<PAGE>
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: [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Preliminary Proxy Statement RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE L.S. STARRETT COMPANY
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] 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>
THE L.S. STARRETT COMPANY
121 Crescent Street
Athol, Massachusetts 01331
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
September 20, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of the stockholders of The
L.S. Starrett Company will be held at the office of the Company in Athol,
Massachusetts, on Wednesday, September 20, 2000 at 2:00 p.m. for the following
purposes:
1. To elect a class of two directors, each to hold office for a term of
three years and until his successor is chosen and qualified.
2. To consider and act upon any other matter that may properly come before
the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed July 28, 2000 as the record date for the
determination of stockholders entitled to vote at the Annual Meeting, or any
adjournments thereof, and to receive notice thereof. The transfer books of the
Company will not be closed.
You are requested to execute and return the enclosed proxy, which is
solicited by the management of the Company.
Steven A. Wilcox, Clerk
Athol, Massachusetts
August 11, 2000
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE DATE,
SIGN AND PROMPTLY RETURN THE ENCLOSED FORM OF PROXY IN THE ENCLOSED STAMPED
AND ADDRESSED ENVELOPE. IF YOU DESIRE TO VOTE YOUR SHARES IN PERSON AT THE
ANNUAL MEETING, YOUR PROXY WILL BE RETURNED TO YOU.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OF
THE L.S. STARRETT COMPANY
121 CRESCENT STREET
ATHOL, MASSACHUSETTS 01331
The enclosed form of proxy and this Proxy Statement have been mailed to
stockholders on or about August 11, 2000 in connection with the solicitation
by the Board of Directors of The L.S. Starrett Company (the "Company") of
proxies for use at the Annual Meeting of Stockholders to be held at the office
of the Company in Athol, Massachusetts on Wednesday, September 20, 2000 at
2:00 p.m., or at any adjournments thereof, for the purposes set forth in the
accompanying notice of annual meeting of stockholders.
It is the intention of the persons named as proxies to vote shares
represented by duly executed proxies for the proposals described in this Proxy
Statement unless contrary specification is made. Any such proxy may be revoked
by a stockholder at any time prior to the voting of the proxy by a written
revocation received by the Clerk of the Company, by properly executing and
delivering a later-dated proxy, or by attending the meeting, requesting return
of the proxy and voting in person. A proxy, when executed and not so revoked,
will be voted at the meeting, including any adjournments thereof; and if it
contains any specifications, it will be voted in accordance therewith.
Stockholders of record as at the close of business on July 28, 2000 will be
entitled to vote at this meeting. On that date, the Company had outstanding
and entitled to vote 4,999,993 shares of Class A Stock and 1,483,837 shares of
Class B Stock. Each outstanding share of Class A Stock entitles the record
holder thereof to one vote and each outstanding share of Class B Stock
entitles the record holder thereof to ten votes. The holders of Class A Stock
are entitled to elect 25% of the Company's directors to be elected at each
meeting and such holders voting together with the holders of Class B Stock as
a single class are entitled to elect the remaining directors to be elected at
the meeting. Except for the foregoing and except as provided by law, all
actions submitted to a vote of stockholders will be voted on by the holders of
Class A and Class B Stock voting together as a single class. Pursuant to
Massachusetts law, the Company's Board of Directors is divided into three
classes with one class to be elected at each annual meeting of stockholders.
<PAGE>
I. ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at seven and
designated Andrew B. Sides, Jr., Douglas R. Starrett and Roger U. Wellington,
Jr. to serve as Class I Directors; Douglas A. Starrett and William S. Hurley
to serve as Class II Directors; and George B. Webber and Richard B. Kennedy to
serve as Class III Directors; and, in the case of each director, until his
successor is chosen and qualified.
It is the intention of the persons named in the proxy to vote for the
election of the two persons named below as Class II Directors, each to hold
office for a term of three years and until his successor is chosen and
qualified.
The names and ages of the nominees for directors proposed by the management,
their principal occupation, the significant business directorships they hold,
the years in which they first became directors of the Company and the amount
of securities of the Company beneficially owned by them as of July 28, 2000
are as follows:
<TABLE>
<CAPTION>
Shares
Beneficially
Owned (1)
(Percent of
Principal Class)
Occupation Director ------------------
Name(Age) Directorships Since Class A Class B
--------- ---------------------------- -------- -------- --------
CLASS II -- Director to be elected by Class A Stockholders:
<S> <C> <C> <C> <C>
William S. Hurley (56).. Senior Vice President and 1993 200(4) --
Chief Financial Officer,
Applied Science and
Technology, Inc., producer
of equipment utilized in the
semiconductor and
telecommunications
industries.
CLASS II -- Director to be elected by Class A and Class B Stockholders voting
together:
Douglas A. Starrett President of the Company. 1984 13,164(5) 21,097(5)
(48)...................
(*) 1.4%
</TABLE>
2
<PAGE>
The following table sets forth the names and ages of the Class III and I
Directors, their principal occupations, the significant business directorships
they hold, the years in which they first became directors of the Company and
the amount of securities of the Company beneficially owned by them as of July
28, 2000:
<TABLE>
<CAPTION>
Shares
Beneficially
Owned (1)
(Percent of
Principal Class)
Occupation Director ------------------
Name(Age) Directorships Since Class A Class B
--------- ------------------------------ -------- -------- --------
CLASS III -- Directors serving until 2001 Annual Meeting of Stockholders:
<S> <C> <C> <C> <C>
Richard B. Kennedy (57). Executive Vice President, 1996 125(4) --
GlobalBA.com, Inc., Worcester, (*) (*)
Massachusetts, e-commerce
service provider. Formerly
Vice president Marketing,
Saint-Gobain Abrasives,
Worcester, Massachusetts,
producer of abrasives
products.
George B. Webber (79)... Vice President, Webber Gage 1962 70,193(6) 79,435(6)
Division of the Company. 1.4% 5.4%
CLASS I -- Directors serving until 2002 Annual Meeting of Stockholders:
Andrew B. Sides, Jr.
(75)................... Formerly CEO of Rhode Island 1986 250 250
Tool Company, Providence, (*) (*)
Rhode Island, producer of
forgings.
Douglas R. Starrett
(80)................... Chairman and CEO of the 1952 56,758(2) 50,547
Company 1.1% 3.4%
Roger U. Wellington, Jr.
(59)................... Treasurer and Chief Financial 1987 11,120(3) 2,988(3)
Officer of the Company. (*) (*)
</TABLE>
---------
(1) Includes shares beneficially owned as defined in applicable rules of the
Securities and Exchange Commission, whether or not the interest in such
shares is disclaimed by the nominee. All shares are held with sole voting
and investment power except as indicated below for certain nominees.
(2) Includes 9,182 Class A and 21,158 Class B shares held with shared voting
and investment power, 4,275 Class A and 683 Class B shares held with
shared voting power only and 4,431 Class A and 4,274 Class B shares held
with sole voting power only. Douglas R. Starrett is the father of Douglas
A. Starrett, the President of the Company.
(3) Includes 977 Class A and 944 Class B shares held with shared voting and
investment power and 8,245 Class A and 2,044 Class B shares held with sole
voting power only.
(4) Shares are held with shared voting and investment power.
3
<PAGE>
(5) Includes 414 Class A and 550 Class B shares held with shared voting and
investment power and 7,601 Class A and 1,776 Class B shares held with sole
voting power only. Douglas A. Starrett is the son of Douglas R. Starrett,
the Chairman and CEO of the Company.
(6) Includes 4,111 Class A and 2,573 Class B shares held with sole voting
power only.
* Less than 1%
At July 28, 2000, the directors' and officers' beneficial ownership of the
Company's Common Stock consisted of 154,906 Class A and 154,632 Class B shares
(3.1% and 10.4%, respectively, of the outstanding shares). Of these shares,
Anthony M. Aspin, Vice President Sales of the Company, owned 3,095 Class A and
315 Class B shares. All shares beneficially owned by the directors and
officers were held with sole voting and investment power, except that 10,916
Class A and 22,652 Class B shares were held with shared voting and investment
power, 4,275 Class A and 683 Class B shares were held with shared voting power
only and 27,465 Class A and 10,982 Class B shares were held with sole voting
power only.
Richard Newton, Douglas A. Starrett and Roger U. Wellington, Jr., as
Trustees under the Company's 401(k) Stock Savings Plan and Employee Stock
Ownership Plan, c/o the Company, 121 Crescent Street, Athol, Massachusetts
01331, at July 28, 2000 owned beneficially 1,196,898 Class A and 332,885 Class
B shares (23.9% and 22.4%, respectively, of the outstanding shares) of Common
Stock of the Company, all of which were held with sole dispositive power
subject to the terms of the respective Plans. Except for an aggregate of
24,388 Class A and 10,667 Class B shares allocated to the accounts of Douglas
A. Starrett, Roger U. Wellington, Jr., George B. Webber and Douglas R.
Starrett in the Plans, such shares are not reflected in the holdings in the
above table.
All of the nominees and directors listed above have had the principal
occupations listed for at least five years except for William S. Hurley who
was Vice President and CFO of CYBEX International, Inc. until 1999, and
Richard B. Kennedy who was Vice President, Marketing, Saint-Gobain Abrasives
until 1999.
The following table sets forth the persons or groups known by the Company to
be beneficial owners of more than 5% of the Company's Common Stock who are not
disclosed as such elsewhere in this Proxy Statement.
<TABLE>
<CAPTION>
Amount And
Nature Of Percent
Name And Address Beneficial Of
Title Of Class Of Beneficial Owner Ownership Class
-------------- ------------------------ --------------- -------
<S> <C> <C> <C>
Class A........................ Dimensional Fund 279,950 shares* 5.43
Advisors 1299 Ocean Ave
Santa Monica, CA 90401
</TABLE>
* All shares are held with sole voting and investment power.
4
<PAGE>
During the fiscal year ended June 24, 2000, there were six meetings of the
Company's Board of Directors, three meetings of the Audit Committee and one
meeting of the Salary (Compensation) Committee. The members of the Audit
Committee during fiscal 2000 were Messrs. Kennedy, Hurley and Sides. In
general, the Audit Committee recommends to the Board of Directors the
independent auditors to be selected and confers with the Company's independent
auditors to review the audit scope, the Company's internal controls, financial
reporting issues, results of the audit and the range of non-audit services.
See also "Relationship with Independent Accountants" below. The members of the
Salary Committee during fiscal 2000 were Messrs. Kennedy, Hurley, Sides and
Douglas R. Starrett. The function of the Salary Committee is to review the
salaries of key management personnel. The Company does not have a standing
nominating committee.
Directors who are not employees of the Company receive an annual retainer
fee of $6,000 payable in quarterly installments and a fee of $700, plus
expenses, for each Board of Directors and committee meeting that they attend.
Only one meeting attendance fee is paid for attending two meetings on the same
day. All directors attended at least 75% of the aggregate number of all
meetings of the Board of Directors and of all committees on which they served.
Non-employee directors may elect to defer part or all of their director's fees
in which event such deferred fees and interest thereon will generally be
payable in five equal annual installments after they cease to be a director.
A. Compensation Committee Report
During fiscal 2000 the Compensation Committee of the Company was chaired by
William S. Hurley. The members of the Committee are all the outside directors
and the Chairman and CEO of the Company. The Committee reviews and sets
compensation for all the executive officers listed in the proxy statement. The
Chairman and CEO is not present when his compensation is considered.
Setting compensation is not done by strict formula. It is a subjective
judgment based on the following factors.
We do not look at the performance of just one year, but for a number of
years, and consider the economic climate in all areas of the world where we
operate. We look at how both stockholders and employees at all locations have
fared during these periods.
In particular, we look at stockholders' equity, which shows the value of the
Company to the stockholders. We also look at the dividend policy of the
Company to make sure that it is consistent or improving, since this is
important to all stockholders. At the same time, we must see that there are
funds left in the Company to provide for growth.
We consider stock price movement, bearing in mind that the stock market is
generally short-term oriented and subjected to pressures that are not under
the control of executive officers.
5
<PAGE>
Compensation is primarily made up of basic salary. We make a judgment based
on the above listed considerations and on competitive compensation of
companies of similar size and in similar fields, as shown by a national
survey, The National Executive Compensation Survey. This is the most
comprehensive survey of its kind. It covers top executive positions for
manufacturing organizations by sales volume. We also draw on our knowledge of
the market cost of any executive who might have to be replaced.
The variable pay for the executive officers who have Company-wide
responsibility is the bonus plan. This plan is based upon the return on equity
and the net margin on sales. No bonuses are awarded unless a certain minimum
is exceeded. Awards for Company performance above that minimum are made by the
judgment of the Compensation Committee.
There are also long-term incentives for everyone in the Company, including
the officers, to own Company stock. This is available by way of a 401(k) plan
and stock option plans approved by stockholders. All officers participate in
these plans.
The Company does not have special perks for executives that are not
available to everyone in the Company, and we maintain a common sense
relationship between executive pays and average pays.
Last year, fiscal 1999, was a pretty good year, but not exceptional and base
pay for the executive officers was not increased, and the bonus variable part
of pay was significantly reduced. This year, fiscal 2000, was a reasonably
good year, but not up to our standards. Because base pays for these officers
are reasonably competitive, they are again being held with no increase.
Reflecting this year's results, there is no bonus variable part of pay.
We do recognize that the results for the year are greatly affected by the
economy, particularly in the industrial manufacturing area where the Company
is strong and is affected the most. When the economic climate we are operating
in is not the best, we look for better management performance, because this is
when it is needed the most. This takes the form of keeping the organization
working together and laying the groundwork for a better future. We pay on
results, however, and we expect the work being done in the Company during this
period will pay off for everyone in the future.
Compensation Committee
William S. Hurley, Chairman
Richard B. Kennedy
Andrew B. Sides, Jr.
Douglas R. Starrett
Compensation Committee Interlocks and Insider Participation:
There were no Compensation Committee interlocks during the last fiscal year.
Douglas R. Starrett, Chairman and CEO of the Company, served as a member of
the Company's Compensation Committee during fiscal 2000.
6
<PAGE>
B. Remuneration
The following information is given on an accrual basis for the last three
fiscal years with respect to the executive officers of the Company who earned
at least $100,000 in fiscal 2000:
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
--------------- ------------
Bonus/
Profit All Other
Name and Position Year Salary Sharing Options Compensation*
----------------- ---- ------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C>
D.R. Starrett................... 1998 289,000 96,000 300 3,283
Chairman and CEO 1999 304,000 52,890 500 3,653
2000 304,000 -- 700 3,333
D.A. Starrett................... 1998 181,000 60,125 300 3,017
President 1999 200,000 34,795 200 3,333
2000 200,000 -- 900 3,333
G.B. Webber..................... 1998 100,000 6,700 300 1,667
Vice President 1999 110,000 2,860 1,246 1,943
Webber Gage Division 2000 110,000 -- 1,196 1,880
R.U. Wellington, Jr............. 1998 160,000 53,150 -- 2,765
Treasurer and CFO 1999 168,000 29,230 4,141 2,800
2000 168,000 -- 3,158 3,287
</TABLE>
---------
* Consists of the market value of the one-third matching shares allocated
under the Company's 401(k) plan.
C. Retirement Plan
The Company's Employees' Retirement Plan covers all domestic employees who
have at least one year of service and have attained age 21. Benefits under the
Retirement Plan are determined by reducing a formula amount calculated under
the Retirement Plan by 90% of the annuity value of the employee's vested
account balance, if any, under The L.S. Starrett Company Employee Stock
Ownership Plan (the "ESOP"). See below, "Employee Stock Savings and Ownership
Plans." At no time will the combined benefit of any participant under the
Retirement Plan and the ESOP be less than such participant's benefits, if any,
under the Retirement Plan before establishment of the ESOP. The formula amount
calculated under the Retirement Plan is based on the sum of 1.25% of the
employee's average base salary up to his Social Security Covered Compensation
plus 1.70% of the employee's average base salary over Covered Compensation,
times the number of years of service up to but not exceeding 35 years. An
employee's average base salary is his average base salary for the five
consecutive highest paid of his last ten years of employment.
7
<PAGE>
Pursuant to provisions of the Internal Revenue Code of 1986, as amended, in
general, annual compensation that may be taken into account in computing a
participant's benefit under the plan is limited (to $170,000 starting in 2000)
and annual annuity benefits may not exceed a specified dollar limit (in
general for 2000, $135,000). The Company has established a Supplemental
Executive Retirement Plan ("SERP") to provide on an unfunded basis out of the
general assets of the Company benefits earned under the Retirement Plan
formula that are in excess of Internal Revenue Code limits. Amounts paid under
the Company's Bonus and Profit-Sharing Plan are not included in base salary.
At July 1, 2000, under the Retirement Plan and SERP the credited years of
service of certain executive officers of the Company and their credited
salaries for the fiscal year then ended were as follows: Douglas R. Starrett--
35 years, $304,000; George B. Webber--35 years, $110,000; Douglas A.
Starrett--23 years, $200,000; and Roger U. Wellington, Jr.--15 years,
$168,000.
The following table sets forth estimates of the pre-offset formula benefit
amount determined under the Retirement Plan for employees in various salary
and years-of-service categories, calculated as a benefit payable as if an
employee retired in 2000 at age 65. In the case of any employee with a vested
account balance under the ESOP, the formula benefit amount under the
Retirement Plan, estimates of which are shown below, would be subject to
offset by 90% of the annuity value of the ESOP vested account balance, but no
deduction would be made for Social Security benefits or other offset amounts.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Credited Service
Average Annual ------------------------------------------------------------------------
Earnings 15 25 35
-------------- ------ ------- -------
<S> <C> <C> <C>
$100,000 23,131 38,551 53,972
125,000 29,506 49,176 68,847
150,000 35,881 59,801 83,722
175,000 42,256 70,426 98,597
200,000 48,631 81,051 113,472
225,000 55,006 91,676 128,347
250,000 61,381 102,301 143,222
275,000 67,756 112,926 158,097
300,000 74,131 123,551 172,972
325,000 80,506 134,176 187,847
</TABLE>
D. Employee Stock Savings and Ownership Plans
The Company maintains for its domestic employees an Employee Stock Ownership
Plan (ESOP), established in 1984, and a 401(k) Stock Savings Plan (401(k)
Plan), which was established in 1986. Both are designed to supplement
retirement benefits provided under the Company's Retirement Plan and to enable
employees to share in the growth of the Company.
8
<PAGE>
In November 1984 the ESOP purchased 800,000 shares of stock from the Company
using funds obtained from borrowings guaranteed by the Company that were
repaid over a ten year period. All employees of the Company are participants
in the ESOP after completing one year of service and attaining age 21.
Allocations to a participant's account under the ESOP are made in proportion
to the ratio that the participant's compensation bears to the aggregate
compensation of all participants. As of June 30, 1994, all available ESOP
shares had been allocated and, consequently, no allocations other than
forfeitures have been made during the past five years.
Employees who retire, die, or otherwise terminate employment under the ESOP
will be entitled to receive their vested account balance, which will generally
be distributed at the same time that the employee is eligible to begin
receiving a benefit under the Retirement Plan. An amount equal to 90% of an
employee's vested ESOP account balance, expressed in annuity form, will be
used to offset the employee's benefit under the Retirement Plan. See above,
"Retirement Plan."
The 401(k) Plan is a savings and salary deferral plan that is intended to
qualify for favorable tax treatment under Section 401(k) of the Internal
Revenue Code. To be a participant an employee must have completed six months
of service and be at least 18 years old. Plan participants may authorize
deferral of a portion of their salary through payroll deductions. Participants
may elect to have up to 15% of their compensation (as determined under the
Plan) contributed to a trust fund established for the Plan as a salary
deferral contribution.
The Company contributes to the 401(k) Plan monthly on behalf of each
participant a matching contribution equal to one-third of the first 1% of the
participant's compensation (as determined under the plan) that the participant
contributes as a salary deferral for such month. In addition, the Company may
contribute to the Plan monthly an additional matching contribution equal to a
portion of each participant's additional salary deferral contributions which
are designated by the participant is Match-Eligible Elective Contributions. At
present, the supplemental matching contribution is equal to one-third of the
participant's Match-Eligible Elective Contributions. Salary deferral
contributions vest immediately. Matching contributions vest after five years
of service (as determined under the Plan) or upon the participant's death,
disability or retirement, if earlier.
Participants in the 401(k) Plan are not subject to Federal or state income
tax on salary deferral contributions or on Company matching contributions or
the earnings thereon until such amounts are withdrawn from the Plan. Matching
Contributions and Match-Eligible Elective Contributions to the Plan are
invested in the Company's Common Stock. Other contributions to the Plan are
invested in accordance with participant directions among various mutual funds
made available for this purpose. Withdrawals from the Plan may only be made
upon termination of employment, attainment of age 59 1/2 or in connection with
certain provisions of the Plan that permit hardship withdrawals. The Plan also
permits loans to participants.
9
<PAGE>
For the last three fiscal years ended June 24, 2000, Company matching
contributions for all executive officers of the Company as a group were 1,507
shares and for all employees of the Company as a group were 60,944 shares.
E. Stock Option and Purchase Plans
The Company currently has in effect for the benefit of eligible employees
the 1997 Employees' Stock Purchase Plan (the "1997 Plan") to provide a
convenient means for these employees to acquire an interest in the future of
the Company by purchasing up to 800,000 shares of Common Stock. At June 24,
2000, there were 1,681 employees eligible to participate in the 1997 Plan.
The option price to purchase shares of the Company's Common Stock under the
1997 Plan, as well as the predecessor "1992 Plan," which is identical, is the
lower of 85% of the market price on the date of grant or 85% of the market
price on the date of exercise (two years from the date of grant). The Company
also sells treasury shares to employees under an Employees' Stock Purchase
Plan adopted in 1952 (the "1952 Plan"). The Company, from time to time,
purchases these shares in the open market to be held in treasury. The Company
pays brokerage and other expenses incidental to purchases and sales under the
1952 Plan and employees may authorize regular payroll deductions for purchases
of shares.
The following table sets forth information regarding options for shares of
the Company's Common Stock under the terms of the Company's stock option and
purchase plans for the executive officers of the Company:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Class of Market
Stock and As % of Price
Number of Total at Grant
Options Employee Grant Exercise Expiration Date
Name Granted Grants Date Price(1) Date Value(2)
---- ------------- -------- ------ -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
D.R. Starrett....... 500 Class B 1.2 $23.69 $20.14 11/22/01 $3,100
200 Class B .7 21.94 18.65 6/6/02 1,200
D.A. Starrett....... 400 Class B 1.0 23.69 20.14 11/22/01 2,400
500 Class B 1.9 21.94 18.65 6/6/02 2,900
G.B. Webber......... 1,196 Class B 2.8 23.69 20.14 11/22/01 7,300
R.U. Wellington..... 3,158 Class B 7.5 23.69 20.14 11/22/01 19,300
</TABLE>
---------
(1) Exercise price represents 85% of market price on dates of grant. Exercise
price will be 85% of market price on date of exercise, if lower.
(2) Based on the Black-Scholes option pricing model (assuming volatility of
25% and interest rates of 4.3 to 6.5%).
10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-The-Money
Number Options at Options at
of Fiscal Year Fiscal Year
Shares Value End (None End (None
Acquired Realized Exercisable) Exercisable)
-------- -------- ------------ ------------
<S> <C> <C> <C> <C>
D.R. Starrett....................... 200 $1,257 700 --
D.A. Starrett....................... 200 1,257 900 --
G.B. Webber......................... 100 408 1,196 --
R.U. Wellington, Jr................. 1,898 7,744 3,158 --
</TABLE>
F. Stock Performance Graph
The following graph sets forth information comparing the cumulative total
return to holders of the Company's Common Stock over the last five fiscal years
with (1) the cumulative total return of the Russell 2000 Index ("Russell 2000")
and (2) an index reflecting the cumulative total returns of the following
companies ("Peer Group"): Badger, Brown & Sharpe, Chicago Rivet & Machine,
Clarcor, Devlieg-Bullard, Eastern Co., Essef, Federal Screw Works, Gleason,
Regal Beloit, Tennant and WD-40. Essef and Gleason total returns are included
only for the first four years since they were acquired during the current year.
[GRAPH APPEARS HERE]
11
<PAGE>
II. RELATIONSHIP WITH INDEPENDENT AUDITORS
During the year ended June 24, 2000, Deloitte & Touche was engaged to
perform the annual audit. Representatives of Deloitte & Touche are expected to
be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so; they will be available to respond to
appropriate questions.
The Company presently expects to engage Deloitte & Touche as auditors for
the 2001 fiscal year, but the selection will not be made until the September
2000 meeting of the Company's Board of Directors.
III. GENERAL
A. Solicitation and Voting
In case any person or persons named herein for election as a director should
not be available for election at the Annual Meeting, proxies in the enclosed
form (in the absence of express contrary instructions) may be voted for a
substitute or substitutes as well as for other persons named herein.
As of the date of this statement your management knows of no business that
will be presented to the Annual Meeting that is not referred to in the
accompanying notice, other than the approval of the minutes of the last
meeting of stockholders, which action will not be construed as approval or
disapproval of any of the matters referred to in such minutes.
As to other business, if any, that may properly come before the Annual
Meeting, it is intended that proxies in the attached form that do not contain
specific instructions to the contrary will be voted in respect thereof in
accordance with the judgment of the persons voting the proxies.
A summary of the Annual Meeting of the Stockholders of the Company will be
sent to each stockholder.
The enclosed proxy is solicited by the Board of Directors of the Company.
The cost of solicitation will be borne by the Company. Such solicitation will
be made by mail and may also be made by the Company's officers and employees
personally or by telephone or telegram. The Company will, on request,
reimburse brokers, custodians and nominees for their expenses in sending
proxies and proxy material to beneficial owners. A proxy that is executed but
that does not specify a vote for, against or in abstention will be voted in
accordance with the recommendation of the Board of Directors contained herein.
Consistent with state law and under the Company's by-laws, a majority of the
shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes
12
<PAGE>
a quorum as to such matter. Votes cast by proxy or in person at the Annual
Meeting will be counted by persons appointed by the Company to act as election
tellers for the Annual Meeting. The three nominees for election as directors
at the Annual Meeting who receive the greatest number of votes properly cast
for the election of directors shall be elected directors.
The election tellers will count shares represented by proxies that withhold
authority to vote for a nominee for election as a director or that reflect
abstentions and "broker non-votes" (i.e., shares represented at the meeting
held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or persons entitled to vote and (ii) the
broker or nominee does not have the discretionary voting power on a particular
matter) only as shares that are present and entitled to vote on the matter for
purposes of determining the presence of a quorum. Abstentions and broker non-
votes will not be counted in favor of or against, and will have no other
effect on the election of directors.
B. Submission of Stockholder Proposals
Stockholder proposals for inclusion in the Company's proxy statement for its
2001 Annual Meeting must be received by the Company no later than April 12,
2001.
Under the Company's By-laws, stockholders who wish to make a proposal at the
2001 Annual Meeting--other than one that will be included in the Company's
proxy statement--must notify the Company no earlier than April 22, 2001 and no
later than May 22, 2001. If a stockholder who wishes to present a proposal
fails to notify the Company by May 22, 2001, the stockholder would not be
entitled to present the proposal at the meeting. If, however, notwithstanding
the requirements of the Company's By-laws, the proposal is brought before the
meeting, then under the SEC's proxy rules the proxies solicited by management
with respect to the 2001 Annual Meeting will confer discretionary voting
authority with respect to the stockholder's proposal on the persons selected
by management to vote the proxies. If a stockholder makes a timely
notification, the proxies may still exercise discretionary voting authority
under circumstances consistent with the SEC's proxy rules.
IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE ASSURED IT IS IMPORTANT THAT
THE PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE URGED TO EXECUTE
AND RETURN THE ENCLOSED PROXY IN THE STAMPED ENVELOPE ADDRESSED TO THE COMPANY
AT ATHOL, MASSACHUSETTS. Stockholders who send in proxies, but attend the
Annual Meeting in person, may withdraw their proxies and vote directly if they
prefer or may allow their proxies to be voted with the similar proxies sent in
by other stockholders.
August 11, 2000
13
<PAGE>
PROXY
THE L.S. STARRETT COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE L.S. STARRETT COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 20, 2000
The undersigned hereby constitutes and appoints Douglas A. Starrett, Douglas R.
Starrett, and George B. Webber, and each of them, as attorneys and proxies of
the undersigned, with full power of substitution, to vote and act in the manner
designated on the reverse side at the Annual Meeting of Stockholders of The L.S.
Starrett Company (the "Company") to be held on the 20th day of September, 2000
at 2:00 p.m. at the office of the Company in Athol, Massachusetts, and any
adjournments thereof, upon and in respect of all of the shares of the Class A
and Class B Common Stock of the Company as to which the undersigned may be
entitled to vote or act, with all powers the undersigned would possess if
personally present, and without limiting the general authorization hereby given,
the undersigned directs that his vote be cast as specified in the Proxy. The
undersigned hereby revokes any proxy previously granted to vote the same shares
of stock for said meeting.
----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
[X] Please mark
votes as in
this example.
Management recommends a vote FOR the following proposals as set forth in the
Proxy Statement:
ELECTION OF DIRECTORS:
Class A Stockholders: FOR WITHHELD
William S. Hurley [ ] [ ]
MARK HERE
Class A and B [ ] [ ] FOR ADDRESS [ ]
Stockholders: CHANGE AND
Douglas A. Starrett NOTE BELOW
______________________________________________
For all nominees except as noted on line above
<PAGE>
The Shares represented hereby will be voted as directed herein but, if no
directions are indicated hereon, they will be voted FOR.
This instrument delegates discretionary authority with respect to matters not
known or determined at the time of solicitation of this instrument.
PLEASE MARK, SIGN, DATE AND RETURN THIS INSTRUMENT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Note: Please sign exactly as name(s) appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signer is a corporation, please sign
corporate name in full by authorized officer.
Signature:__________________________________________ Date:___________________
Signature:__________________________________________ Date:___________________
<PAGE>
PROXY CARD
FOR VOTING CLASS B COMMON STOCK ONLY
THE L.S. STARRETT COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE L.S. STARRETT COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 20, 2000
The undersigned hereby constitutes and appoints Douglas A. Starrett, Douglas R.
Starrett, and George B. Webber, and each of them, as attorneys and proxies of
the undersigned, with full power of substitution, to vote and act in the manner
designated on the reverse side at the Annual Meeting of Stockholders of The L.S.
Starrett Company (the "Company") to be held on the 20th day of September, 2000
at 2:00 p.m. at the office of the Company in Athol, Massachusetts, and any
adjournments thereof, upon and in respect of all of the shares of the Class B
Common Stock of the Company as to which the undersigned may be entitled to vote
or act, with all powers the undersigned would possess if personally present, and
without limiting the general authorization hereby given, the undersigned directs
that his vote be cast as specified in the Proxy. The undersigned hereby revokes
any proxy previously granted to vote the same shares of stock for said meeting.
----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
[X] Please mark
votes as in
this example.
Management recommends a vote FOR the following proposals as set forth in the
Proxy Statement:
ELECTION OF DIRECTOR:
Nominees: Douglas A. Starrett
FOR WITHHELD
[ ] [ ]
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE BELOW
_______________________________________________
For both nominees except as noted on line above
<PAGE>
The Shares represented hereby will be voted as directed herein but, if no
directions are indicated hereon, they will be voted FOR.
This instrument delegates discretionary authority with respect to matters not
known or determined at the time of solicitation of this instrument.
PLEASE MARK, SIGN, DATE AND RETURN THIS INSTRUMENT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Note: Please sign exactly as name(s) appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signer is a corporation, please sign
corporate name in full by authorized officer.
Signature:__________________________________________ Date:___________________
Signature:__________________________________________ Date:___________________
<PAGE>
THE L.S. STARRETT COMPANY
DIRECTIONS UNDER 401(K) STOCK SAVINGS PLAN
AND EMPLOYEE STOCK OWNERSHIP PLAN OF
THE L.S. STARRETT COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 20, 2000
The undersigned hereby directs Douglas A. Starrett, Roger U. Wellington, Jr. and
Richard C. Newton, and each of them, as trustees under the 401(k) Stock Savings
Plan and Employee Stock Ownership Plan (the "Plans") of The L.S. Starrett
Company (the "Company"), to vote and act in the manner designated below at the
Annual Meeting of Stockholders to be held on the 20th day of September, 2000 at
2:00 p.m. at the office of the Company in Athol, Massachusetts, and any
adjournments thereof, upon and in respect of all of the shares of the Class A
and Class B Common Stock of the Company allocated to the undersigned under the
Plans. The undersigned hereby revokes any other directions previously given to
vote the same shares of stock for said meeting.
----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
[X] Please mark
votes as in
this example.
Management recommends a vote FOR the following proposals as set forth in the
Proxy Statement:
ELECTION OF DIRECTORS:
Nominees:
Class A Stockholders: FOR WITHHELD
William S. Hurley [ ] [ ]
MARK HERE
Class A and B [ ] [ ] FOR ADDRESS [ ]
Stockholders: CHANGE AND
Douglas A. Starrett NOTE BELOW
______________________________________________
For all nominees except as noted on line above
<PAGE>
The Shares represented hereby will be voted as directed herein but, if no
directions are indicated hereon, they will be voted in accordance with the terms
of the trusts.
This instrument delegates discretionary authority with respect to matters not
known or determined at the time of solicitation of this instrument.
PLEASE MARK, SIGN, DATE AND RETURN THIS INSTRUMENT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Note: Please sign exactly as name(s) appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signer is a corporation, please sign
corporate name in full by authorized officer.
Signature:__________________________________________ Date:___________________
Signature:__________________________________________ Date:___________________
<PAGE>
PROXY CARD
FOR VOTING CLASS A COMMON STOCK ONLY
THE L.S. STARRETT COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE L.S. STARRETT COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 20, 2000
The undersigned hereby constitutes and appoints Douglas A. Starrett, Douglas R.
Starrett, and George B. Webber, and each of them, as attorneys and proxies of
the undersigned, with full power of substitution, to vote and act in the manner
designated on the reverse side at the Annual Meeting of Stockholders of The L.S.
Starrett Company (the "Company") to be held on the 20th day of September, 2000
at 2:00 p.m. at the office of the Company in Athol, Massachusetts, and any
adjournments thereof, upon and in respect of all of the shares of the Class A
Common Stock of the Company as to which the undersigned may be entitled to vote
or act, with all powers the undersigned would possess if personally present, and
without limiting the general authorization hereby given, the undersigned directs
that his vote be cast as specified in the Proxy. The undersigned hereby revokes
any proxy previously granted to vote the same shares of stock for said meeting.
----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
[X] Please mark
votes as in
this example.
Management recommends a vote FOR the following proposals as set forth in the
Proxy Statement:
ELECTION OF DIRECTORS:
Nominee: William S. Hurley
FOR WITHHELD
[ ] [ ]
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE BELOW
Nominee: Douglass A. Starrett
FOR WITHHELD
[ ] [ ]
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE BELOW
<PAGE>
The Shares represented hereby will be voted as directed herein but, if no
directions are indicated hereon, they will be voted FOR
This instrument delegates discretionary authority with respect to matters not
known or determined at the time of solicitation of this instrument.
PLEASE MARK, SIGN, DATE AND RETURN THIS INSTRUMENT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Note: Please sign exactly as name(s) appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signer is a corporation, please sign
corporate name in full by authorized officer.
Signature:__________________________________________ Date:___________________
Signature:__________________________________________ Date:___________________
