Delta-Omega Technologies, Ltd.
P.O. Box 81518
Lafayette, LA 70598-1518
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1999
To the shareholders of Delta-Omega Technologies, Inc.:
An Annual Meeting of the shareholders of Delta-Omega Technologies, Inc. (the
"Company") will be held at 119 Ida Road, Broussard, Louisiana, at 10:00 A.M.,
(CST) on Tuesday, April 20, 1999, or at any adjournment or postponement
thereof, to vote upon the election of directors, to ratify the reappointment
of auditors and to transact such other business as may properly come before
the meeting.
Details relating to this matter are set forth in the attached Proxy Statement.
All shareholders of record as of the close of business on March 12, 1999 will
be entitled to notice of, and to vote at, such meeting or at any adjournment
or postponement thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT
PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN
THE ENCLOSED PROXY. THE DELIVERY OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE
IN PERSON IF YOU ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ L.G. Schafran
___________________________________
L.G. Schafran
Chairman of the Board
March 19, 1999
PROXY STATEMENT
DELTA-OMEGA TECHNOLOGIES, INC.
c/o American Securities Transfer, Inc.
P.O. Box 1596
Denver, CO 80201-1596
(303) 234-5300
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 20, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Delta-Omega Technologies, Inc. (the
"Company"), a Colorado corporation, to be voted at an Annual Meeting of
Shareholders of the Company ("Annual Meeting") to be held at 10:00 A.M. on
April 20, 1999 at 119 Ida Road, Broussard, Louisiana, or at any adjournment or
postponement thereof. The Company anticipates that this Proxy Statement and
accompanying form of Proxy will be first mailed or given to all shareholders
of the Company on or about March 19, 1999. The shares represented by all
proxies that are properly executed and submitted will be voted at the meeting
in accordance with the instructions indicated thereon. Unless otherwise
directed, votes will be cast FOR the proposals presented. The vote of a
majority of the shares represented at the meeting in person or by proxy will
be required to enact any or all of the proposals.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by delivering written notice of such revocation to the Company, by
substituting a new proxy executed at a later date, or by requesting, in
person, at the Annual Meeting that the proxy be returned.
All of the expenses involved in preparing, assembling and mailing this Proxy
Statement and the material enclosed herewith and all of soliciting proxies
will be paid by the Company. In addition to the solicitation by mail, proxies
may be solicited by officers and regular employees of the Company by
telephone, telegraph or personal interview. Such persons will receive no
compensation for their services other than their regular salaries.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation materials to the beneficial
owners of the shares held on record date by such persons, and the Company may
reimburse such persons for reasonable out-of-pocket expenses incurred by them
in so doing.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
The close of business on March 12, 1999, has been fixed by the Board of
Directors of the Company as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting. At such
date, there were outstanding approximately 14,996,589 shares of the Company's
$.001 par value common stock (hereinafter referred to as the "common stock"),
each of which entitles the holder thereof to one vote per share on each matter
which may come before the meeting. Additionally, there are outstanding
1,335,000 shares of $.001 Series B Convertible Exchange Preferred Shares and
2,396,667 shares of $.001 Series C Convertible Exchangeable Preferred Shares,
each entitles to one vote per share. The Series B and Series C Convertible
Exchangeable Preferred Shares are hereinafter referred to collectively as the
"preferred stock." The shares of preferred stock vote together with the common
stock as a single class except upon amendments of rights and preferences for
the preferred stock. Cumulative voting is not permitted. The Company has no
other class of voting securities outstanding.
A majority of the issued and outstanding shares of the Company's common stock
and preferred stock entitled to vote, represented in person or by proxy,
constitutes a quorum at any shareholder's meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 22, 1999, the common stock
ownership of each person known by the Company to be the beneficial owner of
five percent or more of the Company's common and preferred stock ("Principal
Shareholders"), all Directors and Officers individually and all Directors and
Officers of the Company as a Group. Except as noted, each person has sole
voting and investment power with respect to the shares shown. All shares are
"restricted securities" and as such are subject to limitations on resale. The
shares may be sold pursuant to Rule 144 under certain circumstances. There are
no contractual arrangements or pledges of the Company's securities, known to
the Company, which may at a subsequent date result in a change of control of
the Company.
<TABLE>
Amount of Beneficial
Ownership (1)
Name and Address Common and
Address of Preferred Options and Percent of
Beneficial Owner Stock Warrants Total Class (2)
<S> <C> <C> <C> <C>
L.G. Schafran (3)
Riverside Drive #14B
New York, NY 10024 -- 600,000 600,000 3.10%
Richard A. Brown (4)
P.O. Box 8706
Longboat Key, FL 34228 618,206 -0- 618,206 3.30%
James V. Janes, III (5)
231 Dr. Charlie Drive
Opelousas, LA 70570 201,038 211,500 412,538 2.18%
David H. Peipers (6)
610 Tenth Avenue
Suite 605
New York, NY 10020 1,750,846 130,000 1,880,846 9.97%
Vernon Taylor, Jr. (7)
1670 Denver Club Building
Denver, CO 80202 2,156,109 165,000 2,321,109 12.29%
The Winsome Limited
Partnership
F/K/A Crossroads
Limited Partnership (8)
610 Tenth Avenue
Suite 605
New York, NY 10020 1,619,443 130,000 1,749,443 9.28%
GAMI Investments, Inc. (9)
Two Riverside Plaza
Suite 1100
Chicago, IL 60606 933,333 933,333 1,866,666 9.49%
Marian A. Bourque
P.O. Box 81518
Lafayette, LA 70598-1518 -0- -0- -0- 0%
All Directors &
Officers as a Group
(Five Persons) (10) 2,570,090 941,500 3,511,590 17.85%
</TABLE>
1) Rule 13d-3 under the Securities Exchange Act of 1934, involving the
determination of beneficial owners of securities, includes as
beneficial owners of securities, among others, any person who directly
or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has, or shares, voting power and/or
investment power with respect to such securities; and, any person who
has the right to acquire beneficial ownership of such security within
sixty days through means, including, but not limited to, the exercise
of any option, warrant or conversion of a security. In making this
calculation, options and warrant which are significantly "out-of-the-
money" and therefore unlikely to be exercised within sixty days are
not included in the calculation of beneficial ownership. For this
purpose, the Company deems options and warrants with an exercise price
above $.75 as unlikely to be exercised within the next sixty days.
Any securities not outstanding which are subject to such options,
warrants or conversion privileges are deemed to be outstanding for the
purpose of computing the percentage of outstanding securities of the
class owned by such person, but are not be deemed to be outstanding
for the purpose of computing the percentage of the class by any other
person.
2) As of November 30, 1998, there were 14,996,589 shares of common stock,
1,335,000 shares of Series B Convertible Exchangeable Preferred Stock
and 2,396,667 shares of Series C Convertible Exchangeable Preferred
Stock issued and outstanding. Each share of the Series B and Series C
Convertible Exchangeable Preferred stock is entitled to one vote and
votes together with the common stock as a single class except upon
matters relating to the amendment of rights and preferences for the
preferred stock. Accordingly, there are 18,728,256 shares of capital
stock entitled to vote upon ordinary matters and the percentages in
this column are based upon such number of shares.
3) Mr. Schafran owns options to purchase 600,000 shares of common stock.
Mr. Schafran also owns warrants to purchase 600,000 shares of common
stock at an exercise price of $2.00 per share, but these have been
excluded from the calculation of his beneficial ownership due to the
material difference between the exercise price and the current trading
price of the common stock. Mr. Schafran's wife owns 215,178 shares of
common stock, 131,667 shares of preferred stock and warrants to
purchase 106,667 shares of common stock. Mr. Schafran disclaims
beneficial ownership of the stock owned by his wife.
4) Mr. Brown owns 551,526 shares of common stock. Mr. Brown could be
considered a beneficial owner of 66,680 shares of common stock held in
custodial account for his son, Alexander J. Brown.
5) Mr. Janes owns 194,078 shares of common stock and options to purchase
211,500 shares of common stock. He could be considered a beneficial
owner of 6,960 held in joint tenancy with his mother. Mr. Janes also
owns options to purchase 10,000 shares of common stock at an exercise
price of $2.00 per share, but these have been excluded from the
calculation of his beneficial ownership due to the material difference
between the exercise price and the current trading price of the common
stock. Mr. Janes' wife owns 156,000 shares of common stock. Mr. Janes
disclaims beneficial ownership of the stock owned by his wife.
6) Mr. Peipers owns 131,403 shares of common stock. Mr. Peipers could be
considered a beneficial owner of 1,419,327 shares of common stock,
130,000 shares of preferred stock and warrants to purchase 130,000
shares of common stock held by The Winsome Limited Partnership F/K/A
Crossroads Limited partnership, of which Mr. Peipers is General
Partner. Mr. Peipers could also be considered a beneficial owner of
20,116 common shares and 50,000 shares of preferred stock held by
Cornerhouse Limited Partnership, an affiliate of Winsome.
7) Mr. Taylor owns 550,585 shares of common stock, 200,000 shares of
preferred stock and warrants to purchase 100,000 shares of common
stock. Mr. Taylor could be considered a beneficial owner of 435,000
shares of common stock held by a family member and 284,000 shares of
common stock held by a corporation for which Mr. Taylor is an officer.
Mr. Taylor could also be considered a beneficial owner of 159,398
shares of common stock and 400,000 shares of preferred stock held by
the Ruth and Vernon Taylor Foundation and 65,000 shares of preferred
stock, warrants to purchase 65,000 shares of common stock and 62,126
shares of common stock held by the Sara Taylor Swift Revocable Trust,
since Mr. Taylor is a trustee of both.
8) The Winsome Limited Partnership F/K/A Crossroads Limited Partnership,
is an entity for which David H. Peipers is the General Partner. The
Winsome Limited Partnership owns 1,419,327 shares of common stock,
130,000 shares of preferred stock and warrants to purchase 130,000
shares of common stock. The Winsome Limited Partnership could also be
considered a beneficial owner of 20,116 shares of common stock and
50,000 shares of preferred stock held by Cornerhouse Limited
Partnership, an affiliate of The Winsome Limited Partnership.
9) GAMI Investments, Inc., a Delaware Corporation, owns 933,333 shares of
preferred stock and warrants to purchase 933,333 shares of common
stock.
10) The Directors and Officers as a group (five persons) beneficially own
2,390,090 shares of common stock, 180,000 shares of preferred stock,
warrants to purchase 130,000 shares of common stock and stock options
to purchase 811,500 shares of common stock.
MANAGEMENT
The Executive Officers and Directors of the Company and their ages and
positions with the Company are as follows:
<TABLE>
Name Age Position Period From
Which Served
<S> <C> <C> <C>
L.G. Schafran 59 Chairman of the Board 01/96
James V. Janes, III 50 President, CEO and 10/89
Director
Richard A. Brown 50 Director 10/90
David H. Peipers 41 Director 02/96
Marian A. Bourque 38 Chief Financial and 04/96
Accounting Officer,
Secretary & Treasurer
</TABLE>
The Company has no knowledge of any arrangement or understanding in existence
between any Executive Officer or Director named above and any other person
pursuant to which any such Executive Officer or Director was or is to be
elected to such office or offices. All Officers of the Company serve at the
pleasure of the Board of Directors. No family relationships exist among the
Directors of Executive Officers of the Company. All Officers of the Company
will hold office until the next Annual Meeting of the Company's shareholders.
There is no person who is not a designated officer who is expected to make any
significant contribution to the business of the Company.
The Board of Directors has five committees, which are as follows:
<TABLE>
Number of Meetings During Last
Name of Committee Directors Serving Fiscal Year
<S> <C> <C>
Nominating Committee L.G. Schafran, Chairman 1
James V. Janes, III
Richard A. Brown
Executive Committee L.G. Schafran, Chairman 1
James V. Janes, III
Richard A. Brown
Audit Committee L.G. Schafran, Chairman 1
David H. Peipers
Richard A. Brown
Compensation and
Options James V. Janes, III, Chairman 1
Committee Richard A. Brown
L.G. Schafran
Research and
Development David H. Peipers, Chairman 1
Committee James V. Janes, III
Richard A. Brown
</TABLE>
The Nominating Committee selects Director nominees and will consider
suggestions by shareholders for names of possible future nominees delivered in
writing to the Secretary of the Company on or before November 1 in any year.
The Executive Committee performs strategic planning and recommends Company
policies and direction to the Board. The Audit Committee recommends the
engagement and discharge of independent auditors, directs and supervises
special investigations when necessary, reviews with independent auditors the
audit plan and the results of the audit, reviews the independence of the
independent auditors, considers the range of audit fees and reviews the scope
and results of the Company's procedures for internal auditing and the adequacy
of its system of internal accounting controls. The Compensation and Options
Committee recommends to the Board the compensation arrangements for senior
management and Directors, adoption of compensation plans in which Officers and
Directors are eligible to participate and the granting of stock options or
other benefits under compensation plans. The Research & Development Committee
considers research and development projects and establishes budgets for such
activities.
The Board of Directors had 13 meetings during the last fiscal year. No
Director attended less than 75 percent of the meetings of the Board and the
meetings of the committee on which the respective Directors served held during
the Director's tenure.
L.G. Schafran - Mr. Schafran has been Chairman of the Board of Directors since
January 1996. Mr. Schafran is also currently a director and Chairman of the
Executive Committee of Dart Group Corporation and its two principal
affiliates, Trak Auto Corporation and Crown Books Corporation. Mr. Schafran is
also a director or trustee of Capsure Holdings Corp., Glasstech Inc., National
Income Realty Trust, Oxigene, Inc. and Publicker Industries, Inc. Mr.
Schafran earned a B.B.A. from the University of Wisconsin in 1960 and a MBA
also from the University of Wisconsin in 1961.
Richard A. Brown - Mr. Brown has been a Director of the Company since October
1990, and was Chairman of the Board from 1991 to 1995. Mr. Brown has been the
sole proprietor of the venture capital firm, Eagle Ventures, since 1989. Mr.
Brown has also been a director of Oxigene, Inc., a publicly held company
involved in cancer research, since 1988, and a director of Angiosonics, Inc.,
a publicly-held company involved with cardiac intervention devices, since
1992. From 1986 until 1989, Mr. Brown was President of Eagle Financial Group,
Inc., a venture capital and investment banking firm. Prior to 1986, Mr. Brown
was engaged in the financing and analysis of development stage companies
involved in medical electronic technology. Mr. Brown earned a B.A. degree from
Hamilton College in 1970.
James V. Janes, III - Mr. Janes has been a Director of the Company since
October 1989 and President since January 1996. Mr. Janes was General Manager
of Delta-Omega Technologies, Ltd., the Company's wholly owned subsidiary, from
November 1989 to December 1990. From 1977 to 1989, Mr. Janes was President of
Janes Industries, Inc., a Louisiana corporation licensed as a general
contractor. Mr. Janes served in the U.S. Air Force, earning the Distinguished
Flying Cross, and between 1973 and 1977 was an instructor and evaluator with
the 58th TAC Fighter Squadron at Eglin Air Force Base in Florida. Mr. Janes
earned a B.S. from Northwestern State University in 1970.
David H. Peipers - Mr. Peipers has been a Director of the Company since
February 1996. Mr. Peipers is a co-founder and Chairman of Bedminster
Bioconversion Corporation, a private company which designs and develops large
scale composting facilities for the treatment of organic waste streams. He is
also an active private investor in and director of various companies,
including Segrets, Inc., Cyto Ltd., and SK Technologies. Mr. Peipers earned an
A.B. from Harvard College in 1978 and a J.D. from Harvard Law School in 1981.
Marian A. Bourque - Ms. Bourque has been Chief Financial and Accounting
Officer, Secretary and Treasurer of the Company since April 1996. Ms. Bourque
was Controller of the Company from December 1994 to April 1996. Her past
associations include Broussard, Poche, Lewis and Breaux CPA Firm, where she
was active in the Management Advisory Department and Adobe Oil and Gas, where
she was the Accounts Payable Supervisor. Ms. Bourque, a Certified Public
Accountant, earned a B.S. in Accounting from the University of Southwestern
Louisiana in 1993.
EXECUTIVE COMPENSATION
None of the Company's Officers or Directors received direct remuneration of
$100,000 or more during the fiscal year ended August 31, 1998.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
Securities
Name and Restricted Underlying
Principal Stock Options Compen-
Position Year($) Salary($) Bonus($) Other($) Awards /SAR's sation
<S> <C> <C> <C> <C> <C> <C> <C>
J.V. Janes 1998 $87,200 $ -- $ -- -- -- $ --
CEO and 1997 $77,000 $ -- $ -- -- -- $ --
President 1996 $52,000 $ -- $ -- -- -- $ --
</TABLE>
Stock Option Plans
The Company's policy is to grant options to purchase common stock to
directors, officers or key employees as part of an incentive program. In
addition to the grants under this program, the Company grants options to
purchase common stock to individuals as compensation for services rendered in
lieu of cash. On January 17, 1991, the Company established a non-qualified
stock option plan (the 1991 Plan) under which 1 million options to purchase
common stock were made available. In fiscal year 1994, the Company amended the
1991 non-qualified stock option plan to authorize the issuance of an
additional 600,000 options. All options are non-compensatory and are issued at
or above the market price on the date the option is granted.
The Company's Compensation and Options Committee determines the term of each
grant and when it becomes exercisable. The options expire three years from the
date of grant. As of November 30, 1998, there were 509,000 outstanding options
issued under the 1991 Plan and 1,636,752 outstanding options issued outside
the Plan.
Additionally, the Board of Directors has approved a Management Bonus Pool
which is based on 12% of annual gross profits (before taxes) in excess of
$500,000. Bonuses will be paid to persons filling designated positions,
including Directors. The total pool may not exceed $4,000,000 annually.
Directors' expenses, if any, are reimbursed, including travel, lodging and a
per diem of $150 for out of town travel deemed necessary and in the best
interests of the Company.
1998 Option Exercises and Year-End Option Value Table
The following table provides information on options exercised in 1998 by the
executive officers named in the Summary Compensation Table, the number of
unexercised options each of them held at August 31, 1998, and the value of
unexercised "in-the-money" options each of them held as of that date. No
SAR's were outstanding at any time during 1998.
<TABLE>
Value of Unexercised In-The-
Number of Unexercised Money Options at 1998
Options at 1998 Year-End Year-End (1)
Shares
Acquired On Value Exer- Unexer-
Name Exercise Realized cisable cisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
J.V.
Janes -- -- 221,500 -- -0- --
</TABLE>
1) The values shown in the table are based on the $0.31 closing price of
the Company's Common Stock on August 31, 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Described below are any transactions, or series of similar transactions, for
the Company's last two fiscal years, or any currently proposed transactions,
or series of similar transactions, to which the Company or any of its
subsidiaries was or is to be a party, in which the amount involved exceeds
$60,000 and in which any of the Company's Officers, Directors or Principal
Shareholders had, or will have, a direct or indirect material interest, naming
such person and indicating the person's relationship to the Company, the
nature of such person's interest in the transaction(s), the amount of such
transaction(s) and, where practical, the amount of such person's interest in
the transaction(s):
The Company's executive office, blending and warehouse facilities are located
at 119 Ida Road, Broussard, Louisiana. The Company leases approximately 15,000
square feet under a noncancelable five year lease from Crossroads Investments
at $6,000 per month with an option to renew for an additional five years at an
increase of $1,200 per month. The first two years of this lease were paid for
by issuing 128,000 shares of the Company's restricted common stock. Mr. Donald
P. Carlin, a former director of the Company from April 1990 through May 1998,
is an affiliate of Crossroads Investments, the lessor.
REAPPOINTMENT OF AUDITORS
The Board of Directors has selected Arthur Andersen & Company LLP as the
independent certified public accountants to audit the books, records and
accounts of the Company for its 1999 fiscal year, pending shareholder approval
of such appointment. Arthur Andersen & Company LLP has served as the Company's
independent auditor since the 1994 fiscal year and is, therefore, familiar
with the business and financial procedures of the Company. To the knowledge
neither this firm nor any of its members has any direct or material indirect
financial interest in the Company nor any connection with the Company in any
capacity other than as independent auditor. Although the ratification of
reappointment is not required to be submitted for shareholder approval, it is
a common practice as a courtesy to shareholders. A failure to approve this
proposal will not affect the Company's plans for this year, but could affect
its decisions in coming years. It has not yet been determined whether a
representative of Arthur Andersen & Company LLP will attend the Annual
Meeting. The Company recommends approval of this resolution.
COMPLIANCE WITH SECTION 16(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
Based solely on a review of reports filed with the Company, all Directors and
Executive Officers timely field all reports regarding transactions in the
Company's securities required to be filed during the last fiscal year by
Section 16(a) under the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the year 2000 Annual
Meeting of Shareholders must be received by the Company on or before November
10, 1999 in order to be eligible for inclusion in the Company's Proxy
Statement and form of Proxy. To be so included, a proposal must also comply
with all applicable provisions of Rule 14a-8 under the Securities Exchange Act
of 1934.
OTHER MATTERS
The Board of Directors does not know of any other matters to be brought before
the Annual Meeting. If any other matters not mentioned in this Proxy Statement
are properly brought before the Annual Meeting, the individuals named in the
enclosed proxy intend to vote such proxy in accordance with their best
judgment on such matters.
By Order of the Board of Directors
L.G. Schafran
Chairman of the Board
March 21, 1999
ANNUAL MEETING OF SHAREHOLDERS
DELTA-OMEGA TECHNOLOGIES, INC.
PROXY
The undersigned shareholder of Delta-Omega Technologies, Inc., a Colorado
corporation, hereby appoints L.G. Schafran, Chairman of the Board of Delta-
Omega Technologies, Inc., my proxy to attend and represent me at the annual
meeting of the shareholders of the corporation to be held on April 20, 1999 at
10:00 A.M. (CST), and at my adjournment thereof, and to vote my shares on any
matter or resolution which may come before the meeting and to take any other
action which I could personally take if present at the meeting.
1. Election of Directors: Management has nominated the five following
persons to stand for election. You may vote "for" or you may withhold
your vote from any of those persons and vote "for a person nominated
by others or write in your own nominee. To date, no one has been
nominated by anyone other than management.
a) L.G. Schafran For ______
Withhold ______
b) Richard A. Brown For ______
Withhold ______
c) James V. Janes, III For ______
Withhold ______
d) David H. Peipers For ______
Withhold ______
e) ____________________ For ______
Other Withhold ______
2. Reappointment of Auditors:
RESOLVED, that the reappointment of Arthur Andersen LLP as the auditing firm
for the corporation is hereby ratified.
For _______ Against _______ Abstained _______
Failure to check any of these boxes for each proposal will give management the
authority to vote the proxy at their discretion. This Proxy gives authority to
my Proxy to vote for me on such other matters as may properly come before this
meeting.
Shares Owned: ___________________
Dated: ___________________
__________________________________
Signature of Shareholder
(Sign exactly as name appears on certificate)
__________________________________
Signature if held jointly
