BALTEK CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 27, 1999
To The Shareholders:
Notice is hereby given that an annual meeting of Shareholders of Baltek
Corporation will be held at the offices of Baltek Corporation, 10 Fairway Court,
Northvale, New Jersey, on May 27, 1999, at 10:00 A.M. (Eastern Daylight Savings
Time):
1. To elect seven (7) directors of the Company to hold office for the
ensuing year;
2. To approve the appointment of Deloitte & Touche LLP, Certified
Public Accountants, as the independent auditors of the Company for
1999; and
3. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.
A Proxy Statement relating to such meeting is enclosed herewith. The Annual
Report of the Company for the fiscal year ended December 31, 1998 is also
enclosed. Shareholders of record at the close of business on April 15, 1999 will
be entitled to notice of and to vote at said meeting or any adjournments
thereof.
It is important that your shares be represented and voted at the Annual
Meeting, regardless of whether or not you plan to attend in person. You are
therefore urged to sign, date and return the enclosed proxy card in the envelope
provided.
By Order of the Board of Directors
MARGOT W. KOHN
Secretary
Northvale, New Jersey
May 7, 1999
- --------------------------------------------------------------------------------
Please fill in, date, sign and mail promptly the accompanying proxy in the
return envelope furnished for that purpose, whether or not you plan to attend
the meeting.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
BALTEK CORPORATION
P.O. Box 195
10 Fairway Court
Northvale, New Jersey 07647
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 27, 1999
To the Shareholders of Baltek Corporation:
This statement is furnished in connection with the solicitation by the
Board of Directors of proxies to be used at the Annual Meeting of Shareholders
of Baltek Corporation (the "Company") to be held at 10:00 A.M. Eastern Daylight
Time on May 27, 1999 at the offices of Baltek Corporation, 10 Fairway Court,
Northvale, New Jersey and at any adjournments thereof. All shareholders of
record at the close of business on April 15, 1999 are entitled to notice of and
to vote at such meeting. Proxy Cards and Proxy Statements are expected to be
mailed to shareholders on or about May 7, 1999. The stock transfer books will
not be closed. The holders of a majority of the shares entitled to vote at the
meeting must be present in person or represented by proxy in order to constitute
a quorum for all matters to come before the meeting.
Any proxy, if received in time for voting and not revoked, will be voted at
the meeting in accordance with the directions of the shareholder. Any
shareholder giving a proxy has the power to revoke it in person or by a writing
delivered to the Secretary of the Company at any time before it is exercised.
All expenses incurred in connection with this solicitation will be borne by the
Company.
The Board of Directors does not know of any matters which will be brought
before the meeting other than those specifically set forth in the notice
thereof. However, if any other matter properly comes before the meeting, it is
intended that the persons named in and acting under the enclosed form of proxy,
or their substitutes, will vote on such matters in accordance with their best
judgment.
At the close of business on April 15, 1999, the Company had outstanding
2,523,261 shares of Common Stock. Each share has one vote. Unless the context
otherwise indicates, the term "Company" refers to Baltek Corporation.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's common stock at April 15, 1999 by each person known to the
Company to be the beneficial owner at that date of more than 5 percent of the
outstanding common stock of the Company, by each director, and by all directors
and officers of the Company as a group (1):
<TABLE>
<CAPTION>
Name and Address Number of Percent
Beneficial Owner Shares of Class
- ---------------- ------ --------
<S> <C> <C>
Jacques Kohn (a) 804,237 31.9
10 Fairway Court
Northvale, N.J. 07647
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Name and Address Number of Percent
Beneficial Owner Shares of Class
- ---------------- ------ --------
<S> <C> <C>
Jean Kohn (a) 804,237 31.9
10 Fairway Court
Northvale, N.J. 07647
Bernard Kohn (a) 337,150 13.4
10 Fairway Court
Northvale, N.J. 07647
Henri-Armand Kohn 11,963 *
Reich & Tang Asset Management L.P. (b) 305,500 12.1
Benson J. Zeikowitz 200 *
Bernard J. Wald -0- *
William F. Nicklin 14,000 *
Margot W. Kohn (c) -0- *
All directors and officers as a group (10 1,297,487 51.4
persons including those named above)
</TABLE>
- ----------
* Less than 1 %
(a) The shares owned by Bernard Kohn are held in a voting trust, dated May
25, 1991, of which his brothers, Jacques Kohn and Jean Kohn, are the
voting Trustees.
(b) Successor to New England Investment Companies L.P. as the owner of the
shares listed.
(c) Margot W. Kohn disclaims any beneficial interest in shares owned by her
husband.
(1) For purpose of the above table, beneficial ownership has been determined
in accordance with Rule 13d-3 under the Securities Exchange Act. Other
than with respect to officers and directors of the Company, the
information in this table is based solely upon the information contained
in the Form 13G filed by the named entity with the Securities and
Exchange Commission.
ELECTION OF DIRECTORS
Seven (7) Directors are to be elected to hold office until the next annual
meeting of shareholders and until their successors have been elected and shall
have qualified.
The members of the Board of Directors are elected by a plurality of the
shares present or represented at this meeting, and voting on the election of
directors.
Unless otherwise instructed, shares represented by the proxies will be
voted for the election of the nominees listed below, all of whom are members of
the present Board of Directors. All of the members of the Board of Directors
were elected to their present term of office by the vote of the Shareholders at
the annual meeting of the Company on May 28, 1998.
The table below sets forth each nominee for election as a Director (based
on information supplied by them), their name, their age and their principal
occupation or employment during the past five years.
2
<PAGE>
INFORMATION CONCERNING NOMINEES
<TABLE>
<CAPTION>
Principal Occupation
or Employment by the Has Served
Company unless as Director
Name otherwise indicated since Age
- ---- ------------------- ----- ---
<S> <C> <C> <C>
Jacques Kohn (b) President 1969 (a) 77
Jean Kohn (b) Executive Vice President 1969 (a) 74
Henri-Armand Kohn (b) Executive Vice President 1997 49
Benson J. Zeikowitz (c) Management Consultant 1969 (a) 72
Bernard J. Wald (d) Partner in Law Firm of 1998 66
Herzfeld & Rubin, P.C.
Margot W. Kohn (b) Secretary 1975 73
William F. Nicklin (e) Senior Vice President - 1981 55
Investments
PaineWebber Incorporated
(a securities broker dealer)
</TABLE>
(a) Has been a Director of the Company and its predecessors for over 20
years.
(b) Jacques Kohn and Jean Kohn are brothers. Henri-Armand Kohn is the son of
Jean Kohn. Margot W. Kohn is the wife of Jacques Kohn.
(c) For over 20 years, up until January 1, 1998, Benson Zeikowitz served as
Treasurer of the Company.
(d) Legal services are provided to the Company by the law firm of Herzfeld &
Rubin, P.C.
(e) For more than five years prior to 1999, Mr. Nicklin was a Branch Manager,
Account Executive and Managing Director, BT Alex. Brown (a securities
broker dealer). Mr. Nicklin is a member of the Board of Directors of
Carco Electronics, a corporation registered under Section 12 of the
Exchange Act. None of the other nominees are members of the Board of
Directors of any corporations registered under Section 12 of the Exchange
Act or subject to the requirements of Section 15(d) of the Act.
The Board of Directors has an Audit Committee, the current members of
which are William F. Nicklin and Bernard J. Wald. The functions of the Audit
Committee comprise generally the following: recommend to the Board of Directors
the firm of independent accountants to serve the Company each fiscal year;
review the scope, fees and results of the audit by the independent accountants;
and review the internal accounting control procedures of the Company and
compliance with those procedures and policies. The Audit Committee had two
meetings in 1998.
The Board of Directors also has a Compensation Committee, the current
members of which are William F. Nicklin and Bernard J. Wald. The Compensation
Committee is to review periodically, and at least annually, the current
compensation of the officers of the Company, and determine whether an adjustment
is to be made in the amount and kinds of compensation to be paid to each of the
officers. In 1998, no significant changes were made in the base compensation of
the officers. The Compensation Committee had two meetings in 1998.
3
<PAGE>
The Board of Directors held two meetings in 1998. Jean Kohn, Margot W.
Kohn and Benson J. Zeikowitz, members of the Board of Directors, did not attend
one of those meetings. The Company has no Nominating Committee.
Executive Compensation
The following information is furnished with respect to the President of the
Company, as the Chief Executive Officer (CEO) and the Company's four most highly
compensated officers, other than the CEO (all five are referred to collectively
as the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------------------
Annual Compensation Awards Payouts
------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
------------- --------------- -----------
Other Securities
Annual Restricted Underlying All Other
Name and Principal Compen- Stock Options/ LTIP Compensation(2)
Position Year Salary Bonus(1) sation(3) Award(s) SARS(#) Payout
- ------------------ ---- -------- ------- ---------- ------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jacques Kohn 1998 $192,107 $57,632 $14,502 $0 0 $0 $14,166
President & CEO 1997 $192,107 $25,352 $14,502 $0 0 $0 $13,755
1996 $192,107 $5,000 $14,502 $0 0 $0 $3,371
Jean Kohn 1998 $192,107 $57,632 $10,551 $0 0 $0 $14,166
Executive Vice 1997 $184,922 $24,413 $10,551 $0 0 $0 $13,755
President 1996 $184,992 $5,000 $10,551 $0 0 $0 $9,239
Antonio R. Diaz 1998 $195,054 $58,616 $5,328 $0 0 $0 $14,166
Vice President-Latin 1997 $193,319 $25,512 $5,328 $0 0 $0 $13,755
American Operation 1996 $190,260 $5,000 $5,328 $0 0 $0 $9,239
Thomas Preisel 1998 $208,280 $62,484 $2,099 $0 0 $0 $14,166
Vice President 1997 $186,694 $24,638 $2,099 $0 0 $0 $13,755
Operations & Sales/ 1996 $157,418 $5,000 $2,099 $0 0 $0 $9,239
Marketing
Henri-Armand Kohn 1998 $218,400 $65,520 $4,495 $0 0 $0 $14,166
Executive Vice President 1997 $197,901 $26,117 $3,207 $0 0 $0 $13,755
1996 $161,437 $5,000 $3,207 $0 0 $0 $9,239
</TABLE>
(1) The bonuses were paid pursuant to the Company's Officers' Group Bonus
Plan, adopted in 1988. The provisions of the Plan are as follows: (1) the
Plan covers seven officers of the Company including the named executive
officers; (2) the bonus is based on income before taxes (IBT) and before
bonus; (3) no bonus is paid until consolidated IBT is at least 4% of
revenues, except that if the Company is profitable then a minimum bonus
of $5,000.00 each is paid; (4) Group bonus is calculated as follows:
<TABLE>
<CAPTION>
IBT as a % Group bonus
of Revenues as a % of IBT
---------------------------------------
<S> <C> <C>
4 to 5.99% 5%
6 to 7.99% 8%
8 and up 10%
</TABLE>
4
<PAGE>
(5) the group bonus shall be divided pro-rata based on the current annual
salaries of the officers; and (6) the maximum bonus for each shall not
exceed 30% of annual compensation. This Plan was terminated at the end of
1998. See "Board Compensation Committee Report on Executive
Compensation."
(2) The amounts represent contributions by the Company under the Baltek
Corporation Profit Sharing Plan, a qualified contribution plan covering
all salaried employees, to which the Company makes annual contributions
out of its profits. Each contribution is allocated to participants on the
basis of their respective rates of compensation, but with lesser amounts
allocated to compensation that constitutes "wages" for Social Security
purposes, in accordance with the rules of the Internal Revenue Code. The
Plan provides for vesting of amounts contributed by the Company over a
period of years.
(3) The amounts are premiums paid by the Company on individual life insurance
policies on the lives of seven officers, including the named executive
officers. Each individual executive owns the policy on his life. This
insurance is in addition to a group-term life insurance policy providing
term insurance on all the salaried employees, with a maximum coverage per
employee of $50,000.
(4) The Company has adopted an amendment to the Profit Sharing Plan described
in note (2) providing an election to all the participants, pursuant to
Section 401(k) of the Internal Revenue Code, to defer between 2 percent
and 10 percent of salary. Amounts deferred are paid over to the Trustee
under that Plan. The amendment does not provide for matching Company
contributions. The amounts of salary listed in column (c) are the
salaries of the named executive officers before any elective deferral
under the amendment.
Members of the Board of Directors are not compensated for services on the
Board of Directors, except for William F. Nicklin and Benson J. Zeikowitz who
are compensated $3,000 per annum plus a fee of $350 for each meeting of the
Board of Directors.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Committee's compensation policy is subjective and not subject to
specific criteria. The salaries of certain executive officers were not increased
at all in 1998, and the salaries of the remaining executive officers were not
increased substantially in 1998.
The policy of the Compensation Committee as to compensation payable to
executive officers is that the executive officers function as an integrated
team, headed by the CEO. They earn bonuses under the Officers' Group Bonus Plan,
depending upon the profitability of the Company's operations. Increases in the
salaries of officers are not based on the profit performance of the Company, but
rather on exceptionally valuable services of particular officers and also on
years of service. The Company has recently adopted a stock option plan and an
annual incentive compensation plan, both effective in 1999 (in lieu of the
Officers' Group Bonus Plan), to provide greater incentive to the Company's
executive officers and other key employees.
The base compensation of the CEO was not increased for the year 1998. The
compensation received by him for that year is based on services over a period of
more than 50 years for the Company and its predecessors. His work requires
involvement and decision-making in all areas of the Company's balsa and shrimp
business in the United States, Ecuador, and in all other markets where the
Company's products are sold. His compensation for 1998 was well-earned.
COMPENSATION COMMITTEE
Bernard J. Wald
William F. Nicklin
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a hypothetical
$100 investment made at the close of business at the end of the years 1993
through 1998 in: (a) the Company's common stock; (b) the NASDAQ Market Value
Index; and (c) the SIC Based Peer Group #2430 Millwork, Veneer, Plywood. The
graph is calculated assuming that all dividends are reinvested during the
relevant periods. The graph shows how a $100 investment would increase or
decrease in value over time, based on dividends (stock or cash) and increases or
decreases in, the market price of the stock and each of the indices.
INDEX OF TOTAL RETURNS:
Baltek Corporation; NASDAQ Market Value Index;
Peer Group #2430 Millwork, Veneer, Plywood
January 1, 1994 - December 31, 1998
<TABLE>
<CAPTION>
COMPANY/INDEX/MARKET 12/31/1993 12/30/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998
<S> <C> <C> <C> <C> <C> <C>
Baltek Corp 100.00 92.86 121.43 103.57 132.14 141.07
Millwork & Structural 100.00 106.21 105.92 127.19 156.27 144.94
NASDAQ Market Index 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On recommendation of the Audit Committee, the Board of Directors recommends
the appointment of Deloitte & Touche LLP as independent auditors of the Company
for the year ending December 31, 1999.
A representative of Deloitte & Touche LLP will be present at this Annual
Meeting with the opportunity to make a statement and to respond to shareholder
questions.
The Board of Directors considers Deloitte & Touche LLP to be well qualified
to serve as auditors. The Board of Directors recommends a vote "For" the
proposal to ratify the selection of Deloitte & Touche LLP as independent
accountants for the year 1999.
Ratification of the selection of Deloitte & Touche LLP as independent
accountants requires the affirmative vote of a majority of shareholders present
in person or by proxy at this meeting and voting on this proposal.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the best of the Company's knowledge, all forms that were required to be
filed with the Securities and Exchange Commission during 1998 under Section 16
(a) of the Securities and Exchange Act of 1934 by any of the Company's directors
or officers were filed in a timely fashion.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered by the Company for inclusion in
the 2000 Annual Meeting of Shareholders proxy materials must be received by the
Company not later than December 27, 1999.
OTHER MATTERS
While the Board of Directors does not know of any matters which may be
brought before the meeting, the proxy confers discretionary authority with
respect to the transaction of any other business. It is expected that shares
represented by proxies will be voted in support of the Board of Directors on any
question which may properly be submitted at the meeting.
By Order of the Board of Directors
/s/ MARGOT W. KOHN
------------------
MARGOT W. KOHN
Secretary
Northvale, New Jersey
May 7, 1999
