-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B74JtC1imjcDmFohpIpXrC/ugyjAST6DBsyz4r68dysSktPbWdsNQ0kCm95r3IKu clbF5FCiDKU4QmT0gQW4vw== 0000950168-99-001302.txt : 19990429 0000950168-99-001302.hdr.sgml : 19990429 ACCESSION NUMBER: 0000950168-99-001302 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990427 FILED AS OF DATE: 19990428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATHEY PRODUCTS CORP CENTRAL INDEX KEY: 0000008109 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 360753480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-12649 FILM NUMBER: 99603565 BUSINESS ADDRESS: STREET 1: RTE 1A NORTH STREET 2: P O BOX 669 CITY: RALEIGH STATE: NC ZIP: 27602 BUSINESS PHONE: 9195565171 MAIL ADDRESS: STREET 1: ROUTE 1A NORTH STREET 2: P O BOX 669 CITY: RALEIGH STATE: NC ZIP: 27602 DEF 14A 1 ATHEY PRODUCTS CORPORATION SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant (X) Filed by a Party other than the Registrant ( ) Check the appropriate box: ( ) Preliminary Proxy Statement ( ) Confidential, for Use of the Commission Only (as permitted by 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 ATHEY PRODUCTS CORPORATION (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)(4) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: ( ) Fee paid previously with preliminary materials. ( ) Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule, or Registration Statement No.: 3) Filing Party: 4) Date Filed: ATHEY PRODUCTS CORPORATION 1839 South Main Street Wake Forest, North Carolina 27587-9289 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To be Held on May 27, 1999 The 1999 Annual Meeting of the Stockholders of Athey Products Corporation ("Athey" or the "Company"), a Delaware corporation, will be held at the executive offices of the Company located at 1839 South Main Street, Wake Forest, North Carolina, on Thursday, May 27, 1999 at 11:00 A.M., for the following purposes: 1. To fix the number of directors of the Company at five and to elect a board of directors to hold office until the next annual meeting of stockholders or until their respective successors have been elected or appointed; 2. To ratify the appointment of the accounting firm of McGladrey & Pullen, LLP as independent auditors for the Company for the current year; and 3. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. These items are fully discussed in the following pages, which are made part of this notice. Only stockholders of record on the books of the Company at the close of business on April 12, 1999 will be entitled to notice of and to vote at the annual meeting. A list of such stockholders entitled to vote will be available at the Company's office at 1839 South Main Street, Wake Forest, North Carolina 27587-9289, at the time and place of the meeting, and during the ten days prior to the Annual Meeting. Stockholders are requested to complete, date, sign and return the enclosed proxy card as promptly as possible. The giving of such proxy will not affect your right to vote in person should you decide to attend the Annual Meeting. If you would like to attend the meeting and your shares are held by a broker, bank or other nominee, you must bring to the meeting a recent brokerage statement or a letter from the nominee confirming your beneficial ownership of the shares. You must also bring a form of personal identification. In order to vote your shares at the meeting, you must obtain from the nominee a proxy issued in your name. Whether or not you expect to attend, WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. By Order of the Board of Directors PHYLLIS C. PEARCE Corporate Secretary Wake Forest, North Carolina April 27, 1999 (THIS PAGE INTENTIONALLY LEFT BLANK) ATHEY PRODUCTS CORPORATION 1839 South Main Street Wake Forest, North Carolina 27587-9289 ---------------- April 27, 1999 PROXY STATEMENT SOLICITATION AND REVOCATION OF PROXIES This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Athey Products Corporation ("Athey" or the "Company") for use at the 1999 Annual Meeting of the Stockholders of the Company to be held May 27, 1999, at 11:00 A.M., Eastern Time, at the Company's offices located at 1839 South Main Street, Wake Forest, North Carolina, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The shares represented by the accompanying Proxy will be voted if the Proxy is properly signed and received by the Company prior to the time of the meeting. Where a choice is specified on any Proxy as to the vote on any matter to come before the meeting, the Proxy will be voted in accordance with such specification. If no specification is made, the Proxy will be voted for the nominees for director named herein and for all other proposals. Any stockholder giving the accompanying Proxy has the right to revoke it by notifying the Company, in writing at any time prior to the voting of the Proxy. A Proxy is revoked if the person giving the Proxy attends the meeting and elects to vote in person. The cost of preparing, assembling and mailing this Proxy Statement and form of Proxy, and the costs of soliciting proxies relating to the meeting, will be borne by the Company. It is contemplated that the original solicitation of proxies by mail will be supplemented by telephone, telegraph, and personal solicitation by officers, directors and other regular employees of the Company, and no additional compensation will be paid to such individuals. The Company will also request brokers and other nominees or fiduciaries to forward proxy soliciting material to the beneficial owners of shares which are held of record by them. These materials are first being mailed to stockholders on or about April 27, 1999. ELECTION OF DIRECTORS The By-Laws of the Company provide for a board of not less than three nor more than ten directors, as from time to time shall be determined by a majority of the votes to which all of the stockholders of the Company are at the time entitled. The Board of Directors of the Company has recommended to the stockholders that the number of directors be fixed at five (5), subject to the approval of the stockholders at the 1999 Annual Meeting. Directors will be elected at the meeting to serve until the next Annual Meeting of Stockholders or until their successors are elected and shall have qualified. The affirmative vote of a plurality of the votes cast is required to fix the number of directors at five and to elect directors. Abstentions and broker non-votes will not be counted in determining the number of shares voted for fixing the number of directors at five and in favor of any nominee for director. The proxies returned to the Board of Directors pursuant to this solicitation will be voted by the persons named therein for fixing the number of directors at five and for the election of the following persons as directors. The Board of Directors is not aware of any other person intending to propose nominees for director. Should any nominee be unable to accept the office of director (which is not presently anticipated), it is intended that the persons named in the proxy will vote for election of such other persons as they shall determine. The following table sets forth (i) the name, principal occupation, age, length of service and ownership of Common Shares (as defined below) of the Company (by number of shares and as a percentage of the total outstanding) of each nominee for director and (ii) the Company's current executive officers and directors as a group.
Common Shares Beneficially Director Owned as of Percent Name and Principal Occupation (1) Age Since March 19, 1999(2) of Class - ------------------------------------- ----- ---------- ------------------- ----------- John F. McCullough (3) .............. 73 1975 1,597,726 41.99% Chairman of the Board of the Company and Chairman of Orton/McCullough Crane Company, Inc. Oak Brook, Illinois Martin W. McCullough (3) ............ 41 1985 12,632 * Director of the Company and President Orton/McCullough Crane Company, Inc. Huntington, Indiana Richard A. Rosenthal ................ 66 1977 5,691 * Director of the Company and Retired Director of Athletics University of Notre Dame South Bend, Indiana Thomas N. Nelson .................... 61 1998 325 * Director, President and Treasurer of the Company John P. Kelly (3) ................... 45 1997 100 * Director of the Company and Partner Mountcastle, Kelly and Dyer, P.C. Wheaton, Illinois Executive officers and directors as a group(4) (6 persons) ............. 1,616,574 42.48%
- ---------- * Less than one percent. (1) Each executive officer's and director's principal occupation and employment for each of Messrs. Kelly and Rosenthal for the last five years has been listed above. Additional information in that regard for Messrs. John F. McCullough, Martin W. McCullough and Thomas N. Nelson is set forth below. For the three years prior to May 1997, Mr. John F. McCullough was Chairman & President, and Mr. Martin W. McCullough was Vice-President and General Manager of Orton/McCullough Crane Company, Inc. In May 1997, Mr. Martin W. McCullough became President of Orton/McCullough Crane Company, Inc. and Mr. John F. McCullough continued as Chairman. Prior to June 1996, Mr. Nelson was Product Sales Manager for Bucyrus-Erie Company, South Milwaukee, Wisconsin. From June 1996 to May 1998, Mr. Nelson was Director of Sales & Marketing for the Company. Mr. Nelson was elected as Vice- President, Sales & Marketing of the Company on May 11, 1998, and was elected President and Treasurer on December 16, 1998. Mr. Rosenthal is a director of the following companies: Advanced Drainage Systems, Inc., Columbus, Ohio; Beck Corporation, Elkhart, Indiana; CID Equity Partners, Indianapolis, Indiana; LaCrosse Footwear, Inc., LaCrosse, Wisconsin; RFE Investment Partners, New Canaan, Connecticut; and St. Joseph Capital Corporation, Mishawaka, Indiana. (2) Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them. (3) Common shares shown as owned by Mr. John F. McCullough are owned of record by Orton/ McCullough Crane Company, Inc., of which Mr. John F. McCullough is an officer and principal shareholder (see "Voting Securities and Principal Stockholders" below). Mr. John F. McCullough disclaims beneficial ownership of such shares. Mr. John F. McCullough is the father of Mr. Martin W. McCullough and the father-in-law of Mr. John P. Kelly. (4) Mr. Wes O. Brant is Vice-President, Chief Operating Officer and a director of the Company. Mr. Brant beneficially owns 100 Common Shares which constitute less than one percent of the outstanding Common Shares of the Company. 2 The term of office for all such directors elected would be until their successors are elected and qualified, scheduled for the next annual meeting. The Board of Directors of the Company has an audit committee consisting of Messrs. John F. McCullough, Martin W. McCullough, John P. Kelly and Richard A. Rosenthal. The audit committee, which held one meeting in 1998, recommends the appointment of the Company's independent auditors, determines the scope of the annual audit to be made, reviews the conclusions of such auditors and reports the findings and recommendations thereof to the Board of Directors. There are no nominating or compensation committees. The total number of meetings of the Board of Directors during 1998 was four. During 1998, each director listed attended at least 100% of the meetings of the Board and committees thereof. The Board of Directors recommends a vote FOR fixing the number of directors at five and the election of the above listed nominees for director. RATIFICATION OF AUDITORS The Board of Directors has appointed McGladrey & Pullen, LLP, independent certified public accountants, to audit the books and accounts of the Company for the fiscal year ended December 31, 1999, subject to the approval of the Stockholders. A representative of McGladrey & Pullen, LLP will be present at the meeting. He will have the opportunity to make a statement, if he so desires, and will respond to appropriate questions which are raised orally at the meeting or which are submitted in writing to the Company, before the meeting. If the stockholders do not ratify the appointment of McGladrey & Pullen, LLP the selection of other independent certified public accountants will be considered by the Board of Directors. During the fiscal year ended December 31, 1998, the only services rendered by McGladrey & Pullen, LLP were auditing services, consisting of the annual audit, reviews of the annual report on Form 10-K and the annual report to stockholders, annual audit of the Company's 401(k) plan, consulting on quarterly filings and other matters, and review of federal and state income tax returns. The affirmative vote of a majority of the shares voting at the meeting at which a quorum is present is required to ratify the appointment of auditors. Abstentions and broker non-votes will not be counted in determining the number of shares voted for the proposal to appoint McGladrey & Pullen, LLP or for any other proposal. The Board of Directors recommends a vote FOR ratification of the appointment of McGladrey & Pullen, LLP. 3 VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS The Board of Directors has fixed the close of business on April 12, 1999 as the record date for the determination of stockholders entitled to notice of and to vote at the meeting, and only holders of record of the common stock of the Company, par value $2.00 per share (the "Common Shares"), at the close of business on that date will be entitled to vote at the meeting or any adjournment thereof. At the close of business on April 12, 1999, the record date, there were outstanding 3,805,608 Common Shares. Each Common Share is entitled to one vote on all matters. A majority of the outstanding shares of the Company, represented in person or by proxy, shall constitute a quorum at the meeting. The following table sets forth information as of April 12, 1999, regarding each person who was known by the Company to own beneficially more than 5% of the outstanding Common Shares of the Company:
Amount and Nature of Beneficial Ownership Name and Address of of Common Percent Beneficial Owner Shares(3) of Class - ---------------------------------------------------------------- ----------- ----------- Orton/McCullough Crane Company, Inc. (1) ................ 1,597,726 41.99% 1244 East Market Street Huntington, Indiana 46750 David L. Babson & Company, Inc .......................... 431,110 11.33% One Memorial Drive Cambridge, Massachusetts 02142-1300 Isometrics, Inc. (2) .................................... 247,372 6.50% 1266 North Scales Street Post Office Box 660 Reidsville, North Carolina 27320 Franklin Resources, Inc ................................. 200,000 5.26% 777 Mariners Island Blvd. P.O. Box 7777 San Mateo, California 94403-7777 Executive officers and directors as a group (4) ......... 1,616,574 42.48%
- ---------- (1) Mr. John F. McCullough, an officer and principal shareholder of Orton/McCullough Crane Company, Inc., may be deemed to share beneficial ownership of the shares shown as beneficially owned by Orton/ McCullough Crane Company, Inc., although he disclaims beneficial ownership of such shares. (2) Mr. Dennis M. Bracy, the president, director and majority shareholder, of Isometrics, Inc., may be deemed to share beneficial ownership of the shares shown as beneficially owned by Isometrics, Inc. (3) Shares shown as owned by Orton/McCullough Crane Company, Inc., David L. Babson & Company, Inc., Isometrics, Inc. and Franklin Resources, Inc. are as reported on the latest Schedule 13D or 13G filings by such entities, respectively. (4) Share amounts shown include those held by Orton/McCullough Crane Company, Inc. The Common Shares are the only class of outstanding voting securities of the Company. Also, as of April 12, 1999, all executive officers and directors of the Company owned of record and beneficially, 1,616,574 Common Shares, or approximately 42.48% of the outstanding Common Shares, including the shares of Orton/McCullough Crane Company, Inc. shown above. It is the understanding of management that all officers and directors intend to vote for the election of the directors nominated and for all proposals. 4 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE To the Company's knowledge, based solely on review of reports furnished to it, all Section 16(a) filing requirements applicable to its executive officers, directors and more than 10% beneficial owners were complied with, except that Messrs. Nelson and Brant and Ms. Phyllis Pearce each inadvertently filed late their Form 3 initial statements of beneficial ownership of securities showing their election as officers of the Company. COMPENSATION AND RELATED MATTERS Summary Compensation Table The following table sets forth the aggregate compensation paid by the Company for services rendered in all capacities to the Company during the Company's last three fiscal years to all those individuals serving the Company as President during 1998. No other executive officer of the Company was paid compensation for 1998 in excess of $100,000.
Annual Compensation ------------------ Other Annual Name and Salary Compensation Principal Positions Year $ $ - ------------------------------------- ------ --------- --------------- Thomas N. Nelson(1) 1998 83,206 2,496(2) President, Treasurer and Director 1997 80,000 2,400(4) 1996 48,666 30,202(3) James H. Stumpo(7) 1998 73,264 1,465(4) Former President, CEO and Director 1997 100,417 22,496(5) 1996 100,000 38,101(6)
- ---------- (1) Prior to being elected President of the Company on December 16, 1998, Mr. Nelson served as the Company's Vice-President of Sales and Marketing. (2) Payments included in this amount for the fiscal year ended December 31, 1998 consist of: Company contributions of $2,496 to the Athey Products Corporation Employees 401(k) Plan (the "401(k) Plan"), which is a defined contribution salary reduction 401(k) Plan qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended. (3) Mr. Thomas N. Nelson received $30,202 representing relocation expenses in 1996. (4) The contributions made by the Company to the 401(k) plan accounts for Messrs. Nelson and Stumpo for the year 1997 and 1998, respectively, were omitted from the Company's Annual Report on Form 10-K for the year ended December 31, 1998. (5) Payments included in this amount for the fiscal year ended December 31, 1997 consist of: (a) Company contributions of $2,175 to the 401(k) Plan. (b) Company contributions of $20,321 to the 401(k) Plan from the distribution of excess plan assets stemming from the termination of the Company's non-contributing defined benefit pension plan. (6) Mr. James H. Stumpo received $38,101 representing relocation expenses in 1996. (7) Mr. James H. Stumpo resigned from his positions as President, Chief Executive Officer and a director of the Company effective May 7, 1998. Mr. Stumpo beneficially owns 2,000 Common Shares, which constitutes less than 1% of the outstanding Common Shares. 5 Compensation Report The Company's executive officer compensation program as in effect for 1998 consisted of (i) base salary established on the basis of non-quantitative factors such as positions of responsibility and authority, years of service and annual performance evaluations and (ii) a cash-based incentive bonus plan which is based upon the Company's performance and profitability. Executive officers (including the Chief Executive Officer) were also eligible in 1998 to participate in various Company benefit plans, which are intended to provide a safety net of coverage against various events, such as death, disability and retirement. The Board's compensation program objectives are designed to attract, motivate, reward and retain qualified personnel for positions of substantial responsibility. In keeping with this policy, additional compensation for executive officers and managers is administered through a cash-based incentive bonus plan which is based upon the Company's performance and profitability. No bonuses were paid under the bonus plan for the past four years. The Company has no long-term incentive or stock option plans or stock appreciation rights. Mr. Nelson received $83,206 and $80,000 in base salary from the Company in 1998 and 1997, respectively, serving as Vice-President Marketing and Sales and President of the Company. In 1996, he received $48,666 in base salary for that portion of the year in which he served as Director of Sales & Marketing for the Company. The Company contributed $2,496 and $2,400 to Mr. Nelson's 401(k) Plan in 1998 and 1997, respectively. Mr. Stumpo received $73,264 and $100,417 in base salary from the Company in 1998 and 1997, respectively. The Company contributed $1,465 and $2,175 to Mr. Stumpo's 401(k) Plan in 1998 and 1997, respectively. Board of Directors Wes O. Brant John P. Kelly John F. McCullough Martin W. McCullough Thomas N. Nelson Richard A. Rosenthal Director Compensation Directors who are employees of the Company do not receive fees for attendance at director's meetings, but directors are reimbursed for their out-of-pocket expenses incurred in attending meetings of directors and stockholders. Mr. John F. McCullough is paid $100,000 annually by the Company for serving as Chairman of the Board of Directors. Directors who are not employees of the Company are paid $18,000 a year by the Company for serving as directors. No other remuneration was paid as directors fees in 1998. No directors were paid additional compensation for committee participation or special assignments in 1998. 6 Common Stock Performance The Securities and Exchange Commission requires a five-year comparison of stock performance for the Company with stock performance of a broad equity market index and either a peer company, or, if a peer company is not available, a published industry or line-of-business index. The Company's stock is traded on the NASDAQ National Market System and one appropriate comparison is with the NASDAQ Total Return Index for U.S. companies. Additionally, the Company's performance may be compared to the NASDAQ Transportation Stock Index (specifically SIC Code 3711). COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1) [GRAPH APPEARS HERE]
1993 1994 1995 1996 1997 1998 ---- ---- ---- ---- ---- ---- NASDAQ Total Return Index $100 $ 97 $136 $167 $204 $286 NASDAQ Transportation Stock Index $100 $ 88 $109 $121 $121 $131 Athey Products Corporation $100 $111 $ 73 $ 70 $ 71 $ 43
(1) Assumes that the value of the investment in the Common Shares of Athey Products Corporation, the NASDAQ Total Return Index for U.S. companies and the NASDAQ Transportation Stock Index, was $100 on December 31, 1993 and that all dividends were reinvested. 7 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Board of Directors as a whole (with the exception of the President) establishes the compensation of the President and reviews and approves compensation for all other officers based on the recommendation of the President. No director or nominee for director is a controlling person of the Company, except for Mr. John F. McCullough, a director of the Company and a principal stockholder of Orton/McCullough Crane Company, Inc., which owned 1,597,726 shares of the Company's common stock, or 41.99%, as of April 12, 1999. ANNUAL REPORT The Company's Annual Report to Stockholders for the year ended December 31, 1998, including financial statements, accompanies this Proxy Statement. However, no action is proposed to be taken at the meeting with respect to the Annual Report, and it is not to be considered as constituting any part of the proxy soliciting material. STOCKHOLDER PROPOSALS In order for stockholder proposals intended to be presented at the Company's 2000 Annual Meeting of Stockholders to be eligible for inclusion in the Company's proxy statement and form of proxy for such meeting, they must be received by the Company at its office at 1839 South Main Street, Wake Forest, North Carolina 27587-9289 by December 28, 1999. Any such proposal must be in accordance with the provisions of Rule 14a-8 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. It is suggested that any such proposal be submitted by certified mail -- return receipt requested. OTHER MATTERS Management knows of no other business likely to be brought before the meeting. If, however, other matters do come before the meeting, the persons named in the form of proxy or their substitutes will vote said proxy according to their best judgment. A copy of the Company's 1998 Form 10-K Report required to be filed with Securities and Exchange Commission will be mailed to stockholders without charge upon written request to: Athey Products Corporation, 1839 South Main Street, Wake Forest, North Carolina 27587-9289. Such request must set forth a good-faith representation that the requesting party was either a holder of record or a beneficial owner of common stock of the Company on April 12, 1999. By Order of the Board of Directors PHYLLIS C. PEARCE Corporate Secretary Wake Forest, North Carolina April 27, 1999 8 -----END PRIVACY-ENHANCED MESSAGE-----