<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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
OMNI U.S.A., INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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
OMNI U.S.A., INC.
7502 MESA ROAD
HOUSTON, TEXAS 77028
(713) 635-6331
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 20, 1996
To our Stockholders:
The Board of Directors cordially invites you to attend the 1996 Annual
Meeting of Stockholders (the "Annual Meeting") of Omni U.S.A., Inc. (the
"Company"), to be held on Wednesday, November 20, 1996, at the offices of the
Company, 7502 Mesa Road, Houston, Texas 77028, at 10:00 a.m. Central Standard
Time, or at such time and place to which the Annual Meeting may be adjourned or
recessed, for the following purposes:
1. To elect five directors to the Board of Directors of the
Company to hold office until the 1998 Annual Meeting of Stockholders or until
their successors have been duly elected and qualified. The nominees for
director (each a "Nominee") are Jeffrey K. Daniel, Craig L. Daniel, James L.
Davis, John F. Lillicrop and Bent Petersen;
2. To ratify the Company's adoption of the 1996 Incentive Stock
Option Plan, adopted by the Board of Directors January 31, 1996;
3. To ratify the appointment of Harper & Pearson Company as the
Company's independent auditors; and
4. To act upon such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on October 12,
1996, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting. The Board of Directors
sincerely hopes you can attend the meeting in person. If you cannot attend,
please mark, date and sign the enclosed proxy and return it promptly in the
enclosed envelope, which requires no postage if mailed in the United States.
By Order of the Board of Directors,
/s/ JEFFREY K. DANIEL
-----------------------------------
Jeffrey K. Daniel, President
Houston, Texas
Dated: October 29, 1996
<PAGE> 3
OMNI U.S.A., INC.
7502 Mesa Road
Houston, Texas 77028
(713) 635-6331
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 20, 1996
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Omni U.S.A., Inc., a Nevada corporation (the
"Company" or "Omni"), of the enclosed proxy (the "Proxy") to be voted at the
Company's 1996 Annual Meeting of Stockholders (the "Annual Meeting") to be held
on Wednesday, November 20, 1996, at the offices of the Company, 7502 Mesa Road,
Houston, Texas 77028, at 10:00 a.m., Central Standard Time, or at such time and
place to which the Annual Meeting may be adjourned or recessed, for the
purposes set forth in the accompanying Notice. This Proxy Statement and the
enclosed Proxy were first sent or given to the Company's shareholders on or
about October 29, 1996.
Shares can be voted at the Annual Meeting only if the holder is
present or represented by proxy. The Proxy, if properly executed on its face
and returned, will be voted (or withheld or abstained from voting) according to
the choices specified thereon. The Proxy will be voted in favor of (i) the
election of each nominee named therein, unless a choice is indicated to
withhold authority to vote for such nominee, and (ii) each proposal described
therein unless a choice is indicated to vote against or to abstain from voting
on any specific proposal. All matters to be considered by the shareholders at
the Annual Meeting as set forth in the accompanying notice require the vote of
a majority of the votes counted provided a quorum exists. Votes of those
shareholders attending the Annual Meeting will be counted by ballot; any
abstentions will not be counted as a vote.
GENERAL INFORMATION
Every stockholder of the Company is entitled to cast, in person or by
proxy, one vote for each share of the Company's Common Stock held by such
stockholder at the close of business on October 12, 1996, the record date for
the Annual Meeting. At that date, the Company had outstanding 2,016,983 shares.
The proxy hereby solicited is revocable at any time prior to its
exercise. The proxy may be revoked in any manner permitted by law, including,
without limitation, delivery of written notice of revocation to the Secretary
of Omni, submission to the Secretary of a proxy dated later than a previously
submitted proxy, or attendance at the meeting and voting by ballot.
The cost of preparing, assembling and mailing the proxy statement and
related material will be borne by the Company. In addition to soliciting
proxies by mail, the Company may make requests for proxies by telephone,
telegraph or messenger or by personal solicitation by officers, directors, or
employees of the Company at nominal cost to the Company. The Company will
reimburse third parties for the cost of forwarding proxy material to beneficial
owners of Omni stock.
1
<PAGE> 4
ELECTION OF DIRECTORS; NOMINEES
The nominees for director are Jeffrey K. Daniel and Craig L. Daniel,
who are existing directors and principal executive officers of the Company.
Additional nominees are James L. Davis, John F. Lillicrop and Bent Petersen. On
January 30, 1996, effective January 1, 1996, Edward L. Daniel resigned as a
director of the Company and is currently a paid consultant consistent with the
terms of the Agreement between Edward L. Daniel and the Company. See "Certain
Relationships and Transactions--Settlement with Mr. Daniel" below.
RATIFICATION OF ADOPTION OF INCENTIVE STOCK OPTION PLAN
DESCRIPTION OF NEW PLAN
The Company maintains a Non Qualified Stock Option Plan (the "NQSOP")
and, prior to January 31, 1996, maintained the 1994 Qualified Incentive Stock
Option Plan (the "1994 Plan"). The Board of Directors has, subject to
shareholder approval, adopted the Company's 1996 Incentive Stock Option Plan,
effective January 31, 1996 (the "1996 ISOP"). On that same date, the Board of
Directors voted to terminate the existing 1994 Plan and adopt the 1996 ISOP.
All persons who were to receive options under the 1994 Plan will receive
substantially similar benefits under the 1996 ISOP in exchange for their
benefits under the 1994 Plan. The exercise price of options under the 1996 ISOP
is $4.00per share, as was the exercise price of options under the 1994 Plan.
Persons who received options under the NQSOP will not be affected.
The Board believes that the 1996 ISOP is essential to promote both the
diligence and the longevity of the employees who receive options under the 1996
ISOP, and accordingly it recommends that the shareholders ratify the adoption
of the 1996 ISOP. Ratification is required for the 1996 ISOP to qualify for the
desired tax treatment. If the shareholders do not ratify the 1996 ISOP, the
Board will reconsider such adoption.
The 1996 ISOP provides that Omni may grant options to purchase Common
Stock of the Company on a discretionary basis to key full-time employees,
including officers and directors, subject to certain vesting requirements. An
aggregate of 900,000 shares is available for issuance to not more than
twenty-five (25) key employees. The Board issued options under the 1996 ISOP,
share for share, in exchange for options under the 94 Plan. Under the 1996
ISOP, options for 620,000 shares had been granted as of October 12, 1996. As of
that date, the market value of Common Stock subject to the 1996 ISOP was below
the option exercise price of $4.00 per share. See "COMPENSATION OF MANAGEMENT
- - --Qualified Stock Options" below.
The 1996 ISOP contains several restrictions designed to insure that
such options are "qualified" for tax purposes and that any gain realized from
the exercise of options by a participant is not taxable to the participant at
the time of exercise. For example, with certain exceptions, options may not be
transferred or assigned and must be exercised prior to the date of expiration
or within three months of termination of employment. The stock acquired through
the exercise of options is subject to certain holding requirements as well.
Additionally, the exercise price of any options granted under the 1996 ISOP may
not be less than 100% of the fair market value of the underlying shares of
Common Stock on the day the option is granted, except that, with respect to
options granted to persons owning more than 10% of the Common Stock of Omni,
the option price must be at least 110% of the fair market value of the Common
Stock on the date of grant. All options must be exercised within ten years of
the date of grant, except that, with respect to options granted to persons
owning more than 10% of the stock of Omni, the options must be exercised within
five years of the date of grant. Qualified Stock Options have no tax effect on
the Company.
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<PAGE> 5
NEW PLAN BENEFITS
Options to purchase a total of 620,000 shares of Common Stock have
been granted under the 1996 ISOP. The following employees received the
following options, each comprising more than 5% of the options issuable under
the 1996 ISOP: Jeffrey K. Daniel and Craig L. Daniel each received options to
purchase 160,000 shares of the Company's Common Stock, each representing 17.78%
of such options, and Michael A. Zahorik and Robert S. Moore II each received
options to purchase 50,000 shares, each representing 5.56% of such options.
The following table shows how the 1996 ISOP options were distributed
to groups within the Company:
<TABLE>
<CAPTION>
1996 Incentive Stock Option Plan
------------------------------------------------------------------------
Name and Position Dollar Value ($)(a) Number of Shares
----------------- ------------------- ----------------
<S> <C> <C>
Jeffrey K. Daniel $ -0- 160,000
President and Chief Executive
Officer
Craig L. Daniel $ -0- 160,000
Vice President-Manufacturing
Michael A. Zahorik $ -0- 50,000
Vice President, General Counsel and
Secretary
Robert S. Moore II $ -0- 50,000
Vice President-Finance, Chief
Financial Officer and Treasurer
Executive Officer Group $ -0- 420,000
Non-Executive Officer Employee Group $ -0- 200,000
</TABLE>
- - -------------------------
(a) States dollar value of options if the 1996 ISOP had been in effect during
fiscal year 1996; such options would have had no value since the price of
Omni's Common Stock did not exceed the option price of $4.00 per share as of
the date of grant. There were no exercises on options during the last fiscal
year.
3
<PAGE> 6
RATIFICATION OF APPOINTMENT OF PRINCIPAL AUDITORS
The Board of Directors has selected Harper & Pearson Company ("Harper &
Pearson") as the Company's independent auditors to examine the Company's
financial statements for the fiscal year ending June 30, 1997, subject to the
ratification of such selection by the shareholders at the Annual Meeting.
Harper & Pearson has acted as the Company's independent auditors since November
1993 and audited the Company's financial statements for the year ended June 30,
1996, which are included as part of the Company's Annual Report on Form 10-KSB
delivered with this Proxy Statement.
The Board of Directors recommends that the shareholders ratify the selection
of Harper & Pearson as the independent auditors of the Company for the fiscal
year ending June 30, 1997. The affirmative vote of a majority of the shares of
Common Stock present in person or by proxy is necessary for ratification.
Ratification is not required nor does it prevent the Board from selecting
different auditors; however, the Board is submitting this matter to the
shareholders in order to enhance their participation in this aspect of the
Company's affairs. If the shareholders do not ratify the selection of Harper &
Pearson as the Company's independent auditors, the Board will reconsider the
selection.
Representatives of Harper & Pearson are not expected to attend the Annual
Meeting.
MANAGEMENT
CURRENT DIRECTORS AND NOMINEES
The Company's Articles provide for up to seven directors who serve until the
next annual meeting of the shareholders and until their successors are elected
and shall qualify. As of the date of this Proxy Statement, the following were
the members of Omni's Board of Directors:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Jeffrey K. Daniel 35 Director, President and Chief Executive Officer
Craig L. Daniel 36 Director, Vice President-Manufacturing
</TABLE>
NOMINEE DIRECTORS
As of the date of this Proxy Statement, the following are Nominees for
Omni's Board of Directors:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Jeffrey K. Daniel 35 Director, President and Chief Executive Officer
Craig L. Daniel 36 Director, Vice President-Manufacturing
James L. Davis 48 Director
John F. Lillicrop 61 Director
Bent Petersen 48 Director
</TABLE>
4
<PAGE> 7
EXECUTIVE OFFICERS
It is anticipated after the election of Directors at the annual meeting that
the following persons will be named Executive Officers of the Company:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Jeffrey K. Daniel 35 President and Chief Executive Officer
Craig L. Daniel 36 Vice President-Manufacturing
Robert S. Moore II 42 Vice President-Finance, Chief Financial Officer and
Treasurer
Michael A. Zahorik 33 Vice President, General Counsel and Secretary
- - ------------------------
</TABLE>
Jeffrey K. Daniel has been an employee of Omni since 1985 and is currently the
Chief Executive Officer and President of the Company. He has a Bachelors degree
in business administration from the University of Colorado. He was Vice
President from 1987 until May 1994, when he was elected Chief Executive Officer
and President. From January 1, 1988 through July 1, 1996, Mr. Daniel served as
the Secretary of the Company. Since January 1, 1988, Mr. Daniel has been a
director of Omni. Jeffrey K. Daniel is the brother of Craig L. Daniel.
Craig L. Daniel has been a full time employee of Omni since April, 1989, and is
currently Vice President-Manufacturing. He was appointed director of the
Company on December 23, 1993. Craig L. Daniel is the brother of Jeffrey K.
Daniel.
Robert S. Moore II joined the Company in July 1995 as Vice President-Finance
and Chief Financial Officer. From 1991 until 1993, Mr. Moore was Senior Vice
President and Manager-Corporate Finance of Banc One Capital Corporation, and
before joining Omni was Vice President-Corporate Finance with Principal
Financial Securities, Inc. Mr. Moore graduated summa cum laude with a Bachelors
degree in Economics and Finance from Ottawa University, Ottawa Kansas and a
Masters degree in Business Administration from Southern Methodist University,
Dallas, Texas.
Michael A. Zahorik joined the Company as its General Counsel in November 1994.
In June 1995, Mr. Zahorik became Vice President of the Company, and in July
1996, became Secretary of the Company. Mr. Zahorik has a Bachelors Degree from
the University of Colorado and a Juris Doctorate from the University of Denver.
Prior to his employment with the Company, Mr. Zahorik was senior litigation and
corporate counsel for McGeady Sisneros & Wollins, P.C., in Denver, Colorado.
Mr. Zahorik is admitted to practice law in Colorado, Texas, and other Federal
districts and circuits.
James L. Davis provides financial advice to mid-sized companies through
Waterford Capital, Inc., a financial services firm he has owned since 1988.
Before founding Waterford Capital, Inc., Mr. Davis was a partner at the
accounting firm of Deloitte & Touche. From September 1991 through December
1995, Mr. Davis was a director of Entourage International, Inc., a skin care
products company. Mr. Davis has a Bachelor of Business Administration degree
from Texas Tech University and is a Certified Public Accountant. Mr. Davis is a
Nominee for Director for the Company.
5
<PAGE> 8
John F. Lillicrop is President and Chief Executive Officer of OECO Corporation
("OECO"), a defense and aerospace electronics manufacturer in Portland, Oregon.
From April 1994 through March 1996, Mr. Lillicrop was Senior Vice President of
investment banking at Black and Company, Inc. in Portland, Oregon. From
December 1990 through April 1994, Mr. Lillicrop was Chairman of Springtime,
Inc. I, a wholesale grower of nursery products in Hillsboro, Oregon. Mr.
Lillicrop is on the Board of Directors for OECO, its subsidiary, Hibbing
Electronics Corporation, Black and Company, Inc. and Springtime, Inc. I. He is
a graduate of the University of Colorado and received his MBA from the Peter
Drucker Graduate Management Center of the Claremont Graduate School. Mr.
Lillicrop is a Nominee for Director for the Company.
Bent Petersen is the franchise owner for Mail Boxes Etc. for the areas of
Montana and Wyoming. Prior to 1990, Mr. Petersen was Managing Partner of the
San Diego, California offices of Coopers and Lybrand, Certified Public
Accountants, since 1983. Mr. Petersen holds a Bachelors Degree in Accounting
from California State University, Los Angeles, and is a member of the AICPA.
Mr. Petersen is a Nominee for Director for the Company.
Messrs. Davis, Lillicrop and Petersen are nominees as outside directors for
the Company. The outside directors of the Company are compensated through the
issuance of 15,000 Class A purchase warrants for the initial year of service
and 5,000 Class A purchase warrants for every year of service thereafter, and
are reimbursed expenses up to a maximum of $1,000 for attendance at each board
meeting. Jeffrey K. Daniel and Craig L. Daniel are not compensated for their
service as Directors.
None of the Directors have been a participant in any proxy contest involving
any publicly traded Company within the past ten years. Each of them has agreed
to serve as a director of Omni if elected. There are no other nominees for
director.
BOARD MATTERS
During the fiscal year ended June 30, 1996, the Board of Directors held four
meetings. All Board members attended all meetings held, either in person or by
telephone. Omni has no audit, nominating or compensation committees.
6
<PAGE> 9
COMPENSATION OF MANAGEMENT
Neither Jeffrey K. Daniel nor Craig L. Daniel are parties to
any employment contract that is not terminable at will or which entitles them
to bonuses or payments upon change of control, termination of employment or the
like.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------------------
Awards Payouts
------------ -------------
Restricted Securities
Name and Other Annual Stock Underlying LTIP All Other
Position Year Salary Bonus Compensation Awards Options/SARs Payouts Compensation
- - -------- ---- ------ ----- ------------ ------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO 1994 75,893 --- --- --- 160,000* --- ---
1995 63,665 --- --- --- --- --- ---
1996 76,500 --- --- --- 160,000* --- ---
Edward L. Daniel
Chairman ** 1994 145,000 --- --- --- --- --- ---
1995 145,000 --- --- --- --- --- ---
1996 72,500 --- --- --- --- --- ---
</TABLE>
No other executive officer's annual salary or bonus exceeded $100,000
for any of the three most recent fiscal years ended June 30, 1996.
- - -------------------------
* Jeffrey K. Daniel was awarded options under the 1994 Plan to purchase
160,000 shares of Common Stock of the Company. These options were exchanged for
options to purchase 160,000 shares of Common Stock of the Company awarded under
the 1996 ISOP.
** Edward L. Daniel resigned as an officer and director of the Company
effective January 1, 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
<TABLE>
<CAPTION>
Number of Securities Percent of Total Options/ Exercise
Underlying Options/ SARs Granted to Employees or Base Expiration
Name SARs Granted in Fiscal Year Price Date
- - ---- -------------------- ------------------------- -------- ----------
<S> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO 160,000* 25.8% $4.00 1/31/96
Edward L. Daniel --- --- --- ---
- - ---------------------------
</TABLE>
* Jeffrey K. Daniel was awarded options under the 1994 Plan to purchase
160,000 shares of Common Stock of the Company. These options were exchanged for
options to purchase 160,000 shares of Common Stock of the Company awarded under
the 1996 ISOP.
7
<PAGE> 10
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-money Options/
Shares Acquired Value Options/SARs at FY-End (#) SARs at FY-End ($)
Name on Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
- - ---- --------------- -------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO --- --- 160,000 -0-
160,000/0 -0-/-0-
Edward L. Daniel --- --- --- ---
</TABLE>
No options were exercised during the fiscal year ended June 30, 1996.
QUALIFIED STOCK OPTIONS
The Company's 1996 ISOP was adopted on January 31, 1996, subject to
shareholder approval. The Company granted options to purchase 160,000 shares of
Common Stock, subject in each case to vesting requirements, to each of Jeffrey
K. Daniel and Craig L. Daniel and, on January 31, 1996, granted options to
purchase 50,000 shares of Common Stock, subject in each case to vesting
requirements, to each of Michael A. Zahorik and Robert S. Moore II.
OTHER COMPENSATION
The Company has paid no bonuses to its executive officers. The Company
has a group medical plan which provides medical and hospital benefits and term
life insurance to its employees, including its officers, at no cost to the
employee. Jeffrey K. Daniel and Craig L. Daniel are not compensated separately
as directors.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
DANIEL SETTLEMENT
Currently, the Company and Edward L. Daniel, former Chairman of the
Board and principal shareholder, have the following arrangements: (i) lease of
the Houston facility from Daniel Development Corporation ("DDC"), a Washington
partnership controlled by Edward L. and Joan J. Daniel in the amount $10,000
monthly; (ii) consulting fee to Edward L. Daniel in the amount of $20,000 per
month, of which $4,168 may, at Omni's election, be paid in shares of Series B
Preferred Stock; and (iii) the Company has outstanding one Equity Contract Note
to Edward L. Daniel and Joan J. Daniel for the principal amount of $918,304.
As described below, the Company is a party to various transactions
with Edward L. Daniel and certain of his affiliates. Edward L. Daniel and those
affiliates have entered into global settlements with respect to those
transactions pursuant to a definitive Settlement Agreement executed on June 30,
1994 (the "Settlement Agreement"). The terms of those transactions and
amendments and modifications thereto are described below.
Equity Contract Notes. In October, 1991, the Board of Directors of the
Company approved an "Equity Note Plan," pursuant to which the Company could
issue promissory notes to be repaid five years from the issue date solely in
unregistered shares of the Company's Common Stock valued at $0.625 per share
($9.375 per share, as adjusted for the one- for-fifteen reverse stock split
effective December 17, 1992). In addition, under the Equity Note Plan, upon
maturity of a note the note holder would be entitled to purchase one additional
share of Common Stock for each share issued in repayment of the note at a
purchase price of $0.625 per share ($9.375 per share, as adjusted). Pursuant to
the Equity Note Plan, notes could be issued only in $50,000 denominations, with
the total amount of notes to be issued by the Company not to exceed $3,000,000.
As of June 30, 1996, the Company has
8
<PAGE> 11
outstanding one Equity Contract Note to Edward L. Daniel and Joan J. Daniel in
the principal amount of $918,304.
On March 31, 1993, the terms of the Equity Contract Notes were
modified, and accordingly, upon maturity, the principal amount of the single
remaining outstanding Equity Contract Note became payable in shares of Common
Stock of the Company valued at $3.00 per share. The modified Equity Contract
Notes provided for interest at a rate of prime plus 2% per annum, payable
quarterly in cash, additional Equity Contract Notes, or Common Stock of the
Company valued at $3.00 per share, with such $3.00 per share conversion rate
subject to adjustment for recapitalization, mergers, consolidations, and
similar transactions. Indebtedness represented by the Note was expressly
subordinated in right of payment to senior indebtedness, which includes all
obligations of the Company for borrowed money. The modified Equity Contract
Notes also contain a "most favored investor" clause providing that, in the
event of any subsequent offering of any new equity or convertible financing by
the Company, the holder of the Equity Contract Note is entitled to receive
conversion rights or warrants at least as favorable as those offered to any
third party in any such subsequent offering to the extent that the subsequent
offering was made on more attractive terms than were in effect when the Notes
were issued. Accordingly, following the Company's offering in December 1993, of
units consisting of one share of Common Stock, one Class A Common Stock
Purchase Warrant, and one Class B Common Stock Purchase Warrant, Edward L.
Daniel and Joan J. Daniel became entitled to receive one unit per each $3.00 of
principal amount of the Note (for a total of 656,101 shares of Common Stock,
656,101 Class A Common Stock Purchase Warrants, and 656,101 Class B Common
Stock Purchase Warrants) in lieu of the 656,101 shares of Common Stock that
they otherwise would have been entitled to receive.
Pursuant to the Settlement Agreement, the Company prepaid the Equity
Contract Notes issued to Edward L. Daniel and Joan J. Daniel to the extent of
$1,050,000, by issuing to Edward L. Daniel and Joan J. Daniel 10,000 shares of
its Series B Convertible Preferred Stock, 350,000 Class A Common Stock Purchase
Warrants, and 350,000 Class B Common Stock Purchase Warrants. The Company
prepaid the Equity Contract Notes without penalty or discount, and believes
that the fair market value of the Series B Preferred Stock issued to Edward L.
Daniel and Joan J. Daniel upon retirement of the Equity Contract Notes was, at
the time of issuance, approximately $1,050,000. This value of the Series B
Preferred Stock was established by the Company based upon the sixty-to-one
conversion rate of the Series B Preferred Stock and a market price for the
Common Stock of $3.50 per share. This value was discounted by fifty percent due
to the transfer restrictions on the shares, the lack of voting rights, the
number of shares being acquired and other characteristics of the Series B
Preferred Stock. The Company issued a replacement Equity Contract Note to
Edward L. Daniel and Joan J. Daniel for the remaining principal amount of
$918,304.
The Company recorded as dividends, interest of $63,700 and $73,464 on
Equity Contract Notes for the fiscal years 1995 and 1996.
Lease of Real Property. The Company leases its Houston facility from
Daniel Development Corporation ("DDC"), a Washington partnership controlled by
Edward L. and Joan J. Daniel. In 1994, DDC and the Company amended the Houston
lease by reducing the remaining term to five years (it will now expire in
1999), and by reducing the monthly rental from $14,500 to $10,000. DDC also
granted the Company an option to purchase the Houston facility, which option
may be exercised by the Company at any time prior to December 31, 1999, by the
Company's issuance to DDC of 14,000 shares of the Company's Series C
Convertible Preferred Stock. Upon the Company's exercise of its option to
purchase the Houston facility, Edward L. Daniel and Joan J. Daniel will
surrender the $918,304 Equity Contract Note issued to them on June 30, 1994
(see "Equity Contract Notes" above), in exchange for which the Company will
surrender to Edward L. and Joan J. Daniel the DDC Note (see "Short Term
Advances " below).
Short Term Advances. The Company has from time to time advanced funds
to Edward L. Daniel in the form of unsecured, non-interest bearing short-term
loans. In addition, Edward L. Daniel, while in his capacity as President of the
Company, had from time to time performed certain services for Auster Company,
Ltd.
9
<PAGE> 12
("Auster"), a Hong Kong Company and former shareholder of the Company, for
which Auster owed the Company approximately $315,000 as of June 30, 1994, which
amount had been due and owing in excess of one year.
Pursuant to the Settlement Agreement, DDC assumed the obligations of
each of Edward L. Daniel and Auster to the Company, and in payment therefor
issued the Company its promissory note (the "DDC Note") in the principal amount
of $853,397, which DDC Note bears interest at 8% per annum and is payable in
full on December 31,1999.
LETTER AGREEMENTS REGARDING SERVICES RENDERED BY EDWARD L. DANIEL
Pursuant to a letter of agreement effective November 1, 1994, between
the Company and LaPlante Compressor Company Limited ("LaPlante"), a company
owned by Edward L. Daniel, Omni Resources paid LaPlante an aggregate monthly
fee of $22,000, which included a fee for the services rendered thereunder in
the amount of $12,000 per month, and an additional $10,000 per month for
reimbursement of business related expenses including travel, lodging and
entertainment. This Agreement was terminated effective January 1, 1996.
From January 1, 1996 through December 31, 1999, as part of Edward L.
Daniel's resignation as officer and director, Omni agreed to pay Edward L.
Daniel a consulting fee of $20,000 per month, of which $4,168 may, at Omni's
election, be paid in shares of Series B Preferred Stock. The rate of such fee
shall increase to $24,168 per month when the Series B Preferred Shares are
converted into Omni common stock of which $4,168 may, at Omni's election, be
paid in shares of Series B Preferred Stock. In addition, Omni will continue
Edward L. Daniel's medical health insurance coverage.
SHAREHOLDER LOAN
In November 1993, the Company borrowed $200,000 from Mrs. Jane Daniel,
Edward L. Daniel's mother and a shareholder. The loan is evidenced by a
three-year unsecured note carrying interest at 10% per annum, payable in
monthly installments of $6,453, the last of which is due in November 1996. The
proceeds of the loan were used by the Company as working capital.
SECURITY OWNERSHIP
CAPITALIZATION
The Company's currently authorized equity securities are as follows:
(i) 150,000,000 shares of Common Stock, par value $.004995 per share, (ii)
10,500 shares of Series B Convertible Preferred Stock, and 14,000 shares of
Series C Preferred Stock; (iii) 1,592,666 Class A Common Stock Purchase
Warrants ("Class A Warrants"); (iv) 1,362,473 Class B Common Stock Purchase
Warrants ("Class B Warrants") and (v) Equity Contract Notes issuable under an
Equity Contract Note Plan in the aggregate amount of $3,000,000. As of October
12, 1996, the Company had outstanding 2,016,983 shares of Common Stock, 10,120
shares of Series B Preferred Stock, no shares of Series C Preferred Stock,
Class A Warrants to purchase 1,592,666 shares of Common Stock and Class B
Warrants to purchase 1,362,473 shares of Common Stock.
Series A Preferred Stock. Holders of Series A Preferred Stock are
entitled to dividends of 14% per annum payable in shares of Series A Preferred
Stock in preference to any dividend to holders of the Common Stock.
Additionally, each share of the Series A Preferred Stock is convertible at any
time into one share of Common Stock. During fiscal 1996, holders of all
outstanding shares of the Series A Preferred Stock converted their shares of
Series A Preferred Stock into Common Stock on a share for share basis, which,
together with shares issued in payment of dividends accrued thereon, resulted
in the issuance of an additional 235,397 shares of Common Stock.
Series B Convertible Preferred Stock. There are currently 10,500
shares of Series B Convertible Preferred Stock authorized. Holders of Series B
Preferred Stock are entitled to receive dividends of $5.00 per share per annum
prior to payment of dividends on Common Stock. Holders of Series B Preferred
Stock are entitled to share
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<PAGE> 13
in distributions made to holders of Common Stock as if they were holders of
the Common Stock into which their Series B Preferred Stock is convertible at
the time of such distribution, and in the event of liquidation or dissolution
of the Company are entitled to distributions made to holders of Common Stock as
if their stock had been converted to Common Stock prior to such dissolution.
Each share of Series B Preferred Stock is convertible, at the option of the
Company, into sixty (60) shares of Common Stock, and the Company is obligated
to file a registration statement under the Securities Act of 1933 to register
Common Stock issued upon any conversion within ninety (90) days of such
conversion. The number of shares of Common Stock of the Company issuable upon
conversion is subject to adjustment in the event the Company issues additional
shares of Common Stock, convertible securities or warrants, or grants stock
options or issues other Common Stock equivalents at a purchase price less than
the applicable conversion price, or in the event of a stock split, subdivision,
recapitalization, reclassification, stock dividend or other transaction.
Holders of Series B Preferred Stock have no preemptive right to acquire other
shares of stock of the Company.
Holders of Series B Preferred Stock have no voting rights, but the
consent of the holders of a majority of outstanding shares of the Series B
Preferred Stock is required for any action which (i) results in the sale,
disposal or encumbrance of all or substantially all of the Company's property
or business or the disposal of more than 50% of the voting power of the
Company; (ii) alters or changes the rights, preferences or privileges of the
outstanding Series B Preferred Stock so as to affect adversely the shares;
(iii) increases the authorized number of shares of Series B Preferred Stock;
(iv) creates any new class or series of stock having rights, preferences or
privileges senior to or on a parity with the Series B Preferred Stock with
respect to voting, dividends, registration or liquidation; or (v) results in
taxation of the holders of Preferred Stock under section 305(b) of the Internal
Revenue Code.
Series C Convertible Preferred Stock. There are currently 14,000
shares of Series C Convertible Preferred Stock authorized and none outstanding.
Holders of Series C Preferred Stock are entitled to receive dividends of $8.50
per share per annum. In the event of liquidation of the Company, the holders of
Series C Preferred Stock are entitled to receive a per-share payment in
liquidation of $60.00 per share. Each share of Series C Preferred Stock is
convertible, at the option of the Company, into twenty-five (25) shares of
Common Stock, and the Company is obligated to file a registration statement
under the Securities Act of 1933 to register Common Stock issued upon any
conversion within ninety (90) days of such conversion. The number of shares of
Common Stock of the Company issuable upon conversion is subject to adjustment
in the event the Company issues additional shares of Common Stock, convertible
securities or warrants, or grants stock options or issues other Common Stock
equivalents at a purchase price less than the applicable conversion price, or
in the event of a stock split, subdivision, recapitalization, reclassification,
stock dividend or other transaction. Holders of Series C Preferred Stock have
no preemptive right to acquire other shares of stock of the Company.
Each share of Series C Preferred Stock is entitled to twenty-five (25)
votes per share, and the consent of the holders of a majority of outstanding
shares of the Series C Preferred Stock is required for any action which (i)
results in the sale, disposal or encumbrance of all or substantially all of the
Company's property or business or the disposal of more than 50% of the voting
power of the Company; (ii) alters or changes the rights, preferences or
privileges of the outstanding Series C Preferred Stock so as to affect
adversely the shares; (iii) increases the authorized number of shares of Series
C Preferred Stock; (iv) creates any new class or series of stock having rights,
preferences or privileges senior to or on a parity with the Series C Preferred
Stock with respect to voting, dividends, registration or liquidation; or (v)
results in taxation of the holders of Preferred Stock under section 305(b) of
the Internal Revenue Code.
Class A Warrants. The Class A Warrants may be exercised by the holder
thereof at any time between 90 days after issuance and March 15, 1999, at $4.00
per share, and the Class B Warrants may be exercised at any time between 90
days after issuance and March 15, 2001, at $6.00 per share.
Equity Contract Notes. An aggregate amount of $918,304 principal
balance of Equity Contract Notes are currently outstanding to Mr. Edward L.
Daniel, the Company's Chairman of the Board and former Chief Executive Officer.
The principal balance of the Equity Contract Notes is repayable in December
1999 in shares of
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<PAGE> 14
the Company's Common Stock at the rate of $3.00 per share. The terms of the
Equity Contract Notes require favorable adjustment if the Company offers sales
of Common Stock to other investors at a better rate or under better terms than
provided by the terms of the Equity Contract Notes. The Equity Contract Notes
require that interest be paid quarterly at an annual rate equal to the prime
rate plus 2%.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the close of business on October 12,
1996, by each person who is known to the Company to be a beneficial owner of 5%
or more of the Common Stock, by each current and Nominee director, and by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of Shares
Beneficially
Owned (1)
Name of Beneficial Owner Number Percent
- - ------------------------ ------ -------
<S> <C> <C>
Edward L. and Joan J. Daniel (3)(10) . . . . . . . . 1,616,338 48.6%
Jeffrey K. Daniel (2)(4)(12) . . . . . . . . . . . . . 197,866 9.1%
Craig L. Daniel (2)(5)(13) . . . . . . . . . . . . . . 203,466 9.3%
Websters Publishing, Ltd. (6) . . . . . . . . . . . . . 735,018 29.3%
Stranco Investments, Ltd. (7)(9) . . . . . . . . . . . 113,600 5.4%
Robert F. Gibson, Jr. (8) . . . . . . . . . . . . . . . 124,000 5.8%
James L. Davis (11) . . . . . . . . . . . . . . . . . . . 50,000 2.4%
John F. Lillicrop (14) . . . . . . . . . . . . . . . . . 5,000 0.2%
Bent Petersen . . . . . . . . . . . . . . . . . . . . . . . -0- 0%
Executive Officers and . . . . . . . . . . . . . . . . 565,832 22.8%
Directors as a Group
</TABLE>
(1) Based upon 2,016,983 shares of Common Stock outstanding as of October
12, 1996.
(2) The address for all officers and directors is 7502 Mesa Road, Houston,
Texas 77028.
(3) Includes 1,312,202 shares purchasable under warrants exercisable
within 60 days.
(4) Includes 160,000 shares purchasable under options exercisable within
60 days.
(5) Includes 160,000 shares purchasable under options exercisable within
60 days.
(6) Includes 490,012 shares purchasable under warrants exercisable within
60 days. The address of such beneficial owner is Caroline Center,
10th Floor, 28 Yun Ping Road, Causeway Bay, Hong Kong.
(7) Includes 92,600 shares purchasable under warrants exercisable within
60 days. The address of such beneficial owner is P. O. Box 173,
Roadtown Main Street, British Virgin Islands.
(8) Includes 120,000 shares purchasable under warrants exercisable within
60 days. The address of such beneficial owner is unavailable.
(9) The Company has been informed that these entities hold shares for
numerous beneficial owners, the identities of which beneficial
owners have not been disclosed to the Company as of the date of this
filing.
(10) The address for such beneficial owner is 2476 Bolsover, #626, Houston,
Texas 77005.
(11) Includes 50,000 shares purchasable under warrants exercisable within
60 days. The address of such beneficial owner is One Park Ten
Place, Suite 340, Houston, Texas 77084.
(12) Includes 3,763 shares held in street name and 770 shares held of
record by the Jeffrey K. Daniel Individual Retirement Account, a
self-directed IRA.
(13) Includes 10,133 shares held of record by the Craig L. Daniel
Individual Retirement Account, a self-directed IRA.
(14) Owned jointly with Stella J. Lillicrop.
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<PAGE> 15
Except as set forth above, none of the Nominees was, during the past
year, a party to any contract, arrangement or understanding with any person
with respect to any securities of Omni, including but not limited to, joint
ventures, loan or option arrangements, puts or calls, guarantees against loss
or guarantees of profit, division of losses or profits, or the giving or
withholding of proxies. For a description of certain transactions between Mr.
Edward L. Daniel and the Company, see "CERTAIN RELATIONSHIPS AND TRANSACTIONS"
above.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities to file
reports with the Securities and Exchange Commission relating to transactions
and holdings in the Company Common Stock. Based solely on a review of Forms 3, 4
and 5 and amendments thereto furnished to the Company during the most recent
fiscal year, the Company is not aware of any failure to file such forms on a
timely basis.
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals intended for inclusion in the proxy statement
for the next Annual Meeting must be received by Omni by January 31, 1997, and
should be sent to Michael A. Zahorik, Secretary of the Company, at the address
stated on the first page of this proxy statement.
As of the date of this proxy statement, the Board of Directors of Omni
knows of no matter, other than the election of directors, the approval of the
1996 ISOP, and the ratification of the selection of independent public
accountants, to come before the meeting. If any other matter should properly
come before the meeting, it is the intention of the persons named on the
accompanying form of proxy to vote such proxy in accordance with their judgment
in such matter.
By order of the Board of Directors,
/s/ JEFFREY K. DANIEL
-----------------------------------
JEFFREY K. DANIEL
President and
Chief Executive Officer
Dated: October 29, 1996
A COPY OF THE OMNI U.S.A., INC. ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL
STATEMENTS SCHEDULES, IS AVAILABLE WITHOUT CHARGE TO INTERESTED SECURITY
HOLDERS UPON WRITTEN REQUEST. THE COMPANY WILL FURNISH ANY EXHIBIT DESCRIBED IN
THE LIST ACCOMPANYING SUCH REPORT TO ANY SUCH PERSON ON REQUEST UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. PLEASE
DIRECT INQUIRIES TO ROBERT S. MOORE II, INVESTOR RELATIONS, OMNI U.S.A., INC.,
7502 MESA ROAD, HOUSTON, TEXAS 77028.
YOUR PROXY IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES, PLEASE
SIGN AND MAIL IT TODAY.
13
<PAGE> 16
PROXY OMNI U.S.A., INC.
7502 MESA ROAD
HOUSTON, TEXAS 77028
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey K. Daniel and Craig L. Daniel,
or either of them, as Proxies, each with the full power of substitution, to
vote at the Annual Meeting of Shareholders to be held on November 20, 1996, or
any adjournment thereof, all the shares of stock of Omni, U.S.A., Inc. ("Omni")
held of record by the undersigned on October 12, 1996, uponthe matters
described on the reverse side of this card, all in accordance with and as more
fully described in the accompanying Notice and Proxy Statement for the Annual
Meeting. By signing and returning this Proxy, the undersigned hereby revokes
all proxies previously given with respect to the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE ON THE REVERSE SIDE
HEREOF, THIS PROXY WILL BE VOTED FOR THE PROPOSALS DESCRIBED ON THE REVERSE
SIDE HEREOF. IN ADDITION, THIS PROXY WILL BE EXERCISED, IF EITHER OF THE
PROXIES NAMED ABOVE SO ELECTS IN HIS DISCRETION, TO VOTE (I) FOR THE ELECTION
OF ANY PERSON TO REPLACE A NOMINEE NAMED ABOVE WHO IS UNABLE TO SERVE OR WILL
NOT SERVE, (II) ON ANY OTHER MATTER AS MAY PROPERLY COME BEFORE THE
SHAREHOLDERS AT THE ANNUAL MEETING, AND (III) ON MATTERS INCIDENT TO THE
CONDUCT OF THE ANNUAL MEETING. AS OF OCTOBER 12, 1996, THE PROXIES ARE NOT
AWARE OF ANY OTHER MATTERS TO BE PRESENTED TO THE SHAREHOLDERS AT THE ANNUAL
MEETING.
(TO BE SIGNED ON REVERSE SIDE)
A [X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH BELOW.
FOR WITHHOLD
ALL NOMINEES AUTHORITY
ELECTION OF
DIRECTORS. [ ] [ ]
To vote against a particular Nominee, strike through his name to withhold
authority; to vote with respect to a particular Nominee, write his name in space
below.
- - --------------------------------------------------------------------------------
Nominees for Board of Directors
- - -------------------------------
Mr. Jeffrey K. Daniel
Mr. Craig L. Daniel
Mr. James L. Davis
Mr. John F. Lillicrop
Mr. Bern Peterson
FOR AGAINST ABSTAIN
Ratify Harper & Pearson as Auditors. [ ] [ ] [ ]
Ratify 1996 Incentive Stock Option Plan. [ ] [ ] [ ]
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
- - ------------------------------------------
SIGNATURE
- - ------------------------------------------
SIGNATURE
- - ------------------------------------------
DATED
NOTE: Please sign this Proxy as your name appears hereon, date it and promptly
return it whether or not you plan to attend the Meeting. If signing for a
corporation or partnership or as an agent, attorney or fiduciary, indicate the
capacity in whcih you are signing.
