SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. -----)
Check the appropriate box:
X/ Preliminary Information Statement
/ Confidential, for Use of the Commission Only (as permitted by Rule 14c
5(d)(2)
/ Definitive Information Statement
LIFSCHULTZ INDUSTRIES, INC.
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
/ Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction.
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5) Total fee paid:
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/ Fee paid previously with preliminary materials.
/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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INFORMATION STATEMENT
February 27, 1998
TO THE SHAREHOLDERS OF
LIFSCHULTZ INDUSTRIES, INC.
This Information Statement (the "Information Statement") is being
delivered by Lifschultz Industries, Inc., a Delaware corporation (the
"Company"), and relates to the approval by the shareholders of the Company
of an amendment to the Company's Certificate of Incorporation to reduce the
number of authorized shares from 85,000,000 shares (80,000,000 common and
5,000,000 preferred) to 1,750,000 shares (1,650,000 common and 100,000
preferred). The purpose of the decrease in authorized shares is to reduce
the Company's Delaware franchise tax.
On February 25, 1998, the Board of Directors of the Company approved
the decrease in authorized capital as described above and the accompanying
amendment to the Company's Certificate of Incorporation necessary to effect
the decrease (the "Amendment"). At that time, the Board of Directors also
approved and recommended to the Company's shareholders for their approval
the Amendment. Subsequently, by written consent in lieu of a meeting, the
Amendment was duly approved by the shareholders of the Company.
This Information Statement will be mailed to the Company's shareholders
on or about March 9, 1998. It is being furnished to shareholders solely to
provide them with certain information concerning the Amendment in accordance
with the requirements of the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder, particularly Regulation 14C.
The costs of this Information Statement are being borne by the Company.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Board of Directors and the shareholders of the Company have adopted
a resolution approving an amendment to the Company's Certificate of
Incorporation to effect a reduction in the Company's authorized capital.
The Amendment is attached as Exhibit A.
REASONS FOR AND GENERAL EFFECT OF THE AMENDMENT
As of February 25, 1998, 1,111,479 shares of Common Stock, 5,200 shares
of Series A Convertible Preferred Stock and 21,231 shares of Series E
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Convertible Preferred Stock were issued and outstanding. Additionally,
22,560 shares of Common Stock were held in the Company's treasury and
approximately 151,379 shares of Common Stock were reserved for issuance upon
conversion of the Preferred Stock and issuance upon the exercise of options
granted to certain officers, directors, employees and non-employees of the
Company. Under the Amendment, the Company's currently outstanding shares
of stock and options will remain unaffected. Accordingly, as of February
25, 1998, of the 85,000,000 shares of stock authorized for issuance by the
Certificate of Incorporation, less than 1,290,000 (excluding treasury
shares) are issued and outstanding or reserved for issuance. The amendment
to the Certificate of Incorporation would reduce the number of authorized
shares from 85,000,000 to 1,750,000, leaving approximately 460,000 shares
available for future issuance. The reduction in the number of authorized
shares will allow the Company to substantially reduce the amount of annual
franchise taxes payable to the State of Delaware (by approximately $140,000
for 1998, for example). Franchise taxes in the state of Delaware are
currently determined in accordance with a formula that is based, in part,
on the amount of a corporation's authorized shares of capital stock. The
Board of Directors believes that, even with the reduction to 1,750,000
shares, sufficient shares of Common Stock and preferred stock will be
available for the Company's present needs and its presently anticipated
future needs.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of February 25,
1998, with respect to (i) each person who is known to the Company to
beneficially own more than five percent of the outstanding shares of Common
Stock or a class of Preferred Stock, (ii) the beneficial ownership of such
securities by each executive officer and director of the Company, and (iii)
the beneficial ownership of all such securities by all of the Company's
directors and executive officers as a group. Unless otherwise indicated,
the persons or entities named in the table have sole voting and investment
power with respect to all shares of stock beneficially owned by them,
subject to applicable community property laws. Stock that is "beneficially
owned" includes all the stock that the person has the right to acquire
within 60 days of February 25, 1998. The percentage ownership for any
person is calculated assuming that all the stock that could be acquired by
that person within 60 days by option exercise or otherwise, is in fact
outstanding and that no other shareholder has exercised a similar right to
acquire additional shares.
Amount and Nature
Name and ADdress of Beneficial Percent
Class of Beneficial Owner Ownership of Class
- ----- ------------------- ----------------- --------
Common David K. Lifschultz 496,824 (1) 42.6%
641 West 59th Street
New York, NY 10019
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Common Charlotte K. Lifschultz 207,815 (2) 18.7%
641 West 59th Street
New York, NY 10019
Common Hudson Waterfront 89,992 (3) 8.1%
Associates, L.P.
725 Fifth Ave.
New York, NY 10022
Common Merrill E. Brown 58,498 (4) 5.3%
1444 County Road 502
Bayfield, CO 81122
Common Dennis R. Hunter 35,781 (5) 2.7%
515 East 1860 South
Provo, UT 84606
Common Michael Hirst 27,206 (6) 2.4%
799 E. Utah Valley Drive
American Fork, UT 84003
Common Sidney B. Lifschultz 14,042 (7) 1.3%
641 West 59th Street
New York, NY 10019
Common James C. Triplett 10,000 (8) *
779 E. Utah Valley Drive
American Fork, UT 84003
Common J. Randall Owen 1,000 (9) *
799 E. Utah Valley Drive
American Fork, UT 84003
Common James Solomon -0- (10) -0-
1455 West Center
Orem, UT 84058
Common Joseph C. Fatony -0- (11) -0-
888 Seventh Ave, #402
New York, NY 10106
Series A John G. Bartol 5,200 100%
Preferred 645 W. Rockford Drive
Tempe, AZ 85281
Series E Reboul, MacMurray, 20,679 97.4%
Preferred Hewitt & Kristol
45 Rockefeller Plaza
New York, NY 10111
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Common All directors and
executive officers
(8 persons) as a Group 584,853 (1,5,6,7, 48.4%
8,9,10,11)
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* Less than one percent.
(1) Chairman and Chief Executive Officer of the Company. Includes:
(i) 198,477 shares held directly; (ii) 45,000 shares of common stock
underlying employee stock options that are currently exercisable;
(iii) 205,455 shares for which David K. Lifschultz shares voting power as
co-trustee with Charlotte K. Lifschultz for the Sidney B. Lifschultz 1992
Family Trust; and (iv) 47,892 shares of stock held by Lifschultz Terminal
and Leasing Company for which David K. Lifschultz shares voting power as an
officer and director of Lifschultz Terminal and Leasing Company. Except for
the shares identified in the foregoing item (iii), excludes shares shown as
beneficially owned by Sidney B. Lifschultz (father) and Charlotte K.
Lifschultz (mother).
(2) Beneficial owner of 5% of the class shares indicated. Includes
only shares of stock for which Charlotte K. Lifschultz (wife of Sydney B.
Lifschultz) has shared voting power as a co-trustee with David K. Lifschultz
for the Sydney B. Lifschultz 1992 Family Trust and trusts for the benefit
of family members. Note that 205,454 of the shares shown for Charlotte K.
Lifschultz are also reported for David K. Lifschultz as they share voting
power for such shares held by the Sidney B. Lifschultz 1992 Family Trust.
Except as stated in the foregoing sentence, excludes shares shown as
beneficially owned by Sidney B. Lifschultz (spouse) and David K. Lifschultz
(son).
(3) Beneficial owner of 5% of the class of shares indicated. Includes
89,992 shares held directly.
(4) Beneficial owner of 5% of the class of shares indicated.
Includes: 60,553 shares for which Merrill E. Brown holds shared or sole
voting power as trustee of trusts for various family members.
(5) President, Chief Financial Officer and director of the Company.
Includes only shares underlying employee stock options held by Dennis R.
Hunter that are currently exercisable.
(6) Vice President and director of subsidiary Hart Scientific, Inc.
Includes: (i) 21,968 shares held directly; and (ii) 5,238 shares of common
stock underlying employee stock options that are currently exercisable.
Excludes 200 shares held by an immediate family member for which Michael W.
Hirst disclaims beneficial ownership.
(7) Director of the Company. Includes: (i) 10,900 shares held
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directly; and (ii) 3,142 shares for which Sydney B. Lifschultz holds shared
voting power as co-trustee of certain trusts for family members. Excludes
shares shown as beneficially owned by Charlotte K. Lifschultz (spouse) and
David K. Lifschultz (son).
(8) Chairman and Chief Executive Officer of subsidiary Hart
Scientific, Inc. Includes only shares underlying employee stock options
held by James C. Triplett that are currently exercisable.
(9) President and Chief Operating Officer of subsidiary Hart
Scientific, Inc. Includes 1,000 shares of common stock held directly.
(10) Director of the Company and subsidiary Hart Scientific, Inc.
(11) Director of the Company.
VOTING RIGHTS
The outstanding voting securities of the Company on February 25, 1998,
were (i) 1,111,479 shares of Common Stock, par value $0.001 per share;
(ii) 5,200 shares of Series A Convertible Preferred Stock, par value $0.01
per share ("Series A Shares"); and (iii) 21,231 shares of Series E
Convertible Preferred Stock, par value $0.01 per share ("Series E Shares").
Holders of Series A and E Shares are entitled convert each Series A and E
Share into one-fifth of one share of Common Stock (subject to adjustment for
stock splits and similar events), and to vote with the Common Stock on an
as-converted basis.
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EXHIBIT A
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AMENDMENT TO CERTIFICATE OF INCORPORATION
OF LIFSCHULTZ INDUSTRIES, INC.
Article IV of the Corporation's Certificate of Incorporation shall be
amended to read in its entirety:
ARTICLE IV
CAPITALIZATION
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The total number of shares of all classes of capital stock which this
Corporation shall have authority to issue is ONE MILLION SEVEN HUNDRED FIFTY
THOUSAND (1,750,000) shares of par value stock; ONE HUNDRED THOUSAND
(100,000) shares of $0.01 (One Cent) par value per share to be preferred
shares and ONE MILLION SIX HUNDRED FIFTY THOUSAND (1,650,000) shares of
$0.001 (One Tenth Cent) par value per share to be common shares. All or any
part of the shares of the preferred or common stock may be issued by the
Corporation from time to time and for such consideration as may be
determined and fixed by the Board of Directors, as provided by law, with due
regard to the interest of the existing shareholders; and when such
consideration has been received by the Corporation, such shares shall be
deemed fully paid and non-assessable.
The Board of Directors is authorized, subject to limitations prescribed
by law and the provisions of this Article, to provide for the issuance of
the shares of preferred stock in series, and by filing a certificate
pursuant to the applicable law of the State of Delaware, to establish from
time to time the number of shares to be included in each such series, and
to fix the designations, powers, preferences and rights of the shares of
each such series and the qualifications, limitations or restrictions
thereof.
The authority of the Board with respect to each such series shall
include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate, if any, on the shares of that series,
whether dividends shall be cumulative, and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends on
shares of that series;
(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such voting
rights;
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(d) Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors
shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be redeemable,
and the amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of
shares of that series;
(h) Any other relative rights, preferences, and limitations
of that series.
The Certificates of Designation filed by the Corporation with the
Delaware Secretary of State on January 17, 1991, for Series A Convertible
Preferred Stock and on March 31, 1994, for Series E Convertible Preferred
Stock, as amended by a Certificate of Decrease filed
February 26, 1998, shall continue to be valid designations by the
Corporation's Board of Directors of its preferred stock pursuant to the
provisions of this Article IV.
Effective as of 5:00 p.m., Delaware time, January 27, 1998 (the
"Effective Date"), each one share of the Company's Common Stock issued and
outstanding on the Effective Date shall be automatically changed without
further action into one-fiftieth of a fully paid and nonassessable share of
the Company's Common Stock, provided that no fractional shares shall be
issued pursuant to such change. The Company shall issue to each shareholder
who, based on the aggregate number of shares held by such shareholder, would
otherwise be entitled to a fractional share as a result of such change, one
additional whole share.
