<PAGE>
<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
[X] Definitive Proxy Statement the Commission Only
[ ] Definitive Additional Materials as permitted by Rule 14a-
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 6(e)(2))
</TABLE>
CRYENCO SCIENCES, INC.
- -------------------------------------------------------------------------------
(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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions 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:
- -------------------------------------------------------------------------------
<PAGE>
<PAGE>
CRYENCO SCIENCES, INC.
3811 JOLIET STREET
DENVER, COLORADO 80239
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1997
-----------------
To the Stockholders of CRYENCO SCIENCES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Cryenco Sciences, Inc. (the "Company") will be held on Thursday, January 23,
1997 at 11:00 a.m. local time at the Princeton Club, 15 West 43rd Street, New
York, New York 10036, for the following purposes:
1. to elect a board of five directors;
2. to ratify the appointment of Ernst & Young LLP as independent
auditors for the 1997 fiscal year; and
3. to transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The close of business on December 11, 1996 has been fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at the meeting and any adjournments thereof. A list of the stockholders
entitled to vote at the meeting will be open to the examination of any
stockholder of the Company for any purpose germane to the meeting during
ordinary business hours at the offices of the Company for the ten-day period
prior to the meeting.
YOU ARE EARNESTLY REQUESTED, WHETHER OR NOT YOU PLAN TO BE PRESENT AT
THE MEETING, TO MARK, DATE, SIGN AND RETURN PROMPTLY THE ACCOMPANYING PROXY IN
THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
By Order of the Board of
Directors,
James A. Raabe
Secretary
Denver, Colorado
December 18, 1996
<PAGE>
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
OF
CRYENCO SCIENCES, INC.
-----------------
PROXY STATEMENT
-----------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of Cryenco Sciences, Inc. (the
"Company") of proxies to be voted at the Annual Meeting of Stockholders to be
held at the Princeton Club, 15 West 43rd Street, New York, New York 10036, on
January 23, 1997 at 11:00 a.m. local time, and at any adjournment or
adjournments thereof. The Company operates primarily through its wholly-owned
subsidiary, Cryenco, Inc. Except where otherwise indicated, references to the
Company include its consolidated subsidiary.
All proxies in the accompanying form which are properly executed and
duly returned will be voted in accordance with the instructions specified
therein. If no instructions are given, such proxies will be voted in accordance
with the recommendations of the Board as indicated in this Proxy Statement. A
proxy may be revoked at any time prior to its exercise by written notice to the
Company, by submission of another proxy bearing a later date or by voting in
person at the meeting. Such revocation will not affect a vote on any matters
taken prior thereto. The mere presence at the meeting of the person appointing a
proxy will not revoke the appointment.
The mailing address of the Company's principal executive offices is
3811 Joliet Street, Denver, Colorado 80239. This Proxy Statement and the
accompanying proxy card are being mailed to stockholders of the Company on or
about December 18, 1996.
Only holders of the Company's Class A common stock, par value $.01 per
share (the "Common Stock"), of record at the close of business on December 11,
1996 (the "Record Date") will be entitled to vote at the Annual Meeting or any
adjournment or adjournments of such meeting. There were 6,996,997 shares of
Common Stock outstanding on the Record Date. Each share of Common Stock
outstanding on the Record Date entitles the holder thereof to one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information as of the Record
Date (except as otherwise footnoted below) as to shares of Common Stock
beneficially owned by each person known by the Company to be the beneficial
owner of more than five percent of the outstanding Common Stock.
1
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Shares Percentage
owned of Outstanding
Name and Address Beneficially (1) Common Stock (2)
------------------- ---------------- ----------------
<S> <C> <C>
Mezzanine Capital Corporation Limited
(in liquidation) (3)(4)(5)......................................... 745,645 10.6%
c/o Capital House
Administrators (CI) Limited
P.O. Box 189
Bath Street, St. Helier
Jersey Channel Islands
Alfred Schechter(6)(7)............................................... 300,853 4.2%
c/o Charterhouse Group International, Inc.
535 Madison Avenue
New York, NY 10022-4299
Don M. Harwell(8).................................................... 599,193 8.5%
12 Glenmoore Circle
Cherry Hills Village, Colorado 80110
Globe Venture Nominees Limited, on behalf of......................... 55,100 *
The Mineworkers' Pension Scheme and
The British Coal Staff Superannuation Scheme(9)
Hobard House, Grosvenor Place
London, SW1X 7AD, England
Electra Investment Trust P.L.C.(9)................................... 165,709 2.4%
Electra House, Temple Place,
Victoria Embankment
London WC2R 3HP, England
Slough Parks Holdings Incorporated(9)................................ 55,100 *
33 West Monroe Street, Suite 2610
Chicago, Illinois 60603-2409
Mezzanine Capital Corporation Limited (3)(9)......................... 13,750 *
85 Watling Street
London EC4M 9BJ, England
Charterhouse Finance Corporation Limited(9).......................... 22,080 *
c/o Charterhouse Group International, Inc.
535 Madison Avenue
New York, NY 10022-4299
</TABLE>
2
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Shares Percentage
owned of Outstanding
Name and Address Beneficially(1) Common Stock (2)
---------------- --------------- ----------------
<S> <C> <C>
Merifin Capital N.V.(9).............................................. 127,169 1.8%
c/o Finabel S.A.
254 Route de Lausanne
CH-1292 Geneva-Chambesy
Switzerland
Charterhouse Group International, Inc.(4)(6)(9)...................... 206,650 3.0%
535 Madison Avenue
New York, NY 10022-4299
Jerome L. Katz(6).................................................... 126,356 1.8%
c/o Charterhouse Group International, Inc.
535 Madison Avenue
New York, NY 10022-4299
Zesiger Capital Group LLC(10)........................................ 1,126,480 16.1%
320 Park Avenue
New York, NY 10022
</TABLE>
* Less than 1%
(1) Except as otherwise indicated in the following footnotes, each of the
persons listed in the table owns the shares of Common Stock opposite his
or its name and has sole voting and dispositive power with respect to
such shares.
(2) For purposes of calculating the percentage of Common Stock owned by each
stockholder listed in this table, shares beneficially owned and issuable
upon the exercise of warrants and options owned by such stockholder
exercisable within 60 days of the Record Date have been deemed to be
outstanding with respect to such stockholder.
(3) Mezzanine Capital Corporation Limited (in liquidation), a Cayman Islands
corporation ("MCC"), is a separate and distinct corporation from
Mezzanine Capital Corporation Limited, a corporation organized under the
laws of England and Wales ("Mezzanine") (referred to in this table
below).
(4) Charterhouse Group International, Inc. ("Charterhouse") is a party to an
investment advisory agreement with MCC pursuant to which Charterhouse
provides investment advice to MCC, including advice as to its investment
in the Common Stock, but does not have the power to vote or dispose of
any such investment on MCC's behalf. By reason of the foregoing,
Charterhouse may be considered to have shared power to vote and dispose
of the shares of Common Stock held by MCC and, therefore, for purposes
of the Securities and Exchange Commission (the "Commission")
regulations, may be deemed to be the beneficial owner of those shares.
Charterhouse disclaims beneficial ownership of the shares of Common
Stock held by MCC.
3
<PAGE>
<PAGE>
(5) Includes 45,000 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date pursuant to warrants.
(6) Messrs. Schechter and Katz are directors of Charterhouse and Mr. Katz is
an officer of Charterhouse. Both disclaim ownership of the shares of
Common Stock of which Charterhouse may be deemed to be the beneficial
owner.
(7) Includes 83,531 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date pursuant to warrants and 27,000 shares of Common Stock
deemed to be beneficially owned by reason of the right to acquire such
shares within 60 days of the Record Date upon exercise of stock options.
Does not include 100,000 shares of Common Stock which Mr. Schechter
gifted to The Schechter Foundation, Inc. (the "Schechter Foundation").
Mr. Schechter is the president of the Schechter Foundation and retains
voting and dispositive power with respect to the gifted shares.
Nevertheless, Mr. Schechter has no beneficial interest in the Schechter
Foundation and he disclaims beneficial ownership of the gifted shares.
(8) Includes 75,000 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date pursuant to warrants. Does not include 10,000 shares of
Common Stock which Mr. Harwell gifted to The Harwell Family Foundation
(the "Harwell Foundation"). Mr. Harwell is a director of the Harwell
Foundation and retains voting and dispositive power with respect to the
gifted shares. Mr. Harwell has no beneficial interest in the Harwell
Foundation and he disclaims beneficial ownership of the gifted shares.
The foregoing is based upon information set forth in Amendment No. 3 to
Schedule 13G, dated February 13, 1996, filed with the Commission by Mr.
Harwell.
(9) Charterhouse holds no shares of Common Stock in its own name.
Charterhouse is a party to investment management agreements with Electra
Investment Trust P.L.C. ("Electra"), Globe Venture Nominees Limited
("Globe"), Slough Parks Holdings Incorporated ("Slough"), Mezzanine,
Charterhouse Finance Corporation Limited ("CFC"), and Merifin Capital
N.V. ("Merifin"), pursuant to which Charterhouse manages certain
investments, including the investment in a portion of the shares of
Common Stock referred to above, on behalf of these companies. In
connection therewith, Charterhouse was granted authority to vote and
dispose of these investments. However, the above referenced companies
also retained voting and dispositive power with respect to these
investments. For purposes of the Commission regulations, Charterhouse
may be deemed to be the beneficial owner of those shares (an aggregate
of 206,650 shares or 3.0% of the issued and outstanding shares of Common
Stock). Electra, Globe, Slough, Merifin and CFC (which owns non-voting
stock) own, in the aggregate, 78.5% of the issued and outstanding shares
of capital stock of Charterhouse and each of Electra, Globe, Merifin and
Slough has a representative who is a director of Charterhouse.
(10) Zesiger Capital Group LLC ("Zesiger") disclaims beneficial ownership of
all of these shares. Such shares are held in discretionary accounts
which Zesiger manages. The foregoing is based upon information set forth
in an Amendment to Schedule 13G, dated November 8, 1995, filed with the
Commission by Zesiger.
4
<PAGE>
<PAGE>
The following table sets forth certain information as of the Record
Date, as to shares of Common Stock beneficially owned by the Company's directors
(all of whom are nominees for director), the Chief Executive Officer of the
Company, the other executive officer of the Company and the directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially
Name of Owned on the Percentage of Outstanding
Beneficial Owner Record Date(1) Common Stock(2)
- ---------------- ------------------ -------------------------
<S> <C> <C>
Alfred Schechter 300,853(3)(4) 4.2%
James A. Raabe 19,500(5) *
Russell R. Haines 8,000(6) *
Jerome L. Katz 126,356(3) 1.8%
Burton J. Ahrens 45,504(7) *
Ajit G. Hutheesing 160,000(8) 2.3%
All directors and officers as a
group (six persons) 660,213(9) 9.0%
</TABLE>
- ------------
* Less than 1%
(1) Except as otherwise indicated in the following footnotes, each of the
persons listed in the table owns the shares of Common Stock opposite his
name and has sole voting and dispositive power with respect to such
shares of Common Stock.
(2) For purposes of calculating the percentage of Common Stock owned by each
officer and/or director of the Company, shares beneficially owned and
issuable upon the exercise of warrants and options owned by such
individual exercisable within 60 days of the Record Date have been
deemed to be outstanding with respect to such individual.
(3) See footnote 6 to the first table set forth above under the heading
Security Ownership of Certain Beneficial Owners, Directors and Executive
Officers with respect to voting and dispositive power concerning the
shares of Common Stock.
(4) Includes 83,531 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date pursuant to warrants and 27,000 shares of Common Stock
deemed to be beneficially owned by reason of the right to acquire such
shares within 60 days of the Record Date upon exercise of stock options.
Does not include 100,000 shares of Common Stock which Mr. Schechter
gifted to the Schechter Foundation. Mr. Schechter is the president of
the Schechter Foundation and retains voting and dispositive power with
respect to the gifted shares. Nevertheless, Mr. Schechter has no
beneficial interest in the Schechter Foundation and he disclaims
beneficial ownership of the gifted shares.
5
<PAGE>
<PAGE>
(5) Includes 18,000 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date upon the exercise of stock options.
(6) Includes 5,500 shares of Common Stock deemed to be beneficially owned by
reason of the right to acquire such shares within 60 days of the Record
Date upon the exercise of stock options.
(7) Includes 36,504 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date pursuant to warrants. Does not include 2,000 shares of
Common Stock and warrants to purchase 4,602 shares of Common Stock owned
by Mr. Ahrens' sons. Mr. Ahrens disclaims beneficial ownership of the
shares and warrants owned by his sons.
(8) All these shares of Common Stock are deemed to be beneficially owned by
reason of the right to acquire such shares within 60 days of the Record
Date upon exercise of warrants.
(9) Includes 50,500 shares of Common Stock deemed to be beneficially owned
by reason of the right to acquire such shares within 60 days of the
Record Date upon exercise of stock options and 280,035 shares of Common
Stock deemed to be beneficially owned by reason of the right to acquire
such shares within 60 days of the Record Date pursuant to warrants. Does
not include 100,000 shares of Common Stock which Mr. Schechter gifted to
the Schechter Foundation (see footnote 4 above), and 2,000 shares of
Common Stock and warrants to purchase 4,602 shares of Common Stock owned
by Mr. Ahrens' sons (see footnote 7 above).
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Alfred Schechter, who is the Chairman of the Board, Chief Executive
Officer and President of the Company and Chairman of the Board, Chief Executive
Officer and President of Cryenco, Inc., is also a director of Charterhouse.
Jerome L. Katz, who is a director of the Company, is also a director and the
President of Charterhouse.
On August 30, 1991, the Company entered into a financial consulting
services agreement with Charterhouse, pursuant to which Charterhouse agreed to
provide a variety of financial consulting services to the Company. These
services include advice and assistance in connection with the preparation of
financial budgets, forecasts, cash flow projections and return on investment
analysis relating to capital expenditures; services relating to the Company's
banking relationships including advice and assistance in connection with the
financing and refinancing of corporate indebtedness; analysis, from both a
financial and operational standpoint, in connection with the Company's entering
into additional business areas as well as the consolidation or elimination of
existing business operations; and other miscellaneous services and advice
primarily of a financial nature. The agreement had an initial term of five years
and is automatically renewed on a year-to-year basis unless either party gives
60 days written notice prior to the end of the initial term or any renewal term.
The agreement provides for an annual fee of $125,000 payable in monthly
installments. As of
6
<PAGE>
<PAGE>
August 31, 1996, the Company was in arrears with respect to these payments in
the aggregate amount of $324,000.
-----------------------
PROPOSAL 1 - ELECTION OF DIRECTORS
Upon the recommendation of the Board, five directors, constituting the
entire Board, are to be elected to serve until the next Annual Meeting of
Stockholders and until their respective successors are duly elected and qualify.
All of the nominees are at present directors of the Company. Should any of the
nominees be unable to serve or refuse to serve as a director (an event which the
Board does not anticipate), proxies solicited hereunder will be voted in favor
of those nominees who do remain as candidates and may be voted for substituted
nominees.
<TABLE>
<CAPTION>
Director
Name of Nominee (Age) Principal Occupation Since
- --------------------- ------------------------------------------- -------
<S> <C> <C>
Alfred Schechter (76) Chairman of the Board, 1992
Chief Executive Officer and President of
the Company; Chairman of the Board, Chief
Executive Officer and President of Cryenco,
Inc.
Russell R. Haines (69) Private Consultant 1992
Jerome L. Katz (62) President of Charterhouse Group 1992
International, Inc.
Burton J. Ahrens (59) President of The Edgehill Corporation, Counsel 1994
to the law firm Rubin Baum Levin Constant &
Friedman
Ajit G. Hutheesing (60) Chairman and Chief Executive Officer, 1994
International Capital Partners, Inc.
</TABLE>
ALFRED SCHECHTER has been Chairman of the Board and Chief Executive
Officer of Cryenco, Inc. since September 1991, President of Cryenco, Inc. since
September 1996 and Chairman of the Board, Chief Executive Officer and President
of the Company since February 11, 1992. Mr. Schechter has been a Director of
Charterhouse since 1985. Mr. Schechter served as Chairman of the Board and Chief
Executive Officer of Charter-Crellin, Inc., a designer, manufacturer and
marketer of proprietary injected molded plastic products, from 1985 to 1989 and
as Chairman of the Board and Chief Executive Officer of Paco Pharmaceutical
Services, Inc., a pharmaceutical contract packaging company, from 1975 to 1988.
Mr. Schechter has held the positions of Chairman of Stanley Interiors
Corporation, a manufacturer of home furnishings, Vice Chairman of Joseph
Kirschner Company, Inc., a manufacturer of processed meat products, and Director
of WDP, Inc., a brick refractory servicing the steel industry, Dreyers Grand Ice
Cream, Inc., a manufacturer of ice cream products, Marathon Enterprises Inc., a
manufacturer of processed meat products, and Garden America Corporation, a
manufacturer and distributor of garden products.
RUSSELL R. HAINES has been a Director of the Company since March 1992.
Mr. Haines has been a private consultant in the field of packaging and
engineering design since December 1995. Mr. Haines was Chairman of the Board and
Chief Executive Officer of Paco
7
<PAGE>
<PAGE>
Pharmaceutical Services, Inc., a pharmaceutical contract packaging company, from
1988 to April 1995 and was President and Chief Operating Officer of Paco from
1975 to 1988.
JEROME L. KATZ had been a Director and Chairman of the Board of
Directors of Gulf & Mississippi Corporation, the predecessor of the Company,
since its incorporation and has been a Director of the Company since February
11, 1992. Mr. Katz has been President of Charterhouse since October 1984 and was
Executive Vice President of Charterhouse from 1973 through October 1984. Mr.
Katz is also a Director of Dreyers Grand Ice Cream, Inc., a manufacturer of ice
cream products.
BURTON J. AHRENS has been a Director of the Company since June 1994.
Mr. Ahrens has been President of The Edgehill Corporation, a provider of venture
capital and financial consulting services, since its formation in 1992.
Additionally, Mr. Ahrens is currently counsel to the law firm Rubin Baum Levin
Constant & Friedman, a position he has held since 1993. Mr. Ahrens was counsel
to the law firm Hertzog, Calamari & Gleason from 1992 to 1993. Mr. Ahrens was a
member of the law firm Spengler Carlson Gubar Brodsky & Frischling from 1989 to
1992.
AJIT G. HUTHEESING has been a director of the Company since December
1994. Mr. Hutheesing has been Chairman and Chief Executive Officer of
International Capital Partners, Inc. ("ICP"), which specializes in providing
expansion and acquisition capital and advisory services to smaller growth
companies, since its inception in 1988. Mr. Hutheesing is also the Chairman and
Chief Executive Officer of ICP Investments, an affiliate of ICP. Mr. Hutheesing
is a Director of Counsel Corporation, a health care and real estate management
corporation. Mr. Hutheesing is also a Director of Shared Technology Inc., a
telecommunications corporation.
THESE INDIVIDUALS WILL BE PLACED IN NOMINATION FOR ELECTION TO THE
BOARD OF DIRECTORS. THE SHARES REPRESENTED BY SIGNED PROXY CARDS RETURNED WILL
BE VOTED "FOR" THE ELECTION OF THESE NOMINEES UNLESS AN INSTRUCTION TO THE
CONTRARY IS INDICATED ON THE PROXY CARD.
---------------
REQUIRED VOTE
The affirmative vote of the holders of a plurality of the shares of
Common Stock present, in person or by proxy, and entitled to vote on this matter
at the Annual Meeting is required to elect directors.
---------------
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Audit Committee of the Board is currently composed of two members,
Messrs. Haines and Ahrens. This Committee is charged with meeting periodically
with the independent auditors and Company personnel with respect to the adequacy
of internal accounting controls, receiving and reviewing the recommendations of
the independent auditors, recommending the appointment of auditors and reviewing
the scope of the audit and the compensation of the independent auditors,
reviewing consolidated financial statements and, generally, reviewing
8
<PAGE>
<PAGE>
the Company's accounting policies and resolving potential conflicts of
interests. The Audit Committee held one meeting during the fiscal year ended
August 31, 1996.
The Compensation Committee is currently composed of Messrs. Katz,
Haines and Hutheesing. This Committee is charged with making recommendations
regarding the compensation of senior management personnel and granting of
options pursuant to the Company's stock option plans. All action taken by the
Compensation Committee during the fiscal year ended August 31, 1996 was by
unanimous written consent of the members of the Committee.
The Company does not now, and did not during the past fiscal year, have
a standing nominating committee.
During the fiscal year ended August 31, 1996, the Board of Directors of
the Company held four meetings. All other action taken by the Board was by the
unanimous written consent of the members after review of proposals circulated to
each member. All directors attended in excess of 75% of the meetings of the
Board of Directors and the Committees of the Board on which he served during the
past fiscal year, except that Mr. William P. Phelan attended only two of the
Board of Directors meetings during fiscal 1996. Mr. Phelan resigned from the
Board of Directors of the Company effective October 25, 1996. Mr. Don M. Harwell
resigned from the Boards of Directors and as an officer of the Company and
Cryenco, Inc. effective February 29, 1996. Mr. Dale A. Brubaker resigned from
the Board of Directors of the Company effective July 11, 1996.
The Company paid a director's fee of $2,500 per meeting to each of
Messrs. Haines, Phelan (prior to his resignation) and Hutheesing during the past
fiscal year. Additionally, the Company paid $2,500 to each of Messrs. Haines and
Phelan for their services on the Audit Committee during the past fiscal year and
the Company paid $2,500 to Mr. Haines for his services on the Compensation
Committee during the past fiscal year. Messrs. Schechter, Harwell, Brubaker,
Katz and Ahrens did not receive compensation for their services as directors or
committee members of the Company or its wholly-owned subsidiary, Cryenco, Inc.
during the past fiscal year. Beginning in fiscal 1997, Mr. Ahrens will receive
$2,500 per annum for his services on the Audit Committee.
9
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The Summary Compensation Table below sets forth certain information
concerning the annual and long-term compensation paid or accrued to the Chief
Executive Officer of the Company and the next two most highly compensated
executive officers for services rendered to the Company and its subsidiaries
during the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
------------ ------------
Securities All Other
Underlying Compensation
Name and Principal Position Year Salary ($) Options (#) ($) (1)
- --------------------------- ---- ---------- ----------- --------
<S> <C> <C> <C> <C>
Alfred Schechter, 1996 150,000 15,000(4) 1,000
Chairman of the Board, Chief 1995 135,000 12,000(5) 1,000
Executive Officer and President of the 1994 120,000 -- 1,000
Company; Chairman of the Board and
Chief Executive Officer of Cryenco,
Inc.
Dale A. Brubaker (2), 1996 165,000 15,000(4)(6) 1,000
President and Chief Operating Officer 1995 150,000 12,000(5)(6) 1,000
of Cryenco, Inc. 1994 135,139 6,000(7)(6) 1,000
James A. Raabe (3), 1996 110,000 10,000(4) 1,000
Vice President, Chief Financial Officer, 1995 100,000 5,000(5) 1,000
Treasurer and Secretary of the 1994 38,082 3,000(8) --
Company; Vice President, Chief
Financial Officer, Treasurer and
Secretary of Cryenco, Inc.
</TABLE>
- ---------------------
(1) Relates to amounts contributed by the Company on behalf of the
executive officers to the Company's defined contribution plan. See
"Profit Sharing Plan."
(2) Dale A. Brubaker served as President and Chief Operating Officer of
Cryenco, Inc. from May 1993 until August 31, 1996. Mr. Brubaker served
as a Vice President in various capacities of Cryenco, Inc. from October
1991 until May 1993. Mr. Brubaker was also a Director of the Company
from July 1993 until July 1996.
(3) James A. Raabe became Vice President and Chief Financial Officer of
Cryenco, Inc. and Chief Financial Officer of the Company in July 1994.
He became Vice President of the Company and Treasurer of Cryenco, Inc.
in January 1995 and Secretary and Treasurer of the Company and
Secretary of Cryenco, Inc. in July 1995. Mr. Raabe was employed by
Cryenco, Inc. in March 1994 as Financial Manager. Mr. Raabe was
previously employed by Stanley Aviation Corporation, a manufacturer of
aerospace products, from 1977 to 1993, where he was Vice President -
Finance, Corporate Secretary and a Director of the company. Mr. Raabe
is a Certified Public Accountant.
10
<PAGE>
<PAGE>
(4) Such option was granted November 16, 1995 pursuant to the Company's
1992 Employee Incentive and Non-Qualified Stock Option Plan and became
exercisable November 1, 1996.
(5) Such option was granted on November 8, 1994 pursuant to the Company's
1992 Employee Incentive and Non-Qualified Stock Option Plan and became
exercisable November 1, 1995.
(6) All of these options have terminated.
(7) Such option was granted on November 15, 1993 pursuant to the Company's
1992 Employee Incentive and Non-Qualified Stock Option Plan and became
exercisable November 1, 1994.
(8) Such option was granted on June 1, 1994 pursuant to the Company's 1992
Employee Incentive and Non-Qualified Stock Option Plan and became
exercisable June 1, 1995.
The following table sets forth certain information with respect to
options to purchase the Company's Common Stock granted in fiscal year 1996 under
the Company's 1992 Employee Incentive and Non-Qualified Stock Option Plan for
the executive officers named in the Summary Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
----------------------------------------------------------------------- ---------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS TO EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR(%) ($/SHARE) DATE 5%($) 10%($)
---- ------------- ---------------- ----------- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
Alfred Schechter 15,000 15.5 4.50 03/31/02 92,718 125,559
Dale A. Brubaker 15,000(2) 15.5 4.50 03/31/02 92,718 125,559
James A. Raabe 10,000 10.4 4.50 03/31/02 61,812 92,077
</TABLE>
- ----------------
(1) Options became exercisable November 1, 1996.
(2) All of these options have terminated.
11
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<PAGE>
The following table details the value on August 31, 1996 of options to
purchase Common Stock held by the executive officers named in the Summary
Compensation Table above.
FISCAL YEAR END OPTION VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY
AUGUST 31, 1996 OPTIONS AT AUGUST 31, 1996(2)
---------------------------------------- ----------------------------------------
NAME EXERCISABLE (#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
------ --------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Alfred Schechter 12,000 15,000 -- --
Dale A. Brubaker 30,000(3) 15,000(3) -- --
James A. Raabe 8,000 10,000 750 --
</TABLE>
- ----------------
(1) There were no options exercised by the Company's executive officers
during the fiscal year ended August 31, 1996.
(2) Based on the closing price of the Company's Common Stock on the NASDAQ
National Market System on August 31, 1996, which was $3.25.
(3) All of these options have terminated.
Employment Agreements. Mr. Schechter has entered into an employment
agreement with the Company with an original term expiring August 31, 1996, and
which provides for annual renewals thereafter unless sooner terminated by either
party. Under the agreement, Mr. Schechter may not compete with the Company
during the term of the agreement and for two years after its termination under
certain circumstances. Mr. Schechter's employment agreement also requires him to
devote such time to the Company and its affiliates as the Board shall request
and as is reasonably necessary to enable him to fulfill his duties. The
agreement provides for a minimum annual base salary of $120,000. As of September
1, 1996, Mr. Schechter's annual salary was $150,000, the same as it was for the
previous fiscal year. Mr. Schechter is also entitled to bonus compensation at
the discretion of the Board, as well as participation in all pension,
profit-sharing, retirement, health, insurance and other benefit programs
available to other executive management employees of the Company. In the event
Mr. Schechter's employment is terminated without "cause" (as defined in his
employment agreement) by the Company or by Mr. Schechter for "good reason" (as
defined in his employment agreement), then he will be entitled to receive his
continuing base salary through the end of the initial term or any renewal term,
as applicable.
Mr. Brubaker was employed by the Company pursuant to an amended and
restated employment agreement which expired without being renewed on August 31,
1996. Under the agreement, Mr. Brubaker may not compete with the Company during
the term of the agreement and for two years after its termination under certain
circumstances. The agreement required Mr. Brubaker to devote all of his business
time to the business and affairs of the Company and its affiliates and provided
for a minimum annual salary of $150,000. Mr. Brubaker's annual salary during
fiscal 1996 was $165,000. Mr. Brubaker was entitled to participate in all
pension, profit-sharing, retirement, health, insurance and other welfare and
employee benefit plans for which he was eligible and which were made available
to other
12
<PAGE>
<PAGE>
executive management employees of the Company. Mr. Brubaker's prior employment
agreement required him to devote his full business time to the Company and its
affiliates and provided for a minimum annual salary of $135,000. As of September
1, 1994, Mr. Brubaker's annual salary was increased to $150,000. Additionally,
Mr. Brubaker was entitled to participate in all pension, profit sharing,
retirement, health insurance and other employee benefit programs available to
other executive management employees of the Company.
Profit Sharing Plan. The Company maintains a defined contribution plan
(the "Profit Plan") which satisfies the tax qualification requirements of
Section 401(a) and 401(k) of the Internal Revenue Code, as amended (the "Code").
All employees of the Company who have attained the age of 21 and have completed
one year of service are eligible to participate in the Profit Plan, which
permits participants, at their discretion, to contribute up to 10%, up to a
maximum of $9,500, of their compensation for the taxable year beginning January
1, 1996 (or such larger amount as may be permitted by the Internal Revenue
Service in any subsequent year). The Company may make additional contributions
to the Profit Plan on behalf of its eligible employees equal to 25% of each
employee's contributions up to a maximum of $1,000 per year per employee.
Additional contributions to protect the tax-qualified status of the Profit Plan
may also be made by the Company. In addition, employees may make voluntary
after-tax contributions to the Profit Plan, up to 10% of their aggregate annual
compensation while an employee of the Company.
For fiscal year 1996, the Company contributed $1,000 to the Profit Plan
on behalf of each of Mr. Schechter, Mr. Brubaker and Mr. Raabe (and a total of
$3,000 on behalf of all executive officers as a group) and $65,097 on behalf of
all other employees as a group. For fiscal year 1995, the Company contributed
$1,000 to the Profit Plan on behalf of each of Mr. Schechter, Mr. Brubaker and
Mr. Raabe (and a total of $3,694 on behalf of all executive officers as a group)
and $52,174 on behalf of all other employees as a group. For fiscal year 1994,
the Company contributed $1,000 to the Profit Plan on behalf of each of Mr.
Schechter and Mr. Brubaker (and a total of $3,325 on behalf of all executives
officers as a group) and $37,259 on behalf of all other employees as a group.
Stock Option Plans. The Board adopted the 1986 Non-Qualified Stock
Option Plan (the "1986 Stock Option Plan") in November 1986. Key employees of
the Company and its wholly-owned subsidiaries, as well as directors of the
Company, are eligible to participate in the 1986 Stock Option Plan, pursuant to
which options may be granted to purchase shares of the Company's Common Stock.
An aggregate of 50,000 shares of the Company's Common Stock have been authorized
for issuance under the 1986 Stock Option Plan. All the options under the 1986
Stock Option Plan expired on November 8, 1996 without being exercised.
The Board adopted the 1992 Employee Incentive and Non-Qualified Stock
Option Plan (the "1992 Plan") effective April 1, 1992. Officers, directors and
employees of the Company are eligible to participate in the 1992 Plan. An
aggregate of 187,500 shares of the Company's Common Stock have been authorized
for issuance under the 1992 Plan. The 1992 Plan was approved by the Company's
stockholders on January 7, 1993.
At December 11, 1996, options to purchase 161,500 shares of Common
Stock exercisable at prices ranging from $2.00 to $6.38 per share were
outstanding under the 1992 Plan, all of which are held by certain employees and
officers of the Company.
13
<PAGE>
<PAGE>
The Board adopted the 1993 Non-Employee Director Stock Option Program
(the "1993 Program") effective September 1, 1993. Non-Employee Directors of the
Company are eligible to participate in the 1993 Program. An aggregate of 40,000
shares of the Company's Common Stock have been authorized for issuance under the
1993 Program. The 1993 Program was approved by the Company's stockholders on
January 18, 1994.
At December 11, 1996, options to purchase 12,500 shares of Common Stock
exercisable at prices ranging from $2.25 to $6.13 per share were outstanding
under the 1993 Program, all of which are held by Messrs. Haines and Phelan.
6,000 of such options are held by Mr. Phelan, all of which will terminate on
January 25, 1997. No other Non-Employee Director of the Company participates in
the 1993 Program.
The Board adopted the 1995 Incentive and Non-Qualified Stock Option
Plan (the "1995 Plan") effective November 16, 1995. Officers, directors,
employees, consultants and advisors of the Company are eligible to participate
in the 1995 Plan. An aggregate of 300,000 shares of the Company's Common Stock
have been authorized for issuance under the 1995 Plan. The 1995 Plan was
approved by the Company's stockholders on January 25, 1996.
At December 11, 1996, options to purchase 150,000 shares of Common
Stock at an exercise price of $2.00 per share were outstanding under the 1995
Plan, all of which are held by certain employees and officers of the Company.
50,000 of such options are exercisable on or after November 1, 1997, 50,000 of
such options will become exercisable on or after November 1, 1997 provided that
the Company attains pre-tax profit of at least $1,372,000 during fiscal 1997 and
50,000 of such options will become exercisable on or after November 1, 1997
provided that the Company attains pre-tax profit of at least $1,772,000 during
fiscal 1997.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is charged with making recommendations
regarding the compensation of senior management personnel and granting stock
options pursuant to the Company's stock option plans.
The base salary of Mr. Alfred Schechter, the Company's Chairman,
President and Chief Executive Officer, is paid subject to the terms of his
employment agreement which was entered into as of September 1, 1991 (see
"Employment Agreements" above). The amount of such base salary was subjectively
determined, and was not based on specific factors and criteria, but was intended
to compensate Mr. Schechter fairly for his ongoing leadership skills and
management responsibilities. Although his contract provides for a discretionary
bonus, no such bonus was awarded by the Board for fiscal 1996. The Compensation
Committee determined to maintain Mr. Schechter's annual salary at a rate of
$150,000 for fiscal 1997.
The compensation of the other executive officers consists of a
combination of cash salary and stock options. Individual compensation is
subjectively determined on the basis of various considerations, including
assessment of Company performance, individual performance, position, tenure and
recommendations received from the Company's Chief Executive Officer. For fiscal
year 1996, the Compensation Committee considered the Company's overall
improvement in its business and corporate performance in determining executive
compensation. No cash bonuses were paid to executive officers in fiscal year
1996.
14
<PAGE>
<PAGE>
For the fiscal year ending August 31, 1997, the Compensation Committee
instituted an incentive bonus plan for certain of the Company's executive
officers and employees, including the Chief Executive Officer, which provides
for the payment of a cash bonus for each of the eligible officers and employees
equal to (i) 15% of his annual salary if pre-tax profit of the Company equals or
exceeds $1,372,000 and (ii) 25% of his annual salary if pre-tax profit of the
Company equals or exceeds $1,772,000. The Compensation Committee instituted this
incentive plan in order to provide additional compensation to the eligible
officers and employees in the event the Company achieves the pre-tax profit
levels set forth above.
The Company's stock option plans are designed to align the interest of
the executives and other employees, as well as consultants and advisors of the
Company, with those of the Company's stockholders. Options are granted with
exercise prices equal to the market price on the grant date and, are generally
not exercisable until one year after the grant date and terminate a short time
after an executive or employee leaves the Company. During the 1996 fiscal year,
the Company granted options to purchase 15,000, 15,000 and 10,000 shares of the
Company's Common Stock to Alfred Schechter, Dale A. Brubaker and James A. Raabe,
respectively. Such options have an exercise price of $4.50 and became
exercisable on November 1, 1996, except that the options issued to Mr. Brubaker
have all terminated. The number of shares in respect of which options are
granted is subjective and is based on recommendations received from the
Company's Chief Executive Officer.
Compensation Committee of
the Board of Directors
Jerome L. Katz
Russell R. Haines
Ajit G. Hutheesing
The foregoing report of the Compensation Committee on Executive
Compensation shall not be deemed to be incorporated by reference into any filing
of the Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates such information by reference.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Alfred Schechter and Mr. Jerome L. Katz, who is a director of the
Company and a member of the Compensation Committee, are also directors of
Charterhouse. For a further discussion with respect to the Company's
relationship with Charterhouse see "Certain Relationships and Related
Transactions" set forth above.
15
<PAGE>
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON
The following graph sets forth as of August 31, 1996, the cumulative
total stockholder return on the Company's Common Stock compared with the
cumulative total return of the NASDAQ Stock Market (US Companies) Index and a
peer group common stock index comprised of those public companies whose business
activities fall within the same Standard Industrial Classification Code as the
Company. The total return assumes a $100 investment on February 12, 1992 (the
day after the merger between Cryenco Holdings, Inc., which had simultaneously
acquired Cryenco, Inc., and Gulf and Mississippi Corporation), adjusted for the
Company's one-for-two reverse stock split effective August 13, 1992, and
reinvestment of dividends, if any, in the Company's Common Stock and in each
index. Prior to February 12, 1992, the Company's Common Stock had been traded on
the NASDAQ System and such data is not comparable to periods after February 12,
1992. Additionally, during the period from February 12, 1992 through August 13,
1992, only a limited public market existed for the Company's Common Stock and
the trading volume in such stock was sporadic.
16
<PAGE>
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN OF THE
COMPANY'S COMMON STOCK, NASDAQ STOCK
MARKET (US COMPANIES) INDEX AND
PEER GROUP COMMON STOCK INDEX
[The Performance Graph is being filed in tabular form
pursuant to Item 304(d) of Regulation S-T.]
<TABLE>
<CAPTION>
8/31/91 2/12/92 8/31/92 8/31/93 8/31/94 8/31/95 8/31/96
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Cryenco Sciences, Inc. $ 23.44 $100.00 $156.25 $193.75 $106.25 $106.25 $ 81.25
Market Index - $ 80.71 $100.00 $ 87.53 $115.47 $120.19 $161.86 $182.51
Nasdaq Stock Market
(US Companies)
Peer Index- $ 93.50 $100.00 $ 90.99 $112.73 $122.82 $143.94 $170.20
NASDAQ Stocks
(SIC 3400-3499
US + Foreign)
</TABLE>
The foregoing graph shall not be deemed to be incorporated by reference
into any filing of the Company under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates such information by reference.
-----------------
17
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<PAGE>
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
It is proposed that the stockholders ratify the appointment by the
Board of Ernst & Young LLP as independent auditors for the Company for the 1997
fiscal year. The Company expects representatives of Ernst & Young LLP either to
be available by telephone or to be present at the Annual Meeting at which time
they will respond to appropriate questions submitted by stockholders and may
make such statements as they may desire.
Approval by the stockholders of the appointment of independent auditors
is not required but the Board deems it desirable to submit this matter to the
stockholders. If a majority of stockholders voting at the meeting should not
approve the selection of Ernst & Young LLP, the selection of independent
auditors will be reconsidered by the Board.
-----------------
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
-----------------
VOTING PROCEDURES
Pursuant to Commission rules, a designated blank space is provided on
the proxy card to withhold authority to vote for one or more nominees for
director and a box is provided on the proxy card for stockholders to mark if
they wish to abstain on Proposal 2. Votes withheld in connection with the
election of one or more directors or Proposal 2 will not be counted in
determining the votes cast and will have no effect on the vote.
Under the rules of the National Association of Securities Dealers,
brokers who hold shares in street name for customers have the authority to vote
on certain items when they have not received instructions from beneficial
owners. Under the Delaware General Corporation Law, a broker non-vote will have
no effect on the outcome of the election of directors or upon Proposal 2.
-----------------
18
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<PAGE>
GENERAL
As of the date of this Proxy Statement, the Board does not intend to
present any other matters for action. However, if any other matters are properly
brought before the meeting it is intended that the persons voting the
accompanying proxy will vote the shares represented thereby in accordance with
their best judgment.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholder proposals in respect of matters to be acted upon at the
Company's next Annual Meeting of Stockholders should be received by the Company
on or before August 18, 1997 in order that they may be considered for inclusion
in the Company's proxy materials.
OTHER MATTERS
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED AUGUST 31, 1996, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES THERETO, TO EACH OF THE COMPANY'S
STOCKHOLDERS OF RECORD ON DECEMBER 11, 1996, AND EACH BENEFICIAL OWNER OF COMMON
STOCK ON THAT DATE UPON RECEIPT OF A WRITTEN REQUEST THEREFOR MAILED TO THE
COMPANY'S OFFICES, 3811 JOLIET STREET, DENVER, COLORADO 80239, ATTENTION: JAMES
A. RAABE, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER. IN THE EVENT THAT EXHIBITS
TO SUCH FORM 10-K ARE REQUESTED, A FEE WILL BE CHARGED FOR REPRODUCTION OF SUCH
EXHIBITS. REQUESTS FROM BENEFICIAL OWNERS OF COMMON STOCK MUST SET FORTH A GOOD
FAITH REPRESENTATION AS TO SUCH OWNERSHIP.
19
<PAGE>
<PAGE>
It is important that the accompanying proxy card be returned promptly.
Therefore, whether or not you plan to attend the meeting in person, you are
earnestly requested to mark, date, sign and return your proxy in the enclosed
envelope to which no postage need be affixed if mailed in the United States. The
proxy may be revoked at any time before it is exercised. If you attend the
meeting in person, you may withdraw the proxy and vote your own shares.
MANNER AND EXPENSES OF SOLICITATION
The solicitation of proxies in the accompanying form is made by the
Board and all costs thereof will be borne by the Company. In addition to the
solicitation of proxies by use of the mails, some of the officers, directors and
other employees of the Company may also solicit proxies personally or by mail,
telephone or telegraph, but they will not receive additional compensation for
such services. The Company may retain the services of a professional proxy
solicitation firm if it deems it to be necessary. Brokerage firms, custodians,
banks, trustees, nominees or other fiduciaries holding shares of Common Stock in
their names will be required by the Company to forward proxy material to their
principals and will be reimbursed for their reasonable out of pocket expenses in
such connection.
By Order of the Board of
Directors,
James A. Raabe
Secretary
Denver, Colorado
December 18, 1996
20
<PAGE>
<PAGE>
APPENDIX
CRYENCO SCIENCES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1997
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of
CRYENCO SCIENCES, INC. (the "Company") does hereby constitute and appoint ALFRED
SCHECHTER and JAMES A. RAABE or either of them (each with full power of
substitution of another for himself) as attorneys, agents and proxies, for and
in the name, place and stead of the undersigned, and with all the powers the
undersigned would possess if personally present, to vote as instructed below all
of the shares of Common Stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Company to be held on
Thursday, January 23, 1997 at 11:00 a.m. local time at the Princeton Club, 15
West 43rd Street, New York, New York 10036, and at any adjournment or
adjournments thereof, all as set forth in the Notice of Annual Meeting and Proxy
Statement.
(1) Election of a board of five directors
[ ] FOR all nominees listed (except as [ ] WITHHOLD AUTHORITY
marked to the contrary) to vote for nominees listed
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW):
A. Schechter, J.L. Katz, R.R. Haines, B.J. Ahrens, A.G. Hutheesing
(Continued on other side)
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
(2) Ratification of the appointment of Ernst & Young LLP as independent
auditors for the year ending August 31, 1997. FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
(3) In their discretion, the Proxies are authorized to vote upon such other
and further business as may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN. IF NO SUCH INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED IN FAVOR OF ELECTION OF THE NOMINEES FOR DIRECTORS
DESIGNATED BY THE BOARD OF DIRECTORS AND FOR ITEM 2.
Dated: , 199
--------------------- --
------------------------------------
------------------------------------
IMPORTANT: Please sign exactly as your
name or names appear hereon, and when
signing as attorney, executor,
administrator, trustee or guardian,
give your full title as such. If
signatory is a corporation, sign the
full corporate name by duly authorized
officer. If shares are held jointly,
each stockholder named should sign.
NOTE: PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED FOR
THIS PURPOSE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
<PAGE>
