ORA ELECTRONICS, INC.
---------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held January 26, 1998
10:00 a.m.
To Our Stockholders:
The Annual Meeting of Stockholders of ORA
Electronics, Inc. (the "Company") will be held at The
Chatsworth Hotel, 9777 Topanga Canyon Boulevard, Chatsworth,
California 91311, on Monday, January 26, 1998, at 10:00 a.m.
P.S.T. for the following purposes:
1. To elect four directors each to serve a one-year
term;
2. To ratify the appointment by the Board of Directors
of Richard & Hedrick as independent accountants of the Company
for the fiscal year ending March 31, 1998; and
3. To transact such other business as may properly come
before the Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on
December 1, 1997 as the record date for determination of
stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournment thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING,
PLEASE MARK, DATE AND SIGN THE ACCOMPANYING PROXY CARD AND
RETURN IT PROMPTLY IN THE ENVELOPE ENCLOSED FOR THAT PURPOSE.
By Order of the Board of Directors
By /s/ Matthew F. Jodziewicz
------------------------------
Matthew F. Jodziewicz,
Secretary
Chatsworth, California
December 19, 1997
-1-
<PAGE>
ORA ELECTRONICS, INC.
9410 OWENSMOUTH AVENUE
CHATSWORTH, CA 91311
PROXY STATEMENT
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of
Directors of ORA Electronics, Inc. ("ORA" or the "Company"), in connection
with the Annual Meeting of Stockholders to be held at 10:00 a.m. P.S.T. on
January 26, 1998, at The Chatsworth Hotel, 9777 Topanga Canyon Boulevard,
Chatsworth, California 91311, and at any and all adjournments thereof.
This Proxy Statement and accompanying proxy will first be mailed to
stockholders on or about December 22, 1997. The costs of solicitation of
proxies will be paid by the Company. In addition to soliciting proxies by
mail, the Company's officers, directors and other regular employees,
without additional compensation, may solicit proxies personally or by other
appropriate means. The Company will reimburse brokers, banks, fiduciaries
and other custodians and nominees holding shares of the Company's common
stock ("Common Stock") in their names or in the names of their nominees for
their reasonable charges and expenses incurred in forwarding proxies and
proxy materials to the beneficial owners of such Common Stock.
VOTING RIGHTS AND OUTSTANDING SHARES
Only stockholders of record of Common Stock as of December 1, 1997
will be entitled to vote at the Annual Meeting. On December 1, 1997, there
were 6,605,914 shares of Common Stock outstanding, which constituted all of
the outstanding voting securities of the Company. Each share of Common
Stock is entitled to one vote on all matters to come before the Annual
Meeting.
Assuming a quorum is present, the affirmative vote of a plurality of
the votes cast will be required for the election of directors and the
affirmative vote of a majority of the votes cast will be required for the
approval of Proposal 2 and to act on all other matters to come before the
Annual Meeting. For purposes of determining the number of votes cast with
respect to any voting proposal, the sum of votes cast and abstentions are
included. Abstentions with respect to any proposal are counted as "shares
present" and have the effect of a vote "against" such proposal as to which
they are specified. Broker non-votes with respect to any proposal are not
-2-
<PAGE>
considered "shares present" and, therefore, have the effect of reducing the
number of affirmative votes required to achieve a majority of the votes
cast for such proposal.
REVOCABILITY OF PROXIES
Proxies must be written, signed by the stockholder and returned to
the Secretary of the Company. Any stockholder who signs and returns a proxy
may revoke it at any time before it is voted by filing with the Secretary
of the Company a written revocation or a duly executed proxy bearing a date
later than the date of the proxy being revoked. Any stockholder attending
the Annual Meeting in person may withdraw such stockholder's proxy and vote
such stockholder's shares.
DIRECTORS
The Company's Bylaws authorize a Board of Directors (the "Board" or
"Board of Directors") consisting of five people to be elected by the
Company's stockholders each year. Currently the Board consists of four
members, with one vacancy. The following table sets forth certain
information concerning Board members as of December 19, 1997:
Name Principal Occupation Age
- ---- -------------------- ---
GERSHON N. COOPER Mr. Cooper founded the Company's 48
business in 1974 and has been
Chairman of the Board and
President of the Company since
its incorporation in 1979. He
became Chief Executive Officer of
ORA in December 1996.
JOHN M. BURRIS Mr. Burris, a certified public 50
accountant, joined ORA in 1987 as
its General Manager in charge of
accounting and finances. From
1990 through November 1996 he
continued to work in such
capacity, but as an independent
contractor. In December 1996,
Mr. Burris became ORA's Vice
President and Chief Financial
Officer and an employee and
director of the Company.
-3-
<PAGE>
Name Principal Occupation Age
- ---- -------------------- ---
MATTHEW F. JODZIEWICZ Mr. Jodziewicz, a registered 48
patent attorney, joined ORA in
March 1995 as in-house counsel.
He became Vice President of
Technology and Legal Affairs,
Secretary and a director in
December 1996. Prior to joining
ORA, Mr. Jodziewicz was in the
private practice of law and
provided legal services,
primarily in the intellectual
property area, to the Company and
other clients.
RUTH COOPER Ms. Cooper joined ORA upon its 46
formation in 1974 and has served
in many capacities. From the
Company's incorporation in 1979
to December 1996, she was an
Executive Vice President. She is
the wife of Mr. Cooper.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has not created any committees as of the date
hereof, although it may do so in the future. The Board of Directors did not
hold any regularly scheduled or special meetings during ORA's fiscal year
ended March 31, 1997 ("Fiscal 1997"). The Board of Directors and the board
of directors of Alliance Research Corporation, predecessor to the Company,
acted by unanimous written consent on nineteen occasions during Fiscal
1997.
DIRECTORS' COMPENSATION
Directors who are employees of the Company receive no compensation
for serving on the Board of Directors. Directors who are not employees of
the Company will receive a retainer fee of $1,000 per meeting attended. All
directors are reimbursed for reasonable expenses incurred in connection
with attendance at board or committee meetings. Eligible non-employee
directors will participate in the Company's 1996 Non-Employee Directors
-4-
<PAGE>
Stock Option Plan (the "Directors Plan") which provides for certain
automatic grants of options to non-employee directors. Under the Directors
Plan, each eligible non-employee director who has been elected or who is
continuing to serve on the Board of Directors will receive an option to
purchase an additional 500 shares of Common Stock on each anniversary of
joining the Board. As of December 19, 1997, no options are outstanding
under the Directors Plan.
MANAGEMENT
The following table sets forth certain information concerning the
executive officers of the Company:
Name Age Position
---- --- --------
Gershon N. Cooper 48 Chairman of the Board, Chief
Executive Officer and President
John M. Burris 50 Vice President, Chief Financial
Officer and Director
Matthew F. Jodziewicz 48 Vice President of Technology and
Legal Affairs, Secretary and
Director
Background information on Messrs. Cooper, Burris and Jodziewicz
is set forth under "Directors" above.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation for each of the last
three years of the Chief Executive Officer and each of the most highly
compensated executive officers (the "Named Executive Officers") who earned
over $100,000 during the fiscal year ended Fiscal 1997.
-5-
<PAGE>
<TABLE>
Summary Compensation Table
--------------------------
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------- --------------------------
Other Securities
Annual Underlying All Other
Name and Compen- Options/ Compen-
Principal Fiscal Salary Bonus sation SARS sation
Positions Year ($) ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gershon N. Cooper 1997 95,817<F1> -0- $20,629<F2> -0- -0-
President and 1996 15,000<F1> 250,000 4,200<F3> -0- -0-
Chief Executive 1995 15,000<F1> 282,000 4,200<F1> -0- -0-
Officer
John M. Burris 1997 109,040 -0- 1,400<F3> 30,000<F4> -0-
Vice President 1996 88,800 -0- -- -0- -0-
and Chief 1995 24,000 -0- -- -0- -0-
Financial
Officer
Matthew F. 1997 120,000 -0- -0- 15,000<F4> 250<F5>
Jodziewicz 1996 120,000 -0- -0- -0-<F4> 250<F5>
Vice President 1995 8,308 -0- -- -0- -0-
Technology
and Legal
Affairs and
Secretary
</TABLE>
<F1> During the fiscal years ended March 31, 1995 and March 31, 1996, Mr.
Cooper was paid an annual salary of $15,000 plus an annual bonus during
each such fiscal year. In December, 1996, Mr. Cooper entered into an
Employment Agreement with the Company altering the terms of Mr. Cooper's
compensation.
<F2> Of this amount, $15,023 represents a below market interest differential
on loans by the Company to Mr. Cooper and $5,606 represents an automobile
allowance.
<F3> Such amount was paid by the Company to the indicated Named Executive
Officer as an automobile allowance.
<F4> These stock options were granted to Messrs. Burris and Jodziewicz
pursuant to the terms of the Company's 1996 Stock Plan, as discussed
below.
<F5> Such amounts were paid by the Company to Mr. Jodziewicz pursuant to the
terms of the Company's Profit Sharing 401(k) Savings Plan, as discussed
below.
-6-
<PAGE>
OPTION GRANTS FOR FISCAL 1997
Individual Grants
-----------------
The following table sets forth grants of stock options during Fiscal
1997 to the Named Executive Officers. No stock appreciation rights were
granted to, and no stock options were exercised by, any Named Executive
Officers during Fiscal 1997.
<TABLE>
Potential
% of Realizable
Total Value at Assumed
Options/ Annual Rates of
Number of SARs Stock Price
Securities Granted to Appreciation for
Underlying Employees Exercise or Option Term<F2>
Options/SARs in Fiscal Base Price Expiration --------------------
Name Granted 1997<F2> ($/Share) Date 5%($) 10%($)
---- -------- ---------- --------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Gershon N. -- -- -- -- -- --
Cooper
John M. 30,000 22.6% 5.00 12/20/01 $41,442 $91,577
Burris
Matthew F.
Jodziewicz 15,000 11.3% 5.00 12/20/01 $20,721 $45,788
</TABLE>
<F1> During Fiscal 1997, the Company granted 20 employees options to
purchase an aggregate of 133,000 shares of its Common Stock. All
grants were made at exercise prices equal to the market price of the
underlying Common Stock on the grant date.
<F2> Potential realizable value is based on the assumption that the Common
Stock price appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the option term.
The actual value, if any, an executive may realize will depend on the
excess of the stock price over the exercise price on the date the
option is exercised (if the executive were to sell the shares on the
date of exercise); there is no assurance that the value realized will
be at or near the potential realizable value as calculated in this
table.
-7-
<PAGE>
EXECUTIVE EMPLOYMENT AND SEPARATION AGREEMENTS
Mr. Cooper entered into an employment agreement with the Company in
December 1996 pursuant to which Mr. Cooper will continue to serve as the
Company's Chief Executive Officer and President. The agreement has a term
of three years and contains a non-competition provision effective through
the term of employment and for an additional three years from the end of
such term. Pursuant to the agreement with Mr. Cooper, the Company will pay
to Mr. Cooper a base salary of $330,000 per year (subject to increase but
not decrease by the Board of Directors), an auto allowance of $1,000 per
month and, at the discretion of the Board of Directors, a bonus. In
addition, Mr. Cooper will also be entitled to certain fringe benefits.
Commencing on the expiration of the term of the employment agreement, or
earlier should the employment agreement be terminated prior to the end of
the term, the Company and Mr. Cooper will enter into a three-year
consulting agreement under which he will render certain consulting services
for which the Company will pay an annual consulting fee of $250,000 per
year. If Mr. Cooper is terminated other than for cause, death or
disability, the Company will continue to pay Mr. Cooper an amount equal to
his base salary then in effect for the remaining term of the agreement.
STOCK PLANS
1996 STOCK PLAN. The 1996 Stock Plan was adopted by the Board of
Directors and ratified by the Company's then-existing sole shareholder in
December 1996. The total number of shares of Common Stock subject to
issuance under the 1996 Stock Plan is 2,000,000 shares, subject to
adjustments as provided in the 1996 Stock Plan. The 1996 Stock Plan
provides for the grant of stock options (including incentive stock options
as defined in Section 422 of the Internal Revenue Code of 1986, as amended,
and non-qualified stock options), stock appreciation rights ("SARs") and
other stock awards (including restricted stock awards and stock bonuses) to
employees of the Company or its affiliates or any consultant or advisor
engaged by the Company who renders bona fide services to the Company or the
Company's affiliates in connection with its business; provided, that such
services are not in connection with the offer or sale of securities in a
capital raising transaction. The 1996 Stock Plan will be administered by
the Company's Board of Directors or, when and if formed, the Compensation
Committee of the Board of Directors (the "Committee"). Stock options may be
granted by the Board of Directors or Committee on such terms, including
vesting and payment forms, as it deems appropriate in its discretion;
provided, that no option may be exercised later than ten years after its
grant, and the purchase price for incentive stock options and non-qualified
-8-
<PAGE>
stock options shall not be less than 100% and 85%, respectively, of the
fair market value of the Common Stock at the time of grant. SARs may be
granted by the Board of Directors or Committee on such terms, including
payment forms, as the Board of Directors or Committee deems appropriate;
provided, that an SAR granted in connection with a stock option shall
become exercisable and lapse according to the same vesting schedule and
lapse rules established for the stock option (which shall not exceed ten
years from the date of grant). A SAR shall not be exercisable during the
first six months of its term and only when the fair market value of the
underlying Common Stock exceeds the SAR's exercise price and is exercisable
subject to any other conditions on exercise imposed by the Board of
Directors or the Committee. In the event of a change in control of the
issuer, the Board of Directors or the Committee retains the discretion to
accelerate the vesting of stock options and SARs and to remove restrictions
on transfer of restricted stock awards. Unless terminated by the Board of
Directors, the 1996 Stock Plan continues until December 2006.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN. The Company's 1996
Non-Employee Directors Stock Option Plan (previously defined as the
"Directors Plan") was adopted by the Board of Directors and ratified by the
Company's then-existing sole shareholder in December 1996. A total of
100,000 shares are available for grant under the Directors Plan. The
Directors Plan provides for the automatic grant to each of the Company's
non-employee directors of (i) an option to purchase 5,000 shares of Common
Stock on the date of such director's initial election or appointment to the
Board of Directors (the "Initial Grant") and (ii) an option to purchase 500
shares of Common Stock on each anniversary thereof on which the director
remains on the Board of Directors (the "Annual Grant"). The options will
have an exercise price of 100% of the fair market value of the Common Stock
on the date of grant and have a ten- year term. Initial Grants become
exercisable in two equal annual installments commencing on the first
anniversary of the date of grant thereof and Annual Grants become fully
exercisable beginning on the first anniversary of the date of grant. Both
Initial and Annual Grants are subject to acceleration in the event of
certain corporate transactions. Any options which are vested at the time
the optionee ceases to be a director shall be exercisable for one year
thereafter; provided, that options which are vested on the date the
optionee ceased to be a director due to death or disability generally
remain exercisable for five years thereafter. Options which are not vested
automatically terminate in the event the optionee ceases to be a director
of the Company. If the Company is a party to a transaction involving a sale
of substantially all of its assets, a merger or consolidation, all then
outstanding options under the Directors Plan may be canceled. However,
-9-
<PAGE>
during the 30 day period preceding the effective date of such transaction,
all partly or wholly unexercised options will be exercisable, including
those not yet exercisable pursuant to the vesting schedule.
PROFIT SHARING PLAN
The Company has a defined contribution Profit Sharing 401(k) Savings
Plan (the "401(k) Plan") which covers substantially all of its employees.
The 401(k) Plan became effective on January 1, 1992. Under the terms of the
401(k) Plan, employees can elect to defer up to 15% of their wages or
$9,500, whichever is less, subject to certain limitations set forth by the
Internal Revenue Service ("IRS"), by making voluntary contributions to the
401(k) Plan. Additionally, the Company can, at its discretion, match up to
100% of the voluntary employee contributions, subject to applicable IRS
limitations. The Company has received a determination letter from the IRS
indicating that the 401(k) Plan is qualified within the terms of the
applicable provisions of the Employee Retirement Income Security Act, as
amended.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
During Fiscal 1997, compensation decisions were made by the full
Board of Directors or by Mr. Cooper as Chief Executive Officer.
During Fiscal 1997, Mr. Cooper as Chief Executive Officer established
base salaries for the executive officers.
BASE SALARY. During Fiscal 1997, the annual base salaries of the
Company's Named Executive Officers, including the Chief Executive Officer,
were at the levels set forth in the Executive Compensation Summary
Compensation Table. The annual base salary levels were established by the
Board based upon a subjective judgment with respect to appropriate levels
of pay in relation to the executive officers' respective levels of
responsibility and, when applicable, as required by contract.
ANNUAL BONUS. No bonuses were paid out in Fiscal 1997.
EQUITY COMPENSATION. The Company provides equity-based compensation
to its employees under its 1996 Stock Plan. In Fiscal 1997, the Company
granted 20 employees options to purchase 133,000 shares (for option grants
to the Named Executive Officers, see "Option Grants for Fiscal Year Ended
March 31, 1997 Table").
-10-
<PAGE>
CHIEF EXECUTIVE OFFICER'S COMPENSATION. The Chief Executive Officer's
compensation for Fiscal 1997 consisted of a salary of $95,817, as
determined by the board of directors, in addition to (a) $5,606 which was
paid as an automobile allowance and (b) $15,023 which represents a
below-market interest differential on loans by the Company to Mr. Cooper.
Prior to December, 1996, the Chief Executive Officer was paid a salary of
$15,000 per year with a bonus paid in March of each year. In December,
1996, the Chief Executive Officer entered into an Employment Agreement with
the Company, and his salary was adjusted in accordance therewith.
POLICY WITH RESPECT TO INTERNAL REVENUE CODE SECTION 162(M). In 1993,
the Code was amended to add Section 162(m). Section 162(m), and the
regulations thereunder, place a limit of $1,000,000 on the amount of
compensation that may be deducted by the Company in any year with respect
to certain of the Company's most highly compensated officers. Section
162(m) does not, however, disallow a deduction for qualified
"performance-based compensation," the material terms of which are disclosed
to and approved by stockholders. At the present time, the Company's
executive officer compensation levels do not exceed $1,000,000. The Board
of Directors plans to take such actions in the future to minimize the loss
of tax deductions related to compensation as they deem necessary and
appropriate in light of specific compensation objectives.
CERTAIN TRANSACTIONS
During Fiscal 1996, the Company paid personal expenses on behalf of
Mr. Cooper and Ms. Cooper totaling $243,982. Such amount is evidenced by a
promissory note which bears interest at 5.05% per annum. Such loan was
originally repayable on March 31, 1997. In December 1996, the Company
extended such loan until March 31, 1999. All principal and accrued interest
is due and payable by the Coopers on such date.
From April 1, 1996 to December 4, 1996, the Company paid personal
expenses of the Coopers totaling $280,855. Such amount is evidenced by a
promissory note which bears interest at 5.05% per annum. All principal and
accrued interest under such note is due and payable by the Coopers to the
Company on December 1, 1999.
-11-
<PAGE>
In December 1996, certain shares of Common Stock were issued after
consummation of the merger of North American Energy of Delaware, Inc., with
and into the Company (which merger was consummated on December 20, 1996) in
complete satisfaction of approximately $4,368,130 of indebtedness,
consisting of $2,524,200 in principal and $1,843,930 in accrued interest
(the "Indebtedness"), and $1,500,000 in trade payables (the "Trade
Payables") due Jack D.W. Song, who as of March 31, 1997 beneficially owned
over 10% of the outstanding Common Stock. The Indebtedness, which was
evidenced by three promissory notes, was incurred by the Company in
February 1987, April 1990 and May 1991 to provide working capital, bore
interest at a rate of 7% per annum, was payable upon maturity and would
have matured in June 2000 ($650,000 of original principal) and February
2001 ($1,874,200 of original principal).
The Trade Payables were originally incurred by the Company to
Data-Spec Taiwan, of which Mr. Song is the controlling shareholder.
Subsequently, such Trade Payables were assigned by Data-Spec Taiwan to Mr.
Song. During Fiscal 1997, the Company purchased approximately $10,200,000
of products from Data-Spec Taiwan. As of June 30, 1997, the Company had
total trade payables of approximately $2,400,000 with Data-Spec Taiwan.
COMPARATIVE PERFORMANCE BY THE COMPANY
The Securities and Exchange Commission requires the Company to
present a chart comparing the cumulative total stockholder return on its
Common Stock during the Company's last fiscal year with the cumulative
total stockholder return during the same period on (1) a broad equity
market index and (2) a published industry index or peer group. Although the
chart would normally be for a five-year period, the common stock of the
Company began public trading on December 20, 1996, as successor to North
American Energy of Delaware, Inc., and, accordingly, the following chart
commences as of such date. This chart compares the Company's Common Stock
with (1) the S&P 500 Composite Index and (2) the Dow Jones U.S. Technology
Sector Index and assumes an investment of $100 on December 20, 1996 in the
Company's Common Stock, the stocks comprising the S&P 500 Composite Index
and the stocks comprising the Dow Jones U.S. Technology Sector Index.
-12-
<PAGE>
PERFORMANCE GRAPH
VALUE OF $100 INVESTMENT
Dow Jones U.S.
Ora Electronics, S&P 500 Technology
Inc. Composite Index Sector Index
- --------------------------------------------------------------------------------
12/20/96 $100 $100 $100
3/31/97 $109 $101 $ 97
COMPANY PROPOSALS
The following proposals will be submitted for stockholder consideration
and voting at the Annual Meeting:
PROPOSAL 1
ELECTION OF DIRECTORS
The following people are nominated for election as directors to hold
office for a term of one year expiring at the next succeeding Annual
Meeting:
Gershon N. Cooper
John M. Burris
Matthew F. Jodziewicz
Ruth Cooper
The nominees listed above are current members of the Board of
Directors. All proxies received by the Board of Directors will be voted for
the nominees if no directions to the contrary are given. In the event that
any nominee is unable or declines to serve, an event that is not
anticipated, the proxies will be voted for the election of a nominee
designated by the Board of Directors, or if none are so designated, will be
voted according to the judgment of the person or persons voting the proxy.
The Company's Bylaws fix the number of directors at five; accordingly,
there will be one vacancy. Management is currently considering various
candidates to fill this vacancy but has not identified a suitable candidate
at this time. Proxies cannot be voted for a greater number of persons than
the number of nominees named.
-13-
<PAGE>
VOTE REQUIRED
If applicable, the five nominees receiving the highest number of
affirmative votes of the shares entitled to be voted shall be elected as
directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business, but have no other legal effect.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE NOMINEES.
PROPOSAL 2
RATIFICATION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
The Company's Board of Directors has selected Richard & Hedrick
("R&H") as the Company's independent accountants for the fiscal year ending
March 31, 1998. Although the appointment of R&H is not required to be
submitted to a vote of the stockholders, the Board of Directors believes it
appropriate as a matter of policy to request that the stockholders ratify
the appointment for the current fiscal year. In the event a majority of the
votes cast at the meeting are not voted in favor of the appointment, the
Board of Directors will reconsider its selection. Proxies solicited by the
Board will be voted in favor of the appointment unless stockholders specify
otherwise in such proxies.
The Company's financial statements for the fiscal year ended March
31, 1995, were audited by R&H, and its financial statements for the fiscal
year ended March 31, 1996 were audited by Tanner, Mainstain & Hoffer
("TM&H"). The Company became subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on
December 20, 1996, pursuant to its merger with North American Energy of
Delaware, Inc., which merger was effective on such date. Prior to such
merger, on November 30, 1996, the Company retained R&H as its auditor for
its fiscal year ended March 31, 1997. All of the appointments of auditors
described above were approved by the Company's Board of Directors. TM&H's
report on the Company's financial statements for the fiscal year ended
March 31, 1996 did not contain an adverse opinion or a disclaimer of
opinion and was not qualified as to uncertainty, audit scope or accounting
principles. During the Company's two most recent fiscal years and any
subsequent interim period through the date of R&H's appointment, there were
no disagreements between Registrant and TM&H on any matter of accounting
-14-
<PAGE>
principles or practices, financial statement disclosure, or auditing scope
or procedures, which disagreements, if not resolved to the satisfaction of
TM&H, would have caused it to make a reference to the subject matter of the
disagreements in connection with its reports.
A representative of R&H is expected to be present at the Annual
Meeting and will have an opportunity to make a statement if he or she so
desires. The representative will also be available to respond to
appropriate questions from the stockholders.
VOTE REQUIRED
The affirmative vote of the majority of the shares of Common Stock
voting at the Annual Meeting is required to ratify the selection of Richard
& Hedrick as independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" PROPOSAL 2.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------
The following table sets forth information as of December 1, 1997,
with respect to Common Stock of the Company owned by (i) each person known
by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director of the Company, (iii) each
Named Executive Officer, and (iv) all directors and executive officers of
the Company as a group. Except as noted below, and subject to applicable
community property and similar laws, each stockholder has sole voting and
investment powers with respect to the shares shown.
Number of Shares Percent of Shares
Name of Common Stock Of Common Stock
---- ----------------- -----------------
The Cooper Family Trust<F1> <F2> 5,000,000 75.7%
Gershon N. Cooper<F1> <F3> 5,000,000 75.7%
John M. Burris<F1> 0 0
Matthew F. Jodziewicz<F1> 0 0
Ruth Cooper<F1> <F3> 5,000,000 75.7%
Jack D.W. Song<F4> 1,173,626 17.8%
All directors and 5,000,000 75.7%
executive officers
as a group (4 persons)
-15-
<PAGE>
- --------------------
<F1> The mailing address of such person is c/o ORA Electronics,
Inc., 9410 Owensmouth Ave., Chatsworth, California 91311.
<F2> The shares held by the Cooper Family Trust are deemed beneficially owned
by Gershon N. Cooper and Ruth Cooper, who have shared voting and
investment power.
<F3> All shares held by this person are held of record by the Cooper Family
Trust.
<F4> The mailing address of such person is 6F #219 Chingshan South
Section 2, Taipei, Taiwan, ROC.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's officers, directors and persons who own more
than ten percent of the Company's Common Stock to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes
in ownership of the Common Stock of the Company. To the Company's knowledge
and except as previously disclosed, based solely on its review of the
copies of such reports furnished to the Company and written representations
that no other reports were required, the Company believes that all of its
officers and directors and greater than ten percent beneficial owners
complied with all Section 16(a) filing requirements applicable to them with
respect to transactions during Fiscal 1997, with one exception. The Form 3
(Initial Statement of Beneficial Ownership of Securities) for Jack D.W.
Song (beneficial owner of more than 10% of the Company's Common Stock) was
not filed on or prior to registration of the Company's common stock and
warrants under Section 12(g) of the Exchange Act.
-16-
<PAGE>
STOCKHOLDER PROPOSALS AND NOMINATIONS
Pursuant to the Company's Bylaws, no business proposal will be
considered properly brought before the next annual meeting by a stockholder
and no nomination for the election of directors will be considered properly
made at the next annual meeting by a stockholder, unless notice thereof,
which contains certain information required by the Bylaws, is provided to
the Company no later than 60 days nor more than 90 days prior to the next
annual meeting, provided, however, that, in the event that less than 60
days' notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be so
received not later than the close of business on the 10th day following the
day on which such notice of the date of the meeting was mailed or such
public disclosure was made.
Any stockholder intending to submit to the Company a proposal for
inclusion in the Company's Proxy Statement and proxy for the 1998 Annual
Meeting must submit such proposal so that it is received by the Company no
later than August 22, 1998. Stockholder proposals should be submitted to
the Secretary of the Company. No stockholder proposals were received for
inclusion in this proxy statement.
OTHER MATTERS
While the Notice of Annual Meeting of Stockholders calls for the
transaction of such other business as may properly come before the meeting,
the Board of Directors has no knowledge of any matters to be presented for
action by the stockholders other than as set forth above. The enclosed
proxy gives discretionary authority to the Board of Directors, however, to
consider any additional matters that may be presented.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report for Fiscal 1997 is being mailed to
stockholders together with this Proxy Statement.
-17-
<PAGE>
STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED, TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
/S/ Matthew F. Jodziewicz
-----------------------------------
Matthew F. Jodziewicz,
SECRETARY
Chatsworth, California
December 19, 1997
-18-
<PAGE>
ATTACHMENT A
ORA ELECTRONICS, INC.
Annual Meeting of Shareholders - January 26, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of ORA Electronics, Inc. (the "Company") hereby
appoints Gershon N. Cooper as the nominee of the undersigned to amend and to act
for and on behalf of the undersigned at the annual meeting of shareholders of
the Company to be held on January 26, 1998 at 10:00 a.m. Pacific Daylight Time
(for holders of shares as of December 1, 1997), and at any adjournment or
adjournments thereof, to the same extent and with the same power as if the
undersigned were personally present at said meeting or such adjournment or
adjournments thereof and, without limiting the generality of the power hereby
conferred, the nominees named above are specifically directed to vote as
indicated below.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
vote for each nominee
listed below
Gershon N. Cooper, John M. Burris, Matthew F. Jodziewicz, Ruth Cooper
(INSTRUCTION: To withhold authority to vote for any nominee write names
of such nominee(s) below).
- --------------------------------------------------------------------------------
2. PROPOSAL BY ORA ELECTRONICS, INC. TO RATIFY THE APPOINTMENT OF
RICHARD & HEDRICK AS THE COMPANY'S INDEPENDENT CERTIFYING ACCOUNTANTS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(PLEASE SIGN AND DATE ON REVERSE SIDE)
<PAGE>
This proxy, when properly executed, will be voted in the manner directed by the
undersigned shareholder. WHEN NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE NOMINEES OR PROPOSALS LISTED ABOVE. The undersigned hereby appoint(s)
the proxyholders to vote as designated on this proxy, and in their
discretion, to vote upon such other business as may properly come before the
meeting or any adjournment thereof.
Dated: _____________, 19___
____________________________
Signature
____________________________
Signature if held jointly
Please sign and date exactly as
name(s) appear(s) hereon. When
shares are held by joint
tenants, both should sign. When
signing as attorney, as
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign as partnership name
by authorized person.
