June 26, 1996
Dear Shareholder:
Effective June 26, 1996, Coopers & Lybrand LLP resigned as the
independent accountants of EFI Electronics Corporation. The resignation
was received following the issuance of the financial statements by Coopers
& Lybrand LLP. These statements are not affected by this action. Although
the audit committee of the board of directors has begun the process of
selecting an independent auditor to replace Coopers & Lybrand LLP, no
decision has been reached and no recommendation as to a replacement has
been made to the board of directors.
Because the resignation of Coopers & Lybrand LLP was unexpected
and occurred as the proxy statement was being prepared for mailing,
Item(2) of the enclosed proxy statement regarding shareholder ratification
of the Company's selection of independent accountants will not be
considered and voted upon at the shareholders' meeting to be held July 26,
1996. Please disregard this item as you submit your proxy.
Sincerely,
Richard D. Clasen
President & Chief Executive Officer
EFI ELECTRONICS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 26, 1996
TO THE STOCKHOLDERS:
You are cordially invited to attend the Annual Meeting of Stockholders
(the
"Annual Meeting") of EFI Electronics Corporation ("EFI" or the
"Company")
which will be held at the Crystal Inn, 230 West 500 South, Salt Lake City,
Utah, on Friday, July 26, 1996, at 2:30 p.m., local time, for the
following purposes:
(1) To elect five (5) Directors to serve for one year
and until their successors shall be elected and duly qualified;
(2) To ratify the appointment of Coopers & Lybrand,
L.L.P., as the Company's independent auditors for the 1997 fiscal year;
(3) To transact such other business as may properly come
before the meeting or atany adjournments thereof.
The Board of Directors has fixed the close of business on June 10, 1996,
as
the record date for the determination of stockholders entitled to receive
notice of and to vote at the Annual Meeting. Accordingly, only
stockholders
of record of the Company at the close of business on that date will
be entitled to vote at the meeting. The transfer books of the Company will
not be closed. A list of those entitled to vote at the Annual Meeting will
be available for inspection for ten (10) days prior to the meeting at the
offices of the Company.
All stockholders are urged to attend the meeting.
BY ORDER OF THE BOARD OF
DIRECTORS
Richard D. Clasen
President & Chief Executive Officer
Mailing Date: June 26, 1996
IMPORTANT
Whether or not you expect to attend the Annual Meeting in person, to
assure
that your shares will be represented, please complete, date, sign and return
the enclosed proxy without delay in the enclosed envelope, which requires
no
additional postage if mailed in the United States. Your proxy will not be
used if you are present at the Annual Meeting and desire to vote your
shares
personally.
<page 1>
(THIS PAGE LEFT BLANK INTENTIONALLY.)
<page 2>
EFI ELECTRONICS CORPORATION
2415 South 2300 West
Salt Lake City, Utah 84119
PROXY STATEMENT
Annual Meeting of Stockholders
July 26, 1996
SOLICITATION OF PROXIES:
This Proxy Statement is furnished to stockholders of EFI Electronics
Corporation ("EFI" or the "Company") in connection with the solicitation
by
the board of directors of the Company of proxies for use at the Annual
Meeting of Stockholders (the "Annual Meeting") of the Company
scheduled
to be held at the Crystal Inn, 230 West 500 South, Salt Lake City, Utah,
on Friday, July 26, 1996, at 2:30 p.m., local time and at any adjournment
or postponement of such meeting.
This Proxy Statement and the accompanying Proxy Card are being mailed
on or
about June 26, 1996 to the stockholders of the Company, together with the
Company's Annual Report to Stockholders for the fiscal year ended March
31, 1996.
Stockholders of the Company are cordially invited to attend the Annual
Meeting.
Whether or not you expect to attend, it is important that you complete the
enclosed proxy card and sign, date and return it as promptly as possible in
the envelope provided for that purpose. You have the right to revoke your
proxy at any time prior to its use by filing a written notice of revocation
with the secretary of the Company prior to convening of the Annual
Meeting or
by presenting another proxy card with a later date. If you attend the
Annual
Meeting and desire to vote in person, you may request that your previously
submitted proxy card not be used.
The cost of soliciting proxies and the cost of the Annual Meeting will be
borne
by the Company. In addition to the solicitation of proxies by mail, proxies
may be solicited by personal interview, telephone and similar means by
directors, officers or employees of the Company, none of whom will be
specially compensated for such activities. The Company also intends to
request
that brokers, banks and nominees solicit proxies from their principals and
will pay such brokers, banks and other nominees expenses incurred by
them for
such activities.
VOTING SECURITIES:
As of the close of business on the record date, the Company had
outstanding
3,173,822 shares of common stock, par value $.0001 per share (the
"common
stock"), all of which are entitled to be voted at the Annual Meeting. Each
share is entitled to one (1) vote, and only those stockholders of record of
the common stock as of the close of business on the record date shall be
entitled to vote their shares.
A majority of the outstanding shares of the common stock, represented in
person or by proxy, is required for a quorum at the Annual Meeting. In
the
proposed election of directors, stockholders will not be allowed to
cumulate
their votes and directors will be elected by a plurality of the votes
cast at the meeting. The five (5) nominees receiving the highest number
of
votes will be elected. As a result, abstentions and broker non-votes will
not
affect the outcome of the election. All other matters presented for
approval
to the stockholders will be decided by the affirmative vote of a majority
of
the votes cast at the Meeting on such matters. Accordingly, abstentions
and
broker non-votes will not affect the outcome of such matters.
DIRECTORS AND EXECUTIVE OFFICERS:
At the Annual Meeting, five (5) directors are to be elected to hold office
until the Company's 1997 Annual Meeting of Stockholders and until their
successors shall be elected and duly qualified.
<page 3>
DIRECTORS AND EXECUTIVE OFFICERS - Continued:
Set forth below is a table which identifies the current directors (all of
whom
are nominees) and the Company's executive officers, and the positions and
offices within the Company held by each. The table is followed by a brief
description concerning the employment and business experience of each
such person.
Name Age Position
Richard D. Clasen 53 President, Chief Executive Officer,
Director
David G. Bevan 46 Executive Vice President, Chief
Financial
Officer
Hans Imhof 56 Director
Gaylord K. Swim 47 Director, Chairman of the Board of
Directors
K. Bradford Romney, Jr. 40 Director
Reino Kerttula 54 Nominee for Director
Richard D. Clasen was appointed president and chief executive officer of
the
Company on September 12, 1994. On October 21, 1994, he was elected
to the
Company's board of directors. From 1993 to 1994 he served as chief
executive
officer and chairman of the board of Tripac Systems, Inc., a distributor of
computer data storage and imaging products based in Irving, Texas.
From 1990 to 1993 he served as president and chief executive officer of
Carlisle
Memory Products Groups, Inc. (Bedford, Texas) which manufactured and
distributed computer data storage products. Mr. Clasen also served as
president
and chief executive officer of Zetaco, Inc. (Eden Prairie, Minnesota) from
1986 to 1989. Zetaco, Inc. manufactured and sold computer subsystems.
Both
Zetaco, Inc. and Carlisle Memory Products Groups, Inc. were subsidiaries
of
Carlisle Companies, Inc., a Fortune 500 company. From 1968 to 1986 Mr.
Clasen
was employed by Control Data Corporation (Bloomington, Minnesota)
which
manufactures and sells computer systems, products and services. He rose
to
the position of Vice President of sales and marketing--international
operations.
Mr. Clasen attended the University of California, Los Angeles and
University of
Pennsylvania, Wharton School of Business.
David G. Bevan was appointed executive vice president in May 1996 and
chief
financial officer in July 1995. He has managed the Company's
manufacturing and
development activities since April 1991. He served as controller of the
Company
from April 1990 to April 1991. From November 1989 to April 1990, he
was
secretary and chief financial officer of Douglas Computer, Inc., a Salt
Lake City, Utah based computer reseller. From 1982 to 1989 he owned
and
managed Specialty Engineering and Manufacturing, a Salt Lake City
company
engaged in the manufacture of precision sheet metal products for
electronics
companies. Mr. Bevan is a certified public accountant and obtained a B.S.
degree in economics from Stanford University in 1971 and an M.B.A.
degree from
Amos Tuck School at Dartmouth College in 1973.
Hans Imhof has served as a director of the Company since July 1995. He
is the
co-founder of Computer Site Technologies which was created in 1990 and
which
produces computer alarm system software. Since 1990 he has also been
vice
president of engineering at Datasphere which designs, engineers and
constructs
computer rooms; president of Diversified Protection Systems, Inc. which
installs computer room fire protection systems; and has been a partner in
Warner Management, a real estate management company, all located in
Orange
County, California. From 1972 to 1990 Mr. Imhof was chief executive
officer
of EPE Technologies (Costa Mesa, California) which he founded and
which
manufactured UPS (uninterruptible power supply) devices. Mr. Imhof
received
an electrical engineering degree from the University of Zurich,
Switzerland,
in 1965.
<page 4>
DIRECTORS AND EXECUTIVE OFFICERS - Continued:
Gaylord K. Swim has been a director of the Company since 1981. He was
elected
chairman of the board of directors in May 1996 and previously served as
chairman of the board from December 1989 until December 1991. He is
president
of Swim Investment Management Corporation, a subsidiary of Swim
Financial
Corporation. From June 1984 to February 1989, he was manager of the
Provo,
Utah, office of Dominick & Dominick, a stock brokerage firm and member
of the
New York Stock Exchange.
K. Bradford Romney, Jr. became a director of the Company in December
1992.
Mr. Romney is president, chairman and chief executive officer of Dayna
Communications Inc., a Salt Lake City, Utah, LAN software and
equipment
manufacturer. He joined Dayna in 1986 as executive vice president and
corporate secretary responsible for corporate development and operations.
He
is also a member of the board of directors of Gentner Communications
Corporation and is active in high technology industry associations. Prior
to
1986, Mr. Romney was executive vice president of KRA, a management
consulting
firm. Mr. Romney received J.D. and M.B.A. degrees, both in 1982, from
Brigham Young University.
Reino Kerttula is nominated to become a director of the Company in July
1996.
Mr. Kerttula has been executive vice president and chief operating officer
and
director of Callware Technologies since 1988, a company that provides
LAN-based
voice and call processing Netware Loadable Modules. He has spent twelve
years
in general management positions where he established and implemented
plans and
budgets for multi-phase operations. For seven years he was senior vice
president of FPI Securities, an investment banking firm. Mr. Kerttula
immigrated to the United States in 1964 and received a degree in business
management from Brigham Young University in 1968. He has been active
in civic
affairs, including president of the Finnish American Chamber of
Commerce.
BOARD COMMITTEES, MEETINGS, AND REPORTS:
There were eight meetings of the board of directors held during the fiscal
year ended March 31, 1996. All of the directors attended at least 75% of
the
meetings. The Company has audit and compensation committees of the
board of
directors. The Company has no nominating committee. The audit
committee
periodically makes recommendations concerning the engagement of the
Company's
independent public accountants and reviews the results and independence
of the
accountants and the scope, adequacy and results of the internal auditing
procedures. The Company's audit committee consists of Messrs. Gaylord
K. Swim
and K. Bradford Romney, Jr. Functions of the compensation committee
include
making recommendations concerning director and senior management
remuneration
and other compensation plans. The compensation committee consists of
Messrs.
K. Bradford Romney, Jr., Gaylord K. Swim and Hans Imhof. All of the
committee
members attended at least 75% of the meetings of their respective
committees.
During fiscal 1995, the audit committee held one meeting and the
compensation
committee held two meetings. Section 16(a) of the Securities Exchange Act
of
1934, as amended ("Section 16(a)"), requires the Company's directors and
executive officers and persons who own more than ten percent (10%) of
the
Company's common stock to file with the Securities and Exchange
Commission (the
"Commission") initial reports of ownership and reports of changes in
ownership
of the common stock and other securities which are derivative of the
common
stock. Executive officers, directors, and holders of more than ten percent
(10%) of the common stock are required by Commission regulations to
furnish
the Company with copies of all such reports they file.
It is the Company's belief, based solely upon a review of copies of all
Section 16(a) reports received by the Company, that all reports of initial
ownership and changes thereto in the Company's common stock by said
officers,
directors, and ten percent stockholders have been reported in a timely
manner
to the Commission, with the following exceptions. A late report was filed
by
Mr. Gaylord K Swim to report warrants issued by the Company in
consideration
of an subordinated loan.
<page 5>
EXECUTIVE COMPENSATION:
The compensation of Richard D. Clasen, who served as chief executive
officer
for the fiscal year ended March 31, 1996, is shown below in four tables.
No
other employees of the Company received more than $100,000 in total
salary and
bonus during such period.
Summary Compensation Table
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
<C>
Name/ Other Annual
Securities Underlying All Other
Principal Position Year Salary Bonus Compensation(1)
Options/SARs (#) Compensation
- ----------------------------------------------------------------------------------------
- -----------------------------------
Richard D. Clasen 1996 $150,000 $ -0- -0-
-0- -0-
President & CEO 1995 72,115 5,748 -0-
100,000 50,216(2)
1994 -0- -0- -0-
-0- -0-
___________________
</TABLE>
(1) Does not include cash and non-cash compensation related to use of
automobiles which did not exceed ten percent of the annual salary and
bonus
paid Mr. Clasen.
(2) On December 15, 1994, pursuant to an Employment Agreement
between the
Company and Mr. Clasen, the Company issued 17,384 shares of common
stock to Mr.
Clasen as reimbursement for the brokerage commission of $26,076 paid by
Mr.
Clasen in connection with the sale of his house in Texas. The market value
of
the Company's common stock on such date was $1.50 per share. Pursuant
to such
Employment Agreement, the Company also reimbursed Mr. Clasen for
moving
expenses, aggregating $24,140 (in addition to the 17,384 shares of stock
cited above). (See "Employment Contracts and Arrangements Concerning
Termination.")
Option/SAR Grants in Last Fiscal Year
During the year ended March 31, 1996, the Company did not grant any
stock
options or stock appreciation rights to the executive officer named above.
Aggregated Option / SAR Exercise in Last Fiscal Year and Fiscal Year
End
Option / SAR Values
The following table sets forth the number of unexercised stock options held
by the individual named in the Summary Compensation Table and the
value of
such options as of March 31, 1996. No options were exercised by such
individual during the fiscal year ended March 31, 1996. During the year
ended
March 31, 1996, the Company did not grant any additional stock
appreciation
rights to the executive officer named below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
<C> <C>
Number of Securities Under-
Value of Unexercised
Shares lying Unexercised Options/
In-the-Money Options/
Name/ Acquired Value SARs at Fiscal Year
End SARs at Fiscal Year End(1)
Principal Position on Exercise Realized Exercisable
Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------
- ---------------------------
Richard D. Clasen -0- -0- 25,000 75,000
-0- -0-
President & CEO
</TABLE>
(1) Calculated based on the difference between the price of a share of
common
stock on March 31, 1996, and the exercise price of the options. The price
of
the Company's common stock as reported by NASDAQ on March 31,
1996 was $1-1/4
per share, which was below the exercise price of the options.
<page 6>
Long-term Incentive Plans ("LTIP") - Awards in Last Fiscal Year
During the year ended March 31, 1996, the Company did not grant any
long-term
incentive plan awards to the executive officer named above.
Employment Contracts and Arrangements Concerning Termination
Effective September 12, 1994, Mr. Clasen entered into a renewable
one-year
employment agreement with the Company (the "Employment Agreement")
pursuant to
which, among other things, (i) the Company agreed to pay Mr. Clasen a
base
salary of $12,500 per month to be reviewed annually by the compensation
committee; (ii) the Company agreed to grant to Mr. Clasen stock options
to
purchase 100,000 shares of common stock at an exercise price of $1.50 per
share; (iii) the Company agreed to loan Mr. Clasen $150,000 to be used by
Mr.
Clasen for the purchase of 100,000 shares of common stock (see "Certain
Transactions and Indebtedness of Management"); (iv) the Company granted
to Mr.
Clasen 100,000 performance units having a base value of $1.50 per unit;
(v) the
Company agreed to reimburse Mr. Clasen for moving and transition
expenses,
including the brokerage commission paid with respect to the sale of Mr.
Clasen's home in Texas (see "Summary Compensation Table"); (vi) the
Company
agreed to pay Mr. Clasen up to one (1) year's base salary if the Company
did
not renew the Employment Contract or terminates Mr. Clasen without
cause;
and (vii) Mr. Clasen agreed to be bound by certain restrictive covenants.
Executive Incentive Plan
For the year ended March 31, 1996, the Company maintained an executive
incentive plan (the "Incentive Plan") for certain of its officers and key
employees, including its executive officers. The Incentive Plan was based
on
the Company's profits in comparison to the Company's planned profits
as well as revenue goal attainment. During the fiscal year ended March
31, 1996, no awards were made under the Incentive Plan. The Incentive
Plan
has not been modified and will continue in the current fiscal year.
Bonuses
paid will be allocated by the compensation committee among the executive
officers based on the Company's success in meeting and exceeding targeted
objectives.
Directors' Compensation
Directors who are not employees of the Company were paid fees of $500
per half
day and $1,000 per full day for each board meeting and committee meeting
attended during the 1996 fiscal year.
CERTAIN TRANSACTIONS AND INDEBTEDNESS OF
MANAGEMENT:
Pursuant to the Employment Agreement, 100,000 shares of common stock
were
issued to Mr. Clasen for $150,000, which amount was loaned by the
Company to
Mr. Clasen. The loan is secured by the 100,000 shares issued to Mr.
Clasen
and by any amounts then due to Mr. Clasen pursuant to the performance
units
granted to Mr. Clasen in connection with his employment. The loan bears
interest at the prime rate plus one percent (1%) and is due in full on
September 12, 2000.
<page 7>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT:
The following tabulation shows as of April 30, 1996, unless otherwise
indicated, the number of shares of common stock owned beneficially by:
(a) any
person known to be the holder of more than five percent (5%) of the
Company's
voting securities, (b) all directors (all of whom are nominees),
(c) the executive officers named in the Summary Compensation Table, and
(d)
all officers and directors of the Company as a group:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C> <C>
Amount and Nature of
Beneficial
Ownership (1) As of April 30,
1996
- ----------------------------------------------------------
Common Exercisable
Total
Name and Address of Beneficial Owner Notes Shares Options
& Warrants Ownership Percent (2)
- ----------------------------------------------------------------------------------------
- ----------------------
Gaylord K. Swim* (3) 549,734 20,000
569,734 17.95%
68 West 620 South
Orem, UT 84058
Recreation Systems, Inc. (4) 295,180 -0-
295,180 9.30%
374 South Sterling Drive
Fruit Heights, UT 84037
Hans Imhof* 250,000 -0-
250,000 7.88%
1215 Emerald Bay
Laguna Beach, CA 92651
Dimensional Fund Advisors, Inc. (5) 212,400 -0-
212,400 6.69%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Richard D. Clasen* # 117,384 25,000
142,384 4.49%
2073 Mahre Drive
Park City, UT 84098-8510
Reino Kerttula -0- -0-
-0- **
4252 Sumac Court
Cedar Hills, Utah 84062
K. Bradford Romney, Jr. * -0- -0-
-0- **
1835 Yalecrest Avenue
Salt Lake City, UT 84108
All officers and Directors
as a group (6 persons) (6) 917,118 71,666
988,784 31.15%
</TABLE>
(#)Officer of the Company (*)Director of the Company. (**)Indicates
less
than 1.00% ownership.
(1) Unless otherwise indicated, each person identified in the table
has sole voting and investment power with respect to the common stock
beneficially owned by such person.
(2) Based on 3,173,822 shares outstanding unless noted otherwise.
(3) Includes 505,567 shares held by Mr. Swim as trustee of the
Gaylord
K. Swim Trust,24,167 shares held by Swim Financial Corporation of
which Mr.
Swim is an executive officer, director and majority owner, and 20,000
shares
held by a charitable trust of which Mr. Swim is a trustee.
(4) Recreation Systems, Inc. is a privately held company of which
Mr.
C. Martin Rasmussen, a former director of the Company, is a principal
shareholder.
<page 8>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT -
Continued
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 212,400
shares
of EFI Electronics Corp. stock as of December 31, 1994, all of which
shares
are held in portfolios of DFA Investment Dimensions Group Inc., a
registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit
plans, for all of which Dimensional Fund Advisors Inc. serves as
investment
manager. Dimensional disclaims beneficial ownership of all such
shares. (Based upon information provided by Dimensional Fund Advisors
by
telephone on June 6, 1996.)
(6) The shares which may be acquired by officers and directors
pursuant to outstanding options have been deemed to be outstanding for the
purpose of computing the percentage of the class owned by each named
holder
thereof and by all officers and directors as a group.
RATIFICATION OF SELECTION OF AUDITOR:
The audit committee has recommended, and the board of directors has
selected,
the firm of Coopers & Lybrand, L.L.P., independent certified public
accountants, to audit the financial statements of the Company for the fiscal
year ending March 31, 1997, subject to ratification by the stockholders.
The board of directors recommends to the stockholders that Coopers &
Lybrand,
L.L.P. be selected as the Company's independent public accountants for
the
1997 fiscal year. Representatives of Coopers & Lybrand, L.L.P. are
expected
to be present at the Annual Meeting and will have an opportunity to make
a
statement, if they desire to do so, and are expected to be available to
respond to appropriate questions.
GENERAL:
Management knows of no other matters to be presented at the meeting.
Proposals of Security Holders for 1997 Annual Meeting
Stockholders desiring to submit proposals for the proxy statement for the
1997 annual meeting will be required to submit them in writing to David
G.
Bevan, secretary, at the Company's executive offices (2415 South 2300
West,
Salt Lake City, Utah 84119) on or before April 30, 1997. Any stockholder
proposal must also be proper in form and substance, as determined in
accordance with the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH
STOCKHOLDER, ON
WRITTEN REQUEST, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM
10-KSB FOR THE FISCAL YEAR ENDED MARCH 31, 1996,
INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO AS FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION. WRITTEN REQUEST
FOR SUCH
INFORMATION SHOULD BE DIRECTED TO THE CORPORATE
SECRETARY, EFI
ELECTRONICS CORPORATION, 2415 SOUTH 2300 WEST, SALT
LAKE CITY, UTAH
84119.
<page 9>
