<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
NSA International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
NSA INTERNATIONAL, INC.
4260 EAST RAINES ROAD
MEMPHIS, TENNESSEE 38118
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 3, 1996
Notice is hereby given that the 1996 Annual Meeting of Shareholders of
NSA International, Inc. (the "Annual Meeting") will be held on Tuesday, December
3, 1996, at 10:00 a.m. local time, at The Memphis Marriott Hotel, 2625 Thousand
Oaks Boulevard, Memphis, Tennessee 38118, for the following purposes:
(1) To elect three (3) Class I directors who will serve two-year
terms or until their successors have been duly elected and
qualified;
(2) To ratify the selection of Deloitte & Touche, L.L.P. as
independent accountants and auditors
for the Company; and
(3) To consider and act upon any other matters that may properly
come before the Annual Meeting or any adjournment or
adjournments thereof.
These items are described more fully in the following pages which are
made a part of this notice.
Only holders of NSA International, Inc.'s common shares of record at
the close of business on November 3, 1996 will be entitled to notice of, and to
vote at, the Annual Meeting.
You are cordially invited to attend the Annual Meeting. Please note,
however, that we are asking you to complete and return the enclosed proxy even
if you plan to attend the Annual Meeting. You may, of course, withdraw your
proxy and vote your own shares if you attend the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
STAN C. TURK
Secretary
November 4, 1996
===============================================================================
IMPORTANT NOTICE
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
REVIEW THE ENCLOSED MATERIAL, AND PROMPTLY MARK, DATE, SIGN AND RETURN
THE ENCLOSED FORM OF PROXY IN THE ENCLOSED SELF-ADDRESSED, STAMPED
ENVELOPE.
===============================================================================
<PAGE> 3
NSA INTERNATIONAL, INC.
4260 EAST RAINES ROAD
MEMPHIS, TENNESSEE 38118
-----------------
PROXY STATEMENT
-----------------
GENERAL INFORMATION
THIS PROXY STATEMENT, together with the enclosed proxy, which is first
being mailed to shareholders on or about November 13, 1996, is furnished in
connection with the solicitation of proxies by the Board of Directors of NSA
International, Inc., a Tennessee corporation (the "Company"), for use at the
Annual Meeting of Shareholders (the "Annual Meeting") to be held on Tuesday,
December 3, 1996, at 10:00 a.m. local time, at The Memphis Marriott Hotel, 2625
Thousand Oaks Boulevard, Memphis, Tennessee 38118 and at any adjournment or
adjournments thereof.
VOTING
Shareholders of the Company of record at the close of business on
November 3, 1996, the record date designated by the Board of Directors, will be
entitled to notice of and to vote at the Annual Meeting. On that date, the
Company had outstanding 4,858,156 shares of $.05 par value common stock (the
"Common Shares").
The presence in person or by proxy of the holders of a majority of the
issued and outstanding Common Shares entitled to vote at the Annual Meeting is
necessary in order to constitute a quorum. The election of each of the nominees
to the Board of Directors of the Company will require the affirmative vote of a
majority of the Common Shares voting at the Annual Meeting. The affirmative vote
of a majority of the Common Shares present or represented at the meeting, if a
quorum exists, is required to ratify the selection of the independent
accountants and auditors.
Each holder of the Common Shares is entitled to one vote for each
Common Share held on all matters submitted before the Annual Meeting or any
adjournment or adjournments thereof. Cumulative voting is not provided for in
the election of directors.
Common Shares represented by properly executed proxies, unless
previously revoked, will be voted in accordance with the instructions on such
proxies. If no instruction is indicated on the proxy, the named holders of the
proxies will vote such Common Shares FOR all nominees named in this Proxy
Statement and FOR the ratification of the selection of independent accountants
and auditors. The named holders of proxies also will use their discretion in
voting the Common Shares in connection with any other business that properly may
come before the Annual Meeting.
Any shareholder who sends in a proxy has the power to revoke that proxy
any time prior to the exercise of the proxy by giving written notice to Stan C.
Turk, the Secretary of the Company, at its executive offices located at 4260
East Raines Road, Memphis, Tennessee 38118. Shareholders also may revoke proxies
either by a later dated proxy, if the Company receives such proxy prior to the
exercise of the prior proxy, or by attending the Annual Meeting and voting in
person.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares beneficially owned
as of November 3, 1996, by (a) each person known by the Company to beneficially
own more than 5% of the outstanding shares of Common Stock, (b) each director or
executive officer of the Company, and (c) all directors and executive officers
of the Company as a group.
<TABLE>
<CAPTION>
Amount and Name
Name and Address of of Beneficial Percent
Beneficial Owner Ownership(1) of Class(2)
---------------- ------------ -----------
<S> <C> <C>
(a) National Safety Associates, Inc. 2,336,180(3) 48.1
4260 East Raines Road
Memphis, Tennessee 38118
A. Jay Martin 2,739,175(4) 56.4
4260 East Raines Road
Memphis, Tennessee 38118
L.F. Swords 2,474,266(5) 50.9
4260 East Raines Road
Memphis, Tennessee 38118
(b) A. Jay Martin 2,739,175(4) 56.4
George R. Poteet 164,041 3.4
L.F. Swords 2,474,266(5) 50.9
J. Neil Rood 40,733 *
William W. Deupree, Jr 15,000 *
Charles R. Evans, Jr 8,800 *
William T. Williams -0- *
Stan C. Turk 1,250 *
(c) Officers and directors 3,104,085(4) 63.9
as a group (8 persons)
</TABLE>
- -------------------------
* Indicates less than 1%.
(1) Includes shares of Common Stock as to which such person, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares voting power and/or investment
power. Unless otherwise indicated, each listed shareholder possesses
sole voting and investment power with respect to all of the shares
shown opposite his name.
(2) Based upon 4,858,156 shares issued and outstanding.
(3) Messrs. Martin and/or Swords, as the president and secretary-treasurer
of NSA, respectively, acting separately or jointly, have the power to
vote or to direct the vote, and to dispose of or to direct the
disposition of, the shares owned by NSA, unless otherwise instructed by
the Board of Directors of NSA.
(4) Includes the 2,336,180 shares held by NSA for which Messrs. Martin
and/or Swords have the power to vote or to direct the vote, and to
dispose of or to direct the disposition of. Also includes the indirect
beneficial ownership of 9,000 shares held by Mr. Martin's child for
which Mr. Martin disclaims beneficial ownership.
(5) Includes the 2,336,180 shares held by NSA for which Messrs. Martin and/
or Swords have the power to vote or to direct the vote,
and to dispose of or to direct the disposition of.
(6) Does not include officers of the Company's subsidiaries.
- 2 -
<PAGE> 5
(PROPOSAL 1)
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into two Classes with
the term of office of each Class expiring in succeeding years. The terms of
office of Class I directors expire at the Annual Meeting. The terms of office of
Class II directors expire at the annual meeting of shareholders held in 1997.
The Board of Directors proposes the election of three (3) Class I directors.
Each Class I director elected at the Annual Meeting will hold office until the
annual meeting of shareholders held in 1998 or until their successors are
elected and qualified.
NOMINEES FOR DIRECTOR
Class I
For a Two-Year Term Expiring at the 1998 Annual Meeting
A. Jay Martin
Charles R. Evans, Jr.
J. Neil Rood
Unless authority to vote is withheld, all proxies received by the Board
of Directors will be voted for these three (3) nominees; except that, if any
such nominee is unable to serve, or for good cause will not serve, those proxies
would be voted for the person whom the Board of Directors designated to replace
the nominee. The Board of Directors believes that, if elected, each nominee will
be willing to serve.
The following table sets forth certain information regarding the
directors and executive officers of the Company and its subsidiaries.
<TABLE>
<CAPTION>
Director Term
Name Age Position(s) Since Expires
- ---- --- ----------- ----- -------
DIRECTORS AND NOMINEES:
- -----------------------
<S> <C> <C> <C> <C>
A. Jay Martin(1) 54 President and Director 1989 1996
Charles R. Evans, Jr. 52 Chief Operating Officer
and Executive Vice-
President and Director 1992 1996
J. Neil Rood 63 Director 1989 1996
George R. Poteet 48 Director 1989 1997
L.F. Swords 55 Director 1989 1997
William W. Deupree, Jr. 55 Director 1992 1997
William T. Williams 49 Director 1993 1997
</TABLE>
- 3 -
<PAGE> 6
EXECUTIVE OFFICERS:
<TABLE>
<S> <C> <C>
Stan C. Turk 45 Chief Financial Officer
and Secretary-Treasurer
</TABLE>
- ------------
(1) Mr. Martin is also a director and executive officer of NSA. Mr. Martin
devotes approximately 60% of his management time to the operations of
the Company.
A. Jay Martin has served as President and as a director of the Company
since its inception in March 1989. Mr. Martin founded National Safety
Associates, Inc., a Tennessee corporation ("NSA"), in 1969 and has served NSA in
various capacities since its inception. Presently, Mr. Martin is a shareholder
and serves as President and a director of NSA.
L.F. Swords has been a director of the Company since its inception. Mr.
Swords has been employed by NSA since 1971 in a variety of management positions.
From 1989 until March 1, 1994, Mr. Swords served as Secretary-Treasurer and
Chief Financial Officer of the Company and all of its subsidiaries. Presently,
Mr. Swords is a shareholder, and serves as Vice President, Chief Financial
Officer, Secretary-Treasurer, and a director of NSA.
George R. Poteet has served as a director of the Company since its
inception. Since 1971, Mr. Poteet has been employed by NSA and he presently is a
shareholder and serves as Vice President-Manufacturing and a director of NSA.
From 1989 until February 7, 1994, Mr. Poteet served as Vice
President-Manufacturing of both the Company and NSA Polymers.
J. Neil Rood has been a director of the Company since its inception. In
April 1992, Mr. Rood was elected President of NSA Holdings, and, in December
1992, Mr. Rood was elected Vice President-International Operations for the
Company. In December 1993, Mr. Rood completed his tenure as Vice
President-International Operations. Mr. Rood is a shareholder of NSA. In April
1982, Mr. Rood organized and became President of Jonfor Systems, Inc. In June
1975, Mr. Rood organized and became President of Jonfor, Inc. Both entities are
privately-held Florida corporations which act as holding and operating
companies, respectively, for various retail businesses and real estate
properties. Mr. Rood is also active in various real estate ventures as a
developer and an owner.
Charles R. Evans, Jr. has served as the Executive Vice-President and
the Chief Operating Officer of the Company since August 1992. Mr. Evans joined
NSA Polymers in March 1989 and served as Vice President, Assistant Secretary and
a director of NSA Polymers until August 1992. From 1984 until March 1989, he was
Treasurer of Florida Polymers, Inc., a Florida corporation, the assets of which
were acquired by the Company in March 1989 and which was primarily engaged in
the business of plastics injection molding and tool and die manufacturing.
William W. Deupree, Jr. recently retired as President of Morgan Keegan
& Company, Inc. and its parent company, Morgan Keegan, Inc., a New York Stock
Exchange listed company, after 10 years in such positions. Mr. Deupree joined
Morgan Keegan & Company, Inc. in 1972. He is a past member of the Regional Firms
Advisory Committee of the New York Stock Exchange as well as a past member of
the Board of Directors for the Securities Industry Association. Mr. Deupree is a
director of Morgan Keegan & Company, Inc. and Morgan Keegan, Inc. Mr. Deupree is
a graduate of the University of the South.
William T. Williams is the Executive Vice President of The Hancock
Holding Company, a financial institution with banks located in Louisiana and
Mississippi. From May 1993 until August 1996, Mr. Williams was the Executive
Vice President and Senior Commercial Loan Officer of the Commercial Banking
Group of National Bank of Commerce, a financial institution located in Memphis,
Tennessee.
- 4 -
<PAGE> 7
Stan C. Turk was appointed Chief Financial Officer of the Company on
July 1, 1996. Mr. Turk was elected Assistant Treasurer of the Company in May
1991. Since August 1989, Mr. Turk has been employed as Assistant Treasurer of
NSA. Prior to joining NSA in 1989, Mr. Turk served as the Chief Financial
Officer of Barton Equipment Company and Barton Truck Center in Memphis,
Tennessee and spent approximately 11 years employed as a certified public
accountant.
BOARD OF DIRECTORS AND COMMITTEES
During the fiscal year ended April 30, 1996, the Board of Directors of
the Company held 4 meetings. The Board of Directors has two standing committees,
the Audit Committee and the Compensation Committee. No directors attended less
than 75% of the aggregate number of meetings of the Board of Directors or Board
Committees on which he served.
The Audit Committee, composed of L.F. Swords, William W. Deupree, Jr.
and William T. Williams, held one meeting during the fiscal year ended April 30,
1996. The Audit Committee reviews the integrity of the Company's financial
statements, the Company's internal controls, the Company's internal audit
function, the function and fees of the independent public accountants and other
matters relating to financial and accounting functions. The Audit Committee also
makes recommendations to the Board of Directors concerning the engagement or
discharge of the independent public accountants.
The Compensation Committee, composed of L.F. Swords, William W.
Deupree, Jr., and William T. Williams held one meeting during the fiscal year
ended April 30, 1996. The Compensation Committee reviews the compensation of
executive officers and other key executives and makes recommendations to the
full Board of Directors regarding such compensation.
The Board of Directors does not have a nominating committee.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Report of the Compensation Committee
BOARD COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
July 18, 1996
Overview of compensation philosophy and programs
The Compensation Committee is responsible for developing and
communicating recommendations to the Board of Directors with respect to the
Company's executive compensation policies and reviews the compensation of the
executive officers of the Company. The Company's compensation objectives are to
support the Company's financial objectives and performance goals, provide
compensation that will attract and retain superior management, and reward
performance.
Rapid market and product diversification have caused the Company to
rely on hiring senior executives from outside the corporate organization, rather
than growing or training managers from within. In general, the executive salary
structure is based significantly on local economic considerations for each
market in which management level personnel are retained. The Company makes it a
practice to recruit the best possible talent
- 5 -
<PAGE> 8
available to fill given positions. Although domestically the Company faces less
competition for key executives, internationally the cost of living
considerations and competing salaries weigh heavily in compensation decisions.
Salaries and bonuses are negotiated on an individual basis, and
generally the executive compensation includes a base salary coupled with bonus
compensation. Bonus compensation takes into consideration not only revenues, but
also profitability. Further, executive performance is reviewed on an annual
basis with each executive.
Compensation of the Chief Executive Officer
The Chief Executive Officer recommended to the Board of Directors that
his compensation be set at slightly below average CEO salary levels and without
any bonus or long-term incentive programs. The Chief Executive Officer was one
of the founders of the Company and owns approximately 17% of the outstanding
shares of Common Stock of the Company. Rather than receiving compensation
through increased salary, the Chief Executive Officer and the Board of Directors
have determined that the Chief Executive Officer will be suitably compensated
primarily through the intrinsic value of his stock ownership.
WILLIAM T. WILLIAMS
WILLIAM W. DEUPREE, JR.
L.F. SWORDS
- 6 -
<PAGE> 9
Summary Compensation Table
The following table sets forth the aggregate compensation paid by the
Company and its subsidiaries to the President of the Company and the four most
highly compensated executive officers of the Company or its subsidiaries, for
services rendered in all capacities during the fiscal years ended April 30,
1996, 1995 and 1994. No other executive officer of the Company received
compensation exceeding $100,000 for the fiscal year ended April 30, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
---------------------------------------------------------------
Other Annual All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Compensation
- --------------------------- ---- ---------- --------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
A. Jay Martin 1996 150,000 6,058 -0- -0-
President of the Company 1995 150,000 -0- -0- -0-
1994 150,000 8,654 -0- -0-
Charles R. Evans, Jr. 1996 225,000 7,001 -0- -0-
Chief Operating Officer 1995(1) 135,000 56,250 -0- -0-
of the Company 1994 90,000 -0- -0- -0-
William R. Hagel 1996 123,000 6,366 -0- 3,600(2)
Chief Financial Officer 1995 123,000 7,586 -0- 3,600(2)
1994 39,231 -0- -0- 1,200(2)
John Greenham 1996 139,844 26,128 -0- 49,757(3)
Vice President-Europe 1995 90,268 20,000 -0- 69,663(3)
1994 70,072 -0- -0- 16,917(3)
</TABLE>
- ---------------------------
(1) Mr. Evans executed an Employment Agreement with the Company on August
1, 1994 which provides for an annual compensation of $225,000. During
the first quarter of 1995, the Company paid Mr. Evans $22,500 pursuant
to an oral employment agreement between the parties.
(2) This amount represents payment for a company owned automobile.
(3) Represents housing, school fees, expenses and/or car allowance.
- 7 -
<PAGE> 10
Performance Graph
The following graph compares the percentage change in the Company's
cumulative total shareholder return with returns based on the Nasdaq Stock
Market (U.S. companies) Index and a peer group index, which is described in the
legend to the graph.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Measurement Period NSA NASDAQ Market
(Fiscal Year Covered) International, Inc. Peer Group Index
<C> <C> <C> <C>
3/29/93 100 100 100
1993 37.04 180.50 114.34
1994 31.48 179.74 111.77
1995 12.04 102.10 158.06
4/30/96 26.85 151.97 179.17
</TABLE>
- ----------------
The Peer Group includes Beauticontrol Cosmetics, Inc. and Herbalife
International Inc. The comparison assumes $100 was invested in the Company's
Common Stock on March 29, 1993 and in each of the foregoing indices and assumes
reinvestment of dividends.
Compensation of Directors
The outside directors of the Company currently receive $1,000 for each
Board of Directors meeting. The directors of the Company's subsidiaries do not
receive any additional compensation for serving in such capacities.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
L.F. Swords, a member of the Compensation Committee was formerly an
officer of the Company and several subsidiaries.
Certain Relationships and Related Transactions
Pursuant to a written management agreement, National Safety Associates,
Inc., a Tennessee corporation ("NSA"), provides certain management, consulting
and advisory services to the Company and its subsidiaries. In consideration for
these services, the Company and its subsidiaries reimburse NSA for the costs
incurred by NSA in rendering such services. Such costs include, but are not
limited to, travel expenses, computer services and a portion of the compensation
of any employee of NSA who renders services to the Company and/or its
subsidiaries. The costs reimbursed by the Company and its subsidiaries to NSA
were approximately $1,598,000 for the fiscal year ended April 30, 1996.
Sales of Juice Plus+(TM) to NSA totaled approximately $11,532,000 or
16% of the Company's revenues for the fiscal year ended April 30, 1996.
- 8 -
<PAGE> 11
At April 30, 1996, the Company through the Direct Selling Subsidiaries
owed approximately $8,823,000 to NSA for product purchases, management and
licensing fees, and cash advances for equipment purchases and working capital.
Such borrowings are payable upon demand and are non-interest bearing. On July 9,
1996, NSA made an approximately $7.9 million capital contribution to the Company
by forgiving $7.9 million of the outstanding indebtedness owed to NSA by the
Direct Selling Subsidiaries.
Prior to May 1, 1993, the Company purchased from NSA the majority of
the water filtration and related accessory products which it sold in Canada, the
United Kingdom, Ireland, Germany, Mexico, Switzerland, the Netherlands and
Belgium. The Company still purchases certain water filtration and related
accessory products from NSA. The cost of such purchases was approximately
$536,895 for the fiscal year ended April 30, 1996.
NSA has guaranteed the obligations of National Safety Associates of
America (U.K.) Limited ("NSA UK") under the lease agreements pursuant to which
NSA UK leases approximately 12,800 square feet in Maidenhead, Berkshire,
England.
Effective February 1, 1995, the Company sold substantially all of the
assets of NSA Polymers to its management for $5 million. In order to determine
an appropriate purchase price, the Company had an evaluation and fairness
opinion prepared by an unrelated third party which is in the business of
rendering such opinions. The fairness opinion provides that a purchase price of
$5 million is fair to the Company and its shareholders. The purchase price for
NSA Polymers assets consisted of a $500,000 cash payment at the closing from the
Buyer to NSA Polymers, delivery of the buyer's promissory note in the principal
amount of $500,000 which was due and payable six months from the closing date,
and delivery of the buyer's promissory note in the principal amount of $4
million which is due and payable over an eight year period. The $500,000 and $4
million notes are secured by the fixed assets of the buyer. As additional
consideration for the purchase of NSA Polymer's assets, the Company entered into
a 5 year manufacturing contract with the buyer which requires that certain
minimum purchase levels be maintained by the Company. During fiscal 1996, the
Company failed to meet these minimum purchase requirements and accordingly paid
the buyer approximately $722,000.
On April 30, 1996, the Registrant sold substantially all of the assets
of its wholly owned subsidiary, National Safety Associates Ltd., an Ontario
corporation ("NSA Canada"), to National Safety Associates of Canada Inc.
("Buyer"), an Ontario corporation owned by Roger Pearsall, a vice-president of
the Registrant, Jacques Blondeau, a consultant to NSA, G. Paul Stewart,
President of NSA Canada, and Douglas Arscott, an employee of a subsidiary of the
Registrant. Messrs. Pearsall and Blondeau will be passive investors in the Buyer
and will continue to perform services for the Registrant or its subsidiaries to
the same extent performed prior to the transaction. The purchase price for
substantially all of the assets of NSA Canada was $740,495 (U.S.). The assets of
NSA Canada were sold at the approximate book value of the assets. Due to the
Company's existing relationship with the Purchasers, the Board of Directors
retained an unrelated third party expert to evaluate the fairness of the
transaction to the Company. The fairness opinion provides that the purchase
price is fair to the Registrant and its shareholders. The purchase price for the
NSA Canada assets consists of the delivery and payment in accordance with the
terms of the Buyer's promissory note in the principal amount of $740,495.42
which is due and payable over a five and a half year period. The note is secured
by the fixed assets of the Buyer. Additionally, as a condition of the sale, the
Registrant entered into a distribution contract with the Buyer which provides
that the Buyer will continue to purchase products from the Registrant for resale
in Canada.
On September 2, 1996, the Registrant completed negotiations for the
sale of certain of the assets of NSA Germany, NSA Switzerland, and NSA Austria
to a third party licensee (a "Master Distributor") controlled by one of the
Company's European management level employees (the "Buyer"). The agreed upon
aggregate purchase price for substantially all of the assets for these
subsidiaries was $1.5 million (U.S.), based on the approximate book value of the
assets. The purchase price for these transactions consists of the delivery
- 9 -
<PAGE> 12
of the Buyer's promissory note in the principal amount of $1.5 million which is
due and payable over a seven year period at an interest rate of 4.5%. The note
is secured by certain of the assets of the Buyer. Additionally, as a condition
of the sale, the Registrant entered into a distribution contract with the Buyer
which provides that the Buyer will continue to purchase products from the
Registrant for resale in Austria, Germany and Switzerland.
There have not been, and it is the Company's current intention that
there will not be, loans or other financial transactions between the Company and
its officers, directors or significant employees. However, to the extent such
loans or financial transactions do occur in the future, they will be approved by
the Company's disinterested and independent directors and will be on terms no
less favorable to the Company than could be obtained from unaffiliated parties.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINATION OF THE
LISTED INDIVIDUALS AS DIRECTORS OF THE COMPANY.
- 10 -
<PAGE> 13
(PROPOSAL 2)
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed, subject to ratification by the
shareholders at the Annual Meeting, the firm of Deloitte & Touche, L.L.P. as
independent public accountants to audit the consolidated accounts of the Company
and its subsidiaries for the fiscal year ending April 30, 1997. An affirmative
vote of the majority of the Common Shares voting at the Annual Meeting is
required to ratify the appointment of Deloitte & Touche, L.L.P. Representatives
of Deloitte & Touche, L.L.P. are expected to be present at the Annual Meeting
with the opportunity to make a statement and to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
DELOITTE & TOUCHE, L.L.P. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY
FOR THE FISCAL YEAR ENDING APRIL 30, 1997.
EXPENSES OF SOLICITATION
The Company will pay the total expense of preparing, assembling,
printing, and mailing proxies and proxy solicitation materials. It may be that,
following the original solicitation, some further solicitation will be made by
telephone or other communications with some shareholders. All such further
solicitation will be made by officers and directors of the Company, who will not
receive additional compensation for such activities.
SHAREHOLDER PROPOSALS
Shareholders' proposals intended to be presented at the 1997 annual
meeting of shareholders must be received by the Company at its executive offices
on or before June 30, 1997 to be included in the proxy statement and form of
proxy relating to that meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Such officers, directors and shareholders are required by
SEC regulations to furnish the Company with copies of all such reports that they
file.
Based solely on review of the copies of such reports furnished to the
Company and representations that no other reports were required, during the
fiscal year ended April 30, 1996, all persons subject to the reporting
requirements of Section 16(a) filed the required reports on a timely basis.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the Board of
Directors of the Company has not been informed and is not aware of any matters
to be presented for action at the Annual Meeting other than the matters listed
in the notice of meeting included with this Proxy Statement. If any other
matters should come before the Annual Meeting, or any adjournment thereof, it is
intended that the persons named in the enclosed proxy will have discretionary
authority to vote on such matters according to their best judgment.
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<PAGE> 14
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, WHICH IS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, IS AVAILABLE WITHOUT CHARGE TO EACH SHAREHOLDER OF
RECORD UPON WRITTEN REQUEST TO STAN C. TURK, CHIEF FINANCIAL OFFICER, NSA
INTERNATIONAL, INC., 4260 EAST RAINES ROAD, MEMPHIS, TENNESSEE 38118. Each such
written request must set forth a good faith representation that as of the record
date, November 3, 1996, the person making the request was a beneficial owner of
Common Shares entitled to vote at the Annual Meeting. Exhibits to the Form 10-K
will also be supplied upon the written request to the Chief Financial Officer
and payment to the Company of its cost of furnishing the requested exhibits. The
copy of the Form 10-K furnished without charge to the requesting shareholder
will be accompanied by a list briefly describing all of the exhibits and
indicating the cost of furnishing the exhibits.
BY THE ORDER OF THE BOARD OF DIRECTORS
-----------------------------------------
STAN C. TURK
Secretary
November 4, 1996
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<PAGE> 15
APPENDIX A
NSA INTERNATIONAL, INC.
4260 East Raines Road, Memphis, Tennessee 38118
--------------------
PROXY
--------------------
The undersigned appoints Stan C. Turk and L.F. Swords, and any one or both
of them with full power of substitution, as Proxy or Proxies, to represent and
vote all shares of stock standing in my name on the books of NSA International,
Inc. at the close of business on November 3, 1996, which I would be entitled to
vote if personally present at the Annual Meeting of Shareholders of NSA
International, Inc. to be held at The Memphis Marriott Hotel, 2625 Thousand Oaks
Blvd., Memphis, Tennessee 38118, on December 3, 1996, at 10:00 a.m. local time,
or any adjournments thereof, upon the matters more fully described in the Notice
of Annual Meeting of Shareholders and Proxy Statement (receipt of which is
hereby acknowledged). The Proxies are further authorized to vote in their
discretion as to any other matters which may come before the meeting. The Board
of Directors, at the time of preparation of the Proxy Statement, knows of no
business to come before the meeting other than that referred to in the Proxy
Statement.
1. Election of four directors to serve as described in the accompanying Proxy
Statement or until their successors have been elected and qualified.
FOR all nominees listed WITHHOLD AUTHORITY*
below (except as marked to the to vote for all nominees
contrary below). listed below.
[ ] [ ]
A. Jay Martin, Charles R. Evans, Jr., J. Neil Rood
(*INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
-------------------------------------------------------------------------
2. Proposal to ratify the selection of Deloitte & Touche as the independent
accountants and auditors of NSA International, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THE SHARES COVERED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN AND WHEN NO INSTRUCTIONS ARE GIVEN WILL BE VOTED FOR THE
PROPOSALS DESCRIBED IN THE ACCOMPANYING NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT AND THIS PROXY.
Please sign exactly as the name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
DATED: _________________ , 1996 Signature: _________________________
Number of Shares: _____________ _____________________________________
Signature (if held jointly)
________________________________
Print Name
________________________________
Address
________________________________
===============================================================================
Please return in the enclosed stamped envelope.
I will will not attend the meeting
[ ] [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
===============================================================================
