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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SUNGROUP, INC.
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(Name of Registrant as Specified In Its Charter)
John E. Southwood, Jr., Secretary
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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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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.
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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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Notes:
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SUNGROUP, INC.
9102 North Meridian Street
Suite 545
Indianapolis, Indiana 46260
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 19, 1996
The Annual Meeting of Stockholders of SunGroup, Inc. will be held at the
SunGroup, Inc. Headquarters, 9102 North Meridian Street, Suite 545,
Indianapolis, Indiana 46260 on June 19, 1996, at 1:00 p.m., Eastern Standard
Time, for the following purposes:
1. To elect three (3) Directors to serve until the next Annual Meeting of
Stockholders and until their successors shall have been elected and duly
qualified.
2. To ratify the appointment of Geo. S. Olive & Co., LLC as independent public
accountants for the Corporation for 1996.
3. To transact such other business as properly may come before the meeting or
any adjournment thereof.
Only Stockholders of record at the close of business on April 30, 1996 will
be entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
John E. Southwood, Jr.
Secretary
Indianapolis, Indiana
May 15, 1996
______________________________________________________________________________
All Stockholders are urged to attend the meeting in person. Enclosed is a
proxy card which each stockholder is requested to complete, date, sign and
return in the enclosed envelope. Any Stockholder who signs and returns a proxy
card may revoke it at any time before it is voted.
______________________________________________________________________________
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SUNGROUP, INC.
Proxy Statement for
Annual Meeting of Stockholders
General Information
The enclosed proxy is solicited by the Board of Directors of SunGroup, Inc.
(the "Corporation" or "SunGroup") for use at the Annual Meeting of Stockholders
to be held June 19, 1996, at 1:00 p.m., Eastern Standard Time, at the
Corporation's Headquarters, 9102 North Meridian Street, Suite 545, Indianapolis,
Indiana, and any adjournment thereof. Any Stockholder giving a proxy is entitled
to revoke it at any time before the proxy is voted by giving written notice of
revocation to the Secretary of the Corporation, by executing a proxy bearing a
later date or by attending the Annual Meeting and voting in person.
The mailing address of the principal executive office of the Corporation is
9102 North Meridian Street, Suite 545, Indianapolis, Indiana 46260.
This Proxy Statement, the form of proxy and the Corporation's Annual Report
on Form 10-KSB for the year ended December 31, 1995, containing relevant
financial information for 1995, are being mailed to Stockholders on or about May
17, 1996.
Only holders of common stock of record at the close of business on April
30, 1996 will be entitled to vote at the meeting. At that date there were
6,442,099 shares of common stock outstanding and entitled to vote. Each
Stockholder is entitled to one vote for each share held on all issues presented
at the Annual Meeting.
The nominees for election as directors of the Corporation named in this
Proxy Statement will be elected by a plurality of the votes cast. Action on any
other matters to come before the meeting will be approved if the votes cast
favoring the action exceed the votes cast opposing the action. Abstentions,
broker non-votes, and instructions on the accompanying proxy card to withhold
authority to vote for one or more of the nominees will result in the respective
nominees receiving fewer votes.
The cost of soliciting proxies will be borne by the Corporation. In
addition to use of the mail, proxies may be solicited personally or by telephone
by directors, officers and certain employees of the Corporation who will not be
specially compensated for such soliciting. The Corporation will request
brokerage houses, nominees, custodians and fiduciaries to forward soliciting
material to the beneficial owners of stock and will reimburse such persons for
the cost of forwarding the material.
Summary of Matters to be Considered
At the Annual Meeting, Stockholders of the Corporation will be asked to
vote on the following matters:
(1) The election of three (3) Directors to serve until the next Annual
Meeting. Certain information concerning the Board of Directors' nominees for
election as Directors is set forth in the section of this Proxy Statement
entitled "ELECTION OF DIRECTORS."
(2) The ratification of the appointment of Geo. S. Olive & Co., LLC as
independent public accountants for the Corporation for the year ending December
31, 1996.
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(3) The transaction of such other business as may properly be brought
before the Annual Meeting or any adjournment thereof.
Security Ownership of Certain Beneficial Owners and Management
The following tables set forth information as of April 30, 1996, as to the
beneficial ownership, direct or indirect, of the Corporation's Common Stock by
all Directors, all Directors and Officers as a group, and all persons known by
the Corporation to own beneficially more than 5% of the Corporation's Common
Stock. Each such stockholder has sole voting and investment rights with respect
to the shares of Common Stock listed as beneficially held.
The aggregate percentage of ownership is based on 6,442,099 shares of
Common Stock outstanding and all exercisable options and warrants related to
individuals listed in the tables. However, no such options or warrants had been
exercised as of April 30, 1996, the record date.
OWNERSHIP BY MANAGEMENT
OF THE CORPORATION'S COMMON STOCK
Amount and Nature
Name of Beneficial Ownership (1) Percent of Class (2)
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John W. Biddinger (3) 2,420,056 36.7%
7491 Albert Tillinghast Drive
Sarasota, FL 34240
James M. Elliott 20,000 .3%
230 Fountain Square
P.O. Box 727
Bloomington, IN 47404
John E. Southwood, Jr. 50,000 .8%
9102 N. Meridian St., Suite 545
Indianapolis, IN 46260
Dan E. Young (3) 626,179 9.3%
3210 E. 96th Street
Indianapolis, IN 46240
All Directors and 3,116,435 45.5%
Executive Officers as a Group
(5 persons)
(Footnotes on Following Page)
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FIVE PERCENT STOCKHOLDERS OF THE CORPORATION'S COMMON STOCK
Amount and Nature of Percent of
Name Beneficial Ownership (1) Class (2)
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John W. Biddinger (3) 2,420,056 36.7%
7491 Albert Tillinghast Dr.
Sarasota, FL 34240
Conseco, Inc. (3) 5,972,060 48.1%
11825 N. Pennsylvania Street
Carmel, IN 46032
Radio USA, Ltd. 1,913,007 29.7%
601 Jefferson Street
Houston, TX 77002
Dan E. Young (3) 626,179 9.3%
3210 East 96th Street
Indianapolis, IN 46260
Footnotes
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(1) All shares are held directly unless otherwise noted.
(2) Pursuant to applicable Securities and Exchange Commission Rules, a person
is deemed beneficial owner of those shares not outstanding which are
subject to options, warrants, rights or conversion privileges if that
person can exercise such options, warrants, rights or privileges within 60
days. Any such shares are deemed to be outstanding for the purpose of
computing the percentage of outstanding Common Stock owned by such person
individually, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person.
(3) The Corporation has issued the following warrants to purchase shares of its
Common Stock:
John W. Biddinger 101,601
Conseco, Inc. 5,972,060
Dan Young, IRA 304,803
Each of these warrants is exercisable for $.11 (in total, not per share),
except Conseco which is exercisable for $1.00, are presently exercisable and
terminate if not exercised on or before February 15, 2003.
Mr. Young holds 321,376 shares of Common Stock in the name of Young
Investments Company, and 304,803 warrants in his Individual Retirement Account.
Mr. Young has 100% beneficial ownership and control of Young Investments Company
and his IRA.
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Potential Change in Control
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As outlined above in Footnote 3, Conseco, Inc. ("Conseco") holds
exercisable warrants for 5,972,060 shares of the Corporation's Common Stock for
a total exercise price of $1.00. If these warrants were exercised, Conseco would
control 45.9% of the Corporation's Common Stock on a fully diluted basis. The
warrants expire on February 15, 2003 and are nontransferable until February 15,
1997. If by February 15, 1998, certain restructured notes owed to Conseco are
not repaid, Conseco will receive additional warrants for 10% of the
Corporation's Common Stock on a fully diluted basis.
Election of Directors
Directors are to be elected to hold office until the next Annual Meeting of
Stockholders and until the election and qualification of their successors. The
Corporation's bylaws provide for the exact number of directors to be set by the
Board of Directors. The current Board of Directors has determined that the Board
shall consist of three (3) members. The enclosed proxy will be voted in favor of
the election as Directors of the nominees listed below unless contrary
instructions are received. All of the nominees are members of the present board
of Directors and were re-elected at the last Annual Meeting of Stockholders,
which was held in 1995. If any nominee or nominees should be unwilling or unable
to accept nomination or election as a Director, which is currently not expected,
the proxies may be voted with discretionary authority for a substitute nominee
or nominees as shall be designated by the current Board of Directors.
Years of
Name of Nominee Service as Director Age
--------------- ------------------- ---
John W. Biddinger August 1984 - Present 56
James M. Elliott November 1984 - Present 53
Dan E. Young December 1985 - Present 66
Biographical information concerning Mr. Biddinger is set forth below under
the caption "Executive Officers."
James M. Elliott has been President of Elliott and Associates, an
investment advisor and investment manager, since June 1991. Prior thereto, Mr.
Elliott was Vice President and Chief Financial Officer of the Indiana University
Foundation.
Dan E. Young has been President of Young Investments, Inc., a private
investment company, since 1979. He has been active in the ownership and
management of automobile franchise operations and is a multi-dealership owner.
There is no family relationships among any of the Directors, Executive
Officers, and nominees for Director of the Corporation.
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Meetings and Committees
The Board of Directors had a total of five meetings in 1995. No member
attended fewer than 75% of the total number of Board meetings held in 1995. The
Board of Directors has no Nominating Committee or Audit Committee.
The Compensation Committee consists of one non-employee director, Mr.
Elliott. The committee makes recommendations to Corporation management regarding
the compensation structure of the Corporation as applied to executive personnel.
There was one meeting of the Compensation Committee during 1995.
Executive Officers
The name, age, and position with the Corporation of its executive officers
Name Age Position
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John W. Biddinger 56 President
John E. Southwood, Jr. 38 Vice President/Treasurer/Secretary
Each such officer was elected to his present position at a meeting of the
Board of Directors of the Corporation and serves at the discretion of the Board
of Directors.
John W. Biddinger was elected President on May 24, 1991 and has been
Chairman of the Executive Committee since 1984. Mr. Biddinger is also President
and a Director of Biddinger Investment Capital Corporation, a leveraged buy-out
and workout specialist firm.
John E. Southwood, Jr. became Vice President/Finance, Treasurer and Chief
Financial Officer of the Corporation in February 1990 and Secretary in November
1992. Mr. Southwood is a certified public accountant.
Executive and Director Compensation
The following table summarizes the compensation paid by the Corporation to
its current Chief Executive Officer, as of December 31, 1995, for the past three
fiscal years. The Corporation had no other executive officers at December 31,
1995 whose total annual salary and bonus from the Corporation exceeded $100,000
during the past fiscal year.
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SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Corporation
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Name and LTIP
Principal Salary Bonus Payouts All Other
Position Year ($) ($) ($) Compensation ($)
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John W. Biddinger 1995 132,200 0 0 0
CEO
1994 132,200 0 0 0
1993 132,200 0 19,775 (1) 0
(1) Pursuant to his employment agreement, Mr. Biddinger received 1,977,525
shares of the Corporation's Common Stock in September 1993. The fair
market value of these shares at the date of issuance was $0.01 per
share.
The Corporation has entered into an employment agreement with John W.
Biddinger effective May 24, 1991. This agreement originally had an expiration
date of May 24, 1994, but has been extended through May 31, 2000. The agreement
calls for a minimum annual compensation of $125,000, and annual bonuses of up to
50% of annual salary. The agreement calls for Mr. Biddinger to receive 24 months
of annual compensation should he be dismissed without cause or there is a change
in control of the Corporation (as defined in the agreement).
The agreement provides for a death benefit to Mr. Biddinger's estate of two
and one half times the current annual base salary and a lump sum payment equal
to two times the current annual base salary if he should become permanently
disabled (as defined in the agreement). The Corporation is not insured against
either of these events. The agreement also grants Mr. Biddinger the option to
"put" all of his Stock back to the Corporation at a mutually agreed upon fair
market value (as defined in the agreement).
Mr. Biddinger has agreed in restructuring part of the Corporation's debt to
hold his annual salary at $132,200 per year.
Members of the Board of Directors who are not officers of the Corporation
receive $1,000 for their attendance at each regularly scheduled Board meeting.
There were five such meetings in 1995. Messrs. Biddinger, Elliott and Young
attended all such meetings.
Certain Relationships and Related Transactions
There are no reportable events under this item.
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Stockholders' Proposals for 1997
Annual Meeting
Stockholders' proposals intended for presentation at the 1997 Annual
Meeting of Stockholders must be received by John E. Southwood, Jr., Vice
President and Secretary, SunGroup, Inc., 9102 North Meridian Street, Suite 545,
Indianapolis, Indiana 46260, no later than March 7, 1997 for inclusion in the
proxy statement and form of proxy relating to that meeting. All such proposals
must be in writing and mailed by Certified Mail, Return Receipt Requested, and
must comply with Rule 14a-8 of Regulation 14A of the proxy rules of the
Securities and Exchange Commission.
Ratification of the Appointment of Independent Public Accountants
The firm of Geo. S. Olive & Co., LLC, which has been the independent
public accountants of the Corporation since 1992, has been appointed by the
Board of Directors to continue as the Corporation's auditors for the year ending
December 31, 1996, and the Board of Directors is seeking ratification of this
appointment. Representatives of Geo. S. Olive & Co., LLC are not expected to be
present at the Annual Meeting.
Other Matters
Management of the Corporation is not aware of any other matters which may
be presented for action at the meeting. Should any other matter requiring a vote
of the Stockholders arise, it is intended that the proxies in the accompanying
form will be voted in accordance with the best judgment of the person or persons
voting the proxies in light of conditions then prevailing.
If you do not plan to attend this meeting it would be appreciated if you
would promptly sign, date, and return the enclosed proxy in the enclosed
envelope.
By Order of the Board of Directors
John E. Southwood, Jr.
Vice President and Secretary
May 15, 1996
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PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 19, 1996
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
SUNGROUP, INC.
9102 North Meridian Street
Suite 545
Indianapolis, Indiana 46260
The undersigned hereby appoints John W. Biddinger and John E. Southwood, Jr., or
either of them as Proxies, each with the power of substitution, and hereby
authorizes either of them acting singly to represent and to vote, as designated
below, all of the shares of Common Stock of SunGroup, Inc., which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on June 19, 1996 at 1:00 p.m., Eastern Standard Time, at SunGroup, Inc.'s
Headquarters, 9102 North Meridian Street, Suite 545, Indianapolis, Indiana, or
any adjournment thereof, as follows:
1. ELECTION OF DIRECTORS.
_____ FOR all nominees listed below (except as marked below)
_____ WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME.)
John W. Biddinger James M. Elliott Dan E. Young
2. RATIFY THE APPOINTMENT OF GEO. S. OLIVE & CO., LLC AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE CORPORATION FOR 1996.
For _____ Against _____ Abstain _____
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THE PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
____________________________________ Date: _____________________________
____________________________________
Signature of Stockholder(s)
(Please sign in the exact form in which your name
appears hereon and date your proxy. When signing as
attorney, executor, administrator, guardian, trustee,
officer signing for corporations, etc., please give full
title as such. For joint owners, each joint owner should sign.)
