<PAGE>
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
[_] 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 (S) 240.14a-11(c) or (S) 240.14a-12
Loraca International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Loraca International, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
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(4) Date Filed:
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<PAGE>
LORACA INTERNATIONAL INC.
1601 Fifth Avenue, Suite 2320
Seattle, Washington 98101
___________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 2000
___________
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of Loraca
International, Inc. (the "Company"), which will be held on Friday, May 19, 2000,
at 10:00 A.M. local time at the Company's headquarters at 1601 Fifth Avenue,
Suite 2320, Seattle, Washington, for the following purposes:
1. To elect five (5) members of the Board of Directors to hold office
until the 2000 Annual Meeting of Stockholders and until their
respective successors are elected and qualified.
2. To ratify the appointment of BDO Seidman, LLP as the independent
accountants of the Company for the fiscal year ending December 31,
2000.
3. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on April 3, 2000 are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof. For ten days prior to the meeting, a complete list of the stockholders
entitled to vote at the meeting will be available for examination by any
stockholder for any purpose relating to the meeting during ordinary business
hours at the principal executive office of the Company.
By Order of the Board of Directors,
/s/ Bernard A. Guy
BERNARD A. GUY
President
Seattle, Washington
April 27, 2000
STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. PROXIES ARE REVOCABLE, AND
ANY STOCKHOLDER MAY WITHDRAW HIS OR HER PROXY AND VOTE IN PERSON AT THE MEETING.
<PAGE>
LORACA INTERNATIONAL INC.
1601 Fifth Avenue, Suite 2320
Seattle, Washington 98101
------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
------------
The accompanying proxy is solicited by the Board of Directors of Loraca
International, Inc., a Nevada corporation (the "Company"), for use at the Annual
Meeting of Stockholders to be held Friday, May 19, 2000, at 10:00 A.M. local
time, or any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting. The date of this Proxy Statement is April 27, 2000,
the approximate date on which this Proxy Statement and the accompanying form of
proxy were first sent or given to stockholders.
GENERAL INFORMATION
Annual Report. An annual report on Form 10-K for the fiscal year ended
December 31, 1999, is enclosed with this Proxy Statement.
Voting Securities. Only stockholders of record as of the close of business
on April 3, 2000, will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were 7,390,876 shares of Common Stock of the
Company, par value $0.001 per share, issued and outstanding. Each share is
entitled to one vote. Stockholders may vote in person or by proxy. Each holder
of shares of Common Stock is entitled to one vote for each share of stock held
on the proposals presented in this Proxy Statement. The Company's bylaws
provide that a majority of all of the shares of the stock entitled to vote,
whether present in person or represented by proxy, shall constitute a quorum for
the transaction of business at the meeting.
Solicitation of Proxies. The cost of soliciting proxies will be borne by
the Company. In addition to soliciting stockholders by mail through its regular
employees, the Company will request banks and brokers, and other custodians,
nominees and fiduciaries, to solicit their customers who have stock of the
Company registered in the names of such persons and will reimburse them for
their reasonable, out-of-pocket costs. The Company may use the services of its
officers, directors, and others to solicit proxies, personally or by telephone,
without additional compensation.
Voting of Proxies. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a stockholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted in favor of the
proposal. A stockholder giving a proxy has the power to revoke his or her
proxy, at any time prior to the time it is voted, by delivering to the Secretary
of the Company a written instrument revoking the proxy or a duly executed proxy
with a later date, or by attending the meeting and voting in person.
3
<PAGE>
Stock Ownership of Certain Beneficial Owners and Management. The following
table sets forth certain information, as of April 3, 2000 with respect to the
beneficial ownership of the Company's Common Stock by (i) all persons known by
the Company to be the beneficial owners of more than 5% of the outstanding
Common Stock of the Company, (ii) each director and director-nominee of the
Company, (iii) each of the current executive officers named in the Summary
Compensation Table, and (iv) all current directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Shares that May be
Acquired within
Name and Address of Percentage of 60 days of
Beneficial Owners Shares Owned (1) Class (1) April 3, 2000 (1)
- ----------------------------------- ---------------- ------------- -----------------
<S> <C> <C> <C>
Ronald R. Baca (2) 1,649,568 (3) 22.16% (3) 54,166 (3)
Bernard A. Guy (2) 28,125 (4) 0.38% (4) 28,125 (4)
Robert C. Stilz, Jr. (5) 374,835 (6) 4.91% (6) 236,001 (6)
John Trombello (2) 0 0% 0
Harrison Gentry (2) 0 0% 0
Amber Global Ltd. (7) 583,310 7.89% 0
Aragon Agents Ltd. (8) 584,720 7.91% 0
Chelsea International Ltd. (9) 569,000 7.70% 0
Katori Consultants Ltd. (10) 585,700 7.92% 0
New Age Publications (11) 582,300 7.88% 0
PT Pasifika Pratama Investindo (12) 569,000 7.70% 0
Sandford Enterprises Limited (13) 500,000 6.77% 0
Shang Holdings (14) 584,900 7.91% 0
0
Executive Officers and Directors as
a group (5 persons)................ 2,052,528 (3), (4), (6) 26.62% (3), (4), (6) 318,292 (3), (4), (6)
</TABLE>
______________________
(1) Under the rules of the Securities and Exchange Commission, shares not
actually outstanding are nevertheless deemed to be beneficially owned by a
person if such person has the right to acquire the shares within 60 days.
Pursuant to such SEC rules, shares deemed beneficially owned by virtue of a
person's right to acquire them are also treated as outstanding when
calculating the percent of class owned by such person and when determining
the percentage owned by a group.
(2) The address of Mr. Baca, Mr. Guy, Mr. Trombello and Mr. Gentry is 1601
Fifth Avenue, Suite 2320, Seattle, WA 98101.
(3) Includes 54,166 shares which may be purchased by Mr. Baca upon exercise of
currently exercisable options.
(4) Includes 28,125 shares which may be purchased by Mr. Guy upon exercise of
currently exercisable options.
(5) The address of Mr. Stilz is c/o Kinkead & Stilz, 3120 Wall Street, Suite
350, Lexington, Kentucky 40513.
(6) Includes 236,001 shares which may be acquired upon conversion of floating
rate convertible subordinated notes.
4
<PAGE>
(7) The address of Amber Global Ltd. is Unit No A 12th Fl, 1st Pacific Bank
Center, No 56 Gloucester Rd, Hong Kong.
(8) The address of Aragon Agents Ltd. is Bldg. PT1-07, 1961 Area, Philexcel
Compound, Clark Spec Economic, Pampango, Philippines.
(9) The address of Chelsea International Ltd. is #1 Queens Row, Central Hong
Kong.
(10) The address of Katori Consultants Ltd. is P.O. Box 957, Offshore
Incorporations Centre, Road Town Tortola, British Virgin Islands.
(11) The address of New Age Publications is Bldg. 8584 Boton Wharf, Subic Bay,
Freeport Zone, Olongapo City, 2222, Philippines.
(12) The address of PT Pasifika Pratama Investindo is the Ascot Jakarta, #2
Jalan Kebon Raya, Jakarta, 10230, Indonesia.
(13) The address of Sandford Enterprises Limited is Suite 1-3 16, F Kinwick
Centre, 32 Hollywood Road, Central Hong Kong. The sole shareholder of
Sandford Enterprises Limited is Nicole P. Ontiveros, former Secretary of
Loraca and current Executive Assistant to Ronald R. Baca.
(14) The address of Shang Holdings is P.O. Box 107, Oceanic House, Duke Street,
Grand Turk, Turks & Caicos Islands.
The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws, where applicable.
PROPOSAL 1: ELECTION OF DIRECTORS
The Company's Board of Directors consists of five (5) directors: Ronald R.
Baca, Bernard A. Guy, D. Harrison Gentry, John S. Trombello and Robert C. Stilz,
Jr. Management's five (5) nominees for election to the Board of Directors, and
certain information with respect to their age and background, are set forth
below. Each of the nominees has indicated that he is willing and able to serve
as director. However, if any nominee(s) should for any reason be unable or
unwilling to serve, the proxies will be voted for such substitute nominees as
Management may designate. If elected, the nominees will serve as directors
until the Company's 2001 Annual Meeting of Stockholders, or until their
successors are elected and qualified.
If a quorum is present and voting, the nominees for directors receiving the
highest number of votes will be elected as directors. Abstentions and shares
held by brokers that are present, but not voted because the brokers were
prohibited from exercising discretionary authority, i.e., "broker non-votes"
will be counted as present for purposes of determining if a quorum is present.
The affirmative vote of a plurality of the votes cast at the Annual Meeting
of Stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES NAMED BELOW.
<TABLE>
<CAPTION>
Name Age Position(s)
- -------------------------------- -------- ---------------------------------------------------
<S> <C> <C>
Ronald R. Baca 45 Chairman of the Board, Chief Executive Officer and
Director of Loraca
Bernard A. Guy 43 President and Director of Loraca
D. Harrison Gentry 60 Director of Loraca
John S. Trombello 75 Director of Loraca
Robert C. Stilz, Jr. 50 Director of Loraca
</TABLE>
Ronald R. Baca has served as the Chief Executive Officer and Chairman of
the Board of Directors of Loraca since February 1998, and as the Chairman of the
Board of NMMC, Inc., the wholly-owned subsidiary of the
5
<PAGE>
Company ("NMMC") since January 1991. Mr. Baca also served as the President of
Loraca from February 1998 through September 1999, and as President of NMMC from
January 1991 to November 1998. Mr. Baca is also the President and Chairman of
the Board of Directors of Heartland Insurance Company of America, an Illinois-
domiciled insurance company, positions he has held since 1996. In addition, Mr.
Baca serves as the President and a Director of the Raeaca Corporation, New
Mexico Consumer Finance, Home Credit Corporation, and Addaca, Inc., all of which
are private corporations that are currently inactive. Prior to joining the
Company, Mr. Baca was President of Rio Grande Financial Services, Inc, a small
mortgage banking operation located in Santa Fe, New Mexico. Mr. Baca also served
as Finance Administrator for Don J. Cummings Company, Inc., a wholesale
distributor of commercial building supplies from July 1985 to October 1990.
Bernard A. Guy has served as the President and a Director of Loraca since
September 1999, and as Chief Executive Officer and Director of NMMC since March
1999. Prior to joining the Company, Mr. Guy was the President, Chief Operating
Officer and a Director of Southern Pacific Funding Corporation from October 1997
to September 1998 and Executive Vice President and a Director of Southern
Pacific Funding Corporation from April 1995 to October 1997. Southern Pacific
Funding Corporation filed for bankruptcy protection in September 1998. From
January 1994 to April 1995, he was Senior Vice President of Southern Pacific
Thrift and Loan Association's Residential Lending Division and from December
1992 to January 1994 he was Vice President of the same division. From June 1989
to December 1992, Mr. Guy was Senior Vice President of Preferred Financial
Funding Corp., an independent retail mortgage banking company specializing in
non-conforming credit loans. From June 1984 to June 1989, Mr. Guy was Vice
President/Controller for United First Funding.
D. Harrison Gentry has been a Director of Loraca and NMMC since February
1998. Since January 1995, Mr. Gentry has also served as a member and consultant
of Westpac Consultants, L.L.C., a real estate investment banking firm. In
addition, Mr. Gentry currently serves as a director of Dysart Mortgage, G.B.F.
Properties, and Emerald River Development, Inc.
John S. Trombello has been a Director of Loraca and NMMC since February
1998. In addition, he is currently the President and a director of Trinity
Mortgage Company of Dallas, positions that he has held since March 1990. Mr.
Trombello has worked in the mortgage business in various capacities for more
than forty years.
Robert C. Stilz, Jr. has been a director of Loraca since April 2000. From
February 1997 to the present, he has served as a Partner with the law firm of
Kinkead & Stilz focused primarily in the corporate, real estate, and personal
financial and estate planning areas. Concurrent to this, from 1995 to March
2000, Mr. Stilz was an Officer and Director of The Lexus Companies, and its
wholly-owned subsidiary, Calumet Securities Corporation, a medium sized mortgage
company. From 1975 to January 1997, he was a Partner at the law firm of
Greenebaum Doll & McDonald. While at Greenebaum Doll & McDonald he also served
as chair of the Lexington office department for real estate and financial
matters.
Board Meetings. During fiscal 1999, the Board held two meetings. No
director serving on the Board during fiscal 1999 attended fewer than 75% of such
meetings of the Board and the meetings held by the committees on which he or she
served.
Committees of the Board. No officer or employee of the Company has
participated in deliberations by the Company's Board of Directors concerning
executive officer compensation, except that Mr. Baca participated in the
determination of Mr. Guy's compensation at the time he was hired by the Company.
The Company has no Nominating Committee to date. In December, 1999, the Company
formed an Audit Committee and a Compensation Committee with Mr. Gentry and Mr.
Trombello serving on both committees.
The Audit Committee meets with financial management and the independent
auditors to review internal accounting controls and accounting, auditing, and
financial reporting matters. There were no Audit Committee meetings in fiscal
1999.
The Compensation Committee reviews the compensation of the Chief Executive
Officer and other officers of the Company, reviews executive bonus plan
allocations, and grants stock options to officers and employees of the Company
under its stock option plan. There were no Compensation Committee meetings in
fiscal 1999.
6
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance. Under SEC rules,
each director, officer and beneficial owner of more than ten percent of any
equity security of the Company is required to file periodic reports of their
ownership, and changes in that ownership, with the SEC. Based solely on its
review of copies of these reports and representations of such reporting persons,
the Company believes that during the most recent fiscal year, such SEC filing
requirements were satisfied.
EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Compensation. The following tables and descriptive materials set
forth information concerning the compensation of the Chief Executive Officer of
the Company and the only other executive officer of the Company whose total
salary and bonus for the fiscal years ended December 31, 1999, 1998 or 1997
exceeded $100,000 for services in all capacities to the Company and its
subsidiaries (the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
-------------------------- ---------------------------------------
Securities Other
Name and Principal Position Salary Bonus Underlying Options Compensation
- --------------------------- ------------ ------------ ------------------ -------------------
<S> <C> <C> <C> <C>
Ronald R. Baca (1).................1999 $275,100 0 200,000 0
Chief Executive Officer 1998 $100,000 0 0 0
Thomas G. Bowser (2)...............1999 $126,768 0 112,500 0
President of NMMC
</TABLE>
(1) Mr. Baca was elected as Chief Executive Officer and President of Loraca on
February 25, 1998. In September 1999, Mr. Baca resigned as President of
Loraca, and Bernard A. Guy was elected President of Loraca at that time.
(2) Mr. Bowser joined the Company on February 15, 1999.
Stock Options Granted During Fiscal 1999. The following table provides the
specified information concerning grants of options to purchase the Company's
Common Stock made during the fiscal year ended December 31, 1999 to the persons
named in the Summary Compensation Table.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation
Individual Grants in Fiscal 1999 for Option Term (3)
--------------------------------------------------------- ------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price (2) Expiration
Name Granted (1) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---------------- ----------- ------------ --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ronald R. Baca 200,000 47.06 5.00 4/15/2009 466,005 1,334,368
Thomas G. Bowser 112,500 26.47 5.56 9/2/2009 393,550 997,334
</TABLE>
(1) Options granted under the Company's 1999 Stock Option Plan (the "Option
Plan") vest, in general, at a rate of 25% after one year and then pro-rata
monthly over the next 36 months.
(2) Mr. Bowser's options were granted at fair market value on the date of
grant. Mr. Baca's options were granted at $5.00 when the fair market value
was $4.50.
(3) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates of appreciation
only, in accordance with the Securities and Exchange Commission's rules.
Actual gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock, overall market conditions and the
optionholder's continued employment through the vesting period. The
amounts reflected in this table may not necessarily be achieved. Shares of
stock purchased at $5.00 and $5.5625 per share in fiscal 1999 would yield
profits of approximately $2.33 and $3.50 per share, respectively, at 5%
appreciation over ten years, or approximately $6.67 and $8.87 per share,
respectively, at 10% appreciation over the same period.
7
<PAGE>
Option Exercises and Fiscal 1999 Year-End Values. The following table
provides the specified information concerning unexercised options held as of
December 31, 1999, by the persons named in the Summary Compensation Table. None
of the persons named in the Summary Compensation Table exercised options in
fiscal 1999.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-Money
Options at 12/31/99 Options at 12/31/99 (1)
-------------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ronald R. Baca 0 200,000 0 $25,000
Thomas G. Bowser 0 112,500 0 0
</TABLE>
(1) Valuation based on the difference between the option exercise price and the
fair market value of the Company's Common Stock on December 31, 1999 (which
was $5.125 per share, based on the closing trade price of the common stock
on the over-the-counter Bulletin Board on such date).
Employment Agreements and Termination of Employment and Change of Control
Arrangements. Loraca has entered into an executive employment agreement with
Mr. Baca effective as of January 1, 1999 (the "Baca Agreement") The Baca
Agreement is for a five year term commencing on January 1, 1999. On completion
of the initial term, the Baca Agreement will automatically renew for subsequent
one-year terms unless either party to the agreement provides three months
advance written notice. The Baca Agreement provides for a base salary of
$240,000 per year, as well as (i) an annual review and a six percent increase on
each anniversary date, (ii) incentive compensation based on the Company's
attainment of specified levels of earnings before interest, taxes, depreciation
and amortization and (iii) other fringe benefits. Under the Baca Agreement, if
Mr. Baca is terminated without cause or within 12 months of a change of control,
he is entitled to receive a separation payment equal to two times the base
salary if the termination occurs during the initial term, or a severance payment
equal to three times the base salary than in effect if the termination occurs
after the initial term.
NMMC has entered into executive employment agreements with Mr. Guy and Mr.
Bowser effective as of June 1, 1999 (the "Executive Agreements"). The Executive
Agreements are for a term of three years, commencing on June 1, 1999. On
completion of the initial term, the Executive Agreements will automatically
renew for subsequent one-year terms unless either party to the agreement
provides three months advance written notice. The Executive Agreements provide
for a base salary of $150,000 per year for both Mr. Guy and Mr. Bowser, as well
as
8
<PAGE>
(i) incentive compensation based on NMMC's attainment of specified levels of
earnings before taxes and a minimum return on average equity; (ii) other fringe
benefits. Under the Executive Employment Agreements, if either Mr. Guy or Mr.
Bowser is terminated without cause, he is entitled to receive a separation
package which includes (i) the base salary for the term remaining under the term
of employment then in effect; (ii) a lump sum payment equal to his average bonus
payment for the four most recently completed quarters multiplied by the number
of quarters remaining under the term of employment then in effect; (iii) payment
of health insurance premiums for coverage elected pursuant to the Consolidated
Budget Reconciliation Act of 1985 ("COBRA") and (iv) accelerated vesting of his
outstanding options.
Compensation of Directors. The Company pays each of its outside directors
$1,000 for each Board and Committee meeting attended, as compensation for their
services as members of the Board of Directors of the Company. During the fiscal
year ended December 31, 1999, the Chairman of the Board received an additional
$1,000 for his services to the Company in that capacity.
Performance Graph. The following graph compares the cumulative total
stockholder return (stock price appreciation plus dividends) on the common stock
of the Company with the Nasdaq U.S. Companies Index and the Nasdaq Holding
Offices Index. The Nasdaq Holding Offices Index is prepared by Nasdaq and
includes all companies in the Standard Industry Code 6719 (offices of holding
companies, not elsewhere classified) which are included in the Nasdaq U.S.
Companies Index. The information is provided for the period from March 6, 1998
to December 31, 1999.
[PERFORMANCE GRAPH APPEARS HERE]
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
FISCAL YEAR ENDING
-----------------------------------
COMPANY/INDEX/MARKET 3/06/1998 12/31/1998 12/31/1999
--------- ---------- ----------
LORACA INTERNATIONAL 100.00 69.57 89.13
HOLDING COMPANIES, NEC 100.00 101.81 82.50
NASDAQ MARKET INDEX 100.00 123.67 218.12
Certain Relationships and Related Transactions. The following transactions
involve Loraca, NMMC and certain executive officers, directors and affiliates of
Loraca and/or NMMC. Because of the relationships between the parties to each
transaction, there can be no assurance that transactions described below were on
terms as favorable to Loraca and/or NMMC as could have been obtained from
unaffiliated third parties.
From time to time, the Company's Chief Executive Officer, Ronald R. Baca,
has made loans to Loraca and its wholly-owned subsidiary NMMC in order to fund
the Company's working capital needs, including payroll and other office
expenses. At December 31, 1999, the Company was indebted to Mr. Baca in the
amount of $859,568 (including accrued interest) pursuant to an unsecured demand
promissory note bearing interest at the rate of 8% per annum.
The Company intends to enter into indemnification agreements with its
directors and various executive officers containing provisions which may require
it, among other things, to indemnify its officers and directors against
liabilities that may arise by reasons of their status or service as officers or
directors and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified. In addition, the Company
intends to execute such agreements with its future directors and executive
officers as well.
The Common Stock of Loraca is currently traded on the OTC Bulletin Board
under the ticker symbol "LCAI." The Company is contemplating applying to Nasdaq
for listing on The Nasdaq SmallCap Market. Because the Common Stock is not
listed on any securities exchanges or quoted on the Nasdaq, a limited trading
market for the Common Stock exists. The average trading volume of the Common
Stock during the year ended December 31, 1999 is estimated at approximately
14,240 shares per week, based on a report from Nasdaq Historical Research.
The price information contained in the following table sets forth the high
and low closing bid prices per share of the Common Stock as reported by Nasdaq
Historical Research. The high and low bid prices of the Common Stock reflect
inter-dealer prices which do not include retail markups, mark-downs or
commissions and may not represent actual transactions.
9
<PAGE>
<TABLE>
<CAPTION>
High ($/sh) Low ($/sh)
- --------------------------------------------------------------------------------
1998
- --------------------------------------------------------------------------------
<S> <C> <C>
First Quarter 5.750 5.6250
- --------------------------------------------------------------------------------
Second Quarter 6.250 5.1250
- --------------------------------------------------------------------------------
Third Quarter 6.125 3.0000
- --------------------------------------------------------------------------------
Fourth Quarter 4.125 3.4375
- --------------------------------------------------------------------------------
1999
- --------------------------------------------------------------------------------
First Quarter 2.0000 1.1250
- --------------------------------------------------------------------------------
Second Quarter 8.0000 2.5000
- --------------------------------------------------------------------------------
Third Quarter 5.7500 5.0625
- --------------------------------------------------------------------------------
Fourth Quarter 5.4375 4.0000
- --------------------------------------------------------------------------------
</TABLE>
On April 3, 2000, the last sale price of the Common Stock, according to
publicly available data regarding Over-the-Counter Bulletin Board companies was
$3.75 per share, and there were approximately 7,390,876 shares of Common Stock
outstanding held by approximately 110 stockholders of record.
The Company anticipates that all earnings for the foreseeable future, if
any, will be retained to finance the growth and development of the business and,
therefore, the Company does not anticipate paying cash dividends on its Common
Stock in the foreseeable future. Future dividends, if any, will be determined
by the Company's Board of Directors.
PROPOSAL 2: RATIFICATION OF
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected BDO Seidman, LLP as
independent accountants to audit the financial statements of the Company for the
fiscal year ending December 31, 2000. BDO Seidman, LLP has acted in such
capacity since its appointment in August 1999. A representative of BDO Seidman,
LLP is expected to be present at the Annual Meeting with the opportunity to make
a statement if such representative desires to do so. Such representative is
expected to be available to respond to appropriate questions.
In June 1999, the Company dismissed its former accountants, Meyners + Co.,
LLC, Certified Public Accountants ("Meyners"). The decision to change
independent accountants was ratified by the Company's Board of Directors.
During the two most recent fiscal years audited by Meyners through June 2, 1999,
there were no disagreements with Meyners regarding any matters with respect to
accounting principles or practices, financial statement disclosure or audit
scope or procedure, which disagreements, if not resolved to the satisfaction of
the former accountants, would have caused Meyners to make reference to the
subject matter of the disagreement in connection with its report. The former
accountants reports for the years and periods audited by them are not part of
the financial statements of the Company included in this registration statement.
Such reports did not contain an adverse opinion or disclaimer of opinion or
qualifications or modifications as to uncertainty, audit scope or accounting
principles. Prior to retaining BDO Seidman, LLP, the Company had not consulted
with BDO Seidman, LLP regarding the application of accounting principles or the
type of audit opinion that might be rendered on the Company's financial
statements.
The affirmative vote of a majority of the votes cast at the Annual Meeting
of Stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. Abstentions and broker
non-votes will each be counted as present for purposes of determining the
presence of a quorum. Abstentions and broker non-votes will each have the same
effect as a negative vote on this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
10
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STOCKHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
The Company has an advance notice provision under its bylaws for
stockholder business to be presented at meetings of stockholders. Such
provision states that in order for stockholder business to be properly brought
before a meeting by a stockholder, such stockholder must have given timely
notice thereof in writing to the Secretary of the Company. A stockholder
proposal to be timely must be received at the Company's principal executive
offices not less than 120 calendar days in advance of the one year anniversary
of the date the Company's proxy statement was released to stockholders in
connection with the previous year's annual meeting of stockholders; except that
(i) if no annual meeting was held in the previous year, (ii) if the date of the
annual meeting has been changed by more than thirty calendar days from the date
contemplated at the time of the previous year's proxy statement or (iii) in the
event of a special meeting, then notice must be received not later than the
close of business on the tenth day following the day on which notice of the date
of the meeting was mailed or public disclosure of the meeting date was made.
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders of the Company must be received by the Company at its
offices at 1601 Fifth Avenue, Suite 2320, Seattle, Washington 98101, not later
than December 14, 2000, and satisfy the conditions established by the Securities
and Exchange Commission for stockholder proposals to be included in the
Company's proxy statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
as set forth above. If any other matter or matters are properly brought before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.
By Order of the Board of Directors,
/s/ Bernard A. Guy
BERNARD A. GUY
President
April 27, 2000
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LORACA INTERNATIONAL, INC.
Proxy for Annual Meeting of Stockholders
Solicited by the Board of Directors
The undersigned hereby appoints Ronald R. Baca and Bernard A. Guy, and each
of them, with full power of substitution to represent the undersigned and to
vote all the shares of the stock of Loraca International, Inc. which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Company's headquarters at 1601 Fifth Avenue, Suite
2320, Seattle, Washington on Friday, May 19, 2000 at 10:00 A.M. local time, and
at any adjournment thereof (1) as hereinafter specified upon the proposals
listed below and as more particularly described in the Company's Proxy Statement
and (2) in their discretion upon such other matters as may properly come before
the meeting.
The undersigned hereby acknowledges receipt of: (1) Notice of Annual
Meeting of Stockholders of the Company, (2) accompanying Proxy Statement, and
(3) Annual Report of the Company on Form 10-K for the fiscal year ended December
31, 1999.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
1. Election of the following directors:
[ ] FOR the nominees [ ] WITHHOLD AUTHORITY
listed below (except to vote for the
as marked to the nominees listed
contrary below) below)
(INSTRUCTION: To withhold authority to vote for a nominee, strike a line
through the nominee's name.)
Ronald R. Baca
Bernard A. Guy
D. Harrison Gentry
John S. Trombello
Robert C. Stilz, Jr.
2. To ratify the appointment of BDO Seidman, LLP as independent
accountants of the Company for the fiscal year ending December 31,
2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
Whether or not you plan to attend the meeting in person, you are urged to sign
and promptly mail this proxy in the return envelope so that your stock may be
represented at the meeting.
The shares represented hereby shall be voted as specified. If no specification
is made, such shares shall be voted FOR proposals 1 and 2.
[ ] CHECK HERE FOR ADDRESS CHANGE AND NOTE BELOW.
[ ] CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING.
Sign exactly as your name(s) appears on your stock certificate. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign the above Proxy. If shares of stock are held of record by a
corporation, the Proxy should be executed by the President or Vice President and
the Secretary or Assistant Secretary, and the corporate seal should be affixed
thereto. Executors or administrators or other fiduciaries who execute the above
Proxy for a deceased stockholder should give their full title. Please date the
Proxy.
Dated: _____________, 2000
Signature(s):
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