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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 [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Siena Holdings, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
SIENA HOLDINGS, INC.
5068 West Plano Parkway, Suite 345
Plano, Texas 75093
NOTICE OF ANNUAL MEETING
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of Siena
Holdings, Inc. will be held on December 16, 1998 at 10 o'clock EST, at The Hotel
DuPont, Wilmington, Delaware, for the following purposes:
1. To elect five directors to serve until the next annual meeting and
until their successors are elected and qualified;
2. To approve certain changes in compensation for the Board of
Directors.
3. To approve creation of a non-qualified stock option plan for the
Board of Directors.
4. To ratify the appointment of KPMG Peat Marwick LLP as independent
public accountants for the Company for the fiscal year ending June
30, 1999; and
5. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of record of Common Stock as of the close of business on
November 13, 1998 are entitled to receive notice of and vote at the meeting or
any adjournment or adjournments thereof.
By Order of the Board of Directors:
/s/ W. JOSEPH DRYER
------------------------------------------
Secretary
Dated at Plano, Texas
November 9, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID RETURN ENVELOPE.
SIENA HOLDINGS, INC.
PROXY STATEMENT
<PAGE> 3
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by and on behalf of the Board of Directors of Siena Holdings, Inc. (together
with its wholly-owned subsidiaries, the "Company") of proxies from the holders
of the Company's common stock for use at the Annual Meeting (the "Meeting") to
be held on December 16, 1998, and any adjournment or adjournments thereof. The
giving of a proxy does not affect your right to vote should you attend the
Meeting in person, and the proxy may be revoked at any time before it is voted
by giving the Secretary of the Company a signed instrument revoking the proxy or
a signed proxy of a later date. Each properly executed proxy not revoked will be
voted in accordance with instructions thereon. If no contrary instructions are
specified in the proxy, it is the intention of the persons named in the
accompanying proxy to vote FOR the election of the nominees named herein as
directors of the Company and FOR the matters described in Items 2, 3, 4 and 5 in
the Notice of Annual Meeting.
The Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1998 (the "Annual Report"), containing audited consolidated financial
statements, in the form of the information filed by the Company with the
Securities and Exchange Commission on Form 10-K, is being mailed to Stockholders
along with the Notice of Annual Meeting and Proxy Statement. The consolidated
financial statements and discussion and analysis by management of the Company's
financial condition and results of operations contained in the Annual Report are
incorporated herein by reference.
The mailing address of the Company's principal executive office is:
5068 West Plano Parkway, Suite 345, Plano, Texas 75093, and the approximate date
on which this Proxy Statement and the form of proxy are first being sent to
stockholders is November 18, 1998.
Only holders of record of the Company's Common Stock, par value $.10
per share (the "Common Stock"), at the close of business on November 13, 1998,
are entitled to vote at the Meeting, one vote for each share of Common Stock so
held. On that date, there were 6 million shares of Common Stock outstanding.
PRINCIPAL STOCKHOLDERS
The following table shows, as of November 13, 1998, the total number of
shares of Common Stock owned beneficially by persons or groups, within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
known to the Company to be the beneficial owners of more than 5% of the Common
Stock:
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<TABLE>
<CAPTION>
Shares Beneficially
Name and Address of Owned Directly or Percent of
Beneficial Owner Indirectly Common Stock
- ------------------- ------------------- ------------
<S> <C> <C>
Credit Suisse 910,509 15.2%
First Boston Corporation
11 Madison Avenue
New York, NY 10010
John P. Kneafsey 2,385,176 39.8%
c/o Pathfinder Advisory Services
9515 Deereco Road, Suite 903
Timonium, MD 21093
</TABLE>
ELECTION OF DIRECTORS
The five persons named in the following table have been designated as
nominees for election to the Board of Directors, each to serve for a one-year
term and until his successor is duly elected and qualified. All of the nominees
listed below currently serve as directors of the Company. If any of such
nominees declines or becomes unable to serve, the persons named in the proxy
will vote for the election of any substitute nominee designated by the Board of
Directors. The Company has no reason to believe that any nominee will decline or
be unable to serve.
<TABLE>
<CAPTION>
Name, Age, Principal Occupation During Served as Shares Beneficially Owned
Past Five Years, and Other Corporate Director
Directorships Since Amount Percent
- -------------------------------------- ----- ------ -------
<S> <C> <C> <C>
JOHN P. KNEAFSEY - Chairman and 1997 2,385,176 39.8%
Chief Executive Officer of the Company,
since October 1996; President, Pathfinder
Advisory Services, Inc., since 1997;
Senior Vice President-Investments,
Prudential Securities, Inc., from 1980 to
1997. Age 51.
ERIC M. BODOW - Senior Vice 1998 ----- -----
President, Sagner/Marks, Inc., since 1992;
Vice President, First National Bank of
Chicago, from 1985 to 1992. Age 53.
</TABLE>
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<TABLE>
<S> <C> <C> <C>
JAMES D. KEMP - Principal, Antaean 1997 ----- -----
Solutions, LLC, since 1997; President and
Chief Executive Officer, The Trust
Company, N.A., from 1996 to 1997;
President and Chief Executive Officer,
Kemp Consulting, from 1992 to 1997;
President, Ameritrust Texas, N.A., from
1980 to 1992. Age 51.
MATTHEW S. METCALFE - Chairman 1997 ----- -----
and President, Airland Corporation;
Director Emeritus, Amsouth
Bankcorporation; Member, State of
Alabama Oil and Gas Board; Chairman,
Mobile Airport Authority. Age 67.
FRANK B. RYAN - Professor of 1997 ----- -----
Mathematics at Rice University (currently
on leave); Director, Danielson Holding
Corporation; Director, Texas Micro, Inc.;
Director, America West Airlines, Inc.
Age 62.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE ABOVE
NOMINEES AS DIRECTORS OF THE COMPANY.
BOARD ORGANIZATION AND COMPENSATION
The Board of Directors held five meetings during the fiscal year ended
June 30, 1998. Each incumbent director attended at least 100% of the meetings of
the Board and of its committees of which he was a member. In addition, the
Company has an Audit Committee and a Compensation Committee, but does not have a
Nominating Committee.
The Audit Committee of the Board of Directors, composed of all four
independent members of the Board of Directors, met once during the fiscal year
ended June 30, 1998. The Audit Committee reviews with KPMG Peat Marwick LLP, the
Company's independent auditors, the audit plan and the internal accounting
controls for the Company and its subsidiaries, as well as the Company's
consolidated financial statements and management letter. The Audit Committee
reports to the full Board of Directors. It also recommends to the Board of
Directors the selection of independent auditors for the Company.
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The Compensation Committee of the Board of Directors, composed of all four
independent members of the Board of Directors, met once during the fiscal year
ended June 30, 1998. This Committee periodically reviews the Company's
management compensation and reports its actions or recommendations to the Board
of Directors. The Committee also approves the general salary scale for employees
of the Company.
EXECUTIVE MANAGEMENT COMPENSATION
Compensation of Executive Officers
The following table sets forth all compensation paid by the Company for
the year ended June 30, 1998, the three-month period ended June 30, 1997 and the
nine-month period ended March 31, 1997, for services rendered in all capacities
to the two executive officers of the Company during fiscal year 1998. For
compensation information as to officers of the Predecessor Company in prior
fiscal years, reference is made to the Joint Disclosure Statement, a copy of
which was filed as an exhibit to the Company's annual report on Form 10-K for
the year ended June 30, 1996.
<TABLE>
<CAPTION>
Base Other Cash Total Cash
Officer Period Compensation Compensation Compensation
<S> <C> <C> <C> <C>
John P Year Ended 6/30/98 $ 84,667 $ 6,200 $ 90,867
Kneafsey 3 Mos. Ended 6/30/97 $ 6,000 $ 6,000
9 Mos. Ended 3/31/97 $ 12,000 $ 12,000
W. Joseph Year Ended 6/30/98 $139,000 $197,467 $336,467
Dryer 3 Mos. Ended 6/30/97 $ 33,000 $ 33,000
9 Mos. Ended 3/31/97 $170,106 $170,106
</TABLE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of June 30, 1998 and related
information are as follows:
John P. Kneafsey, Chairman and Chief Executive Officer (See information under
"Election of Directors" above.)
W. Joseph Dryer, President and Chief Accounting Officer since October 4, 1996;
prior thereto, Senior Vice President from January 1995; also, President and
Director of Russian River Energy Co. from 1992 to 1994; and President and
Director of Geothermal Resources International, Inc. since 1994; prior thereto,
an Officer since 1984. Age 43.
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<PAGE> 7
Compensation of Directors
Directors of the Company receive annual compensation at the rate of
$5,000 and fees of $1,000 for each directors' meeting attended, plus
reimbursement for all reasonable expenses. The following items related to
additional compensation of the Board of Directors will be submitted to the
Shareholders for approval:
(1) Non-qualified Stock Option Agreements. Pursuant to the
proposed Non-Qualified Stock Option Agreements for the Board
of Directors (the "Directors' Stock Option Plan"), each
Director of the Company would receive options to purchase
40,000 shares of the Company's common stock, with an effective
date of December 1, 1997 (the "Date of Grant"). The options to
be granted under the Directors' Stock Option Plan will have an
exercise price of $0.92 per common share and vest at a rate of
twenty percent per year for five years on the anniversary of
the Date of Grant. The fair market value of the common stock
on the Date of Grant was $1.109. Upon the event of any
change-in-control of the Company the stock options shall be
100% vested. If approved by the Shareholders, the Company
would recognize compensation expense of $4,000 in fiscal year
1999 for the period from December 1, 1997 through June 30,
1998. This would have an insignificant impact on earnings
(loss) per share for the year ended June 30, 1998.
(2) Plan Providing for Additional Compensation for Directors. The
proposed plan for providing additional compensation to the
non-officer members of the Board of Directors (the "Directors
Additional Compensation Plan") includes success-based
financial incentives contingent on the sale or liquidation of
certain assets of the Company, which will pay a percentage of
the "deal value" established by the Board of Directors or the
appreciated value above the fair market value of the asset,
which as a result of the fresh start adjustments is the same
as book value as of March 31, 1997. In aggregate, the
non-officer directors would be paid a total of 2% of the gross
appreciation value above book value or 2% of the deal value,
upon the close of any such transaction. Such bonus provision
for any such payments would be applied to the Company and its
subsidiaries and the Company's results as trustee of the
Creditors' Trust. During the year ended June 30, 1998, two
transactions were closed that will result in payments to the
non-officer directors under the Directors' Bonus Plan, if
approved by the Shareholders, as follows:
On January 14, 1998, the Creditors' Trust received $8.1
million pursuant to the negotiated final settlement of a
subordinated promissory note. The Company as trustee began
negotiations early in 1997. The Bankruptcy Court approved the
settlement on December 29, 1997. The settlement provided the
Creditors' Trust with a gain of $5.9 million. This gain was
recognized for income tax purposes in April 1997 upon the
transfer of the promissory note from the Company to the
Creditors' Trust. The Company received $590,000 in May 1998
for the bonus pool from the
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<PAGE> 8
proceeds received by the Creditors' Trust based on the cash
received by the Creditors' Trust in excess of book value. The
Board of Directors approved an aggregate bonus amount of
$492,000 for the executive officers. Based on the same bonus
criteria, but subject to Shareholder approval, the remaining
$98,000 remains payable to the directors in accounts payable
and other expenses on the Company's Consolidated Balance Sheet
as of June 30, 1998.
The Company sold its investment in Vistamar, Inc., a former
real estate subsidiary incorporated in Puerto Rico, for
$20,000 in April 1998. Upon receipt of the proceeds, the
executive officers received an aggregate bonus amount of
$2,000 and $400 remains payable to the directors in accounts
payable and other expenses on the Company's Consolidated
Balance Sheet as of June 30, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED
NON-QUALIFIED STOCK OPTION PLAN AND THE PROPOSED PLAN PROVIDING FOR ADDITIONAL
COMPENSATION TO THE NON-OFFICER MEMBERS OF THE BOARD OF DIRECTORS.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors appointed the firm of KPMG Peat Marwick LLP to
act as independent auditors for the Company for the fiscal year ended June 30,
1998. The Board of Directors, upon recommendation of the Audit Committee, has
selected the firm of KPMG Peat Marwick LLP to audit the consolidated financial
statements of the Company for the fiscal year ending June 30, 1999. A
representative of KPMG Peat Marwick LLP is expected to be present at the
Meeting, have an opportunity to make a statement, and be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY
THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING JUNE 30, 1999.
VOTING PROCEDURES
Each proposal submitted to the Company's stockholders for a vote is
deemed approved if a majority of the shares of Common Stock of the Company
present in person or by proxy at a meeting at which a quorum is present votes in
favor of the proposal. The presence in person or by proxy of stockholders
entitled to cast a majority of all the votes entitled to be cast at the meeting
constitutes a quorum. A stockholder is entitled to one vote for each share
owned.
Stockholder votes are tabulated by the Company's Registrar and Transfer
Agent. Proxies received by the Registrar, if such proxy is properly executed and
delivered, will be voted in
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<PAGE> 9
accordance with the voting specifications made on such Proxy. Proxies received
by the Registrar on which no voting specification has been made by the
stockholder will be voted FOR all items discussed in the Proxy Statement, in the
manner stated on the proxy card. Stockholders who execute and deliver proxies
retain the right to evoke them by notice in writing delivered to the Company's
Secretary at any time before such proxies are voted.
Under applicable Delaware corporate law and the Charter and by-Laws of
the Company, proxies received by the Registrar specifying an abstention as to
any proposal will cause the shares so represented to be counted toward a quorum,
but are not counted as favorable votes and, therefore, have the same effect as a
vote against the proposal. To the extent holders or brokers having the right to
vote shares do not attend the meeting or return a proxy, such shares will not
count toward a quorum, and if a quorum is otherwise achieved, will have no
effect on the vote of the proposals considered at the meeting which shall be
based solely upon the vote of the shares represented at the meeting.
1999 ANNUAL MEETING OF STOCKHOLDERS
If any stockholder intends to present a proposal for consideration at
the 1999 Annual Meeting of Stockholders, such proposal must be received by the
Company on or before September 1, 1999, in order to be included in the Company's
Proxy Statement and form of proxy for such meeting. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement and
form of proxy relating to the 1999 Annual Meeting of Stockholders any
stockholder proposal which does not meet all of the requirements for such
inclusion established by the Securities and Exchange Commission at that time in
effect.
As of the date of this Proxy Statement, the Board of Directors knows of
no matters, other than those stated above, that may be brought before the
Meeting. However, if other matters do properly come before the Meeting, the
persons named in the enclosed proxy will vote upon them in their discretion and
in accordance with their best judgment.
A COPY OF THE COMPANY'S FORM 10-K ANNUAL REPORT AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C., HAS BEEN PROVIDED TO EACH
STOCKHOLDER OF RECORD IN CONNECTION WITH THE NOTICE OF THE ANNUAL MEETING.
The cost of preparing and mailing the Notice of Meeting, Proxy
Statement and form of proxy will be paid by the Company. The Company will
request banks, brokers, fiduciaries, and similar persons to forward copies of
such material to beneficial owners of the Company's common stock in a timely
manner and to request authority for execution of proxies, and the Company will
reimburse such persons and institutions for their reasonable out-of-pocket
expenses incurred in connection therewith. To the extent necessary to assure
sufficient representation, officers and regular employees of the Company may
solicit the return of the proxies by telephone, telegram, or personal interview.
The extent of this solicitation by personal contact will depend upon the
response
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<PAGE> 10
to the initial solicitation by mail. It is anticipated that the costs of such
solicitation, if undertaken, will not exceed $4,000.
By the Order of the Board of Directors.
/s/ W. JOSEPH DRYER
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Secretary
Dated at Plano, Texas
November 9, 1998
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