PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 22, 2002
SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of EDAC Technologies Corporation ("EDAC" or the
"Company") of proxies, in the accompanying form, to be used at the Annual
Meeting of Shareholders of the Company to be held at the offices of the Company,
1790 New Britain Avenue, Farmington, Connecticut 06032, on October 22, 2002, at
10:00 a.m. Eastern Daylight Time, and any adjournments thereof. This Proxy
Statement is being mailed on or about September 17, 2002 to shareholders of
record at the close of business on September 10, 2002.
Each shareholder of record at the close of business on September 10,
2002 will be entitled to one vote for each share of common stock, par value
$.0025 per share ("Common Stock"), registered in such shareholder's name in
regard to each proposal put to shareholders at the meeting. On that date, there
were 4,416,038 shares of Common Stock outstanding, the Company's only class of
stock outstanding. Assuming a quorum is present, the directors to be elected to
the Board are elected by plurality, meaning the six directors receiving the most
votes will be elected. All other matters which are properly brought before the
meeting will be approved upon the affirmative vote of a majority of the shares
represented and voted at the meeting. Accordingly, abstentions and broker
non-votes will have no effect. Although not required by law, the Company is
seeking shareholder approval to ratify the appointment of Deloitte & Touche LLP
as the Company's independent auditors for the 2002 fiscal year. If shareholders
do not ratify such appointment, the Company may reevaluate its appointment. The
Company knows of no other matter which will be brought before the meeting other
than the election of directors and ratification of auditors.
All shares of Common Stock represented by properly executed proxies
that are received in time for the annual meeting and which have not been revoked
will be voted in accordance with the instructions indicated in such proxies. If
no such instructions are indicated, such shares of Common Stock will be voted
"FOR" each nominee for election to the Board of Directors and "FOR" the
ratification of the appointment of independent auditors of the Company. In
addition, the persons designated in such proxies will have the discretion to
vote on matters incident to the conduct of the annual meeting. If the Company
proposes to adjourn the annual meeting, the persons named in the enclosed proxy
card will vote all shares of Common Stock for which they have authority, in
favor of such adjournment.
The grant of a proxy on the enclosed proxy card does not preclude a
shareholder from voting in person at the annual meeting. A shareholder may
revoke a proxy at any time prior to its exercise by delivering to the Secretary
of the Company, prior to the annual meeting, a written notice of revocation
bearing a later date or time than the proxy, delivering to the Secretary of the
Company a duly executed proxy bearing a later date or time than the revoked
proxy or
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attending the annual meeting and voting in person. Attendance at the annual
meeting will not in and of itself constitute the revocation of a proxy.
The expense of printing and mailing the Notice and Proxy Statement,
including forwarding expense to beneficial owners of Common Stock held in the
name of another, will be borne by the Company.
ELECTION OF DIRECTORS
NOMINEES
The Company's By-Laws provide for at least five and no more than nine
directors to be elected at each Annual Meeting of Shareholders, to hold office
until the next succeeding Annual Meeting and until their successors are duly
elected. In accordance with the By-Laws, the Company has set the number of
directors at six. Robert J. Gilchrist, a current director, is not standing for
re-election at the annual meeting. The table below sets forth certain
information about each person nominated for election as a director. The Company
anticipates that all nominees listed in this Proxy Statement will be candidates
when the election is held. However, if for any reason any nominee is not a
candidate at that time, proxies will be voted for a substitute nominee
designated by the Company (except where a proxy withholds authority with respect
to the election of directors).
DIRECTOR PRINCIPAL
NAME (AND AGE) SINCE OCCUPATION (1)
-------------- ----- --------------
John Kucharik (51) 2000 Industry consultant
John Moses (57) - Private investor
Dominick A. Pagano (58) - President and Chief Executive Officer of the Company
and President and Chief Executive Officer of Dapco
Industries, Inc.
Stephen J. Raffay (74)(2)(3) 2000 Retired Vice-Chairman,
Emhart Corporation (a manufacturer of various
machinery and consumer products)
Ross C. Towne (58) - President and Chief Financial Officer, The
Washington Source, Inc. (custom precision sheet
metal fabrication and integration company)
Daniel C. Tracy (61)(2)(3) 1999 Chairman of the Board of the Company and Business
Consultant
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(1) The principal occupation of each director during the past five years
was that shown in the table, except that: (1) Mr. Kucharik was Chief
Executive Officer of IPC, Inc. (custom powder coater, e-coater and
electro--plating company) from 2000 to 2002. He
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was President and Chief Executive Officer of MVE, Inc. (manufacturer of
cryogenic holding tanks and equipment) from 1997 to 2000. Prior to
1997, Mr. Kucharik was President of General Signal Pump Group
(manufacturer of water pumps) from 1995 to 1997; (2) Mr. Pagano became
President and Chief Executive Officer of the Company in August of 2002
and also continues as President and Chief Executive Officer of Dapco
Industries, Inc. Mr. Pagano also served as Chairman of the Board of
Directors of American Environmental Technologies, Inc. from 1988 until
1999. He also served as a director of the Company from July 2001 to
April 2002; (3) Mr. Raffay served as a senior executive and as a
Director of Emhart Corporation until his retirement as Vice Chairman in
1987. Since then he has done consulting work and serves as a member of
the boards of directors for a number of companies; (4) Mr. Towne owned
Management Partners, Inc., a management consulting firm from 1990 to
2000, specializing in business planning, organizational restructuring
and operational audits; and (5) Mr. Tracy was employed by Arthur
Andersen from 1963 until his retirement in 1998, serving most recently
as a partner.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
The Board of Directors recommends that shareholders vote FOR all of the
nominees.
DIRECTOR RESIGNATIONS
Joseph P. Lebel resigned from the Board of Directors on February 25,
2002, George Fraher resigned from the Board of Directors on March 14, 2002,
Dominick Pagano resigned from the Board of Directors on April 16, 2002, Ronald
G. Popolizio resigned from the Board of Directors on May 1, 2002 and Richard A.
Dandurand resigned from the Board of Directors and as Chairman and Chief
Executive Officer of the Company on July 29, 2002.
In his letter of resignation, Mr. Lebel stated that he objected to
certain actions of the board majority. Mr. Lebel did not provide any basis for
his objections and the Company does not believe that they have merit.
Mr. Pagano sent a follow-up letter dated April 26, 2002 to the Company
in which Mr. Pagano made certain assertions in connection with his resignation,
including assertions regarding the Company's compensation policies, the proposed
sale of the Company's Precision Components Division in 2001 and the subsequent
operation of that division in 2001, and certain amendments made to the Company's
By-Laws.
DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors has an Audit Committee and a Compensation
Committee.
The Audit Committee held four meetings during 2001. The Audit Committee
meets annually to consider the report and recommendation of the Company's
independent public accountants and is available for additional meetings upon
request of such accountants. The
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Audit Committee's functions also include making recommendations to the Board of
Directors regarding the engagement or retention of such accountants, adoption of
accounting methods and procedures, public disclosures required for compliance
with securities laws and other matters relating to the Company's financial
accounting. For additional information regarding the Audit Committee, see the
"Report of the Audit Committee" below.
The Compensation Committee held four meetings during 2001. The
Compensation Committee sets the compensation for the executive officers of the
Company.
The Company's strategic planning function previously performed by the
Strategic Planning Committee was assumed by the entire Board of Directors which
reviewed the Company's strategic plan.
The Board of Directors held eight meetings during 2001. No director
attended fewer than 75% of the total number of meetings of the Board of
Directors and each Committee on which he served.
FEES OF INDEPENDENT AUDITORS
AUDIT FEES. Arthur Andersen LLP billed the Company $101,500 in fees for
professional services rendered for the audit of the Company's financial
statements for the fiscal year ended December 29, 2001, including reviews of the
interim financial statements in the Company's Quarterly Reports on Form 10-Q
during the fiscal year ended December 29, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Arthur
Andersen LLP did not render any professional services to the Company for
information technology advice during the fiscal year ended December 29, 2001.
ALL OTHER FEES. Arthur Andersen LLP billed the Company $56,875 in fees
for all other professional services rendered to the Company during the fiscal
year ended December 29, 2001. These services consisted of tax services and
services relating to employee benefit plans.
The Audit Committee of the Board of Directors of the Company considered
that the provision of the services and the payment of the fees described above
are compatible with maintaining the independence of Arthur Andersen LLP.