TOROTEL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY, SEPTEMBER 18, 1995
TO THE SHAREHOLDERS OF TOROTEL, INC.
PLEASE TAKE NOTICE that the Annual Meeting (the "Meeting")
of the Shareholders of Torotel, Inc. (the "Corporation") will be
held on Monday, September 18, 1995, in the Royal Ballroom at the
Adam's Mark Hotel, I-70 and the Truman Sports Complex, Kansas
City, Missouri. The Meeting will convene at 2:00 p.m., Central
Daylight Time, to:
(1) Elect a Board of Directors;
(2) Transact such other business as may
properly come before the Meeting, or any
postponement or adjournment thereof.
The Stock Transfer Books of the Corporation will not be
closed, but only shareholders of record at the close of business
on August 4, 1995, will be entitled to receive notice of and to
vote at the Meeting.
The accompanying Form of Proxy is solicited by the Board of
Directors of the Corporation. Reference is made to the attached
Proxy Statement for further information with respect to the
business to be transacted at the Meeting.
Shareholders are cordially invited to attend the Meeting in
person. WHETHER OR NOT YOU EXPECT TO ATTEND THE METING, PLEASE
SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU DECIDE TO ATTEND THE
MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.
BY ORDER OF THE
BOARD OF DIRECTORS
\s\ Donald H. Loudon
DONALD H. LOUDON
SECRETARY OF TOROTEL, INC.
KANSAS CITY, MISSOURI
AUGUST 18, 1995
TOROTEL, INC.
13402 SOUTH 71 HIGHWAY
GRANDVIEW, MISSOURI 64030
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY, SEPTEMBER 18, 1995
SECURITY HOLDERS ENTITLED TO VOTE
Holders of shares of the Common Stock of Torotel, Inc. (the
"Corporation") of record at the close of business on August 4,
1995, will be entitled to vote at the Annual Meeting of
Shareholders (the "Meeting") to be held Monday, September 18,
1995, at 2:00 p.m., Central Daylight Time, in the Royal Ballroom
at the Adam's Mark Hotel, I-70 and the Truman Sports Complex,
Kansas City, Missouri, and at any and all postponements or
adjournments thereof.
This Proxy Statement, the enclosed Form of Proxy, the Notice
of Annual Meeting, and the accompanying 1995 Annual Report to
Shareholders (a), were initially distributed to shareholders on
or about August 18, 1995.
If the enclosed Proxy is properly executed and returned
prior to voting at the Meeting, the shares represented thereby
will be voted in accordance with any specifications made therein.
In the absence of instructions, the shares will be voted "FOR"
the nominees of the Board of Directors in the election of
directors.
Shareholders who execute Proxies retain the right to revoke
them at the time before they are voted by notifying the Secretary
of the Corporation in writing, by delivering a duly authorized
Proxy bearing a later date, or by attending the Meeting and
declaring the intention of voting in person.
(a) 1995 Annual Report to Shareholders is already on file on form
10-KSB with the SEC
PERSONS MAKING THE SOLICITATION
This Proxy is solicited on behalf of the Board of directors
of Torotel, Inc. The solicitation is by mail. The total expense
of such solicitation will borne by the Corporation and will
include reimbursement paid to brokerage firms and others for
their expenses in forwarding solicitation material regarding the
Meeting to beneficial owners. It may be that further
solicitation of Proxies will be made by telephone or oral
communication with some shareholders of the Corporation,
following the original solicitation. All such further
solicitation will be made by regular employees of the Corporation
who will not be additionally compensated therefor, or by its
Transfer Agent, and the cost will be borne by the Corporation.
Voting Securities and Principal Holders Thereof
The voting securities entitled to vote at the Meeting
consist of shares of common stock of the Corporation. Each
shareholder is entitled to one vote for each of said shares and
has the right to cumulate his votes for directors. The number of
issued and outstanding shares (exclusive of treasury shares) at
the close of business on August 4, 1995, was 2,766,688.
The close of business on August 4, 1995, has been fixed by
the Board of Directors as the record date for the determination
of the shareholders who will be entitled to vote at the Meeting.
The following persons beneficially owned more that 5% of the
outstanding voting securities of Torotel, Inc. at the close of
business on August 4, 1995:
<TABLE>
NAME AND ADDRESS AMOUNT
OF BENEFICIAL TITLE BENEFICIALLY PERCENT
OWNER CLASS OWNED OF CLASS
<S> <C> <C> <C>
Richard A. Sizemore Common 341,296 (a) 12.3%
8356 Hallet
Lenexa, KS 66215
Linda V. Sizemore Common 341,296 (b) 12.3%
8356 Hallet
Lenexa, KS 66215
Paulette A. Estes Common 328,943 (c) 11.9%
3917 N.E.59th St.
Kansas City, MO 64119
Gregory M. Sizemore Common 345,938 (d) 12.5%
12735 Mohawk Circle
Leawood, KS 66209
Julie Sizemore Common 345,938 (e) 12.5%
12735 Mohawk Circle
Lenexa, KS 66209
Dale H. Sizemore, Jr. Common 332,429 (f) 12.0%
2705 W. 121st Terrace
Leawood, KS 66209
Carol J. Sizemore Common 332,429 (g) 12.0%
2705 W. 121st Terrace
Leawood, KS 66209
Pauline R. Sizemore Common 244,345 (h) 8.8%
10541 Askew
Kansas City, MO 64137
</TABLE>
(a) Richard A. Sizemore's direct ownership is 121,256 shares.
Mr. Sizemore's indirect ownership is 220,040 shares. Of
this amount 6,666 shares are owned by Mr. Sizemore's wife,
12,868 shares are owned by Mr. Sizemore as trustee for his
children, and 200,506 shares are owned by a General
Partnership in which Mr. Sizemore is a general partner.
(b) Linda V. Sizemore's direct ownership is 6,666 shares. Mrs.
Sizemore's indirect ownership is 334,630 shares. Of this
amount, 121,256 shares are owned my Mrs. Sizemore's husband,
12,868 shares are owned by Mrs. Sizemore's husband as
trustee for her children, and 200,506 shares are owned by a
General Partnership in which Mrs. Sizemore's husband is a
general partner.
(c) Paulette A. Estes' direct ownership is 112,749 shares. Ms.
Estes' indirect ownership is 216,194 shares. Of this
amount, 15,688 shares are owned by Ms. Estes as trustee for
her children, and 200,506 shares are owned by a General
Partnership in which Ms. Estes is a general partner.
(d) Gregory M. Sizemore's direct ownership is 118,654 shares.
Mr. Sizemore's indirect ownership is 227,284 shares. Of
this amount 6,666 shares are owned by Mr. Sizemore's wife,
20,112 shares are owned by Mr. Sizemore as trustee for his
children, and 200,506 shares are owned by a General
Partnership in which Mr. Sizemore is a general partner.
(e) Julie Sizemore's direct ownership is 6,666 shares. Mrs.
Sizemore's indirect ownership is 339,272 shares. Of this
amount, 118,654 shares are owned by Mrs. Sizemore's husband,
20,112 shares are owned by Mrs. Sizemore's husband as
trustee for her children, and 200,506 shares are owned by a
General Partnership in which Mrs. Sizemore's husband is a
general partner.
(f) Dale H. Sizemore, Jr.'s direct ownership is 111,964 shares.
Mr. Sizemore's indirect ownership is 220,465 shares. Of
this amount, 5,351 shares are owned by Mr. Sizemore's wife,
14,608 shares are owned by Mr. Sizemore as trustee for his
children, and 200,506 shares are owned by a General
Partnership in which Mr. Sizemore is a general partner.
(g) Carol J. Sizemore's direct ownership is 5,351 shares. Mrs.
Sizemore's indirect ownership is 327,078 shares. Of this
amount, 111,964 shares are owned by Mrs. Sizemore's husband,
14,608 shares are owned by Mrs. Sizemore's husband as
trustee for her children, and 200,506 shares are owned by a
General Partnership in which Mrs. Sizemore's husband is a
general partner.
(h) Pauline R. Sizemore's direct ownership is 244,345.
DIRECTORS AND COMMITTEES
Torotel's Articles of Incorporation authorize seven
directors. At the Meeting, seven individuals will be
Management's nominees for election as members of the Board of
Directors until the next Annual Meeting of Shareholders, and
until their successors have been elected. Those shareholders
present at the Meeting may also nominate individuals for election
to the Board of Directors. If there are any nominees for the
vacant positions at the Meeting, the Proxies solicited hereby
will not be voted for such nominees.
Management's nominees include five present members of the
Board of Directors along with two new candidates. The nominees
are as follows: Dale H. Sizemore, Jr., Jack C. Beecroft, Ronald
L. Benjamin, Victor K. Brewer, Jr., Christian T. Hughes, Dr.
Thomas L. Lyon, Jr., and Richard A. Sizemore. Alfred F. Marsh,
former Chairman, retired and resigned as a director on August 4,
1995. H. James Serrone, Vice President of Finance and Chief
Financial Officer, is not a nominee for reelection as a director.
During the fiscal year ended April 30, 1995, the Board of
Directors of the Corporation held four meetings (including
regularly scheduled and special meetings). Each of the incumbent
directors being nominated for reelection attended 100% of the
Board meetings held while he was director. Jack C. Beecroft and
Victor K. Brewer, Jr. were compensated at the rate of $100 per
Board meeting attended. Dale H. Sizemore, Jr., Ronald L.
Benjamin and Dr. Thomas L. Lyon, Jr. were compensated at the rate
of $6,000 per fiscal year, plus $600 per Board meeting attended,
and $400 per Committee meeting attended.
If the enclosed Proxy is duly executed and received in time
for the Meeting, and if no contrary specification is made as
provided herein, it is the intention of the persons names therein
to vote the shares represented thereby "FOR" the seven persons
nominated by the Board for election as directors of the
Corporation. The Proxies cannot be voted for a greater number of
persons than the number of persons named herein. There will be
cumulative voting for the election of directors. In cumulative
voting, each share carries as many votes as there are vacancies
to be filled, the shareholder being permitted to distribute the
votes for all his shares among the nominees in any way he
desires. Since seven directors are nominated, each shareholder
may cast that number of votes which is equal to the number of
shares owned by him multiplied by seven. If no choice is
indicated on the enclosed Proxy, the persons named in the Proxies
will cumulate the votes and distribute them among the nominees in
their discretion. If a shareholder desires to cumulate his votes
for the Directors in a particular manner, he should indicate the
number of votes to be cast on the shareholder's behalf for each
nominee immediately following that nominee's name on the Proxy.
If any nominee should refuse or be unable to serve, the Proxy
will be voted for such person as shall be designated by the Board
of Directors to replace any such nominee. Management presently
has no knowledge that any of the nominees will refuse or be
unable to serve.
The Corporation does not have a nominating committee.
Donald H. Loudon and Victor K. Brewer, Jr. are members of the
Administrative Committee for the Employee Stock Purchase Plan.
Mr. Loudon is not a director but is an officer of the
Corporation. The Committee receives its authority from the Plan
and from the Board of Directors. This Committee administers and
implements the Employee Stock Purchase Plan and determines
eligibility of employees to participate therein. The Committee
does not meet on a regular basis but meets as required. The
Committee did not meet during the last fiscal year.
Ronald L. Benjamin and Dr. Thomas L. Lyon, Jr. are members
of the Audit Committee. The Committee held one meeting during
the last fiscal year. In fulfilling its responsibilities, the
Audit Committee's activities included, but were not limited to,
review of internal accounting controls, and review of the
financial activities, financial position and related consolidated
reports of the Corporation.
Dale H. Sizemore, Jr., Ronald L. Benjamin and Dr. Thomas L.
Lyon, Jr. are members of the Compensation Committee. The
Committee did not meet during the last fiscal year. The function
of the Strategic Planning Committee has been assumed by the Board
of Directors. The Board of Directors has no other Committees
performing similar functions.
Biographical summaries concerning individuals nominated by
the Board of Directors for election as directors, the
Corporation's executive officers and significant employees, and
information with respect to the number of shares of the
Corporation's Common Stock beneficially owned by each of them
directly or indirectly, as of August 4, 1995, are shown below.
The number of shares beneficially owned by the following
individuals includes shares, if any, held in the name of the
spouse, minor children, or other relative of the individual
living in his home, as well as shares, if any, held in the
name of another person under an arrangement whereby the
individual enjoys the right to vote or the use of the income, or
whereby the individual can vest or revest title in himself at
once or at some future time.
<TABLE>
SHARES OF
COMMON STOCK
BIOGRAPHICAL SUMMARIES OF NOMINEES, BENEFICIALLY PERCENT
EXECUTIVE OFFICERS, AND SIGNIFICANT OWNED AT OF
EMPLOYEES AUGUST 4, 1995 CLASS
<S> <C> <C>
Dale H. Sizemore, Jr., age 43, Chairman of
the Board, President and Chief Executive
Officer of Torotel, Inc. 332,429 12.0%
Mr. Sizemore became a Director of the
Corporation in 1984. He has served as
Chairman and President since August 1995.
Mr. Sizemore has been President of Kansas
Communications in Lenexa, Kansas since 1983.
Victor K. Brewer, Jr., age 51, President of
Torotel Products, Inc., Vice President and
Treasurer of Torotel, Inc., Treasurer of
OPT Industries, Inc. 74,399 (a) 2.7%
Mr. Brewer became a Director of the
Corporation in 1987. He has served as
President of Torotel Products since August
1995. He joined Torotel in 1973, became
Vice President and Treasurer of Torotel
Products in 1979, and Executive Vice
President in 1982. Mr. Brewer has served
as Treasurer of the Corporation since 1986,
and as Vice President since September 1993.
He has been Treasurer of OPT Industries
since September 1993.
Christian T. Hughes, age 46, President of
OPT Industries, Inc. -0- 0.0%
Mr. Hughes became President of OPT
Industries in Phillipsburg, New Jersey, in
August 1995. He joined OPT in 1992 as Vice
President of Sales and Marketing and became
Executive Vice President in 1993. Prior
to joining OPT, Mr. Hughes was Vice President
of Sales for Hitran Corporation in
Flemington, New Jersey, from 1987 to 1992.
Jack C. Beecroft, age 67, Vice President of
Torotel Products, Inc. 74,126 (b) 2.7%
Mr. Beecroft became a Director of the
Corporation in 1987. He has served Torotel
since 1962, and has been Vice President of
Torotel Products since 1977.
Ronald L. Benjamin, age 50, President of
Resource and Development Group, Inc. -0- 0.0%
Mr. Benjamin became a Director of the
Corporation in 1993. He has been President
of Resource and Development Group in Lenexa,
Kansas, since 1985. Mr. Benjamin is also a
50% owner of Robinson Potato Supply. He
holds a B.S. degree in electrical
engineering from Bucknell University and
received his M.B.A. from Harvard University.
Dr. Thomas L. Lyon, Jr., age 51, Professor and
Academic Chair of the Executive Fellows
Program at Rockhurst College 210 0.0%
Dr. Lyon became a Director of the
Corporation in 1993. He is a professor and
Academic Chair of the Executive Fellows
Program at Rockhusrt College in Kansas
City, Missouri. Dr. Lyon is a past director
of the Graduate and Undergraduate Business
Division, has been Acting Dean of the School
of Management, and was the first director of
Rockhurst's M.B.A. Program. He has been at
Rockhurst since 1975. He holds his B.A. in
economics from Rockhurst, and his M.A. in
economics and Ph.D. in economics and
finance from the University of Missouri.
Richard A. Sizemore, age 35, President of
Interactive Design, Inc. 341,296 12.3%
Mr. Sizemore has been owner and President
of Interactive Design, Inc. in Lenexa,
Kansas, since 1987. He holds a B.S.
degree in electrical engineering and an
M.B.A. from the University of Kansas.
H. James Serrone, age 40, Vice President of
Finance and Chief Financial Officer of
Torotel, Inc., Torotel Products, Inc., and
OPT Industries, Inc. 16,333 (c) .6%
Mr. Serrone joined Torotel in 1979, became
Controller in 1982, and was named Vice
President in 1993. Mr. Serrone has served
as Vice President of Torotel Products
since 1992, and became Vice President of
OPT Industries in 1993.
All Directors and Executive Officers as a
Group (8 persons) 838,793 (d) 30.3%
</TABLE>
(a) Victor K. Brewer, Jr.'s beneficial ownership
includes 57,513 shares which are acquirable within 60
days pursuant to the exercise of outstanding stock
options.
(b) Jack C. Beecroft's beneficial ownership includes
52,631 shares which are acquirable within 60 days
pursuant to the exercise of outstanding stock options.
(c) H. James Serrone's beneficial ownership includes
11,917 shares which are acquirable within 60 days
pursuant to the exercise of outstanding stock options.
(d) The beneficial ownership of all directors and
executive officers as a group includes 122,061 shares
which are acquirable within 60 days pursuant to the
exercise of outstanding stock options.
EXECUTIVE COMPENSATION
The following table sets forth the compensation of the named
executive officers for each of the Corporation's last three
completed fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Name and Principal
Position Year Salary Options Awarded
<S> <C> <C> <C>
Alfred F. Marsh 1995 $ 16,785 -0-
President and 1994 $ 73,642 -0-
Chief Executive Officer 1993 $100,000 11,367
</TABLE>
OPTION GRANTS TABLE
Shareholders approved the Incentive Compensation Plan on
September 18, 1994. However, there were no grants of stock
options made during the last completed fiscal year.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE
TABLE
The following table sets forth the aggregate stock option
exercises made during the last completed fiscal year and the
fiscal year-end option values for each of the named executive
officers.
<TABLE>
AGGREGATED OPTION EXCERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of
Number of Unexercised
Unexercied In-the-Money
Options Options
at Fisal at Fiscal
Shares Year-end Year-end
Acquired Value Exercisable/ Exercisable
Name on Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Alfred F. Marsh -0- $ -0- 91,150 (a) $10,300 (a)
6,692 (b) $ -0- (b)
(a) Exercisable
(b) Unexercisable
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
INDEBTEDNESS TO MANAGEMENT
At April 30, 1995, the Corporation was indebted to Alfred F.
Marsh, President of Torotel, Inc., for $250,000 in the form of a
promissory note, which was executed in April 1986. The face
value of the note plus $179,000 of its accrued interest are
subordinated to the Corporation's debt payable to Mercantile
Business Credit, Inc. ("MBCI").
Pursuant to a Subordination Agreement between MBCI and Mr. Marsh,
the Corporation is restricted from making payments on the note
and the subordinated interest until September 1, 1998.
The note requires annual interest payments at a rate of 10%
per annum. If an interest payment is not made, interest will
then accrue on a compounded basis. For the year ended April 30,
1995, the Corporation incurred $47,000 in interest on the note.
Since the inception of the note, the Corporation has accrued
total interest of $293,000, of which $261,000 remains due and
payable.
CERTAIN TRANSACTIONS
(a) Donald H. Loudon, secretary of the Corporation, is a
director of the law firm of Shughart, Thomson and Kilroy, a
Professional Corporation, counsel to the Corporation.
(b) As of the date of this Proxy Statement, all directors
and officers are in compliance with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934. To the
best of Management's knowledge, all beneficial owners of more
than 10% of the outstanding common shares of the Corporation are
in compliance as well.
APPOINTMENT OF AUDITORS
The Board of Directors has appointed Grant Thornton LLP as
the Corporation's independent certified public accountants, to
audit the financial statements of the Corporation and its
subsidiaries for the fiscal year ending April 30, 1996. Grant
Thornton LLP has served as the Corporation's auditors since
September 1980.
A representative of Grant Thornton LLP will be present at
the Meeting. An opportunity will be provided for the
representative to make a statement, if so desired, and to respond
to appropriate shareholder questions.
OTHER MATTERS
The Board of Directors know of no other matters that may
properly be, or which are likely to be, brought before the
Meeting. However, if any other matters are properly brought
before the Meeting, the persons named in the enclosed Proxy or
their substitutes will vote in accordance with their best
judgment on such matters.
SHAREHOLDER PROPOSALS
Any proposals which a shareholder intends to present at the
Annual Meeting of Shareholders to be held on Monday, September
16, 1996, must be received by Torotel, Inc. on or before May 12,
1996, in order for such proposal to be included in the
Corporation's Proxy Statement and Form of Proxy.
BY ORDER OF THE
BOARD OF DIRECTORS
\s\ Donald H Loudon
DONALD H. LOUDON
SECRETARY OF TOROTEL, INC.
