SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
P&F INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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and 0-11.
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P & F INDUSTRIES, INC.
300 SMITH STREET
FARMINGDALE, NEW YORK 11735
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 2001
To the Stockholders of P & F Industries, Inc.:
The Annual Meeting of Stockholders of P & F Industries, Inc. will be held at
the Huntington Hilton Hotel, 598 Broad Hollow Road, Melville, New York on
Wednesday, May 30, 2001 at 10:00 A.M., for the following purposes:
(1) To elect three directors to hold office for three years;
(2) To ratify the selection of BDO Seidman, LLP, independent certified
public accountants, as auditors for the fiscal year ending December 31,
2001; and
(3) To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment or postponement thereof.
In accordance with the provisions of the Company's By-Laws, the Board of
Directors has fixed the close of business on April 20, 2001 as the date for
determining stockholders of record entitled to receive notice of, and to vote
at, the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
You are cordially invited to attend the Annual Meeting. If you do not expect
to attend the Annual Meeting in person, please vote, date, sign and return the
enclosed proxy as promptly as possible in the enclosed reply envelope.
By order of the Board of Directors,
JOSEPH A. MOLINO, JR.
SECRETARY
Dated: April 27, 2001
Farmingdale, New York
P & F INDUSTRIES, INC.
300 SMITH STREET
FARMINGDALE, NEW YORK 11735
------------------------
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of P & F Industries, Inc. (the "Company") to
be used at the meeting of stockholders of the Company (the "Annual Meeting") to
be held on Wednesday, May 30, 2001 at 10:00 A.M., at the Huntington Hilton
Hotel, 598 Broad Hollow Road, Melville, New York, or at any adjournment or
postponement thereof, for the purposes set forth in the accompanying notice of
Annual Meeting of Stockholders. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked at any time before it is exercised,
either in person at the Annual Meeting or by written notice or by a duly
executed proxy, bearing a later date, sent to the Secretary of the Company. The
Company anticipates mailing this proxy statement and the accompanying proxy to
stockholders on or about April 27, 2001.
As of April 20, 2001, there were 3,554,448 shares of the Company's Class A
Common Stock, $1.00 par value (the "Class A Common Stock"), outstanding. Each
share of Class A Common Stock is entitled to one vote. Only holders of record of
Class A Common Stock at the close of business on April 20, 2001 will be entitled
to notice of, and to vote at, the Annual Meeting. The Company will bear the cost
of the Annual Meeting and the cost of soliciting proxies, including the cost of
mailing the proxy material. In addition to solicitation by mail, directors,
officers and regular employees of the Company (who will not be specifically
compensated for such service) may solicit proxies by telephone or otherwise.
All proxies received pursuant to this solicitation will be voted, except as
to matters where authority to vote is specifically withheld and, where a choice
is specified as to the proposal, such proxies will be voted in accordance with
such specification. If no instructions are given, the persons named in the
proxies solicited by the Board of Directors of the Company intend to vote for
the nominees for election as directors of the Company set forth herein and for
the confirmation of the appointment of BDO Seidman, LLP as independent certified
public accountants of the Company for the fiscal year ending December 31, 2001.
If any other matter should be presented at the Annual Meeting upon which a vote
may properly be taken, the shares represented by the proxy will be voted with
respect thereto in the discretion of the person or persons holding such proxy.
For purposes of determining whether a proposal has received the required
number of votes for approval, abstentions will be included in the vote totals
with the result that an abstention will have the same effect as a negative vote.
In instances where nominee recordholders, such as brokers, are prohibited from
exercising discretionary authority for beneficial owners of shares of Class A
Common Stock who have not returned a proxy ("broker non-votes"), those shares of
Class A Common Stock will not be included in the vote totals and, therefore,
will have no effect on the vote. If a quorum should not be present, the Annual
Meeting may be adjourned from time to time until a quorum is obtained.
ELECTION OF DIRECTORS
As permitted by Delaware law, the Board of Directors is divided into three
classes, the classes being divided as equally as possible and each class having
a term of three years. Each year the term of office of one class expires. A
director elected to fill a vacancy, including a vacancy resulting from an
increase in the number of directors constituting the Board of Directors, serves
for the remaining term of the class in which the vacancy exists. The Board of
Directors presently consists of nine members, with three classes each consisting
of three directors.
During 2001, the term of a class consisting of three directors expires.
Management proposes that Messrs. Richard A. Horowitz, Alan I. Goldberg and
Robert M. Steinberg, whose terms of office expire in 2001, be re-elected as
directors to serve for terms to expire at the 2004 Annual Meeting of
Stockholders. Unless otherwise indicated, the enclosed proxy will be voted for
the election of such nominees. Should any one or more of these nominees become
unable to serve for any reason or, for good cause, will not serve, which is not
anticipated, the Board of Directors may, unless the Board of Directors by
resolution provides for a lesser number of directors, designate substitute
nominees, in which event the persons named in the enclosed proxy will vote for
the election of such substitute nominee or nominees.
Directors will be elected by the plurality vote of the holders of the
Class A Common Stock entitled to vote at the Annual Meeting and present in
person or by proxy.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE FOREGOING NOMINEES.
INFORMATION AS TO DIRECTORS AND NOMINEES FOR DIRECTORS
Set forth below are the name and age of each nominee for director and each
director currently in office and whose term continues, his principal occupation,
the year each became a director of the Company and a description of his
principal occupation for the past five years. The information set forth below is
as of April 20, 2001.
SERVED AS DIRECTOR
NAME AGE CONTINUOUSLY SINCE
- ---- -------- ------------------
NOMINEES TO SERVE IN OFFICE UNTIL 2004:
Richard A. Horowitz....................................... 51 1975
Alan I. Goldberg.......................................... 51 1998
Robert M. Steinberg....................................... 58 2000
DIRECTORS TO CONTINUE IN OFFICE UNTIL 2003:
Sidney Horowitz........................................... 80 1962
Arthur Hug, Jr............................................ 78 1987
Dennis Kalick............................................. 48 1997
DIRECTORS TO CONTINUE IN OFFICE UNTIL 2002:
Robert L. Dubofsky........................................ 61 1990
Neil Novikoff............................................. 47 1998
Marc A. Utay.............................................. 41 1992
Sidney Horowitz has been Chairman Emeritus of the Board of Directors since
November 1995 and was Chairman of the Board of Directors and Chief Executive
Officer of the Company from 1968 to November 1995. Sidney Horowitz is the father
of Richard A. Horowitz.
Arthur Hug, Jr., who is retired, was the President of Vanguard
Ventures, Inc. from 1987 to 1989 and was Chairman of North American Bancorp from
1974 to 1987.
2
Dennis Kalick has been engaged in the private practice of providing
accounting services with Gilman & Ciocia, Inc. (or a predecessor firm) since
1993.
Robert L. Dubofsky has been Managing Director of BWD Group LLC (formerly
Blumencranz, Klepper, Wilkins & Dubofsky, Ltd.), an insurance brokerage group,
since April 1992.
Neil Novikoff has been a partner in the law firm of Willkie Farr & Gallagher
for more than the last five years.
Marc A. Utay has been a Managing Partner of Clarion Capital Partners, LLC,
an investment banking firm, since October 1999. From May 1993 until
October 1999, Mr. Utay was a Managing Director of Wasserstein Perella
Co., Inc., an investment banking firm.
Richard A. Horowitz has been Chairman of the Board of Directors and Chief
Executive Officer of the Company since November 1995 and has been President of
the Company since 1986.
Alan I. Goldberg has been President of Larkspur America, Inc., an apparel
manufacturing corporation, since 1977.
Robert M. Steinberg has been Chief Executive Officer of 1st in
Health, Inc., a healthcare services company, since June 2000. Mr. Steinberg
served as Chairman of the Board and Chief Executive Officer of Reliance
Insurance Company from 1984 to November 1999 and served as Vice Chairman of
Reliance Insurance Company from November 1999 until July 2000. On January 25,
2001, Reliance Insurance Company consented to the entry of an Order of
Supervision pursuant to which it was placed under supervision of the Insurance
Commissioner of the Commonwealth of Pennsylvania.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During 2000, the Board of Directors held four meetings and acted by
unanimous written consent on three occasions. No director attended fewer than
75% of the total number of meetings of the Board of Directors and all committees
on which he served. The Board of Directors has an Audit Committee and a Stock
Option Committee. The current members of the Audit Committee are Messrs. Hug,
Dubofsky and Kalick and the current members of the Stock Option Committee are
Messrs. Hug and Kalick. The Audit Committee recommends the selection of
independent auditors to the Board of Directors, reviews the overall scope and
the results of the Company's annual audit and reviews the Company's overall
internal controls. During 2000, the Audit Committee met once. The Stock Option
Committee administers the Stock Option Plan. The Stock Option Committee met one
time during 2000. The Board does not have a nominating or a compensation
committee or a committee performing similar functions.
DIRECTOR COMPENSATION
During 2000, each director who was not an employee of the Company or any of
its subsidiaries received fees of $3,500, plus $1,250 for each meeting of the
Board of Directors or Audit Committee attended. Upon election to the Board of
Directors, each director who is not an employee of the Company receives an
option to purchase 2,000 shares of Class A Common Stock. Directors who are also
officers of the Company are not compensated for their duties as directors.
3
OWNERSHIP OF EQUITY SECURITIES
The following table sets forth the beneficial ownership of Class A Common
Stock as of April 20, 2001, including shares as to which a right to acquire
ownership within 60 days exists (for example, through the exercise of stock
options) within the meaning of Rule 13d-3(d)(1) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), by (i) each director and nominee
for director, (ii) the executive officers listed in the Summary Compensation
Table (Richard A. Horowitz and Joseph A. Molino, Jr. are the only executive
officers of the Company), (iii) each person known by the Company to be the
beneficial owner of more than 5% of the Class A Common Stock and (iv) all
directors and executive officers as a group. Except as indicated in the
applicable footnotes, each beneficial owner listed has sole voting power and
sole investment power over the shares of Class A Common Stock indicated. Except
as indicated in the applicable footnotes, the address of each beneficial owner
is in the care of the Company, 300 Smith Street, Farmingdale, New York 11735.
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------ -------------------- --------
Robert L. Dubofsky...................................... 22,000(1)(2) *
Alan I. Goldberg........................................ 2,000(2) *
Sidney Horowitz......................................... 280,731(3)(4) 7.9
Richard A. Horowitz..................................... 1,239,565(5) 32.8
Arthur Hug, Jr.......................................... 3,000(2) *
Dennis Kalick........................................... 2,000(2) *
Joseph A. Molino, Jr.................................... 20,500(6) *
Neil Novikoff........................................... 2,000(2) *
Marc A. Utay............................................ 72,000(2) 2.0
Robert M. Steinberg..................................... 2,000(2) *
FMR Corp................................................ 351,900(7) 9.9
Steel Partners II L.P................................... 398,785(8) 11.2
Lawndale Capital Management, LLC........................ 360,350(9) 10.1
All directors and executive officers
as a group (10 persons)............................... 1,645,796(10) 43.2
- ------------------------
* Less than 1%.
(1) Includes 5,000 shares owned by his child.
(2) Includes 2,000 shares issuable upon the exercise of stock options.
(3) The address of Sidney Horowitz is 20596 Links Circle, Boca Raton, Florida
33434.
(4) Includes 99,988 shares owned by Grace Horowitz, wife of Sidney Horowitz,
individually and as trustee for their daughter, and 400 shares owned by The
Sidney and Grace Horowitz Foundation. Sidney Horowitz disclaims beneficial
ownership of the 99,988 shares owned by Grace Horowitz individually and as
Trustee for the daughter of Grace Horowitz and Sidney Horowitz. Also
includes 2,000 shares issuable upon the exercise of stock options.
(5) Includes (i) 660,000 shares owned by Linda Horowitz, wife of Richard A.
Horowitz, individually, (ii) 22,400 shares owned by Linda Horowitz,
individually and as Trustee for the daughter of Linda Horowitz and Richard
A. Horowitz, and (iii) 10,000 shares owned by The Linda and Richard Horowitz
Foundation. Linda Horowitz has granted Richard A. Horowitz a ten year
irrevocable proxy to vote the 660,000 shares owned by her. Richard A.
Horowitz disclaims beneficial ownership of the 22,400 shares owned by Linda
Horowitz individually and as Trustee for the daughter of Linda Horowitz and
Richard A. Horowitz. Also includes 221,000 shares issuable upon the exercise
of stock options.
4
(6) Includes 20,000 shares issuable upon the exercise of stock options. Joseph
A. Molino, Jr. has been Vice President and Chief Financial Officer of the
Company since December 1997. From July 1990 until November 1997, Mr. Molino
was chief financial officer of several small private manufacturing and
service companies.
(7) Information obtained from a Schedule 13G, dated February 14, 2001, filed
with the Securities and Exchange Commission by FMR Corp., Edward C. Johnson
3d and Abigail P. Johnson. FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson have sole power to dispose or to direct the disposition of all
shares held. The address of FMR Corp. is 82 Devonshire Street, Boston,
Massachusetts 02109.
(8) Information obtained from a Schedule 13D, dated June 12, 1998, filed with
the Securities and Exchange Commission by Steel Partners II, L.P. and Warren
Lichtenstein. Steel Partners II, L.P. and Warren Lichtenstein have sole
voting and sole dispositive power over all shares held. The address of Steel
Partners II, L.P. is 750 Lexington Avenue, 27th Floor, New York, New York
10022.
(9) Information obtained from a Schedule 13G, dated February 8, 2001, filed with
the Securities and Exchange Commission by Lawndale Capital Management, LLC,
Andrew E. Shapiro, Diamond A Partners, L.P. and Diamond A Investors, L.P.
Lawndale Capital Management, LLC shares voting and dispositive power with
Andrew E. Shapiro with respect to 360,350 shares, Diamond A Partners, L.P.
with respect to 310,850 shares and Diamond A Investors, L.P. with respect to
49,500 shares. The address of each of the foregoing entities is One Sansome
Street, Suite 3900, San Francisco California 94104.
(10) Includes 257,000 shares issuable upon the exercise of stock options and
warrants.
5
EXECUTIVE COMPENSATION
The following table sets forth all cash and non cash compensation for each
of the past three fiscal years awarded to or earned by the Chairman of the Board
and Chief Executive Officer and the other executive officer whose aggregate
compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------- ---------------
SECURITIES
SALARY BONUS UNDERLYING ALL OTHER
NAME AND PRINCIPAL OCCUPATION YEAR ($) ($)(1) OPTIONS/SARS(#) COMPENSATION($)(2)
- ----------------------------- -------- -------- --------- --------------- ------------------
Richard A. Horowitz...................... 2000 610,000 640,000 -- 27,637
Chairman of the Board.................. 1999 550,000 740,000 -- 26,072
and Chief Executive Officer............ 1998 499,000 600,000 150,000 25,084
Joseph A. Molino, Jr..................... 2000 201,000 150,000 -- 12,400
Vice President and Chief............... 1999 188,000 150,000 10,000 11,600
Financial Officer...................... 1998 175,000 135,000 10,000 --
- ------------------------
(1) The Company has an incentive compensation bonus plan (the "Bonus Plan").
Under the terms of the Bonus Plan, the total bonuses paid to executive
officers may not exceed 15% of the Company's pre-tax, pre-bonus income prior
to the payment under the Bonus Plan. Allocations to the individuals set
forth above are made at the discretion of the Board of Directors. Amounts
are accrued in the year shown above and paid in the following year.
(2) The Company maintains a split-dollar life insurance policy on the life of
Mr. Richard Horowitz and paid $821, $1,081 and $1,043 allocated to the term
portion of the split-dollar coverage for 2000, 1999 and 1998, respectively.
The actuarial equivalent of the value of the premium paid by the Company for
2000, 1999 and 1998, based on certain assumptions regarding interest rates
and periods of coverage, was $14,416, $13,391 and $12,441, respectively. It
is anticipated that the Company will recover the premiums on this policy or
the cash surrender value thereof.
Mr. Horowitz and Mr. Molino are covered by a Company-sponsored defined
contribution retirement plan (the "Plan"). The Plan covers all employees (other
than employees of the Company's Green Manufacturing, Inc. subsidiary, who are
covered by a separate plan) who do not receive pension benefits under a
collective bargaining agreement, have been in the employ of the Company for at
least one year and are at least 21 years of age. Contributions paid by the
Company are 5% of the first $40,000 of each employee's salary and 8% of the
balance up to $170,000. Upon leaving the Company, an employee may receive a lump
sum payment of all amounts vested for him under the Plan, including earnings
thereon. Contributions made on behalf of Mr. Horowitz were $12,400, $11,600 and
$11,600 for 2000, 1999 and 1998, respectively. Contributions made on behalf of
Mr. Molino were $12,400 in 2000 and $11,600 in 1999.
6
OPTION/SAR GRANTS IN LAST FISCAL YEAR
For the fiscal year ended December 31, 2000, no stock options were granted
to the executive officers named in the Summary Compensation Table.
The following table shows for the fiscal year ended December 31, 2000 the
number of stock options which were exercised during 2000 and the number and
value of unexercised options for the executive officers named in the Summary
Compensation Table.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S AT OPTIONS/SAR'S
FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
SHARES --------------------- ----------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE # REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- --------------------- ----------------------
Richard A. Horowitz...................... -- -- 203,500/46,500 0/0
Joseph A. Molino, Jr..................... -- -- 20,000/0 0/0
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Effective as of February 28, 1997, the Company entered into an employment
agreement (the "Horowitz Employment Agreement") with Richard A. Horowitz. The
Horowitz Employment Agreement provides for Richard Horowitz to serve as
President of the Company for a term expiring on February 28, 2004, unless sooner
terminated pursuant to the provisions of the Horowitz Employment Agreement.
Pursuant to the Horowitz Employment Agreement, Richard Horowitz will receive an
annual salary of $675,000 for the year ending December 31, 2001. Mr. Horowitz is
also eligible to receive such increases in base compensation as the Board of
Directors may from time to time grant to him and to receive such bonuses as the
Board of Directors, in its discretion, may allocate to him. In the event of a
"discharge" following a "change in control" of the Company (as each term is
defined in the Horowitz Employment Agreement) Richard Horowitz will receive his
annual salary and all benefits to which he is entitled under the Horowitz
Employment Agreement for the remainder of the term thereof or a lump sum
severance allowance in an amount equal to 2.99 times his "annualized includable
compensation for the base period" (as defined in the Internal Revenue Code of
1986, as amended).
7
REPORT ON EXECUTIVE COMPENSATION
The Company does not have a compensation committee. The Board of Directors
reviews the annual compensation of the Company's executive officers. Each
executive officer's compensation includes salary and a performance bonus. In
1986, the Company established the Bonus Plan for its executive officers that
provides for the payment of a cash bonus not to exceed, in the aggregate, 15% of
the Company's pre-tax, pre-bonus income. In respect of 2000, Messrs. Horowitz
and Molino received bonuses of $640,000 and $150,000, respectively, under the
Bonus Plan. These awards were based on a subjective evaluation of the
performance of Mr. Horowitz and Mr. Molino during the year.
In determining the executive officers' base compensation for the ensuing
fiscal year, the Board of Directors considers the individual officer's job
performance and level of responsibility, prior years' compensation, number of
years of employment with the Company and the rate of inflation. Mr. Horowitz's
and Mr. Molino's base compensation increased by 11% and 7%, respectively, for
2000. These increases were based on a subjective evaluation of the performance
of Mr. Horowitz and Mr. Molino during the prior year.
MEMBERS OF THE BOARD OF DIRECTORS
ROBERT DUBOFSKY ARTHUR HUG, JR.
ALAN I. GOLDBERG DENNIS KALICK
SIDNEY HOROWITZ NEIL NOVIKOFF
RICHARD A. HOROWITZ (Chairman) MARC A. UTAY
ROBERT M. STEINBERG
8
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS(1)
The Audit Committee of the Board of Directors of P&F Industries, Inc. is
composed of three independent directors (each of whom is independent under
applicable rules of the National Association of Securities Dealers, Inc.)
appointed by the Board of Directors. The Audit Committee operates under a
written charter adopted by the Board of Directors during fiscal 2000. The
members of the Audit Committee are Messrs. Dubofsky, Hug and Kalick.
The written charter adopted by the Board of Directors is attached as
Appendix A to this Proxy Statement.
Management is responsible for the Company's internal accounting and
financial controls, the financial reporting process and the internal audit
function. The Company's independent accountants are responsible for performing
an independent audit of the Company's consolidated financial statements in
accordance with auditing standards generally accepted in the United States of
America, and for issuing a report thereon. The Audit Committee's responsibility
is to monitor and oversee these processes and to report its findings to the full
Board.
In this context, the Audit Committee has met and held discussions
separately, and jointly, with each of management and the Company's independent
accountants. Management represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America, and the Audit
Committee has reviewed and discussed the consolidated financial statements with
management and the independent accountants. The Audit Committee discussed with
the independent accountants matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees).
In connection with new standards for independence of the Company's external
auditors promulgated by the Securities and Exchange Commission, during the
Company's 2001 fiscal year the Audit Committee will undertake to consider in
advance of the provision of any non-audit services by the Company's independent
accountants whether the provision of such services in compatible with
maintaining the independence of the Company's external auditors.
The Company's independent accountants also provided to the Audit Committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent accountants that firm's independence.
Based on the Audit Committee's discussion with management and the
independent accountants and the Audit Committee's review of the representation
of management and the report of the independent accountants to the Audit
Committee, the Audit Committee recommended that the Board of Directors include
the audited consolidated financial statements in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000 filed with the Securities and
Exchange Commission.
Robert Dubofsky Dennis Kalick
Arthur Hug, Jr.
- ------------------------
(1) This Section is not "soliciting material," is not deemed "filed" with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Exchange Act, whether made before or after the date hereof
and irrespective of any general incorporation language in any such filing.
9
COMPANY STOCK PERFORMANCE GRAPH
The following performance graph compares the five-year cumulative return of
the Class A Common Stock to the total returns of the Nasdaq Stock Market
(U.S.A.) Index and a composite group comprised of companies with approximately
the same market capitalization as the Company at December 31, 1995. Such
composite group was used because the Company, through its three subsidiaries,
engages in several different lines of businesses and an applicable peer group
does not exist. In addition to the Company, the following companies are included
in the index: 4 Kids Entertainment, Inc., Driver Harris Co. Inc., Energy
West, Inc., Halsey Drug Corp., Harris & Harris Group, Inc., Presidential Realty
Corp., TSR, Inc. and Wendi-Bristol Health Corp. Each case assumes a $100
investment on December 31, 1995 and reinvestment of any dividends. Cumulative
returns are at December 31 of each year.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
12/29/95 12/31/96 12/31/97 12/31/98 12/31/99 12/29/00
P&F Industries $100 $153 $305 $416 $271 $216
NASDAQ $100 $123 $150 $210 $391 $238
Peer Group $100 $111 $82 $78 $178 $73
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Class A Common Stock and other equity securities of the Company. Officers,
directors and greater than 10% stockholders are required by the Securities and
Exchange Commission to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company or written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with
during, or in respect of, the fiscal year ended December 31, 2000.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Company and Sidney Horowitz are parties to a Consulting Agreement, which
will terminate on October 31, 2003, pursuant to which Mr. Horowitz receives
$75,000 in annual consulting fees.
10
SELECTION OF AUDITORS
The Board of Directors, upon the recommendation of its Audit Committee, has
selected BDO Seidman, LLP as independent certified public accountants for the
Company, to audit and report upon the Company's consolidated financial
statements for the 2001 fiscal year, and the Board of Directors is submitting
this matter to the stockholders for their ratification. The affirmative vote of
a majority of the shares of Class A Common Stock present or represented and
entitled to vote on the proposal at the Annual Meeting is required for the
ratification of the selection of BDO Seidman, LLP. Representatives of BDO
Seidman, LLP are expected to be present at the Annual Meeting, to make a
statement if they desire to do so and to be available to respond to appropriate
questions that may be asked by stockholders.
AUDIT FEES. The aggregate fees billed for professional services rendered
for the audit of the Company's annual financial statements and the review of the
Company's quarterly statements for the fiscal year ended December 31, 2000 were
$173,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION. The Company did
not engage BDO Seidman, LLP to provide advice to the Company regarding financial
information systems design and implementation during the fiscal year ended
December 31, 2000.
ALL OTHER FEES. The aggregate fees billed for services rendered by BDO
Seidman, LLP for the fiscal year ended December 31, 2000, other than the audit
fees disclosed above, were $27,000.
For the year ended December 31, 2000, the Audit Committee did not consider
whether the provision of services unrelated to the audit of the Company's annual
financial statements and the review of the Company's quarterly financial
statements was compatible with maintaining the principal accountant's
independence.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR APPROVAL OF THE SELECTION OF BDO SEIDMAN, LLP AS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Stockholder proposals intended for inclusion in the proxy material for the
2002 Annual Meeting of Stockholders must be received by the Secretary of the
Company at the Company's offices at 300 Smith Street, Farmingdale, New York
11735 not later than December 29, 2001 in order for such proposals to be
included in the proxy materials for the 2002 Annual Meeting of Stockholders.
Such proposals must also meet the requirements of Rule 14a-8 of the Exchange Act
relating to stockholders' proposals. Any stockholder interested in bringing a
proposal before the 2002 Annual Meeting of Stockholders outside of the processes
of Rule 14a-8 is referred to the advance notice provisions contained in the
Company's By-Laws, which require receipt of such proposals by the Secretary of
the Company at the Company's offices not prior to October 30, 2000 and not later
than December 29, 2001. Since the Company did not receive timely notice of any
stockholder proposal for the 2001 Annual Meeting of Stockholders, it will have
discretionary authority to vote on any stockholder proposals presented at such
Meeting.
ADDITIONAL INFORMATION AND OTHER MATTERS
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2000 (WITHOUT EXHIBITS) AS FILED WITH THE COMMISSION MAY BE
OBTAINED FREE OF CHARGE BY WRITING TO THE COMPANY, 300 SMITH STREET,
FARMINGDALE, NEW YORK 11735; ATTENTION: SECRETARY OF THE COMPANY.
Management of the Company is not aware of any matters to be presented for
action at the Annual Meeting other than the matters mentioned above, and does
not intend to bring any other matters before the Annual Meeting. However, if any
other matters should come before the Annual Meeting, it is intended that the
holders of the proxies will vote them in their discretion.
By order of the Board of Directors,
JOSEPH A. MOLINO, JR.
SECRETARY
Date: April 27, 2001
11
ANNEX A
P&F INDUSTRIES, INC. AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be an Audit Committee of the Board of Directors composed of
three directors independent of the management and free of any relationship that,
in the opinion of the Board, would interfere with their exercise of the Audit
Committee's independent judgment. Members of the Audit Committee shall also meet
such requirements as are established for them pursuant to law or the rules of
the Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. or any other applicable regulatory authority or securities
exchange or trading system. The Audit Committee shall elect a chairperson from
its own membership.
STATEMENT OF POLICY
The Audit Committee shall assist the Board in fulfilling its responsibility
to oversee the process of financial reporting by the Corporation.
RESPONSIBILITIES
In performing its oversight function, the Audit Committee shall undertake
those tasks which, in its judgment, most effectively contribute to the integrity
of the financial reporting process. In particular, the Audit Committee shall:
- Seek to establish a "tone at the top" or environment within the
Corporation that encourages integrity in financial reporting;
- Make appropriate inquiry to assess the logistical capabilities of the
financial reporting system;
- Seek to put in place a system capable of detecting financial misreporting
should it occur;
- Possess, along with the Board, ultimate authority and responsibility for
the selection, evaluation, and, where appropriate, replacement of the
outside auditor so that the outside auditor shall ultimately be
accountable to the Board and to the Audit Committee as the representatives
of shareholder interests;
- Meet with the independent auditor to inquire into the scope of the audit
proposed for the current year and significant audit procedures to be
utilized, the adequacy of material accounting and financial controls, and
at its conclusion review the results of the audit;
- Discuss the financial statements contained in the annual report with
management and the independent auditor to determine that the independent
auditor is satisfied with the disclosure and content of the financial
statements and discuss the auditor's judgment about the quality, and not
just the acceptability, of the accounting principles and disclosures and
any year-to-year changes;
- Review matters relevant to the independence of the independent auditor;
receive from the independent auditor written statements delineating all
relationships between the auditor and the Corporation, consistent with
Independence Standards Board Standard 1; engage in dialogue with the
auditor with respect to any disclosed relationships or services that may
affect the objectivity and independence of the auditor; and take, or
recommend that the Board take, appropriate action to ensure the
independence of the auditor;
- Provide appropriate opportunity for the independent auditor to meet with
the Audit Committee without management present; and
- Investigate any matter brought to the Audit Committee's attention within
the scope of its duties, which, in its judgment, warrants investigation,
possess the power to retain professional assistance for that purpose and
review accounting and financial personnel.
ADOPTED: MARCH 7, 2000
12
PROXY P&F INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
May 30, 2001
The undersigned hereby appoints RICHARD A. HOROWITZ and JOSEPH A. MOLINO,
JR., or any one of them, attorney with full power of substitution and
revocation to each, for and in the name of the undersigned, with all powers
the undersigned would possess if personally present, to vote the Class A
Common Stock of the undersigned in P&F Industries, Inc. at the Annual Meeting
of Stockholders to be held at the Huntington Hilton Hotel, 598 Broad Hollow
Road, Melville, New York on Wednesday, May 30, 2001 at 10:00 a.m. and at any
adjournment thereof, for the following matters.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this
Proxy will be voted "FOR" each proposal and in the discretion of the
undersigned stockholder(s) for any other matters which may properly come
before the annual meeting.
(Continued, and to be signed on reverse side)>
/X/ Please mark your votes as in this example.
1. Election of three directors, as set forth to right, for a term of three years
(expiring in 2004) and until their successors are duly elected and qualified.
Nominees: Richard A. Horowitz
Alan I. Goldberg
Robert M. Steinberg
INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name on the line provided below.
- --------------------------------------------------------------------------------
FOR the nominees listed (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for the nominees listed below
FOR AGAINST ABSTAIN
2. Ratification of the selection of auditors. / / / / / /
3. In their discretion upon any other matters
which may properly come before the meeting. / / / / / /
This proxy will be voted as specified above.
Important - please vote, sign and return this proxy as soon as possible so that
it will arrive before the Annual Meeting on May 30, 2001
SIGNATURE(S) __________________________________ DATE _______________, 2001
Note: Please sign as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If more than one name shown, including the case of joint tenants, each party
should sign.