AMISTAR CORPORATION
237 Via Vera Cruz
San Marcos, California 92069
PROXY STATEMENT
MARCH 23, 2001
GENERAL
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Amistar Corporation, a California corporation (the
"Company"), for use at the Annual Meeting of Shareholders of the Company to be
held Wednesday, May 2, 2001 at 10:00 A.M., local time, at the Company
headquarters in San Marcos, California, and at any adjournments or adjournments
thereof.
At the Annual Meeting, the shareholders of the Company (the "Shareholders") will
be asked to elect six Directors. All proxies which are properly completed,
signed and returned to the Company prior to the Annual Meeting will be voted.
Any proxy given by a Shareholder may be revoked at any time before it is
exercised by filing with the Secretary of the Company an instrument revoking it,
by a duly executed proxy bearing a later date, or by the Shareholder attending
the Annual Meeting and expressing a desire to vote his or her shares in person.
It is anticipated that this Proxy Statement and the accompanying form of proxy
will be mailed to the Shareholders on or about March 30, 2001.
The Board of Directors has fixed the close of business on March 16, 2001 as the
record date for the determination of Shareholders entitled to vote at the Annual
Meeting and any adjournment thereof. At the close of business on the record date
there were outstanding 3,139,000 shares of common stock of the Company (the
"Common Stock"). The shares of Common Stock vote as a single class. Holders of
shares of Common Stock on the record date are entitled to one vote for each
share held (unless there is cumulative voting, as described below). The presence
at the Annual Meeting, either in person or by proxy, of the holders of a
majority of the shares of Common Stock issued, outstanding and entitled to vote
is necessary to constitute a quorum for the transaction of business. Abstentions
and broker non-votes are counted for purposes of determining the presence of a
quorum.
In the event that, prior to the election of Directors, a Shareholder has given
notice at the Annual Meeting of such Shareholder's intention to cumulate votes
(i.e. to cast for any one or more candidates a number of votes for each share
equal to the number of Directors to be elected) and the names of such candidate
or candidates have been placed in nomination, then in electing Directors all
Shareholders may cumulate their votes for candidates in nomination. Otherwise,
no Shareholder shall be entitled to cumulate votes. The Company has not been
advised that any Shareholder intends to give notice of intention to nominate a
Director or to cumulate votes for Directors. In the event the Directors are to
be elected by cumulative voting, the persons named in the accompanying form of
proxy will have the discretion to cumulate votes and to distribute such votes
among all nominees (or if authority to vote for any nominee or nominees has been
withheld, among the remaining nominees, if any) in whatever manner they deem
appropriate. Whether or not there is cumulative voting, the six candidates
receiving the highest number of affirmative votes will be elected. Votes against
a candidate and votes withheld have no legal effect.
1
If a choice is specified in the proxy as to the manner in which it is to be
voted, the persons acting under the proxy will vote the shares of Common Stock
represented thereby in accordance with such choice. If no choice is specified,
the shares of Common Stock will be voted "FOR" the Directors nominated. In
matters other than the election of Directors, under California law abstentions
and broker non-votes are not counted for purposes of determining whether a
proposal has been approved. For purposes of SEC Rule 16b-3, however, abstentions
are treated as votes against the proposal while broker non-votes are not
counted.
In the event that sufficient votes in favor of the proposal are not received by
the date of the Annual Meeting, the persons named as proxies may propose one or
more adjournments of the Annual Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of the holders
of a majority of the shares of Common Stock present in person or by proxy at the
Annual Meeting. The persons named the proxies will vote in favor of such
adjournment or adjournments.
The cost of preparing, assembling, printing and mailing the Proxy Statement, the
Notice and the enclosed proxy form and the cost of soliciting proxies relating
to the Annual Meeting will be borne by the Company. The Company will request
banks, brokers, dealers and voting trustees or other nominees to solicit their
customers who are beneficial owners of shares listed of record in names of
nominees, and will reimburse them for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of proxies by mail may be
supplemented by telephone, telegram and personal solicitation by officers and
other regular employees of the Company, but no additional compensation will be
paid to such individuals on account of such activities.
ELECTION OF DIRECTORS
Nominees
- --------
The Bylaws of the Company presently provide that the authorized number of
Directors shall be no less than five and no more than nine and that the exact
number of Directors shall be fixed from time to time by the Board of Directors.
At present, the Board has fixed the number of Directors at six.
At the Annual Meeting, six Directors will be elected to serve until the next
Annual Meeting and until their successors are elected and qualified. The Board
of Directors intends to nominate the six persons named below (each of whom
currently serves as a Director until the Annual Meeting and until a successor
has been elected and qualified) for election as Directors. Unless otherwise
instructed the proxy holders intend to vote the shares of Common Stock
represented by the proxies to cause the election of these nominees. All of these
nominees have indicated that they are able and willing to serve as Directors.
2
Information Concerning Nominees
- -------------------------------
The nominees are listed below, together with their ages, positions and offices
with the Company.
Name Age Title
------------------------ ------- --------------------------------------
Stuart C. Baker 69 Chairman of the Board, President and
Director
William W. Holl 70 Chief Financial Officer, Treasurer,
Secretary and Director
Sanford B. Ehrlich Ph.D. 49 Director (*)
Gordon S. Marshall 81 Director (*)
Carl C. Roecks 67 Director
Howard C. White 60 Director (*)
(*) Member of the audit and compensation committees
Mr. Baker, a founder of the Company, has served the Company as a Director and
President since its inception in 1971 and as its Chairman of the Board since
1993.
Mr. Holl, a founder of the Company, has served the Company as a Director and as
Treasurer and Secretary since its inception in 1971 and as Chief Financial
Officer since 1978.
Dr. Ehrlich was appointed a Director in 2000. Dr. Ehrlich is Associate Professor
of Management at the College of Business Administration, San Diego State
University, and serves as the Executive Director of the school's Entrepreneurial
Management Center.
Mr. Marshall has served the Company as the Chairman of the Board from 1974 to
1993. Mr. Marshall is the founder and former Chairman of the Board of Marshall
Industries, an electronics distribution company acquired by Avnet Electronics
Marketing in 1999.
Mr. Roecks, a founder and Director of the Company has served the Company in
various engineering and management capacities since its inception in 1971. Since
1989 Mr. Roecks has been retired, and serves the Company on a part-time basis.
Mr. White was appointed a Director in 2000. Mr. White was formerly a Managing
Partner with Anderson WorldWide. Mr. White is currently President of White &
White LLC, a financial and business consulting services company.
3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock owned on December 31, 2000 by each person who is known by the
Company to own beneficially more than 5% of the Company's Common Stock, by each
of the Company's directors, executive officers, and by all directors and
executive officers as a group.
Directors, Officers Shares
And 5% Shareholders Beneficially Owned (1) Percent
------------------- ---------------------- -------
Gordon S. Marshall 634,800 20.2%
9320 Telstar Avenue
El Monte, CA 91731
Stuart C. Baker 409,800 (2) 13.1%
237 Via Vera Cruz
San Marcos, CA 92069
Carl C. Roecks 202,700 (3) 6.5%
237 Via Vera Cruz
San Marcos, CA 92069
Dimensional Fund Advisor 201,300 (4) 6.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
William W. Holl 150,000 (5) 4.8%
237 Via Vera Cruz
San Marcos, CA 92069
Daniel C. Finn 10,000 *
237 Via Vera Cruz
San Marcos, CA 92069
Gregory D. Leiser 1,300 *
237 Via Vera Cruz
San Marcos, CA 92069
All directors and officers as a 1,408,600 44.6%
group (6 persons)
* Not Meaningful
1)
4
(1) Except as indicated in other notes to this table, each shareholder listed
has sole voting and dispositive power with respect to the shares
beneficially owned, subject to applicable community property laws.
2) Represents shares held by the Baker Family Trust dated January 16, 1985 for
which Mr. Baker and his wife are co-trustees.
3) Represents shares held by the Roecks Family Trust dated June 7, 1984 for
which Mr. Roecks and his wife are co-trustees.
4) Information as of December 31, 2000 reported on Schedule 13G dated February
2, 2001 under the Securities Exchange Act of 1934.
5) Represents shares held by the Holl Trust dated September 24, 1998 for which
Mr. Holl and his wife are co-trustees.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Cash Compensation
- -----------------
The following table sets forth information concerning cash compensation paid or
accrued for services rendered during the year ended December 31, 2000 to each of
the executive officers of the Company.
I. SUMMARY COMPENSATION TABLE
THE PURPOSE OF THIS TABLE IS TO SET FORTH IN SPECIFIC COLUMNAR FORM THE TOTAL
COMPENSATION OF THE CEO/PRESIDENT AND THE ONLY EXECUTIVES WHO EARN MORE THAN
$100,000 PER YEAR IN SALARY AND BONUSES.
LONG-TERM COMPENSATION
- ------------------------------------------------------------------------- -----------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- --------------------------- --------------------------------------------- -------------------- -----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
(2) Other Restricted
Name and (1) Annual Stock Options/ LTIP All Other
Principal Position Year Salary ($) Bonus ($) Compensation Award(s) SARs Payouts ($) Compensation
- --------------------------- --------- ---------- --------- ------------ ---------- -------- ----------- ------------
Stuart C. Baker 2000 150,000 0 7,200 0 0 0 0
President 1999 150,000 0 7,200 0 0 0 0
1998 150,000 10,725 7,200 0 0 0 0
William W. Holl 2000 143,000 0 11,490 0 0 0 0
Chief Financial Officer 1999 143,000 0 11,490 0 0 0 0
1998 143,000 10,225 11,490 0 0 0 0
Daniel C. Finn 2000 110,000 0 10,500 0 0 0 0
VP Machine Operations 1999 110,000 0 9,300 0 0 0 0
1998 100,000 5,720 3,000 0 0 0 0
Tod N. Kilgore 2000 125,000 0 9,150 0 0 0 0
VP Marketing /Sales
Harry A. Munn 2000 136,000 0 11,280 0 0 0 0
V.P. Marketing / Sales 1999 136,000 0 11,280 0 0 0 0
1998 136,000 9,724 11,280 0 0 0 0
Michael G. Saloka 2000 130,000 0 11,100 0 0 0 0
VP & General Manager
(1) Bonuses are shown in the year paid and are based on the prior year's
performance.
(2) Includes a car allowance for each named individual, plus the Company's
matching contributions to the Company's 401-K Plan.
5
Report of the Compensation Committee
------------------------------------
The Committee, which determines and administers the compensation of the
Company's executive officers endeavors to ensure that the compensation
program for executive officers is effective in attracting and retaining the
key executives responsible for the success of the corporation.
The Committee takes into account various indicators of corporate and
individual performance in determining the level of executive compensation,
as net income, earnings per share and return on investment. The Committee
also must establish base salaries of the President and other executive
officers at levels considered appropriate in light of the duties and scope
of responsibilities of each officer's position.
The Committee may also grant stock options to executive officers and key
employees. No options have been granted to Mr. Baker or to Mr. Holl.
Compensation Committee
Gordon. S. Marshall, Chairman
Sanford. B. Ehrlich
Howard. C. White
Report of the Audit Committee
-----------------------------
The following is the report of the Audit Committee with respect to the
Company's audited financial statements for the year ended December 31,
2000.
The Audit Committee has reviewed and discussed the Company's audited
financial statements with management. The Audit Committee has discussed
with KPMG LLP, the Company's independent accountants, the matters required
to be discussed by Statement of Auditing Standards No. 61, COMMUNICATION
WITH AUDIT COMMITTEES which includes, among other items, matters related to
the conduct of the audit of the Company's financial statements. The Audit
Committee has also received written disclosures and the letter from KPMG
LLP required by Independence Standards Board Standard No. 1, which relates
to the accountant's independence from the Company, and has discussed with
KPMG LLP their independence from the Company. Based upon our review and
discussions concerning the Company's audited financial statements, we
recommend that the audited financial statements for the year ended December
31, 2000 be included in the Company's annual report.
Audit Committee
Howard C. White, Chairman
Sanford. B. Ehrlich
Gordon. S. Marshall
6
II. OPTION/ SAR GRANTS TABLE
THIS TABLE SETS FORTH THE HYPOTHETICAL POTENTIAL VALUE OF OPTIONS GRANTED DURING
THE LAST YEAR TO THOSE INDIVIDUALS NAMED IN TABLE I ASSUMING AN ANNUAL PRICE
APPRECIATION OF 5% AND 10%.
Potential Realizable
Value at Assumed Alternative
Annual Rates of Stock to (f) & (g)
Price Appreciation Grant Date
Individual for Option Term Value
Grants
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
% of Total
Options/ Options/SARs Exercise Grant Date
SARs Granted to or Base Expiration Present
Name Granted Emp. in FY Price Date 5% ($) 10% ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Stuart C. Baker 0 0 $0 $0 $0 $0
President
- ------------------------------------------------------------------------------------------------------------------------------------
William W. Holl 0 0 $0 $0 $0 $0
Chief Financial Officer
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel C. Finn 0 0 $0 $0 $0 $0
VP Machine Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Tod N. Kilgore 0 0 $0 $0 $0 $0
VP Marketing & Sales
- ------------------------------------------------------------------------------------------------------------------------------------
Harry A. Munn 0 0 $0 $0 $0 $0
VP Marketing & Sales
- ------------------------------------------------------------------------------------------------------------------------------------
Michael G. Saloka 0 0 $0 $0 $0 $0
VP & General Manager
- ------------------------------------------------------------------------------------------------------------------------------------
7
III. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
THIS TABLE SETS FORTH INFORMATION ON THOSE INDIVIDUALS NAMES IN TABLE I AS TO
THE OPTIONS EXERCISED DURING THE YEAR AND THE STATUS OF OUTSTANDING OPTIONS AT
YEAR-END.
Aggregated Option/SAR Exercises in Last Fiscal Year, and FY-End Option/SAR Value
- ------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
At FY-End at FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
(#) ($)
- ------------------------------------------------------------------------------------------------------------
Stuart C. Baker 0 0 0 0
President
- ------------------------------------------------------------------------------------------------------------
William W. Holl 0 0 0 0
Chief Financial Officer
- ------------------------------------------------------------------------------------------------------------
Daniel C. Finn 0 0 7,500/22,500 $8,125/$24,375
VP Machine Operations
- ------------------------------------------------------------------------------------------------------------
Tod N. Kilgore 0 0 7,500/22,500 $5,938/$17,813
VP Marketing & Sales
- ------------------------------------------------------------------------------------------------------------
Harry A. Munn 0 0 12,500/17,500 $4,688/$14,063
VP Marketing & Sales
- ------------------------------------------------------------------------------------------------------------
Michael G. Saloka 0 0 7,500/22,500 $8,748/$26,243
VP & General Manager
- ------------------------------------------------------------------------------------------------------------
8
IV. CORPORATE COMPARISON
THE PURPOSE OF THIS TABLE IS TO COMPARE THE PERFORMANCE OF THE COMPANY'S STOCK
AGAINST THE NASDAQ STOCK MARKET TOTAL RETURN INDEX (TRI). TOTAL RETURN INCLUDES
STOCK APPRECIATION/DEPRECIATION PLUS DIVIDENDS. THE CHART ASSUMES $100 WAS
INVESTED 5 YEARS AGO. THE TRI IS THE AVERAGE TOTAL RETURN OF ALL U.S. COMPANIES
TRADED OVER THE NASDAQ STOCK MARKET.
[table below represented in graph form here]
Nasdaq Nasdaq
Amistar All Sectors Non-Financial Sectors
------- ----------- ---------------------
1995 $100.00 $100.00 $100.00
1996 $34.45 $123.02 $121.43
1997 $35.14 $150.68 $142.15
1998 $21.62 $212.49 $208.66
1999 $18.27 $394.88 $408.57
2000 $28.38 $237.60 $238.39
9
SAVINGS AND RETIREMENT PLAN
- ---------------------------
The Company maintains the Amistar Corporation Saving and Retirement Plan (the
"Retirement Plan") which is a tax-qualified plan under the Internal Revenue Code
(the "Code"). All employees (including officers of the Company) are eligible to
participate in the Retirement Plan following the completion of ninety days of
service. The Retirement Plan has been amended, effective as of January 1, 1983,
to allow participants to elect to treat their contributions to the Retirement
Plan as being either to a normal thrift plan or to a plan satisfying the
requirements of Section 401(k) of the Code. Among other differences,
contributions by participants to the Retirement Plan which the participant
elects to treat as being to a normal thrift plan are not deductible for federal
income tax purposes, while contributions which the participant elects to treat
as being to a plan satisfying the requirement of Section 401(k) of the code are
deductible. Participants under the Retirement Plan may make contributions under
its normal thrift plan provisions of up to 6% of their gross compensation from
the Company. Participants who elect to treat their contributions under the
Section 401(k) provisions of the Retirement Plan may make contributions of
similar amounts except that the maximum amount of contributions by certain
highly compensated employees may be limited to a lower percentage of their
compensation, depending upon the amount of contributions by other employees
under the Section 401(k) provisions of the Retirement Plan. The Company is
obligated to make a matching contribution to the Retirement Plan equal to 50% of
the first 6% of compensation contributed by each participant. The Company will
be entitled to a deduction for federal income tax purposes equal to the amount
of the Company's matching contributions. Participants may also make additional
non-deductible, non-matched contributions of up to 4% of their compensation.
Participants are always fully vested in all of their contributions to the
Retirement Plan (and in the earnings on such contributions), and participants
attain a vested right to the Company's matching contributions made on their
behalf to the Retirement Plan (and the earnings thereon) at the rate of 20% for
each full year of service after one year until such participants are fully
vested after six full years of service.
STOCK OPTION PLAN
- -----------------
In 1994, the Company's Board of Directors and common shareholders approved the
1994 Employee Stock Option Plan. The Plan allows for grants of options to
purchase up to 310,000 shares of authorized but un-issued common stock. Stock
options are granted with an exercise price equal to the stock's fair market
value, generally vest over four years from the date of grant, and expire five
years after the date of grant.
The following table reflects the exercise prices of options outstanding, of
which 60,000 are currently exercisable:
Shares Exercise Price
---------- --------------
11,000 $3.50
10,000 $3.00
6,000 $2.6875
8,000 $2.3125
72,000 $2.125
20,000 $1.563
86,000 $1.25
----------
213,000
==========
10
BONUS PLAN
- ----------
On August 7, 1997 the Compensation Committee of the Board of Directors adopted a
bonus plan for executives of the Company effective with years beginning January
1, 1997. The plan provides that bonuses will be paid to certain executives of
the Company based on a formula of after tax profits which exceed an eight
percent return on equity, weighted 70% on the current year and 30% on the prior
year. The formula is: bonus is a percentage of salary which equal 3, 4, or 5
times the percentage of after tax profits which exceeds an eight percent return
on equity, weighted 70% on the current years performance and 30% on the prior
years performance. All executive officers are in the plan. No bonuses were
accrued or paid for each of the years ended December 31, 2000 and 1999.
REMUNERATION OF DIRECTORS
- -------------------------
Each non-employee director of the Company receives compensation of $2,500 per
quarter and reimbursement of expenses incurred in serving as a director.
SELECTION OF INDEPENDENT ACCOUNTANTS
- ------------------------------------
KPMG LLP served as independent auditors of the Company for fiscal 2000 and has
been selected by the Board of Directors to serve in that capacity again during
fiscal 2001. Fees for audit services, including quarterly 10Q reviews, covering
the year ended December 31, 2000 totaled $68,000. All other fees for services to
KPMG LLP for the year 2000 represent income tax preparation services totaling
$29,000.
The Audit Committee has considered whether the non-audit services performed are
compatible with maintaining auditors independence.
SHAREHOLDER PROPOSALS
- ---------------------
Shareholder proposals complying with the applicable rules under the 1934 Act
intended to be presented at the Annual Meeting of Shareholders of the Company to
be held on the first Wednesday in May 2002 must be received by the Company by
February 1, 2002 to be eligible for inclusion in the Company's proxy materials
for such meeting. Such proposals should be directed to the attention of the
Secretary, Amistar Corporation, 237 Via Vera Cruz, San Marcos, CA 92069.
OTHER BUSINESS
- --------------
The Company is not aware of any other business to be presented at the Annual
Meeting. All shares of Common Stock represented by proxies will be voted in
favor of the proposals of the Company unless otherwise indicated on the form of
proxy. If any other matters come before the meeting, proxy holders will vote
thereon according to their best judgment.
By Order of the Board of Directors
/s/ William W. Holl
-------------------------------
William W. Holl
Secretary
San Marcos, California
March 23, 2001
11
APPENDIX 1
AUDIT COMMITTEE CHARTER
- -----------------------
1. MEMBERS. The Board of Directors shall appoint an Audit Committee of at least
three members, consisting entirely of "independent" directors of the Board, and
shall designate one member as chairperson. For purposes hereof, "independent"
shall mean a director who meets the National Association of Securities Dealers,
Inc. ("NASD") definition of "independence."
Each member of Amistar Corporation's audit committee must be financially
literate and one member of the audit committee shall have accounting or related
financial management expertise, both as provided in the NASD rules.
2. PURPOSES, DUTIES, AND RESPONSIBILITIES. The Audit Committee shall represent
the Board of Directors in discharging its responsibility relating to the
accounting, reporting, and financial practices of Amistar Corporation and its
subsidiaries, and shall have general responsibility for surveillance of internal
controls and accounting and audit activities of Amistar Corporation and its
subsidiaries. Specifically, the Audit Committee shall:
2.1 Recommend to the Board of Directors, and evaluate, the firm of
independent certified public accounts to be appointed as auditors of
Amistar Corporation, which firm shall be accountable ultimately to the
Board of Directors through the Audit Committee.
2.2 Review with the independent auditors their audit procedures,
including the scope, fees and timing of the audit, and the results of
the annual audit examination and any accompanying management letters,
and any reports of the independent auditors with respect to interim
periods.
2.3 Review the written statement from the outside auditor of Amistar
Corporation concerning any relationships between the auditor and
Amistar Corporation or any other relationships that may affect
adversely the independence of the auditor and assess the independence
of the outside auditor as required under Independent Standard Boards
Standard No. 1.
2.4 Review and discuss with management and the independent auditors the
financial statements of Amistar Corporation, including an analysis of
the auditors' judgment as to the quality of Amistar Corporation's
accounting principles.
2.5 Review the adequacy of Amistar Corporation's internal controls.
2.6 Review significant changes in the accounting policies of Amistar
Corporation and accounting and financial reporting proposals that may
have a significant impact on Amistar Corporation's financial reports.
2.7 Review material pending legal proceedings involving Amistar
Corporation and other contingent liabilities.
2.8 Review the adequacy of the Audit Committee Charter on an annual
basis.
12
AUDIT COMMITTEE CHARTER, CONTINUED
- ----------------------------------
3. MEETINGS. The Audit committee shall meet as often as may be deemed necessary
or appropriate in its judgment, either in person or telephonically. The Audit
Committee shall meet in executive session with the independent auditors at least
annually. The Audit Committee may create subcommittees who shall report to the
Audit Committee. The Audit Committee shall report to the full Board of Directors
with respect to its meetings. The majority of the members of the Audit Committee
shall constitute a quorum.
APPENDIX 2
FINANCIAL INFORMATION
- ---------------------
The Company's annual report on Form 10K for the year ended December 31, 2000 has
been mailed to each shareholder of record as of March 16, 2001 along with this
Proxy Statement and is incorporated by reference.