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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1 )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)) [x] Definitive Proxy Statement [ ]
Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
GRIFFIN INDUSTRIES, INC.
1111 Third Avenue, Suite 2500
Seattle, Washington 98101
(206) 326-8090
(Names of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed per Exchange Act Rules 14a-6(i)(1) and 0-11.
[ ] Fee paid previously with preliminary materials.
- - AUGUST 1998 -
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IMPORTANT NOTICE
TO GRIFFIN INDUSTRIES, INC.
COMMON STOCK SHAREHOLDERS
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[QUESTIONS & ANSWERS]
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Although we recommend you read the complete proxy statement, for your
convenience, we've provided a brief overview of the issues to be voted on.
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[Q] WHY IS A SHAREHOLDER MEETING BEING HELD?
[A] Because Griffin Industries, Inc. is seeking to change its status from
that of a business development company which is an investment company regulated
by the Investment Company Act of 1940, to that of an ordinary corporation. The
Securities and Exchange Commission requires that such a status change
necessitates a vote of the shareholders.
[Q] WHAT PROPOSALS WILL BE VOTED ON?
[A] You are being asked to ratify the election of Griffin Industries to withdraw
from the status of being regulated as a business development company and no
longer be subject to certain provisions of the Investment Company Act of 1940.
The impact of this change of status in terms of how it relates to your share
ownership is outlined in Proposal No. 1. The second proposal you are being asked
to vote on is to ratify the adoption of an employee stock option plan for
Griffin Industries. Griffin's officers and Directors are returning all warrants
that were previously issued and outstanding, a total of 4,100,000 warrants to
purchase the equivalent amount of shares of common stock, in exchange for the
ratification and approval of an employee stock benefit plan that will issue no
more than, in aggregate, greater than 15% of the total issued and outstanding
shares of the Company during any given fiscal year. Details of this stock option
plan are described more fully in Proposal No. 2.
[Q] WILL MY VOTE MAKE A DIFFERENCE?
[A] Yes! Your vote is important and will make a difference in the development of
your Company, no matter how many shares you own.
[Q] HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
[A] They recommend that you vote "For" each proposal on the enclosed proxy card.
[Q] WHERE DO I CALL FOR MORE INFORMATION?
[A] Please call Griffin Industries at (206) 326-8090 from 8:00 a.m. to 5:00
p.m. Pacific Time, Monday through Friday.
[Q] DO I HAVE THE RIGHT TO VOTE?
[A] Yes, if you currently are and were a shareholder of Griffin Industries
common stock at or before July 24, 1998.
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ABOUT THE PROXY CARD
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Please vote on each issue using blue or black ink to mark an X in one of the
boxes provided on the proxy card.
APPROVAL FOR WITHDRAWING FROM BDC STATUS - mark "For", "Against" or "Abstain"
RATIFICATION OF EMPLOYEE STOCK OPTION PLAN - mark "For", "Against" or "Abstain"
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[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
1. As to the proposal to elect to withdraw [ ] [ ] [ ]
from BDC status and no longer be subject
to Sections 55 through 65 of the Investment
Company Act of 1940
FOR AGAINST ABSTAIN
2. As to the proposal to ratify the [ ] [ ] [ ]
approval of the Employee Stock Option
Plan
Please be sure to sign and date this Proxy. Date_________
Shareholder sign here ________________ Co-owner sign here ____________
Give the amount of Griffin Industries common stock owned as of the Record
Date: ________
</TABLE>
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GRIFFIN INDUSTRIES
1111 Third Avenue, Suite 2500
Seattle, Washington 98101
(206) 326-8090
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 11 1998
Notice is hereby given to the holders of common shares of beneficial interest
("Common Shares") of Griffin Industries, Inc. ("Griffin" or "Company") to the
attached Proxy Statement that a Special Meeting of the Shareholders of Griffin
(the "Meeting") will be held at the offices of Griffin Industries, Inc., 1111
Third Avenue, Suite 2500, Seattle, Washington, 98101 on Friday, September 11,
1998, at 11:00 a.m. for the following purposes:
1. To seek approval from a majority of the outstanding shareholders present or
entitled to vote via proxy, for Griffin Industries, Inc. to withdraw from being
regulated as a business development company and thereby be no longer subject to
Sections 55 through 65 of the Investment Company Act of 1940.
2. To seek the adoption of an employee stock option plan for Griffin Industries,
where the aggregate shares allocated for distribution pursuant to such plan
shall be no greater than 15% of the total outstanding shares of common stock of
the Company.
3. To transact such other business as may properly come before the Meeting.
Holders of record of the Common Shares of Griffin Industries at the close of
business on July 24, 1998 are entitled to notice of, and to vote at, the Meeting
and any adjournment thereof.
By order of the Board of Directors
RON AGUILAR, Corporate Secretary
August 4, 1998
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT
QUARTERLY REPORT TO A SHAREHOLDER UPON REQUEST. ANY SUCH REQUEST SHOULD BE
DIRECTED TO GRIFFIN INDUSTRIES BY CALLING 1-206-326-8090 OR BY WRITING TO THE
COMPANY AT 1111 THIRD AVENUE, SUITE 2500, SEATTLE, WASHINGTON 98101.
SHAREHOLDERS OF THE COMPANY ARE INVITED TO ATTEND THE MEETING IN PERSON. IF
YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD WITH RESPECT TO WHETHER YOU WERE A
SHAREHOLDER AS OF THE RECORD DATE, DATE AND SIGN SUCH PROXY CARD(S), AND RETURN
IT (THEM) IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK
THAT YOU MAIL YOUR PROXY PROMPTLY.
THE BOARD OF DIRECTORS OF GRIFFIN INDUSTRIES RECOMMENDS THAT YOU CAST YOUR
VOTE:
- - FOR approval that Griffin Industries withdraw its previous election to be
regulated as a business development company under the Investment Company Act of
1940.
- - FOR ratification of the 1998-1999 employee stock option plan.
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- --PROXY STATEMENT--
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY CARD(S) PROMPTLY NO MATTER
HOW MANY SHARES YOU OWN.
Send your Proxy Card to:
PROXY STATEMENT
GRIFFIN INDUSTRIES
1111 Third Avenue, Suite 2500
Seattle, Washington 98101
(206) 326-8090
September 11, 1998
This Proxy Statement is furnished in connection with the solicitation by the
respective Board of Directors (the "Directors" or the "Board") of Griffin
Industries, Inc. ("Griffin" or "Company") of proxies to be voted at a Special
Meeting of Shareholders of the Company, and all adjournments thereof (the
"Meeting"), to be held at the offices of the Company at 1111 Third Avenue, Suite
2500, Seattle, Washington, 98101 on Friday, September 11 1998, at 11:00 a.m.
The Meeting will be a special shareholders meeting of the Company. The
approximate mailing date of this Proxy Statement and accompanying form of proxy
is August 14, 1998.
Participating in the Meeting are holders of common shares of beneficial
interest (the "Common Shares"). The Meeting is scheduled as a special meeting of
the shareholders of the Company because the shareholders are expected to
consider and vote on matters being presented.
The Board has fixed the close of business on July 24, 1998 as the record date
(the "Record Date") for the determination of holders of Common Shares entitled
to vote at the Meeting. The number of issued and outstanding Common Shares is
2,175,300 as of the Record Date to this Proxy Statement.
VOTING
Shareholders of the Company on the Record Date will be entitled to one vote per
Common Share with respect to each proposal submitted to the shareholders of the
Company, with no Share having cumulative voting rights. The voting requirement
for passage of a particular proposal depends on the nature of the proposal.
With respect to Proposal 1, the affirmative vote of a plurality of the Common
Shares of the Company present at the Meeting in person or by proxy is required
to approve the withdrawal by the Company of continuing to be regulated as a
business development company and subject to Sections 55 through 65 of the
Investment Company Act of 1940. ("BDC status")
With respect to Proposal 2, holders of Common Shares are required to ratify the
adoption of the 1998-1999 Employee Stock Option Plan of the Company.
The Board of Directors of Griffin Industries recommends that you cast your vote:
- FOR approval to withdraw from election of BDC status by the Company.
- FOR ratification of and adoption of the 1998-1999 employee
All properly executed proxies received prior to the Meeting will be voted at the
Meeting in accordance with the instructions marked thereon. Proxies received
prior to the Meeting on which no vote is indicated will be voted "FOR" each
proposal as to which it is entitled to vote. Abstention and broker non-votes
will be deemed "votes cast" with respect to such proposal, and such Common
Shares will be counted as present for the purpose of determining a quorum. A
majority of the outstanding Common Shares of the Company must be present in
person or by proxy to have a quorum for the Company to conduct business at the
Meeting.
Shareholders who execute proxies may revoke them at any time before they are
voted by filing with the Company a written notice of revocation, by delivering a
duly executed proxy bearing a later date or by attending the Meeting and voting
in person.
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The Company knows of no business other than that mentioned in Proposals 1 and 2
of the Notice that will be presented for consideration at the Meeting. If any
other matters are properly presented, it is the intention of the persons named
on enclosed proxy to vote proxies in accordance with their best judgment. In the
event a quorum is present at the Meeting but sufficient votes to approve any of
the proposals of the Company are not received, the persons named as proxies may
propose one or more adjournments of the Meeting with respect to such proposal to
permit further solicitation of proxies, provided they determine that such an
adjournment and additional solicitation is reasonable and in the interest of
shareholders based on a consideration of all relevant factors, including the
nature of the relevant proposal, the percentage of votes then cast, the
percentage of negative votes then cast, the nature of the proposed solicitation
activities and the nature of the reasons for such further solicitation.
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PROPOSAL 1: WITHDRAWAL OF BUSINESS DEVELOPMENT COMPANY STATUS
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On February 3, 1998, the Company elected to be regulated as a business
development company and to be subject to Sections 55 through 65 of the
Investment Company Act of 1940, by filing a properly executed notice of such
election pursuant to Form N-54A with the Securities and Exchange Commission.
Within its offering memorandum dated November filed on October 23, 1997 on Form
1-E pursuant to Regulation E of the Securities Act of 1933 and its subsequent
private placement offering memorandum dated filed on April 23, 1998 on Form D
pursuant to Regulation D of the Securities Act of 1933 (jointly referred to as
the "Offerings"), the Company stated that its principal business objective was
to invest in a diverse portfolio of eligible portfolio companies that were
within three distinct industries, the heavy construction equipment rental and
distribution industry, temporary and permanent staffing companies and companies
involved in information technology. The proceeds raised in the Offerings were
sought to acquire controlling interests or the rights to acquire a controlling
interest (where a "controlling interest" is defined as greater than twenty five
percent of the issued capital stock) in each of several eligible portfolio
companies in these three industries in exchange for cash and/or Griffin common
stock or other asset(s) held by Griffin. However, Griffin Industries, Inc. has
realigned its focus by limiting its business plan to just acquiring companies in
the heavy construction equipment rental and distribution industry, acting as a
holding company to perform a roll up or consolidation in this industry. Because
Griffin will no longer be diversified in more than one industry nor have
interests of less than 25% of the total outstanding stock of companies within
the equipment rental industry, it will not qualify for the favorable
pass-through tax treatment afforded a "registered investment company" or a
diversified closed end management investment company. Therefore, the Board of
Directors believe that it is in the best interest of the Company and of its
shareholders that the Company elect out of business development company status
and no longer be subject to Sections 55 through 65 of the Investment Company Act
of 1940. ("1940 Act")
As a BDC, Griffin must invest at least 70% of its total assets in
Qualifying Assets consisting of eligible portfolio companies and certain other
assets including cash and cash equivalents. In order to receive favorable
pass-through tax treatment on its distributions to its shareholders, the Company
needs to diversify its pool of investments in such a manner so as to qualify as
a diversified closed end management investment company. However, because of
recent developments the Company will most likely not be diversified sufficiently
to receive favorable pass-through tax treatment.
The Board of Directors of the Company have determined that it would be in the
best interests of the Company to act as a platform or holding company that will
acquire one hundred percent controlling interests in several separate companies
that are within the construction equipment rental and distribution industry. By
limiting its business objectives to performing such a roll up transaction within
the construction equipment rental and distribution industry, the Board of
Directors of Griffin Industries has determined that it would not be in the best
interests to continue to elect to be regulated as a business development company
and thereby be subject to the 1940 Act. Because the Company has refocused its
business objectives in performing a consolidation in the equipment rental and
distribution industry, the Company is limited in its ability to qualify as a
Registered Investment Company or "RIC", a former objective while the Company was
regulated as a BDC.
<PAGE>
To qualify as a RIC, the Company must meet certain issuer diversification
standards under the Internal Revenue Code that require that, at the close of
each quarter of the Company's taxable year, (i) not more than 25% of the market
value of its total assets is invested in the securities of a single issuer, and
(ii) at least 50% of the market value of its total assets is represented by
cash, cash items, government securities, securities of other RICs and other
securities (with each investment in such other securities limited so that not
more than 5% of the market value of the Company's total assets is invested in
the securities of a single issuer and the Company does not own more than 10% of
the outstanding voting securities of a single issuer). For purposes of the
diversification requirements under the Internal Revenue Code, the percentage of
the Company's total assets "invested" in securities of a company will be deemed
to refer, in the case of financings in which the Company commits to provide
financing prior to funding the commitment, to the amount of the Company's total
assets represented by the value of the securities issued by the eligible
portfolio company to the Company at the time each portion of the commitment is
funded.
Thus, as a result of the Company's newer business objective of acting as the
platform company to perform a consolidation in the construction equipment rental
and distribution industry, the Company is unlikely to qualify now or in the near
future to be regulated as, or receive the favorable pass through tax treatment
available to investment companies that qualify as a Registered Investment
Company.
The probable impact to you the shareholder, of Griffin's election to
withdraw from being regulated as a business development company is that, in so
doing, the Company will no longer be subject to the more restricted provisions
placed on investment companies by the 1940 Act concerning transactions with
certain affiliates and other related parties to the Company. As a result,
shareholders will no longer have the added security of having the Securities and
Exchange Commission ("SEC") review and accept or reject a proposed affiliated
party transaction prior to its implementation, as required by business
development companies. However, traditional "C" corporations that enter
transactions with affiliates do not have transactions reviewed and accepted or
rejected by the SEC prior to entering such transactions.
SHAREHOLDER APPROVAL
The shareholders of common stock of Griffin Industries, Inc. are entitled to
vote on this proposal. The affirmative vote of a majority of the common stock
present at the Meeting in person or by proxy is required to ratify the election
to withdraw from BDC status. THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR' THIS
PROPOSAL.
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PROPOSAL NO. 2 ADOPTION OF 1998-1999 NON-QUALIFIED STOCK OPTION PLAN
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EXECUTIVE COMPENSATION
On November 19, 1997, the Board of Directors approved the authorization of
Executive Employee Performance Warrants, which provide incentive warrants to the
Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and
pursuant to such issued 3,100,000 warrants to purchase the equivalent amount of
common stock to Mr. Landon Barretto and 300,000 warrants to purchase the
equivalent amount of common stock to Mr. Greg Zeitler, where each warrant is
redeemable for one share of common stock upon payment of a $1.00 per warrant
redemption price to the Company. The warrants will vest and are redeemable at a
rate equal to the cumulative earnings per share as reported by the Company in
its annual audited financial statements as a percentage of one dollar cumulative
earnings per share for the years 1998, 1999, and 2000. For example, if the
Company earns $0.15 EPS in 1998, $0.30 EPS in 1999 and $0.55 EPS in 2000, then
its executive employees that are employed in the following calendar year may
exercise 15% of their aggregate warrants in 1999, 30% of their warrants in 2000
and the remaining 55% of their warrants in 2001.
<PAGE>
Pursuant to Board Action on July 23, 1998, the Company rescinded the Executive
Employee Performance Warrants program and all employees returned all warrants
issued to each of them. Mr. Landon Barretto returned his entire 3,100,000 class
A common stock purchase warrants previously issued to him, Mr. Greg Zeitler
returned the complete 300,000 purchase warrants previously issued to him. Mr.
Chris Gardner, Mr. Ron Aguilar, Mr. Glen Santha and Mr. Tom Raack returned
300,000, 100,000, 150,000 and 50,000 class A common stock purchase warrants
previously issued to each of them respectively. These actions were taken in
anticipation of receiving similar remuneration pursuant to a 1998-1999
Non-Qualified Employee Stock Option Plan ("Plan") that is proposed herein.
The proposed Plan will be for the issuance of options to purchase common stock
of the Company at a value equivalent to the market value of the Company's common
stock on issuance or $3.00, whichever is greater. The Plan will be structured as
a common stock option plan, to be administered by a compensation committee that
is duly designated by the Board of Directors, and where the aggregate options
issued per fiscal year shall not exceed greater than fifteen percent of the
total issued and outstanding shares of the Company during the preceding fiscal
year, notwithstanding issuance of shares pursuant to the Plan. Thus, all
eligible recipients of such Plan, will not, in aggregate, receive the rights to
greater than fifteen percent of the total issued and outstanding shares of
common stock as incentive stock options per fiscal year. For example, if the
Company has a total of 10,000,000 common stock issued and outstanding at the end
of the 1998 fiscal year, all eligible recipients of the Company's Plan will not
receive, in the aggregate, greater than the right to acquire 1,500,000 shares of
common stock of the Company in the 1999 fiscal year.
In conjunction with the rescission of the Company's earlier issuance of
4,100,000 class A common stock purchase warrants issued to certain officers and
directors, the Board of Directors believes it is in the best interests of the
Company to ratify the adoption of the Plan that will be administered according
to the parameters set forth herein, will be less dilutive, and provide a more
favorable incentive to the officers and other recipients of such Plan.
SHAREHOLDER APPROVAL
The shareholders of common stock of Griffin Industries, Inc. are entitled
to vote on this proposal. The affirmative vote of a majority of the common stock
present at the Meeting in person or by proxy is required to ratify this proposal
to adopt a 1998-1999 Non-Qualified Employee Stock Option Plan. THE BOARD OF
DIRECTORS RECOMMEND A VOTE "FOR' THIS PROPOSAL.
ADDITIONAL MATTERS
At the date hereof, there are no other matters which the Board of Directors
intends to present or has reason to believe others will present at the meeting.
However, if any other matter should be presented, the persons named in the
accompanying proxy will vote according to their best judgment in the interest of
Griffin with respect to such matters.
Dated: August 4, 1998 /s/ Ron Aguilar
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Ron Aguilar
Corporate Secretary
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