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 (Amendment No. )
Filed by registrant |X|
Filed by a party other than the registrant |_|
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
ASAHI/AMERICA, INC.
____________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
____________________________________________________________________________
(Name of Person[s] Filing Proxy Statement, if other than the Registrant)
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 transactions applies:
_____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
_____________________________________________________________________
______________________
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
(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:
_____________________________________________________________________
ASAHI/AMERICA, INC.
Notice of Annual Meeting of Stockholders
May 28, 1997 -- 10:00 A.M.
You are hereby notified that the Annual Meeting of Stockholders of
Asahi/America, Inc. will be held on Wednesday, May 28, 1997 at 10:00 A.M., at
the offices of Gadsby & Hannah LLP, 225 Franklin Street, 22nd Floor, Boston,
Massachusetts, to consider and act upon the following matters:
1. To elect (a) two (2) Directors with their terms to expire at
the 2000 Annual Meeting of Stockholders; and (b) one (1)
Director, with his term to expire at the 1998 Annual Meeting
of Stockholders, to succeed a current Director who is
resigning from the Board concurrent with this Annual Meeting;
2. To ratify the action of the Directors reappointing Arthur
Andersen LLP as auditors for the Company;
3. To ratify the action of the Directors adopting the Company's
Employee Stock Purchase Plan; and
4. 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 Limited Partnership, 150 Royall Street, Canton, Massachusetts 02021.
Only stockholders of record on the books of the Company at the close of
business on April 10, 1997, are entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors,
Burton Winnick, Clerk
Dated: April 25, 1997
ASAHI/AMERICA, INC.
EXECUTIVE OFFICES:
35 GREEN STREET
MALDEN, MASSACHUSETTS 02148
PROXY STATEMENT
VOTING PROCEDURES
This proxy statement and the accompanying proxy card are first being
mailed to stockholders commencing on or about April 28, 1997. The accompanying
proxy is solicited by the Board of Directors of Asahi/America, Inc. (the
"Company" or "Asahi"), for use at the Annual Meeting of Stockholders to be held
on May 28, 1997, and any adjournment or adjournments thereof. The cost of
soliciting proxies will be borne by the Company. Directors, officers and
employees of the Company may assist in the solicitation of proxies by mail,
telephone, facsimile and personal interview without additional compensation.
When a proxy 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 is signed and returned without specifying choices, the
shares will be voted 'FOR' proposals 1, 2, 3 and 4 and in 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 has fixed April 10, 1997 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 3,340,000
shares of Common Stock of the Company ("Common Stock") issued and outstanding.
The holders of Common Stock do not have cumulative voting rights.
For all Items on the agenda, the holders of a majority in interest of
Common Stock issued and outstanding and entitled to vote and present in person
or represented by proxy, will constitute a quorum. Shares represented by all
proxies received, including proxies that withhold authority for the election of
Directors and/or abstain from voting on an Item, 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 Common Stock present in person or represented 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," discussed below, will be excluded entirely and
will have no effect on the election of Directors of the Company.
Assuming the presence of a quorum, an affirmative vote of a majority of
the shares of Common Stock present in person or by proxy and voting will be
required for ratification of the adoption of the Employee Stock Purchase Plan.
As to such matters, shares may be voted for or against each such matter or may
abstain from
voting thereon. Abstentions and "broker non-votes," discussed below, are not
counted in determining the number of votes cast with respect to each such
matter.
Under applicable rules, brokers who hold shares of 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. Item 1, the uncontested election of Directors,
and Item 2, 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", here,
Item 3 on the agenda for this meeting of 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 (whether it is "routine" or
"non-routine") or does not indicate a specific choice "for," "against" or
"abstain" on a matter that is "non-routine," that action is called a "broker
non-vote" as to that matter. Broker "non-votes" with respect to "routine"
matters such as Items 1 and 2 on the agenda for this meeting, or "non-routine"
matters, 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, the shares will be voted as specified in the proxy card.
At this meeting of the Company's stockholders, shares represented by such proxy
card would be voted for the election of the Director nominees and for the
ratification of the independent accountants.
ELECTION OF DIRECTORS
(Item 1 On Proxy Card)
The Board of Directors currently consists of seven members, divided as
nearly as possible into three classes each having an equal number of Directors,
with the terms of each class staggered so that the term of one class expires at
each annual meeting of the stockholders.
Nominees Leslie B. Lewis and Jeffrey C. Bloomberg, the Directors whose
terms expire at the 1997 annual meeting, are both currently members of the
Board. Unless otherwise instructed in the proxy, all proxies will be voted for
the election of each of the nominees to a three-year term expiring at the 2000
Annual Meeting of Stockholders, with each to hold office until his successor has
been duly elected and qualified. Stockholders who do not wish their shares to be
voted for a particular nominee may so indicate by striking out the name of the
nominee(s) on the proxy card. Management does not contemplate that either of the
nominees 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.
Kazumitsu Yamaguchi, currently a Director, has submitted his
resignation from the Board, to be effective with the Annual Meeting of
Stockholders. Mr. Yamaguchi's term as a Director expires upon the 1998 Annual
Meeting of Stockholders. Pursuant to the Company's By-Laws, the Board of
Directors has nominated Mr. Masashi Uesugi to serve as a Director for the
remainder of Mr. Yamaguchi's term. Unless otherwise instructed in the proxy, all
proxies will be voted for the election of Mr. Uesugi to a one-year term expiring
at the 1998 Annual Meeting of Stockholders, and until his successor has been
duly elected and qualified. Stockholders who do not wish their shares to be
voted for Mr. Uesugi may so indicate by striking out the name of the nominee on
the proxy card. Management does not contemplate that Mr. Uesugi 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" EACH OF THE
NOMINEES.
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Information Regarding Nominees, Directors and Executive Officers
The following table and biographical descriptions set forth information
regarding the principal occupation, other affiliations, committee memberships
and age, for the nominees for election as a Director, each Director continuing
in office and the executive officers of the Company who are not Directors, based
on information furnished to the Company by each Director and officer. The
following information is as of March 1, 1997 unless otherwise noted.
Term as
Name Age Position with Company a Director Ends
---- --- --------------------- ---------------
Nominees for Election:
Leslie B. Lewis..................... 56 Chairman of the Board, President 2000*
and Chief Executive Officer
Jeffrey C. Bloomberg................ 49 Director (1)(2) 2000*
Masashi Uesugi...................... 55 Director-elect 1998*
Directors continuing in Office:
Samuel J. Gerson.................... 55 Director (1)(2) 1998
Tadashi Kitamura.................... 61 Director 1999
Nannette S. Lewis................... 47 Director 1998
Kazuyuki Sato....................... 50 Director 1999
Kazumitsu Yamaguchi (3)............. 59 Director (1)(2) 1998
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* Assuming election at this Annual Meeting.
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Mr. Yamaguchi has submitted his resignation from the Board, to be effective
with this Annual Meeting of Stockholders.
Nominees for Election as Directors
Leslie B. Lewis has served as President and Chief Executive Officer
since November 1989. Prior thereto, for more than 19 years, he served in various
executive management positions with the Company. Mr. Lewis has been a Director
of the Company since 1977. He was elected Chairman of the Board in October 1996.
Jeffrey C. Bloomberg has been a Director of the Company since the
closing of the Company's public offering in May 1996. Mr. Bloomberg is the
President and principal of Bloomberg Associates, Inc., a private investment
banking firm that he founded in January 1994. For 14 years prior thereto, Mr.
Bloomberg was associated with the investment banking firm of Bear, Stearns &
Co., Inc., including as a Senior Managing Director from 1985 through November
1993, and as a General Partner of its predecessor.
Masashi Uesugi has been nominated by the Board of Directors to fill the
vacancy created by the resignation of Mr. Yamaguchi. Mr. Uesugi's term as a
Director, if elected, will expire with the 1998 Annual Meeting of Stockholders.
Mr. Uesugi has been the Executive Vice President of Nichimen America Inc., a
United States subsidiary of Nichimen Corporation, since April 1997 and prior
thereto since 1964 was continuously employed by Nichimen Corporation in a number
of managerial capacities, last as Deputy Senior General Manager of the Plastic
division.
Directors Continuing In Office
Samuel J. Gerson has been a Director of the Company since the closing
of the Company's public offering in May 1996. Mr. Gerson has been Chairman of
the Board and Chief Executive Officer of Filene's Basement, Inc. since January
1984. He is a Director of Bon Ton Stores, Inc.
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Tadashi Kitamura has served as a Director of Asahi Organic Chemicals
Industry Co., Ltd. ("AOC"), the Company's supplier of thermoplastic valves since
June 1992 and as the General Manager of the Sales Department of AOC since
February 1992. Prior thereto, for more than 30 years, he was employed by Asahi
Chemical Industry, the largest shareholder of AOC, in a number of managerial
capacities, last as Deputy General Manager of the Plastics Department. Mr.
Kitamura has been a Director of the Company since 1993.
Nannette S. Lewis has been a Director of the Company since 1989. Mrs.
Lewis has been the President and principal of Nannette Lewis Interiors, Inc.,
which has been engaged in providing commercial and residential interior design
services for more than ten years.
Kazuyuki Sato has served as a Director of the Company since 1996. Since
October 1993 Mr. Sato has been the General Manager of the Plastics Department
(polyolefin, PVC and rubber) of Nichimen Corporation, a Japanese trading company
which provides credit and import services to the Company, where he has been
continuously employed since 1969.
Executive Officers Who Are Not Directors
Kozo Terada has served in his current positions as Vice President,
Treasurer and Chief Financial Officer since May 1993, and served as a Director
from May 1993 until March 1996. Prior to assuming his positions with the
Company, he held various management positions with Nichimen Corporation for more
than 24 years, last as a manager in the Plastics Division.
Timothy L. Robinson has served as Executive Vice President and Chief
Operating Officer of the Company since October 1989. Prior thereto, for more
than eleven years, he held various management positions with the Company.
The Board of Directors and Its Committees
The Company's Board of Directors held five meetings, including three
actions by written consent, during fiscal year 1996. The Board of Directors
established an Audit Committee and a Compensation Committee in May 1996,
concurrently with the Company's initial public offering.
The Audit Committee, which held no meetings in fiscal year 1996, 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, reviews the independence of the independent accountants and the
adequacy and effectiveness of the Company's internal accounting controls. The
Audit Committee consists of three members, currently Messrs. Yamaguchi,
Bloomberg and Gerson, and is reconstituted annually. The Board has not yet
elected a new member to serve on the Audit Committee upon Mr. Yamaguchi's
resignation.
The Compensation Committee, which held two meetings in fiscal year 1996
including one action by written consent, recommends to the Board of Directors
the compensation of the Company's executive officers. It also administers the
Company's 1996 Equity Incentive Plan and Employee Stock Purchase Plan. The
Compensation Committee consists of three members, currently Messrs. Yamaguchi,
Bloomberg and Gerson, and is reconstituted annually. The Board has not yet
elected a new member to serve on the Compensation Committee upon Mr. Yamaguchi's
resignation.
All Directors attended at least 75% of the meetings of the Board and of
the committees of which they are members.
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Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee has interlocking or
other relationships with other boards or with the Company that would call into
question his independence as a Committee member.
Compensation of Directors
Directors who are not employees of the Company or affiliated with or
related to a principal stockholder of the Company receive a quarterly fee of
$1,875 for serving on the Board and a fee of $500 for each Board or Committee
meeting attended, plus reimbursement of out-of-pocket expenses for attendance at
such meetings.
Under a formula-based stock option plan for independent Directors (the
"Directors' Plan"), each current Director who is not an employee or affiliated
with or related to a principal stockholder of the Company as of the adoption of
the Directors' Plan or first elected after the effective date of the Directors'
Plan will receive, upon his or her election to the board, a one-time grant of an
option to purchase 10,000 shares of Common stock. All such options will have an
exercise price per share equal to the fair market value of a share of Common
Stock on the date of election to the board, will be fully vested when granted,
and will be exercisable for a period of 5 years.
Bloomberg Associates, Inc., of which Jeffrey C. Bloomberg is the
principal, had a consulting contract with the Company pursuant to which it
provided financial advisory services to the Company in connection with the
Company's initial public offering and other matters. For services to the
Company, Bloomberg Associates billed the Company on an hourly basis and received
reimbursement for out-of-pocket expenses, for a total amount of $75,037.
In connection with the Company's recent purchase and renovation of a
facility adjacent to its headquarters and the correlated renovations to its
existing facility, the Company retained Nannette Lewis Interiors, Inc. ("NLI")
to perform interior design services. In 1996 the Company paid NLI approximately
$82,000 for its services. The Company anticipates that the entire cost of the
arrangement with NLI will approximate $90,000. Nannette Lewis, a Director of the
Company, is the sole stockholder of NLI.
RATIFICATION OF CHOICE OF INDEPENDENT ACCOUNTANTS
(Item 2 on Proxy Card)
The Board of Directors has reappointed the firm of Arthur Andersen LLP,
independent accountants to audit the books, records and accounts of the Company
and its subsidiaries for the fiscal year ending December 31, 1997. In accordance
with a resolution of the Board of Directors, this selection is being presented
to the stockholders for ratification at the meeting.
Arthur Andersen LLP has no direct or indirect material financial
interest in the Company or its subsidiaries. Representatives of Arthur Andersen
LLP are expected to be present at the meeting and will be given the opportunity
to make a statement on behalf of Arthur Andersen LLP if they so desire. The
representatives also will be available to respond to appropriate questions
raised by those in attendance at the meeting.
Proxies solicited by management will be so voted unless stockholders
specify otherwise. Ratification by the stockholders is not required. If the
proposal is not approved by the stockholders, the Board of Directors will not
change the appointment for fiscal 1997, but will consider the stockholder vote
in appointing auditors for fiscal 1998.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE REAPPOINTMENT OF
ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 1997.
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PROPOSAL TO APPROVE EMPLOYEE STOCK PURCHASE PLAN
(Item 3 on Proxy Card)
On July 5, 1996, the Board of Directors voted to approve the Employee
Stock Purchase Plan (the "Plan") in the form attached as Exhibit A to this Proxy
Statement, subject to the approval of the stockholders of the Corporation. If
approved by the stockholders, the Employee Stock Purchase Plan will provide
eligible employees of the Company with a means to purchase through payroll
deductions up to 150,000 shares of the Company's Common Stock at a discount from
market value.
The purpose of the Plan is twofold: first, to encourage stock ownership
by employees by establishing a program that permits them to purchase shares on a
regular basis through payroll deductions; and second, to offer employees an
opportunity, without adverse tax consequences, to purchase stock at up to a 15%
discount from market price.
Eligible Participants
Employees eligible to participate in the Plan include those persons who
are customarily employed on a full-time or part-time basis by the Company and
are regularly scheduled to work more than 20 hours per week and more than five
months per calendar year (but excludes those employees that hold five percent or
more of the Common Stock; e.g., Leslie B. Lewis, Chairman, President and Chief
Executive Officer).
Material Features of Plan
As of March 31, 1997 approximately 123 employees of the Company are
eligible to participate. Each participant in the plan is granted an option for a
designated option period to purchase stock from the Company that is exercisable
at 85% of the market price on the date of grant or the date of purchase,
whichever price is lower. The initial option period under the Plan began July
15, 1996 and ends June 30, 1997, and 30,000 shares in the aggregate are
available to be purchased. Thereafter, option periods are six months, with
15,000 shares in the aggregate available for each option period (plus any shares
not purchased in previous offering periods). New option periods will commence
until all the shares reserved under the Plan have been sold or the Plan
terminates. In any option period in which there is an over-subscription of
shares, shares would be allocated among participants on a pro rata basis.
An employee saves funds to exercise his or her option by authorizing
payroll deductions between 1% to 10% of his or her base salary. An employee may
withdraw from the Plan at any time and receive a refund of payroll deductions.
Except in the event of death of the employee, an option may be exercised only by
the employee. An option shall terminate, and must therefore be exercised within
90 days, after an employee's employment terminates for any reason. In the event
of death, the option may be transferred and may be exercised by the deceased
employee's heirs or administrators at the end of the then current option period.
Federal Tax Consequences to the Company and the Participant
The Employee Stock Purchase Plan is intended to qualify as an employee
stock purchase plan ("ESPP") within the meaning of Section 423 of the Code. Were
it not for the favorable tax treatment afforded to such employee stock purchase
plans ("ESPPs"), the 15% discount would be taxable as ordinary income to the
employee in the year that stock is purchased under the plan. Neither the grant
nor the exercise of an option under an ESPP is a taxable event to the employee.
The special tax rules applicable to ESPPs limit the amount of ordinary
compensation income to the 15% discount and defer the recognition of this income
until the shares are sold in a qualifying disposition (i.e., a disposition that
meets the holding periods). The employee's basis in the stock purchased is the
option exercise price. If the employee does not transfer the shares before the
expiration of two years from the date of grant and one year from the date of
exercise (i.e., a qualifying disposition), then upon a transfer the employee
will report ordinary income in an amount equal to the discount (the difference
between the exercise price and the market price at date of grant of the option,
not the date of exercise), his or her basis in
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the stock will be increased by that amount, and the employee will report
long-term capital gain equal to the difference between the adjusted basis and
the sale price. Assuming a qualifying disposition, the Company is not entitled
to take any deduction for tax purposes.
The tax consequences are significantly different if an employee makes a
disqualifying disposition (i.e., does not meet the two years from grant/one year
from purchase holding periods). In such case, the tax consequences are also
deferred until the disposition occurs, but the employee will recognize ordinary
income equal to the difference between the option exercise price and the market
price on the date of exercise of the option, not the date of grant. The
employee's basis will again be adjusted, and his/her capital gain will be the
difference between the adjusted basis and the sale price. In this scenario, the
Company is entitled to a deduction for tax purposes equal to the amount that the
employee reports as ordinary income.
Plan Administration and Termination
The Employee Stock Purchase Plan provides for administration by the
Compensation Committee. The Board of Directors may terminate the Plan at any
time and amend it in any respect, except that the approval of the stockholders
is required for any amendment to increase the number of shares available for
purchase under the Plan, to adjust the percentage of discount available under
the Plan (currently 15%), or to change the class of employees eligible to
participate in the Plan.
Although the foregoing summarizes the essential features of the Plan,
it is qualified in its entirety by reference to the full text of the Plan, which
is attached as Exhibit A to this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF
THE EMPLOYEE STOCK PURCHASE PLAN.
OTHER BUSINESS
In addition to the business described above, there will be remarks by
the Chairman of the Board and Chief Executive Officer and a general discussion
period during which stockholders will have an opportunity to ask questions about
the Company.
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 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 be properly brought before the meeting, as seems to them
to be in the best interest of the Company and its stockholders.
EXECUTIVE COMPENSATION
Report of the Board of Directors
Prior to the Company's initial public offering in May 1996 and the
concurrent election of the Company's Compensation Committee, the Board of
Directors determined the compensation and benefits of all executive officers of
the Company. With the election of the Compensation Committee (the "Committee"),
the Board delegated that task to the Committee and charged the Committee with
the task of reviewing general policy matters relating to compensation and
benefits of employees of the Company, and making recommendations concerning
these matters to the Board of Directors. The Committee also administers the
Company's 1996 Equity Incentive Plan.
The compensation policy of the Company for its executive officers is
based on the following principles:
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o 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;
o The compensation program should reflect the highly competitive
nature of the industry in which the Company operates; and
o 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
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 markets and sells thermoplastic valves, piping systems and
components for use in a variety of environmentally sensitive and industrial
applications, including semiconductor manufacturing, chemical processing, waste
treatment processing and pharmaceutical manufacturing. The Company also
manufactures pneumatic and electric actuators and controls, double containment
piping systems and related products. The industrial valve, pipe and fittings
market is very fragmented, with many manufacturers and suppliers. The Company
estimates that there are more than 100 suppliers of metal valves and at least a
dozen suppliers of thermoplastic valves. The Company believes that there are two
companies which have significant shares of both markets, one additional
significant competitor in the valve market and three additional significant
competitors in the pipe market.
The executive officers' salaries, bonuses and, when granted, options to
purchase stock of the Company, have been determined based on the subjective
evaluation of a variety of factors, each of which is weighted, again
subjectively, by each member of the Board or Committee (as the case may be)
according to his or her own experience and background. Among the criteria used
in making such evaluation of the appropriate compensation of each executive
officer are:
o his influence on the performance of the Company through his
management, financial and/or sales skills;
o his ability to work with other executive officers in carrying out
corporate policies;
o his ability to work with, influence and effectuate the policies of
the Board of Directors;
o his skill in long range planning for the Company's future growth
and activities; and
o 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 in determining each element of compensation. Except for
the bonus determination with respect to the Chief Executive Officer and the
determination of the pool, if any, to be available for the Company's profit
sharing plan, there is no specific relationship between the performance of the
Company and the compensation of the executive officers. With respect to bonuses
for officers other than the Chief Executive Officer, however, performance of the
Company is given more weight than the other criteria.
The salary shown in the Summary Compensation Table represents the fixed
portion of compensation for each named executive officer for the year.
In 1995, the Board approved employment agreements with Leslie B. Lewis
and Timothy L. Robinson, and in April 1996, an employment agreement with Kozo
Terada. The employment agreement with Mr. Lewis is for a term of three years,
which commenced on January 1, 1996, and which may be extended at Mr. Lewis'
option, for an additional period of up to three years, two years or one year if
the Company achieves or exceeds on a cumulative basis 80%, 70% or 60%,
respectively, of target net operating income ("Target NOI") specified in the
agreement for the three year period ended December 31, 1998. Mr. Lewis'
agreement provides for an annual base salary of $300,000 ($330,000 during any
extension period). Mr. Lewis is also eligible to receive an annual bonus equal
to the sum of (i) $100,000 multiplied by a fraction (not greater than one), the
numerator of which is the Company's net operating income ("NOI") and the
denominator of which is Target NOI for the year plus (ii)
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an amount equal to 10% of the amount by which NOI for the year exceeds Target
NOI for the year. For purposes of the agreement, NOI is the Company's net income
before taxes, depreciation, amortization and certain other defined expenses. To
the extent that NOI exceeds Target NOI for any year, the excess is carried
forward and added to NOI in the following year. For 1996, there was a
carryforward amount of NOI of $195,550, representing the amount by which NOI
exceeded Target NOI during the three year period ended December 31, 1995.
Pursuant to the agreement, the Company is obligated to maintain life insurance
on Mr. Lewis in the amount of $5 million, and if Mr. Lewis is still employed
with the Company on December 31, 2005, to use the accumulated cash surrender
value of the policy, if any, in excess of total premiums paid (which will be
refunded to the Company) to fund a retirement benefit for Mr. Lewis, and he has
the right thereafter, at the time he leaves the employ of the Company, to
designate the beneficiary under the policy.
The Company's employment agreement with Mr. Robinson commenced as of
November 1, 1995, and terminates on December 31, 1998. Under the agreement, Mr.
Robinson is entitled to base compensation of $165,000 in 1996, with annual
increases of $5,000 thereafter. Mr. Robinson will be entitled to receive bonuses
at such times and in such amounts as the Committee may determine in its
discretion.
The Company's employment agreement with Mr. Terada commenced on May 1,
1996 and terminates on December 31, 1998. Under the agreement, Mr. Terada is
entitled to base compensation of $140,000 with annual increases of $5,000
thereafter. Mr. Terada will be entitled to receive bonuses at such times and in
such amounts as the Committee may determine in its discretion.
In order to provide appropriate and continuing long-term incentives to
the named executive officers who were not stockholders of the Company, and in
order to align more fully the interests of the stockholders and the named
executive officers, the Company granted new options for 75,000 shares in the
aggregate to the named executive officers effective with the closing of the
public offering, with Mr. Robinson receiving options for 50,000 shares and Mr.
Terada receiving options for 25,000 shares. 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 such executive officers to
continue to focus on building stockholder value.
The Company's 1996 Equity Incentive Plan ("Equity Plan") was adopted by
the Board of Directors and stockholders of the Company on March 11, 1996. A
total of 330,000 shares of Common Stock have been reserved for awards under the
Equity Plan. The Equity Plan is intended to be an incentive to the key employees
of, and persons who provide services to, the Company by enabling them to acquire
or increase their proprietary interest in the Company. The Committee may make
awards under the Equity Plan in the form of stock options (both qualified and
non-qualified), stock appreciation rights, performance shares, restricted stock
or stock units. The Committee has complete authority to designate persons to
receive awards, to grant the awards, to determine the form of the award and to
fix all terms of any awards granted. Qualified stock options (which are intended
to qualify as incentive stock options under Section 422 of the Internal Revenue
Code) may be granted only to employees of the Company and must have an exercise
price of not less than 100% of the fair market value of the Company's Common
Stock on the date of grant (110% for qualified options granted to any 10%
stockholder of the Company). The aggregate exercise price of the shares as to
which a qualified stock option becomes exercisable in any year may not exceed
$100,000. The term of qualified stock options may not exceed ten years (five
years in the case of options granted to any 10% stockholder of the Company).
Non-qualified stock options and other stock awards may be granted on such terms
(as to date of grant, vesting, number of shares, exercise price in the case of
options, purchase price, restrictions on transfer, forfeiture and other
provisions) as the Committee may determine. The Equity Plan may be suspended or
discontinued by the Board and may be amended by the Board, except that the
stockholders of the Company must approve any amendment if such approval is
required to comply with any applicable tax or regulatory requirement.
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.
-9-
Based on such review, the Compensation Committee believes that the limitation
had no effect on the Company in 1996 nor will it have any effect on the Company
in 1997.
Respectfully submitted,
Leslie B. Lewis, Kazumitsu Yamaguchi,
Chairman of the Board of Directors Chairman of the Compensation Committee
Jeffrey C. Bloomberg Nannette S. Lewis
Samuel J. Gerson Kazuyuki Sato
Tadashi Kitamura
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth information concerning the compensation
paid or accrued by the Company during the fiscal years ended December 31, 1994,
1995 and 1996, to or for the Company's Chief Executive Officer and its two other
most highly compensated executive officers whose salary and bonus combined
exceeded $100,000 for fiscal year 1996 (hereinafter referred to as the "named
executive officers").
Long-Term
Compensation
Annual Compensation Securities All Other
------------------- ---------- ---------
Year Salary Bonus Other Annual Underlying Compensation
Name and Principal Position ($) ($) ($) Compensation ($) Options (#) ($)
- - --------------------------- ------- ----- ----- ---------------- ------------ ----------
Leslie B. Lewis, President 1996 300,000 100,000 39,980 (1) -- 19,243 (1)
and Chief Executive Officer 1995 300,000 100,000 33,831 (1) -- 39,420 (2)
Timothy L. Robinson, 1996 165,000 40,000 27,853 (3) 50,000 --
Executive Vice President 1995 160,000 25,000 28,760 (3) -- 5,000 (2)
and Chief Operating Officer
Kozo Terada (4) 1996 128,673 -- 22,788 (5) 25,000 --
- - -----------------
(1) Includes non-accountable travel expense allowance, disability insurance,
personal travel expenses (1995 only), payment of health care expenses not
covered by the Company's employee health care plan, $9,500 and $9,240 for
1996 and 1995 respectively contributed by the Company for Mr. Lewis under
the Company's 401(k) plan, $5,460 and $6,469 for 1996 and 1995
respectively contributed by the Company for Mr. Lewis pursuant to the
Company's Profit Sharing Plan and $15,522 and $11,473 for 1996 and 1995
respectively for car lease and insurance expenses. All other compensation
includes $19,243 for personal use of a vehicle. Does not include any
amount related to a ten-year variable premium life insurance policy on
the life of Mr. Lewis as to which the Company is the owner and
beneficiary. If Mr. Lewis remains in the employ of the Company for ten
years, the cash surrender value of the policy, if any, in excess of total
premiums paid (which will be reimbursed to the Company) will be used to
fund a retirement benefit for Mr. Lewis and he has the right thereafter,
at the time he leaves the employ of the Company, to designate the
beneficiary under the policy.
(2) Messrs. Lewis and Robinson received these one-time payments for Company
buyouts of accrued but unused vacation time as a result of a change in
Company policy to limit the amount of unused vacation time that employees
may carry forward from year to year.
(3) Includes non-accountable travel expense allowance, disability insurance,
payment of health care expenses not covered by the Company's employee
health care plan, $9,500 and $9,240 for 1996 and 1995 respectively
contributed by the Company for Mr. Robinson under the Company's 401(k)
plan, $5,460 and $6,469 for 1996 and 1995 respectively contributed by the
-10-
Company for Mr. Robinson under the Company's Profit Sharing Plan and
$12,261 and $11,886 for 1996 and 1995 respectively for car lease and
insurance expenses.
(4) During 1995, although he worked full-time for the Company, Kozo Terada,
the Company's Vice President, Treasurer and Chief Financial Officer, was
an employee of Nichimen America Inc., one of the Company's principal
stockholders. The Company paid a total of $160,000 to Nichimen America
Inc. in 1995 for management fees, which included Mr. Terada's services.
Nichimen America Inc. paid Mr. Terada his salary and provided any
employee benefits to which he was entitled under its plans.
(5) Includes non-accountable travel expense allowance, disability insurance,
payment of health care expenses not covered by the Company's health care
plan, $5,000 contributed by the Company for Mr. Terada pursuant to the
Company's 401(k) plan, $4,816 contributed by the Company for Mr. Terada
under the Company's Profit Sharing Plan and $9,537 for car lease and
insurance payments.
Option/SAR Grants in Last Fiscal Year
Individual Grants
-------------------------
Percent of Potential Realizable
Number of Total Annual Rates of Stock
Securities Options Value at Assumed Price
Underlying Granted to Appreciation
Options Employees Exercise or Prices for Option Term
Granted in Fiscal Base Price Expiration ($)(1)
Name (#) Year ($/Sh) Date 5% 10%
---- ------- ------ -------- ------ ---- ----
Leslie B. Lewis................ -- -- -- -- -- --
Timothy L. Robinson............ 50,000 15.2% $7.50 5/15/06 $235,836 $597,653
Kozo Terada.................... 25,000 7.6% $7.50 5/15/06 $117,918 $298,827
___________
(1) The dollar amounts in this table are the result of calculations at stock
appreciation rates specified by the SEC and are not intended to forecast
actual future appreciation rates of the Company's stock price.
FY-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money
Options at Fiscal Year End (#) Options at Fiscal Year End ($)
------------------------------ ------------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- - ---- ------------------------- -------------------------
Leslie B. Lewis................ --/-- --/--
Timothy L. Robinson............ 16,666/33,334 $10,416/$20,833
Kozo Terada.................... 8,333/16,667 $5,208/$10,417
No performance graph is provided to show cumulative total stockholder
return as the Common Stock has been registered under the Securities Exchange Act
of 1934 only since May 15, 1996.
Stock Option Plans
1996 Equity Incentive Plan. The Company's 1996 Equity Incentive Plan
("Equity Plan") was adopted by the Board of Directors and stockholders of the
Company on March 11, 1996, and was effective as of May 15, 1996. A total of
330,000 shares of Common Stock have been reserved for awards under the Equity
Plan. The Equity Plan is intended to be an incentive to the key employees of,
and persons who provide services to, the
-11-
Company by enabling them to acquire or increase their proprietary interest in
the Company. The Equity Plan is administered by the Compensation Committee of
the Company's Board of Directors ("Committee"). The Committee may make awards
under the Equity Plan in the form of stock options (both qualified and
non-qualified), stock appreciation rights, performance shares, restricted stock
or stock units. The Committee has complete authority to designate persons to
receive awards, to grant the awards, to determine the form of the award and to
fix all terms of any awards granted. Qualified stock options (which are intended
to qualify as incentive stock options under section 422 of the Internal Revenue
Code) may be granted only to employees of the Company and must have an exercise
price of not less than 100% of the fair market value of the Company's Common
Stock on the date of grant (110% for qualified options granted to any 10%
stockholder of the Company). The aggregate exercise price of the shares as to
which a qualified stock option becomes exercisable in any year may not exceed
$100,000. The term of qualified stock options may not exceed ten years (five
years in the case of options granted to any 10% stockholder of the Company).
Non-qualified stock options and other stock awards may be granted on such terms
(as to date of grant, vesting, number of shares, exercise price in the case of
options, purchase price, restrictions on transfer, forfeiture and other
provisions) as the Committee may determine. The Equity Plan may be suspended or
discontinued by the Board and may be amended by the Board, except that the
stockholders of the Company must approve any amendment if such approval is
required to comply with any applicable tax or regulatory requirement.
Effective with the closing of the Company's public offering, the
Company granted ten year options to purchase Common Stock under the Equity Plan
to Timothy Robinson and Kozo Terada for 50,000 and 25,000 shares, respectively,
exercisable at the initial public offering price of $7.50 per share. The options
vest in three equal annual installments beginning on the anniversary of the date
of grant.
Independent Directors' Stock Option Plan. The Board of Directors
adopted an Independent Directors' Stock Option Plan which was approved by the
Company's stockholders on March 11, 1996, effective as of the closing of the
Company's public offering. An aggregate of 20,000 shares of Common Stock are
reserved under the plan. This plan authorized the issuance of an option to each
Director who is neither an employee of the Company nor the holder of, or
affiliated with a holder of, five percent or more of the Company's Common Stock,
to purchase up to 10,000 shares of the Company's Common Stock at a purchase
price equal to the fair market value of the Common Stock on the date of election
to the Board of Directors. Pursuant to the plan, each of Messrs. Bloomberg and
Gerson received a five-year fully vested option to purchase 10,000 shares of
Common Stock at the initial public offering price of $7.50 per share.
Employment Agreements
The Company has entered into employment agreements with Messrs. Lewis,
Robinson and Terada. The employment agreement with Mr. Lewis is for a term of
three years, which commenced on January 1, 1996, and which may be extended at
Mr. Lewis' option, for an additional period of up to three years, two years or
one year if the Company achieves or exceeds on a cumulative basis 80%, 70% or
60%, respectively, of target net operating income ("Target NOI") specified in
the agreement for the three year period ended December 31, 1998. Mr. Lewis'
agreement provides for an annual base salary of $300,000 ($330,000 during any
extension period). Mr. Lewis is also eligible to receive an annual bonus equal
to the sum of (i) $100,000 multiplied by a fraction (not greater than one), the
numerator of which is the Company's net operating income ("NOI") and the
denominator of which is Target NOI for the year plus (ii) an amount equal to 10%
of the amount by which NOI for the year exceeds Target NOI for the year. For
purposes of the agreement, NOI is the Company's net income before taxes,
depreciation, amortization and certain other defined expenses. To the extent
that NOI exceeds Target NOI for any year, the excess is carried forward and
added to NOI in the following year. For 1996, there was a carryforward amount of
NOI of $195,550, representing the amount by which NOI exceeded Target NOI during
the three year period ended December 31, 1995. Pursuant to the agreement, the
Company is obligated to maintain life insurance on Mr. Lewis in the amount of $5
million, and if Mr. Lewis is still employed with the Company on December 31,
2005, to use the accumulated cash surrender value of the policy, if any, in
excess of total premiums paid (which will be refunded to the Company) to fund a
retirement benefit for Mr. Lewis, and he has the right thereafter, at the time
he leaves the employ of the Company, to designate the beneficiary under the
policy.
-12-
The Company's employment agreements with Messrs. Robinson and Terada
terminate on December 31, 1998. Under Mr. Robinson's agreement, he is entitled
to base compensation of $165,000 in 1996, with annual increases of $5,000
thereafter. Under Mr. Terada's agreement, he is entitled to base compensation of
$140,000 with annual increases of $5,000 thereafter. Messrs. Robinson and Terada
will be entitled to receive bonuses at such times and in such amounts as the
Committee may determine in its discretion.
OWNERSHIP OF COMPANY COMMON STOCK
The following table sets forth certain information as of March 31,
1997, with respect to the Company's Common Stock owned by (1) each Director of
the Company, (2) the executive officers named in the Summary Compensation Table,
(3) all Directors and executive officers of the Company as a group, and (4) each
person who is known by the Company to beneficially own more than five percent of
the Company's capital stock. Unless otherwise indicated in the footnotes to the
table, all stock is owned of record and beneficially by the persons listed in
the table.
Name and, with respect to owner
of more than 5%, address Number Percent(1)
- - ------------------------------- ------ ----------
Leslie B. Lewis (2) (3) 960,885 27.1%
President, Chief Executive Officer and
Chairman of the Board
c/o Asahi/America, Inc.
35 Green Street, Malden, MA 02148
Tadashi Kitamura, Director -- --
Kazuyuki Sato, Director -- --
Kazumitsu Yamaguchi, Director -- --
Nannette S. Lewis, Director (4) 960,885 27.1%
Jeffrey C. Bloomberg, Director 17,500 *
Samuel J. Gerson, Director 15,000 *
Masashi Uesugi, Director-elect -- --
Timothy L. Robinson, Executive Vice 21,666 *
President and Chief Operating Officer (6)
Kozo Terada, Vice President, Treasurer 9,333 *
and Chief Financial Officer (7)
Asahi Organic Chemicals Industry Co., Ltd. 491,470 14.7%
15-9, Uchikanda 2 Chome
Chiyodaku, Tokyo, Japan
-13-
Name and, with respect to owner
of more than 5%, address Number Percent(1)
- - ------------------------------- ------ ----------
Nichimen Corporation (8) 491,470 14.7%
1-23, Shiba 4-Chome
Minato-Ku, Tokyo 108, Japan
Nichimen America Inc. (8) 146,585 4.4%
1185 Avenue of the Americas
New York, NY 10036
Wells Fargo Bank, N.A., as executor 207,257 6.2%
of the estate of Alan Baker (3)
Northern California Estate Division
420 Montgomery Street
San Francisco, CA 94104
All Directors and executive
officers as a group 1,024,384 28.9%
- - ----------
* Less than one percent.
(1) Percentage ownership of Common Stock is based on 3,340,000 shares
issued and outstanding plus shares subject to options exercisable
within sixty (60) days of March 31, 1997 held by the stockholder or
group.
(2) Leslie B. Lewis and Nannette S. Lewis are husband and wife. Includes
6,025 shares for which Mr. Lewis serves as custodian pursuant to the
terms of a gift made to his grandchildren under the Uniform Gifts to
Minors Act. Also includes 207,257 shares owned by Wells Fargo Bank,
N.A., as executor of the estate of Alan Baker. Pursuant to a voting
trust, Mr. Lewis has voting control over the shares, and he also holds
a currently exercisable option and a right of first refusal to purchase
the shares.
(3) Pursuant to a voting trust, Leslie B. Lewis has voting control over the
207,257 shares owned by Wells Fargo Bank, N.A., as executor of the
estate of Alan Baker, and Mr. Lewis also holds a currently exercisable
option and right of first refusal to purchase the shares.
(4) Leslie B. Lewis and Nannette S. Lewis are husband and wife. Represents
shares beneficially owned by Mr. Lewis.
(5) Includes 2,500 shares for which Mr. Bloomberg serves as custodian
pursuant to the terms of a gift made to his children under the Uniform
Gift to Minors Act.
(6) Includes 16,666 shares of Common Stock subject to options owned by Mr.
Robinson and exercisable within 60 days of March 31, 1997.
(7) Includes 8,333 shares of Common Stock subject to options owned by Mr.
Terada and exercisable within 60 days of March 31, 1997.
(8) All Nichimen Corporation amounts and percentages include shares owned
by Nichimen America as Nichimen Corporation may be deemed to be the
beneficial owner of such shares.
-14-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 31, 1993, the Company issued and sold an aggregate of
1,287,000 shares of its Common Stock to Asahi Organic Chemicals Industry Co.,
Ltd. ("AOC") (643,500 shares), Nichimen Corporation (450,450 shares) and
Nichimen America Inc. (193,050 shares) for total cash consideration of $4
million or approximately $3.11 per share. The purchase price was determined by
negotiation between the Company and the investors. In connection with the
investment, the investors and Mr. Leslie B. Lewis entered into a Stockholders
Agreement which provided, among other things, that the parties would vote to
elect as Directors of the Company two designees named by Mr. Lewis and a trust
that was a stockholder at the time and a designee named by each of the three
investors. Pursuant to this agreement, Messrs. Kitamura, Sato and Yamaguchi were
elected to the Company's Board of Directors as designees of the investors. The
Stockholders Agreement terminated by its terms effective as of the closing of
the Company's public offering.
In connection with the transaction described in the preceding
paragraph, AOC, Nichimen Corporation and Nichimen America Inc. granted to Leslie
B. Lewis an option to purchase up to an aggregate of 140,400 shares of Common
Stock from them (in proportion to their ownership interests) for a total of
$530,712 or approximately $3.78 per share which was exercisable only if the
Company achieved a target level of cumulative net income, as defined, for the
three year period ended December 31, 1995. The Company achieved that target, and
on March 11, 1996, Mr. Lewis exercised his option in full.
AOC has been the principal supplier of valves to the Company for more
than 20 years. The Company purchased a total of approximately $10.3 million,
$10.0 million and $10.4 million of valves from AOC in the years ended December
31, 1994, 1995 and 1996 respectively. The Company purchases products from AOC at
AOC's list price. Under its contract with the Company, AOC has the right to
revise the price list "in good faith." The Company has a long-term
Distributorship Agreement with AOC.
Since August 1992, the Company has purchased valves from AOC through
Nichimen Corporation and Nichimen America Inc. The two latter companies are
responsible for all export (from Japan) and import (into the United States)
arrangements, including all documentation, transportation arrangements and
custom clearance in Japan, and Nichimen America Inc. sells the valves to the
Company on open account up to $6,000,000 (above which letters of credit are
required), eliminating the costly letter of credit arrangements previously
required in connection with direct purchases from AOC. Prior to this arrangement
with Nichimen Corporation and Nichimen America, the Company had been required to
pay for substantially all shipments from AOC with irrevocable letters of credit,
which the Company financed with bank borrowing. For their services, Nichimen
Corporation and Nichimen America Inc. are paid by AOC a combined mark-up of
approximately 8% of the invoiced price of the Company's purchases from AOC. For
the years ended December 31, 1994, 1995 and 1996, the total mark-up was
approximately $824,320, $797,680 and $828,080, respectively. Nichimen
Corporation and Nichimen America Inc. are parties to the Company's
Distributorship Agreement with AOC.
Mr. Leslie B. Lewis, President and Chief Executive Officer, was
indebted to the Company in the amount of $297,500 as of December 31, 1996. The
original loan to Mr. Lewis of $350,000, which was made to him in October 1991,
is evidenced by an amended loan agreement dated March 31, 1993. Under the
amended loan agreement, interest began to accrue on January 1, 1996, at prime
plus one percentage point. The principal is payable in equal quarterly
installments plus accrued interest through the first quarter of 2001.
Bloomberg Associates, Inc., of which Jeffrey C. Bloomberg is the
principal, had a consulting contract with the Company pursuant to which it
provided financial advisory services to the Company in connection with the
Company's initial public offering and other matters. For services to the
Company, Bloomberg Associates billed the Company on an hourly basis and received
reimbursement for out-of-pocket expenses, for a total amount of $75,037.
In connection with the Company's recent purchase and renovation of a
facility adjacent to its headquarters and the correlated renovations to its
existing facility, the Company retained Nannette Lewis
-15-
Interiors, Inc. ("NLI") to perform interior design services. In 1996 the Company
paid NLI approximately $82,000 for its services. The Company anticipates that
the entire cost of the arrangement with NLI will approximate $90,000. Nannette
Lewis, a Director of the Company, is the sole stockholder of NLI.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders of the Company (including Director
nominations) intended to be presented at the 1998 Annual Meeting of Stockholders
must be received by the Company not later than December 29, 1997 to be included
in the Company's proxy statement and form of proxy relating to the 1998 Annual
Meeting of Stockholders. Nominations and proposals of stockholders may be
submitted to the Company for consideration at the 1998 Annual Meeting of
Stockholders if certain conditions set forth in the Company's By-laws are
satisfied, although such nominations and proposals will not be included in the
proxy statement and form of proxy relating to that annual meeting unless
submitted in accordance with the time limits and other requirements set forth
above and in the related rules of the Securities and Exchange Commission. See
"Election of Directors - The Board of Directors and Its Committees."
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers and Directors, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and The Nasdaq Stock Market. Officers,
Directors and greater than 10% stockholders are required to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company
and written representations that no other reports were required during the
fiscal year ended December 31, 1996, all Section 16(a) filing requirements
applicable to its executive officers, Directors and greater than 10% beneficial
owners were satisfied, except for the following: Mr. and Mrs. Lewis each filed a
Form 5 to report eight (8) acquisitions of stock by Mr. Lewis, each acquisition
not exceeding 6,000 shares, as gifts to Mr. Lewis' grandsons, that should have
been earlier reported on Forms 4; Mr. Bloomberg filed a late Form 5 to report a
purchase of 7,500 shares in the initial public offering and the subsequent gift
of 2,500 of such shares to his two minor stepchildren that should have been
reported on earlier Forms 4; and Messrs. Gerson, Robinson and Terada each filed
a late Form 5 to report the acquisition of stock in the initial public offering
that should have been reported on earlier Forms 4.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR 1996 MAY BE OBTAINED WITHOUT CHARGE
UPON WRITTEN REQUEST TO THE CHIEF FINANCIAL OFFICER, ASAHI/AMERICA, INC., 35
GREEN STREET, MALDEN, MASSACHUSETTS 02148.
-16-
EXHIBIT A
ASAHI/AMERICA, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I -- PURPOSE
1.01. Purpose
The Asahi/America, Inc. Employee Stock Purchase Plan is intended to
provide the employees of Asahi/America Inc. and its subsidiary corporations
(hereinafter referred to, unless the context otherwise requires, as the
"Company") the opportunity to acquire a proprietary interest in the Company
through the purchase of shares of the Common Stock of the Company. It is the
intention of the Company that the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423 of the
Code.
ARTICLE II -- DEFINITIONS
2.01. "Base Pay" means regular straight-time earnings, excluding payments for
overtime, shift premium, bonuses and other special payments, commissions and
other incentive payments.
2.02. "Committee" means the individuals described in Article XI.
2.03. "Common Stock" or "stock" means the Common Stock, no par value, of the
Company.
2.04. "Employee" means any person who is customarily employed on a full-time
or part-time basis by the Company and is regularly scheduled to work more than
20 hours per week and more than five months per calendar year.
2.05. "Subsidiary Corporation" means any present or future corporation which
(i) would be a "subsidiary corporation" of Asahi/America, Inc. as that term is
defined in Section 424 of the Code and (ii) is designated as a participant in
the Plan by the Committee.
ARTICLE III -- ELIGIBILITY AND PARTICIPATION
3.01. Initial Eligibility.
Except as otherwise provided in this Plan, each and every employee of
the Company shall be eligible to participate in offerings under the Plan which
commence on or after the respective employee's commencement date of employment.
3.02. Leave of Absence.
For purposes of participation in the Plan, an employee on leave of
absence shall be deemed to be an employee for the first 90 days of such leave of
absence and such employee's employment shall be deemed to terminate at the close
of business on the 90th day of such leave of absence unless such employee shall
have returned to regular full-time or part-time employment (as the case may be)
prior to the close of business on such 90th day. Termination of any employee's
leave of absence, other than termination of such leave of absence by return to
full time or part time employment, shall terminate an employee's employment for
all purposes of the Plan and shall terminate such employee's participation in
the Plan and right to exercise any option.
-17-
3.03. Restrictions on Participation.
Notwithstanding any provisions of the Plan to the contrary, no employee
shall be granted an option to participate in the Plan:
(a) if, immediately after the grant, such employee would own
stock and/or hold outstanding options to purchase stock possessing 5%
or more of the total combined voting power or value of all classes of
stock of the Company (for purposes of this paragraph, the rules of
Section 424(d) of the Code shall apply in determining stock ownership
of any employee); or
(b) which permits his rights to purchase stock under all
employee stock purchase plans of the Company to accrue at a rate which
exceeds $25,000 in fair market value of the stock (determined at the
time such option is granted) for each calendar year in which such
option is outstanding.
3.04. Commencement of Participation.
An eligible employee may become a participant by completing an
authorization for a payroll deduction on the form provided by the Company and
delivering it to the Treasurer of the Company on or before the date set therefor
by the Committee, which date shall be prior to the Offering Commencement Date
for the Offering (as such terms are defined below). Payroll deductions for a
participant shall commence on the applicable Offering Commencement Date when his
authorization for a payroll deduction becomes effective and shall end on the
Offering Termination Date of the Offering to which such authorization is
applicable, unless sooner terminated by the participant as provided in Article
VIII.
ARTICLE IV -- OFFERINGS
4.01. Annual Offerings.
The Plan will be implemented by an initial offering (the "Initial
Offering") and eight subsequent semi-annual offerings (the "Semi-Annual
Offerings" and each a "Semi-Annual Offering") of the Company's Common Stock. The
Initial Offering shall commence on July 15, 1996 (the "Plan Commencement Date"),
and shall terminate on June 30, 1997. The subsequent Semi-Annual Offerings shall
commence on the first day of July and on the first day of the following January,
and shall terminate on the 31st day of December and 30th day of June,
respectively, with the first Semi-Annual Offering commencing on July 1, 1997,
and the last Semi-Annual Offering commencing on January 1, 2001. The maximum
number of shares to be issued in the Initial and subsequent Semi-Annual
Offerings shall be:
o Initial Offering from the Plan Commencement Date to June 30, 1997:
30,000 shares.
o Semi-Annual Offering from July 1, 1997 to December 31, 1997: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
o Semi-Annual Offering from January 1, 1998 to June 30, 1998: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
o Semi-Annual Offering from July 1, 1998 to December 31, 1998: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
o Semi-Annual Offering from January 1, 1999 to June 30, 1999: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
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o Semi-Annual Offering from July 1, 1999 to December 31, 1999: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
o Semi-Annual Offering from January 1, 2000 to June 30, 2000: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
o Semi-Annual Offering from July 1, 2000 to December 31, 2000: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
o Semi-Annual Offering from January 1, 2001 to June 30, 2001: 15,000
shares plus unissued shares from the prior Offerings, whether offered or not.
As used in the Plan, "Offering Commencement Date" means the Plan
Commencement Date, January 1 or July 1, as the case may be, on which the
particular Offering begins and "Offering Termination Date" means the June 30 or
December 31, as the case may be, on which the particular Offering terminates.
ARTICLE V -- PAYROLL DEDUCTIONS
5.01. Amount of Deduction.
At the time a participant files his authorization for payroll
deduction, he shall elect to have deductions made from his pay on each payday
during the time he is a participant in an Offering at the rate of 1, 2, 3, 4, 5,
6, 7, 8, 9 or 10% of his base pay in effect at the Offering Commencement Date of
such Offering, but in no event less than $10.00 per pay period. In the case of
an eligible part-time hourly employee, such employee's base pay during an
Offering shall be determined by multiplying such employee's hourly rate of pay
in effect on the Offering Commencement Date by the number of regularly scheduled
hours of work for such employee during such Offering.
5.02. Participant's Account.
All payroll deductions made for a participant shall be credited to his
account under the Plan. A participant may not make any separate cash payment
into such account except when on leave of absence and then only as provided in
Section 5.04.
5.03. Changes in Payroll Deductions.
A participant may discontinue his participation in the Plan as provided
in Article VIII, but no other change can be made during an Offering and,
specifically, a participant may not alter the amount of his payroll deductions
for that Offering.
5.04. Leave of Absence.
If a participant goes on a leave of absence, such participant shall
have the right to elect: (a) to withdraw the balance in his or her account
pursuant to Section 7.02, (b) to discontinue contributions to the Plan but
remain a participant in the Plan, or (c) remain a participant in the Plan during
such leave of absence, authorizing deductions to be made from payments by the
Company to the participant during such leave of absence and undertaking to make
cash payments to the Plan at the end of each payroll period to the extent that
amounts payable by the Company to such participant are insufficient to meet such
participant's authorized Plan deductions.
ARTICLE VI -- GRANTING OF OPTION
6.01. Number of Option Shares.
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On the Commencement Date of each Offering, a participating employee
shall be deemed to have been granted an option to purchase a maximum number of
shares of the stock of the Company equal to an amount determined as follows: an
amount equal to (i) that percentage of the employee's base pay which he has
elected to have withheld (but not in any case in excess of 10%) multiplied by
(ii) the employee's base pay during the period of the Offering plus (iii)
imputed interest (calculated as provided in Section 9.01) on that amount (iv)
divided by 85% of the market value of the stock of the Company on the applicable
Offering Commencement Date. The market value of the Company's stock shall be
determined as provided in paragraphs (a) and (b) of Section 6.02 below. An
employee's base pay during the period of an Offering shall be determined by
multiplying, in the case of the Initial Offering, his normal weekly rate of pay
(as in effect on the last day prior to the Commencement Date of the particular
Offering) by 50 or the hourly rate by 2,000 or, in the case of a Semi-Annual
Offering, by 26 or 1040, as the case may be, provided that, in the case of an
eligible part-time hourly employee, the employee's base pay during the period of
an Offering shall be determined by multiplying such employee's hourly rate of
pay in effect on the Offering Commencement Date by the number of regularly
scheduled hours of work for such employee during such Offering.
6.02. Option Price.
The option price of stock purchased with payroll deductions made during
an Offering for a participant therein shall be the lower of:
(a) 85% of the closing price of the stock on the Offering
Commencement Date or the nearest prior business day on which trading
occurred on the Nasdaq National Market; or
(b) 85% of the closing price of the stock on the Offering
Termination Date or the nearest prior business day on which trading
occurred on the Nasdaq National Market.
If the Common Stock of the Company is not admitted to trading on any of the
aforesaid dates for which closing prices of the stock are to be determined, then
reference shall be made to the fair market value of the stock on that date, as
determined on such basis as shall be established or specified for the purpose by
the Committee.
ARTICLE VII -- EXERCISE OF OPTION
7.01. Automatic Exercise.
Unless a participant gives written notice to the Company as hereinafter
provided, his option for the purchase of stock with payroll deductions made
during any Offering will be deemed to have been exercised automatically on the
Offering Termination Date applicable to such Offering, for the purchase of the
number of full shares of stock which the accumulated payroll deductions in his
account at that time plus accrued interest will purchase at the applicable
option price (but not in excess of the number of shares for which options have
been granted to the employee pursuant to Section 6.01), and any excess in his
account at that time will be returned to him.
7.02. Withdrawal of Account.
By written notice to the Treasurer of the Company, at any time prior to
the Offering Termination Date applicable to any Offering, a participant may
elect to withdraw all the accumulated payroll deductions plus accrued interest
in his account at such time.
7.03. Fractional Shares.
Fractional shares will not be issued under the Plan and any balance in
his account which would have been used to purchase fractional shares will be
returned to any employee promptly following the termination of an Offering.
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7.04. Transferability of Option.
During a participant's lifetime, options held by the participant shall
be exercisable only by the participant.
7.05. Delivery of Stock.
As promptly as practicable after the Offering Termination Date of each
Offering, the Company will deliver to each participant, as appropriate, the
stock purchased upon exercise of his option.
ARTICLE VIII -- WITHDRAWAL
8.01. In General.
As indicated in Section 7.02, a participant may withdraw payroll
deductions plus accrued interest credited to his account under the Plan at any
time by giving written notice to the Treasurer of the Company prior to the
Offering Termination Date applicable to any Offering. All of the participant's
payroll deductions credited to his account plus accrued interest will be paid to
him promptly after receipt of his notice of withdrawal, and no further payroll
deductions will be made from his pay during such Offering. The Company may, at
its option, treat any attempt to borrow by an employee on the security of his
accumulated payroll deductions as an election, under Section 7.02, to withdraw
such deductions.
8.02. Effect on Subsequent Participation.
A participant's withdrawal from any Offering will not have any effect
upon his eligibility to participate in any succeeding Offering or in any similar
plan which may hereafter be adopted by the Company.
8.03. Termination of Employment.
Upon termination of the participant's employment for any reason,
including retirement (but excluding death while in the employ of the Company or
continuation of a leave of absence for a period beyond 90 days), the payroll
deductions plus accrued interest credited to his account will be returned to
him, or, in the case of his death subsequent to the termination of his
employment, to the person or persons entitled thereto under Section 12.01.
8.04. Termination of Employment Due to Death.
Upon termination of the participant's employment because of his death,
his beneficiary (as defined in Section 12.01) shall have the right to elect, by
written notice given to the Treasurer of the Company prior to the earlier of the
Offering Termination Date or the expiration of a period of sixty (60) days
commencing with the date of the death of the participant, either:
(a) to withdraw all of the payroll deductions plus accrued
interest credited to the participant's account under the Plan, or
(b) to exercise the participant's option for the purchase of
stock on the Offering Termination Date next following the date of the
participant's death for the purchase of the number of full shares of
stock which the accumulated payroll deductions plus accrued interest in
the participant's account at the date of the participant's death will
purchase at the applicable option price, and any excess in such account
will be returned to said beneficiary.
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In the event that no such written notice of election shall be duly received by
the office of the Treasurer of the Company, the beneficiary shall automatically
be deemed to have elected, pursuant to paragraph (b), to exercise the
participant's option.
8.05. Leave of Absence.
A participant on leave of absence shall, subject to the election made
by such participant pursuant to Section 5.04, continue to be a participant in
the Plan so long as such participant is on continuous leave of absence. A
participant who has been on leave of absence for more than 90 days and who
therefore is not an employee for the purpose of the Plan shall not be entitled
to participate in any Offering commencing after the 90th day of such leave of
absence. Notwithstanding any other provisions of the Plan, unless a participant
on leave of absence returns to regular full time or part time employment with
the Company at the earlier of: (a) the termination of such leave of absence or
(b) three months from the 90th day of such leave of absence, such participant's
participation in the Plan shall terminate on whichever of such dates first
occurs.
ARTICLE IX -- INTEREST
9.01. Payment of Interest.
Interest will accrue on all amounts paid into the Plan or credited to
the account of any participant employee, and shall be paid on any and all money
which is distributed to an employee or his beneficiary pursuant to the
provisions of Sections 7.02, 8.01, 8.03, 8.04 and 10.01. Such distributions
shall bear simple interest during the period from the date of withholding to the
date of return at the regular passbook savings account rates per annum in effect
at the First National Bank of Boston, Boston, Massachusetts, during the
applicable Offering period or, if such rates are not published or otherwise
available for such purpose, at the regular passbook savings account rates per
annum in effect during such period at another major commercial bank in Boston,
Massachusetts, selected by the Committee. Where the amount returned represents
an excess amount in an employee's account after such account has been applied to
the purchase of stock, the employee's withholding account shall be deemed to
have been applied first toward purchase of stock under the Plan, so that
interest shall be paid on the last withholdings during the period which results
in the excess amount.
ARTICLE X -- STOCK
10.01. Maximum Shares.
The maximum number of shares of the Company's Common Stock which shall
be issued under the Plan, subject to adjustment upon changes in capitalization
of the Company as provided in Section 12.04, shall be 30,000 shares in the
Initial Offering and 15,000 shares in each Semi-Annual Offering (plus in each
Offering all unissued shares from prior Offerings, whether offered or not), not
to exceed 150,000 shares for all Offerings. If the total number of shares for
which options are exercised on any Offering Termination Date in accordance with
Article VI exceeds the maximum number of shares for the applicable Offering, the
Company shall make a pro rata allocation of the shares available for delivery
and distribution in as nearly a uniform manner as shall be practicable and as it
shall determine to be equitable, and the balance of payroll deductions plus
accrued interest credited to the account of each participant under the Plan
shall be returned to him as promptly as possible.
10.02. Participant's Interest in Option Stock.
The participant will have no interest in stock covered by his option
until such option has been exercised.
10.03. Registration of Stock.
Stock to be delivered to a participant under the Plan will be
registered in the name of the participant, or, if the participant so directs by
written notice to the Treasurer of the Company prior to the Offering
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Termination Date applicable thereto, in the names of the participant and one
such other person as may be designate by the participant, as joint tenants with
rights of survivorship or as tenants by the entirety, to the extent permitted by
applicable law.
10.04. Restrictions on Exercise.
The Board of Directors may, in its discretion, require as conditions to
the exercise of any option that the shares of Common Stock reserved for issuance
upon the exercise of the option shall have been duly listed, upon official
notice of issuance, on the Nasdaq National Stock Market or another stock
exchange, and that either:
(a) a Registration Statement under the Securities Act of 933,
as amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of
purchase, in form and substance satisfactory to the Company, that it is
his intention to purchase the shares for investment and not for resale
or distribution.
XI -- ADMINISTRATION
11.01. Appointment of Committee.
The Board of Directors shall appoint a committee (the "Committee") to
administer the Plan, which shall consist of no fewer than three members of the
Board of Directors. No member of the Committee shall be eligible to purchase
stock under the Plan. In the absence of the appointment of a separate committee
to administer the Plan, the Plan shall be administered by the Compensation
Committee of the Company's Board of Directors.
11.02. Authority of Committee.
Subject to the express provisions of the Plan, the Committee shall have
plenary authority in its discretion to interpret and construe any and all
provisions of the Plan, to adopt rules and regulations for administering the
Plan, and to make all other determinations deemed necessary or advisable for
administering the Plan. The Committee's determination on the foregoing matters
shall be conclusive.
11.03. Rules Governing the Administration of the Committee.
The Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee. The Committee may select
one of its members as its Chairman and shall hold its meetings at such times and
places as it shall deem advisable and may hold telephonic meetings. A majority
of the Committee's members hall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. The Committee may correct
any defect or omission or reconcile any inconsistency in the Plan, in the manner
and to the extent it shall deem desirable. Any decision or determination reduced
to writing and signed by a majority of the members of the Committee shall be as
fully effective as if it had been made by a majority vote at a meeting duly
called and held. The Committee may appoint a secretary and shall make such rules
and regulations for the conduct of its business as it shall deem advisable.
ARTICLE XII -- MISCELLANEOUS
12.01. Designation of Beneficiary.
A participant may file a written designation of a beneficiary who is to
receive any stock and/or cash under the Plan. Such designation of beneficiary
may be changed by the participant at any time by written notice
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to the Treasurer of the Company. Upon the death of a participant and upon
receipt by the Company of proof of identity and existence at the participant's
death of a beneficiary validly designated by him under the Plan, the Company
shall deliver such stock and/or cash to such beneficiary. In the event of the
death of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's death, the
Company shall deliver such stock and/or cash to the executor or administrator of
the estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver such stock and/or cash to the spouse or to any one or more dependents of
the participant as the Company may designate. No beneficiary shall, prior to the
death of the participant by whom he has been designated, acquire any interest in
the stock or cash credited to the participant under the Plan.
12.02. Transferability.
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Section 7.02.
12.03. Use of Funds.
All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purpose and the Company shall not
be obligated to segregate such payroll deductions.
12.04. Adjustment Upon Changes in Capitalization.
(a) If, while any options are outstanding under the Plan, the
outstanding shares of Common Stock of the Company have increased, decreased,
changed into, or been exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the Committee in the
number and/or kind of shares which are subject to purchase under outstanding
options and to the option exercise price or prices applicable to such
outstanding options. In addition, in any such event, the number and/or kind of
shares which may be offered in the Offerings described in Article IV hereof
shall also be proportionately adjusted. No adjustments shall be made for stock
dividends. For the purposes of this Section, any distribution of shares to
shareholders in an amount aggregating 20% or more of the outstanding shares
shall be deemed a stock split and any distributions of shares aggregating less
than 20% of the outstanding shares shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or stock of the Company to
another corporation, the holder of each option then outstanding under the Plan
will thereafter be entitled to receive at the next Offering Termination Date
upon the exercise of such option for each share as to which such option shall be
exercised, as nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Common stock was entitled to
receive upon and at the time of such transaction. The Board of Directors shall
take such steps in connection with such transactions as the Board shall deem
necessary to assure that the provisions of this Section 12.04 shall thereafter
be applicable, as nearly as reasonably may be determined, in relation to the
said cash, securities and/or property as to which such holder of such option
might thereafter be entitled to receive.
12.05. Amendment and Termination.
The Board of Directors shall have complete power and authority to
terminate or amend the Plan; provided, however, that the Board of Directors
shall not, without the approval of the stockholders of the Corporation, (i)
increase the maximum number of shares which may be issued under the Plan (except
pursuant
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to Section 12.04); (ii) amend the requirements as to the class of employees
eligible to purchase stock under the Plan or permit the members of the Committee
to purchase stock under the Plan. No termination, modification, or amendment of
the Plan may, without the consent of an employee then having an option under the
Plan to purchase stock, adversely affect the rights of such employee under such
option.
12.06. Effective Date.
The Plan shall become effective as of July 15, 1996, subject to
approval by the holders of the majority of the Common Stock present and
represented at a special or annual meeting of the stockholders held on or before
July 15, 1997. If the Plan is not so approved, the Plan shall not become
effective.
12.07. No Employment Rights.
The Plan does not, directly or indirectly, create any right for the
benefit of any employee or class of employees to purchase any shares under the
Plan, or create in any employee or class of employees any right with respect to
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an employee's employment at any time.
12.08. Effect of Plan.
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each employee
participating in the Plan, including, without limitation, such employee's estate
and the executors, administrators or trustees thereof, heirs and legatees, and
any receiver, trustee in bankruptcy or representative of creditors of such
employee.
12.09. Governing Law.
The law of The Commonwealth of Massachusetts will govern all matters
relating to this Plan except to the extent it is superseded by the laws of the
United States.
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ASAHI/AMERICA, INC.
Dear Stockholder,
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, to be
held on Wednesday, May 28, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Asahi/America, Inc.
X Please mark
- - ------ votes as in
this example.
1.Election of Directors to terms expiring at the 2000 Annual Meeting of
Stockholders.
Nominees: Leslie B. Lewis and Jeffrey C. Bloomberg
Election of a Director to a term expiring at the 1998 Annual Meeting of
Stockholders.
Nominee: Masashi Uesugi
For Withheld
--- --------
_____________________________________________________
For all nominees except as noted above
2.Ratification of the appointment
of Arthur Andersen LLP as For Against Abstain
independent auditors of the _____ _______ _______
Company.
3.Approval of the adoption of the _____ _______ _______
Employee Stock Purchase Plan.
4.In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting or at any
adjournment(s) thereof.
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Mark box at right if an address change or
comment has been noted on the reverse
side of this card. _____
Signature: ___________________________________ Date:_________________________
Signature: ___________________________________ Date:_________________________
ASAHI/AMERICA, INC.
35 Green Street
Malden, Massachusetts 02148
Annual Meeting of Stockholders - May 28, 1997
Proxy Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints Leslie B. Lewis and
Kozo Terada as Proxies, with full power of substitution to each, to vote for and
on behalf of the undersigned at the 1997 Annual Meeting of Stockholders of
Asahi/America, Inc. to be held at the offices of Gadsby & Hannah LLP, 225
Franklin Street, 22nd Floor, Boston, Massachusetts 02110, on Wednesday, May 28,
1997, at 10:00 a.m., and at any adjournment or adjournments thereof. The
undersigned hereby directs the said proxies to vote in accordance with their
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, 2 AND 3.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN 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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