NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_______________
HUFFMAN KOOS INC.
ROUTE 4 AND MAIN STREET
RIVER EDGE, NJ 07661
To the Shareholders of Huffman Koos Inc:
Notice is hereby given that the Annual Meeting of Shareholders of
Huffman Koos Inc., a Delaware corporation (the "Company"), will be held at
the Huffman Koos River Edge Store, Route 4 and Main Street, River Edge,
New Jersey on Tuesday, June 13, 1995 at eleven o'clock A.M. for the
following purposes:
Proposal 1: To elect eight persons to the Board of Directors;
Proposal 2: To approve appointment by the Board of Directors of
Coopers & Lybrand L.L.P. as auditors for the Company;
And to transact such other business as may properly come before the
meeting.
Shareholders are cordially invited to attend the meeting in person.
Whether or not you presently intend to attend the Annual Meeting in
person, the Board of Directors asks you to complete, date and sign the
enclosed proxy and return it promptly by mail in the envelope provided.
Only shareholders of record on the books of the Company at the close
of business on May 5, 1995 will be entitled to notice of and to vote at
the meeting or any adjournment thereof. The stock transfer books will not
be closed.
By Order of the Board of
Directors.
WILLIAM M. GUZIK
Secretary
May 22, 1995
HUFFMAN KOOS INC.
ROUTE 4 AND MAIN STREET
RIVER EDGE, NJ 07661
PROXY STATEMENT
SOLICITATION OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Huffman Koos Inc. (the "Company") to be used at the Annual
Meeting of Shareholders to be held at the Huffman Koos River Edge Store,
Route 4 and Main Street, River Edge, New Jersey on June 13, 1995, at 11:00
A.M. and at any adjournments thereof. All shares represented by proxies
will be voted at the meeting in accordance with the specifications marked
thereon or, if no specifications are made, proxies will be voted in favor
of all matters for which proxies have been solicited. Any shareholder
giving a proxy may revoke the same at any time prior to the voting of such
proxy by giving written notice of revocation to the Secretary of the
Company, by submitting a later dated proxy, or by attending the meeting
and voting in person. This Proxy Statement and the accompanying proxy are
first being mailed to shareholders on or about May 22, 1995.
VOTING AT THE MEETING
The Board of Directors has fixed May 5, 1995 as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting. As of such date, there were 3,925,800 shares of the Company's
common stock, .01 par value (the "Common Stock") issued and outstanding.
The holders of outstanding shares of Common Stock are entitled to one vote
per share on any matter voted on at the meeting.
The presence in person or by proxy of the holders of a majority of
the Company's outstanding shares of Common Stock will constitute a quorum.
Abstentions and broker non-votes are counted for determining the presence
or absence of a quorum for the transaction of business. Abstentions are
counted as votes against a proposal in tabulating the votes cast on
proposals presented to shareholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
The affirmative vote of a majority of the shares of Common Stock
represented at the meeting in person or by proxy will be necessary for the
election of directors and for the taking of all other action at the
meeting.
MAJOR SHAREHOLDERS
The Company has been advised by certain of its directors and
officers, Sussex Group, Ltd. ("Sussex"), the holder of approximately 35.7%
of the outstanding shares of Common Stock of the Company, and The Jupiter
Industries, Inc. ("Jupiter"), the holder of approximately 20.4% of the
outstanding shares of Common Stock of the Company, that such persons,
having the aggregate power to vote 2,246,200 shares of Common Stock, or
57.2% of the outstanding shares of Common Stock, intend to vote (i) for
the election of all the nominees for the Board of Directors to be elected
at the Annual Meeting, and (ii) for the approval of the appointment by the
Board of Directors of Coopers & Lybrand L.L.P. as auditors for the
Company.<PAGE>
Sussex, through a series of controlled companies, is an indirect
subsidiary of JG Industries, Inc. ("JG"). JG is a publicly-held
corporation, the common stock of which is traded on the Chicago Stock
Exchange and NASDAQ. Jupiter owns approximately 55.0% of the outstanding
shares of common stock of JG. JG files reports and other information with
the Securities and Exchange Commission. Philip Rootberg, Edward Ross and
the Estate of Jerrold Wexler beneficially own approximately 3.8%, 7.9% and
68.4%, respectively, of the outstanding common stock of Jupiter. William
Hellman beneficially owns approximately 3.8% of the outstanding stock of
JG. Messrs. Hellman, Rootberg, and Ross are directors of the Company.
Mr. Rootberg is a co-executor of the estate of Jerrold Wexler Estate.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of May 5,
1995, regarding beneficial ownership of the Company's Common Stock by (i)
all persons who owned of record or, to the knowledge of the Company ,
beneficially, 5% of more of the outstanding shares of Common Stock, (ii)
each director and nominee for director, (iii) the Chief Executive Officer
and the other executive officers named in the Summary Compensation Table
on Page 3, and (iv) all directors and executive officers as a group.
<TABLE>
Number of Shares Approximate
of Common Stock Percentage
Name of Beneficial Owner Beneficially Owned of Class
<CAPTION>
<S> <C> <C>
Sussex Group, Ltd 1,400,000 35.7%
1615 West Chicago Ave.
Chicago, IL 60622
The Jupiter Industries, Inc. 800,000 20.4%
919 N. Michigan Ave.
Chicago, IL 60611
Fred Berk +* 29,000 (1) **
Peter C. B. Bynoe + 0 0
William Hellman + 32,500 **
Charles Jamison + 0 0
Michael Kurzman + 0 0
Philip Rootberg +* 10,000 **
Edward W. Ross + 0 0
Wallace W. Schroeder + 1,500 **
Joseph Albanese * 7,100 (2) **
John Alecci * 7,100 (3) **
Timothy Costello * 4,200 (4) **
Al Melchiano * 6,000 (5) **
Directors & Officers (8 persons) 97,400 (6) 2.4%
</TABLE>
(1) This number includes 28,000 shares issuable upon exercise of
currently exercisable employee stock options.
(2) This number includes 6,600 shares issuable upon exercise of
currently exercisable employee stock options.
(3) This number includes 6,400 shares issuable upon exercise of
currently exercisable employee stock options.
(4) This number includes 4,200 shares issuable upon exercise of
currently exercisable employee stock options.
(5) This number includes 6,000 shares issuable upon exercise of
currently exercisable employee stock options.
(6) This number includes 51,200 shares issuable upon exercise of
currently exercisable employee stock options.
+ Director and nominee for director
* Executive Officer
** Less than 1%
Executive Compensation
The following table sets forth certain information regarding
compensation paid or accrued by the Company to or on behalf of the
Company's Chief Executive Officer and each of the four other highest
compensated executive officers of the Company (determined as of the end of
the last fiscal year) for the fiscal years ended January 31, 1995, 1994
and 1993 ("Named Executive Officers").
<TABLE>
Summary Compensation Table
Awards All
Securities Other
Name and Salary Bonus Underlying Compensation(c)
Principal Position Year ($) ($) Options(#) ($)
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fred Berk(a).......... 1995 $241,667 $109,440 20,000 $7,965
President and 1994 198,333 87,570 10,000 5,396
Chief Executive 1993 185,000 66,258 - 4,020
Officer
Al Melchiano(b)....... 1995 110,833 44,639 5,000 10,325
Vice President - 1994 101,750 38,920 5,000 5,761
Marketing and 1993 97,084 29,448 5,000 6,338
Advertising
Joseph Albanese(b).... 1995 100,833 44,639 5,000 9,777
Vice President - 1994 91,750 38,920 5,000 2,632
Chief Financial 1993 87,333 29,448 2,000 508
Officer
Timothy Costello(b)... 1995 100,833 44,639 5,000 10,002
Vice President - 1994 91,750 38,920 5,000 2,825
Warehouse 1993 87,333 29,448 1,000 567
Distribution
John Alecci(b)........ 1995 93,333 44,639 5,000 9,962
Vice President - MIS 1994 84,167 38,920 5,000 2,673
1993 78,667 29,448 3,000 543
</TABLE>
__________
(a) Mr. Berk entered into an employment agreement with the Company
as of August 5, 1990 providing for his employment as President
and Chief Executive Officer. On March 31, 1994, Mr. Berk's
contract was extended for a three-year term effective April 1,
1994 at a base salary of $250,000, plus a share of the
Company's bonus pool. The contract was amended on April 30,
1995 to provide certain benefits in the event there is a
change in ownership or control of the Company and to increase
Mr. Berk's base salary to $275,000, plus a share of the
Company's bonus pool. In the event of a change in ownership
or control of the Company, if either the Company or Mr. Berk
choose to terminate the existing employment contract, Mr. Berk
is entitled to a sum equal to twenty-four months salary as
severance pay. In the event the Company and Mr. Berk cannot
mutually agree on an extension prior to the end of the
agreement, he will receive as severance pay equal to six
months salary.
(b) The Company and this employee entered into a Severance
Agreement providing certain benefits to the employee if
ownership or control of the Company changes and the employee's
employment terminates within a specified time period. In such
case, this employee is entitled to a sum equal to twelve
months salary as severance pay.
(c) The amounts shown represent Company contributions to the
account of the Named Executive Officer pursuant to the
Company's 401(k) plan, car allowances, and the cost of group
term life insurance in excess of $50,000.
REPORT OF STOCK OPTION AND COMPENSATION COMMITTEE
The Stock Option and Compensation Committee of the Board of
Directors determines salary and bonus arrangements for all executive
officers of the Company, including the Chief Executive Officer. The Stock
Option and Compensation Committee is composed of William Hellman, Chairman
of the Board; Philip Rootberg, Vice President and Treasurer; and Edward
Ross, Director.
Compensation of store managers and buyers consists of a base salary,
which is related to the size of the profit center managed, plus a bonus
based on a pre-set formula related to sales and gross margins produced by
such profit center. Compensation of other department managers consists of
a base salary which is related to the duties and responsibilities of the
position consistent with industry and regional pay guides.
The Chief Executive Officer's compensation, as well as that of the
next four most highly compensated officers, is comprised of a base salary
which is directly related to the responsibilities of the position and a
bonus based on a pre-set formula related to annual pre-tax profits. The
Chief Executive Officer and the four most highly compensated officers
which comprise the executive staff work together as a corporate team and
bear the principal burden of corporate management decisions - the Chief
Executive Officer, of course, bearing final responsibility. Thus, the
executive staff participates in a separate and more heavily weighted bonus
award. Determination of executive staff bonuses is made only after all
store managers and buyers bonuses have been computed and deducted from
pre-tax earnings. From the remaining profit before taxes, a bonus pool is
created for payment to the executive staff. Total bonuses accrued in
fiscal 1995 for the executive staff, store managers and buyers amounted to
$412,000.
The compensation of the Chief Executive Officer is directly related
to the performance and profitability of the Company. A significant
portion of the Chief Executive Officer's compensation is based on his
bonus which is directly related to the pre-tax profits of the Company.
For fiscal 1995, the bonus of the Chief Executive Officer increased 25%
while the pre-tax profits of the Company increased 21%.
Based upon a review of publicly available information on regional
companies reporting comparable amounts of annual gross revenues, The Stock
Option and Compensation Committee believes that the cash compensation
(salary and bonus) paid to the Chief Executive Officer of the Company is
comparable to the compensation of the chief executive officers of such
regional companies.
The Company has maintained employee compensation programs designed
to compensate its officers, managers, and other key employees in
relationship to the profitability of the Company through its bonus
programs. In addition, stock options for officers, managers, and other
key employees are awarded at the discretion of the Stock Option and
Compensation Committee of the Board of Directors. The stock option
program is designed to give additional incentive to the officers,
managers, and other key employees to enhance the value of the Company to
all shareholders.
____________________________
William Hellman
____________________________
Philip Rootberg
____________________________
Edward Ross
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage
change in the cumulative total stockholder return on the Company's Common
Stock against the cumulative total return of the NASDAQ Stock Market Index
and the NASDAQ Retail Trade Index for the period of five years commencing
January 31, 1990 and ending January 31, 1995. The graph assumes that the
value of the investments in the Company's Common Stock and each index was
$100 on January 31, 1990.
<TABLE>
Comparison of Five Year Total Return Among
Huffman Koos Inc.
Nasdaq Stock Market and
Nasdaq Retail Trade Indices
NASDAQ NASDAQ
Huffman Koos, Inc. Stock Market Retail Trade
Year Common Stock Index Indecies
<CAPTION>
<S> <C> <C> <C>
1990 $100 $100 $100
1991 58 102 120
1992 125 156 210
1993 358 176 189
1994 433 203 203
1995 483 192 180
</TABLE>
Additional Information With Respect to Compensation Committee Interlocks
and Insider Participation in Compensation Decisions
The Stock Option and Compensation Committee has performed the
function of determining executive officer compensation. During the fiscal
year ended January 31, 1995, the Stock Option and Compensation Committee
was comprised of three members, two of whom are also officers and one who
is a non-employee of the Company. William Hellman, Chairman of the Board,
and Philip Rootberg, Vice-President and Treasurer, each serves on the
Stock Option and Compensation Committee. Edward Ross also serves as
Chairman of the Stock Option and Compensation Committee. This Committee
met once in fiscal 1995.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended,
or the Exchange Act that might incorporate future filings, including this
Proxy Statement, in whole or in part, the Report of Stock Option and
Compensation Committee on Executive Compensation and the Stockholder
Return Performance Graph shall not be incorporated by reference into any
such filings.
DIRECTOR COMPENSATION
Each Director who is not an officer of the Company or its
subsidiaries receives an annual fee of $5,000 plus $500 for each Board
meeting attended, and is also compensated for all committee meetings at a
rate equal to one-half of that set from time to time for Board meetings.
Outside directors may also be compensated for attendance at meetings with
the executives of the Company and for related services on behalf of the
Company, in the discretion of the Executive Committee.
Stock Option Plan
On August 29, 1986, the Company's Board of Directors adopted the
Company's 1986 Stock Option Plan which was approved by the Company's sole
shareholder, Sussex, on August 19, 1986, and amended and restated in
November 1990 (the "Plan"). The Plan permits the granting of options to
officers and key employees of the Company to purchase up to an aggregate
of 200,000 shares of Common Stock, subject to adjustment under certain
circumstances. Some or all of such options may be "incentive stock
options" within the meaning of the Internal Revenue Code, as amended. All
options granted under the Plan have an exercise price of not less than the
fair market value of the shares on the date of grant. As of April 1,
1995, 156,000 shares of the Company's Common Stock were subject to
outstanding options, and there were 33 participants. The average per
share exercise price of all such options was $4.67. As of April 1, 1995
228,600 shares of the Company's Common Stock remained available for grants
under the plan.
The Plan is administered by the Stock Option and Compensation
Committee of the Board of Directors which has sole authority to determine,
among other things, the persons to whom options will be granted and the
time or times when options become exercisable.
The following table provides certain information concerning
individual grants of stock options under the Plan made during the fiscal
year ended January 31, 1995 to each of the Named Executive Officers.
<TABLE>
Option Grants in Last Fiscal Year
Potential
Individual Grants(a) Realizable
% of Total Value at
Options Assumed Annual
Granted To Exercise or Rates of Stock
Options Employees Base Price Price Appreciation
Granted In Fiscal ($ Per Expiration For Option Term (b)
Name # Year Share) Date 5%($) 10%($)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fred Berk .......... 20,000 38.5% $7.94 3/31/04 $99,800 $253,000
Al Melchiano ....... 5,000 9.6% 7.94 3/31/04 24,950 63,250
Joseph Albanese .... 5,000 9.6% 7.94 3/31/04 24,950 63,250
Timothy Costello ... 5,000 9.6% 7.94 3/31/04 24,950 63,250
John Alecci ........ 5,000 9.6% 7.94 3/31/04 24,950 63,250
</TABLE>
(a) The Plan provides that the optionee may purchase 20% of
the shares of stock on and after the first anniversary
of the date of issuance and after each of the four
succeeding anniversaries of that date.
(b) Based upon the per share market price on the date of
grant and an annual appreciation at the rate stated of
such market price through the expiration date of such
options. Gains, if any, are dependent upon the actual
performance of the Common Stock, as well as the
continued employment of the executive officers through
the vesting period. There is no assurance that the
stock price will appreciate at the rates shown in the
table. The potential realizable values indicated have
not taken into account amounts required to be paid as
income tax under the Code and any applicable state laws.
The following table provides certain information concerning
each exercise of stock options under the Plan during the fiscal year
ended January 31, 1995, by each of the Named Executive Officers and
the fiscal year end value of unexercised options held by such
persons under the Plan:
<TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of Securities Value of Unexercised
Shares Value Underlying Unexercised In-the-Money
Acquired on Realized Options at Fiscal Options at Fiscal
Name Exercise(#) ($) Year End(#) Year End($)(a)
Exercisable Unexercisable Exercisable Unexercisable
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fred Berk ........ - - 22,000 33,000 $133,000 $44,500
Al Melchiano ..... - - 3,000 12,000 11,500 21,000
Joseph Albanese .. - - 4,200 10,800 21,100 15,900
Timothy Costello . - - 2,000 10,400 7 700 14,200
John Alecci ...... - - 3,800 11,200 17,900 17,600
</TABLE>
(a) Dollar values were calculated by determining the difference
between the fair market value of the underlying securities at
fiscal year end and the exercise price of the options.
Certain Relationships and Interests in Certain Transactions
The Company participates in the Sussex and JG medical,
casualty, property and liability insurance programs. The Company's
annual cost of insurance during the year ended January 31, 1995
(fiscal 1995) was approximately $2,621,000.
JG charges the Company for administration services performed on
behalf of the Company. Charges for such services for fiscal 1995
were $768,000.
Effective October 29, 1993, JG, Sussex and Jupiter entered into a
Stock Purchase and Loan Agreement. Under the terms of the
agreement, JG, through Sussex borrowed $5,075,000 from Jupiter on
October 29, 1993. The note was repaid per the terms of the
agreement on February 4, 1994 by the transfer of 700,000 shares of
the Company's common stock from Sussex to Jupiter, along with the
interest at the prime rate. Effective November 30, 1994, Sussex and
Jupiter entered into a Stock Purchase Agreement whereby Sussex sold
an additional 100,000 shares of the Company's common stock to
Jupiter for $800,000. As a result of the transactions described
above, JG and Jupiter now own approximately 35.7% and 20.4% of the
Company's outstanding common stock, respectively.
The Stock Purchase and Loan Agreement and Stock Purchase Agreement
(the "Agreements") contain an option with allows Sussex to
repurchase any or all of the 800,000 shares on or prior to February
4, 1996 for a purchase price ranging from $7.25 to $8.00 per share,
plus interest. The Agreements also contain a provision which
requires Jupiter to vote the 800,000 of the Company's shares for the
election of a majority of the Board of Director's of the Company as
Sussex shall direct. As a result of this voting provision, JG
through Sussex retained effective control of the Company.
Information Concerning The Board of Directors
And Certain Committees Thereof
The Board of Directors has designated an Audit Committee, an
Executive Committee and a Stock Option and Compensation Committee,
but not a Nominating Committee. Currently, the members of the Audit
Committee are Peter C.B. Bynoe, Charles Jamison (Chairman), and
Wallace W. Schroeder; the members of the Executive Committee are
William Hellman (Chairman), Philip Rootberg and Edward Ross.
The functions of the Audit Committee include reviewing the
independent auditors, recommending to the Board of Directors the
engagement and discharge of independent auditors, reviewing with the
independent auditors the plan and results of auditing engagements,
approving or ratifying each professional service provided by
independent auditors and estimated by management to cost more than
10% of the previous year's audit fee, considering the range of audit
and non-audit fees, reviewing the scope and results of the Company's
procedures for internal auditing and adequacy of internal accounting
controls and directing and supervising special investigations. The
Audit Committee met twice during fiscal 1995.
The Executive Committee is authorized to exercise the powers
of the Board of Directors in certain business transactions and
affairs of the Company during the intervals between meetings of the
Board.
The Board of Directors held a total of four meetings during
Fiscal 1995. All directors attended at least 75% of all Board
meetings and at least 75% of all meetings of any committee of which
such director was a member.<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The By-laws of the Company provide for eight persons to
constitute the Board of Directors. It is the intention of the
persons named in the enclosed proxy, in the absence of contrary
instructions, to vote for the election of the nominees named below,
each of whom has consented to serve as a director if elected. If at
the time of the meeting, however, any of said nominees should be
unable to serve as a director, then the persons named in the
enclosed proxy, or their substitutes, will, in their discretion,
vote for another nominee or nominees. All directors will hold
office until the next Annual Meeting of Shareholders and until their
respective successors shall have been duly elected and qualified.
Information Concerning Nominees for Election as Directors:
The following table respecting the Company's nominees for
election to the Board of Directors sets forth the name and age of
each nominee, the position or positions held with the Company by
each nominee, each nominee's principal occupation or employment
since at least January 1988, other directorships held by each
nominee, the year in which each person became a director, and the
number of shares of Common Stock beneficially owned, directly or
indirectly, by each nominee or in which such nominee had a
beneficial interest as of April 1, 1995. All of the nominees have
previously been elected to the Board of Directors by the
shareholders.
<TABLE>
Shares of Approximate
Director Common Stock Percent of
of the Beneficially Class
Name, Principal Occupation Company Owned on (if more
and Other Directorships(1) Age Since April 1, 1995 than .1%)
<CAPTION>
<S> <C> <C> <C>
William Hellman ................................ 74 1986 32,500
Chairman of the Board of Directors since
February 1988; Chief Executive Officer from
February 1988 to August 1990; Chairman and
Chief Executive Officer of JG since June 1983;
President of JG from May 1983 through May 1993.
President of Goldblatt's Department Stores, Inc.
(a wholly owned subsidiary of JG) since May 1993
and from February 1986 to October 1990; Director
of Sussex since September 1984 and its Chairman,
Chief Executive Officer and President since
February 1988.
Fred Berk ...................................... 51 1989 28,000
President and Chief Executive Officer of
the Company since August 1990; President
and Chief Operating Officer from March
1989 to August 1990; President of the
Barker Bros. division of Sussex from March
1986 to March 1989.
Peter C.B. Bynoe ............................... 44 1991 None
Attorney at Law, Rudnick and Wolfe;
Chairman and Chief Executive Officer of
Telemat Ltd.; Director of JG since 1991.
Director of Uniroyal Technology Corporation.
Charles H. Jamison ............................. 55 1986 None
President, Chief Operating Officer and
Director of Jupiter; Director of Integon
Corporation; Director of JG since 1986.
Michael Kurzman ................................ 56 1993 None
Executive Vice President and Treasurer of
The Lurie Company, and its subsidiaries and
LaSalle Security Systems Inc.; Director and
President of Lurie Century Associates,
Lurie Columbia Associates, Inc., Randolph
Jefferson, Inc., and TLC Real Estate, Inc.;
Director of JG since 1983.
Philip Rootberg ................................ 77 1986 10,000
Vice President and Treasurer of the Company
since 1989; Vice President and Director of
JG; Director of Sussex since 1984; Senior
Executive Vice President and a Director of
Jupiter; Senior Partner of Philip Rootberg
& Company L.L.P., a public accounting firm.
Edward W. Ross ................................. 74 1986 None
Vice Chairman and Director of JG since 1983;
Chairman, Chief Executive Officer and Director
of Jupiter; Director of Sussex.
Wallace W. Schroeder ........................... 70 1988 1,500
Director of JG since 1992; Outside
Consultant to the Company from September
1987 to May 1988; Vice President-Chief
Financial Officer of the Company from July
1986 to September 1987.
</TABLE>
__________
(1) Only directorships of issuers with a class of securities registered
pursuant to Section 12 of the Securities Act of 1934, as amended, or
subject to the requirements of Section 15(d) of the Act, or
directorships of issuers registered as investment companies under
the Investment Company Act of 1940 are listed in the above table.
The Board of Directors unanimously recommends that you vote "FOR"
the election of the nominees listed above as directors of the
Company.
PROPOSAL 2
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of
Directors has appointed Coopers & Lybrand L.L.P. as independent
accountants for the Company to audit its consolidated financial
statements for the fiscal year ending January 31, 1996 and to
perform audit-related services. Such services include review of
periodic reports and registration statements filed by the Company
with the Securities and Exchange Commission and consultation in
connection with various accounting and financial reporting matters.
Coopers & Lybrand L.L.P. also performs certain limited non-audit
services for the Company.
The Board has directed that the appointment of Coopers &
Lybrand L.L.P. be submitted to the shareholders for approval. If
the shareholders should not approve such appointment, the Audit
Committee and the Board would reconsider the appointment.
The Company has been advised by Coopers & Lybrand L.L.P. that
it expects to have a representative present at the Meeting and that
such representative will be available to respond to appropriate
questions. Such representative will also have the opportunity to
make a statement if he or she desires to do so.
The Board of Directors unanimously recommends a vote "FOR" the
approval of the appointment of Coopers & Lybrand L.L.P. as
independent accountants.
Financial Statements
The Company's Annual Report to Shareholders for Fiscal 1995,
including audited financial statements, accompanies this Proxy
Statement and shareholders are urged to read such report in its
entirety.
1996 Annual Meeting Of Shareholders
The 1996 Annual Meeting of Shareholders is presently scheduled
to be held on June 11, 1996. Any proposals of shareholders intended
to be personally presented at such meeting must be received by the
Secretary of the Company no later than February 13, 1996 for
inclusion in the Company's Proxy Statement.
Expenses of Solicitation
The cost of preparing and mailing the notice of meeting, Proxy
Statement and forms of proxy will be paid by the Company. In
addition to the cost of mailing copies of this material to
shareholders, the Company will request banks and brokers to forward
copies of such materials to persons for whom they hold stock of the
Company and to request authority for execution of the proxies. The
Company will reimburse such banks and brokers for the reasonable
out-of-pocket expenses incurred in connection therewith, which
expenses are estimated not to exceed $10,000.
Compliance with Section 16(a) of the Securities Exchange Act
Under Section 16(a) of the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder by the
Securities and Exchange Commission (the "SEC"), directors, officers
and beneficial owners of more than 10% of the Company's equity
securities (each a "Reporting Person") must file certain reports,
known as Forms 3, 4, and 5, with the SEC upon the occurrence of
certain events, primarily the acquisition or disposition of shares
of Common Stock (or options to acquire Common Stock) by such
persons.
Form 4 is a Statement of Changes on Beneficial Ownership, and
is required to be filed within 10 days of the end of a month in
which a Reporting Person acquires or disposes of Common Stock.
Joseph Albanese, John Alecci, Fred Berk, Timothy Costello, John
Walsh, and Al Melchiano, each officers of the Company, and Fred
Berk, an officer and director of the Company, each filed one Form 4
late in fiscal 1995, in each case two days after such filing was
required. In addition, Jupiter Industries, Inc., and Sussex Group,
Ltd., each a 10% holder of the Company's Common Stock, each filed
one Form 4 late in fiscal 1995, in each case one day after such
filings was required.
Based solely on a review of the Forms 3, 4 and 5 filed with
the Company and one certain representations made to the Company, the
Company does not know of any failures to file a required form or of
any late filings under Section 16(a) of the Securities Exchange Act
other than those set forth above.
Other Matters
The only other business to be presented at the meeting, of
which the directors and officers have knowledge, will be the
approval of the minutes of the last meeting of shareholders, but it
is not intended that action taken under the proxies will constitute
approval of the matters referred to in such minutes. If any other
matters are properly presented at the meeting for action, it is
intended that the shares represented by proxies will be voted on
such matters in the discretion of the persons named therein.
