SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the Commission
only (as permitted by Rule 14A-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14A-12
LaBarge, Inc.
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(Name of Registrant as Specified in its Charter)
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(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.
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is
calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
[LA BARGE LOGO]
NOTICE OF
2002 ANNUAL MEETING
NOVEMBER 20, 2002
AND PROXY STATEMENT
[LA BARGE LOGO]
Notice of Annual Meeting of Stockholders
NOVEMBER 20, 2002
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of LaBarge, Inc. will be held at the St.
Louis Marriott West, 660 Maryville Centre Drive, St. Louis, Missouri, on
November 20, 2002, at 4:00 P.M., CST.
At the Annual Meeting, Common Stockholders will be asked:
1. To elect three Class A Directors for a term ending in 2005,
respectively;
2. To consider and act upon the ratification of the selection
of KPMG LLP as
Independent Auditors for fiscal 2003;
3. To transact such other business as may properly come
before the meeting.
Only stockholders whose names appear of record at the Company's close of
business on September 25, 2002 (the "Record Date") are entitled to receive
notice of and to vote at the Annual Meeting or any adjournment thereof. ALL
CAPITALIZED TERMS NOT OTHERWISE DEFINED IN THIS NOTICE HAVE THE DEFINITIONS
GIVEN TO THEM IN THE ATTACHED PROXY STATEMENT.
We encourage you to vote via Internet or telephone, or you may mail your proxy.
If you receive more than one proxy card because you own shares registered
in different names or at different addresses, please vote each proxy as soon as
possible by following the instructions on the proxy card regarding voting by
Internet, telephone or mail.
By Order of the Board of Directors,
S/Donald H. Nonnenkamp
Donald H. Nonnenkamp
Vice President, Chief Financial Officer and
Secretary
September 25, 2002
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU
INTEND TO BE PRESENT, PLEASE VOTE YOUR PROXY. STOCKHOLDERS CAN HELP THE COMPANY
AVOID UNNECESSARY EXPENSE AND DELAY BY PROMPTLY VOTING THE ENCLOSED PROXY CARD.
THE PRESENCE, IN PERSON OR BY PROPERLY EXECUTED PROXY, OF A MAJORITY OF THE
COMMON STOCK OUTSTANDING ON THE RECORD DATE IS NECESSARY TO CONSTITUTE A QUORUM
AT THE ANNUAL MEETING.
LaBarge, Inc.
9900A Clayton Road
St. Louis, Missouri 63124
PROXY STATEMENT
Annual Meeting of Stockholders
to be held on November 20, 2002
This Proxy Statement is being furnished to the Common Stockholders of
LaBarge, Inc. (the "Company") on or about October 16, 2002, in connection with
the solicitation of proxies on behalf of the Board of Directors of the Company
for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held
on November 20, 2002 at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting, and at any adjournment or postponement of
that meeting.
Holders of shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company at its close of business on September 25, 2002 (the
"Record Date") will be entitled to receive notice of and vote at the Annual
Meeting. On the Record Date, 15,021,116 shares of Common Stock were
outstanding. Holders of Common Stock are entitled to one vote per each share of
Common Stock held of record on the Record Date on each matter that may properly
come before the Annual Meeting.
A plurality of votes of Common Stockholders cast at the Annual Meeting is
required for the election of each Director. Ratification of the selection of
independent auditors requires the affirmative vote of stockholders holding a
majority of the shares of Common Stock voted at the Annual Meeting.
Management of the Company (the "Management"), together with members of the
Board of Directors of the Company, in the aggregate directly or indirectly
controlled approximately 23.7% of the Common Stock outstanding on the Record
Date.
Stockholders of record on the Record Date are entitled to cast their votes
in person or by properly executed proxy at the Annual Meeting. The presence, in
person or by properly executed proxy, of a majority of the Common Stock
outstanding on the Record Date is necessary to constitute a quorum at the Annual
Meeting. If a quorum is not present at the time the Annual Meeting is convened,
the Company may adjourn or postpone the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business. Abstentions and broker non-votes are not
counted for purposes of determining whether a proposal has been approved. Under
applicable Delaware law, an abstention or broker non-vote will have no effect on
the outcome of the election of directors.
All Common Stock represented at the Annual Meeting by properly executed
proxies received prior to or at the Annual Meeting and not properly revoked will
be voted at the Annual Meeting in accordance with the instructions indicated in
such proxies. If no instructions are indicated, such proxies will be voted FOR
election of the Board's nominees as directors, FOR the ratification of the
recommended independent accountants, and, at the discretion of the named
proxies, on any other matters that may properly come before the Annual Meeting.
The Board of Directors of the Company does not know of any matters other than
the matters described in the Notice of Annual Meeting attached to this Proxy
Statement that will come before the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the Annual Meeting, a written
notice of revocation bearing a date later than the date of the proxy, (ii) duly
executing a subsequently dated proxy relating to the Common Stock and delivering
it to the Secretary of the Company at or before the Annual Meeting, or (iii)
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute a revocation of a proxy).
Any written notice revoking a proxy should be sent to: Corporate Secretary,
LaBarge, Inc., 9900A Clayton Road, St. Louis, Missouri 63124.
The proxies are solicited by the Board of Directors of the Company. In
addition to the use of the Internet, telephone and mail, proxies may be
solicited personally or by facsimile transmission by Directors, officers or
regular employees of the Company. The cost of solicitation of proxies will be
borne by the Company.
A copy of the Company's Annual Report for the fiscal year ended June 30,
2002 is being mailed to each stockholder along with this Proxy Statement.
The date of this Proxy Statement is September 25, 2002.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes
designated Class A, Class B and Class C. Each Director is elected for a three-
year term and the term of each Class expires in a different year.
The Board of Directors has nominated for election as Class A Directors:
Messrs Craig E. LaBarge, James P. Shanahan, Jr. and Jack E. Thomas, Jr. Each of
the nominees is currently serving as a Director of the Company and each has
consented to continue to serve as a Director if elected. Unless proxy cards are
marked to withhold authority to vote for any of the Director nominees, the
proxies intend to vote all properly executed proxies FOR election of each of the
Director nominees.
The following biographical information is furnished with respect to each
nominee and each current Director whose term continues after the Annual Meeting:
Term
Expiration Direct Positions with
or the
Date Age Since Company
-------------------- --------- ---- ------ -----------
Nominees Class A
Directors
Craig E. LaBarge 2002 51 1981 Chief Executive
Officer,
President and
Director
James P. Shanahan, Jr. 2002 41 1987 Director
Jack E. Thomas, Jr. 2002 50 1997 Director
Continuing Class B
Directors
Robert G. Clark 2003 43 2001 Director
John G. Helmkamp, Jr. 2003 55 1998 Director
Lawrence J. LeGrand 2003 51 1998 Director
Continuing Class C
Directors
Robert H. Chapman 2004 57 1998 Director
Richard P. Conerly 2004 78 1975 Director
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR ELECTION OF ITS NOMINEES FOR DIRECTOR.
Executive Officers, Directors and Nominees for Director
The following table sets forth certain information, as of September 25,
2002, with respect to the executive officers, directors whose term of office
will continue after the Annual Meeting, and nominees for directors of the
Company:
Name Age Position(s)
-------------------- ----- -------------------
Craig E. LaBarge ....... 51 Chief Executive Officer,
President and Director
Randy L. Buschling ...... 42 Vice President and Chief
Operating Officer
Donald H. Nonnenkamp ..... 50 Vice President, Chief Financial
Officer & Secretary
Vernon R. Anderson ...... 54 Vice President - Operations
Harvey Baker .......... 51 Vice President - Enterprise
Systems
Thomas N. Hilleary ...... 52 Vice President
Thomas L. Hubbard ...... 49 Vice President
John R. Parmley ....... 48 Vice President - Sales &
Marketing
Robert H. Chapman ....... 57 Director
Robert G. Clark .......... 43 Director
Richard P. Conerly ........ 78 Director
John G. Helmkamp, 55 Director
Jr. .......
Lawrence J. LeGrand ..... 51 Director
James P. Shanahan, Jr. ..... 41 Director
Jack E. Thomas, Jr. ....... 50 Director
Craig E. LaBarge has been a Director since 1981. He assumed the positions
of Chief Executive Officer and President in 1991. Prior to that time, he was
Vice President-Marketing of the Electronics Division of the Company (1975 to
1979), President of the Electronics Division of the Company (1979 to 1986), Vice
President of the Company (1981 to 1986) and President and Chief Operating
Officer of the Company (1986 to 1991). Mr. LaBarge is also a director and
member of the Audit Committee of both TALX Corporation and Young Innovations,
Inc.
Mr. Buschling joined the Company in 1998. He is currently Vice President
and Chief Operating Officer of the Company. He served as Senior Vice President
of the Company's Manufacturing Services Group from 1999 to 2002 and as Vice
President-Aerospace and Defense Business Unit from 1998 to 1999. Prior to
joining the Company, Mr. Buschling was General Manager of Watlow Electric
Manufacturing Company's Systems Division for more than five years.
Mr. Nonnenkamp joined the Company in 1999 and currently serves as Vice
President, Chief Financial Officer and Secretary. Previously, he was Vice
President and Treasurer for Esco Electronics Corporation from 1993 to 1999.
Prior to joining Esco, Mr. Nonnenkamp served as Vice President and Chief
Financial Officer for Clark Oil and Refining Corporation.
Mr. Anderson joined the Company in 1978 and became Vice President-
Operations in 2002. Mr. Anderson previously served as Divisional General
Manager (2001-2002) and General Manager of the Joplin, Missouri, facility for
more than five years.
Mr. Baker joined the Company in 1996 and became Vice President-Enterprise
Systems in 2002. He served previously as Vice President-Operations. Prior to
joining the Company, Mr. Baker was Vice President of Manufacturing and Customer
Service for the Broadcast Division of Harris Corporation for more than five
years.
Mr. Hilleary joined the Company in 1998 with the acquisition of Open
Cellular Systems, Inc. He is Vice President of LaBarge, Inc. and oversees the
Company's Network Technologies Group. Prior to joining the Company, he was
President of Open Cellular Systems, Inc. from 1997 to 1998, and Vice President-
Engineering of Distribution Control Systems, Inc. from 1992 to 1997.
Mr. Hubbard joined the Company in 1980. He is Vice President of LaBarge,
Inc. and works with the Company's Network Technologies Group. He was Vice
President-Telecommunications Business Unit from 1996 to 1999. Prior to that
time, he was Sales Manager for the Company's Joplin, Missouri, facility for more
than five years.
Mr. Parmley joined the Company in 1997 and became Vice President-Sales and
Marketing for the Manufacturing Services Group in 1999. He was Account Manager-
Aerospace and Defense Business Unit from 1997 to 1999. Previously, Mr. Parmley
was employed by Eagle-Picher Industries, Inc., where he served in various sales
and management positions from 1991 to 1997.
Mr. Chapman became a Director in 1998 and serves as a member of the Audit
Committee of the Board of Directors. Since 1975, he has served as Chairman of
the Board and Chief Executive Officer of Barry-Wehmiller Companies, Inc., a
leading provider of packaging automation equipment, and serves as Director on
the Board of Midwest Bank Centre, Inc.
Mr. Clark became a Director in 2001 and serves as a member of the Human
Resources Committee of the Board of Directors. Since 1984, he has served as
Chairman of the Board and Chief Executive Officer of Clayco Construction
Company, a national firm doing business across the United States and Canada.
Mr. Conerly became a director in 1975 and serves as a member of the Audit
Committee of the Board of Directors. He was formerly Chairman and Chief
Executive Officer of Orion Capital Inc. from 1987 to 1994; President of Pott
Industries Inc., a marine services company, from 1969 to 1987; and Vice Chairman
of Coal Marine, Houston Natural Gas Corporation, parent company of Pott
Industries Inc., from 1979 to 1985. He is also a director of Young Innovations,
Inc.
Mr. Helmkamp became a Director in 1998 and serves as a member of the Audit
Committee of the Board of Directors. He retired from the positions of Chairman
of the Board and Chief Executive Officer of Illinois State Bank and Trust in
1996, where he served in those capacities for more than five years. Mr.
Helmkamp also serves on the Board of Directors of the United Way of Greater St.
Louis.
Mr. LeGrand became a Director in 1998 and serves as Chairman of the Audit
Committee of the Board of Directors. He has been Executive Vice President of
Plancorp, Inc. since 2001. He served as Executive Vice President of LMI
Aerospace from 1998 to 2001. Prior to that time, Mr. LeGrand was a partner of
KPMG LLP for more than 20 years.
Mr. Shanahan became a Director in 1987 and serves as a member of the Human
Resources Committee of the Board of Directors. He has been Executive Vice
President, General Counsel and Director of Pacholder Associates, Inc., an
investment advisory firm, since 1986.
Mr. Thomas became a Director in 1997 and serves as Chairman of the Human
Resources Committee of the Board of Directors. Since 1982, he has been
President, Chief Executive Officer and Chairman of the Board of Coin Acceptors,
Inc., a world leader in the design and manufacture of coin mechanisms, bill
validators, control systems, and vending machines. Mr. Thomas serves on the
Board of Directors of U.S. Bancorp, is Chairman of Royal Vendors, Inc. and is
also Chairman and Chief Executive Officer of Money Controls, Ltd.
Meetings of the Board of Directors
The Board of Directors of the Company held seven meetings in fiscal 2002.
The Company has a standing Audit Committee of its Board of Directors, which held
four meetings in fiscal 2002. This Committee is governed by a Charter, that
specifies its responsibilities, the accountability of the outside auditors to
the Board of Directors and the Audit Committee, and the Audit Committee's
responsibility to ensure independence of the outside auditors. The Audit
Committee reviews the adequacy of its Charter annually. The Company also has a
standing Human Resources Committee of its Board of Directors, which held one
meeting in fiscal 2002. This Committee performs the principal function of
acting as a compensation committee. The Company has no standing nominating
committee or any committee that performs similar functions. Each Director
attended at least 75% of the meetings of the Board and its Committees on which
he served in fiscal 2002.
Directors' Fees
Members of the Board of Directors who are not employees of the Company
receive $1,500 for each Board meeting attended, $750 for each committee meeting
attended and $500 for attendance at the Company's Annual Meeting. Directors are
reimbursed for expenses incurred in attending meetings of the Board of Directors
and Committees.
Summary Compensation Table
The following table sets forth information concerning the compensation of
the Chief Executive Officer and the four other most highly compensated
executives who served in such capacities as of June 30, 2002, for the fiscal
years indicated.
Annual
Compensation(1)
Name and Fiscal ($) ($)
Principal Position Year Salary Bonus (2)
---------------- ---- ----- -------
Craig E. LaBarge 2002 394,469 125,000
Chief Executive Officer 2001 372,245 219,300
and President 2000 352,508 184,000
Randy L. Buschling 2002 224,847 78,000
Vice President and 2001 221,128 134,000
Chief Operating Officer 2000 238,577 91,000
Donald H. Nonnenkamp (3) 2002 220,735 65,000
Vice President, Chief 2001 210,750 80,000
Financial 2000 146,923 64,000
Officer and Secretary
Harvey Baker 2002 185,267 28,260
Vice President 2001 181,217 97,250
2000 172,000 74,000
John R. Parmley 2002 179,865 62,993
Vice President 2001 156,481 103,518
2000 121,500 87,000
Long-Term
Compensation
Awards Payouts
Name and (#) ($) LTIP ($) All Other
Principal Position Options (2) Compensation
Payouts (5)
(4)
------------------- ---- ----- -------
Craig E. LaBarge 109,675 0 62,445
Chief Executive Officer 135,294 72,300 50,722
and President 294,118 75,000 47,066
Randy L. Buschling 69,550 0 26,075
Vice President and 63,636 0 26,160
Chief Operating Officer 68,632 0 25,536
Donald H. Nonnenkamp (3) 34,085 0 33,492
Vice President, Chief 36,364 0 34,916
Financial 59,221 0 15,008
Officer and Secretary
Harvey Baker 23,260 0 41,577
Vice President 31,818 0 42,190
34,309 0 41,716
John R. Parmley 43,260 0 29,866
Vice President 31,818 0 9,972
34,309 0 7,272
(1) Includes compensation amounts earned during the fiscal years shown but
deferred pursuant to individual deferred compensation agreements with the
Company.
(2) Bonus amounts and Long-Term Incentive Plan (LTIP) payouts are earned in the
fiscal year shown and paid in the subsequent fiscal year.
(3) Mr. Nonnenkamp became an officer of the Company on November 8, 1999.
(4) Under the terms of the Company's LTIP, awards to the Chief Executive
Officer are paid 50% in cash and 50% in non-qualified stock
options. Payouts to
all other participants are in non-qualified stock options.
(5) Includes the following by individual for the fiscal year ended June 30,
2002:
Split Dollar Company Use of
Life Match on
Name Premium ($) 401(k) Auto ($)
(a) Deferrals
($)
------------ ---- ----- -----
Craig E. LaBarge 50,500 2,695 12,250
Randy L. Buschling 13,954 2,356 9,765
Donald H. 21,923 2,496 9,073
Nonnenkamp
Harvey Baker 31,900 2,427 7,250
John R. Parmley 19,297 2,819 7,750
(a)By agreement, these "split dollar life" premiums will be substantially
recovered upon the surrender of the policy or death of the executive.
Option Grants in Last Fiscal Year
The following table sets forth all stock options granted to the named
executives during the fiscal year ended June 30, 2002.
Individual Grants
----------------------
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise
or
Granted Employees Base Price Expiration
in
Name (#) (a) Fiscal Year ($/sh) Date (a)
----------- -------- ------- ------- ------
Craig E. LaBarge 92,900 27.6 2.85 8/22/11
16,775 (b) 5.0 7.24 8/22/06
Randy L. 69,550 20.7 2.85 8/22/11
Buschling
Donald H. 34,085 10.1 2.85 8/22/11
Nonnenkamp
Harvey Baker 23,260 6.9 2.85 8/22/11
John R. Parmley 43,260 12.9 2.85 8/22/11
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Term
----------------------
Name 5% ($) 10% ($)
-------------------- -------- --------
Craig E. LaBarge 174,076 434,015
0 0
Randy L. Buschling 130,322 324,927
Donald H. Nonnenkamp 63,868 159,240
Harvey Baker 43,584 108,667
John R. Parmley 81,060 202,104
(a) The options granted in fiscal 2002 vest in five equal installments, on each
of the first five anniversaries of the date of the grant or
immediately after a
change in control.
(b) Options awarded under this grant to Mr. LaBarge will become exercisable on
August 22, 2003.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The following table sets forth all stock options exercised by the named
executives during the fiscal year ended June 30, 2002, and the number and value
of unexercised options held by such executives at fiscal year-end.
Shares Number of Securities
Acquired Underlying Unexercised
on Value Options at Fiscal Year End
(#)
Name Exercise Realized Exercisable Unexercisable
(#) ($) (b)
------------- ------- --------- -------- ---------
Craig E. LaBarge 0 0 180,219 399,379
Randy L. 0 0 40,179 161,636
Buschling
Donald H. 0 0 42,960 86,705
Nonnenkamp
Harvey Baker 0 0 56,585 69,295
John R. Parmley 0 0 20,085 89,295
Value of Unexercised
"In the Money" Options
at Fiscal Year End ($) (a)
Name Exercisable Unexercisable
---------------- ------------- -------------
Craig E. LaBarge 207,137 518,525
Randy L. Buschling 58,260 227,373
Donald H. Nonnenkamp 62,292 125,665
Harvey Baker 35,423 100,477
John R. Parmley 19,896 122,477
(a)Options are "in the money" if the market value of the shares covered thereby
is greater than the option exercise price.
Market value of a share at June 30, 2002 was $3.95.
(b)Value realized is the difference between the market value of a share on the
exercise date and the exercise price per share, times the number of shares
exercised.
Human Resources Committee
Report on Executive Compensation
LaBarge, Inc. has had an independent Human Resources Committee (the
"Committee") since 1981. The Committee is made up of three outside directors
appointed annually by the Board of Directors (the "Board"). The principal
responsibilities of the Committee include the following:
Review and recommend to the Board the annual salary, incentive
compensation, including performance awards under the 1999
Non-Qualified Stock
Option Plan, and other benefits of the chief executive
officer and other members
of executive management.
The Company's compensation practices are designed to achieve certain
fundamental objectives, including:
To attract and retain talented key executives;
To set competitive compensation levels;
To provide incentives which focus performance on
the achievement of Company
objectives;
To align executive compensation, including the award
of stock options, with
the interest of the stockholders.
To assist the Committee, the Company has, for more than 10 years, contracted
with an independent compensation and benefits consulting firm. This firm
periodically evaluates each of the key management positions within the Company.
The evaluation is based upon such criteria as the size and scope of the job,
specific technical and managerial skills required, and the impact of the
specific job on Company results.
Using the evaluations of each job and data on the compensation practices of
over 500 industrial companies in the U.S., the consultants recommend ranges for
both base salary and bonus opportunity. The range for base salary is wide (plus
or minus 20% from a mid-point) to accommodate a variety of individual criteria,
including competitive factors and specific job performance over time. The
recommended range for bonus opportunity is also wide, plus or minus 50% from a
mid-point. The Committee believes that executives should be paid a base salary
that is within the recommended range. Actual bonus payments may range from zero
to the recommended high point or greater.
Each year, the CEO makes recommendations to the Committee regarding proposed
salary changes and bonus payments, if any. The recommendations, and the
Committee's evaluation of them, are based upon a variety of criteria including
profit performance to plan, cash flow, debt reduction, customer development, the
accomplishment of specific important objectives and many subjective factors.
All of these factors were considered in determining the salaries and bonuses for
2002. These factors are also considered in establishing the compensation of the
Chief Executive Officer.
Committee members: Jack E. Thomas, Jr., Chairman
Robert G. Clark
James P. Shanahan, Jr.
Employment Agreement with Named Executive Officer
In 1999, the Company entered into an Executive Severance Agreement
("Agreement") with Donald H. Nonnenkamp, Vice President, Chief Financial Officer
and Secretary of the Company. The Agreement provides that, following a Change
of Control (as defined by the Agreement), the Company will continue to employ
Mr. Nonnenkamp for a period not less than one year at his place of employment
immediately prior to the Change of Control or within 50 miles thereof. During
that period, Mr. Nonnenkamp would be entitled to a base salary in the amount not
less than the annualized base salary paid or payable to him during the month
immediately preceding the month in which the Change of Control occurs. He would
also be entitled to an annual bonus equal to the same percentage of his base
salary as the average bonuses paid to Mr. Nonnenkamp in each of the five fiscal
years most recently ended were to his base salary in those years, after
disregarding the highest and lowest of such percentages. Mr. Nonnenkamp would
also be entitled, during such one-year period, to all pension, welfare and other
employee benefits, fringe benefits and perquisites in amounts and on terms no
less favorable than those to which he was entitled on the date of the Change of
Control. The Agreement also provides that, in the event of termination of Mr.
Nonnenkamp's employment during such one-year period for reasons other than
death, disability, or Cause (as defined by the Agreement) or voluntarily by Mr.
Nonnenkamp without Good Reason (as defined by the Agreement), Mr. Nonnenkamp
would be entitled to a lump sum payment from the Company equal to the sum of:
(i) his salary and other compensation not yet paid by the Company through the
date of termination; (ii) a bonus prorated for the portion of the year through
the date of termination; (iii) the product of three times the sum of (x) Mr.
Nonnenkamp's salary plus (y) the bonus to which he would have been entitled for
the full fiscal year; plus (iv) vacation pay. The Company would also be
required to provide to Mr. Nonnenkamp for three years after termination all
medical, hospitalization, disability and certain other benefits in amounts and
on terms not less favorable than those to which he was entitled at the time of
termination. If the foregoing amounts were not paid when due, they would bear
interest at the rate of 15% per annum. The Agreement provides for appropriate
adjustments of such payments if they would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended.
Report of the Audit Committee
The primary role of the Audit Committee is to assist the Board of Directors
in its oversight of the Company's financial reporting process. Management has
the primary responsibility for the financial statements and the reporting
process, including the systems of internal controls. The independent auditors
are responsible for auditing the Company's financial statements and expressing
an opinion as to their conformity to accounting principles generally accepted in
the United States.
In the performance of its oversight function, the Audit Committee has
reviewed and discussed with management and the independent auditors the
Company's audited financial statements. The Audit Committee also has discussed
with the independent auditors the matters required to be discussed by Statement
on Auditing Standards No. 61 relating to communication with audit committees.
In addition, the Audit Committee has received from the independent auditors the
written disclosures and letter required by Independence Standards Board Standard
No. 1 relating to independence discussions with audit committees and has
considered whether the independent auditor's provision of non-audit services to
the Company is compatible with maintaining the auditor's independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee meets with the
independent auditors to discuss the results of their examinations, their
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved that
the Company's audited financial statements be included in the Company's 2002
Annual Report to Shareholders and Annual Report on Form 10-K for the year ended
June 30, 2002 for filing with the Securities and Exchange Commission.
In addition, the Board of Directors has determined that all of the members
of the Audit Committee are "independent," as defined by the rules of the
American Stock Exchange.
Committee members: Lawrence J. LeGrand, Chairman
Robert H. Chapman
Richard P. Conerly
John G. Helmkamp, Jr.
Voting Securities and Ownership Thereof By Management and Certain Beneficial
Owners
Set forth below is information as of September 25, 2002, concerning all
persons known to the Company to be beneficial owners of more than 5% of the
Common Stock outstanding on the Record Date, and beneficial ownership of Common
Stock by each Director and nominee for Director of the Company, each Executive
Officer of the Company named in the compensation table and all Executive
Officers and Directors as a group (unless otherwise indicated, such ownership
represents sole voting and sole investment power).
Name and Address of Shares Percent
Beneficial Owners (1) Beneficially Owned of Class
---------------- -------------------- --------
Harvey Baker 77,717 - (2) *
Randy L. Buschling 76,532 - (2) *
Robert H. Chapman 2,600 *
Robert G. Clark 6,700 *
Richard P. Conerly 51,704 *
John G. Helmkamp, Jr. 507,196 - (3) 3.4%
Craig E. LaBarge 2,236,679 - 14.9%
(2)(4)(5)(6)(7)(8)
Lawrence J. LeGrand 341,203 - (9) 2.3%
Donald H. Nonnenkamp 1,154,114 - (2)(4)(10) 7.7%
John R. Parmley 45,465 - (2)(11) *
James P. Shanahan, Jr. 84,000 *
Jack E. Thomas, Jr. 2,000 *
All executive officers
and
directors as a group 3,560,423 23.7%
(15 persons)
* Less than 1%.
Name and Address of Shares Percent
Certain Beneficial Beneficially Owned of Class
Owner (1)
----------------- ---------------------- -------
Pierre L. LaBarge, Jr. 1,686,322 - (12)(13)(14) 11.2%
(1) The address of each Executive Officer, Director and Beneficial Owner is c/o
LaBarge, Inc., 9900A Clayton Road, St. Louis, Missouri 63124.
(2) Includes options exercisable within 60 days for the following number of
shares under the 1993 and 1995 Incentive Stock Option Plans and the 1999 Non-
Qualified Stock Option Plan: Harvey Baker - 74,961; Randy L. Buschling -
76,532; Craig E. LaBarge - 304,681; Donald H. Nonnenkamp -64,893; John R.
Parmley - 37,961. All executive officers and directors as a group - 559,028
shares.
(3) Includes 3,800 shares held by Mr. Helmkamp's spouse in her name, 5,911
shares in her IRA and 35,000 shares held in a trust, of which she acts as
trustee. Also includes 57,900 shares held in three trusts for the benefit of
Mr. Helmkamp's children and 65,000 shares held in a
charitable remainder trust;
Mr. Helmkamp is trustee of the aforesaid trusts. Mr. Helmkamp disclaims
beneficial ownership of all of these shares.
(4) Includes 1,088,221 shares held in the Benefit Plan as to which the two
members of the Benefit Plan administrative committee have shared voting power;
comprising an aggregate of 240,832 shares which are held in accounts of
executive officers of the Company and an aggregate of 847,389 shares which are
held in accounts of other employees of the Company.
(5) Includes 19,754 shares held by three trusts for the benefit of two nephews
and one niece, of which trusts Craig E. LaBarge is a co-trustee and in which
shares Mr. LaBarge disclaims beneficial ownership.
(6) Includes 70,548 shares held by Craig E. LaBarge's spouse in her name,
34,000 shares held in her IRA, and 10,842 shares as custodian for their two
minor children. Mr. LaBarge disclaims beneficial ownership of these shares.
(7) Includes 18,172 shares held by a trust for two minor children of Craig E.
LaBarge. Mr. LaBarge is a co-trustee and disclaims beneficial ownership.
(8) Includes 667,711 shares owned in Craig E. LaBarge's individual capacity,
2,750 shares owned jointly with his spouse and 20,000 shares held in his IRA.
(9) Represents 336,203 shares held in a grantor trust, of which trust Mr.
LeGrand is trustee.
(10) Includes 1,000 shares owned in Mr. Nonnenkamp's individual capacity.
(11) Includes 7,504 shares owned in Mr. Parmley's individual capacity.
(12) Includes 689,222 shares owned in Pierre L. LaBarge, Jr.'s individual
capacity.
(13) Includes 987,100 shares held in Pierre L. LaBarge, Jr.'s revocable
living trust.
(14) Includes 10,000 shares held by Pierre L. LaBarge, Jr.'s spouse. Mr.
LaBarge disclaims beneficial ownership of these shares.
Section 16(a) Beneficial Ownership Compliance
To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements were met during
fiscal 2002.
Performance Graphs
Five-Year Total Return. The following graph compares the cumulative total
stockholder return (stock price appreciation plus dividends) on the Company's
Common Stock with the cumulative total return of the American Stock Exchange
market value and a peer group.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG LA BARGE, INC., AND AMEX MARKET VALUE INDEX AND A PEER GROUP
[CHART]
LABARGE, INC. 100.00 53.06 33.67 33.68 50.61 64.49
AMEX COMPOSITE 100.00 115.86 128.17 150.33 147.42 143.44
PEER GROUP 100.00 75.92 68.55 104.18 72.89 95.14
The peer group consists of the following companies selected on the basis of
their market capitalization and similarity of businesses: Cubic Corporation,
EDO Corporation, Miltope Group, Inc., Esterline Technologies Corporation and
Sparton Corporation.
PROPOSAL 2: SELECTION OF INDEPENDENT ACCOUNTANTS
KPMG LLP ("KPMG") has been appointed as independent accountants for the
Company for the fiscal year ending June 29, 2003 by the Board of Directors with
the approval of the Audit Committee. KPMG has been the Company's independent
accountants since 1980. Although the appointment of independent accountants does
not require the approval of Common Stockholders, the Board of Directors believes
Common Stockholders should participate in the appointment through ratification.
A representative of KPMG is expected to be present at the Annual Meeting of
Stockholders with the opportunity to make a statement, if he so desires, and he
is expected to be available to respond to appropriate questions raised orally at
the meeting.
Audit Fees. The aggregate fees billed by KPMG in connection with the audit
of the Company's consolidated financial statements for the fiscal year ended
June 30, 2002, the review of quarterly financial statements included in the
Company's Forms 10-Q and audits of employee benefit plans were approximately
$233,000.
Financial Information Systems Design and Implementation Fees. KPMG did not
provide any financial information systems design and implementation services to
the Company during the fiscal year ended June 30, 2002.
All Other Fees. The aggregate fees billed by KPMG for professional
services (primarily tax services), other than services related to the audit of
the annual financial statements or the review of the quarterly financial
statements, rendered during the year ended June 30, 2002 were approximately
$220,000.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock casting a vote at the Annual Meeting is necessary for the
ratification of the selection of the independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
SELECTION OF KPMG LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL 2003.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be presented at the next Annual Meeting, which
is expected to be held in November 2003, must be received by the Company at its
principal office at the address listed on page 2 hereof no later than May 16,
2003.
By Order of the Board of Directors,
S/Donald H. Nonnenkamp
DONALD H. NONNENKAMP
Vice President, Chief Financial Officer and
Secretary
St. Louis, Missouri
September 25, 2002
[LaBarge Logo]
LaBarge, Inc.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 20, 2002
The undersigned hereby appoints Craig E. LaBarge and Donald H. Nonnenkamp, or
either of them acting in the absence of the other, proxies for the undersigned,
with full power of substitution, to vote all shares of the undersigned at the
Annual Meeting of Stockholders of LaBarge, Inc. to be held at the St. Louis
Marriott West, 660 Maryville Centre Drive, St. Louis, Missouri, on November 20,
2002, at 4:00 P.M. St. Louis time, and at any adjournments thereof, in
accordance with the instructions noted below, and with discretionary authority
with respect to such other matters not known or determined at the time of the
solicitation of this proxy, as may properly come before said meeting or any
adjournments thereof.
YOUR VOTE IS IMPORTANT TO US!
We encourage voting on the Internet or by telephone.
(Please Refer to the Accompanying Voting Instruction Sheet.)
(Detach Proxy Form Here)
The undersigned hereby revokes any proxies heretofore given in connection with
the Annual Meeting and directs said persons to use this proxy to act or vote as
follows:
1. Election of Directors: Class A- 01 - Craig E. LaBarge
02 - James P. Shanahan, Jr.
03 - Jack E. Thomas, Jr.
[ ] FOR all [ ] FOR all nominees [ ] WITHHOLD
nominees listed EXCEPT for AUTHORITY to vote
nominees written in space for all nominees
below
2. Proposal to ratify the selection of KPMG LLP as independent auditors for
the fiscal year ending June 29, 2003.
[ ] FOR KPMG LLP as [ ] AGAINST KPMG LLP for [ ] ABSTAIN
Independent Auditors Independent Auditors
(See Reverse Side)
(Detach Proxy Form Here)
THANK YOU FOR YOUR VOTE
IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE, DETACH PROXY CARD AND
MAIL IN ENVELOPE PROVIDED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
UNLESS OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
DATE: __________________
____________________________________
SIGNATURE(S)
____________________________________
SIGNATURE(S)