SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the approprate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant
to ss 240.14a-11(c) or ss 240.14a-12
Bridgeport Machines, Inc.
(Name of Registrant as Specified in its Charter)
------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(3) 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):
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4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
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<PAGE>
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
BRIDGEPORT MACHINES, INC. 500 Lindley Street
Bridgeport, CT 06606
August 7, 1998
To Our Stockholders:
On behalf of the Board of Directors, we cordially invite you to attend the
1998 Annual Meeting of Bridgeport Machines' stockholders. The Annual Meeting
will be held at 10:30 a.m. on September 18, 1998 at Bridgeport Machines, Inc.,
500 Lindley Street, Bridgeport, CT. The formal notice of the Annual Meeting is
set forth on the next page.
The matters expected to be acted upon at the meeting are described in the
attached Proxy Statement. In addition, we will respond to your questions and
comments.
It is important that your views be represented whether or not you are able
to attend the Annual Meeting. Please sign and date the enclosed proxy card and
promptly return it to us in the postage paid envelope. For your information, a
report on the 1998 Annual Meeting will be included in the second quarter report
to stockholders which will be mailed in early November.
To assist us in our preparation for the meeting, we would appreciate
having you complete the proxy card and indicate your intentions for attending
the meeting.
We hope each of you will vote your shares either in person or by proxy,
and we urge you to return the proxy card at your earliest convenience.
Should you require directions to Bridgeport Machines, Inc. or need further
information about the meeting, you may call our Corporate Administration
Department at (203) 337-8598.
Sincerely,
/s/ Joseph E. Clancy
--------------------
Joseph E. Clancy
Chairman of the Board of Directors
<PAGE>
BRIDGEPORT MACHINES, INC. 500 Lindley Street
Bridgeport, CT 06606
August 7, 1998
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Bridgeport Machines, Inc.:
Notice is hereby given that the annual meeting of stockholders of
Bridgeport Machines, Inc. will be held at 10:30 a.m. on September 18, 1998 at
Bridgeport Machines, Inc., 500 Lindley Street, Bridgeport, CT for the purpose of
considering and voting upon the following matters:
1. Election of one director to serve for a term of three years and until the
director's respective successor is elected and qualified.
2. Ratification of the selection of Arthur Andersen LLP as independent public
accountants for the year ending April 3, 1999.
3. Such other business as may properly be brought before the meeting.
Only stockholders of record at the close of business on July 24, 1998 are
entitled to notice of, and to vote at, the meeting. Your attention is directed
to the accompanying Proxy Statement.
By Order of the Board of Directors
/s/ Ralph J. LoStocco
---------------------
Ralph J. LoStocco, Secretary
Bridgeport, Connecticut
August 7, 1998
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. PLEASE INDICATE ON THE
PROXY WHETHER YOU PLAN TO ATTEND THE MEETING. IF YOU DO ATTEND THE MEETING, YOU
MAY THEN REVOKE YOUR PROXY AND VOTE IN PERSON.
If you have not received or had access to the fiscal 1998 Annual Report of
Bridgeport Machines, Inc. which includes financial statements, kindly notify
Ralph J. LoStocco, Vice President-Administration and Secretary (203) 337-8461
and a copy will be sent to you promptly.
<PAGE>
BRIDGEPORT MACHINES, INC. 500 Lindley Street
Bridgeport, CT 06606
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
September 18, 1998
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Bridgeport Machines, Inc. ("Bridgeport") of proxies to
be voted at the 1998 annual meeting of stockholders (the "Annual Meeting") of
Bridgeport to be held at 10:30 a.m. on September 18, 1998 at Bridgeport
Machines, Inc. 500 Lindley Street, Bridgeport, CT and at any and all
postponements or adjournments thereof. The date on which this proxy statement,
the enclosed form of proxy and Annual Report to Stockholders are first being
sent to stockholders is on or about August 7, 1998.
Each share of Common Stock par value $0.01 per share (the "Common Stock")
is entitled to one vote. Properly executed proxies received prior to the Annual
Meeting, unless revoked, will be voted in accordance with the specified
instructions. Regarding the election of a Director, stockholders may vote in
favor of the nominee or withhold their vote as to the nominee. With respect to
all other proposals to be voted upon, stockholders may vote in favor of a
proposal, against a proposal or may abstain from voting. Stockholders should
specify their choices on the enclosed proxy card. If no instructions are given
with respect to the matters to be acted upon, the proxy will be voted as
follows:
For the election of the nominee for director named herein, and
For ratification of the selection of Arthur Andersen LLP as independent
public accountants for fiscal 1999.
If any other matters should be presented at the Annual Meeting upon which
a vote may properly be taken, the shares represented by the proxy will be voted
with respect thereto by the person or persons holding such proxy as in their
judgment is in the best interests of Bridgeport and its stockholders. The Board
of Directors does not know of any matters other than as described in the Notice
of Annual Meeting that are to come before the Annual Meeting.
All expenses of the solicitation of proxies for the Annual Meeting,
including the cost of mailing, will be borne by Bridgeport. In addition to
solicitation by mail, officers and regular employees of Bridgeport may solicit
proxies from stockholders by telephone, telegram or personal interview and will
not receive additional compensation for such services.
VOTING SECURITIES
Only holders of record of Common Stock at the close of business on July
24, 1998 are entitled to vote on the matters presented at the Annual Meeting.
The number of shares outstanding on such date was 5,654,404. Each such share is
entitled to one vote with respect to such matters.
The presence in person or by proxy of holders of a majority of the
outstanding shares of Common Stock is required for a quorum to transact business
at the Annual Meeting, but if a quorum should not be present, the Annual Meeting
may be adjourned from time to time until a quorum is obtained. The affirmative
vote of the holders of the plurality of the shares of Common Stock present or
<PAGE>
represented at the Annual Meeting and entitled to vote is required for the
election of directors and the affirmative vote of the holders of a majority of
the shares of Common Stock present or represented at the Annual Meeting and
entitled to vote is required for all other proposals to come before the Annual
Meeting. See "Item I. Election of a Director - Compensation Committee Interlocks
and Insider Participation" for a discussion regarding certain voting
arrangements with respect to the election of directors.
Abstentions and broker non-votes (shares held by a broker or nominee which
are represented at the Annual Meeting, but with respect to which such broker or
nominee does not have discretionary authority to vote on a particular proposal)
will be counted as present at the Annual Meeting for purposes of determining
whether or not a quorum exists. Abstentions and broker non-votes will generally
not be counted for any other purpose, except that abstentions with respect to
any proposal, other than the election of a director, will be treated as negative
votes.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July 24, 1998 the beneficial
ownership of Common Stock by (i) each person known to the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock, (ii) directors
and executive officers individually and (iii) by the directors and executive
officers as a group. Except as described below, each of the persons and group
listed below has sole voting power with respect to the shares shown.
<TABLE>
<CAPTION>
Shares Percent of
Name Beneficially Owned (1) Total Shares
---- ---------------------- ------------
<S> <C> <C>
Textron Inc. 1,207,733 21.3%
40 Westminster Street
Providence, RI 02903
Travelers Group Inc. (2) 781,468 13.8
388 Greenwich Street
New York, NY 10013
Lehman Brothers Holdings, Inc. 639,935 11.3
Three World Financial Center
New York, NY 10285
High Technology Holding Corp. (3) 568,700 10.1
2229 South Yale Street
Santa Ana, CA 92704
Kansas Debt Fund, Nominee for
Kansas Public Employees Retirement Systems (13) 535,910 9.5
c/o Portfolio Advisors, Inc.
9 Old Kings Highway South
Darien, CT 06820
U.S. Bancorp (4) 347,596 6.2
601 2nd Ave. South
Minneapolis, MN 55402
Joseph E. Clancy 82,043 1.5
Dan L. Griffith (5) 76,444 1.3
Walter C. Lazarcheck (6) 10,833 *
Ralph J. LoStocco (7) 32,500 *
Robert L. Rochford (8) 3,400 *
Malcolm Taylor (9) 23,583 *
Robert J. Cresci (10) 11,500 *
Eliot M. Fried (11) 21,500 *
Bhikhaji M. Maneckji (12) - *
All Directors and Executive Officers 261,803 4.5
as a group (total 9 persons)
- ------------
* Less than 1% of the outstanding Common Stock
</TABLE>
<PAGE>
(1) Pursuant to the regulations of the Securities and Exchange Commission (the
"Commission"), shares are deemed to be "beneficially owned" by a person if
such person directly or indirectly has or shares the power to vote or
dispose of such shares whether or not such person has any pecuniary
interest in such shares or the right to acquire the power to vote or
dispose of such shares within 60 days, including any right to acquire
through the exercise of any option, warrant or right.
(2) In a Schedule 13G filed with the Commission on January 23, 1998, Travelers
Group Inc. reported that as of January 12, 1998 it held 781,468 shares of
Common Stock (13.8% of the outstanding shares of Common Stock as of July
24, 1998). Travelers Group Inc. reported that it possessed: (i) shared
dispositive power with respect to 781,468 shares and (ii) shared voting
power with respect to 781,468 shares. The Schedule 13G also states that
Travelers Group Inc. has not acquired Bridgeport's shares for the purpose
of changing or influencing the control of Bridgeport.
(3) In a Schedule 13D filed with the Commission on July 22, 1998 High
Technology Holding Corp. reported that as of July 21, 1998, it held
568,700 shares of common stock. High Technology Holding Corp. reported
that it possessed: (i) sole dispositive power with respect to 568,700
shares and (ii) sole voting power with respect to 568,700 shares.
(4) In a Schedule 13G filed with the Commission on February 9, 1998, U.S.
Bancorp, a parent holding company, reported that as of December 31, 1997
it held 347,596 shares of Common Stock (6.1% of the outstanding shares of
Common Stock as of July 24, 1998). U.S. Bancorp reported that it
possessed: (i) sole dispositive power with respect to 328,596 shares and
shared dispositive power with respect to 600 shares and (ii) sole voting
power with respect to 346,596 shares. The Schedule 13G also states that
U.S. Bancorp has not acquired Bridgeport's shares for the purpose of
changing or influencing the control of Bridgeport.
(5) Includes 23,333 shares which may be acquired by Mr. Griffith upon the
exercise of immediately exercisable options.
(6) Consists of 10,833 shares which may be acquired by Mr. Lazarcheck upon the
exercise of immediately exercisable options.
(7) Includes 7,500 shares which may be acquired by Mr. LoStocco upon the
exercise of immediately exercisable options.
(8) Consists of 2,000 shares which may be acquired by Mr. Rochford upon the
exercise of immediately exercisable
options.
(9) Includes 12,500 shares which may be acquired by Mr. Taylor upon the
exercise of immediately exercisable options.
(10) Consists of 11,500 shares which may be acquired by Mr. Cresci upon the
exercise of immediately exercisable options. Does not include 226,166
shares beneficially owned by State of Delaware Employees Retirement Fund
("DERF"), which Mr. Cresci may be deemed to beneficially own by virtue of
his position as a Managing Director of Pecks Management Partners Ltd.,
investment advisor for such fund.
(11) Includes 11,500 shares which may be acquired by Mr. Fried upon the
exercise of immediately exercisable options. Does not include shares
beneficially owned by Lehman Brothers Holdings, Inc., which Mr. Fried may
be deemed to beneficially own by virtue of his position as Managing
Director of Lehman Brothers Holdings, Inc.
(12) Does not include shares beneficially owned by Textron Inc. ("Textron"), of
which Mr. Maneckji disclaims beneficial ownership.
(13) As a stockholder of record, the latest available information as of July
24, 1998 indicates that Kansas Debt Fund, Nominee for Kansas Public
Employees Retirement Systems holds 535,910 shares of common stock.
<PAGE>
ITEM I. ELECTION OF A DIRECTOR
Bridgeport's Bylaws provide that the number of Directors will be fixed by
the Board of Directors, but must consist of not more than 15 nor less than three
Directors. Currently, the number of Directors is fixed at five. Pursuant to the
Certificate of Incorporation and the Bylaws, the Board of Directors is divided
into three classes serving staggered three-year terms. The Board of Directors
intends to present for action at the Annual Meeting the election of Bhikhaji M.
Maneckji, whose present term expires this year, to serve until the 2001 Annual
Meeting and until his successor has been elected and qualified. Pursuant to a
voting arrangement entered into prior to Bridgeport's initial public offering,
certain stockholders, including Textron, Kansas Debt Fund ("KDF") and Lehman
Brothers Holdings, Inc., have agreed to vote their shares of Common Stock in
favor of the election of Mr. Maneckji. See "Compensation Committee Interlocks
and Insider Participation."
The nominee has consented to being designated in this Proxy Statement and
to serve as a Director of Bridgeport if elected. It is the intention of the
person named in the proxy to vote shares under the authority granted by the
proxy for the election of the nominee named above. If the nominee should be
unable or declines to serve, the proxies will be voted for the election of such
other person as shall be determined in the discretion of the persons designated
to vote shares under the authority granted by the proxy.
The Board of Directors recommends that stockholders vote "FOR" the
election of the nominee for director listed below.
Set forth below is information with respect to the nominee, Directors
continuing in office and Executive Officers of the Company.
Nominated Director:
Name Age Position
---- --- --------
Bhikhaji M. Maneckji 49 Director
Bhikhaji M. Maneckji has been a Director of Bridgeport since May 1995. Mr.
Maneckji is the designee Board member of Textron. See "Compensation Committee
Interlocks and Insider Participation." Mr. Maneckji is Vice President and
General Counsel-Textron Industrial Products, Textron Inc. From October 1995 to
January 1997, Mr. Maneckji was General Counsel-Textron Industrial Products,
Textron Inc. From 1986 to October 1995, Mr. Maneckji was Assistant General
Counsel and Assistant Secretary of Textron. From 1973 to 1986, Mr. Maneckji
served Textron in various positions. Mr. Maneckji is Chairman of Bridgeport's
Audit Committee.
<PAGE>
Continuing Directors and Executive Officers:
<TABLE>
<CAPTION>
Name Term Expires Age Position
---- ------------ --- --------
<S> <C> <C> <C>
Joseph E. Clancy 1999 68 Chairman of the Board of Directors
Dan L. Griffith 2000 57 President, Chief Executive Officer and Director
Walter C. Lazarcheck --- 34 Vice President and Chief Financial Officer
Ralph J. LoStocco --- 65 Vice President-Administration and Secretary
Malcolm Taylor --- 62 Senior Vice President and Managing Director-
European Operations
Robert J. Cresci 1999 54 Director
Eliot M. Fried 2000 65 Director
</TABLE>
Joseph E. Clancy has served as Chairman of the Board since 1988 and was
Chief Executive Officer of Bridgeport from 1986 to June 1995 and President from
1986 until September 1994. From 1968 to 1986, Mr. Clancy served the Bridgeport
Machines Division of Textron in various senior management positions, including
as President from 1978 to 1986. Mr. Clancy currently serves as a director of
People's Bank, Bridgeport, Connecticut. Mr. Clancy is Chairman of Bridgeport's
Nominating Committee.
Dan L. Griffith has served as Chief Executive Officer of Bridgeport since
June 1995, and as President since September 1994. Mr. Griffith also served as
Chief Financial Officer of Bridgeport from 1986 to June 1995 and Executive Vice
President from 1986 to September 1994. Mr. Griffith has been a Director since
April 1992. Mr. Griffith joined the Bridgeport Machines Division of Textron in
1983 after holding various financial positions with Textron. Mr. Griffith is a
member of Bridgeport's Nominating Committee.
Walter C. Lazarcheck has served as Vice President and Chief Financial
Officer of Bridgeport since June 1995. Mr. Lazarcheck joined Bridgeport in
January 1995 as Vice President - Finance. Mr. Lazarcheck previously was an audit
manager for Arthur Andersen LLP and worked for Arthur Andersen LLP from 1985 to
1994.
Ralph J. LoStocco has served as Vice President - Administration and
Secretary of Bridgeport since 1986. Mr. LoStocco served as Vice President of
Human Resources for Producto Machine Company from 1973 to 1986 and as its
Manager of Human Resources from 1963 to 1972.
Malcolm Taylor has served as Senior Vice President and Managing
Director-European Operations since September 1995. From 1988 to September 1995,
Mr. Taylor was Managing Director of Bridgeport's United Kingdom subsidiary,
Bridgeport Machines Ltd. From 1984 to 1988, Mr. Taylor was Managing Director of
Bridgeport Machines Ltd.'s Singapore operations. Mr. Taylor has been associated
with Bridgeport for 26 of the last 33 years.
Robert J. Cresci has served as a Director of Bridgeport since 1986, except
for the period from August to November 1991. Mr. Cresci has been a Managing
Director of Pecks Management Partners Ltd., an investment management firm, since
September 1990. Mr. Cresci currently serves on the boards of EIS International,
Inc., Sepracor, Inc., Arcadia Financial, Ltd., Hitox, Inc., Garnet Resources
<PAGE>
Corporation, Meris Laboratories, Inc., Film Roman, Inc., Educational Medical,
Inc., Source Media, Inc., Castle Dental Centers, Inc., Candlewood Hotel Co.,
SeraCare, Inc. and several private companies. Mr. Cresci is a member of
Bridgeport's Compensation Committee.
Eliot M. Fried has served as a Director of Bridgeport since 1988. Mr.
Fried has been a Managing Director of Lehman Brothers Inc. ("Lehman") and its
predecessors since 1991. Prior thereto, he was Senior Executive Vice President
of Lehman. Mr. Fried is a director of Axsys Technologies, Inc., L-3
Communications Holdings, Inc. and Walter Industries Inc. Mr. Fried is Chairman
of Bridgeport's Compensation Committee and a member of Bridgeport's Audit
Committee.
Board of Directors Meetings and Committees
The Board of Directors had six meetings and took action by unanimous
written consent six times during fiscal 1998. Each Director attended more than
75% of the total number of Board meetings and meetings of Board committees on
which such Director served during fiscal 1998.
There are currently Audit, Compensation and Nominating Committees of the
Board of Directors. Committee membership, the number of committee meetings held
during fiscal 1998 and the functions of those committees are described below.
Audit Committee. The Audit Committee is composed of Bhikhaji M. Maneckji
(Chairman) and Eliot M. Fried, both of whom are independent Directors. The Audit
Committee makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans and
results of the audit engagement, approves professional services provided by the
independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and non-audit fees and reviews
the adequacy of Bridgeport's internal accounting controls. The Audit Committee
had one meeting during fiscal 1998.
Compensation Committee. The Compensation Committee is composed of Eliot M.
Fried (Chairman) and Robert J. Cresci, both of whom are independent Directors.
The Compensation Committee determines compensation for Bridgeport's executive
officers, in addition to administering Bridgeport's 1994 Stock Incentive Plan
and the 1994 Non-Employee Director Stock Option Plan (the "Directors Plan"). The
Compensation Committee had two meetings during fiscal 1998.
Nominating Committee. The Nominating Committee is composed of Joseph E.
Clancy (Chairman) and Dan L. Griffith, both of whom are employee Directors. The
Nominating Committee nominates the slate of Directors for election as necessary.
The Nominating Committee had no meetings during fiscal 1998. The Nominating
Committee will consider nominees recommended by stockholders. See "Date for
Submission of Stockholder Proposals" for discussions of certain procedures and
timing to be followed by stockholders in submitting such recommendations.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Bridgeport's Directors and executive officers, and persons who own more than ten
percent of a registered class of Bridgeport's equity securities to file with the
<PAGE>
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of Bridgeport. Officers, directors and greater than ten percent
stockholders are required by Commission regulation to furnish Bridgeport with
copies of all Section 16(a) reports they file.
Based solely on a review of copies of such reports furnished to Bridgeport
through the date hereof, or written representations that no reports are required
to be filed, Bridgeport believes that during the fiscal year ended March 28,
1998 all such filings applicable to its officers, directors and ten percent
stockholders were complied with.
Compensation of Directors
Each Director who is not an employee of Bridgeport receives from
Bridgeport an annual fee of $12,500, a meeting fee of $500 for each Board or
Committee meeting attended and reimbursement of expenses incurred in attending
meetings. Each non-employee Director was granted under the Directors Plan an
option to purchase 7,500 shares of Common Stock upon the consummation of
Bridgeport's initial public offering in December 1994. Those non-employee
Directors who were not directors at such time were granted an option to purchase
7,500 shares of Common Stock upon being appointed Director of the Company. In
addition, each non-employee Director will automatically be granted annually an
option to purchase an additional 2,000 shares of Common Stock on the date of
each of Bridgeport's annual meetings of stockholders.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding the cash and other
compensation paid or accrued and certain long-term awards made to the Chief
Executive Officer and the four highest paid named executives for services in all
capacities for the fiscal years ending March 28, 1998, March 29, 1997 and March
30, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
Annual Compensation Awards
------------------- ------
(1) Securities
Other Underlying
Annual Options/ All Other
Name and Principal Compen- SARs Compen-
Position Year Salary ($) Bonus ($) sation ($) (# Shares) sation($)
-------- ---- ------ --- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
J.E. Clancy 1996 275,000 - 875 - 11,691
Chairman of the Board 1997 275,000 - 919 - 10,287
1998 240,385 - 82 - 9,347 (2)
D.L. Griffith 1996 231,730 - - - 8,915
President, Chief 1997 255,769 - - 10,000 8,332
Executive Officer and 1998 278,461 - - 15,000 9,256 (3)
Director
M.S. LaMonica, Jr. 1996 142,327 26,907 1,281 - 6,282
Vice President- 1997 151,754 28,502 569 - 6,060
Marketing & Sales (7) 1998 52,735 29,037 74 - 2,288 (7)
R. L. Rochford 1998 81,016 57,091 27 6,000 4,522 (4)
Vice President-Sales
M. Taylor 1996 159,501 (5) - - 5,000 609 (5)
Senior Vice President 1997 182,931 (5) - - 5,000 657 (5)
and Managing Director- 1998 194,443 (5) - - 9,900 879 (5)
European Operations
R.J. LoStocco 1996 124,042 - 662 5,474
Vice President- 1997 130,000 - 1,643 5,036
Administration and 1998 136,246 - 3,002 6,000 6,088 (6)
Secretary
</TABLE>
<PAGE>
1) Fringe benefit amounts are omitted to the extent the aggregate value of
such benefits is less than the lesser of 10% of salary and bonus, or
$50,000. Amounts listed in this column represent above-market interest on
deferred compensation.
2) Consists of (i) $7,457 contributed by Bridgeport to Mr. Clancy's account
under the Company's 401(k) savings plan and (ii) $1,890 in life insurance
premiums paid by Bridgeport for the benefit of Mr. Clancy.
3) Consists of (i) $8,581 contributed by Bridgeport to Mr. Griffith's account
under Bridgeport's 401(k) savings plan and (ii) $675 in life insurance
premiums paid by Bridgeport for the benefit of Mr. Griffith.
4) Consists of (i) $4,305 contributed by Bridgeport to Mr. Rochford's account
under Bridgeport's 401(k) savings plan and (ii) $217 in life insurance
premiums paid by Bridgeport for the benefit of Mr. Rochford.
5) The compensation was paid in United Kingdom pounds sterling and translated
at average rates. Amount listed under All Other Compensation -1998 consists
of $879 in medical insurance premiums paid by Bridgeport for the benefit of
Mr. Taylor.
6) Consists of (i) $4,198 contributed by Bridgeport to Mr. LoStocco's account
under Bridgeport's 401(k) savings plan and (ii) $1,890 in life insurance
premiums paid by Bridgeport for the benefit of Mr. LoStocco.
7) Mr. LaMonica, Jr. resigned from his position as Vice President-Marketing &
Sales on July 3, 1997. Mr. Rochford assumed the position of Vice
President-Sales in fiscal 1998. All other compensation consists of (i)
$2,119 contributed by Bridgeport to Mr. LaMonica's account under
Bridgeport's 401(k) savings plan and (ii) $169 in life insurance premiums
paid by Bridgeport for the benefit of Mr. LaMonica.
The following table sets forth information regarding grants of stock
options made during fiscal year 1998 to each of the named executive officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (1)
Number of Potential Realized Value at
Securities % of Total Assumed Annual Rates of
Underlying Options Granted Exercise or Stock Price Appreciation
Options to Employees Base Price for Option Term (3)
Name Granted (#) in Fiscal Year(2) ($/Sh) Expiration Date 5% 10%
---- ----------- ----------------- ------ --------------- -- ---
<S> <C> <C> <C> <C> <C> <C>
J. E. Clancy - - - - - -
D. L. Griffith 15,000 11.9% $10.75 December 2002 $44,550 $98,445
R. L. Rochford 6,000 4.8 $10.75 December 2002 $17,820 $39,378
R. J. LoStocco 6,000 4.8 $10.75 December 2002 $17,820 $39,378
M. Taylor 9,900 7.9 $10.75 December 2002 $29,403 $64,974
</TABLE>
(1) All options granted to named executive officers were granted pursuant to
Bridgeport's 1994 Stock Incentive Plan. The options vest and become
exercisable over a period of three years at the rate of one-third annually
on each of the first three anniversary dates of issuance. The options were
granted on December 15, 1997.
(2) Percentages listed are based on options to purchase a total of 125,600
shares of Common Stock granted by Bridgeport to certain of its employees
during fiscal year 1998. Calculations do not include options to purchase
an aggregate of 8,000 shares of Common Stock granted to the independent
Directors in fiscal 1998 pursuant to the Directors Plan.
<PAGE>
(3) Potential realizable value is calculated based on an assumption that the
fair market value of the Common Stock appreciates at the annual rates
shown (5% and 10%), compounded annually, from the date of grant until the
end of the option term (5 years). The 5% and 10% assumed rates are
mandated by the Commission for the purposes of calculating realizable
value and do not represent Bridgeport's estimate or projection of future
stock prices.
The following table sets forth the information concerning the option
exercises during fiscal 1998 and the fiscal year-end value of unexercised
options.
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1998 Fiscal Year and 1998 Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired on Value Fiscal Year-End Fiscal Year-End (1)
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. E. Clancy 20,000 $43,000 - - - -
D. L. Griffith - - 23,333 21,667 $33,116 $14,358
R. L. Rochford - - 1,400 2,000 $ 2,275 $ 1,750
R. J. LoStocco - - 7,500 6,000 $12,187 $ 5,250
M. Taylor 710 $ 2,960 12,500 14,900 $12,495 $ 9,278
</TABLE>
(1) Amounts listed are based upon the $11.625 per share closing price for the
Common Stock on the Nasdaq National Market on March 27, 1998 (last trading
day in fiscal 1998).
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of Robert J. Cresci and
Eliot M. Fried. None of the members of the Compensation Committee is or has been
an officer or employee of Bridgeport. No executive officer of Bridgeport served
on any board of directors or compensation committee of any entity (other than
Bridgeport) with which any member of the Compensation Committee is affiliated.
The following agreements relate to certain relationships and related
transactions involving among others, the members of the Compensation Committee.
Voting Agreement. In connection with the operational restructuring and
financial restructuring and recapitalization of Bridgeport completed in December
1992 (the "1992 Recapitalization"), existing stockholders of Bridgeport
("Existing Stockholders") who, as of July 24, 1998, owned a total of 1,958,309
shares of Common Stock, entered into an agreement (the "Voting Agreement")
pursuant to which they agreed to vote their shares to elect members of the Board
of Directors as follows: (i) one Director designated by Textron, as holder of
1,189,233 shares of Common Stock and (ii) one Director designated by KDF and
DERF, acting by a majority of an aggregate of 608,538 shares of Common Stock
held by KDF and DERF, of which KDF currently owns approximately 63%. Such voting
arrangements lapse in each case, on the earlier of December 31, 2000 or the date
on which the covered shares owned by Textron or KDF and DERF, as the case may
be, constitute less than 5% of the outstanding Common Stock.
<PAGE>
Pursuant to the Termination Agreement and Waiver, Textron, KDF and DERF
waived their rights with respect to each share of Common Stock held by an
Existing Stockholder that is sold or otherwise transferred by the Existing
Stockholder to a person or entity which is not an affiliate (as defined in the
Termination Agreement and Waiver) of such Existing Stockholder (see also
"-Textron Stockholders Agreement" below). In addition, each of the parties to
the Voting Agreement waived any and all rights granted to it pursuant to the
Voting Agreement with respect to any shares of Common Stock sold in Bridgeport's
initial public offering in December 1994.
Textron Stockholders Agreement. In connection with the 1992
Recapitalization Existing Stockholders with respect to certain shares of Common
Stock (the "Covenanted Shares"), agreed to share with Textron certain proceeds
from the sale or disposition of their respective shares of Common Stock. Such
price sharing arrangement was terminated in fiscal 1995 and no longer has any
effect.
During the term of the agreement, the holders of the Covenanted Shares
also agreed to vote their shares in favor of a Textron nominee to the Board of
Directors, provided that such agreement shall not preclude such holders from
voting in favor of any other nominee in addition to the Textron nominee. All
Covenanted Shares are subject to the Voting Agreement and, as a result, the
Textron Stockholders Agreement does not provide the Textron nominee with
additional votes (see "-Voting Agreement" above).
The voting arrangement under the Textron Stockholders Agreement will
continue in effect until the earlier of December 15, 2000 or the date on which
the shares received by Textron in the 1992 Recapitalization constitute less than
5% of the outstanding Common Stock or, with respect to each Covenanted Share,
until the occurrence of any of the following events with respect to such share
and compliance by the holder with applicable procedures: (i) the sale of a
Covenanted share at $7.05 or more in a transaction where no public market exists
for the Common Stock, (ii) the first sale of such Covenanted Share while a
public market for the Common Stock exists, (iii) the sale of such Covenanted
Share in a transaction involving a sale of all of the Common Stock and (iv) the
distribution, whether in dissolution, by dividend or otherwise, to Bridgeport's
stockholders of all of the net proceeds of the sale by Bridgeport of
substantially all of its assets. In the event Textron disposes of any of its
original 1,448,400 shares of Common Stock (Textron currently holds 1,189,233 of
such shares) while the covenant is in effect, such covenant will lapse with
respect to a proportionate number of Covenanted Shares. In addition, pursuant to
the Termination Agreement and Waiver, Textron waived its voting rights with
respect to each Covenanted Share that is sold or otherwise transferred by a
holder to a person or entity other than an affiliate (as defined in the
Termination Agreement and Waiver). (See "-Voting Agreement" above.)
<PAGE>
Performance Graph
The graph set forth below compares the yearly percentage change in the
cumulative shareholder return on the Common Stock with the cumulative total
return of the Nasdaq Stock Market-U.S. and industry peer groups for the period
commencing November 28, 1994 (the date on which trading of Bridgeport's Common
Stock commenced) through March 28, 1998. The old peer group consists of
Cincinnati Milacron, Inc., Giddings & Lewis Inc. and Hurco Companies Inc.
Giddings & Lewis Inc. is no longer a publicly traded company. The Company
created a new peer group consisting of Cincinnati Milacron Inc., Hardinge Inc.,
Hurco Companies Inc. and Monarch Machine Tool Company. The new peer group was
created in order to provide a broader base for comparison to other machine tool
companies. The following graph assumes that the value of the investment in
Bridgeport and the indices was $100 at the beginning of the period. The stock
price performance presented below is not necessarily indicative of future
results.
(GRAPHIC OF PERFORMANCE GRAPH)
11/29/94 4/1/95 3/30/96 3/29/97 3/28/98
-------- ------ ------- ------- -------
Bridgeport Machines, Inc. 100 148 180 110 116
New Peer Group 100 100 116 92 147
Old Peer Group 100 107 123 94 146
Nasdaq Stock Market - US 100 109 148 169 248
<PAGE>
Pension Scheme
Bridgeport maintains a Pension Scheme for its United Kingdom operations
("UK Pension Scheme"). The following table sets forth the estimated annual
benefit payable upon retirement under the UK Pension Scheme.
<TABLE>
<CAPTION>
Pension Plan Table
--------------------------- Years of Service ----------------------------
Remuneration 15 20 25 30
------------ -- -- -- --
<S> <C> <C> <C> <C>
$145,000 $32,625 $43,500 $54,375 $65,250
160,000 36,000 48,000 60,000 72,000
175,000 39,373 52,500 65,625 78,750
190,000 42,750 57,000 71,250 85,500
205,000 46,125 61,500 76,875 92,250
210,000 47,250 63,000 78,750 94,500
215,000 48,375 64,500 80,625 96,750
220,000 49,500 66,000 82,500 99,000
</TABLE>
The Remuneration column relates to a participant's annual salary such as
that set forth in the Salary column of the Summary Compensation Table. A
participant's pensionable salary is the highest average annual salary of any
three consecutive years during the last ten years prior to retirement. The
normal retirement date for participants is age 65. The normal retirement benefit
consists of a stream of monthly payments over the life of the participant.
Malcolm Taylor, Senior Vice President and Managing Director -European
Operations, is a participant in Bridgeport's UK Pension Scheme and is 62 years
old and has 26 years of service.
Employment Agreements
Joseph E. Clancy and Dan L. Griffith have employment agreements with
Bridgeport. Under such agreements, Mr. Clancy serves as Chairman of the Board
and as an Executive Officer for a base salary of $125,000 and Mr. Griffith
serves as President and Chief Executive Officer for a base salary of $290,000.
The base salary is automatically adjusted annually for increases in U.S. City
Average Consumer Price Index. The agreements also provide for annual salary
increases as determined by the Board of Directors. The term of each agreement
continues until the earlier of the executive's retirement, death, disability or
voluntary termination. Under the agreements, Messrs. Clancy and Griffith are
also provided the opportunity to participate in pension and welfare plans,
programs and benefits offered generally to all executives.
In the event of termination of employment of either Mr. Clancy or Mr.
Griffith by Bridgeport for cause, or if the executive resigns other than by
reason of a substantial breach of the employment agreement by Bridgeport, the
executive will be entitled only to his base salary and benefits through the date
of termination. In the event of termination of employment without cause or
<PAGE>
resignation by the executive as a result of a substantial breach of the
employment agreement by Bridgeport (such as reduction in base salary), the
executive will be entitled to two years' base salary plus any bonus awarded (but
not received) during the current or preceding year (subject to reduction for
amounts received in connection with other employment commencing one year after
the date of termination) and benefits for two years following termination of the
agreement.
Each of Mr. Clancy and Mr. Griffith has agreed to refrain from competing
with Bridgeport for two years following termination of employment or resignation
therefrom. The agreements provide that the restricted period may be extended if
the executive violates the non-competition provisions. Additionally, the
executive forfeits any right to severance if he materially breaches such
provisions.
Bridgeport is permitted to assign the agreement to any business that
acquires all or substantially all of the assets of Bridgeport by merger,
consolidation or otherwise.
Malcolm Taylor entered into a new employment agreement in September 1995
pursuant to which he serves as Senior Vice President-Bridgeport Machines, Inc.
and Managing Director of Bridgeport's European Operations. The agreement has a
term of two years after which it may be terminated by Bridgeport at any time
upon not less than 24 months notice or by Mr. Taylor at any time upon not less
than 12 months notice. The agreement presently provides for an annual salary of
(pounds) 116,500 (approximately $190,000), subject to annual increases as
determined by the board of Bridgeport's United Kingdom subsidiary. Under the
agreement, Mr. Taylor is provided the opportunity to participate in Bridgeport's
bonus programs and pension and welfare plans and benefits. In the event Mr.
Taylor is unable to perform his duties under the agreement as a result of
illness or other incapacity beyond his control, he will be entitled to receive
all or part of his salary for a period of six months or longer at the Board's
discretion.
Report of the Compensation Committee of Executive Compensation
The policy of the Compensation Committee is to align executive
compensation with the attainment of business objectives and with the overall
corporate performance of Bridgeport. In addition, the executive compensation
policy is structured to attract, retain and reward executive officers who
contribute to the long-term success of Bridgeport for the purpose of creating
greater value for the stockholders.
The principal components of executive compensation are annual cash
compensation consisting of base salary and incentive bonus, and long-term
incentive compensation consisting of awards of restricted stock and stock
options. The Compensation Committee makes awards of restricted stock and stock
options through the Bridgeport 1994 Stock Incentive Plan (the "Stock Incentive
Plan"). Stock-based awards are designed to create and encourage ownership and
retention of Bridgeport stock by executive officers in order to align their
interests with those of the stockholders. Each year, after a review of each
executive officer's individual performance, his contribution to the achievement
of any business objectives and the overall corporate performance of Bridgeport
<PAGE>
for the previous year, the Compensation Committee makes a subjective
determination of each executive officer's compensation for the following year.
The amount of compensation and the mix of cash and stock-based compensation is
structured to be competitive with similar companies. Although no formal survey
is undertaken, the Compensation Committee makes such determination based on its
general knowledge of similar companies.
The compensation of Joseph E. Clancy and Dan L. Griffith is paid pursuant
to employment agreements. These employment agreements provide for annual salary
increases as determined by the Board of Directors through the term of the
agreement. Additionally, the employment agreements provide for participation in
Bridgeport's incentive bonus plans, including the Stock Incentive Plan. During
fiscal year 1998, the annual salary of Mr. Griffith was increased to $290,000.
Mr. Clancy's annual salary was reduced to $125,000 effective January 1, 1998.
The Compensation Committee determined the fiscal year 1998 compensation of
Messrs. Clancy and Griffith using the same criteria as it does for all other
executive officers of Bridgeport as described above.
Section 162(m) of the Internal Revenue Code imposes a $1,000,000 ceiling
on tax-deductible remuneration paid to each of the five most highly compensated
executive officers of a publicly-held corporation, unless the compensation is
treated as performance related. The compensation generally paid to each of
Bridgeport's executive officers is less than the $1,000,000 threshold. The
Compensation Committee has not yet made any policy decisions with respect to
this limit.
Compensation Committee
Eliot M. Fried (Chairman)
Robert J. Cresci
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Settlement of Certain Environmental Matters
In connection with the leveraged buy-out of Bridgeport from Textron in
1986, Textron agreed to retain liability for, among other things, historic
contamination related to Bridgeport facility in Bridgeport, Connecticut.
Subsequent to Bridgeport's leveraged buy-out transaction in 1986, contamination
was identified at the Connecticut facility. Textron disputed the extent of its
liability for remediation of the contamination. Bridgeport commenced litigation
against Textron. In settlement of the litigation, Textron and Bridgeport entered
into an agreement in June 1994 which allocates remediation costs between Textron
and Bridgeport. Under the settlement agreement, Textron agreed to accept sole
responsibility to remediate hazardous substances in certain areas of the
Bridgeport facility to the extent required by law, and Bridgeport and Textron
agreed to share equally the costs to remediate groundwater beneath the property.
Textron Financing Arrangements
Bridgeport offers to its customers the ability to finance purchases
through financing arrangements provided by Textron Financial Corporation
("TFC"), a subsidiary of Textron. TFC determines whether or not to extend
financing to customers on a case by case basis. In the event of default by a
customer, Bridgeport is under no obligation to repurchase the equipment.
Bridgeport believes that the loss of TFC as a financing source would not have a
material adverse effect on Bridgeport.
<PAGE>
Assumption of Product Liability by Textron
In connection with Bridgeport's leveraged buy-out transaction in 1986,
Textron assumed certain product liability exposure for products shipped by
Bridgeport prior to the effective date of the closing of such transaction.
Certain other relationships and related transactions are described above
under "Compensation Committee Interlocks and Insider Participation."
<PAGE>
ITEM II. RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors proposes and recommends that the stockholders
ratify the selection of Arthur Andersen LLP, independent public accountants, to
audit the accounts of Bridgeport and its subsidiaries for fiscal 1999. The
following resolution will be offered at the Annual Meeting:
RESOLVED, that the selection by the Board of Directors of Arthur Andersen
LLP, independent public accountants, to audit the accounts of Bridgeport and its
subsidiaries for fiscal 1999 be, and hereby is, ratified and approved.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will consider it a direction to select other independent public
accountants for the subsequent year. Even if the selection is ratified, the
Board of Directors, in its discretion, may direct the appointment of a new
independent public accounting firm at any time during the year, if the Board
determines that such a change would be in the best interest of Bridgeport and
its stockholders.
Arthur Andersen LLP has been serving as Bridgeport's independent public
accountants since fiscal 1992.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting with the opportunity to make a statement if he or she desires to do so
and will be available to respond to appropriate questions.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
In accordance with the rules established by the Commission, stockholder
proposals to be included in Bridgeport's proxy statement with respect to the
1999 Annual Meeting of stockholders must be received by Bridgeport at its
executive offices located at 500 Lindley Street, Bridgeport, Connecticut, 06606
no later than March 29, 1999.
In addition, Bridgeport's Bylaws provide that any stockholder of record
desiring to nominate a director or have a stockholder proposal considered at an
annual meeting must provide written notice of such nomination or proposal and
appropriate supporting documentation, as set forth in the Bylaws, to Bridgeport
Machines, Inc., Attention: Secretary, at its principal executive offices not
less than 60 days nor more than 90 days prior to the anniversary date of the
prior year's annual meeting (the "Anniversary Date"); provided, however, that
stockholders will have additional time to deliver the required notice in the
event the annual meeting is advanced by more than 30 days or delayed by more
than 90 days from the Anniversary Date. The required notice must set forth (i)
as to each person whom the stockholder proposes to nominate, all information
relating to such person required by Regulation 14A under the Securities Exchange
Act of 1934, as amended, (ii) as to any other business to be proposed by the
stockholder, a brief description of such business, the reasons for conducting
the business and any material interests of the stockholder (and beneficial
owner, if any) in the business and (iii) the name and address of, and the number
of shares owned by, such stockholder (and beneficial owner, if any).
<PAGE>
OTHER BUSINESS OF THE MEETING
Management does not know of any business to be transacted at the Annual
Meeting other than as indicated herein. However, certain stockholders may
present topics for discussion from the floor. Should any matter other than as
indicated herein properly come before the meeting for a vote, the persons
designated as proxies will vote thereon in accordance with their best judgment.
You are urged to mark, sign, date and return the enclosed proxy in the
prepaid envelope provided for such purpose.
By Order of the Board of Directors,
/s/ Joseph E. Clancy
--------------------
Joseph E. Clancy
Chairman of the Board of Directors
August 7, 1998
<PAGE>
REVOCABLE PROXY
BRIDGEPORT MACHINES, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 18, 1998
The undersigned hereby appoints Dan L. Griffith and Walter C. Lazarcheck, or
either of them, with full powers of substitution, to act as attorneys and
proxies for the undersigned to vote all shares of common stock of Bridgeport
Machines, Inc. (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of Stockholders (the "Meeting"), to be held at Bridgeport
Machines, Inc., 500 Lindley Street, Bridgeport, CT at 10:30 AM on September 18,
1998 and at any and all adjournments and postponements thereof, as follows:
I. The election as director the nominee listed below for a three-year term.
Bhikhaji M. Maneckji
[ ] FOR [ ] WITHHOLD
II. Ratification of the selection of Arthur Andersen LLP as independent public
accountants for the Company for the fiscal year ending April 3, 1999.
In their discretion, the proxies are authorized to vote on such other matters
as may properly come before the Meeting or any adjournments or postponements
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE NOMINEE AND THE PROPOSAL STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
Please be sure to sign and date this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
BRIDGEPORT MACHINES, INC.
The Board of Directors recommends a vote "FOR" the listed nominee and
proposal.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Should the person(s) signing above be present and elect to vote at the Meeting
or at any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this Proxy, then the power of such attorneys and proxies shall be
deemed terminated and of no further force and effect.
The person(s) signing above acknowledge(s) receipt from the Company, prior to
the execution of this Proxy, of Notice of the Meeting, and a Proxy Statement and
an Annual Report to Stockholders for the fiscal year ended March 28, 1998.
Please sign exactly as your name(s) appear(s) on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
