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[X]
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 Rule 14a-11(c) or Rule 14a-12
PRECISION STANDARD, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant):
Gorsuch Kirgis LLP
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
PRECISION STANDARD, INC.
1225 17th Street, Suite 1800
Denver, Colorado 80202
(303) 292-6565
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 15, 1998
TO THE SHAREHOLDERS OF PRECISION STANDARD, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of
Precision Standard, Inc., a Colorado corporation (the "Company"), will be
held at the Westin Hotel Tabor Center, 1672 Lawrence, Denver, Colorado
80202, on Wednesday, April 15, 1998, at 10:00 a.m. Mountain Time, and at
any and all adjournments thereof, for the purpose of considering and
acting upon the following matters:
1. To approve a 4-for-1 reverse stock split of the Company's Common
Stock; and
2. The transaction of such other business as properly may come
before the Meeting or any adjournment thereof.
A Proxy Statement explaining the matters to be acted upon at the
Meeting is enclosed. Please read it carefully.
Only holders of record of the $.0001 par value common stock of the
Company at the close of business on Friday, March 13, 1998, will be
entitled to notice of and to vote at the Meeting or at any adjournment or
adjournments thereof. The Proxies are being solicited by the Board of
Directors of the Company.
All Shareholders, whether or not they expect to attend the Special
Meeting of Shareholders in person, are urged to sign and date the enclosed
Proxy and return it promptly in the enclosed postage-paid envelope which
requires no additional postage if mailed in the United States. The giving
of a Proxy will not affect your right to vote in person if you attend the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Denver, Colorado MATTHEW L. GOLD
March 16, 1998 PRESIDENT
PRECISION STANDARD, INC.
1225 17th Street, Suite 1800
Denver, Colorado 80202
(303) 292-6565
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 15, 1998
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Precision Standard, Inc., a Colorado corporation (the
"Company"), for use at the Company's Special Meeting of Shareholders (the
"Meeting") to be held at the Westin Hotel Tabor Center, 1672 Lawrence,
Denver, Colorado 80202, on Wednesday, April 15, 1998, at 10:00 a.m.,
Mountain Daylight Time, and at any adjournment thereof. It is anticipated
that this Proxy Statement and the accompanying Proxy will be mailed to the
Company's Shareholders on or about March 16, 1998.
Any person signing and returning the enclosed Proxy may revoke it at
any time before it is voted by (i) giving a later dated written revocation
of Proxy to the Company, or (ii) providing a later dated amended Proxy to
the Company, or (iii) voting in person at the Meeting. The expense of
soliciting Proxies, including the cost of preparing, assembling and
mailing this Proxy material to Shareholders, will be borne by the Company.
It is anticipated that solicitations of Proxies for the Meeting will be
made only by use of the mails; however, the Company may use the services
of its Directors, officers and employees to solicit Proxies personally or
by telephone, without additional salary or compensation to them.
Brokerage houses, custodians, nominees and fiduciaries will be requested
to forward the Proxy soliciting materials to the beneficial owners of the
Company's shares held of record by such persons, and the Company will
reimburse such persons for the reasonable out-of-pocket expenses incurred
by them in that connection.
All shares represented by valid Proxies will be voted in accordance
therewith at the Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the
Company's $.0001 par value common stock ("Common Stock"), with each share
entitled to one vote. Only Shareholders of record at the close of
business on Friday, March 13, 1998, are entitled to notice of and to vote
at the Meeting or any adjournment thereof. On March 13, 1998, the Company
had 12,717,870 shares of Common Stock outstanding, each share of which is
entitled to one vote on all matters to be voted upon at the Meeting.
A majority of the Company's outstanding Common Stock represented in
person or by Proxy and entitled to vote will constitute a quorum at the
Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
the Company's Common Stock owned beneficially, as of March 6, 1998, by any
person who is known to the Company to be the beneficial owner of 5% or
more of such Common Stock, and, in addition, by each Director of the
Company, by certain named Executive Officers, and by all Directors and
Executive Officers of the Company as a group. Information as to
beneficial ownership is based upon statements furnished to the Company by
such persons. For purposes of this disclosure, the amount of the Company's
Common Stock beneficially owned is the aggregate number of shares of the
Common Stock outstanding on such date plus an amount equal to the
aggregate amount of Common Stock which could be issued upon the exercise
of stock options or warrants within 60 days of such date.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial
Name of Beneficial Owner Ownership Percent of Class
<S> <C> <C>
Matthew L. Gold 8,736,630 shares 57.1%
1225 17th Street, Suite 1800 directly and
Denver, Colorado 80202 indirectly(1)
Donald C. Hannah 73,125 shares *
6400 East Cactus Wren Road directly(2)
Paradise Valley, Arizona 85253
Admiral George E. R. Kinnear II 121,425 shares *
20 Roaring Rock Road directly(3)
York, Maine 03909
J. Ben Shapiro, Jr. 34,000 shares *
One Midtown Plaza, #1200 directly(4)
1360 Peachtree Street
Atlanta, Georgia 30309
General Thomas C. Richards 26,375 shares *
29688 Softwind Circle directly(5)
Fair Oaks Ranch, Texas 78015
Bank of America National 3,750,637.375 shares 22.9%
Trust and Savings Association directly(6)
315 Montgomery Street, 13th Floor
San Francisco, California 94104
All Directors and Executive 8,991,555 shares 58.1%
Officers as a Group directly and
(5 Persons) indirectly(7)
</TABLE>
- ------------------
(1) Includes 1,000,000 shares held by Arapaho Capital Management, Inc., a
corporation controlled by Mr. Gold. Includes options to purchase
520,000 shares.
(2) Consists of options to purchase 73,125 shares.
(3) Includes options to purchase 53,125 shares.
(4) Includes options to purchase 33,000 shares.
(5) Consists of options to purchase 26,375 shares.
(6) In March 1996, the Company renegotiated its Senior Subordinated Loan
which it had obtained from Bank of America in 1988 pursuant to which
the Company had granted to the Bank a warrant to purchase 4,215,753
shares of the Company's Common Stock. The warrant is now the subject
of a repurchase agreement over a period of six quarters ending
October 31, 1998. The Company has the right to repurchase the
warrant with cash or by the issuance of Common Stock with a value
equal to the difference between the approximate $0.24 warrant
exercise price and the fair market value of the Common Stock on
specified dates. To date the Company has issued 2,169,730 shares of
Common Stock for the redemption of 2,634,845.625 warrants pursuant to
the repurchase agreement. The Company will redeem the remaining
1,580,907.375 warrants during the next three quarters as specified in
the agreement.
(7) Includes options to purchase 705,625 shares.
*Less than one percent.
CHANGE IN CONTROL
As far as is known to the Board of Directors or the management of the
Company, there are no arrangements, including any pledge by any person of
securities of the Company, the operation of which might, at a subsequent
date, result in a change in control of the Company.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
PROPOSAL TO APPROVE A
REVERSE STOCK SPLIT
On January 27, 1998, the Board of Directors approved a 4-for-1
reverse stock split of the Company's Common Stock. Assuming that a
reverse stock split would cause the trading price of the Company's Common
Stock to increase in the same proportion as the amount of the split, a
reverse stock split would result in an increase in the quoted bid price of
the Common Stock to approximately $2.40 or more (based on the average of
the closing prices for the three month period ended March 10, 1998) and
thereby keep the Common Stock eligible to be quoted on The Nasdaq Stock
Market ("Nasdaq"). By a letter dated November 20, 1997, the Company was
notified by Nasdaq of its concern regarding the continued listing of the
Company on The Nasdaq National Market ("National Market") pursuant to the
National Market's corporate governance rules because of the Company's
failure, among other things, to maintain a minimum bid price of $1.00 per
share for the ten consecutive trading dates prior to the notice. After a
hearing on January 29, 1998, before a Nasdaq Listing Qualifications Panel
(the "Panel"), the Company was informed by the Panel that the Company
would be moved to The Nasdaq SmallCap Market and that it must effect a
reverse stock split sufficient to meet or exceed the $1.00 minimum bid
price requirement on or before April 15, 1998. Therefore, on January 30,
1998, the Board of Directors declared April 15, 1998 as the effective date
for the 4-for-1 reverse stock split and called for a special meeting of
the Company's Shareholders to approve the reverse stock split.
The Board of Directors is recommending that the Company's
Shareholders now approve a 4-for-1 reverse stock split of the Company's
Common Stock. The Board believes that retaining the Company's listing on
Nasdaq is important to the short-term liquidity of its Shareholders'
Common Stock and may affect the Company's long term business prospects and
Shareholder value.
As a result of the 4-for-1 reverse stock split, each four issued
shares of the Company's Common Stock held on the record date will
automatically be converted into one share of Common Stock. No fractional
shares will be issued and no cash will be paid for fractional shares.
Instead, each fractional share would be rounded up to a whole share.
EFFECT OF PRINCIPAL SHAREHOLDERS' AND MANAGEMENT'S VOTE
As of the record date, the beneficial owners of five percent or more
of the Company's Common Stock, together with the Company's Executive
Officers and Directors, have voting control over 10,455,660 shares of
record (not including options or warrants exercisable within 60 days of
the record date), or 70.8%, of the outstanding Common Stock. Accordingly,
these principal shareholders and management could exercise voting control
of the approval of the reverse stock split as described above. Matthew L.
Gold, the Company's President and Chairman of the Board, holds 8,216,630
shares of record (not including options exercisable within 60 days of the
record date), or 55.6%, of the outstanding Common Stock, which he has
indicated he will vote in favor of the proposal. The Company also
believes that Bank of America National Trust and Savings Association will
vote its 2,169,730 shares of record (not including warrants exercisable
within 60 days of the record date), or 14.7% of the outstanding Common
Stock, in favor of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE REVERSE STOCK SPLIT.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** * * * * * * *
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was
not aware of any other matter to be presented at the Meeting other than as
set forth herein. However, if any other matters are properly brought
before the Meeting, the shares represented by valid Proxies will be voted
with respect to such matters in accordance with the judgment of the
persons voting them.
Under Colorado law, the number of shares represented in person or by
proxy at the Meeting and entitled to vote cast in favor of the reverse
stock split must exceed the votes opposing it for the reverse stock split
to be approved. Abstentions and broker non-votes will be counted for
purposes of establishing a quorum only. Only those votes cast for the
reverse stock split will be counted as votes in favor or affirmative
votes.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN MAY 1998
Any proposal from a Shareholder intended to be presented at the
Company's Annual Meeting of Shareholders presently expected to be held in
May 1998, must have been received at the offices of the Company, 1225 17th
Street, Suite 1800, Denver, Colorado 80202 no later than December 15,
1997, in order to be included in the Company's proxy statement and proxy
relating to that meeting. No shareholder proposals have been received by
the Company nor will any such proposals be presented at the Annual
Meeting.
MATTHEW L. GOLD
PRESIDENT
Denver, Colorado
March 16, 1998
ATTACHMENT
PROXY CARD
PRECISION STANDARD, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Matthew L. Gold and Kathleen Page,
each with the power to appoint his or her substitute, and hereby
authorizes them to represent and to vote as designated below, all the
shares of common stock of Precision Standard, Inc. held of record by the
undersigned on March 13, 1998, at the Special Meeting of Shareholders to
be held on April 15, 1998 or any adjournment thereof.
1. PROPOSAL TO APPROVE A 4-FOR-1 REVERSE STOCK SPLIT OF THE
COMPANY'S COMMON STOCK.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To transact 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 SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR PROPOSAL 1. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement furnished herewith.
Dated:-------------, 1998
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Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s)
stenciled hereon. Executors, administrators,
trustees, guardians and attorneys should
indicate when signing. Attorneys should
submit powers of attorney.
PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING OR TO SUBMIT A LATER DATED REVOCATION OR
AMENDMENT TO THIS PROXY ON THE ISSUE SET FORTH ABOVE.
