GOLFROUNDS.COM, INC.
376 MAIN STREET, P.O. BOX 74
BEDMINSTER, NEW JERSEY 07921
------------------------------------------
INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF
THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 14F-1
NOTICE OF CHANGE IN THE MAJORITY
OF THE BOARD OF DIRECTORS
JANUARY 21, 2000
------------------------------------------
This Information Statement is being furnished to all holders of record at
the close of business on January 20, 2000 of the common stock, par value $.01
per share ("Common Stock"), of GolfRounds.com, Inc., a Delaware corporation
("Company"), in accordance with the requirements of Section 14(f) of the
Securities Exchange Act of 1934 ("Exchange Act") and SEC Rule 14f-1.
No vote or other action by the Company's stockholders is required in
response to this Information Statement. Proxies are not being solicited.
INTRODUCTION
The Company anticipates that, effective upon the expiration of the ten-day
period beginning on the later of the date of the filing of this Information
Statement with the Securities and Exchange Commission ("SEC") pursuant to Rule
14f-1 or the date of mailing of this Information Statement to the Company's
stockholders, Paul O. Koether, John W. Galuchie, Jr. and Thomas K. Van Herwarde
will resign as directors of the Company and Robert H. Donehew, Larry Grossman
and John F. McCarthy, III, will become the new directors to fill the vacancies
created by the resignations. The resignations of Messrs. Koether, Galuchie and
Van Herwarde and the appointment of Messrs. Donehew, Grossman and McCarthy are
occurring pursuant to a Stock Purchase Agreement and a related agreement
discussed below under "Stock Purchase and Related Agreements". Pursuant to such
agreements, on January 21, 2000 certain stockholders of the Company sold 500,000
shares ("Purchased Shares") of the Company's outstanding Common Stock to a group
of purchasers and gave such purchasers irrevocable proxies ("Proxies") to vote
an additional 449,690 shares of the Company's outstanding Common Stock.
Because of the change in the composition of the Board, the sale of the
Purchased Shares and the issuance of the Proxies, there will be a change in
control of the Company on the date the new directors referred to above take
office.
As of January 20, 2000, the Company had issued and outstanding 2,099,491
shares of Common Stock, the Company's only class of voting securities that would
be entitled to vote for directors at a stockholders meeting if one were to be
held. Each share of Common Stock is entitled to one vote.
Please read this Information Statement carefully. It describes the terms of
the Stock Purchase Agreement and the related agreement and contains certain
1
<PAGE>
biographical and other information concerning the executive officers and
directors of the Company. Additional information about the Stock Purchase
Agreement and the related agreement is contained in the Company's Current Report
on Form 8-K ("Form 8-K") dated January 19, 2000, which was filed with the SEC on
January 19, 2000. The Form 8-K and the accompanying exhibits may be inspected
without charge at the public reference section of the SEC at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. Copies of this material also may
be obtained from the SEC at prescribed rates. The SEC also maintains a website
that contains reports, proxy and information statements and other information
regarding public companies that file reports with the SEC. Copies of the Form
8-K may be obtained from the SEC's website at http://www.sec.gov.
STOCK PURCHASE AND RELATED AGREEMENTS
On January 18, 2000, six stockholders of the Company ("Sellers") entered
into a stock purchase agreement ("Stock Purchase Agreement") with seven
purchasers (collectively the "Purchasers") pursuant to which the Sellers agreed
to sell to the Purchasers an aggregate of 500,000 shares of Common Stock at a
price of $1.375 per share. In connection with the execution of the Purchase
Agreement, the Company and its directors, Messrs. Koether, Galuchie and Van
Herwarde, entered into a separate agreement with the Purchasers pursuant to
which, among other things, Messrs. Koether, Galuchie and Van Herwarde agreed to
resign as directors and appoint new directors designated by the Purchasers of
the shares. The Purchasers designated Messrs. Donehew, Grossman and McCarthy for
appointment to the board of directors of GolfRounds, to take office upon the
resignation of the current directors. Mr. Koether and entities he controls,
including some of the other Sellers, also agreed to give a designee of the
Purchasers irrevocable Proxies to vote an additional 449,690 shares of the
Company's common stock that he and such other entities own.
The sale of shares contemplated by the Stock Purchase Agreement was
consummated on January 21, 2000, and on that date the Proxies given by Mr.
Koether and certain entities controlled by him to a designee of one of the
Purchasers became effective.
The Sellers include Asset Value Holdings, Inc. ("AVH"), a Delaware
corporation of which Mr. Koether is President and Mr. Galuchie is Treasurer,
Bradford Trading Company, a Delaware corporation, Mr. Koether, Shamrock
Associates ("Shamrock"), a New Jersey limited partnership of which Mr. Koether
is the general partner, Sun Equities Corporation ("Sun"), a Delaware corporation
of which Mr. Koether is Chairman and Mr. Galuchie is Vice President and a
director, and Mr. Van Herwarde. The following table lists the Sellers and the
number of shares sold by each:
Name of Seller Number of Shares Sold
-------------- ---------------------
Asset Value Holdings, Inc. 200,000
Bradford Trading Company 25,000
Paul O. Koether 10,000
Shamrock Associates 208,000
Sun Equities Corporation 7,000
Thomas K. Van Herwarde 50,000
--------
TOTAL 500,000
The Purchasers include The Rachel Beth Heller 1997 Trust Dated 7/9/97, of
which Lawrence Kupferberg is trustee, The Evan Todd Heller 1997 Trust dated
6/17/97, of which Mr. Kupferberg is trustee,
2
<PAGE>
Martan & Co., a New Jersey corporation, Donehew Fund Limited Partnership, a
Georgia limited partnership, Jonathan & Nancy Glaser Family Trust dated
12/16/98, of which Jonathan and Nancy Glaser are the trustees, W. Robert
Ramsdell, and the Nagelberg Family Trust dated 9/24/97, of which David S.
Nagelberg and Bette Nagelberg are the trustees. The following table lists the
Purchasers and the number of shares purchased by each:
Name of Purchaser Number of Shares Purchased
- ----------------- --------------------------
The Rachel Beth Heller 1997 Trust Dated 70,000
7/9/97
The Evan Todd Heller 1997 Trust Dated 70,000
6/17/97
Martan & Co. 70,000
Donehew Fund Limited Partnership 70,000
Jonathan & Nancy Glaser Family Trust 40,000
Dated 12/16/98
W. Robert Ramsdell 40,000
Nagelberg Family Trust Dated 9/24/97 140,000
-------
TOTAL 500,000
The following table lists the names of the persons or entities who gave a
proxy to the Purchasers' designee and the number of shares held by such person
or entity after giving effect to the sale of shares contemplated by the Stock
Purchase Agreement:
Name of Holder Number of Shares Held
- -------------- ---------------------
Paul O. Koether 31,388
Paul O. Koether Individual Retirement 1,666
Account
Asset Value Holdings, Inc. 200,000
Shamrock Associates 209,470
Sun Equities Corporation 7,166
-----
TOTAL 449,690
The Purchasers have designated Donehew Fund Limited Partnership as their
designee to hold the Proxies. The Proxies give the holder of the Proxies full
right of substitution to name any of the other Purchasers to exercise the
Proxies.
3
<PAGE>
CHANGE OF CONTROL
As a result of the actions described above under the captions
"Introduction" and "Stock Purchase and Related Agreements," designees of the
Purchasers will constitute the Board and the Purchasers will be able to control
the voting of a significant block of the Company's voting shares. As a result of
the transactions consummated on January 21, 2000 pursuant to the Stock Purchase
Agreement and the related agreement, the Purchasers, as a group, and their
designee may be deemed to own beneficially an aggregate of 949,690 shares of
Common Stock, or approximately 45%, of the 2,099,491 outstanding shares of the
Company's common stock.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned as of the date of this Information Statement by (1) those
persons or groups known to the Company who beneficially own more than 5% of the
Company's Common Stock, (2) each current director and each person who has been
designated to serve as a director by the Purchasers ("New Director"), (3) each
executive officer whose compensation exceeded $100,000 in the fiscal year ended
August 31, 1999, (4) all current directors and executive officers as a group,
and (5) all New Directors and other persons who will serve as executive officers
of the Company after the New Directors take office ("New Officers") as a group.
The information is determined in accordance with Rule 13d-3 promulgated under
the Exchange Act based upon information furnished by the persons listed or
contained in filings made by them with the SEC. Except as indicated below, the
stockholders listed possess sole voting and investment power with respect to
their shares. This table reflects the consummation on January 21, 2000 of the
sale of 500,000 shares of Common Stock by the Sellers to the Purchasers. Except
as otherwise indicated in the table below, the business address of each of the
persons listed is c/o GolfRounds.com, Inc., 376 Main Street, P.O. Box 74,
Bedminster, New Jersey 07921.
Amount and
Nature of
Beneficial Percent
Name and Address of Beneficial Owner Ownership of Class(1)
- ------------------------------------ --------- -----------
Paul O. Koether
211 Pennbrook Road
Far Hills, New Jersey 07931 484,690(2) 23.1%
John W. Galuchie, Jr. 212,166(3) 10.1%
Thomas K. Van Herwarde 50,000 2.4%
Robert H. Donehew
Donehew Fund Limited Partnership
111 Village Parkway, Building #2
Marietta, Georgia 30067 519,690(4) 24.8%
Larry Grossman
c/o Thunderbolt Capital Corp.
1239 Shermer Road
Northbrook, Illinois 60062 0 *
John F. McCarthy, III
2401 Pennsylvania Avenue, N.W.
Washington, D.C. 20037 0 *
Shamrock Associates
211 Pennbrook Road
Far Hills, New Jersey 07931 409,470(5) 19.5%
4
<PAGE>
Amount and
Nature of
Beneficial Percent
Name and Address of Beneficial Owner Ownership of Class(1)
- ------------------------------------ --------- -----------
Asset Value Holdings, Inc. 200,000 9.5%
The Purchasers 949,690(6) 45.2%
Nagelberg Family Trust Dated 9/24/97
P.O. Box 2142
Rancho Santa Fe, California 92067 140,000 6.7%
All current directors and executive officers
as a group (3 persons) 539,690(7) 25.7%
All New Directors and New Officers as a 569,690(8) 27.1%
group ( 4 persons)
- ---------------------
* Less than 1%.
(1) Based on 2,099,491 shares of Common Stock outstanding as of the date of
this Information Statement.
(2) Includes 209,470 shares of Common Stock beneficially owned by Shamrock
Associates, of which Mr. Koether is the general partner; 200,000 shares
held by AVH, of which Mr. Koether is President; 7,166 shares owned by
Sun, of which Mr. Koether is Chairman and a principal stockholder;
1,666 shares held by Mr. Koether's Individual Retirement Account
("IRA"); 20,000 shares owned by Mr. Koether's wife; and 15,000 shares
held in discretionary accounts for Mr. Koether's brokerage customers.
Mr. Koether, Shamrock, AVH, Sun and Mr. Koether's IRA have given
Donehew Fund Limited Partnership irrevocable proxies to vote an
aggregate of 449,690 shares that they own.
(3) Includes 200,000 shares of Common Stock held by AVH, of which Mr.
Galuchie is the Treasurer. Mr. Galuchie disclaims beneficial ownership
of the shares held by AVH. Also includes 7,166 shares owned by Sun, of
which Mr. Galuchie is a director and officer. Mr. Galuchie disclaims
beneficial ownership of the shares held by Sun. AVH and Sun have given
Donehew Fund Limited Partnership irrevocable proxies to vote an
aggregate of 207,716 shares that they own.
(4) Includes 70,000 shares of Common Stock owned by Donehew Fund Limited
Partnership, of which Donehew Capital LLC, a Georgia limited liability
company, is the general partner; Mr. Donehew is the manager of Donehew
Capital LLC. Also includes 449,690 shares as to which Donehew Fund
Limited Partnership holds irrevocable proxies.
(5) Includes 200,000 shares of Common Stock held by AVH, of which Shamrock
is the ultimate parent. Shamrock disclaims beneficial ownership of
these shares. AVH has given Donehew Fund Limited Partnership an
irrevocable proxy to vote these shares.
(6) Includes 70,000 shares of Common Stock owned by the Rachel Beth Heller
1997 Trust Dated 7/9/978, with an address of 74 Farview Road, Tenafly,
New Jersey 07670; 70,000 shares owned by the Evan Todd Heller 1997
Trust Dated 6/19/97, with an address of 74 Farview Road, Tenafly, New
Jersey 07670; 70,000 shares owned by Martan & Co., a New Jersey
corporation with an address of 525 Washington Boulevard, Jersey City,
New Jersey 07310; 70,000 shares owned by Donehew Fund Limited
Partnership, a Georgia limited partnership with an address of 111
Village Parkway, Building #2, Marietta, Georgia 30067; 40,000 shares
owned by the Jonathan & Nancy Glaser Family Trust Dated 12/16/98, with
an address of 1999 Avenue of the Stars, Suite 2530, Los Angeles,
California 90067; 40,000 shares owned by W. Robert Ramsdell, with an
address of 474 Paseo Miramar, Pacific
5
<PAGE>
Palisades, California 90272; and 140,000 shares owned by the Nagelberg
Family Trust Dated 9/24/97, with an address of P.O. Box 2142, Rancho
Santa Fe, California 92067. Also includes 449,690 shares as to which
Donehew Fund Limited Partnership holds irrevocable proxies.
(7) Includes the shares of Common Stock deemed to be included in the
respective beneficial holdings of Paul O. Koether, Thomas K. Van
Herwarde and John W. Galuchie, Jr.
(8) Includes the shares of Common Stock deemed to be included in the
respective beneficial holdings of Robert H. Donehew, Larry Grossman,
John F. McCarthy, III, and Thomas K. Van Herwarde.
DIRECTORS AND EXECUTIVE OFFICERS
Effective upon the expiration of the ten-day period beginning on the later
of the date of the filing of this Information Statement with the SEC pursuant to
Rule 14f-1 or the date of mailing of this Information Statement to the Company's
stockholders, Messrs. Koether, Galuchie and Van Herwarde will resign as
directors of the Company and Messrs. Donehew, Grossman and McCarthy will be
appointed as new directors to fill the vacancies created by the resignations.
The following table sets forth information regarding the Company's current
executive officers and directors and the proposed executive officers and
directors of the Company after the new directors take office. If any proposed
director listed in the table below should become unavailable for any reason,
which the Purchasers do not anticipate, the directors will vote for any
substitute nominee or nominees who may be selected by the Purchasers prior to
the date the new directors take office.
Current Executive Officers and Directors
Name Age Positions
- ---- --- ---------
Paul O. Koether 63 Chairman and Director
Thomas K. Van Herwarde 41 President and Director
John W. Galuchie, Jr. 46 Vice President, Treasurer and Director
Proposed Executive Officers and Directors
Name Age Positions
- ---- --- ---------
John F. McCarthy, III 54 Chairman and Director
Thomas K. Van Herwarde 41 President
Robert H. Donehew 48 Vice President, Treasurer, and Director
Larry Grossman 50 Director
Paul O. Koether has been Chairman and a director of the Company since July
1992 and was President of the Company from July 1992 to May 1999. He has been
Chairman and director since July 1987 and President since October 1990 of Kent
Financial Services, Inc. ("Kent") and the general partner since 1990 of Shamrock
Associates, an investment partnership that is the principal stockholder of Kent.
He also holds various positions with affiliates of Kent, including Chairman
since 1990 and a registered representative since 1989 of T. R. Winston &
Company, Inc. ("Winston"), a securities broker-dealer. Mr. Koether also has been
Chairman since April 1988, President from April 1989 to February 1997 and a
director since March
6
<PAGE>
1988 of Pure World, Inc. ("Pure World"), and for more than five years, the
Chairman and President of Sun, a private, closely-held corporation that is Pure
World's principal stockholder. Until August 1994, when it sold its majority
ownership of North Corp. Realty Advisors, Inc. ("NorthCorp.") to an unaffiliated
party, Pure World operated as a real estate asset manager through NorthCorp.
Prior to its sale, Mr. Koether also served as Chairman and a director of
NorthCorp. Since December 1994, Mr. Koether has been a director of Pure World
Botanicals, Inc. ("PWBI"), a wholly-owned subsidiary of Pure World, and since
January 1995, he has been its Chairman. PWBI is a manufacturer of natural
products. In September 1998 Mr. Koether was elected a director and Chairman of
Cortech, Inc. ("Cortech"), a biopharmaceutical company.
Thomas K. Van Herwarde has been President and a director of the Company
since May 1999. From 1995 through May 1999, he was President of PKG Design, Inc.
("PKG"). PKG was the developer of two internet websites, golfrounds.com and
skiingusa.com, that the Company acquired from PKG in May 1999. In 1994, Mr. Van
Herwarde was self-employed as a consultant to e-marketing, e-commerce and online
retail companies.
John W. Galuchie, Jr., a certified public accountant, has been Vice
President, Treasurer and a director of the Company since July 1992. He has been
Executive Vice President since April 1988 and director from January 1990 until
October 1994 of Pure World. He has been Vice President and a director of Sun for
more than five years. He has also held various executive positions with Kent
since 1986 and was a director of Kent from June 1989 until August 1993. Mr.
Galuchie has been President since January 1990 and a director since September
1989 of Winston. He served as a director of Crown NorthCorp, Inc., the successor
corporation to NorthCorp., from June 1992 to August 1996. In September 1998, Mr.
Galuchie was elected a director and President of Cortech. Mr. Galuchie served as
a director of HealthRite, Inc., a nutritional product company, from December
1998 to June 1999. Since September 1999, Mr. Galuchie has been a director of
Gish Biomedical, Inc., a medical device manufacturer.
John F. McCarthy III has served as a Director of ReverseAuction.com, Inc.
("ReverseAuction"), a private company that owns and operates an Internet auction
site and several related Internet sites, since February 1999 and has served as
Chairman of ReverseAuction since April 1999. Mr. McCarthy was a Director and
General Counsel of Globalink, Inc. from 1993 until it was acquired by Lernout &
Hauspie Speech Products N.V. in October 1998. From 1989 to 1993, he was Vice
President and General Counsel of Computone Company. From 1985 to 1988, he was a
partner in the law firm of Burnham, Connelly, Osterle & Henry and from 1983 to
1985 he was a partner in the law firm of Rose, Schmidt, Chaperman, Duff &
Hasley. In addition, since 1993, Mr. McCarthy has been a principal in McCarthy,
Johnston & Associates, which provides business advice to small and medium-sized
organizations.
Robert H. Donehew has been the Chief Executive Officer of Donehew Capital,
LLC, the general partner of Donehew Fund Limited Partnership, a private
investment partnership specializing in the securities market, since July, 1996.
In addition, since July, 1997 he has been the Chief Executive Officer of 3-D
Capital, LLC, an investment firm specializing in due-diligence consulting and
investments in the securities markets. Since 1983 he has also served as the
Chief Financial Officer of the R.D. Garwood, Inc. Companies. From 1976 through
1983 he had his own tax and financial planning practice. Mr. Donehew has been on
the Board of Directors of MSDC, a medical software company, since 1986.
Larry Grossman has been the Chairman of Thunderbolt Capital Corporation, a
venture capital firm he co-founded, since January 1998. From September 1997 to
January 1998 he was retired. From October 1996 to August 1997, he was Chairman
and Chief Executive Officer of Trans Leasing International, Inc., a company
specializing in medical equipment and auto leasing. From 1989 to October 1996,
he was Chairman and Chief Executive Officer of FluoroScan Imaging Systems, Inc.,
a manufacturer of x-ray imaging devices. From 1987 to 1989 Mr. Grossman was
President, Chief Operating Officer and a director of Pain Prevention Labs, Inc.,
which manufactured a patented electronic anesthesia machine.
7
<PAGE>
During the year ended August 31, 1999, the Board held no formal meetings
but acted via unanimous written consents. The Board does not have any formal
committees.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act, as amended, requires the Company's
officers, directors and persons who beneficially own more than ten percent of
the Company's Common Stock to file reports of ownership and changes in ownership
with the SEC. These reporting persons also are required to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on its review of the copies of such forms furnished to it and
representations that no other reports were required, the Company believes that
all Section 16(a) reporting requirements were complied with by the Company's
officers and directors during the year ended August 31, 1999.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by or paid to the Company's
Chairman of the Board in the year ended August 31, 1999. There were no executive
officers whose compensation exceeded $100,000 in the year ended August 31, 1999:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
Other Annual
Name and Principal Position Salary Bonus Compensation
- --------------------------- Year ($) ($) ($)
---- ------ ----- ------------
<S> <C> <C> <C> <C>
Paul O. Koether 1999 -0- -0- -0-
Chairman of the Board 1998 -0- -0- -0-
1997 -0- -0- -0-
</TABLE>
Employment Agreements
In May 1999, the Company entered into an employment agreement with Thomas
K. Van Herwarde, the Company's President, for an initial term of one-year at an
annual salary of $90,000. Mr. Van Herwarde was the sole stockholder of PKG
Design, Inc., which the Company acquired in May 1999. On the expiration of the
one-year period, and on each yearly anniversary thereafter, unless otherwise
terminated by either party, the employment agreement will automatically renew
for an additional one-year period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the transactions described in this Information Statement, no
information is required to be reported under this item.
GOLFROUNDS.COM, INC.
Dated: January 21, 2000
8
