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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BRUNSWICK TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:(1)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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BRUNSWICK TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998 -- 10:00 A.M.
You are hereby notified that the Annual Meeting of Stockholders of
Brunswick Technologies, Inc. will be held on May 13, 1998, at 10:00 A.M., at the
Marriott at Sable Oaks, 200 Sable Oaks Drive, South Portland, Maine, 04106, to
consider and act upon the following matters:
1. To elect the members of the Board of Directors;
2. To ratify the action of the Board of Directors in selecting Coopers &
Lybrand L.L.P. as independent accountants for the Company; and
3. To transact such other business as may properly come before the meeting.
If you are unable to attend the meeting personally, please be sure to date,
sign and return the enclosed proxy in the envelope provided to: Boston
EquiServe, L.P., 150 Royall Street, Mail Stop 45-02-62, Canton, Massachusetts
02021.
Only stockholders of record on the books of the Company at the close of
business on March 20, 1998 are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
DANIEL G. MCKAY, Clerk
Dated: April 16, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE ANNUAL MEETING.
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BRUNSWICK TECHNOLOGIES, INC.
EXECUTIVE OFFICES:
43 BIBBER PARKWAY
BRUNSWICK, MAINE 04011
PROXY STATEMENT
This proxy statement and the accompanying proxy card are being mailed to
stockholders commencing on or about April 16, 1998. The accompanying proxy is
solicited by the Board of Directors of Brunswick Technologies, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on May 13,
1998, and any adjournment or adjournments thereof. The cost of soliciting
proxies will be borne by the Company. Directors, officers and a few employees
may assist in the solicitation of proxies by mail, telephone, telegraph and
personal interview without additional compensation. The Company has also
retained Corporate Investor Communications, Inc., a proxy solicitation firm, for
assistance in connection with the solicitation of proxies, at a cost of
approximately $2,500, plus reimbursement of reasonable out-of-pocket expenses.
When a proxy card is returned properly signed, the shares represented
thereby will be voted by the persons named as proxies in accordance with the
stockholder's directions. You are urged to specify your choices on the enclosed
proxy card. If a proxy card is signed and returned without specifying choices,
the shares will be voted 'FOR' proposals 1 and 2 and at the discretion of the
persons named as proxies in the manner they believe to be in the best interests
of the Company as to other matters that may properly come before the meeting. A
stockholder giving a proxy may revoke it at any time before it is voted at the
meeting by written notice to the Company, by oral notice to the Clerk at the
meeting or by submitting a later dated proxy.
The Board of Directors of the Company (also referred to herein as the
"Board") has fixed the close of business on March 20, 1998 as the record date
for the meeting. Only stockholders of record on the record date are entitled to
notice of and to vote at the meeting. On the record date, there were 5,152,113
shares of the Company's common stock, $0.0001 par value (the "Common Stock")
issued and outstanding, each of which is entitled to one vote. The holders of
Common Stock do not have cumulative voting rights.
QUORUM AND VOTING
The presence in person or by proxy at the annual meeting of holders of
one-half (1/2) of the Common Stock issued and outstanding is required for a
quorum. Therefore, holders of not less than 2,562,557 shares of Common Stock
must be present in person or by proxy for there to be a quorum. Shares
represented by all proxies received, including proxies that withhold authority
for the election of directors and/or abstain from voting on the ratification of
the accountants, as well as "broker non-votes," discussed below, count toward
establishing the presence of a quorum.
Assuming the presence of a quorum, directors of the Company are elected by
majority vote of the shares of Common Stock present in person or by proxy and
voting in the election of directors. Shares may be voted for or withheld from
each nominee for election as a director. Shares for which the vote is withheld
and "broker non-votes" will be excluded entirely and have no effect on the
election of directors of the Company.
Under applicable rules, brokers who hold shares of the Company's Common
Stock in street name have the authority to vote the shares in the broker's
discretion on "routine" matters if they have not received specific instructions
from the beneficial owner of the shares. The uncontested election of directors
and the ratification of independent accountants are "routine" matters for this
purpose. With respect to matters which are determined by the appropriate
broker-dealer regulatory organization to be "non-routine," none of which is
currently on the agenda for this meeting of the Company's stockholders, brokers
may not vote shares held in street name without specific instructions from the
beneficial owner. If a broker holding shares in street name submits a proxy card
on which the broker physically lines out the matter, that action is called a
"broker non-vote" as to that matter. "Broker non-votes" are not counted in
determining the number of votes cast with respect to the matter. If a broker
submits a proxy but does not indicate a specific choice on a "routine" matter,
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the shares will be voted as specified in the proxy card. At this meeting of the
Company's stockholders, shares represented by such a proxy card would be voted
for the election of the director nominees and for ratification of the
independent accountants.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
The Board of Directors currently consists of seven members, with the terms
of all of the directors expiring at each annual meeting of stockholders and
until his successor has been duly elected and qualified.
The term of the current Board of Directors, currently consisting of Martin
S. Grimnes, William M. Dubay, David M. Coit, Donald R. Hughes, Max G. Pitcher,
David E. Sharpe and Peter N. Walmsley, expires at the 1998 annual meeting. It is
proposed that these directors be elected to serve another term. Unless otherwise
instructed in the proxy, all proxies will be voted to elect these same directors
to another one-year term expiring at the 1999 annual meeting, with each such
director to hold office until his successor has been duly elected and qualified.
The Company does not contemplate that any of these directors will be unable to
serve, but in that event, proxies solicited hereby will be voted for the
election of another person or persons to be designated by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE 'FOR' THE ELECTION OF
MESSRS. GRIMNES, DUBAY, COIT, HUGHES, PITCHER, SHARPE AND WALMSLEY.
The following table and narrative sets forth information regarding the
principal occupations, other affiliations, committee memberships and ages of the
nominees and directors of the Company continuing in office.
POSITION DIRECTOR
NAME AGE WITH COMPANY SINCE
---- --- ------------ --------
NOMINEES FOR ELECTION:
Martin S. Grimnes.................. 50 Chairman of the Board, Chief Executive Officer 1984
and Director
William M. Dubay(1)................ 47 President, Chief Operating Officer and Director 1997
David M. Coit...................... 50 Director 1987
Donald R. Hughes(1)(2)............. 68 Director 1997
Max G. Pitcher(1)(2)............... 62 Director 1997
David E. Sharpe(2)................. 55 Director 1993
Peter N. Walmsley.................. 62 Director 1991
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
MARTIN S. GRIMNES is the founder of the Company and since the Company's
inception in 1984, has served as a director and between 1984 and 1987 as
President and Treasurer. Mr. Grimnes has been Chief Executive Officer since the
Company's inception and Chairman of the Board since 1987. Mr. Grimnes has a
textile engineering degree from the Technische Akademie e.V. in Hohenstein,
Germany and a B.S. in Industrial Management from the University of Vermont.
Prior to founding the Company, he was export manager for W.S. Libbey Co. of
Lewiston, Maine, an industrial and decorative textile manufacturer (1980 --
1984) and General Manager of Sandvika Veveri A/S of Oslo, Norway, a decorative
textile manufacturer (1974 -- 1980).
WILLIAM M. DUBAY has been employed by the Company since May 1989, has
served as President and Chief Operating Officer since November 1991, and has
been a director since the completion of the Company's initial public offering in
February, 1997. Mr. Dubay received a B.A. in Business Education from Thomas
College in Waterville, Maine. Prior to his employment by the Company, he was
Manager of Provider Services for Blue Cross/Blue Shield of Maine (November 1987
through April 1989) and from June 1981
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through August 1987 was employed by Sabre Yachts in South Casco, Maine, a
nationally known manufacturer of premium quality sailing yachts, where he earned
successive promotions to Senior Manager, Manufacturing.
DAVID M. COIT has been, since 1986, President of North Atlantic Capital
Corporation, a venture capital management company which manages three venture
capital funds, including North Atlantic Venture Fund, L.P. Mr. Coit is also a
General Partner of North Atlantic Capital Partners, Limited Partnership, which
is the General Partner of North Atlantic Venture Fund. Previously, Mr. Coit was
President of Maine Capital Corporation and an Assistant Vice President for
commercial lending of First National Bank of Boston. Mr. Coit received his B.A.
from Yale University and received his M.B.A. from the Harvard Graduate School of
Business Administration.
DONALD R. HUGHES, who became a director upon the completion of the
Company's initial public offering in February, 1997, retired from his previous
positions as Vice Chairman, Chief Financial Officer, and director of Burlington
Industries, Inc., where he had been employed for over 35 years, at the end of
1994. Mr. Hughes is currently a consultant to Burlington. Mr. Hughes is former
Chairman of the Fiber, Fabric and Apparel Coalition for Trade, the former
President of the American Textile Manufacturers Institute, and former Chairman
of the North Carolina Citizens for Business and Industry. He is a member of the
Board of Visitors of the University of North Carolina at Chapel Hill's Graduate
School of Business Administration. He is also on the Board of Trustees of the
Moses H. Cone Memorial Hospital in Greensboro, North Carolina. Mr. Hughes
received his bachelor's and master's degrees from Harvard University.
MAX G. PITCHER, who became a director upon the completion of the Company's
initial public offering in February, 1997, is President of NEFT Inc., which
manufactures oil equipment in Russia. Mr. Pitcher retired from Conoco Inc. on
January 1, 1993, where he was Executive Vice President, Exploration Production,
with oversight responsibility for Europe, Africa, and the former U.S.S.R. Mr.
Pitcher had been with Conoco for 30 years. He was also a Senior Vice President
of E.I. du Pont de Nemours and Company, Inc., the parent company of Conoco. Mr.
Pitcher received his bachelor's and master's degrees in petroleum geology from
Brigham Young University and his Ph.D. in geology from Columbia University. He
is a member of the American Association of Petroleum Geologists (AAPG) and
currently serves on AAPG's industry liaison committee.
DAVID E. SHARPE has been employed in management or executive positions for
Vetrotex CertainTeed Corp. and its affiliates for more than 22 years, most
recently serving since 1989 as Vice President of Sales and Marketing of
Vetrotex. Vetrotex is a stockholder of the Company and a major supplier of raw
materials thereto. Mr. Sharpe is a member of the Board of the Composites
Institute of the Society of the Plastics Industry, Inc. He holds a B.S. in
biology and chemistry from Otterbein College in Westerville, Ohio and an M.B.A.
in finance and economics from New York University.
PETER N. WALMSLEY has been for more than the past five years, one of two
general partners of AMT Associates Ltd., which is the sole general partner of
both AMT Venture Partners, Ltd. and JHAM Limited Partnership, which are venture
capital funds and former stockholders of the Company. During the past five years
he has been President and 50% owner of AMT Management, Inc., and also for the
last three years, President and sole owner of Newton Delaware, Inc.,
corporations which manage the two funds. Mr. Walmsley was previously Manager,
Acquisitions & Divestitures, in the Corporate Plans Department at E.I. du Pont
de Nemours and Company, Inc., where he was also responsible for corporate
venture capital activities. Mr. Walmsley received his Ph.D. in chemical
engineering at Manchester University in England.
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INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES
MEETINGS
The Company's Board of Directors held six (6) meetings during fiscal year
1997. The Board has standing audit and compensation committees; there is no
nominating committee. All directors attended more than 75% of all meetings of
the Board and of the committees of which they were members.
AUDIT COMMITTEE
The Audit Committee currently consists of three members: William M. Dubay,
Donald R. Hughes and Max G. Pitcher. The Audit Committee meets with the
Company's auditors and principal financial personnel to review the results of
the annual audit. The Audit Committee also reviews the scope of, and establishes
fees for, audit and non-audit services performed by the independent accountants,
and reviews the independence of the independent accountants and the adequacy and
effectiveness of the Company's internal accounting controls. The Audit Committee
held two (2) meetings in fiscal year 1997.
COMPENSATION COMMITTEE
The Compensation Committee establishes the compensation, including bonus
and incentive arrangements, of the Company's Chief Executive Officer and
considers and approves or modifies the recommendations of the Chief Executive
Officer as to the proposed compensation of each executive officer of the Company
whose aggregate compensation exceeds a threshold amount of $100,000. The
Compensation Committee currently consists of three members: David E. Sharpe,
Donald R. Hughes and Max G. Pitcher. The Compensation Committee held five (5)
meetings in fiscal year 1997.
COMPENSATION OF DIRECTORS
All directors are reimbursed by the Company for their out-of-pocket
expenses incurred in connection with attendance at Board and committee meetings
or otherwise in the performance of their services as a director. Directors who
are not employees of the Company or affiliated with or related to a principal
stockholder of the Company ("outside directors"), currently Messrs. Hughes and
Pitcher, each receive an annual retainer of $6,000, payable quarterly, and a fee
of $1,000 for each Board or committee meeting attended; provided, however, that
compensation for a committee meeting held in conjunction with a Board meeting is
set at $500. The foregoing compensation to the outside directors may be paid in
shares of Common Stock, based on the fair market value of the Common Stock on
the date of the quarterly payment or meeting at issue. Each of Messrs. Hughes
and Pitcher received 642 shares of Common Stock in lieu of cash compensation in
fiscal year 1997. Furthermore, each of Messrs. Hughes and Pitcher received, at
each of their elections to the Board in February 1997, an issuance of 500 shares
of Common Stock and a grant of an option to purchase 4,500 shares of Common
Stock, exercisable at the fair market value at time of grant, which option vests
in three equal tranches over a three year period so long as he remains a
director. In October 1997, each of Messrs. Hughes and Pitcher received an
additional 500 shares of Common Stock in connection with their elections to the
Board. In February 1998, the Board voted to issue to each of Messrs. Hughes and
Pitcher an additional 500 shares of Common Stock. No other directors receive any
compensation for performance of their services as directors.
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EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information concerning the executive
officers of the Company who are not also directors. The executive officers of
the Company are elected annually by the Board of Directors following the Annual
Meeting of Stockholders and serve at the discretion of the Board.
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
Robert R. Fuller..................... 41 Vice President, Sales
Alan M. Chesney...................... 42 Interim Chief Financial Officer and Treasurer(1)
Thomas L. Wallace.................... 45 Vice President, Manufacturing
Peter L. DeWalt...................... 61 President, Advanced Textiles, Inc.
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(1) John P. O'Sullivan served as Chief Financial Officer and Treasurer of the
Company during fiscal year 1997.
ROBERT R. FULLER has served as Vice President, Sales, since 1993 and has
been with the Company since 1990. Mr. Fuller received his B.S. in
engineering-naval architecture from the University of Michigan in Ann Arbor.
Prior to his employment with the Company, Mr. Fuller founded and was Chief
Executive Officer of Advanced Sail Concepts, a ship design firm located in
Massachusetts and North Carolina. He has also served as a naval architect and
project manager with General Dynamics in Quincy, Massachusetts.
ALAN M. CHESNEY has served as Interim Chief Financial Officer and Treasurer
of the Company since February 1998. Prior to joining the Company, Mr. Chesney
served as Vice President of Commercial Lending in the Asset Based Lending
Division of Fleet Bank of Maine from 1991 to 1994. From 1994 to 1996, Mr.
Chesney served as Sales Operations Manager of the Company, and during 1997 he
served as Business Information Manager of the Company. Mr. Chesney received his
Bachelor's Degree in Business Administration from the University of
Massachusetts.
THOMAS L. WALLACE has served as Vice President, Manufacturing since January
1994. Prior thereto he was Manufacturing Manager for Personal Electronics in
Manchester, N.H. from March 1992 through December 1993, Director of Quality
Assurance for AM Technologies in Manchester, N.H. from August 1991 until March
1992 and Director of Operations for Summa Four, also in Manchester, N.H. from
May 1983 until August 1991. Mr. Wallace received his B.S. in business management
from Franklin Pierce College and has completed various M.B.A. courses at the
University of New Hampshire.
PETER L. DEWALT has been President of Advanced Textiles, Inc., a wholly
owned subsidiary of the Company, since 1985. Mr. DeWalt was a co-founder of ATI,
and was previously employed for over two decades by PPG Industries, Inc., in
various executive positions in manufacturing, technical service, product
development, sales and marketing. Mr. DeWalt is a graduate of Waynesburg
College.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of April 1, 1998, to the best
of the Company's knowledge, regarding beneficial ownership of Common Stock of
each person who is known by the Company to own beneficially more than five
percent (5%) of the Company's Common Stock, each director and each "named
executive officer" (as defined in Item 402 of Regulation S-K), certain other
executive officers, as disclosed above, and all directors and executive officers
as a group.
NAME OF OWNER+ NUMBER(1) PERCENT(1)
-------------- --------- ----------
David E. Sharpe(2).......................................... 713,746 13.8%
Director
Vetrotex CertainTeed Corp.(2)............................... 713,746 13.8%
David M. Coit(3)............................................ -- --
Director
Peter N. Walmsley(4)........................................ 1,000 *
Director
Martin S. Grimnes(5)........................................ 310,670 5.9%
Chairman, Chief Executive Officer and Director
William M. Dubay(6)......................................... 115,020 2.2%
President, Chief Operating Officer and Director
Robert Fuller(7)............................................ 63,140 1.2%
Vice President, Sales
Donald R. Hughes(8)......................................... 3,642 *
Director
Max G. Pitcher(9)........................................... 3,642 *
Director
Alan M. Chesney(10)......................................... 6,335 *
Interim Chief Financial Officer and Treasurer
Thomas L. Wallace(11)....................................... 33,140 *
Vice President, Manufacturing
Peter L. DeWalt(12)......................................... 10,650 *
President, Advanced Textiles, Inc.
Montgomery Asset Management, LLC/........................... 290,300 5.6%
Montgomery Micro Cap Fund(13)
Wellington Management Company, LLP(14)...................... 307,000 6.0%
All Directors and Executive Officers as a group (11
persons).................................................. 1,260,985 22.9%
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+ The address of Messrs. Sharpe, Coit, Walmsley, Grimnes, Dubay, Fuller,
Hughes, Pitcher, Chesney, Wallace, and DeWalt, is c/o Brunswick
Technologies, Inc., 43 Bibber Parkway, Brunswick, ME 04011. The address of
Vetrotex CertainTeed Corp. is 750 E. Swedesford Road, Valley Forge, PA
19482. The address of Montgomery Asset Management, LLC and Montgomery Micro
Cap Fund is 101 California Street, San Francisco, CA 94111. The address of
Wellington Management Company, LLP is 75 State Street, Boston MA 02109.
* Less than 1% of the outstanding shares of Common Stock.
(1) For the purpose of this table, shares of Common Stock, which to the
Company's knowledge, an individual or group has a right to acquire within
sixty (60) days upon the exercise of options or warrants, are deemed
outstanding for the purposes of computing the approximate number and
percentage of shares beneficially owned by such individual or group. Such
shares are not deemed to be outstanding for the purpose of computing the
percentage of shares beneficially owned by any other individual or group
shown in the table. This table does not include an approximate aggregate
amount of 18 shares of Common Stock held by the executive officers of the
Company through the Company's 401(k) plan.
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(2) Includes 713,746 shares of Common Stock beneficially owned by Vetrotex
CertainTeed Corp. ("Vetrotex"). Mr. Sharpe, a director of the Company, is
the Vice President, Sales and Marketing, of Vetrotex. Mr. Sharpe disclaims
beneficial ownership of shares held or beneficially owned by Vetrotex.
(3) Mr. Coit does not beneficially own any shares of the Company's Common
Stock.
(4) Includes 1000 shares of Common Stock.
(5) Includes 181,300 shares of Common Stock and 129,370 shares of Common Stock
subject to options exercisable within 60 days of April 1, 1998.
(6) Includes 115,020 shares of Common Stock subject to options exercisable
within 60 days of April 1, 1998.
(7) Includes 63,140 shares of Common Stock subject to options exercisable
within 60 days of April 1, 1998.
(8) Includes 2,142 shares of Common Stock and 1,500 shares of Common Stock
subject to options exercisable within 60 days of April 1, 1998.
(9) Includes 2,142 shares of Common Stock and 1,500 shares of Common Stock
subject to options exercisable within 60 days of April 1, 1998.
(10) Includes 3,000 shares of Common Stock and 3,335 shares of Common Stock
subject to options exercisable within 60 days of April 1, 1998.
(11) Includes 300 shares of Common Stock and 32,840 shares of Common Stock
subject to options exercisable within 60 days of April 1, 1998.
(12) Includes 10,350 shares of Common Stock and 300 shares of Common Stock
subject to options exercisable within 60 days of April 1, 1998.
(13) Includes 290,300 shares of Common Stock of which the beneficial owners have
sole voting power and sole dispositive power. The information with respect
to the beneficial owners has been taken from the beneficial owners'
Schedule 13G jointly filed with the Commission on February 5, 1998.
(14) Includes 307,000 shares of Common Stock of which the beneficial owner has
shared voting power and shared dispositive power. The information with
respect to the beneficial owner has been taken from the beneficial owner's
Schedule 13G filed with the Commission on February 9, 1998.
EXECUTIVE COMPENSATION
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing the compensation, including bonus and incentive
arrangements, of the Company's Chief Executive Officer and to consider and
approve or modify the recommendations of the Chief Executive Officer as to the
proposed compensation of each executive officer of the Company whose aggregate
compensation exceeds a threshold amount of $100,000.
The compensation policy of the Company for its executive officers is based
on the following principles:
- the compensation program should support the strategic and financial
objectives of the Company by rewarding its executive officers for
regular and significant improvement in earnings and increase in the
value of the Company's Common Stock;
- the compensation program should reflect the highly competitive nature
of the industry in which the Company operates, and the fact that the
key executives throughout the industry are known to each other; and
- an important part of the compensation program is to provide
performance-based incentives to executive officers by way of equity
ownership so that, with successful performance and the
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consequent increase in the value of the Company, their interests
become more and more aligned with those of the owners of the Company's
Common Stock.
The Company is a leading developer and producer of engineered reinforcement
fabrics used in the fabrication of composite materials. The Company's
technologically advanced stitchbonding equipment and processes prepare fabrics
which are used in the construction of such diverse items as boats, skis, diving
boards, protective helmets and ballistic armor applications, car and truck
parts, and industrial tanks and pipes. As a result of their superior features,
composite reinforcement fabrics are increasingly demanded by a growing number of
industries and applications, including transportation, infrastructure,
recreation, petro-chemical and construction. There are competitors which the
Company believes have significant shares of these markets, and are known to the
members of the Committee, whose experience in the industry is extensive.
The Chief Executive Officer's salary, bonus and, when granted, options to
purchase stock of the Company, are determined annually by the Committee based on
the Committee's subjective evaluation of a variety of factors, each of which is
weighted, again subjectively, by each member of the Committee according to his
own experience and background. Among the criteria used by each member of the
Committee in making his evaluation of the appropriate compensation of the Chief
Executive Officer are:
- the compensation of the chief executives of competitive entities;
- his influence on the performance of the Company through his
leadership, management, financial and/or sales skills;
- his ability to work with, influence and effectuate the policies of the
Board of Directors;
- his skill in long range planning for the Company's future growth and
activities; and
- the manner in which he positions the Company to succeed in what has
been in recent years a very competitive market.
These criteria are used by the members of the Committee in determining each
element of compensation. There is no specific relationship between the
performance of the Company and the compensation of the executive officers,
although, with respect to bonuses and stock options, performance of the Company
is given more weight by the Committee than the other criteria. The Committee
believes that the total compensation program for executives of the Company is on
a level with the compensation programs provided by other companies facing
similar challenges.
The salary shown in the Summary Compensation Table represents the fixed
portion of compensation for each named executive officer for the year. Changes
in salary depend upon overall Company performance as well as levels of base
salary paid by companies of similar size in the Company's industry.
In 1997, the 1997 base salary for the Chief Executive Officer was increased
by 18%. In addition, increases for the other named executive officers ranged
from 6%-15%. In 1998, the 1998 salaries were increased by 7%. These changes
were felt to be necessary to bring the base salaries of the key executives more
in line with competitive salaries for similar positions.
In order to provide what the Committee believes to be appropriate and
continuing long-term incentives to these named executive officers, and in order
to align more fully the interests of the stockholders and the named executive
officers, the Company granted new options for 11,250 shares in the aggregate to
the named executive officers in 1997. As these options were granted with
exercise prices equal to the market value of the Common Stock on the grant date,
they provide incentive for the creation of stockholder value over the long term
since their full benefit cannot be realized unless there occurs over time an
appreciation in the price of the Common Stock. The Committee considers the
number of shares to be an appropriate incentive for the named executive officers
to continue to focus on building stockholder value.
The Committee has reviewed the potential consequences for the Company of
Section 162(m) of the Internal Revenue Code, which imposes a limit on tax
deductions for annual compensation in excess of one million dollars paid to any
of the five most highly compensated executive officers of the employing company.
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Based on such review, the Committee believes that the limitation had no effect
on the Company in 1997 nor will it have any effect on the Company in 1998.
Respectfully submitted,
David E. Sharpe, Chairman
Donald R. Hughes
Max G. Pitcher
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of David E.
Sharpe, Donald R. Hughes and Max G. Pitcher, none of whom are or have been
officers or employees of the Company or any of its subsidiaries. Mr. Sharpe is
the Vice President of Sales and Marketing of Vetrotex CertainTeed
Corp.("Vetrotex"), a stockholder of the Company and major supplier of raw
materials thereto. In March 1992, Vetrotex loaned the Company $300,000, on an
interest-free basis, to finance the purchase and modification of one
stitchbonding machine. Vetrotex obtained a purchase money security interest in
the machine. The Company repaid the loan in full during fiscal year 1997.
Prior to the Company's initial public offering in February 1997, Martin S.
Grimnes, Chairman and Chief Executive Officer, served on the Compensation
Committee of the Board of Directors. Mr. Grimnes no longer serves on the
Compensation Committee.
None of the executive officers of the Company have served on the board of
directors or compensation committee of any other entity that has had any of such
entity's executive officers serve on the Company's Board of Directors or
Compensation Committee.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
In 1996, as part of the Company's acquisition of Advanced Textiles, Inc.
("ATI"), ATI and Peter L. DeWalt entered into a two-year employment agreement
(the "Agreement") pursuant to which Mr. DeWalt continues to serve, as of October
30, 1996, as President of ATI. Mr. DeWalt receives a base salary of $125,000. On
October 30, 1997 ATI paid Mr. DeWalt a performance bonus of $40,000 pursuant to
the Agreement, based on the Compensation Committee's determination that, in its
discretion, Mr. DeWalt performed satisfactorily in connection with the
integration of the operations of ATI with those of the Company. Mr. DeWalt will
also be eligible for a bonus of up to $40,000 on October 30, 1998, on the same
terms. Upon the successful completion of the Agreement's two-year term, the
Company will issue to Mr. DeWalt an additional 5,350 shares of Common Stock. Mr.
DeWalt also received, pursuant to the Agreement, an option to purchase 9,900
shares of Common Stock at an exercise price of $9.50 per share, which option
vests on October 30, 1998.
There are no employment contracts or change-in-control arrangements in
place for the other executive officers of the Company.
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SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation paid
or accrued by the Company to or on behalf of the Company's Chief Executive
Officer and each of the two other most highly compensated executive officers of
the Company (the "named executive officers," as defined in Item 402 of
Regulation S-K) during the fiscal years ended December 31, 1996 and December 31,
1997 (the Company has completed only two fiscal years following its initial
public offering):
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
----------------
ANNUAL COMPENSATION AWARDS
------------------------------------------------ ----------
FISCAL SECURITIES
YEAR OTHER ANNUAL UNDERLYING ALL OTHER
ENDED SALARY(1) BONUS COMPENSATION(2) OPTIONS/SARS(3) COMPENSATION(4)
NAME AND PRINCIPAL POSITION DEC. 31 ($) ($) ($) (#) ($)
- --------------------------- ------- --------- ----- --------------- --------------- ---------------
Martin S. Grimnes 1997 134,993 170 -- 5,000 7,359
Chairman and Chief 1996 109,824 7,936 -- -- 4,509
Executive Officer
William M. Dubay 1997 123,879 1,453 131,025 3,750 11,980
President and Chief 1996 122,599 4,137 -- -- 4,570
Operating Officer
Robert R. Fuller 1997 112,637 170 270,855 2,500 8,222
Vice President, Sales 1996 98,736 4,919 -- -- 9,212
- ---------------
(1) Amounts shown indicate cash compensation earned and received by executive
officers. Amounts shown also include sums for accrued but unused vacation
time.
(2) Amounts shown reflect the difference between the aggregate exercise price of
options exercised during the period, and the aggregate fair market value of
the shares of Common Stock issued upon such exercises, as of the date of
issuance.
(3) Amounts shown reflect grants of options to purchase Common Stock pursuant to
the Company's stock option plans.
(4) Amounts shown reflect payments for automobile expenses, health and life
insurance, and memberships (where applicable).
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OPTION/SAR GRANTS TABLE
Set forth below is an Option/SAR Grants table concerning individual grants
of stock options and SARs made during the last completed fiscal year to each of
the named executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE AT
NUMBER OF PERCENT OF TOTAL ASSUMED ANNUAL
SECURITIES OPTIONS/SARS RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION
OPTIONS/SARS EMPLOYEES IN EXERCISE OR FOR OPTION TERM (1)
GRANTED FISCAL YEAR (2) BASE PRICE EXPIRATION ---------------------
NAME (#) (%) ($/SH) DATE(3) 5%($) 10%($)
---- ------------ ---------------- ----------- ---------- ----- ------
Martin S. Grimnes.......... 5,000 .10 9.50 2/10/07 29,850 75,700
Chairman and Chief
Executive Officer
William M. Dubay........... 3,750 .08 9.50 2/10/07 22,388 56,775
President and Chief
Operating Officer
Robert R. Fuller........... 2,500 .05 9.50 2/10/07 14,925 37,850
Vice President, Sales
- ---------------
(1) The dollar gains under these columns result from calculations assuming
hypothetical growth rates as set by the Commission and are not intended to
forecast price appreciation of the Common Stock.
(2) In fiscal 1997, options to purchase a total of 48,750 shares of Common Stock
were granted to employees and directors of the Company.
(3) These options vest in five (5) equal annual installments beginning one year
from the date of grant. These options are subject to earlier termination
upon certain events related to termination of employment.
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AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table
Set forth below is a table concerning each exercise of stock options (or tandem
SAR's) and freestanding SARs during the last completed fiscal year by each of
the named executive officers and the fiscal year-end value of unexercised
options and SARs.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS
ACQUIRED VALUE AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- -------- --------------------- ---------------------
Martin S. Grimnes,................... -- -- 129,370/10,930 1,822,631/111,318
Chairman and Chief Executive
Officer
William M. Dubay,.................... 7,500 131,025 115,020/ 7,950 1,627,361/ 80,245
President and Chief Operating
Officer
Robert R. Fuller,.................... 15,504 270,855 63,140/ 5,960 863,690/ 62,146
Vice President, Sales
- ---------------
(1) In-the-money options are those options for which the fair market value of
the underlying Common Stock is greater than the exercise price of the
option. On December 31, 1997, the fair market value of the Company's Common
Stock underlying the options (as determined by the closing price reported on
the Nasdaq National Market) was $14.625. The dollar value of the unexercised
options is calculated by determining the difference between the fair market
value of the Common Stock underlying the options and the exercise price of
the options at fiscal year end.
12
15
PERFORMANCE GRAPH
Set forth below is a line-graph presentation comparing the cumulative
stockholder return on the Company's Common Stock, on an indexed basis, against
cumulative total returns of the Nasdaq Stock Market (U.S. companies) and a "peer
group" selected by management of the Company. The peer group selected for
inclusion in this proxy statement includes Zoltek Companies, Inc. (Nasdaq symbol
"ZOLT"), XXYS Technologies, Inc. (Nasdaq symbol "XSYS"), Hexcel Corporation (New
York Stock Exchange symbol "HXL"), and Owens Corning (New York Stock Exchange
symbol "OWC") (collectively, the "Peer Group Companies"). The Peer Group
Companies were selected because they are frequently utilized as a basis for
comparison with the Company. The returns for each company were weighted
according to each issuer's market capitalization. The Performance Graph shows
total return on an investment of $100 for the period beginning February 5, 1997
(the date of the Company's initial public offering) and ending December 31, 1997
(the Company's fiscal year end). The graph assumes reinvestment of dividends, if
any. The graph is not necessarily indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG BRUNSWICK TECHNOLOGIES, INC.
NASDAQ MARKET INDEX AND PEER GROUP INDEX
[PERFORMANCE GRAPH OMITTED]
LEGEND
CUMULATIVE TOTAL RETURNS FOR: PERIOD ENDED:
----------------------------- --------------------------------------------------------
02/05/97 03/31/97 06/30/97 09/30/97 12/31/97
Brunswick Technologies, Inc..................... 100.00 95.00 93.75 160.00 146.25
Peer Group Index................................ 100.00 87.29 96.50 109.72 86.53
Nasdaq Market Index............................. 100.00 88.47 104.67 122.03 114.34
13
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
David E. Sharpe, a member of the Board of Directors and a member of the
Compensation Committee, is the Vice President of Sales and Marketing of Vetrotex
CertainTeed Corp. ("Vetrotex"), a stockholder of the Company and a major
supplier of raw materials thereto. In March 1992 Vetrotex loaned the Company
$300,000, on an interest-free basis, to finance the purchase and modification of
one stitchbonding machine. Vetrotex obtained a purchase money security interest
in the machine. The Company repaid the loan in full during fiscal year 1997.
In October 1996 the Company acquired all of the capital stock of Advanced
Textiles, Inc. ("ATI") from Burlington Industries, Inc. and Peter L. DeWalt. Mr.
DeWalt, who was the President of ATI and held capital stock of ATI equal to less
than 1% of the outstanding capital stock of ATI, received 5,350 shares of Common
Stock of the Company in connection with the sale of his interest in ATI to the
Company. Mr. DeWalt continues in his position as President of ATI pursuant to an
employment agreement, the terms of which are described elsewhere in this Proxy
Statement.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
(ITEM 2 ON PROXY CARD)
The Board of Directors has selected Coopers & Lybrand L.L.P., independent
accountants, to audit the books, records and accounts of the Company and its
subsidiaries for the fiscal year ending December 31, 1998. In accordance with a
resolution of the Board of Directors, this selection is being presented to the
stockholders for ratification at the meeting.
Coopers & Lybrand L.L.P. has no direct or indirect material financial
interest in the Company or its subsidiaries. Representatives of Coopers &
Lybrand L.L.P. are expected to be present at the meeting and will be given the
opportunity to make a statement on behalf of Coopers & Lybrand L.L.P. if they so
desire. The representatives also will be available to respond to questions
raised by those in attendance at the meeting.
Proxies solicited by management will be voted for ratification of the
selection of Coopers & Lybrand L.L.P. unless stockholders specify otherwise. As
discussed at the beginning of this proxy statement, the affirmative vote of a
majority of the outstanding shares of Common Stock is required to ratify the
selection of Coopers & Lybrand L.L.P. Ratification of this appointment is not,
however, required. If the selection is not ratified by the stockholders, the
Board of Directors will not change the appointment for fiscal year 1998, but
will consider the stockholder vote in appointing auditors for fiscal year 1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE 'FOR' RATIFICATION OF
COOPERS & LYBRAND L.L.P.
OTHER MATTERS
As of the date of this proxy statement, the management of the Company knows
of no matter not specifically referred to above as to which any action is
expected to be taken at the Annual Meeting of Stockholders. It is intended,
however, that the persons named as proxies will vote the proxies, insofar as
they are not otherwise instructed, regarding such other matters and the
transaction of such other business as may properly be brought before the
meeting, as seems to them to be in the best interest of the Company and its
stockholders.
STOCKHOLDER PROPOSALS
Any stockholder desiring to present a proposal for consideration at the
Company's next annual meeting of stockholders, which is currently scheduled to
be held on May 13, 1999, must submit the proposal to the Company so that it is
received at the principal executive offices of the Company, 43 Bibber Parkway,
Brunswick, Maine, 04011, on or before December 16, 1998. Any stockholder
desiring to submit a proposal
14
17
should consult applicable rules and regulations of the Securities and Exchange
Commission and the Company's Bylaws.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of the Company's
outstanding shares of Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC") and NASDAQ.
Officers, directors and greater than ten percent stockholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Each of Messrs. Pitcher and Hughes filed an untimely Form 5 to report
(1) the receipt of 642 shares of Common Stock in lieu of cash compensation for
the attendance of Board and committee meetings in fiscal year 1997 and (2) the
receipt in October 1997 of an additional 500 shares of Common Stock in
connection with their elections to the Board.
------------------------
THE COMPANY'S ANNUAL REPORT TO SHAREHOLDERS FOR FISCAL YEAR 1997 IS BEING
MAILED SIMULTANEOUSLY HEREWITH AND CONTAINS THE FINANCIAL STATEMENTS OF THE
COMPANY.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR FISCAL YEAR 1997 MAY BE OBTAINED WITHOUT
CHARGE UPON WRITTEN REQUEST TO MARTIN S. GRIMNES, CHIEF EXECUTIVE OFFICER,
BRUNSWICK TECHNOLOGIES, INC., 43 BIBBER PARKWAY, BRUNSWICK, MAINE, 04011.
------------------------
DATED: APRIL 16, 1998
15
18
- -----
X PLEASE MARK VOTES
- ----- AS IN THIS EXAMPLE
With- For All
-------------------------------- 1. Election of Directors. For hold Except
BRUNSWICK [ ] [ ] [ ]
TECHNOLOGIES, INC. MARTIN S. GRIMNES
-------------------------------- WILLIAM M. DUBAY
DAVID M. COIT
DONALD R. HUGHES
MAX G. PITCHER
DAVID E. SHARPE
PETER N. WALMSLEY
NOTE: If you do not wish your shares voted "FOR" a particular
nominee, mark the "FOR ALL EXCEPT" box and strike a line
through that nominee's name. Your shares shall be voted for
the remaining nominees.
For Against Abstain
RECORD DATE SHARES: _________ 2. Ratification of the appointment [ ] [ ] [ ]
of Coopers & Lybrand LLP
[Name and Address as independent auditors of the
of Shareholder] Company.
3. In his discretion, the Proxy is authorized to vote upon any
other business that may properly come before the meeting or
at any adjournment(s) thereof.
------------------
Date Mark box at right if an address change or comment has been noted
Please be sure to sign and date this Proxy on the reverse side of this card. [ ]
- ----------------------------------------------------------------
Stockholder sign here Co-owner sign here
- ----------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH CARD DETACH CARD
BRUNSWICK
TECHNOLOGIES, INC.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, May 13,
1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Brunswick Technologies, Inc.
[Name and Address of Shareholder]
19
BRUNSWICK TECHNOLOGIES, INC.
43 BIBBER PARKWAY
BRUNSWICK, MAINE 04011
ANNUAL MEETING OF STOCKHOLDERS - MAY 13, 1998
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Martin S. Grimnes
as Proxy, with full power of substitution for and on behalf of the undersigned
at the 1998 Annual Meeting of Stockholders of BRUNSWICK TECHNOLOGIES, INC. to be
held at the Marriott at Sable Oaks, 200 Sable Oaks Drive, South Portland, Maine
04106, on Wednesday, May 13, 1998, at 10:00 a.m., and at any adjournment or
adjournments thereof. The undersigned hereby directs the said Proxy to vote in
accordance with his judgment on any matters which may properly come before the
Annual Meeting, all as indicated in the Notice of Annual Meeting, receipt of
which is hereby acknowledged, and to act on the following matters set forth in
such notice as specified by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS 1 AND 2.
-----------------------------------------------------------------------
- ---- PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY USING THE ----
ENCLOSED ENVELOPE.
------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the
Company. Joint owners should each sign personally. Trustees, custodians, and
other fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If the shareholder is a
corporation, the signature should be that of an
authorized officer who should indicate his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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