SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
[Amendment No............]
EAC Industries, Inc.
................................................................................
Peter B. Fritzsche
Chairman of the Board and Chief Executive Officer
................................................................................
Common Stock
................................................................................
[to come]
(CUSIP Number of Class of Securities)
................................................................................
Peter B. Fritzsche
EAC Industries, Inc.
2111 Claridge Lane
Northbrook, IL 60062-8615
(847) 509-8657
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A [17 CFR 240.14a-1 to 240.14b-1], Regulation 14C [17
CFR 240.14c-1 to 240.14c101] or Rule 13e-3(c) [Section 240.13e-3(c)] under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of
1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [X]
Calculation of Filing Fee
Transaction valuation is based on approximately Amount of filing fee
70,000 shares being purchased at $.10 per share cash. $14.00
------
[ ] Check box if any part of the fee is offset as provided by Rule O-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid:.........................................................
Form or Registration No.:.......................................................
Filing Party:...................................................................
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION
(a) EAC Industries, Inc. 2111 Claridge Lane, Northbrook, Illinois
60062-8615
(b) Common Stock, $.10 per share, 2,892,819 shares outstanding as of August
31, 1999, which were held by approximately 760 shareholders of record.
(c) The principal market in which such securities are being traded is the
over-the-counter market. The range of high and low bid quotations for each
quarterly period during the past two years, and the source of such quotations is
as follows:
QTR. QTR.
ENDED HIGH LOW ENDED HIGH LOW
----- ---- --- ----- ---- ---
9/30/99 0.10 0.02 9/30/98 0.0125 0.0938
6/30/99 0.03 0.01 6/30/98 0.13 0.07
3/31/99 0.10 0.03 3/31/98 0.13 0.10
12/31/98 0.125 0.07 12/31/97 0.19 0.10
9/30/97 0.19 0.10
National Quotation Bureau OTC Bulletin Board
(d) No dividends have been paid during the past two fiscal years with
respect to such class of securities. The restriction on the issuer's present or
future ability to pay such dividends includes New York corporate law and the
issuer's financial situation which at the present requires the, to the extent
feasible, the conservation of cash and financial resources.
(e) N/A
(f) With respect to purchases of such securities made by the issuer or its
affiliates since the commencement of the issuer's second full fiscal year
preceding the date of this Schedule, the amount of such securities purchased,
the range of prices paid for such securities and the average purchase price for
each quarterly period of the issuer during such period are as follows: None
ITEM 2. IDENTITY AND BACKGROUND
The person filing this statement is the issuer of the class of equity securities
which is the subject of the subject Rule 13e-3 transaction.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
(a) N/A
(b) The contacts or negotiations concerning the matters referred to in Item
3(a)(2) which have been entered into or which have occurred since the
commencement of the issuer's second full fiscal year preceding the date of this
schedule (i) between any affiliates of the issuer of the class of securities
which is the subject of the subject Rule 13e-3 transaction; or (ii) between such
issuer or any of its affiliates and any person who is not affiliated with the
issuer and who would have a direct interest in such matters are set forth in the
attached preliminary proxy materials of the issuer ("Preliminary Proxy") at
pages 7 to 9 thereof.
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ITEM 4. TERMS OF THE TRANSACTION
(a) The material terms of the subject Rule 13e-3 transaction are set forth
in the Preliminary Proxy at pages 7 to 9 thereof.
(b) A term or arrangement concerning the subject Rule 13e-3 transaction
relating to any security holder of the issuer which is not identical to that
relating to other security holders of the same class of securities of the issuer
is the fact that the Fritzsche Group (as defined in the Preliminary Proxy)
intends to dispose of certain of its shares, constituting 23,500 shares in total
to an independent third party so that its percentage ownership is unchanged as a
result of the Reverse Stock Split.
ITEM 5. PLANS OF PROPOSALS OF THE ISSUER OR AFFILIATE
As of this date there is no plan or proposal of the issuer or its
affiliates regarding activities or transactions which are to occur after the
subject Rule 13e-3 transaction which relate to or would result in:
(a) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the issuer or any of its subsidiaries;
(b) A sale or transfer of a material amount of assets of the issuer or any
of its subsidiaries;
(c) Any change in the present board of directors or management of the
issuer including, but not limited to, any plan or proposal to change the number
or term of directors, to fill any existing vacancy on the board or to change any
material term of the employment contract of any executive officer;
(d) Any material change in the present dividend rate or policy or
indebtedness or capitalization or the issuer;
(e) Any other material change in the issuer's corporate structure or
business;
(f) As described in the Preliminary Proxy, one of the intended effects of
the Reverse Stock Split Proposal is that a class of equity securities of the
issuer would become eligible for termination of registration pursuant to Section
12(g)(4) of the Act;
(g) As described in the Preliminary Proxy, one of the intended effects of
the Reverse Stock Split Proposal is that the suspension of the issuer's
obligation to file reports pursuant to Section 15(d) of the Act would be
accomplished.
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION
(a) The source and total amount of funds or other consideration to be used
in the subject Rule 13e-3 transaction is as follows: general corporate funds not
expected to exceed $12,000
(b) A statement of all expenses incurred or estimated to be incurred in
connection with the Rule 13e-3 transaction including, but not limited to, filing
fees, legal, accounting and appraisal fees, solicitation expenses and printing
costs is as follows: $100 in filing fees;
$18-20,000 in legal fees;
$5,000 in printing fees; and
$3,000 in mailing and solicitation fees.
The issuer had paid or will be responsible for paying all of such expenses.
(c) No funds or other consideration is, or is expected to be, directly or
indirectly borrowed for the purpose of the subject Rule 13e-3 transaction.
(d) N/A
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ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS
(a) The purpose(s) for the subject Rule 13e-3 transactions are set forth in
the Preliminary Proxy at pages 7 to 8 thereof.
(b) The issuer and its affiliates considered alternative means to
accomplish such purpose(s) and such alternative(s) and the reason(s) for their
rejection are set forth in the Preliminary Proxy at page 7 thereof.
(c) The reasons for the structure of the Rule 13e-3 transaction and for
undertaking such transaction at this time are set forth at pages 8 to 9 of
the Preliminary Proxy.
(d) The effects of the Rule 13e-3 transaction on the issuer, its affiliates
and unaffiliated security holders, including the federal tax consequences
thereof are set forth at pages 7-8, and 9 respectively of the
Preliminary Proxy.
ITEM 8. FAIRNESS OF THE TRANSACTION
(a) The issuer believes that the subject Rule 13e-3 transaction is fair to
unaffiliated security holders of the issuer, which view was unanimously endorsed
by the Board of Directors of the issuer. For further information on such
viewpoint, see pages 15-16 of the Preliminary Proxy.
(b) Set forth in the Preliminary Proxy at pages 15 to 16 thereof is a
discussion of the material factors upon which the belief stated in Item 8(a) is
based and, to the extent such exists, the weight assigned to each such factor.
The factors which were given weight, to the extent deemed practicable and
reliable, in determining the fairness of a transaction to unaffiliated security
holders and the relative weight, if any, which was given to them in the
determination whether the consideration offered to unaffiliated security holders
constitutes fair value were:
(1) current market prices;
(2) historical market prices;
(3) net book value;
(4) going concern value;
(5) liquidation value;
(6) the purchase price paid in previous purchases disclosed in Item
1(f) of this Schedule;
(7) any report, opinion, or appraisal described in Item 9; and
(8) firm offer of which the issuer or affiliate is aware made by any
unaffiliated person, other than the person filing this statement, during
the preceding eighteen months for (A) the merger or consolidation of the
issuer into or with such person or of such person into or with the issuer,
(B) the sale or other transfer of all or any substantial part of the assets
of the issuer or (C) securities of the issuer which would enable the holder
thereof to exercise control of the issuer.
(c) The transaction has not been structured so that approval of at least a
majority of unaffiliated security holders is required.
(d) A majority of directors who are not employees of the issuer did not
retain an unaffiliated representative to act solely on behalf of unaffiliated
security holders for the purposes of negotiating the terms of the Rule 13e-3
transaction and/or preparing a report concerning the fairness of such
transaction.
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(e) The Rule 13e-3 transaction was approved by a majority of the directors
of the issuer who are not employees of the issuer.
(f) N/A
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(a) Neither the issuer or its affiliate(s) has received any report, opinion
(including an opinion of counsel) or appraisal from an outside party which is
materially related to the subject Rule 13e-3 transaction including but not
limited to, any such report, opinion or appraisal relating to the consideration
or the fairness of the consideration to be offered to security holders of the
class of securities which is the subject of the Rule 13e-3 transaction or the
fairness of such transaction to the issuer or affiliate or to security holders
who are not affiliates.
(b) N/A
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER
(a) With respect to the class of equity security to which the subject Rule
13e-3 transaction relates, the aggregate amount and percentage of securities
beneficially owned as of the most recent practicable date by each affiliate, by
each person enumerated in Instruction C of this Schedule or by any associate or
majority owned subsidiary of the issuer or affiliate, and the name and address
of any such persons is as follows:
NAME ADDRESS PERCENT
---- ------- -------
Peter B. Fritzsche EAC Industries, Inc. 33%
2111 Claridge Lane
Northbrook, IL 60062-8615
Ruth Fritzsche, c/o EAC Industries, Inc. less than 1%*
wife and associate 2111 Claridge Lane
of P. B. Fritzsche Northbrook, IL 60062-8615
Bart Fritzsche, c/o EAC Industries, Inc. less than 1%*
child and associate 2111 Claridge Lane
of P. B. Fritzsche Northbrook, IL 60062-8615
David Fritzsche, c/o EAC Industries, Inc. less than 1%*
child and associate 2111 Claridge Lane
of P. B. Fritzsche Northbrook, IL 60062-8615
Kathleen Fritzsche, c/o EAC Industries, Inc. less than 1%*
child and associate 2111 Claridge Lane
of P. B. Fritzsche Northbrook, IL 60062-8615
* Beneficial ownership of their shares is disclaimed.
(b) No transactions in the class of equity securities of the issuer were
effected during the past 60 days by the issuer or by the persons named in
response to paragraph (a) of this Item.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES
All contracts, arrangements, understandings or relationship (whether or not
legally enforceable) in connection with the subject Rule 13e-3 transaction
between the issuer (including any person enumerated in Instruction C of this
Schedule) and any person with respect to any securities of the issuer
(including, but no limited to, contracts, arrangements, understandings or
relationships concerning the transfer or the voting of any such securities,
joint
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ventures, loan or option arrangement, put or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations), have been disclosed in the Preliminary Proxy attached hereto.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION
(a) The present intention with regard to the subject Rule 13e-3 transaction
indicating whether or not any executive officer, director or affiliate of the
issuer or any person enumerated in Instruction C of this statement, and
securities with respect to which such person holds proxies, will be voted and
the reasons therefor have been disclosed in the Preliminary Proxy attached
hereto at page 7 thereof.
(b) Certain persons named in paragraph (a) of this item have made a
recommendation in support of the subject Rule 13e-3 transaction and the reasons
for such recommendation have been disclosed in the Preliminary Proxy attached
hereto at pages 15-16 thereof.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION
(a) Appraisal rights are not provided under applicable state law, under the
issuer's articles of incorporation will be voluntarily accorded by the issuer
only to affected security holders ( those whose shares are converted to cash) in
connection with the subject Rule 13e-3 transaction. Such rights are described in
the Preliminary Proxy Statement attached hereto at page 12.
(b) N/A
(c) N/A
ITEM 14. FINANCIAL INFORMATION
(a) The following financial data concerning the issuer is included in the
Issuer's 10-KSB Annual Report to the Securities and Exchange Commission for the
fiscal year ended January 31, 1999 (incorporated herein by reference); or in the
Issuer's most recent 10-QSB with respect to the 6-months fiscal period ended
July 31, 1999 (incorporated herein by reference); and/or is included in the
Preliminary Proxy enclosed herewith:
(1) Audited financial statements for the two fiscal years required to
be filed with the issuer's most recent annual report under Sections 13 and
15(d) of the Act;
(2) Unaudited balance sheets and comparative year-to-date income
statements and statements of cash flows and related earnings per share
amounts required to be included in the issuer's most recent quarterly
report filed pursuant to the Act;
(3) Ratio of earnings to fixed charges for the two most recent fiscal
years and the interim periods provided under Item 14(a)(2); and
(4) Book value per share as of the most recent fiscal year end and as
of the date of the latest interim balance sheet provided under Item
14(a)(2).
(b) Pro forma data disclosing the effect of the subject Rule 13e-3
transaction on:
(1) The issuer's balance sheet as of the most recent fiscal year end
and the latest interim balance sheet provided under Item 14(a)(2);
(2) The issuer's statement of income, earnings (loss) per share
amounts, and ratio of earnings to fixed charges for the most recent fiscal
year and the latest interim period provided under Item 14(a)(2); and
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(3) The issuer's book value per share as of the most recent fiscal year
end and as of the latest interim balance sheet date provided under Item
14(a)(2), are not provided as such effects are not material.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED
(a) N/A
(b) N/A
ITEM 16. ADDITIONAL INFORMATION
N/A
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS
Attached are copies of the following Exhibits:
(a) N/A
(b) N/A
(c) Any document setting for the terms of any contract, arrangements or
understandings or relationships referred to in Item 11 of this schedule; and
(d) The disclosure materials furnished to security holders in connection
with the transaction pursuant to the subject Rule 13e-3(d) [Section
240.13e-3(d)] are set forth at Exhibit A.
(e) A detailed statement describing the appraisal rights and the procedures
for exercising such appraisal rights which are referred to in Item 13(a) of this
schedule is set forth in the Preliminary Proxy at pages 12-13 thereof.
(f) N/A
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
EAC INDUSTRIES, INC.
September 22, 1999 (Date)
- ----------------------------------------
/s/ Peter B. Fritzsche (Signature)
- ----------------------------------------
Chairman of the Board and Chief Executive Officer
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