SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to '240.14a-11(c) or '240.14a-12
CURTIS INTERNATIONAL LTD.
------------------------------------------------
(Name of Registrant as specified in its charter)
(Name of Person(s) Filing Proxy Statement), if other than Registrant
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] $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:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: (A)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CURTIS INTERNATIONAL LTD.
315 Attwell Drive
Etobicoke, Ontario M9W 5C1
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 7, 1999
TO THE STOCKHOLDERS OF CURTIS INTERNATIONAL LTD.:
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Stockholders of Curtis
International Ltd. (the "Meeting") will be held at 9:30 a.m. on December 7, 1999
at Wyndham Hotel, 950 Dixon Road, Toronto, Ontario M9W 5N4, for the following
purposes:
1. To elect the Board of Directors of Curtis International Ltd. for the
ensuing year;
2. To ratify the appointment of Schwartz, Levitsky, Feldman, LLP, Chartered
Accountants, as the Company's independent auditors for the ensuing year;
and
3. To transact such other business as may properly come before the Meeting and
any continuations and adjournments thereof.
Stockholders of record at the close of business on October 20, 1999 are entitled
to notice of and to vote at the meeting.
In order to ensure a quorum, it is important that Stockholders representing a
majority of the total number of shares issued and outstanding and entitled to
vote, be present in person or represented by their proxies. Therefore, whether
you expect to attend the meeting in person or not, please sign, fill out, date
and return the enclosed proxy in the self-addressed, postage-paid envelope also
enclosed. If you attend the meeting and prefer to vote in person, you can revoke
your proxy.
In addition, please note that abstentions and broker non-votes are each included
in the determination of the number of shares present and voting, for purposes of
determining the presence or absence of a quorum for the transaction of business.
Neither abstentions nor broker non-votes are counted as voted either for or
against a proposal.
November 10, 1999
By Order of the Board of Directors
/s/ Jacob Herzog
----------------
Jacob Herzog
Chairman of the Board
<PAGE>
CURTIS INTERNATIONAL LTD.
315 Attwell Drive
Etobicoke, Ontario M9W 5C1
-------------------------------
PROXY STATEMENT
-------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 7, 1999
This Proxy Statement is being furnished in connection with the
solicitation by the Board of Directors of Curtis International Ltd. (the
"Company"), for use at the Annual Meeting of Stockholders of the Company (the
"Meeting") to be held on December 7, 1999 at 9:30 a.m. at Wyndham Hotel, 950
Dixon Road, Toronto, Ontario M9W 5N4, and at any continuation and adjournment
thereof. Anyone giving a proxy may revoke it at any time before it is exercised
by giving the Chairman of the Board of Directors of the Company written notice
of the revocation, by submitting a proxy bearing a later date or by attending
the meeting and voting. This statement, the accompanying Notice of Meeting and
form of proxy have been first sent to the Stockholders on or about November 16,
1999.
In addition, please note that abstentions and broker non-votes are
included in the determination of the number of shares present and voting, for
purposes of determining the presence or absence of a quorum for the transaction
of business. Neither abstentions nor broker non-vtoes are counted as voted
either for or against a proposal.
All properly executed, unrevoked proxies on the enclosed form, which
are received in time will be voted in accordance with the stockholder=s
directions, and unless contrary directions are given, will be voted for the
election of directors of the nominees described below.
OWNERSHIP OF SECURITIES
Only stockholders of record at the close of business on October 20,
1999, the date fixed by the Board of Directors in accordance with the Company=s
By-Laws, are entitled to vote at the meeting. As of October 20, 1999, there were
issued and outstanding 5,373,145 shares of the Company's common stock.
Each outstanding share of common stock is entitled to one vote on all
matters properly coming before the meeting. A majority of the shares of the
outstanding common stock is necessary to constitute a quorum for the meeting.
-1-
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of the date
hereof, with respect to the beneficial ownership of the Common Stock by: (i)
each person known to the Company to beneficially own more than 5% of the
outstanding shares of Common Stock; (ii) each executive officer and director of
the Company; and (iii) all executive officers and directors of the Company as a
group.
Unless otherwise indicated, each of the stockholders has sole voting
and investment power with respect to the shares beneficially owned. Unless
otherwise indicated, the address of each person listed below is c/o Curtis
International Ltd., 315 Attwell Drive, Etobicoke, Ontario M9W 5C1.
NAME AND ADDRESS OF
BENEFICIAL OWNER(1) NUMBER OF SHARES PERCENTAGE
------------------- ---------------- ----------
Aaron Herzog(2)(4) 1,786,500 33.1%
Jacob Herzog(3)(4) 1,786,500 33.1%
Louis Drazin(5) 2,500 *
David Ben David(6) 2,500 *
All Executive Officers and Directors as a
Group (4 persons)(2)(3)(5)(6) 3,578,000 66.3%
- -------------
*less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities and includes Shares of Common Stock issuable
upon conversion of outstanding preferred stock, or subject to options, or
warrants exercisable or convertible within 60 days.
(2) Consists of: (i) 1,689,208 shares of Common Stock owned directly by Aaron
Herzog; (ii) 84,792 shares of Common Stock owned by the A&E Herzog Family Trust
of which Aaron Herzog and Evelyn Fisher Herzog are the Trustees; and (iii)
12,500 shares of common stock issuable upon the exercise options granted under
the Company's Stock Option plan.
(3) Consists of: (i) 1,663,882 shares of Common Stock owned by Jacob Herzog;
(ii) 110,118 shares of Common Stock owned by the Herzog Family Trust of which
Jacob Herzog, Beatrice Herzog and Aaron Grubner are the Trustees; and (iii)
12,500 shares of common stock issuable upon the exercise of options granted
under the Company's Stock Option plan.
(4) Aaron and Jacob Herzog are parties to a voting trust agreement which
provides that they will vote their shares together.
(5) Consists of 2,500 shares of common stock issuable upon the exercise of
options granted under the Company's Stock Option Plan.
(6) Consists of 2,500 shares of common stock issuable upon the exercise of
options granted under the Company's Stock Option Plan.
-2-
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Four directors are to be elected at the Meeting to hold office until
the next meeting of stockholders or until their successors have been duly
elected and qualified. The election of directors requires the affirmative vote
of at least the majority of shares of Common Stock present or represented at a
meeting at which a quorum is present or represented.
The By-Laws of the Company provide that the authorized number of
directors shall be as set by the Board of Directors but shall not be less than
three (3) or more than ten (10). The directors hold office until the next annual
meeting of stockholders and until their successors have been elected and
qualified. There are no agreements with respect to the election of directors.
The Company has not to date paid directors fees for service on the Board of
Directors or any committee thereof.
STOCKHOLDER VOTE REQUIRED
The election of the directors will require the affirmative vote of the
majority of the shares present in person or represented by proxy at the Annual
Meeting of Stockholders and entitled to vote on the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE BOARD OF DIRECTORS
OF THE COMPANY OF EACH OF THE NOMINEES
NAME AGE POSITION
---- --- --------
Aaron Herzog 38 President, Chief Executive Officer and
Director
Jacob Herzog 47 Chairman, Treasurer, Secretary and Director
Louis Drazin 63 Director
David Ben David 37 Director
Set forth below is a biographical description of each director and
executive officer of the Company based on information supplied by each of them.
AARON HERZOG is a co-founder of Curtis International Ltd., and has
served as the Company's President, Chief Executive Officer and Director since
its formation in 1990. Mr. Herzog also acts as sales director of the Company.
Mr. Herzog earned a degree in Management from McGill University in 1981.
JACOB HERZOG is a co-founder of Curtis International Ltd., and has
served as the Company's Chairman, Treasurer, Secretary and Director since its
formation in 1990. Mr. Herzog has been in the consumer electronics business
since the early 1970's.
-3-
<PAGE>
LOUIS DRAZIN has been a Director of the Company since August 1998. From
1961 - present, Mr. Drazin has been a Senior Partner at Drazin, Ouaknine &
Friedman, Notaries. From 1990 - present he has been a senior executive at Shutam
Canada Inc., a real estate acquisition, investment and development company. Mr.
Drazin graduated from McGill University in 1957 with a B.A. with honors in
economics and political science. Mr. Drazin earned a Bachelor of Civil Law from
McGill University in 1960.
DAVID BEN DAVID has been a Director of the Company since August 1998.
From July 1990 - June 1997, Mr. David served as Vice President and Chief
Financial Officer of NSI Communications, Inc. From June 1997 - present, Mr.
David has served as President and Chief Operating Officer of NSI Communications,
Inc. NSI Communications, Inc. is a manufacturer of communications products. Mr.
David earned a B.A. in Economics in 1983 from Bar Ilan University in Israel, an
M.B.A. in 1987 from McGill University and a Public Accountant degree in 1989
from McGill University.
Aaron Herzog and Jacob Herzog are brothers. There are no other family
relationships among the Company's directors and executive officers.
The term of office of each Director is until the next annual meeting of
stockholders and until a successor is elected and qualified or until the
Director's earlier death, resignation or removal from office. Executive officers
hold office until their successors are chosen and qualified, subject to earlier
removal by the Board of Directors.
For the period of five years from November 12, 1999, Joseph Stevens &
Company, the representative of the Company's initial public offering, has been
granted the right to designate a nominee to the Company's Board of Directors.
COMMITTEES OF THE BOARD
The Company's Board of Directors has an Audit Committee, comprised of
Jacob Herzog, Louis Drazin and David Ben David, and a Compensation Committee,
comprised of Aaron Herzog, Louis Drazin and David Ben David. Neither the Audit
Committee nor the Compensation Committee met during the fiscal year ended May
31, 1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is responsible for
making all compensation decisions with respect to the executive officers of the
Company. The Compensation Committee consists of Aaron Herzog, the Company's
President and Chief Executive Officer, Louis Drazin and David Ben David, each of
whom are independent outside directors.
-4-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation paid
by the Company during each of the last three fiscal years to the Company's Chief
Executive Officer and to each of the Company's executive officers who earned in
excess of $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
SECURITIES
UNDERLYING
NAME AND OTHER ANNUAL OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) SARS(#) COMPENSATION
- ------------------ ---- ------- ----- --------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Aaron Herzog(2) 1999 $175,000 $ 25,000 $ -0- -0- $ 12,000
CEO and Director 1998 28,000 -0- 177,192 -0- -0-
1997 28,000 -0- 213,962 -0- -0-
Jacob Herzog(3) 1999 $175,000 $25,000 $ -0- -0- $ 12,000
Chairman, Treasurer, 1998 34,000 -0- 177,192 -0- -0-
Secretary and Director 1997 33,000 -0- 213,963 -0- -0-
<FN>
(1) Represents compensation paid to corporations (AEG Trading Limited and
Worldwide Holdings Limited) controlled by such persons solely for providing the
full time services of Messrs. Aaron and Jacob Herzog. See "Certain
Transactions."
(2) In addition, Aaron Herzog's wife received annual compensation of $35,000 in
each of the years 1997, 1998 and 1999 in her capacity as an administrative
assistant at the Company. "All Other Compensation" for 1999 includes a car
allowance of $1,000 per month.
(3) In addition, Jacob Herzog's wife received annual compensation of $35,000 in
each of the years 1997, 1998 and 1999 in her capacity as an administrative
assistant at the Company. "All Other Compensation" for 1999 includes a car
allowance of $1,000 per month.
</FN>
</TABLE>
-5-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock options
granted to each of the executives named in the Summary Compensation Table for
the fiscal year ending May 31, 1999:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
PERCENTAGE OF ASSUMED ANNUAL RATES OF STOCK
TOTAL OF PRICE APPRECIATION FOR OPTION
NUMBER OF SHARES OPTIONS TERM (1)
UNDERLYING GRANTED TO
OPTIONS GRANTED EMPLOYEES EXERCISE
DURING FISCAL PRICE PER EXPIRATION
NAME YEAR SHARE DATE 5% 10%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aaron Herzog 25,000 35.7% $5.00 11/1/08 $73,750 $309,500
Jacob Herzog 25,000 35.7% $5.00 11/1/08 $73,750 $309,500
<FN>
- ------------
(1) The amounts shown in these columns represent the potential realizable
values using the options granted and the exercise price. The assumed
rates of stock price appreciation are set by the Securities and
Exchange Commission's executive compensation disclosure rules and are
not intended to forecast appreciation of the Common Stock.
</FN>
</TABLE>
FISCAL YEAR-END OPTION VALUES
To date, no options have been exercised by the executives named in the
Summary Compensation Table. The following table sets forth certain information
concerning the number of shares covered by both exercisable and unexercisable
stock options as of May 31, 1999. Also reported are values of "in-the-money"
options that represent the positive spread between the respective exercise
prices of outstanding stock options and the fair market value of the Company's
Common Stock as of May 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SHARES SUBJECT TO UNEXERCISED OPTIONS VALUE OF IN-THE-MONEY OPTIONS AT FISCAL
AT FISCAL YEAR-END YEAR END(1)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aaron Herzog 6,250 18,750 $6,250 $18,750
Jacob Herzog 6,250 18,750 $6,250 $18,750
<FN>
- -------------
(1) Based on the closing bid price of the Company's Common Stock of $6.00
per share on May 28, 1999.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
Effective June 1, 1998, the Company entered into two year employment
agreements with each of Aaron Herzog and Jacob Herzog. Such employment
agreements provide for annual salaries of $175,000 with an annual bonus of
$25,000 provided the Company meets certain performance criteria. In addition,
each is entitled to a $1,000 per month car allowance.
-6-
<PAGE>
STOCK OPTION PLAN
The Plan will be administered by the compensation committee or the
Board of Directors, who determine among other things, those individuals who
shall receive options, the time period during which the options may be partially
or fully exercised, the number of shares of Common Stock issuable upon the
exercise of the options and the option exercise price.
The Plan is effective for a period for ten years, expiring in 2008.
Options may be granted to officers, directors, consultants, key employees,
advisors and similar parties who provide their skills and expertise to the
Company. The Plan is designed to enable management to attract and retain
qualified and competent directors, employees, consultants and independent
contractors. Options granted under the Plan may be exercisable for up to ten
years, require a minimum two year vesting period, and shall be at an exercise
price all as determined by the Board. Options are non-transferable except by the
laws of descent and distribution or a change in control of the Company, as
defined in the Plan, and are exercisable only by the participant during his or
her lifetime. Change in control includes (i) the sale of substantially all of
the assets of the Company and merger or consolidation with another Company, or
(ii) a majority of the Board changes other than by election by the stockholders
pursuant to Board solicitation or by vacancies filled by the Board caused by
death or resignation of such person.
If a participant ceases affiliation with the Company by reason of
death, permanent disability or retirement at or after age 70, the option remains
exercisable for one year from such occurrence but not beyond the option's
expiration date. Other types of termination allow the participant three months
to exercise, except for termination for cause which results in immediate
termination of the option.
The exercise price of an option may not be less than the fair market
value per share of Common Stock on the date that the option is granted in order
to receive certain tax benefits under the Income Tax Act of Canada (the "ITA").
The ITA requires that the exercise price of all future options will be at least
85% of the fair market value of the Common Stock on the date of grant of the
options. A benefit equal to the amount by which the fair market value of the
shares at the time the employee acquires them exceeds the total of the amount
paid for the shares or the amount paid for the right to acquire the shares shall
be deemed to be received by the employee in the year the shares are acquired
pursuant to paragraph 7(1) of the ITA. Where the exercise price of the option is
equal to the fair market value of the shares at the time the option is granted,
paragraph 110(1)(d) of the ITA allows a deduction from income equal to one
quarter of the benefit as calculated above. If the exercise price of the option
is less than the fair market value at the time it is granted, no deduction under
paragraph 110(1)(d) is permitted. Options granted to any non-employees, whether
directors or consultants or otherwise will confer a tax benefit in contemplation
of the person becoming a stockholder pursuant to subsection 15(1) of the ITA.
The Company, however, has agreed not to grant any options under the Plan at less
than 100% of the fair market value of the Common Stock. Additionally, the
Company has agreed to limit the amount of options granted pursuant to the Plan
to Aaron Herzog and Jacob Herzog to an aggregate of 100,000 options.
Options may not be transferred by an optionee other than by will or the
laws of descent and distribution, and, during the lifetime of an optionee, the
option will be exercisable only the optionee.
Options under the Plan must be issued within ten years from the
effective date of the Plan.
-7-
<PAGE>
Any unexercised options that expire or that terminate upon an
employee's ceasing to be employed by the Company become available again for
issuance under the Plan.
The Plan may be terminated or amended at any time by the Board of
Directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the Plan may not be
increased without the consent of the stockholders of the Company. As of May 31,
1999, the Company issued an aggregate of 70,000 options pursuant to the Plan.
DIRECTORS COMPENSATION AND COMMITTEES
The Company has two formal committees; the Audit Committee, which
consists of Jacob Herzog, Louis Drazin and David Ben David and the Compensation
Committee, which consists of Aaron Herzog, Louis Drazin and David Ben David. The
Company does not currently have a Stock Option Committee or a Nominating
Committee.
The functions of the Audit Committee include: (i) recommending for
approval by the Board of Directors a firm of certified public accountants whose
duty it will be to audit the financial statements of the Company for the fiscal
year in which they are appointed, and (ii) to monitor the effectiveness of the
audit effort, the Company's internal financial and accounting organization and
controls and financial reporting. The Audit Committee will also consider various
capital and investment matters.
The Compensation Committee is responsible for establishing compensation
arrangements for officers and directors of the Company, reviewing benefit plans
and administering each of the Company's stock option plans.
EXECUTIVE COMPENSATION POLICY
The Company's executive compensation policy is designed to attract,
motivate, reward and retain the key executive talent necessary to achieve the
Company's business objectives and contribute to the long-term success of the
Company. In order to meet these goals, the Company's compensation policy for its
executive officers focuses primarily on determining appropriate salary levels
and providing long-term stock-based incentives. To a lesser extent, the
Company's compensation policy also contemplates performance-based cash bonuses.
CASH COMPENSATION. In determining its recommendations for
adjustments to officers' base salaries the Company focuses primarily on the
scope of each officer's responsibilities, each officer's contributions to the
Company's success in moving toward its long-term goals during the fiscal year,
the accomplishment of goals set by the officer and approved by the Board for
that year, the Company's assessment of the quality of services rendered by the
officer, comparison with compensation for officers of comparable companies and
an appraisal of the Company's financial position. In certain situations,
relating primarily to the completion of important transactions or developments,
the Company may also pay cash bonuses, the amount of which will be determined
based on the contribution of the officer and the benefit to the Company of the
transaction or development.
-8-
<PAGE>
EQUITY COMPENSATION. The grant of stock options to executive
officers constitutes an important element of long-term compensation for the
executive officers. The grant of stock options increases management's equity
ownership in the Company with the goal of ensuring that the interests of
management remain closely aligned with those of the Company's stockholders. The
Board believes that stock options in the Company provide a direct link between
executive compensation and stockholder value. By attaching vesting requirements,
stock options also create an incentive for executive officers to remain with the
Company for the long term. See "Stock Option Plan."
CORPORATE PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
return from the Company's initial public offering on November 12, 1998 through
May 31, 1999 for the Company, the Nasdaq Stock Market - U.S. Index ("Nasdaq
U.S.") and the Nasdaq Non-Financial Index ("Nasdaq Non-Financial").
Graphic Omitted
Nasdaq
Curtis Nasdaq U.S. Non-Financial
------ ----------- -------------
November 12, 1998 100 100 100
February 1999 107 124 133
May 1999 114 126 136
The graph assumes that the value of the investment in the Company's
Common Stock, the Nasdaq U.S. and the Nasdaq Non-Financial was $100 on November
12, 1998 and that all dividends were reinvested. No dividends have been declared
or paid on the Company's Common Stock.
-9-
<PAGE>
CERTAIN TRANSACTIONS
Aaron Herzog and Jacob Herzog, and companies controlled by them,
advanced monies to the Company, which advances are evidenced by promissory notes
which are non-interest bearing to May 31, 1998. Had such advances been valued at
the current value of cash flows at the Company's current rate of borrowing, the
advances would have been valued at $725,303 in 1998 and $832,295 in 1997. As of
June 1, 1998 the advances bear interest at the rate of 8% per annum and are
repayable in six quarterly installments in the 18 month period after the
Offering. The repayment of such loans on a quarterly basis is contingent on the
Company reporting profitability for such quarter on a post-tax basis. The loans
were utilized for working capital to fund the Company's expansion.
During Fiscal 1998 and Fiscal 1997, the Company paid an aggregate of
$354,384 and $427,925, respectively, to companies controlled by Aaron Herzog and
Jacob Herzog. These fees were in consideration solely for such companies
providing the Company with the services of Messrs. Aaron and Jacob Herzog. See
"ManagementCExecutive Compensation."
During 1996 and 1997, the Company occupied office and warehouse space
which was owned by Worldwide Holdings Limited ("Worldwide"), a company owned by
Jacob Herzog. The Company paid rent of $102,767 during 1996, $102,587 during
1997 and $8,548 for the month of January 1998, to Worldwide. Additionally, the
Company guaranteed the mortgage payments due from Worldwide to a mortgage
corporation in the principal amount of $1,305,000. The guarantee was also
secured by the issue of a collateral debenture containing a fixed charge and a
floating charge on the assets of the Company. On January 30, 1998, Worldwide
sold the office and warehouse space to an independent third party. The Company
paid Worldwide a lease cancellation fee of $155,926. Thus, Worldwide no longer
acts as landlord to the Company. In addition, on May 31, 1998, Worldwide was
amalgamated with and into the Company.
In July 1998, Jacob Herzog's father-in-law loaned the Company $900,000
at 7.5% per annum, which was repaid on November 24, 1998.
In August 1998, Aaron and Jacob Herzog and their affiliates returned an
aggregate of 300,000 shares of Common Stock to the Company for cancellation, for
which they received no consideration.
Aaron Grubner, a former director, is a former partner with the law firm
of Grubner, Krauss, which previously served as counsel to the Company. The
Company has in the past paid legal fees to Grubner, Krauss for services
rendered.
All future transactions between the Company and its officers, directors
or 5% stockholders, and their affiliates, will be on terms no less favorable
than could be obtained from unaffiliated third parties.
-10-
<PAGE>
PROPOSAL 2
RATIFICATION OF SCHWARTZ, LEVITSKY, FELDMAN, LLP, CHARTERED
ACCOUNTANTS, AS THE COMPANY'S INDEPENDENT AUDITORS
The Board of Directors has unanimously approved and unanimously
recommends that the stockholders approve the appointment of Schwartz, Levitsky,
Feldman, LLP, Chartered Accountants as the Company's independent auditors for
the ensuing year. A member of Schwartz Levitsky Feldman, will be available to
answer questions and will have the opportunity to make a statement if he or she
so desires at the Annual Meeting of Stockholders.
STOCKHOLDER VOTE REQUIRED
Ratification of the appointment of Schwartz, Levitsky, Feldman, LLP,
Chartered Accountants as the Company's independent auditors will require the
affirmative vote of the majority of the shares present in person or represented
by proxy at the Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF SCHWARTZ LEVITSKY, FELDMAN, LLP, CHARTERED ACCOUNTANTS AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE ENSUING YEAR.
-11-
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any matters other than those
referred to in the Notice of Meeting which will be presented for consideration
at the meeting. However, it is possible that certain proposals may be raised at
the meeting by one or more stockholders. In such case, or if any other matter
should properly come before the meeting, it is the intention of the person named
in the accompanying proxy to vote such proxy in accordance with his or her best
judgement.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company.
Solicitations may be made by mail, personal interview, telephone, and telegram
by directors, officers and employees of the Company. The Company will reimburse
banks, brokerage firms, other custodians, nominees and fiduciaries for
reasonable expenses incurred in sending proxy material to beneficial owners of
the Company's capital stock.
STOCKHOLDER PROPOSALS
In order to be included in the materials for the Company's next Annual
Meeting of Stockholders, stockholder proposals must be received by the Company
on or before July 8, 2000.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
To the knowledge of the Company, no officers, directors, beneficial
owner of more than ten percent of any class of equity securities of the Company
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any other person subject to Section 16 of the
Exchange Act with respect to the Company, failed to file on a timely basis
reports required by Section 16(a) of the Exchange Act during the most recent
fiscal year, which ended May 31, 1999.
ANNUAL AND QUARTERLY REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION
The Annual Report on Form 10-K for the year ended May 31, 1999 as filed
with the Securities and Exchange Commission will be made available to
stockholders free of charge by writing to 315 Attwell Drive, Etobicoke, Ontario
M9W 5C1 Attention: Corporate Secretary.
November 10, 1999
By Order of the Board of Directors
/s/ Jacob Herzog
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Jacob Herzog
Chairman of the Board
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GENERAL PROXY - ANNUAL MEETING OF STOCKHOLDERS OF CURTIS INTERNATIONAL LTD.
The undersigned hereby appoints Jacob Herzog, with full power
of substitution, proxy to vote all of the shares of Common Stock of the
undersigned and with all of the powers the undersigned would possess if
personally present, at the Annual Meeting of Stockholders of Curtis
International Ltd., to be held at Wyndham Hotel, 950 Dixon Road, Toronto,
Ontario M9W 5N4 on December 7, 1999 at 9:30 a.m. local time and at all
adjournments thereof, upon the matters specified below, all as more fully
described in the Proxy Statement dated November 10, 1999 and with the
discretionary powers upon all other matters which come before the meeting or any
adjournment thereof.
This Proxy is solicited on behalf of Curtis International Ltd.'s
Board of Directors.
1. To elect directors to hold office for the ensuing year.
- Jacob Herzog - Aaron Herzog - David Ben David - Louis Drazin
[ ] FOR ALL NOMINEES [ ] WITHHELD FOR ALL NOMINEES
INSTRUCTION: To withhold authority to vote for any individual, write
that nominee's name in the space provided below:
2. To ratify the appointment of Schwartz, Levitsky, Feldman, LLP,
Chartered Accountants, as the Company independent auditors for the
ensuing year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other matter or matters that may
properly come before the meeting, or any adjournments thereof.
(Continued and to be signed on the other side)
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(Continued from other side)
Every properly signed proxy will be voted in accordance with the specifications
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2 and 3.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Meeting and Proxy Statement and hereby revokes any proxy or proxies
heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope provided.
Date: __________________ , 1999
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(Print name of Stockholder)
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(Print name of Stockholder)
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Signature
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Signature
Number of Shares _______________
Note: Please sign exactly as name appears in the
Company's records. Joint owners should
each sign. When signing as attorney,
executor or trustee, please give title
as such.
