SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 Under Rule 14a-12
ALDILA, INC.
------------
(Name of Registrant as Specified in Its Charter)
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
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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):
N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
[LOGO - ALDILA]
April 4, 2001
To Our Stockholders:
On behalf of the Board of Directors, I cordially invite you to attend
the Annual Meeting of Stockholders of Aldila, Inc., to be held Wednesday,
May 16, 2001, at 9:00 a.m. at the Rancho Bernardo Inn, 17550 Bernardo Oaks
Drive, San Diego, California 92128. The formal notice and proxy statement
for the Annual Meeting are attached to this letter.
It is important that you vote your shares as soon as possible, either
by phone or by mail as explained on the enclosed proxy card, even if you
currently plan to attend the Annual Meeting. By doing so, you will ensure
that your shares are represented and voted at the meeting. If you decide to
attend, you can still vote your shares in person, if you wish.
On behalf of the Board of Directors, I thank you for your cooperation
and I look forward to seeing you on May 16.
Very truly yours,
/s/ Peter R. Mathewson
Peter R. Mathewson
Chairman of the Board
ALDILA, INC.
12140 COMMUNITY ROAD
POWAY, CALIFORNIA 92064
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 2001
TO THE STOCKHOLDERS OF ALDILA, INC.
Notice is hereby given that the Annual Meeting of Stockholders of
Aldila, Inc. (the "Company") will be held at the Rancho Bernardo Inn, 17550
Bernardo Oaks Drive, San Diego, California 92128, on Wednesday, May 16,
2001, at 9:00 a.m., Pacific time, for the following purposes:
1. ELECTION OF DIRECTORS. To elect by vote of the holders of Common
Stock a total of seven persons to the Board of Directors to serve
until the next Annual Meeting of Stockholders and until their
successors are elected and have qualified. The Board of
Directors' nominees are:
Peter E. Bennett John J. Henry
Thomas A. Brand Peter R. Mathewson
Marvin M. Giles, III Chapin Nolen
Vincent T. Gorguze
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS. To
ratify the Board of Directors' selection of Deloitte & Touche LLP
as the Company's independent accountants for the fiscal year
ending December 31, 2001.
3. OTHER BUSINESS. To consider and act upon such other business as
may properly come before the meeting.
Only stockholders of record at the close of business on March 29, 2001
will be entitled to notice of the Annual Meeting and to vote at the Annual
Meeting and at any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert J. Cierzan
Robert J. Cierzan
Secretary
Dated: April 4, 2001
WHETHER OR NOT YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING IN PERSON,
PLEASE VOTE BY PHONE OR BY MAIL, AS INSTRUCTED ON THE ENCLOSED PROXY CARD,
AS PROMPTLY AS POSSIBLE. YOU MAY REVOKE YOUR PROXY (WHETHER GIVEN BY PHONE
OR MAIL) IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO VOTE YOUR
SHARES IN PERSON.
ALDILA, INC.
12140 COMMUNITY ROAD
POWAY, CALIFORNIA 92064
(858) 513-1801
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 2001
GENERAL
This proxy statement is furnished to stockholders of Aldila, Inc., a
Delaware corporation (the "Company"), in connection with the solicitation
of proxies by the Board of Directors of the Company (the "Board" or "Board
of Directors") for use at the Annual Meeting of Stockholders to be held at
9:00 a.m., Pacific time, on Wednesday, May 16, 2001, at the Rancho Bernardo
Inn, 17550 Bernardo Oaks Drive, San Diego, California 92128, and any
adjournments thereof (the "Annual Meeting" or "Meeting").
Common stockholders of record as of the close of business on March 29,
2001, will be entitled to vote at the Meeting or any adjournments thereof.
As of the record date, the Company had outstanding 15,262,204 shares of
Common Stock, each entitled to one vote on all matters to be voted upon.
This proxy statement, the accompanying form of proxy and the Company's
annual report to stockholders for the fiscal year ended December 31, 2000
are being mailed on or about April 4, 2001 to each stockholder entitled to
vote at the Meeting.
VOTING AND REVOCATION OF PROXIES
VOTING
If the enclosed proxy is voted by telephone or executed and returned
by mail in time and not revoked, all shares represented thereby will be
voted. Each proxy will be voted in accordance with the stockholder's
instructions. If no such instructions are specified, the proxies will be
voted FOR the election of each person nominated for election as a director
and FOR the ratification of the Board's selection of Deloitte & Touche LLP
as the Company's independent accountants for the fiscal year ending
December 31, 2001.
Assuming a quorum is present, the affirmative vote by the holders of a
plurality of the votes cast at the Meeting will be required for the
election of directors; the affirmative vote of a majority of the votes cast
at the Meeting will be required for the ratification of the Board's
selection of Deloitte & Touche LLP as the Company's independent
accountants; and the affirmative vote of a majority of the votes cast at
the Meeting will be required to act on all other matters to come before the
Annual Meeting. An automated system administered by the Company's transfer
agent tabulates the votes. For purposes of determining the number of votes
cast with respect to any voting matter, only those cast "for" or "against"
are included. Abstentions and broker non-votes are counted only for
purposes of determining whether a quorum is present at the Meeting. With
respect to all matters (other than the election of directors), abstentions
and broker non-votes will have the effect of reducing the number of
affirmative votes required to achieve a majority of the votes cast.
REVOCATION
A stockholder giving a proxy may revoke it at any time before it is
voted by delivery to the Company of a subsequently executed proxy or a
written notice of revocation. In addition, returning your completed proxy
by mail or by telephone will not prevent you from voting in person at the
Annual Meeting should you be present and wish to do so.
ELECTION OF DIRECTORS
The Company's Restated Bylaws give the Board the power to set the
number of directors at no less than one nor more than twenty-one. The size
of the Company's Board is currently set at seven. Directors hold office
until the next annual meeting of stockholders and until their successors
are elected and have qualified.
Unless otherwise directed, proxies in the accompanying form will be
voted FOR the nominees listed below. If any one or more of the nominees is
unable to serve for any reason or withdraws from nomination, proxies will
be voted for the substitute nominee or nominees, if any, proposed by the
Board of Directors. The Board has no knowledge that any nominee will or may
be unable to serve or will or may withdraw from nomination. All of the
following nominees are current directors of the Company whose terms end at
the 2001 Annual Meeting. Information concerning the nominees for directors
is set forth below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE BOARD OF DIRECTORS'
NOMINEES FOR DIRECTORS TO BE ELECTED BY THE HOLDERS OF COMMON STOCK.
NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK
THOMAS A. BRAND has been a director of the Company since November
1997. Since January 1994, Mr. Brand has been an instructor at the
University of Phoenix and a consultant to the composite materials industry.
Since August 2000, he has been a director of Reinhold Industries, Inc., a
manufacturer of advanced custom composite components, sheet molding
compounds and graphic arts and industrial rollers for a variety of
applications in the United States and Europe. From 1983 to 1992, he was
Senior Vice President/General Manager of Fiberite Advanced Materials, a
business unit of ICI-PLC. From 1964 to 1983, Mr. Brand served as Vice
President/General Manager, Fiberite West Coast Corp., which is a division
of Fiberite Corporation. Age: 67.
PETER E. BENNETT has been a director of the Company since November
1994. Mr. Bennett has been the President and a Senior Partner of Liberty
Partners L.P. since September 1992. He is a director of Tnex.net, Internet
Healthcare Group, Datamax Corp., Norwood Promotional Products, Inc.,
PlayPower, Inc., PADCOM, Inc., and Regulus Group, LLC. Age: 59.
MARVIN M. GILES, III has been a director of the Company since October
1993. He has been President of Octagon Golf ("Octagon") since he co-founded
that company in 1973. Octagon is a business management firm that
specializes in representing professional athletes, particularly golfers
including Davis Love III, Tom Kite and Lanny Wadkins. Mr. Giles is also an
accomplished golfer. He was the 1972 U.S. Amateur Champion and the 1975
British Amateur Champion. Mr. Giles was the 1993 U.S. Walker Cup Captain
and played on four Walker Cup teams from 1969 to 1975. Age: 58.
VINCENT T. GORGUZE has been a director of the Company since May 2000.
Mr. Gorguze previously served on the Board of Directors of the Company (or
its predecessors) from September 1998 until May 1999. He served as Chairman
of the Board of the Company (or its predecessors) from September 1988 until
December 31, 1995 and served as Chairman Emeritus of the Company from 1995
until May 5, 1999. He was Chief Executive Officer of the Company (or its
predecessors) from September 1988 until June 1992 and served as a
consultant to the Company for five and one half years following his service
as Chief Executive Officer. He has been the Chairman of the Board of
Directors of Cloud Corporation LLC ("Cloud") since February 2000. Cloud is
a privately held food packaging company located in Illinois. Since
September 1997, Mr. Gorguze has been Chairman of the Board of Directors and
Chief Executive Officer of Carco Electronics Inc., a manufacturer of flight
motion simulators, target systems, radar sighting equipment and gyroscopes.
Since 1978, Mr. Gorguze has been Chairman and CEO of Sinclair & Rush, Inc.,
a plastics company, and since July 1995 has served as Chairman and CEO of
PlayPower, Inc. Since June 1992, Mr. Gorguze has served as Chairman of the
Board of Directors of Cameron Holdings Corporation, which is an investment
company. Mr. Gorguze previously held various executive positions with
Emerson Electric from 1962 to 1978, including Vice Chairman, President and
Chief Operating Officer. Age: 85.
JOHN J. HENRY has been a director of the Company since November 1994.
Mr. Henry has been the Vice Chairman of Sinclair & Rush since September
1978. Mr. Henry previously held various executive positions with Rockwell
International Corp. from 1967 to 1978, including Sr. Vice President and
President of the Admiral Corporation. He is a director of PlayPower, Inc.
and Duquesne University. Age 74.
PETER R. MATHEWSON has been a director of the Company since January
1997 and has been President, Chief Executive Officer and Chairman of the
Board of the Company since January 2000. From 1990 until December 31, 1999,
he served as Vice President of the Company (or its predecessors). Since
January 1997, Mr. Mathewson has also served as President and Chief
Operating Officer of Aldila Golf Corp., the Company's operating subsidiary
that conducts its core golf operations. Mr. Mathewson has been with the
Company (or its predecessors) since September 1973 and has held various
positions, including: plant manager, production manager, shipping and
receiving supervisor, and purchasing agent. Age: 50.
CHAPIN NOLEN has been a director of the Company since November 1994.
Mr. Nolen has been a director and was President of Combe, Incorporated from
1970 to 1995 and is currently serving as Vice Chairman of its Board of
Directors. He is a director of Santa Barbara Olive Company and the Cosmetic
Toiletry and Fragrance Association. Age: 68.
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company directs the management of the
business and affairs of the Company, as provided by Delaware law, and
conducts its business through meetings of the Board and four standing
committees: Executive, Audit, Compensation and Stock Option. In addition,
from time to time, special committees may be established under the
direction of the Board when necessary to address specific issues. The
Company has no nominating or similar committee.
COMMITTEES OF THE BOARD -- BOARD MEETINGS
The Board of Directors of the Company held four meetings in fiscal
2000. Each director, with the exception of Vincent T. Gorguze, attended 75%
or more of the aggregate of (i) meetings of the Board held during the
period for which he served as a director and (ii) meetings of all
committees held during the period for which he served on those committees.
The EXECUTIVE COMMITTEE of the Board has the authority, between
meetings of the Board of Directors, to exercise all powers and authority of
the Board in the management of the business and affairs of the Company that
may be lawfully delegated to it under Delaware law. The Committee is
chaired by Peter R. Mathewson and its other members are Peter E. Bennett
and Vincent T. Gorguze. The Executive Committee held no meetings in fiscal
2000.
The AUDIT COMMITTEE is currently comprised of John J. Henry, as
chairman, Peter E. Bennett and Chapin Nolen. The Audit Committee held four
meetings in fiscal 2000. See "Report of Audit Committee" for a description
of its responsibilities and activities.
The COMPENSATION COMMITTEE is charged with the responsibility of
supervising and administering the Company's compensation policies,
management awards, reviewing salaries, approving significant changes in
salaried employee benefits, and recommending to the Board such other forms
of remuneration as it deems appropriate. The Compensation Committee is
currently comprised of Peter E. Bennett, as chairman, and John J. Henry and
Marvin M. Giles. The Compensation Committee held one meeting in fiscal
2000.
The STOCK OPTION COMMITTEE's principal functions are to determine
individuals to whom stock options will be granted under the Company's 1994
Stock Incentive Plan, the terms on which such options will be granted, and
to administer the 1994 Stock Incentive Plan. The Stock Option Committee is
currently comprised of Thomas A. Brand, who is the chairman, Chapin Nolen
and Marvin M. Giles, who are independent, "non-employee directors" (within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act")). The Stock Option Committee also retains administrative
responsibility over the Company's 1992 Stock Option Plan. The Stock Option
Committee held three meetings in fiscal 2000.
RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board has selected the accounting firm of Deloitte & Touche LLP to
audit the Company's financial statements for, and otherwise act as the
Company's independent accountants with respect to, the fiscal year ending
December 31, 2001. Deloitte & Touche LLP has acted as independent
accountants for the Company since the fiscal year ended December 31, 1991.
In accordance with the Board's resolution, its selection of Deloitte &
Touche LLP as the Company's independent accountants for the current fiscal
year is being presented to stockholders for ratification at the Annual
Meeting. The Company knows of no direct or material indirect financial
interest of Deloitte & Touche LLP in the Company or any connection of that
firm with the Company in the capacity of promoter, underwriter, voting
trustee, officer or employee.
Members of Deloitte & Touche LLP will be present at the Meeting, will
have an opportunity to make a statement if they so desire, and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT ACCOUNTANTS OF THE
COMPANY.
INDEPENDENT ACCOUNTANT FEES
AUDIT FEES
Aggregate fees billed to the Company for the fiscal year ended
December 31, 2000, by the Company's principal accounting firm, Deloitte &
Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their
respective affiliates were as follows:
Audit Fees (a) $101,850
Financial Information Systems Design $ 0
and Implementation Fees (b)
All Other Fees (c) $99,050
(a) Audit fees include audit of consolidated financial
statements, quarterly reviews, review of annual report on
Form 10-K, attendance at audit committee and shareholder
meetings and review of proxy statement for annual meeting.
(b) Deloitte & Touche LLP did not bill any fees for the
professional services described in Paragraph (c)(4)(ii) of
Rule 2-01 of Regulations S-X.
(c) Includes fees for tax services - $73,450; audit of employee
benefit plan - $10,500; audit of foreign statutory report -
$15,100.
The Audit Committee has concluded that the provision of these services
did not adversely impact the independence of Deloitte & Touche LLP.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
shares of Common Stock beneficially owned as of March 29, 2001 by (a) each
person or entity who, insofar as the Company has been able to ascertain,
beneficially owned more than 5% of the Company's Common Stock as of such
date, (b) each of the directors of the Company (all nominees for election
as a director are current members of the Board), (c) the Company's Chief
Executive Officer and the two other most highly compensated executive
officers of the Company for the fiscal year ended December 31, 2000 (the
"Named Executive Officers") and (d) all current directors and executive
officers of the Company as a group (9 persons). Except as otherwise
indicated, the business address for each person is c/o Aldila, Inc., 12140
Community Road, Poway, California 92064.
COMMON STOCK
BENEFICIALLY PERCENT OF
NAME OWNED(1) SHARES(1)
------------------------------------------ ------------------- -----------
J. Carlo Cannell D/B/A Cannell Capital
Management(2) ............................... 1,010,000 6.6%
Dimensional Fund Advisors Inc.(3)............ 864,800 5.7%
Fuller & Thaler Asset Management, Inc.(4).... 1,630,600 10.7%
Lloyd I. Miller, III (5)..................... 1,609,363 10.5%
PNC Bank, National Association (6) .......... 962,755 6.3%
Peter E. Bennett(7).......................... 89,648 *
Thomas A. Brand(8)........................... 37,981 *
Robert J. Cierzan(9)......................... 302,474 2.0%
Marvin M. Giles, III(10)..................... 74,648 *
Vincent T. Gorguze(11)....................... 607,857 4.0%
John J. Henry(12)............................ 77,848 *
Peter R. Mathewson(13)....................... 367,532 2.4%
Chapin Nolen(14)............................. 109,648 *
Michael J. Rossi(15)......................... 86,032 *
All directors and executive officers
as a group (9 persons)(16).............. 1,753,668 10.6%
- -----------------------
* The percentage of shares of Common Stock beneficially owned does not
exceed one percent of the outstanding shares of Common Stock.
(1) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares of Common Stock which such
person has the right to acquire within 60 days following March 29,
2001. For purposes of computing the percentage of outstanding shares
of Common Stock held by each person or group of persons named above,
any security which such person or persons has or have the right to
acquire within 60 days following March 29, 2001 is deemed to be
outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person.
(2) Based on a joint filing of a Schedule 13G dated January 10, 2000, J.
Carlo Cannell D/B/A Cannell Capital Management ("Cannell"), which is
an investment advisor, has shared dispositive power and shared voting
power with respect to 1,010,000 shares of Common Stock of the Company.
Based on information in a recent letter from Cannell to the Company,
it is the Company's belief that Cannell may have sole or shared voting
power over as much as 9.9% of the shares. The address of Cannell's
principal business office is 600 California Street, San Francisco,
California 94108.
(3) Based on a Schedule 13G dated February 2, 2001 (the "Dimensional
13G"), Dimensional Fund Advisors Inc. ("Dimensional"), which is an
investment advisor, has sole voting and dispositive power over 864,800
shares of Common Stock of the Company. Based on the Dimensional 13G,
all shares of Common Stock of the Company are owned by advisory
clients of Dimensional, no one of which to the knowledge of
Dimensional owns more than 5% of such shares. Dimensional disclaims
beneficial ownership of all such shares. Dimensional's principal
business office is located at 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401.
(4) Based on a Schedule 13G filed on February 13, 2001 by Fuller & Thaler
Asset Management, Inc. ("Fuller & Thaler"), which is an investment
advisor, and Russell J. Fuller ("Fuller"), the president of Fuller &
Thaler. Fuller & Thaler and Fuller report sole dispositive power over
all 1,630,600 shares beneficially owned by them and sole voting power
over 1,110,700 of such shares. Fuller & Thaler's and Fuller's
principal office is located at 411 Borel Avenue, Suite 402, San Mateo,
California 94402.
(5) Based on a filing of a Schedule 13G dated September 8, 2000, as
amended by Amendment No. 1, dated January 16, 2001, and as further
amended by Amendment No. 2, dated February 13, 2001, Lloyd I. Miller,
III has sole voting and dispositive power over 615,975 shares of
Common Stock of the Company, and shared voting and dispositive power
over 993,388 shares of Common Stock of the Company. The reported
address of Mr. Miller is 4550 Gordon Drive, Naples, Florida 34102.
(6) Based on a Schedule 13G dated February 12, 2001 by The PNC Financial
Services Group, Inc. ("PNC Group"), PNC Bancorp, Inc. ("PNC Bancorp")
and PNC Bank, National Association ("PNC BNA"). PNC Group, PNC Bancorp
and PNC BNA report shared power over all 962,755 shares beneficially
owned by them. PNC Group's and PNC BNA's principal office is located
at One PNC Plaza, 249 Fifth Avenue, Pittsburgh, PA 15222 and PNC
Bancorp's principal office is located at 222 Delaware Avenue,
Wilmington, Delaware 19899.
(7) Includes options to acquire 59,648 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Bennett also
has options to purchase 16,666 shares of Common Stock that will not
have vested within 60 days following March 29, 2001.
(8) Includes options to acquire 32,981 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Brand also
had options to purchase 13,333 shares of Common Stock that will have
not vested within 60 days following March 29, 2001.
(9) Includes options to acquire 233,000 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Cierzan also
has options to purchase 50,000 shares of Common Stock that will not
have vested within 60 days following March 29, 2001. All of the
currently owned shares are owned by Robert J. Cierzan and Lynn M.
Cierzan, JTWROS.
(10) Includes options to acquire 69,648 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Giles also
has options to purchase 16,666 shares of Common Stock that will not
have vested within 60 days following March 29, 2001.
(11) Includes options to acquire 93,771 shares of Common Stock that will
have vested within 60 days following March 29, 2001. All of the shares
currently owned by Mr. Gorguze are owned by Gorguze Investments, L.P.,
a limited partnership, of which Mr. Gorguze is sole limited partner
and a corporation, of which Lynn Gorguze, his daughter, owns 100% of
the capital stock, is sole general partner. Mr. Gorguze also has
options to purchase 17,543 shares of Common Stock that will not have
vested within 60 days following March 29, 2001.
(12) Includes options to acquire 59,648 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Henry also
has options to purchase 16,666 shares of Common Stock that will not
have vested within 60 days following March 29, 2001.
(13) Includes options to acquire 305,000 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Mathewson
also has options to purchase 75,000 shares of Common Stock that will
not have vested within 60 days following March 29, 2001.
(14) Includes options to acquire 59,648 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Nolen also
has options to purchase 16,666 shares of Common Stock that will not
have vested within 60 days following March 29, 2001. All of the
currently owned shares are owned directly by the Nolen Millennium LLC,
a Delaware limited liability company ("Nolen LLC"), of which Mr. Nolen
has a 15.8% membership interest and shares the remaining membership
interests with his two adult daughters. As a result of his position as
sole manager of Nolen LLC, Mr. Nolen may be deemed to beneficially own
the shares of Common Stock held by Nolen LLC.
(15) Includes options to acquire 85,832 shares of Common Stock that will
have vested within 60 days following March 29, 2001. Mr. Rossi also
has options to purchase 41,668 shares of Common Stock that will not
have vested within 60 days following March 29, 2001.
(16) Includes beneficial ownership of shares of Common Stock subject to
options exercisable within 60 days following March 29, 2001 and
includes the shares held by Gorguze Investments, L.P. and Nolen LLC.
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and holders of more than 10% of the Company's Common
Stock to file with the Securities and Exchange Commission (the "SEC")
reports of ownership and changes in ownership of Common Stock and other
equity securities of the Company on Forms 3, 4 and 5. Based on a review of
such forms and written representations of reporting persons, the Company
believes that during the fiscal year ended December 31, 2000, its officers
and directors and holders of more than 10% of the Company's Common Stock
complied with all applicable Section 16(a) filing requirements.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information regarding each of the current
executive officers of the Company. Information about Mr. Mathewson is
presented in "ELECTION OF DIRECTORS -- Nominees for Election by Holders of
Common Stock." Officers are appointed by and serve at the discretion of the
Board. Except as otherwise indicated, the positions listed are with Aldila,
Inc.
Name Age Position
Peter R. Mathewson 50 Chairman of the Board of Directors,
Chief Executive Officer, President
and Director; President and Chief
Operating Officer of Aldila Golf
Corp.
Robert J. Cierzan 54 Vice President, Finance, Secretary
and Treasurer
Michael J. Rossi 47 Vice President, Sales and Marketing
of Aldila Golf Corp.
The principal occupations and positions for the past five years, and
in certain cases prior years, of the executive officers of the Company who
are not also nominees for election as a director, are as follows.
Robert J. Cierzan has been Secretary and Treasurer of Aldila (or its
predecessors) since January 1991 and Vice President, Finance since March
1989. From September 1988 to February 1989, Mr. Cierzan held the position
of Executive Vice President-Finance at Illinois Coil Spring Company, a
diversified manufacturer of springs, automotive push-pull controls and
rubber products.
Michael J. Rossi has been the Vice President, Sales and Marketing of
Aldila Golf Corp. since March 24, 1997 when he joined the Company. Prior to
that, from August 1994 to March 1997, Mr. Rossi was the Vice President and
General Manager of Fujikura Composite America which manufactures graphite
golf shafts and is a wholly owned subsidiary of Fujikura Rubber Limited, a
Japanese publicly held company. From November 1989 to August 1994, he was
Vice President, Sales and Marketing for True Temper Sports, a division of
the Black & Decker Corporation which manufactures steel golf shafts.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the
compensation (cash and non-cash, plan and non-plan) paid to each of the
Named Executive Officers for services rendered in all capacities to the
Company during the three fiscal years ended December 31, 2000, 1999 and
1998.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
------------------------------------------ -------------------
Securities
Other Annual Underlying
Name and Principal Position Fiscal Year Base Salary Bonus Compensation Options
- -------------------------------- ---------------- ----------------- -------------- ------------------ ----------------
Peter R. Mathewson 2000 $249,000 $247,000 -- 25,000
Chairman of the Board and 1999 210,000 -- -- 87,500
Chief Executive Officer; 1998 209,700 -- -- 25,000
President and
Chief Operating Officer,
Aldila Golf Corp.
Robert J. Cierzan 2000 $175,000 $174,000 -- 15,000
Vice President, Finance; 1999 168,000 -- -- 60,000
Secretary and Treasurer 1998 166,600 -- -- 15,000
Michael J. Rossi 2000 $163,400 $162,000 -- 12,500
Vice President - Sales and 1999 157,500 -- -- 50,000
Marketing, Aldila Golf Corp. 1998 155,700 -- -- 20,000
The following table sets forth information concerning the grant of
stock options during the fiscal year ended December 31, 2000 to each of the
Named Executive Officers.
OPTION GRANTS
IN THE FISCAL YEAR ENDED DECEMBER 31, 2000
Individual Grants
-----------------------------------------------------------------------------------
Percent of
Total Potential Realizable
Options Value at Assumed
Granted to Annual Rates of
Employees Exercise or Stock Price
Options in Fiscal Base Price Expiration Appreciation for
Name Granted(1) Year 2000(2) (per share) Date(3) Option Term - 10 yr.
- --------------------- ----------------- --------------- ---------------- ------------------ ---------------------------
5% (4) 10%(4)
------------- -------------
Peter R. Mathewson 25,000 8.1% $1.67 05/12/10 $26,256 $66,539
Robert J. Cierzan 15,000 4.9% 1.67 05/12/10 15,754 39,923
Michael J. Rossi 12,500 4.1% 1.67 05/12/10 13,128 33,269
- ----------------------------
<FN>
(1) These options were granted pursuant to the Company's 1994 Stock
Incentive Plan, as amended and restated (the "1994 Stock Incentive
Plan"). One-third of the total number of options granted are
exercisable on the first anniversary of the option grant date and
thereafter, an additional one-third of the total number of options
granted are exercisable on each of the second and third anniversaries
of the option grant.
(2) In fiscal 2000, the Company granted a total of 307,500 options to its
employees under the Company's 1994 Stock Incentive Plan. This number
was used in calculating the percentages above.
(3) The options granted under the Company's 1994 Stock Incentive Plan
generally expire on the earliest of (a) the tenth anniversary of the
date of grant, (b) if the Optionee's employment is terminated as a
result of death, disability, retirement or within two years after a
change in control, one year following termination of employment, (c)
if the Optionee's employment is terminated for any other reason, 30
days following termination of employment or (d) the exercise in full
of the option.
(4) The assumed 5% and 10% annual rates of appreciation over the term of
the options are set forth in accordance with rules and regulations
adopted by the SEC and do not represent the Company's estimate of
stock price appreciation.
</FN>
Aggregated Option Exercises. The following table sets forth
information (on an aggregated basis) concerning each exercise of stock
options during the fiscal year ended December 31, 2000 by each of the Named
Executive Officers and the fiscal year-end value of unexercised options.
The Company has no outstanding stock appreciation rights, either
freestanding or in tandem with options.
AGGREGATE OPTION EXERCISES
IN THE FISCAL YEAR ENDED DECEMBER 31, 2000 AND
FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of Securities Underlying "In-the-Money"
Shares Unexcercised Options at Options at Fiscal
Acquired on Value Fiscal Year-End Year-End(1)
--------------------------------- ---------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ---------------- ------------- ---------------- ---------------- ---------------- ----------------
Peter R. Mathewson -- -- 288,334 91,666 $9,417 $25,333
Robert J. Cierzan -- -- 223,000 60,000 $5,700 $15,300
Michael J. Rossi -- -- 73,333 54,167 $4,750 $12,750
- ----------------------
<FN>
(1) Options are "in-the-money" at the fiscal year-end if the fair market
value of the underlying securities on such date exceeds the exercise
price of the option. The amounts set forth above represent the
difference between the closing price of the Company's Common Stock on
December 31, 2000 and the exercise price of the options, multiplied by
the applicable number of options.
</FN>
DIRECTOR COMPENSATION
Directors, other than management directors (Peter R. Mathewson),
currently receive for their service as directors $2,000 per quarter, $1,000
per Board meeting attended and $500 per committee meeting attended. Each
director, including each management director and other directors not
receiving directors' fees, is reimbursed for his or her out-of-pocket
expenses arising from attendance at meetings of the Board or committees
thereof.
Pursuant to the Company's 1994 Stock Incentive Plan, on May 31, 2000,
each of the non-employee directors who had more than one year of service
(Peter E. Bennett, Thomas A. Brand, Marvin M. Giles, III, John J. Henry and
Chapin Nolen) received an annual stock option grant of 10,000 shares. Under
the 1994 Stock Incentive Plan, each non-employee director with more than
one year of service (currently, Messrs. Bennett, Brand, Giles, Gorguze,
Henry and Nolen) will receive additional options to acquire 10,000 shares
annually on the last trading day in the month of May. In addition, under
the 1994 Incentive Plan, each new non-employee director receives options to
purchase 26,314 shares on his or her date of election to the Board.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company entered into a Severance Protection Agreement (the
"Severance Agreement") in March 1999, with each of the following Named
Executive Officers: Messrs. Cierzan, Mathewson and Rossi. All capitalized
terms in the description below have the same meaning as in the Severance
Agreement. Pursuant to the Severance Agreement, in the case of termination
of employment as a result of death, by the Company for Cause or Disability,
or by the Executive other than for Good Reason, the Executive is entitled
to his Accrued Compensation. In the case of termination for any other
reason, the Executive is entitled to the following: (i) Accrued
Compensation and a Pro Rata Bonus for the year of termination (typically
computed based on the average bonus paid for the prior two years), (ii) a
lump sum payment equal to twice the sum of the Executive's then annual base
salary and his average bonus for the prior two years, (iii) continued
provision of insurance (including life, disability and medical) for two
years, "grossed up" to cover any excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, and (iv) a lump sum equal to two years'
automobile allowance (or the length of the automobile lease, if longer, in
the case of automobiles leased by the Company for the Executive's use).
These payments are in lieu of any other severance benefit to which the
Executive would otherwise have been entitled. Upon a Change-in-Control,
regardless of whether the Executive's employment has terminated, the
Company is required to contribute to a grantor trust an amount sufficient
to fund the payments under clauses (i), (ii), and (iv) above.
Change-in-Control means (1) an acquisition of 40% of the Company's
Common Stock, (2) a change in two-thirds of the composition of the Board of
Directors of the Company without the approval of the existing members of
the Board, (3) the completion of a merger where the existing stockholders
and Board of Directors do not retain control of the surviving company, or
(4) the liquidation or sale of substantially all the assets of the Company.
Except as provided above and except for the provisions of the 1994
Stock Incentive Plan and related agreements thereto, there are no
compensatory plans or arrangements with respect to any of the above
executive officers (including each of the Named Executive Officers) which
are triggered by, or result from, the resignation, retirement or any other
termination of such executive officer's employment, a change-in-control of
the Company or a change in such executive officer's responsibilities
following a change-in-control.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
ON EXECUTIVE COMPENSATION
Introduction. The Compensation Committee of the Board of Directors in
2000 was comprised of Peter E. Bennett, Donald C. Klosterman (through June
2000,) Wm. Brian Little (through September 2000), Marvin M. Giles, III (as
of August 2000) and John J. Henry (as of November 2000). The Company's
employee stock option plans, including its 1994 Stock Incentive Plan, are
administered by the Stock Option Committee, which was comprised in 2000 of
Marvin M. Giles, III, Mr. Klosterman (through June 2000) and Mr. Little
(through May 2000), Thomas A. Brand (as of May 2000) and Chapin Nolen (as
of August 2000).
Compensation Objectives and Policies. The principle objectives of the
Company's executive compensation committee are to: (i) support the
achievement of desired Company performance, (ii) align the executive
officers' interests with the success of the Company and with the interests
of the Company's stockholders and (iii) provide compensation that will
attract and retain superior talent and reward performance. These objectives
are principally achieved through compensation in the form of annual base
salaries, bonuses and equity investment opportunities. In line with these
objectives, the Company's executive compensation system consists generally
of base salary, bonuses based on corporate performance under the Company's
Executive Bonus Plan (the "Bonus Plan"), and the grant of stock options
under the 1994 Stock Incentive Plan.
Executive officers generally receive salary increases at the time of
their respective employment anniversaries as approved by the Compensation
Committee, taking into consideration the recommendations of the Company's
Chairman and Chief Executive Officer. In 2000, due to the overall financial
performance of the Company, executive officer salaries were increased by 5%
with the exception of Peter Mathewson. Mr. Mathewson requested that, in
lieu of his salary increase, he be awarded additional stock options in an
amount to be approved by the Stock Option Committee. The Stock Option
Committee has not yet decided how many options, if any, to award to Mr.
Mathewson in lieu of this salary increase. In deciding to provide these
salary increases to the executive officers, the Compensation Committee took
into account the overall performance of the Company in recent years in the
face of increasing market pressures, including declining unit prices that
have been negatively impacting the Company's gross margins, and the
substantially improved performance in 2000 over 1999.
In addition to annual base salaries in 2000, all executive officers
participated in the Company's Executive Bonus Plan (the "Bonus Plan").
Bonus awards to be granted under the Bonus Plan were predicated on the
actual financial performance of the Company at the end of the Company's
fiscal year as compared to the target financial performance objectives
established by the Compensation Committee in late 1999 based on the
Company's 2000 operating plan. The bonuses awarded were dependent upon the
Company achieving a specified dollar amount of pretax profits and increased
to the extent pretax profits exceeded that minimum level and achieved
various higher levels. The bonus for each participant was set at a
percentage of the participant's base salary, with the percentage depending
on what level of pretax profits the Company achieved. In establishing the
targets and resulting bonuses, the Committee determined that it was
important that the bonus payment structure be designed to reward executive
officers for high levels of performance by the Company, weighted so that
superior performance (viewed against the performance then expected in
accordance with management's internal projections for 2000 performance as
approved by the Board of Directors) would result in substantially higher
bonuses than would result from merely acceptable performance. While a
substantial portion of the bonus was subject solely to the Company
attaining its quantitative objectives, a portion of the total bonus award
was also subject to a discretionary modifier determined by the Chairman and
Chief Executive Officer allowing him to reduce the bonus if the executive's
individual performance so warranted. As a result of the improved
performance in 2000 as compared to 1999 and high level of performance as
compared to the performance targets, significant bonuses were paid to the
executive officers for 2000. Consistent with historic experience under the
Bonus Plan, no executive officer's bonus changed as a result of application
of the discretionary modifier.
The Compensation Committee believes that overall 2000 executive
compensation levels, including the bonuses, adequately reflected (i) each
executive's business results and performance in his area of responsibility,
(ii) each executive's contribution to the overall management team and (iii)
each executive's then expected future contributions to the Company.
The Board of Directors believes that executive officers who are in a
position to make a substantial contribution to the long-term success of the
Company and to build stockholder value should have a significant stake in
the Company's on-going success. To this end, the Company's compensation
objectives have been designed to be achieved through significant stock
ownership in the Company by executive officers in addition to base salary
and bonus payments.
The purpose of the 1994 Stock Incentive Plan is to provide an
additional incentive to employees to work to maximize stockholder value and
to facilitate broadening and increasing stock ownership by executives and
other key employees. In 2000, options to purchase an aggregate of 307,500
shares were granted to employees of the Company as a group, with 52,500 of
those being granted to the Named Executive Officers. The Stock Option
Committee believes that these stock option grants were appropriate in light
of the policy of the Board of Directors that significant equity ownership
by executive officers is an important contributor to aligning the interests
of executive officers with those of the stockholders of the Company, and
the number of options awarded to individual officers were set based on the
Stock Option Committee's perception, in part in light of recommendations by
the Company's Chairman and Chief Executive Officer, as to each officer's
ability to affect the Company's overall future performance. The Named
Executive Officers collectively hold options to acquire 790,500 shares.
The Stock Option Committee believes that these newly granted options,
together with the shares and options previously made available to executive
officers, have provided significant incentives for executives to increase
the value of the Company for the benefit of all stockholders and have
offered executives significant opportunities to profit personally from
their efforts to increase that value.
The Compensation Committee and the Stock Option Committee have
considered the impact of Section 162(m) of the Internal Revenue Code on
their executive compensation decisions. Section 162(m) generally disallows
a federal income tax deduction to any publicly-held corporation for
compensation paid to the chief executive officer and the four other most
highly compensated executive officers to the extent that such compensation
in a taxable year exceeds $1 million. Section 162(m), however, does not
disallow a deduction for qualified "performance-based compensation" the
material terms of which are disclosed to and approved by stockholders. The
Company's Bonus Plan as in effect in 2000 does not qualify as
performance-based compensation for the purposes of Section 162(m), although
the 1992 Plan and the 1994 Stock Incentive Plan each so qualify. During
2000, the Compensation Committee believed it unlikely that any executive
officer of the Company would receive in excess of $1 million in
compensation, other than performance-based compensation, and the
Compensation Committee believes that it unlikely that any executive officer
will receive in excess of that amount in 2001. As a result, the
Compensation Committee has not taken any steps to qualify the bonus plan as
performance-based compensation, although it anticipates that the Company
would do so before any executive receives salary, bonus and other
non-performance based compensation in excess of $1 million.
Compensation of Chief Executive Officer. Peter R. Mathewson's
compensation during 2000 as Chairman of the Board and Chief Executive
Officer was reviewed in connection with the Compensation Committee's
overall review of executive officer compensation. The Compensation
Committee proposed in the fall of 2000 to increase his base salary
reflecting the overall performance of the Company during his tenure as
Chief Executive Officer and his performance specifically. However, Mr.
Mathewson chose not to receive any salary increase and, in lieu thereof,
has requested that he be awarded additional stock options in an amount to
be approved by the Stock Option Committee in connection with the next grant
of stock options to the employees of the Company. The amount of these
additional options has not been determined. Mr. Mathewson also received a
bonus of $247,434 under the Bonus Plan. In May 2000, as part of the general
grant referred to above, the Stock Option Committee awarded Mr. Mathewson
options to acquire 25,000 shares of the Company's Common Stock. The Stock
Option Committee believed that this number of options was appropriate in
light of the importance of Mr. Mathewson's position to the Company and his
level of stock ownership. The Compensation Committee also continues to
believe that Mr. Mathewson's participation in the Bonus Plan in conjunction
with his stock ownership and employee stock options have provided
substantial incentives for him to create stockholder value.
The Compensation and Stock Option Committee Report on Executive
Compensation shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act and shall not otherwise be deemed filed under such Acts.
REPORT OF AUDIT COMMITTEE
The Audit Committee currently consists of John J. Henry (chairman),
Peter E. Bennett, and Chapin Nolen, all of whom are independent directors
meeting the requirements of the NASDAQ rules. It held four meetings during
fiscal 2000. The Audit Committee operates under a written charter adopted
by the Board of Directors on May 10, 2000, a copy of which is attached to
this proxy statement as Exhibit A.
Under its charter, the Audit Committee's principal responsibilities
are to (a) monitor the integrity of the Company's financial reporting
process and systems of internal controls, (b) monitor the independence and
performance of Company's independent accountants, currently Deloitte &
Touche LLP, and (c) provide an avenue of communication among the
independent accountants, Company management and the Board of Directors. The
Company's management remains directly responsible for the Company's
internal controls and the financial reporting process, and the Company's
independent accountants are responsible for performing an independent audit
of the Company's financial statements in accordance with generally accepted
auditing standards and to issue a report on the Company's financial
statements, as well as to review the Company's quarterly financial
statements. The Audit Committee has the principal responsibility to monitor
and oversee these processes, although the Board of Directors retains
ultimate responsibility for the performance of the Company's independent
accountants and management.
The Audit Committee is charged with meeting at least four times each
year, at a minimum including a meeting following preparation of quarterly
and annual financial statements to review these financial statements with
management and the independent accountants. Company management has
represented to the Audit Committee that the Company's financial statements
for the fiscal year 2000 were prepared in accordance with generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed these financial statements with management and the Company's
independent accountants. The Audit Committee also discussed with the
Company's independent accountants matters required to be discussed by the
Statement on Auditing Standards No. 61 (communications with audit
committees).
The Company's independent accountants also provided to the Audit
Committee the written disclosure required by Independence Standards Board
Standard No. 1 (independence discussions with audit committees), and the
Audit Committee discussed with the independent accountants the accounting
firm's independence. The Audit Committee also considered whether non-audit
services provided by the independent accountants during the last fiscal
year were compatible with maintaining the independent accountants'
independence.
The Audit Committee is also responsible for recommending the
independent accountants to be retained by the Company for each fiscal year
and has recommended that Deloitte & Touche LLP be nominated again for
approval by the stockholders for fiscal 2001.
Based upon the Audit Committees' discussion with management and the
Company's independent accountants and the Audit Committees' review of the
representations of management and the report of the independent accountants
to the Audit Committee, the Audit Committee has recommended to the Board of
Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000 filed with the Securities and Exchange Commission.
This report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, and shall not otherwise be deemed filed
under such Acts.
PERFORMANCE GRAPH FOR ALDILA, INC. COMMON STOCK
The performance graph for the Company's Common Stock compares the
cumulative total return (assuming reinvestment of dividends) on the
Company's Common Stock with (i) the Center for Research in Security Prices
("CRSP") Index for NASDAQ Stock Market (U.S. Companies) (the "Market
Index") and (ii) the CRSP Index for NASDAQ Stocks (SIC 3940 - 3949) --
Dolls, Toys, Games and Sporting and Athletic Goods (the "Peer Index"),
assuming an investment of $100 on December 31, 1995 in each of the Common
Stock, the stock comprising the Market Index and the stock comprising the
Peer Index.
[PERFORMANCE GRAPH]
INDEXED/CUMULATIVE RETURN
---------------------------------------------------------------------
12/31 12/31 12/31 12/31 12/31
COMPANY/INDEX 1996 1997 1998 1999 2000
------------- ---- ---- ---- ---- ----
Aldila 114.0 102.9 58.8 32.4 30.9
Market Index 123.0 150.7 212.5 394.8 237.4
Peer Index 62.1 56.3 25.1 20.3 26.7
NOTES:
A. The index levels are derived from compounded daily returns that
include all dividends.
B. The index levels for the Company, the Market Index and the Peer Index
were each set to 100 at December 31, 1995.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December 31,
2000 (the "2000 Annual Report") is included with the mailing of this Proxy
Statement. The 2000 Annual Report contains consolidated financial
statements of the Company and its subsidiaries and the report thereon of
Deloitte & Touche LLP, independent accountants.
PROXY SOLICITATION
The cost of soliciting proxies will be paid by the Company. Mellon
Investor Services, 400 South Hope Street, 4th Floor, Los Angeles,
California 90071, has been retained to solicit proxies by mail, telephone
or personal solicitation for a fee of $4,500 plus expenses. The Company has
also arranged for reimbursement, at the rate suggested by the New York
Stock Exchange, of brokerage houses, nominees, custodians and fiduciaries
for the forwarding of proxy materials to the beneficial owners of shares
held of record. Proxies may also be solicited by directors, officers and
employees of the Company, but such persons will not be specially
compensated for such services.
PROPOSALS OF STOCKHOLDERS
If a stockholder desires to have a proposal included in the proxy
materials for the 2002 Annual Meeting of Stockholders, such proposal shall
conform to the applicable proxy rules of the SEC concerning the submission
and content of proposals and must be received by December 4, 2001 at the
executive offices of the Company, 12140 Community Road, Poway, California
92064, Attention: Secretary. The Company's receipt of notice of a
stockholder's intent to submit a proposal outside of Rule 14a-8 at the 2002
Annual Meeting of Stockholders after February 18, 2002 will be considered
untimely under Rule 14a-4(c)(1).
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports, proxy statements
and other information with the SEC. Reports, proxy statements and other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the SEC's Regional
Offices located at 7 World Trade Center (13th Floor), New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials can be obtained by mail from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates or, at no charge, may be obtained at the
SEC's web site: http://www.sec.gov. In addition, such material may also be
inspected and copied at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1500.
OTHER MATTERS
The Board knows of no matters other than those listed in the attached
Notice of Annual Meeting which are likely to be brought before the Meeting.
However, if any other matter properly comes before the Meeting, the persons
named on the enclosed proxy card will vote the proxy in accordance with
their best judgment on such matter.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert J. Cierzan
Robert J. Cierzan
Secretary
April 4, 2001
EXHIBIT A
ALDILA, INC. AUDIT COMMITTEE CHARTER
The Board of Directors of Aldila, Inc. (the "Company") has established an
Audit Committee (the "Committee") with general responsibility and specific
duties as described below.
COMPOSITION:
- -----------
The Committee shall be comprised of not less than three Directors who shall
meet the requirements of the Nasdaq Stock Market. In addition, the members
of the Committee should be free from any relationship that, in the opinion
of the Board, would interfere with the exercise of their independent
judgment as a member of the Committee. Committee members and the Chair of
the Committee shall be appointed by the Board of Directors.
RESPONSIBILITY:
- --------------
The Committee's responsibility is to assist the Board of Directors in
fulfilling its fiduciary responsibilities as to accounting policies and
reporting practices of the Company.
The Committee's primary responsibilities are the following:
1. Monitoring the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting and legal compliance;
2. Monitoring the independence and performance of the independent
accounting firm retained by the Company to conduct audits as to
its financial statements (the "Independent Accountant"); and
3. Providing an avenue of communication among the Independent
Accountant, management of the Company ("Management"), and the
Board of Directors.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of Management and the Independent
Accountant.
The Independent Accountant is ultimately accountable to the Board of
Directors. Nothing in this Charter should be deemed as restricting the
ability of the Board of Directors and the Independent Accountant to
communicate directly should either desire to do so.
In fulfilling its responsibilities, the Committee is empowered, to the
extent it deems it to be appropriate, (a) to retain persons having special
competence to provide the Committee with needed assistance and (b) to
conduct investigations. The Committee is entitled to rely on the advice of,
and information received from, Management and outside advisors to the
Company, the Board of Directors and the Committee to the same extent as is
the Board of Directors. The Committee is not responsible for resolving
disagreements between Management and any of the outside advisors to the
Company, the Board of Directors and the Committee or among the outside
advisors to the Company, the Board of Directors and the Committee.
MEETINGS
- --------
The Committee shall meet at least four times a year (following preparation,
and prior to the public release, of quarterly and annual financial
reports), with such additional meetings as circumstances require.
ATTENDANCE:
- ----------
All members of the Committee should endeavor to be present, in person or by
telephone, at all meetings; however, two Committee members shall constitute
a quorum. As necessary, the Chair may request members of Management and
representatives of the Independent Accountant to be present at meetings.
MINUTES OF MEETINGS:
- -------------------
Minutes of each meeting shall be prepared and sent to Committee members and
to Company Directors who are not members of the Committee.
SPECIFIC DUTIES:
- ---------------
In furtherance of its responsibilities, the Committee is to do the
following:
1. Review with Management and the Independent Accountant the
Company's policies and procedures, as appropriate, in order to
assess the adequacy of internal accounting and financial
reporting controls.
2. Review the Committee's Charter annually and make recommendations
to the Board of Directors as to any appropriate updates.
3. Recommend to the Board of Directors the Independent Accountant to
be selected for the Company (subject to ratification by the
stockholders if the Board of Directors so determines), evaluate
the Independent Accountant, approve the compensation of the
Independent Accountant, and review and approve any discharge of
the Independent Accountant.
4. Receive periodic written statements from the Independent
Accountant regarding its independence and delineating all
relationships between it and the Company, discuss such reports
with the Independent Accountant, and, if so determined by the
Committee, recommend that the Board take appropriate action.
5. Become familiar with the accounting and reporting principles and
practices applied by the Company in preparing its financial
statements.
6. Review, prior to the annual audit, the scope and general extent
of the Independent Accountant's audit examinations.
7. Review with Management and the Independent Accountant, upon
completion of the annual audit, financial results for the year
prior to their release to the public. Review with Management and
the Independent Accountant, upon completion of quarterly
financial statements, financial results for the quarter prior to
their release to the public. Discuss with the Independent
Accountant the matters required to be discussed by the Statement
on Auditing Standards No. 61 relating to the conduct of the
year-end audit.
8. Review the quality and adequacy of the Company's financial
accounting personnel, including receiving reports from the
Independent Accountant as to its views and recommendations
regarding the financial accounting personnel. Make
recommendations to the Board of Directors as to any changes or
additions to the Company's financial accounting personnel that
the Committee deems appropriate.
9. Report Committee actions to the Board of Directors with such
recommendations as the Committee may deem appropriate.
10. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement, commencing with the proxy statement for the 2001
Annual Meeting.
11. Meet with the Independent Accountant, the Company's Chief
Financial Officer or other members of Management in separate
executive sessions, if desirable, to discuss any matters that the
Committee or these other persons believe should be discussed
privately with the Committee.
12. Review with the Independent Accountant any problems or
difficulties the Independent Accountant may have encountered,
including those identified in any management letter, and the
appropriateness of the Company's response to such problems or
difficulties.
13. Perform such other functions as may be required by law, the
Company's Certificate of Incorporation or the Company's Bylaws or
as may be assigned to the Committee, with its concurrence, by the
Board.
ALDILA, INC.
The undersigned stockholder of ALDILA, INC. hereby appoints
PETER R. MATHEWSON and VINCENT T. GORGUZE, or either of them,
Proxies of the undersigned, each with full power to act without
the other and with the power of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of Aldila,
Inc., to be held at the Rancho Bernardo Inn, 17550 Bernardo Oaks
Drive, San Diego, California 92128 on Wednesday, May 16, 2001 at
9:00 a.m. (Pacific time), and at any adjournments or
postponements thereof, and to vote all shares of stock of the
Company standing in the name of the undersigned with all the
powers the undersigned would possess if personally present, in
accordance with the instructions below and on the reverse hereof,
and in their discretion upon such other business as may properly
come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED ON THE REVERSE HEREOF, AND WILL BE
VOTED IN FAVOR OF PROPOSALS 1, 2 AND 3 IF NO INSTRUCTIONS ARE
INDICATED.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
- --------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS CHANGE BOX ON REVERSE SIDE
(Continued and to be marked, signed and dated on reverse side)
FOLD AND DETACH HERE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
|X| PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
1. ELECTION OF DIRECTORS. FOR all nominees WITHHOLD
listed (except as AUTHORITY to
marked to the vote for all
contrary) nominees listed
|_| |_|
Nominees: Peter E. Bennett, Thomas A. Brand, Marvin M. Giles, III, Vincent
T. Gorguze, John |-| J. Henry, Peter R. Mathewson, Chapin Nolen
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.)
- ----------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment
of Deloitte & Touche LLP as [_] [_] [_]
the independent accountants
of the Company.
3. In their discretion, the Proxies
are authorized to vote upon such [_] [_] [_]
other business as may properly
come before the meeting or any
adjournment thereof.
I PLAN TO ATTEND THE MEETING [_]
COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments or an address
change on the reverse side. [_]
The undersigned hereby acknowledges receipt of
the Notice of Annual Meeting of Stockholders
to be held May 16, 2001 and the Proxy
Statement furnished herewith.
Signature(s) Date , 2001
---------------------------------- ---------
Please sign as name appears hereon, date and return the proxy card
promptly using the enclosed envelope. When signing as attorney,
executor, administrator, trustee or guardian, give full title as
such. If more than one name appears hereon, all parties should
sign.
FOLD AND DETACH HERE AND READ THE REVERSE SIDE
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS:
===============================================================================
VOTE BY PHONE: FOR U.S. STOCKHOLDERS ONLY, CALL TOLL-FREE 1-800-840-1208
ON A TOUCH TONE TELEPHONE 24 HOURS A DAY, 7 DAYS A WEEK.
There is NO CHARGE to you for this call. Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box
in the lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
OPTION 2: If you choose to vote on each proposal separately, Press 0.
You will hear these instructions:
Proposal 1, Director Election Proposal: To vote FOR ALL nominees, press 1;
to WITHHOLD FOR ALL nominees, press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the instructions.
Proposal 2 and All Other Proposals: To vote FOR, press 1; AGAINST, press 9;
ABSTAIN, press 0
The instructions are the same for all other proposals.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
===============================================================================
OR
===============================================================================
VOTE BY PROXY CARD: Mark, sign and date your proxy card and return it
promptly in the enclosed envelope.
NOTE: If you voted by telephone, THERE IS NO NEED TO MAIL BACK your proxy card.
===============================================================================
THANK YOU FOR VOTING.