SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240-11(c) or ss.240.14a-12
USA Service Systems, Inc.
(Name of Registrant as Specified in Its Charter)
William T. Hart - Attorney for Registrant
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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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 statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration No.:
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3) Filing Party:
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4) Date Filed:
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Preliminary
Proxy
Statement
USA SERVICE SYSTEMS, INC.
1750 University Drive
Suite 117
Coral Springs, Florida 33071
(954) 796-8060
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD _______________, 2000
Notice is hereby given that a special meeting of the shareholders of USA
Service Systems, Inc (the "Company") will be held at the Company's offices,
___________________________ on _____________, 2000, at ______ __.M., for the
following purpose:
(1) to change the name of the Company to East Coast Beverage Corp.;
(2) to approve a reverse split of the Company's common stock such that
each 8.194595 shares of the Company's outstanding shares will be
converted into one share of common stock.
(3) To ratify the adoption of the Company's Incentive Stock Option Plan
which provides that up to 500,000 shares (on a post - split basis)
of common stock may be issued upon the exercise of options granted
pursuant to the Plan;
(4) To ratify the adoption of the Company's Non-Qualified Stock Option
Plan which provides that up to 1,500,000 shares (on a post - split
basis) of common stock may be issued upon the exercise of options
granted pursuant to the Plan;
(5) To ratify the adoption of the Company's Stock Bonus Plan which
provides that up to 250,000 shares (on a post - split basis) of
common stock may be issued as stock bonuses pursuant to the Plan.
To transact such other business as may properly come before the
meeting.
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The Board of Directors has fixed the close of business on January 20, 2000
as the record date for the determination of shareholders entitled to notice of
and to vote at such meeting. Shareholders are entitled to one vote for each
share held. As of January 20, 2000, the Company had 52,521,821 outstanding
shares of common stock.
USA SERVICE SYSTEMS, INC.
______________, 2000 By /s/ John Calebrese
President
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USA SERVICE SYSTEMS, INC.
1750 University Drive
Suite 117
Coral Springs, Florida 33071
(954) 796-8060
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of the
Company for voting at the special meeting of shareholders to be held on
____________, 2000, and at any and all adjournments of such meeting. If the
proxy is executed and returned, it will be voted at the meeting in accordance
with any instructions, and if no specification is made, the proxy will be voted
for the proposals set forth in the accompanying notice of the annual meeting of
shareholders. Shareholders who execute proxies may revoke them at any time
before they are voted, either by writing to the Company at the address set forth
on page one or in person at the time of the meeting. Additionally, any later
dated proxy will revoke a previous proxy from the same shareholder. This proxy
statement was mailed to shareholders of record on or about ____________, 2000.
Only the holders of the Company's common stock are entitled to vote at
the meeting. Each share of common stock is entitled to one vote and votes may be
cast either in person or by proxy. A quorum consisting of one-third of the
shares entitled to vote is required for the meeting. The affirmative vote of the
holders of a majority of the outstanding shares of the Company's common stock is
required to approve the change of the Company's name and the reverse stock
split. The approval of the holders of a majority of shares present at the
meeting, in person or by proxy, is required to approve the adoption of the
Company's Stock Option and Bonus Plans as well as any other proposals to come
before the meeting. As of January 20, 2000 the Company had 52,521,821
outstanding shares of common stock.
PRINCIPAL SHAREHOLDERS
The following table sets forth the number of and percentage of outstanding
shares of common stock beneficially owned by the Company's officers, directors
and those shareholders owning more than 5% of the Company's Common Stock as of
January 20, 2000.
Shares of
Name and Address Common Stock Percent of Class
John Calebrese 12,323,285 (1) 23.4%
1750 University Drive
Suite 117
Coral Springs, Florida 33071
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Shares of
Name and Address Common Stock Percent of Class
Alex Garabedin 2,663,243 5%
1750 University Drive
Suite 117
Coral Springs, FL 33071
Edward Shanahan 1,597,946 3%
78 Harrington Ridge Road
Sherborn, MA 01770
John Dauymeyer 1,065,297 2%
8621 Brookridge Dr.
West Chester, OH 45069
William Perry Maxwell 1,065,297 2%
2679 Corey Place
San Ramon, CA 94583
Drew Carver 1,065,297 2%
3852 E. Keresan
Phoenix, AZ 85044
Arnold Rosen 6,220,472 (2) 11.8%
7138 Ayrshire Lane
Boca Raton, FL 33496
FPI, Inc. 5,736,216 10.9%
Mizner Park Corporate Center
433 Plaza Real, Suite 275
Boca Raton, FL 33445
Genco Overseas Ventures Limited 3,513,941 (3) 6.7%
1500 Northwest 65th Ave.
Plantation, FL 33313
Acion Investments, Limited 3,513,941 (3) 6.7%
1500 Northwest 65th Ave.
Plantation, FL 33313
All Officers and Directors 19,780,365 37.7%
as a Group (8 persons)
(1) Excludes 500,000 shares issuable upon the exercise of options held by Mr.
Calebrese. The options are exercisable at a price of $2.75 per share at any
time prior to December 31, 2004.
(2) Includes shares held by Mr. Rosen, Mr. Rosen's wife, and their respective
IRA accounts.
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(3) Jack Namer is the controlling person of this shareholder and is therefore
the beneficial owner of the shares held of record by this shareholder.
PROPOSAL TO CHANGE THE COMPANY'S NAME
Between November 1998 and July 1999 USA Service Systems, Inc. (the
"Company") provided retail stores and manufacturers with product assembly,
product demonstrations, point - of - sale product displays, and inventory counts
and audits. As of July 1999 the Company had entered into letters of intent for
the acquisition of four companies engaged in the same business as that conducted
by the Company. However, the Company was unable to obtain approximately
$4,000,000 in additional equity capital which was needed to finance these
acquisitions. In July 1999 the Company essentially discontinued its business and
made plans to distribute its remaining assets (having a minimal value) to George
Pursglove, a former officer and director of the Company.
Effective August 31, 1999 the Company acquired all of the issued and
outstanding shares of East Coast Beverage Corp. ("ECBC") in exchange for
41,300,758 shares of the Company's common stock. Immediately prior to this
transaction, certain officers and directors of the Company surrendered 2,734,202
shares of the Company's common stock. Following this transaction the Company had
44,354,058 issued and outstanding shares of common stock. The former
shareholders of ECBC now own approximately 93% of the Company's common stock. In
connection with this transaction the management of the Company resigned and was
replaced by the management of ECBC.
The business of the Company, which is conducted through ECBC, now involves
the development, production and distribution of Coffee House USA(TM), a
proprietary line of all natural, ready to drink ("RTD") bottled coffee drinks.
ECBC's product is more than just a cold coffee, but rather tastes like a
milkshake and is marketed as such. It can be substituted at any occasion where a
milkshake might be used - with a hamburger at lunch, as a stand-alone snack,
etc. ECBC's iced coffee is naturally flavored and enhanced with whole milk and
rich coffee bean extract. ECBC's products are all natural, low in fat, visually
exciting and have a broad spectrum of flavors.
ECBC's product can be differentiated with those of competitors by its
taste, advanced technological Fuji wrap and ECBC's proprietary glass container.
Each of the flavors used by ECBC has gone through extensive consumer tasting and
approval. ECBC's iced coffee comes in the following flavors:
Cinnamon, Mocha, Vanilla Mouse, Regular, Hazelnut, Toasted Almond,
German Chocolate, and Banana's Foster
ECBC's proprietary formulas for its products are trade secrets and ECBC
requires its manufacturers, employees, brokers and consultants to sign
confidentiality agreements.
ECBC's glass container is also proprietary and design protected.
<PAGE>
ECBC sells its products through distributors and wholesalers to
supermarkets, mass-marketers, convenience stores, drug store chains and oil
company convenience stores. As of December 31, 1999 ECBC's products were being
sold in 44 states.
As of December 31, 1999 ECBC had nine full time employees. ECBC plans to
hire additional employees as may be required by the level of its operations.
The following sets forth certain information concerning the present
management of the Company:
Name Age Position with Company
John Calebrese 47 Chief Executive Officer and a Director
Alex Garabedin 46 President
Edward Shanahan 47 Vice President - Eastern Division
John Dauymeyer 59 Vice President - Central Division
William Perry Maxwell 59 Vice President - Western Division
Drew Carver 53 Vice President -Business Development
James Harford 61 Director
Edith G. Osman 52 Director
The Company's offices now located at 1750 University Drive, Suite 117,
Coral Springs, Florida 33071. The Company's new telephone number is (954)
796-8060 and its new facsimile number is (954) 796-0802.
As a result of the acquisition of ECBC, the Company's Board of Directors
believes it is in the Company's best interest to change the name of the Company
to East Coast Beverage Corp.
PROPOSED REVERSE STOCK SPLIT
In connection with the August 1999 acquisition of ECBC, the Company issued
8.194,595 shares of its common stock for each outstanding share of ECBC, or
41,300,758 shares in total. Immediately prior to this acquisition, ECBC had
5,040,000 outstanding shares of common stock.
The business plan of ECBC was based upon ECBC having approximately
5,000,000 outstanding shares of common stock prior to raising additional
capital. The reverse split ratio (8.194595 to 1) will result in the former ECBC
shareholders owning shares of the Company's common stock equal in number to the
shares of ECBC which were originally owned by such shareholders. In addition,
and although there can be no assurance that such will be the case, the Company
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believes that having a smaller number of outstanding shares will benefit the
Company by attracting brokerage firms which tend to deal with corporations which
have less than 25,000,000 outstanding shares of common stock.
Accordingly, the Company's board of directors has adopted a proposal,
subject to shareholder approval, to reverse split the shares of the Company's
common stock such that each 8.194595 of the Company's outstanding shares would
be automatically converted to one share of common stock.
As of the date of this proxy statement, the Company had approximately
400 shareholders. The reverse stock split would not eliminate any shareholders
since according to the records of the Company no shareholder owns less than ten
shares.
The Company would still have approximately 400 shareholders after the
reverse stock split and would continue to be registered under Section 12(g) of
the Securities Act of 1933.
If the reverse split is approved by the Company's shareholders the
Company will have 6,409,325 outstanding shares of common stock. Any fractional
shares resulting from the reverse stock split will be rounded to the nearest
whole share.
PROPOSAL TO RATIFY ADOPTION OF INCENTIVE STOCK OPTION PLAN
Shareholders are being requested to ratify the adoption of the Company's
Incentive Stock Option Plan. The purpose of the Plan is to furnish additional
compensation and incentives to the Company's officers and employees.
The Plan will authorize the issuance of up to 500,000 shares (on a post -
split basis) of the Company's common stock to persons that exercise options
granted pursuant to the Plan. Only officers and employees of the Company may be
granted options pursuant to the Incentive Stock Option Plan. As of the date of
this proxy statement the Company had not granted any options to purchase shares
of common stock pursuant to the Plan.
The Plan was adopted by the Board of Directors on January 10, 2000. Any
options granted under the Plan must be granted before January 10, 2010. The
Board of Directors recommends that the shareholders of the Company approve the
adoption of the Plan.
In order to qualify for incentive stock option treatment under the
Internal Revenue Code, the following requirements must be complied with:
1. Options granted pursuant to the Plan must be exercised no later than:
(a) The expiration of thirty (30) days after the date on which an option
holder's employment by the Company is terminated.
(b) The expiration of one year after the date on which an option
holder's employment by the Company is terminated, if such
termination is due to the Employee's disability or death.
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2. In the event of an option holder's death while in the employ of the
Company, his legatees or distributees may exercise (prior to the option's
expiration) the option as to any of the shares not previously exercised.
3. The total fair market value of the shares of Common Stock (determined
at the time of the grant of the option) for which any employee may be granted
options which are first exercisable in any calendar year may not exceed
$100,000.
4. Options may not be exercised until one year following the date of
grant. Options granted to an employee then owning more than 10% of the Common
Stock of the Company may not be exercisable by its terms after five years from
the date of grant.
5. The purchase price per share of Common Stock purchasable under an
option is determined by the Company's Board of Directors but cannot be less than
the fair market value of the Common Stock on the date of the grant of the option
(or 110% of the fair market value in the case of a person owning the Company's
stock which represents more than 10% of the total combined voting power of all
classes of stock).
PROPOSAL TO RATIFY ADOPTION OF NON-QUALIFIED STOCK OPTION PLAN
Shareholders are being requested to ratify the adoption of the Company's
Non-Qualified Stock Option Plan. The Company's employees, directors and
officers, and consultants or advisors to the Company are eligible to be granted
options pursuant to the Non-Qualified Plan as may be determined by the Company's
Board of Directors, provided however that bona fide services must be rendered by
such consultants or advisors and such services must not be in connection with
the offer or sale of securities in a capital-raising transaction.
The Non-Qualified Plan authorizes the issuance of up to 1,500,000 shares
(on a post split basis) of the Company's common stock to persons that exercise
options granted pursuant to the Plan. The option exercise price is determined by
the Board of Directors but cannot be less than the market price of the Company's
Common Stock on the date the option is granted. As of the date of this proxy
statement the Company had not granted any options pursuant to the Non-Qualified
Plan.
The Non-Qualified Plan was adopted by the Board of Directors on January
10, 2000. The Board of Directors recommends that the shareholders of the Company
ratify the adoption of the Non-Qualified Plan.
PROPOSAL TO RATIFY ADOPTION OF STOCK BONUS PLAN
Shareholders are being requested to ratify the adoption of the Company's
Stock Bonus Plan. The purpose of the Stock Bonus Plan is to furnish additional
compensation and incentives to the Company's officers employees, consultants and
advisors.
<PAGE>
Under the Stock Bonus Plan, the Company's employees, directors, officers,
consultants and advisors are eligible to receive a grant of the Company's
shares; provided, however, that bona fide services must be rendered by
consultants or advisors and such services must not be in connection with the
offer or sale of securities in a capital-raising transaction.
The Stock Bonus Plan authorizes the issuance of up to 250,000 shares (on a
post split basis) of the Company's Common Stock to persons granted stock bonuses
pursuant to the Stock Bonus Plan. As of the date of this Proxy Statement, no
shares have been granted pursuant to the Stock Bonus Plan.
The Stock Bonus Plan was adopted by the Board of Directors on January 10,
2000. The Board of Directors recommends that the shareholders of the Company
ratify the adoption of the 1999 Stock Bonus Plan.
Other Information Regarding the Plans.
The Plans are administered by the Company's Board of Directors. The Board
of Directors has the authority to interpret the provisions of the Plans and
supervise the administration of the Plans. In addition, the Board of Directors
is empowered to select those persons to whom shares or options are to be
granted, to determine the number of shares subject to each grant of a stock
bonus or an option and to determine when, and upon what conditions, shares or
options granted under the Plans will vest or otherwise be subject to forfeiture
and cancellation.
In the discretion of the Board of Directors, any option granted pursuant
to the Plans may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also accelerate the date upon which any option (or any part of any options) is
first exercisable. Any shares issued pursuant to the Stock Bonus Plan and any
options granted pursuant to the Incentive Stock Option Plan or the Non-Qualified
Stock Option Plan will be forfeited if the "vesting" schedule established by the
Board of Directors at the time of the grant is not met. For this purpose,
vesting means the period during which the employee must remain an employee of
the Company or the period of time a non-employee must provide services to the
Company. At the time an employee ceases working for the Company (or at the time
a non-employee ceases to perform services for the Company), any shares or
options not fully vested will be forfeited and cancelled. In the discretion of
the Board of Directors payment for the shares of Common Stock underlying options
may be paid through the delivery of shares of the Company's Common Stock having
an aggregate fair market value equal to the option price, provided such shares
have been owned by the option holder for at least one year prior to such
exercise. A combination of cash and shares of Common Stock may also be permitted
at the discretion of the Board of Directors.
Options are generally non-transferable except upon death of the option
holder. Shares issued pursuant to the Stock Bonus Plan will generally not be
transferable until the person receiving the shares satisfies the vesting
requirements imposed by the Board of Directors when the shares were issued.
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The Board of Directors of the Company may at any time, and from time to
time, amend, terminate, or suspend one or more of the Plans in any manner it
deems appropriate, provided that such amendment, termination or suspension
cannot adversely affect rights or obligations with respect to shares or options
previously granted. The Board of Directors may not, without shareholder
approval: make any amendment which would materially modify the eligibility
requirements for the Plans; increase or decrease the total number of shares of
Common Stock which may be issued pursuant to the Plans except in the case of a
reclassification of the Company's capital stock or a consolidation or merger of
the Company; reduce the minimum option price per share; extend the period for
granting options; or materially increase in any other way the benefits accruing
to employees who are eligible to participate in the Plans.
The Plans are not qualified under Section 401(a) of the Internal Revenue
Code, nor are they subject to any provisions of the Employee Retirement Income
Security Act of 1974.
Summary.
The following sets forth certain information as of the date of this proxy
statement concerning the stock options and stock bonuses granted by the Company
pursuant to its Plans, assuming the proposed reverse stock split is approved by
the Company's shareholders. Each option represents the right to purchase one
share of the Company's common stock.
Total Shares Shares Reserved Shares Remaining
Reserved for Outstanding Issued As Options/Shares
Name of Plan Under Plan Options Stock Bonus Under Plan
- ------------ ----------- --------------- ----------- -------------
Incentive Stock
Option Pla 500,000 -- N/A 500,000
Non-Qualified Stock
Option Plan 1,500,000 500,000 (1) N/A 1,000,000
Stock Bonus Plan 250,000 N/A -- 250,000
(1) Options were granted to John Calebrese, the Company's Chief Executive
Officer. The options are exercisable at $2.75 per share at any time prior
to December 31, 2004.
Other Options
The Company has granted options to purchase shares of the Company's common
stock to the persons below. These options were not granted pursuant to the
Company's Incentive or Non-Qualified stock option plans.
Shares Issuable Option
Upon Exercise Exercise Expiration
Name of Options Price of Option
Arnold Rosen 100,000 $2.00 10/30/2000
Arnold Rosen 12,500 $3.50 1/03/2002
Other third parties 40,000 $3.50 1/03/2002
Arnold Rosen and persons affiliated with Mr. Rosen presently own
approximately 11% of the Company's common stock. See "Principal Shareholders".
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AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the year ending December 31,
1998 will be sent to any shareholder of the Company upon request. Requests for a
copy of this report should be addressed to the Secretary of the Company at the
address provided on the first page of this proxy statement.
SHAREHOLDER PROPOSALS
Any shareholder proposal which may properly be included in the proxy
solicitation material for the annual meeting of shareholders to be held after
the Company's fiscal year ending December 31, 1999 must be received by the
Secretary of the Company not later than March 31, 2000.
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USA SERVICE SYSTEMS, INC.
This Proxy is Solicited by the Board of Directors
The undersigned stockholder of the Company, acknowledges receipt of
the Notice of the Special Meeting of Stockholders, to be held ____________,
2000, _____ a.m. local time, at _________________________________, and hereby
appoints John Calebrese and Alex Garabedin, each with the power of substitution,
as Attorneys and Proxies to vote all the shares of the undersigned at said
Special Meeting of stockholders and at all adjournments thereof, hereby
ratifying and confirming all that said Attorneys and Proxies may do or cause to
be done by virtue hereof. The above named Attorneys and Proxies are instructed
to vote all of the undersigned's shares as follows:
(1) To change the name of the Company to East Coast Beverage Corp.;
___ ___ ___
/__/ FOR /__/ AGAINST /__/ ABSTAIN
(2) To approve a reverse split of the Company's common stock such that each
8.194595 of the Company's outstanding shares will be converted into one
share of common stock.
___ ___ ___
/__/ FOR /__/ AGAINST /__/ ABSTAIN
(3) To ratify the adoption of the Company's Incentive Stock Option Plan.
___ ___ ___
/__/ FOR /__/ AGAINST /__/ ABSTAIN
(4) To ratify the adoption of the Company's Non-Qualified Stock Option
Plan.
___ ___ ___
/__/ FOR /__/ AGAINST /__/ ABSTAIN
(5) To ratify the adoption of the Company's Stock Bonus Plan.
___ ___ ___
/__/ FOR /__/ AGAINST /__/ ABSTAIN
To transact such other business as may properly come before the meeting.
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DISCRETION IS INDICATED, THIS PROXY WILL BE VOTED
IN FAVOR OF ITEMS 1 THROUGH 5.
Dated this __ day of _______, 2000.
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(Signature)
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(Signature)
Please sign your name exactly as it
appears on your stock certificate.
If shares are held jointly, each
holder should sign. Executors,
trustees, and other fiduciaries
should so indicate when signing.
Please Sign, Date and Return this
Proxy so that your shares may be
voted at the meeting.
Return this Proxy to:
East Coast Beverage Corp.
1750 University Drive
Suite 117
Coral Springs, Florida 33071
(954) 796-8060
(954) 796-0802 (fax)
