
before the proxy exercises its authority under the appointment.
VOTING AND SOLICITATION
Each shareholder will be entitled to one vote for each share of Common
Stock held at the record date. Assuming a quorum is present, a plurality of
votes cast by the shares entitled to vote in the election of directors will be
required to elect each director. It is estimated that the proxy materials
will be mailed to shareholders of record on or about July 13, 1998. The
principal executive offices of the Company are located at 1301 West 400 North,
Orem, Utah 84057. The Company will bear the cost of solicitation of proxies.
In addition to the use of the mail, proxies may be solicited personally, by
telephone, or by facsimile, and the Company may reimburse brokerage firms and
other persons holding shares of the Company's Common Stock in their names or
those of their nominees for their reasonable expenses in forwarding soliciting
materials to the beneficial owners. Abstentions or broker non-votes (ie.,
shares held by a broker nominee which are represented at the meeting, but with
respect to which such broker or nominee is not empowered to vote on a
<PAGE> 5
particular proposal) will be counted as shares that are present and entitled
to vote for purposes of determining the presence of a quorum.
Deadline for Receipt of Shareholder Proposals
Shareholders of the Company who intend to present proposals at the
Company's 1999 annual meeting of shareholders must deliver such proposals to
the Company no later than March 15, 1999, in order to be included in the proxy
statement and form of proxy relating to the 1999 annual meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES
The Company's Board of Directors currently consists of four directors.
It is contemplated that four directors will be elected at the annual meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received
by them for management's four nominees, namely Gregory L. Wilson, Ralph E.
Crump, C. Lewis Wilson and Peter Najar, all of whom are presently directors of
the Company. In the event that any director nominee is unable or declines to
serve as a director at the time of the annual meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner as will ensure the election of as
many of the referenced nominees as possible. It is not expected that any
nominee will be unable or will decline to serve as a director. The term of
office of each person elected as a director will continue until the next
annual meeting of shareholders, or until such person's successor has been
elected and qualified. Officers are appointed by the Board of Directors and
serve at the discretion of the Board.
RECOMMENDATION OF BOARD OF DIRECTORS:
The Board of Directors recommends that the shareholders vote "FOR" each
of the four nominees to the Company's Board of Directors. Assuming a quorum
is present, a plurality of votes cast by the shares entitled to vote in the
election of directors will be required to elect each director.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings
during the fiscal year ended March 31, 1998. The Audit Committee of the Board
of Directors, consisting of directors Crump, Najar and C. Wilson, met three
times during the last fiscal year. The Audit Committee is primarily
responsible for reviewing the services performed by the Company's independent
public accountants and internal accounting department and evaluating the
Company's accounting principles and its system of internal accounting
controls. The Compensation Committee of the Board of Directors, consisting of
directors Crump, Najar and C. Wilson, met three times during the last fiscal
year. The Compensation Committee is primarily responsible for reviewing
<PAGE> 6
compensation of executive officers and overseeing the granting of stock
options. All members of the Board of Directors attended at least 75 percent
of all meetings of the Board and all Board Committee members attended at least
75 percent of all Committee meetings held during the fiscal year ended March
31, 1998.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
director nominees and executive officers of the Company.
DIRECTOR OR OFFICER
NAME AGE POSITION WITH THE COMPANY
- ------------------ ----- -----------------------------------
Gregory L. Wilson 50 Chairman of the Board, President,
and Chief Executive Officer
Kenneth A. Law 49 Vice President - Manufacturing
Bradley T Nielson 36 Vice President - Finance, Chief
Financial Officer and Corporate
Secretary
V. Douglas Johnson 60 Treasurer
Ralph E. Crump(1) 74 Director
Peter Najar(1) 48 Director
C. Lewis Wilson(1) 58 Director
- --------------------------------------------------------------
(1) Member of Compensation and Audit Committees.
Officers are appointed by and serve at the discretion of the Board of
Directors. Each director holds office until the next annual meeting of
shareholders or until his successor has been duly elected and qualified.
Gregory L. Wilson and C. Lewis Wilson are brothers. Ralph E. Crump is the
father-in-law of Peter Najar. All executive officers of the Company devote
full time to their duties. Non-management directors devote such time as is
necessary to carry out their responsibilities.
The following is a description of the business experience of each of the
director nominees and each of the executive officers of the Company.
Gregory L. Wilson is the founder of the Company and has been the
President, Chief Executive Officer and a director since the Company's
inception in September 1987. He has served as Chairman of the Board since
March 1988. Mr. Wilson also served as the Treasurer from September 1993 to
August 1995. From 1982 until 1987, Mr. Wilson was President of Church
Furnishings, Inc., in Provo, Utah. He is currently a director of Stratasys,
Inc. (Nasdaq). He earned a Bachelor of Arts Degree in Economics from Brigham
Young University in 1971 and a Masters of Business Administration Degree from
Indiana University in 1973.
<PAGE> 7
Kenneth A. Law has been Vice President - Manufacturing since September
1993. From April 1988 until September 1993, Mr. Law served as the Company's
Production Manager. From September 1987 to September 1988 he was a production
foreman for the Company. Mr. Law holds an Associate Degree in Business
Management from Utah Valley State College.
Bradley T Nielson became the Company's Vice President - Finance and Chief
Financial Officer in March 1994. He was elected Corporate Secretary in
January 1998. From August 1992 to March 1994, Mr. Nielson was the Vice
President - Finance for Pinnacle Micro, Inc. From January 1991 to August
1992, he was a management consultant for Price Waterhouse's National
Manufacturing Management Consulting Group. He was employed by Ernst & Young
from June 1985 to January 1991. Mr. Nielson graduated with a Bachelor of
Science Degree in Accounting from Brigham Young University. He is a Certified
Public Accountant, a Certified Management Accountant and is Certified in
Financial Management.
V. Douglas Johnson became the Company's Treasurer in August 1995. He
joined the Company in May 1990 and served as the Controller prior to being
named Treasurer. He has 25 years experience as a self-employed Certified
Public Accountant. Mr. Johnson graduated from Brigham Young University with a
Master of Accountancy Degree in 1964. Mr. Johnson will be retiring from the
Company in August 1998.
Ralph E. Crump has been a director since March 1988. Mr. Crump is
President of Crump Industrial Group, an investment firm located in Trumbull,
Connecticut. For a short time in 1988, Mr. Crump served as the Company's
Treasurer. Mr. Crump is a founder and director of Osmonics, Inc. (NYSE) and
Stratasys, Inc. (Nasdaq). He is also a founder, director and chairman of
IMTEC, Inc. (Nasdaq) and Structural Instrumentation, Inc. (Nasdaq). From 1962
until 1987, Mr. Crump was the President and Chairman of Frigitronics, Inc.
(NYSE). Mr. Crump is also a Trustee of the Alumni Foundation of the
University of California at Los Angeles and a member of the Board of Overseers
for the Thayer Engineering School at Dartmouth College. He received a
Bachelor of Science Degree in Chemical Engineering in 1950 from the University
of California at Los Angeles and a Bachelor of Science Degree in Marine
Engineering from the U. S. Merchant Marine Academy. Mr. Crump is a licensed
professional engineer.
Peter Najar has been a director since March 1988. From August 1988 until
September 1993 he served as the Assistant Treasurer and Assistant Corporate
Secretary. Mr. Najar has been a sales engineer employed by Lange Sales, Inc.
in Littleton, Colorado from November 1981 to the present. From 1977 to 1981,
Mr. Najar was the National Technical Director for Head Ski Co.
<PAGE> 8
C. Lewis Wilson has been a director since May 1991. From 1987 to 1996,
Mr. Wilson, a licensed professional engineer, was the President of Heath
Engineering Company, a consulting engineering firm in Salt Lake City, Utah.
From 1996 to present, Mr. Wilson has served as the Chairman and Chief
Executive Officer of Heath Engineering Company. He received a Bachelor of
Engineering Sciences Degree in Mechanical Engineering from Brigham Young
University in 1966 and a Masters of Mechanical Engineering Degree from Purdue
University in 1968. Mr. Wilson is a published technical author and has been
an Adjunct Professor of Mechanical Engineering at the University of New
Mexico, Brigham Young University and the University of Utah.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and persons who own beneficially
more than 10 percent of a registered class of the Company's equity securities
to file with the Securities and Exchange Commission and Nasdaq initial reports
of ownership and reports of changes in ownership of the Company's equity
securities. Officers, directors and greater than 10 percent beneficial owners
are required to furnish the Company with copies of all Section 16(a) reports
they file. Based on the Company's information, the directors, officers, and
greater than 10 percent shareholders have timely filed all necessary Forms 3,
4 and 5, for the fiscal year ended March 31, 1998.
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth security ownership information as of May
22, 1998 (i) for persons known by the Company to own beneficially more than 5
percent of the Company's Common Stock, (ii) for each director or director
nominee and executive officer, and (iii) for all officers and directors of the
Company as a group:
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS(1) OWNED(2) OF CLASS(3)
- --------------------------------- ---------- -------------
Gregory L. Wilson(4) 879,242 25.94%
Peter Najar(5) 469,631 13.85
Ralph E. Crump(6) 337,634 9.96
Bradley T Nielson(7) 60,666 1.79
Kenneth A. Law(8) 59,027 1.74
C. Lewis Wilson(9) 35,391 1.04
V. Douglas Johnson (10) 30,594 0.90
All officers and directors as a
group (7 persons) 1,872,185 55.23
- ---------------------------------------------
(1) The address for Gregory L. Wilson, Kenneth A. Law, Bradley T Nielson and
V. Douglas Johnson is 1301 West 400 North, Orem, Utah 84057. The
address for Peter Najar is 9900 Phillips Road, Lafayette, Colorado
80026. The address for Ralph E. Crump is 28 Twisted Oak Circle,
Trumbull, Connecticut 06611. The address for C. Lewis Wilson is 377 West
800 North, Salt Lake City, Utah 84103.
(2) The number of shares beneficially owned includes shares of the Company's
Common Stock for which the persons set forth in this table have or share
either investment or voting power. The number of shares beneficially
owned also includes shares that any of the named persons has the right to
acquire within 60 days of May 22, 1998, upon exercise of the stock
options granted to them under the Company's 1990 Stock Option Plan and
the Company's 1997 Stock Incentive Plan.
(3) All percentages have been calculated to include 3,264,934 shares of
Common Stock outstanding on May 22, 1998, plus options exercisable within
60 days following May 22, 1998 to purchase 124,897 shares.
(4) Includes 428,909 shares owned individually by Mr. Wilson, 439,247 shares
owned individually by his wife, Kathleen Wilson, and 11,086 shares held
by Kathleen Wilson as the custodian for the Wilson children. Gregory and
Kathleen Wilson disclaim beneficial ownership of the shares held by
Kathleen Wilson as custodian for their children.
<PAGE> 10
(5) Includes 213,883 shares owned individually by Constance Crump, the wife
of Mr. Najar, and 41,865 shares held by Constance Crump as custodian for
certain minor-aged relatives. Mr. Najar disclaims beneficial ownership
of the shares held by Constance Crump as custodian.
(6) Includes 168,817 shares owned individually by Marjorie Crump, the wife of
Mr. Crump.
(7) Includes 6,000 shares owned individually by Mr. Nielson, 1,200 shares
owned jointly by Mr. Nielson and his wife, Kellie J. Nielson, and 53,466
shares that Mr. Nielson had the right to acquire within 60 days following
May 22, 1998 upon exercise of options granted to him.
(8) Includes 10,287 shares owned individually by Mr. Law, 7,774 shares owned
individually by Fern Law, his wife, and 40,966 shares that Mr. and Mrs.
Law had the right to acquire within 60 days following May 22, 1998 upon
exercise of stock options granted to them.
(9) Includes 27,467 shares owned jointly by C. Lewis Wilson and his wife,
Grace Wilson, 3,662 shares owned individually by Grace Wilson, 3,662
shares owned individually by Mr. Wilson and 600 shares held by Mr. Wilson
as custodian for the Wilson children.
(10) Includes 9,246 shares owned jointly by Mr. Johnson and his wife, Cheryl
Johnson, and 753 shares held by Mr. Johnson as custodian for the Johnson
children.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the annual
and long-term compensation awards to the President and Chief Executive Officer
of the Company and other executive officers (the "Named Executive Officers")
receiving more than $100,000 in annual salary and bonus compensation for
services in all capacities to the Company for the fiscal years ended March 31,
1996, March 31, 1997 and March 31, 1998.
<PAGE> 11
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
UNDERLYING
FISCAL OPTIONS/ ALL OTHER
YEAR SALARY BONUS(1) SARs (#) COMP.(2)
---- ------- -------- ----------- ---------
Gregory L. Wilson, 1998 $75,000 $69,000 -- $5,300
Chairman, President, and 1997 73,100 70,000 -- 8,600
Chief Executive Officer 1996 60,000 70,000 -- 7,600
Bradley T Nielson, Vice 1998 70,000 45,000 10,000(3) 6,000
President Finance, Chief 1997 68,800 40,000 -- 6,000
Financial Officer, and 1996 60,000 31,000 20,000(4) 4,000
Corporate Secretary
Kenneth A. Law, Vice 1998 70,000 30,000 -- 5,800
President Manufacturing 1997 68,800 33,000 -- 5,300
1996 60,000 31,000 20,000(4) 4,100
Stanley L. Pool, Vice 1998 70,000 33,600 -- 6,800
President Sales & 1997 68,800 25,000 -- 4,600
Marketing(5) 1996 60,000 29,000 -- 5,900
Brent R. Bonham, Vice 1998 70,000 35,000 -- 4,900
President Product 1997 68,800 28,500 -- 2,600
Development(5) 1996 61,200 31,000 -- 2,900
(1) During the reported periods, bonuses were awarded annually at the
discretion of the Board of Directors to the Named Executive Officers and
certain other officers and Company personnel. No formal bonus plan
exists. The Board is not obligated to award bonuses.
(2) Amounts under the column heading "All Other Compensation" represent
matching contributions made by Mity-Lite under the Company's 401(k)
defined contribution plan and the value of personal use of Company-owned
vehicles.
(3) Options vest over a three-year period commencing in 1998, one-third of
the options vesting per year.
(4) Options vest over a three-year period commencing in 1997, one-third of
the options vesting per year.
(5) Messrs. Pool and Bonham resigned from the Company effective March 31,
1998 and April 30, 1998, respectively.
<PAGE> 12
1990 STOCK OPTION PLAN. As of May 22, 1998, options to purchase 499,245
shares of the Company's Common Stock had been granted under the Company's 1990
Incentive Stock Option Plan (the "1990 Option Plan"), which expires by its own
terms in May 2000. Of the total 499,245 options granted as of May 22, 1998,
389,760 had been granted to executive officers of the Company. Of the total
options granted, 455,735 were vested and had either been exercised or were
immediately exercisable as of May 22, 1998. As of May 22, 1998, the Company
had 755 shares reserved for issuance upon exercise of options that could still
be granted under the 1990 Option Plan.
The 1990 Option Plan provides for the grant of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, and non-qualified stock options to employees and non-employee
directors of the Company. Incentive stock options may be granted only to
employees. The 1990 Option Plan is administered by the Compensation Committee
of the Board of Directors, which determines the terms of options granted
including the exercise price, the number of shares subject to the option, and
the exercisability of the option.
The term of the 1990 Option Plan is ten years. With respect to any
participant who owns stock representing more than 10 percent of the voting
rights of the Company's outstanding capital stock, the exercise price of any
option must be at least equal to 110 percent of the fair market value on the
date of grant. Otherwise, the exercise price for options intended to be
incentive stock options is the fair market value on the date of grant. The
exercise price of any non-qualified stock option is determined by the
Compensation Committee, in its absolute discretion after taking into
consideration factors it deems relevant.
1997 STOCK INCENTIVE PLAN. As of May 22, 1998, options to purchase
247,000 shares of the Company's Common Stock had been granted under the
Company's 1997 Stock Incentive Plan (the "1997 Stock Incentive Plan"), which
expires by its own terms in March 2007. Of the total 247,000 options granted
as of May 23, 1997, 10,000 had been granted to an executive officer of the
Company and 135,000 options had been granted to executive officers of the
Company's affiliate, DO Group, Inc. Of the total options granted, 3,333 were
vested and were exercisable as of May 22, 1998. As of May 22, 1998, the
Company had 53,000 shares reserved for issuance upon exercise of options that
could still be granted under the 1997 Stock Incentive Plan.
The 1997 Stock Incentive Plan provides for the grant of incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, non-qualified stock options and stock rights to directors,
officers, employees and consultants of the Company and its affiliates.
Incentive stock options may be granted only to officers and employees. The
1997 Stock Incentive Plan is administered by the Compensation Committee of the
Board of Directors, which determines the terms of options granted including
the exercise price, the number of shares subject to the option, and the
exercisability of the option.
<PAGE> 13
The term of the 1997 Stock Incentive Plan is ten years. With respect to
any participant who owns stock representing more than 10 percent of the voting
rights of the Company's outstanding capital stock, the exercise price of any
option must be at least equal to 110 percent of the fair market value on the
date of grant. Otherwise, the exercise price for options intended to be
incentive stock options is the fair market value on the date of grant. The
exercise price of any non-qualified stock option is determined by the
Compensation Committee, in its absolute discretion after taking into
consideration factors it deems relevant.
Shown below is information with respect to exercises of stock options
during the last completed fiscal year by each of the Named Executive Officers
and the fiscal year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARs
OPTIONS/SARs AT AT MARCH 31,
MARCH 31, 1998(#) 1998 ($)(1)
SHARES
ACQUIRED OR VALUE EXERCISABLE/ EXERCISABLE/
EXERCISED REALIZED ($) UNEXERCISABLE UNEXERCISABLE
----------- ------------ ------------- -------------
Gregory L. Wilson,
Chairman, President,
and Chief Executive
Officer -- -- -- --
Bradley T Nielson,
Vice President
Finance, Chief
Financial Officer and
Corporate Secretary 5,000 $67,000 50,133/16,667 $767,000/168,000
Kenneth A. Law, Vice
President
Manufacturing 876 13,000 40,966/7,001 607,000/ 76,000
Stanley L. Pool, Vice
President Sales &
Marketing(2) -- -- -- --
Brent R. Bonham, Vice
President Product
Development (2) 66,600 857,000 3,980/-- 64,000/--
<PAGE> 14
(1) Value is based on market price of the Company's Common Stock (closing
price of $19.50 per share on the Nasdaq National Market on March 31,
1998) less exercise price.
(2) Messrs. Pool and Bonham resigned from the Company effective March 31,
1998 and April 30, 1998, respectively.
401(k) PLAN. In January 1995, the Board of Directors of the Company
adopted a Defined Contribution 401(k) Plan and Trust (the "401(k) Plan"). The
401(k) Plan allows the Board to determine the amount of the Company
contribution. The Board adopted a contribution formula specifying that such
discretionary employer matching contributions would equal 25 percent of the
participating employee's contribution to the 401(k) Plan up to a maximum
discretionary employer contribution of 3 percent of a participating employee's
compensation, as defined by the 401(k) Plan. In addition, the Board at its
discretion can provide for additional employer matching. For the 401(k) Plan
year ended December 31, 1995, the Board provided for additional matching
contributions that would equal 25 percent of the participating employee's
contribution to the 401(k) Plan up to a maximum 3 percent of a participating
employee's compensation, as defined by the 401(k) Plan. For the 401(k) Plan
year ended December 31, 1996 and 1997, the Board provided for additional
matching contributions that would equal 37.5 percent of the participating
employee's contribution to the 401(k) Plan up to a maximum 3 percent of a
participating employee's compensation, as defined by the 401(k) Plan. The
401(k) Plan allows the Board to utilize either Common Stock of the Company or
cash as a matching contribution. To date, all matching contributions have
been in cash. The Board has approved the reservation of 25,000 shares of
Common Stock for issuance under the Company's 401(k). These shares may be
issued to satisfy all or a portion of the Company's matching contribution
under the 401(k) Plan or issued as a result of a participant's election to
acquire shares of the Company's Common Stock as an investment option under the
401(k) Plan. If such investment option is elected by plan participants, the
shares will be issued at a price per share which is the lower of 85 percent of
the fair market value of a share of Common Stock on the commencement of the
applicable quarterly election period or 85 percent of the fair market value of
a share of Common Stock on the last day of the applicable quarterly election
period. As of May 22, 1998, 8,108 shares have been issued to the 401(k) Plan.
All employees who have completed at least six months of service with the
Company and who satisfy other requirements are eligible to participate in the
401(k) Plan.
EMPLOYMENT AGREEMENTS. The Company has entered into employment
agreements effective May 21, 1998, with Gregory L. Wilson, the Company's
Chairman and President and Kenneth A. Law, the Company's Vice President-
Manufacturing, each for a term ending May 21, 2003. The Company entered into
an employment agreement effective March 9, 1994 with Bradley T Nielson, Chief
Financial Officer, with a term ending March 9, 1999. Mr. Wilson is currently
paid an annual base salary of $75,000. Messrs. Law and Nielson are each paid
an annual base salary of $70,000. Mr. Johnson is paid an annual base salary
of $55,000. Each employment agreement provides that compensation will be
determined annually by the Compensation Committee of the Board of Directors.
<PAGE> 15
Each employment agreement contains a non-compete clause covering the term of
the agreement and three years thereafter. Each employment agreement can be
terminated by the Company without cause entitling the terminated employee to
two months salary as severance.
DIRECTOR COMPENSATION. The Company's directors receive no compensation
for attendance at Board meetings. However, the directors are reimbursed for
their expenses related to attending Board meetings.
CERTAIN TRANSACTIONS
The Company leases its production and office facility for a five-year
term from a trust of which Gregory L. Wilson's uncle is a trustee. The fixed
base monthly rent for the term of the lease is $17,100. The Company pays
maintenance costs, taxes and insurance costs under the lease. The Company
believes that the terms of the lease are no less favorable to the Company than
could be obtained from an unrelated third party. No independent appraisal or
evaluation of the lease terms has been obtained.
The Company has entered into indemnification agreements with each of its
officers and directors. The Company has adopted policies that any loans to
officers, directors and 5 percent or more stockholders ("affiliates") are
subject to approval by a majority of the disinterested directors and that any
transactions with affiliates will be on terms no less favorable than could be
obtained from unaffiliated parties. There are currently no loans outstanding
to officers, directors, and 5 percent or more stockholders.
PROPOSAL TWO
AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN
By resolution dated effective May 19, 1998, the Board of Directors of the
Company approved an amendment to the Company's 1997 Stock Incentive Plan
increasing the shares of Common Stock reserved for issuance upon exercise of
options granted under the Company's 1997 Stock Incentive Plan from 300,000
shares of Common Stock to 500,000 shares of Common Stock. The Board of
Directors further directed that the amendment to the plan be submitted to the
shareholders of the Company for their approval. The resolution did not
contemplate or authorize any other amendment or modification to the 1997 Stock
Incentive Plan.
RECOMMENDATION OF BOARD OF DIRECTORS:
The Board of Directors has unanimously approved increasing the shares
reserved for issuance upon exercise of options granted under the 1997 Stock
Incentive Plan to 500,000 and recommends that the stockholder vote "FOR" the
proposal. Assuming a quorum is present, a majority of votes cast by the
shares entitled to vote for approval of the 1997 Stock Incentive Plan will be
required to approve the amendment.
<PAGE> 16
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent
as the Company may recommend.
ANNUAL REPORT TO SECURITIES AND EXCHANGE COMMISSION
A copy of the Company's Annual Report on Form 10-KSB as filed with the
Securities and Exchange Commission may be obtained by shareholders without
charge by written request to Bradley T Nielson, Chief Financial Officer, Mity-
Lite, Inc., 1301 West 400 North, Orem, Utah, 84057.
By the Order of Board of Directors
Bradley T Nielson, Corporate Secretary
DATED: July 13, 1998
<PAGE> 17
FORM OF PROXY:
MITY-LITE, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
August 20, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MITY-LITE, INC.
The undersigned common shareholder of Mity-Lite, Inc., a Utah
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, to be held on August 20, 1998, 2:00 p.m. local time at the
University of Utah, Olpin Union Building, 200 South Central Campus Drive, Salt
Lake City, Utah, and hereby appoints Gregory L. Wilson and Bradley T Nielson,
or either of them, each with the power of substitution, as proxies to vote at
said Annual Meeting of Shareholders and at all adjournments thereof, all
shares of common stock which the undersigned would be entitled to vote on the
matters set forth below, if personally present.
1. ELECTION OF DIRECTOR NOMINEES: Gregory L. Wilson, Ralph E. Crump,
C. Lewis Wilson and Peter Najar.
[ ] FOR all nominees listed (except [ ] WITHHOLD AUTHORITY to vote
for as marked to the contrary all nominees listed
below)
Instruction: To withhold authority for an individual nominee, write
that nominee's name here:
- ------------------------------------------------------------------------------
(Continued and to be signed on other side)
<PAGE> 18
2. APPROVE THE AMENDMENT TO THE COMPANY'S 1997 STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, ON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
DIRECTION IS INDICATED, WILL BE VOTED FOR PROPOSAL 1 AND PROPOSAL 2. In their
discretion, the proxies are authorized to vote upon such other matters as may
properly come before the meeting or any adjournment(s) thereof.
Dated: , 1998
--------------------------------
Signature
(This proxy should be marked, dated, signed by each
shareholder exactly as such shareholder's name
appears hereon and returned promptly in the
enclosed envelope. Persons signing in a fiduciary
capacity should so indicate. If shares are held
by joint tenants or as community property, both
should sign. If a corporation, please sign in full
corporation name by the President or by an
authorized corporate officer. If a partnership,
please sign in partnership name by an authorized
person).
