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
LEC Technologies, Inc.
- - -------------------------------------------------------------------
(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)(1)
and O-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 O-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 O-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration number, or the Form or Schedule and the date of its
filing.
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4) Date Filed:
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LEC TECHNOLOGIES, INC.
6540 South Pecos Road
Suite 103
Las Vegas, Nevada 89120
-------------------------
NOTICE OF ANNUAL MEETING
To Be Held June 18, 1997
To all Stockholders of
LEC TECHNOLOGIES, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of LEC TECHNOLOGIES, INC., a Delaware corporation (the "Company"),
will be held at the Company's headquarters at 6540 South Pecos
Road, Suite 103, Las Vegas, Nevada 89120 on June 18, 1997 at the
hour of 9:00 a.m., Pacific Standard Time, for the following
purposes:
1. To elect three directors to serve for a term of one year
and until their respective successors shall be elected and qualify;
and
2. To transact such other business as may properly come
before the meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on May 5,
1997 are entitled to notice of and to vote at such meeting or any
adjournment thereof. If you attend the meeting you may vote in
person if you wish, even though you have previously returned your
proxy. A copy of the Company's Proxy Statement and its Annual
Report to shareholders for the year ended December 31, 1996 are
enclosed herewith.
By order of the Board of Directors.
MICHAEL F. DANIELS
-----------------------------------
Michael F. Daniels,
President
Las Vegas, Nevada
May 13, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE COMPANY'S BOARD OF
DIRECTORS AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE WHICH HAS
BEEN PROVIDED. ANY STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME
BEFORE THE MEETING BY WRITTEN NOTICE TO SUCH EFFECT BY SUBMITTING
A SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE MEETING AND VOTING
IN PERSON.
LEC TECHNOLOGIES, INC.
6540 South Pecos Road
Suite 103
Las Vegas, Nevada 89120
----------------------------
PROXY STATEMENT FOR ANNUAL
MEETING OF STOCKHOLDERS
----------------------------
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of LEC
TECHNOLOGIES, INC. (the "Company"), a Delaware corporation, for use
at the Annual Meeting of Stockholders to be held at the Company's
headquarters at 6540 South Pecos Road, Suite 103, Las Vegas, Nevada
89120 on Wednesday, June 18, 1997, at the hour of 9:00 a.m.,
Pacific Standard Time, and at any adjournment thereof (the "1997
Meeting").
Stockholders who execute proxies retain the right to revoke
them at any time by notice in writing to the Secretary of the
Company, by revocation in person at the meeting or by preparing a
later dated proxy. Unless so revoked, the shares represented by
proxies will be voted at the meeting in accordance with the
directions given therein.
The principal executive offices of the Company are located at
6540 South Pecos Road, Suite 103, Las Vegas, Nevada 89120. The
approximate date upon which the enclosed form of proxy will first
be sent to stockholders is on or about May 16, 1997.
Stockholders of record of the Company's Common Stock at the
close of business on May 5, 1997 (the "Record Date") shall be
entitled to one vote for each share then held. There were
outstanding on said date approximately 4,726,028 shares of Common
Stock owned by approximately 220 stockholders of record.
Management and Directors of the Company, which collectively
owned on the record date approximately 19.8% of the outstanding
shares of the Common Stock, have indicated that they will vote all
of their shares for each such proposal.
A list of stockholders entitled to vote at the 1997 Meeting
will be available at the Company's offices, 6540 South Pecos Road,
Suite 103, Las Vegas, Nevada 89120 for a period of ten days prior
to the 1997 Meeting for examination by any stockholder and at the
1997 Meeting itself.
ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees to the Board of Directors
Three directors will be elected at the 1997 Meeting to serve
for a term of one year and until their respective successors shall
have been elected and shall qualify. Unless otherwise indicated,
the accompanying form of proxy will be voted for the persons listed
below. In the event that any nominee for Director should become
unavailable to serve, it is intended that votes will be cast,
pursuant to the enclosed form of proxy, for such substitute nominee
as may be nominated by the Company. At this time, the Board of
Directors knows of no reason why any nominee may be unable to
serve. There is no arrangement or understanding between any
director or nominee and any other person pursaunt to which such
person was selected as a director or nominee.
Michael F. Daniels
Larry M. Segall
L. Derrick Ashcroft
Messrs. Daniels, Segall and Ashcroft are current members of
the Board of Directors. Certain information regarding these
nominees is set forth below in the MANAGEMENT Section under the
heading "Directors and Executive Officers".
Recommendation of the Board of Directors
The Board of Directors recommends that the stockholders vote
"FOR" each of the three nominees named above.
Vote Required
The nominees for election as director at the 1997 Meeting who
receive the three largest pluralities of votes properly cast for
the election of directors shall be elected directors of the
Company. Abstentions with respect to the election of a nominee for
Director will have the same effect as a withheld vote and broker
non-votes will have no effect on the election of Directors.
Cumulative voting is not permitted.
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 5, 1997, certain
information concerning those persons known to the Company, based on
information obtained from such persons, with respect to the
beneficial ownership (as such term is defined in Rule 13d-3 under
the Securities Act of 1934) of shares of Common Stock, $0.01 par
value, of the Company by (i) each person known by the Company to be
the owner of more than 5% of the outstanding shares of Common
Stock, (ii) each Director of the Company, (iii) each executive
officer of the Company named in the Summary Compensation Table and
(iv) all executive officers and Directors as a group:
Amount and Nature
Name and Address of of Beneficial Own- Percentage of
Beneficial Owner (1) ership (2) Class (3)
- - ---------------------- ------------------ -------------
Michael F. Daniels 633,958 (4) 11.8%
William J. Vargas 66,833 (5) 1.4%
Larry M. Segall 266,875 (6) 5.3%
L. Derrick Ashcroft 152,500 (7) 3.1%
Select Media Ltd. 248,000 (8) 5.0%
All Directors and
Executive Officers
as a Group (4 persons) 1,120,166 19.2%
(1) The address for all individuals identified herein is 6540 S.
Pecos Road, Suite 103, Las vegas, Nevada 89120.
(2) Unless otherwise noted, the Company believes that all persons
named in the table have sole investment power with respect to
all shares of common stock beneficially owned by them. A
person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days from the date
hereof upon the exercise of warrants or options or upon the
conversion of convertible securities. Each beneficial owner's
percentage ownership is determined by assuming that options or
warrants or shares of Series A Convertible Preferred Stock
that are held by such person (but not those held by any other
person) and which are exercisable or convertible within 60
days from the date hereof have been exercised or converted.
(3) Based on 4,726,028 shares of common stock outstanding as of
May 5, 1997.
(4) Includes options to purchase 180,250 shares of common stock
granted to Mr. Daniels which are currently exercisable and
options to purchase 83,333 shares of common stock which are
exercisable within 60 days from the date hereof.
(5) Includes options to purchase 12,500 shares of common stock
granted to Mr. Vargas which are currently exercisable and
options to purchase 23,333 shares of common stock which are
exercisable within 60 days from the date hereof.
(6) Includes options to purchase 254,000 shares of common stock
granted to Mr. Segall which are currently exercisable.
(7) Includes options to purchase 147,500 shares of common stock
granted to Mr. Ashcroft which are currently exercisable.
(8) Includes options to purchase 198,000 shares of common stock
which are currently exercisable.
MANAGEMENT
Directors and Executive Officers
The names, ages and respective positions of the Executive
Officers and Directors of the Company are as follows:
Name Age Position
Michael F. Daniels 48 Chairman of the Board, President
and Chief Executive Officer
William J. Vargas 37 Vice President - Finance, Chief
Financial Officer, Treasurer and
Secretary
Larry M. Segall 42 Director
L. Derrick Ashcroft 68 Director
Michael F. Daniels. Michael F. Daniels has served as Chairman of
the Board of Directors, President and Chief Executive Officer since
April 1994 and as a Director of the Company since 1983. He served
as Chief Operating Officer from March 1993 to April 1994 and as
Senior Vice President - Marketing for more than five years prior
thereto. From 1970 to 1983 he was a Senior Systems Engineer with
Metropolitan Life Insurance Company.
William J. Vargas. William J. Vargas has served as Vice President
- - - Finance, Chief Financial Officer and Treasurer since May 1995 and
as Secretary since February 1996. From July 1993 to January 1995
he was the Senior Director of Finance for Fitzgeralds Casino/Hotel
and from February 1995 through April 1995 he was an independent
financial consultant. From July 1990 to December 1991 and from
January 1992 to July 1993 he was the Chief Financial Officer of
Electronic Data Technologies, Inc. and Sport of Kings, Inc.,
respectively, two publicly traded gaming companies. From 1984 to
1990 he was employed as an auditor with Arthur Andersen & Co.
Larry M. Segall. Larry M. Segall has served as a Director of the
Company since November 1989. Mr. Segall has been employed by
Tiffany & Co. as Controller since 1985 and is currently its Vice
President, Treasurer and Controller. From 1983 to 1985 he was the
Controller of Murijani International Ltd. From 1977 to 1983 he was
employed as an auditor with Touche Ross & Co.
L. Derrick Ashcroft. L. Derrick Ashcroft has served as a Director
of the Company since August 1994. From 1988 to 1995 he was
Chairman of the Board of Cardiopet, Inc., an animal diagnostic firm
and from 1986 to 1988 he was Chairman of the Board and President of
Ashcroft Rubin, Inc., an equipment leasing company specializing in
tax-driven equipment leases. He also currently serves as a
director on the board's of Tatatech, Inc., a high-tech venture
capital firm and Telco Technologies, Inc., a telecommunications
services company. Mr. Ashcroft is a graduate of Oxford University,
England.
Meetings and Committees of the Board of Directors
The Board of Directors held a total of seven meetings during
the fiscal year ended December 31, 1996. All incumbent directors
attended at least seventy-five percent of those meetings and of its
committees of the Board on which they served.
The Board of Directors has the following committees, the
current composition of which is as follows: the Compensation
Committee, comprised of Messrs. Daniels, Segall and Ashcroft; the
Audit Committee, comprised of Messrs. Segall and Ashcroft, and the
Stock Option Plan Committee, comprised of Messrs. Segall and
Ashcroft.
The Compensation Committee is charged with periodically
reviewing the compensation of the Company's officers and employees
and recommending appropriate adjustments. The Compensation
Committee met once during fiscal year 1996.
The Audit Committee recommends engagement of the Company's
independent accountants and is primarily responsible for reviewing
their performance and their fees and for reviewing and evaluating
with the independent auditors and management the Company's
accounting policies and its system of internal controls. The Audit
Committee met twice during fiscal year 1996.
The Stock Option Plan Committee administers the Company's
stock option plans and makes awards under such plans. The Stock
Option Plan Committee met one time during fiscal year 1996.
Compensation of Directors
Each non-employee director of the Company is paid $1,000 per
month. In addition, each director is entitled to participate in
the Company's 1991 and 1993 Director Stock Option Plan and the 1994
Stock Option Plan, and, other than directors who act as members of
the Stock Option Plan Committee, the 1996 Stock Option Plan.
Issuances of options to directors under the 1991 and 1993 Director
Stock Option Plans and the 1994 Stock Option Plan were determined
by the Director Stock Option Plan Committee then in effect. In
May, 1996, Messrs. Segall and Ashcroft were granted options to
purchase 200,000 and 75,000 shares, respectively, of the Company's
Common Stock at an exercise price of $1.75 per share, which was the
market value of the Company's common stock on the date of grant.
The Company does not pay its directors any additional fees for
committee participation.
Compliance with Stock Ownership Reporting requirements
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and persons who own more than ten
percent of a registered class of the Company's equity securities to
file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission"). Specific
due dates for these reports have been established by the Commission
and the Company is required to report in this Proxy Statement any
failure to file by these due dates during or with respect to 1996.
All of these filing requirements were satisfied by its officers,
directors and ten percent holders. In making these statements, the
Company has relied on the written representations of its officers,
directors and its ten percent holders and copies of the reports
that they have filed with the Commission.
Executive Compensation
The following table sets forth certain information with
respect to the compensation paid and/or accrued to the Chief
Executive Officer of the Company for services rendered to the
Company during the three fiscal years ended December 31, 1996 and
the compensation paid and/or accrued to the Chief Financial Officer
of the Company for services rendered to the Company during the year
ended December 31, 1996. No other executive officer received
annual compensation in excess of $100,000 in any of the three years
ended December 31, 1996. This information includes the dollar
value of base salaries, bonuses, awards, the number of stock
options granted and certain other compensation, if any, whether
paid or deferred.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Other Annual
Name and Salary Bonus Compensation
Principal Position Year ($) ($) ($)
Michael F. Daniels 1996 $273,077 - $258,619 (2)
President & CEO 1995 254,808 $ 25,000(1) 198,987 (2)
1994 188,314 732,000(4) 192,148 (2)
William J. Vargas 1996 115,341 - -
CFO & Secretary
LONG TERM COMPENSATION
AWARDS
Securities
Restricted Underlying All Other
Name and Stock Options/ Compensation
Principal Position Year Awards SARs (#) ($)
Michael F. Daniels 1996 - 250,000 4,750 (3)
President & CEO 1995 - 79,000 4,500 (3)
1994 - - 4,500 (3)
William J. Vargas 1996 - 70,000 1,900 (3)
CFO & Secretary
(1) Consists of accrued bonus pursuant to employment contract.
(2) Consists of commission income based upon realization of excess
residual values related to leases entered into prior to May
15, 1993.
(3) Represents Company matching contribution to 401(k) Profit
Sharing Plan.
(4) Consists of 300,000 shares of restricted common stock at a
quoted market price of $2.44 granted in lieu of discretionary
commissions.
The following table discloses for the Chief Executive Officer
and the Chief Financial Officer each stock option grant in the last
fiscal year as a percentage of total options granted to Employees
in such fiscal year.
Number of Percent of
Securities Total Options/
Underlying SAR's Granted Exercise
Options/SAR's to Employees or Base Expiration
Name Granted (#) In Fiscal Year Price($/Sh) Date
- - ----------- ------------- -------------- ----------- ----------
Michael F.
Daniels 250,000 50.0% $1.75 05-09-01
William J.
Vargas 70,000 14.0% 1.75 05-09-01
The following table discloses for the Chief Executive Officer
and the Chief Financial Officer each stock option exercised in the
last fiscal year and the value of all options at the end of the
last fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Value of
Securities Unexercised
Underlying In-The-Money
Options/SAR's Options/SAR's
At FY-END (#) At FY-END ($)*
Shares
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
- - ----------- ----------- -------- ------------- -------------
Michael F. 0 0 180,250/ $55,218/
Daniels 250,000 $0.00
William J. 0 0 12,500/ $0.00/
Vargas 70,000 $0.00
* The last sales price for the Common Stock on the Nasdaq
SmallCap Market tier of the Nasdaq Stock Market on December 31,
1996 was $1.03.
Employment Contracts
Michael F. Daniels serves as the Company's President and Chief
Executive Officer under an employment agreement dated July 1, 1995
and expiring June 30, 2000. Mr. Daniels' compensation under such
agreement is $300,000 per annum and he is eligible for a bonus
based on company performance. In addition, Mr. Daniels is entitled
to receive commissions equal to 25% of the net proceeds realized by
the Company in excess of the residual value of equipment subject to
leases which commenced prior to May 15, 1993 and for which Mr.
Daniels was the lead salesperson.
William J. Vargas serves as the Company's Chief Financial
Officer, Treasurer and Secretary under an employment agreement
dated July 1, 1995 and expiring June 30, 2000. Mr. Vargas'
compensation under such agreement is $110,000 per annum.
Certain Relationships and Related Transactions
Customer Relationship. Mr. Segall, a director of the Company,
is also an officer of Tiffany & Co., one of the Company's
customers. Mr. Segall receives no cash or other remuneration from
the Company other than a fee for his services as a director and
participation in certain of the Company's stock option plans. The
Company believes that the terms of its lease arrangements with
Tiffany & Co. are fair and have been reached on an arms-length
basis.
Independent Accountants
No action is being taken at the 1997 Meeting with respect to
the Company's independent accountants. KPMG Peat Marwick LLP acted
as the Company's independent accountants for the year ended
December 31, 1996. The Board of Directors has not made a decision
on the retention of KPMG Peat Marwick LLP as the Company's
independent accountants for the fiscal year ended December 31,
1997.
MISCELLANEOUS
Any proposal of a stockholder intended to be presented at the
1998 Annual Meeting of Stockholders must be received by the Company
by December 31, 1997 to be eligible for inclusion in the Company's
proxy statement and for the proxy related to such meeting.
The Board of Directors does not intend to present and knows of
no others who intend to present at the meeting any matter of
business other than that set forth in the accompanying Notice of
Annual Meeting of Stockholders. If other matters are properly
brought before the meeting, it is the intention of the persons
named in the accompanying form of proxy to vote any proxies on such
matters in accordance with their judgement.
The Company shall bear the cost of preparing, assembling and
mailing the enclosed form of proxy, this Proxy Statement and other
material which may be sent to stockholders in connection with this
solicitation. Officers and regular employees may solicit proxies
by mail, telephone, telegraph and personal interview, for which no
additional compensation will be paid. The Company may reimburse
persons holding shares in their names or in the names of nominees
for their reasonable expenses in sending proxies and proxy material
to their principals.
By order of the Board of
Directors,
MICHAEL F. DANIELS
Michael F. Daniels, President
Las Vegas, Nevada
May 13, 1997
APPENDIX
LEC TECHNOLOGIES, INC.
6540 South Pecos Road
Suite 103
Las Vegas, Nevada 89120
_____________________________
NOTICE OF ANNUAL MEETING
To Be Held June 18, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael F. Daniels and William
J. Vargas, and each of them, as proxies for the undersigned, each
with full power of substitution, and hereby authorizes them to
represent and to vote, as designated on the reverse, all shares of
stock of the Company at the Annual Meeting of Stockholders of the
Company to be held at the Company's headquarters at 6540 South
Pecos Road, Suite 103, Las Vegas, Nevada 89120 on June 18, 1997 at
the hour of 9:00 a.m., Pacific Standard Time, for the following
purposes:
(Continued and to be signed on the reverse side)
Please mark your votes as in this example [X]
The Board of Directors recommends a vote FOR each proposal:
1. Election of Directors
FOR WITHHOLD NOMINEES
all nominees listed AUTHORITY
at right (except as to vote for Michael F. Daniels
marked to the contrary all nominees Larry M. Segall
at right) L. Derrick Ashcroft
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list
at right.
2. To transact such other business as may properly come before the
meeting or any adjounment(s) thereof.
Only stockholders of record as of the close of business on May
5, 1997 are entitled to notice of and to vote at such meeting or
any adjournment thereof. If you attend the meeting you may vote in
person if you wish, even though you have previously returned your
proxy. A copy of the Company's Proxy Statement and its Annual
report to shareholders for the year ended December 31, 1996 are
enclosed herewith.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE COMPANY'S BOARD OF
DIRECTORS AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED.
ANY STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME BEFORE THE MEETING
BY WRITTEN NOTICE TO SUCH EFFECT, BY SUBMITTING A SUBSEQUENTLY
DATED PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
SIGNATURE ___________________________________ DATE __________
SIGNATURE ___________________________________ DATE __________
IF HELD JOINTLY
IMPORTANT: Please sign exactly as your name appears hereon and
mail it promptly even though you now plan to attend the meeting.
When signing as an attorney, executor, administrator, trustee or
guardian, please give full title as such. When shares are held by
joint tenants, both should sign. If a corporation, please sign in
full corporate name by president or other authorized officer. If
a partnership, please sign in partnership name by authorized
person.