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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))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SEARCH CAPITAL GROUP, INC.
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(Name of Registrant as Specified in its Charter)
NOT APPLICABLE
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/X/ 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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[SEARCH CAPITAL GROUP, INC. LETTERHEAD]
September 30, 1996
Dear Stockholders:
In the recent notice and proxy statement that we sent regarding the special
meeting of stockholders to be held on October 1, 1996, Search Capital Group,
Inc. ("the Company") indicated that its Board of Directors had UNANIMOUSLY
recommended that the stockholders vote in favor of the Company's three
proposals. At the time that the proposals were first made by Search management
to the Board of Directors, the Board (as it was comprised at that time) did
unanimously support management's proposals. Subsequently, five new directors
were added to the Company's Board of Directors. Two of the new directors do
not suport the proposed clarifying amendments to the terms of the Company's
9%/7% Convertible Preferred Stock or the change to the employee stock option
plan. However, the majority of the Board of Directors DOES STILL SUPPORT
THOSE PROPOSALS AND ALL OF THE DIRECTORS SUPPORT THE ONE-FOR-EIGHT REVERSE
STOCK SPLIT.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR ADOPTION OF ALL THREE
PROPOSALS.
To allow you to consider how the fact that the Board is not unanimous in its
support of the clarifying amendments to the 9%/7% Convertible Preferred Stock
and the change to the employee stock option plan might affect your vote on
these matters, we intend to cause an adjournment of the special meeting of the
stockholders after it is convened on October 1, 1996 until October 24, 1996, in
order to give you an opportunity to reconsider your vote, if you so desire. We
regret that it is necessary to delay the meeting but we felt it was important
that you be apprised of the situation and have an opportunity to cast your
ballot accordingly.
In order to facilitate the voting process, we are enclosing a new proxy card
that you may use to change or cast your vote. IF YOU HAVE ALREADY SENT YOUR
PROXY CARD AND YOU DO NOT WISH TO CHANGE YOUR VOTE, YOU DO NOT NEED TO DO
ANYTHING. PLEASE SEND IN THE CARD ONLY IF YOU HAVE NOT YET VOTED OR IF YOU WISH
TO CHANGE YOUR VOTE.
Sincerely,
/s/ GEORGE C. EVANS
George C. Evans
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SEARCH CAPITAL GROUP, INC.
700 NORTH PEARL STREET, SUITE 400
DALLAS, TEXAS 75201
SUPPLEMENT TO PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
SCHEDULED TO BE HELD OCTOBER 1, 1996
This Supplement to Proxy Statement is furnished to stockholders of
Search Capital Group, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at a special meeting of stockholders scheduled to be held on
October 1, 1996, and any adjournments thereof. This Supplement to Proxy
Statement and the accompanying form of proxy are first being sent or given to
the Company's stockholders on or about September 30, 1996.
ACTIONS TO BE TAKEN AT THE MEETING
The Proxy Statement has been, and this Supplement is being, furnished
to the stockholders of the Company in connection with the solicitation of
proxies by the Board of Directors of the Company to be voted FOR each of the
following proposals (the "Proposals"):
1. The approval of an increase in the number of shares of the
Company's Common Stock for which options may be granted
pursuant to the Company's 1994 Employee Stock Option Plan (the
"Plan Amendment");
2. The approval of certain clarifying amendments to the terms of
the Company's 9%/7% Convertible Preferred Stock (the
"Clarifying Amendments"); and
3. The approval of amendments to the Company's Restated
Certificate of Incorporation to effect a one-for-eight
"reverse" stock split of the Company's Common Stock and
Preferred Stock (the "Reverse Split Amendments").
In addition, any proxy solicited by or obtained by the Board of
Directors will be voted, in the discretion of the proxyholders, as to the
transaction of such other business as may properly come before the meeting.
REASONS FOR SUPPLEMENT
The Proxy Statement contains certain statements to the effect that the
Board of Directors unanimously recommends that the stockholders vote for
adoption of the Plan Amendment and the Clarifying Amendments. The number of
members of the Board has been expanded from six to 11, and five new directors
have been appointed. Subsequent to the mailing of the Proxy Statement, the
Company's management was advised by one of the new directors, Mr. Craig Hall,
that he disapproved of the Plan Amendment and the Clarifying Amendments. At a
subsequent Board meeting on September 26, 1996, the Board reconsidered the Plan
Amendment and the Clarifying Amendments. At that meeting, Mr. Hall and another
director, Larry E. Levey, who is an officer of Hall Financial Group, Inc., a
company controlled by Mr. Hall, voted against adoption of the Clarifying
Amendments, and the nine remaining directors voted for adoption of the
Clarifying Amendments. As to the Plan Amendment, the directors confirmed that,
at a meeting of the Board prior to its expansion from six to 11 members, the
then existing six directors unanimously adopted the Plan Amendment. Messrs.
Hall and Levey indicated that they would vote against the Plan Amendment if a
new vote of the Board were taken.
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As a result of the foregoing, the Company has determined that it would
be appropriate to supplement the statements made in the Proxy Statement with
respect to the recommendations of the Board of Directors. The Proxy Statement
indicates that the Board's actions were unanimous and that the Board of
Directors unanimously recommended the adoption of the Plan Amendment and the
Clarifying Amendments.
Adoption by the Company's stockholders of the Plan Amendment would
increase the number of shares of the Company's Common Stock for which options
may be granted pursuant to the Company's 1994 Employee Stock Option Plan from
1,750,000 shares to 5,000,000 shares, or 625,000 shares if the Reverse Split
Amendments are adopted. The Board of Directors unanimously approved the Plan
Amendment, when the Board consisted of only six directors. Nine of the current
directors on the Company's Board of Directors recommend that the stockholders
vote for adoption of the Plan Amendment. Two directors, Messrs. Hall and
Levey, do not support this recommendation.
Adoption by the Company's stockholders of the Clarifying Amendments
would effect certain clarifying amendments to the terms of the Company's 9%/7%
Convertible Preferred Stock (the "New Preferred Stock"). Nine of the directors
on the Company's Board of Directors have voted for adoption of the Clarifying
Amendments and recommend that the stockholders vote for adoption of the
Clarifying Amendments. Two directors, Messrs. Hall and Levey, have voted
against adoption of the Clarifying Amendments and do not support this
recommendation. As discussed in the Proxy Statement, approval of the
Clarifying Amendments by October 1, 1996 is a condition to the closing of the
Company's purchase of the assets of U.S. Lending Corporation. An extension of
that date is being sought. Clarification of the terms of the New Preferred
Stock is also intended to enable the Company to issue shares of the New
Preferred Stock in future acquisitions or stock offerings, as also discussed in
the Proxy Statement. In addition, under the terms of the Company's acquisition
agreement with Dealers Alliance Credit Corp ("DACC")., if the Clarifying
Amendments are not effected by April 1, 1997, the Company must pay $200,000 to
DACC.
Any statements in the Proxy Statement regarding the beliefs and
recommendations of the Board of Directors in relation to the Plan Amendment or
the Clarifying Amendments should be construed to mean nine of the 11 existing
members of the Board have such beliefs or recommendations and not the entire
Board of Directors.
The Board of Directors continues to recommend unanimously the adoption
by the Company's stockholders of the Reverse Split Amendments, which would
effect a one-for-eight "reverse" stock split of the Company's Common Stock and
Preferred Stock through amendments to the Company's Restated Certificate of
Incorporation.
A MAJORITY OF THE BOARD OF DIRECTORS RECOMMENDS THE ADOPTION BY THE
STOCKHOLDERS OF THE PLAN AMENDMENT AND THE CLARIFYING AMENDMENTS. THE BOARD
UNANIMOUSLY RECOMMENDS ADOPTION OF THE REVERSE SPLIT AMENDMENTS.
PURPOSE OF ADJOURNMENT OF MEETING
The Company's management intends to request at the special meeting,
when it is convened on October 1, 1996, that the stockholders approve an
adjournment until 9:00 a.m. on October 24, 1996. The adjourned meeting will
take place at the same location. The Company believes that the proxyholders
are holding proxies representing sufficient votes of stockholders to cause such
adjournment to be approved at the meeting.
The purpose of the adjournment is to enable the stockholders to review
this Supplement and to reconsider their votes with respect to the Plan
Amendment and the Clarifying Amendments, in light of the information disclosed
in this Supplement.
If a stockholder desires to change his, her or its vote with respect
to either or both of the Plan Amendment and the Clarifying Amendments, the
stockholder should complete, sign, date and return the enclosed proxy card in
the enclosed return envelope to the Company's transfer agent, American
Securities Transfer, Inc. in Denver, Colorado. If a stockholder has not yet
voted on the Proposals, the stockholder may similarly complete, sign, date and
return the enclosed proxy card. The latest dated proxy card will constitute a
revocation of all prior dated proxy cards and will be voted for or against each
of the Proposals as the stockholder appropriately specifies on the proxy card.
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Proxies in the form enclosed will be voted at the reconvened meeting,
if properly executed, returned to the transfer agent or the Company prior to
the reconvened meeting and not revoked. A proxy may be revoked at any time
before it is voted either in person at the meeting or an adjournment thereof or
by giving written notice to the Secretary of the Company.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. Reference should be made to the Proxy Statement, and
the Company's Form 10-K Report for the transition period ended March 31, 1996
and the Form 10-Q Quarterly Report for the period ended June 30, 1996
accompanying the Proxy Statement, for additional information regarding the
Company, the Proposals and other relevant matters. If a stockholder has a
question regarding this Supplement, the adjournment of the meeting or the
Proposals, the stockholder may contact the Investor Relations Department of the
Company at (800) 725-6673, or the Company's proxy solicitation firm, MacKenzie
Partners, Inc. at (800) 322-2885.
/s/ GEORGE C. EVANS
George C. Evans
Chairman of the Board
Dallas, Texas
September 30, 1996
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