SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[Amendment No. ]
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 240.14a-11(c) or 240.14a-12
ADDvantage Technologies Group, Inc.
(Name of Registrant As Specified In 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.
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applies:
2) Aggregate number of securities to which transaction applies:
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:
[ ] 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:_________________________________________________________
ADDvantage Technologies Group, Inc.
1605 East Iola
Broken Arrow, Oklahoma 74012
NOTICE OF ANNUAL MEETING
Date: Thursday, March 5, 2002
Time: 10:00 a.m.
Place: Forest Ridge Golf Club,
7501 East Kenosha,
Broken Arrow, Oklahoma
Matters to be voted on:
1. Election of six directors.
2. Ratification of the appointment of Tullius Taylor Sartain &
Sartain LLP as our independent auditors for 2002.
3. Any other business properly brought before the shareholders
at the meeting.
By Order of the Board of Directors,
/S/ Lynnwood R. Moore
Lynnwood R. Moore, Jr., Secretary
January 29, 2002
CONTENTS
Page
----
General Information About Voting 2
Stock Ownership 3
Proposal No. 1: Election of Directors 4
Proposal No. 2: Appointment of Independent Auditors 8
Shareholder Proposals for 2003 Annual Meeting 8
Other Matters 8
PROXY STATEMENT
Your vote at the annual meeting is important to us. Please vote your
shares of common stock by completing the enclosed proxy card and returning
it to us in the enclosed envelope. This proxy statement has information
about the annual meeting and was prepared by our management for the board
of directors. This proxy statement is first being sent to shareholders on
or about February 9th, 2002. Please note that our annual report accompanies
this mailing of the proxy statement.
ADDvantage Technologies Group, Inc.
1605 East Iola
Broken Arrow, Oklahoma 74012
PROXY STATEMENT FOR 2002 ANNUAL MEETING
GENERAL INFORMATION ABOUT VOTING
Who can vote?
You can vote your shares of common stock if our records show that
you owned the shares on January 25, 2002. A total of 10,011,716 shares of
common stock can vote at the annual meeting. You get one vote for each
share of common stock. We do not recognize cumulative voting for the
election of our directors. The enclosed proxy card shows the number of
shares you can vote.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card to vote on each
proposal to be considered at the annual meeting. Sign and date the proxy
card and mail it back to us in the enclosed envelope. The proxyholders
named on the proxy card will vote your shares as you instruct. If you sign
and return the proxy card but do not vote on a proposal, the proxyholders
will vote for you on that proposal. Unless you instruct otherwise, the
proxyholders will vote for each of the six directors and for each of the
other proposals to be considered at the meeting.
What if other matters come up at the annual meeting?
The matters described in this proxy statement are the only matters
we know will be voted on at the annual meeting. If other matters are
properly presented at the meeting, the proxyholders will vote your shares
as they see fit.
Can I change my vote after I return my proxy card?
Yes. At any time before the vote on a proposal, you can change
your vote either by giving our secretary a written notice revoking your
proxy card or by signing, dating and returning to us a new proxy card. We
will honor the proxy card with the latest date. Attendance at the annual
meeting will not, by itself, revoke your proxy card.
Can I vote in person at the annual meeting rather than by completing the
proxy card?
Although we encourage you to complete and return the proxy card to
ensure that your vote is counted, you can attend the annual meeting and vote
your shares in person.
What do I do if my shares are held in "street name"?
If your shares are held in the name of your broker, a bank, or other
nominee, that party should give you instructions for voting your shares.
How are votes counted?
We will hold the annual meeting if holders of a majority of the
shares of common stock entitled to vote either sign and return their proxy
cards or attend the meeting. If you sign and return your proxy card, your
shares will be counted to determine whether we have a quorum even if you
abstain or fail to vote on any of the proposals listed on the proxy card.
Votes will be tabulated by an inspector of election appointed by our board
of directors. Abstentions from voting, which you may specify on each
proposal except the election of directors, will have the effect of a negative
vote.
If your shares are held in the name of a nominee, and you do not
tell the nominee how to vote your shares (so called "broker nonvotes"),
the nominee cannot vote them on any proposal. Broker nonvotes will be
counted as present to determine if a quorum exists but will not be counted
as present and entitled to vote on the election of directors or to ratify
the approval of Tullius Taylor Sartain & Sartain LLP as our independent
auditors.
Who pays for this proxy solicitation?
The accompanying proxy is solicited by and on behalf of our board
of directors, and the entire cost will be paid by us. In addition to
sending you these materials, some of our employees may contact you by
telephone, by mail or in person. None of these employees will receive
any extra compensation for doing this, but they may be reimbursed for
their out-of-pocket expenses incurred while assisting us in soliciting
your proxy.
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STOCK OWNERSHIP
The following table shows the number of shares of common stock or
preferred stock beneficially owned (as of January 25, 2002) by:
- each person who we know beneficially owns more than 5% of
our common stock;
- each director;
- each executive officer named in the Summary Compensation
Table on page 7; and
- our directors and executive officers as a group.
Except as otherwise indicated, the beneficial owners listed in
the table have sole voting and investment powers of their shares.
Beneficial Ownership
Number of Number of
Number of Shares of Shares of
Shares of Series A Series B
Common Preferred Preferred
Stock Percent Stock Percent Stock Percent
Name and Address of Beneficially of Beneficially of Beneficially of
Beneficial Owner Owned (1) Class Owned (2) Class Owned Class
---------------- --------- ----- --------- ----- ----- -----
Gary W. Young 138,708 (3) 1.4% -0- -0- -0- -0-
5905 S. Knoxville Ave.
Tulsa, OK 74135
David E. Chymiak 4,168,100 (4) 41.6% 100,000 50.0% 150,000 50.0%
1605 E. Iola
Broken Arrow, OK 74012
Kenneth A. Chymiak 4,002,000 (4) 40.0% 100,000 50.0% 150,000 50.0%
1605 E. Iola
Broken Arrow, OK 74012
Stephen J. Tyde 16,500 (4) * -0- -0- -0- -0-
8008 S. Fulton Ave.
Tulsa, OK 74136
Freddie H. Gibson 2,000 (4) * -0- -0- -0- -0-
808 S. Erie Avenue
Tulsa, OK 74136
Randy L. Weideman 137,780 (4) 1.4% -0- -0- -0- -0-
Highway 136 West
Deshler, NE 68340
All Executive Officers 8,465,088(3,4) 84.6% 200,000 100% 300,000 100%
Directors as a group
(6 persons)
_____________________________
* Less than one percent.
(1) Shares which an individual has the right to acquire within 60 days
pursuant to the exercise of options are deemed to be outstanding
for the purpose of computing the percentage ownership of such
individual, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown
in the table or the percentage ownership of all officers and
directors as a group.
(2) Each share of Series A Cumulative Convertible Preferred Stock
is convertible into 10 shares of our common stock.
(3) Includes 26,000 shares subject to a stock option which is fully
exercisable.
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(4) Includes 2,000 shares subject to a stock option which is fully
exercisable.
(5) All of the shares beneficially owned by Mr. Young are held of record
by the GWYSEY General Partnership jointly owned by Mr. Young and
his wife.
(6) All of the shares beneficially owned by Mr. Chymiak are held of record
50% by him as trustee of the Ken Chymiak Revocable Trust and 50% by
his wife as trustee of the Susan Chymiak Revocable Trust. Mr. Chymiak
disclaims beneficial ownership of the shares held by his wife.
PROPOSAL NO. 1
Election Of Directors
Our entire board of directors will be elected at the annual meeting.
The directors will be elected for one-year terms expiring at the next
annual meeting. Our bylaws provide that our board shall consist of not
less than one nor more than nine directors, as determined from time to
time by board resolution. Our board has established the number of
directors at six.
Vote Required. The six nominees receiving the highest number of votes
will be elected. Votes withheld for a nominee will not be counted. You
get one vote for each of your shares of common stock for each of the
directorships.
Nominations. At the annual meeting, we will nominate the persons
named in this proxy statement as directors. Although we do not know of
any reason why one of these nominees might not be able to serve, our board
of directors will propose a substitute nominee if any nominee is unavailable
for election.
Shareholders also can nominate persons to be directors. If you want
to nominate a person, you must make the nomination in person at the annual
meeting and the nominee must have agreed to serve if elected.
General Information About the Nominees. All of the nominees are
currently directors of ADDvantage. Each has agreed to be named in this proxy
statement and to serve as director if elected. The ages listed for the
nominees are as of January 29, 2002.
David E. Chymiak Director since 1999
David E. Chymiak, 56, has been the Chairman of our board since 1999.
He is also the President and a director of our wholly owned subsidiary,
TULSAT Corporation, which he and Kenneth A. Chymiak acquired in 1985.
Kenneth A. Chymiak Director since 1999
Kenneth A. Chymiak, 55, has been our President and Chief Executive
Officer since 1999. He is also the Executive Vice President and a director
of TULSAT Corporation, which he acquired with David E. n Chymiak in 1985.
Freddie H. Gibson Director since 1999
Freddie H. Gibson, 54, has been the president and chairman of the board
of directors of Heat Transfer and Equipment, a manufacturer of shell and
turbo heat exchangers for oil and petroleum industries, since 1992.
Stephen J. Tyde Director since 1999
Stephen J. Tyde, 54, was the founder, president and chief executive
officer of The Pump & Motor Works, Inc., an electric motor and turbo
machinery manufacturing company from 1991-2001. He was also the
co-owner and chief operating officer of P&MW Holdings, Inc.
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Gary W. Young Director since 1990
Gary W. Young, 60, served as our Executive Vice President - Finance and
Administration from 1990-1999. He is also the owner and president of Young
Ideas Inc., a financial consulting and investment company, which he founded
in 1987.
Randy L. Weideman Director since 1999
Randy L. Weideman, 45, founded Diamond W Investments, Inc. in 1985 and
has served as its president since that time. We acquired Diamond W
Investments, Inc. in 1999 and changed its name to Lee CATV Corporation.
Committees of the Board. The board of directors has two
principal committees. The following chart describes the function
and membership of each committee and the number of times it met
during our fiscal year ended September 30, 2001:
Audit Committee - 1 Meeting
Functions Members
- Reviews qualifications of our independent auditors and Gary W. Young
makes recommendations to our board about our independent
auditors Freddie H. Gibson
- Reviews scope and results of audits with independent Stephen J. Tyde
auditors, compliance with any of our written policies
and procedures and the adequacy of our system of internal
accounting and controls
- Oversees quarterly reporting
- Performs the other functions listed in the Charter of the
Audit Committee.
Report of the Audit Committee
The Audit Committee of our board of directors is comprised of three
directors who are not officers of the Company. Under currently applicable
rules, all members are "independent" as defined under Rule 4200(a)(15) of
the NASD listing standards. The Audit Committee reviews our financial
reporting process on behalf of the board of directors. Management has the
primary responsibility for the financial statements and the reporting
process, including the system of internal controls.
In connection with its function to oversee and monitor our financial
reporting process, the Audit Committee has done the following:
- reviewed and discussed the audited financial statements for
the fiscal year ended September 30, 2001, with management;
- discussed with the independent auditors the matters required
to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit
Committees);
- received the written disclosures and the letter from the
independent accountants required by
Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees); and
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- based on the review and discussions referred to above,
recommended to the Board that the audited financial statements be
included in our Annual Report on Form 10-KSB for filing with the
SEC.
Gary W. Young Freddie H. Gibson Stephen J. Tyde
Compensation Committee - 1 Meeting
Functions Members
--------- -------
- Reviews and monitors performance of our Gary W. Young
officers
Freddie H. Gibson
- Approves compensation and benefits programs Stephen J. Tyde
of our officers
Our board had one meeting during fiscal 2001 (all other action being
taken by unanimous written consent). Each director attended all meetings of
the board and the committees on which he served.
Compensation of Directors
We pay our three non-employee directors at a rate of $500 for each board
meeting and $250 for each committee meeting the director attends. In
addition, all directors are eligible to receive awards of options to
purchase 1,000 shares of our common stock each year. We reimburse all
directors for out-of-pocket expenses incurred by them in connection with
their service on our board and any board committee. During the fiscal year
ended September 30, 2001, each of the three non-employee directors received
a director's fee of $1,000. All of the directors received an award of
stock options to purchase 1,000 shares of common stock at an exercise price
of $1 1/2 per share. Directors who were our employees received no
additional compensation for their services on our board of directors.
Certain Relationships and Related Party Transactions
In fiscal 1999, Chymiak Investments, L.L.C., which is owned by
David E. Chymiak and Kenneth A. Chymiak, purchased from TULSAT Corporation
on September 30, 1999 the real estate and improvements comprising the
headquarters and a substantial portion of the other office and warehouse
space of TULSAT Corporation for a price of $1,286,000. The price
represents the appraised value of the property less the sales commission
and other sales expenses that would have been incurred by TULSAT Corporation
if it had sold the property to a third party in an arm's-length transaction.
TULSAT Corporation has entered into a five-year lease commencing
October 1, 1999 with Chymiak Investments, L.L.C. covering the property
under which the annual rental due to Chymiak Investments, L.L.C. is
$180,000. TULSAT Corporation is leasing other property from Chymiak
Investments, L.L.C. and paid that company $91,500 in 2000 and $150,000 in
2001, as rental under those leases. The amounts of the rental due in
future years are $150,000 in 2002, $126,500 for 2003, and $78,000 for 2004.
Chymiak Investments Inc., which is owned by Kenneth A. Chymiak and his
wife, Susan C. Chymiak, own three other properties leased to TULSAT
Corporation for five-year terms (all ending in 2003) at rentals of $3,000
per month each (aggregate rentals per year of $108,000 for all three
buildings).
In fiscal 2001, ADDvantage Technologies Group of Missouri and ADDvantage
Technologies Group of Texas borrowed $150,000 each on June 26, 2001 from
Chymiak Investments, L.L.C. for the purchase of two buildings comprising of
office and warehouse space at locations in Missouri and Texas. The note is
payable at 7.5% over 10 years and total interest paid in 2001 was $5,594.
The Company has outstanding loans from stockholders of $1,250,000. Of this
amount, $1,000,000 is payable to revocable trusts for the benefit of
Kenneth A. Chymiak and his wife and $250,000 is payable to David E. Chymiak.
The interest rate on the notes is one and one-quarter percentage point below
the Chase Manhattan Bank Prime, which is the same rate as the Company's bank
line of credit. The current rate on the notes is 3.5% and the total interest
6
paid on the notes was $118,344 in 2000 and $79,166 in 2001.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10% of
our common stock to report their initial ownership of our common stock
and any subsequent changes in that ownership to the Securities and
Exchange Commission or the SEC and to furnish us with a copy of each of
these reports. SEC regulations impose specific due dates for these
reports, and we are required to disclose in this proxy statement any
failure to file by these dates during fiscal 2001.
To our knowledge, based solely on the review of the copies of these
reports furnished to us and written representations that no other reports
were required, during and with respect to fiscal 2001, all Section 16(a)
filing requirements applicable to our executive officers, directors and
more than 10% shareholders were complied with.
Summary Compensation Table
Executive Officers
Annual Compensation Long-Term Compensation
------------------------- ---------------------------------
Number
Other of Shares
Annual Restricted Under- Long-Term
Compen- Stock lying Incentive
Name and Salary Bonus sation Awards Options Payouts
Principal Position Year ($)(1) ($) ($)(2) ($) Granted ($)
------------------ ---- ------- ------ ------- ------ ------- ---
David E. Chymiak 2001 213,463 -0- 8,500 -0- 1,000 -0-
Chairman 2000 150,000 -0- 6,837 -0- 1,000 -0-
1999 124,094 -0- 4,680 -0- -0- -0-
Kenneth A. Chymiak 2001 213,463 -0- 8,500 -0- 1,000 -0-
President and 2000 150,000 -0- 6,837 -0- 1,000 -0-
Chief Executive Officer 1999 124,094 -0- 4,680 -0- -0- -0-
________________
(1) These amounts represent the salaries paid to these officers
by TULSAT Corporation but does not reflect distributions made to
them as shareholders. Prior to year 2000, TULSAT Corporation was
an S corporation for tax purposes before it was acquired by
ADDvantage and distributions were routinely made to the
shareholders in at least the amounts necessary for them to pay
the federal income tax liability they incurred personally as a
result of the net income realized by TULSAT Corporation.
(2) Other annual compensation represents, in 2001, 2000 and
1999, our contributions on behalf of each of the individuals to
our 401(k) Plan.
Option Grants During Fiscal 2001
The following table sets forth information regarding options granted
during fiscal 2001 to named executive officers.
Number of % of Total
Shares Options
Underlying Granted to
Options Employees in Exercise Price
Name Granted Fiscal Year ($/Sh) Expiration Date
---- -------- ------------ -------------- ---------------
Kenneth A. Chymiak 1,000 2.6% $ 1.50 3/6/11
David E. Chymiak 1,000 2.6% $ 1.50 3/6/11
Option Exercises and Year-End Value Table
There were no stock options exercised by the named executive officers
during fiscal 2001. The following table sets forth information regarding
the value of unexercised stock options held by each of the named executive
officers as of the year ended September 30, 2001.
Number of Shares of Value of Unexercised
Shares Common Stock Underlying In-the-Money Options
Acquired on Value at September 30, 2000 at September 30, 2000
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------ ------------ --------- ----------- ------------- ----------- -------------
Kenneth A. Chymiak - - 2,000 - $2,040 -
David E. Chymiak - - 2,000 - $2,040 -
PROPOSAL NO. 2
Appointment Of Independent Auditors
We recommend that you vote for the ratification of the appointment of
Tullius Taylor Sartain & Sartain LLP.
We have appointed the accounting firm of Tullius Taylor Sartain &
Sartain LLP as our independent auditors to examine our financial statements
for the fiscal year ending September 30, 2002. Tullius Taylor Sartain &
Sartain LLP have been our independent auditors since 1994. Fees paid to the
firm in relation to fiscal 2001 were as follows:
Auditor Fees $ 33,450
Financial Information Systems Design
and Implementation Fees -
All other fees -
----------
Total $ 45,000
==========
A resolution to ratify their appointment will be presented at the annual
meeting. A majority of the votes cast must vote in favor to ratify the
appointment. If the shareholders do not ratify the appointment, we will
reconsider our selection of Tullius Taylor Sartain & Sartain LLP. Although
your ratification of the appointment of our independent auditors is not
required, we are submitting the appointment of Tullius Taylor Sartain & Sartain
LLP for your ratification as a matter of good corporate practice.
A representative of Tullius Taylor Sartain & Sartain LLP will be present
at the annual meeting. The representative will have the opportunity to make
a statement if he or she desires to do so and will be available to answer
questions.
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
If you want to include a shareholder proposal in the proxy statement
for the 2003 annual meeting, it must be delivered to our executive offices,
1605 East Iola, Broken Arrow, Oklahoma, 74102, on or before October 12, 2002.
In addition, if you wish to present a proposal at the 2003 annual meeting
that will not be included in our proxy statement and you fail to notify the
us by November 16, 2002, then the proxies solicited by our board for the
2003 annual meeting will include discretionary authority to vote on your
proposal in the event that it is properly brought before the meeting.
OTHER MATTERS
At the date of mailing of this proxy statement, we are not aware of
any business to be presented at the annual meeting other than the proposals
discussed above. If other proposals are properly brought before the
meeting, any proxies returned to us will be voted as the proxyholders see
fit.
You can obtain a copy of our Annual Report on Form 10-KSB for the
year ended September 30, 2001 at no charge by writing to us at 1605 East
Iola, Broken Arrow, Oklahoma, 74102.
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PROXY
ADDVANTAGE TECHNOLOGIES GROUP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Kenneth A. Chymiak, and David E. Chymiak,
as proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of ADDvantage Technologies Group, Inc. (the
"Company") held of record by the undersigned on January 25, 2002 at the
Annual Meeting of Shareholders of the Company to be held on March 5, 2002,
and at any and all adjournments or postponements thereof.
1. Election of directors.
FOR all nominees listed below (except as indicated to the
contrary below and subject to the discretion of the proxies as
provided herein).
[ ] Kenneth A. Chymiak David E. Chymiak Stephen J. Tyde
Freddie H. Gibson Gary W. Young Randy L. Weideman
[ ] WITHHOLD AUTHORITY to vote for all the nominees above.
Instructions: To withhold authority for any individual nominee
or nominees, write their name(s) here:
(Continued and to be signed on the reverse side)
2. Proposal to approve the appointment of Tullius Taylor Sartain &
Sartain, LLP as our independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
This Proxy when properly executed will be voted at the Annual Meeting or
any adjournments or postponements thereof as directed herein by the
undersigned shareholder. If no specifications are made, this Proxy will be
voted For Proposals 1 and 2. This Proxy is revocable at any time before
it is exercised.
IMPORTANT: Please date this and sign this Proxy exactly as name appears
to the left. If shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
Dated:_________________,2002
Signature(s)________________
Signature(s)________________
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED FOR MAILING INHE UNITED STATES.