STRATEGIC CAPITAL RESOURCES, INC.
f/k/a
JJFN SERVICES, INC.
2500 Military Trial North
Suite 260
Boca Raton, Florida 33431
(561) 995-0043
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
DECEMBER 15, 1998
To the Shareholders of
Strategic Capital Resources, Inc.
Please take notice that the Annual Meeting of Shareholders of
Strategic Capital Resources, Inc. will be held on December 15, 1998, at 9:00
a.m., at The Sheraton Hotel, 2000 NW 19th Street, Boca Raton, Florida 33431,
to consider and vote on the following matters:
1. To elect a board of nine directors who will serve until the next annual
meeting of shareholders following their election or until their successors are
elected and qualified.
2. To approve the appointment of Horton & Company, LLC. as the Corporation's
independent auditors for the current fiscal year ended June 30, 1999.
3. To ratify the amendment to the Certificate of Incorporation to change the
name of the Corporation to Strategic Capital Resources, Inc. and reducing the
authorized but unissued common and preferred stock.
4. To ratify the Corporation's Equity Incentive Plans.
5. To transact any other business that may properly come before the meeting or
any adjournment thereof.
November 6, 1998 has been fixed as the record date of the shareholders
entitled to vote at the meeting and only holders of shares of Common Stock of
record at the close of business on that day will be entitled to vote. The
stock transfer books will not be closed.
All shareholders are cordially invited to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Samuel G. Weiss, Secretary
Boca Raton, Florida
November 20, 1998
STRATEGIC CAPITAL RESOURCES, INC.
f/k/a
JJFN SERVICES, INC.
2500 Military Trial North
Suite 260
Boca Raton, Florida 33432
(561) 995-0043
INFORMATION STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
DECEMBER 15, 1998
Introduction
WE ARE NOT ASKING YOU FOR A PROXY AND YOUR ARE BEING
REQUESTED NOT TO SEND US A PROXY.
This Information Statement is furnished by the Board of Directors of Strategic
Capital Resources, Inc. (the "Company") for its Annual Meeting of
Shareholders to be held on Tuesday, December 15, 1998 at 9:00 a.m. at The
Sheraton Hotel, 2000 NW 19th Street, Boca Raton, Florida 33431, and at any
adjournment thereof.
The Board of Directors of the Company has fixed the close of business
on November 6, 1998 as the record date for determining the holders of
outstanding shares of common stock entitled to notice of, and to vote at, the
Annual Meeting. On that date, there were 17,012,005 shares of common stock
issued and 15,904,085 shares of common stock outstanding. Each share of
common stock is entitled to one vote at the meeting. The Notice of Annual
Meeting and this Information Statement are first being mailed to shareholders
of the Company on or about November 20, 1998.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership
of the Company's common stock as of November 6, 1998, by (i) each person
known to the Company to own beneficially more than 5% of its common stock,
(ii) each director and nominee for director of the Company, (iii) each
officer named in the executive compensation table of this information
statement, and (iv) all directors and officers as a group. Unless otherwise
indicated, each person in the table has sole voting and investment power as
to the shares shown.
Amount and Nature
of Beneficial Percent
Name and Address of Beneficial Owner Ownership(1) of Class
Directors and Officers
David Miller 6,184,368** 36.4%
3565 NW 61st Circle
Boca Raton, FL 33496
Samuel G. Weiss 154,165 0.9%
30 Main Street
Port Washington, NY 11050
Ralph Wilson 157,500 0.9%
7 Ensign Lane
Massapequa, NY 11758
Joan Kushay 154,200 0.9%
618 Cypress Green Circle
Wellington, FL 33414
Gerald Mylroie -0- *
18 Highway Avenue
Old Greenwich, CT 06870
Kenneth MacKenzie -0-
112 South Federal Hwy
Suite 5, Box 757
Boynton Beach, FL 33425
John Kushay -0-
618 Cypress Green Circle
Wellington, FL 33414
Geoffrey Winters -0-
70 Seaview Avenue
Stamford, CT 06902
John H. Roach, Jr. -0-
16 Oakwood Lane
Greenwich, CT 06830
Don Lederman -0-
1166 NW 108th Terrace
Plantation, FL 33322
Richard K. LeBlond, III -0-
1364 Lexington Avenue, 2N
New York, NY 10128
All Officers and Directors
as a group (11 persons) 6,650,233 39.10%
* Effective January 1, 1999 Gerald Mylroie will become a Director and
President of the Company.
**Includes 1,050,00 of shares owned by Lite 'N Low, Inc. and 1,050,000 of
shares owned by Priority Capital Corp.
Other 5% Shareholders
Libo Fineberg Trustee 1,250,000 7.3%
Helen Miller Irrevocable Trust
3500 Gateway Drive
Pompano Beach, FL 33069
Rita Miller 1,333,500 7.8%
3565 NW 61st Circle
Boca Raton, FL 33496
Scott Miller 1,333,500 7.8%
3565 NW 61st Circle
Boca Raton, FL 33496
EXECUTIVE COMPENSATION
Fiscal Year Fiscal Year
Ended Ended All
6/30/98 6/30/98 Other
Salary Bonus
David Miller $247,500 $19,038 (1)
(1) The value of perquisites and other personal benefits received by fiscal
year did not exceed $10,000.
The following table provides information with respect the value of Mr.
Miller's unexercised options at June 30, 1998.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-money Options
Options at Fiscal Year-end Exercise at Fiscal Year-end ($)(1)
Name (Exercisable) (Not exercisable) Price (Exercisable) (Unexercisable)
------------- ----------------- -------- ------------- ---------------
David Miller
100,000 0 $.125 $6,500.00 0
200,000 200,000 $.25 $-0- 0
200,000 200,000 $.14 $-0- 0
200,000 200,000 $.20 $-0- 0
(1) The bid price of the Company's common stock on June 30, 1998 on OTCBB was
$.19.
OPTION GRANTS AND EXERCISES IN LAST FISCAL YEAR
The following table provides information on options granted for the
fiscal year ended June 30, 1998 and subsequent to that date to officers and
directors of the Company. No options were exercised during that period.
Number of
Securities Percent of
Underlying Total Options Exercise
Options Granted to Price
Granted Employees Per Share Expiration
#(1) (%)(2) ($/sh)(3) Date
David Miller 200,000 13% $.14 12/23/2002
200,000 13% $.20 8/14/2003
Samuel G. Weiss 100,000 7% $.14 12/23/2002
100,000 7% $.20 8/14/2003
Joan E. Kushay 100,000 7% $.14 12/23/2002
100,000 7% $.20 8/14/2003
John Kushay 100,000 7% $.14 12/23/2002
100,000 7% $.20 8/14/2003
Ralph Wilson 50,000 3% $.14 12/23/2002
50,000 3% $.20 8/14/2003
Kenneth MacKenzie 50,000 3% $.14 12/23/2002
50,000 3% $.20 8/14/2003
Don Lederman 100,000 7% $.14 12/23/2002
100,000 7% $.20 8/14/2003
Richard K. LeBlond, III 100,000 7% $.20 8/14/2003
(1) Such options become exercisable after thirteen (13) months for a five-year
period from the date of grant.
(2) The Company granted options representing 1,500,000 shares to employees
from July 1, 1997 to date.
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting, nine directors are to be elected, each director to
hold office until the next annual meeting of shareholders or until their
successor is elected and qualified. The person's names in the accompanying
information statement have been designated by the Board of Directors and
unless authority is withheld, they intend to vote for the election of the
nominees named below to the Board of Directors. Although the Board of
Directors does not contemplate that any of the nominees will become
unavailable for election, if such situation arises prior to the Annual
Meeting, the persons named in the enclosed information statement will note
for the election of such other person(s) as may be nominated by the Board of
Directors or the Board may be reduced accordingly
Nominees for Election at the 1998 Annual Meeting.
Certain information concerning the nominees is set forth below.
Director
Name Position Age Since
David Miller Chairman of the Board
Director 53 1997
Samuel G. Weiss(2)(4) Interim President, Secretary
Counsel and Director 49 1995
Joan E. Kushay(2) Assistant Secretary/
Vice President, and
Director 37 1995
John P. Kushay(1) Vice President, Chief
Financial Officer,
Treasurer and Director 38 1996
Ralph Wilson(2)(1) Director 67 1995
Kenneth MacKenzie(1) Director 64 1996
Geoffrey Winters Director 55 1998
John H. Roach, Jr. Director 57 1998
Gerald Mylroie(3) President and Director 53 --
(1) Member of the Audit Committee
(2) Member of the Compensation and Incentive Committee.
(3) Mr. Mylroie's election will be effective January 1, 1999.
(4) President until January 1, 1999.
David Miller was appointed Chairman of the Board on July 29, 1997. Prior to
that time, Mr. Miller had been engaged as a Strategic Consultant to the
Company since its organization. Prior to his consulting engagement, Mr.
Miller has been a strategic consultant to several companies, including Antares
Resources Corporation, since 1992, and Priority Capital Corporation since
1993. Since 1994, Mr. Miller has served as Chairman of the Board of Lite 'N
Low, Inc., a holding company no longer actively engaged in business.
Samuel G. Weiss, President, Secretary, General Counsel and Director, has been
an executive officer of the Company since its organization. Effective May
1997, Mr. Weiss was elected President. Since 1974, Mr. Weiss has been
engaged in the practice of law in the State of New York. Mr. Weiss also
served as Secretary, General Counsel, and Director of Antares Resources
Corporation from June 1993 to December 1996.
John P. Kushay was appointed Treasurer and Chief Financial Officer in June
1996. Mr. Kushay was elected a Director of the Company in June 1996. In May
1997, Mr. Kushay was appointed Vice President. Prior to joining the Company,
Mr. Kushay had been Controller of International Operations at Xpedite
Systems, Inc. from February 1994 through March 1996. From May 1990 to
February 1994, he was controller at Tamco Systems, Inc.
Richard K. LeBlond, III, was appointed Senior Vice President in June 1998.
Prior to joining the Company Mr. LeBlond was the Vice President for Strategy
and Business Development at the Avon Group, Inc., an insurance brokerage
concern, where he concentrated on credit related surety products, since
February 1997. From January 1990 to January 1997, Mr. LeBlond was a
self-employed sales, marketing and business development consultant,
specializing in media and communications business concerns. His services
included strategic business plan development, identification of business
prospects and sales strategy development.
Don Lederman, was appointed Vice President, Sales and Marketing in November
1996. Prior to joining the Company, Mr. Lederman had been Director - Sales
and Marketing at K. Hovnanian Companies of Florida since July 1993. From
September 1988 to July 1993, he was Project and Sales Manager at Kennedy
Properties, Ltd. He has over 14 years experience in the sales and marketing
of new homes, product design, community and land planning.
Joan E. Kushay, Assistant Secretary and Director, has held these positions
since the Company's organization. From June 1994 to November 1995, she was
employed as an executive assistant at XYZ Cleaning Contractors in Garden
City, New York. From February, 1994 through June, 1994, Ms. Kushay was
employed by Arrow Electronics Inc. of Melville, New York in shareholder and
investor relations and, from July 1988 to January, 1994 by Action Staffing
Inc. a publicly held corporation located in Tampa, Florida, as Executive
Assistant to the Chairman. Ms. Kushay was also Assistant Secretary and
Director of Antares Resources Corporation from December 1994 to December 1996.
Ralph Wilson, Director, has held that position since the Company's
organization. From October 1990, through February 1995, Mr. Wilson was
President of Antares Resources Corporation and served as a director of the
Company from December 1994, to December 1996. In addition, since 1971 Mr.
Wilson has been a principal officer of Comet Electronics Corp., a privately
owned manufacturer of subassemblies in Farmingdale, New York. Mr. Wilson
devotes only such time as is necessary to the business of the Company.
Kenneth MacKenzie, was elected a Director of the Company in November 1996.
From 1985 to 1996, Mr. MacKenzie served as co-executive director of The
Institute of Business Appraisers, Inc. and President of Southeast Business
Investment Corp. of Boynton Beach, Florida. In January 1997, Mr. MacKenzie
found Southeast Business Appraisal Corporation, which specializes in
appraisals and valuations of businesses. Mr. MacKenize devotes only such
time as in necessary to the business of the Company.
Geoffrey J. Winters, has been the Chairman and Chief Executive Officer of
NorthStar Capital Corp. since 1994. Prior to joining NorthStar Capital Corp.,
Mr. Winters was Managing Director of Gruntal & Co. from 1991 to 1994,
Managing Director and Head of Capital Markets for Laidlaw & Co. from 1985 to
1991; Managing Director of Paine Webber form 1982 to 1985; and Managing
Director of Lehman Brothers from 1972 to 1982. Mr. Winters majored in
Economics at George Washington University and studied separately at the
Sorbonne. He served in the U.S. Marine Corps.
Gerald Mylroie, has been the Real Estate Asset Manager for Warburg Dillon Read
from 1993 to the present. Prior to Mr. Mylroie was Senior Vice President,
Director Portfolio/Asset Management for The O'Connor Group from 1990 to 1992,
Senior Vice President, Corporate Director Management Services Group for
Cushman & Wakefield from 1986 to 1990, Vice President, Head of Occupancy
Planning and Acquisitions for First National Bank of Chicago and First
Chicago Building Corporation from 1982 to 1986, Special assignment to improve
and reduce estate planning for U.S. President's office of Management and
Budget from 1979 to 1980.
John H. Roach, Jr. has been the Senior Managing Director for Reliance National
from March, 1998 to present, Senior Managing Director, Client Management and
Marketing for American International Group, AIG Risk Finance from 1995 to
1997, Vice Chairman and Senior Managing Director for Geneva Companies: Geneva
Financial Corporation from 1992 to 1995, Managing Director; Head of Corporate
Finance Client Management and Loan Products for Chemical Bank from 1964 to
1992.
Board and Committee Activity; Structure and Compensation
The Company's operations are managed under the board supervision of
the Board of Directors, which has the ultimate responsibility for the
establishment and implementation the Company's general operating philosophy,
objectives, goals and policies.
During fiscal 1998, the Board of Directors had a total of five
meetings. The directors attended all of the meetings of the Board of
Directors and meetings of each of the Committees on which they served.
The Company has established a policy that a portion of the
non-employee directors remuneration should be paid by granting non-qualified
stock options in accordance with the Company's Amended and Restated 1998
Equity Incentive Plan, subject to ratification of stockholder approval of
certain amendments to such Plan. In fiscal 1998 each director who is not an
employee was paid a fee of $750.00. All out of pocket expenses were
reimbursed. Subject to shareholder ratification, each non employee director
have been granted stock options representing 100,000 shares of the Company's
Common Stock.
During fiscal 1998, the Board of Directors had the following committees:
The Audit Committee is composed of John Kushay, Kenneth MacKenzie and
Ralph Wilson. The function of the Audit Committee is to review the Company's
internal controls; it's financial reporting and the scope and results of the
audit engagement. It meets with appropriate Company financial personnel and
independent public accountants in connection with these reviews. The
Committee also recommends to the Board the appointment of the independent
public accountants, who have access to the Committee at any time. In fiscal
1998, one Audit Committee meeting was held.
The Compensation and Incentive Committee is composed of Ralph Wilson,
Samuel G. Weiss and Joan Kushay. The function of this Committee is to
establish the amount and form of compensation awarded to Executive Officers,
including salary, bonuses and stock option awards of the Company and to
administer the Company's Equity Incentive Plan. In fiscal 1998 one Committee
meeting were held.
The Board of Directors does not have a nominating committee.
PROPOSAL 2: APPOINTMENT OF HORTON & COMPANY, LLC AS THE
COMPANY'S INDEPENDENT AUDITOR
The Board of Directors has recommended the appointment of Horton &
Company, LLC. as independent auditors for the Company for the fiscal year
ending June 30, 1999. Horton & Company, LLC acted in the same capacity in
the prior fiscal year.
A representative of the accounting firm is expected to be present at
the Annual Meeting of Shareholders. If a representative is present, they
will have an opportunity to make a statement and will be available to respond
to appropriate questions.
PROPOSAL 3: RATIFICATION OF THE ADOPTION OF THE 1997 EQUITY
INCENTIVE PLANS I AND II AND 1998 EQUITY INCENTIVE PLAN.
The Company's Equity Incentive Plans I and II and 1998 Equity
Incentive Plan (the "Plans") provide inter alia for the grant of incentive
stock options ("ISO's") qualifying under the Internal Revenue Code, the grant
of nonqualified stock options ("NSO's"), and the grant of awards of stock
appreciation rights, stock options, restricted stock or performance units
("Awards") to officers, employees and consultants of the Company and its
affiliates. The purpose of the Plans is to aid the Company in retaining the
services of executive and key employees and in attracting new management
personnel when needed for future operations and growth, to offer such
personnel additional incentives to put forth maximum efforts for the success
of the business and to afford them opportunities to obtain or increase a
proprietary interest in the Company on a favorable basis and, thereby, to
have an opportunity to share in its success.
Each Plan will expire ten years from its effective date as specified
by the Board of Directors at the time the Plan is approved (except as to
options outstanding at that time). The Board may amend, alter or terminate
any Plan in any respect at any time, except that no amendment, alteration or
termination shall be made which would (i) impair the rights of an optionee
under a stock option, stock appreciation right, restricted stock award or
performance unit award therefore granted without such optionee's consent, or
(ii) disqualify the Plans from the exemption provided by Rule 16b-3 of the
Securities Exchange Act of 1934, and further, no material amendment shall be
made without the prior approval of the Company's shareholders to the extent
such approval is required by law or agreement.
The Plans are administered by the Compensation and Incentive Committee
of the Board of the Board of Directors (the "Committee"). The Committee has
substantial discretion pursuant to the Plan to determined the persons to who
ISO's, NSO's and Awards may be granted or authorized and also to determine the
amounts, time price (provided that the exercise price per share shall not be
less than the fair market value of the Common Stock on the date of grant),
exercise terms and restrictions imposed in connection with each individual
grant. ISO's, NSO's and Awards may be granted to any employee (which may
include officers and directors who are also employees) or consultant of the
Company or its subsidiaries. No stock option shall be exercisable more than
ten years after the date such option is granted. Options may expire earlier
as determined by the Committee and the Committee may determine vesting
provisions in its discretion.
Stock appreciation rights may be granted in conjunction with all or
part of any stock options granted under the Plan or alone and unrelated to an
option grant at the discretion of the Committee. Shares of restricted stock
and performance units may be awarded either alone or in addition to other
Awards granted under the Plan at the discretion of the Committee.
If an optionee ceases to be an employee of the Company or of a
subsidiary other than by reason of death, disability or retirement, any stock
option held by him shall terminate on the date of termination of his
employment in the case of voluntary termination, and shall terminate three
months after the termination of his employment in the case of involuntary
termination of employment (but not later than its specified expiration date).
In the case of death, any stock option held by an optionee may be exercised
by his estate, personal representative or beneficiary at any time prior to the
earlier of the specified expiration date of the stock option or one year from
the date of the optionee's death. If an optionee's employment is terminated
by reason of disability or retirement, the optionee may exercise any stock
options held by him at any time prior to the earlier of the specified
expiration date of the stock option or three years from the date of
termination of employment.
Options are, in general, non-assignable. The options carry certain
anti-dilution provisions concerning stock dividends, stock splits,
consolidations, mergers, recapitalizations and reorganizations. Generally,
under applicable provisions of the Internal Revenue Code, the amount of
profit realized by an optionee upon exercise of stock option is taxed as
ordinary income to the optionee in the year of exercise. The Company is
entitled to a compensation deduction in the same amount in the same year.
An optionee who holds the stock received upon exercise of a stock
option for at least two years from the date the option was granted and at
least one year form the receipt of the stock upon exercise generally pays not
tax until to stock is sold, at which time any profit or loss realized is
long-term capital gain or loss, as the case may be, and the Company is not
entitled to a corresponding tax deduction at any time. The spread at
exercise of a stock option is effectively treated as a tax performance item
in the exercise year for purposes of calculating the optionee's alternative
minimum tax.
As optionee who sells the stock received upon exercise of a stock
option within two years after the option was granted or within one year of
receipt of the shares upon exercise is taxed on the profit up to the date of
exercise (which is ordinary income) and the Company is entitled to a
corresponding tax deduction; the income and deduction items are recognized by
the optionee and the Company, respectively, in the year to stock is sold.
Appreciation or depreciation after the date of exercise is taxable to the
optionee as capital gain or loss, respectively, and is nondeductible by the
Company.
The Company may be required to withhold tax on the amount of the
income recognized by the optionee upon exercise of an option and upon
transfer of stock received upon exercise of an option.
The Committee has approved the issuance of options under the Plans to
executive officers and directors of the Company. These Options now cover a
total of 2,475,000 shares of common stock; a list of the options granted
since July 1, 1997, showing the number of shares subject to each such option
is shown above. None of these options has been exercised.
Ratification of the Plans require a majority shareholder approval. If
the shareholders ratify the Plans by a majority vote at the Annual Meeting,
all previously granted options will be ratified.
PROPOSAL 4: RATIFICATION OF CORPORATE NAME CHANGE AND
REDUCTION OF AUTHORIZED BUT UNISSUED SHARES OF
COMMON AND PREFERRED STOCK.
On October 16, 1998, the Board of Directors and a majority of
shareholders, acting by written consent, approved an amendment of the
Company's Certificate of Incorporation changing its name to Strategic Capital
Resources, Inc. and reducing its authorized common stock from 50 million to
25 million shares and its authorized preferred stock from 25 million to 5
million shares.
The Board views the former name of the Company, JJFN Services, Inc.,
as not descriptive of the business in which the Company is engaged. The new
name will convey to the market a better sense of the Company's business -
which is providing essential capital resources to the home building industry.
Management believes that changing the Company's name to better reflect its
activities will improve its visibility in the construction and real estate
sector and should prove beneficial.
The Board believes that the reduction in the Company's authorized
capital stock more accurately reflects the actual number of shares
outstanding and likely to be outstanding. This should help to dispel any
fear that the shareholders' position in the Company will be subject to
excessive dilution in the future.
The Board now wishes the shareholders to ratify this amendment at the
Annual Meeting. A vote of a majority of all shares outstanding is required
for ratification. The management intends to vote its shares (now amounting
to over one-half of the total shares outstanding) in favor of ratification.
Other Matters
The Company knows of no other business to be presented at the meeting.
The Annual Report to Shareholders for the fiscal year ended June 30, 1998 is
included with this Information Statement and is being provided to each
shareholder entitled to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Samuel G. Weiss, Secretary
Dated: November 20, 1998.
