UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
Selas Corporation of America
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(Name of Registrant as Specified In Its Charter)
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[LOGO]
SELAS CORPORATION OF AMERICA
1260 RED FOX ROAD
ARDEN HILLS, MINNESOTA 55112
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2003 Annual Meeting of Shareholders (the "Annual Meeting") of Selas
Corporation of America (the "Corporation") will be held on Wednesday, April 23,
2003 at the offices of Blank Rome LLP, One Logan Square, 18th and Cherry
Streets, Philadelphia PA 19103, at 1:00 PM, Eastern standard time, for the
following purposes:
(1) to elect directors; and
(2) to transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on March 14, 2003,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting or any adjournment or postponement thereof. If
the Annual Meeting is adjourned for one or more periods aggregating at least 15
days because of the absence of a quorum, those shareholders entitled to vote who
attend the reconvened Annual Meeting, if less than a quorum as determined under
applicable law, shall nevertheless constitute a quorum for the purpose of acting
upon any matter set forth in this Notice of Annual Meeting.
All shareholders are cordially invited to attend the meeting, but whether
or not you expect to attend the meeting in person, please mark, sign and date
the enclosed proxy card and return it promptly in the envelope provided in order
that your shares may be voted. If you attend the meeting, you may revoke your
proxy and vote in person.
By Order of the Board of Directors
/s/ Michael J. McKenna
Michael J. McKenna
Chairman of the Board
March 21, 2003
Philadelphia, Pennsylvania
SELAS CORPORATION OF AMERICA
1260 RED FOX ROAD
ARDEN HILLS, MINNESOTA 55112
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of the Selas
Corporation of America (the "Corporation") for use at the 2003 Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Wednesday, April 23, 2003 at
the offices of Blank Rome LLP, One Logan Square, 18th and Cherry Streets,
Philadelphia PA 19103, at 1:00 PM, Eastern standard time, and any adjournment or
postponement thereof. This Proxy Statement and accompanying proxy card are first
being mailed to shareholders on or about March 21, 2003.
The Board of Directors has fixed the close of business on March 14, 2003,
as the record date for determination of the shareholders entitled to notice of
and to vote at the Annual Meeting. As of March 14, 2003, there were 5,124,214
common shares, par value $1.00 per share ("Common Share"), of the Corporation
outstanding, each of which is entitled to one vote on all matters to be
presented at the Meeting.
Proxies in the form enclosed, if properly executed and received in time for
voting, and not revoked, will be voted as directed on the proxies. If no
directions to the contrary are indicated, the persons named in the proxy will
vote all of your Common Shares "for" the election of the nominees for director.
With respect to any other matter that properly comes before the meeting, the
proxy holders will vote the proxies in their discretion in accordance with their
best judgment. Sending in a signed proxy will not affect a shareholder's right
to attend the Annual Meeting and vote in person since the proxy is revocable.
Any shareholder who submits a proxy may revoke it at any time before the proxy
is voted at the Annual Meeting by delivering a later dated proxy or by giving
written notice to the Secretary of the Corporation or attending the Annual
Meeting in person and so requesting. Attendance at the Annual Meeting will not
by itself revoke a previously granted proxy.
The presence, in person or represented by proxy, of the holders of a
majority of the outstanding Common Shares will constitute a quorum for the
transaction of business at the Annual Meeting. All Common Shares present in
person or represented by proxy (including "broker non-votes") and entitled to
vote at the Annual Meeting, no matter how they are voted or whether they abstain
from voting, will be counted in determining the presence of a quorum. If the
Annual Meeting is adjourned because of the absence of a quorum, those
shareholders entitled to vote who attend the adjourned Annual Meeting, although
constituting less than a quorum as provided herein, shall nevertheless
constitute a quorum for the purpose of electing directors. If the Annual Meeting
is adjourned for one or more periods aggregating at least 15 days because of the
absence of a quorum, those shareholders entitled to vote who attend the
reconvened Annual Meeting, if less than a quorum as determined under applicable
law, shall nevertheless constitute a quorum for the purpose of acting upon any
matter set forth in the Notice of Annual Meeting.
-1-
Each Common Share is entitled to one vote on each matter that may be
brought before the Annual Meeting. The election of directors will be determined
by a plurality vote and the two nominees receiving the highest number of "for"
votes will be elected. Approval of any other proposal will require the
affirmative vote of a majority of the shares entitled to vote and present in
person or represented by proxy. Under the Pennsylvania Business Corporation Law,
an abstention, withholding of authority to vote or broker non-vote, will not
have the same legal effect as an "against" vote and will not be counted in
determining whether the proposal has received the required shareholder vote.
The cost of this solicitation will be borne by the Corporation. In addition
to solicitation by mail, proxies may be solicited in person or by telephone,
telegraph or teletype by officers, directors or employees of the Corporation,
without additional compensation. Upon request, the Corporation will pay the
reasonable expenses incurred by record holders of the Corporation's Common
Shares who are brokers, dealers, banks or voting trustees, or their nominees,
for mailing proxy materials and the annual report to shareholders to the
beneficial owners of the shares they hold of record.
-2-
ELECTION OF DIRECTORS
The Board of Directors currently consists of five members divided into
three classes.
John H. Duerden, whose term was to expire in 2005, resigned from the Board
of Directors effective December 31, 2002. The Board of Directors has nominated
Fredrick L. Bissinger and Nicholas A. Giordano for re-election at the Annual
Meeting to serve until the 2006 annual meeting of shareholders and until their
respective successors have been duly elected and qualified. Both Messrs.
Bissinger and Giordano have indicated their willingness to continue serving as
directors. The Board of Directors knows of no reason why the nominees would be
unable to serve as directors. If either of the nominees should for any reason be
unable to serve, then the proxies will be voted for the election of such
substitute nominee as the Board of Directors may designate, unless the Board of
Directors reduces the number of directors on the board.
Assuming a quorum is present, the two nominees receiving the highest number
of "for" votes will be elected. For such purposes, an abstention, the
withholding of authority to vote or broker non-vote will not be counted in
determining whether the proposal has received the required shareholder vote.
The following table sets forth certain information concerning the nominees
and the persons whose terms as directors will continue after the Annual Meeting,
including their ages and principal occupations during the past five years:
DIRECTOR TERM
NAME, AGE AND OCCUPATION SINCE EXPIRES
------------------------ -------- -------
Frederick L. Bissinger (92) retired Vice Chairman of Allied Chemical 1974 2003
Corporation (now Honeywell Inc.) a chemical and manufacturing company.
Nicholas A. Giordano (60), business consultant and investor since 1997. Mr. 2000 2003
Giordano was Interim President of LaSalle University from July 1998 to June
1999. From 1981 to 1997, Mr. Giordano was President and Chief Executive
Officer of the Philadelphia Stock Exchange. Mr. Giordano serves as a
trustee of W.T. Trust and Kalmar Pooled Investment Trust, mutual funds, and
as a Director of Independence Blue Cross of Philadelphia, Fotoball USA,
Inc., and Daisytek International Corporation.
Robert N. Masucci (65), Chairman of the Board of Montgomery Capital Advisors, 2002 2005
Inc., an investment advisory company, since 1990 and, Chief Executive
Officer of Barclay Brand Ferndon, Inc., a distribution company, since
1996. Prior to 1990, Mr. Masucci was Chief Executive Officer of Drexel
Industries, Inc., a forklift manufacturer.
-3-
DIRECTOR TERM
NAME, AGE AND OCCUPATION SINCE EXPIRES
------------------------ -------- -------
Mark S. Gorder (56), President and Chief Executive Officer of the Corporation 1996 2004
since April 2001; President and Chief Operating Officer of the Corporation
from December 2000 to April 2001; and Vice President of the Corporation
from 1996 to December 2000. Mr. Gorder has been President and Chief
Executive Officer of Resistance Technology, Inc., a subsidiary of the
Corporation, since 1983.
Michael J. McKenna (68), Chairman of the Board of Directors of the 1998 2004
Corporation since April 2001. In March 2001, Mr. McKenna retired as was the
Vice Chairman of the Board of Directors and a Director of Crown Cork & Seal
Company, Inc., a manufacturing company. From 1995 to 1998, Mr. McKenna was
the President and Chief Operating Officer and, prior to 1995, was the
Executive Vice President and President of the North American Division of
Crown Cork & Seal Company, Inc.
Messrs. Giordano and Masucci are first cousins.
BOARD AND COMMITTEE MATTERS
The Corporation's Board of Directors held six meetings in 2002. In 2002,
Mr. McKenna received an annual retainer of $141,500 for services performed as
Chairman of the Board. The other Directors who were not officers of the
Corporation received an annual retainer of $21,600 plus $800 per Board or
Committee meeting attended on a particular day and $400 for each additional
Board or Committee meeting attended on the same day. Mr. Giordano receives an
additional $200 per meeting for his services as Chairman of the Audit Committee.
Total fees earned were $33,900, $23,800 and $23,600 by Mr. Giordano, Bissinger
and Masucci, respectively. Under the Corporation's Non-Employee Directors Stock
Option Plan adopted in 1998, directors who are not employees of the Corporation
or any of its subsidiaries receive an automatic one-time grant of an option to
acquire 5,000 Common Shares of the Corporation upon their initial election or
appointment to the Board of Directors. In 2002, pursuant to the discretionary
grant provision of that plan, Mr. McKenna was granted an option to purchase an
additional 22,500 Common Shares and Messrs. Bissinger, Giordano and Masucci each
were granted options to purchase an additional 15,000 Common Shares. In December
2002, the Board approved a stock grant of 5,000 Common Shares to Mr. Bissinger
in recognition of his 28 years of service to the Corporation.
The Board of Directors has standing Audit and Compensation Committees.
There is no standing Nominating Committee.
The Audit Committee, which in 2002 consisted of Messrs. Giordano
(Chairman), Masucci, and McKenna, held five formal meetings in 2002. In
addition, the Audit Committee, or its Chairman, held informal telephonic
meetings with the Corporation's management and independent auditors to review
and approve the Corporation's quarterly consolidated financial statements. The
Audit Committee receives information from the outside auditors and from
management of the Corporation relating to the Corporation's consolidated
financial statements and considers recommendations of the auditors and
-4-
financial management as to audit and accounting matters. The Audit Committee
appoints the independent auditors, reviews the audit plan and results of the
audit engagement, reviews the independence of the auditors, and reviews the
independent auditor's assessment of the adequacy of the Company's system of
internal control.
The Compensation Committee, consisting of Messrs. McKenna (Chairman),
Giordano, Masucci, and Bissinger, held two meetings in 2002. The Compensation
Committee reviews and makes recommendations to the Board of Directors concerning
officer compensation and officer and employee bonus programs and administers the
Corporation's 2001 Stock Option Plan, Amended and Restated 1994 Stock Option
Plan and Non-Employee Directors Stock Option Plan.
ADDITIONAL INFORMATION
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND CERTAIN OFFICERS
The following table sets forth certain information as of March 14, 2003,
concerning beneficial ownership of the Common Shares by (i) persons or groups of
persons shown by Securities and Exchange Commission records to own beneficially
more than 5% of the Common Shares (ii) directors and nominees, (iii) the
executive officers named in the Summary Compensation Table included herein and
(iv) all directors and executive officers as a group.
NUMBER OF
SHARES
BENEFICIALLY PERCENT
NAME OWNED(1) OF CLASS
---- -------- --------
The Trust Company of New Jersey (2)................................... 468,200 9.1%
35 Journal Square
Jersey City, NJ 07306
Dimensional Fund Advisors, Inc (3)................................... 394,400 7.7%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
U.S. Bancorp (4)...................................................... 264,650 5.2%
601 2nd Ave. South
Minneapolis, MN 55402-4302
Frederick L. Bissinger, Director (5).................................. 24,000 *
Mark S. Gorder, Director, President and Chief Executive Officer(6).... 359,950 6.9%
Nicholas A. Giordano, Director (7).................................... 9,333 *
Michael J. McKenna, Chairman of the Board of Directors (8)............ 18,500 *
Robert N. Masucci, Director (9) ...................................... 6,667
James C. Deuer, Vice President (10)................................... 61,499 1.2%
Christian Bailliart, Vice President (11).............................. 24,800 *
All Directors and Executive Officers as a Group (9 persons) (12)...... 525,249 9.9%
---------
* Less than 1%
-5-
(1) Unless otherwise indicated, each person has sole voting and investment
power with respect to all such shares. The securities "beneficially
owned" by a person are determined in accordance with the definition of
"beneficial ownership" set forth in the regulations of the Securities
and Exchange Commission and, accordingly, include securities owned by
or for the spouse, children or certain other relatives of such person
as well as other securities as to which the person has or shares
voting or investment power or has the right to acquire within 60 days
after the March 14, 2003. The same shares may be beneficially owned by
more than one person. Beneficial ownership may be disclaimed as to
certain of the securities.
(2) Based upon a Schedule 13G/A filed with the SEC on February 13, 2003.
(3) Based upon a Schedule 13G/A filed with the SEC on February 12, 2003.
(4) Includes 264,650 Common Shares owned by Mr. Gorder and held in a trust
for which U.S. Bank National Association serves as agent and U.S.
Bancorp Asset Management, Inc. serves as investment advisor. Based
upon a Schedule 13G/A filed with the SEC on February 10, 2003 that
also includes U.S. Bancorp Asset Management, Inc. as the beneficial
owner of the shares shown in the table. According to the Schedule
13G/A, U.S. Bancorp is a holding company which is the parent company
of U.S. Bancorp Asset Management, Inc., an investment advisor.
(5) Includes 10,000 shares which Mr. Bissinger has the right to acquire
within 60 days of March 14, 2003 through the exercise of stock
options.
(6) Includes 95,500 shares which Mr. Gorder has the right to acquire
within 60 days of March 14, 2003 through the exercise of stock
options. Includes 264,650 shares, which are owned by Mr. Gorder and
are held in a trust account at U.S. Bancorp, as previously listed in
the table. Mr. Gorder, whose business address is 1260 Red Fox Road,
Arden Hills, MN 55112, is also President and Chief Executive Officer
of Resistance Technology, Inc., a wholly owned subsidiary of the
corporation.
(7) Includes 8,333 shares which Mr. Giordano has the right to acquire
within 60 days of March 14, 2003 through the exercise of stock
options.
(8) Includes 12,500 shares which Mr. McKenna has the right to acquire
within 60 days of March 14, 2003 through the exercise of stock
options.
(9) Includes 6,667 shares which Mr. Masucci has the right to acquire
within 60 days of March 14, 2003 through the exercise of stock
options.
(10) Includes 24,000 shares which Mr. Deuer has the right to acquire within
60 days of March 14, 2003 through the exercise of stock options.
(11) Includes 24,800 shares which Mr. Bailliart has the right to acquire
within 60 days of March 14, 2003 through the exercise of stock
options.
(12) Includes 202,300 shares which directors and executive offices have the
right to acquire within 60 days of March 14, 2003 through the exercise
of stock options.
-6-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning
compensation paid or accrued by the Corporation and its subsidiaries for
the years indicated to the Corporation's Chief Executive Officer and its
four most highly compensated executive officers that made over $100,000 in
annual compensation for fiscal year ended December 31, 2002 (the "Named
Officers").
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------- ---------------------
NAME AND PRINCIPAL SECURITIES UNDERLYING ALL OTHER
POSITION(1) YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)(2)
------------------------------- ---- ---------- --------- ----------- -------------------
Mark S. Gorder................. 2002 268,127 - 50,000 8,322
Chief Executive Officer of 2001 264,640 - 25,000 5,687
the Corporation and President 2000 205,478 40,000 50,000 5,445
of Resistance Technology, Inc.
James C. Deuer................. 2002 130,371 37,000 - 3,911
Vice President of the 2001 130,371 - - 3,345
Corporation and President 2000 130,371 80,000 - 3,345
of Deuer Manufacturing, Inc.
Christian Bailliart(3) ........ 2002 143,662 - - 6,338(4)
Vice President of the 2001 136,373 - - 5,143(4)
Corporation and Chairman of 2000 133,387 25,000 2,000 5,194(4)
Selas SAS
(1) For fiscal year ended December 31, 2002, the Corporation only had two
executive officers that made over $100,000 in annual compensation.
Mr. Robert F. Gallagher, who serves as the Chief Financial Officer,
Secretary and Treasurer, was hired on August 19, 2002, but his annual
compensation did not meet the disclosure requirements. Mr. Gerald H.
Broecker was appointed as Vice President of Administration on December
17, 2002, but his annual compensation did not meet the disclosure
requirements.
(2) Represents the Corporation's or a subsidiary's contributions to the
Named Officer's account under retirement plans and group term life
insurance.
(3) Mr. Bailliart's salary and bonus, which were paid in euros, have been
translated into U.S. dollars for purposes of this presentation based
upon the average prevailing exchange rate for the applicable year.
(4) Represents amounts paid by the Corporation or its subsidiaries to
obtain insurance which provides coverage to Mr. Bailliart in the event
Mr. Bailliart's employment is terminated.
-7-
STOCK OPTION TABLES
The following tables set forth certain information about stock option
grants by the Corporation to the Named Officers in fiscal 2002 and the number of
options exercised in fiscal 2002 and the number, respectively, of unexercised
options and the value of unexercised in-the-money options at the 2002 fiscal
year end held by Named Officers.
% OF TOTAL
OPTIONS POTENTIAL REALIZABLE VALUE
GRANTED TO AT ASSUMED ANNUAL RATES
OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION OF STOCK PRICE APPRECIATION
NAME GRANTED IN 2002(1) PER SHARE DATE FOR OPTION TERM (2)
---- ------- ---------- --------- ---- -------------------
AT 5% AT 10%
----- ------
Mark S. Gorder 50,000 50.0% $1.55 12/17/2012 24,370 61,758
James C. Deuer - - - - - -
Christian Bailliart - - - - - -
---------------
(1) During 2002 the Corporation granted options under the 2001 Stock
Option Plan covering a total of 100,000 Common Shares.
(2) These amounts represent hypothetical gains that could be achieved for
the respective options if exercised at the end of the option term.
These gains are based on assumed rates of stock appreciation of 5% and
10% compounded annually from the date the respective options were
granted to their expiration date. The rates of appreciation used in
this table are prescribed by regulation of the Securities and Exchange
Commission and are not intended to forecast future appreciation of the
market value of the Common Shares.
AGGREGATED OPTION EXERCISES IN 2002
AND DECEMBER 31, 2002 OPTION VALUES
NUMBER OF SHARES
COVERED BY VALUE OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED OPTIONS AT DECEMBER 31, 2002 DECEMBER 31, 2002(1)
ON VALUE ----------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
Mark S. Gorder - - 90,500 100,000 - -
James C. Deuer - - 24,000 - - -
Christian Bailliart - - 24,800 1,200 - -
-------------------------
(1) Represents the difference between the option exercise price and the
fair market value of the Common Shares at December 31, 2002.
In-the-money options are those where the fair market value of the
underlying securities exceeds the exercise price of the option. The
closing price of the Common Shares on December 31, 2002, was $1.52 per
share.
-8-
EMPLOYMENT AGREEMENT
The Corporation entered into an employment agreement with Mr. Gorder, as
President and Chief Executive Officer of the Corporation. The agreement provides
for Mr. Gorder to serve as President and Chief Executive officer of the
Corporation until April 30, 2004. Pursuant to the agreement, Mr. Gorder was
compensated at the annual rate of $250,000 for the period of January 1, through
April 30, 2001 and at the annual rate of $275,000 for the period of May 1, 2001
through December 31, 2001. Mr. Gorder's annual compensation after December 31,
2001 was to be established by the Board of Directors, but is required to be no
less than $275,000 thereafter. The "Summary Compensation Table" shows a lower
amount, however, due to the voluntary salary reduction that Mr. Gorder has taken
in the last two years. If Mr. Gorder's employment is terminated for any reason,
other than for cause, he will be entitled to the continued payment of his salary
and bonus until April 30, 2004, or, at his election, a lump sum payment equal to
the present value of these payments
CHANGE-OF-CONTROL ARRANGEMENTS
Under an agreement with Mr. Gorder that expired on December 31, 2002, the
Corporation would be required to pay two years' salary to him upon involuntary
termination (defined to include a reduction in salary, change of location or
adverse change in responsibilities) following a change in control or sale of
substantial assets of the Corporation or Resistance Technology, Inc.
CERTAIN TRANSACTIONS
TRANSACTIONS WITH MR. GORDER
Mr. Gorder is a general partner (with a one-third interest) of Arden
Partners I, L.L.P., a Minnesota limited liability partnership ("Arden") that
owns and leases to the Corporation's subsidiary, Resistance Technology, Inc.
("RTI"), property under a lease entered into October, 1991, and amended and
restated on November 1, 1996. The leased property is one of RTI's two
manufacturing facilities. In 2002, the lease was renewed with a term of October
31, 2011. Under the lease, RTI pays Arden a base monthly rent of approximately
$27,500 until October 2003 and a base monthly rent of approximately $30,667
thereafter. In August 1997, the Corporation made a personal loan to Mr. Gorder
in the amount of $58,000. The loan accrues interest at the rate of 8.5% per
annum. The largest aggregate amount of indebtedness, including interest,
outstanding on the loan during the last fiscal year was $75,411. As of February
28, 2003, the amount of indebtedness outstanding on the loan was $60,081.
Mr. Gorder is the President and Chief Executive Officer of the Corporation, as
well as a director.
-9-
COMPENSATION COMMITTEE REPORT
The Corporation's compensation program for officers, which is administered
by the Compensation Committee of the Board of Directors, is designed to align a
significant portion of officer compensation with the Corporation's business
objectives and performance. The Compensation Committee consists of four
independent outside directors, none of whom has ever been an employee of the
Corporation or any of its subsidiaries.
The Corporation's officer compensation program consists of base salary,
potential annual cash incentive compensation and long-term incentive
compensation in the form of stock options. Officers are also covered under
medical, life insurance, pension and savings plans generally available to
employees of the Corporation or the business unit managed by the officer.
Through the use of data on comparable companies and its evaluation of
officers' performance, the Compensation Committee's objective is to recommend to
the Board of Directors the setting of total base salary and potential incentive
compensation for the Corporation's Chief Executive Officer and other officers
(including Named Officers) at levels designed to achieve the Corporation's
objectives of attracting, retaining, motivating and rewarding talented
executives. The Compensation Committee's philosophy is that a significant
portion of the total potential compensation of the Chief Executive Officer and
other senior executives should be leveraged to be dependent upon the degree of
the Corporation's or a business unit's financial success in a particular year.
In 2002 the Compensation Committee recommended to the Board of Directors
and the Board of Directors approved an incentive compensation program for 2002
that applied financial performance measures tailored to the nature of the
particular business unit and the desired contribution to the overall financial
results of the Corporation. In all cases, incentive compensation was
substantially dependent on the achievement of financial performance targets
relating to a particular business unit or to the Corporation on a consolidated
basis. Because of the financial performance of the Corporation and its business
units for 2002, the only executive officer who received a bonus was the
president of the tire holders and lifts segment, for meeting performance
targets. The Chief Executive Officer's base compensation for 2002 was set at
$275,000 as defined within his employment agreement that took effect January 1,
2001. The "Summary Compensation Table" shows a lower amount, however, due to the
voluntary salary reduction that the Chief Executive Officer has taken in the
last two years.
The Corporation's Amended and Restated 1994 Stock Option Plan and 2001
Stock Option Plan are its long-term incentive plans for officers and key
employees. These plans are designed to further align the interests of the
Corporation's officers and its shareholders by creating a direct link between
long-term executive compensation and long-term shareholder value. Since all
options are granted at fair market value at the time of grant, there is no
built-in profit and thus the value of the option is tied solely and directly to
increases in value of the Common Shares. Stock options are granted to the
Corporation's officers from time to time, as deemed appropriate by the
Compensation Committee, based on various factors, including the executive's
ability to contribute to the Corporation's long-term growth and profitability.
THE COMPENSATION COMMITTEE
Michael J. McKenna, Chairman
Frederick L. Bissinger
Robert N. Masucci
Nicholas A. Giordano
-10-
AUDIT COMMITTEE REPORT
The Audit Committee of the Corporation's Board of Directors currently
consists of three directors, all of whom are independent for purposes of the
American Stock Exchange listing standards. The Audit Committee operates under a
written charter adopted by the Board of Directors. The Audit Committee has
prepared the following report on its activities with respect to the
Corporation's audited consolidated financial statements for the year ended
December 31, 2002, which is referred to herein as the Corporation's audited
consolidated financial statements.
o The Audit Committee has reviewed and discussed the audited consolidated
financial statements with management.
o The Audit Committee has discussed with KPMG LLP, the Corporation's
independent auditors, the matters required to be discussed by Statements on
Auditing Standards No. 61, which include, among other items, matters
related to the conduct of the audit of the Corporation's consolidated
financial statements.
o The Audit Committee has received the written disclosures and the letter
from KPMG LLP required by Independence Standards Board Standard No. 1, and
has discussed with KPMG LLP its independence from the Corporation.
o Based on the review and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the audited consolidated
financial statements be included in the Corporation's Annual Report on Form
10-K for the year ended December 31, 2002, for filing with the Securities
and Exchange Commission.
THE AUDIT COMMITTEE
Nicholas A. Giordano, Chairman
Michael J. McKenna
Robert N. Masucci
-11-
ADDITIONAL INFORMATION REGARDING THE CORPORATION'S AUDITORS
The Corporation's independent auditors for the fiscal year ended December
31, 2002 was KPMG LLP. The Audit Committee of the Board of Directors has
appointed KPMG LLP as the Corporation's independent auditors for the fiscal year
ending December 31, 2003. Representatives of KPMG LLP are expected to be present
at the Annual Meeting and will have the opportunity to make a statement if they
so desire and will be available to respond to appropriate questions.
AUDIT FEES
The aggregate fees charged to the Corporation by KPMG LLP for its audit of
the Corporation's 2002 consolidated financial statements and for its review of
the Corporation's consolidated financial statements included in the
Corporation's quarterly reports on Form 10-Q for 2002 were approximately
$410,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Corporation did not engage KPMG LLP to provide professional services
related to financial information systems and design and implementation for 2002.
ALL OTHER FEES
The aggregate fees charged to the Corporation by KPMG LLP for all other
services primarily tax compliance related for 2002 were approximately $86,500.
The Audit Committee has considered the nature of the above-listed services
provided by KPMG LLP and determined that the provision of the services are
compatible with maintaining its independence.
-12-
PERFORMANCE GRAPH
The following graph shows the cumulative total return for the last five
years, calculated as of December 31 of each such year, for the Common Shares,
the Standard & Poor's 500 Index and the American Stock Exchange Market Value
Index. The graph assumes that the value of the investment in each of the three
was $100 at December 31, 1997 and that all dividends were reinvested.
[PLOT POINTS GRAPH]
Base
Year
1997 1998 1999 2000 2001 2002
--------------------------------------------
Selas 100 86 70 36 22 16
S&P 500 100 127 151 136 118 91
AMEX 100 101 128 131 124 120
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers and directors and persons who own more than ten
percent of a registered class of the Corporation's equity securities
(collectively, the "reporting persons") to file reports of ownership and changes
in ownership with the Securities and Exchange Commission and to furnish the
Corporation with copies of these reports.
Based on the Corporation's review of the copies of these reports received
by it and written representations, if any, received from reporting persons with
respect to the filing of reports of Forms 3, 4 and 5, the Corporation believes
that all filings required to be made by the reporting persons for fiscal 2002
were made on a timely basis, with the exception that Mr. Gorder was late in
filing a Form 4 report with respect to options granted to him on December 17,
2002.
-13-
SHAREHOLDER PROPOSALS
The deadline for providing the Corporation timely notice of any shareholder
proposal to be submitted outside of the Rule 14a-8 process for consideration at
the Corporation's 2004 Annual Meeting of Shareholders (the "2004 Meeting") will
be March 4, 2004. As to all such matters which the Corporation does not have
notice on or prior to March 4, 2004, discretionary authority shall be granted to
the persons designated in the Corporation's proxy related to the 2004 Meeting to
vote on such proposal. In addition, the Rule 14a-8 requirements applicable to
inclusion of shareholder proposals in the Corporation's proxy materials related
to the 2004 Meeting require that a shareholder proposal regarding the 2004
Meeting must be submitted to the Corporation at its office located at 1260 Fox
Road, Arden Hills, Minnesota 55112 by December 16, 2003 to receive consideration
for inclusion in the Corporation's proxy materials for the 2004 Meeting. Any
such proposal must also comply with the proxy rules under the Exchange Act,
including Rule 14a-8.
ANNUAL REPORT TO SHAREHOLDERS AND FORM 10-K
A copy of the annual report to shareholders of the Corporation, including
consolidated financial statements, for 2002 is being delivered with the proxy
materials and is not to be regarded as proxy solicitation material.
EACH SHAREHOLDER CAN OBTAIN A COPY OF THE CORPRORATION'S ANNUAL REPORT ON
FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES FOR THE YEAR
ENDED DECEMBER 31, 2002 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WITHOUT CHANGE EXCEPT FOR EXHIBITS TO THE REPORT, BY SENDING A WRITTEN REQUEST
TO: SELAS CORPORATION OF AMERICA, 1260 RED FOX ROAD, ARDEN HILLS, MINNESOTA
55112, ATTN: MR. ROBERT F. GALLAGHER.
OTHER MATTERS
The Corporation is not presently aware of any matters (other than
procedural matters) that will be brought before the Meeting which are not
reflected in the attached Notice of the Meeting. The enclosed proxy confers
discretionary authority to vote with respect to any and all of the following
matters that may come before the Meeting: (i) matters which the Corporation did
not receive notice by February 6, 2003 were to be presented at the Meeting; (ii)
approval of the minutes of a prior meeting of shareholders, if such approval
does not amount to ratification of the action taken at the meeting; (iii) the
election of any person to any office for which a bona fide nominee named in this
Proxy Statement is unable to serve or for good cause will not serve; (iv) any
proposal omitted from this Proxy Statement and the form of proxy pursuant to
Rules 14a-8 or 14a-9 under the Securities Exchange Act of 1934; and (v) matters
incident to the conduct of the Meeting. In connection with such matters, the
persons named in the enclosed proxy will vote in accordance with their best
judgment.
Robert F. Gallagher
Secretary, Treasurer,
and Chief Financial Officer
-14-
SELAS CORPORATION OF AMERICA
ARDEN HILLS, MINNESOTA 55112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a shareholder of Selas Corporation of America (the
"Corporation"), hereby constitutes and appoints MARK S. GORDER and ROBERT F.
GALLAGHER, and either of them, as attorneys and proxies of the undersigned, with
full power of substitution, for and in the name, place and stead of the
undersigned, to attend, vote and act for the undersigned at the Annual Meeting
of Shareholders to be held on April 23, 2003 (the "Annual Meeting"), and any
adjournments or postponements thereof, and to vote and represent all the Common
Shares of the Corporation which the undersigned is entitled to vote, with all
the powers and authority the undersigned would possess if personally present.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS TO THE CONTRARY ARE
INDICATED, THE PROXY AGENTS IN-TEND TO VOTE FOR ALL OF THE NOMINEES FOR
DIRECTOR. WITH RESPECT TO SUCH OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF, SAID PROXY IS AUTHORIZED
TO VOTE IN ACCORDANCE WITH ITS BEST JUDGMENT.
THE PROXY AGENTS PRESENT AND ACTING IN PERSON OR BY THEIR SUBSTITUTES OR,
IF ONLY ONE IS PRESENT AND ACTING, THEN THAT ONE, MAY EXERCISE ALL THE POWERS
CONFERRED BY THIS PROXY. DISCRETIONARY AUTHORITY IS CONFERRED BY THIS PROXY AS
TO CERTAIN MATTERS DESCRIBED IN THE PROXY STATEMENT.
PLEASE MARK, SIGN, AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
(CONTINUED ON REVERSE SIDE)
1. ELECTION OF DIRECTORS. The nominees for election are Frederick L. Bissinger
and Nicholas A. Giordano.
For all nominees listed Withhold Authority to TO WITHHOLD AUTHORITY TO
above (except as marked vote for all nominees VOTE FOR ANY INDIVIDUAL,
to the contrary at the right) listed above. NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE
SPACE BELOW.
[ ] [ ]
-------------------------
2. To transact such other business as may properly come before the Annual
Meeting or any of its adjournments or postponements.
Date , 2003
----------------------------
Signature (if joint account)
Date , 2003
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE
CORPORATION'S ANNUAL REPORT TO SHAREHOLDERS, NOTICE OF
THE ANNUAL MEETING AND PROXY STATEMENT RELATING THERETO.
________________________________________________________
Signature
Date _______________________________,2003
________________________________________________________
Signature (if joint account)
Date _______________________________,2003
NOTE: Your signature should appear exactly as your name appears in the space to
the left. For joint accounts, any co-owner may sign. When signing as attorney,
executor, administrator, or fiduciary, please give your full title as such.