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
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting materials pursuant to Rule 14a-11(c) or Rule 14a-12
JANUS INDUSTRIES, INC.
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(Name of Registrant as Specified in its 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 per Exchange Act Rules
14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
N.A.
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(2) Aggregate number of securities to which transaction applies:
N.A.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N.A.
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(4) Proposed maximum aggregate value of transaction:
N.A.
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(5) Total fee paid:
N.A.
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|_| Fee paid previously with preliminary materials:
N.A.
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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 number, or the
form or schedule and the date of its filing.
(1) Amount Previously Paid:
N.A.
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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JANUS INDUSTRIES, INC.
2300 CORPORATE BLVD. N.W., SUITE 232
BOCA RATON, FLORIDA 33431-8596
TELEPHONE (561) 994-4800, FACSIMILE (561) 997-5331
Louis S. Beck
Chairman September 4, 1997
To Our Stockholders:
On behalf of the Board of Directors of Janus Industries, Inc. (the
"Company"), I cordially invite you to attend the 1997 Annual Meeting of
Stockholders. The Annual Meeting will be held at 10:00 a.m. Eastern time, on
September 29, 1997, at the Holiday Inn, 1950 Glades Road in Boca Raton, Florida,
one of the hotels managed by the Company. The formal notice of the Annual
Meeting appears on the next page. During the meeting, stockholders who are
present will have the opportunity to meet and ask questions of our senior
management team.
We believe that interaction between stockholders and management is
important and hope that you will be able to attend the Annual Meeting.
Whether or not you are able to attend the Annual Meeting, it is
important that your views be represented. To be sure that happens, please sign
and date the enclosed proxy card and return it in the envelope provided. If you
plan to attend the Annual Meeting, please check the appropriate box on the proxy
card.
Sincerely,
Louis S. Beck
<PAGE>
JANUS INDUSTRIES, INC.
2300 CORPORATE BLVD., N.W. SUITE 232
BOCA RATON, FLORIDA 33431-8596
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 29, 1997
----------------------------------------
The 1997 Annual Meeting of the Stockholders of Janus Industries, Inc.
(the "Company") will be held at The Holiday Inn, 1950 Glades Road, Boca Raton,
Florida on September 29, 1997 at 10:00 a.m.
Eastern Time for the following purposes:
1) To elect four (4) directors.
2) To ratify the selection of J.H. Cohn, L.L.P. as the Company's
independent auditors for the fiscal year ending December 31,
1997.
3) To consider and vote upon an amendment to the Company's Restated
Certificate of Incorporation, as amended, to change the Company's
name from "Janus Industries, Inc." to "Janus American Group,
Inc."
4) To consider and vote upon the ratification of the grant of
certain stock appreciation rights to non-officer directors of the
Company.
5) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 26,
1997, as the record date for determining the stockholders entitled to notice of
and to vote at the meeting and any adjournment thereof.
Your attention is directed to the accompanying Proxy Statement for the
text of the resolutions to be proposed at the meeting and further information
regarding each proposal to be made.
STOCKHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY BY MAIL IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
Frank E. Lawatsch, Jr.
Secretary
September 4, 1997
Boca Raton, Florida
<PAGE>
JANUS INDUSTRIES, INC.
2300 CORPORATE BLVD., N.W. SUITE 232
BOCA RATON, FLORIDA 33431-8596
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PROXY STATEMENT FOR ANNUAL MEETING
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This Proxy Statement is furnished by the Board of Directors (the "Board
of Directors") of Janus Industries, Inc., a Delaware corporation (the "Company"
or "Janus"), in connection with the solicitation of proxies to be used at the
Annual Meeting of Stockholders (the "Meeting") to be held at The Holiday Inn,
1950 Glades Rd., Boca Raton, Florida , on September 29, 1997 at 10 a.m. Eastern
Time, and at any adjournment thereof. This Proxy Statement and the accompanying
Annual Report, are being mailed to stockholders on or about September __, 1997.
The principal executive offices of the Company are located at 2300 Corporate
Blvd., N.W. Suite 232, Boca Raton, Florida 33431-8596.
Only stockholders of record at the close of business on the record
date, August 26, 1997, will be entitled to vote at the Meeting and at all
adjournments thereof.
On August 26, 1997 there were issued and outstanding 8,731,836.181
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"). Each share of Common Stock is entitled to one vote on each matter to be
voted upon. On August 26, 1997 there were issued and outstanding 10,451.88
shares of the Company's preferred stock, Series B, par value $.01 per share (the
"Preferred Stock"). The holders of Preferred Stock do not presently have the
right to vote on any matter being considered at the Meeting. A majority of the
shares of Common Stock entitled to vote at the Meeting will constitute a quorum
for the transaction of business. There are no cumulative voting rights.
PROXY PROCEDURE
If a proxy is properly signed by a stockholder and is not revoked, the
shares represented thereby will be voted at the Meeting in the manner specified
on the proxy, or if no manner is specified with respect to any matter therein,
such shares will be voted by the persons designated therein (a) "FOR" the
election of each of Louis S. Beck, Lucille Hart-Brown, C. Scott Bartlett, Jr.,
and Richard P. Lerner as Class A directors of the Company with a term expiring
in 2000; (b) "FOR" the ratification of the selection of J.H. Cohn, L.L.P. as the
Company's independent auditors for the fiscal year ending December 31, 1997; (c)
"FOR" the approval of an amendment to the Company's Restated Certificate of
Incorporation, as amended (the "Restated Certificate of Incorporation") by which
the Company's name would be changed from "Janus Industries, Inc." to "Janus
American Group, Inc."; (d) "FOR" the approval of the grant of certain stock
appreciation rights to non-officer directors of the Company; and (e) in
connection with the transaction of such other business as may properly be
brought before the meeting, in accordance with the judgment of the person or
persons voting the proxy. If any of the nominees for director is unable to serve
or for good cause will not serve, an event that is not anticipated by the
Company, the shares represented by the accompanying proxy will be voted for a
substitute nominee designated by the Board of Directors.
<PAGE>
Votes will NOT be considered cast, however, if the shares are not voted
for any reason, including an abstention indicated as such on a written proxy or
ballot, directions are given in a written proxy to withhold votes or if the
votes are withheld by a broker.
The proxy may be revoked by the stockholder at any time prior to the
voting thereof by giving notice of revocation in writing to the Secretary of the
Company, by duly executing and delivering to the Secretary of the Company a
proxy bearing a later date or by voting in person at the Meeting.
BOARD OF DIRECTORS
The Board of Directors manages the business of the Company. The
Company's Restated Certificate of Incorporation contains a provision which
divides the Board of Directors into three classes known as Class A, Class B and
Class C, with each class of Directors serving a staggered term of three years.
Each class of Directors must consist, as nearly as possible, of one third of the
authorized number of Directors. The authorized number of directors is determined
from time to time by a vote of a majority of the directors then in office.
The authorized number of directors is presently fixed at twelve (12)
and four (4) individuals, all allocated to Class A, are standing for election as
directors at the Meeting. They will be elected for a term to expire at the
Annual Meeting in 2000 and until their successors are elected and qualified. The
terms of the Class B and Class C directors expire in 1998 and 1999 respectively.
During 1996, the Board of Directors of the Company held six (6)
meetings. No director attended less than seventy-five percent (75%) of the
meetings held while he or she was a director.
All directors of the Company hold office until their respective
successors are elected and qualified, or until their death, resignation or
removal. Officers serve at the discretion of the Board of Directors.
There are no family relationships between any directors or executive
officers of the Company.
DIRECTORS OF THE COMPANY
The directors (including class designation) of the Company are as
follows:
NAME AGE POSITION
---- --- --------
Louis S. Beck 51 Chairman of the Board (Class A)
Harry G. Yeaggy 51 Vice Chairman of the Board (Class C)
James E. Bishop 45 Director (Class C) and President
Michael M. Nanosky 38 Director (Class C) and President of
Hotel Operations
Vincent W. Hatala, Jr. 66 Director (Class C)
Anthony J. Pacchia 41 Director (Class B)
Arthur Lubell 83 Director (Class B)
Richard P. Lerner 58 Director (Class A)
C. Scott Bartlett, Jr. 64 Director (Class A)
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Lucille Hart-Brown 48 Director (Class A)
Paul Tipps 60 Director (Class B)
Peter G. Aylward 55 Director (Class B)
LOUIS S. BECK has been a director and Chairman of the Board of the
Company since April 24, 1997. He has been a principal stockholder and Chief
Executive Officer of Beck Hospitality Inc. III and predecessor companies engaged
in the hotel management business since 1972. He has also been a principal
stockholder and Chairman of the Board of Union Savings Bank in Cincinnati, Ohio
since 1986. Union Savings Bank is a wholly owned subsidiary of U.S. Bancorp., a
savings and loan holding company of which Mr. Beck is a director and President.
In addition, since 1992 he has served as Chairman of the Board of Guardian
Savings Bank in Cincinnati, Ohio and serves as a director and President of its
holding company, Guardian Bancorp, Inc. Mr. Beck is standing for re-election as
a director at the Meeting.
HARRY G. YEAGGY has been a director and Vice Chairman of the Company
since April 24, 1997. He has been a principal stockholder and Chief Operating
Officer of Beck Hospitality Inc. III and predecessor companies engaged in the
hotel management business since 1986. He has also been a director and President
of Union Savings Bank in Cincinnati, Ohio since 1986. Union Savings Bank is a
wholly owned subsidiary of U.S. Bancorp., a savings and loan holding company of
which Mr. Yeaggy is a director and Vice President and Secretary.
JAMES E. BISHOP has served as President and a director of the Company
since August 1996. Mr. Bishop was Chief Executive Officer of the Company from
August 1996 until April 24, 1997. Mr. Bishop joined the Company in September
1995 as its Executive Vice President and was charged with the responsibility for
carrying out the Company's acquisition objectives. From 1993 to 1995 he was
Senior Vice President of Gates Capital Corp., an investment banking firm. For
the seventeen years prior thereto he was an investment banker and senior manager
for various public and private entities.
MICHAEL M. NANOSKY has been a director and President of Hotel
Operations of the Company since April 24, 1997. Prior to joining the Company,
since March, 1990 he was President of Beck Group Management Corp., a company
engaged in the hotel management business.
VINCENT W. HATALA, JR. was designated a creditor representative member
of the Board of Directors pursuant to the Plan in May 1990 and was President of
the Company following the redemption of the interests of DKM on May 15, 1995
until August 28, 1996, and Chairman until April 24, 1997. Mr. Hatala operated an
independent financial consulting business from 1971 until his retirement from
that business in 1990. He was a member of the U.S. Lines Creditors' Committee
from its inception and served as a co-trustee of the Reorganization Trust from
1990 to 1993.
ANTHONY J. PACCHIA was designated a creditor representative member of
the Board of Directors in the Plan in May 1990 and was Secretary of the Company
following the redemption of the interests of DKM on May 15, 1995 until April 24,
1997. He had been a member of the U.S. Lines Creditors' Committee from inception
in 1986 until conclusion of the Chapter 11 proceeding. Since 1994 he has
operated an independent financial consulting business and engaged in the private
practice of law. From 1991 to 1994 he was a Group Vice President of First
Fidelity Bank, N.A., New Jersey and responsible for special situation loan
workouts.
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<PAGE>
ARTHUR LUBELL was designated a creditor representative member of the
Board of Directors pursuant to the Plan in May 1990 and was Treasurer of the
Company following the redemption of the interests of DKM on May 15, 1995 until
April 24, 1997. Mr. Lubell has been a member of the law firm Lubell & Koven, New
York City, since 1960, and is counsel to Daewoo International (America) Corp., a
subsidiary of Daewoo Corporation, a former major unsecured creditor of U.S.
Lines and a current stockholder of the Company. On November 23, 1994, pursuant
to a plea agreement, Mr. Lubell pled guilty to a federal misdemeanor offense
charging that he offered compensation to an agent of the Internal Revenue
Service. Mr. Lubell was fined $5,000 and given six months of unsupervised
probation.
RICHARD P. LERNER has been a director of the Company since August 1996.
Mr. Lerner has been a partner with the law firm of Lambos & Junge, New York
since 1996. Mr. Lerner was a partner with the law firm of Lambos & Giardino, New
York from 1978 to 1996. Mr. Lerner was a member of the U.S. Lines Creditors'
Committee from inception in 1986 until conclusion of Chapter 11 proceeding. Mr.
Lerner is standing for re-election as a director at the Meeting.
C. SCOTT BARTLETT, JR. has been a director of the Company since August
1996. Mr. Bartlett has served as independent financial consultant advising
financial institutions in matters involving credit policy, loan approval and
loan workout since 1990. Mr. Bartlett served as Senior Vice President and Chief
Credit Officer of MTB Bank from 1992 until 1994. Mr. Bartlett served as
Executive Vice President, Senior Lending Officer and Chairman, Credit Policy
Committee for National Westminster Bank USA from 1984 until 1990. Mr. Bartlett
presently serves as a director of the following corporations: Harvard
Industries, Inc. (Chairman, Audit Committee; Compensation Committee); NVR, Inc.
(Audit Committee, Nominating Committee); The Western Transmedia Co., Inc.
(Compensation Committee); Darling International, Inc. (Chairman, Compensation
Committee; Audit Committee); Triangle Wire & Cable, Inc. (Audit Committee);
Bucyrus International, Inc. (Compensation Committee). Mr. Bartlett is standing
for re-election as a director at the Meeting.
LUCILLE HART-BROWN has been a director since August 1996. Ms.
Hart-Brown has served as President of Benefit Services, Inc. since June 1996.
Ms. Hart-Brown served as Administrator of Marine Engineers' Beneficial
Association from 1982 until 1996. Ms. Hart-Brown was a member of the Creditors'
Committee from inception in 1986 until conclusion of Chapter 11 proceeding. Ms.
Hart-Brown is standing for re-election as a director at the Meeting.
PAUL TIPPS has been a director of the Company since April 24, 1997. Mr.
Tipps has been President of Public Policy Consultants, Inc., a government
affairs consulting firm, since 1983. Since January 1997 he has been a director
of the Federal Home Loan Bank - Cincinnati.
PETER G. AYLWARD has been a director of the Company since April 24,
1997. Mr. Aylward has been President of Strategic Property Advisers, Inc., an
investment advisory company, since 1992 and has operated his own law firm,
specializing in tax and securities law, since 1993.
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<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has appointed three committees:
the Audit Committee, Compensation Committee and Operating Committee. The members
of the Audit Committee are Peter Aylward, Anthony J. Pacchia, Paul Tipps,
Richard P. Lerner and Arthur Lubell. The Audit Committee periodically reviews
the Company's auditing practices and procedures and makes recommendations to
management or to the Board of Directors as to any changes to such practices and
procedures deemed necessary from time to time to comply with applicable auditing
rules, regulations and practices, and recommends independent auditors for the
Company to be ratified by the stockholders. The members of the Compensation
Committee are C. Scott Bartlett, Jr., Lucille Hart-Brown, Paul Tipps and Richard
P. Lerner. The Compensation Committee meets periodically to make recommendations
to the Board of Directors concerning the compensation and benefits payable to
the Company's executive officers and other senior executives. The members of the
Operating Committee are Louis S. Beck, James E. Bishop. C. Scott Bartlett, Jr.,
Lucille Hart-Brown, and Peter Aylward. The Operating Committee advises and makes
recommendations to the full Board of Directors with respect to matters of policy
relating to the general conduct of the business of the Company.
The Audit Committee did not meet and the Compensation Committee met one
time during the year ended December 31, 1996. The Operating Committee was
created on April 24, 1997.
DIRECTOR COMPENSATION
During calendar year 1996, the Company's non-employee directors and the
non-salaried employee directors received an annual retainer of $15,000 and
$1,000 per meeting attended of the Board of Directors or any committee thereof.
The arrangements for director compensation have remained the same for calendar
year 1997.
In 1996, the Board of Directors and stockholders of the Company adopted
the Janus Industries, Inc. Directors Stock Option Plan (the "Directors Plan")
under which, beginning in 1997, each member of the Board of Directors who is not
an employee would automatically receive a nonstatutory option for the purchase
of 4,000 shares of Common Stock on the first day of the month following the
month in which the annual meeting of stockholders is held. The Directors Plan
was terminated in April 1997 prior to the issuance of any options thereunder.
The non-officer directors were granted certain stock appreciation rights in
April 1997 subject to stockholder ratification at the Meeting. SEE "Stock
Appreciation Rights" and "Item 4 - Proposal to Approve the Grant of Stock
Appreciation Rights to Certain Non-Officer Directors."
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued by the
Company for services rendered in all capacities for executive officers of the
Company who received compensation in excess of $100,000 during the period
January 1, 1996 to December 31, 1996 (the "Named Executive Officers").
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS($) LONG TERM COMPENSATION AWARDS
- --------------------------- ---- ---------- -------- SECURITIES UNDERLYING OPTIONS (#)
---------------------------------
<S> <C> <C> <C> <C>
James E. Bishop, President 1996 $119,500 $25,000 4,000
Vincent W. Hatala, Jr., Chairman 1996 $358,200 $0 4,000(1)
</TABLE>
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(1) The option with respect to 4,000 shares is an incentive stock
option. Mr. Hatala has also been granted a tandem nonstatutory stock option to
acquire 6,000 shares of Common Stock at $2.75 per share. The two options granted
to Mr. Hatala are mutually exclusive. The nonstatutory stock option will not be
exercisable as long as the incentive stock option remains exercisable. To the
extent that the incentive stock option is exercised in part, the number of
shares subject to the nonstatutory stock option will be reduced by .667 shares
for each share issued pursuant to the exercise of the incentive stock option.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock options
granted to the Named Executive Officers during the year ended December 31, 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM (1)
----------------- --------------------------------
PERCENT
OF
TOTAL
OPTIONS
GRANTED EXERCISE
OPTIONS IN OR BASE
GRANTED FISCAL PRICE EXPIRATION
NAME (#) YEAR ($)/SH. DATE 5%($) 10% ($)
- ---- --- ---- ------- ---- ----- -------
<S> <C> <C> <C> <C> <C> <C>
James E. Bishop 4,000 20% $2.75 7/17/06 $17,520 $27,360
Vincent W. Hatala, Jr. 4,000 20% $2.75 7/17/06 $17,520 $27,360
</TABLE>
- ---------------------
(1) Amounts shown reflect the potential realizable value of each grant
of stock options, assuming that the market price of the underlying shares
appreciates in value from the date of grant to the expiration date at an
annualized rate of 5% or 10%. These potential values are reported in order to
comply with requirements of the Securities and Exchange Commission. The Company
cannot predict whether these values will be achieved.
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<PAGE>
EMPLOYMENT AGREEMENTS
The Company has entered into written employment agreements with Louis
S. Beck, Harry G. Yeaggy and Michael M. Nanosky all dated April 24, 1997, James
E. Bishop dated April 4, 1997 and Vincent W.
Hatala, Jr. dated January 1, 1997.
The agreement with Mr. Beck is for a term of three years which ends on
April 23, 2000. He is employed as Chairman of the Board, and paid an annual
salary of $275,000, which may be increased from time to time at the discretion
of the Board of Directors. He may also be paid a bonus in an amount determined
by the Board of Director in its discretion and is entitled to such benefits as
the Board of Directors shall adopt. Mr. Beck devotes in excess of half of his
working time to the business of the Company. In the agreement the Company has
acknowledged that Mr. Beck is the owner, an officer and director of other
businesses that engage in the same business as the Company and that, in certain
instances, such businesses may be considered to be in competition with the
Company. Together with Mr. Yeaggy, Mr. Beck owns seven of the Managed Hotels and
five additional hotel properties which are managed by their affiliate Beck
Hospitality III Inc. Mr. Beck has agreed not to engage in any business that
competes with the Company other than the existing businesses. Mr. Beck has also
agreed to recuse himself from any matter coming before the Company's Board of
Directors which pertains to his independent businesses.
The agreement with Mr. Yeaggy is for a term of three years which ends
on April 23, 2000. He is employed as Vice Chairman of the Board and is paid an
annual salary of $175,000, which may be increased from time to time at the
discretion of the Board of Directors. His agreement is otherwise substantially
similar to the agreement between Mr. Beck and the Company. Mr. Yeaggy devotes
approximately 25% of his working time to the business of the Company. He has
also agreed to recuse himself from any matter coming before the Company's Board
of Directors which pertains to his independent businesses.
The agreement with Mr. Bishop is for a term of three years which ends
on April 23, 2000. He is employed as President of the Company with general
supervisory authority of the business of the Company and its subsidiaries and
charged with the responsibility of preparing and implementing a strategic plan
and seeking out and consummating acquisitions, under the supervision of and in
accordance with policies set by the Chairman of the Board and the Board of
Directors. Mr. Bishop is paid an annual salary of $200,000, which may be
increased from time to time at the discretion of the Board of Directors. He is
also entitled to an annual bonus in an amount to be determined in accordance
with the Company's then current bonus or incentive compensation plan. Mr. Bishop
is also entitled to a comprehensive medical indemnity policy for himself and his
family, an annual allowance of $2,000 for additional out-of-pocket medical
payments, an annual allowance of $2,000 for dental expenses, an annual payment
of $10,000 for the purchase of annuity, grossed up for the income tax cost, term
life insurance coverage in the amount of $1,000,000 to the extent the same is
available at normal market rates, long term disability insurance coverage and
such other benefits as the Board of Directors shall adopt and approve for him.
Under the agreement, the Company reimbursed Mr. Bishop for his reasonable moving
expenses incurred incidental to the relocation of Company's principal offices
from New Jersey to Boca Raton, Florida. In the event of a change in control of
the Company, Mr. Bishop is entitled to a lump sum payment of $300,000.
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The agreement with Mr. Nanosky is for a term of three years which ends
on April 23, 2000. He is employed as President - Hotel Operations of the Company
and charged with the responsibilities typical of a division president. He is
paid an annual salary of $100,000, which may be increased from time to time at
the discretion of the Board of Directors. He is also entitled to an annual bonus
of up to $100,000 based upon the Company's success in achieving budgeted goals
for the Company's hotel properties and operations. Mr. Nanosky is also entitled
to a comprehensive medical indemnity policy for himself and his family, "split
dollar" life insurance coverage in the amount of $480,000, long term disability
insurance coverage and such other benefits as the Board of Directors shall adopt
and approve for him.
Mr. Hatala's employment agreement with the Company which was in effect
during the year 1996 provided for an annual base salary of $75,000 plus $200 per
hour for each hour devoted to the business of the Company in excess of 500 hours
per annum. Effective January 1, 1997 his prior agreement was replaced with a new
agreement for a one year term which expires December 31, 1997. Under this
agreement, Mr. Hatala is paid an annual salary of $75,000 in consideration of
his services as Chairman of the Board (which position he resigned from effective
April 24, 1997) and such other executive duties as are assigned to him by the
Board of Directors from time to time. He may also be paid a bonus by the Board
of Directors in its discretion. He has agreed to make himself available to the
Company for at least 500 hours on an annual basis. Mr. Hatala is also entitled
to an annual allowance of $2,000 on account of dental expenses, reimbursement
for medical insurance premium payments and up to an additional $2,000 on account
of out-of-pocket medical expenses and such other benefits as the Board of
Directors shall adopt and lawfully approve for him.
STOCK OPTIONS
In August, 1996, the Board of Directors and stockholders of the Company
adopted the 1996 Stock Option Plan ("Plan") and reserved 300,000 shares of
Common Stock for issuance thereunder. The Plan provides for the granting to
employees (including employee directors and officers) of options intended to
qualify as incentive stock options within the meaning of ss.422 of the Internal
Revenue Code of 1996, as amended, and for the granting of nonstatutory stock
options to employees and consultants. The Plan is currently administered by the
Company's Compensation Committee.
The Plan provides for the granting of both Incentive Stock Options
("ISOs") and nonstatutory stock options (a "NSO") and in connection with such
options the granting of stock appreciation rights (an "SAR") or additional stock
options, known as progressive stock options, in the event the grantee exercises
such stock options by surrendering shares of Common Stock of the Company (a
"PSO"). NSOs and SARs may be issued to any key employee or officer of the
Company or its subsidiaries, or any other person who is an independent
contractor, agent or consultant of the Company or its subsidiaries but not any
director of the Company who is not an employee of the Company. ISOs may be
issued to key employees and officers of the Company and its subsidiaries, but
not to any independent contractor, agent or consultant. The Compensation
Committee also determines the times at which options become exercisable, their
transferability and the dates, not more than ten years after the date of grant,
on which options will expire. In the event of a tender offer for more than 25%
of the Company's outstanding stock, or a "change in control" (as defined in the
Plan) of the Company, all outstanding options become immediately exercisable.
The fair market value of the stock with respect to which ISOs
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under the Plan or any other plan of the Company first become exercisable may not
exceed $100,000 in any year. The option price of an ISO is to be at least 100%
of the fair market value on the date of grant (110% in the case of optionees
holding more than ten percent of the combined voting power of all classes of
stock of the Company). The Plan, however, permits the Compensation Committee to
grant NSOs at any exercise price consistent with the purposes of the Plan,
whether or not such exercise price is equal to the fair market value of the
stock on the date of grant of the NSO. NSOs with an exercise price of less than
fair market value on the date of grant would not qualify as performance-based
compensation under ss.162(m) of the Internal Revenue Code of 1986, as amended,
and, therefore, any compensation expense generated by the exercise of such an
option would not be deductible by the Company when the Company is considered to
be subject to such Section, if the optionee is a "covered employee" who is paid
compensation from the Company in an amount in excess of $1,000,000 in the year
of exercise.
Options may be exercised by the payment of the exercise price in cash,
Common Stock or a combination thereof. Subject to compliance with the provisions
of applicable governmental regulations, the Compensation Committee may make a
loan for the purpose of exercising any option granted under the Plan to an
optionee in an amount not to exceed 100% of the purchase price of the shares
acquired upon exercise of the options. The loan must be secured by a pledge of
shares of the Company having an aggregate purchase price equal to or greater
than the amount of the loan.
The Plan permits the Compensation Committee to grant SARs in connection
with any option granted under the Plan. SARs enable an optionee to surrender an
option and to receive a payment in cash or Common Stock, as determined by the
Compensation Committee, equal to the difference between the fair market value of
the Common Stock on the date of surrender of the related option and the option
price.
The Plan also permits the Compensation Committee to grant PSOs in
connection with any option granted under the Plan. PSOs enable an optionee to
receive additional stock options in the event the grantee exercises a stock
option, in whole or in part, by surrendering shares of Common Stock of the
Company. Any PSO granted will be for a number of shares equal to the number of
surrendered shares of Common Stock, shall not be exercisable for a minimum of
six months from the grant date of the option, shall have an option price per
share equal to 100% of the fair market value of a share of stock on the grant
date and shall be subject to such other terms and conditions as the Compensation
Committee may determine.
Unless otherwise provided by the Compensation Committee, the following
rules will apply to all options granted under the Plan. Options granted under
the Plan expire immediately if an employee is terminated for cause. If
termination of employment is voluntary or involuntary, options granted expire
after a three month period. In the event of an employee's death within such
three-month period, the employee's estate may exercise the option for the number
of shares for which it is exercisable at the date of termination, for one year
after death but in no event beyond the expiration dates of the option. An option
outstanding at the time an employee retires under a Company retirement plan or
becomes disabled is exercisable within one year of termination in the case of an
ISO and in the case of a NSO may be exercisable at any time to the extent that
the optionee was otherwise entitled to exercise it at the time of such cessation
of employment with the Company or a subsidiary thereof, but in no event after
the expiration of the option period. If an employee dies, whether before or
after such retirement or disability, the employee's estate may exercise the
option exercisable at the date of termination of
9
<PAGE>
employment for up to three years after death (one year in the case of voluntary
termination of employment), but in no event beyond the expiration dates of the
option.
STOCK APPRECIATION RIGHTS
Effective April 24, 1997, the Company granted a stock appreciation
right to James E. Bishop, the President of the Company, in connection with his
employment agreement with respect to 100,000 shares of Common Stock at an
exercise price of $3.25 per share, which vests 20,000 shares per year over a
period of five years, subject to accelerated vesting under certain
circumstances. On April 24, 1997, Messrs. Hatala, Lubell, Pacchia, Bartlett,
Lerner, Aylward and Tipps and Ms. Hart-Brown were granted stock appreciation
rights with respect to 5,000 shares at an exercise price of $3.25 per share
(collectively, the "Director SARs"), subject to approval of such grants by the
Company's stockholders at the Meeting. If so approved, the Director SARs may be
exercised during the period October 25, 1997 through April 23, 2003. In no event
may the appreciated value per share paid in respect of the Director SARs exceed
$7.00 per share. SEE "Item 4 - Proposal to Approve the Grant of Stock
Appreciation Rights to Certain Non-Officer Directors."
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of the Company
presents this report on the compensation policies of the Company for its
executive officers. The Compensation Committee was created on August 28, 1996.
It consists entirely of directors who are not and have never been employees of
the Company. On the date of its creation, Ms. Hart-Brown and Messrs. Bartlett
and Lerner became members of the Compensation Committee. Mr. Tipps became a
member of the Compensation Committee effective April 24, 1997.
From January 1, 1996 until August 28, 1996, Messrs. Hatala, Pacchia and
Lubell constituted the Board of Directors of the Company and made all decisions
regarding compensation.
CHIEF EXECUTIVE OFFICER COMPENSATION
The basic compensation of James E. Bishop, who became President and
Chief Executive Officer of the Company effective August 28, 1996, for the fiscal
year ended December 31, 1996, was determined by the Board of Directors as it
existed prior to August 28, 1996.
Until September 1, 1996, Mr. Bishop's employment agreement provided for
his employment as Executive Vice President of the Company at an annual salary of
$100,000 and a bonus of up to $100,000, at the discretion of the Board of
Directors, upon the closing of an acquisition by the Company. Mr. Bishop waived
any right to a bonus in respect of the closing of the acquisition of the assets
of Pre-Tek Wireline Service Company, Inc. in July 1996 in exchange for a new
employment agreement which became effective September 1, 1996.
The new agreement, which remained in effect until April 24, 1997,
provided for Mr. Bishop's employment as President and Chief Executive Officer.
His annual salary was $150,000, subject to review each year. He was also
entitled to a cash bonus, the amount and terms of which were to be determined by
the Board of Directors in its discretion. In addition, Mr. Bishop was entitled
to a tax-qualified retirement plan, participation at the chief executive officer
level in a
10
<PAGE>
compensation plan based on the performance of the common stock of the Company
and life insurance coverage in the amount of $500,000.
At a meeting in November 1996, the Compensation Committee determined to
award Mr. Bishop a bonus of $25,000 based upon his performance in identifying
acquisition opportunities for the Company.
During the period January 1, 1996 through August 1996, Mr. Hatala was
the chief executive officer of the Company. Under the terms of an employment
agreement which commenced on May 15, 1995, Mr. Hatala was entitled to a salary
at an annual rate of $75,000 plus $200 per hour for each hour devoted to the
business of the Company in excess of 500 hours per annum.
COMPENSATION COMMITTEE
Lucille Hart-Brown
C. Scott Bartlett, Jr.
Richard P. Lerner
Paul Tipps
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth stock ownership information as of August
26, 1997 concerning (i) the name and address of stockholders known to the
Company to own beneficially more than 5% of the outstanding shares of the
Company's common stock, (ii) each of the Company's directors and executive
officers and (iii) all directors and executive officers of the Company as a
group.
On August 26, 1997 there were 8,731,836.181 shares of the Common Stock
issued and outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE AMOUNT AND NATURE
OF BENEFICIAL OF BENEFICIAL PERCENT OF PERCENT OF
NAME AND ADDRESS OF OWNERSHIP OF OWNERSHIP OF CLASS OF CLASS OF
BENEFICIAL OWNER (1) COMMON STOCK PREFERRED STOCK COMMON STOCK PREFERRED STOCK
-------------------- ------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Louis S. Beck (2) 2,927,499.25 8,113.91 34% 78%
Harry G. Yeaggy (3) 1,182,500.75 3,437.97 14% 33%
Vincent W. Hatala, Jr. (4) 4,000 0 * 0%
Anthony J. Pacchia (5) 6,000 0 * 0%
Arthur Lubell (6) 6,000 0 * 0%
Richard P. Lerner 0 0 0% 0%
James E. Bishop (7) 4,000 0 * 0%
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
C. Scott Bartlett, Jr. 0 0 0% 0%
Lucille Hart-Brown 0 0 0% 0%
Richard A. Tonges 0 0 0% 0%
Michael M. Nanosky 0 0 0% 0%
Paul Tipps 0 0 0% 0%
Peter G. Aylward 0 0 0% 0%
The United States Lines, Inc. and 1,056,975 0 12% 0%
United States Lines (S.A.), Inc.
Reorganization Trust, John
Paulyson, Trustee (8)
184-186 North Avenue East Cranford,
N.J. 07016
Beck Hospitality III Inc. (9) 310,000 1,100 4% 11%
8534 E. Kemper Road
Cincinnati, Ohio 45249
Daewoo Corporation (10) 623,911 0 7% 0%
c/o Lubell & Koven
350 Fifth Avenue
New York, New York 10118
All directors and executive 4,129,999 10,451.88 47% 100%
officers as a group (13 persons)
</TABLE>
* Less than 1%.
- --------------------
(1) Unless otherwise noted, the address of each of the listed persons
is c/o the Company at 2300 Corporate Boulevard, N.W., Suite 232, Boca Raton,
Florida 33431-8596.
(2) Includes 310,000 shares of Common Stock and 1,100 shares of
preferred stock held by Beck Hospitality Inc. III. Mr. Beck is an officer,
director and controlling shareholder of Beck Hospitality, Inc. III.
(3) Includes 310,000 shares of Common Stock and 1,100 shares of
preferred stock held by Beck Hospitality Inc. III. Mr. Yeaggy is an officer and
director of Beck Hospitality, Inc. III.
(4) Includes options to purchase 4,000 shares of Common Stock which are
currently exercisable.
(5) Includes options to purchase 6,000 shares of Common Stock which are
currently exercisable.
(6) Includes options to purchase 6,000 shares of Common Stock which are
currently exercisable.
(7) Includes options to purchase 4,000 shares of Common Stock which are
currently exercisable.
(8) The Reorganization Trust is the record owner of 1,056,975 shares of
Common Stock for the benefit of former unsecured creditors of U.S. Lines whose
claims have not been resolved. In accordance with an order of the United States
Bankruptcy Court for the Southern District of New York (In re United States
Lines, Inc., Case No. 86B 12240), the Trustee of the
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<PAGE>
Reorganization Trust votes such shares, on each proposal before shareholders, in
the same proportion "for" or "against" (or "withhold" in the case of director
elections) such proposal as shareholders (other than the Trust) who actually
vote in person or by proxy, but disregarding for this purpose (i) shareholders
who do not vote or who vote "abstain" and (ii) shares of Common Stock issued
after March 16, 1997. At present, the 3,799,999 shares held by Messrs. Beck,
Yeaggy and their affiliate are the shares issued after March 16, 1997.
(9) Messrs. Beck and Yeaggy own 75% and 25%, respectively, of the stock
of Beck Hopsitality III Inc. and are officers and directors of the corporation.
(10) Daewoo Corporation, a public corporation of South Korea with
headquarters in Seoul, was the largest unsecured creditor in the U.S. Lines
bankruptcy and, accordingly, the recipient of the greatest number of shares
through the Reorganization Trust.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ACQUISITION OF THE BECK YEAGGY GROUP. In a series of transactions with
corporations wholly-owned by Messrs. Beck and Yeaggy which closed on April 23
and 24, 1997, the Company acquired from affiliates of Messrs. Beck and Yeaggy
certain assets relating to the hospitality business comprised of (i) six hotels
and an 85% partnership interest in a partnership which owns a hotel
(collectively, the "Owned Hotels"), (ii) a hotel management company, with 21
hotels under management inclusive of the Owned Hotels (iii) a management fee
sharing arrangement with Summit Hotel Management Company and (iv) two loans, one
of which is secured by a first mortgage on a hotel and the other of which is
secured by a first mortgage on a campground and both of which are personally
guaranteed by Messrs. Beck and Yeaggy (the acquired businesses and assets are
collectively the "Beck-Yeaggy Group"). In consideration therefor, the Company
issued 3,799 999 shares of Common Stock and 10,451.88 shares of Preferred Stock.
The Preferred Stock has a liquidation preference of $1,000 per share and has an
annual dividend expense of $75 per share. Dividends are payable quarterly. For
purposes of pricing the transaction, the Common Stock was valued at $3.25 per
share. Such valuation was determined based upon a combination of the cash held
by the Company, the possible receipt by the Company of additional cash from the
United States Lines, Inc. and United States Lines (S.A.) Reorganization Trust,
the value of the Company's net operating losses as applied to the expected
pre-tax cash flows of the Beck-Yeaggy Group and the potential for a future
public market for the shares of Common Stock.
INTEREST OF MESSRS. BECK AND YEAGGY IN HOTELS UNDER MANAGEMENT BY THE
COMPANY. The Company has agreements to manage 14 hotel properties which are not
owned directly or indirectly by the Company. Seven of these properties are owned
by corporations or partnerships owned by Messrs. Beck and Yeaggy. The management
agreements with the Beck/Yeaggy - affiliated hotels provides for the payment to
the Company of an annual management fee equal to 5% of gross revenues and have
an initial term expiring in 2007. In the event of a sale of a hotel subject to a
management agreement, the Company is entitled to receive a payment equivalent to
the discounted present value of the anticipated management fees over the
remainder of the initial term.
INTEREST OF MESSRS. BECK AND YEAGGY IN PROPERTIES SUBJECT TO MORTGAGES
HELD BY THE COMPANY. The Company has financial participations in the form of
promissory notes secured by mortgages on a hotel property in Juno Beach, Florida
(the "Juno Note") and on a KOA Campground in the vicinity of Orlando, Florida
(the "KOA Note"), both of which are owned by affiliates of Messrs. Beck and
Yeaggy. The principal balances of the Juno Note and the KOA Note as of June 30,
1997 are $2,199,921 and $3,524,439 respectively. The Juno Note is subject
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<PAGE>
to a prior lien in favor of The Provident Bank as security for indebtedness of
the Company in the remaining principal amount of $1,160,602 as of June 30, 1997.
Both the Juno Note and KOA Note provide for monthly principal payments based
upon a twenty year amortization. Both notes mature on May 1, 2000, but their
respective maturity dates may be extended for an additional three years if the
notes are not in default on the original maturity date. The Juno Note bears
interest at a floating rate equal to the prime rate plus 1%, but in no event
less than 7.75% per annum. The KOA Note bears interest at a fixed rate of 8% per
annum. Messrs. Beck and Yeaggy have jointly and severally guaranteed the payment
of the notes.
INTEREST OF MESSRS. BECK AND YEAGGY IN SERVICE PROVIDERS TO THE
COMPANY. The Company has a service agreement dated April 23, 1997 for a hotel
property management system with Computel Computer Systems, Inc. ("Computel"), a
corporation wholly-owned by Messrs. Beck and Yeaggy. The agreement has a term of
one year and automatically renews for successive terms of one year, unless one
party notifies the other to the contrary at least three months prior to the
termination date. Computel is paid a monthly fee of $275 per hotel location for
its basic property management software package plus one computer terminal. For
each additional terminal at a hotel location there is an additional charge of
$75 per month. Additional monthly fees are charged for add-on software for such
services as guest messaging, call accounting interface, franchise central
reservation interface and movie interface. The Company believes that these are
market-rate fees. Based on the Company's present operations, the Company
projects aggregate payments to Computel of $43,650 during 1997. On each annual
renewal of the agreement, Computel is entitled to increase its fees commensurate
with the fees charged to other customers.
Personnel at the hotels owned and managed by the Company are provided
by Hospitality Employee Leasing Program, Inc. ("HELP"), a corporation also
wholly-owned by Messrs. Beck and Yeaggy, pursuant to an agreement dated April
23, 1997. The Agreement has a term of one year and automatically renews for
successive terms of one year, unless one party notifies the other to the
contrary at least three months prior to the termination date. The Company pays
HELP an administrative fee of $8.15 per bi-monthly pay period per employee. The
Company believes that this is a market-rate fee. Based on the Company's present
operations, the Company projects aggregate fees of $39,120 to HELP during 1997.
INTEREST OF MESSRS. BECK AND YEAGGY IN PREMISES OCCUPIED BY THE
COMPANY. The Company subleases office space in Cincinnati, Ohio and Boca Raton,
Florida from affiliates of Messrs. Beck and Yeaggy. The Sublease agreements are
on a triple-net basis and provide for annual rental payments of $25,248 and
$18,240 respectively. The Company believes that these are market rate rentals.
INTEREST OF MESSRS. BECK AND YEAGGY IN BEST WESTERN, KINGS QUARTERS.
The Company has an 85% general partnership interest in Kings Dominion Lodge, a
Virginia general partnership, the sole asset of which is the hotel known as the
Best Western, Kings Quarters, which is adjacent to the Kings Dominion Amusement
Park near Richmond, Virginia. The remaining 15% general partnership interest is
held by Elbe Properties, an Ohio general partnership whose partners are Messrs.
Beck and Yeaggy.
GUARANTEES BY MESSRS. BECK AND YEAGGY OF INDEBTEDNESS OF THE COMPANY.
Messrs. Beck and Yeaggy have personally guaranteed the obligations of Envoy Inns
of Morrisville, L.L.C., a Delaware limited liability company, of which the
Company is the sole member, and
14
<PAGE>
Kings Dominion Lodge, a Virginia general partnership, of which the Company owns
an 85% interest, in connection with three loans secured by mortgages on three
hotel properties in favor of State Street Bank and Trust Company, as Trustee
under a Pooling and Servicing Agreement dated as of January 1, 1997 for J.P.
Morgan Commercial Mortgage Finance Corporation. The obligations of Messrs. Beck
and Yeaggy pursuant to their guarantees in connection with these loans are
limited to payment of the outstanding debt in the event of fraud or material
misrepresentation by the borrowing entities, and indemnification in connection
with certain specific liability and costs for the lender, such as environmental
liability and liability caused by the gross negligence or willful misconduct of
the borrowing entity, the failure to pay property taxes when due, the
misapplication of insurance and condemnation proceeds, damage or waste to the
property subject to lender's mortgage, and costs incurred by the Lender as a
result of certain actions taken by the borrowing entity after an event of
default.
In addition, Messrs. Beck and Yeaggy have personally guaranteed the
obligations of the Company in connection with two loans from Star Bank, N.A.,
which obligations were assumed by the Company on April 24, 1997 from affiliates
of Messrs. Beck and Yeaggy and are secured by mortgages on two hotel properties.
The guarantees of Messrs. Beck and Yeaggy pursuant to these loans are limited to
an aggregate total of $209,250, plus liability incurred by the lender in
connection with events such as fraud or intentional misrepresentation by the
Company or its predecessor and misapplication of insurance or condemnation
proceeds.
Messrs. Beck and Yeaggy are also personally obligated in connection
with loans from The Huntington National Bank in the original principal amount of
$3,260,000, and from 1st National Bank, located in Warren County, Ohio, in the
original principal amount of $50,000 each of which was assumed by the Company on
April 24, 1997 and are secured by mortgages on one hotel property.
ITEM 1 - ELECTION OF DIRECTORS
Each of Messrs. Beck, Bartlett and Lerner and Ms. Hart-Brown, Class A
Directors whose terms are expiring at the Meeting, have agreed to stand for
re-election. Each such individual and each of the other nominees is at present
available for election. The directors elected at the Meeting have a term
expiring at the annual meeting of stockholders of the Company in 2000 and until
their successors are elected and qualified.
The affirmative vote of the holders of a plurality of the shares of the
Company's Common Stock voted in person or by proxy at the Meeting is required
for the election of each director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
ITEM 2 - RATIFICATION AND APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, subject to stockholder ratification, has
selected J.H. Cohn, L.L.P., to serve as its independent auditors for the fiscal
year ending December 31, 1997. If the stockholders do not ratify the selection
of J.H. Cohn, L.L.P., the Board of Directors may reconsider its selection.
A representative of J.H. Cohn, L.L.P. is expected to be present at the
Meeting to respond to appropriate questions and will be given the opportunity to
make a statement if he or she desires to do so.
15
<PAGE>
The affirmative vote of the holders of a majority of the shares of the
Company's common stock present, in person or by proxy, at the Meeting is
required for the ratification and approval of the selection of the auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND
APPROVAL OF THE SELECTION OF J.H. COHN, L.L.P. AS INDEPENDENT AUDITORS.
ITEM 3 - PROPOSAL TO CHANGE THE COMPANY'S NAME.
The Board of Directors has unanimously approved and recommended the
adoption by the shareholders of the following amendment to the Restated
Certificate of Incorporation, which would change the Company's name from "Janus
Industries, Inc." to "Janus American Group, Inc."
"Article FIRST of the Company's Restated Certificate of Incorporation,
as amended to date, is hereby amended to read as follows:
FIRST: The name of the corporation (which is hereinafter
referred to as the "Corporation") is Janus American Group,
Inc.
The reasons for the Board's approval and recommendation to the
stockholders are as follows:
In 1990, the Company's name was changed from "United States Lines,
Inc." to "Janus Industries, Inc." as part of the Company's plan of
reorganization under Chapter 11 of the United States Bankruptcy Code, to reflect
the fact that the Company was no longer engaged in the shipping business. The
name "Janus Industries, Inc." was selected to reflect the Company's intended new
beginning as the owner of various operating companies.
Recently, the Company has become primarily a hospitality business with
geographically diverse operations. The Board of Directors believes that the word
"Industries" in the Company's name is inconsistent with the nature of the
Company's present operations and therefore has proposed the change of name.
The affirmative vote of the holders of a majority of the outstanding
shares of the Company's Common Stock voted in person or by proxy at the Meeting
is required in order to approve the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT.
ITEM 4 - PROPOSAL TO APPROVE THE GRANT OF STOCK APPRECIATION RIGHTS TO CERTAIN
NON-OFFICER DIRECTORS
At the Meeting, stockholders will be asked to consider and approve the
grant by the Board of Directors on April 24, 1997 of the Director SAR to each of
Messrs. Hatala, Lubell, Pacchia, Bartlett, Lerner, Aylward and Tipps and Ms.
Hart-Brown, the non-executive officer Directors of the Company.
The Director SARs entitle the holder thereof, upon exercise, to receive
the appreciated value of a share of Common Stock in excess of $3.25, up to a
maximum appreciated value of $7.00 per share. For purposes of pricing the
acquisition of the Beck-Yeaggy Group, the
16
<PAGE>
Common Stock was valued at $3.25 per share. See "Certain Relationship and
Related Transaction - Acquisition of the Beck-Yeaggy Group."
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock voted in person or by proxy at the Meeting is required in
order to approve the grant of the Directors SARs.
A form of agreement memorializing the Director SARs is attached hereto
as Appendix A.
INCOME TAX CONSEQUENCES. SAR's will not result in taxable income upon
grant. Upon exercise, the optionee will realize ordinary income in an amount
equal to the cash and/or the fair market value of any shares received which
amount will be subject to appropriate income and employment taxes. The Company
will be entitled to a corresponding compensation deduction.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE GRANT OF
THE DIRECTORS SARS.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership. Executive officers,
directors and greater than ten percent stockholders are required by Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
The Company's executive officers, directors and greater than ten
percent beneficial owners had no Section 16(a) filing requirements during the
year ended December 31, 1996 because the Company was not yet subject to the
Exchange Act reporting requirements.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
In November 1996, the Company engaged J.H. Cohn LLP as independent
auditors to perform the audit of the Company's annual financial statements as
successor to Arthur Andersen LLP ("Arthur Andersen"). In October, 1996, Arthur
Andersen decided to no longer serve as the Company's auditors. Arthur Andersen
informed the Company that it was not aware of any disputes between its firm and
the Company in the context of its audits and tax return services performed for
the years ended December 31, 1994 and 1995. From the effective date of the Plan
in 1990 until the date hereof, there have been no disagreements between the
Company and prior certified public accountants on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of such
prior accountants, would have caused them to make reference in connection with
their report to the subject matter of the disagreements.
STOCKHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposals intended to be presented at the Company's
next annual meeting of stockholders must be received by the Company at its
offices at 2300 Corporate
17
<PAGE>
Boulevard, N.W., Suite 232, Boca Raton, FL 33431-8596, on or before December 29,
1997, for consideration for inclusion in the proxy material for such annual
meeting of stockholders.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited by regular
employees of the Company, either personally or by telephone or telecopy. The
Company does not expect to pay any compensation for the solicitation of proxies.
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Meeting other than as stated in this Proxy Statement, and is not aware that any
other matters will be presented for action at the Meeting. If any other matters
come before the Meeting, the persons named in the enclosed form of proxy will
vote the proxy with respect thereto in accordance with their best judgment,
pursuant to the discretionary authority granted by the proxy.
If you do not plan to attend the Meeting in person, please complete,
sign, date and return the enclosed proxy card promptly. Even if you do plan to
attend the Meeting, please so note where provided and return the proxy card
promptly.
JANUS INDUSTRIES, INC.
Frank E. Lawatsch, Jr.
Secretary
Dated: September 4, 1997
18
<PAGE>
APPENDIX A
SAR - 5,000 Stock Appreciation Rights
JANUS INDUSTRIES, INC.
BOARD OF DIRECTORS
STOCK APPRECIATION RIGHT CERTIFICATE
Janus Industries, Inc. (the "Company"), a Delaware corporation, hereby
grants to the person named below a Stock Appreciation Right ("SAR") with respect
to the shares of Common Stock, par value $0.01 per share, of the Company
exercisable on the following terms and conditions and those set forth on the
reverse side of this certificate:
Name of Grantee:
----------------------------------------------
Address:
----------------------------------------------
----------------------------------------------
Social Security No.:
----------------------------------------------
Number of SAR's: 5,000
----------------------------------------------
Price: $3.25
----------------------------------------------
Date of Grant: April 24, 1997
----------------------------------------------
EXERCISABILITY SCHEDULE
EXERCISE PERIOD
-----------------------------------------
NUMBER OF SAR'S COMMENCEMENT DATE EXPIRATION DATE
- --------------- ----------------- ---------------
All SAR's October 25, 1997 April 23, 2003
By acceptance of this SAR, the grantee agrees to the terms and
conditions hereof.
JANUS INDUSTRIES, INC.
Dated: April 24, 1997 By: __________________________________
Name: Louis S. Beck
Title: Chairman of the Board
ACCEPTED:
- ----------------------------------------
<PAGE>
JANUS INDUSTRIES, INC.
BOARD OF DIRECTORS
STOCK APPRECIATION RIGHT
TERMS AND CONDITIONS
1. STOCK APPRECIATION RIGHT. THIS STOCK APPRECIATION RIGHT ("SAR") IS
ISSUED BY JANUS INDUSTRIES, INC. (THE "COMPANY"). THE BOARD OF DIRECTORS SHALL
ADMINISTER THIS SAR AND ITS DETERMINATIONS REGARDING THIS SAR ARE FINAL AND
BINDING. CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED IN THIS CERTIFICATE
HAVE THE MEANINGS GIVEN TO THEM IN THE JANUS INDUSTRIES, INC. 1996 STOCK OPTION
PLAN.
2. EXERCISABILITY SCHEDULE. THE SAR MAY BE EXERCISED AT ANY TIME AND
FROM TIME TO TIME AND IN ACCORDANCE WITH THE EXERCISABILITY SCHEDULE SET FORTH
ON THE FACE OF THIS CERTIFICATE, PROVIDED, HOWEVER, THAT THE EXERCISE OF THE SAR
MAY NOT BE MADE PRIOR TO SIX MONTHS AFTER THE DATE OF GRANT OF THE SAR. THE SAR
SHALL BE EXERCISABLE ONLY TO THE EXTENT THE SAR HAS A POSITIVE VALUE AND MAY NOT
BE EXERCISED AFTER THE EXPIRATION DATE.
3. METHOD OF EXERCISE OF THE SAR. TO EXERCISE THIS SAR, THE GRANTEE
SHALL DELIVER WRITTEN NOTICE OF EXERCISE TO THE CHAIRMAN OF THE BOARD OF THE
COMPANY SPECIFYING THE NUMBER OF RIGHTS WITH RESPECT TO WHICH THE SAR IS BEING
EXERCISED. PROMPTLY FOLLOWING SUCH NOTICE, THE COMPANY WILL DELIVER TO THE
GRANTEE THE PAYMENT SET FORTH HEREIN.
4. SAR PAYMENT. UPON TENDER OF THIS SAR, THE GRANTEE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF AN AMOUNT DETERMINED BY MULTIPLYING THE NUMBER OF RIGHTS
WITH RESPECT TO WHICH THE SAR IS BEING EXERCISED BY THE DIFFERENCE OBTAINED BY
SUBTRACTING THE EXERCISE PRICE PER RIGHT OF THE SAR FROM THE FAIR MARKET VALUE
OF A SHARE OF STOCK ON THE DATE OF EXERCISE OF THE SAR (THE "PAYMENT"). THE
PAYMENT SHALL BE MADE IN CASH.
6. RIGHTS AS A STOCKHOLDER OR DIRECTOR. THE GRANTEE SHALL NOT HAVE ANY
RIGHTS TO CONTINUED MEMBERSHIP ON THE BOARD OF DIRECTORS BY VIRTUE OF THE GRANT
OF THE SAR AND GRANTEE SHALL NOT HAVE ANY RIGHTS AS A STOCKHOLDER OF THE COMPANY
BY VIRTUE OF BEING A HOLDER OF THE SAR.
7. RECAPITALIZATION, MERGERS, ETC. IN THE EVENT OF CERTAIN CORPORATE
TRANSACTIONS AFFECTING THE COMPANY'S OUTSTANDING COMMON STOCK, THE BOARD OF
DIRECTORS SHALL EQUITABLY ADJUST THE NUMBER AND KIND OF RIGHTS SUBJECT TO THE
SAR, THE EXERCISE PRICE OF THE SAR AND THE VALUE LIMITATION. IF SUCH TRANSACTION
INVOLVES A CONSOLIDATION OR MERGER OF THE COMPANY WITH ANOTHER ENTITY, THE SALE
OR EXCHANGE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY OR A
REORGANIZATION OR LIQUIDATION OF THE COMPANY, THEN IN LIEU OF THE FOREGOING, THE
BOARD OF DIRECTORS MAY UPON WRITTEN NOTICE TO THE GRANTEE PROVIDE THAT THE SAR
SHALL TERMINATE ON A DATE NOT LESS THAN 20 DAYS AFTER THE DATE OF SUCH NOTICE
UNLESS THERETOFORE EXERCISED. IN CONNECTION WITH SUCH NOTICE, THE BOARD OF
DIRECTORS MAY IN ITS DISCRETION ACCELERATE OR WAIVE ANY DEFERRED EXERCISE
PERIOD.
8. SAR NOT TRANSFERABLE. THE SAR IS NOT TRANSFERABLE BY THE GRANTEE
OTHERWISE THAN BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION, AND IS
EXERCISABLE, DURING THE GRANTEE'S LIFETIME, ONLY BY THE GRANTEE. ANY ATTEMPTED
ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION SHALL BE VOID
AND OF NO EFFECT.
9. PAYMENT OF TAXES. THE GRANTEE SHALL PAY TO THE COMPANY, OR MAKE
PROVISION SATISFACTORY TO THE COMPANY FOR PAYMENT OF, ANY TAXES REQUIRED BY LAW
TO BE WITHHELD PURSUANT TO THE PAYMENT. THE COMPANY AND ITS SUBSIDIARIES MAY, TO
THE EXTENT PERMITTED BY LAW, DEDUCT ANY SUCH TAX OBLIGATIONS FROM ANY PAYMENT OF
ANY KIND OTHERWISE DUE TO THE GRANTEE.
10. GOVERNING LAW. THIS SAR SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO THE
LEGISLATIVE OR JUDICIAL CONFLICT OF LAWS RULES OF ANY STATE), EXCEPT TO THE
EXTENT SUPERSEDED BY FEDERAL LAW.
<PAGE>
11. VALUE LIMITATION. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
THE DIFFERENCE BETWEEN EXERCISE PRICE PER RIGHT AND THE FAIR MARKET VALUE OF A
SHARE OF COMMON STOCK AT THE DATE OF EXERCISE MAY NOT EXCEED $7.00, AS ADJUSTED
PURSUANT TO PARAGRAPH 7.
12. APPROVAL OF STOCKHOLDERS. THIS SAR MAY NOT BE EXERCISED UNTIL IT
HAS BEEN APPROVED BY THE STOCKHOLDERS OF THE COMPANY.
<PAGE>
JANUS INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 29, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Louis S. Beck and James E. Bishop and each of
them, with full power of substitution as proxies for the undersigned, to attend
the annual meeting of stockholders of Janus Industries, Inc. (the "Company"), to
be held at The Holiday Inn, 1950 Glades Road, Boca Raton, Florida at 10:00 a.m.
Eastern Daylight Time on September 29, 1997, or any adjournment thereof, and to
vote the number of shares of common stock of the Company that the undersigned
would be entitled to vote, and with all the power the undersigned would possess,
if personally present.
(Continued on reverse side)
<TABLE>
<S> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR 1, 2, 3 AND 4 Please mark your [X]
vote as indicated in
this example
FOR AGAINST ABSTAIN
1. To vote for the FOR WITHHOLD AUTHORITY 2. Approval of the appointment [ ] [ ] [ ]
following nominees of J.H Cohn, LLP as the
for election as Company's independent
directors: auditors for the fiscal year
ending December 31, 1997
CLASS A DIRECTORS,
TERM EXPIRES 2000
Louis S. Beck, C. [ ] [ ] 3. Approval of the Amendment to [ ] [ ] [ ]
Scott Bartlett, the Company's Restated
Lucille Hart-Brown, Certificate of Incorporation
Richard P. Lerner changing the Company's name
to "Janus American Group, Inc."
4. Approval of grant of stock [ ] [ ] [ ]
appreciation rights to
non-officer directors of the
Company
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write the nominee's name on the
line provided below.)
5. In their discretion, on such other business
- ----------------------------------------------------- as may property come before the meeting or
any adjournment thereof
IF YOU PLAN TO ATTEND [ ]
THE ANNUAL MEETING
PLEASE CHECK BOX
Unless a contrary direction is indicated, the shares represented
by this proxy will be voted FOR approval of each of the
proposals; if specific instructions are indicated, this proxy
will be voted in accordance with such instructions.
SIGNATURE SIGNATURE DATE
----------------------------- ----------------------------------- ---------------------
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH
</TABLE>
