<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
MBF USA, 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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
<PAGE> 2
MBF USA, INC.
500 PARK BOULEVARD
ITASCA, ILLINOIS 60143
===============================================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
===============================================================================
To the Shareholders of MBf USA, INC.:
Notice is hereby given that the annual meeting of shareholders (the
"Meeting" or the "Annual Meeting") of MBf USA, INC., a Maryland corporation
(the "Company"), will be convened at the Wyndham Hotel, 400 Park Boulevard,
Itasca, Illinois 60143, on December 5, 1996, at 10:00 a.m. Central Standard
Time (the "Meeting Date"). All holders of Common Stock, par value $.01 per
share, and Series A Convertible Common Stock, par value $.01 per share of the
Company (the "Shareholders") are entitled to attend the Meeting. The Company is
soliciting proxies, pursuant to the attached Proxy Statement, for use at the
Annual Meeting on the Meeting Date. The Company expects that a quorum will be
present on the Meeting Date and that the proposals to be considered by the
Shareholders will be:
(1) To elect seven (7) Class A Directors and two (2) Class B Directors
to hold office until the next annual meeting of Shareholders or
until their respective successors are elected and qualified;
(2) To increase the number of authorized Common Stock shares from
4 million to 10 million shares;
(3) To concur in the selection of Arthur Andersen LLP as the
Company's independent public accountants for the year 1996; and
(4) To transact any other business as may properly come before the
Meeting, or any adjournment or postponement thereof.
Only Shareholders of record at the close of business on October 1,
1996, are entitled to receive notice of the Meeting and to vote at the Meeting
or any adjournment or postponement thereof (the "Eligible Holders"). A list of
Eligible Holders will be available for inspection at the Company's office for
at least 10 days prior to the Meeting.
The Company's Annual Report on Form 10-K is being mailed concurrently
with this Notice and Proxy Statement to all Shareholders of record.
All Shareholders are cordially invited to attend the Annual Meeting.
Those who cannot attend are urged to sign, date and otherwise complete the
enclosed proxy and return it promptly in the envelope provided. Any Shareholder
giving a proxy has the right to revoke it at any time before it is voted.
By order of the Board of Directors:
Loi Heng Sewn
Chairman
Itasca, Illinois
October 23, 1996
<PAGE> 3
===============================================================================
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
MBF USA, INC.
DECEMBER 5, 1996
===============================================================================
This proxy statement (the "Proxy Statement") is furnished to all
holders of record as of the close of business on October 1, 1996 of Common
Stock, par value $.01 per share (the "Common Stock"), and Series A Convertible
Common Stock, par value $.01 per share (the "Series A Common Stock") (the
"Shareholders") of MBf USA, INC., a Maryland corporation (the "Company"), in
connection with the solicitation of proxies by and on behalf of the Company's
Board of Directors (the "Directors" or the "Board") to be voted at the annual
meeting of Shareholders (the "Meeting" or the "Annual Meeting"). The Annual
Meeting will be convened on December 5, 1996, at 10:00 a.m. Central Standard
Time (the "Meeting Date"), or any adjournment or postponement thereof. This
Proxy Statement, and the enclosed form of proxy are first being mailed or
otherwise delivered to Shareholders on or about November 15, 1996. Shareholders
who wish to attend the Meeting should contact the Company at (630) 285-9191 so
that arrangements can be made.
The Company expects that a quorum will be present on the Meeting Date
and that the proposals to be considered by the Shareholders will be:
(1) To elect seven (7) Class A Directors and two (2) Class B
Directors to hold office until the next annual meeting of
Shareholders or until their respective successors are elected
and qualified;
(2) To increase the number of authorized Common Stock shares from
4 million to 10 million shares;
(3) To concur in the selection of Arthur Andersen LLP as the
Company's independent public accountants for the year 1996; and
(4) To transact any other business as may properly come before the
Meeting, or any adjournment or postponement thereof.
THE PROXIES SOLICITED BY THE COMPANY PURSUANT TO THIS PROXY STATEMENT
ARE SOLICITED FOR USE AT THE MEETING WHEN CONVENED ON THE MEETING DATE AND ANY
SUBSEQUENT ADJOURNMENTS AND MAY NOT BE USED FOR ANY OTHER PURPOSE, INCLUDING
THE DETERMINATION OF WHETHER A QUORUM IS PRESENT, PRIOR TO THE MEETING DATE.
THEREFORE, IT IS ANTICIPATED THAT THE BUSINESS OF THE COMPANY TO BE CONSIDERED
AT THE MEETING, WITH RESPECT TO WHICH PROXIES ARE SOLICITED PURSUANT TO THIS
PROXY STATEMENT, WILL BE ADDRESSED ON THE MEETING DATE.
The shares of Common Stock and/or the Series A Common Stock (the
"Shares") represented by properly executed proxies in the accompanying form
received by the Board of Directors prior to the meeting Date will be voted at
the Meeting. The Shares not represented by properly executed proxies or held by
Shareholders who attend the Meeting will not be voted. Where a Shareholder
specifies a choice in a proxy with respect to any matter to be acted upon, the
Shares represented by such proxy will be voted as specified. When a Shareholder
does not specify a choice, in any otherwise properly executed proxy, with
respect to any proposal referred to therein, the Shares represented by such
proxy will be voted with respect to such proposal in accordance with the
recommendations of the Board of Directors described herein. A Shareholder who
signs and returns a proxy in the accompanying form may revoke it by: (i) giving
written notice of revocation to the Assistant Secretary of the Company before
the proxy is voted at the Meeting on the Meeting Date; (ii) executing and
delivering a later-dated proxy; or (iii) attending the Meeting on the Meeting
Date and voting his or her Shares in person.
<PAGE> 4
In electing directors only, the Common Stock and the Series A Common
Stock each vote as a separate class. Seven (7) Class A Directors will be
elected by the holders of the Series A Common Stock and two (2) Class B
Directors will be elected by the holders of the Common Stock. The Class A
Directors and the Class B Directors will be elected by a plurality of the votes
cast by the respective class. Concurrence in the selection of Arthur Andersen
LLP as the Company's independent public accountants for the fiscal year ending
December 31, 1996 and the proposed increase in the number of shares of the
Company's authorized Common Stock from 4 million to 10 million shares require
the affirmative vote of a majority of the votes cast, with the holders of
Common Stock and Series A Common Stock voting together as a single class. MBf
International Ltd., a Hong Kong corporation ("MBf International"), owns 100% of
the Series A Common Stock and 55% of the Common Stock, or 68% of the Shares.
See below regarding the intention of MBf International to vote in favor of the
proposals described herein. Shares represented at the Meeting as the result of
proxies marked "abstain" will be counted for purposes of determining the
existence of a quorum at the Meeting, but will not be voted. Shareholders have
no cumulative voting rights. Shares held by brokers will not be considered
entitled to vote on matters as to which the brokers have not received authority
to vote from beneficial owners.
It is not anticipated that matters other than those set forth in the
Notice of Annual Meeting, as described herein, will be brought before the
Meeting for action. If any other matters properly come before the Meeting, it
is intended that votes thereon will be cast pursuant to said proxies in
accordance with the best judgment of the proxy holders.
RECORD DATE
The close of business on October 1, 1996, has been fixed by the Board
of Directors of the Company as the record date (the "Record Date") for the
determination of Shareholders entitled to receive notice of, and to vote at,
the Meeting. Each outstanding share of Common Stock is entitled to one (1) vote
on all matters herein, except for the election of the Class A Directors; Common
Stock Shareholders are entitled to vote only for the election of Class B
Directors. Each outstanding share of Series A Common Stock is entitled to one
(1) vote on all matters herein, except for the election of Class B Directors;
Series A Common Stock Shareholders are entitled to vote only for the election
of Class A Directors. On the Record Date, the Company had outstanding 3,058,313
shares of Common Stock and 1,252,537 shares of Series A Common Stock. Only
Shareholders of record as of the Record Date will be entitled to vote at the
Meeting or any adjournment thereof. A quorum, consisting of the holders of at
least a majority of the issued and outstanding Shares eligible to vote, must be
present, in person or by proxy, at the Meeting for valid Shareholder action to
be taken at the Meeting or any adjournment thereof. Shareholders do not have
any appraisal or similar rights of dissent with respect to the matters to be
considered at the Meeting.
EXPENSES OF SOLICITATION
The expenses of this solicitation of proxies will be borne by the
Company, including expenses in connection with the preparation and mailing of
this Proxy Statement and all documents which now accompany or may hereafter
supplement it. The Company anticipates the total cost of the proxy solicitation
to be $10,000. Solicitations will be made only by the use of the mails, except
that, if deemed desirable, officers and regular employees of the Company may
solicit proxies by telephone, telegram, facsimile, or personal calls. Officers
and regular employees of the Company will not be paid additional compensation
for soliciting proxies. It is contemplated that brokerage houses, custodians,
nominees, and fiduciaries will be requested to forward the proxy soliciting
material to the beneficial owners of the Common Stock held of record by such
persons and that the Company will reimburse them for their reasonable expenses
incurred in connection therewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock and Series A Common Stock as
of October 1, 1996 by: (i) each Director of the Company who beneficially owns
Common Stock or Series A Common Stock; (ii) each Executive Officer of the
Company; (iii) each person that is known by the Company to beneficially own in
excess of five percent of the outstanding shares of its Common Stock and Series
A Common Stock; and (iv) all Directors and Executive Officers, as a group.
Except as otherwise indicated in the footnotes to
2
<PAGE> 5
the table, the Shareholders named below have sole voting and investment power
with respect to the shares of Common Stock and Series A Common Stock
beneficially owned by them.
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE OF TOTAL VOTING
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP STOCK
- - -------------- ------------------------ -------------------- ------------
<S> <C> <C> <C> <C>
Series A Common Stock MBf International Ltd.(1) 1,252,538 29.06%(4)
Common Stock MBf International Ltd.(1) 1,682,275 39.02%(4)
Common Stock P.I.E. Healthcare Sdn. Bhd.(2) 296,296 6.87%(4)
Common Stock Tan Sri Dato (Dr.) Hean Heong Loy 6,824(3) *
Common Stock Teik Hok Loy 10,000 *
Common Stock Heng Sewn Loi 50,000(3) *
Common Stock Heng Sewn Loi 5,000 55,000 1.27%(4)
Common Stock Teoh Cheng Soon 1,000(3) *
Common Stock Edward J. Marteka 50,000(3)
Common Stock Edward J. Marteka 5,000 55,000 1.27%(4)
Common Stock George Jeff Mennen 1,000(3) *
Common Stock Dr. Sen Chong Teo 1,000(3) *
Common Stock Robert J. Simmons 1,000(3) *
Common Stock Don L. Arnwine 1,000(3) *
Common Stock Stephen K.H. Tan 5,000 *
Common Stock Robert C. Carter 3,000(3) *
Common Stock Total Executive Officers & Directors 124,824(3)
as a group (11 persons) 15,000 139,824 3.24%(4)
</TABLE>
The Company is not aware of any arrangements, the operation of which
may at a subsequent date, result in a change of control of the Company.
MATTERS TO BE CONSIDERED BY SHAREHOLDERS
1. ELECTION OF DIRECTORS
Nine (9) individuals will be elected at the Annual Meeting to serve as
Directors of the Company, until the next annual meeting of Shareholders or
until their successors have been elected and qualified. The biographies of the
nominees designated by the Board of Directors, all of whom are presently
Directors of the Company, are set forth below. Seven (7) of the nominees have
been nominated as Class A Directors and two (2) have been nominated as Class B
Directors. Holders of Common Stock and Series A Common Stock each vote as a
separate class only with respect to the election of Directors.
- - --------------
* Represents less than 1%.
(1) MBf International Limited is located at 17th Floor, One Pacific Place,
88 Queensway, Hong Kong.
(2) P.I.E. Healthcare Sdn. Bhd. is located at Lot 60-61, Senawang Industrial
Estate, 70450 Seremban, Negeri Sembilan Darul Khusus, Malaysia.
(3) Represents shares to be issued upon exercisable options granted under the
Company's Omnibus Equity Compensation Plan within sixty (60) days of the
date of this Proxy Statement.
(4) Percent of class is based upon the combined number of shares of Series A
Common Stock and Common Stock outstanding on Ocotber 1, 1996.
3
<PAGE> 6
The Company has been advised by the holder of the Series A Common Stock that
its proxy is to be voted FOR the seven (7) Class A nominees for Directors
listed below. In the event any nominee is unable or declines to serve as a
Director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. As of the date of this Proxy Statement, the Company is not aware of
any nominee who is unable or will decline to serve as a Director. The nominees
receiving more than the minimum number of votes of shares of Common Stock or
Series A Common Stock required for election, as the case may be, shall be
elected. See "Compensation of Directors and Executive Officers " regarding
compensation of Directors.
CLASS A DIRECTORS
<TABLE>
<CAPTION>
Year Became a
Name Age Principal Occupation(s) During Past 5 Years Director
- - ---- --- ------------------------------------------- --------
<S> <C> <C> <C>
Tan Sri Dato (Dr.) Hean Heong 60 Class A Director of the Company. Former Chairman of the Board 1992
of Directors, elected to the Board of Directors on February 27,
1992. On December 17, 1993, he resigned as
Chairman of the Board but continues to serve as a Director of
the Company. He has served in various capacities with MBf
Holdings Berhad ("MBf Holdings") since 1963 and currently is
the President and Chief Executive Officer of MBf Holdings. He
has served as Chairman of the Board of Directors of MBf
International Ltd. since May 1991. Tan Sri Dato Loy also serves
on the Board of Directors of MasterCard International. Tan Sri
Dato Loy was made a Justice of the Peace, an honorary title, by
the late Sultan of Perak for his contributions to the nation of
Malaysia, and in the same year was conferred the award of the
honorary title "Dato Paduka Mahkota Johor" by the late Sultan
of Johor. On June 6, 1992, the additional title "Tan Sri" was
conferred upon him
Teik Hok Loy 32 Class A Director of the Company. He has served in various 1993
capacities with MBf Holdings since 1988 and currently serves
in the position of Alternate to the President and Chief
Executive Officer of MBf Holdings. He also serves as a Director
of MBf Holdings. Teik Hok Loy is the son of Tan Sri Dato Loy
Heng Sewn Loi 36 Class A Director of the Company and Chairman of the Board. 1993
He has served in various capacities with MBf Holdings since
1983 and previously served as President of its manufacturing
division. Heng Sewn Loi is the nephew of Tan Sri Dato Loy
Edward J. Marteka 58 Class A Director and President of the Company. He has served as 1995
President and a Director of the Company's subsidiary,
American Health Products Corporation ("AHPC") since its
incorporation in 1988. As President of the Company and AHPC,
Mr. Marteka is responsible for their overall operations. From
1968 to 1988, Mr. Marteka held various positions with Baxter
Healthcare Corporation, most recently serving as Vice President
of its International Division
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
Year Became a
Name Age Principal Occupation(s) During Past 5 Years Director
- - ---- --- ------------------------------------------- --------
<S> <C> <C> <C>
George Jeff Mennen 54 Class A Director of the Company. For over five years, Mr. 1994
Mennen has headed the G.J. Mennen Group, a consulting firm
specializing in family-owned businesses. Mr. Mennen had a
distinguished career at The Mennen Company including being the
Vice Chairman of the company. The Mennen Company was founded by
Mr. Mennen's great grandfather in 1878 and remained privately
owned until it was sold in 1992 to Colgate-Palmolive.
Cheng Soon Teoh 52 Class A Director of the Company. He currently serves as the 1995
Senior Vice President, Mergers and Acquisitions of MBf Holdings
and has held this position for over the last five years. Prior
to this, Mr. Teoh was with the Central Bank of Malaysia for
17 years and has held directorships in several companies.
Dr. Sen Chong Teo 51 Elected Class A Director of the Company on March 20, 1996. Dr. 1996
Teo was employed by MBf Holdings on December 1, 1995 and is
currently President of the manufacturing division of MBf
Holdings in Malaysia. Prior to this, Dr. Teo worked as the
Deputy Managing Director for Thai Rubber Latex Public Co.,
Ltd. During 1991 through 1993, Dr. Teo was the Factory Manager
for London Royal (Thailand) Co. Dr. Teo has had a long and
distinguished career in rubber and latex industrial
technology. In his 25 years in the industry, he has managed
several of the world's largest latex glove and condom plants.
CLASS B DIRECTORS
Robert J. Simmons 53 Mr. Simmons is currently President of RJS HealthCare, Inc., a 1995
healthcare consulting company, founded in 1990. He served as
executive vice president at Baxter International, Inc. from
1987 until founding RJS in 1990. Mr. Simmons joined Baxter
after serving over 20 years at American Hospital Supply
Corporation. His last position at American Hospital Supply
Corporation was vice president of corporate marketing.
Don L. Arnwine 64 Mr. Arnwine is President of Arnwine Associates, a company he 1995
formed in 1989 to provide specialized advisory services to the
health care industry. From 1961 to 1972, Mr. Arnwine served as
Director of the Hospital at the University of Colorado Medical
Center. From 1972 to 1982, he served as President and CEO of
the Charleston Area Medical Center. Mr. Arnwine became
President and CEO of Voluntary Hospitals of America (VHA) in
1982, and was named Chairman and CEO in 1985, in which
capacity he served until founding Arnwine Associates.
</TABLE>
5
<PAGE> 8
BOARD MEETINGS AND COMMITTEES
During 1995, the Company's Board of Directors held two meetings. All
other actions by the Board of Directors were taken by unanimous written consent
without a meeting. The Board of Directors has a Compensation Committee which
administers the Company's Omnibus Equity Compensation Plan (the "Plan"). The
Compensation Committee is responsible for reviewing, determining and
establishing the salaries, bonuses and other compensation of the Company's
executive officers. The Board has not delegated its functions to any other
standing committees, and thus has not created audit, executive, nominating or
other similar committees. During 1995, all action of the Compensation Committee
was taken by unanimous written consent without a meeting. At the end of 1995,
the Compensation Committee consisted of George Jeff Mennen, Teik Hok Loy and
Cheng Soon Teoh. See also "Compensation of Directors and Executive Officers
Report of the Compensation Committee of the Board of Directors on Executive
Compensation."
RECOMMENDATION OF THE BOARD: The Board hereby recommends and nominates
each of Messrs. Tan Sri Dato (Dr.) Hean Heong Loy, Teik Hok Loy, Heng Sewn Loi,
Edward J. Marteka, George Jeff Mennen, Cheng Soon Teoh and Dr. Sen Chong Teo
for election as Class A Directors, and each of Messrs. Robert J. Simmons and
Don L. Arnwine for election as Class B Directors of the Company to serve until
the next annual meeting for Shareholders or until their respective successors
are elected and qualified.
2. INCREASE IN AUTHORIZED COMMON STOCK SHARES
The following Resolution will be presented to the holders of Common
Stock and Series A Common Stock at the Meeting:
RESOLVED, that the Company's Certificate of Incorporation be amended
to increase the number of authorized shares of Common Stock from 4 million to
10 million shares.
The Company is proposing this amendment to its Certificate of
Incorporation to allow the Company to have sufficient Shares for issuance in
connection with employee stock options, business acquisitions, the conversion
of Series A Common Stock for Common Stock, public offerings, as well as for
other purposes. The Certificate of Incorporation presently authorizes the
Company to issue up to 4 million shares of Common Stock and there are currently
issued and outstanding Common Shares of 3,058,313 at October 1, 1996.
Currently, there is insufficient Common Stock authorized to convert the Series
A Common Stock to Common Stock, if the holder thereof should decide to make
such conversion.
If the Resolution is adopted, the additional 6 million Common Stock
shares will be available for issuance by the Board of Directors without any
requirement of further Shareholder approval. The Company may issue shares to
provide additional funds for working capital and acquisition of other business.
The Board of Directors believes it desirable that the Company have the
flexibility to be able to issue additional shares without Shareholder approval.
Shareholders have no preemptive right to purchase any shares. The Company may
issue additional shares at such times and under such circumstances as to have a
dilutive effect on earnings per share and on the equity ownership of present
Shareholders. Currently, the Company has no intention of issuing any shares
other than in connection with the exercise of employee stock options.
RECOMMENDATION OF THE BOARD: The Board recommends that the number of
authorized Common Stock shares be increased from 4 million to 10 million by
amending the Company's Certificate of Incorporation.
The affirmative vote of a majority of the votes cast by Shareholders
present in person or by proxy and eligible to vote at the Meeting, a quorum
being present, is required for the adoption of the foregoing resolution. For
purposes hereof, the holders of Series A Common Stock and Common Stock vote as
a single class.
3. CONCURRENCE IN SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as
independent public accountants for the Company to audit its financial
statements for the year 1996 and has determined that it would be desirable to
request that the
6
<PAGE> 9
Shareholders approve such appointment. Arthur Andersen LLP is knowledgeable
about the Company's operations and accounting practices and is well qualified
to act in the capacity of independent public accountants to the Company. A
representative of Arthur Andersen LLP is expected to be present at the Meeting
and will have the opportunity to make a statement if he or she so desires. The
representative also is expected to be available to respond to appropriate
questions from Shareholders.
RECOMMENDATION OF THE BOARD: The Board considers Arthur Andersen LLP
to be well-qualified and recommends that the Shareholders concur in the
following resolution which will be presented for a vote of the Shareholders at
the Annual Meeting:
RESOLVED, that the Shareholders concur in the appointment, by the
Board, of Arthur Andersen LLP to serve as the independent public accountants
for the Company for 1996.
The affirmative vote of a majority of the votes cast by Shareholders
present in person or by proxy and eligible to vote at the Meeting, a quorum
being present, is required for the adoption of the foregoing resolution. For
purposes hereof, the holders of Series A Common Stock and Common Stock vote as
a single class.
EXECUTIVE OFFICERS
The following table sets forth information with respect to the executive
officers of the Company. Each officer is appointed by the Board of Directors
and serves until his successor is elected and qualified or until his death,
resignation or removal by the Board of Directors. The executive officers of the
Company are Heng Sewn Loi, Chairman, Edward J. Marteka, President, Stephen K.H.
Tan, Chief Financial Officer and Secretary, and Robert C. Carter, Controller
and Assistant Secretary. The biographies of Heng Sewn Loi and Edward J. Marteka
are set forth above.
<TABLE>
<CAPTION>
Year Became
Name Age Principal Occupation(s) During Past 5 Years an Officer
- - ---- --- ------------------------------------------- ----------
<S> <C> <C> <C>
Stephen K.H. Tan 41 Chief Financial Officer and Secretary of the Company. He was 1995
engaged by MBf Holdings Bhd as CFO of the Trading Division in
December 1994, and was transferred to the United States in
September 1995. In 1981, Mr. Tan graduated in London as a
Certified Accountant, and had worked in England, New Zealand,
and Malaysia as financial accountant, business consultant and
auditor with various organizations and government bodies for
the past 16 years.
Robert C. Carter 35 Controller and Assistant Secretary of the Company. Mr. Carter 1995
joined the Company in March 1992 as the Controller and became
the Assistant Secretary in May 1995. From February 1987 to
March 1992, Mr. Carter was a CPA with Clifton, Gurderson & Co.,
CPA's.
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
A. DIRECTOR COMPENSATION
Mr. George Jeff Mennen and the Class B Directors will receive $1,000
for each meeting of the Board attended as well as $500 for each committee
meeting attended. All Directors will be reimbursed for expenses incurred in
attending meetings of the Board and meetings of committees. Each Director is
presently entitled to receive stock options under the Plan to purchase 1,000
shares of the Company's Common Stock in connection with his election. Robert
Simmons and
7
<PAGE> 10
Don L. Arnwine both received options to purchase 1,000 shares of
Common Stock at an exercise price of $2.63 under the Plan in connection with
their election as Class B Director in December 1995. Mr. Marteka received
options to purchase 1,000 shares of Common Stock at an exercise price of $16.80
under the Plan in connection with his election as a Class A Director in May
1995. Under the terms of the Plan, the Compensation Committee may determine the
exercise price for options granted to Directors for a period of up to six
months from the date of the grant. All Director options are immediately
exercisable for a period of ten years from the date of grant.
B. EXECUTIVE COMPENSATION
The following table discloses the compensation awarded to or earned
by, during the Company's last three fiscal years, the Chairman and the
President as of the end of fiscal year 1995. No other executive officer had
aggregate annual salary and bonus which exceeded $100,000.
<TABLE>
<CAPTION>
- - --------------------------- --------------- ----------------------------------------------- ----------------------------------
Annual Compensation Long-Term Compensation
Name and Other Annual Restricted Stock Stock
Principal Position Fiscal Year Salary Bonus Compensation Awards ($) Options
=========================== ============== ================ ============== ================ ==================== =============
<S> <C> <C> <C> <C> <C> <C>
Heng Sewn Loi(5) 1995 --- --- --- $312,000 40,000
Chairman 1994 --- --- --- $118,125 9,000
1993 --- --- --- $ 13,700 1,000
- - --------------------------- -------------- ---------------- -------------- ---------------- -------------------- -------------
Edward J. Marteka(6) 1995 $144,792 $34,375 $7,200 $126,000 15,000
President 1994 $137,500 $75,000 $7,200 $415,625 35,000
1993 $125,000 $40,577 $7,200 $ 0 ---
- - --------------------------- -------------- ---------------- -------------- ---------------- -------------------- -------------
</TABLE>
There is no other long term compensation for the executives listed above in
1993 through 1995.
EMPLOYMENT AGREEMENTS
On April 1, 1994, the Company entered into an Employment Agreement
with Edward J. Marteka (the "Marteka Agreement"). The Marteka Agreement, as
amended on June 1, 1995, provides for: (i) Mr. Marteka to serve as President of
the Company (since May 31, 1995) and American Health Products Corporation; (ii)
a base salary of $150,000 per year ($137,500 prior to June 1, 1995) paid by the
Company; (iii) non-qualified stock options to purchase 35,000 shares of Common
Stock under the Plan, with 5,000 shares exercisable commencing April 1, 1994,
with 20,000 shares exercisable on April 1, 1995, and with 10,000 shares
exercisable on April 1, 1996 at an exercise price of $11.875, the closing price
of the Common Stock as reported on the Nasdaq Stock Market on the day the
options were granted by the Compensation Committee; and (iv) life and medical
insurance, and an automobile allowance.
Mr. Marteka has also been granted additional non-qualified stock
options as follows: (i) 1,000 shares of Common Stock upon his appointment as
Class A Director on May 31, 1995, at an exercise price of $16.80, the closing
price on the day the options were granted; and (ii) 14,000 shares of Common
Stock granted on July 21, 1995, with 7,000 shares exercisable commencing July
21, 1995, and with 7,000 shares exercisable on July 21, 1996 at an exercise
price of $7.80, the closing price of the Common Stock as reported on the Nasdaq
Stock Market on the day the options were granted by the Compensation Committee.
On September 1, 1995, the Company entered into an Employment Agreement
with Mr. Heng Sewn Loi (the "Loi Agreement"). The Loi Agreement provides for:
(i) Mr. Loi to serve as Chairman of the Company; (ii) a base salary of $66,000
per year, (iii) a second allowance of $74,000 per year, and (iv) automobile
allowance, accommodation expenses,
- - --------------------
(5) Heng Sewn Loi became Chairman of the Company on September 1, 1995.
(6) Edward J. Marteka become President and a Class A Director of the Company
on May 31, 1995.
8
<PAGE> 11
children tuition allowance, family home leave, relocation expenses, tax
equalization settlement, and other additional customary benefits. Mr. Loi was
not paid by the Company in 1995 during which time his application to work in
the U.S. was being processed. His application was approved toward the end of
1995 and the Company began his salary payments effective January 1, 1996. The
total value of Mr. Loi's salary and benefits is expected to be approximately
$260,000 per year.
On July 21, 1995, Mr. Loi was granted non-qualified stock options as
follows: 40,000 shares of Common Stock under the Plan, with 20,000 shares
exercisable on July 21, 1995, and with 20,000 shares exercisable on July 21,
1996 at an exercise price of $7.80, the closing price of the Common Stock as
reported on the Nasdaq Stock Market on the day the options were granted by the
Compensation Committee. In 1993, Mr. Loi received an option to purchase 1,000
shares of the Company's Common Stock at an exercise price of $13.70 in
connection with his appointment to the Board of Directors. In 1994, Mr. Loi
received an option to purchase 9,000 shares of the Company's Common Stock at an
exercise price of $13.125, the closing price on the day the options were
granted.
OPTION GRANTS IN FISCAL 1995
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
OPTION/SAR GRANTS IN 1995
Potential Realized Value at Assumed Annual
Individual Grants Rates of Stock Price Appreciation for
Option Term
=========================== ================= ================== =============== ================= ============= =============
(a) (b) (c) (d) (e) (f) (g)
=========================== ================= ================== =============== ================= ============= =============
Number of % of Total
Securities Options/ SARs
Underlying Granted to
Options/ Employees in Exercise or
Name SARs Granted Fiscal Year Base Price Expiration Date 5% ($) 10% ($)
=========================== ================= ================== =============== ================= ============= -------------
<S> <C> <C> <C> <C> <C> <C>
Heng Sewn Loi 40,000 36.0% $ 7.80 07/21/05 $508,000 $809,200
Edward J. Marteka 14,000 12.6% $ 7.80 07/21/05 $177,800 $283,220
Edward J. Marteka 1,000 .9% $16.80 06/30/05 $ 27,360 $ 43,575
- - --------------------------- ----------------- ------------------ --------------- ----------------- ------------- -------------
</TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1995 AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal
1995 by the executive officers named in the summary compensation table and the
value of such officers' unexercised stock options as of December 31, 1995.
<TABLE>
<CAPTION>
========================= =============== =============== ================================ =================================
Value of Unexercised
Number of Unexercised In-the-Money Options at 12/31/95
Options at 12/31/95
========================= =============== =============== ================================ =================================
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
========================== ============== =============== ================ ================ =============== ================
<S> <C> <C> <C> <C> <C> <C>
Heng Sewn Loi -0- $0 30,000 20,000 $0 $0
========================== ============== =============== ================ ================ =============== ================
=
Edward J. Marteka -0- $0 33,000 17,000 $0 $0
========================== ============== =============== ================ ================ =============== ================
</TABLE>
9
<PAGE> 12
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
At the end of 1995, the Compensation Committee of the Board of
Directors was comprised of the following Class A Directors: George Jeff Mennen,
Teik Hok Loy and Cheng Soon Teoh. The Compensation Committee oversees
administration of the Plan. The purpose of the Plan is to attract and retain
capable and experienced officers and employees by compensating them with
equity-based awards whose value is connected to the continued growth and
profitability of the Company. Under the Plan, awards may be made in the form of
stock options or restricted stock. Apart from the Plan, the Company has not
developed any formalized compensation policy or program. In general, the
Company compensates executive officers and senior management through salary,
bonus (where appropriate) and the grant of stock options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Teik Hok Loy is the son of Tan Sri Dato Loy and alternate CEO and
Director of MBf Holdings Berhad. Cheng Soon Teoh currently serves as the Vice
President of Mergers and Acquisitions for MBf Holdings Berhad. Accordingly,
these members should not be considered as independent Directors when serving on
the Compensation Committee.
STOCK PERFORMANCE CHART
The following graph compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock for each of
the Company's last five fiscal years with the cumulative total return (assuming
reinvestment of dividends) of (i) the NASDAQ Stock Market-US Index and (ii) a
peer group selected by the Company in good faith. The peer group consists of
American Shared Hospital Services, Daxor Corp., DVI Inc., Hemacare Corp.,
Medical Sterilization Inc., National Home Health Care Inc., Prime Medical
Services Inc. and Psicor Inc.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
============== ============= ============== ============== ============== =============
12/90 12/91 12/92 12/93 12/94 12/95
============== ============= ============== ============== ============== =============
<S> <C> <C> <C> <C> <C> <C>
MBf USA, INC. 100.0 445.0 250.0 175.0 260.0 60.0
Nasdaq Stock Market-US Index 100.0 134.6 147.6 164.2 163.4 222.8
Peer Group 100.0 155.2 162.9 149.4 142.3 237.2
</TABLE>
10
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 29, 1995, MBf International, the majority Shareholder of
the Company, loaned $1,200,000 to the Company, which the Company then
contributed to AHPC in exchange for 7% Preferred Stock. MBf International
agreed to accept 250,980 shares of the Company's Common Stock having a value of
$1,200,000 in satisfaction of the Company's indebtedness to MBf International,
which transaction was effective as of October 30, 1995.
The Company entered into a Stock Acquisition Agreement with MBf
International dated as of October 31, 1995 whereby MBf International exchanged
its 70% majority interest in 1,365 shares of common stock (par value Indonesian
Rupiah 2,167,000, with each share equivalent to $1,000 US Dollars) of P.T. MBf
Buana Multicorpora ("PT Buana"), and a non-interest bearing demand note with a
face value of $737,769 (the "Note") for 255,072 shares of the Company's Common
Stock, having an aggregate value of $1,219,563. The shares were held in trust
by MBf Holdings Berhad for the benefit of MBf International and represent
seventy percent (70%) of the outstanding common stock of PT Buana. PT Buana is
a new Indonesia manufacturing plant which produces latex examination gloves and
became operational in May 1996. The Note received in the transaction is
expected to be outstanding for three years and will be guaranteed by MBf
Holdings Berhad, the parent company of MBf International.
In 1995, AHPC purchased the majority of its powdered latex glove
inventories from MBf Health Sdn. Bhd. ("MBf Health"), a Malaysian glove
manufacturing subsidiary of MBf International. On August 17, 1995, MBf
International announced that it had sold all its shares of its subsidiary, MBf
Health, to Perusahaam Intan Emas Sdn Bhd ("PIE") for approximately $1,250,000,
subject to an option to repurchase the issued shares. In October 1995, PIE
changed the name of the MBf Health plant to P.I.E. Healthcare Sdn. Bhd. ("PIE
Healthcare"). In connection with the sale, an agreement had been executed
between MBf Health (now known as PIE Healthcare) and AHPC calling for the
purchase of product by AHPC according to a predetermined formula. AHPC will
continue purchasing the majority of its powered latex examination gloves from
the PIE Healthcare factory along with the PT Buana factory. The Company intends
to continue to purchase non-powdered gloves from other sources. The Company
does not expect the sale of MBf Health to have a significant impact on its
operations.
During 1995, the Company purchased substantially all of its inventory
related to its latex condom products from MBf Personal Care, a Malaysian
factory, which is a wholly owned subsidiary of MBf Capital, an affiliate of MBf
International.
In October 1994, pursuant to two debenture and warrant purchase
agreements between the Company and two trusts established by George S. Mennen,
the Company issued, and each trust purchased, a convertible subordinated
debenture in the amount of $1,000,000 payable in seven years with interest at
one and one-half percent (1.5%) over the prime rate. Each debenture is
convertible into Common Stock of the Company at a conversion price of $25.00
per share. In addition, each trust received a warrant exercisable over five
years to purchase 7,500 shares of Common Stock at an exercise price of $22.50
per share. For the year ended December 31, 1995, the Company incurred interest
expense of approximately $200,000 on this indebtedness.
In December 1994, the Company loaned to an affiliate, MACC Trading
Limited, on a short term basis the principal amount of $1,500,000. This loan
was secured by the Company's obligation to MACC Trading Limited under the
party's December 30, 1993 purchase agreement for the acquisition by the Company
of the Playboy condom license rights from MACC Trading Limited. This loan bore
interest at the rate of four percent (4%) over prime. On May 5, 1995, the
Company and MBf Holdings (the parent company of MACC Trading) entered into an
agreement allowing the Company's subsidiary AHPC to offset the MACC Trading
receivable along with the accrued interest thereon ($ 1,572,688) against the
trade payable balance owed by AHPC to MBf Health. Therefore, the $1,500,000
receivable from MACC Trading was considered as effectively paid on May 5, 1995.
11
<PAGE> 14
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires certain officers, Directors and beneficial owners of more than 10% of
the Company's Common Stock to file reports of ownership and changes in their
ownership of the equity securities of the Company with the Securities and
Exchange Commission and the Nasdaq Stock Market. Based solely on a review of
the reports and representations furnished to the Company during the last fiscal
year, the Company believes that each of these persons is in compliance with all
applicable filing requirements.
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1997 Annual Meeting of Shareholders must
be received by the Company at its executive office in Itasca, Illinois, on or
prior to August 6, 1997 for inclusion in the Company's proxy statement for that
meeting. Any Shareholder proposal must also meet the other requirements for
shareholder proposals as set forth in the rules of the U.S. Securities and
Exchange Commission relating to shareholder proposals.
REQUESTS FOR DOCUMENTS
Any requests for documents or other information should be directed to
Robert C. Carter, Controller and Assistant Secretary at (630) 285-9191. The
Company will forward such documents, via first class mail, upon receipt of a
Shareholder's written request therefor.
OTHER MATTERS
As of the date of this Proxy Statement, no business, other than that
discussed above, is to be acted upon at the Meeting. If other matters not known
to the Board of Directors should, however, properly come before the Meeting,
the persons appointed by the signed proxy intend to vote it in accordance with
their best judgment.
MBf USA, INC.
By Order of the Board of Directors
Loi Heng Sewn
Chairman
Itasca, Illinois
October 23, 1996
===============================================================================
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES. PLEASE PROMPTLY
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE.
===============================================================================
12
<PAGE> 15
APPENDIX A
===============================================================================
PROXY CARD
===============================================================================
MBF USA, INC.
500 PARK BOULEVARD, SUITE 1260, ITASCA, ILLINOIS 60143-2639
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Heng Sewn Loi, Edward J. Marteka and
Stephen K.H. Tan and each of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote all of the
shares of Common Stock of MBf USA, Inc. (the "Company"), a Maryland
corporation, held of record by the undersigned, at the Annual Meeting of
Shareholders ("Meeting") to be held on December 5, 1996, or any adjournments or
postponements thereof, as hereinafter specified on the matters as more
specifically described in the Company's proxy statement and in their discretion
on any other business that may properly come before the Meeting.
1. Proposal to elect two (2) Class B directors of the Company as follows:
Robert J. Simmons Don L. Arnwine
[ ] FOR the election of the [ ] WITHHOLD authority with respect
two nominees. to ______________________________.
SHAREHOLDERS MAY WITHHOLD AUTHORITY
TO VOTE FOR ANY NOMINEE BY WRITING
HIS NAME ON THE LINE ABOVE.
2. Proposal to increase the number of authorized Common Stock shares
from 4 million to 10 million shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the Board of Directors' selection of Arthur
Andersen LLP as the Company's independent accountants for the fiscal year
ending December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner
designated herein by the undersigned shareholder. If no designation is made,
the Proxy will be voted FOR each of the above Proposals.
<PAGE> 16
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
DATED: _________________________, 1996
--------------------------------------
(Signature)
--------------------------------------
(Signature if held jointly)
Please sign as name appears hereon.
When shares are held jointly, both
should sign. When signing as
attorney, executor, administrator
trustee or guardian, please give full
title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer.
If a partnership, please sign in
partnership name by authorized officer.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1, 2 AND 3.
