SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 ss. 240.14a-11(c)
or ss. 240.14a-12
Acorn Holding Corp.
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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:
2) Aggregate number of securities to which transaction applies:
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):
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:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing:
1) Amount Previously Paid:
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2) Form, Schedule or Registration No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
ACORN HOLDING CORP.
1251 AVENUE OF THE AMERICAS
45TH FLOOR
NEW YORK, NEW YORK 10020-1104
March 8, 1999
Dear Fellow Stockholders:
You are cordially invited to attend our Special Meeting of Stockholders
which will be held on April 15, 1999 at 11:00 A.M., at offices of Acorn Holding
Corp., 107 Cherry Street, New Canaan, Connecticut 06840.
The Notice of Special Meeting and Proxy Statement which follow describe
the business to be conducted at the Special Meeting.
Whether or not you plan to attend the Special Meeting in person, it is
important that your shares be represented and voted. After reading the enclosed
Notice of Special Meeting and Proxy Statement, I urge you to complete, sign,
date and return your proxy card in the envelope provided. If the address on the
accompanying material is incorrect, please advise our Transfer Agent,
Continental Stock Transfer & Trust Company, in writing at Two Broadway, New
York, NY 10004.
Your vote is very important, and we will appreciate a prompt return of
your signed proxy card. We hope to see you at the meeting.
Cordially,
Stephen A. Ollendorff
Chief Executive Officer
<PAGE>
ACORN HOLDING CORP.
1251 AVENUE OF THE AMERICAS
45TH FLOOR
NEW YORK, NEW YORK 10020-1104
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held April 15, 1999
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To the Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Acorn
Holding Corp. (the "Company') will be held on April 15, 1999 at 11:00 A.M. local
time at offices of the Company, 107 Cherry Street, New Canaan, Connecticut 06840
for the following purposes:
1. To consider and vote upon a proposed amendment of the Company's
Certificate of Incorporation to effect a combination of the Company's issued and
outstanding shares of Common Stock on the basis that each five (5) shares of
Common Stock then outstanding will be converted into two (2) shares of Common
Stock; and
2. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Only stockholders of record on the books of the Company at the close of
business on March 8, 1999 will be entitled to notice of and to vote at the
meeting or any adjournments thereof.
March 8, 1999 By order of the Board of Directors
Stephen A. Ollendorff
Secretary
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED FOR THAT PURPOSE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE
PRESENT AT THE MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.
<PAGE>
PROXY STATEMENT
ACORN HOLDING CORP.
SPECIAL MEETING OF STOCKHOLDERS
To Be Held April 15, 1999
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Acorn Holding Corp., a Delaware corporation
(the "Company"), for use at the Special Meeting of Stockholders to be held on
April 15, 1999 (the "Special Meeting"), including any adjournment or
adjournments thereof, for the purposes set forth in the accompanying Notice of
Meeting.
Management intends to mail this proxy statement and the accompanying form
of proxy to stockholders on or about March 10, 1999.
The costs of soliciting proxies will be borne by the Company. It is
estimated that such costs will be nominal. The Company expects to reimburse
banks, brokers and other persons for their reasonable out-of-pocket expenses in
handling proxy materials for beneficial owners of the Common Stock.
Proxies in the accompanying form, duly executed and returned to the
management of the Company and not revoked, will be voted at the Special Meeting.
Any proxy given pursuant to such solicitation may be revoked by the stockholder
at any time prior to the voting of the proxy by a subsequently dated proxy, by
written notification to the Secretary of the Company, or by personally
withdrawing the proxy at the meeting and voting in person.
The address and telephone number of the principal executive offices of the
Company are:
1251 Avenue of the Americas
45th Floor
New York, New York 10020-1104
Telephone: (212) 536-4089
OUTSTANDING STOCK AND VOTING RIGHTS
Only stockholders of record at the close of business on March 8, 1999 (the
"Record Date") are entitled to notice of and to vote at the Special Meeting. As
of the Record Date, there were issued and outstanding 4,068,406 shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock"), the
Company's only class of voting securities. Each share of Common Stock entitles
the holder thereof to cast one vote on each matter submitted to a vote at the
Special Meeting.
VOTING PROCEDURES
At the Special Meeting, the proposed amendment to the Company's
Certificate of Incorporation will be approved upon receiving the affirmative
vote of the holders of a majority of the shares of Common Stock outstanding on
the Record Date. Other matters, if any, to come before the Special Meeting will
be decided by the affirmative vote of the holders of a majority of the shares of
Common Stock present at the Special Meeting in person or by proxy, provided a
quorum is present. A quorum is present if at least a majority of the shares of
Common Stock outstanding as of the Record Date are present in person or
represented by proxy at the Special Meeting. It is currently anticipated that
votes will be counted and certified by an Inspector of Election who is currently
expected to be an employee of the Company or its
<PAGE>
legal counsel. Pursuant to Delaware corporate law and the Company's By-laws,
abstentions and "broker non-votes" (i.e. proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares as to a matter with respect to
which the brokers or nominees do not have discretionary power to vote) will be
treated as present for purposes of determining the presence of a quorum.
Abstention and broker non-votes will not be counted in the tabulation of votes
cast on proposals. Because of the requirement for an absolute majority of the
outstanding Common Stock to approve the proposed amendment to the Certificate of
Incorporation, abstentions and broker non-votes will also have the same effect
as a vote "against" the proposed amendment to the Certificate of Incorporation.
Abstentions and broker non-votes will, however, have no legal effect on the vote
on any other particular matter which requires the affirmative vote of the
holders of a majority of the shares of Common Stock present at the Special
Meeting.
The enclosed proxies will be voted in accordance with the instructions
thereon. Unless otherwise stated, all shares represented by such proxy will be
voted as instructed. Proxies may be revoked as noted above.
The entire cost of soliciting proxies, including the costs of preparing,
assembling, printing and mailing this proxy statement, the proxy and any
additional soliciting material furnished to stockholders, will be borne by the
Company. Arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy materials to the beneficial
owners of stock, and such persons may be reimbursed for their expenses by the
Company. Proxies may also be solicited by directors, officers or employees of
the Company in person or by telephone, telegram or other means. No additional
compensation will be paid to such individuals for these services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of the Record Date,
based on information obtained from the persons named below, with respect to the
beneficial ownership of shares of Common Stock by (i) each person known by the
Company to be the beneficial owner of more than five percent of the outstanding
shares of Common Stock, (ii) each of the Company's directors, (iii) each of the
Company's Chief Executive Officer and other executive officers of the Company
who earned more than $100,000 in salary for the fiscal year ended December 31,
1998, and (iv) all directors and executive officers as a group:
<TABLE>
<CAPTION>
Amount and
Nature of Percentage of
Name and Address of Position with Beneficial Outstanding
Beneficial Owner(1) the Company Ownership(2) Shares Owned
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Estate of -
Herbert Berman 283,660 6.97%
405 Lexington Avenue (3)
New York, NY 10174
Allen Landers, M.D. -
1385 York Avenue 253,800 6.24%
New York, NY 10021
Bert Sager Director 428,125 10.12%
(4)(5)
2
<PAGE>
Amount and
Nature of Percentage of
Name and Address of Position with Beneficial Outstanding
Beneficial Owner(1) the Company Ownership(2) Shares Owned
- --------------------------------------------------------------------------------
Stephen A. Ollendorff Chairman of the 1,462,200 32.58%
Board, Chief (5)(6)(7)
Executive
Officer and
Secretary
Edward N. Epstein President, 936,000 22.35%
Chief Operating (5)(6)(8)
Officer and
Director
Paula Berliner Director 168,300 4.07%
(5)
Robert P. Freeman President and 140,000 3.36%
Chief Executive (5)
Officer-
Recticon
Enterprises,
Inc.
Ronald J. Manganiello Director 184,946 4.55%
(9)
All executive officers and 2,552,858 52.01%
directors as a group (7 (4)(5)(6)
persons) (7)(8)(9)
- ------------------
* Less than 1%
(1) Unless otherwise indicated, the address of each beneficial owner of the
Common Stock is c/o the Company's principal executive offices at 1251
Avenue of the Americas, 45th Floor, New York, NY 10020-1104.
(2) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days from the Record Date upon
the exercise of options, warrants or convertible securities. Each
beneficial owner's percentage ownership is determined by assuming that
convertible securities, options or warrants that are held by such person
(but not those held by any other person) and which are exercisable within
60 days of the Record Date have been exercised. Unless otherwise noted,
the Company believes that all persons named in the table have sole voting
and investment power with respect to all shares of Common Stock
beneficially owned by them.
(3) Excludes 51,000 shares owned by the adult children of the late Herbert
Berman.
(4) Does not include 200 shares of Common Stock owned by Mr. Sager's spouse,
as sole trustee of a trust formed by Mrs. Sager's mother, as to which Mr.
Sager disclaims beneficial ownership
(5) Includes the following shares that may be acquired upon exercise of
options within 60 days from March 1, 1999: Mr. Sager - 160,000; Mr.
Ollendorff - 300,000; Mr. Epstein - 120,000; Ms. Berliner - 70,000; Mr.
Freeman - 100,000; and all directors and executive officers as group (7
persons) 840,000.
3
<PAGE>
(6) Stephen A. Ollendorff, Chairman of the Board, Chief Executive Officer and
Secretary of the Company, has entered into an Irrevocable Proxy and Voting
Agreement with Respect to Election of Directors dated December 19, 1995
with Edward N. Epstein, President of the Company, with respect to 936,000
shares of Common Stock beneficially owned by Mr. Epstein. See "Certain
Relationship and Related Transactions." Accordingly, Mr. Ollendorff's
beneficial ownership includes such shares. Other than as set forth above,
Mr. Ollendorff disclaims beneficial ownership of such shares.
(7) Includes 1,000 shares owned by Mr. Ollendorff's spouse.
(8) Includes 10,000 shares owned by Mr. Epstein as trustee for his minor child.
(9) Includes 32,946 shares owned by Mr. Manganiello's spouse and 2,000 owned
by Mr. Manganiello as trustee for his children.
</TABLE>
PROPOSAL I
AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT
A COMBINATION OF THE COMPANY'S OUTSTANDING
COMMON STOCK ON THE BASIS OF TWO SHARES
FOR EACH FIVE OUTSTANDING SHARES
GENERAL
The Company's Board of Directors (the "Board") has unanimously adopted a
resolution declaring the advisability of, and submits to the stockholders for
approval, a proposal to amend the Company's certificate of incorporation to
effect a two-for-five combination (the "Reverse Split") of the Company's issued
and outstanding common stock, par value $.01 per share ("Common Stock"). The
proposal may be abandoned by the Board at any time before or after the Special
Meeting and prior to the date and time at which the Reverse Split becomes
effective if for any reason the Board deems it advisable to abandon the
proposal. The Reverse Split will be effected by filing a certificate of
amendment to the Company's certificate of incorporation (the "Amendment") with
the Secretary of State of Delaware (the "Delaware Secretary"). The complete text
of the proposed Amendment is set forth as Exhibit A to this proxy statement,
subject to such changes as may be required by the Delaware Secretary. The Board
may make such changes to the Amendment as it deems necessary to cause the
Delaware Secretary to accept the Amendment for filing and to give effect to the
Reverse Split.
If the Reverse Split is approved by the requisite vote of the Company's
stockholders, upon filing of the Amendment with the Delaware Secretary of State,
the Reverse Split will be effected. As promptly as practicable, following the
Effective Date (as defined below), stockholders of record at the close of
business on the Effective Date will be requested to exchange their existing
stock certificates representing shares of Common Stock outstanding immediately
prior to the Effective Date ("Old Common Stock") for stock certificates
representing the number of shares of Common Stock outstanding immediately
following the Effective Date ("New Common Stock") and/or check for cash in lieu
of fractional shares of New Common Stock. The transfer agent for Common Stock
will circulate to holders of record of Common Stock as of the close of business
on the Effective Date a form of letter of transmittal to be used by such
stockholders in surrendering their stock certificates representing shares of Old
Common Stock, which letter will set forth the procedures for effecting such
exchange.
4
<PAGE>
The number of shares of Common Stock authorized by the certificate of
incorporation and the par value per share will not change as a result of the
Reverse Split.
PRINCIPAL EFFECTS OF THE PROPOSED REVERSE SPLIT
Assuming approval of the Reverse Split by the requisite vote of
stockholders at the Special Meeting, the Amendment will be filed with the
Delaware Secretary as promptly as practicable thereafter and the Reverse Split
will become effective on the date the Amendment is accepted by the Delaware
Secretary (the "Effective Date"). Without further action on the part of the
Company or the stockholders, from and after the Effective Date, the total number
of shares held by each stockholder will be automatically converted into a number
of whole shares of Common Stock, determined by dividing the number of shares
owned of record by each stockholder immediately prior to the Effective Date by
five (5)and then multiplying the quotient so determined by two (2), and/or into
cash based on the Purchase Price (as defined below) in lieu of any fractional
shares. See "Cash Payment In Lieu of Fractional Shares."
If the Reverse Split is effected, the ownership interest in the Company
and proportional voting power of each holder of record of five (5) or more
shares will remain unchanged, except for minor differences resulting from the
purchase of fractional shares. All other rights and privileges of such holder
will be substantially unaffected by the Reverse Split.
On the Effective Date, each holder of record of (i) fewer than five (5)
shares of Common Stock or (ii) greater than five (5) shares of Common Stock, to
the extent of the fractional shares which would otherwise be issuable after the
Effective Date will have only the right to receive cash based upon the Purchase
Price in lieu of receiving a fractional share. The interest of each such
stockholder in the Company, to the extent of such fractional shares, will
thereby be eliminated, and such person will have no right to vote as a
stockholder or share in the assets or any future earnings of the Company with
respect to, and to the extent of, such eliminated interest.
At the Record Date, there were outstanding options, warrants and other
convertible securities to purchase an aggregate of approximately 900,000 shares
of Common Stock. On the Effective Date, the exercise prices of all outstanding
options, warrants and other convertible securities will be proportionately
increased and the number of shares of Common Stock issuable upon exercise
thereof will be proportionately decreased to give effect to the Reverse Split.
The Common Stock is currently registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the Exchange Act"), and as a
result, the Company is subject to the periodic reporting and other requirements
of the Exchange Act. The effectuation of the Reverse Split will not affect the
registration of the Common Stock under the Exchange Act and the Company has no
present intention of terminating such registration under the Exchange Act in
order to become a "private" company.
If approved, the Reverse Split will result in some stockholders owning
"odd-lots" of less than 100 shares of Common Stock. Brokerage commissions and
other costs of transactions in odd-lots are generally higher than the costs of
transactions in "round-lots" of even multiples of 100 shares.
Stockholders have no right under Delaware law or the Company's Certificate
of Incorporation or By-Laws to dissent from the Reverse Split or to dissent from
the payment of cash in lieu of issuing fractional shares.
5
<PAGE>
CASH PAYMENT IN LIEU OF FRACTIONAL SHARES
In lieu of issuing fractional shares resulting from the Reverse Split, the
Company will value each outstanding share of Common Stock held immediately prior
to the Effective Date at the average daily closing price per share of the Common
Stock on the over-the-counter market as obtained from The Nasdaq Stock Market,
Inc. ("Nasdaq") for the 10 trading days preceding the Effective Date adjusted to
give effect to the Reserve Split. Such adjusted per share price is sometimes
hereinafter referred to as the "Purchase Price." In lieu of fractional shares
arising as a result of the Reverse Split, holders of record of shares
immediately prior to the Effective Date will be entitled to receive cash equal
to the product of multiplying the Purchase Price by the amount of any fraction
resulting from the conversion of the Common Stock outstanding immediately prior
to the Effective Date into a smaller number of shares. No brokerage commission
will be payable by holders who receive cash in lieu of fractional shares.
Any stockholder owning fewer than five (5) shares who desires to retain an
equity interest in the Company after the Effective Date may do so by purchasing
sufficient additional shares of the Company's Common Stock in the open market to
increase his ownership to five (5) shares or more prior to the Effective Date.
Likewise, any stockholder owning five (5) or more shares who desires to retain
an equity interest in the Company after the Effective Date with respect to any
shares which would be converted into fractional shares as a result of the
Reserve Split may do so by purchasing sufficient additional shares of the
Company's Common Stock in the open market to increase his ownership to a
multiple of five (5) shares prior to the Effective Date.
REASONS FOR THE REVERSE SPLIT
The reason for the Reverse Split is to increase the per share market price
of the Common Stock. In January 1999, the Company was notified by The Nasdaq
Stock Market, Inc. ("Nasdaq") that, based upon their review of price data for
the Company's Common Stock, the closing bid price for the Company's Common Stock
was less than $1.00 per share during the relevant review period which was a
requirement for continued inclusion of the Company's securities on the Nasdaq
Small Cap Market. Nasdaq has advised the Company that the Common Stock will be
delisted from trading on Nasdaq unless the closing bid price of the Common Stock
is above $1.00 per share for at least 10 consecutive trading days and thereafter
continues to trade at or above the $1.00 level.
The Board believes that the current low per share market price of the
Common Stock has had a negative effect on the marketability of the existing
shares, the amount and percentage of transaction costs paid by individual
stockholders and the potential ability of the Company to raise capital by
issuing additional shares of Common Stock. The Board believes there are several
reasons for this effect:
First, certain institutional investors have internal policies preventing
the purchase of low-priced stocks. Moreover, a variety of policies and practices
of broker-dealers discourage individual brokers within those firms from dealing
in low-priced stocks because of the time-consuming procedures that make the
handling of low-priced stocks unattractive to broker-dealers from an economic
standpoint. More specifically, trading in the Common Stock is subject to certain
rules promulgated under the Exchange Act, which require additional disclosure by
broker-dealers in connection with trades involving a "penny stock" (generally,
any non-Nasdaq equity security that has a market price of less than $5.00 per
share, subject to certain exceptions). Such rules require the delivery, prior to
any transaction in a penny stock, of a disclosure schedule explaining the penny
stock market and the risks associated therewith, and impose various sales
practice requirements on broker-dealers
6
<PAGE>
who sell penny stock to persons other than established customers and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
purchase of the securities. The additional burdens imposed upon broker-dealers
by such requirements may discourage broker-dealers from effecting transactions
in the Common Stock, which could severely limit the market liquidity of the
Common Stock and the ability of holders of Common Stock to sell such securities
in the over-the-counter market.
Second, since the brokers' commissions on low-priced stocks generally
represent a higher percentage of the stock price than commissions on higher
priced stocks, the current share price of the Company's Common Stock can result
in individual stockholders paying transaction costs (commissions, markups or
markdowns) which are a higher percentage of their total share value than would
be the case if the Company's share price were substantially higher. This factor
is also believed to limit the willingness of institutions to purchase the Common
Stock.
The Board of Directors anticipates that the Reverse Split will result in a
bid price for the Common Stock in excess of $1.00 per share. The Board also
believes that the decrease in the number of shares of Common Stock outstanding
as a consequence of the Reverse Split, and the anticipated increase price of the
Common Stock, could encourage interest in the Common Stock and possibly promote
greater liquidity for the Company's stockholders, although such liquidity could
be adversely affected by the reduced number of shares outstanding after the
Reverse Split. Also, although any increase in the market price of the Common
Stock resulting from the Reverse Split may be proportionately less than the
decrease in the number of outstanding shares, the Reverse Split could result in
a market price for the shares that will be high enough to overcome the
reluctance, policies and practices of brokers and investors referred to above
and to diminish the adverse impact of trading commissions on the market for the
shares.
There can be no assurances, however, that the foregoing events will occur,
or that the market price of the Common Stock immediately after the proposed
Reverse Split will be maintained for any period of time. Moreover, there can be
no assurance that the market price of the Common Stock after the proposed
Reverse Split will be five (5) times the market price before the Reverse Split,
or that the market price following the Reverse Split will either exceed or
remain in excess of the current market price. There can also be no assurance
that the Company will be able to maintain the listing of the Common Stock on
Nasdaq even if the Reverse Split results in a bid price for the Common Stock
that exceeds $1.00.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based on
the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury
Regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion is for general information only and does not discuss
consequences which may apply to special classes of taxpayers (e.g., non-resident
aliens, broker/dealers or insurance companies). The state and local tax
consequences of the Reverse Stock split may vary significantly as to each
stockholder, depending upon the state in which such stockholder resides.
Stockholders are urged to consult their own tax advisors to determine the
particular consequences to them.
The conversion of shares of the Common Stock outstanding immediately prior
to the Reverse Split into a reduced number of shares of Common Stock
7
<PAGE>
after giving effect to the Reverse Split will not result in the recognition of
gain or loss (except in the case of cash received for fractional shares as
described below). The holding period of the shares of Common Stock after giving
effect to Reverse Split will include the stockholder's holding period for the
shares of Common Stock held immediately prior to Reverse Split, provided that
the shares of Common Stock were held as a capital asset. The tax basis of the
shares of Common Stock after giving effect to Reverse Split will be the same as
the tax basis of the shares of Common Stock immediately prior to giving effect
to the Reverse Split, reduced by the basis allocable to the receipt of cash in
lieu of fractional shares described below.
A stockholder who receives cash in lieu of fractional shares will be
treated as if the Company has issued fractional shares to such stockholder and
then immediately redeemed such shares for cash. Such stockholder should
recognize gain or loss, as the case may be, measured by the difference between
the amount of cash received and the basis of his Common Stock allocable to such
fractional shares, had they actually been issued. Such gain or loss will be a
capital gain or loss if such stockholder's Common Stock was held as a capital
asset and any such capital gain or loss will generally be long-term capital gain
or loss to the extent such stockholder's holding period for his Common Stock
exceeds 12 months.
The decrease in the number of outstanding shares of Common Stock as a
result of the Reverse Split will not produce any taxable income or gain or loss
to the Company.
RECOMMENDATION AND VOTE
The proposal must be approved by the affirmative vote of the holders of a
majority of the shares of Common Stock outstanding at the Record Date.
The BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE PROPOSAL.
OTHER INFORMATION
The Board of Directors is not aware of any matter which may be presented
for action at the Special Meeting other than matters set forth herein. Should
any other matter requiring a vote of stockholders arise, it is intended that the
enclosed Proxy will be voted with respect thereto in accordance with the
judgment of the persons named in said Proxy.
By order of the Board of Directors
Stephen A. Ollendorff,
Secretary
March 8, 1999
8
<PAGE>
EXHIBIT A
TEXT OF PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
The Certificate of Incorporation is amended by the addition of the
following to Article "FOURTH":
The presently issued and outstanding shares of Common Stock, exclusive of
treasury stock, shall be combined in the ratio of two (2) share of Common
Stock for each five (5) shares of Common Stock currently issued and
outstanding. Such combination shall not change the stated capital of the
Corporation nor shall it affect the rights or preferences of the holders
of the shares of Common Stock now issued and outstanding.
<PAGE>
ACORN HOLDING CORP.
Proxy For Special Meeting To Be Held on April 15, 1999
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of ACORN HOLDING CORP., a Delaware
corporation (the "Company"), hereby constitute(s) and appoint(s) EDWARD N.
EPSTEIN and RONALD J. MANGANIELLO, and each of them, with full power of
substitution in each, as the agent, attorneys and proxies of the undersigned,
for and in the name, place and stead of the undersigned, to vote at the Special
Meeting of Stockholders of the Company to be held at 107 Cherry Street, New
Canaan, Connecticut, on Thursday, April 15, 1999 at 11:00 A.M. (local time), and
any adjournment(s) thereof, all of the shares of stock which the undersigned
would be entitled to vote if then personally present at such meeting in the
manner specified and on any other business as may properly come before the
Meeting.
PLEASE MARK BOXES / / OR X IN BLUE OR BLACK INK.
1. Adoption of Amendment to Certificate of Incorporation to Effect a
Two-for-Five Reverse Stock Split
FOR / / AGAINST / / ABSTAIN / /
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment(s)
thereof and as set forth in Rule 14a-4c of the Securities Exchange Act of
1934, as amended.
(Continued and to be signed and dated on the reverse side.)
<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED HEREIN.
IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.
Please date and sign exactly as name appears
to the left. When shares are held by joint
tenants, both should sign. When signed as
attorney, executor, administrator, trustee
or guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized
person.
Dated 1999
---------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
--------------------------------------------
Title (if applicable)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
EVNELOPE.
