<PAGE> 1
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
Filed by the Registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HELM RESOURCES, INC.
_______________________________________________________________________
(Name of Registrant as Specified in its Charter)
Clare J. Attura
_______________________________________________________________________
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act 0-11(c)(1)(ii), 14a-6(i)(1) or Rule 14a-6(j)(2)
[ ] $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:
_______________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing fee for which the offsetting fee
was previously paid. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE> 2
HELM RESOURCES, INC.
----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 29, 1996
----------------------
TO OUR STOCKHOLDERS:
You are cordially invited to attend the Annual Meeting of Stockholders
of Helm Resources, Inc. (the "Company") to be held on Tuesday, October 29,
1996, at 2:00 p.m., at the offices of the Company, 537 Steamboat Road,
Greenwich, Connecticut, for the following purposes:
1. To elect six directors; and
2. to transact such other business as may properly come before the
meeting or any adjournment of the meeting.
Only stockholders of record at the close of business on September
18, 1996 will be entitled to notice of and to vote at the meeting.
Please sign, date and mail the enclosed proxy card in the return
envelope provided for your convenience.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE MARK,
DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE
ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. PLEASE RETURN YOUR PROXY CARD REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD AND WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND
VOTE IN PERSON IF YOU WISH.
By Order of the Board of Directors
David S. Lawi, Secretary
September 18, 1996
Greenwich, Connecticut
<PAGE> 3
HELM RESOURCES, INC.
537 STEAMBOAT ROAD
GREENWICH, CONNECTICUT 06830
(203) 629-1400
-------------------
PROXY STATEMENT
-------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of the Helm Resources, Inc. (the
"Company") for use at the the Company's Annual Meeting of Stockholders to
be held at the offices of the Company at 537 Steamboat Road, Greenwich,
Connecticut on Tuesday, September 18, 1996 at 2:00 p.m. Eastern Standard
Time, and at any adjournment of the meeting. The proxy may be revoked at
any time before it is exercised by notice, in writing, to the secretary of
the Company.
The proxy statement and form of proxy are being sent to shareholders on
or about September 18, 1996.
The Board of Directors has fixed the close of business on September 18,
1996 as the record date for the meeting. On that date, the Company had
outstanding 2,529,378 shares of common stock. Only stockholders of record
at the close of business on that date will be entitled to vote at the
meeting or at any adjournment of the meeting. Each such shareholder will
be entitled to one vote for each share held and may vote in person or by
proxy authorized in writing. Holders of the Company's common stock have no
cumulative voting rights. The presence at the meeting, in person or by
proxy, of the holders of the majority of the outstanding shares of common
stock entitled to vote is necessary to constitute a quorum.
Proxies in the accompanying form are solicited on behalf and at the
direction of the Board of Directors. All shares of common stock
represented by properly executed proxies will be voted at the meeting in
accordance with the instructions made on the proxies, unless such proxies
have been previously revoked. If authority to vote a proxy has not been
withheld and no instruction is indicated, the shares will be voted FOR the
election of the Board of Directors' nominees for directors. If any other
matters are properly presented at the meeting for action, including a
question of adjourning the meeting from time to time, the persons named in
the proxies and acting thereunder will have discretion to vote on such
matters in accordance with their best judgment.
VOTE REQUIRED
Directors will be elected by a plurality of the votes cast at the
meeting. With regard to the election of directors, votes may be cast in
favor or withheld; votes that are withheld will be excluded entirely from
the vote and will have no effect. With respect to any other proposal,
abstentions may be specified and will have the effect of a negative vote.
Likewise, broker non-votes are counted for purposes of determining the
presence or absence of a quorum with respect to a given
- 3-
<PAGE> 4
proposal, but they are not counted for purposes of determining whether
the proposal has been approved.
REVOCATION OF PROXIES
A stockholder executing and returning a proxy has the power to revoke
it before it is exercised. A stockholder who wishes to revoke a proxy
can do so by delivering a subsequently signed and dated proxy or other
written notice to the Secretary of the Company at any time prior to the
vote at the meeting or by appearing at the meeting and voting in person
the shares to which the proxy relates. Attendance at the Meeting by a
stockholder who has executed and returned the enclosed proxy does not
alone constitute revocation of the proxy. Any written notice revoking a
proxy should be sent to the Company, attention: David S. Lawi, Secretary,
at the Company's executive offices which are located at 537 Steamboat
Road, Greenwich, Connecticut 06830.
SOLICITATION
After the initial mailing of this Proxy Statement, proxies may be
solicited by telephone, telegram or personally by directors, officers and
other employees of the Company (who will not receive any additional
compensation therefore). All expenses with respect to this solicitation
of proxies will be borne by the Company. Arrangements will be made with
brokers and other custodians, nominees and fiduciaries to send proxies
and the proxy materials to their principals, and the Company will, upon
request, reimburse them their reasonable expenses in doing so. The
Company may engage an outside proxy soliciting firm to assist in the
soliciation of proxies, and reasonable fees and out of pocket expenses of
such firm will be paid by the Company.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement, and, if given or
made, such information or representation should not be relied upon as
having been authorized by the Company. This Proxy Statement does not
constitute the solicitation of a proxy in any jurisdiction from any
person to whom it is unlawful to make such proxy solicitation in such
jurisdiction.
----------------------------
The date of this Proxy Statement is September 18, 1996
----------------------------
- 4-
<PAGE> 5
Nominees for Directors
- ----------------------
At the meeting, six directors are to be elected. The persons named in
the enclosed form of proxy have advised that, unless contrary instructions
are received, they intend to vote for the six nominees named by the Board
of Directors of the Company and listed below. If, by reason of death or
other unexpected occurrence, one or more of these nominees is not
available for election, the persons named in the form of proxy have
advised that they will vote for such substitute nominees as the Board of
Directors of the Company may propose.
Name, Principal Occupation
Over Past Five Years and Director of
Other Directorships of Nominee Age Company Since
- ------------------------------ --- -------------
Herbert M. Pearlman................... 63 l980
Mr. Pearlman has been the Company's president and chief executive
officer since l980 and became the chairman of the Company's Board of
Directors in June 1984. Mr. Pearlman is a co-founder and since l982 has
been a director of Seitel, Inc. ("Seitel"), a New York Stock Exchange
company which is engaged in acquiring and marketing seismic data. In
March l987, he was elected as the chairman of Seitel's
Board of Directors. Since l984, Mr. Pearlman has been chairman of the
board of directors of InterSystems, Inc., a public company engaged in
the design and manufacture of industrial and agricultural equipment and
in chemical compounding ("ISI"). 1990, Mr. Pearlman became chairman of
the board of directors of Unapix Entertainment, Inc. ("Unapix"), a
Delaware corporation and a public company engaged in the business of
marketing and distributing television programs and motion pictures. In
1994, Mr. Pearlman became chairman of the board of ABC Dispensing
Technologies, Inc. ("ABC"), a public company which is engaged in the
business of designing and manufacturing equipment which dispenses
liquids, solids, gases, pastes and gels.
Walter M. Craig, Jr.................. 42 1993
Mr. Craig has been president of Professionals' Financial Services,
Inc., a Delaware corporation which is in the business of financing
receivables of healthcare and other enterprises, since 1993. He has
also served as president and a director of PLB Management Corp., the
general partner of The Mezzanine Financial Fund, L.P. (the "Fund"), a
Delaware limited partnership which makes collateralized loans to
companies, and as president of the Fund, since 1993. Mr. Craig has
been a director of Seitel since 1987, a director of Unapix since 1993
and a director of ISI since 1993. He has also served as a director,
executive vice president and chief operating officer of Helm since
1993. Prior thereto, Mr. Craig served as vice president for business
and legal affairs for Helm.
- 5-
<PAGE> 6
David S. Lawi......................... 61 l980
Mr. Lawi has been the Company's executive vice president and
secretary from l980 until 1992, when he was appointed secretary
treasurer. Since l984, Mr. Lawi has been a director and secretary of
ISI and since 1986 he has been chairman of ISI's Executive Committee.
Since l982, Mr. Lawi has been a director of Seitel and in 1989 he was
elected chairman of Seitel's Executive Committee. In 1990, Mr. Lawi
became a director of Unapix, and in 1993, he became treasurer and
secretary of Unapix, and chairman of the Executive Committee of Unapix.
Joseph J. Farley...................... 73 l982
From l982 until February 1991, Mr. Farley served as the Company's
vice president for marketing and engineering. Prior to joining the
Company, Mr. Farley had been a senior executive with International
Business Machines Corporation ("IBM") for 32 years, where he held
various positions in engineering, marketing and field engineering. His
final assignment at IBM was corporate director of marketing/standard
practices.
William Lerner........................ 63 l985
Mr. Lerner is a practising attorney in New York and Pennsylvania.
From 1989 to 1990, he was General Counsel to Hon Development Company, a
Southern California real estate development company. Mr. Lerner has
been a director of Seitel since July l984. Mr. Lerner is also a
director of several other public companies, including Rent-Way, Inc., a
company engaged in the rental-purchase business, and Micro-toMainframes,
Inc., a provider and systems integrator of advanced technology
communications products and Internet services.
John E. Stieglitz..................... 63 l986
Since l976, Mr. Stieglitz has been president of Conspectus, Inc., a
privately held company engaged in providing consulting services in the
area of executive recruiting. Mr. Stieglitz has been a director of
Seitel since 1989, a director of ISI since 1991 and a director of ABC
since January 1995.
Executive Officers
- ------------------
In addition to Messrs. Pearlman, Craig and Lawi, the Company has
one additional executive officer. Daniel T. Murphy, 57, joined the
Company in May 1984 as vice president and chief financial officer. In
April 1992 he was appointed executive vice president-finance. In May
1984 he became vice president-finance and operations, and in 1985 he
became executive vice president of operations and chief financial
officer, of ISI. He became a director of ISI in 1986.
All of the Company's executive officers spend a majority of their
work-related time on the various businesses of the Company and its
subsidiaries and affiliates, and allocate their time among these
entities according to the relative need of each for executive
assistance.
- 6-
<PAGE> 7
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors and persons who own more than 10% of a
registered class of the Company's equity securities to file with the
Securities and Exchange Commission (the "SEC") and the American Stock
Exchange initial reports of ownership and reports of changes of
ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a)
reports they file. Based upon a review of reports and amendments thereto
furnished to the Company during, and with respect to, its most recent
fiscal year, and written representations furnished to the Company, it
appears that all such reports required to be filed were filed on a
timely basis.
Attendance at Meetings; Committees
- ----------------------------------
During 1995, the Company's Board of Directors held one meeting,
which was attended by all of the directors.
The Board of Directors has a standing Audit Committee, Compensation
and Stock Option Committee and Executive Committee. During 1995, the
Audit Committee as well as the Compensation and Stock Option Committee
consisted of Messrs. Lerner and Stieglitz. The function of the Audit
Committee is to select the independent public accountants of the
Company, to review with them the Company's financial statements, to
review the Company's financial systems and controls and to oversee other
matters relating to the integrity of the Company's finances and
financial statements as the Committee may consider appropriate. The
function of the Compensation and Stock Option Committee is to determine
the compensation of the officers of the Company and to administer the
Company's stock option plans. The Executive Committee is comprised of
Messrs. Pearlman, Lawi and Farley, who is the Chairman. The function of
the Executive Committee is to act on an interim basis for the full
Board. The Audit Committee, the Compensation and Stock Option Committee
and the Executive Committee did not meet separate from the entire Board
of Directors during 1995.
In addition, in June 1994, the Board of Directors appointed a
Special Committee to evaluate and negotiate the sale of Interpak
Holdings, Inc. to InterSystems, Inc. The Special Committee is chaired
by Mr. William Lerner, and Messrs. Herbert M. Pearlman and David S. Lawi
also serve on this Committee. During 1995, the Special Committee met
several times with the InterSystems Acquisition Committee, and all
members of the Special Committee attended these meetings.
- 7-
<PAGE> 8
Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------
Set forth below is certain information as of September 1, l996
concerning the beneficial ownership of common stock (the Company's
only class of voting securities) by each director individually, and
by all officers and directors of the Company as a group and by all
beneficial owners of more than 5% of the outstanding shares of the
Company's common stock.
<TABLE>
Amount and Nature
of Beneficial Percent of
Name Ownership(l)(2) Class(2)
- ---- --------------- ----------
<S> <C> <C>
Gerson I. Fox.......................... 742,830 (3) 26.1%
1230 Huntington Drive
Duarte, CA 91010
Clarence Y. Palitz..................... 562,500 (4) 18.4%
650 Allamuchy Road
Allamuchy, NJ 07820
Directors and Officers
- ----------------------
Herbert M. Pearlman*................... 826,160 (5) 25.9%
David S. Lawi*......................... 435,872 (6) 15.0%
Walter M. Craig, Jr.................... 27,711 (7) 1.1%
Joseph J. Farley....................... 26,008 1.0%
John E. Stieglitz...................... 17,333 **
William Lerner ........................ 16,866 **
Daniel T. Murphy....................... 13,786 (8) **
All officers and directors
as a group (7 persons)..................1,363,736 (5)-(8) 37.7%
_______________________________________
* address is 537 Steamboat Road, Greenwich, CT 06830
** less than 1%
</TABLE>
(l) Except as otherwise indicated, each named holder has, to the best
of the Company's knowledge, sole voting and investment power with
respect to the shares indicated.
(2) Includes shares that may be acquired within 60 days by any of the
named persons upon exercise of any contractual right.
(3) Includes 312,766 shares that may be acquired from the Company upon
conversion of Series B 8% Cumulative Convertible Preferred Stock
(212,766) and 1993 Class B warrants (100,000). Does not include
shares held by Mr. Fox's wife, as to which he disclaims beneficial
ownership.
- 8-
<PAGE> 9
(4) Includes 520,833 shares that may be acquired from the Company upon
conversion of Series A 8% Cumulative Convertible Preferred Stock
held by Mr. Palitz (104,166) and by a limited partnership as to
which Mr. Palitz is the president of the corporate general partner
(416,667).
(5) Includes 664,536 shares that may be acquired from the Company upon
exercise of options (13,334) and Class A Warrants (66,145), and
conversion of Series A Preferred Stock (11,667), Series A 8%
Cumulative Convertible Preferred Stock (421,875) and 8% debentures
(151,515). Does not include shares held by Mr. Pearlman's wife, as
to which he disclaims beneficial ownership.
(6) Includes 383,938 shares that may be acquired from the Company upon
exercise of options (6,667) and 1993 Class A Warrants (27,763), and
conversion of Series A Preferred Stock (13,333), Series A 8%
Cumulative Convertible Preferred Stock (260,417) and 8% debentures
(75,758).
(7) Includes 27,031 shares which may be acquired from the Company upon
exercise of options (7,667), and conversion of 8% debentures
(19,364).
(8) Includes 12,576 shares which may be acquired from the Company upon
exercise of options (5,000) and conversion of 8% debentures
(7,576).
[The rest of this page intentionally left blank.]
- 9-
<PAGE> 10
Executive Compensation
- ----------------------
Set forth below is certain information with respect to cash and
noncash compensation awarded to, earned by or paid to the Chief
Executive Officer of the Company and the next most highly compensated
individuals who served as executive officers of the Company for
services rendered to the Company and its subsidiaries during 1995.
Each of the named officers has been a party to an employment agreement
with ISI during the years ended December 3l, 1995, 1994 and 1993. See
"Certain Relationships and Related Party Transactions--The Company and
InterSystems, Inc."
<TABLE>
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation
-------------------
All
Name and Other
Principal Compen-
Position Year Salary(1) Bonus sation(2)
- --------- ---- --------- ----- ---------
<S> <C> <C> <C> <C>
Herbert M. 1995 $340,000(3) - $ 16,800
Pearlman, 1994 340,000(3) - 16,800
CEO and Chairman 1993 257,083(3) - 12,600
David S. Lawi, 1995 170,000(3) - 17,442
Secretary- 1994 170,000(3) - 16,769
Treasurer 1993 128,541(3) - 14,027
Walter M. Craig, 1995 150,570 23,000 9,105
Jr., Executive 1994 138,167 20,000 10,064
Vice President 1993 127,577 19,556 8,828
and COO
Daniel T. 1995 139,999 - 16,343
Murphy, 1994 140,000 - 15,812
Executive Vice 1993 143,790 - 13,516
President, Finance
</TABLE>
_______________________
(1) includes the following amounts paid by the Company's affiliate,
InterSystems, Inc., during 1995, 1994 and 1993, respectively: Mr.
Pearlman: $100,000, $100,000 and $66,667; Mr. Murphy: $85,127, $90,000
and $94,743; Mr. Lawi: $50,000, $50,000 and $33,333; and Mr. Craig:
$17,500, $17,500 and $17,500; also includes $16,820, $33,667 and $29,615
paid by the Company's subsidiary, Cliff Engle Ltd., during 1995, 1994
and 1993, respectively, to Mr. Craig, $100,000, $50,000 and $24,500 paid
during 1995, $100,000, $50,000 and $24,500 paid during 1994 and
$100,000, $50,000 and $20,462 paid during 1993 by the Company's
subsidiary, Interpak Holdings, Inc., to Mr. Pearlman, Mr. Lawi and Mr.
Craig, respectively.
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<PAGE> 11
(2) Amounts shown include automobile allowances and taxable fringe
benefits.
(3) Includes amounts payable in common stock of the Company, which will
be issued pending listing on the American Stock Exchange, as follows:
<TABLE>
<S> <C> <C>
Herbert M. Pearlman 1995 $100,000
1994 100,000
1993 33,333
David S. Lawi 1995 50,000
1994 50,000
1993 16,666
</TABLE>
Aggregated Option/SAR Exercises In Last Fiscal Year and Fiscal Year-
- --------------------------------------------------------------------
End Option/SAR Value Table
- --------------------------
The following table sets forth aggregated option exercises in 1995,
the number of unexercised options and fiscal year-end values of in-the-
money options for the Chief Executive Officer and the next most highly-
compensated executive officers.
<TABLE>
Value of
Number of Unexercised
Shares Unexercised In-the-money
Acquired Options at Options at
on Fiscal year-end fiscal year end
Exercise Value Exercisable/ Exercisable/
Name (#) Realized ($) Unexercisable Unexercisable (1)
---- -------- ------------ --------------- -----------------
<S> <C> <C> <C> <C>
Herbert M. - - 13,334/0 n/a
Pearlman
David S. - - 6,667/0 n/a
Lawi
Walter M - - 7,667/0 n/a
Craig, Jr.
Daniel T. - - 5,000/0 n/a
Murphy
- ----------------
(1) All options are out-of-the-money.
</TABLE>
Compensation of Directors
- -------------------------
Outside directors receive fees of $10,000 for services they render to
the Company, payable $5,000 in cash and $5,000 in common stock of the
Company. Mr. Farley receives an additional $5,000 for his services as
Chairman of the Executive Committee. Expenses reasonably incurred in the
furtherance of their duties are reimbursed by the Company.
- 11-
<PAGE> 12
Employment Agreements And Termination Of Employment Arrangements
- ----------------------------------------------------------------
Pearlman Employment Agreement
On January 1, 1990, the Company entered into an employment contract
with Herbert M. Pearlman, as the Company's President and Chief Executive
Officer, with a continuous five-year term (the "Pearlman Agreement"). The
Pearlman Agreement, as amended, provides for (a) a base salary, payable by
the Company or its subsidiaries, of $404,475 a year (subject to annual
upward adjustments in relation to the increase in the consumer price index)
(the "Base Salary") and (b) additional fees ("Additional Fees") each year
equal to 5% of the Company's consolidated pre-tax profits and 5% of the
annual pre-tax profits of each unconsolidated subsidiary of the Company
attributable to the Company for such year. To the extent Mr. Pearlman
receives a portion of his salary from a subsidiary, the amount of salary he
receives from the Company is similarly reduced.
Mr. Pearlman has agreed to voluntarily reduce his base salary.
Effective September 1, 1993, the annual base salary payable to Mr. Pearlman
was $340,000, of which $200,000 in the aggregate is paid by two of the
Company's subsidiaries. An additional $100,000 is payable in common stock
of the Company based upon certain average stock prices, and $40,000 is
payable in cash by the Company. To date, no shares have been issued under
this arrangement pending listing of the shares on the American Stock
Exchange.
If Mr. Pearlman is unable to discharge his duties for a period of six
consecutive months, the Company may terminate the Pearlman Agreement, in
which event Mr. Pearlman will be entitled to receive the Base Salary for
two years from the date of termination. Thereafter, until age 65 Mr.
Pearlman shall receive annual disability payments in an amount equal to the
greater of 60% of his final Base Salary or $10,000 per month. Under the
Pearlman Agreement, Mr. Pearlman is not required to devote his full time to
the Company and may seek to acquire businesses for enterprises other than
the Company as long as he obtains the prior approval of the Board of
Directors of the Company before acquiring any business with sales, net
income before taxes and stockholders equity of more than $4,000,000,
$600,000 and $750,000, respectively.
If, at any time during the term of the Pearlman Agreement the majority
of the Company's Board of Directors are comprised of members recommended by
a party not supported by the Company's present Chairman (hereinafter
"Change of Control"), Mr. Pearlman, at his option, will receive, no later
than the date upon which such Change of Control occurs, the following
(hereafter the "Change in Control Payments"):
(i) a lump sum cash payment equal to 2.99 times the
average of all forms of compensation paid to Mr. Pearlman by
the Company and all of its subsidiaries and affiliates during
the prior five years reduced by the amounts received pursuant
to terms (ii) and (iii) below;
- 12-
<PAGE> 13
(ii) a lump sum cash payment equal to the difference
between the exercise price of all stock options, warrants,
convertible preferred stock and convertible debentures held
by Mr. Pearlman and the then current market price for the
Company's common stock; and
(iii) a continuation of all medical and disability
insurances and benefits for Mr. Pearlman (and his family) for
a period of five years.
Messrs. Lawi, Murphy and Craig have similar Change of Control
Payment provisions pursuant to their employment arrangements (see
descriptions below). By way of illustration, if a Change in Control
occurred during 1996, it is estimated that Messrs. Pearlman, Lawi,
Murphy and Craig would receive Change of Control Payments of $960,000,
$480,000, $450,000, and $450,000, respectively. The Company believes
that the Change in Control Payment provisions in these officers'
agreements may tend to discourage attempts to acquire a controlling
interest in the Company and may also tend to make the removal of
management more difficult; however, the Company believes such
provisions provide security and decision making independence for its
executive officers.
The Pearlman Agreement further provides (i) that upon the
expiration of the term, if Mr. Pearlman's employment is not continued,
he will be entitled to a severance payment of two years' salary and
(ii) for certain company-paid fringe benefits such as life insurance,
with the beneficiary to be specified by Mr. Pearlman, disability
insurance and health insurance providing one hundred (100%) per cent
coverage of most medical expenses.
Lawi Employment Agreement
On January 1, 1990, the Company entered into an employment
agreement whereby David S. Lawi is presently employed as the Company's
Secretary-Treasurer with a continuous five year term (the "Lawi
Agreement"). The Lawi Agreement, as amended, provides for Mr. Lawi to
receive a salary, payable by the Company or its subsidiaries, of
$202,238 a year (subject to annual adjustment in proportion to the
increase in the consumer price index or as determined by the Board of
Directors), plus an annual bonus equal to 2.5% of the Company's
consolidated pre-tax profits and 2.5% of the annual pre-tax profits of
each unconsolidated subsidiary of the Company attributable to the
Company for such year. To the extent Mr. Lawi receives a portion of
his salary from a subsidiary, the amount of salary he receives from the
Company is similarly reduced.
Mr. Lawi has agreed to voluntarily reduce his base salary.
Effective September 1, 1993, the annual base salary payable to Mr. Lawi
was $170,000, of which $100,000 in the aggregate is paid by two of the
Company's subsidiaries. An additional $50,000 is payable in common
stock of the Company based upon certain average stock prices, and
$20,000 is payable in cash by the Company. To date, no shares have
been issued under this arrangement pending listing of the shares on the
American Stock Exchange.
- 13-
<PAGE> 14
If Mr. Lawi is unable to discharge his duties for a period of six
consecutive months, the Company may terminate the Lawi Agreement but
will be required to pay Mr. Lawi's base salary for two additional
years. Thereafter, until age 65, Mr. Lawi will receive annual
disability payments in an amount equal to the greater of 60% of his
final base salary or $10,000 per month.
The Lawi Agreement contains Change in Control Payment provisions
and provisions permitting him to devote his time to other business
enterprises, severance arrangements and provisions regarding Company-
paid fringe benefits which are similar to those described above for Mr.
Pearlman. See "Pearlman Employment Agreement" for additional
information concerning these provisions.
Craig Employment Agreement
On January 1, 1995, the Company entered into an employment
agreement whereby Walter M. Craig, Jr. is presently employed as the
Company's Chief Operating Officer with a continuous three year term
(the "Craig Agreement"). The Craig Agreement provides for Mr. Craig to
receive a salary, payable by the Company or its subsidiaries, of
$161,000 a year (subject to annual adjustment in proportion to the
increase in the consumer price index or as determined by the Board of
Directors). In addition, Mr. Craig is entitled to a minimum annual
bonus equal to the greater of $20,000 or $12,500 for each $1,000,000 of
the Company's consolidated pre-tax profits, and such additional bonus
as is equitable in the opinion of the Company's Chairman. Any minimum
bonus owing will be offset by any bonus paid by PLB Management Corp.,
ISI and any other affiliated companies (other than Unapix).
If Mr. Craig is unable to discharge his duties for a period of
150 days, the Company may terminate the Craig Agreement but will be
required to pay Mr. Craig's base salary for two additional years.
Thereafter, until age 65, Mr. Craig will receive annual disability
payments in an amount equal to the greater of 60% of his final base
salary or $10,000 per month.
The Craig Agreement contains Change in Control Payment provisions
and provisions permitting him to devote his time to other business
enterprises, severance arrangements and provisions regarding Company-
paid fringe benefits which are similar to those described above for Mr.
Pearlman. See "Pearlman Employment Agreement" for additional
information concerning these provisions.
Murphy Employment Arrangement
The Board of Directors also has authorized an employment
arrangement for Daniel T. Murphy, Executive Vice President and Chief
Financial Officer, which requires Mr. Murphy to devote his full time to
the Company, its affiliates and subsidiaries. Pursuant to Mr. Murphy's
arrangement, he receives an annual salary of approximately $165,000,
which he has voluntarily reduced to $140,000 and which is subject to
annual increases based on a cost-of-living index. The salary payable
under this arrangement is reduced by the compensation received by the
officer from any of the Company's subsidiaries or
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<PAGE> 15
affiliates. In addition, Mr. Murphy receives a bonus to be determined
on an annual basis by the Company's Board of Directors. The agreement
also provides Change of Control Payments, severance benefits and
fringe benefits similar to those provided for Messrs. Lawi and
Pearlman. As of the date hereof, a formal contract has not been
entered into by the Company with Mr. Murphy.
Certain Relationships and Related Party Tranactions
- ---------------------------------------------------
The Company, its Subsidiaries and the Fund
Messrs. Herbert M. Pearlman and David S. Lawi are principal
shareholders of, and control, PLB Management Corp. ("PLB"), a Delaware
corporation serving as general partner to The Mezzanine Financial Fund,
L.P. (the "Fund"). In addition, they hold 5.5% and 1%, respectively,
limited partnership interests in the Fund. Mr. Walter M. Craig, Jr. is
President of PLB and of the Fund.
In December 1994, the Fund made available a $250,000 line of credit
to the Company which was increased to $350,000 during 1995. The line
matures on December 31, 1996, bears interest at 15% per annum, entitles
the Fund to the option to receive an additional 10% interest per annum or
to purchase from the Company shares of common stock of Helm, Unapix and
ISI in equal amounts based upon the annual outstanding loan balance.
This loan is secured by the assets of the Company. At December 31, 1995,
$340,000 was outstanding under the loan.
In August 1994, the Fund made available a $250,000 line of credit
to ISI. In 1995, the line was increased to $450,000. The line was paid
in full in February 1996.
In February 1993, the Fund made available a $750,000 line of credit
to Healthcare Financial Services, Inc. ("HC"), a wholly-owned subsidiary
of Professionals' Financial Services, Inc. ("PFS"), to enable HC to
initiate its business activity. The line, which was increased to
$1,350,000 but subsequently reduced to $500,000 during 1996, matures on
December 31, 1996 and bears interest at 15% per annum. At December 31,
1995, $900,000 was outstanding under the loan. Messrs. Pearlman, Lawi
and Craig are directors of PFS, and Mr. Craig serves as President of PFS.
In addition, Helm owns approximately 19% of the outstanding common stock
of PFS.
In January, 1995, PFS made a $100,000 accounts receivable line of
credit available to The Tropical Manufacturing Group, Inc.("TMG"), which
is a party to an operating agreement and a letter of intent for the
purchase of assets with Tropical Systems, Inc.("TSI"), a subsidiary of
InterSystems, Inc., a Nebraska corporation and a subsidiary of ISI
("InterSystems Nebraska"). Effective upon the execution of the operating
agreement in October 1995, no further accounts receivable of TMG were
purchased under the line of credit, and PFS entered into a substitute
accounts receivable line of credit in the amount of $250,000 with TSI.
At December 31, 1995, $203,804.39 was outstanding under the TMG line of
credit and $193,610.21 was outstanding under the TSI line of credit.
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<PAGE> 16
In March 1995, PFS acquired from the Company a $200,000 limited
partnership interest in the Fund in exchange for 400,000 shares of
common stock of PFS.
The Company and InterSystems, Inc.
Messrs. Pearlman, Lawi, Murphy and Craig are parties to employment
agreements with ISI. All salary amounts paid under the ISI agreements
reduce the amount of salary the Company is responsible to pay to said
officers. The agreements, as amended, provide for current annual
salaries of approximately $238,000, $130,000, $90,000 and $17,500 to
Messrs. Pearlman, Lawi, Murphy and Craig, respectively. Beginning in
1992, however, Messrs. Pearlman and Lawi agreed to significant
voluntary salary reductions and are currently receiving $100,000 and
$50,000, respectively, from ISI. Each of the four individuals is also
entitled to an annual bonus from ISI computed on the basis of ISI's
earnings, if any. Specifically, Messrs. Pearlman and Lawi are entitled
to 5% and 2.5%, respectively, of ISI's consolidated pre-tax profits (as
defined), less the amount, if any, paid to such officer by the Company
as a result of the inclusion in the Company's earnings of ISI's income
for that year. Messrs. Murphy and Craig receive a discretionary bonus
determined by ISI's Board of Directors.
If at any time the Company no longer is able to elect a majority
of ISI's Board of Directors, any of the officers may terminate their
employment under his respective agreement upon 18 months' notice and
receive upon the conclusion of that period a lump sum severance payment
equal to 18 months' salary. Each agreement also provides that upon the
expiration of the term, if the officer's employment is not continued,
he will be entitled to a severance payment of two years' salary (unless
employment is secured elsewhere). If, upon expiration of the
employment term, continuation is offered but declined by the officer,
the officer is obligated to act as a consultant for two years at 50% of
his then current salary, during which time he will not provide services
for any competitor of ISI.
The Company has an arrangement with ISI whereby ISI pays the
Company an amount equal to the expenses incurred by the Company and
allocable to the business of ISI. These expenses consist primarily of
office-related and administrative expenses and rent. During 1995, ISI
paid a total of $5,153 during, and accrued an additional $47,767 at
December 31, 1995, to the Company pursuant to this arrangement.
In connection with the August 1993 purchase by ISI of InterSystems
Nebraska, certain ongoing contractual relationships exist between Helm
and ISI. In addition to the base purchase price paid to Helm,
additional consideration will be paid in the form of an earnout and a
royalty.
Performance Earnout. Helm is entitled to a performance earnout payable
in the event that InterSystems Nebraska's average earnings before
federal income taxes, related party management fees and non-recurring
or extraordinary expense ("EBTME") in 1992 through 1995 inclusive,
exceeds $550,000. If during this period, the average EBTME of InterSystems
Nebraska exceeds $550,000, ISI is required to
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<PAGE> 17
pay to Helm an amount equal to six (6) times such excess (the "Earnout
Payments"). Earnout Payments are required to be made commencing March
1994 (for any Earnout Payment payable under the formula for 1992 and
1993), and each successive year thereafter, as necessary, until March
1996. The March 1994 Earnout Payment covers average EBTME for 1992 and
1993. The March 1995 Earnout Payment covers average EBTME for 1992
through and including 1994. The March 1996 Earnout Payment covers
average EBTME for 1992 through and including 1995. In the event of a
reduction of average EBTME for any period from the average EBTME for
previous periods, no refund of Earnout Payments will be made. However,
the Payments due in March 1995 and 1996 will reflect a credit of the
payments previously made toward the total earnout payment owed.
Earnout Payments may be made, at ISI's option, by delivering cash,
shares of common stock (valued at the average closing sale price on the
American Stock Exchange for the 60 days preceding delivery), by
delivering to Helm shares of ISI's common stock having an aggregate
value of such Earnout Payment or other agreed upon consideration or by
the retirement of indebtedness of Helm to ISI. InterSystems Nebraska's
EBTME for the years 1995, 1994, 1993 and 1992 was $567,000, $507,000,
$666,000 and $420,000, respectively. No Earnout Payment was due for
March 1994, March 1995 or March 1996.
Royalty Arrangements. In addition to the base purchase price and the
earnout payments, Helm also is entitled to receive royalties on three
classes of InterSystems Nebraska products that were developed with the
assistance of Helm, and that have not yet had a material impact on
InterSystems Nebraska's sales to date. These three products are: a
sampler used to sample, among other things, wood chips and coal; a
higher capacity sampler used to sample, among other things, wood pulp,
cement and coal; and a radius bottom conveyor. With respect to each of
these three products, Helm will receive a royalty of 5% of all net
sales of such products exceeding certain established thresholds (which
thresholds approximated the highest annual net sales for each of the
products during the last three years), payable on an annual basis for
the 15-year period following the closing (the "Royalties"). In no case
can the annual Royalties paid to Helm in any year with respect any of
the products licensed exceed 10% of the annual gross profit of such
product, calculated in accordance with the accounting procedures and
practices currently employed by InterSystems Nebraska. Royalties to
Helm on account of 1995 sales were approximately $7,000, which remained
unpaid at December 31, 1995.
In General
Since 1988, Messrs. Pearlman, Lawi, Murphy and Craig (the
"Officers") have been the holders of an aggregate $1,800,000 principal
amount of the Company's unsecured 8% subordinated convertible debentures,
due 1999 (the "Debentures"), holding $1,000,000, $500,000, $100,000 and
$175,000, respectively, in principal amount at Decmeber 31, 1995. The
Debentures were purchased at face value by the Officers with individual
promissory notes, each bearing interest at 9% per annum, and payable in
annual installments over 10 years. Interest and principal on each note
may be repaid in cash or by the Officer's surrender to the Company of
securities of the Company, or any affiliated company. As of
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<PAGE> 18
March 15, 1996, the outstanding principal balance under the notes for each
of Messrs. Pearlman, Lawi, Murphy and Craig was $400,000, $200,000,
$50,000 and $83,750, respectively. In addition, as of such date, the
Company owes Messrs. Pearlman, Lawi, Murphy and Craig interest on their
Debentures net of interest on the notes, in the amounts of $78,221,
$39,579, $7,816 and $11,569, respectively.
Messrs. Pearlman and Lawi are limited partners of a Texas limited
partnership known as Partnership 102 Limited, and control the corporation
which serves as general partner to the limited partnership. Partnership
102 Limited is the landlord at a facility in Houston, Texas leased by
Interpak Terminals, Inc. of Texas. Interpak had been a tenant in this
facility for over four years prior to the 1989 acquisition of the facility
by Partnership 102 Limited. The lease provides for minimum annual
payments of $429,000 through the year 2005, which lease payments are the
same as Interpak paid prior to the acquisition of the facility. See Note
13 to Consolidated Financial Statements in the 1995 Annual Report to
Shareholders accompanying this Proxy Statement.
Arcadian Financial Corp. ("Arcadian") is a Delaware corporation and a
former indirect subsidiary of the Company. Historically, Arcadian has
been engaged in the business of providing accounts receivable based credit
facilities to small businesses, usually having annual sales between
$100,000 and $4,000,000, which were unable to qualify for traditional bank
financing. In 1995, Arcadian sold its portfolio of loans and ceased
operations except that it receives an annual royalty of 10% of the income
from the portfolio, and it receives a monthly 2% participation fee on a
$150,000 loan made to a customer of HF in connection with HF's financing
of that business. In November 1995, the Company sold the parent company
of Arcadian to the Fund for $60,000.
During 1995, management of the Company provided various
administrative, managerial, financial, legal and accounting services to
Unapix, for which the Company was paid $310,000 by Unapix in 1995.
Messrs. Pearlman, Lawi and Craig are directors of Unapix, and Mr. Murphy
is the Chief Financial Officer of Unapix.
During 1995, in order to raise needed working capital, the Company
engaged in a series of transactions in which it sold shares of stock of
ISI, Unapix and PFS held by it to Messrs. Pearlman and Lawi at market .
In April 1995, the Company sold 15,000 shares of common stock of Unapix to
Mr. Pearlman and 7,500 shares of common stock of Unapix to Mr. Lawi in
exchange for $60,000 and $30,000 respectively, half of which was paid in
cash and half of which was paid by a reduction in the principal amount
outstanding of the Company's 14% Notes held by each of them. The closing
price of these shares of common stock of Unapix on the day of the sale on
the NASDAQ was $4.00.
In May 1995, the Company sold 4,166 shares of common stock of Unapix
to Mr. Pearlman and 2,083 shares of common stock of Unapix to Mr. Lawi in
exchange for $16,667 and $8,333, respectively, half of which was paid in
cash and half of which was paid by a reduction in the principal amount
outstanding of the Company's 14% Notes held by each of them. The closing
price of these shares of common stock on the day of the sale on the NASDAQ
was $4.00. On the same day in May 1995, the Company sold 13,334 shares of
common stock of PFS to Mr. Pearlman and 6,667 shares of
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<PAGE> 19
common stock of Unapix to Mr. Lawi in exchange for $16,667 and $8,333
respectively, half of which was paid in cash and half of which was paid by
a reduction in the principal amount outstanding of the Company's 14% Notes
held by each of them. The market price of these shares of common stock of
PFS, which was based upon the most recent price at which shares of PFS
were sold in a private placement, was $1.25.
In September 1995, the Company sold 10,355 and 5,178 shares of common
stock of Unapix at $4.375 per share, 40,270 and 20,135 shares of common
stock of ISI at $1.125 per share and 36,243 and 18,122 shares of common
stock of PFS at $1.25 per share to Messrs. Pearlman and Lawi,
respectively, in exchange for $67,956 and $33,978 in cash, respectively,
and $67,957 and $33,978 in the reduction of the principal amount
outstanding of the Company's 14% Notes held by each of them, respectively.
The closing market price of these shares of common stock of Unapix, as
determined by the NASDAQ, on the day of the sale was $1.25. The closing
market price of these shares of common stock of ISI, as determined by the
AMEX, on the day of the sale was $1.25. The market price of these shares
of common stock of PFS, which was based upon the most recent price at
which shares of PFS were sold in a private placement, was $1.25.
INDEPENDENT PUBLIC ACCOUNTANTS
------------------------------
The Board of Directors has selected BDO Seidman, LLP as independent
auditors for the Company for the year ended December 31, 1996. BDO
Seidman, LLP has served as independent auditors for the Company since
1985. The Company has been advised that representatives of BDO Seidman, LLP
will attend the Annual Meeting of Stockholders, will have an opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions.
PROPOSALS BY STOCKHOLDERS
-------------------------
Proposals that stockholders wish to include in the Company's proxy
statement and form of proxy for presentation at the next Annual Meeting
of Stockholders must be received by the Company at 537 Steamboat Road,
Greenwich, Connecticut 06830, Attention David S. Lawi, prior to July 1,
1997.
MISCELLANEOUS
-------------
The Board of Directors knows of no other matters that are to be
brought before the meeting. However, if any other matters do come
before the meeting, the persons named on the enclosed form of proxy or
their substitutes will vote in accordance with their judgment on those
matters.
Greenwich, Connecticut
September 18, 1996
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<PAGE> 20
HELM RESOURCES, INC.
FORM OF PROXY
The undersigned hereby appoints HERBERT M. PEARLMAN and DAVID S.
LAWI, and each of them with full power of substitution, proxies to vote
all shares of common stock of Helm Resources, Inc. (the "Company")
owned by the undersigned at the Annual Meeting of Stockholders on
October 29, 1996 and at any adjournment thereof on the items of
business set forth below and on such other business as may properly
come before the meeting.
Election of Messrs. Herbert M. Pearlman, David S. Lawi, Joseph J.
Farley, William Lerner, John E. Stieglitz and Walter M. Craig, Jr. as
directors until their successors shall be duly elected.
FOR [___] WITHHOLD AUTHORITY [___]
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), PRINT NAMES BELOW
___________________________________________________________________
This proxy is solicited on behalf of the Board of Directors. If the
undersigned fails to specify how the proxy is to be voted, it will be voted
FOR the election of the nominees and FOR the Proposals.
_______________
Date:__________, 1996 ____________________________ (L.S.)
Signature of Stockholder
____________________________ (L.S.)
Signature of Stockholder
(Please sign your name exactly as it appears on the proxy.
When signing as attorney, agent, executor, administrator, trustee,
guardian or corporate officer, please give your full title as such.
Each joint owner should sign the consent).
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