NIAGARA CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Niagara Corporation, a Delaware corporation (the "Company"), will be held
at the offices of the Company, 667 Madison Avenue, New York, New York
10021, on Thursday, May 29, 1997, at 10:00 a.m. local time for the
following purposes:
1. To elect a Board of four Directors, each to serve until
the next Annual Meeting or until a successor shall have
been duly elected and qualified;
2. To ratify and approve the appointment of BDO Seidman LLP
as independent accountants for 1997; and
3. To transact such other business as may properly come
before the Annual Meeting.
The Board of Directors has fixed the close of business on May 5, 1997
as the record date for the determination of stockholders entitled to notice
of and to vote at the Annual Meeting.
You are cordially invited to attend the Annual Meeting. Whether or
not you plan to attend, please complete, date and sign the enclosed proxy
and return it promptly in the self-addressed stamped envelope provided. If
you attend the Annual Meeting, you may withdraw your proxy and vote in
person if you so desire.
By Order of the Board of Directors,
GILBERT D. SCHARF
Secretary
New York, New York
May 5, 1997
NIAGARA CORPORATION
667 MADISON AVENUE
11TH FLOOR
NEW YORK, NEW YORK 10021
(212) 317-1000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the stockholders of Niagara
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Company's Board of Directors (the "Board of
Directors" or the "Board") for use at the Annual Meeting of Stockholders
scheduled to be held on Thursday, May 29, 1997, at 10:00 a.m. local time at
the offices of the Company, 667 Madison Avenue, New York, New York 10021
(with any adjournment or postponement thereof, the "Annual Meeting"). This
Proxy Statement, the Notice of Annual Meeting and the accompanying form of
proxy are first being mailed to stockholders on or about May 6, 1997.
Shares of the Company's Common Stock, par value $.001 per share
("Common Stock"), represented by properly executed proxies received prior
to or at the Annual Meeting and not revoked will be voted at the Annual
Meeting in accordance with the instructions indicated on such proxies. If
no instructions are indicated, shares represented by such proxies will be
voted (i) "FOR" the election of the four nominees to the Board of Directors
and (ii) "FOR" ratification and approval of BDO Seidman LLP as independent
accountants for 1997. The Board of Directors is not aware of any other
matter which is to come before the Annual Meeting; if any other matter is
properly presented for consideration, the persons named in the enclosed
proxy will have discretion to vote on such matters in accordance with their
best judgment.
Any proxy given pursuant to this solicitation can be revoked by the
person giving such proxy at any time before it is voted. Proxies can be
revoked by (i) filing with the Secretary of the Company, at or before the
taking of the vote at the Annual Meeting, a written notice of revocation
bearing a later date than the proxy, (ii) duly executing a subsequent proxy
relating to the same shares and delivering it to the Secretary of the
Company before the Annual Meeting or (iii) attending the Annual Meeting and
voting in person (although presence at the Annual Meeting without further
action will not revoke a proxy). Any written notice revoking a proxy should
be sent to: Niagara Corporation, Attention: Gilbert D. Scharf, Secretary,
667 Madison Avenue, New York, New York 10021, or hand delivered to the
Secretary at or prior to the vote at the Annual Meeting.
The Board of Directors has fixed the close of business on May 5, 1997
as the record date for the Annual Meeting. Accordingly, only holders of
record of shares of Common Stock at the close of business on such date are
entitled to notice of and to vote at the Annual Meeting. At the close of
business on the record date, 3,954,465 shares of Common Stock were issued
and outstanding. On all matters voted upon at the Annual Meeting, holders
of shares of Common Stock vote as a single class, with each record holder
entitled to one vote per share.
The presence, in person or by properly executed proxy, of holders of
a majority of outstanding shares of Common Stock entitled to vote at the
Annual Meeting will constitute a quorum. A stockholder who abstains from a
vote on a particular matter by registering an abstention will be deemed
present at the Annual Meeting for quorum purposes, but will not be deemed
to have voted on such matter. Proxies relating to "street name" shares
voted by brokers on a discretionary basis on certain proposals will be
treated as present for quorum purposes on all proposals, but will not be
entitled to vote on any proposal as to which the broker does not have
discretionary voting power and has not received instructions from the
beneficial owner ("broker non-votes").
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors has nominated four candidates for election at
the Annual Meeting. Each nominee currently serves as a director of the
Company. The directors elected at the Annual Meeting will hold office until
the next annual meeting of stockholders or until their respective
successors have been duly elected and qualified.
If a quorum is present, those nominees receiving a plurality of the
votes cast at the Annual Meeting will be elected as directors. A
"plurality" means that the nominees who receive the greatest number of
votes present or represented by proxy are elected as directors, up to four
directors. Any shares not voted "FOR" a particular director (whether as a
result of a direction to withhold authority or a broker non-vote) will not
be counted to determine a plurality.
Unless otherwise specified, shares represented by properly executed
and returned proxies will be voted "FOR" the nominees listed below. Each
nominee has consented to being named in the proxy statement and to serve if
elected. If, prior to the Annual Meeting, any nominee becomes unavailable
for election, which is not anticipated, the persons named in the enclosed
proxy will have full discretion to vote or refrain from voting for any
other person in accordance with their best judgment.
DIRECTORS AND EXECUTIVE OFFICERS
The nominees for director, their ages, the year in which each first
became a director and the positions held with the Company are as follows:
DIRECTOR
NOMINEE AGE SINCE POSITION
- ------- --- --------- --------
Michael J. Scharf............... 54 1993 Chairman of the Board,
President and Chief
Executive Officer
Gilbert D. Scharf............... 48 1993 Vice President,
Secretary, Treasurer
and Director
Gerald L. Cohn.................. 68 1993 Director
Andrew R. Heyer................. 39 1993 Director
MICHAEL J. SCHARF has been Chairman of the Board, President and Chief
Executive Officer of the Company since its inception in 1993. He has also
served as Chairman of the Board of Niagara Cold Drawn Corp. ("Niagara") and
LaSalle Steel Company ("LaSalle") since the dates of their acquisition by
the Company and Niagara, respectively, and currently holds various other
positions with such subsidiaries. Since August 1994, Mr. Scharf has been
Vice President, Secretary, Treasurer and a director of Financial Services
Acquisition Corporation, a holding company with operating subsidiaries in
the financial services industry ("FSAC"), and since November 1996, he has
been a director of Euro Brokers Investment Corporation ("Euro Brokers"), a
financial services company and wholly owned subsidiary of FSAC. Since
August 1989, Mr. Scharf also has been a private investor. From October 1983
to August 1989, Mr. Scharf was the Chairman and Chief Executive Officer of
Edgcomb Steel of New England, Inc. and its successor corporation, Edgcomb
Corporation. Mr. Scharf has an A.B. degree from Princeton University and an
M.B.A. from Harvard Business School.
GILBERT D. SCHARF has been Vice President, Secretary, Treasurer and
director of the Company since its inception. He has also served as a
director of Niagara and LaSalle since the dates of their acquisition by the
Company and Niagara, respectively, and currently holds various other
positions with such subsidiaries. Since August 1994, Mr. Scharf has been
Chairman of the Board, President and Chief Executive Officer of FSAC, and
since November 1996, he has held the same positions with Euro Brokers.
Since 1989, Mr. Scharf also has been a private investor and Chairman of
Scharf Advisors, Inc. Mr. Scharf has a B.A. degree from Duke University.
GERALD L. COHN has been a director of the Company since its
inception. Mr. Cohn is a private investor who, since 1968, has been
involved in the financing and acquisition of companies, including AgMet,
Inc., a refiner of precious metals and a recycler of ferrous and
non-ferrous metals, Cadillac Cable Corp., a multi-plant manufacturer of
copper and aluminum building wire, Pepco, Inc., a ferrous and non-ferrous
metal recycler and ferrous stevedoring and shipping company, and DVI, Inc.,
a health service finance company for which Mr. Cohn currently serves as a
financial advisory consultant and a director. Mr. Cohn is also a director
of Diametrics Medical, Inc., SMT Health Services, Inc. and Frazier
Healthcare Investments, L.P. Mr. Cohn attended Penn State University.
ANDREW R. HEYER has been a director of the Company since its
inception. Since February 1990, Mr. Heyer has been a Managing Director and
co-head of CIBC Wood Gundy Securities Corp., (formerly, The Argosy Group
L.P.) ("CIBC"), a financial advisory firm specializing in merger,
acquisition, divestiture, financing, refinancing and restructuring
transactions. Mr. Heyer is also the Chairman of Hain Food Group, Inc. and a
director of Hayes Wheels International, Inc. Mr. Heyer has a B.S. degree
and an M.B.A. from the Wharton School of the University of Pennsylvania.
Michael J. Scharf and Gilbert D. Scharf are brothers. There are no
other family relationships among the Company's directors, executive
officers or persons nominated or chosen by the Company to become a director
or executive officer.
COMMITTEES, MEETINGS, AND COMPENSATION OF THE BOARD OF DIRECTORS
During 1996, the Board of Directors met five times. All incumbent
directors attended at least 75% of the meetings of the Board and Committees
on which they serve.
The Board of Directors has Executive, Audit and Compensation
Committees. The Executive Committee is comprised of Messrs. Michael Scharf
(Chairman) and Gilbert Scharf, and is authorized to exercise all powers and
authority of the Board of Directors, except those reserved to the Board by
law, the Company's Restated Certificate of Incorporation or By-laws, or by
Board resolution. The Executive Committee did not meet during 1996 because
its duties were carried out by the Board of Directors.
The Audit Committee is comprised of Messrs. Michael Scharf
(Chairman), Heyer and Cohn and recommends to the Board of Directors the
accounting firm to be appointed as independent accountants for the Company;
reviews with the Company's management and independent accountants the
Company's annual operating results; and reviews with the Company's
independent accountants the scope and results of the audit and the adequacy
of the Company's internal accounting procedures and systems. The Audit
Committee did not meet during 1996 because its duties were carried out by
the Board of Directors.
The Compensation Committee is comprised of Messrs. Cohn (Chairman)
and Heyer and considers and makes recommendations to the Board of Directors
on matters relating to the cash compensation of executive officers of the
Company. The Compensation Committee also administers the Company's 1995
Stock Option Plan (the "Option Plan"). The Compensation Committee met twice
during 1996.
The members of the Board of Directors are compensated in a manner and
at a rate determined from time to time by the full Board. On September 13,
1996, each member of the Board of Directors, other than Michael Scharf,
received as compensation for his service as a director, a non-qualified
stock option (a "Director Option") to purchase 15,000 shares of Common
Stock, exercisable at $5.50 per share. Each Director Option became
exercisable as to 10,000 of the underlying shares of Common Stock as of the
date of grant. The remainder of each Director Option will become
exercisable on September 13, 1997, provided the holder is then serving as a
director of the Company, and will become exercisable in full upon a "change
in control" of the Company (as defined in the Option Plan). Each Director
Option expires on the earlier of (i) the tenth anniversary of the date of
grant and (ii) 90 days after the date on which the holder ceases to serve
as a director of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Andrew R. Heyer, a current director and nominee for election as a
director of the Company, is a Managing Director of CIBC, which rendered
investment banking and financial advisory services to the Company in 1996.
The amount paid by the Company to such firm in connection with such
services did not exceed 5% of such firm's consolidated gross revenues for
its last full fiscal year. In April 1997, CIBC served as placement agent in
connection with the issuance of (i) $20 million aggregate principal amount
of 12.5% senior subordinated notes of Niagara and (ii) 285,714 shares of
Common Stock, the proceeds of which were used to finance Niagara's
acquisition of LaSalle. The Company and Niagara paid CIBC $790,081 in fees
and reimbursement of expenses as consideration for such services.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires officers, directors and persons who beneficially
own more than 10% of a registered class of equity securities of the Company
("10% stockholders") to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (the "Commission"). Officers,
directors and 10% stockholders also are required to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on its
review of copies of such forms furnished to it, and written representations
that no other reports were required, the Company believes that during the
fiscal year ended December 31, 1996, each of its officers, directors and
10% stockholders complied with the Section 16(a) reporting requirements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION OF THE FOUR
NOMINEES LISTED ABOVE AS DIRECTORS.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The information set forth in the following table is furnished as of
May 5, 1997 with respect to each person known by the Company to be the
beneficial owner of more than 5% of the Common Stock, shares beneficially
owned by each of the Company's directors and executive officers, and all
directors and executive officers as a group.
NUMBER OF PERCENTAGE
NAME(1) SHARES(2) BENEFICIALLY OWNED(3)
---- --------- ---------------------
Michael J. Scharf(3)................. 1,198,750(4) 26.84%
Gilbert D. Scharf(3)................. 537,250(5) 12.83%
Gerald L. Cohn....................... 20,000(6) *
Andrew R. Heyer...................... 20,000(6) *
All directors and executive
officers as a group
(four persons)...................... 1,776,000 37.64%
- ---------------
* Less than 1%
(1) The address of each stockholder is c/o Niagara Corporation, 667
Madison Avenue, 11th Floor, New York, New York 10021.
(2) Includes shares of Common Stock issuable upon the exercise of
warrants to purchase shares of Common Stock ("Warrants") beneficially
owned by the stockholder. Each Warrant entitles the holder to
purchase from the Company, until the close of business on August 13,
2000, one share of Common Stock at $5.50 per share, subject to
adjustment in certain circumstances. Also includes shares of Common
Stock issuable upon the exercise of stock options held by the
stockholder that are currently exercisable or exercisable within 60
days ("Exercisable Options").
(3) Based upon 3,954,465 shares of Common Stock outstanding as of May 5,
1997, plus any shares of Common Stock issuable upon the exercise of
Warrants beneficially owned by the stockholder or Exercisable Options
held by the stockholder (but not, in either case, by any other
stockholder).
(4) Includes 100,000 shares of Common Stock owned by the Michael J.
Scharf 1987 Grantor Income Trust and 100,000 shares of Common Stock
owned by the Scharf Family 1989 Trust. Michael Scharf is a trustee of
both of these trusts. Also includes 437,500 shares of Common Stock
issuable upon the exercise of Warrants held by Mr. Scharf and 75,000
shares of Common Stock issuable upon the exercise of Warrants held by
the Michael J. Scharf 1987 Grantor Income Trust.
(5) Includes 221,500 and 10,000 shares of Common Stock issuable upon the
exercise of Warrants and Exercisable Options, respectively.
(6) Includes 10,000 shares of Common Stock issuable upon the exercise of
Exercisable Options.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation earned by the
executive officers of the Company for the last three fiscal years.
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation(1) Securities Underlying All Other
Executive Officer Year Base Salary Bonus Options (No. of Shares) Compensation
- ----------------- ---- ---------------------- ----------------------- ------------
<S> <C> <C> <C> <C> <C>
Michael J. Scharf 1996 $240,000 $100,000(2) 200,000 ---
Chairman, Chief 1995 90,000(3) --- --- (4)
Executive Officer 1994 --- --- --- (4)
and President
Gilbert D. Scharf 1996 --- --- 15,000 (5) ----
Vice President, 1995 --- --- --- (6)
Secretary and 1994 --- --- --- ---
Treasurer
</TABLE>
- ------------
(1) Prior to the Company's acquisition of Niagara on August 16, 1995,
none of the Company's executive officers received any compensation
for services rendered, but were reimbursed for out-of pocket expenses
incurred in connection with the Company's business.
(2) Awarded by the Compensation Committee in April 1997 in respect of
1996.
(3) Based on an annual salary of $240,000 set by the Compensation
Committee in January 1996, effective as of August 16, 1995.
(4) Through August 1995, the Company paid $5,000 per month to MGS
Corporation for office space and certain office and secretarial
services. MGS Corporation is wholly owned by Michael Scharf. In
addition, Mr. Scharf (and trusts of which he is a trustee) holds
400,000 shares ("Pre-IPO Shares") of Common Stock issued in May 1993
prior to the Company's August 1993 initial public offering (the
"IPO"). In the IPO, each unit offered for sale to the public
(consisting of one share of Common Stock and two Warrants) was priced
at $6.00. All Pre-IPO shares were issued at $.04 per share and were
subject to certain restrictions, including having no value if the
Company were forced to liquidate if it did not consummate an initial
business combination within two years of the IPO. As noted above, the
Company acquired Niagara on August 16, 1995. On August 13, 1996, all
restrictions on Michael Scharf's Pre-IPO Shares terminated.
(5) As discussed above under "Committees, Meetings and Compensation of
the Board of Directors," on September 13, 1996, Gilbert Scharf
received a Director Option to purchase 15,000 shares of Common Stock
as compensation for his service as a director.
(6) Gilbert Scharf holds 195,000 Pre-IPO Shares issued in May 1993 at
$.04 per share. Such Pre-IPO Shares were subject to the same
restrictions as those described in footnote 4, which restrictions
terminated on August 13, 1996.
STOCK OPTION GRANT TABLE
The following table sets forth certain information concerning stock
options granted during 1996 to the Company's executive officers.
STOCK OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total Options Exercise at Assumed Annual Rates of
Executive Shares Underlying Granted to All Price Per Expiration Stock Price Appreciation
Officer Options Granted Employees in 1996(1) Share Date for Option Term
- --------- ----------------- -------------------- --------- ---------- --------------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Michael J. Scharf 200,000(2) 75.5 $5.50 9/13/06(3) $528,000 $1,494,000
Gilbert D. Scharf 15,000(4) 5.7 $5.50 9/13/06(5) 39,600 112,050
</TABLE>
(1) Includes Director Option granted to Gilbert Scharf (as compensation
for his service as a director) but excludes Director Options granted
to Messrs. Heyer and Cohn.
(2) On September 13, 1996, Michael Scharf was granted an incentive stock
option to purchase an aggregate of 100,000 shares of Common Stock and
a non-qualified stock option to purchase an aggregate of 100,000
shares of Common Stock. Such options will become exercisable as to
20% of the underlying shares on each of the first through fifth
anniversaries of the date of grant, provided that Mr. Scharf is then
employed by the Company or one of its subsidiaries. Upon the
occurrence of a "change in control" of the Company (as defined in the
Option Plan), such options will become fully exercisable.
(3) Michael Scharf's options expire on the earlier of September 13, 2006
and 90 days after the termination of his employment with the Company
and its subsidiaries.
(4) Granted as a Director Option as compensation for Gilbert Scharf's
service as a director. Such Director Option is exercisable as to
10,000 of the underlying shares of Common Stock and is exercisable in
full on September 13, 1997, provided Mr. Scharf is then serving as a
director of the Company, and upon a "change in control" of the
Company (as defined in the Option Plan).
(5) Gilbert Scharf's Director Option expires on the earlier of September
13, 2006 and 90 days after the date on which he ceases to serve as a
director of the Company.
OPTION EXERCISES AND FISCAL YEAR END VALUES
The executive officers of the Company did not exercise any stock
options during 1996. Accordingly, at December 31, 1996, the number of
options held by each executive officer was the same as the total number
granted to him in fiscal 1996 (as set forth in the table above). At
December 31, 1996, no portion of the options granted to Michael Scharf were
exercisable and the Directors Option held by Gilbert Scharf was exercisable
as to 10,000 of the underlying shares of Common Stock. In addition, based
on the December 31, 1996 closing sale price for the Common Stock of $4-3/8
per share, none of such options had an exercise price below such closing
sale price.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
General
The Compensation Committee of the Board of Directors, formed in
August 1995, is comprised of Messrs. Cohn and Heyer. There are no
"interlocks," as defined by the Commission with respect to any director who
serves, or for any part of fiscal year 1996 served, as a member of the
Compensation Committee.
The Compensation Committee considers and makes recommendations to the
Board on matters relating to cash compensation of the Company's executive
officers and is also responsible for administering the Company's Option
Plan which was adopted and approved by the Company's stockholders in May
1996. The Compensation Committee reviews and develops compensation policies
and programs designed to enhance the Company's long-term profitability.
Currently, the Compensation Committee's objectives are implemented through
three components -- base salary, annual bonus and stock option awards. In
considering and determining these components, the Compensation Committee,
among other things, reviews the Company's current and historical
performance and evaluates the executive's contributions and performance for
the relevant compensation period.
Compensation of the Chief Executive Officer
In establishing (in January 1996) Michael Scharf's base salary for
the year, the Compensation Committee considered (i) Mr. Scharf's
contributions to the Company (and in particular, the Company's successful
completion of its acquisition of Niagara in August 1995 and the anticipated
closing of Niagara's acquisition of Southwest Steel Company, Inc.), (ii)
the fact that Mr. Scharf had served as the Company's Chairman, Chief
Executive Officer and President without compensation for over two years and
(iii) the salary levels of Niagara employees.
In establishing (in April 1997) Michael Scharf's bonus in respect of
1996, the Compensation Committee considered (i) Mr. Scharf's contributions
to the Company and, in particular, Mr. Scharf's significant efforts to
complete Niagara's acquisition of LaSalle and (iii) bonuses paid to Niagara
senior management for 1997.
In September 13, 1996, the Compensation Committee determined to grant
Mr. Scharf an incentive stock option and a non-qualified stock option,
each to purchase an aggregate of 100,000 shares of Common Stock at $5.50
per share. On the day such options were granted, the closing sales price
for the Common Stock was $5.00 per share. Mr. Scharf's options will become
exercisable as to 20% of the underlying shares on each of the first through
fifth anniversaries of the date of grant, provided that Mr. Scharf is then
employed by the Company or one of its subsidiaries. Upon the occurence of a
"change in control" of the Company (as defined in the Option Plan), such
options will become fully exercisable. In making this determination, the
Compensation Committee considered (i) Mr. Scharf's long-term contributions
to the Company and, in particular, his successful shepherding of the
Company through two acquisitions and his significant efforts towards
consummating additional acquisitions, (ii) the fact that Mr. Scharf had
served as the Company's Chairman, Chief Executive Officer and President
without compensation for over two years, (iii) the options granted to other
employees of the Company and its subsidiaries and (iv) that the five-year
vesting schedule would serve to further align Mr. Scharf's interests with
the long-term interests of the Company and its stockholders.
COMPENSATION COMMITTEE
Gerald L. Cohn, Chairman
Andrew R. Heyer
STOCK PRICE PERFORMANCE COMPARISON
The following graph compares cumulative total return of shares of
Common Stock with the cumulative total return of (i) the Standard & Poor's
600 Smallcap index (the "S&P 600 Smallcap Index"), (ii) a new industry peer
group index comprised of five other publicly-traded steel companies (the
"Steel Index") and (iii) a prior peer group index consisting of five
publicly-traded "Specified Purpose Acquisition Companies"(R) (the "SPAC
Index"). The graph assumes $100 was invested on August 20, 1993 (the date
the Common Stock began trading) in shares of Common Stock, and stocks
comprising the S&P 600 Smallcap Index, the Steel Index and the SPAC Index,
and the reinvestment of all dividends.
The companies comprising the Steel Index are publicly-traded steel
companies that produce, process and/or distribute steel bars. The companies
comprising the Steel Index are: Nucor Corporation, Republic Engineered
Steels, Inc., Olympic Steel, Inc., A.M. Castle & Co. and Northwest Steel &
Wire Company.
In prior years, the Company had used the SPAC Index because at such
time it shared in common with the companies comprising such index certain
unique business purposes and investor-protection features. Because the
Company no longer has such purposes and features, the Company believes the
use of the Steel Index is more appropriate. Although the Company will not
be using the SPAC Index in the future, the Company is required to include
the prior index for comparative purposes in the first performance graph
that changes from the prior index to a new index. The Companies comprising
the SPAC Index are: Source Media, Inc., Bogen Communications International,
Inc., Boston Acoustics, Inc., Kellstrom Industries, Inc., and Emerson Radio
Corp.
COMPARATIVE STOCK PRICE PERFORMANCE(1)
[TABULAR DESCRIPTION OF PERFORMANCE GRAPH]
COMPARATIVE STOCK PRICE PERFORMANCE AMONG
NIAGARA CORPORATION, S&P 600 INDEX, SPAC INDEX AND STEEL INDEX
MEASUREMENT NIAGARA S&P 600 SPAC STEEL
PERIOD CORPORATION INDEX INDEX INDEX
August 1995 $100.00 $100.00 $100.00 $100.00
September 1995 104.17 102.55 106.74 94.92
October 1995 87.50 97.42 106.29 96.22
November 1995 84.33 101.20 100.14 98.73
December 1995 75.00 102.77 100.89 108.57
January 1996 78.17 102.90 97.96 109.64
February 1996 94.83 106.20 96.80 106.78
March 1996 79.17 108.37 92.84 111.62
April 1996 85.50 114.49 102.20 116.00
May 1996 98.00 118.49 103.51 120.24
June 1996 93.83 113.73 106.74 119.16
July 1996 93.83 105.83 98.55 112.06
August 1996 73.00 112.28 102.20 112.06
September 1996 85.50 117.08 104.68 115.67
October 1996 75.00 116.18 98.83 106.25
November 1996 70.83 122.12 91.37 111.65
December 1996 73.00 123.45 88.75 109.91
January 1997 95.83 125.40 103.65 107.35
February 1997 94.83 122.73 114.18 100.91
March 1997 87.50 116.34 109.66 91.99
(1) The comparisons in the performance graph are set forth in response to
disclosure requirements of the Commission and are not intended to
forecast or be indicative of future performance of the shares of the
Common Stock (or of any of the indices or companies comprising them).
The Company's Common Stock is traded on the Nasdaq National Market.
Until October 15, 1995, such stock was quoted on the OTC Bulletin Board, a
National Association of Securities Dealers, Inc. sponsored and operated
inter-dealer automated quotation system for equity securities not included
in the Nasdaq System. Such over-the-counter market quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and
may not necessarily reflect actual transactions.
PROPOSAL 2: APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, on the recommendation of members of the Audit
Committee, has appointed BDO Seidman LLP ("BDO Seidman") as independent
accountants for 1997, subject to ratification and approval by stockholders.
BDO Seidman has served as the Company's independent accountants since the
Company's inception. The Board recommends that stockholders ratify and
approve their appointment. A representative of BDO Seidman is expected to
attend the Annual Meeting and will have an opportunity to make a statement,
if he desires to do so, and to respond to questions from the Company's
stockholders.
The affirmative vote of the holders of a majority of shares of Common
Stock present or represented by proxy at the Annual Meeting and entitled to
vote is required to ratify and approve the appointment of BDO Seidman as
independent accountants for 1997. Unless a contrary instruction is
indicated, a properly executed and returned proxy will be voted "FOR"
appointment of BDO Seidman as independent accountants for 1997. A failure
to vote shares, either by abstention or broker non-vote, will have the same
effect as a vote against this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPOINTMENT OF BDO SEIDMAN AS INDEPENDENT ACCOUNTANTS FOR 1997.
SOLICITATION OF PROXIES
The costs of soliciting proxies for the Annual Meeting will be paid
by the Company. In addition to the mailing of proxy materials, such
solicitation may be made in person or by telephone, facsimile or telegram
by directors and executive officers of the Company, who will receive no
additional compensation. Kissel-Blake Inc. will assist in the solicitation
of proxies by the Company for a fee of $3,500, plus reasonable
out-of-pocket expenses. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries for forwarding solicitation
materials to beneficial owners of Common Stock held of record by such
persons, and the Company will reimburse such custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses.
STOCKHOLDER PROPOSALS
Proposals which stockholders of the Company intend to present at next
year's annual meeting of stockholders must be received, in order to be
considered at such meeting, by the Secretary of the Company, at the
Company's executive offices located at 667 Madison Avenue, New York, New
York 10021, not later than the close of business on January 5, 1998.
Stockholder proposals received after that date will not be included in the
Company's proxy statement or form of proxy prepared in connection with such
meeting.
ADDITIONAL INFORMATION
The Company's Annual Report on Form 10-K for the year ended December
31, 1996, as filed with the Commission, is enclosed with this proxy
statement (without exhibits or schedules), but is not to be regarded as
proxy soliciting materials. The Company will provide without charge to each
stockholder, upon written request, copies of the exhibits and schedules to
such Form 10-K. Stockholders should address such written requests to:
Niagara Corporation, Attention: Gilbert D. Scharf, Secretary, 667 Madison
Avenue, New York, New York 10021.
By Order of the Board of Directors,
GILBERT D. SCHARF
Secretary
New York, New York
May 5, 1997
NIAGARA CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 29, 1997
The undersigned hereby appoints Michael J. Scharf and Gilbert D.
Scharf as Proxies, each with the power to appoint such stockholder's
substitute, and hereby authorizes them, or either one of them, to represent
and to vote, as designated below, all of the shares of Common Stock of
Niagara Corporation (the "Company"), held of record by the undersigned on
May 5, 1997, at the Annual Meeting of Stockholders to be held on Thursday,
May 29, 1997 at 10:00 a.m. local time and any and all adjournments or
postponements thereof.
1. Proposal 1 Election of Directors Nominees are: Michael J. Scharf,
Gilbert D. Scharf, Gerald L. Cohn and Andrew R. Heyer.
FOR ALL NOMINEES ( ) WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES ( )
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME IN THE SPACE BELOW.
2. Proposal 2 Appointment of BDO Seidman LLP as independent accounts
for 1997.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other matters as may properly come before the Annual Meeting and
any adjournment or postponement thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 and 2.
Dated: ___________________, 1997
_________________________________
Signature
_________________________________
Signature if held jointly
Please sign exactly as your name appears
herein. If shares are held by joint
tenants, both must sign. When signing as
an attorney, executor, administrator,
trustee, or guardian, give your full
title as such. If shares are held by a
corporation, the corporation's president
or other authorized officer must sign
using the corporation's full name. If
shares are held by a partnership, an
authorized person must sign using the
partnership's full name.
PLEASE MARK, DATE, SIGN, AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
SELF-ADDRESSED STAMPED ENVELOPE.
