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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
[ X ]Filed by Registrant
[ X ] Definitive Proxy Statement
Commission file number: 0-18108
FINET HOLDINGS CORPORATION
(Name of Registrant as specified in its charter)
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<PAGE> 2
FINET HOLDINGS CORPORATION
3021 Citrus Circle
Walnut Creek, CA 94598
October, 1997
Dear Finet Shareholder:
We have scheduled the 1997 Finet Holdings Corporation Annual Meeting of
Shareholders. We anticipate that it will be a brief, routine meeting to
complete the following items, the first two of which are annual
requirements. We have received no requests for other matters to be
presented.
1. Re-elect seven directors
2. Approve reappointment of Reuben E. Price & Co. as independent auditors
3. Approve the Board of Directors resolution to amend the Company's stock
option plan
Shareholders of record at the close of business on October 31, 1997 may
vote. If you attend you can cast your vote at the meeting, or you can vote
by signing and returning the enclosed proxy, in which case the individuals
named on the proxy will vote your shares in the manner you indicate.
So that we may provide adequate seating, if you plan to attend, please
immediately notify Paige Lane at 510-906-5884.
Whether or not you plan to attend, please complete, sign, date and return
the enclosed proxy ballot in the envelope provided.
Thank you for your continued interest in our Company.
Sincerely,
/s/ Jan Hoeffel
Jan Hoeffel
Secretary
<PAGE> 3
Attendance and Voting Matters
The Quorum Requirement
A quorum of shareholders is necessary to hold a valid meeting. If
shareholders representing at least one-half of Finet shares outstanding are
present in person or by proxy, a quorum will exist. By completing and
returning the enclosed ballot, your shares will count as present for
establishing a quorum.
Item 1. Election of Directors
Our bylaws provide for not less than five and not more than nine directors
and for the election of all directors at each annual shareholders meeting
to serve a term which expires at the next annual shareholder meeting. The
following directors are nominated for reelection:
1. Stephen J. Sogin, Ph.D., 54, a Director of the Company since 1990. Dr.
Sogin is also a Director of Osteotech, Inc.
2. L. Daniel Rawitch, 38, Chief Executive Officer of Finet Holdings
Corporation and a Director of the Company since 1994.
3. Jan Hoeffel, 61, President and Secretary of Finet Holdings Corporation
and a Director of the Company since 1995.
4. James W. Noack, 45, President of Monument Mortgage, Inc. and a
Director of the Company since January, 1997.
5. S. Lewis Meyer Ph.D., 52, President and Chief Executive Officer of
Imatron, Inc., a computerized tomography firm and a Director of the Company
since January, 1997.
6. Jose Filipe Guedes, 50, Managing Partner of Ceramic, a ceramic tile
manufacturer, and Pinto Basil, a real estate investment firm, and a
Director of the Company since January, 1997.
7. Jose Maria Salema Garcao, 50, a Director and Chairman of the Company
since October, 1997.
Your Board of Directors recommends a vote for these nominees.
Board Meetings and Committees
Normally the Board meets quarterly. Our full Board met five times thus far
in calendar 1997. In addition to meetings of the full Board, directors
attended meetings of individual Board committees and often considered
issues separate from these meetings. For our incumbent Board as a whole,
attendance at full Board and committee meetings exceeded 90%
Our Board has three standing committees that serve a critical function for
Finet and its shareholders.
The Executive Committee normally meets in months without a full Board
meeting to review ongoing company operations and plans. Present members of
the Committee are Messrs. Meyer, Sogin, Rawitch, Hoeffel and Noack. Thus
far in calendar 1997, the Committee held six meetings
The Audit Committee reviews management's independent accountant selection
and makes recommendations to the Board based on that review. The Committee
also questions management and independent accountants on the application of
accounting and reporting standards to Finet. Present members of the
committee are Messrs. Meyer and Sogin. Thus far in calendar 1997, the
Committee held one meeting.
The Compensation Committee reviews Finet's compensation practices and
approves its compensation programs and plans. Present members of the
Committee are Messrs. Meyer, Sogin and Noack. Thus far in calendar 1997,
the Committee held one meeting.
<PAGE> 4
Security ownership of certain beneficial owners and Management
The following table sets forth certain information with respect to the
beneficial ownership of the Company's common stock at April 30, 1997: (1)
by each person known by the Company to own beneficially more than five
percent of the Company's outstanding shares of common stock; (2) by each
current Director, executive officer of the Company; and (3) by all
officers, Directors and Director nominees as a group. Except as otherwise
indicated in the notes to this table, the holders listed below have sole
voting and investment power with respect to such shares. For purposes of
this table, a person is deemed to have "beneficial ownership" of any shares
as of a given date which such person has the right to acquire within 60
days after such date. For purposes of computing the percentage of
outstanding shares held by each person named below on a given date, any
security which such person has the right to acquire within 60 days after
such date is deemed to be outstanding, but is not deemed to be outstanding
for the purpose of computing the percentage ownership of any other person.
<TABLE>
Beneficial Ownership
- -----------------------------------------------------------
<CAPTION>
Name and Address of ----Common stock----
Beneficial Owner # owned % owned
- ------------ ---------------------- ---------- -------
<S> <C> <C> <C>
Beneficial Jose Salema Garcao 9,100,000 <F1> 29.9%
Owners of Quinta de Marinha
more than 5% Lote CT-14
of shares 2750 Cascais, Portugal
outstanding
James A. Umphryes 3,260,000 <F2> 12.7%
3741 Waterford Lane
Walnut Creek, CA 94598
Cumberland Partners 2,564,781 <F3> 9.9%
1114 Ave of Americas
New York, NY 10036
Directors Jose Salema Garcao 9,100,000 <F1> 29.9%
and Officers James W. Noack 4,315,000 <F4> 16.7%
and Officers Jan C. Hoeffel 1,263,975 <F5> 4.9%
L. Daniel Rawitch 1,074,934 <F6> 4.1%
Jose Philipe Guedes 360,000 <F7> 1.4%
Stephen J. Sogin 155,663 <F8> 0.6%
S. Lewis Meyer 40,000 <F9> 0.2%
D. Allen Malmuth 7,500 <F10> 0.0%
8 Directors
and Officers
as a group 16,296,962 56.2%
<FN>
<F1>
Reflects 4,400,000 shares beneficially owned by him and currently
exercisable warrants to acquire 4,700,000 shares.
<F2>
Reflects 3,220,000 shares beneficially owned by him, 20,000 beneficially
owned by his spouse and 20,000 shares beneficially owned by his minor
child.
<F3>
Reflects 2,350,000 shares beneficially owned and currently exercisable
warrants to acquire 214,781 shares.
<F4>
Reflects 4,295,000 shares beneficially owned by him and 20,000 shares
beneficially owned by his minor child.
<PAGE> 5
<F5>
Reflects 1,037,817 shares beneficially owned by him, 917 shares
beneficially owned by his spouse and currently exercisable options to
acquire 225,241 shares.
<F6>
Reflects 926,934 shares beneficially owned by him and currently exercisable
options to acquire 148,000 shares.
<F7>
Reflects 320,000 shares beneficially owned by him and currently exercisable
options to purchase 40,000 shares granted for his services as a Director.
<F8>
Reflects 50,000 shares beneficially owned by him and currently exercisable
options to purchase 105,633 shares granted for his services as a Director.
<F9>
Reflects currently exercisable options to purchase 40,000 shares granted
for his services as a Director.
<F10>
Reflects 7,500 shares beneficially owned by him.
</FN>
</TABLE>
EXECUTIVE AND DIRECTOR COMPENSATION
Executive Compensation
The following table sets forth information regarding compensation received
by the Company's Chief Executive Officers and each of the Company's other
executive officers whose total annual compensation exceeded $100,000 with
respect to the fiscal years ended April 30, 1997, 1996, and 1995,
respectively. Effective January 1, 1997, Messrs. Rawitch, Hoeffel and
Noack, each of whom manages a different segment of the Company's business,
voluntarily elected to defer a portion of their annual salaries.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Awards Other
------------------- ---------------------- --------
Name and Other Restricted Securities All
Principal Fiscal Annual Stock Underlying Other
Position Year Salary Comp Awards Options Comp <F1>
- --------- ------ -------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
L. Daniel 1997 $ 90,664 $ 58,341 - - $ 35,000
Rawitch 1996 60,840 38,789 - 100,000 -
CEO 1995 100,000 20,000 - 48,000 -
Harry R. 1997 - - - - -
Kraatz 1996 - - - - -
CEO/Pres 1995 <F2> 60,000 - - 184,320 -
Jan C. 1997 55,169 53,762 - - 18,000
Hoeffel, 1996 47,000 1,500 - 100,000 -
President 1995 0 - - 125,000 -
James W. 1997 116,990 8,735 - - -
Noack, MMI
President,
Director
Paul R. 1997 119,386 10,033 - - -
Garrigues,
MMI CFO
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<FN>
<F1>
During fiscal year 1997 prior to the acquisition of PAMN by Finet, Mr.
Rawitch was employed by PAMN on a part time basis and received annual
compensation of $35,000, and Mr. Hoeffel received from PAMN consulting fees
of $18,000.
<F2>
Mr. Kraatz , who resigned as Chief Executive Officer and voluntarily
surrendered 96,000 options on May 15, 1995, was engaged through November,
1995 to market brokerage franchises, for which no compensation was earned
or paid, and his remaining 88,320 options expired unexercised in December
1995.
</FN>
</TABLE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
- -----------------------------------------------------------------
% Total Exercise
Options Options Price Expiration
Name Granted Granted Price($/sh) Date
- ----------------- ------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Stephen J. Sogin 40,000 33.3% .50 1/2002
Jose Philipe Guedes 40,000 33.3% .50 1/2002
S. Lewis Meyer 40,000 33.3% .50 1/2002
------- ------
120,000 100.0%
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</TABLE>
The period covered in the above table is from May 1, 1996 to April 30,
1997. The most recent prior annual report covered the period from January
1, 1995 to December 31, 1995. During the intervening period from January 1,
1996 to April 30, 1996, the following options were granted:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
% Total Exercise
Options Options Price<F1> Expiration
Name Granted Granted Price($/sh) Date
- ----------------- ------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Stephen J. Sogin 50,317 20.2% $ .06 1/2001
L. Daniel Rawitch 100,000 39.9% .06 1/2006
Jan C. Hoeffel 100,000 39.9% .06 1/2006
------- --------
250,317 100.0%
<FN>
<F1>
Pursuant to the Company's plan of recapitalization approved by shareholders
in the first quarter of 1996, which included the agreement to repurchase 6
million shares from Cumberland for $.03 per share, in the absence of an
active trading market for the Company's shares, the Company's Board of
Directors established $.03 as the share value for that period. As a result
of the reverse split of October, 1996, that value became $.06 per share.
The options granted and the exercise prices above have been adjusted for
the reverse stock split of October, 1996.
</FN>
</TABLE>
<PAGE> 7
Director Compensation
Heretofore, the members of the Board of Directors have not received any
cash compensation for services on the Board of Directors or any committee
thereof but are reimbursed for expenses actually incurred in attending
meetings of the Board and its committees. In January, 1997 the Board's
Compensation Committee recommended and the Board resolved that outside
Directors be compensated as described below. Of our current Board members,
three, Messrs. Rawitch, Hoeffel and Noack, are salaried employees of Finet.
Board members that are not salaried employees of Finet receive separate
compensation for Board service.
Annual Retainer: $15,000 for attendance at full Board meetings
Attendance Fees: $1,000 for each Board Committee meeting
Expense Reimbursement: Expenses related to meeting attendance
Stock Options: 40,000 shares upon initial election, 25,000
per year
for three years thereafter, all subject to
continued
service. (Assumes shareholder approval of option
plan amendment as described herein)
Payment of all Director retainer fees and attendance fees has been deferred
year to date.
Item 2. Appointment of Reuben E. Price & Co.
Each year, independent outside auditors are employed to review the
Company's annual financial statements. The Board of Directors recommends
the reappointment of Reuben E. Price & Co. as independent auditors for the
fiscal year ending April 30, 1998.
Reuben E. Price & Co. has been the independent auditors of the Company
since 1993, and no relationship exists other than the usual relationship
between independent public accountant and client.
If the appointment of Reuben E. Price & Co. as independent auditors for the
current fiscal year is not approved by shareholders, the adverse vote will
be considered a direction to the Board of Directors to consider other
auditors for next year. However, because of the difficulty in making any
substitution of auditors so long after the beginning of the current year,
the appointment for this year will stand unless the Board finds other good
reason for making a change.
A representative of Reuben E. Price & Co. will be available at the annual
meeting of shareholders to respond to questions.
Your Board of Directors recommends a vote for this proposal.
Item 3. Amendment of the Company's Stock Option Plan
The Company has had an incentive stock option plan since 1989. The number
of shares reserved for issuance under this plan , originally 750,000, was
increased to 1,000,000 in 1990 at a time when the total shares outstanding
was less than 3,000,000. Directors were to be granted 5,000 options at the
rate of 1,250 options per year as consideration for their continued
service.
As a result of several subsequent reverse stock splits and increases in the
number of shares reserved, the current number of shares reserved for the
stock option plan is 500,000, the total number of shares outstanding is
nearly 30,000,000, and the number of options to be granted to directors is
316 at the rate of 79 options per year.
Accordingly, the Board of Directors has resolved to amend the plan as
follows:
A. to change the name of the plan from the "William & Clarissa, Inc. 1989
Stock Option Plan" to the "Finet Holdings Corporation 1989 Stock Option
Plan."
<PAGE> 8
B. to grant directors an immediately exerciseable non-incentive five year
option to purchase 40,000 shares upon initial election as a director and,
thereafter, on each of the next four anniversaries of continued service as
a director, a five year option to purchase 25,000 shares, exerciseable at
the rate of 6,250 shares per quarter, all subject to continued service as a
director.
C. to increase the number of shares reserved for issuance under the plan
from 500,000 shares to 1,750,000 shares.
D. to reserve 875,000 shares for a Stock Bonus Plan, with all such grants
of stock in lieu of cash bonus payments to be as recommended by the
Compensation Committee and approved by the Board of Directors.
E. to add at the discretion of the Board a fourth payment alternative for
the exercise of stock options in the form of a net exercise payment
alternative whereby shares would be issued upon exercise in an amount equal
to the positive difference, if any, between the exercise price and the fair
market value upon exercise divided by the fair market value upon exercise.
Your Board of Directors recommends a vote for this proposal.
Other Matters
Section 16(a) Beneficial Ownership Reporting Compliance
Based on a review of our records, all reports required to be filed pursuant
to Section 16(a) of the Exchange Act were filed on a timely basis.
Shareholder Proposals for the 1998 Annual Meeting
If you want to submit proposals for possible inclusion in the Company's
1998 Proxy Statement, you must do so on or before August 31, 1998
Solicitation
Finet is soliciting this proxy on behalf of its Board of Directors. This
solicitation is being made by mail but also may be made by telephone or in
person.
Shareholder List
A shareholder list will be available for your examination during normal
business hours at the Company's offices.
Revocability of Proxy
You may revoke the enclosed proxy by filing written notice of revocation
with the Company or by providing a later executed proxy.
<PAGE> 9
SUPPLEMENTAL STOCKHOLDER INFORMATION
Annual Meeting
On Thursday, November 20, 1997, at
3:00 p.m. PST, the annual meeting
of shareholders will be held at Secretary
3021 Citrus Circle, Walnut Creek, Finet Holdings Corporation
CA 94598. Requests for proxies are 3021 Citrus Circle
being sent to shareholders on or Walnut Creek, CA 94598
about November 6, 1997
The Company also makes available to
Stock Transfer Agent shareholders copies of its Form 10-
Continental Stock Transfer & Trust Q reports. These reports are
Co. available in September, December
2 Broadway and March.
New York, NY 10004
Telephone: 212-509-4000 Investor Inquiries
For those seeking additional
Stock Exchange Listing information about the corporation:
On October 29, 1997, the Company
was notified that its application Institutional analysts and
to have its common stock listed on representatives of financial
the Nasdaq SmallCap Market had been institutions should contact:
approved. Completion of the
listing procedure is expected in Director of Investor Relations
early November, 1997. Finet Holdings Corporation
3021 Citrus Circle
Number of shareholders Walnut Creek, CA 94598
Shareholders of record at October Telephone: (510) 988-6550
31, 1997 total approximately 600. Facsimile: (510) 934-2903
E-mail: [email protected]
Common Stock Price Range
The Company's share price closed at Individual shareholders should
$2.50 at fiscal year end April 30, contact:
1997. Subsequent quarterly price
ranges of Finet common stock on the Secretary
OTC Bulletin Board, the principal Finet Holdings Corporation
market on which the stock has been 3021 Citrus Circle
traded, were: Walnut Creek, CA 94598
Telephone: (510) 988-6550
Quarter High Low
First $5.125 $2.625 Internet Sites
Second $7.5635 $2.875
http://www.finetholdings.com
Publications for Shareholders http://www.iQualify.com
Single copies of the Company's http://www.theptn.com
annual report for the year ended http://www.pamn.com
April 30, 1997 on Securities and http://www.monument.com
Exchange Commission Form 10-K http://www.homeseekers.com (a
(without exhibits) was mailed to marketing partner)
all shareholders of record in
October, 1997. A copy will be
provided without charge to
shareholders upon written request
to:
<PAGE> 10
DIRECTORS AND OFFICERS
DIRECTORS
Jose Maria Salema Garcao, Director and Chairman
Jose Filipe Guedes Director
Stephen J. Sogin Director
Jan Hoeffel Director
S. Lewis Meyer Director
James W. Noack Director
L. Daniel Rawitch Director
OFFICERS
L. Daniel Rawitch Chief Executive Officer
Jan Hoeffel President, Secretary
George P. Winkel Executive Vice President, Chief Financial Officer
James W. Noack Executive Vice President, Chief Information Officer
D. Allen Malmuth Vice President, General Counsel
Katherine L. Carroll Controller
Paige Lane Assistant Secretary
<PAGE> 11
BALLOT
Your shareholder vote is important ! Please vote, sign and mail your proxy
(this page) in the enclosed postage-paid envelope today.
Item 1. Election of Directors
Jose Maria Salema Garcao Jose Filipe Guedes
Stephen J. Sogin Jan Hoeffel
S. Lewis Meyer James W. Noack
L. Daniel Rawitch
[ ] For all nominees listed above except as marked to the
contrary
To withhold authority to vote for any individual nominee, line out that
nominee's name above.
[ ] Withhold authority to vote for all nominee's above.
Item 2. Ratification of selection of Reuben E. Price & Co. as independent
auditors
[ ] For
[ ] Against
[ ] Abstain
Item 3. Approval of Option Plan Amendment
[ ] For
[ ] Against
[ ] Abstain
The undersigned shareholder of Finet Holdings Corporation does hereby
appoint L. Daniel Rawitch and Jan Hoeffel, and each of them, as attorneys-
in-fact and proxies of the undersigned, with full powers of substitution,
to attend the Annual Shareholders Meeting of Finet Holdings Corporation to
be held November 20, 1997 at 3021 Citrus Circle, Walnut Creek, CA 94598 at
3:00 P.M. PST and at all adjournments thereof, and to vote the shares held
in the name of the undersigned on the record date for said meeting for the
matters specified above. Said attorneys-in fact shall vote in accordance
with their best judgment as to any other matter. The shares represented
hereby will be voted as indicated above or FOR if no choice is indicated.
Please sign exactly as your name appears on your stock certificate or
securities account, as applicable. When signing as a custodian, attorney,
executor, administrator, trustee, etc., please give your full title as
such. All joint owners should sign. If the account is registered in the
name of a corporation, partnership or other entity, a duly authorized
individual must sign on its behalf and give title.
Dated: _________________________________, 1997
Signature: ____________________________________
Signature: ____________________________________
