PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
(616) 382-8200
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 27, 1997
TO: The Shareholders
Prab, Inc.
The Annual Meeting of Shareholders of Prab, Inc., a Michigan
corporation, of Kalamazoo, Michigan, will be held at Holiday Inn-East, 3522
Sprinkle Road, Kalamazoo, Michigan, on Thursday, March 27, 1997, at 10:00
a.m. (EST). A form of Proxy and Proxy Statement for the meeting are furnished
herewith. The purpose of the meeting is to consider and vote on the following
matters.
1. To elect a Board of six (6) directors.
2. To ratify the appointment of Plante & Moran, LLP Certified
Public Accounts as independent public accountants for the
Company.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on January 29,
1997, as the record date for determination of shareholders entitled to notice
of and to vote at the meeting.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD. YOU ARE INVITED TO ATTEND
THE MEETING IN PERSON, BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE
COMPLETE, DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY, IF YOU WISH,
REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By order of the Board of Directors
Eric V. Brown, Jr.
Secretary
Date: February 19, 1997
Kalamazoo, Michigan
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 ss.240.14a-11(c) or ss.240.14a-12
PRAB, INC.
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(Name of Registrant as Specified in its Charter)
Prab, Inc.
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(Name of Persons(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box)
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per Unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement no.:
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3. Filing Party:
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4. Date Filed:
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PRAB, INC.
5944 E. Kilgore Road
P.O. Box 2121
Kalamazoo, Michigan 49003
February 19, 1997
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of PRAB, INC. (the "Company")
from the holders of the common stock, $0.10 par value, of the Company for use
at the Annual Meeting of Shareholders to be held on Thursday, March 27, 1997,
at 10:00 a.m. (EST), at Holiday Inn-East, 3522 Sprinkle Road, Kalamazoo,
Michigan. This Proxy Statement is being mailed to shareholders beginning on
or about February 19, 1997, accompanied by the Company's annual report for
the fiscal year ending October 31, 1996.
The cost of solicitation will be borne by the Company. In addition to
the use of the mails, these proxies may be solicited by persons regularly
employed by the Company, by personal interview, and by telephone.
Arrangements have been made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of stock.
The Board of Directors knows of no business which will be presented
at the meeting other than the matters referred to in the accompanying Notice
of Annual Meeting. However, if any other matters are properly presented at
the meeting, it is intended that the persons named in the proxy will vote
upon the same and act in accordance with their judgment. Shares represented
by properly executed proxies will be voted at the meeting in the manner
specified therein. If no instructions are specified in the proxy, the shares
represented thereby will be voted for the proposals referred to therein and
the election as directors of the nominees referred to below. Any proxy may be
revoked by the person giving it any time prior to being voted by giving a
later dated proxy or by attending the meeting, revoking the proxy and voting
in person.
Only shareholders of record at the close of business on January 29,
1997, are entitled to notice of and to vote at the meeting. On such date:
(i) 1,757,339 shares of common stock having one vote each were outstanding;
and (ii) 366,667 shares of Convertible Preferred Stock, $0.75 par value,
having one vote each for the election of one director (as described below)
were outstanding.
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1. ELECTION OF DIRECTORS
Six directors are to be elected by the holders of Common Stock to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Except as otherwise specified in the
proxy, proxies will be voted for a Board of six directors and will be voted
for the election of the nominees named below, all of whom are now members of
the Board. If a nominee becomes unable or unwilling to serve, proxies will be
voted for such other person, if any, as shall be designated by the Board.
However, management now knows of no reason to anticipate that this will
occur.
Directors are elected by a plurality of votes cast at the meeting
meaning that the six nominees receiving the highest number of votes will be
elected as directors. Abstentions and broker non-votes will have no effect on
the election of directors.
The holders of the Company's Convertible Preferred Stock have the
right to vote as a class to nominate and elect one member of the Board. The
holders of Convertible Preferred Stock have no other voting rights, except as
required by law. The Company has been advised that the State of Michigan
Retirement Systems ("SMRS"), the sole holder of the Company's Convertible
Preferred Stock, intends to waive its right to nominate and elect a director
at the 1997 annual meeting.
Nominees for election by the holders of common stock are as follows:
Present Principal Occupation,
Director Business Experience, and
Name Age Since Certain Other Information
---- --- -------- -------------------------
John J. Wallace (1) 81 1961 Chairman of the Board of the Company since
1974; Chief Executive Officer from 1974 to
December, 1988; President from 1961 to 1982,
and from July, 1990 to June, 1991
Gary A. Herder (1) 49 1991 President and Chief Executive Officer since
1991; joined the Company in 1965, previously
served as Executive Vice President, General
Manager of Conveyors, and Chief Engineer
James H. Haas 50 1993 President and Founder of Summit Polymers,
Inc., a plastic injection molding company,
since 1972
Eric V. Brown, Jr 56 1996 Attorney in private practice of law since
1965 and currently a senior principal in the
law firm of Miller, Canfield, Paddock and
Stone, P.L.C.; Secretary of the Company
since 1996.
John W. Garside 57 1996 President of Woodruff Coal Company, a
diversified energy company, since 1980.
Director of Universal Forest Products, Inc.,
a lumber products company
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William G. Blunt 56 1996 Retired - President of Harborlite
Corporation, a manufacturer of industrial
minerals, from 1969 to 1996.
<FN>
- ---------
(1) Messrs. Wallace and Herder are the only executive officers of the
Company.
Meetings and Committees of the Board of Directors. The Board of
Directors has a standing Audit Committee, which during fiscal year 1996,
consisted of Eric V. Brown, Sr., Robert J. Hamman, James H. Haas, and Robert
J. Skandalaris. The Audit Committee met once during the last fiscal year. Its
principal functions are to recommend to the full Board the engagement or
discharge of independent auditors; to direct and supervise investigations
into matters relating to audit functions; to review with independent auditors
the plan and results of the audit engagement; to approve services performed
by independent auditors before such services are performed; to review the
degree of independence of the auditors; to consider the range of audit and
non-audit fees; and to review the adequacy of the Company's system of
internal accounting controls. The Board of Directors has a standing
Compensation Committee, which during fiscal year 1996 consisted of John J.
Wallace, Eric V. Brown, Sr., Robert J. Hamman and James H. Haas. The
Compensation Committee met once during the last fiscal year. Its principal
functions are to review the performance of Mr. Herder and certain other
management personnel and to make recommendations to the Board of Directors
regarding the salary, bonuses and other compensation to be paid to such
individuals. The Board of Directors does not have a standing nominating
committee.
After the end of the last fiscal year, Eric V. Brown, Sr., Robert J.
Hamman and Robert J. Skandalaris resigned from the Board of Directors and
their vacancies were filled by Messrs. Brown, Jr., Blunt and Garside.
During the last fiscal year, the Board of Directors met five times.
For the fiscal year, Messrs. Wallace, Herder and Haas each attended 75% or
more of the aggregate total number of meetings of the Board (held during the
period for which he was director) and the Committees on which he served
(during the period that he served).
Section 16(a) Beneficial Ownership Reporting Compliance. Based solely
upon a review of Forms 3 and 4 and amendments thereto furnished to the
Company during the last fiscal year and Form 5 and amendments thereto
(together with written representations from reporting persons that no Form 5
was required) furnished to the Company with respect to the last fiscal year,
the Company is not aware of any person who, at any time during the last
fiscal year, was a director, officer, or beneficial owner of more than 10% of
the Company's Common Stock, that failed to file on a timely basis reports
required by Section 16(a) of the Securities Exchange Act of 1934 during the
most recent fiscal year or prior years, except that Gary A. Herder failed to
timely report, on Form 4, the acquisition of 14,047 shares of the common
stock of the Company during fiscal year 1996.
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EXECUTIVE COMPENSATION
The following table shows the total compensation received by the
Company's Chief Executive Officer for the last three fiscal years. No
executive officer of the Company, other than the Chief Executive Officer,
received total annual salary and bonus in excess of $100,000 during the last
fiscal year.
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------------------------ ---------------------------
Name and Other Annual
Principal Compensation Original All Other
Position Year Salary Bonus (1) Stock Options Compensation
- -------- ---- ------ ----- ------------ ------------- ------------
Gary Herder, 1996 $137,976 $33,170 $6,000 0 $9,773(2)
President and 1995 $134,540 $29,172 $5,850 0 $9,841
Chief Executive 1994 $128,928 $10,000 $5,100 30,000 $6,672
Officer
<FN>
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(1) Represents annual car allowance paid to Mr. Herder
(2) Represents: $1,676 Company match under the Company's 401(k) Plan;
$1,711 Company contribution under the Company's 401(k) Plan; $5,720
Company contribution under the Company's Profit Sharing Plan; and
$666 Company payment for life insurance to fund the Company's
obligations under its deferred compensation agreement with Mr.
Herder.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values
The following table provides information on the value of options held
by the Chief Executive Officer of the Company at October 31, 1996 measured in
terms of the average of the bid and ask prices of the Company's common stock
on that day. There were no options exercised by an officer during the fiscal
year ended October 31, 1996.
Number of Unexcercised Value of Unexcercised
Options at October 31, 1996 In-the-Money Options at
# October 31, 1996 ($)
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Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Gary A. Herder 78,500 -0- $39,375(1) 0
<FN>
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(1) Options held by Mr. Herder for 18,500 shares have exercise prices which
exceed the fair market value of the Company's common stock on October 31,
1996.
Compensation of Directors. The Company pays each of the outside
directors $500 plus traveling expenses in excess of $100 for each Board
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meeting attended by them and $250 for each Committee meeting attended by
them, plus an additional $250 for each such meeting not held in conjunction
with a regularly scheduled Board meeting.
Certain Relationships and Related Transactions. Eric V. Brown, Jr.
Secretary and director of the Company is a senior principal in the law
firm of Miller, Canfield, Paddock and Stone, P.L.C., which firm is
general legal counsel to the Company. During fiscal year 1996, the
Company incurred $87,595 for legal services rendered by such firm.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of December 31,
1996, regarding each person known by the Company to own beneficially more
than 5% of the Company's Common Stock, each director and nominee of the
Company, each executive officer named in the Summary Compensation Table
above, and all directors and executive officers of the Company as a group.
Except as noted, each person named below is the record owner of the shares
indicated and possesses sole voting and investment power with respect to such
shares.
Name and Address of
Beneficial Owner or Amount of Percentage
Identity of Group Beneficial Ownership Ownership
----------------- -------------------- ---------
John J. Wallace 356,424(1)(3) 20.3%
3003 W. Gull Lake Drive
Richland, Michigan
Gary A. Herder 235,918(2)(3) 12.9%
89885 Shorelane Dr.
Lawton, Michigan
William G. Blunt 21,206 1.2%
963 Reed Lane
Vicksburg, Michigan
Eric V. Brown, Jr. 9,651 *
444 W. Michigan Avenue
Kalamazoo, Michigan
John W. Garside 21,956 1.2%
309 E. Michigan
Kalamazoo, Michigan
James H. Haas -- --
11912 Highview
Vicksburg, Michigan
Gary A. Herder and Robert Klinge, 123,371(3) 7.0%
Co-Trustees
5944 E. Kilgore Road
Kalamazoo, Michigan
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Robert Klinge 158,652(4) 8.9%
120 S. Patterson
Wayland, Michigan
Henry Penn Wenger 132,600 7.5%
PO Box 43098
Detroit, Michigan
State of Michigan Retirement 366,667(5) 17.3%
Systems
All executive officers and directors 644,632(3) 35.1%
as a group (6 persons)
<FN>
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*Shares indicated are less than 1% of the Company's outstanding common
stock.
(1) Includes 345,230 shares held by Mr. Wallace as trustee of a trust
of which he is the grantor and beneficiary.
(2) Includes 78,500 shares with respect to which Mr. Herder has the right
to acquire beneficial ownership pursuant to the Company's Stock
Option Plans and 123,371 shares as to which Mr. Herder shares voting
power.
(3) Gary A. Herder and Robert Klinge are the Co-Trustees of The
Company's profit sharing plan. This plan holds 123,371 shares of
the Company's Common Stock (the "Plan Stock"). Messrs. Herder and
Klinge have the sole power to vote the Plan Stock. The
Administrative Committee appointed by the Board of Directors to
administer this plan has the sole power to direct the disposition
of the Plan Stock. During the last fiscal year, the members of the
Administrative Committee were John J. Wallace, and Eric V. Brown,
Sr. The Plan Stock is not included in the amount or percentage set
forth in the table regarding Mr. Wallace. The Plan Stock is
included in the amounts and percentages set forth in the table
regarding Messrs. Herder and Klinge and all executive officers and
directors as a group.
(4) Includes 20,750 shares with respect to which Mr. Klinge has the
right to acquire beneficial ownership pursuant to the Company's
Stock Option Plans and 123,371 shares as to which Mr. Klinge shares
voting power. Mr. Klinge is the Controller of the Company. Mr.
Klinge's shares are not included in the amount and percentage set
forth in the table regarding all executive officers and directors
as a group.
(5) Includes 366,667 shares which the State of Michigan Retirement
Systems has the right to acquire pursuant to its rights as a holder
of the Company's Convertible Preferred Stock, (366,667 shares). On
and after November 1, 1994, the Convertible Preferred Stock may be
converted to Common Stock at a ratio of one share of Common Stock for
each share of Convertible Preferred Stock.
-7-
Changes in Control of Registrant. Since the transactions described
below, the Company is not aware of any arrangements which may result in a
change in control of the Company.
On October 31, 1996, the Company purchased from the State of Michigan
Retirement Systems ("SMRS") the following shares of the Company's stock:
600,000 shares of non-convertible preferred stock for a purchase price of
$300,000, plus accrued unpaid dividends; 1,633,333 shares of convertible
preferred stock at a price of $1.35 per share; and 1,013,770 shares of common
stock at a price of $1.35 per share (collectively the "Repurchased Shares").
The aggregate purchase price of $3,897,589.05 (including accrued dividends)
for the Repurchased Shares was paid in cash by the Company on October 31,
1996. The purchase prices for the Repurchased Shares were determined by
negotiations between the Company and SMRS. Prior to the Company's purchase of
the Repurchased Shares, SMRS beneficially owned 66% of the common stock of
the Company. After sale of the Repurchased Shares, SMRS beneficially owned
17% of the common stock of the Company.
2. SELECTION OF AUDITORS
The Board of Directors has, subject to ratification by the vote of a
majority of the votes cast by the holders of shares at the Annual Meeting,
appointed the accounting firm of Plante & Moran, LLP (the "Auditing Firm"),
as the principal independent accountants for the Company for the current
fiscal year. Ratification of the appointment of auditors is being submitted
to the shareholders of the Company because Management believes it is an
important corporate decision in which shareholders should participate. The
firm of independent accountants is located in Kalamazoo, Michigan. The
Company has been informed that neither the Auditing Firm nor any of its
partners has any financial interest, direct or indirect, in the company or in
the securities of the Company, and that no partner of the firm was connected
with the Company as promotor, underwriter, voting trustee, director, officer
or employee during the four years ended October 31, 1996. If the appointment
is rejected, or if the Auditing Firm shall decline to act, resign or
otherwise become incapable of acting, or if their employment is otherwise
discontinued, the Board of Directors will appoint other auditors for the
period remaining until the 1998 Annual Meeting of Shareholders when
employment of auditors shall be subject to approval by the Shareholders at
the Meeting.
Representatives of the Auditing Firm are expected to be present at
the Shareholders' Meeting and have the opportunity to make a statement and
respond to appropriate questions.
3. OTHER MATTERS
Management does not know of any matters to be presented at the Annual
Meeting other than those mentioned above. However, if any other matters
properly come before the meeting or any adjournment thereof, the
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holders of the proxies are authorized to vote thereon in their
discretion.
1998 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 1998 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's proxy statement,
they must be received by the Company at its principal office, 5944 E. Kilgore
Road, P.O. Box 2121, Kalamazoo, Michigan 49003, on or before October 22,
1997.
By Order of the Board of Directors,
Eric V. Brown, Jr.
Secretary
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PRAB, INC.
PROXY
The shareholder whose signature appears hereon appoints John J. Wallace,
Eric V. Brown, Jr., and Robert Klinge or any one of them, proxies with full
power of substitution, to vote all of the common stock of Prab, Inc., which
the Shareholder is entitled to vote at the Annual Meeting of Shareholders to
be held at Holiday Inn-East, 3522 Sprinkle Road, Kalamazoo, Michigan, on
March 27, 1997 at 10:00 A.M. (EST), and at any adjournment thereof, with all
the powers the Shareholder would possess if personally present, upon the
proposals set forth below and in their discretion, upon any other business
that may properly come before said meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR
PROPOSAL 2.
1. Election of Directors FOR all nominees____________________
(except as noted below)
WITHHOLD AUTHORITY__________________
to vote for all nominees
Nominees: John J. Wallace, Gary A. Herder, William G. Blunt, Eric
V. Brown, Jr., John W. Garside and James H. Haas.
[INSTRUCTIONS: To withhold authority to vote for one or more individual
nominees, line through or otherwise strike the name(s) of such
nominee(s)].
......................................................................
2. Selection of Plante & Moran, LLP as independent public accountants.
FOR____ AGAINST____ ABSTAIN____
(Continued and to be signed on other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF NOT OTHERWISE
SPECIFIED ABOVE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES AND FOR PROPOSAL
2. The undersigned revokes all proxies heretofore given to vote at such
meeting and all adjournments.
Dated:_________________________________
______________________________
______________________________
Please Sign Here
(To assist our planning, please check here if you plan to personally attend
the meeting___________ ). Please sign your name as it appears above. If
executed by a corporation, a duly authorized officer should sign. Executors,
administrators and trustees should so indicate when signing. If shares are
held jointly, EACH holder should sign.