U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Rule 13E-3 Transaction Statement
(Pursuant to Section 13 (e) of the Securities Exchange Act of 1934
and Rule 13E-3 (Section 240.13E-3) thereunder)
Crowell & Co., Inc.
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(Name of the Issuer)
Crowell & Co., Inc.
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(Name of Person Filing Statement)
Common Stock No Par Value NA
- ------------------------------ -------------------------------------
(Title of Class of Securities) (CUSIP Number of Class of Securities)
Mark L. Gilliam
Crowell & Co., Inc.
610 Industrial Park Boulevard
Evans, GA 30809
(706)855-1099
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(Name, Address, and Telephone Number of Persons Authorized to Receive Notice
and Communications on Behalf of Persons Filing Statement)
This statement is filed in connection with (Check the appropriate box):
a. [X] The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C, or Rule 13E-3 (c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [X]
Calculation of Filing Fee
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Transaction valuation $19,326 Amount of filing fee $4
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* Calculated based on the maximum aggregate number of fractional shares of
common stock to be exchanged for a payment of $.03 per pre-reverse stock split
shares, at a valuation of $.03 per pre-reverse stock split shares, the price to
be paid for such pre-reverse stock split shares as described in the February 13,
1998 Proxy Statement which is incorporated by reference in its entirety to this
filing.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11 (a) (2)
and identify the filing with 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.
Amount Previously Paid:
Form or Registration No:
Filing Party:
Date Filed:
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INTRODUCTION
This Rule 13E-3 Transaction Statement (Statement") relates to a
solicitation of proxies by Crowell & Co., Inc. (the "Company"), to be used at a
special meeting ("Meeting") of shareholders of the Company to consider and vote
upon a proposal to amend the Company's Articles of Incorporation ("Amendment")
to effect a reverse split of the Company's issued and outstanding common stock
as of 4:30 p.m., E.S.T., on the date of filing of the Amendment on the basis
that each share of common stock then outstanding will be converted into .000005
share, at $.03 per share pre-reverse-split price, with fractional shareholders
receiving cash in lieu of their resulting fractional share (the "Transaction").
The Company has filed a Preliminary Proxy Statement ("Preliminary Proxy
Statement") and Schedule 14A, with exhibits with the Securities and Exchange
Commission. The Preliminary Proxy Statement describes and requires a vote on the
Transaction. The cross reference sheet herein is being supplied pursuant to
General Instruction F to Schedule 13E-3 required to be included in response to
the items of this Statement. The information in the Preliminary Proxy Statement
is hereby expressly incorporated herein by reference and the responses to each
item are qualified in their entirety by the contents thereof.
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CROSS REFERENCE SHEET
Pursuant to General Instruction F of Schedule 13E-3, the following table
sets forth the location in the Preliminary Proxy Statement of the registrant
dated February 13, 1998 (which has been filed in preliminary form with the
Securities and Exchange Commission and is attached hereto as Exhibit 1), of the
information required by Schedule 13E-3 which is incorporated herein from such
Preliminary Proxy Statement.
<TABLE>
<CAPTION>
Schedule 13E-3 Item and Caption Location in Preliminary Proxy Statement
- ------------------------------- ---------------------------------------
<S> <C>
Item 1. Issuer and Class of Security
Subject to the Transaction (a) Outside cover page
(b) General
(c) - (d) Market Price of Company Common Stock,
Preferred Stock and Shares
(e) - (f) Not applicable
Item 2. Identity and Background This Preliminary Proxy Statement is being
filed by the issuer of the class of equity
securities which is the subject of this Rule
13E-3 transaction
(a) - (g) Not applicable
Item 3. Past Contacts, Transactions
Or Negotiations
(a) - (b) Not applicable
Item 4. Terms of the Transaction General/Quorum and Vote Required/Proxies/
The Reverse Stock Split/Background and
Reason for the Reverse Stock Split/The
Effects of the Reverse Stock Split/Board
Recommendations/Dissenters' Rights/Certain
Federal Income Tax Consequences/Sources
and Amount of Funds
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<PAGE>
(b) Not applicable
Item 5. Plans or Proposals of the Issuer
or Affiliate
(a) - (e) Not applicable
(f) - (g) Purpose/Background of and Reason
for the Reverse Stock Split
Item 6. Source and Amount of Funds
Or Other Consideration
(a) Sources and Amount of Funds
(b) Not in Proxy Statement
(c) Not applicable
(d) Not applicable
Item 7. Purpose (s), Alternatives, Reasons, and Effects
(a) Purpose
(b) - (c) Background of and Reason for the Reverse
Stock Split
(d) Purpose/Background of and Reason for the
Reverse Stock Split/The Effects of the
Reverse Stock Split/Certain Federal Income
Tax Consequences
Item 8. Fairness of the Transaction
(a) - (b) Background of and Reason for the Reverse
Stock Split/Board Recommendations
(c) Quorum and Vote Required
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(d) - (f) Not applicable
Item 9. Reports, Opinions, Appraisals No report, opinion or appraisal and materially
Certain Negotiations related to this Rule 13E-3 Transaction has
been received by the Issuer
(a) - (c) Not Applicable
Item 10. Interest in Securities of the Issuer
(a) Principal Shareholders
(b) Not applicable
Item 11. Contracts, Arrangements or There are no contracts, arrangements, or
Understandings with Respect understandings with respect to the Issuer's
to the Issuer's Securities securities in connection with the Rule 13E-3
Transaction
Item 12. Present Intention and Recommen-
dation of Certain Persons with
Regard to the Transaction
(a) - (b) Quorum and Vote Required/ Background and
Reason for the Reverse Stock Split/Board
Recommendations
Item 13. Other Provisions of the
Transaction
(a) Dissenter's Rights
(b) No such provision has been made
(c) Not applicable
Item 14. Financial Information
(a) 1996 Annual report/10-QSB for Quarter
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ended September 30, 1997
(b) Not applicable
Item 15. Persons and Assets Employed,
Retained or Utilized
(a) Mark L. Gilliam, Vice President, Secretary,
Chief Financial Officer, and Director has
prepared the Proxy, Schedule 13E-3, 1996
Annual Report, December 31, 1997 8-K, and
10-QSB for the Quarter ended September
30, 1997/Deborah E. Nelson, Executive
Assistant, has assisted Mr. Gilliam in the
preparation of such materials
(b) Not applicable
Item 16. Additional Information Not applicable
Item 17. Material to be Filed as Exhibits
(a) - (c) Not applicable
(d) 1996 Annual Report/8-K for December 31,
1997/10-QSB for the Quarter ended
September 30, 1997
(e) Voting/Dissenters' Rights
(f) Not applicable
</TABLE>
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<PAGE>
Item 1. Issuer and Class of Security Subject to the Transaction.
(a) Information in response to this sub-item is contained on the cover
sheet of Schedule 13E-3.
(b) Information in response to this sub-item is incorporated by
reference to "General" in the preliminary proxy statement. There
are approximately 750 holders of record as of January 31, 1998.
(c) Information in response to these sub-items is incorporated by
reference to "Market Price of Company Common Stock, Preferred
Stock, and Shares" in the Preliminary Proxy Statement.
(d) Information in response to these sub-items is incorporated by
reference to "Market Price of Company Common Stock, Preferred
Stock, and Shares" in the Preliminary Proxy Statement.
(e) Not applicable.
(f) Not applicable.
Item 2. Identity and Background.
This Proxy Statement if being filed by the Issuer of the class of
equity security which is the subject of this Rule 13e-3 transaction.
(a) - (d) Not applicable.
(e) No executive officer, director, control person, or executive
officer or director of any corporation ultimately in control of
the registrant during the past five years has been convicted
during the last five years in a criminal proceeding (excluding
traffic violations and similar misdemeanors).
(f) No executive officer, director, control person, or executive
officer or director of any corporation ultimately in control of
the registrant during the past five years has been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining further violations
of, or prohibiting activities subject to, federal or state
securities laws or a finding of any violation of such laws.
(g) Not applicable.
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<PAGE>
Item 3. Past contacts, Transactions or Negotiations.
(a) - (b) Not applicable.
Item 4. Terms of the Transaction.
(a) Information in response to this sub-item is incorporated herein by
reference to "General, Quorum and Vote Required, Proxies, The
Reverse Stock Split, Background and Reason for the Reverse Stock
Split, The Effects of the Reverse Stock Split, Board
Recommendations, Dissenters' Rights, Certain Federal Income Tax
Consequences, and Sources and Amount of Funds" in the Preliminary
Proxy Statement.
(b) Not applicable.
Item 5. Plans or Proposals of the Issuer or Affiliate.
(a) - (e) Not applicable.
(f) - (g) Information in response to these sub-items is incorporated
herein by reference to "Purpose, Voting, Background of and Reason
for the Reverse Split" in the Preliminary Proxy Statement.
Item 6. Source and Amount of Funds or Other Consideration.
(a) Information in response to this sub-item is incorporated herein by
reference to "Source and Amount of Funds" in the Preliminary Proxy
Statement.
(b) An itemized statement of all expenses incurred or estimated to be
incurred in connection with the Rule 13e-3 transaction is as
follows:
Printing $ 3,000
Postage 3,000
Legal 4,000
Accounting 500
Filing fees 500
Fractional share purchase 20,000
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$ 31,000
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(c) Not applicable
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(d) Not applicable
Item 7. Purpose(s), Alternatives, Reasons and Effects.
(a) Information in response to this sub-item is incorporated herein by
reference to "Purpose" in the Preliminary Proxy Statement.
(b) - (c) Information in response to these sub-items is incorporated
herein by reference to "Background of and Reason for the Reverse
Stock Split" in the Preliminary Proxy Statement.
(d) Information in response to this sub-item is incorporated herein by
reference to "Purpose, Background of and Reason for the Reverse
Stock Split, The Effects of the Reverse Stock Split, and Certain
Federal Income Tax Consequences" in the Preliminary Proxy
Statement.
The benefits and detriments to the issuer are either
explicitly or implicitly disclosed in the Proxy Statement. The
benefit to the issuer is the termination of reporting requirements
to the Securities and Exchange Commission. The issuer estimates
that this will save approximately $50,000 per year in expense. The
detriment to the issuer is the inability to raise capital through
a secondary offering after termination of reporting status.
The benefit to the unaffiliated shareholders is that they will
receive payment in exchange for their shares, whereas they have
not received any payments of dividends over the past ten years and
the issuer has no knowledge that dividends have ever been paid to
common shareholders. The issuer has no knowledge that a public
trading market has ever existed for its common shares.
Additionally, some shareholders will be able to recognize a
federal income tax loss on the exchange which should result in a
lowering of their income taxes.
The issuer sees no detriment to the interests of unaffiliated
shareholders because of this transaction.
Item 8. Fairness of the Transaction.
(a) - (b) Information in response to these sub-items is incorporated
herein by reference to "Background of and Reason for the Reverse
Stock Split and Board Recommendations" in the Preliminary Proxy
Statement.
The Board of Directors ("Board") of the issuer believes the
transaction to be fair to unaffiliated shareholders. The Board
considered the following factors when reaching this decision.
There is no public market for the common stock so market value is
not readily determinable. The Board has no knowledge of anyone who
is actively purchasing or selling the common stock so no value
could be derived from such transactions. The Board has no
knowledge of any
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<PAGE>
public market for the common stock on which to base a common stock
value over the past ten years so no value could be derived from
historical market prices. The net book value of the common stock
is a negative number (see Item 14).
Based on the negative book value, paying or not paying
anything per share would be fair to the unaffiliated shareholders,
inasmuch as the common stock's book value would indicate that it
is worthless. The going concern value of the issuer is not readily
determinable since the issuer has experienced operating losses
over the past three years. Additionally, the continued existence
of the issuer relies on the personal guarantee of payment of debt
by Otis L. Crowell, Chairman and President of the issuer. This
personal guarantee of Mr. Crowell is not a corporate asset and
should not be considered when determining the going concern value
of the issuer. Therefore, the Board has relied on what it
considers a fair value of the issuer based on the value of its
assets in excess of liabilities and preferred stock rights
adjusted for a liquidation type sale. This valuation yielded a
value of approximately $20,000 for unaffiliated shareholders. The
Board believes that unaffiliated common stock value would be lower
if the issuer actually attempted to liquidate, based on past land
and lot sales experience.
(c) Information in response to this sub-item is incorporated herein by
reference to "Quorum and Vote Required" in the Preliminary Proxy
Statement.
(d) - (f) Not applicable.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations.
No report, opinion or appraisal and materially related to this Rule
13E-3 Transaction has been received by the Issuer.
(a) - (c) Not applicable.
Item 10. Interest in Securities of the Issuer.
(a) Information in response to this sub-item is incorporated herein by
reference to "Principal Shareholders" in the Preliminary Proxy
Statement.
(b) Not applicable.
Item 11. Contracts, Arrangements or Understandings with Respect to the Issuer's
Securities.
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There are no contracts, arrangements, or understandings with respect to
the Issuer's securities in connection with the Rule 13E-3 Transaction.
Item 12. Present Intention and Recommendation of Certain Persons with Regard to
The Transaction.
(a) - (b) Information in response to these sub-items is incorporated
herein by reference to "Quorum and Vote Required, Background and
Reason for the Reverse Stock Split, Board Recommendations" in the
Preliminary Proxy Statement.
Item 13. Other Provisions of the Transaction.
(a) Information in response to this sub-items is incorporated herein
by reference to "Dissenters' Rights" in the Preliminary Proxy
Statement.
Item 14. Financial Information.
(a) Information in response to this sub-item is incorporated herein by
reference to the 1996 Annual Report, and 10 QSB for Quarter Ended
September 30, 1997 as filed in the Preliminary Proxy Statement.
The book value per common share is as follows at:
September 30, 1997 December 31, 1996 December 31, 1995
$(.17) $(.20) $(.16)
The ratio of earnings to fixed charges is as follows for the years
ended:
December 31, 1996 December 31, 1995
(.04) (1.52)
The ratio of earnings to fixed charges is as follows for the nine
months ended:
September 30, 1997 September 30, 1996
.33 (.33)
(b) Not applicable.
Item 15. Persons and Assets Employed, Retained or Utilized.
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(a) Mark L. Gilliam, Vice President, Secretary, Chief Financial
Officer, and Director has prepared the Preliminary Proxy
Statement, Schedule 13E-3, 1996 Annual Report, December 31, 1997
8-K, and 10-QSB for the quarter ended September 30, 1997. Deborah
E. Nelson, Executive Assistant, has assisted Mr. Gilliam in the
preparation of such materials.
(b) Not applicable.
Item 16. Additional Information.
Not applicable.
Item 17. Material to be filed as Exhibits.
(a) - (c) Not applicable.
(d) The 1996 Annual Report, December 31, 1997 8-K, and 10-QSB for the
quarter ended September 30, 1997 has been filed with the
Preliminary Proxy Statement and is incorporated by reference
herein.
(e) Information in response to this sub-item is incorporated herein by
reference to "Dissenter's Rights" in the Preliminary Proxy
Statement.
(f) Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
March 10, 1998
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(Date)
/s/ Mark L. Gilliam
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(Signature)
Mark L. Gilliam, Vice President,
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Chief Financial Officer,
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Secretary, and Director
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(Name and Title)
