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SCHEDULE 14C
Information Required in Information Statement
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934.
Check the appropriate box:
[ ] Preliminary Information Statement
[X] Definitive Information Statement
Bestway, Inc.
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(Name of Registrant As Specified In Charter)
Bestway, Inc.
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(Name of Persons(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying values of transaction computed
pursuant to Exchange Act rule 0-11:1
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Date Filed:
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
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INFORMATION STATEMENT
BESTWAY, INC.
7800 N. Stemmons, Suite 320
Dallas, Texas 75247
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE NOT REQUESTED TO SEND US A PROXY
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INTRODUCTION
This Information Statement is furnished in connection with the action
taken by holders of the majority of outstanding common stock (the "Common
Stock") of Bestway, Inc. (the "Company") to approve the adoption of the
Bestway, Inc. Incentive Stock Option Plan (the "Plan").
The Board of Directors of the Company (the "Board") authorized the
Plan at a Board Meeting on May 24, 1995, and received the authorization for the
Plan from holders of a majority of the Common Stock on May 31, 1995, pursuant
to Section 228 of the Delaware General Corporation Law ("DGCL") that permits
any action which is taken at a meeting of stockholders to be adopted by written
consent of stockholders holding such number of shares of Common Stock as would
be required to pass the proposal at a meeting of stockholders at which all
shares entitled to vote thereon were present and voted. This Information
Statement will serve as written notice to stockholders who did not execute the
written consent to the Plan, pursuant to Section 228(d) of the DGCL.
This Information Statement will be distributed beginning on or about
June 30, 1995 to stockholders of record on June 19, 1995 (the "Record Date").
The principal executive offices of the Company are located at 7800 N. Stemmons,
Suite 320, Dallas, Texas 75247.
VOTING SECURITIES AND VOTES REQUIRED
The only outstanding class of voting securities of the Company is its
Common Stock, each share of which entitles the holder thereof to one vote. The
approval of the Plan occurred prior to the reverse stock split and
reclassification of the Common Stock that took place on June 6, 1995 and June
7, 1995, respectively, as described in the Information Statement sent to
stockholders of the Company on or about April 28, 1995 (the "Reverse Split and
Reclassification"). As of January 31, 1995, there were 75,003,620 shares of
the Company's Common Stock outstanding and entitled to vote for the approval of
the Plan as described herein. In order to approve the Plan by written consent
of the stockholders, the affirmative vote of a majority of all outstanding
shares of Common Stock was required. The Company received a written consent,
dated as of May 31, 1995, approving the Plan from holders of 58,043,647 shares
of Common Stock.
THE INCENTIVE STOCK OPTION PLAN
The Company believes that the Plan will further the success of the
Company and its affiliates by providing officers and employees of the Company
with incentive to devote their best efforts to the Company and its affiliates
through ownership of the Company's stock. The Company believes that the Plan
will provide equity incentive to the officers and employees to serve and
continue to serve with the Company, thus enhancing the value of the Company for
the benefit of the stockholders.
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The following summary of the Plan is qualified in its entirety by
reference to the Plan, a copy of which may be obtained, at no cost, from the
Company:
Administration of the Plan
The Plan will be administered by a committee appointed by the Board
(the "Committee") composed of not less than two directors, neither of whom has
been granted an equity security from the Company or any of its affiliates
within one year prior to his service on the Committee. The Committee shall
have full and final authority in its discretion, subject to the provisions of
the Plan, to determine the participants to whom, and the time or times at
which, options shall be granted and the number of shares covered by each
option; to construe and interpret the Plan and any agreements made pursuant to
the Plan; to determine the terms and provisions of the option agreements
entered into in connection therewith, including terms covering the payment of
the exercise price of the options; and to make all other determinations and
take all other actions deemed necessary or advisable for the proper
administration of the Plan.
Options Authorized
The Plan authorizes grants of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986 (the "Code"). The
aggregate number of shares of the Company's common stock, par value $0.01 (the
"Common Stock"), that may be issued upon the exercise of options shall not
exceed 225,000 shares. Management anticipates that the Company will register
the shares available under the Plan with the Securities and Exchange Commission
pursuant to the provisions of Form S-8 concurrently with the distribution of
this Information Statement.
Each option shall be exercisable from time to time (but not sooner
than six months after the date of grant) over such period and upon such terms
as the Committee may determine, but not at any time as to less than 25 shares
unless the remaining shares that have become so purchasable are less than 25
shares. The price per share of Common Stock with respect to each option shall
be determined by the Committee, but in no instance shall be less than the fair
market value of the shares subject to the option as of the date of grant. The
fair market value of such shares shall be based on the last price at which such
shares were traded on such date as reported on the over-the-counter exchange on
which the Common Stock is traded. Pursuant to the Plan, the aggregate fair
market value of the Common Stock with respect to which options are exercisable
for the first time by a participant in any calendar year shall not exceed
$100,000. As of June 19, 1995, taking into account the Reverse Split and the
Reclassification, the fair market value of the Common Stock was $6.25 per
share. The Committee may make adjustments to the number of shares covered by
outstanding options or the exercise price, if such adjustments are required to
prevent any dilution or enlargement of rights of holders of options in the
event of any change in the capital structure of the Company.
The expiration date of each option shall be fixed by the Committee,
but in no event, shall be more than ten years from the date of the grant of the
option. In the event of a termination of employment, other than (i) for cause,
(ii) a voluntary termination without the consent of the Company or (iii) a
termination by reason of death, the participant may exercise the option, to the
extent it is vested at the time of the termination, at any time within three
months of such termination. In the event of a termination for cause or a
voluntary termination without the Company's consent, the option, to the extent
not previously exercised, will terminate upon the termination of employment.
In the event of the death of the participant, the option may be exercised
within one year after the death. No option granted under the Plan is
transferable or assignable, other than by will or the laws of descent and
distribution.
The Committee, in its discretion, may provide that a participant, in
lieu of purchasing the entire number of shares subject to purchase pursuant to
the option granted to him, shall have the right to
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relinquish all or any part of the unexercised portion of such option for a
number of whole shares of Common Stock equal to the product of (i) the number
of shares of Common Stock subject to such option and (ii) a fraction, the
numerator of which is the excess of (A) the current fair market value per share
of Common Stock covered by such option over (B) the exercise price of such
option, and the denominator of which is the fair market value per share of such
Common Stock.
As of the date hereof, the Committee has approved the following grants
of options under the Plan:
NEW PLAN BENEFITS
Bestway, Inc. Incentive Stock Option Plan
<TABLE>
<CAPTION>
Number of Shares of Common
Name and Position Stock Underlying Option(1)(2)
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<S> <C>
Executive Officer 60,800
Non-Executive Employees as a group 42,600
</TABLE>
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(1) The exercise price of such options has not yet been determined as of
the date of this Information Statement.
(2) The date of grant of such options shall be 20 days from the date
hereof.
Plan Participants
Any employee and officer of the Company or it affiliates and any
director of the Company who is also an employee of the Company are eligible to
participate in the Plan. In determining participants to whom options may be
granted and the number of shares of Common Stock to be covered by such options,
the Committee may take into account the nature of the services rendered by the
respective participants, their present and potential contributions to the
Company's success, and such other factors as the Committee in its discretion
shall deem relevant. As of June 19, 1995, there were 185 officers and
employees (including director- employees) of the Company and its affiliates
eligible to participate in the Plan.
An option may be granted to a participant only if such participant, at
the time the option is granted, does not own, after application of the
attribution rules of Section 424(d) of the Code, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or
its affiliates. The preceding restriction shall not apply if at the time the
option is granted, the exercise price is at least 110% of the fair market value
as of the date of grant of the Common Stock subject to the option, and such
option by its terms is not exercisable after the expiration of five years from
the date of grant.
Withholding
If any withholding amount for the exercise of an option under the Plan
is required by law, the Committee may (a) require a participant to remit a cash
amount sufficient to satisfy, in whole or in part, any federal, state and local
withholding requirements prior to delivery by the Company of certificates for
Common Stock; (b) grant a participant the right to satisfy any withholding
requirements, in whole or in part, by electing to require that the Company,
upon exercise of the relinquishment of an option, withhold from the shares of
Common Stock issuable to the participant, that number of full shares of Common
Stock having a fair market value equal to the amount required to be withheld;
or (c) satisfy withholding
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requirements through any other lawful method, such as through additional
withholdings against the participant's other wages with the Company.
Federal Income Tax Consequences
There are no federal tax consequences, either to the participant or to
the Company upon the grant of an option under the Plan. Upon the exercise of
the option, the participant will not recognize any income, and the Company will
not be entitled to a deduction, although the exercise may give rise to
alternative minimum tax liability for the participant. Generally, if the
participant disposes of shares acquired upon the exercise of an option within
two years of the date of grant or one year of the date of exercise, the
participant will recognize ordinary income, and the Company will be entitled to
a deduction equal to the excess of the fair market value of the shares on the
date of exercise over the option price (limited generally to the gain on the
sale). If the shares are disposed of after the foregoing holding requirements
are met, the Company will not be entitled to any deduction, and the entire gain
or loss for the participant will be treated as a capital gain or loss.
Termination of Plan
The Plan shall terminate on May 31, 2005, unless earlier terminated by
the Board of Directors. The Board of Directors may suspend, terminate or amend
the Plan prior to such date in order to conform to any changes in law or if
such suspension, termination or amendment is deemed to be in the best interest
of the Company; provided, however, that without approval by stockholders of the
Company voting the proper percentage of their collective voting power, no
amendment shall be made for which stockholder approval is required under (a)
Rule 16b-3 of the Securities Exchange Act of 1934; (b) the Code or certain
regulations promulgated pursuant thereto; (c) the rules for listed companies on
the national stock exchange on which the Common Stock is traded; or (d) any
other applicable law or rule.
EXECUTIVE COMPENSATION OF DIRECTORS AND OFFICERS
The following Summary Compensation Table shows all cash and other
compensation paid (or to be paid) by the Company for the fiscal years ended
July 31, 1994, 1993 and 1992 to the Company's Chief Executive Officer for
services rendered in all capacities in which he served during each period. The
Chief Executive Officer is the only executive officer of the Company whose
total annual salary and bonus exceeded $100,000 in the fiscal year ended July
31, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Name and Compensation
Principal Position Annual Compensation Awards
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Restricted
Fiscal Salary Bonus Stock
Year ($) ($) Awards ($)
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<S> <C> <C> <C> <C>
R. Brooks Reed, Chairman, President and 1994 $150,000 $74,104(1) --
Chief Executive Officer 1993 $167,800 -- $164,487(2)
1992 $155,500 -- --
</TABLE>
(1) This amount represents the tax liability paid by the Company relating
to the restricted stock awarded by the Company to Mr. Reed in 1993 in
the amount of 5,482,901 pre-Reverse Split and Reclassification shares
of the Company's Common Stock in connection with the restructuring of
the Company.
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(2) In connection with the restructuring of the Company in 1993, the
Company awarded Mr. Reed 5,482,901 pre-Reverse Split and
Reclassification shares of restricted stock valued at $0.03 per share.
RETIREMENT SAVINGS PLAN PROGRAM - 401(K) PLAN
The Company established a Retirement Savings Plan (the "Savings
Plan"), effective as of September 1, 1994, which is intended to qualify under
Section 401(k) of the Code. Employees who have been employed with the Company
for one year or more are eligible for participation in the Savings Plan.
Pursuant to the Savings Plan, employees may elect to reduce their current
compensation by up to 15% (subject to certain limitations under the Code) and
have the amount of such reduction contributed to the Savings Plan by the
Company on behalf of all participants in the Savings Plan. The Company has
made no additional or matching contributions to the Savings Plan. The Board
intends to conduct a review at the end of each fiscal year to determine whether
the Company will make any additional or matching contributions to the Savings
Plan. All assets of the Savings Plan are held in trust at all times.
COMPENSATION OF DIRECTORS
The Company's policy is to reimburse its directors for travel, lodging
and related expenses incurred on account of attendance at meetings of the Board
and committees thereof. For their participation in special meetings of the
Board convened by conference telephone call, for services in relation to any
matters adopted by the unanimous written consent of the directors, and for all
the various services rendered, directors, other than those who are employees or
consultants of the Company, receive an annual retainer of $1,200.
Additionally, each director, other than those who are officers or employees of
the Company, receive $500 for each meeting attended. In order to conserve
cash, no fees have been paid in cash to any director since 1988, and from 1984
through 1988, directors received Common Stock of the Company in lieu of fees.
Furthermore, in connection with the 1993 restructuring of the Company, Messrs.
R. Brooks Reed and Jack E. Meyer received 5,482,901 and 663,556 pre-Reverse
Split and Reclassification shares, respectively, of the Company's Common Stock.
The purpose of granting stock to Messrs. Reed and Meyer was to prevent dilution
of their respective ownership positions in the Company, to provide an incentive
to them to build stockholder value following the restructuring and to
compensate them for past service to the Company, including, but not limited to,
their waiver of directors fees and service as directors without compensation
since 1988.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions regarding the compensation of the executive officers of the
Company are made by the Board. In fiscal year 1994, decisions concerning the
compensation of Ms. Beth A. Durrett and Ms. Teresa A. Sheffield were made by
the entire Board, and decisions concerning the compensation of Mr. R. Brooks
Reed were made by Mr. Jack E. Meyer and Mr. James A. O'Donnell.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The following table sets forth certain information as of June 19,
1995, obtained from information furnished by the persons named below,
concerning the beneficial ownership of Common Stock of each director and
executive officer of the Company and of such persons as a group since such
date.
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<TABLE>
<CAPTION>
Percentage of
Outstanding
Number of Shares Shares of
Name and Address of Beneficial Owner Beneficially Owned(1) Common Stock(1)
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<S> <C> <C>
James A. O'Donnell 983,871 65.6%
5949 Sherry Lane, Suite 1755
Dallas, Texas 75225
R. Brooks Reed 58,872 3.9%
7800 Stemmons, Suite 320
Dallas, Texas 75247
Jack E. Meyer 16,203 1.1%
7800 Stemmons, Suite 320
Dallas, Texas 75247
All officers and directors as group 1,880,101 72.5%
</TABLE>
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(1) Numbers reflect Reverse Split and Reclassification.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports and
other information with the Commission. Such reports and other information can
be inspected and copied at public reference facilities of the Commission.
By Order of the Board of Directors
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R. Brooks Reed, Chairman of the Board
Dallas, Texas
June 30, 1995
