SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Proxy Statement
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Everest & Jennings International Ltd.
(Name of Registrant as Specified in Its Charter)
----
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(e)(1)(ii), 14a-6(i)(1) 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: ____
(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: _____
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>
EVEREST & JENNINGS INTERNATIONAL LTD.
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
June 4, 1996
Notice is hereby given that the 1996 Annual Meeting of Stockholders
(the "Annual Meeting") of Everest & Jennings International Ltd. (the
"Company") will be held at the offices of the Company, 4203 Earth City
Expressway, Earth City, Missouri 63045, on Tuesday, June 4, 1996,
commencing at 11:00 a.m. The Annual Meeting is being held for the
following purposes:
(1) To elect five (5) members of the Board of Directors;
(2) to consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to effect a one-for-ten reverse stock split by
changing the number of authorized shares of Common Stock from 120,000,000
shares to 12,000,000 shares and by changing the voting rights of holders of
each share of the Company's Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock to provide for one-tenth vote on all
matters submitted to a vote of the Company's Common Stock (the
"Amendment");
(3) To ratify the appointment of Price Waterhouse LLP as the
independent accountants of the Company for fiscal 1995; and
(4) To transact such other business as properly may come before the
meeting and any adjournment thereof.
Only stockholders of record at the close of business on April 28, 1996
are entitled to vote at the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person.
IN ANY EVENT, PLEASE MARK YOUR VOTES, THEN DATE AND SIGN THE ENCLOSED FORM
OF PROXY AND RETURN YOUR VOTED PROXY OR PROXIES PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE WHETHER OR NOT YOU CURRENTLY PLAN TO ATTEND THE
ANNUAL MEETING. YOU MAY REVOKE YOUR PROXY IF YOU DECIDE TO ATTEND THE
ANNUAL MEETING AND WISH TO VOTE YOUR SHARES IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
TIMOTHY W. EVANS
Secretary
St. Louis, Missouri
May ____, 1996
<PAGE>
EVEREST & JENNINGS INTERNATIONAL LTD.
4203 Earth City Expressway
Earth City, Missouri 63045
PROXY STATEMENT
GENERAL
This Proxy Statement (first mailed on or about May ___, 1996 to
stockholders of record on April 26, 1996) is furnished in connection with
the solicitation by the Board of Directors of Everest & Jennings
International Ltd. (the "Company") of Proxies for use at the 1996 Annual
Meeting of Stockholders (the "Annual Meeting"), or at any adjournment
thereof. The Annual Meeting will be held on June 4, 1996, at 11:00 a.m.,
at 4203 Earth City Expressway, St. Louis County, Missouri 63045.
The Annual Meeting is being held: (i) to elect five members of the
Board of Directors of the Company; (ii) to consider and vote upon a
proposal to amend the Company's Certificate of Incorporation to effect a
one-for-ten reverse stock split by changing the number of authorized shares
of Common Stock from 120,000,000 shares to 12,000,000 shares and by
changing the voting rights of holders of each share of the Company's Series
A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock to
provide for one-tenth vote on all matters submitted to a vote of the
Company's Common Stock (the "Amendment"); (iii) to ratify the appointment
of Price Waterhouse LLP as the independent accountants of the Company for
fiscal 1996; and (iv) to transact such other business as properly may be
brought before the meeting or any adjournment thereof.
A Proxy in the accompanying form which is properly executed and
received by the Company and not revoked prior to the Annual Meeting, will
be voted in accordance with the stockholder's direction and in the absence
of direction will be voted FOR each of the nominees for director shown on
the form of Proxy, FOR the Amendment and FOR ratification of the
appointment of Price Waterhouse LLP as the independent accountants of the
Company. Any Proxy executed and returned to the Company may be revoked by
the person giving it by delivering a later signed and dated Proxy or other
written notice of revocation to the Secretary of the Company at any time
prior to the exercise of the Proxy. A Proxy is also subject to revocation
if the person executing the Proxy is present at the Annual Meeting and
chooses to vote in person.
STOCK OWNERSHIP
The stockholder shown in the following table is known to have owned
beneficially, as of March 31, 1996, at least 5% of any class or series of
the Company's voting stock.
Shares of
Shares of Series A
Common Stock Preferred Stock
Beneficially Beneficially
Owned<F1><F2> Owned<F1><F2>
-------------------- ------------------
Number Number
Name and Address of of of
Beneficial Owner Shares Percent Shares Percent
- ------------------- -------- ------- -------- -------
BIL (Far East Holdings)
Limited, 2306 Jardine 57,799,352 80% 7,867,842 100%
House, #1 Connaught Place
Central, Hong Kong
(CONTINUED)
Shares of Shares of
Series B Series C
Preferred Stock Preferred Stock
Beneficially Beneficially
Owned<F1><F2> Owned<F1><F2>
-------------------- ------------------
Number Number
Name and Address of of of
Beneficial Owner Shares Percent Shares Percent
- ------------------- -------- ------- -------- -------
BIL (Far East Holdings)
Limited, 2306 Jardine 786,357 100% 20,000,000 100%
House, #1 Connaught Place
Central, Hong Kong
[FN]
<F1>
For purposes of this table and the beneficial stock ownership table
preceding it, the percentage of ownership of the Company's Common Stock is
based on the 72,280,646 shares of Common Stock actually outstanding as of
March 31, 1996. The following shares are not included: 84,000 shares
issuable under currently exercisable options granted under the Company's
1990 Omnibus Stock Incentive Plan, 400,000 shares issuable under options
granted to Bevil J. Hogg, 284,193 shares issuable on exercise of
outstanding options granted under the MCT plan, and 42,400 shares issuable
on exercise of outstanding options granted under the Company's 1981 Stock
Option Plan (all such options issued under the 1990 Omnibus Stock Incentive
Plan, the 1994 Plan and the 1981 Stock Option Plan, all of which are or
will become exercisable within 60 days after March 31, 1996 at exercise
prices in excess of the recent closing prices for the Common Stock, which
options the Company accordingly believes are unlikely to be exercised
within 60 days of March 31, 1996); 7,867,842 shares issuable on exercise of
the outstanding Series A Preferred Stock; 786,357 shares issuable on
conversion of the outstanding Series B Preferred Stock; and 20,000,000
shares issuable on conversion of the outstanding Series C Preferred Stock.
<F2>
Each outstanding share of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Common Stock is entitled to one vote
and the holders of the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Common Stock vote together as a single class
on all matters submitted to a stockholder vote (including the election of
directors) other than a matter with respect to which any such class would
be entitled under applicable law to vote separately.
<FN/>
QUORUM AND VOTING
Only stockholders of record as of the close of business on April 26,
1996 (the "Record Date") will be entitled to vote at the Annual Meeting.
On that date, 72,280,646 Common shares, $0.01 par value; 7,867,842 shares
of Series A Preferred Stock, $0.01 par value; 786,357 shares of Series B
Preferred Stock, $0.01 par value; and 20,000,000 shares of Series C
Preferred Stock, $0.01 par value, were outstanding.
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of the Common Stock, the
Series A Preferred Stock, the Series B Preferred Stock and the Series C
Preferred Stock is necessary to constitute a quorum for transacting
business. The holders of Common shares, Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock are entitled to one vote per
share.
Cumulative voting is permitted in the election of directors provided
that at least one stockholder has given notice at the Annual Meeting,
before voting has commenced, of an intention to cumulate votes. If any one
stockholder gives notice of an intention to cumulate votes, all
stockholders may cumulate their votes for the candidates. To cumulate
votes, a stockholder may cast as many votes as there are directors to be
elected multiplied by the number of shares registered in his or her name on
the Record Date. These votes may be cast all for one candidate or may be
distributed among the candidates at the discretion of the stockholder. In
any election of directors, the five candidates receiving the highest number
of affirmative votes are elected; votes against a director and votes
withheld have no legal effect. The Company has not been informed that any
stockholder intends to cumulate votes at the Annual Meeting. Whether or
not votes are cumulated for the election of directors at the Annual
Meeting, BIL has the power as of March 31, 1996 to elect all five of the
Directors.
Approval of the reverse stock split and the related amendment to the
voting rights of holders of the Company's preferred stock will require the
affirmative vote of stockholders casting a majority of the votes of the
shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock, voting together as a single class and
entitled to be at the meeting.
The ratification of the appointment of Price Waterhouse LLP as
independent accountants for the Company for fiscal 1996 will require the
affirmative vote of a majority of the votes of the shares of Common Stock,
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock, voting together as a single class, present and voting at the Annual
Meeting in person or by Proxy.
Abstentions and broker "non-votes" are not counted in the total number
of votes cast and thus will have no effect on the outcome of voting on
directors. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner is present at the meeting but does not vote upon a
particular proposal because the nominee does not have discretionary voting
power with respect to that proposal and has not received instructions from
the beneficial owner. Broker "non-votes" and the shares as to which
stockholders abstain are included for purposes of determining whether a
quorum of shares is present at a meeting and, therefore, as to matters
other than the election of directors, have the same effect as if such
shares were voted against such matters. Shares not voted on one or more
but less than all such matters on proxies returned by brokers will be
treated as not represented at the Meeting as to such other matter or
matters.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors
In accordance with the Company's Bylaws, the Board of Directors has
fixed the number of directors at five members as of the Annual Meeting.
Each of the persons listed below has been nominated by the Company's
current Board of Directors for election to the Board at the Annual Meeting.
Each director will hold office until the next Annual Meeting and until his
or her successor is elected and qualified. In addition to the nominees
listed below, Dianne J. Jennings served as a director during a portion of
1995. Ms. Jennings did not stand for re-election in 1995.
If the enclosed Proxy is properly executed and returned to the Company
before the Annual Meeting, it will be voted in the manner directed by the
stockholder(s) submitting such proxy. If no such direction is provided,
the proxy will be voted FOR the nominees shown on the Proxy.. The persons
named in the Proxy will have the right to vote cumulatively and to
distribute votes among nominees as they consider advisable. If any of the
nominees becomes unavailable for any reason, or if a vacancy should occur
before the election, the shares represented by the Proxy will be voted FOR
the person, if any, who is designated by the Board of Directors to replace
the nominee or to fill the vacancy on the Board. The Board of Directors
has no reason to believe that any of the nominees will be unavailable or
that any vacancy on the Board of Directors will occur. All nominees have
consented to be named and have indicated their intent to serve if elected.
Information Regarding Nominees and Executive Officers
The following table sets forth certain information concerning the
business experience of the nominees for election to the Board of Directors.
Principal Occupations and Affiliations Served
Over the Last Five Years and as
Directorships in Other Publicly Director
Name Age Held Companies Since
- ---- --- -------------------------------------- --------
Sandra L. Baylis 48 Executive Assistant, Brierley Investments 1995
Ltd., an Australian holding company,
since 1993; Executive Assistant, Pioneer
International Ltd.,a producer of building
construction materials, from 1990 to 1993.
Bevil J. Hogg 48 President and Chief Executive Officer of 1994
the Company since January 21, 1994;
Executive Vice President of the Company
from January 14, 1994 to January 20, 1994;
Chief Executive Officer of Medical
Composite Technology, Inc., a wheelchair
designer and manufacturer, from December 16,
1992 to January 13, 1994; Chief Executive
Officer of Cycle Composite, Inc., a bicycle
manufacturer, from 1986 to December, 1992.
Rodney F. Price 52 Chairman of the Board of the Company 1994
since May 23, 1994; Director, Brierley
Investments Ltd., an Australian investment
holding company, since 1993; Managing
Director and Chief Executive Officer,
Pioneer International Ltd., a producer
of building construction materials, from
1990 to 1993; Managing Director and Chief
Executive Officer, Industrial Equity Limited
(IEL) from 1986 to 1989; Chairman, Australia
Media Ltd.
Robert C. 75 Private investor; Chairman of Zac 1982
Sherburne Industries, a manufacturer of computer
peripheral components, from February 1985
to June 1990; Director of Zero Corp. from
1975 to 1992; Director of Golden Systems Inc.
Charles D. Yie 37 General Partner of Ampersand Specialty 1994
Materials Ventures Limited Partnership
("ASMVLP"), a venture capital investment
company, since 1989; Principal from 1987
to 1989. Director of Aseco Corporation.
The following table sets forth the beneficial stock ownership as of
March 31, 1996 of each of the nominees for election to the Board of
Directors, each of the executive officers named in the Summary Compensation
Table on page 13 (the "named executive officers") and of the Directors and
executive officers as a group. The number of shares shown includes shares,
if any, held beneficially or of record by each person's spouse; voting and
investment power of the shares also may be shared by spouses.
Shares of Shares of Series
Common Stock A Preferred Stock
Beneficially Beneficially
Owned<F1><F2> Owned<F1><F2>
-------------------- ------------------
Number Number
Name of of of
Beneficial Owner Shares Percent Shares Percent
- ------------------- -------- ------- -------- -------
Sandra L. Baylis 0 * 0 *
Bevil J. Hogg 207,650 * 0 *
Rodney F. Price 57,799,352<F2> 80% 7,867,842<F2> 100%
Robert C. Sherburne 500 * 0 *
Charles D. Yie 2,581,970<F3> 4% 0 *
Timothy W. Evans 1,000 * 0 *
Angelo A. Conti 0 * 0 *
Robert B. Senn 0 * 0 *
John G. Cowan 650 * 0 *
Directors and
Executive Officers
As a group (10 persons) 60,591,122 84% 7,867,842 100%
BENEFICIAL STOCK OWNERSHIP
(CONTINUED)
Shares of Series Shares of Series
B Preferred Stock C Preferred Stock
Beneficially Beneficially
Owned<F1><F2> Owned<F1><F2>
-------------------- ------------------
Number Number
Name of of of
Beneficial Owner Shares Percent Shares Percent
- ------------------- -------- ------- -------- -------
Sandra L. Baylis 0 * 0 *
Bevil J. Hogg 0 * 0 *
Rodney F. Price 786,357<F2> 100% 20,000,000<F2> 100%
Robert C. Sherburne 0 * 0 *
Charles D. Yie 0 4% 0 *
Timothy W. Evans 0 * 0 *
Angelo A. Conti 0 * 0 *
Robert B. Senn 0 * 0 *
John G. Cowan 0 * 0 *
Directors and
Executive Officers
As a group (10 persons) 786,357 100% 20,000,000 100%
* The percentage of shares beneficially owned does not exceed 1% of the
outstanding shares of the applicable class.
[FN]
<F1>
See Notes <F1> and <F2> to the Stock Ownership Chart on page 2.
<F2>
Consists entirely of shares of stock beneficially owned by BIL and which
Mr. Price may be deemed to own beneficially because he is a director of
BIL.
<F3>
Consists entirely of shares of stock beneficially owned by ASMVLP and which
Mr. Yie may be deemed to own beneficially because he is a director of
ASMVLP.
PROPOSAL NO. 2
REVERSE STOCK SPLIT
General
In response to recent concerns about the Company's stock price, the
Board of Directors on May 9, 1996 adopted a resolution proposing a one <F1>
for ten (10) reverse stock split of the presently issued and outstanding
shares of the Company's Common Stock (the "Reverse Split"). In connection
with the Reverse Split, the Board is recommending that the Certificate of
Incorporation of the Company (the "Certificate") be amended to decrease the
number of authorized shares of Common Stock from 120,000,000 to 12,000,000,
to increase the par value of such shares from $.01 to $.10 per share and to
reduce the voting rights of each share of Preferred Stock to a 1/10 vote on
all matters submitted to the Company's Common Stock (the "Amendment"). A
copy of the resolution proposing such Amendment is attached hereto as
Exhibit 1.
Approval of the Reverse Split and the Amendment will require the
affirmative vote of stockholders casting a majority of the votes of the
shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock, voting together as a single class, and
entitled to be cast at the meeting. If the Reverse Split is approved by
the stockholders, it will become effective upon the filing of the Amendment
with the Delaware Secretary of State (the "Effective Time").
At the Effective Time, each certificate representing a particular
number of shares of Common Stock outstanding immediately prior to the
Reverse Split (the "Old Shares") will be deemed automatically, without any
action on the part of the stockholders, to represent one-tenth (1/10) of
such number of shares of Common Stock after the Reverse Split (the "New
Shares"); provided, however, that no fractional New Shares will be issued
as a result of the Reverse Split. In lieu thereof, each stockholder whose
Old Shares are not evening divisible by ten (10) will be entitled to re-
ceive a cash payment from the Company for such fractional interests (see
Implementation of the Reverse Stock Split, below).
After the Effective Time, stockholders will be asked to surrender
certificates representing Old Shares in accordance with the procedures set
forth in a letter of transmittal to be sent by the Company. The New Shares
issued pursuant to the Reverse Split will be fully paid and nonassessable.
The voting and other rights that presently characterize the Common Stock
will not be altered by the Reverse Split.
Purposes of the Proposed Reverse Split
The Company's shares of Common Stock are listed, and trade, on the
American Stock Exchange ("AMEX"). For continued listing on AMEX it is
necessary that, among other things, the minimum price per share of the
Company's Common Stock exceed $3.00 per share. Over the past several
years the price of the Company's Common Stock has fluctuated and, for
protracted periods, has fallen below $3.00 per share. Management believes
that if the Reverse Split is approved and effectuated, the Company's shares
of Common Stock will have a minimum price in excess of $3.00 per share and,
therefore, will continue to be listed and traded on AMEX.
Additionally, Management believes the Reverse Split will enhance the
acceptability and marketability of the Common Stock by the financial
community and investing public. The reduction in the number of issued and
outstanding shares of Common Stock caused by the Reverse Split is expected
to result in a broader market for the Common Stock than that which
currently exists. Many brokerage firms and institutional investors do not
effect transactions in stock such as the Company's Common Stock because of
its relatively low trading price. In addition, the structure of trading
commissions also tends to have an adverse impact upon holders of lower
priced stock because the brokerage commission on a sale of lower priced
stock generally represents a higher percentage of the sales price than the
commission on a relatively higher priced issue. The expected increased
price level may also encourage interest and trading in the Common Stock and
promote greater liquidity for the Company's stockholders.
However, no assurance can be given that any or all of these effects
will occur, including, without limitation, that the market price per New
Share of Common Stock after the Reverse Split will be ten (10) times the
market price per Old Share of Common Stock before the Reverse Split, or
that such price will either exceed or remain in excess of the current
market price. Further, no assurance can be given that the market for the
Common Stock will be improved. Stockholders should be aware that the Board
of Directors cannot predict what effect the Reverse Split will have on the
market price of the Common Stock.
Principal Effects of the Reverse Split
If the Reverse Split is approved by the stockholders and implemented by
the Company, the Company's Certificate will be amended to decrease the
number of authorized shares of Common Stock from One Hundred Twenty Million
(120,000,000) shares to Twelve Million (12,000,000) shares. The Amendment
will also increase the par value per share of the Company's Common Stock
from $.01 to $.10. The increase in par value per share is intended to
maintain the Company's capital stock accounts at current levels.
The Common Stock is currently registered under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, as a result, the Company
is subject to the periodic reporting and other requirements of the Exchange
Act. The Reverse Split will not affect the registration of the Common
Stock under the Exchange Act.
Right of Appraisal
Under Delaware law, the proposed Reverse Split does not require the
Company to provide dissenting stockholders with a right of appraisal.
Management of the Company believes the price to be paid to the stockholders
for fractional shares to be fair and has made no provision for any
nonstatutory appraisal right.
Effect of Reverse Stock Split on Options and Preferred Stock
The Company currently has issued outstanding shares of Series A, B and
C Convertible Preferred Stock (the "Preferred Stock") and maintains the
1994 Stock Option Plan. Each of the above has terms providing for
adjustment of certain conversion rights in proportion to any change in the
amount of Common Stock outstanding. If the Reverse Split is approved by
the stockholders and implemented by the Company, appropriate adjustments
will be made. In addition, each share of Preferred Stock is currently
entitled to one <F1> vote on all matters submitted to a vote of the holders
of Common Stock and to vote together with the Common Stock as a class. In
order to maintain proportional voting privileges with the holders of Common
Stock, the terms of the Preferred Stock will be adjusted to provide that,
after the Effective Time, each share of Preferred Stock will be entitled to
a one-tenth (1/10) vote on all matters submitted to a vote of the Company's
Common Stock.
Federal Income Tax Consequences
The following discusses only the United States Federal income tax
consequences of the Reverse Split to the United States persons who hold
their shares of the Company as capital assets. It does not discuss all the
tax consequences that might be relevant to any Company stockholder entitled
to special treatment under United States Federal income tax law such as tax
exempt corporations and non-United States stockholders. This discussion is
based on the Internal Revenue Code of 1986, as amended, in effect on the
date of this document ("Code"), including any applicable Treasury
Regulations promulgated thereunder, current administrative rulings and
court decisions, all of which are subject to change. Any such change, which
may or may not be retroactive, could alter the tax consequences described
herein and may adversely affect the tax treatment of any Company
stockholder.
Because of the complexity of the tax laws and because the tax
consequences of the Reverse Split to any particular stockholder may be
affected by matters not discussed herein, it is strongly recommended that
each Company stockholder consult his or her tax advisor concerning the tax
consequences (including any state and local tax consequences) of the
Reverse Split applicable to their individual situation.
THE REVERSE SPLIT
The Reverse Split is intended to be treated as a reorganization
described in Section 368(a)(1)(E) of the Code. As a reorganization, the
Company stockholders receiving New Shares of Common Stock in exchange for
their Old Shares of Common Stock pursuant to the Reverse Split will not
recognize any gain or loss as a result of the exchange (except as otherwise
noted herein). The initial tax basis in the New Shares of Common Stock
received will be equal to such stockholder's adjusted tax basis in the Old
Shares of Common Stock surrendered therefor (less any portion of the
initial tax basis allocated to the fractional shares). The holding period
for the New Shares of Common Stock received will include such stockholder's
holding period in the Old Shares of Common Stock surrendered therefor.
Receipt of Cash in Lieu of Fractional Shares
Company stockholders who receive cash in lieu of fractional shares will
be treated as if they had received fractional New Shares of Common Stock in
the Reverse Split and such fractional New Shares were redeemed by the
Company immediately thereafter. Under the Code section applicable to
redemptions, Code Section 302, any Company stock holder who receives cash
in a redemption that qualifies as a "sale or exchange" will recognize
capital gain or capital loss equal to the difference between the amount of
the cash received and the tax basis of the fractional New Shares. Any
capital gain or capital loss resulting from the receipt of cash in lieu of
fractional shares will be long term if such stockholder has held their
Common Stock more than one year.
Under the rules of Section 302 of the Code, if the receipt of cash in
lieu of fractional shares pursuant to the Reverse Split does not constitute
a "sale or exchange" with respect to a given stockholder, then the cash
received by the stockholder in lieu of fractional shares would be treated
as a dividend to the extent that the Company has currently and/or
accumulated earnings and profits.
Implementation of the Reverse Stock Split
Assuming approval by the Company's stockholders, the Reverse Split will
be effective upon the filing of the Amendment with the Delaware Secretary
of State. Without any further action on the part of the Company or the
stockholders, at the Effective Time the certificates representing a
particular number of Old Shares will be deemed to represent one-tenth
(1/10) of such number of New Shares. No fractional New Shares will be
issued for any fractional New Share interest. Consequently, at the
Effective Time, each stockholder who would otherwise hold a fractional
interest in a New Share will be entitled to receive a fair cash payment
from the Company in lieu of such fractional interest in the amount of the
closing price of the Old Shares as reported by AMEX as of the close of
business on the date of the Effective Time multiplied by the number of Old
Shares that comprise such fractional interest of New Shares.
After the Effective Time, stockholders will be required to exchange
their stock certificates for new certificates representing the New Shares.
Stockholders will be furnished with the necessary materials and
instructions for the surrender and exchange of certificates of Old Shares
at the appropriate time by the Company's transfer agent. Stockholders will
not be required to pay a transfer or other fee in connection with the
exchange of certificates. The materials provided to stockholders will also
include information on how the payment of cash in exchange for fractional
interests will be handled.
Vote Required; Vote of Principal Stockholder
The Reverse Split proposal requires the approval of a majority of the
outstanding shares of the Company. BIL currently owns eighty percent (80%)
of the Company's outstanding shares of Common Stock, as well as one hundred
percent (100%) of the outstanding shares of its Series A, B and C Preferred
Stock. The Company has been advised by BIL that such shares will be voted
in favor of the Reverse Split proposal. It is contemplated that all of the
directors and executive officers who hold shares of the Common Stock also
will vote in favor of the Reverse Split proposal. Accordingly, it is
likely that the required number of votes will be obtained to approve the
Reverse Split proposal.
Board Recommendation
The Board of Directors recommends a vote FOR the adoption of the
proposed Reverse Split and for the resolution to amend the Certificate with
respect thereto as set forth in Exhibit 1 attached hereto.
PROPOSAL NO. 3
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon the recommendation of its Audit Committee,
has determined to appoint Price Waterhouse LLP as the Company's independent
accountants for the fiscal year 1996.
The Company has employed Price Waterhouse LLP as its independent
accountants since 1990. During the fiscal year ended December 31, 1995,
the audit services of Price Waterhouse LLP included the audit of the
Company's consolidated financial statements, services related to filings
with the Securities and Exchange Commission and accounting consultation
services.
The rendition of routine audit and non-audit services by Price
Waterhouse LLP was reviewed and approved in advance by the Audit Committee
on behalf of the Board of Directors. As part of the process, the Audit
Committee also considered whether the rendition by that firm of certain non-
audit services affects its independence as the Company's independent
accountants and concluded that it does not.
It is anticipated that representatives of Price Waterhouse LLP will be
present at the Annual Meeting and will have an opportunity to make a
statement, if they wish to do so, and to respond to any appropriate
inquiries of the stockholders or their representatives.
Vote Required and Recommended for Approval
The Board of Directors and its Audit Committee recommend that the
stockholders vote FOR ratification of the appointment of Price Waterhouse
LLP as independent accountants to perform the audit of the Company's
accounts for the 1996 fiscal year. The affirmative vote of a majority of
the shares of Common Stock, A Preferred Stock, B Preferred Stock and Series
C Preferred Stock present or represented by proxy at the meeting is
required for ratification of such appointment by the stockholders.
BIL has indicated that it intends to vote all of its Common shares,
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock FOR ratification of the appointment of Price Waterhouse LLP as
independent accountants. Such a vote by BIL, standing alone, would
constitute ratification of such appointment by the stockholders.
IDENTIFICATION OF EXECUTIVE OFFICERS
The following table sets forth certain information concerning all current
executive officers of the Company.
Name and Position Officer Business Experience
With the Company Age Since During Past Five Years
- ----------------- --- ------- ----------------------------
Bevil J. Hogg 48 1993 President and Chief Executive Officer of
President, Chief the Company since January 21, 1994;
Executive Officer Executive Vice President of the Company
and a Director from January 14, 1994 to January 20,
of the Company 1994; Chief Executive Officer of
Medical Composite Technology, Inc., a
wheelchair designer and manufacturer,
from December 16, 1992 to January 13,
1994; Chief Executive Officer of Cycle
Composite, Inc., a bicycle manufacturer,
from 1986 to December, 1992.
Timothy W. Evans 46 1993 Senior Vice President of the Company
Senior Vice President, since July 25, 1995; Vice President,
Chief Financial Officer Chief Financial Officer and Secretary of
and Secretary the Company since September 20,
1994; Corporate Controller from June,
1993 to September 20, 1994. Prior to
joining the Company was Director,
Corporate Development and Group
Controller of Chromalloy America
Corporation, a large diversified
company.
Angelo A. Conti 38 1994 Senior Vice President, Operations of the
Senior Vice President, Company since July 25, 1995; Vice
Operations President, Operations of the
Company since June 16, 1994; Director,
International Operations of Herman
Miller, Inc., a manufacturer of office
furniture systems, from 1992 to 1994;
Director, Northeast Operations of Herman
Miller from 1988 to 1992.
John G. Cowan 57 1974 President and Chief Executive Officer of
President and Chief Everest & Jennings Canadian Limited,
Executive Officer of Ontario, Canada, a wholly-owned
Everest & Jennings subsidiary of the Company, since 1974. A
Canadian Limited Director of Everest & Jennings
Canadian Limited from 1974 to March,
1996.
Wim Van Voorst 44 1995 Chief Operating Officer, Everest and
Chief Operating Officer, Jennings Canadian Limited, since March
Chief Financial Officer 1996; Chief Financial Officer, Everest &
of Everest & Jennings Jennings Canadian Limited, since June
Canadian Limited 1995; Chief Financial Officer of S.A.
Armstrong Limited, a multinational
manufacturer of pumps, valves and heat
exchangers, from 1992 to 1995; Finance
Director of Colgate-Palmolive India
Limited, a manufacturer of toothpaste
and soap, from 1988 to 1992.
INFORMATION CONCERNING MANAGEMENT
Summary of Cash Compensation and Certain Other Compensation
The following Summary Compensation Table shows, for the fiscal years
ended December 31, 1993, 1994 and 1995, the cash compensation paid by the
Company as well as certain other compensation paid or accrued for those
years to the Chief Executive Officer the other three current executive
officers and one former executive officer whose salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 1995 for services
rendered in all capacities:
SUMMARY COMPENSATION TABLE
Annual Compensation
------------------------------------------
Other
Annual
Name and Salary Bonus Compensation
Principal Position Year ($) ($) ($)
- ------------------ ---- ------ ----- ------------
Bevil J. Hogg <F1> 1995 223,000 0 0
President and 1994 211,666 0 0
Chief Executive Officer 1993 - - -
of the Company
Timothy W. Evans <F3> 1995 116,613 0 0
Senior Vice President 1994 100,000 0 0
and Chief Financial Officer 1993 - - -
of the Company
Angelo A. Conti <F5> 1995 116,063 0 0
Senior Vice President, 1994 52,083 0 0
Operations of the Company 1993 - - -
Robert B. Senn <F7> 1995 161,884 0 0
Executive Vice President, 1994 53,246 0 0
Sales & Marketing 1993 - - -
John G. Cowan 1995 120,066 0 0
President of 1994 118,260 0 0
E&J Canadian Limited 1993 121,500 0 0
SUMMARY COMPENSATION TABLE (continued)
Long-Term Compensation
----------------------------------
Awards Payouts
---------------------- -------
Restricted All
Stock Options/ LTIP Other
Name and Award(s) SARs Payouts Compensation
Principal Position ($) ($) ($) ($)
- ------------------ ------- ------ ----- ------------
Bevil J. Hogg 0 0 0 0
President and 0 1,000,000 0 58,679<F2>
Chief Executive Officer - - - -
of the Company
Timothy W. Evans 0 75,000 0 0
Senior Vice President 0 75,000 0 135<F4>
and Chief Financial - - - -
Officer of the Company
Angelo A. Conti 0 75,000 0 45,291<F6>
Senior Vice President, 0 75,000 0 19,943<F6>
Operations of the Company - - - -
Robert B. Senn 0 0 0 11,023<F8>
Executive Vice President, 0 0 0 75,742<F8>
Sales & Marketing - - - -
John G. Cowan 0 0 0 0
President of 0 250,000 0 0
E&J Canadian Limited 0 0 0 0
[FN]
<F1>
Hired on January 21, 1994.
<F2>
Represents relocation expense in connection with his hiring including
$10,680 tax gross-up on relocation expenses.
<F3>
Promoted to executive officer on September 20, 1994; he was employed by the
Company on June 1, 1993.
<F4>
Represents the Company's matching contribution under the 401K Plan.
<F5>
Hired on June 16, 1994.
<F6>
Represents relocation expense in connection with his hiring including
$22,809 tax gross-up on relocation expenses.
<F7>
Hired on September 12, 1994; resigned December 1, 1995.
<F8>
Represents relocation expense in connection with his hiring including
$41,172 tax gross-up on relocation expenses.
The Company has not included in the table above the value of incidental
personal perquisites furnished by the Company to its executive officers
since such incidental personal value did not exceed the lesser of $50,000
or 10% of the total of annual salary and bonus reported for the named
executive officers in the table above.
Stock Options
The following table contains information concerning grants of stock
options to the named executive officers for 1995. The exercise price for
all of the grants of stock options was the fair market value on the date of
the grant.
OPTION GRANTS DURING THE
FISCAL YEAR ENDED DECEMBER 31, 1995
Individual Grants
------------------------------------------------
% of Total
Options
Granted to
Options Employees Exercise or
Granted in Fiscal Base Price Expiration
Name # 1995 ($/Sh) Date
- ------------------ ------ ---------- --------- ----------
Bevil J. Hogg -- -- -- --
Timothy W. Evans 75,000 7% .85 11/1/99
Angelo C. Conti 75,000 7% .85 11/1/99
John G. Cowan -- -- -- --
Robert B. Senn -- -- -- --
OPTION GRANTS DURING THE
FISCAL YEAR ENDED DECEMBER 31, 1995
(continued)
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price Appreciation
for Option Term <F1>
--------------------------
5% ($) 10% ($)
------ -------
Bevil J. Hogg -- --
Timothy W. Evans 12,604 57,832
Angelo C. Conti 12,604 57,832
John G. Cowan -- --
Robert B. Senn -- --
[FN]
<F1>
The dollar amounts under the 5% and 10% columns in the Option Grants table
are the result of calculations required by rules of the Securities and
Exchange Commission and, therefore, are not intended to forecast possible
future appreciation of the stock price of the Common Stock of the Company.
Although permitted by SEC rules, the Company did not use an alternative
formula or model to compute a grant date valuation because, given the
Company's recent financial performance, the Company is not aware of any
formula which will determine with any reasonable degree of accuracy a
present value based on future unknown or volatile factors. Amounts shown
reflect the difference between the appreciation and the exercise price.
The following table sets forth information with respect to the named
executive officers regarding the value of their unexercised uptions held as
of December 31, 1995. No options were exercised during 1995.
AGGREGATED OPTION VALUES AT DECEMBER 31, 1995
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1995 at December 31, 1995
(#) ($)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Bevil J. Hogg 524,589 600,000 54,107 0
Timothy W. Evans 14,000 157,000 0 0
Angelo C. Conti 0 150,000 0 0
John G. Cowan 62,500 250,000 0 0
Robert B. Senn 0 0 0 0
COMPARATIVE STOCK PERFORMANCE
The following graph sets forth a comparison of cumulative total stockholder
returns (assuming investment of $100 at December 31, 1990 and reinvestment
of dividends) of the Company's Class A Common shares and Class B common
shares (single class after November 18, 1993), the Standard & Poors 500
Composite Stock index ("S&P 500"), and the Standard & Poors Health Care
Composite Index ("Health Care Composite") for the period from December 31,
1990 through December 31, 1995.
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
S&P 500 Index $130 $140 $155 $157 $215
Health Care Composite $154 $129 $118 $134 $211
E&J Class A Common $200 $138 $115 $ 45 $ 58
E&J Class B Common $182 $ 95 $ 79 $ 31 $ 40
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 1995, no officers or
employees of the Company or any of its subsidiaries, other than Bevil J.
Hogg, President and Chief Executive Officer of the Company, participated in
deliberations of the Company's Board concerning executive officer
compensation and there were no interlocking relationships between any
executive officer of the Company and any other entity.
Report of the Board of Directors on Executive Compensation
The Board is responsible for developing and implementing the Company's
executive compensation program and determines on an annual basis the nature
and amount of compensation to be paid to the President and Chief Executive
Officer and to the other executive officers of the Company.
The compensation program for executive officers, including the
President and Chief Executive Officer, currently consists of annual base
compensation, participation in the Company's 1994 Stock Option Plan ("1994
Plan") and other employee benefit programs.
As the Company has restructured and replaced members of its management
team, it has attempted to lower the compensation levels paid to senior
officers (including the Chief Executive Officer) while at the same time
removing reporting layers, thus flattening the organization structure.
When the Company returns to profitable operations, some compensation levels
may be reviewed and bonus plans may be implemented to raise the
compensation levels of those senior officers who were instrumental in this
recovery.
In 1995 the Board of Directors granted stock options to three executive
officers and certain associates. The quantity of options granted an
individual associate was based on the level of their position within the
organization and was generally established at a level intended to incent
associates to perform in a manner that promotes the overall performance of
the Company.
The Revenue Reconciliation Act of 1993 (the "Act") precludes the
Company from making a deduction for certain compensation in excess of $1
million per year paid or accrued with respect to the Chief Executive
Officer and the four other highest paid Executive Officers on and after
January 1, 1994. As of April 24, 1996, neither the Board nor the Company
has taken any action to qualify compensation (not otherwise qualified under
the Act) for deduction by the Company. Based on present levels of
compensation, it does not appear that any of the named executive officers'
non-deductible compensation will exceed $1 million in 1996.
1995 Board of Directors:
Sandra L. Baylis
Bevil J. Hogg
Rodney F. Price
Robert C. Sherburne
Charles D. Yie
CORPORATE GOVERNANCE
Meetings of the Board
Regular meetings of the Board generally are held on a monthly basis.
Special meetings are called when necessary. During the Company's fiscal
year ended December 31, 1995, there were eight Board meetings. All current
directors attended more than 75% of the meetings of the Board and of Board
committees on which they served.
Committees of the Board
The standing committees of the Board are the Audit Committee and the
Compensation Committee. Membership for the Audit Committee was as follows:
from January 1, 1995 to June 5, 1995 -- Dianne J. Jennings, Robert C.
Sherburne and Charles D. Yie; from June 6, 1995 to the Record Date --
Rodney F. Price, Robert C. Sherburne and Charles D. Yie. Membership for
the Compensation Committee was as follows: from January 1, 1995 to June 5,
1995 -- Dianne J. Jennings, Rodney F. Price and Charles D. Yie; from June
6, 1995 to the Record Date -- Sandra L. Baylis, Rodney F. Price and Charles
D. Yie
Audit Committee
The Audit Committee has responsibility for recommending to the Board of
Directors a firm of independent accountants to audit the Company's
accounts, for reviewing the scope and results of audits, for reviewing both
the auditors' recommendations to management and the response of management
to such recommendations, and for reviewing the adequacy of internal
financial and accounting controls. During fiscal 1995, this committee met
three times.
Nominating Committee
The ad hoc Nominating Committee, which consists of the full Board,
considers as potential director nominees persons recommended by
stockholders. Stockholder recommendations should, where possible, include
a brief description of the potential nominee's business background for the
last five years and a list of other publicly held companies of which the
potential nominee is a director. Recommendations should be submitted to
the ad hoc Nominating Committee in care of the Secretary of the Company by
December 17, 1996.
Compensation of Directors
No non-management Directors received compensation for attendance at
either Board or Committee meetings during 1995, other than reimbursement
for expenses in connection with attending such meetings.
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 directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission and the American Stock
Exchange initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten-percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, during the fiscal year ended December 31, 1995
all Section 16(a) filing requirements applicable to its officers, directors
and greater than ten-percent beneficial owners were complied with.
CERTAIN TRANSACTIONS
Principal Terms of Series A Preferred Stock. The principal terms of
the Series A Preferred Stock are as follows: Dividends -- the Series A
Preferred Stock bears 9% cumulative dividends mandatorily payable (subject
to applicable law) at the end of each fiscal quarter of the Company, in
cash, or, at the option of the Company, in kind, as additional Series A
Preferred Stock ("In-Kind Dividend Stock"); Conversion -- the Series A
Preferred Stock is convertible into Common Stock on a share-for-share
basis, subject to anti-dilution provisions; Registration Rights -- the
Series A Preferred Stock has registration rights as follows with respect to
Common Stock issued upon conversion (for the purpose of registration) of
Series A Preferred Stock and Common Stock which both were issued upon
conversion (for a purpose other than registration) of shares of Series A
Preferred Stock by BIL and are still held by BIL (collectively, the "Series
A Registration Shares"): (a) the holders of the greater of (i) 2,761,112
shares of Series A Preferred Stock or (ii) 50% or more of the sum of (x)
the number of shares of Series A Preferred Stock then outstanding plus (y)
the Common Stock, which both were issued on conversion of Series A
Preferred Stock by BIL and are still held by BIL, may make a one-time
demand that the Company register the distribution of the Series A
Registration Shares; and (b) the holders of Series A Registration Shares
have the right to request that the distribution of such Series A
Registration Shares be included in any registration statement under the
Securities Act of 1933 filed by the Company (with the exception of certain
stock option, merger and exchange registration statements); Voting Rights -
- - the Series A Preferred Stock has the same voting rights as, and the right
(except as limited by applicable law) to vote together with, the Common
Stock; Redemption -- the Series A Preferred Stock is redeemable at the
Company's option from and after April 27, 1999 at a per share redemption
price equal to (i) for all shares except the In-King Dividend Stock,
$1.67458437, and (ii) for the In-Kind Dividend Stock an amount equal to
150% of the "market price" of the Class A Common Shares (or, if applicable,
Single Class Common Stock) as of the redemption date; Sinking Fund -- there
is no sinking fund requirement for redemption of the Series A Preferred
Stock; and Liquidation Preference -- the Series A preferred Stock has a
liquidation preference per share equal to $1.67458437. Except to the
extent the Company is restricted under applicable law from so doing, the
terms of the Series A Preferred Stock do not restrict the Company from
repurchasing or redeeming the Series A Preferred Stock while there is an
arrearage in the payment of dividends.
During the fiscal year ended December 31, 1995 BIL received 649,638
shares of in kind Series A Convertible Preferred Stock dividends and
interest on debt securities totaling $1,087,874.
Principal Terms of Series B Preferred Stock. The principal terms of
the Series B Preferred Stock include the following: Dividends -- the
Series B Preferred Stock has the same right to dividends and distributions
as the Common Stock; Conversion -- the Series B Preferred Stock is
convertible into Common Stock on a share-for-share basis, subject to anti-
dilution provisions; Registration Rights -- there are registration rights
as follows with respect to Common Stock issued upon conversion (for the
specific purpose of registration) of Series B Preferred Stock and Common
Stock, which both were issued upon conversion (for a purpose other than
registration) of shares of Series B Preferred Stock by BIL and are still
held by BIL (collectively, the "Series B Registration Shares"): (a) the
holders of the greater of (i) 384,575 shares of Series B Preferred Stock or
(ii) 50% or more of the sum of (x) the number of shares of Series B
Preferred Stock then outstanding plus (y) the Common Stock, which both were
issued on conversion of Series B Preferred Stock by BIL and are still held
by BIL, may make a one-time demand that the Company register the
distribution of the Series B Registration Shares; and (b) the holders of
Series B Registration Shares have the right to request that the
distribution of such Series B Registration Shares be included in any
registration statement under the Securities Act of 1933 filed by the
Company (with the exception of certain stock option, merger and exchange
registration statements); Voting Rights -- the Series B Preferred Stock has
the same voting rights as, and the right (except as limited by applicable
law) to vote together with, the Common Stock; Redemption -- the Company, at
its option, may redeem the Series B Preferred Stock at any time prior to
April 27, 1999 at a per share redemption price (the "Series B Redemption
Price") equal to the quotient of (a) the aggregate amount of interest
forgiven pursuant to the Amended Credit Agreement, pursuant to which BIL
acquired Security Pacific National Bank's interest in the $31,000,000
Amended and Restated Promissory Note issued August 30, 1991 between the
Company, Everest & Jennings, Inc. And Security Pacific National Bank,
divided by (b) 786,357 shares; Sinking Fund -- there is no sinking fund
requirement for redemption of the Series B Preferred Stock; and Liquidation
Preference -- the Series B Preferred Stock has a liquidation preference per
share equal to the Series B Redemption Price plus accrued, unpaid
dividends, if any. Except to the extent the Company is restricted under
applicable law from so doing, the terms of the Series B Preferred Stock
will not restrict the Company from repurchasing or redeeming the Series B
Preferred Stock while there is an arrearage in the payment of dividends.
Principal Terms of Series C Preferred Stock. The principal terms of
the Series C Preferred Stock are as follows: Dividends -- 7% cumulative
dividends mandatorily payable (subject to applicable law), commencing after
the Company achieves two consecutive fiscal quarters of operating profit,
accruing as of the first day of such quarters, and payable on the first
business day of each April, commencing with the first April following the
end of the fiscal year in which the second of the consecutive fiscal
quarters occurs and payable in kind, in shares of Common Stock ("In-Kind
Dividend Stock"), at the option of the Company; Conversion --
convertibility into Common shares on a share-for-share basis, subject to
anti-dilution provisions; Registration Rights -- as contained in the
Registration Rights Agreement, and as follows with respect to shares of
Common Stock issuable upon conversion of Series C Preferred Stock: (a) the
holder may make a one-time demand that the Company register distribution of
shares of Common Stock for not less than 500,000 shares; and (b) the holder
has the right to request that the distribution of its shares of Common
Stock be included in any registration statement under the Securities Act of
1933 filed by the Company; Sinking Fund -- none; Redemption -- none;
Preemptive Rights -- none; Voting Rights -- the same voting rights as, and
the right (except as limited by applicable law) to vote together with, the
Common shares; and Liquidation Preference -- a liquidation preference per
share equal to $1.00.
Guarantee of Certain Indebtedness. In December 1995, HSBC and E&J Inc.
agreed to amend the Revolving Credit Agreement originally entered into on
September 30, 1992 and extend its term through September, 1997. The HSBC
facility, as amended, provides up to $6 million of letter of credit
availability and cash advances of up to $25 million to E&J Inc. Advances
under the Revolving Credit Agreement bear interest at the prime rate plus
0.25%, as announced by Marine Midland Bank N.A. from time to time (8.5% at
December 31, 1995), and are guaranteed by Brierley Investments Limited, an
affiliate of BIL. Repayment of existing debt with BIL is subordinated to
the HSBC debt, and Brierley Investments Limited, an affiliate of BIL,
guaranteed its repayment.
Lease Transaction. An affiliate of Brierley Investments Limited
("BIL"), Steego Corporation ("Steego"), is leasing to the Company the
computer system and the telephone system which are located at the Company's
facilities in St. Louis. Steego has entered in to a back-to-back lease
arrangement for such systems with Sentry Financial Corporation, which is
not affiliated with either BIL or Steego.
Indirect Interests. Rodney F. Price, a director of the Company, is
also a director of BIL. As a result, Mr. Price may be deemed to have an
indirect interest in the foregoing transactions with BIL.
EXPENSES OF PROXY SOLICITATIONS
The principal solicitation of Proxies is being made by mail. However,
certain officers, directors and employees of the Company, none of whom will
receive additional compensation therefor, may solicit Proxies by telegram,
telephone or other personal contact. The Company will bear the cost of the
solicitation of the Proxies, including postage, printing and handling, and
will reimburse the reasonable expenses of brokerage firms and others for
forwarding solicitation materials to beneficial owners of shares.
ANNUAL REPORT
Included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 are, among other things, a description of the
business of the Company and its subsidiaries, consolidated balance sheets
of the Company and its subsidiaries for the fiscal years ended December 31,
1994 and December 31, 1995, the related statements of operations,
stockholders' equity and cash flows for each of the three fiscal years in
the period ended December 31, 1995, and a financial summary for the five
fiscal years ended December 31, 1995. A copy of the Company's Annual
Report on Form 10-K is being mailed to stockholders prior to or together
with this Proxy Statement. Stockholders are urged to read the Company's
Annual Report carefully.
Upon written request and payment of a copying charge of $.20 per page,
the Company will furnish to any such stockholder a copy of the exhibits to
the Annual Report on Form 10-K for the fiscal year ended December 31, 1995.
Requests should be addressed to Timothy W. Evans, Secretary, Everest &
Jennings International Ltd., 4203 Earth City Expressway, Earth City,
Missouri 63045.
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR PRESENTATION AT 1996 ANNUAL MEETING
Any proposal that a stockholder wishes to present for consideration at
the 1997 Annual Meeting and which such stockholder wishes included in the
Company's 1997 proxy materials must be received by the Company no later
than January 5, 1997.
OTHER BUSINESS TO BE TRANSACTED
As of the date of this Proxy Statement, the Board of Directors knows of
no other business to be presented for action at the Annual Meeting. As for
any business that may properly come before the Annual Meeting, the Proxies
confer discretionary authority in the persons named therein. Those persons
will vote or act in accordance with their best judgment with respect
thereto.
YOU ARE URGED TO VOTE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE AT YOUR EARLIEST CONVENIENCE, WHETHER OR
NOT YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
TIMOTHY W. EVANS
Secretary
St. Louis, Missouri
May ____, 1996
EXHIBIT 1
Proposed Amendment to Paragraph A of Article IV of the Certificate of
Incorporation effecting a reverse stock split by changing the number of
authorized shares of Common Stock and a proposed amendment to the voting
rights of the Series A, B and C Preferred Stock to maintain equal voting
rights relative to the Common Stock.
RESOLVED, that the Board of Directors declares it advisable to amend
Paragraph A of Article IV of the Certificate of Incorporation of the
Company to read as follows:
"A. The Corporation is authorized to issue one class of
Common Stock. The number of shares of Common Stock which
the corporation is authorized to issue is 12,000,000, par
value ten cents ($0.10) each."
FURTHER RESOLVED, that the Board of Directors declares it advisable to
amend Section 3(a) of the Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock to read as follows:
"(a) except as provided in Section 3(c) below, each
share of Series A Convertible Preferred Stock shall
entitle the holder thereof to a 1/10 vote on all matters
submitted to a vote of the Corporation's holders of
Common Stock;"
FURTHER RESOLVED, that the Board of Directors declares it advisable to
amend Section 3(a) of the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock to read as follows:
"(a) except as provided in Section 3(c) below, each
share of Series B Convertible Preferred Stock shall
entitle the holder thereof to a 1/10 vote on all matters
submitted to a vote of the Corporation's holders of
Common Stock;"
FURTHER RESOLVED, that the Board of Directors declares it advisable to
amend Section 3(a) of the Certificate of Designations, Preferences and
Rights of Series C Convertible Preferred Stock to read as follows:
"(a) except as provided in Section 3(c) below, each
share of Series C Convertible Preferred Stock shall
entitle the holder thereof to a 1/10 vote on all matters
submitted to a vote of the Corporation's holders of
Common Stock;".
(PROXY CARD)
Everest & Jennings International Ltd.
May ___, 1996
Dear Shareholder:
The 1996 Annual Meeting of Shareholders of Everest & Jennings International
Ltd. will be held at the Company's corporate office, 4203 Earth City
Expressway, Earth City, Missouri 63045, on Tuesday, June 4, 1996, at 11:00
a.m. local time.
It is important that your shares be represented at this meeting. Whether
or not you plan to attend the meeting, please review the enclosed proxy
materials, complete the proxy form attached below and return it promptly in
the envelope provided.
PLEASE MARK THE PROXY BELOW, SIGN AND DATE ON THE REVERSE SIDE,
DETACH AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE
-----------------------------------------------------------------------
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
EVEREST & JENNINGS INTERNATIONAL LTD.
The undersigned hereby appoints Bevil J. Hogg and Timothy W. Evans, or
either of them, each with full power of substitution, as proxies of the
undersigned to vote, as designated below, all the shares of Common Stock of
Everest & Jennings International Ltd. that the undersigned would be
entitled to vote if personally present at the meeting of shareholders of
the Company to be held on June 4, 1996 at 11:00 a.m. local time, at the
corporate office of the Company, 4203 Earth City Expressway, Earth City,
Missouri 63045, and at any adjournment thereof:
1. ELECTION OF DIRECTORS
___ FOR all nominees listed below
(except as marked to the contrary below)
___ WITHHOLD AUTHORITY
to vote for all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name on the list below:
Sandra L. Baylis, Bevil J. Hogg, Rodney F. Price, Robert C. Sherburne,
Charles D. Yie
2. PROPOSAL TO APPROVE REVERSE STOCK SPLIT.
___ FOR ___ AGAINST ___ ABSTAIN
3. PROPOSAL TO RATIFY APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS FOR THE COMPANY.
___ FOR ___ AGAINST ___ ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the meeting or any adjournment
thereof.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this
Proxy will be voted FOR the election of director nominees listed in
proposal 1, FOR proposal 2 and FOR proposal 3.
The undersigned acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated May _____, 1996, and a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995.
Date _____________________ , 1996
Signature _______________________________________
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer.
