<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / 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
FIREPLACE MANUFACTURERS, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
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:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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TO BE HELD OCTOBER 8, 1996
TO OUR SHAREHOLDERS:
The annual Meeting of Shareholders of Fireplace Manufacturers, Inc.,
will be held at Fireplace Manufacturers, Inc., 2701 S. Harbor Boulevard,
Santa Ana, California 92704 on October 8, 1996 at 10:00 a.m., local time, for
the following purposes:
(1) To elect members to the Board of Directors of the company for the
ensuing year to serve until the next annual Meeting of Shareholders and until
their respective successors shall be elected and shall qualify. The Board of
Directors' nominees for directors are:
Willard V. Harris, Jr. John D. Hornsby Willard P. Harris
(2) To approve an amendment to the By-Laws of the Company to change the
authorized number of directors to a number not less than three nor more than
five.
(3) To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on August 27,
1996, as the record date for the determination of the shareholders authorized
to receive notice and to vote at the Meeting.
You are cordially invited to attend this Meeting, as the Board believes
that the Shareholders of the Company should be represented as fully as
possible at the Annual Meeting.
Whether or not you plan to be present, kindly fill in and sign the
enclosed Proxy as your name appears on the envelope containing this Notice of
Annual Meeting and mail it promptly so your Proxy can be recorded. If you
should attend the Meeting in person, your Proxy will be returned to you upon
request. A Proxy Statement is furnished herewith.
By Order of the Board of Directors
John D. Hornsby
Secretary
Santa Ana, California
WHETHER OR NOT YOU EXPECT TO ATTEND THIS MEETING, PLEASE SIGN THE PROXY
AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. IF YOU ATTEND THE MEETING,
YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
[LOGO]
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2701 S. Harbor Blvd., Santa Ana, CA 92704 - (714) 549-7782
<PAGE>
PROXY STATEMENT
OF
FIREPLACE MANUFACTURERS, INC.
This Proxy Statement is furnished in connection with a solicitation of
proxies on behalf of the Board of Directors of Fireplace Manufacturers, Inc.,
(herein called the "Company"), to be voted at the Annual Meeting of
Shareholders of the Company to be held on October 8, 1996 at 10:00 a.m.,
local time at Fireplace Manufacturers, Inc., 2701 S. Harbor Boulevard, Santa
Ana, California 92704, and at any adjournment thereof for the purposes set
forth in the accompanying Notice of Annual Meeting.
The Company's executive offices are located at 2701 South Harbor Boulevard,
Santa Ana, California 92704, telephone (714) 549-7782. The approximate date on
which this Proxy Statement and the form of Proxy are first being sent to
shareholders is September 6, 1996.
The Company's Annual Report to Shareholders for it's fiscal year ended
March 31, 1996 including financial statements, is enclosed herewith. The Annual
Report does not form any part of the Proxy soliciting material.
The total number of shares of Common Stock outstanding as of August 27,
1996, was 3,327,750 shares. Each share of Common Stock is entitled to one
vote as to all proposals before the Annual Meeting. If, prior to the election
of directors, any shareholder has given notice that he intends to cumulate
his votes, then, for the election of directors, each shareholder may cumulate
his votes for any nominee if the nominee's name was placed in nomination
prior to the voting. Under cumulative voting, each shareholder is entitled in
the election of directors to one vote for each voting share held by him
multiplied by the number of directors to be elected, and he may cast all such
votes for a single nominee for director or may distribute them among any two
or more nominees as he sees fit. Only shareholders of record at the close of
business on August 27, 1996, will be entitled to vote at the Meeting. In any
election of directors, the three nominees receiving the highest number of
affirmative votes are elected. Approval of the above amendment to the By-Laws
requires the affirmative vote of at least a majority of the outstanding
shares of Common Stock of the Company. Within such range, the Board of
Directors can set the exact number of directors.
As of August 27, 1996, to the best of the Company's knowledge, except as
set forth under the election of directors, one individual and one corporation
owned beneficially 5% or more of the Company's outstanding Common Stock.
Benjamin Harris owns 250,000 shares or 7.5% of the Company's outstanding Common
Stock. Desa International Inc. owns 200,300 shares or 6.0% of the Company's
outstanding Common Stock. The total shares owned beneficially by all officers
and directors as a group total 1,118,003 or 33.6% of the outstanding Common
Stock.
ELECTION OF DIRECTORS
The Board of Directors of the company has nominated and recommends for
election as directors the following three persons to serve until the next Annual
Meeting of Shareholders and until their respective successors have been duly
elected and shall qualify. The enclosed Proxy will be voted in favor of the
persons nominated unless otherwise indicated. If any of the nominees should be
unable to serve or should decline to do so, the discretionary authority provided
in the Proxy will be exercised by the Board of Directors to vote for a
substitute or substitutes to be designated by management. The Board of Directors
has no reason to believe that any substitute nominee or nominees will be
required.
If voting for directors is conducted by cumulative voting, the persons
named on the enclosed form of Proxy will have discretionary authority to
cumulate votes among the nominees, with respect to which authority was not
withheld or, if the form of Proxy either was not marked or was marked for all
nominees, among all nominees. In any case, the Proxies may be voted for less
than the entire number of nominees if any situation arises which, in the opinion
of the proxyholders, makes such action necessary or desirable.
<PAGE>
The table below indicates the position held, age, year of becoming a
director and stock ownership as of August 27 1996 of each.
<TABLE>
<CAPTION>
YEAR
FIRST COMMON STOCK PERCENT
BECAME BENEFICIALLY OF
NAME POSITION HELD AGE DIRECTOR OWNED CLASS
- --------------------- ------------------------- --- -------- ------------ -------
<S> <C> <C> <C> <C> <C>
Willard V. Harris Jr. Chairman of the Board 62 1978 353,530 10.6%
of Directors, Fireplace
Manufacturers, Inc.
Willard P. Harris President, Chief 40 1983 351,725 10.6%
Executive Officer and
Director, Fireplace
Manufacturers, Inc.
John D. Hornsby Secretary, Chief 42 1983 412,748 12.4%
Operating Officer
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</TABLE>
WILLARD V. HARRIS, JR., has been Chairman of the Board of Directors since
March 1978. He was also President and Chief Executive Officer of the Company
between March 1978 and February 1983. Mr. Harris is a trustee of the
University of LaVerne and Whittier College.
WILLARD P. HARRIS has been President, Chief Executive Officer, and Director
of the Company since February 1983. From June 1980 to February 1983, he held
positions from Regional Sales Manager to General Sales Manager of the
Company. For over three years prior thereto, he held several positions with
Rampart General, Inc., including salesperson. Willard P. Harris is the son of
Willard V. Harris, Jr.
JOHN D. HORNSBY was named Chief Operating Officer in April 1987, and has been
Secretary-Director of the Company since February 1983. He joined the Company
in May 1978 as a manager trainee and became Operations Manager in 1979.
<PAGE>
REMUNERATION - DIRECTORS AND OFFICERS
The following table sets forth information concerning the compensation
of the Chief Executive Officer of the Company and the two other most highly
compensated executive officers of the Company as of March 31, 1996 whose
total salary and bonus for the year ended March 31, 1996 exceeded $100,000
for services in all capacities to the Company and its subsidiaries during
such fiscal year.
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
OTHER ANNUAL
NAME AND PRINCIPAL FISCAL COMPENSATION
POSITION YEAR SALARY BONUS ($) (1)
- -------------------------- ------ -------- -------- ------------
Willard V. Harris, Jr. 1996 $112,000 $ 55,000 -0-
Chairman of the Board 1995 108,000 125,000 -0-
1994 108,000 -0- -0-
Willard P. Harris 1996 $195,000 $ 69,000 $37,000
President, Chief Executive 1995 176,000 108,000 37,000
Officer, Director 1994 132,000 12,000 38,000
John D. Hornsby 1996 $152,000 $ 64,000 $19,000
Chief Operating Officer 1995 113,000 93,000 -0-
1994 89,000 68,000 -0-
(1) The Company repaid loans for the President and Chief Operating Officer
as defined in "Certain Relationships and Related Transactions."
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Salaries are based on merit and industry standards for each position in a
comparable sized company. Bonuses are awarded as a percent of net income
before tax.
FISCAL YEAR 1997 STOCK BONUS
The Board of Directors has tentatively approved a bonus based on significant
first quarter 1997 results. The bonus is intended to be issued during the
second quarter of 1997 to each of four Vice Presidents in addition to three
members of the Board of Directors.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended March 31, 1994, the Company ceased selling to Rampart
General Inc. (Rampart) a company partially owned by a stock holder of the
Company, Willard V. Harris, Jr. The unpaid balance due the Company at March 31,
1995 of $645,000 was determined to be uncollectable and was written off against
an equal amount of bad debt reserve, this transaction had no effect on pre tax
net income in 1995 or 1996. The Company is continuing its efforts to collect
some or all of this debt.
On March 31, 1996, advances to Officers and Stockholders totaling $132,000
were outstanding. Principal payments on these advances are due in semi annual
installments over the next three years. In the event that the amounts are not
repaid, the principle and interest due will be charged to these individuals as
compensation expense over the repayment period. Compensation expense of $56,000
and $37,000 was charged to 1996 and 1995 operating results respectively. The
amount outstanding at March 31, 1995 was $204,000. These notes carry interest
rates of 8% and 10%.
During fiscal year 1996 the Company entered into a monthly operating lease
of equipment with H&H Equities Incorporated. H&H Equities Incorporated is wholly
owned by Willard P. Harris and John D. Hornsby, members of the Company's Board
of Directors. The monthly lease payments are $3,872 and totaled $30,976 in
fiscal year 1996.
APPROVAL OF AMENDMENT TO BY-LAWS
The Company's By-Laws provide for a Board of Directors comprised of from
four to seven members with the exact number of directors currently set at
four. The Company however has only three directors. While the Company has
from time to time sought to add to its Board additional members from the
business community it has not been successful in doing so. Therefore,
management believes that a By-Law provision authorizing the maximum possible
range of directors, while being reflective of the current situation, would be
advisable.
Under the California Corporation Code (the "Code"), a range of directors
is permitted in which the maximum number of directors is double the minimum
number, less one. Therefore, the Company proposes that the By-Laws be amended
to provide for a range of authorized directors from a number not less than
three (the minimum number required) nor more than five.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
McGladrey & Pullen, LLP was appointed as independent public accountants
for the Company on December 15, 1994. McGladrey & Pullen, LLP will not attend
the Annual Meeting of Shareholders.
For the two fiscal years ended March 31, 1994 and 1993, Ernst and Young,
LLP were the Company's independent public accountants. Ernst and Young, LLP
were dismissed as the Company's auditors by approval of the Audit Committee
of the Board of Directors on December 14, 1994. The reports of Ernst & Young,
LLP on the financial statements did not contain an adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to an
uncertainty, audit scope or accounting principles by Ernst & Young, LLP.
During the two fiscal years ended March 31, 1994 and 1993, and in the interim
periods subsequent to March 31, 1994, there were not any disagreements with
Ernst & Young, LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures.
<PAGE>
SOLICITATIONS OF PROXIES
This solicitation is being made by and and on behalf of the Board of
Directors of the Company. A Proxy may be revoked by written notice to the
Secretary of the Company at any time prior to the voting of the Proxy, or by
executing a later Proxy or by attending the Meeting and voting in person.
Unrevoked Proxies will be voted in accordance with the instructions therein
indicated, or if there are no such instructions, such Proxies will be voted
for the election of the Board of Directors' nominees for directors and for
the change in the number of authorized Directors required and in the
discretion of the proxyholder for any other matter to come before the Meeting.
The cost of preparing, assembling and mailing the Notice, Proxy
Statement and Proxy will be borne by the Company. In addition to mailing
copies of this material to all shareholders, the Company will request banks
and brokers to forward copies of such materials to persons for whom they hold
stock in the Company and to request authority for execution of Proxies. The
Company will reimburse such banks and brokers for their out-of-pocket
expenses incurred in connection therewith. To the extent necessary in order
to insure sufficient representation, officers and regular employees of the
Company may solicit the return of Proxies by mail, telephone, telegram or
personal interview, which solicitation will not involve any material
additional cost to the Company.
OTHER MATTERS
The Board of Directors knows of no other matters to be acted upon at the
Meeting. However, if any other business properly comes before the Meeting, it
is the intention of the persons named in the enclosed Proxy to vote on such
matters in accordance with their best judgement.
THE PROMPT RETURN OF YOUR PROXY WILL BE APPRECIATED AND HELPFUL IN
OBTAINING THE NECESSARY VOTE.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY AND
RETURN IT IN THE ENCLOSED, STAMPED ENVELOPE.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
In order for a shareholder proposal to be included in the Board of
Directors' Proxy Statement for the Annual Meeting of Shareholders to be held in
1997, such proposal must be received at 2701 South Harbor Boulevard, Santa Ana,
California 92704, Attention: Corporate Secretary, no later than the close of
business May 9, 1997.
ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report for the fiscal year ended March
31, 1996 on Form 10-KSB, as filed with the Securities and Exchange
Commission, will be provided without charge to shareholders of the Company on
receipt of their written request. Address all requests to John D. Hornsby,
Corporate Secretary, Fireplace Manufacturers, Inc., 2701 South Harbor
Boulevard, Santa Ana, California 92704.
By Order of the Board of Directors
John D. Hornsby
Secretary
DATED: September 6, 1996
<PAGE>
FIREPLACE MANUFACTURERS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 8, 1996
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and
appoints WILLARD V. HARRIS, JR., WILLARD P. HARRIS and JOHN D. HORNSBY, and
each of them, the attorneys and proxies of the undersigned with full power of
substitution to appear and to vote all of the common shares of FIREPLACE
MANUFACTURERS, INC. registered in the name of the undersigned at the Annual
Meeting of the Shareholders of said Corporation which will be held on
Tuesday, October 8, 1996 at Fireplace Manufacturers, Inc., 2701 Harbor
Boulevard, Santa Ana, California at 10:00 a.m., local time, or any
adjournment thereof, respecting the election of Directors, and the number of
authorized Directors, as more fully described in the accompanying Proxy
Statement, and in their discretion, on other matters which properly come
before the Meeting.
Upon being returned, signed, and dated, all shares represented by the Proxy
will be voted as indicated on the reverse hereof. IN THE ABSENCE OF SUCH
INDICATION, THIS PROXY WILL BE VOTED FOR ITEM (1) AND FOR ITEM (2). THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIREPLACE
MANUFACTURERS, INC.
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THIS PROXY FORM IN THE
ENVELOPE PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE MEETING.
THE EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF
YOU ARE PRESENT AT THE MEETING.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
FIREPLACE MANUFACTURERS, INC.
P.O. BOX 11057
NEW YORK, N.Y. 10203-0057
<PAGE>
<TABLE>
<S> <C> <C> <C>
(1) Election Directors FOR all nominees /X/ WITHHOLD AUTHORITY to vote /X/ EXCEPTIONS /X/
listed below for all nominees listed below
Nominees: Willard V. Harris, Jr., Willard P. Harris and John D. Hornsby
INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that nominee's name in
the space provided below
Exceptions _______________________________________________________________________________________________________________________
(2) To approve a change in the authorized number of (3) IN THEIR DISCRETION ON OTHER MATTERS WHICH PROPERLY COME
Directors to not less than three nor more than five. BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
FOR /X/ AGAINST /X/ ABSTAIN /X/ I WILL /X/ I WILL NOT /X/ ATTEND MEETING
CHANGE OF ADDRESS AND
OR COMMENTS MARK HERE /X/
IMPORTANT: Please sign exactly as your name or
names appear on the stock certificates and when
signing as an attorney, administrator trustee or
guardian, give your fill title as such. If the
signatory is a corporation, sign full corporate
name by duly authorized officer, or if a partnership
sign in partnership name by authorized person.
Dated:______________________________________, 1996
__________________________________________________
Signature
__________________________________________________
Signature
Please Mark, Date, Sign and Mail Your Votes MUST be indicated
Proxy Promptly in the Enclosed Envelope. (x) in Black or Blue ink. /X/
</TABLE>
