<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant []
Check the appropriate box:
[ ] 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 Section 240.14a-11(c) or Section 240.14a-12
MBfUSA, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Shefsky & Froelich Ltd., Suite 2500, 444 N. Michigan Ave.,
Chicago, IL 60611
Attn: Dennis B. O'Boyle
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required.
[ ] 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 identifying 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, SUITE 1260
ITASCA, ILLINOIS 60143
November 6, 1997
Dear Shareholder:
It is my pleasure to extend to you a cordial invitation to attend the
Annual Meeting of Shareholders of MBf USA, Inc. on Wednesday, December 3, 1997.
The meeting will be at the Wyndham Hotel, 400 Park Boulevard, Itasca,
Illinois, at 10:00 a.m. Central Standard Time. Refreshments begin at 9:30 a.m.
The Notice of Annual Meeting of Shareholders and the Proxy Statement
accompanying this letter describe the business we will consider at the meeting.
In particular, I would like to call to your attention the two Class B nominees
who are standing for re-election to the Board. Mr. Robert J. Simmons and Mr.
Don L. Arnwine have distinguished professional careers and bring important and
diverse experiences to the Board. We believe they make important contributions
as members of the Board.
Your vote is very important. I urge you to sign, date, and return the
enclosed proxy card in the envelope provided in order to be certain your shares
are represented at the meeting, even if you plan to attend the meeting in
person.
I look forward to seeing you at the meeting.
Loi Heng Sewn
Chairman
enclosures
<PAGE> 3
MBf USA, INC.
500 PARK BOULEVARD, SUITE 1260
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 3, 1997, 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 concur in the selection of Arthur Andersen LLP as the Company's
independent public accountants for the year 1997; and
(3) 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 27, 1997,
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
November 6, 1997
<PAGE> 4
================================================================================
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
MBf USA, INC.
DECEMBER 3, 1997
================================================================================
This proxy statement (the "Proxy Statement") is furnished to all holders
of record as of the close of business on October 27, 1997 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 at the Wyndham Hotel, 400 Park Boulevard, Itasca,
Illinois on December 3, 1997, 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 10, 1997. 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 concur in the selection of Arthur Andersen LLP as the Company's
independent public accountants for the year 1997; and
(3) 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> 5
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. Approval of the ratification of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1997
requires the affirmative vote of the holders of at least a majority of all
outstanding shares of Common Stock and Series A Common Stock, with the holders
of Common Stock and Series A Common Stock voting together as a single class.
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 27, 1997, 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 3,061,667
shares of Common Stock and 1,252,538 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 all 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.
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 27, 1997 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 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.
2
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF TOTAL
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP VOTING STOCK(3)
- -------------- ------------------------ -------------------- ----------------
<S> <C> <C> <C> <C>
Series A Common Stock MBf International Ltd.(1) 1,252,538 29.03%
Common Stock MBf International Ltd.(1) 1,682,275 38.99%(4)
Common Stock Asia Pacific Ventures Limited(2) 216,296 5.01%
Common Stock Tan Sri Dato (Dr.) Hean Heong Loy 6,824(4) *
Common Stock Teik Hok Loy 10,000(4) *
Common Stock Heng Sewn Loi 55,000(4)
Common Stock Heng Sewn Loi 7,000 62,000 1.44%
-------
Common Stock Edward J. Marteka 55,000(4)
Common Stock Edward J. Marteka 7,000 62,000 1.44%
-------
Common Stock George Jeff Mennen 5,000(4) *
Common Stock Robert J. Simmons 5,000(4) *
Common Stock Don L. Arnwine 5,000(4) *
Common Stock Stephen K.H. Tan 15,000(4)
Common Stock Stephen K.H. Tan 7,000 22,000 *
-------
Common Stock Robert C. Carter 10,000(4) *
Common Stock Total Executive Officers & Directors 166,824(4)
as a group (9 persons) 21,000 187,824 4.35%
-------
</TABLE>
MBf International Limited is a wholly-owned subsidiary of MBf Holdings
Bhd., a publicly-traded Malaysian company. The owners of more than 5% of the
shares of MBf Holdings Bhd. are Tan Sri Dato (Dr.) Loy Hean Heong and MBf Land
Bhd. who own 27.2% and 9.6% respectively of the issued capital.
________________________
*Represents less than 1%
(1) MBf International Limited is located at 17th Floor, One Pacific Place, 88
Queensway, Hong Kong.
(2) Asia Pacific Ventures Limited c/o PIE Healthcare at Lot 60-61, Senawang
Industrial Estate, 70450 Seremban, Negeri Sembilan Darul Khusus, Malaysia.
(3) Percent of class is based upon the combined number of shares of Series A
Common Stock and Common Stock outstanding on October 27, 1997.
(4) Represents shares to be issued upon exercisable options granted under the
Company's Omnibus Equity Compensation Plan.
See also "Certain Relationships and Related Transactions" for information
concerning the Wembley agreements.
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. 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
____________
3
<PAGE> 7
unable or will decline to serve as a Director. The nominees receiving a
majority of the 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.
<TABLE>
<CAPTION>
CLASS A DIRECTORS
-----------------
Year Became
Name Age Principal Occupation(s) During Past 5 Years a Director
- ---- --- ------------------------------------------- -----------
<S> <C> <C> <C>
Tan Sri Dato (Dr.) 61 Class A Director of the Company. Former 1992
Hean Heong Loy Chairman of the Board 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 33 Class A Director of the Company. He has 1993
served in various 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 37 Class A Director of the Company and 1993
Chairman of the Board and CEO of the
Company. 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 60 Class A Director and President of the 1995
Company. He has served as 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.
George Jeff Mennen 55 Class A Director of the Company. For over 1994
five years, Mr. 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-
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
Year Became
Name Age Principal Occupation(s) During Past 5 Years a Director
- ---- --- ------------------------------------------- -----------
<S> <C> <C> <C>
Palmolive.
Richard C.M. Wong 52 Elected Class A Director of the Company on 1997
May 20, 1997. Mr. Wong is currently the
President and Chief Executive Officer of
Wembley Rubber Products Sdn. Bhd., a
Malaysian glove manufacturer. In
addition, he is also a Deputy Chairman of
Nylex Malaysia Bhd., and a director of two
other publicly listed companies in
Malaysia. Mr. Wong is the founder of TEC
Asia Centre, an international organization
of Chief Executive Officers who share
ideas to manage change and remain
competitive.
Kwong Ann Lew 36 Elected Class A Director of the Company on 1997
May 20, 1997. Mr. Lew is an Executive
Director and Chief Financial Officer of
Wembley Rubber Products Sdn. Bhd. He is a
member of the Malaysian CPA Society and
Institute of Taxation and was with Arthur
Andersen LLP from 1988 to 1991 before
joining Uniphoenix Bhd. as a corporate
finance manager and D. Bhd as a Senior
Consultant until 1995.
Mr. Wong and Mr. Lew were elected on May 20, 1997 as Class A Directors in the place of Mr.
Teoh Cheng Soon and Dr. Teo Sen Chong who resigned prior to their appointment and as a
result of the Wembley Rubber Products Sdn. Bhd. agreements to buy 55.1% of the Company as
described in the section "Certain Relationships and Related Transactions".
CLASS B DIRECTORS
-----------------
Robert J. Simmons 54 Mr. Simmons is currently President of RJS 1995
HealthCare, Inc., a 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 65 Mr. Arnwine is President of Arnwine 1995
Associates, a company he 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> 9
BOARD MEETINGS AND COMMITTEES
During 1996, 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 1996, all action of the Compensation
Committee was taken by unanimous written consent without a meeting. At the end
of 1996, the Compensation Committee consisted of George Jeff Mennen, Teik Hok
Loy and Cheng Soon Teoh. In early 1997, Mr. Cheng Soon Teoh resigned from the
Board of Directors and from the Compensation Committee. At this time, the
vacancy has not yet been filled. 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, Richard Wong and Kwong Ann Lew 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 of Shareholders or until their respective successors are
elected and qualified.
2. 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 1997 and has determined that it would be desirable to request that the
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 1997.
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.
6
<PAGE> 10
<TABLE>
<CAPTION>
Year Became
Name Age Principal Occupation(s) During Past 5 Years an Officer
- ---- --- ------------------------------------------- -----------
<S> <C> <C> <C>
Stephen K.H. Tan 42 Chief Financial Officer and Secretary of 1995
the Company. He was 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 17 years.
Robert C. Carter 36 Controller and Assistant Secretary of the 1995
Company. Mr. Carter 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, Gunderson & Co.,
CPA's. Prior to that, Mr. Carter worked
for Arthur Andersen LLP as an auditor.
</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. Mr. Mennen, Mr.
Simmons, and Mr. Arnwine all received options to purchase 4,000 shares of
Common Stock at an exercise price of $3.66 under the Plan in January, 1997.
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.
Effective July 23, 1996, the Company repriced all outstanding director and
employee options to $2.75, the closing stock price on the grant date. All
director options issued to former directors were terminated upon their
departure from the Board.
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 1996. No other executive officer had aggregate
annual salary and bonus which exceeded $100,000.
7
<PAGE> 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
=================== ======================
Name and Other Annual Restricted Stock Stock
Principal Position Fiscal Year Salary Bonus Compensation Awards ($) Options
========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Heng Sewn Loi(5) 1996 $140,000 $35,000 $100,000 --- ---
Chairman and CEO 1995 --- --- $20,000 $312,000 40,000
1994 --- --- --- $118,125 9,000
- --------------------------------------------------------------------------------------------------------
Edward J. Marteka(6) 1996 $160,000 $33,333 $7,200 --- ---
President 1995 $150,000 $29,166 $7,200 $126,000 15,000
1994 $137,500 $75,000 $7,200 $415,625 35,000
- --------------------------------------------------------------------------------------------------------
</TABLE>
There is no other long term compensation for the executives listed above in
1994 through 1996.
EMPLOYMENT AGREEMENTS
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 and CEO; (ii) a base salary of
$140,000 per year; (iii) non-qualified stock options to purchase 40,000 shares
of Common Stock under the Plan, 20,000 shares exercisable commencing July 21,
1995, and 20,000 shares exercisable commencing July 21, 1996 at an exercise
price of $7.80, the closing price of the Common Stock as reported on the Nasdaq
SmallCap Market on the day the options were granted by the Compensation
Committee; and (iv) life and medical allowance, automobile allowance, living
expenses, dependent tuition allowance, home leave and family travel, provident
fund, relocation expenses, tax equalization settlement, U.S. legal and taxation
matters and other additional customary benefits. Due to Mr. Loi's pending U.S.
residency status, Mr. Loi's salary from September 1, 1995 through December 31,
1995 was incurred by MBf Holdings. Mr. Loi's residence status in the U.S. was
approved in January 1996 and his salary was paid by the Company in 1996. Mr.
Loi's total employment compensation package amounted to approximately $240,000
per year inclusive of salary, taxes, and benefits.
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 30, 1995 and on July 22, 1996, provides for: (i) Mr. Marteka to serve as
President of the Company (since May 31, 1995) and American Health Products
Corporation ("AHPC"); (ii) a base salary of $160,000 per year; (iii)
non-qualified stock options to purchase 35,000 shares of Common Stock under the
Plan, 5,000 shares exercisable commencing April 1, 1994, 20,000 shares April 1,
1995 and 10,000 shares April 1, 1996 at an exercise price of $11.875, the
closing price of the Common Stock as reported on the Nasdaq SmallCap Market on
the day the options were granted by the Compensation Committee; and (iv) life
and medical insurance, automobile allowance and other additional customary
benefits. The amended Marteka Agreement also granted to Mr. Marteka additional
non-qualified stock options to purchase 14,000 shares of Common Stock, 7,000
shares exercisable commencing July 21, 1995 and 7,000 shares July 21, 1996, at
an exercise price of $7.80, the closing price of Common Stock as reported on the
Nasdaq SmallCap Market on the day the options were granted by Compensation
Committee. Mr. Marteka also received options to purchase 1,000 shares of the
Company's Common Stock upon his appointment as Class A Director in 1995.
As approved by the Compensation Committee, all of Mr. Loi and Mr.
Marteka's outstanding stock options were repriced effective July 23, 1996 to
$2.75, the closing stock price on the date of the grant.
_________________
(5) Heng Sewn Loi became Chairman and CEO of the company on September 1, 1995.
(6) Edward J. Marteka became President and a Class A Director of the company on
May 31, 1995.
8
<PAGE> 12
OPTION GRANTS IN FISCAL 1996
None of the executive officers named in the summary compensation table
were granted any stock options during the 1996 fiscal year.
On January 6, 1997, the Company issued options under the Company's Omnibus
Equity Compensation Plan to certain employees to purchase 92,500 shares of the
Company's Common Stock at an exercise price of $3.66 per share, the closing
price of the Common Stock as reported on NASDAQ on the date the options were
granted by the Compensation Committee. The options are exercisable for ten
(10) years from January 6, 1997, the date of grant.
Mr. Loi and Mr. Marteka were each granted options to purchase 5,000 shares
of the Company's Common Stock in accordance with the Company's January 6, 1997
stock option offering.
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal
1996 by the executive officers named in the summary compensation table and the
value of such officers' unexercised stock options as of December 31, 1996.
<TABLE>
<CAPTION>
Number of Unexercised Value of In-the-Money
Options at 12/31/96 Options at 12/31/96
--------------------- ---------------------
Value
Shares Acquired on Realized
Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
------------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Heng Sewn Loi - 0 - - 0 - 50,000 - 0 - $50,000 - 0 -
Edward J. Marteka - 0 - - 0 - 50,000 - 0 - $50,000 - 0 -
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors was comprised of
the following three Class A Directors: Teik Hok Loy, George Jeff Mennen and
Cheng Soon Teoh, each of whom were appointed by the Board of Directors in 1995.
In early 1997, Mr. Cheng Soon Teoh resigned from the Board of Directors and the
Compensation Committee. At this time, the vacancy on the Compensation Committee
has not yet been filled. The Committee oversees administration of the Company's
Omnibus Equity Compensation Plan (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.
Because the Company's executive officers' employment agreements presently
control the compensation paid to such executive officers, the Compensation
Committee did not formulate policies with respect to the executive officers
compensation during 1996. During fiscal 1996, all action of the Compensation
Committee was taken by the Committee by unanimous written consent without a
meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Tan Sri Dato (Dr.) Hean Heong Loy has a substantial ownership interest in
MBf Holdings, which owns MBf International and 31.5% of MBf Capital Berhad, an
affiliate which owns MBf Personal Care. Teik Hok Loy is the son of Tan Sri Dato
(Dr.) Hean Heong Loy and alternate CEO and Director of MBf Holdings.
Accordingly, these members should not be considered as independent Directors
when serving on the Board of Directors or the Compensation Committee.
9
<PAGE> 13
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 NYSE/AMEX/Nasdaq Stock Market - U.S.
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.,
DVI Health Services Corp., Hemacare Corp., Medical Sterilization Inc., National
Home Health Care Inc., Prime Medical Services Inc. and Psicor Inc.
[Chart]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-----------------------
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
MBf USA, Inc. 100 56 39 58 14 13
NYSE/AMEX/Nasdaq Stock 100 110 122 121 166 201
Peer Group 100 105 96 92 153 174
</TABLE>
* $100 invested on December 31, 1991 in stock or Index -- including
reinvestment of dividends. Fiscal year ending December 31.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company had entered into arrangements with several entities which are
related to MBf International and/or MBf Holdings. The significance of these
arrangements to the Company's business, financial condition and operations in
the short and long term are discussed below. The Company believes the prices
charged by each related entity are as favorable as those that could be
negotiated with unaffiliated third parties.
In 1995, the Company began purchasing glove packaging materials (inner
boxes and outer cases) from MBf Printing, a Malaysian printing entity and a
subsidiary of MBf Holdings. In 1996, the Company purchased approximately
$430,000 of packaging material from MBf Printing and the prices charged by them
were as favorable as to those that could be negotiated with unaffiliated
suppliers. The Company anticipates continuing this arrangement in 1997 but has
no contractual obligation to do so.
The Company utilizes MBf Insurans, an affiliate of MBf Holdings, to insure
all of AHPC's inventory purchases while in transit to AHPC's various U.S.
warehouses. In 1996, the total cost charged by MBf Insurans to insure all
inventory in transit was approximately $24,000, which the Company believes is
comparable to unaffiliated third party prices. No contractual obligations exist
between the Company and MBf Insurans but the Company anticipates continuing to
utilize their services.
On June 17, 1996, the Company issued 488,973 shares of Common Stock to MBf
International for cash proceeds in the amount of approximately $1,400,000.
On August 20, 1996, the Company issued 672,269 shares of Common Stock to
MBf International for cash proceeds in the amount of $1,000,000.
10
<PAGE> 14
On May 20, 1997, the Company announced that its majority shareholder, MBf
International Ltd. ("MBfI") had entered into two separate agreements with its
powder-free supplier, Wembley Rubber Products (M) Sdn. Bhd. ("Wembley") which
called for the following:
i.) MBfI selling all of the Company's Series A Common Stock (1,252,538
shares) to Wembley for approximately $ 6.27 million; and
ii.) the purchase of 2,500,000 shares of the Company's unregistered
Common Stock by Wembley at a price of $ 2.70 per share.
The agreements were scheduled to close simultaneously on August 8, 1997.
However, the date of closure has been extended to the end of 1997 as a result
of the non-fulfillment of certain conditions precedent.
The Class A Common Stock has the ability to designate a majority of the
members of the Company's board of directors, and represents 29% of the
Company's Common Stock assuming no new shares are issued. Assuming
transactions (1) and (2) close, Wembley will be able to elect new Class A
directors, a majority of the Class B directors, and will hold 55.1% of the
Company's Common Stock after issuance of the 2,500,000 new shares.
Under the Purchase Agreement, two (2) new Class A directors representing
Wembley were appointed to the Company's board of directors--Mr. Richard Wong
Chin Mun, President/CEO of Wembley and Mr. Lew Kwong Ann, Executive
Director/Chief Financial Officer of Wembley.
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 1998 Annual Meeting of Shareholders must be
received by the Company at its executive office in Itasca, Illinois, on or
prior to July 15, 1998 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
Stephen Tan, Chief Financial Officer and Secretary at (630) 285-9191. The
Company will forward such documents, via first class mail, upon receipt of a
Shareholder's written request therefor.
11
<PAGE> 15
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
November 6, 1997
================================================================================
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> 16
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 3, 1997, 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.
<TABLE>
<S> <C> <C> <C>
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 ratify the Board of Directors' selection of Arthur Andersen LLP as the Company's independent
accountants for the fiscal year ending December 31, 1997.
[ ] 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.
</TABLE>
<PAGE> 17
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
DATED:
------------------------------------------,1997
-----------------------------------------------------
(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 AND 2.
2
<PAGE> 18
PROXY CARD
MBf USA, INC.
SERIES A COMMON STOCK
500 PARK BOULEVARD, SUITE 1260, ITASCA, ILLINOIS 60143-2639
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints 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 Series A
Common Stock of MBf USA, Inc. (the "Company"), a Maryland corporation, held of
record by the undersigned, all of the Annual Meeting of Shareholders
("Meeting") to be held on December 3, 1997, 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.
<TABLE>
<S> <C> <C> <C> <C>
1. Proposal to elect seven (7) Class A directors of the Company as follows:
Tan Sri Dato (Dr.) Hean Heong Loy Teik Hok Loy
Heng Sewn Loi Richard Wong
Edward J. Marteka George Jeff Mennen
Kwong Ann Lew
[ ] FOR the election of the seven nominees. [ ] WITHHOLD authority with respect
to ______________________________.
SHAREHOLDERS MAY WITHHOLD AUTHORITY TO VOTE FOR ANY
NOMINEE BY WRITING HIS NAME ON THE LINE ABOVE.
2. 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, 1997.
[ ] 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.
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
DATED:
------------------------------------------, 1997
-------------------------------------------------------
(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 AND 2.
---
