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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
INDEX, INC.
(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 below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1. Title of each class of securities to which transaction
applies: N/A
2. Aggregate number of securities to which transaction applies:
N/A
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Date Filed: N/A
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PRELIMINARY COPY - For the Information of the
Securities and Exchange Commission Only
INDEX, INC.
580 WESTLAKE PARK BOULEVARD, SUITE 1100
HOUSTON, TEXAS 77079
_______________________________
CONSENT STATEMENT
_______________________________
April 28, 1997
This Consent Statement is being furnished to the holders of Common
Stock, par value $.01 per share ("Common Stock"), Series A Preferred Stock, par
value $1.00 per share ("Series A Preferred Stock"), and Series B Preferred
Stock, par value $1.00 per share ("Series B Preferred Stock"), of Index, Inc.,
a Texas corporation (the "Company"), in connection with a solicitation of
consents by the Board of Directors of the Company for adoption of an amendment
to the Restated Articles of Incorporation of the Company (the "Articles of
Incorporation"), that would effect a change in the Company's name and a
two-to-one reverse split of the issued and outstanding shares of Common Stock
(the "Amendment").
Adoption of the Amendment requires the affirmative consent of the
holders of a majority of the votes of the shares of Common Stock, Series A
Preferred Stock and Series B Preferred Stock, voting as a single class,
outstanding as of April 21, 1997 (the "Record Date"). As of the Record Date,
the Company had outstanding shares of Common Stock, 3,366
shares of Series A Preferred Stock and 16,800 shares of Series B Preferred
Stock. Each outstanding share of Common Stock will be entitled to one vote and
each outstanding share of Series A Preferred Stock and Series B Preferred Stock
will be entitled to one-tenth of a vote. See "Voting".
A shareholder who executes and returns a consent may revoke it at any
time before the Company's receipt of the requisite number of consents for
adoption of the Amendment by returning a consent bearing a later date or by
giving written notice of revocation to the Secretary of the Company at the
address set forth above prior to the Company's receipt of the requisite
consents for adoption of the effective date of the Amendment. No consent will
be effective unless the Company has received the requisite consents from the
holders of Common Stock, Series A Preferred Stock and Series B Preferred Stock
as of the Record Date for adoption of the Amendment.
This Consent Statement and the enclosed form of consent will be mailed
on or about April 28, 1997 to shareholders of record on the Record Date. The
Company will bear the cost of solicitation of consents by the Board of
Directors, including charges and expenses of brokerage firms, banks and others
for forwarding solicitation material to beneficial owners. In addition to the
use of the mails, consents may be solicited by officers and employees of the
Company, without remuneration, by personal contact, telephone or telecopy.
<PAGE> 3
Upon filing with and acceptance by the Secretary of State of Texas,
the Amendment will become effective. Such filing will be made as promptly as
practicable after the date upon which requisite consents for adoption of the
Amendment from the holders of Common Stock, Series A Preferred Stock and Series
B Preferred Stock are received. To assure that the Amendment is adopted and
made effective in a timely manner, the Company requests that it receive
executed consents no later than May 9, 1997. If the Company has not received
the requisite consents for adoption of the Amendment by May 9, 1997, it will
accept consents received after such date and consents received prior to such
date will be valid, subject to the right of the shareholder executing such
consent to revoke such consent and subject to applicable law.
PURPOSE AND DESCRIPTION OF AMENDMENT
The Board of Directors is proposing the Amendment to change the name
of the Company to "DXP Enterprises, Inc." and to effect a reclassification of
the Common Stock by converting each outstanding share of Common Stock to
one-half of one share.
SUMMARY AND PURPOSE OF AMENDMENT
Name Change
The purpose of the name change is to provide the Company with a more
distinctive name. The Company was incorporated under the name of Index, Inc.,
which the Board of Directors believes does not distinguish the Company from
many other corporations that, in whole or part, have the same name. The Board
of Directors is proposing the Amendment to change the Company's name to DXP
Enterprises, Inc., which the Company believes is more distinctive and better
reflects its business.
The text of the Amendment is set forth in the proposed resolutions
contained in the consent that accompanies this Consent Statement.
Reverse Stock Split
On December 4, 1996, the Company effected a reorganization of its
current wholly-owned subsidiary, SEPCO Industries, Inc. ("Sepco"), and a merger
of one of its wholly-owned subsidiaries with and into Newman Communications
Corporation ("Newman"). In connection with the reorganization and merger, the
former shareholders of Sepco and Newman received an aggregate of 15,986,394
shares of Common Stock and the Company qualified the Common Stock for trading
on the OTC Bulletin Board of the National Association of Securities Dealers,
Inc. Although the Company achieved its goal of establishing a public market
for the Common Stock, the Common Stock has been trading at a price that the
Company believes is detrimental to future expansion, financing and securing a
listing of the Common Stock on the Nasdaq SmallCap Market. The Company
currently is considering an acquisition program in which all or a part of the
purchase price for businesses to be acquired may be paid in shares of Common
Stock. While there can be no assurance that any acquisitions will be
consummated or as to the terms or timing thereof or that the Common Stock will
be approved for listing on the Nasdaq SmallCap Market, critical steps in the
Company's efforts in these regards are reducing the total number of outstanding
shares of Common Stock to a level that is comparable to other public companies
of similar size and nature and achieving the minimum listing qualifications for
the Nasdaq SmallCap Market.
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In furtherance of this goal, the Board of Directors has approved, and
directed that the same be presented to the shareholders of the Company for
their approval, the Amendment, which in addition to the name change described
above, would effect a two-to-one reverse stock split. The Amendment would also
authorize the purchase by the Company of fractional shares resulting from the
reverse stock split.
DESCRIPTION AND EFFECT OF THE PROPOSED AMENDMENT
The proposed name change and reverse stock split would be effected
through the Amendment, which would become effective upon filing with and
acceptance by the Secretary of State of Texas. The text of the Amendment and
the procedures for settling fractional share interests are set forth in the
resolutions contained in the consent that accompanies this Consent Statement
and incorporated by reference herein.
Name Change
Upon effectiveness of the Amendment, the Company's name would be "DXP
Enterprises, Inc."
Reverse Stock Split
The Articles of Incorporation currently authorize the issuance of
110,000,000 shares of capital stock, consisting of 100,000,000 shares of Common
Stock, and 10,000,000 shares of preferred stock, $1.00 par value per share, of
which 1,000,000 have been designated Series A Preferred Stock and 1,000,000
have been designated Series B Preferred Stock. At April 21, 1997, the Company
had outstanding ___________ shares of Common Stock, 3,366 shares of Series A
Preferred Stock and 16,800 shares of Series B Preferred Stock. In addition, as
of such date, the Company had reserved 7,278,400 shares of Common Stock for
issuance upon conversion or exercise of various outstanding securities of the
Company.
Upon effectiveness of the Amendment, one new share of Common Stock
will be exchanged for every two shares of Common Stock outstanding as of the
date on which the Amendment is filed with the Secretary of State of Texas (the
"Effective Date"). Based on information as of the Record Date, it is
anticipated that the number of shares of Common Stock that would be outstanding
on the Effective Date is ____________. In addition, it is expected that
3,639,200 shares of Common Stock will be reserved for issuance upon the
conversion or exercise of various of the Company's other outstanding securities
(convertible preferred stock and options), leaving a total of approximately
___________ shares of Common Stock available for future issuances.
No fractional shares of new Common Stock will be issued for any
fractional new share interest. Rather, each shareholder who would otherwise
receive a fractional new share of Common Stock as a result of the Amendment
will receive an amount of cash equal to the average of the closing sale price
of a share of Common Stock on the OTC Bulletin Board during the 20 trading days
immediately preceding the Effective Date multiplied by the number of shares of
Common Stock held by such holder that would otherwise have been exchanged for
such fractional interest. Because the price of the Common Stock fluctuates,
the amount to be paid for fractional shares cannot be determined until such
date and may be greater or less than the price on the date that any shareholder
executes his consent. It currently is estimated that the cost to the Company
of purchasing fractional shares will be not more than $2,400.
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If the Amendment is approved, the Company will notify shareholders of
the filing of the Amendment with the Secretary of State of Texas and will
furnish shareholders of record as of the close of business on the Effective
Date with a Letter of Transmittal for use in exchanging certificates. The
shareholders of the Company, promptly after the Amendment becomes effective,
will be required to mail their certificates representing their shares of Common
Stock of the Company to the Exchange Agent named in the Letter of Transmittal
so that a new stock certificate giving effect to the name change and the
reverse stock split may be issued and proceeds of the settlement of fractional
interests delivered promptly.
It is not expected that the interests of any shareholders will be
eliminated pursuant to the reverse stock split. Fractional interests settled
by the Company are expected to aggregate approximately ________, or __ %, of
those currently outstanding. Shares no longer outstanding as a result of the
fractional share settlement procedure will be returned to authorized but
unissued shares of Common Stock.
After giving effect to the settlement of fractional shares of Common
Stock, there will be no material differences between those securities
outstanding prior to the Amendment and those to be outstanding after the
Amendment is effected. The Amendment will, however, result in an adjustment to
the conversion ratio of the Series B Preferred Stock. Specifically, pursuant
to the Articles of Incorporation and as reflected in the Amendment, the
conversion ratio of the Series B Preferred Stock will be adjusted so that such
shares will be convertible into such number of shares of Common Stock that a
holder of such shares of Series B Preferred Stock would have been entitled to
receive in the reclassification if such shares of Series B Preferred Stock were
to have been converted into Common Stock immediately prior to the
reclassification. Pursuant to such adjustment, upon effectiveness of the
Amendment, each share of Series B Preferred Stock will be convertible into 56
shares of Common Stock. Similar adjustments will be made to the exercise
provisions of the Company's outstanding options.
In the reverse stock split, cash proceeds received from the settlement
of fractional shares may result in a shareholder realizing taxable gain or loss
to the extent of the difference between such proceeds and the cost or other
basis applicable to the fractional shares. No officer, director, associate or
affiliate of the Company is expected to derive any material benefit from the
reverse stock split other than the benefits that might be enjoyed by any other
person holding the same number of shares.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDMENT, AND THE
NAME CHANGE AND REVERSE STOCK SPLIT CONTEMPLATED THEREBY, AND RECOMMENDS THAT
SHAREHOLDERS EXECUTE AND DELIVER A CONSENT FOR ADOPTION OF THE AMENDMENT.
VOTING
The affirmative consent of the holders of a majority of the votes of
the shares of Common Stock, Series A Preferred Stock and Series B Preferred
Stock outstanding as of the Record Date, voting as a single class, is necessary
for approval of the Amendment. UNLESS OTHERWISE PROVIDED, CONSENTS THAT ARE
RECEIVED WILL BE CONSIDERED CONSENTS FOR ADOPTION OF THE AMENDMENT.
David R. Little, a director and officer of the Company, and Gary A.
Allcorn, an officer of the Company, have advised the Company that they intend
to execute consents for adoption of the Amendment
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with respect to the 8,315,452 shares of Common Stock and 15,000 shares of
Series B Preferred Stock beneficially owned by them. See "Security Ownership
of Certain Beneficial Owners and Management". Except as otherwise set forth in
this Consent Statement, no other person has any substantial interest in the
adoption of the Amendment.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date, with
respect to (i) persons known to the Company to be beneficial holders of five
percent or more of either the outstanding shares of Common Stock, Series A
Preferred Stock or Series B Preferred Stock, (ii) named executive officers and
directors of the Company and (iii) all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership(2)
------------------------------------------------------------------------
Name and Address of Series A Series B
------------------- Common Preferred Preferred
Beneficial Owner(1) Stock % Stock % Stock %
--------------------------------------- --------------- ------ ---------------- ------ ---------------- -----
<S> <C> <C> <C> <C> <C> <C>
Gary A. Allcorn(3) 8,988,723 -- -- 15,000 89.3
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
David R. Little(4) 4,286,729 -- -- -- --
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
Bryan H. Wimberly(5) 1,673,013 -- -- -- --
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
Jerry J. Jones(6) 1,439,963 -- -- -- --
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
SEPCO ESOP 3,825,194 1,870 55.5 -- --
c/o River Oaks Trust Company, Trustee
2001 Kirby
Houston, Texas 77210
Denny Lawrence(7) 201,600 -- -- 1,800 10.7
Route 1, Box 265-B
Farmerville, Louisiana 71241
Nelvin F. Luke(8) 229,691 374 11.1 -- --
225 Newman Avenue
Jefferson, Louisiana 70121
Norman O. Schenk(9) 160,050 374 11.1 -- --
4415 Waynesboro
Houston, Texas 77035
Donald E. Tefertiller(10) 186,168 374 11.1 -- --
4425 Congressional Drive
Corpus Christi, Texas 78413
Ernest E. Herbert(11) 94,140 * 187 5.6 -- --
57 Coronado Avenue
Kenner, Louisiana
Charles E. Jacob(12) 95,769 * 187 5.6 -- --
P. O. Box 57
Maypearl, Texas 76064
Thomas V. Orr 16,000 * -- -- -- --
Director(13)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Kenneth H. Miller 16,000 * -- -- -- --
Director(14)
Cletus Davis 16,000 * -- -- -- --
Director(15)
All executive officers, directors and 16,436,428 -- -- 15,000 89.3
nominees as a group (7 persons)(16)
</TABLE>
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* Less than 1%.
(l) Each beneficial owner's percentage ownership is determined by assuming
that options, warrants and other convertible securities that are held by
such person (but not those held by any other person) and that are
exercisable or convertible within 60 days have been exercised or
converted. An aggregate of ___ shares of Common Stock issuable upon
surrender of certificates formerly representing shares of capital stock of
Sepco and Newman were not included in the determination of each beneficial
owner's percentage ownership.
(2) Unless otherwise noted, the Company believes that all persons named in
the above table have sole voting and investment power with respect to all
shares of Common Stock, Series A Preferred Stock and Series B Preferred
Stock beneficially owned by them.
(3) Includes 6,851,184 shares of Common Stock and 15,000 shares of Series B
Preferred Stock owned by the Kacey Joyce, Andrea Rae and Nicholas David
Little 1988 Trust (the "Trusts") for which Mr. Allcorn serves as trustee.
Because of this relationship, Mr. Allcorn may be deemed to the beneficial
owner of such shares and the 1,680,000 shares of Common Stock issuable
upon conversion of the 15,000 shares of Series B Preferred Stock held by
the Trusts. Also includes 80,000 shares of Common Stock issuable upon
exercise of an option and 28,739 shares of Common Stock held of record by
the SEPCO Industries, Inc. Employee Stock Ownership Plan, as amended (the
"SEPCO ESOP"), for Mr. Allcorn's account.
(4) Includes 3,200,000 shares of Common Stock issuable to Mr. Little upon
exercise of an option and 161,829 shares of Common Stock held of record
by the SEPCO ESOP for Mr. Little's account.
(5) Includes 201,600 shares of Common Stock owned of record by a trust of
which Mr. Wimberly is one-third beneficiary and 195,200 shares of Common
Stock issuable upon exercise of an option granted to Mr. Wimberly. Also
includes 34,613 shares of Common Stock held by the SEPCO ESOP for Mr.
Wimberly's account.
(6) Includes 1,436,800 shares of Common Stock issuable upon exercise of an
option granted to Mr. Jones and 3,163 shares of Common Stock held by the
SEPCO ESOP for Mr. Jones's account.
(7) Includes 201,600 shares of Common Stock issuable upon conversion of
shares of Series B Preferred Stock.
(8) Includes 16,000 shares of Common Stock issuable upon exercise of an
option and 90,491 shares of Common Stock held of record by the SEPCO ESOP
for Mr. Luke's account.
(9) Includes 36,580 shares of Common Stock held of record by the SEPCO ESOP
for Mr. Schenk's account.
(10) Includes 16,000 shares of Common Stock issuable upon exercise of an
option and 46,968 shares of Common Stock held of record by the SEPCO ESOP
for Mr. Tefertiller's account.
(11) Includes 47,140 shares of Common Stock held of record by the SEPCO ESOP
for Mr. Herbert's account.
(12) Includes 33,369 shares of Common Stock held of record by the SEPCO ESOP
for Mr. Jacob's account.
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(13) Includes 16,000 shares of Common Stock issuable upon exercise of an
option.
(14) Includes 16,000 shares of Common Stock issuable upon exercise of an
option.
(15) Includes 16,000 shares of Common Stock issuable upon exercise of an
option.
(16) See notes (3) through (6) and (13) through (15).
By Order of the Board of Directors,
--------------------------------------
Gary A. Allcorn
Secretary
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INDEX, INC.
CONSENT OF SHAREHOLDERS
IN LIEU OF SPECIAL MEETING
Pursuant to Article 9.10 of the Texas Business Corporation Act, the
undersigned, being the holders of the number of shares of capital stock of
Index, Inc., a Texas corporation (the "Company"), set forth opposite their names
below and in lieu of a special meeting of the shareholders, do hereby adopt the
following resolutions:
RESOLVED, that the Board of Directors of the Company is hereby
authorized to cause to be filed Articles of Amendment to the Company's
Restated Articles of Incorporation amending Article One and the first
paragraph and paragraph (B)(3)(d)(i) of Article Fourth as follows:
"ARTICLE ONE
The name of the corporation is DXP Enterprises, Inc."
"ARTICLE FOUR
Capital Stock"
The total number of shares of stock of all classes
which the Corporation shall have the authority to issue is
110,000,000, of which 100,000,000 shares of the par value $.01
each shall be designated common stock ("Common Stock") and
10,000,000 shares of the par value of $1.00 each shall be
designated serial preferred stock ("Preferred Stock").
At the effective time of this amendment, each share
of Common Stock issued and outstanding immediately prior to
the effective time shall automatically be changed and
converted, without any action on the part of the holder
thereof, into one-half of a share of Common Stock and, in lieu
of fractional interests in shares of Common Stock of the
Corporation, each holder whose aggregate holdings of shares of
Common Stock prior to the effective time of this amendment
amounted to a number not evenly divisible by two, shall be
entitled to receive for such fractional interest, and at the
effective time of this amendment any such fractional interest
in shares of Common Stock of the Corporation shall be
converted into the right to receive, upon the surrender of the
stock certificates formerly representing shares of Common
Stock of the Corporation, an amount in cash equal to the
average closing price per share for the shares of the Common
Stock on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. (the "NASD"), as reported by the
NASD, for the 20 trading days immediately preceding the date
on which this amendment becomes effective.
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A statement of all of the powers, preferences and
rights, and the qualifications, limitations or restrictions
thereof in respect of the Common Stock and the Preferred Stock
is as follows:"
"(i) At any time prior to the redemption
of any share of Series B Preferred Stock, the holder of such
shares of Series B Preferred Stock shall have the right to
convert such share into 56 shares of Common Stock. The right
to receive the converted shares requires delivery to the
office of the Corporation or its transfer agent of the
shareholder's written notice stating the number of shares the
shareholder is electing to convert. Said notice shall be
accompanied by the surrender of the Series B Preferred Stock
certificate or certificates, duly endorsed to the Corporation.
The date of conversion shall be the date of receipt by the
Corporation or its transfer agent of the notice and the duly
endorsed certificate or certificates."
RESOLVED, that the Board of Directors of the Company is hereby
authorized to implement the following procedures in connection with
the reclassification of the Company's Common Stock, $.01 par value per
share ("Old Stock"), from __________ issued and outstanding shares to
_____________ issued and outstanding shares of Common Stock, $.01 par
value per share ("New Stock"):
1. Immediately upon effectiveness of the
amendment to the Company's Restated Articles of Incorporation
authorizing the reverse stock split, every two shares of Old Stock
outstanding shall be converted into one share of fully-paid and
non-assessable New Stock, subject to the required settlement of
fractional shares. The Company shall issue one share of New Stock for
every two shares of Old Stock outstanding, and shall pay cash in lieu
of any fraction of a New Share which any shareholder would otherwise
receive. The settlement amount for such fractional shares shall be
based upon the average closing price per share for the shares of the
Old Stock on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. (the "NASD"), as reported by the NASD, for
the 20 trading days immediately preceding the date of the filling of
the amendment. From and after the date the amendment becomes
effective, certificates representing shares of Old Stock shall be
deemed to represent only the right to receive shares of New Stock and
cash in lieu of any fractional share of New Stock to which an
individual shareholder would be entitled.
2. Shareholders and the Company (except with
respect to treasury shares) shall be required to deliver the
certificates representing their shares of the Old Stock outstanding
immediately prior to the time the amendment becomes effective, upon
which the Company shall, through its Exchange Agent, issue a
certificate representing such shareholder's shares of New Stock, and
shall deliver a check for the amount necessary to pay such shareholder
for any fraction of a whole share of New Stock.
RESOLVED, that the Board of Directors of the Company is hereby
authorized to adopt a resolution adjusting the capital accounts of the
Company as, in their judgment, shall be in the best interests of the
Company in light of the adoption of the foregoing resolutions; and
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RESOLVED, that the Board of Directors of the Company is hereby
authorized and directed to adopt any or all changes to the bylaws of
the Company, and the officers of the Company are hereby authorized and
directed to do all things and execute and file all documents,
including amendments to the Company's Restate Articles of
Incorporation, which in their sole judgment are deemed to be necessary
and proper to carry out the intent of the foregoing resolutions.
Executed this _________ day of _____________________, 1997.
SHAREHOLDER
---------------------------------------
(Signature)
---------------------------------------
(Printed Name) (Number of Shares)
* IMPORTANT: The signature on this Consent must correspond with the
name(s) as written on the face of the certificate(s) representing the
shares of stock of Index, Inc. held by such stockholder. When signing
as trustee, executor, attorney or guardian, please give the full title
as it appears on the certificate(s).
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