SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 Section 240.14a-11(c) or Section
240.14a-12
Worksafe Industries Inc.
(Name of Registrant as Specified in Its Charter)
Worksafe Industries 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:
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_________________________________________________________________
(5) Total Fee Paid: _________________________________________________
[ ] 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:__________________________________________
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:____________________________________________________
(4) Date filed:______________________________________________________
<PAGE>
WORKSAFE INDUSTRIES INC.
130 West 10th Street
Huntington Station, New York 11746
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------
The annual meeting of the stockholders of Worksafe Industries Inc. will be held
on December 15, 1999, at 3:30 P.M. at the Company's office located at 130 West
10th Street, Huntington Station, New York 11746. The meeting is called for the
following purposes:
ELECTION OF DIRECTORS
The election of four directors to hold office for the term continuing through
the annual meeting following the fiscal year ended June 30, 2001, and until the
election and qualification of their respective successors.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
To ratify the appointment of Arthur Andersen, LLP, Certified Public Accountants,
as independent auditors.
TRANSACTION OF OTHER BUSINESS
To transact such other business as may properly come before the meeting or any
adjournments thereof.
Stockholders of record at the close of business on October 27, 1999, are
entitled to receive notice of, and to vote at, this meeting. Sending in your
proxy will not prevent you from attending and voting at the meeting in person
should you later decide to do so.
The accompanying form of proxy is solicited by the Board of Directors of the
Company. Reference is made to the enclosed proxy statement for further
information with respect to the business to be transacted at the meeting.
If you do not expect to attend the meeting in person, please sign and date the
enclosed proxy and mail it promptly in the enclosed envelope.
By order of the Board of Directors.
LAWRENCE DENSEN
President
DATED: October 27, 1999
<PAGE>
WORKSAFE INDUSTRIES INC.
130 West 10th Street
Huntington Station, New York 11746
----------------------------------
PROXY STATEMENT
----------------------------------
The proxy statement mailed to stockholders commencing approximately on November
8, 1999, is furnished in connection with the solicitation of proxies by the
Board of Directors of Worksafe Industries Inc. (the "Company") in connection
with the annual meeting of stockholders (the "Annual Meeting") of the Company to
be held December 15, 1999, at 3:30 P.M. at the offices of the Company located at
130 West 10th Street, Huntington Station, New York 11746. Proxies will be voted
in accordance with directions specified thereon or otherwise in accordance with
the judgment of the persons designated as proxies. Any proxy on which no
direction is specified will be voted in favor of the action described in the
proxy statement.
A proxy in the enclosed form may be revoked at any time, prior to it being voted
at the Annual Meeting, by sending a subsequently dated proxy or by giving
written notice to the Company, in each case to the attention of Anthony P.
Towell, Secretary, at the address set forth above. Stockholders who attend the
meeting may withdraw their proxies at any time before their shares are voted by
voting their shares in person.
The expense of the solicitation of proxies for the meeting, including the cost
of preparing, assembling and mailing the notice, proxy card and proxy statement,
the handling and tabulation of proxies received and the charges of brokerage
houses and other institutions, nominees or fiduciaries in forwarding such
documents of the proxy material to beneficial owners, will be paid by the
Company. In addition to the mailing of the proxy material, such solicitation may
be made in person or by telephone by directors, officers or regular employees of
the Company. It is estimated that the total cost of proxy solicitations by the
Company will not exceed $10,000.
The matters to be considered at this Annual Meeting will be the election of four
directors to hold office for the term continuing through the annual meeting
following the fiscal year ended June 30, 2001 ("2001 Annual Meeting"), and until
the election and qualification of their respective successors and the
ratification of the appointment of Arthur Andersen, LLP, Certified Public
Accountants, as independent auditors. The Company is aware of no other matters
to be presented for action at this meeting.
Under SEC rules, boxes and a designated blank space are provided on the proxy
card for stockholders to mark if they wish either to abstain on one or more of
the proposals or to withhold authority to vote for one or more nominees for
director.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Company's voting securities consist solely of Common Stock. Holders of
Common Stock at the close of business on October 27, 1999, will be entitled to
vote. Each share of Common Stock entitles the holder to one (1) vote on each
matter to be voted upon. On the record date there were outstanding 1,686,579
shares of Common Stock.
<PAGE>
STOCK OWNERSHIP OF DIRECTORS
The following table sets forth as of October 27, 1999, the number of shares of
Common Stock owned by each of the present directors of the Company, together
with certain information with respect to each:
Number of
Shares
Director Beneficially Percent
Name Since Owned (1) (1)
- - ---- --------- ----------- -------
Lawrence Densen 1986 229,696(2) 13%
Alan E. Densen 1958 208,948(2) 12%
Anthony P. Towell 1989 232,150(2) 13%
Dr. Martin Fleisher 1989 12,000 *
James Favia 1995 14,000 *
Charles Holzberg 1996 12,000 *
Dr. Bruce Friedman 1997 11,000 *
- - ----------
* Less than 1%
(1) Beneficial ownership is determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934.
(2) Includes 100,000 shares of Common Stock for each Messrs. L. Densen, A.
Densen, and A. Towell, who are each trustees under a voting trust agreement
dated April 17, 1997, (the "Voting Trust Agreement") by and among Eastco
Glove Technologies, Inc., the Company, Steven Robins and Phillip Robins.
The Voting Trust Agreement was a condition to the closing of a stock
exchange agreement (the "Stock Exchange Agreement") dated April 17, 1997,
by and among Eastco Glove Technologies, Inc., the Company, Steven Robins
and Phillip Robins. Pursuant to the Stock Exchange Agreement and the Voting
Trust Agreement, 100,000 shares of the Company's Common Stock were issued,
said shares being issued in the names of Lawrence Densen, Alan E. Densen
and Anthony P. Towell as trustees until the five (5) year term of the
voting trust expires or Steven Robins or Phillip Robins desires to sell the
shares after one year pursuant to Rule 144 of the Securities Act of 1933.
As of October 27, 1999, the directors and executive officers of the Company,
nine persons, owned of record and beneficially a total of 548,916 shares
representing 26% of the issued and outstanding Common Stock of the Company. The
stated ownership of these shares assumes the exercise of 401,340 shares issuable
upon the exercise of options, rights and warrants exercisable within 60 days of
October 27, 1999, but reflects the ownership of the shares described in the
preceding footnote (2) above for each of the three directors named therein, only
once.
2
<PAGE>
Lawrence Densen became President and Chief Executive Officer of the Company
effective March 1, 1997. Prior to this time, he served as Senior Vice President
and has also been a Vice President. He has been a director of the Company since
1986. He is the son of Alan E. Densen.
Alan E. Densen was Senior Vice President until April, 1999, and has been a
director of the Company since 1958 and Co-Chairman of the Board since March,
1997. From 1958 through March 1, 1997 (except for the period September 1993 to
January 1994 when he served as Senior Vice President), he served as President
and Chief Executive Officer of the Company. He was also Treasurer and Chief
Financial Officer of the Company through 1992. He is the father of Lawrence
Densen.
Anthony P. Towell is a Senior Vice President and has been Secretary of the
Company since 1993, as well as Vice President and Co-Chairman of the Board since
March 1997. From 1992 through February 1,1997, he served as the Company's Vice
President of Finance, Treasurer, and Chief Financial Officer, and from 1989 to
1992 he served as its Vice President. He has been a director of the Company
since 1989. In addition, he has been a director of Windswept Environmental
Group, Inc. ("Windswept")(formerly Tradewinds, Inc.) since November, 1996. He
was a director from 1988 through September, 1997 of Nytest Environmental Inc.
("Nytest"), a hazardous waste testing company. He was a director from 1988 to
1995 of New York Testing Laboratories, Inc. ("NYT"), a laboratory testing
company and manufacturer of automotive accessories. Mr. Towell was a director of
Ameridata Technologies, Inc. ("Ameridata"), a provider of computer products and
services from 1991 to 1996. Since January 1998, Mr. Towell has been a director
of GulfWest Oil Company, an oil exploration and production company. The common
stock of Windswept and Nytest are registered under Section 12(g) of the
Securities and Exchange Act of 1934 (the "Exchange Act"), and the common stock
of Ameridata and GulfWest Oil Company are registered under Section 12(g) and (b)
of the Exchange Act.
Dr. Martin Fleisher has been a director of the Company since 1989. He holds a
Ph.D. in biochemistry from New York University and has been an attending
clinical chemist at Memorial Sloan-Kettering Cancer Center since 1967.
James Favia has been a director of the Company since July 26, 1995. He has
been a consultant during the past five years to Donald & Co. ("Donald"), which
has acted in the past as the Company's investment advisor. He is a chartered
financial analyst and has an MBA in finance which he obtained from New York
University in 1959. He was a director of T.J. Systems, a computer and peripheral
leasing firm until November, 1994 and a director of K2 Systems, a creator of web
sites until March, 1999. The common stock of T.J. Systems and K2 Systems are
registered under Section 12(g) of the Securities Exchange Act of 1934.
Charles Holzberg has been a director of the Company since December 5, 1996. He
has been President, since 1975, of The Charles Holzberg Agency, Inc., a general
agent for the sale of life insurance.
Dr. Bruce Friedman has been a director of the Company since April 16, 1997.
Since 1988, he has served as President of the Flower Hill Chiropractic Office,
P.C., where he is a chiropractic doctor.
3
<PAGE>
ELECTION OF DIRECTORS
Present Composition of Board
The bylaws of the Company provide that there will be not less than three nor
more than seven directors. The present size of the board is fixed at seven (7)
directors. The Board of Directors is divided into two (2) classes. The terms of
office of Lawrence Densen, Alan E. Densen and Anthony P. Towell do not expire
until the Company's annual meeting following the fiscal year ended June 30,
2000, and when their successors are elected.
Nominees for Director
The Board of Directors has unanimously nominated and designated the following
individuals for election as directors for a two-year term continuing through the
Company's 2001 annual meeting and until their successors are elected and take
their places:
James Favia
Dr. Martin Fleisher
Dr. Bruce Friedman
Charles Holzberg
Reference should be made to "Stock Ownership of Directors," above, for
disclosure of their business experience and stock ownership, and to "Certain
Relationships and Related Transactions," below, for additional information about
them.
Proxies in the enclosed form will be voted for the nominees named above.
Authority may be withheld for any nominee. In addition, stockholders may
nominate additional nominees as candidates for the position as director.
Although the Board of Directors does not anticipate that any nominee will be
unavailable for election, in the event of such occurrence, the proxy will be
voted for such substitute, if any, as the Board of Directors may designate.
Proxies will not vote for a greater number of persons than the number of
nominees named. Directors will be elected by the vote of a plurality of the
votes cast. Abstentions and broker non-votes are not counted as votes cast.
MEETINGS OF THE BOARD OF DIRECTORS AND CERTAIN
COMMITTEES THEREOF
Five (5) meetings of the Board of Directors were held during the fiscal year
ending June 30, 1999. The Board of Directors has established a Compensation
Committee, a Stock Option Committee and an Audit Committee. The Company does not
have a standing nominating committee. The Compensation Committee consists of
Messrs. Fleisher, Holzberg and Towell. The purpose of the Compensation Committee
is to review the Company's compensation for its executives, to make
determinations relative thereto and to submit recommendations to the Board of
Directors with respect thereto. The Stock Option Committee consists of Messrs.
Fleisher, Favia and Holzberg. The purpose of the Stock Option Committee is to
select the persons to whom options will be granted to purchase shares of the
Company's Common Stock under the Company's Stock Option Plans and to make
various other determinations with respect to such plans. The Company's Audit
Committee consists of Messrs. Towell, Fleisher and Holzberg. The purpose of the
Audit Committee is to provide general oversight of audit, legal compliance and
potential conflict of interest matters. The Stock Option Committee met 3 times
during the fiscal year ended June 30, 1999. The Audit Committee met 3 times
during the fiscal year ended June 30,
4
<PAGE>
1999, and the Compensation Committee met 2 times. Members of the Board of
Directors who are not employees of the Company receive a fee of $500 per each
Board of Directors meeting attended in person.
PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth, as of October 27, 1999, the ownership with
respect to each person known to own beneficially more than 5% of the Company's
common stock:
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Owner(1) of Class(1)
- - -------------- ---------------- ------------------- -----------
Common Stock Lawrence Densen 229,696 13%
$0.12 par value 130 W. 10th Street
Huntington Station, NY
Common Stock Alan E. Densen 208,948 12%
$0.12 par value 130 W. 10th Street
Huntington Station, NY
Common Stock Anthony P. Towell 232,150 13%
$0.12 par value 130 W. 10th Street
Huntington Station, NY
(1) See the footnotes under "Stock Ownership of Directors."
5
<PAGE>
EXECUTIVE COMPENSATION
Summary
The following describes the components of the total compensation of the CEO and
each other executive officer of the Company whose total annual salary and bonus
exceeds $100,000.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long term compensation
--------------------------------------- --------------------------------------
Awards Payouts
------------------------ -----------------
Other Securities All
Name and annual Restricted underlying LTIP other
principal Salary Bonus compen- stock options/ payouts compen-
position Year ($) ($) sation($) award(s)($) SARs (#) ($) sation($)
- - -------- ---- --- --- --------- ----------- -------- --- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence 1999 175,409 30,000 4,200 -0- 15,000(1) -0- -0-
Densen, 1998 121,441 -0- 4,200 -0- 1,500 -0- -0-
Pres/CEO 1997 115,381 -0- 4,200 -0- 85,200 -0- -0-
Arthur 1999 98,526 20,000 -0- -0- 10,000(1) -0- -0-
Wasser- 1998 89,988 -0- -0- -0- -0- -0- -0-
spring, 1997 82,305 -0- -0- -0- -0- -0- -0-
VP of
Finance,
Treas
and CFO
Richard 1999 104,116 -0- -0- -0- -0- -0- -0-
Boyen, 1998 96,500 -0- -0- -0- -0- -0- -0-
VP of 1997 91,236 -0- -0- -0- -0- -0- -0-
Manuf
Opera-
tions
</TABLE>
- - ----------
(1) Includes only rights granted on February 10, 1999, to Lawrence Densen and
Arthur Wasserspring to acquire 15,000 shares and 10,000 shares,
respectively, of Common Stock until June 30, 2000, at $1.30 per share. At
the time of grant the market value was $2.63 per share. Lawrence Densen has
exercised 2,500 of these rights and Arthur Wasserspring 1,000. The rights
were granted in compensation of services in connection with the Company's
sale of its distribution business. See below for all options granted and
exercised during the last fiscal year.
6
<PAGE>
Stock Options
Option/SAR Grants and Exercises in Last Fiscal Year
Option/SAR Grants in Last Fiscal Year
[Individual Grants]
<TABLE>
<CAPTION>
Number of Percent of Potential realizable value
securities total options/ at assumed annual rates
underlying SARs granted Exercise of stock price appreciation
Options/SARs in fiscal or base Expiration for option term
Name granted (#) year price($/Sh) Date 5% 10%
- - ---- ----------- ---- ----------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Lawrence 8,000 14 $2.38 12/15/03 $24,300 $30,664
Densen, 15,000 60 1.30 06/30/00 42,285 45,203
30,000 59 2.63 02/08/09 128,520 204,646
Arthur 10,000 40 $1.30 06/30/00 28,190 30,135
Wasser- 20,000 39 2.63 02/09/09 85,680 136,431
spring
</TABLE>
- - ----------
Aggregated Option/sar Exercises in Last Fiscal Year
And Fy-end Option/sar Values
Number
of securities Value
underlying unexercised in-
unexercised the-money options
Shares SARs at FY-end (#) SARs at FY-end($)
acquired on Value exercisable / exercisable /
Name exercise (#) realized ($) unexercisable(1) unexercisable
- - ---- ------------ ------------ ---------------- -------------
Lawrence 2,500 $781.00 124,646/139,618 $938/-
Densen
Arthur 1,000 313.00 18,200/52,000 825/-
Wasser-
spring
Richard -- -- 9,700/32,000 -/-
Boyen
- - ----------
(1) Includes all options, rights and warrants owned by such person.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL FEATURES
As of July 1, 1995, Lawrence Densen entered into an employment agreement
("Employment Agreement") which provided for him to serve as the Company's Vice
President for a term of five years. Effective March 1, 1997, Lawrence Densen
signed a modification agreement (the "1997 Modification Agreement"). The 1997
Modification Agreement of Lawrence Densen changed his position with the Company
to President. Pursuant to the 1997 Modification Agreement, the
7
<PAGE>
Company may terminate his Employment Agreement as a result of physical or mental
disability, or failure or inability to perform required duties for a period of
six (6) months in any two-year period. At the end of each fiscal year during the
term of the Employment Agreement, it is automatically extended for one
additional year to be added at the end of the then current term of the
agreements, unless the Board of Directors determines not to extend the
Employment Agreements. Lawrence Densen may also terminate his Employment
Agreement upon 30 days written notice. He is also entitled to receive an annual
contractual bonus, which has been waived for the fiscal years, equal to 3 1/3%
of the Company's earnings before interest and taxes for the fiscal year ended
June 30, 1999 and each fiscal year thereafter during the term of the Employment
Agreement, and he is also entitled to .75% of the Company's revenues in excess
of $20.5 million which has also been waived through June 30, 2000.
The Employment Agreement entered into by Lawrence Densen includes provisions
that provide for his right to terminate his Employment Agreement and thereby
receive additional compensation, as provided below, in the event that he is not
elected or retained as President or as a director of the Company; the Company
acts to materially reduce his duties and responsibilities under the Employment
Agreement; the Company changes its geographic location; his base compensation is
reduced by 10% or more; any successor to the Company fails to assume the
Employment Agreement; any other material breach of the Employment Agreement is
not cured by the Company within 30 days; and a "Change of Control" occurs by
which a person, other than a person who is an officer and/or director of the
Company as of the effective date of the agreement, or a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial
owner of 20% or more of the combined voting power of the then outstanding
securities of the Company or the composition of the board changes so that
officers of the Company no longer hold a majority of the seats.
In the event that Lawrence Densen terminates his position because of any of the
aforesaid reasons other than a "Change of Control", or if the Company terminates
his employment in any way that is a breach of the Employment Agreement by the
employer, he shall be entitled to receive, in addition to his salary
continuation, a cash payment equal to his total base salary plus projected
expenses and bonuses for the remainder of the term thereof, payable within 30
days of termination and all stock options, warrants and other stock appreciation
rights granted by the Company, with the exception of qualified incentive stock
option plans, to them shall become immediately exercisable at an exercise price
of $0.10 per share. In the event that he either owns or is entitled to receive
any unregistered securities of the Company, than the Company shall register such
securities. In the event that there is a "Change of Control", Lawrence Densen
shall be paid within 30 days thereof a one-time bonus equal to his total minimum
base salary for the next three years.
Arthur Wasserspring, Vice President of Finance and Richard Boyen, Vice President
of Manufacturing Operations each have employment agreements with the Company.
The agreements each terminate January 31, 2001, and automatically continues for
an additional year to year thereafter, unless canceled by either party, at least
a year in advance. Each agreement provides that the employee shall have the
right to terminate his employment within six months of the withdrawal from the
Company's board of directors of a majority of the board as constituted as of
February 1, 1997, other than by reason of a voluntary resignation or demise of
such directors and receive a
8
<PAGE>
one-time bonus equal to one dollar less than three times the present value of
the base amount of the employee's salary, as determined in accordance with
Section 280G of the Internal Revenue Code, as amended. Each agreement also
provides that the employee may terminate his agreement and receive his
compensation until the end of the agreement, and for the vesting of all options
and warrants, if the employee is not retained in his position as officer, his
duties are immediately reduced, the geographic location of where his duties are
performed are changed, any successor employer does not assume their agreements
or a material breach of the agreement by the employer.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's Common Stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than ten percent beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the Company
and written representations from the Company's executive officers and directors,
the Company believes that during the fiscal year ended June 30, 1999, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten percent beneficial owners were complied with.
STATEMENT PURSUANT TO SECTION 726(d) BUSINESS CORPORATION LAW
The Company has obtained from National Union Insurance Company a Directors and
Officers Liability and Company Reimbursement Policy for the period September 16,
1999, to September 16, 2000. The policy provides annual coverage of $5,000,000
per loss with an aggregate of $5,000,000 for all claims for directors and
officers liability. Coverage is in accordance with the terms of the policy and
is subject to various exceptions contained therein. The insurance is on a
claims-made basis. The premium paid for this insurance is $47,000. This
statement is delivered pursuant to Section 726(d) of the Business Corporation
Law of the State of New York.
COMPENSATION COMMITTEE, INTERLOCKS AND INSIDER PARTICIPATION
Anthony P. Towell, Senior Vice President of the Company served as a member of
the Compensation Committee during the fiscal year ended June 30, 1999.
9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE TO THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee (the "Committee") approves compensation objectives
and policy for the Company's executive officers, including the individuals named
in the Summary Compensation Table.
The Committee is comprised of Messrs. Charles Holzberg and Martin Fleisher,
independent outside directors, and Anthony P. Towell. The Committee seeks to
provide rewards that are linked to Company and individual performance, and
ensure that compensation and benefits are at levels that enable the Company to
attract and retain the high-quality employees it needs.
The Compensation Committee believes that stock options and restricted stock play
an important role in attracting, retaining, and motivating executives. Stock
options also provide executives with a means of increasing Company stock
ownership, which is a key objective of the executive compensation program and
serves to align executives' interest with those of stockholders.
The Company has incurred losses during its three (3) previous years ended June
30, 1999, including discontinued operations. Accordingly, the Company's CEO, and
executive officers, where applicable, have waived their contractual bonuses
through June 30, 2000, although the Company did pay a special bonus to the
Companys CEO and CFO in connection with the disposition of its distribution
business. The Compensation Committee believes in future years that executive
remuneration should be more directly linked to the Company's results. The
committee intends to monitor the Company's activities and review compensation
during fiscal 2000 to ascertain whether or not the results of the Company,
considering all other factors such as costs, competition and otherwise, support
the compensation being paid.
STOCK PERFORMANCE GRAPH
The following is a performance graph comparing, over a five-year period, the
performance of the Common Stock of Worksafe Industries Inc. against the Nasdaq
US Index and a group of peer issuers, which group is comprised of Angelica
Corp., Cyrk Inc., Lakeland Industries Inc. and Salant Corp.
[THE FOLLOWING WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
TOTAL SHAREHOLDER RETURNS
10
<PAGE>
ANNUAL RETURN PERCENTAGE
Years Ending
- - --------------------------------------------------------------------------------
Company Name/Index Jun95 Jun96 Jun97 Jun98 Jun99
- - --------------------------------------------------------------------------------
Worksafe Industries Inc. 0.00 -55.37 -65.60 -11.61 -42.11
Nasdaq US Index 33.49 28.39 21.38 32.21 44.04
Peer Group -31.09 10.24 -17.73 2.62 -27.72
INDEXED RETURNS
Years Ending
- - --------------------------------------------------------------------------------
Company Name/ Base
Index Period
Jun94 Jun95 Jun96 Jun97 Jun98 Jun99
- - --------------------------------------------------------------------------------
Worksafe
Industries
Inc. 100 100.00 44.63 15.35 13.57 7.86
Nasdaq US
Index 100 133.49 171.39 208.03 275.04 396.16
Peer Group 100 68.91 75.97 62.50 64.14 46.36
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A group of investors (the "Associates") holds a first mortgage on the Company's
executive offices in Huntington Station, New York in the principal amount of
approximately $377,000 as of June 30, 1999, and security interest on the
Company's personal property. The wife of Anthony P. Towell, an executive officer
and director of the Company, Charles Holzberg, director of the Company and the
wife of Alan E. Densen, a director, together own approximately 40% thereof.
During the fiscal year ended June 30, 1999, the Company paid Associates $74,675
in principal and interest on the mortgage, of which $47,115 constituted
interest. The first mortgage held by Associates, which was issued in 1992 and
upon which interest was being paid at the rate of 14%, was scheduled to come due
on July 1, 1997, in the amount of approximately $434,000. Associates and the
Company agreed to extend the mortgage for five years with interest at 12% per
annum or 3% over prime, whichever is greater. At the end of this five-year
period, the mortgage will come due in the amount of approximately $275,000.
11
<PAGE>
The Company has extended until March 31, 2000, the exercise date of warrants to
acquire 41,618 shares at $5.623 held by each Lawrence Densen, Alan E. Densen and
Anthony P. Towell.
Considering the circumstances of each transaction, the Company believes that all
transactions heretofore with officers/directors and shareholders of the Company
and their affiliates have been made, and in the future will be made, on terms no
less favorable to the Company than those available from unaffiliated parties and
will be approved by a majority of the disinterested directors.
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
Effective June 4, 1998, the Company's Board of Directors replaced Cornick,
Garber & Sandler, LLP as its independent public accountants with Arthur
Andersen, LLP. On June 4, 1998, the Company filed a Form 8-K with the Securities
and Exchange Commission to notify the Commission of the change of the Company's
independent public accountants. This Form 8-K is incorporated herein by
reference. The Board of Directors of the Company appointed and proposed
ratification of the firm of Arthur Andersen, LLP as the Company's independent
auditors for the fiscal year ending June 30, 2000. Arthur Andersen, LLP has
advised the Company that it has no financial interest of any kind in the Company
and has had no connection with the Company at any time in the past except for
the professional relationship between auditor and client.
The affirmative vote of the holders of a majority of the shares of Common Stock
represented at the Annual Meeting will be required for approval of the auditors.
In accordance with New York State law, abstentions are not counted in
determining the votes cast in connection with the selection of auditors. If such
approval is not obtained, selection of independent auditors will be reconsidered
by the Board of Directors.
Representatives of Arthur Andersen, LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so, and
shall be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR ratification of the
appointment of Arthur Andersen, LLP as its independent auditors.
PROCEDURE FOR SUBMISSION OF 2000 STOCKHOLDER PROPOSALS
Proposals by stockholders for inclusion in the 2000 annual meeting proxy
statement must be received by Worksafe Industries Inc. at 130 West 10th Street,
Huntington Station, New York 11746, Attention: Anthony P. Towell, Secretary,
prior to September 15, 2000. All such proposals are subject to the applicable
rules and requirements of the Securities and Exchange Commission.
OTHER MATTERS
So far as the Board of Directors is aware, only the aforementioned matters will
be acted upon at the meeting. If any other matters properly come before
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the meeting, it is intended that the accompanying proxy may be voted on for such
other matters in accordance with the best judgment of the person or persons
voting said proxy.
By order of the Board of Directors.
Dated: October 27, 1999
LAWRENCE DENSEN
President
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WORKSAFE INDUSTRIES INC.
130 West 10th Street
Huntington Station, New York 11746
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
December 15, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LAWRENCE DENSEN and ARTHUR WASSERSPRING and each
or either of them (with power of substitution) and proxies for the undersigned,
to vote all shares of Common Stock of record on October 27, 1999, of WORKSAFE
INDUSTRIES INC. which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held on December 15, 1999,
at 3:30 P.M. local time, or at any adjournment thereof, upon the matters set
forth in the Notice of Annual Meeting of Stockholders and Proxy Statement for
said Meeting, copies of which have been received by the undersigned, and, in
their discretion, upon all other matters which may properly come before said
meeting. Without otherwise limiting the generality of the foregoing said proxies
are directed to vote as follows:
No. 1: ELECTION OF DIRECTORS
To serve for the term continuing through the Annual Meeting following
the fiscal year ending June 30, 2001, and qualification of their
respective successors.
James Favia, Dr. Martin Fleisher, Dr. Bruce Friedman and Charles
Holzberg
[ ] FOR all nominees listed above (except as withheld in the space
below.)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
(Instruction: To withhold authority to vote for any individual nominee
write that nominee's name in the space provided below.)
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No. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Proposal to ratify the appointment of Arthur Andersen, LLP, Certified
Public Accountants, as the independent auditors to examine the
financial statements of the Company for the fiscal year ended June 30,
2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting.
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED.
IF NO CONTRARY DIRECTION IS GIVEN ABOVE, AND THIS PROXY IS PROPERLY SIGNED, THE
SHARES WILL BE VOTED FOR THE PROPOSALS LISTED ABOVE.
Your proxy is important to assure a quorum at the meeting whether or not you
plan to attend in person. You may revoke this proxy at any time, and the giving
of it will not affect your right to attend the meeting and vote in person.
Dated ___________________________, 1999
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Signature
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Signature, if held jointly
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Number of Shares as of October 27, 1999
This proxy must be signed exactly as name appears. When shares are held by joint
tenants, both must sign. When signing as attorney or as trustee, executor or
guardian, please give full title as such. If a corporation, please sign the full
corporate name by the president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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