<PAGE>
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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
OMNI U.S.A., INC.
7502 MESA ROAD
HOUSTON, TEXAS 77028
(713) 635-6331
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 22, 1999
To Our Shareholders:
The Board of Directors cordially invites you to attend the 1999 Annual
Meeting of Shareholders (the "Annual Meeting") of Omni U.S.A., Inc. (the
"Company"), to be held on Monday, November 22, 1999, at the offices of Omni
USA, Inc., 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 1999 Annual Meeting of Shareholders or until
their successors have been duly elected and qualified;
2. To ratify the appointment of Harper & Pearson Company as the
Company's independent auditors for the 2000 fiscal year; and
3. 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 1,
1999, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting. Therefore, the Board of
Directors sincerely hopes you can attend the meeting in person. It is important
that your shares be represented at the Annual Meeting regardless of whether you
plan to 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. If you are present at the meeting, and you wish to do so, you may
revoke the proxy and vote your shares in person.
By Order of the Board of Directors,
/s/ Jeffrey K. Daniel
----------------------------
Jeffrey K. Daniel, President
Houston, Texas
Dated: October 11, 1999
<PAGE>
OMNI U.S.A., INC.
7502 MESA ROAD
HOUSTON, TEXAS 77028
(713) 635-6331
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 22, 1999
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 1999 Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Monday, November 22, 1999, at the offices of Omni
USA, Inc., 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 11, 1999.
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. In addition, the proxy confers discretion in
the persons named in the proxy authorizing those persons to vote, in their
discretion, on any matters properly presented at the meeting. The presence,
in person or by proxy, of at least a majority of the outstanding shares of
Common Stock is required for a quorum. The election of directors and the
approval of any other matters will require the affirmative vote of the
holders of a majority of the shares of Common Stock entitled to vote and
present in person or by proxy at the Annual Meeting. In the case of shares
that are present at the Annual Meeting for quorum purposes, an abstention or
not voting such shares for a particular nominee for director (including by
withholding authority on the proxy) or an abstention on any other proposal
will have the same effect as a vote against such director or proposal; and a
broker non-vote will have no effect on the outcome of any proposals.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business.
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 1, 1999, the record date for
the Annual Meeting. At that date, the Company had outstanding 3,623,092
shares of such Common Stock.
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 the Company, submission to the Secretary of a proxy dated later than a
previously submitted proxy, or attendance at the meeting and voting by ballot.
<PAGE>
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.
PROPOSAL 1
ELECTION OF DIRECTORS
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. The Board of Directors has nominated and urges you
to vote for the election of the four nominees identified below who have been
nominated to serve as directors until the next annual meeting of shareholders
of until their successors are duly elected and qualified. Each of the
nominees listed below is a member of the Company's present Board of
Directors. For personal information on each nominee director, SEE
"MANAGEMENT," below.
If, at the time of or prior to the Annual Meeting, any of the nominees
should be unable or decline to serve, the discretionary authority provided in
the proxy may be used to vote for a substitute or substitutes designed by the
Board of Directors. The Board of Directors has no reason to believe that any
substitute nominee or nominees will be required.
The following are Omni's Nominees for Board of Directors:
<TABLE>
<CAPTION>
Name Age Position Director Since
- ---- --- -------- --------------
<S> <C> <C> <C>
Jeffrey K. Daniel 38 Director, President and
Chief Executive Officer January 1988
Craig L. Daniel 39 Director and
Vice President-Manufacturing December 1993
James L. Davis 51 Director November 1996
John F. Lillicrop 64 Director November 1996
W. Wayne Patterson 56 Director January 1997
</TABLE>
The Board of Directors recommends that shareholders vote "For" the
election of each of the above named nominees, and proxies executed and
returned will be so voted unless contrary instructions are indicated thereon.
BOARD OF DIRECTORS
The business and affairs of the Company are managed under the direction of
the Board of Directors (the "Board"). The Board has the responsibility for
establishing broad corporate policies and for the overall performance of the
Company, rather than day-to-day operating details. Outside members of the
Board are kept informed of the Company's business by various reports and
information provided to them throughout the year and information presented at
meetings of the Board by the Company's officers and employees.
2
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has established two standing committees: an Audit Committee and
a Compensation Committee. Actions taken by a committee of the Board are
reported to the Board of Directors at its next meeting. The Company does not
have a Nominating Committee. The following is a brief description of the
committees of the Board of Directors and their respective principal
responsibilities.
The AUDIT COMMITTEE consists of two outside directors. This committee
recommends the appointment of a firm of independent certified public
accountants to audit the accounting records of the Company each year. It
reviews with representatives of the independent public accountants the
auditing arrangements and scope of the independent public accountants'
examination of the accounting records, results of those audits, their fees,
and any other problems identified by the independent public accountants
regarding internal accounting controls. The current members of the Audit
Committee are Messrs. Davis and Lillicrop. The Audit Committee met two times
in fiscal year 1999.
The COMPENSATION COMMITTEE consists of two outside directors. This
committee makes recommendations to the Board of Directors as to the salaries
and annual bonuses of the elected officers, and reviews the salaries of other
senior executives. This committee makes recommendations to the Board of
Directors regarding grants of stock options to elected and other senior
executive officers and other eligible employees. The current members of the
Compensation Committee are Messrs. Davis and Lillicrop. The Compensation
Committee met two times in fiscal year 1999.
BOARD MATTERS
During the fiscal year ended June 30, 1999, the Board of Directors held 6
meetings. The Board has regularly scheduled meetings during the year and
meets at other times during the year as necessary to review significant
developments affecting the Company and to act on matters requiring Board
approval. With the exception of one meeting, all Board members attended all
meetings of the Board of Directors and of the committees on which such
director served during the fiscal year, either in person or by telephone.
DIRECTORS COMPENSATION
Messrs. Davis, Lillicrop and Patterson are nominees as outside directors
for the Company. Each director of the Company who is not an employee of the
Company or any subsidiary is compensated through the issuance of 20,000
options to purchase Common Stock for the initial year of service and 10,000
options to purchase Common Stock for every year of service thereafter. The
outside directors are reimbursed for their 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. During fiscal year 1999,
the Company issued to each Messrs. Davis, Lillicrop and Patterson options to
purchase 10,000 shares of Company Common Stock at $1.625.
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 the Company if elected. There are no
other nominees for director.
3
<PAGE>
MANAGEMENT
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 38 President and Chief Executive Officer
Michael A. Zahorik 36 Executive Vice President, Chief Operating Officer,
General Counsel and Secretary
David M. Sallean 33 Chief Financial Officer
Craig L. Daniel 39 Vice President-Manufacturing
- --------------------
</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. Jeffrey K. Daniel is the brother of Craig L. Daniel.
Jeffrey K. Daniel has served as a director of the Company since January 1988
and is a nominee for director of the Company.
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 Executive Vice President and Secretary of the Company, and
in January 1998, became Chief Operating Officer 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.
DAVID M. SALLEAN joined the Company as its Chief Financial Officer in March
1999. Mr. Sallean has a Bachelors degree from Southwest Texas State
University and is a Certified Public Accountant. Prior to his employment with
the Company, Mr. Sallean was employed by Stewart Title Guaranty Company from
June 1988 through March 1999, most recently as Controller of National Title
Services.
CRAIG L. DANIEL has been a full time employee of Omni since April, 1989, and
is currently Vice President-Manufacturing for the Company, Managing Director
of Omni Resources, Limited and General Manager of Shanghai Omni Gear Company,
Limited. Craig L. Daniel is the brother of Jeffrey K. Daniel. Craig L. Daniel
has served as a director of the Company since December 1993 and is a nominee
for director of the Company.
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
has served as a director of the Company since December 1996 and is a nominee
for director of the Company.
4
<PAGE>
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 a director of OECO, Black and Company,
Inc., Tycom Corporation, and Springtime, Inc. I. He is a graduate of the
University of Colorado and received his EMBA from the Peter Drucker Graduate
Management Center of the Claremont Graduate School. Mr. Lillicrop has served
as a director of the Company since December 1996 and is a nominee for
director of the Company.
W. WAYNE PATTERSON is President of HWG Capital, L.L.C. and a principal
shareholder of Harris Webb & Garrison, Inc. Mr. Patterson also serves as
Chairman of the Board of Integrated Service and Industrial Supply, a
consolidator of industrial distribution companies and of U.S Graphics
Industries. Mr. Patterson was formerly the Chairman, CEO and founder of Texas
Micro Systems, a manufacturer of computers primarily for the
telecommunications industry. Mr. Patterson also served as Chairman and CEO of
BriskHeat Corporation, a manufacturer of thermal management products to the
laboratory, aerospace and semiconductor industries. Prior to founding Texas
Micro and BriskHeat in 1989, Mr. Patterson served as Executive Vice President
of Keystone International, Inc., a NYSE listed manufacturer of flow control
products. In this position, he led Keystone's merger and acquisition
activities in addition to his operational responsibilities. Mr. Patterson
continued to serve as Director and Chairman of the Audit Committee of
Keystone until its merger with TYCO in August of 1997. Mr. Patterson holds
BBA and LLD degrees from the University of Texas, is a CPA and a member of
the Texas State Bar. Mr. Patterson has served as a director of the Company
since January 1998 and is a nominee for director of the Company.
5
<PAGE>
COMPENSATION OF MANAGEMENT
Neither Jeffrey K. Daniel, Craig L. Daniel, Michael A. Zahorik nor David
Sallean 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.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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 1997 76,500 --- --- --- 136,000* --- ---
1998 76,500 --- --- --- --- --- ---
1999 76,500 --- --- --- --- --- ---
Craig L. Daniel
Vice President- 1997 76,500 --- --- --- 136,000* --- ---
Manufacturing 1998 76,500 --- --- --- --- --- ---
1999 76,500 --- --- --- --- --- ---
Michael A. Zahorik
Executive Vice
President, COO & 1997 68,500 --- --- --- 68,000* --- ---
Gen. Counsel 1998 68,500 --- --- --- --- --- ---
1999 73,250 --- --- --- --- --- ---
David M. Sallean
CFO 1997 --- --- --- --- --- --- ---
1998 --- --- --- --- --- --- ---
1999 70,000 --- --- --- 30,000** --- ---
No other executive officer's annual salary or bonus exceeded $100,000 for any of the three most recent fiscal years
ended June 30, 1999.
- --------------------------------
</TABLE>
* On June 6, 1997, under the 1996 ISOP, Jeffrey K. Daniel and Craig L. Daniel
were granted additional options to purchase 136,000 shares of Common Stock
and Michael A. Zahorik was granted additional options to purchase 68,000
shares of Common Stock. These grants are at an exercise price of $1.00 and
vest 100% three (3) years from date of grant. SEE "STOCK OPTION PLANS" below.
** On March 8, 1999, under the 1996 ISOP, David M. Sallean was granted
options to purchase 30,000 shares of Common Stock. These grants are at an
exercise price of $1.188 and vest 100% three (3) years from date of grant.
SEE "STOCK OPTION PLANS" below.
6
<PAGE>
OPTIONS/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 -0- N/A N/A N/A
Craig L. Daniel
Vice President-
Manufacturing -0- N/A N/A N/A
Michael A. Zahorik
Exec. Vice President, Chief
Operating Officer & General
Counsel -0- N/A N/A N/A
David M. Sallean
Chief Financial Officer 30,000 66.6% $1.188 03/08/09
</TABLE>
- ---------------------------
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of Unexercised
Number of Unexercised in-the-money Options/
Shares Acquired Value Options/SARs at FY-End (1) SARs at FY-End (2)
Name On Exercise Realized Exercisable/unexercisable Exercisable/unexercisable
- ---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Jeffrey K. Daniel
President & CEO N/A N/A 296,000 $111,000
------- --------
160,000/136,000 $60,000/$51,000
Craig L. Daniel
Vice President-
Manufacturing N/A N/A 296,000 $111,000
------- --------
160,000/136,000 $60,000/$51,000
Michael A. Zahorik
Exec. Vice President &
General Counsel N/A N/A 138,000 $51,750
------- -------
70,000/68,000 $26,250/$25,500
David M. Sallean 30,000 $7,710
Chief Financial Officer ------ ------
N/A N/A -0-/30,000 -0-/$7,710
</TABLE>
- ------------------------
N/A Not applicable; No options were exercised during the fiscal year ended June
30, 1999.
(1) Indicates number of options exercisable and unexercisable as of June 30,
1999.
(2) Based upon closing price of Common stock at June 30, 1999 of $1.375.
7
<PAGE>
STOCK OPTION PLANS
The Company maintains a 1994 Non-Qualified Stock Option
Plan (the "1994 NQSOP") and a 1996 Incentive Stock Option Plan (the "1996
ISOP"). The NQSOP covers 600,000 shares of Common Stock and the 1996 ISOP
covers 900,000 shares of Common Stock. The purpose of the NQSOP and 1996 ISOP
is to offer eligible employees of the Company and its subsidiaries an
opportunity to acquire or increase their proprietary interests in the Company
and provide additional incentive to contribute to its performance and growth.
On June 6, 1997, the Board, upon recommendation from the
Compensation Committee, repriced all options granted and existing to current
Company employees under the 1996 ISOP and NQSOP from $4.00 per share to $1.00
per share. The repriced options vest 50% twelve (12) months from date of
grant and 50% twenty-four (24) months from date of grant.
On June 6, 1997, the Board, upon recommendation of the Compensation
Committee, granted options to purchase 136,000 shares of Common Stock at
$1.00 per share to each Jeffrey K. Daniel and Craig L Daniel, and granted
options to purchase 68,000 shares of Common Stock at $1.00 per share to
Michael A. Zahorik, all such options to vest three years from date of grant.
On January 25, 1999, the Board granted 10,000 options to purchase
Company Common Stock at $1.625 per share to James L. Davis, John F.
Lillicrop, and W. Wayne Patterson. All director options were immediately
vested.
On March 8, 1999, under the 1996 ISOP, David M. Sallean was granted
options to purchase 30,000 shares of Common Stock. These grants are at an
exercise price of $1.188 and vest 100% three (3) years from date of grant.
TEN-YEAR OPTIONS/SAR REPRICINGS
<TABLE>
<CAPTION>
Number of Length
Securities Market Exercise of Original
Underlying Price of Stock Price of Stock Option Term
Options/SARs at Time of at Time of New Remaining at
Repriced or Repricing or Repricing or Exercise Date of
Name Date Amended Amendment Amendment Price Repricing
- ---- ---- ------- --------- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey K. Daniel 6/6/97 160,000 $0.75 $4.00 $1.00 9 years
Craig L. Daniel 6/6/97 160,000 $0.75 $4.00 $1.00 9 years
Michael A. Zahorik 6/6/97 70,000 $0.75 $4.00 $1.00 9 years
</TABLE>
COMPENSATION COMMITTEE REPORT ON REPRICING OF OPTIONS
The repricing reflected in the above table was implemented in 1996 on the
recommendation of the Compensation Committee in place at that time to conform
the options to prevailing market prices and provide an incentive for which the
options were designed.
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 as directors.
8
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
EDWARD L DANIEL AND AFFILIATES
From time to time, the Company has been a party to various
transactions with Edward L. Daniel ("Edward Daniel"), Joan J. Daniel ("Joan
Daniel") and certain affiliates ("Affiliates")(collectively, Edward Daniel,
Joan Daniel and Affiliates will be referred to as "Daniel"). The Company and
Daniel had a series of disputes regarding the validity of certain agreements
between the parties. As a result of such disputes, the Company and Daniel
have entered into a Mutual Release and Settlement Agreement, effective June
30, 1997 (the "Agreement") which supersedes and replaces all prior
negotiations, statements and agreements of the parties.
Under the terms of the Agreement, (1) the Company was released from
any obligation under the Equity Contract Notes ("ECN") in the principle
amount of $918,304, together with accrued interest in the amount of $222,516;
(2) Daniel transferred to the Company all 10,180 Preferred B shares; (3)
Daniel released the Company from any accrued dividends under the Preferred B
shares; (4) Daniel transferred all warrant holdings consisting of 656,101 A
Warrants and 656,101 B Warrants; and (5) released the Company from any
obligation to pay $20,000 per month in consulting fees through December 1999.
Upon execution of the Agreement, the Company (a) paid Edward Daniel
and Joan Daniel $35,000; (b) released a note receivable from an affiliate of
Edward Daniel, Daniel Development Corporation (the "DDC Receivable") in the
principle amount of $853,397, together with accrued interest thereon in the
amount of $208,310; (c) cancelled an account receivable in the amount of
$63,199 from LaPlante Compressor Company ("LaPlante"), an affiliate of Edward
Daniel; and (d) issued Edward Daniel and Joan Daniel 750,000 shares of Common
Stock, which shares could not be voted by Daniel until August 1999. The
Company granted Edward Daniel and Joan Daniel demand registration and
piggyback rights through 2001 subject to certain conditions and limitations
set forth in the Registration Rights Agreement executed in connection with
the Agreement. Under the Agreement, the Company paid Daniel $20,000 per month
for twelve months through July 1998.
As a result of the Agreement, Edward Daniel and Joan Daniel own
1,054,136 shares of Company Common Stock (including 750,000 shares of Common
Stock delivered under the Agreement).
LEASE OF REAL PROPERTY. The Company leased its Houston facility
from Daniel Development Corporation ("DDC"), a Washington partnership
controlled by Edward L. Daniel and Joan J. Daniel at $8,000 per month through
March 1998. The Company made aggregate lease payments to DDC of $72,000 in
1998. On March 6, 1998, effective April 1, 1998, the building was sold to
Phenix Investment Company, a real estate investment company located in
Houston Texas. Phenix Investment Company is not affiliated with Daniel
Development Corporation, Edward L. Daniel or Joan J. Daniel. The terms of the
lease were not changed as a result of the sale.
ESTATE OF MRS. JANE DANIEL
In November 1993, The Company borrowed $200,000 from Mrs. Jane
Daniel (now deceased), Edward Daniel's mother and a shareholder. The loan was
an unsecured note that was fully paid during the fiscal year ended June 30,
1998.
9
<PAGE>
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)
2,312,773 Class A Common Stock Purchase Warrants ("Class A Warrants"); and
(iii) 1,362,473 Class B Common Stock Purchase Warrants ("Class B Warrants").
As of October 1, 1999, the Company had outstanding 3,623,092 shares
of Common Stock and Class B Warrants to purchase 706,372 shares of Common
Stock.
On or about September 6, 1997, the Company cancelled all previously
authorized and outstanding Series A Preferred Stock, the Series B Convertible
Preferred Stock and the Series C Convertible Preferred Stock.
CLASS A AND B WARRANTS. There are 706,372 Class B Warrants to
purchase Common Stock. The Class B Warrants may be exercised at any time
between 90 days after issuance and March 15, 2001, at $6.00 per share. The
Class A Warrants to purchase 946,565 shares of Common Stock, which were
exercisable by the holder thereof at any time between 90 days after issuance
and March 15, 1999, at $4.00 per share, expired on March 15, 1999.
10
<PAGE>
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 June 30,
1999, 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>
Amount and Nature
Of Beneficial
Name and Address of Beneficial Owner Ownership Percent of Class(1)
- ------------------------------------ --------- ----------------
<S> <C> <C>
Edward L. Daniel (4) 527,068 15.0%
Joan J. Daniel (4) 527,068 15.0%
Jeffrey K. Daniel (2)(6) 210,550 4.5%
Craig L. Daniel (2)(7) 238,411 5.0%
Michael A. Zahorik (2)(8) 121,715 2.6%
David M. Sallean (2)(11) 5,000 *
Websters Publishing, Ltd. (3) 351,321 8.3%
James L. Davis (5) 50,000 1.0%
John F. Lillicrop (9) 60,000 1.3%
W. Wayne Patterson (10) 30,000 *
Executive Officers and
Directors as a Group 715,676 15.2%
* less than 1% of the total number of shares outstanding
</TABLE>
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(1) Based upon 3,523,092 shares of Common Stock outstanding as of June 30,
1999.
(2) The address for all officers is 7502 Mesa Road, Houston, Texas 77028.
(3) Includes 245,006 shares purchasable under B Warrants exercisable within 60
days at $6.00 per share. The address of such beneficial owner is Caroline
Center, 10th Floor, 28 Yun Ping Road, Causeway Bay, Hong Kong.
(4) The address for such beneficial owner is 2476 Bolsover, #626, Houston,
Texas 77005.
(5) Includes 40,000 shares purchasable under options exercisable within 60 days
at $1.00 per share and 10,000 shares purchasable under options exercisable
within 60 days at $1.625 per share. The address of such beneficial owner is
One Park Ten Place, Suite 340, Houston, Texas 77084.
(6) Includes 160,000 shares purchasable under options exercisable within 60
days at $1.00 per share and 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 and 9,254 shares purchased through the Company's 401(k)
plan.
(7) Includes 160,000 shares purchasable under options exercisable within 60
days at $1.00 per share and 6,800 shares held of record by the Craig L.
Daniel Individual Retirement Account, a self-directed IRA.
(8) Includes 70,000 shares purchasable under options exercisable within 60 days
at $1.00 per share and 21,900 shares held of record by the Michael A.
Zahorik Individual Retirement Account, a self-directed IRA and 7,315 shares
purchased through the Company's 401(k) plan.
(9) Includes 40,000 shares purchasable under options exercisable within 60 days
at $1.00 per share and 10,000 shares purchasable under options exercisable
within 60 days at $1.625 per share. Owned jointly with Stella J. Lillicrop.
The address of such beneficial owners is 1220 Skyland Drive, Lake Oswego,
Oregon 97034.
(11) Includes 20,000 shares purchasable under options exercisable within 60 days
at $1.00 per share and 10,000 shares purchasable under options exercisable
within 60 days at $1.625 per share. The address of such beneficial owner is
5599 San Felipe, Suite 301, Houston, Texas 77056.
(11) Includes 5,000 shares held of record by the David M. Sallean Individual
Retirement Account, a self-directed IRA.
11
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF PRINCIPAL AUDITORS
The Board of Directors has appointed 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, 2000, 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, 1999, 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 vote the
ratification of the selection of Harper & Pearson as the independent auditors
of the Company for the fiscal year ending June 30, 2000. 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.
12
<PAGE>
STOCKHOLDER PROPOSALS AND OTHER MATTERS
YEAR 2000
The Company is in the process of identifying internal software and
imbedded technology Year 2000 risks. The Company has performed internal test
operations using dates subsequent to Year 2000 (specifically, the Company's
financial and inventory systems) and is in the process of testing and
evaluating its computer operated machinery and facilities equipment and has
not encountered problems which are material to the Company's operations. The
Company anticipates the completion of the identification, evaluation and
verification process to be completed by October 31, 1999.
The Company has tested and has requested, and in some instances,
received written assurances from its software and hardware vendors and key
suppliers in its efforts to achieve Year 2000 compliance. Where such vendors
or key suppliers are unable to verify their readiness to the Company's
satisfaction, the Company plans to consider alternative or contingent vendors
or suppliers. The Company has spent approximately $15,000 to date to assure
Year 2000 compliance and expects to spend approximately $10,000 in upgrades
over the second and third quarter of the calendar year.
As a result of the Company's year 2000 assessment, the Company has
not encountered problems which have not already been addressed or that would
have a material effect on the Company's business, results of operations, or
financial condition. However, to the extent the Company, or third parties
upon which it relies, does not achieve Year 2000 readiness in a timely
manner, the Company's financial position, cash flow or results of operations
may be adversely affected.
SHAREHOLDER PROPOSALS
Shareholder proposals intended for inclusion in the proxy statement
for the next Annual Meeting must be received by the Company by March 31,
2000, 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, 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,
JEFFREY K. DANIEL
President and Chief Executive Officer
Dated: October 11, 1999
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 INVESTOR RELATIONS, OMNI U.S.A., INC.,
7502 MESA ROAD, HOUSTON, TEXAS 77028.
- --------------------------------------------------------------------------------
YOUR PROXY IS IMPORTANT, PLEASE SIGN AND MAIL IT TODAY.
- --------------------------------------------------------------------------------
13
<PAGE>
PROXY OMNI USA, 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 22, 1999, or any
adjournment thereof, all the shares of stock of Omni USA, Inc. ("Omni") held of
record by the undersigned on October 1, 1999, upon the 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 1, 1999, the Proxies are not aware of any other matters to be
presented to the shareholders at the Annual Meeting.
The Board of Directors recommends a vote FOR the Proposals set forth on the
reverse side.
<PAGE>
NOMINEES FOR BOARD OF DIRECTORS. / / For all Nominees / / Against all
Nominees / / Withhold Authority
<TABLE>
<S> <C>
Mr. Jeffrey K. Daniel
Mr. Craig L. Daniel
Mr. James L. Davis To vote against a particular Nominee, strike through his name; to withhold authority
Mr. John F. Lillicrop to vote with respect to a particular Nominee, write his name in space below.
Mr. W. Wayne Patterson
</TABLE>
RATIFY HARPER & PEARSON AS AUDITORS. / / For / / Against / /
Abstain
Please sign this Proxy as your name appears below, 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 which you are signing.
<TABLE>
<S> <C>
------------------------------------------------
Signature
------------------------------------------------
Capacity
Dated: -----------------------------------------
</TABLE>
