-- GODDARD INDUSTRIES, INC. 705 Plantation Street Worcester, Massachusetts 01605 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held March 8, 1996 To The Stockholders of Goddard Industries, Inc. Notice is hereby given that the Annual Meeting of Stockholders of Goddard Industries, Inc., a Massachusetts corporation, will be held on Friday, March 8, 1996 at 11:00 a.m. at The Beechwood Inn, 363 Plantation Street, Worcester, Massachusetts for the following purposes: 1. To elect one director to hold office until the 1999 Annual Meeting of Stockholders and until his successor is duly elected and qualified. 2. To consider and act upon any matters incidental to the foregoing purpose and any other matters which may properly come before the meeting or any adjournments thereof. Information regarding matters to be acted upon at the Annual Meeting of Stockholders is contained in the proxy statement attached to this notice. Only stockholders of record at the close of business on January 12, 1996 are entitled to notice of, or to vote at, such meeting or any adjournments thereof. By Order of the Board of Directors Joel M. Reck, Clerk Worcester, Massachusetts January 29, 1996 You are cordially invited to attend this meeting in person, but if you cannot do so, please complete, date, sign and return the accompanying proxy at your earliest convenience. A reply envelope is provided for this purpose, which needs no postage, if mailed in the United States. GODDARD INDUSTRIES, INC. PROXY STATEMENT For Annual Meeting of Stockholders To be Held Friday, March 8 1996 This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Goddard Industries, Inc. (referred to hereinafter as the "Company") for use at the Annual Meeting of Stockholders to be held at 11:00 a.m. on Friday, March 8, 1996 at The Beechwood Inn, 363 Plantation Street, Worcester, Massachusetts and at any adjournment or adjournments thereof (the "Meeting"). Solicitation of proxies may be made in person or by mail, telephone or telegram by directors, officers and regular employees of the Company, for which no additional compensation will be received. The Company may also request banking institutions, brokerage firms, custodians, trustees, nominees and fiduciaries to forward solicitation material to the beneficial owners of Common Stock held of record by such persons and the Company will reimburse the forwarding expense. All costs of preparing, printing, assembling and mailing the form of proxy and proxy statement will be borne by the Company. It is expected that this proxy statement and the accompanying proxy will be mailed to the stockholders on or about January 29, 1996. The principal executive offices of the Company are located at 705 Plantation Street, Worcester, Massachusetts 01605. Only stockholders of record at the close of business on January 12, 1996 are entitled to notice of, and to vote at, the Meeting. As of that date, there were outstanding and entitled to vote 2,032,804 shares of Common Stock, $.01 par value (the "Common Stock"), of the Company. Each share is entitled to one vote on all matters to come before the Meeting. Provided a quorum (consisting of a majority of the shares outstanding and entitled to vote) is present in person or by proxy at the meeting, a plurality of the votes cast for any nominee is required for election of directors. Under Massachusetts law and the Company's By-laws, all shares present or represented by proxy, whether they vote or abstain, will be counted as present for purposes of determining a quorum and for purposes of determining the number of shares present and entitled to vote. Accordingly, abstentions, including broker non-votes, will have no effect on the outcome of the vote for the election of directors. The enclosed proxy, if executed and returned, will be voted as directed on the proxy and, in the absence of such direction, for the election of the nominee as director, and in accordance with their best judgment by the proxies if any other matter shall properly come before the Meeting. The proxy may be revoked at any time prior to exercise by filing with the Clerk of the Company a written revocation, by executing a proxy with a later date, or by attending and voting at the Meeting. The Board of Directors knows of no matters, other than election of directors, to be presented for consideration at the Meeting. The Annual Report to Stockholders of the Company for the fiscal year ended September 30, 1995, including audited financial statements, is being mailed to each of the stockholders of the Company simultaneously with this proxy statement. PROPOSAL NO. 1 ELECTION OF DIRECTORS At the Meeting, one director (constituting 25% of the present Board of Directors) is to be elected to serve until the 1999 annual meeting of stockholders and until his successor is elected and qualified. The proxy cannot be voted for a greater number of persons than one. The Company's Restated Articles of Organization, as amended, and By-laws and the Massachusetts Business Corporation Law provide that the Board of Directors shall be composed of three classes of directors, one class to be elected each year. It is the intention of the persons named in the accompanying form as proxies to vote for the election of Jacky Knopp, Jr. to the class of directors indicated, and for the term set forth therein. In the unanticipated event that the nominee is unable to serve, the persons named as proxies will vote for such substitute, if any, as the present Board of Directors may designate or to reduce the number of directors. Directors are elected by a plurality of the votes cast for election of directors. Information As To Officers, Directors and Beneficial Owners The following table sets forth certain information, as of November 30, 1995, with respect to the nominee, each of the directors whose term extends beyond the Meeting, all officers and directors as a group (5 persons) and each person owning five percent or more of the Company's Common Stock. This table is based on information furnished by such persons. Number of Shares of Common Stock Year Term Name, Age and Principal Occupation Director Since Beneficially Owned (1) Percent of Class Would Expire and Class Benjamin Dubin, 78 1965 20,750 (2) 1.0% 1998 President, Dubin Wool Stock Company, Inc. (wool waste) Class 2 52 Kinnicutt Road, Worcester, MA Dr. Jacky Knopp, Jr., 73 1972 72,000 (3) 3.5% 1996 President, Crosby Research Associates Class 3 (marketing and management consultants) 211 Delamere Road, Buffalo, New York; Account Executive, Moors & Cabot, Inc. (stock brokerage firm) 4575 Main Street, Amherst, New York; Professor Emeritus of Canisius College, Buffalo, New York Saul I. Reck, 77 1959 321,955 (4) 15.3% 1997 President of the Company Class 1 Lyle E. Wimmergren, 64 1978 -- -- 1998 Professor Emeritus of Management Class 2 Worcester Polytechnic Institute 55 Liberty Hill Road, Henniker, NH All executive officers and directors as a group -- 482,605 (5) 22.9% -- (5 persons) Robert E. Humphreys -- 457,950 (6) 22.5% -- 64 Alcott Street, Action, MA Joseph A. Lalli -- 183,550 (7) 9.0% -- 6 Middlemont Way, Stow, MA (1) Unless otherwise noted, each person identified possesses sole voting and investment power. (2) Includes 6,750 shares owned by Mr. Dubin's wife, as to which he disclaims beneficial interest. (3) Includes 36,000 shares owned Dr. Knopp's wife, as to which he disclaims beneficial interest. (4) Includes 5,250 shares held by Mr. Reck's wife, as to which he disclaims beneficial interest. Also includes an option to purchase 75,000 shares held by Mr. Reck. (5) In addition to the matters noted above in (2)-(4), includes 19,900 shares owned by an officer jointly with his wife. (6) Mr. Humphreys has reported to the Company that a Schedule 13D, Amendment No. 5, was filed with the Securities and Exchange Commission indicating that as beneficial owner, he has sole power to vote and dispose of 217,650 shares, and shared power to vote and dispose of 225,300 shares by virtue of a power of attorney over the investment accounts of seven persons. Mr. Humphreys and certain other persons, acting as a group, beneficially own an aggregate of 457,950 shares. (7) Mr. Lalli has reported to the Company that a Schedule 13D, Amendment No. 6, was filed with the Securities and Exchange Commission indicating that he has sole voting and dispositive power of 154,050 shares and shared voting and dispositive power with his wife of 29,500 shares. All of the directors have had the same principal occupation for the last five years, except that the Amherst, New York office of Moors & Cabot, Inc. at which Dr. Knopp is an account executive was previously owned by other brokerage firms, and each of Dr. Knopp and Mr. Wimmergren has become a professor emeritus at his institution. Saul I. Reck is the brother-in-law of Benjamin Dubin, a director of the Company, and is the father of Joel M. Reck, Clerk of the Company. The Board of Directors of the Company held three meetings during the fiscal year ended September 30, 1995. Each present director attended at least 75% of the meetings of the Board of Directors and of all committees of which he was a member. The Board of Directors has an Audit Committee and a Compensation Committee, both composed of Dr. Knopp and Mr. Wimmergren. The Audit Committee, which met twice during the last fiscal year, is charged with recommending to the Board of Directors retention of a firm of independent accountants and with reviewing the Company's internal audit and accounting controls, the report of the independent accountants and the financial statements of the Company. The Compensation Committee, which met twice during the last fiscal year, is responsible for recommending salary and bonus levels of officers and key employees. There is no Nominating Committee of the Board of Directors. The Board of Directors as a whole will consider nominees for director submitted to it in writing by any shareholder. Executive Compensation The following table sets forth information concerning the annual compensation for the chief executive officer (the only executive officer of the Company whose annual salary and bonus exceeded $100,000) for services in all capacities to the Company during the last three fiscal years. SUMMARY COMPENSATION TABLE Annual Compensation Other Annual Name and Fiscal Year Salary Bonus (1) Compensation (2) Principal Position Ended ($) ($) ($) Saul I. Reck 9/30/95 $115,000 $55,000 $10,000 President & 10/1/94 115,000 0 10,000 Treasurer 10/2/93 110,000 30,000 10,000 (1) Under the terms of his Employment Agreement with the Company described below, Mr. Reck is entitled to receive a bonus equal to 10% of the amount by which Company pre-tax profits exceed specified base amounts. (2) Consists of cash payments to Mr. Reck to be used for purchase of retirement benefits. The following table shows information concerning the exercise of stock options during fiscal 1995 and the fiscal year-end value of unexercised options and stock appreciation rights. AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES Number of Securities Value of Unexercised Underlying Unexercised In-the Money Options/SARs Options/SARs at Shares Acquired 09/30/95 09/30/95 on Exercise Value Realized Exercisable Exercisable Name (#) ($) (#) ($) Saul I. Reck -- -- 75,000 $14,062 Under an Employment Agreement with Saul I. Reck entered into in 1989, as amended in 1992 and again in 1994, Mr. Reck has agreed to be employed by the Company as Chairman of the Board and President on a full time basis. Mr. Reck received a base salary of $115,000 in fiscal 1995, plus $10,000 to be used to purchase a retirement benefit. In addition, Mr. Reck received a bonus equal to 10% of the amount by which the Company's pre-tax profits exceeded a base amount which increases each year and was $200,000 in fiscal 1995. After he retires, Mr. Reck will be entitled to receive an unfunded annuity of $60,000 per year for his life and his surviving spouse will be entitled to an annuity of $30,000 per year for life, with both amounts payable under these annuities subject to adjustment based upon cost of living increases after October 1, 1993. Compensation of Directors Each director who is not also an officer or employee of the Company receives a base fee of $2,000 per year. Each director who is not also an officer or employee of the Company and who lives in the greater Worcester area receives $400 for each directors' meeting he attends. Each director who is not also an officer or employee of the Company and who lives outside the greater Worcester area receives $500 for each such meeting, plus travel expenses to and from Worcester. No extra compensation is paid for attendance at meetings of committees. All non-employee directors as a group were paid $10,200 for services rendered during fiscal year 1995. The Board of Directors has a Severance Compensation Plan for certain officers and all directors in the event that there is a "change in control" of the Company not approved by the Board of Directors resulting in the termination of employment or reduction in the duties and responsibilities of the President, Vice-Presidents and Treasurer (as determined by the Board of Directors) and/or a termination of service as director of the Company. The plan provides that such President, Vice-Presidents and Treasurer will continue to receive the compensation being paid to them at the time of the termination or change in the nature of employment, for a period of five years following such termination or change, and the non-employee directors will continue to receive directors' fees of $400 or $500 per fiscal quarter, depending on whether or not the director lives in the greater Worcester area, for such five year period. At the current rate of compensation this would entail an aggregate payment of $1,315,500 to the executive officers as a group and a payment of $28,000 to the non- employee directors as a group. Based solely upon a review of forms furnished to the Company under Securities and Exchange Commission rules and annual director questionnaires, the Company is not aware that any officer, director or 10% beneficial owner failed to file on a timely basis any report required by Section 16(a) under the Securities Exchange Act of 1934. OTHER MATTERS Relationship with Independent Public Accountants The Audit Committee of the Board of Directors has selected Greenberg, Rosenblatt, Kull & Bitsoli, P.C. as independent auditors for the Company for the current fiscal year. That firm and its predecessors have served in such capacity since fiscal year 1982. It is anticipated that a representative of Greenberg, Rosenblatt, Kull & Bitsoli, P.C. will be present at the meeting. The representative will be afforded the opportunity to make a statement and is expected to be available to respond to appropriate questions. Other Matters To Be Acted Upon The Board of Directors has no knowledge of any other matters which may come before the Meeting and does not itself intend to present any such matters. However, if any other matters shall properly come before the Meeting, the persons named as proxies will have discretionary authority to vote the shares represented by the accompanying proxy in accordance with their own judgment. Shareholder Proposals Shareholder proposals intended to be presented at the 1997 Annual Meeting must be received by the Company on or before September 30, 1996, and should be addressed to Saul I. Reck, President, Goddard Industries, Inc., 705 Plantation Street, Worcester, Massachusetts 01605. Annual Report And Form 10-KSB Additional copies of the Annual Report to Stockholders for the fiscal year ended September 30, 1995 and copies of the Annual Report of the Company to the Securities and Exchange Commission on Form 10-KSB for that fiscal year are available to stockholders without charge upon written request addressed to Lucy J. Rybacki at the Company at 705 Plantation Street, Worcester, Massachusetts 01605. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED ENVELOPE. ,: 439281O:\DOCSOPEN\PROGS\docs_b\searlejr\9#y901!.DOC PROXY GODDARD INDUSTRIES, INC. PROXY The undersigned hereby appoints Ben Dubin and Saul J. Reck, and each of them, with full power of substitution, attorneys and proxies to represent the undersigned at the Annual Meeting of Stockholders of Goddard Industries, Inc. to be held on Friday, March 8, 1996, and at any adjournment or adjournments thereof, with all power which the undersigned would possess if personally present, and to vote all shares of stock which the undersigned may be entitled to vote at said meeting upon the following proposal more fully described in the notice of and proxy statement for the meeting in accordance with the following instructions and with discretionary authority upon such other matters as may come before the meeting. All previous proxies are hereby revoked. 1. Election of Directors. To elect to serve as a director Jacky Knopp, Jr. until 1999. / / FOR / / WITHHOLD AUTHORITY on the nominee ________________________________________________________ ____________________________________________ THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION IS INDICATED, IT WILL BE VOTED FOR THE ELECTION OF THE NOMINEE. (PLEASE FILL IN, DATE AND SIGN ON THE REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE) DATED: _____________________, 1996 ______________________________________________ Signature(s) (Signatures should be the same as the name printed hereon. Executors, administrators, trustees, guardians, attorneys and officers of corporations should add their titles when signing.) #436368 v1 - MURPHRDH - 9cpc01!.DOC - 1170/1170