UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement
Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|X| Preliminary information statement |_| Confidential, for use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
| | Definitive information statement
|_ | Definitive additional materials
|_ | Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
<PAGE>
ALBARA CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Information 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 transaction applies:
(3)Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4)Proposed maximum aggregate value of transaction:
(5)Total fee paid:
|_|Fee paid previously with preliminary materials:
|_|Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1)Amount Previously Paid:
(2)Form Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed: November 10, 1999
<PAGE>
By Order of the Board of Directors
Barbara Provencher
Secretary
Conroe, Texas
November __, 1999
MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. YOUR COOPERATION
WILL BE APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK
PERSONALLY, OTHERWISE YOUR VOTE WILL NOT BE COUNTED.
ALBARA CORPORATION
November __, 1999
To the Stockholders of
ALBARA CORPORATION:
Dear Fellow Shareholders:
Attached please find a notice of annual meeting of the stockholders of
ALBARA CORPORATION (hereinafter referred to as "ALBARA" and/or the "Company"),
that will be held at the ALBARA headquarters, 610 South Frazier, Conroe,
Texas 77301, on ______________, 1999, at 10:00 a.m., Central Daylight Time
("CDT").
The purpose of this meeting is to consider, discuss, vote and act upon
the following:
(i) restating and amending the Company's Articles of Incorporation in order
to change its name from ALBARA CORPORATION to "LEAPFROG SMART PRODUCTS,
INC." ("name change"), effect a 1-for-10 (1:10) reverse stock split in the
outstanding shares of ALBARA common stock, no par value (Common Stock")
("stock split"), increase the number of authorized shares of Common Stock
to thirty million (30,000,000);
(ii) electing a new Board of Directors;
(iii)restating and amending the Company's incentive stock option plan; and
(iv) approving all past transactions conducted by the current and past
officers and directors.
<PAGE>
Page 2
Albara Shareholders
November __, 1999
______________________
Certain officers, directors and affiliates of ALBARA who own in excess of
50.00% of the outstanding voting shares of the Company have advised the
Company that they intend to vote in favor of each item set forth above.
Consequently, the proposals will be approved at the annual meeting of
stockholders.
If there are any questions or any further information is required with
respect to the meeting and the transactions contemplated thereby, please
contact me at (409) 441-2650 or Mark T. Thatcher, Esq., Nadeau & Simmons,
P.C., 1250 Turks Head Building, Providence, RI 02903 401-272-5800.
Warmest regards,
/s/ Real Provencher
REAL PROVENCHER,
Chairman
DATED: November __, 1999
<PAGE>
PRELIMINARY COPY
ALBARA CORPORATION
610 SOUTH FRAZIER
CONROE, TEXAS 77301
- - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
- - --------------------------------------------------------------------------------
ALBARA CORPORATION
Dated as of November __, 1999
______________________________________________________________________________
To the Stockholders of ALBARA:
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned, being the Secretary of ALBARA CORPORATION, provides that:
______________________________________________________________________________
Notice is hereby given that the annual meeting (the "Meeting") of the
stockholders of ALBARA CORPORATION (hereinafter referred to as "ALBARA" and/or
the "Company"), a Colorado corporation, will be held at the Company
headquarters, 610 South Frazier Conroe, Texas 77301, on ________________,
1999, at 10:00 a.m., Central Daylight Time ("CDT").
______________________________________________________________________________
The purpose of the Meeting is to consider and to act upon the following
proposals ("Proposals"):
(i) restating and amending the Company's Articles of Incorporation in order
to change its name from ALBARA CORPORATION to "LEAPFROG SMART PRODUCTS,
INC." ("name change"), effect a 1-for-10 (1:10) reverse stock split in
the outstanding shares of ALBARA common stock, no par value (Common
Stock") ("stock split"), increase the number of authorized shares of
Common Stock to thirty million (30,000,000);
(ii) electing a new Board of Directors;
(iii)restating and amending the Company's incentive stock option plan; and
(iv) approving all past transactions conducted by the past officers and
directors.
<PAGE>
Certain officers, directors and affiliates of the Company own in excess of
50.00% of the Voting Shares of the Company and have advised the Company that
they intend to vote in favor of the Proposals. Consequently, the Proposals
will be approved at the Meeting.
Upon the approval of the Proposals, the Company and LEAPFROG will immediately
file appropriate Articles of Merger, in accordance with Colorado and Florida
law, to effect the Merger and change in the issued and outstanding common
stock of ALBARA. The Merger will become effective upon the filing of such
Articles. Upon the filing, and without any further action being required by
the Company and LEAPFROG, each ALBARA shareholder will maintain a resulting
equity position in accordance with the stock split as outlined above.
The Board of Directors of the Company believes that the Proposals will be in
the best interest of ALBARA stockholders.
If there are any questions or further information is required with respect to
the Proposals, please contact Real Provencher at P.O. Box 541, Texas
77301-0541, 409-441-2650.
By order of the Board of Directors,
/s/ Barbara Provencher
___________________________________
BARBARA PROVENCHER,
Secretary
DATED: November __, 1999
<PAGE>
__________________________________________________
INFORMATION STATEMENT
ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS
To be held November __, 1999
__________________________________________________
ALBARA CORPORATION
610 SOUTH FRAZIER
CONROE, TEXAS 77301
November __, 1999
GENERAL INFORMATION
This Information Statement is furnished in connection with an Annual Meeting
of Stockholders called by the Board of Directors (the "Board") of Albara
Corporation ("Albara"), to be held at 610 South Frazier, Conroe, Texas 77301,
at 10:00 a.m. local time on ________________, 1999, and at any and all
postponements, continuations or adjournments thereof (collectively the
"Meeting"). This Information Statement and the accompanying Notice of Annual
Meeting will be first mailed or given to Albara's stockholders on or about
November __, 1999.
All shares of Albara's common stock, no par value, and all shares of Preferred
Series C stock, no par value, (the "Voting Shares") represented in person will
be eligible to be voted at the Meeting.
WE ARE NOT ASKING FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
<PAGE> 1
ITEM 1. DATE, TIME AND PLACE INFORMATION
The enclosed information statement is provided by the Board of Albara for use
at the Annual Meeting of Stockholders to be held at the Company's headquarters
at 610 South Frazier, Conroe, Texas 77301 at 10:00 a.m. on ________________
__, 1999, and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on November 19, 1999 (the
"Record Date") will be entitled to vote at the meeting or any adjournment or
adjournments thereof. On that date the Company had outstanding 2,061,503
shares of Common Stock entitled to one (1) vote per share and 185 shares of
Preferred Series C entitled to 9,037 votes per share (the "Voting Shares").
The affirmative vote of the holders of a majority of the Company's Voting
Shares is required to approve each of the Proposals.
The presence of the holders of a majority of the issued and outstanding shares
of Voting Shares voting as a single class, entitled to vote at the meeting is
necessary to constitute a quorum for the transaction of business at the
meeting.
BACKGROUND INFORMATION
A Plan and Agreement of Merger (the "Agreement") was executed on October 25,
by and among Albara, Leapfrog Merger, Inc., a Florida Company and a directly
held, wholly-owned subsidiary of Albara ("Albara Subsidiary" or "Merger
Surviving Company") and Leapfrog Smart Products, Inc., a Florida Company
("Leapfrog"), and Real Provencher ("Provencher"), who joined in the execution
of the Agreement for the purpose of making certain covenants regarding the
transaction contemplated therein.
Albara is a Company duly organized and validly existing under the laws of the
state of Colorado, with its registered office at 1560 Broadway, Denver,
Colorado 80202 and its principal executive office at 610 South Frazier,
Conroe, Texas 77301; and
Albara Subsidiary is a Company duly organized and validly existing under the
laws of the State of Florida, with its registered office located in the city
of Orlando, County of Dade, State of Florida, and its principal executive
office at 545 Delaney Avenue, Bldg. 2, Orlando, Florida 32801; and
Leapfrog is a Company duly organized and validly existing under the laws of
the state of Florida, with its registered office located in the city of
Orlando, County of Dade, State of Florida, and its principal executive office
at 545 Delaney Avenue, Bldg. 2, Orlando, Florida 32801; and
<PAGE> 2
The respective boards of directors of Albara, Albara Subsidiary and Leapfrog
deemed it desirable and in the best interests of their respective Companies,
for Albara to acquire the outstanding capital stock of Leapfrog by merging
Leapfrog into Albara Subsidiary in exchange for the issuance of shares of the
common stock of Albara (together with other consideration provided for
therein) and have proposed, declared advisable and approved such merger (the
"LEAPFROG Merger") pursuant to the Agreement, which Agreement has been duly
approved by resolutions of the respective boards of directors of Albara,
Albara Subsidiary and Leapfrog. The stockholders of Albara will not consider
the Merger although enactment of this Proposal One is required in order for
the parties to consummate the Merger.
PROPOSAL ONE
AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors has unanimously approved, and recommends for
shareholder approval, the restatement and amendment of the Company's Articles
of Incorporation in order to change the Company's name to "Leapfrog Smart
Products, Inc.", amending the Company's Articles of Incorporation to effect a
1-for-10 (1:10) reverse stock split in Albara common stock ("stock split");
and amending the Company's Articles of Incorporation to increase the number of
common shares authorized from 6,666,667 to 30,000,000; Approval of the
restatement and amendment will not result in any other material amendment or
change to the Company's Articles of Incorporation. The restatement and
amendment is required in conjunction with the Company's acquisition of
Leapfrog.
PROPOSAL TWO
ELECTION OF DIRECTORS
At the Meeting of stockholders, the successors to the Board of Directors whose
terms expire at that meeting will be elected for a term of office, such term to
commence on the effective date of the Merger The nominee directors who are
chosen to fill vacancies on the Board shall hold office until the next
election for which those nominee directors are chosen, and until their
successors are duly elected by the stockholders.
The following table sets forth the ages of and positions and offices
presently held by each nominee director of the Company. For information
about ownership of the Company's Voting Securities by each nominee director,
see "BENEFICIAL OWNERSHIP OF VOTING SECURITIES."
<PAGE> 3
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
- - -------------------- ---- ---------- ----------------------
<S> <C> <C> <C>
Ron Breland* N/A None
Washington, D.C.
Dr. William Campion* N/A None
El Paso, Texas
Jim Grebey* N/A None
Orlando, Florida
Dale Grogan* N/A None
Orlando, Florida
Bob Hartnett* N/A None
Orlando, Florida
George MacKay* N/A None
Maitland, Florida
Randall Schrader* N/A None
Philadelphia, Pennsylvania
Bruce Starling* N/A None
Orlando, Florida
Van Staton* N/A None
Ocala, Florida
George Stuart* N/A None
Orlando, Florida
Randolph Tucker* N/A None
Orlando, Florida
- - ------------------------------------------------------
<FN>*Nominees for election at this meeting.
</FN>
</TABLE>
<PAGE> 4
PROPOSAL NO. 3
AMENDMENT TO INCENTIVE STOCK OPTION PLAN
On February 26, 1988, the Company adopted an Incentive Stock Option Plan (the
"Plan"), under which options granted are intended to qualify as "incentive
stock options" under Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"). The Plan was further modified by vote of the Company's
shareholders at the annual Company shareholder's meeting which was held on
June 3, 1989. The purpose of this Plan is to advance the interests of the
Company and its stockholders by helping the Company obtain and retain the
services of employees upon whose judgment, initiative and efforts the Company
is substantially dependent, and to provide those persons with further
incentives to advance the interests of the Company.The Board of Directors has
unanimously approved, and recommends for shareholder approval, the restatement
and amendment of the Company's Incentive Stock Option Plan in order to
increase the aggregate number of shares that may be issued pursuant to this
Plan from 166,667 to 350,000 restricted shares and change the Plan such that
options granted by the Board of Directors shall be subject to the limitation
that (i) the exercise price cannot be less than 110% of the market value of
the Common Stock on the date of the grant; (ii) no option can have a term in
excess of 5 years measured from the grant date; (iii) no option may vest in a
period of less than eighteen (18) months from the grant date; (iv) all options
granted to an individual shall expire 30 days after the termination of
employment, with or without cause, from the Company; and (v) options once
granted by the Board of Directors may not have their terms altered in any way
but may by mutual consent with the option holder be canceled.
ITEM 2. REVOCABILITY OF PROXY
Not Applicable
ITEM 3. DISSENTERS' RIGHT OF APPRAISAL
Not Applicable
ITEM 4. PERSONS MAKING THE SOLICITATION
The enclosed information statement is distributed by the Board of Directors
(the "Board of Directors") of Albara. The cost of distribution will be borne
by the Company. In addition to the distribution by mail, officers and
employees of the Company may distribute in person. The Company may reimburse
brokers or persons holding stock in their names, or in the names of their
nominees, for their expenses in sending the information statement to the
beneficial owners.
<PAGE> 5
ITEM 5. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Not Applicable
ITEM 6. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of November 1, 1999 by (i) each person known by
the Company to own beneficially more than 5% of the outstanding Common Stock,
(ii) each director, and (iii) all executive officers and directors as a
group. Each person has sole voting and sole investment or dispositive power
with respect to the shares shown except as noted.
<TABLE>
<CAPTION>
PREFERRED
STOCK
COMMON STOCK SERIES C
---------------- ----------------
Name and address # of % of # of % of
of beneficial owner(1) shares Class Shares Class
- - ---------------------- ------- ----- ------ ------
<S> <C> <C> <C> <C>
Barbara A. Provencher(3) 0 0 0 0
610 South Frazier
Conroe, Texas 77301
Real Provencher (2) 1,091,370 53% 185 100%(a)
610 South Frazier
Conroe, Texas 77301
<PAGE> 6
PREFERRED
STOCK
COMMON STOCK SERIES C
----------------- -------------------
Name and address # of % of # of % of
of beneficial owner(1) shares Class Shares Class
- - ------------------------- ---------- -------- -------- ---------
All Executive Officers 1,091,370 53% 185 100%(a)
and Directors as a
Group (2 persons)
</TABLE>
<TABLE>
<CAPTION>
Voting Control
- - ---------------------------
Percent of Total Votes in
Number of Votes in Matters Matters Submitted to
Name Submitted to Shareholders Shareholders
- - --------------------------------------------------------------------------------
<S> <C> <C>
Real Provencher2, 763,272(a) 74%
Barbara A. Provencher 0 0
All Executive Officers
and Directors as a Group 2,763,272(a) 74%
(2 persons)
<FN>
(a) Each share of Series C Convertible Preferred Stock has the right to
9,037 votes, in all matters that come before the shareholders. Mr.
Provencher is the owner of all of the issued and outstanding shares of
Series C Convertible Preferred Stock.
(1) The Company currently has two series of Preferred Stock: Series C,
and Series F Convertible Preferred Stock. The shares of Series F
Convertible Preferred Stock do not have any voting rights. None of
the issued and outstanding shares of Series F Convertible Preferred
Stock are owned or beneficially held by a director, officer or person known
by the Company to be a beneficial owner of more than five percent of any
class of equity stock of the Company as of the date hereof.
<PAGE> 7
(2) The amounts of Common Stock listed do not include shares of Common Stock
to be received upon conversion of the Series C Convertible Preferred Stock.
(3) Ms. Provencher owns, as community property, one half of the shares of
stock set forth beside the name of her husband, Mr. Provencher, and may be
deemed the beneficial owner of such shares.
</TABLE>
Management of Albara has advised that they may acquire additional shares of
Albara Common Stock from time to time in the open market at prices prevailing
at the time of such purchases.
PRICE RANGE OF COMMON STOCK
During the 1997 through 1999 period, the Company's common stock traded on the
over-the-counter market and was quoted in the National Quotation Bureau,
Inc.'s "Pink Sheets" and "Bulletin Board". The range of high and low
bid quotations for the Common Stock for the two most recently completed fiscal
years and the current fiscal year are provided below. The volume of trading
in the Company's Common Stock has been limited and the bid prices as
reported may not be indicative of the value of the Common Stock or of the
existence of an active trading market. These over-the-counter market
quotations reflect inter-dealer prices without retail markup, markdown or
commissions and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
1997 Fiscal Year High Bid Low Bid
- - ---------------- ---------- -----------
<S> <C> <C>
First Quarter $ 0.18 $ 0.09
Second Quarter $ 0.18 $ 0.09
Third Quarter $ 0.18 $ 0.09
Fourth Quarter $ 0.09 $ 0.01
1998 Fiscal Year
- - ----------------
First Quarter $ 0.01 $ 0.01
Second Quarter $ 0.01 $ 0.01
Third Quarter $ 0.01 $ 0.01
Fourth Quarter $ 0.05 $ 0.04
<PAGE> 8
1999 Fiscal Year High Bid Low Bid
- - ---------------- ---------- ---------
First Quarter $ 0.09 $ 0.04
Second Quarter $ 0.09 $ 0.01
Third Quarter $ 0.43 $ 0.01
</TABLE>
On November 1, 1999, the reported bid for the Company's Common Stock was
$0.34. The number of record holders of the Company's Common Stock on
November 1, 1999, was 183.
The Company has never paid dividends with respect to the Common Stock and
currently does not have any plans to pay cash dividends in the future.
There are no contractual restrictions on the Company's present or future
ability to pay dividends. Future dividend policy is subject to the discretion
of the Board of Directors and is dependent upon a number of factors,
including future earnings, capital requirements and the financial condition of
the Company. The payment of future dividends will also be restricted to the
extent of $20,000 in liquidation preference inuring to the benefit of the
holders of the Company's Series F Preferred Stock. The Colorado Business
Corporation Act provides that a corporation may not pay dividends if the
payment would reduce the remaining net assets of the corporation below the
corporation's stated capital plus amounts constituting a liquidation
preference to other security holders.
COMPLIANCE WITH SECTION 16(a)
Section 16(a) ("Section 16(a)") of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires executive officers and directors, and
persons who beneficially own more than ten percent (10%) of the Company's
Common Stock,to file initial reports on Form 3, reports of changes in ownership
on Form 4 and annual statements of changes in beneficial ownership on Form 5
with the Securities and Exchange Commission ("SEC") and any national securities
exchange on which the Company's securities are registered. Executive officers,
directors and greater than ten percent (10%) beneficial owners are required
by SEC regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on a review of the copies of such forms furnished to the Company
and representations from the Company's executive officers and directors, the
Company believes that all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than ten percent (10%) beneficial
owners were complied with for Fiscal 1998.
<PAGE> 9
ITEM 7. DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors met three (3) times during Fiscal 1999 and also met
informally on a number of occasions, voting on corporate actions by written
consent. All of the Company's directors attended all of the meetings of the
Board of Directors in Fiscal 1999 during the period for which they were
directors.
THE DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company, their ages and positions
held in the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position with the Company Since
- - --------------------- ---- ------------------------- -------------
<S> <C> <C> <C>
Barbara A. Provencher 42 Secretary and Director Nov. 1988
Real Provencher 46 President, Chief Executive Nov. 1988
Officer, Chief Financial
Officer, Director
</TABLE>
All directors of the Company will hold office until the next annual meeting
of the shareholders and until their successors have been elected and
qualified.
The officers of the Company are elected by the Board of Directors at the
first meeting after each annual meeting of the Company's shareholders, and
hold office until their successors are elected and shall have qualified,
or until resignation or removal from office.
Summary of Experience and Responsibilities
- - -------------------------------------------------------------
Real Provencher - Mr. Provencher has served as President, Chief Executive
Officer, Chief Financial Officer and Director of the Company since
November 1988, of Hardware That Fits since August 1989 and of Helix
Technologies since March 1992. In addition to his responsibilities as
President, Mr. Provencher owns and operates a franchise called "The
Alternative Board" specializing in small business consulting and CEO
coaching. Mr. Provencher possesses a Master of Management Science degree
from Stevens Institute of Technology, as well as Bachelor and Master degrees
in Civil Engineering from Tufts University.
<PAGE> 10
Barbara A. Provencher- Ms. Provencher was elected as a director of the
Company in November 1988 and has been employed as a sales manager by
the Company's former subsidiary, Hardware That Fits, from August 1989 through
March, 1995. Since 1995, Ms. Provencher has owned and operated a
privately held company called "Rolisher & Associates, Inc." which
specializes in direct marketing of services to consumers on a national
basis. Ms. Provencher is the wife of Mr. Provencher.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
- - --------------------------------------------------------------------------------
Section 16(a) of the Exchange Act, requires the Company's officers,
directors and persons who beneficially own more than ten percent of the
Common Stock to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission. Officers, directors
and greater than ten percent beneficial owners also are required by rules
promulgated by the Securities and Exchange Commission to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely upon review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required,
the Company believes that during 1996 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with except that Mr. Provencher
inadvertently failed to file a Form 4 with the Securities and Exchange
Commission on a timely basis with respect to the conversion in October
of 50 shares of Series E Convertible Preferred stock into 66,667 shares
of Common Stock. A Form 4 regarding such transaction was filed by Mr.
Provencher in May, 1999.
COMMITTEES OF THE BOARD
The Board of Directors delegates certain of its authority to a Compensation
Committee and an Audit Committee. There are currently vacancies on both of
these committees. The Board expects to fill such vacancies after it has
filled the vacancies on the Board of Directors.
The primary function of the Compensation Committee will be to review and make
recommendations to the Board with respect to the compensation, including
bonuses, of the Company's officers and to administer the Company's proposed
Incentive Stock Option Plan.
The function of the Audit Committee is to review and approve the scope of
audit procedures employed by the Company's independent auditors, to review and
approve the audit reports rendered by both the Company's independent auditors
and to approve the audit fee charged by the independent auditors. The Audit
Committee will report to the Board of Directors with respect to such matters
and recommends the selection of independent auditors.
<PAGE> 11
BOARD AND COMMITTEE ATTENDANCE
In the 1998 fiscal year, the Board of Directors held four meetings. All
directors attended more than 75% of the aggregate of board and committee
meetings held during the 1998 fiscal year.
(THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK)
<PAGE> 12
ITEM 8. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
Long Term Compensation
________________________________________________________________________________
Annual Compensat. Awards Payouts
________________________________________________________________________________
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Rest. All
Name and Annual Stock LTIP Other
Principal Calend. Comp. Award(s) Opt. P/outs Comp.
Position Year Salary Bonus($) ($) ($) SARs(#) ($) ($)
_____________________________________________________________________________
Real
Provencher 1998 $120,000 0 - 0 -
Chief
Executive 1997 120,000 0 - 0 -
Officer 1996 120,000 0 - 0 -
Robert
Shumate(2) 1996 106,000 0 - 0 -
President,
Helix
Technologies
[FN]
(1) Excludes perquisites and other benefits, unless the aggregate amount of
such compensation is the lessor of $50,000 or 10% of the total of annual
salary and bonus reported for the named executive officer.
(2) Mr. Shumate resigned from the Company in August, 1997.
License Agreement
- - ---------------------------
In July 1989, the Company entered into a license agreement with Mr.
Provencher, President of the Company, covering the license of the
tradenames "Software That Fits", "Hardware That Fits" and "Software and
Hardware That Fits" by the Company during a ten year period for the sum
of $120,000 to be paid monthly at the rate of $1,000 per month. In 1996, and
1997, Mr. Provencher was paid $12,000 per year in connection with this
license agreement. This cash license fee was in addition to the compensation
shown above. This liability was retained by the Company's former subsidiary
when it was disposed of on December 31, 1997. Therefore, no payment was
made by the Company to Mr. Provencher in 1998 in connection with this
obligation.
<PAGE> 13
Accrued and unpaid Compensation
- - ------------------------------------------------
At December 31, 1996, 1997 and 1998, the unpaid but accrued balance
associated with salaries, bonus and vacation was approximately $51,000,
$75,000 and $142,000 respectively.
Employment Agreement
- - ---------------------------------
In July 1995, the Board of Directors approved a three year employment
agreement (the "Employment Agreement") with Mr. Provencher to act as
its President and Chief Executive Officer which includes a base salary of
$120,000 per year. The Employment Agreement also provides Mr. Provencher
with, among other items, an automobile allowance, disability insurance, life
insurance and major medical insurance. Although this employment agreement
has expired, the Company continues to operate as if the agreement had been
extended.
As a condition to entering into the Employment Agreement,the Company
agreed to revise the conversion provisions of the Preferred Convertible Series
C stock that is exclusively held by Mr. Provencher. Each share of Series C
stock is convertible into 9,037 shares of common stock of the Company at the
option of the holder conditioned on: (a) the Company achieving certain
profitability targets; or (b) the Company disposing of substantially all of
its assets; or (c) a change of control of the Company. In return, Mr.
Provencher agreed to forfeit all stock options which had been previously
awarded to him by the Company (i.e., approximately 83,500).
Deferred Compensation Plan
- - ---------------------------------------
On July 1, 1995, the Company adopted a Deferred Compensation Plan. The
purpose of the Plan is to provide a means by which certain key employees
may elect to defer receipt of designated percentages or amounts of
their compensation and to provide a means for certain other deferrals of
compensation. The Plan is intended to be a plan which is unfunded
within the meaning of Sections 201(2) and 301(a)(3) of the ERISA Act of 1974.
In 1996, 1997 and 1998, Mr. Provencher elected to defer $12,000 per year of
the compensation shown above pursuant to this plan.
Incentive Stock Option Plan
- - ---------------------------------------
On February 26, 1988, the Company adopted an Incentive Stock Option Plan
(the "Plan"), under which options granted are intended to qualify as
"incentive stock options" under Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code"). The Plan was further modified by
vote of the Company's shareholders at the annual Company shareholder's
meeting which was held on June 3, 1989. Pursuant to the modified Plan,
options to purchase up to 166,667 shares of the Company's Common Stock may be
granted to employees of the Company.
<PAGE> 14
The Plan is administered by the Board of Directors, which is empowered
to determine the terms and conditions of each option, subject to the
limitation that the exercise price cannot be less than the market value of the
Common Stock on the date of the grant (110% of the market value in the
case of options granted to an employee who owns 10% or more of the Company's
outstanding Common Stock) and no option can have a term in excess of 10 years
(5 years in the case of options granted to an employee who owns 10%
or more of the Company's outstanding Common Stock).
None of the options granted under this plan have been exercised.
Furthermore, all outstanding option grants under this plan expired in
1997.
Non-employee Director Compensation
- - ----------------------------------------------------
One of the Company's directors in 1996, Mr. Robert Vallis, was not an
employee of the Company. Mr. Vallis' term as a director expired in July,
1996.
On January 30, 1995, as part of his compensation, Mr. Vallis was issued
three warrants to purchase 15,000 shares in the aggregate of the
Company's common stock at a price of $0.50 per share. These three
warrants have been issued for time in service in each of three successive
years: 1995, 1996 and 1997. Each such warrant became fully vested on the
last day of its respective calendar year, became immediately exercisable on
the first business day of the following year, and would expire ten years
after becoming vested. Since Mr. Vallis' term as a director expired in July,
1996, warrants for service in 1997 were automatically terminated upon the
completion of Mr. Vallis' term in 1996.
Indemnification and Limitation of Liability
- - -----------------------------------------------------------
The Company's Articles of Incorporation include provisions which eliminate
or limit the personal liability of the Company's directors except in
situations when a director shall be liable for (i) a breach of Section
7-5-114 of the Colorado Corporation Code, including liability for
improper dividends or distributions; (ii) a breach of loyalty; (iii)
failure to act in good faith; (iv) intentional misconduct or knowing violation
of the law; or (v) obtaining an improper personal benefit. In addition, the
Articles of Incorporation allow for the indemnification of any director
or officer to the fullest extent permitted by the Colorado Corporation Code
as in effect at the time of the conduct of such person.
In addition to the general indemnification provisions discussed above, the
Company's employment agreement with Mr. Provencher includes an
indemnification provision in which the Company agrees to indemnify, defend and
hold harmless Mr. Provencher against and in respect to any and all
claims, actions, demands, judgments, losses, costs, expenses, liabilities and
<PAGE> 15
penalties connected, directly or indirectly with any personal guaranty
entered into or executed by Mr. Provencher guaranteeing indebtedness or
obligations of the Company or its subsidiaries.
No employee of the Company receives any additional compensation for his
services as a director. The Company has no retirement, pension or profit
sharing program for the benefit of its directors, officers or other
employees. The Board of Directors may recommend one or more such programs for
adoption in the future.
ITEM 9. INDEPENDENT PUBLIC ACCOUNTANTS
The Company hereby incorporates by reference any of the information required by
paragraph (d) of this Item, that is contained in the Company's Form 10-KSB,
Item 9, filed with the Securities and Exchange Commission on June 10, 1999.
A representative of Thomas Leger & Co. is expected to be present at the
meeting, and will have the opportunity to make a statement and answer
questions from stockholders.
ITEM 10. COMPENSATION PLANS
Other than Proposal 3 stated herein, no action is to be taken by the Company
with respect to any plan pursuant to which cash or non-cash bonuses may be paid
or distributed.
ITEM 11. AUTHORIZATION OR ISSUANCE OF SECURITIES OTHERWISE THAN FOR EXCHANGE
Not Applicable
ITEM 12. MODIFICATION OR EXCHANGE OF SECURITIES
No action is to be taken by the Company with respect to the modification of
any class of securities of the Company, or the issuance or authorization for
issuance of securities of the Company in exchange for outstanding securities
of the Company.
<PAGE> 16
ITEM 13. FINANCIAL AND OTHER INFORMATION
The Company hereby incorporates by reference any of the information required
by paragraph (a) of this Item, that is contained in the annual report to
security holders and the Company's Form 10KSB, Item 8, filed with the
Securities and Exchange Commission on June 10, 1999, and interim reports filed
on Form 10QSB for the periods ended March 31, 1998 and June 30, 1999.
ITEM 14. MERGERS, CONSOLIDATIONS, ACQUISITIONS AND SIMILAR MATTERS
No action is to be taken by the stockholders with respect to mergers,
consolidations acquisitions or similar matters.
ITEM 15. ACQUISITION OR DISPOSITION OF PROPERTY
No action is to be taken by the Company with respect to the acquisition or
disposition of any property.
ITEM 16. RESTATEMENT OF ACCOUNTS
No action is to be taken by the Company with respect to the restatement of any
asset, capital, or surplus account of the Company.
ITEM 17. ACTION WITH RESPECT TO REPORTS
No action is to be taken by the Company with respect to any report of the
Company or of its directors, officers, or committees or any minutes of a
meeting of its security holders.
ITEM 18. MATTERS NOT REQUIRED TO BE SUBMITTED
No action is to be taken by the Company with respect to any matter which is
not required to be submitted to a vote of security holders. The management
does not know of any other matters which may come before this meeting.
However, if any other matters are properly presented to the meeting, it is the
intention of the officers and directors named in the accompanying information
statement to vote, or otherwise act, in accordance with their judgment on such
matters.
<PAGE> 17
ITEM 19. AMENDMENT OF ARTICLES, BYLAWS OR OTHER DOCUMENTS
Action will be taken by the Company with respect to the restatement and
amendment of articles and Bylaws of the Company, whereby the name of the
company will be changed from Albara Corporation to "Leapfrog Smart Products,
Inc.", the Company's Articles of Incorporation will be amended to effect a
1-for-10 (1:10) reverse stock split in Albara Common Stock ("stock split");
and the Company's Articles of Incorporation will be amended to increase the
number of common shares authorized from 6,666,667 to 30,000,000; Approval of
the restatement and amendment will not result in any other material amendment
or change to the Company's Articles of Incorporation. The restatement and
amendment is proposed in conjunction with the anticipated closing under the
Plan between Albara, Albara Subsidiary and Leapfrog. Copies of the proposed
Restated and Amended Articles of Incorporation are available upon request by
contacting the Company in writing at P.O. Box 541, Conroe, Texas 77301-0541.
ITEM 20. OTHER PROPOSED ACTION
No action is to be taken by the Company on any matter not specifically
referred to in this Schedule 14C.
ITEM 21. VOTING PROCEDURES
The Board of Directors has fixed November 19, 1999, as the record date for the
determination of stockholders entitled to vote at the meeting. At the close
of business on that date there were outstanding and entitled to vote
2,061,503 shares of Common Stock entitled to one (1) vote per share and 185
shares of Preferred Series C entitled to 9,037 votes per share (the "Voting
Shares"). The affirmative vote of the holders of a majority of the Company's
Voting Shares is required to approve each of the Proposals.
The directors, officers and affiliates of the Company as a group own or may be
deemed to control 1,091,370 shares of Common Stock and 185 shares of Preferred
Series C, constituting approximately seventy-four percent (74%) of the
outstanding shares of Voting Shares. Each of the directors, nominated
directors and officers has indicated his or her intent to vote all shares of
Voting Shares owned by him or her in favor of each item set forth herein.
ITEM 22. INFORMATION REQUIRED IN INVESTMENT COMPANY PROXY STATEMENT
Not applicable
<PAGE> 18
EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included as exhibits
to previous filings with the Commission and are incorporated herein by this
reference:
EXHIBIT NO. DOCUMENT
1.1 Underwriting Agreement (incorporated herein by reference to
Albara's Registration Statement No. 33-53708 on Form S-1 dated
January 12, 1993).
2.1 MBSI's Plan of Reorganization as confirmed (incorporated herein
by reference to Albara's 1994 Annual Report on Form 10-KSB).
2.2 MBSI's Disclosure Statement (incorporated herein by reference to
Albara's 1994 Annual Report on Form 10-KSB).
2.3 MBSI's Final Decree Statement (incorporated herein by reference
to Albara's 1996 Annual Report on Form 10-KSB).
3.1 Articles of Incorporation and Bylaws (incorporated herein by
reference to Albara's 1989 Form S-18 Registration Statement).
3.2 Articles of Amendment to the Articles of Incorporation, as filed
with the Colorado Secretary of State on December 31, 1990
(incorporated herein by reference to Albara's Registration
Statement No. 33-53708 on Form S-1 dated January 12, 1993).
3.3 Articles of Amendment to the Articles of Incorporation, as filed
with the Colorado Secretary of State on September 4, 1991
(incorporated herein by reference to Albara's Registration
Statement No. 33-53708 on Form S-1 dated January 12, 1993).
3.4 Statement Establishing Series of Preferred Stock, and designating
Series A and Series B Convertible Preferred Stock, as filed
with the Colorado Secretary of State on November 7, 1988
(incorporated herein by reference to Albara's Registration
Statement No. 33-53708 on Form S-1 dated January 12, 1993).
<PAGE> 19
EXHIBIT NO. DOCUMENT
3.5 Statement Establishing Series of Preferred Stock and designating
Series D Convertible Redeemable Preferred Stock, as filed with
the Colorado Secretary of State on May 18, 1989 (incorporated
herein by reference to Albara's Registration Statement No. 33-53708
on Form S-1 dated January 12, 1993).
3.6 Statement Establishing Series of Preferred Stock, and designating
Series Convertible Redeemable Preferred Stock, as filed with
the Colorado Secretary of State on February 6, 1990 (incorporated
herein by reference to Albara's Registration Statement No. 33-53708
on Form S-1 dated January 12, 1993).
3.7 Statement Establishing Series of Preferred Stock, and designating
Series Convertible Preferred Stock, as filed with the Colorado
Secretary of State on November 21, 1990 (incorporated herein by
reference to Albara's Registration Statement No. 33-53708 on
Form S-1 dated January 12, 1993).
3.8 Statement Establishing Series of Preferred Stock, and designating
Series F Convertible Preferred Stock, as filed with the Colorado
Secretary of State August 27, 1992 (incorporated herein by
reference to Albara's Registration Statement No. 33-53708 on
Form S-1 dated January 12, 1993).
3.9 Certificate of Correction, as filed with the Colorado Secretary
of State on September 11, 1992 (incorporated herein by reference
to Albara's Registration Statement No. 33-53708 on Form S-1 dated
January 12, 1993).
4.5 Warrant Agreements Issued to Non-Employee Directors on January 30,
1995 (incorporated herein by reference to Albara's 94 Annual
Report on Form 10-K).
4.6 Warrant Agreements Issued to Non-Employee Directors on April 4,
1993 (incorporated herein by reference to Albara's 1995 Annual
Report on Form 10-KSB).
10.1 Incentive Stock Option Plan (incorporated herein by reference to
Albara's 1988 Form S-18 Registration Statement).
<PAGE> 20
EXHIBIT NO. DOCUMENT
10.2 Employment Agreement with Mr. Provencher (incorporated herein by
reference to Albara's Registration Statement No. 33-53708 on
Form S-1 dated January 12, 1993).
10.3 First Amendment to Employment Agreement with Mr. Provencher
(incorporated herein by reference to Albara's Registration Statement
No. 33-53708 on Form S-1 dated January 12, 1993).
10.4 Tradename License Agreement (incorporated herein by reference to
Albara's Post-Effective Amendment No. 2 to the Form S-18
Registration Statement).
10.10 WilTel Communications Systems, Inc. telephone lease agreement
with NorthCon Technologies, Inc. (incorporated herein by reference
to Albara's Registration Statement No. 33-53708 on Form S-1 dated
January 12, 1993).
10.11 WilTel Communications System, Inc. telephone lease agreement with
Micro Business Solutions, Inc. (incorporated herein by reference
to Albara's Registration Statement No. 33-53708 on Form S-1 dated
January 12, 1993).
10.12 Mutual Release Agreement between Dataproducts Corporation, Micro
Business Solutions, Inc, Albara Corporation and Real Provencher,
Individual (incorporated herein by reference to Albara's 1994
Annual Report on Form 10-KSB).
10.13 Order approving compromise of claims between Micro Business
Solutions, Inc. and Capetronic Computer U.S.A. [HK], Inc.
(incorporated herein by reference to Albara's 1994 Annual Report
on Form 10-KSB).
10.14 Employment Agreement with Mr. Provencher dated July 1, 1995
(incorporated herein by reference to Albara's 1995 Annual Report
on Form 10-KSB).
10.15 Deferred Compensation Plan (incorporated herein by reference to
Albara's 1995 Annual Report on Form 10-KSB).
<PAGE> 21
EXHIBIT NO. DOCUMENT
10.16 Split-Dollar Agreement with Mr. Real Provencher dated July 1, 1995
(incorporated herein by reference to Albara's 1995 Annual Report
on Form 10-KSB).
10.17 Split-Dollar Agreement with Ms. Barbara A. Provencher dated July
1, 1995 (incorporated herein by reference to Albara's 1995 Annual
Report on Form 10-KSB).
10.18 Earnest Money Contract covering sale of land and building located
at 610 South Frazier, Conroe, TX 77301 (incoporated herein by
reference to Albara's 1996 Annual Report on Form 10-KSB).
10.19 Asset Purchase Agreement covering the sale of Helix technology to
The Chip Merchant (incoporated herein by reference to Albara's
1996 Annual Report on Form 10-KSB).
10.20 Agreement and Plan of Merger between Albara Corporation, Leapfrog,
Inc. and Leapfrog Smart Products, Inc. (incorporated herein by
reference to Albara's report on Form 8-K dated November 3, 1999).
16.1 Letter regarding change in Certifying Accountant (incorporated
herein by reference to Albara's Registration Statement No. 33-53708
on Form S-1 dated January 12, 1993).
22 Subsidiaries of the Company (incorporated herein by reference to
Albara's 1998 Annual Report on Form 10-KSB).
28.4 Promissory Note payable to the Company from MBSI (incorporated
herein by reference to Albara's 1989 Annual Report on Form 10-K).
28.15 Real Estate Lien Note payable to Fred A. Grams and wife, Alberta
Betty Grams from the Company (incorporated herein by reference to
Albara's 1990 Annual Report on Form 10-K).
28.22 Promissory Note payable to Barbara Provencher from the Company
(incorporated herein by reference to Albara's 1993 Annual Report
on Form 10-KSB).
28.23 Promissory Note payable to the Company from STI (incorporated
herein by reference to Albara's 1994 Annual Report on Form 10-KSB).
<PAGE> 22
(c) Reports on Form 8-K.
Filed November 3, 1999, Item 5, Other Events, Exhibit 10.20-
Plan and Agreement of Merger.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Albara Corporation has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ALBARA CORPORATION
By: /S/ Real Provencher
- - ----------------------------------------------
Real Provencher,
President
DATE: November 10, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Albara
Corporation and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
President, Chief
/S/ Real Provencher Executive Officer
- - --------------------- and Director November 10, 1999
Real Provencher
Secretary
/S/ Barbara A. Provencher and Director November 10, 1999
- - --------------------------
Barbara A. Provencher
THIS INFORMATION STATEMENT IS PROVIDED TO YOU
FOR INFORMATION PURPOSES ONLY. NO ACTION ON YOUR
PART IS SOUGHT OR REQUIRED.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 29
<SECURITIES> 0
<RECEIVABLES> 33
<ALLOWANCES> 8
<INVENTORY> 37
<CURRENT-ASSETS> 91
<PP&E> 1273
<DEPRECIATION> 716
<TOTAL-ASSETS> 996
<CURRENT-LIABILITIES> 381
<BONDS> 205
<COMMON> 3825
0
15
<OTHER-SE> (3430)
<TOTAL-LIABILITY-AND-EQUITY> 996
<SALES> 1147
<TOTAL-REVENUES> 1147
<CGS> 139
<TOTAL-COSTS> 139
<OTHER-EXPENSES> 1347
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22
<INCOME-PRETAX> (303)
<INCOME-TAX> 0
<INCOME-CONTINUING> 1147
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (303)
<EPS-BASIC> (.20)
<EPS-DILUTED> (.20)
</TABLE>
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR COMPLIANCE STATEMENT
FOR FORWARD LOOKING STATEMENTS
In passing the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"), 15 U.S.C.A. Sections 77z 2 and 78u 5 (Supp. 1996), Congress encouraged
public companies to make "forward looking statements" by creating a safe
harbor to protect companies from securities law liability in connection with
forward looking statements. Albara Corporation ("Albara" or the "Company")
intends to qualify both its written and oral forward looking statements for
protection under the Reform Act and any other similar safe harbor provisions.
"Forward looking statements" are defined by the Reform Act. Generally, forward
looking statements include expressed expectations of future events and the
assumptions on which the expressed expectations are based. All forward
looking statements are inherently uncertain as they are based on various
expectations and assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could cause actual
events or results to differ materially from those projected. Due to those
uncertainties and risks, the investment community is urged not to place undue
reliance on written or oral forward looking statements of Albara. The
Company undertakes no obligation to update or revise this Safe Harbor
Compliance Statement for Forward Looking Statements (the "Safe Harbor
Statement") to reflect future developments. In addition, Albara undertakes no
obligation to update or revise forward looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future
operating results over time.
Albara provides the following risk factor disclosure in connection with its
continuing effort to qualify its written and oral forward looking statements
for the safe harbor protection of the Reform Act and any other similar safe
harbor provisions.
<PAGE>
YEAR 2000
It is possible that the Company's currently installed computer systems,
software products or other business systems, or those of the Company's
customers, vendors or resellers, working either alone or in conjunction with
other software or systems, will not accept input of, store, manipulate and
output dates for the year 2000 or thereafter without error or interruption
(commonly known as the "Year 2000" problem). The Company has conducted a
review of its business systems, including its computer systems, and is
querying its customers, vendors and resellers as to their progress in
identifying and addressing problems that their computer systems may face in
correctly interrelating and processing date information as the year 2000
approaches and is reached. Through its review, the Company has identified a
number of older legacy systems that will be abandoned in favor of a limited
number of more efficient processing systems, rather than make all the systems
Year 2000 compatible. Customers, vendors and resellers have been identified
and requests for information distributed regarding the Year 2000 readiness of
such parties.
VOLATILITY OF STOCK PRICE
Albara believes factors such as the Company's liquidity and financial
resources and quarter to quarter and year to year variations in financial
results could cause the market price of Albara Common Stock to fluctuate
substantially. Any adverse announcement with respect to such matters or any
shortfall in revenue or earnings from levels expected by Management could have
an immediate and material adverse effect on the trading price of Albara Common
Stock in any given period. As a result, the market for Albara Common Stock
may experience material adverse price and volume fluctuations and an
investment in the Company's Common Stock is not suitable for any investor who
is unwilling to assume the risk associated with any such price and volume
fluctuations.
