SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Appliance Recycling Centers of America, Inc.
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APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426
--------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 2003
--------------------------
TO OUR SHAREHOLDERS:
The annual meeting of the shareholders of Appliance Recycling Centers of
America, Inc. will be held on Thursday, April 24, 2003 at 3:30 p.m., at the
Appliance Recycling Centers of America, Inc. corporate offices located at 7400
Excelsior Boulevard, Minneapolis, Minnesota 55426. At the meeting, shareholders
will act on the following matters:
o PROPOSAL ONE: The election of three directors to serve for a term of
one year expiring at the 2004 annual meeting of shareholders.
o To transact such other business as may properly come before the annual
meeting or any adjournment or postponement of the meeting.
Only shareholders of record at the close of business on March 14, 2003 are
entitled to notice of and to vote at the annual meeting and any adjournment or
postponement of the meeting.
EACH OF YOU IS INVITED AND URGED TO ATTEND THE ANNUAL MEETING IN PERSON IF
POSSIBLE. WHETHER OR NOT YOU ARE ABLE TO ATTEND IN PERSON, YOU ARE REQUESTED TO
DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE ENCLOSED FOR
YOUR CONVENIENCE OR VOTE YOUR PROXY BY USING OUR INTERNET VOTING SERVICE AT
"http://www.eproxy.com/arci/".
By Order of the Board of Directors
Denis E. Grande, Secretary
March 21, 2003
TABLE OF CONTENTS
SOLICITATION OF PROXIES.......................................................1
ABOUT THE MEETING.............................................................1
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?.................................1
WHO IS ENTITLED TO VOTE?...................................................1
WHO CAN ATTEND THE MEETING?................................................1
WHAT CONSTITUTES A QUORUM?.................................................1
HOW DO I VOTE?.............................................................2
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?.........................2
WHAT ARE THE BOARD'S RECOMMENDATIONS?......................................2
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?............................2
WHO WILL COUNT THE VOTE?...................................................3
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?...................3
HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?........................3
WHEN ARE SHAREHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING OF
SHAREHOLDERS DUE?........................................................3
WHO PAYS FOR THE COST OF THIS PROXY SOLICITATION?..........................3
COMMON STOCK OWNERSHIP........................................................4
WHO ARE THE LARGEST OWNERS OF THE COMPANY'S COMMON STOCK?..................4
HOW MUCH COMMON STOCK DO THE COMPANY'S DIRECTORS AND EXECUTIVE
OFFICERS OWN?............................................................4
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE....................5
PROPOSAL ONE -- ELECTION OF DIRECTORS.........................................6
GENERAL INFORMATION........................................................6
NOMINEES...................................................................6
ACTIONS AND COMMITTEES OF THE BOARD OF DIRECTORS...........................7
REPORT OF THE 2002 AUDIT COMMITTEE.........................................7
FEES PAID TO AUDITORS BY THE COMPANY DURING LAST FISCAL YEAR...............9
REPORT OF THE 2002 COMPENSATION AND BENEFITS COMMITTEE.....................9
NON-VOTING BOARD SEAT.....................................................10
COMPENSATION OF DIRECTORS.................................................11
INFORMATION CONCERNING OFFICERS AND KEY EMPLOYEES WHO ARE NOT
DIRECTORS...............................................................11
EXECUTIVE COMPENSATION....................................................12
STOCK OPTIONS GRANTED AND EXERCISED IN LAST FISCAL YEAR...................12
STOCK OPTION PLANS........................................................13
CERTAIN RELATIONSHIPS AND TRANSACTIONS....................................14
PERFORMANCE GRAPH.........................................................15
OTHER MATTERS................................................................17
Appendix A AUDIT COMMITTEE CHARTER..........................................18
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APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426
PROXY STATEMENT
SOLICITATION OF PROXIES
This proxy statement contains information related to the annual meeting
of shareholders of Appliance Recycling Centers of America, Inc. (the "Company")
to be held on Thursday, April 24, 2003, beginning at 3:30 p.m., at the corporate
offices of the Company, located at 7400 Excelsior Boulevard, Minneapolis,
Minnesota 55426. The enclosed proxy is solicited by the Board of Directors for
use at the 2003 annual meeting of shareholders and any adjournment or
postponement of the meeting. The approximate date on which this proxy statement
and form of proxy will first be sent or given to shareholders is March 21, 2003.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Company's annual meeting, shareholders will act upon the matters
described in the accompanying notice of annual meeting of shareholders. This
includes the election of three directors. In addition, the Company's management
will report on the performance of the Company during the 2002 Fiscal Year and
respond to questions from shareholders.
WHO IS ENTITLED TO VOTE?
Only shareholders of record of outstanding common stock of the Company
at the close of business on the record date, March 14, 2003, are entitled to
receive notice of and to vote at the meeting, or any postponement or adjournment
of the meeting. Each outstanding share of common stock entitles its holder to
cast one vote on each matter to be voted upon.
WHO CAN ATTEND THE MEETING?
All shareholders as of the record date, or their duly appointed
proxies, may attend the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of the common stock of the Company outstanding on the
record date will constitute a quorum. A quorum is required for business to be
conducted at the meeting. As of the record date, 2,343,890 shares of common
stock of the Company were outstanding. If you submit a properly executed proxy
card or vote your proxy by using the internet voting service, even if you
abstain from voting, then you will be considered part of the quorum. However,
abstentions are not counted in the tally of votes FOR or AGAINST a proposal. A
WITHHELD vote is the same as an abstention.
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HOW DO I VOTE?
Sign and date each proxy card you receive and return it in the prepaid
envelope or vote using our internet voting service. If you return your signed
proxy card or voted using our internet voting service but do not mark the boxes
showing how you wish to vote, your shares will be voted FOR all directors in
Proposal 1.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD OR MY INTERNET VOTE?
Yes. Even after you have submitted your proxy or voted by internet, you
may change your vote at any time before the proxy is exercised at the meeting.
You may change it by:
1) Returning a later-dated signed proxy card or re-accessing the
internet voting site listed on your proxy card;
2) Delivering a written notice of revocation to the Company's
Secretary at the Company's principal executive office at 7400
Excelsior Boulevard, Minneapolis, Minnesota 55426; or
3) Attending the meeting and voting in person at the meeting
(although attendance at the meeting without voting at the
meeting will not, in and of itself, constitute a revocation of
your proxy).
WHAT ARE THE BOARD'S RECOMMENDATIONS?
The Board's recommendations are set forth after the description of the
proposal in this proxy statement. In summary, the Board recommends a vote:
o FOR the election of each of the nominated directors (see
Proposal 1 on page 6)
Unless you give other instructions on your proxy card or your
internet vote, the persons named as proxy holders on the proxy card will vote in
accordance with the recommendations of the Board.
With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the Board or, if no
recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
For Proposal 1, the affirmative vote of the holders of a majority of
the shares of common stock represented in person or by proxy and entitled to
vote on the proposal will be required for approval. A properly executed proxy
marked "ABSTAIN" with respect to any proposal will not be voted, although it
will be counted for purposes of determining whether there is a quorum.
Accordingly, an abstention will have the effect of a negative vote.
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to the proposal to be acted
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upon. Thus, if you do not give your broker or nominee specific instructions,
your shares may not be voted on the proposal and will not be counted in
determining the number of shares necessary for approval of Proposal 1. Shares
represented by such "broker non-votes" will, however, be counted in determining
whether there is a quorum.
WHO WILL COUNT THE VOTE?
An Inspector of Elections will be appointed for the annual meeting and
will work with a representative of Wells Fargo Shareowner Services, our
independent stock transfer agent, to count the votes.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
If your shares are registered differently and are in more than one
account, you will receive more than one proxy card. To ensure that all your
shares are voted, sign and return all proxy cards or use the internet voting
service for each proxy card. We encourage you to have all accounts registered in
the same name and address (whenever possible). You can accomplish this by
contacting our stock transfer agent, Wells Fargo Shareowner Services at
1-800-468-9716.
HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
Although we do not know of any business to be considered at the 2003
annual meeting other than the proposal described in this proxy statement, if any
other business is presented at the annual meeting, your proxy gives authority to
Edward R. Cameron and Denis E. Grande to vote on such matters at their
discretion.
WHEN ARE SHAREHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING OF SHAREHOLDERS DUE?
To be considered for inclusion in the Company's proxy statement for the
2004 annual meeting, shareholder proposals must be received at the Company's
offices no later than November 21, 2003. Proposals must be in compliance with
Rule 14a-8 under the Securities Exchange Act of 1934, and must be submitted in
writing and delivered or mailed to the Company's Secretary, at Appliance
Recycling Centers of America, Inc., 7400 Excelsior Boulevard, Minneapolis,
Minnesota 55426.
Under Rule 14a-4(c)(1), any shareholder who wishes to have a proposal
considered at the 2004 annual meeting of shareholders, but not submitted for
inclusion in the Company's proxy statement, must set forth such proposal in
writing and file it with the Secretary of the Company no later than February 4,
2004, and failure to notify the Company by that date would allow the Company's
proxies to use their discretionary voting authority (to vote for or against the
proposal) when the proposal is raised at the annual meeting without any
discussion of the matter being included in the Company's proxy statement.
WHO PAYS FOR THE COST OF THIS PROXY SOLICITATION?
The expense of the solicitation of proxies for this annual meeting,
including the cost of mailing, has been or will be borne by the Company.
Arrangements will be made with brokerage houses and other custodian nominees and
fiduciaries to send proxies and proxy materials to their principals and the
Company will reimburse them for their expense in so doing. In addition to
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solicitation by mail, proxies may be solicited by telephone, telegraph or
personally by certain of the Company's directors, officers and regular
employees, without additional compensation. No proxy solicitors have been hired
in connection with the annual meeting.
COMMON STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF THE COMPANY'S COMMON STOCK?
The following persons or groups owned 5% or more of the Company's
shares of common stock outstanding as of March 14, 2003:
Edward R. Cameron 16.0%
7400 Excelsior Boulevard
Minneapolis, MN 55426
Perkins Capital Management, Inc. 27.0%
730 East Lake Street
Wayzata, MN 55391-1769
HOW MUCH COMMON STOCK DO THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS OWN?
The following table sets forth as of March 14, 2003 the beneficial
ownership (which includes shares which may be acquired in the next 60 days
through options or warrants) of common stock by each of the Company's directors,
including director nominees, each of the executive officers named in the Summary
Compensation Table on page 12, and all directors and executive officers of the
Company as a group, as well as information about beneficial owners of 5% or more
of the Company's common stock. Unless otherwise noted, each person or group
identified has sole voting and investment power with respect to the shares
shown.
POSITION NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER WITH COMPANY BENEFICIALLY OWNED(1) OUTSTANDING(2)
- ---------------- ------------ --------------------- --------------
Edward R. Cameron Chairman of the Board,
President and Chief
Executive Officer 387,689(3) 16.0%
Duane S. Carlson Director 31,875(4) 1.3%
Harry W. Spell Director 27,500(4) 1.2%
All officers
and directors as a
group (5 persons) 455,713(4) 18.3%
Perkins Capital Mgmt Inc. 633,675(5) 27.0%
Medallion Capital Inc. 800,000(6) 26.3%
- -----------------------
(1) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to such shares.
(2) Applicable percentage of ownership is based on 2,343,890 shares of common
stock outstanding as of March 14, 2003 plus, for each shareholder, all
options for such shareholder.
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(3) Includes 85,000 shares, which could be purchased within 60 days upon the
exercise of existing stock options, and excludes options to purchase 90,000
shares, which are not currently exercisable. These options were granted to
Mr. Cameron under the Company's stock option plan, 25,000 in July 1999 in
consideration of his previous guaranty of the Company's line of credit and
150,000 in May 2000 in consideration of his performance for the Company.
(4) Includes shares which could be purchased within 60 days upon the exercise
of existing stock options or warrants, as follows: Mr. Carlson, 27,500
shares; Mr. Spell, 27,500 shares; and all directors and current officers as
a group, 148,500 shares.
(5) According to a Schedule 13G filed January 29, 2003, Perkins Capital
Management, Inc. ("Perkins Capital") beneficially owned 633,675 shares of
Common Stock as a result of serving as investment advisor to various
clients. Perkins Capital has sole dispositive power as to all 633,675
shares and sole voting power as to 627,200 shares.
(6) Includes 700,000 shares, which could be purchased within 60 days upon
exercise of existing warrant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors, its executive officers and any persons holding
more than 10% of outstanding common stock are required to file reports
concerning their initial ownership of common stock and any subsequent changes in
that ownership. Except as follows, the Company believes that the filing
requirements for the last fiscal year were satisfied: Medallion Capital, Inc.,
holder of 100,000 shares of Common Stock and of currently exercisable warrants
to purchase 700,000 shares at a current exercise price of $0.60 per share
(collectively, approximately 26.3% of the outstanding stock if all warrants are
exercised), has not made filings with the SEC to the Company's knowledge.
In making the above disclosure, the Company has relied on the written
representations of its directors, executive officers and beneficial owners of
more than 10% of Common Stock and copies of the reports that they have filed
with the Securities and Exchange Commission.
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PROPOSAL ONE -- ELECTION OF DIRECTORS
GENERAL INFORMATION
The property, affairs and business of the Company are managed under the
direction of the Board of Directors. A board of three directors is to be elected
at the meeting. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for management's three nominees named below. The term
of office for each person elected as a director will continue until the next
annual meeting of the shareholders and until a successor has been elected and
qualified, or until such director is removed or resigns.
All of the nominees named below are presently directors of the Company
and have served continuously since the year indicated. All nominees have
indicated a willingness to serve if elected. The Company knows of no
arrangements or understandings between a nominee and any other person pursuant
to which the nominee has been selected as a director.
All shares represented by proxies which have been properly executed and
returned or properly voted using the internet voting service will be voted for
the election of all of the nominees named below, unless other instructions are
indicated thereon. In the event any one or more of such nominees should for any
reason not be able to serve as a director, the proxies will be voted for such
other person or persons as may be designated by the Board.
THE BOARD RECOMMENDS A VOTE FOR ALL OF THE NOMINEES.
NOMINEES
The names of the nominees, all of whom are currently serving as
directors of the Company, are set forth in the table below. Following the table
is certain information for at least the last five years regarding each nominee.
There are no family relationships between any of the nominees, directors or
executive officers of the Company.
DIRECTOR
NAME POSITION WITH THE COMPANY AGE SINCE
----------------- ------------------------- --- -----
Edward R. Cameron Chairman of the Board, Director, 62 1976
President and Chief Executive Officer
Duane S. Carlson Director 67 1990
Harry W. Spell Director 79 1991
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EDWARD R. CAMERON is the founder and has been the President of the
Company since its inception in 1976. He has been a director and
Chairman of the Board of the Company since 1989 and prior to 1989 was a
director of a predecessor of the Company. Prior to founding the
Company, Mr. Cameron served as a district product manager and an
account manager for Burroughs Corporation (a predecessor of Unisys
Corporation) and served in executive positions for several small
businesses. Mr. Cameron has a bachelor of science degree in business
administration from Montana State University.
DUANE S. CARLSON has been a director of the Company since 1990. Mr.
Carlson is currently a self-employed business consultant, as he was
from 1988 to 1991. From 1991 to 1997, Mr. Carlson was executive vice
president and chief financial officer of NetStar, Inc., a company
engaged in the development, manufacturing and marketing of high-speed
computer communications equipment. He was a founder of NetStar, Inc.
and was a member of its board of directors. NetStar, Inc. became a
wholly-owned subsidiary of Ascend Communications, Inc. on August 15,
1996 and is now part of Lucent Technologies which recently acquired
Ascend. He was a founder of Lee Data Corporation and from 1979 to 1988
was employed by Lee Data Corporation (which became Carleton
Corporation, and is now part of Oracle, Inc.) in various capacities,
most recently as chief financial officer and executive vice president,
and was also a member of the board of directors. Mr. Carlson also
currently serves as a director of Astrocom Corporation (where he also
serves on the Audit Committee) and of several privately held companies.
HARRY W. SPELL has been a director of the Company since 1991. Mr. Spell
has been retired since 1988. From 1949 to 1988, he was employed in
various capacities by Xcel Energy (formerly Northern States Power
Company), most recently as senior vice president-finance and chief
financial officer. Mr. Spell serves as chairman of the board of
directors and a member of the executive committee for PW Eagle, Inc.
and Chairman of Spell Capital Partners, LLC, a private equity and
buyout firm.
ACTIONS AND COMMITTEES OF THE BOARD OF DIRECTORS
In 2002, the Board of Directors met seven times. The Board of Directors
has two standing committees, the Audit Committee and the Compensation and
Benefits Committee. In 2002, the Audit Committee met five times and the
Compensation and Benefits Committee met once. The Board currently has no
nominating or other standing committees and has no current plans to establish
additional committees. All of the directors attended at least 75% of the total
number of meetings of the Board of Directors and of the committees on which the
Director served.
REPORT OF THE 2002 AUDIT COMMITTEE
The Audit Committee is responsible for relations with the Company's
independent auditors, for review of internal auditing functions (whether formal
or informal) and internal controls and for review of financial reporting
policies to assure full disclosure of financial conditions. The Audit Committee
has adopted, and the Board of Directors has approved, a written Charter for the
Audit Committee which is attached to this proxy statement as Appendix A. The
Company's non-employee directors serve on the Audit Committee. For 2002, Duane
S. Carlson (Chairman), Marvin Goldstein, and Harry W. Spell served as such
committee, and are also, except for Marvin Goldstein, expected to serve for
2003. The
7
members of the Audit Committee are all "independent" directors, as that term is
defined in Rule 4200(a)(15) of the NASD listing standards.
The Audit Committee reviewed the audited financial statements in the
Annual Report with management including a discussion of the reasonableness of
significant judgments and accounting principles.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United
States of America, their judgments as to the Company's accounting principles and
such other matters as are required to be discussed with the committee under
auditing standards generally accepted in the United States of America. In
addition, the Audit Committee has discussed with the independent auditors the
auditor's independence from management and the Company including the matters in
the written disclosures required by the Independence Standards Board.
The Audit Committee discussed with the Company's independent auditors
the overall scope and plans for their audit. The committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
committee held five meetings during fiscal 2002, one with the independent
auditors and four without the auditors present. In addition, at the end of each
quarter the chairman of the Audit Committee discussed with the independent
auditors their findings and procedures relative to the auditor's quarterly
reviews.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 28, 2002 for filing with the Securities and
Exchange Commission.
March 3, 2003
The 2002 Audit Committee
Duane S. Carlson
Marvin Goldstein
Harry W. Spell
The information set forth above in the Audit Committee Report is not to
be considered "filed" with the SEC for any purpose or "incorporated by
reference" into any Securities Act or Exchange Act document of the Company for
any purpose.
8
FEES PAID TO AUDITORS BY THE COMPANY DURING LAST FISCAL YEAR
AUDIT FEES. Aggregate fees to McGladrey & Pullen, LLP for professional
services rendered for the audit of the Company's 2002 annual consolidated
financial statements and review of the Company's 2002 quarterly reports on Form
10-Q, assistance with the 2002 annual report and Form 10-K filings, attendance
at the 2002 audit committee meeting and consultation on audit and accounting
matters during 2002 were approximately $74,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There
were no fees to McGladrey & Pullen, LLP or associated entities for services
provided with respect to the design and implementation of financial information
systems during the most recent fiscal year.
OTHER FEES. Aggregate fees to McGladrey & Pullen, LLP and associated
entities for all other professional services (principally tax return
preparation, special tax analysis and planning, and 401(k) plan audit) rendered
to the Company during 2002 were approximately $46,000.
The Audit Committee of the Board of Directors did consider the services
provided by McGladrey & Pullen, LLP and associated entities, other than with
respect to the audit fees, in considering the independence of the auditors.
REPORT OF THE 2002 COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee of the Board of Directors (the
"Compensation Committee") is composed entirely of non-employee directors. For
2002, Duane S. Carlson, Marvin Goldstein, and Harry W. Spell (Chairman) served
on such committee, and are also, except for Marvin Goldstein, expected to serve
for 2003. The Compensation Committee is responsible for review and approval of
officer salaries and other compensation and benefit programs and determination
of officer bonuses. The Compensation Committee also administers the Company's
1989 Stock Option Plan and either the Compensation Committee or the entire Board
may administer and make grants under the Company's 1997 Stock Option Plan.
Annual compensation for the Company's executive officers, other than
the President, is recommended by the President and approved by the Compensation
Committee. The individual salary recommendations may vary based on the
President's perception of the value of that position to the Company, the
executive's individual performance and the President's views as to comparative
compensation for like positions at other companies. The annual compensation for
the President is recommended by the Compensation Committee and approved by the
Board of Directors.
The Company believes that compensation of the Company's key executives
should be sufficient to attract and retain highly-qualified personnel, and
should also provide meaningful incentives for superior performance. The Company
seeks to reward achievement of long-term and short-term performance goals
including the development of new customers, increasing sales volume, meeting or
exceeding financial targets and other factors.
Compensation of the Company's executives generally consists of a base
salary, a cash bonus and long-term incentive compensation in the form of stock
options. The Company does not utilize a formulaic approach to executive base
compensation. In principle, the Company's executive compensation approach is to
place each officer's salary compensation, excluding bonus, in the mid
9
range of executive compensation levels for companies of a similar size. The
Company currently provides no retirement benefits to its executive officers
except for the 401(k) Plan.
The amount of any bonus awarded under the Company's bonus plan for all
officers is based on the successful and timely achievement of Company goals,
including financial performance and positioning for future results.
Salaries for officers of the Company were not increased for 2002.
Bonuses of between 12% and 30% of annual base salary were granted to officers
for 2002, payable in March 2003. General Managers receive a bonus based on a
formula, which considers both profit at their center and individual merit.
Bonuses paid to general managers for 2002 ranged between approximately 20%-33%
of annual base salary.
Stock options are awarded to provide incentives to the officers to
promote improved long-term performance of the Company. Option grants for all
officers other than the President are recommended by the President. Options were
granted in 2002 to officers to purchase an aggregate of 2,000 shares of Common
Stock at an exercise price of $4.30.
The compensation for Edward R. Cameron, the Company's President and
Chief Executive Officer, is determined by using a process and philosophy similar
to that used for all other officers. The Compensation Committee considers its
members' views as to comparative compensation for like positions at other
companies together with its own assessment of Mr. Cameron's performance and
contributions to the Company, recommending a salary, bonus and stock options for
the Board of Directors' approval. There is no specific formulaic tie between the
Company's goals and performance and the Compensation Committee's recommendation;
instead, the Compensation Committee's judgment and discretion is used in its
recommendations to the Board of Directors.
The Compensation Committee has reviewed the provisions of Internal
Revenue Code Section 162(m) relating to the deductibility of annual executive
compensation in excess of $1,000,000. The Compensation Committee currently does
not have a policy with respect to Section 162(m) because it is unlikely that
such limit will apply to compensation paid by the Company to any of the
Company's executive officers in the near future.
March 3, 2003
The 2002 Compensation and Benefits Committee
Duane S. Carlson
Marvin Goldstein
Harry W. Spell
NON-VOTING BOARD SEAT
In connection with a loan in 1998, Medallion Capital, Inc. was granted
non-voting attendance rights at all Board meetings and warrants to purchase
700,000 shares. Medallion's current Board attendee is Dean Pickerell.
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COMPENSATION OF DIRECTORS
The Company will have three directors in 2003, one of whom (Mr.
Cameron) is an executive officer of the Company and does not receive any
additional compensation for serving as a director of the Company. Non-employee
directors of the Company receive an annual fee of $7,500 for their service as
directors, as well as stock options under the Restated 1997 Stock Option Plan.
The Chairman of the Audit Committee receives an additional $1,000 per year of
service.
INFORMATION CONCERNING OFFICERS AND KEY EMPLOYEES WHO ARE NOT DIRECTORS
BRUCE J. WALL, 49, is the Vice President of Resource Efficiency
Programs, a position he has held since October 2000. Previously, Mr.
Wall was employed by the Company as a National Account Manager from
1993 to 1997. From 1997 until rejoining the Company, Mr. Wall worked
for the Northeast Energy Efficiency Partnerships, Inc. At Northeast
Energy Efficiency Partnerships, Inc., Mr. Wall facilitated and managed
groups to develop, implement and evaluate regional market
transformation strategies. Currently as Vice President of Resource
Efficiency Programs, Mr. Wall is responsible for expanding the scope of
services offered to utility companies and developing programs to
provide resource efficiency benefits.
LINDA KOENIG, 41, was promoted to Vice President of Finance in March
2003. She had previously served as the Controller of the Company since
September 1999. During 1999 the Company eliminated the position of
Chief Financial Officer. The functions previously undertaken by that
position were handled by the controller. Prior to her promotion to
Controller, Ms. Koenig was General Accounting Manager for the Company,
a position she held for approximately three and one half years, from
February 1996 to September 1999. From August 1994 to February 1996, Ms.
Koenig was employed by WTC Industries as Accounting Manager.
JIM KIRWAN, 51, is the General Manager of the Company's California
retail and recycling operations, a position he has held since October
1996. From October 1993 to September 1996, Mr. Kirwan served as the
transportation manager for the California facility.
MORGAN WOLF, 60, is the General Manager of the Company's Minnesota
retail and recycling operations. Mr. Wolf served in this position
during 1997 and again since January 1, 1999. He served as Vice
President of Operations during 1998. Mr. Wolf joined the Company in
1995 as National Quality Control Manager.
11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation
earned by the Chief Executive Officer for each of the last three fiscal years.
No other officer of the Company received salary and bonus for any such year in
excess of $100,000.
Annual Compensation Long-Term Compensation(1)
----------------------------------------------- -------------------------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER COMP.
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS($)(2) COMP. ($)(3) OPTIONS(#) ($)
- --------------------------- ---- ---------- ----------- ------------ ---------- ----------
Edward R. Cameron 2002 $160,000 $48,000 $ 2,220 0(2) $0
Chairman of the Board, President 2001 160,000 96,000 32 0(2) 0
and Chief Executive Officer 2000 150,000 45,000 24,299 150,000 0
(1) The Company has no Long-Term Incentive Plan as defined by Item
402(a)(7)(iii) of SEC Regulation S-K.
(2) The bonus for 2002 was paid in 2003. The bonus for 2001 was paid in 2002.
The bonus for 2000 was paid in 2001. No stock options were granted in 2002
or 2001 to Mr. Cameron.
(3) Includes $23,084 for payment of unused vacation in 2000 and premiums on car
insurance for each year.
STOCK OPTIONS GRANTED AND EXERCISED IN LAST FISCAL YEAR
The following table provides certain information with respect to stock
options granted and exercised under the Company's stock option Plans in fiscal
2002 by the named executive officer and the value of such officer's unexercised
options at December 28, 2002.
OPTION GRANTS IN LAST FISCAL YEAR
% OF TOTAL STOCK
NUMBER OF SECURITIES OPTIONS GRANTED TO
UNDERLYING OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE
---- ---------- ----------- --------- ----
Edward R. Cameron 0 --- $0 ---
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FY-END(#) AT FY-END($)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Edward R. Cameron --- --- 85,000 90,000 $32,421 ---
12
STOCK OPTION PLANS
The Company currently has two stock option plans: The Restated 1997
Stock Option Plan (the "1997 Plan") and the Restated 1989 Stock Option Plan (the
"1989 Plan"). No further shares may be granted under the 1989 Plan; however,
options currently outstanding may remain exercisable until their individual
termination or expiration date.
Under the 1989 Plan, there are currently outstanding and exercisable
options to purchase an aggregate of 46,000 shares held by 9 employees of the
Company. The exercise prices for options under 1989 Plan range from $.625 per
share to $10.50 per share.
The 1997 Plan may be administered by the Compensation and Benefits
Committee of the Board of Directors or the full Board of Directors acting as the
Committee (the "Committee"). In March 2002, the Board of Directors adopted an
amendment (the "Amendment") to the 1997 Plan, which was approved by the
shareholders at the 2002 annual meeting.
Under the 1997 Plan, as amended in March 2002, the Company has reserved
an aggregate of 600,000 shares of its common stock for option grants under the
plan. As of March 1, 2003, options to purchase an aggregate of 283,000 shares
had been granted to employees and were outstanding under the 1997 Plan, and
options to purchase an aggregate of 107,500 shares had been granted to the
Company's then four non-employee directors. Under the 1997 Plan, 5,750 options
have been exercised.
The Amendment adopted by the Board in March 2002 and approved by the
shareholders at the 2002 annual meeting added 200,000 shares to the 1997 Plan,
bringing the total number of shares subject to the 1997 Plan to 600,000.
Each option to a non-employee director becomes exercisable six months
after the date of grant, provides for the forfeiture of any nonexercisable
portion if an optionee ceases to be a director for certain reasons, provides
that the exercisable portion may be exercised for a period of 10 years from the
date of grant, and expires on the tenth anniversary of the date of grant. The
exercise price of an option is the fair market value of the common stock on the
date the option is granted.
Employees of the Company, including employee directors, are eligible to
receive awards of options to purchase common stock pursuant to the 1997 Plan.
The Committee has the discretion to select eligible employees to whom awards
will be granted and establish the type, price, amount, size and terms of awards,
subject in all cases to the provisions of the 1997 Plan and the applicable
provisions of the Internal Revenue Code.
The exercise price of an incentive stock option cannot be less than
100% of the fair market value of the Common Stock on the date the option is
granted, except that if the optionee owns 10% or more of the voting rights of
all of the Company's stock ("10% Holder"), the exercise price of an incentive
stock option cannot be less than 110% of the fair market value of the common
stock on the date the option is granted.
Options granted to employees cannot be exercised prior to a set period
after their date of grant, which cannot be less than one year during which time
the optionee must remain employed by
13
the Company. Each option specifies the expiration date, which may not exceed 10
years from the date the option is granted, provided, however, that if the
optionee is a 10% Holder, the exercise period with respect to incentive stock
options may not exceed five years.
Unless otherwise specifically provided in an optionee's agreement,
options cannot be exercised prior to the first anniversary of the date of grant
and provide for the forfeiture of any nonexercisable portion if an optionee
ceases to be an employee of the Company for any reason and that the exercisable
portion may be exercised for a period of three months after termination (or one
year in the case of death, disability or normal retirement).
CERTAIN RELATIONSHIPS AND TRANSACTIONS
PRIVATE PLACEMENT OF STOCK. In February 1999, the Company completed a
private placement of 1,030,000 shares of Common Stock at $.50 per
share. As part of this offering, Marvin Goldstein, a former member of
the Board of Directors of the Company, purchased 100,000 shares; a
client of Perkins Capital Management, Inc. (which currently controls
approximately 27.0% of the common stock of the Company) purchased
400,000 shares; and Medallion Capital, Inc. ("Medallion Capital"), one
of the Company's current lenders (which holds non-voting attendance
rights at board meetings) purchased 100,000 shares. In addition, the
February 1999 issuance of shares triggered an adjustment in the
exercise price under the warrant held by Medallion Capital to $0.60 per
share.
WARRANTS. In addition to stock options granted to non-employee
directors under the Company's 1997 Plan, Marvin Goldstein, a former
member of the Board of Directors, received warrants in March 1999 to
purchase 5,000 shares of common stock, subject to customary
antidilution adjustments. Mr. Goldstein was awarded such warrants in
consideration for certain general business consulting services provided
to the Company since his initial election to the Board in November 1998
and which he had agreed to provide during his tenure on the Board. The
warrants are exercisable, beginning September 6, 1999, for a period of
ten years, at an exercise price of $0.625 per share. When Mr. Goldstein
ceased to be a director of the Company, the warrants not exercisable
terminated, and the remaining warrants are exercisable for the full ten
year term.
The Company issued warrants in connection with a private
placement in July 1998 by the Company of 12% subordinated promissory
notes. Certain employees of the Company provided financing for a
portion of these notes. All notes were repaid in September 1998. In
July 2001, 53,750 of the 68,750 warrants were exercised on a cashless
basis resulting in the issuance of 9,768 common shares. The remaining
warrants expired on July 20, 2001.
In connection with a loan in September 1998, Medallion Capital
received a warrant to purchase 700,000 shares of Common Stock and a
non-voting attendance right at the board meeting. The current exercise
price of the warrant is $0.60 per share.
14
PERFORMANCE GRAPH
The following graph compares cumulative total shareholder returns on
the Company's Common Stock over the last five fiscal years with the Nasdaq Stock
Market (U.S. Companies) Index and the revised Dow Jones Pollution Control Index,
assuming an initial investment of $100 at the beginning of the period and the
reinvestment of all dividends. The following graph has been revised for all
periods to give effect to the Company's one-for-four reverse stock split,
effective February 21, 1997.
--------------------------------------------------------------------
YEAR ENDING
--------------------------------------------------------------------
12/97 12/98 12/99 12/00 12/01 12/02
- -------------------------------------------------- ----------- ------------ ---------- ---------- ---------- ----------
Appliance Recycling Centers of America, Inc. $100.00 $33.33 $50.00 $55.56 $177.78 $86.67
- -------------------------------------------------- ----------- ------------ ---------- ---------- ---------- ----------
NASDAQ Stock Market (U.S. Companies) $100.00 $140.99 $261.48 $157.42 $124.88 $86.34
- -------------------------------------------------- ----------- ------------ ---------- ---------- ---------- ----------
DOW Jones Industrial Average $100.00 $104.09 $57.81 $81.23 $91.15 $71.59
- -------------------------------------------------- ----------- ------------ ---------- ---------- ---------- ----------
Effective September 8, 1998, the Company was delisted from the Nasdaq
SmallCap Market for failure to meet continued listing requirements, specifically
the net worth requirement. The Company's Common Stock is currently traded on the
OTC Bulletin Board under the symbol ARCI.
15
The Common Stock was traded on the Nasdaq SmallCap Market from February
26, 1997 to September 7, 1998, and the Nasdaq National Market System from
January 8, 1993 to February 25, 1997, and the Nasdaq SmallCap Market from
November 7, 1991 until January 7, 1993. Prior to November 7, 1991, the Common
Stock traded on the local over-the-counter market in the Minneapolis - St. Paul,
Minnesota area.
The closing price on March 11, 2003 was $1.25 per share.
16
OTHER MATTERS
At the date of this proxy statement the Company's management knows of
no other matters which may come before the annual meeting. However, if any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed proxy form to vote such proxies received by the Company in
accordance with their judgment on such matters.
A COPY OF THE COMPANY'S 2002 ANNUAL REPORT TO SHAREHOLDERS IS BEING
MAILED TO YOU WITH THIS PROXY STATEMENT. THE ANNUAL REPORT INCLUDES, AMONG OTHER
THINGS, THE CONSOLIDATED BALANCE SHEET OF THE COMPANY AS OF DECEMBER 28, 2002
AND DECEMBER 29, 2001 AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS,
SHAREHOLDERS' EQUITY AND CASH FLOWS FOR THE THREE YEARS ENDED DECEMBER 28, 2002.
IF YOU DESIRE AN ADDITIONAL COPY OF THE ANNUAL REPORT OR A COPY OF OUR FORM 10-K
FILED WITH THE SEC, YOU MAY OBTAIN ONE (EXCLUDING EXHIBITS) WITHOUT CHARGE BY
ADDRESSING A REQUEST TO INVESTOR RELATIONS, APPLIANCE RECYCLING CENTERS OF
AMERICA, INC., 7400 EXCELSIOR BOULEVARD, MINNEAPOLIS, MINNESOTA 55426. YOU MAY
ALSO ACCESS A COPY OF OUR FORM 10-K ON THE SEC'S WEBSITE AT WWW.SEC.GOV.
By Order of the Board of Directors
Denis E. Grande, Secretary
March 21, 2003
17
APPENDIX A
AUDIT COMMITTEE
CHARTER
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
AUDIT COMMITTEE CHARTER
(Adopted by the Board of Directors March 3, 2003)
The Audit Committee ("Committee") is a standing committee of the Board of
Directors. Its primary function is to assist the Board in fulfilling its
oversight responsibilities by reviewing the financial information that will be
provided to the shareholders and others, the systems of internal controls that
management and the Board of Directors have established, and the external audit
processes.
The Audit Committee shall be comprised of no less than three (3) independent
members from the Board of Directors and appointed by the Board. Independent
means: 1) not receiving other than for service on the board any consulting,
advisory, or other compensatory fee from the Company, and 2) having no material
(non-board of directors) relationship with the Company and not being an
affiliated person (i.e. a person able to exert influence on the Company, often
but not solely, resulting from a significant minority ownership position) of the
Company, or any subsidiary of the Company. The Chair of this Committee will also
be appointed by the Board.
At least one member of the Audit Committee will be a "Financial Expert." In
determining whether a member is a Financial Expert, the Audit Committee shall
consider whether a person has: (1) an understanding of generally accepted
accounting principles and financial statements; (2) experience in the
preparation or auditing of financial statements of generally comparable
companies and the application of such principles in connection with the
accounting for estimates, accruals and reserves; (3) experience with internal
accounting controls, and (4) an understanding of audit committee functions. The
Company must disclose annually that the Committee includes at least one
Financial Expert.
The Committee shall meet at least two times per year or more frequently as
circumstances require. The Company's Chief Financial Officer serves as staff to
the Committee, however, the Committee may ask members of management or others to
attend its meetings and hold such executive sessions as it deems necessary.
In meeting its responsibilities, the Committee is expected to:
1) Provide an open channel of communication between the outside
auditor, management, and the Board.
2) Determine that management has established and maintained an
adequate system of internal controls appropriate for the
Company.
18
3) Review and update the Committee's charter periodically as
needed, at least annually.
4) Recommend to the Board the outside auditor to be appointed by
the Board and the fee to be paid to the outside auditor. The
outside auditor is ultimately accountable to The Board of
Directors and the Audit Committee, and that the Audit
Committee has the direct authority and responsibility to
select, evaluate and replace outside auditors.
5) Ensure that the outside auditor does not provide any non-audit
services including: (1) bookkeeping or other services related
to the accounting records or financial statements of the audit
client; (2) financial information systems design and
implementation; (3) appraisal or valuation services fairness
opinions, or contribution-in-kind reports; 4) actuarial
services; (5) internal audit outsourcing services; (6)
management or human resources functions; (7) broker/dealer,
investment advisor or investment banking services; (8) legal
services and expert services unrelated to the audit; or (9)
any other service that the Committee determines is
impermissible. The outside auditor may engage in any permitted
non-audit service (including tax services) not listed above
only if the activity is pre-approved by the Committee and if
the activity is material, disclosed in it annual financial
reports.
6) Ensure that the lead audit or coordinating partner and the
reviewing partner must rotate off of the audit every 5 years.
7) Confirm and assure the independence of the outside auditor,
including a review of any permitted non-audit services and
related fees charged by the outside auditor. Obtain a formal
written statement from the outside auditors delineating all
relationships with the Company. Ensure that the Board Chair,
President, CEO, CFO, and any Controller, Chief Accounting
Officer or persons in an equivalent position have not been
employed by the company's audit firm during the 1-year period
preceding the current year audit.
8) Consider, in consultation with the outside auditor, the audit
scope and plan of the outside auditor.
9) Consider and review with management and the outside auditor:
a) The adequacy of the Company's system of internal
controls including computerized information system
controls and security and the presence of a records
retention/destruction policy.
b) Any related significant findings and recommendations
of the outside auditor together with management's
responses thereto.
c) Management's responsibility to communicate the
importance of internal control and ensure that all
employees and contractors who are involved in the
system of internal controls possess an understanding
of their roles and
19
responsibilities, including that employees and
contractors may freely and without fear of reprisals
address issues relating to internal control,
accounting financial statement disclosure matters or
violations of federal or state laws to the Committee
in the event that they believe these issues have not
been adequately addressed by Management.
d) Any communications required by auditing standards
generally accepted in the United States including,
specifically, communication from the outside auditor
about fraud, illegal acts, and deficiencies in
internal control.
e) The adequacy of the CEO and CFO's written statement
accompanying the audit report which certifies the
appropriateness of the financial statements and
disclosures contained in the audit report, and that
those financial statements and disclosures fairly
present, in all material respects, the operations and
financial condition of the Company.
10) Review with management and the outside auditor at the
completion of the annual audit:
a) The Company's annual financial statements and related
footnotes, and any other filings with financial
regulatory bodies such as the SEC,
b) The outside auditor's audit of the financial
statements and the auditor's report thereon,
c) Any significant changes required in the outside
auditor's audit plan,
d) Management's handling of any proposed adjustments
identified by the outside auditor,
e) Any serious difficulties or disputes with management
encountered during the course of the audit, including
any restrictions on the scope of the outside
auditor's work or access to required information,
f) Significant accounting and reporting issues,
including complex or unusual transactions identified
by the outside auditor, and recent professional and
regulatory pronouncements to include an understanding
of their impact on the financial statements. All
material accounting policies and practices used,
alternative treatments of financial information
within accounting principles generally accepted
within the United States that have been discussed
with management, ramifications of the use of such
alternative disclosures and treatments, and the
treatment preferred by the outside auditor.
g) Any legal and regulatory matters that may have a
material impact on the financial statements,
h) Any matters which the outside auditor believes should
be addressed to the Committee as a result of the
outside auditor's review of executive perquisites and
a representative sample of travel and expense
reimbursements of the Company's President and CEO,
i) Any matters which the outside auditor believes should
be addressed to the Committee as a result of the
auditors quarterly review of the Company's financial
statements,
j) Any other matters related to the conduct of the audit
that are to be communicated to the Committee under
auditing standards generally accepted in the United
States.
20
11) Whenever requested, or as considered useful or appropriate by
Committee members, meet with the outside auditor, and
management in separate executive sessions to discuss any
matters that the Committee or these groups believe should be
discussed privately with the Committee.
12) Review and approve, upon the advice of counsel, the terms of
any material extension of credit to a Director or executive
officer of the Company.
13) Approve a code of ethics for Company officers and review it
annually for adequacy. Obtain annually an assurance in writing
from each officer that they have complied with the code of
ethics.
14) Report Committee actions to the Board of Directors with such
recommendations as the Committee may deem appropriate.
The Committee shall have the power to conduct or authorize investigations into
any matters within the Committee's scope of responsibilities. The Committee
shall be empowered to retain independent counsel, accountants or others to
assist it in the conduct of any investigation. The Committee will perform such
other functions as assigned by law, the Company's charter or bylaws, or the
Board of Directors.
21
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 2003
3:30 P.M.
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
7400 EXCELSIOR BLVD.
MINNEAPOLIS, MN 55426
- --------------------------------------------------------------------------------
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
7400 EXCELSIOR BLVD., MINNEAPOLIS, MN 55426 PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking all prior proxies, hereby appoints Edward R. Cameron
and Denis E. Grande, or either of them, as Proxy or Proxies, with full power of
substitution and revocation, to vote all shares of stock of Appliance Recycling
Centers of America, Inc. standing of record in the name of the undersigned at
the close of business on March 14, 2003 at the Annual Meeting of Shareholders to
be held on April 24, 2003, or at any adjournment or postponement of the meeting.
The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting
of Shareholders of Appliance Recycling Centers of America, Inc. and the proxy
statement dated March 21, 2003 furnished with the Notice.
SEE REVERSE FOR VOTING INSTRUCTIONS.
------------------
|COMPANY # |
|CONTROL # |
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VOTE BY INTERNET -- http://www.eproxy.com/arci/ -- QUICK --- EASY --- IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. (CT) on April 23, 2003.
o You will be prompted to enter your 3-digit Company Number, your 7-digit
Control Number (these numbers are located on the proxy card) and the last four
digits of the U.S. Social Security Number or Tax Identification Number for
this account to obtain your records and create an electronic ballot. If you do
not have a U.S. SSN or TIN please leave blank.
VOTE BY MAIL
Please mark, sign and date your proxy card and return it in the postage-paid
envelope we've provided or return it to Appliance Recycling Centers of America,
Inc., c/o Shareowner Services-, P.O. Box 64873, St. Paul, MN 55164-0873.
\ PLEASE DETACH HERE /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
1. Election of the 01 Edward R. Cameron 03 Harry W. Spell [ ] Vote FOR [ ] Vote WITHHELD
following nominees 02 Duane S. Carlson all nominees from all nominees
as directors: (except as marked)
------------------------------------------------
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, | |
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) | |
------------------------------------------------
In their discretion the Proxies are authorized to vote upon such other matters as may properly come before the meeting or any
adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR ON PROPOSAL 1.
Address Change? Mark Box [ ] Indicate changes below: Date _________________________________________
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Signature(s) in Box
Please sign your name exactly as it appears at
left. In the case of shares owned in joint tenancy
or as tenants in common, all should sign.
Fiduciaries should indicate their title and
authority.