<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant x Filed by a party other than the registrant
check the appropriate box:
Preliminary proxy statement
x Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AJAY SPORTS, INC.
(Name of Registrant as Specified in Its Charter)
ROBERT R. HEBARD
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
x $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2) $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 O-11
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11:
(4) Proposed maximum aggregate value of transaction:
Check Box if any part of the fee is offset as provided by
Exchange Act Rule O-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:
(f) Date filed:
<PAGE>
AJAY SPORTS, INC.
1501 E. Wisconsin Street
Delavan, WI 53115
***************
Notice of Annual Meeting of Stockholders
to be held on May 23, 1996
***************
The Annual Meeting of Stockholders of Ajay Sports, Inc. (the "Company") will be
held at the offices of Ajay Leisure Products, Inc. at 1501 E. Wisconsin Street,
Delavan, Wisconsin 53115, on May 23, 1996 at 11:00am (CDT), for the following
purposes:
1. To elect 6 directors to hold office until the next
annual meeting of stockholders or until their
successors are duly elected and qualified.
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Stockholders holding shares of Common Stock of record at the close of business
on April 18, 1996 will be entitled to receive notice of and vote at the meeting.
Stockholders, whether or not they expect to be present at the meeting, are
requested to sign and date the enclosed proxy and return it promptly in the
envelope enclosed for that purpose. Any person giving a proxy has the power to
revoke it at any time by following the instructions provided in the Proxy
Statement.
By Order of the Board of Directors,
Robert R. Hebard
Secretary
April 22, 1996
Delavan, Wisconsin
<PAGE>
Proxy Statement
for 1996 Annual Meeting of Stockholders
General Information
This Proxy Statement is furnished to stockholders of Ajay Sports, Inc.
("Company") in connection with the solicitation of proxies by and on behalf of
the Company's Board of Directors (the "Board") for use at the Annual Meeting of
Stockholders of the Company (the "Meeting") to be held on May 23, 1996 at the
offices of the Company's operating subsidiary, Ajay Leisure Products, Inc., 1501
E. Wisconsin Street, Delavan, Wisconsin 53115, at the time and for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders. This
Proxy Statement, the accompanying proxy card and the Notice of Annual Meeting
will be first sent to stockholders on or about April 22, 1996.
As of April 18, 1996 the record date for entitlement to notice of and to vote at
the Annual Meeting, the Company had outstanding 22,337,746 shares of Common
Stock, $.01 par value per share (the "Common Stock"). The presence, in person or
by proxy, of holders of one-third of the shares of Common Stock entitled to vote
at the Meeting constitutes a quorum for the transaction of business at the
Meeting. In addition, the Company has 313,290 outstanding shares of 10%
Cumulative Convertible Preferred Stock, which have no voting rights.
Each share of Common Stock outstanding on the record date is entitled to one
vote on all matters presented at the Meeting. To be elected as a director, a
nominee must have more shares cast in his favor than shares for which voting
authority is withheld. Abstentions are counted only for purposes of determining
whether a quorum is present at the meeting and/or a vote entitled to be cast at
the Meeting. Broker non-votes will not be counted for any purpose.
A stockholder who gives his proxy may revoke it at any time before it is voted
by giving notice of the revocation thereof to the Secretary of the Company, by
filing another proxy with the Secretary or by attending the Meeting and voting
in person. All properly executed and unrevoked proxies delivered pursuant to
this solicitation, if received in time, will be voted in accordance with the
instructions of the beneficial owners contained thereon.
The Company will bear the cost of the solicitation. In addition to solicitation
by mail, the Company will request banks, brokers and other custodian nominees
and fiduciaries to supply proxy materials to the beneficial owners of the
Company's Common Stock for whom they hold shares and will reimburse them for
their reasonable expenses in so doing.
The Company's 1995 Annual Report on Form 10-K is being sent to all stockholders
with this Proxy Statement.
Proposal 1 - Election of Directors
At the Meeting six (6) directors will be elected to hold office until the next
annual meeting of stockholders or until their successors are duly elected and
qualified. Unless marked to the contrary, the proxies received by the Board will
be voted for the election of the six nominees named herein, all of whom are
presently members of the Board. Should any of the nominees for the office of
director decline or be unable to serve if elected, it is intended that the
person named in the accompanying form of proxy will vote for the election of
such other person for director as the Board of Directors recommends. The Board
has no reason to believe that any nominee will decline or be unable to serve if
elected.
<TABLE>
<CAPTION>
Positions and 1st Yr. As
Name Age Offices with Company Director
<S> <C> <C> <C>
Anthony B. Cashen 61 Director 1993
Robert R. Hebard 43 Director, Secretary of the 1989
Company
</TABLE>
1
<PAGE>
<TABLE>
<S> <C> <C> <C>
Stanley V. Intihar 61 Director 1994
Thomas W. Itin 61 Chairman, President, Treasurer 1993
and Director of the Company
Robert D. Newman 54 Director 1994
Clarence H. Yahn 59 Director 1994
</TABLE>
Anthony B. Cashen. Mr. Cashen has served as Secretary, Treasurer and Director of
LBO Capital Corp., since inception. He is currently a Managing Partner in
Lamalie Amrop International, a management consulting and executive recruiting
firm located in New York City. Previously, Mr. Cashen had been an officer and
Principal of the investment firms of A.G. Becker, Inc. and Donaldson, Lufkin &
Jenrette, Inc. He serves as Director of PW Communications and Immucell
Corporation, both of which are publicly-held companies. Mr. Cashen is also
President of the Sagamore Institute. He received his MBA from the Johnson
Graduate School of Management at Cornell University, and his B.S. degree from
Cornell University.
Robert R. Hebard. Mr. Hebard has served as Secretary of the Company since
September of 1990. From June 1986 to January 1992 he was First Vice
President/Director of Product Management for Comerica Bank and from February
1992 to October 1992 was Director of Retail Marketing for the merged
Comerica/Manufacturers Bank. Mr. Hebard is also currently serving as Vice
President of Woodward Partners, Inc., a real estate development company in
suburban Detroit, Michigan. In June 1993, he was named Chairman of the Board and
President of Enercorp, Inc., a publicly traded business development company
under the Investment Company Act of 1940, as amended. In 1993, Mr. Hebard was
also named Chief Executive Officer, Chief Financial Officer, and Treasurer of
CompuSonics Video Corporation, a publicly held company. From December 1993 to
August 1994 Mr. Hebard served as Director of Kimbro Imaging Systems, Inc. He
received his MBA from Canisius College and his B.S. degree from Cornell
University.
Stanley V. Intihar. From March 1994 to the present, Mr. Intihar has been Senior
Vice President of Williams Controls, Inc. and has been a Director of Williams
Controls, Inc. since December of 1992. From 1992 to 1994, he was an independent
consultant for Williams. From 1988 to 1991, Mr. Intihar held various offices
with Park Ohio Industries, Inc., including President and Chief Operating Officer
and most recently Chairman of the Board and Chief Executive Officer. Since 1978
Mr. Intihar has been a Director of Horsburgh & Scott Co., a private company. He
received his B.S. degree in Mechanical Engineering from Cornell University and
graduated from the Harvard School of Business, Advanced Management Program.
Thomas W. Itin. Mr. Itin was elected Chairman of the Board and President of the
Company in June of 1993. Mr. Itin has served as Chairman of the Board, Chief
Executive Officer and Chief Operating Officer of LBO Capital Corp. since its
inception, and is the Company's largest single stockholder. Mr. Itin has been
Chairman, President and Owner of TWI International, Inc. ("TWI") since he
founded the firm in 1967. Mr. Itin also is the Owner and Principal Officer of
Acrodyne Corporation since 1962. Mr. Itin is Chairman, President, Treasurer,
Chief Executive Officer, and Chief Operating Officer of Williams Controls, Inc.,
a publicly held corporation from March 1989 to the present. Mr. Itin was a
co-founder of Roadmaster Industries, Inc. in 1987 and served as a Director
thereof from October 1987 until June 1993. From December 1987 until October
1993, Mr. Itin was an officer and Director of CompuSonics Video Corporation, a
publicly held company. He received his B.S. degree from Cornell University and
his MBA from New York University.
Robert D. Newman. Mr. Newman became a Director of the Company in August 1994.
Mr. Newman has served as General Manager of Leisure Life, Inc., a wholly owned
subsidiary of the Company since August 1994. Mr. Newman founded Leisure Life,
Inc. in October, 1990 and has served as President since its inception, until its
purchase by the Company in August 1994. Mr. Newman was President and Chief
Executive Officer of Stone Mountain Millworks from 1985 to 1989. Mr. Newman
served as Director of Product Development for Gold Medal, Inc. from 1989 to
October 1990. He attended Northern Illinois University.
2
<PAGE>
Clarence H. Yahn. Mr. Yahn became a Director of the Company in September 1994,
and has served as Director of Ajay Leisure Products, Inc., a wholly owned
subsidiary of Ajay Sports, Inc. since September 1993 and as Ajay Leisure's
President since January 1994. Mr. Yahn is on the Board of Directors of Leisure
Life, Inc., a subsidiary of the Company. In 1988, Mr. Yahn joined Gold Medal,
Inc. as its President. Prior to joining Ajay Leisure Products, Mr. Yahn served
as Chief Executive Officer of Melnor, Inc. a consumer durables company from 1992
to 1993. He received his B.S. degree in mathematics and physics from the
University of Wisconsin and received a Masters in International Business from
the American Graduate School of International Management.
Robert R. Hebard is the son-in-law of Thomas W. Itin. Other than this
relationship there are no other family relationships between any director or
executive officers.
During the fiscal year ended December 31, 1995, the Board of Directors held a
total of three meetings and acted by unanimous written consent nineteen times.
Mr. Cashen is the sole member of the nominating committee of the Board of
Directors. The Audit Committee consists of Mr. Hebard, Mr. Cashen and Mr.
Intihar, and the Compensation Committee consists of Mr. Cashen and Mr. Intihar.
Committees of the Board. The Audit Committee recommends to the Board the
appointment of independent auditors, reviews with the independent auditors the
scope and results of the audit engagement and any non-audit services to be
performed by the independent auditors, monitors the Company's system of internal
accounting controls and evaluates the independence of the independent auditors
and their fees for services. The Compensation Committee monitors the Company's
compensation policies and reviews and recommends to the Board the salaries and
bonuses of executive officers of the Company and the remuneration of the
directors. The Compensation Committee also administers the 1994 Stock Option
Plan. The Audit Committee and the Compensation Committee each met one time in
fiscal 1995.
The directors of the Company are not compensated for their services as
directors, but are reimbursed for reasonable costs incurred on behalf of the
Company.
Executive Officers of the Company
The following table sets forth, as of April 1, 1996, the names and ages of the
Company's executive officers including all positions and offices held by each
such person. These officers are elected to hold office for one year or until
their respective successors are duly elected and qualified.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Thomas W. Itin 61 Chairman of the Board, President, Chief Executive
Officer and Treasurer
Robert R. Hebard 43 Director and Secretary
Clarence H. Yahn 59 Director; President of Ajay Leisure Products, Inc.
and Leisure Life, Inc.(subsidiaries)
Duane Stiverson 54 Chief Financial Officer of Ajay Sports, Inc., Ajay
Leisure Products, Inc. and Leisure Life, Inc.
</TABLE>
For information regarding Mr. Hebard, Mr. Yahn and Mr. Itin, see their
biographies above.
Duane Stiverson has been Chief Financial Officer since July 19, 1994. Prior to
joining the Company, Mr. Stiverson was the Vice President of Operations for
VariQuest Technologies, Inc. and held that position since 1991. From 1987 to
1990, Mr. Stiverson was Vice President of Materials for the Ambrosia Chocolate
Company. From 1978- 1987 he was the Vice President of Finance for Ambrosia, and
from 1976-78 was its Controller. Mr. Stiverson held various controller and
corporate finance positions with the Bendix Corporation. Mr. Stiverson has a
Bachelor of Science from the University of Nebraska and was later awarded a
Master of Business Administration from Michigan State University.
3
<PAGE>
Executive Compensation
Summary of Cash and Certain Other Compensation
The following table shows, for the years ending December 31, 1995, 1994 and
1993, the cash compensation paid by the Company and its subsidiaries, as well as
certain other compensation paid or accrued for those years, to each of the
executive officers of the Company who received compensation from all capacities
in which they serve:
Summary Compensation Table
<TABLE>
<CAPTION>
===================================================================================================================================
Annual Long-Term
Compensation Compensation
----------------------------------------------------
Securities
Underlying
Options
Name and Principal Position Year Salary (# Shares)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas W. Itin (1) 1995 $ 1 -
President, Treasurer and Director of the 1994 $ 1 -
Company, and Treasurer and Director of Ajay 1993 - -
Leisure Products, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Clarence H. Yahn (2) 1995 $104,875 -
Director of the Company and President of Ajay 1994 $101,000 350,000
Leisure Products 1993 - -
- -----------------------------------------------------------------------------------------------------------------------------------
Duane R. Stiverson 1995 $ 65,000 -
CFO of the Company and VP/CFO of Ajay 1994 $ 28,000 75,000
Leisure Products 1993 - -
===================================================================================================================================
</TABLE>
(1) On June 21, 1993 Mr. Itin was elected Chairman of the Board, President,
Treasurer and Director of the Company, and Chairman of the Board, Treasurer and
Director of Ajay Leisure Products, Inc. Mr. Itin has a three- year employment
arrangement with the Company, pursuant to which he will receive a salary of $1
per year for 1994 and 1995.
(2) On December 28, 1995, Mr. Yahn was granted 34,000 shares of the Company's
Common Stock. This value is included in Mr. Yahn's 1995 Annual Compensation in
the table.
Employment Contracts
The Company has an employment agreement with Mr. Itin under which he will serve
as the President and Chief Executive Officer of the Company at a salary of $1
per year for 1994 and 1995. The employment agreement terminates on December 31,
1996. Mr. Itin's compensation for 1996 is to be determined by the Board based on
Mr. Itin's contribution to the success of the Company in 1994, 1995 and 1996.
Under this arrangement, the Company may terminate the employment agreement with
Mr. Itin only for cause.
Common Stock Options
No stock options were granted to, and no options were exercised by, any
executive officer listed in the table for the fiscal year ended December 31,
1995. The following table summarizes common stock option values as of the year
ended December 31, 1995:
4
<PAGE>
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexerc. in-the-Money
Unexercised Options/FY-End (#) Options/FY-End ($)
Name Exerc. Unexerc. Exerc. Unexerc.
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Clarence H. Yahn 233,334 116,666 0 0
Pres. (Ajay)
Duane R. Stiverson 45,000 30,000 0 0
VP & CFO
</TABLE>
Further Information
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth, as of February 29, 1996, the number of shares of
Common Stock beneficially owned by each director and executive officer (named in
the Summary Compensation Table) of the Company individually, all officers and
directors as a group, and all beneficial owners of more than five percent of the
Common Stock. The following stockholders have sole voting and investment power
with respect to their holdings unless otherwise footnoted.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name and Address Beneficially Owned of Class (1)
<S> <C> <C>
Thomas W. Itin 13,281,225 (2)(3) 46.1%
7001 Orchard Lake Road
Suite 424
West Bloomfield, MI 48322
Williams Controls Industries, Inc. 15,228,520 (4) 44.2%
14100 S.W. 72nd Avenue
Portland, OR 97224
TICO 8,676,540 (5) 32.1%
7001 Orchard Lake Road
Suite 424
West Bloomfield, MI 48322
Acrodyne Profit Sharing Trust 2,773,471 (6) 11.1%
7001 Orchard Lake Road
Suite 424
West Bloomfield, MI 48322
Robert R. Hebard 1,928,797 (7) 8.3%
7001 Orchard Lake Road
Suite 426
West Bloomfield, MI 48322
Enercorp, Inc. 1,893,797 8.1%
7001 Orchard Lake Road
Suite 426
West Bloomfield, MI 48322
5
<PAGE>
LBO Capital Corp. 1,680,000 (8) 7.1%
7001 Orchard Lake Road
Suite 424
West Bloomfield, MI 48322
Robert D. Newman 926,000 (9) 3.9%
215 4th Avenue North
P.O. Box 60
Baxter, TN 38544
Clarence H. Yahn 417,334 (10) 1.8%
1501 E. Wisconsin Street
Delavan, WI 53115
Duane R. Stiverson 80,000 (11) 0.3%
1501 E. Wisconsin Street
Delavan, WI 53115
Stanley V. Intihar 21,667 (12) 0.1%
2688 Cranlyn Road
Shaker Heights, OH 44122
Anthony B. Cashen 11,667 (12) ***
Lamalie Amrop International
200 Park Avenue. Suite 3100
New York, NY 10166
All officers and directors as a group 16,666,690 57.0%
(seven persons)
</TABLE>
*** Less than 1%
(1) Where persons listed on this table have the right to obtain additional
shares of Common Stock through the exercise of outstanding options or
warrants or the conversion of convertible securities within 60 days
from March 4, 1996 these additional shares are deemed to be outstanding
for the purpose of computing the percentage of Common Stock owned by
such persons, but are not deemed to be outstanding for the purpose of
computing the percentage owned by any other person. Percentages are
based on 23,345,018 shares outstanding.
(2) Mr. Itin may be deemed to be a "control person" of the Company.
Includes Common Stock and shares of Common Stock issuable upon the
exercise of presently exercisable warrants and the conversion of
presently convertible Preferred Stock beneficially owned by Mr. Itin's
spouse and affiliates of Mr. Itin as follows:
6
<PAGE>
<TABLE>
<S> <C> <C>
TICO 5,000,040 Common Stock
First Equity Corporation 151,214 Common Stock
Acrodyne Profit Sharing Trust 2,773,471 Common Stock and Warrants
LBO Capital Corp. 1,680,000 Common Stock and Warrants
---------
9,604,725
TICO (12,500 shares of Series B
Preferred Stock convertible at one
share for 294.12 shares of
Common Stock) 3,676,500 Preferred Stock Conversion
---------
13,281,225
</TABLE>
Mr. Itin disclaims beneficial ownership in the securities owned by LBO
Capital Corp. and First Equity Corporation in excess of his pecuniary
interest. See Note 3 below with regard to securities owned by Williams
Controls, the beneficial ownership of which is disclaimed by Mr. Itin.
(3) Does not include 4,117,647 Common Shares and 11,110,873 options owned
by Williams Controls, Inc. Mr. Itin is Chairman of the Board,
President, Chief Executive Officer, Chief Operating Officer, Treasurer
and 26.7% beneficial owner of Williams Controls, Inc. Even though Mr.
Itin is a director of Williams Controls, he abstains from voting on
matters pertaining to the Company in meetings of the directors of
Williams Controls. If the shares and warrants owned by Williams
Controls were included, the number of shares beneficially owned would
be 28,509,745 and the percentage of class would be 71.4%.
(4) Includes 11,110,873 shares of Common Stock issuable upon the exercise
of outstanding stock options. See "Certain Relationships and Related
Transactions."
(5) Includes 3,676,500 shares of Common Stock issuable upon conversion of
12,500 shares of presently convertible Series B Preferred Stock, at a
rate of 294.12 shares of Common Stock for every one share of preferred
stock. TICO is a Michigan partnership of which Mr. Itin is the Managing
Partner.
(6) Includes 1,597,000 shares of Common Stock issuable upon exercise of
options. Mr. Itin is trustee and beneficiary of Acrodyne Profit Sharing
Trust.
(7) Includes the following Common Stock and shares of Common Stock issuable
upon the conversion of presently convertible Preferred Stock owned by
Enercorp, Inc., a Colorado corporation of which Mr. Hebard is Chairman
of the Board of Directors and President:
<TABLE>
<S> <C>
Common Stock 1,864,706
2,000 shares of Series C Preferred Stock convertible at
one share or 14.5 shares of Common Stock 29,091
----------
1,893,797
</TABLE>
(8) Includes 200,000 shares of Common stock issuable upon exercise of
warrants. LBO Capital Corp. is a Colorado corporation of which Mr. Itin
is a 51% shareholder, Chairman of the Board of Directors, and
President.
(9) Includes 100,000 shares of Common Stock issuable upon the exercise of
outstanding stock options.
(10) Includes 233,633 shares of Common Stock issuable upon the exercise of
outstanding stock options.
(11) Includes 60,000 shares of Common Stock issuable upon the exercise of
outstanding stock options.
(12) Includes 1,667 shares of Common Stock issuable upon the exercise of
outstanding stock options automatically granted under the 1994 Stock
Option Plan.
7
<PAGE>
Changes in Control
On May 5, 1994, the Company entered into a Joint Venture Implementation
Agreement ("JVIA") with Williams Controls Industries, Inc. ("Williams"),
concurrently with the execution of a Loan Agreement with Williams. Pursuant to
the JVIA, the Company granted to Williams the option to purchase shares of the
Common Stock of the Company at various option prices. See Certain Relationships
and Related Transactions for more information on the JVIA.
Compliance with Section 16(a) of the
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than ten-percent stockholders are
required by the SEC regulation to furnish the Company with copies of Section
16(a) forms they file. Based solely on review of the copies of such forms
furnished to the Company, or written representations of the reporting person,
the Company has determined that all required reports have been timely filed
during the year, except for one shareholder, Williams Controls, Inc., which
filed a late report involving a transaction in July 1995. In addition, directors
Anthony B. Cashen and Stanley V. Intihar filed late reports relating to
automatic stock option grants on October 31, 1994 and May 24, 1995 under the
Company's 1994 Stock Option Plan.
Certain Relationships and Related Transactions
The Company and Ajay entered into the JVIA with Williams in which the Company
granted Williams an option to purchase Common Stock of the Company at various
option prices. This JVIA included the establishment of a loan facility on behalf
of the Company by Williams. On July 23, 1995, the Company completed a financing
arrangement with the United States National Bank of Oregon ("US Bank") for an
$8.5 million credit facility. Upon the closing of the credit facility with US
Bank, Williams was paid in full for all outstanding obligations under the Loan
Agreement with Williams.
On October 3, 1994, Williams exercised a portion of its options and purchased
4,117,647 shares of the Company's Common Stock. On April 5, 1995, the Company
and Williams agreed to modifications of the terms of the JVIA. The changes still
in effect include, (1) a waiver of Williams' preemptive rights under certain
circumstances, (2) a reduction in the number of $1.00 options previously granted
to Williams, from 1,394,979 to 348,745, (3) a reduction in the exercise price of
the $1.00 options granted to Williams to $.50, (4) an extension of the
expiration date of all options granted to Williams under the Joint Venture
Agreement to August 1, 1999, and (5) an additional four-year extension of the
manufacturing joint venture at the Company's Mexicali, Mexico and Delavan,
Wisconsin facilities. Williams retains the following options granted under the
JVIA:
<TABLE>
<CAPTION>
Option Expiration
# of Options Exercise Price Date
<S> <C> <C>
4,717,219 $.34 8/1/99
3,487,447 .40 8/1/99
2,906,207 .50 8/1/99
</TABLE>
Mr. Itin, the Chairman and president of the Company, is, and was at the time of
the Loan Agreement, Chairman, President, Treasurer, Chief Executive Officer, and
Chief Operating Officer of Williams, a publicly-held corporation.
8
<PAGE>
Independent Public Accountants
The Company's Financial Statements for the fiscal year ended December 31, 1993
were audited by Coopers & Lybrand ("Coopers"). Coopers issued its report thereon
dated March 25 1994. On June 3, 1994, the Company was informed by Coopers that
the client-auditor relationship between the Company and Coopers had ceased. On
July 21, 1994, the Company engaged Hirsch & Silberstein of Farmington Hills,
Michigan, to audit the Company's Financial Statements for the year ended
December 1994, and Hirsch & Silberstein has continued in that capacity until the
current time, including the completion of the Company's 1995 audit.
Representatives of Hirsch & Silberstein will not be present at the Annual
Meeting of Stockholders.
The report of Hirsch and Silberstein on the Company's financial statements for
the fiscal year ended December 31, 1994 was qualified as to uncertainty
concerning the Company's ability to continue as a going concern due to
significant losses during 1993 and 1994. That qualification was removed as part
of the completion of the 1995 audit.
The report of Coopers on the Company's financial statements for the fiscal year
ended December 31, 1993 was qualified as to uncertainty concerning the Company's
ability to continue as a going concern due to significant losses during 1993 and
the Company not being in compliance with certain debt covenants under its bank
loan. The bank loan was subsequently repaid in full on May 5, 1994, at which
time the Company entered into a new loan agreement with another company.
In connection with the audit for the year ended December 31, 1993, there were no
disagreements with Coopers on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which if not
resolved to the satisfaction of Coopers would have caused them to make reference
to the matter in their report. The same was true as of June 3, 1994, the date
that the client-auditor relationship between the Company and Coopers ceased.
Stockholder Proposals
All proposals of stockholders intended to be included in the proxy statement to
be presented at the next annual meeting of stockholders must be received at the
Company's administrative offices at 7001 Orchard Lake Road, Suite 424, West
Bloomfield, Michigan 48322, Attention: Corporate Secretary, on or before January
23, 1997.
Other Business
Management does not know of any other business to be brought before the Meeting.
If any such matters are brought before the meeting, the proxies named in the
enclosed form of proxy will vote proxies received by them as they deem best with
respect to all such matters.
By Order of the Board of Directors,
Robert R. Hebard
Secretary
April 22, 1996
Delavan, Wisconsin
9
<PAGE>
- --------------------------------------------------------------------------------
PROXY
- --------------------------------------------------------------------------------
AJAY SPORTS, INC.
1501 E. Wisconsin Street
Delavan, WI 53115
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Ajay Sports, Inc. (the "Company")
hereby constitutes and appoints Thomas W. Itin and Robert R. Hebard as proxies,
each with the power to appoint his substitute, to appear, attend and vote all of
the shares of the Common Stock of the Company standing in the name of the
undersigned at the 1996 Annual Meeting of Stockholders of Ajay Sports, Inc. to
be held at 1501 E. Wisconsin Street, Delavan, Wisconsin, on May 23, 1996, at
11:00am (CDT), and at any postponements or adjournments thereof, upon the
following matters:
1. ELECTION OF DIRECTORS
|_| FOR all nominees listed below (except as marked to
the contrary below).
|_| WITHHOLD AUTHORITY to vote for all nominee(s).
Instruction: To withhold authority to vote for any
individual nominee, strike a line through the
nominee's name in the list below:
Anthony B. Cashen Robert R. Hebard Stanley V. Intihar
Thomas W. Itin Robert D. Newman Clarence H. Yahn
2. To transact such other business as may properly come before
the meeting.
The proxy, when properly signed and delivered, will be voted in the
manner directed herein by the undersigned stockholder. If no direction is made,
this proxy will be voted FOR the election of directors, and for Proposal 2. This
proxy will be voted in accordance with the discretion of the proxies on any
other business.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders, the Proxy Statement dated April 22, 1996 and the Annual
Report on Form 10-K of Ajay Sports, Inc. for the year ended December 31, 1995.
The undersigned ratifies all of the proxies, or any of them or their
substitutes, may lawfully do or cause to be done by virtue hereof and revokes
all former proxies.
Please mark, date and sign your name exactly as it appears hereon and
return the Proxy in the enclosed envelope as promptly as possible. It is
important to return this Proxy properly signed in order to
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exercise your right to vote if you do not attend the meeting and vote in person.
When signing as agent, partner, attorney, administrator, guardian, trustee or in
any other fiduciary or official capacity, please indicate your title. If stock
is held jointly, each joint owner must sign.
Date: __________________, 1996
Signature
Signature (if jointly held)
Address if different from
that on label:
Street Address
City, State and Zip Code
Number of Shares
Please check if you intend to be present at the meeting: _____________
11
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