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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:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BROWN DISC PRODUCTS COMPANY, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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BROWN DISC PRODUCTS COMPANY, INC.
3029 S. Harbor Blvd.
Santa Ana, California 92704
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 1997
NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING OF STOCKHOLDERS OF BROWN DISC
PRODUCTS COMPANY, INC., A COLORADO CORPORATION (THE "COMPANY"), WILL BE HELD AT
THE COURTYARD MARRIOT HOTEL, 3002 S. HARBOR BLVD., SANTA ANA, CALIFORNIA, ON
MONDAY, JUNE 2, 1997 AT 10:00 A.M. LOCAL TIME. THE ANNUAL MEETING WILL BE
HELD FOR THE FOLLOWING PURPOSES, AS MORE FULLY DESCRIBED IN THE ATTACHED PROXY
STATEMENT:
1. To elect a Board of three (3) Directors;
2. To change the name of the Company to The Quartz Group, Inc.
3. To vote to ratify the appointment of Stockman Kast Ryan & Scruggs,
P.C. as the Company's independent certified accountants; and
4. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
In accordance with the provisions of the Bylaws, the Board of Directors has
fixed the close of business on April 21, 1997 as the record date for the
determination of the holders of Common Stock entitled to notice of and to vote
at the Annual Meeting.
Whether or not you expect to attend the meeting in person, please complete,
date and sign the enclosed proxy card and mail it as promptly as possible in the
enclosed envelope to assure representation of your shares at the meeting.
By Order of the Board of Directors,
/s/ DAVID J. LOPES
-------------------------------------
David J. Lopes, Chairman of the Board
Santa Ana, California
May 9, 1997
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BROWN DISC PRODUCTS COMPANY, INC.
3029 S. HARBOR BLVD.
SANTA ANA, CALIFORNIA 92704
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 1997
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the management and Board of
Directors of BROWN DISC PRODUCTS COMPANY, INC., a Colorado corporation (the
"Company" or "Brown Disc"), for use at the Company's Annual Meeting of
Stockholders and at any and all adjournments thereof. Any shareholder has the
power to revoke his or her proxy at any time before it is voted. A proxy may be
revoked at any time prior to its exercise by delivering a written notice of
revocation to the Secretary of the Company at its principal office address
listed above, by a subsequent proxy executed by the person executing the prior
proxy and presented to the Secretary of the Company, or by attendance at the
meeting and voting in person by the person executing the proxy.
The cost of preparing, assembling and mailing this Notice of Annual Meeting
and Proxy Statement and the enclosed proxy card will be paid by the Company.
Following the mailing of this Proxy Statement, directors, officers and regular
employees of the Company may solicit proxies by mail, telephone, telegraph or
personal interview. Such persons will receive no additional compensation for
such services. Brokerage houses and other nominees, fiduciaries and custodians
nominally holding shares of the Company's common stock of record will be
requested to forward proxy soliciting material to the beneficial owners of such
shares, and will be reimbursed by the Company for their reasonable charges and
expenses in connection therewith. This Proxy Statement was first mailed to the
Company's stockholders on or about May 9, 1997.
ANNUAL REPORT ON FORM 10-KSB FOR LAST FISCAL YEAR
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1996, as filed with the Securities and Exchange Commission
("Commission"), including audited financial statements at June 30, 1996 and for
the two fiscal years then ended, is available to stockholders without charge
upon written request addressed to the Company at its address listed above.
Reports filed by the Company with the Commission subsequent to May 6, 1996 are
also available through the Commission's EDGAR Database of Corporate Information
which can be accessed on the Internet at the Commission's URL address,
http://www.sec.gov.
VOTING AND RECORD DATE
The holders of record of the Company's common stock ("Common Stock") and
Series A Redeemable Preferred Stock ("Series A preferred") at the close of
business on April 21, 1997, the record date for the Annual Meeting (the "Record
Date"), are entitled to notice of and to vote at the Annual Meeting. The Company
had 6,029,837 shares of Common Stock and 12,613 shares of Series A preferred
outstanding as of the Record Date. Each share of Common Stock and Series A
preferred entitles the holder thereof to one vote on each matter to be acted
upon at the meeting. Abstentions and broker "non-votes" will be counted in
determining the number of shares present for a quorum but will not be voted for
election of directors or on other proposals and will have the same effect as
abstentions as to the election of directors and Proposal No. 2.
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The following table sets forth information (except as otherwise indicated by
footnote) as to shares of Common Stock owned on the Record Date by (i) each
person known by management to beneficially own more than 5% of the Company's
outstanding capital stock, (ii) each of the Company's directors and nominees for
election as directors, and (iii) all executive officers, directors and nominees
for election as directors as a group. None of such persons owns any shares of
the Company's Series A preferred stock.
<TABLE>
<CAPTION>
COMMON STOCK (2) VOTING RIGHTS (3)
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NAME OR GROUP (1) SHARES % OF CLASS VOTES % OF TOTAL
- ---------------------------------- --------- ---------------- --------- -----------
<S> <C> <C> <C> <C>
DIRECTORS:
Ronald H. Cole (4) 50,000 .7% 1,363,900 22.6%
David J. Lopes (5) 500,000 7.4% -0- ---
Daryl M. Silversparre (6) 250,000 3.7% -0- ---
All officers and directors
as a group [four persons] (7) 800,000 11.8% 1,363,900 22.6%
Other 5% Shareholders:
R. Eugene Rider and Eva
Forsberg-Rider (8) 1,301,900 19.2% -0- ---
</TABLE>
(1) To the best knowledge of the Company's management, the persons named in the
table have sole voting and investment power with respect to all shares
shown to be beneficially owned by them, subject to the information
contained in the footnotes to the table and, where applicable, community
property laws.
(2) Assumes 6,792,450 shares outstanding including 6,043,450 shares currently
outstanding and 750,000 issuable upon exercise of presently exercisable
warrants held by the above entitled stockholders. No person listed in the
table owns shares of Series A or Series B preferred stock. Shares listed in
these columns do not include shares any such person or group may be
entitled to vote by proxy which are not otherwise beneficially owned by
such person or group. See Notes 4, 6 and 9.
(3) The amount and percentage of voting rights shown in these columns are
based on 6,042,450 shares entitled to vote as of the Record Date
(representing all outstanding shares of Common Stock and Series A preferred
stock at one vote per share). Figures shown in these columns do not include
shares beneficially owned by a person or group if such person or group is
not entitled to vote such shares at the Annual Meeting. See Notes 4, 6 and
9.
(4) The following shares are subject to irrevocable proxies expiring on
September 7, 1997 granted to Mr. Cole: 1,051,900 shares beneficially owned
by R. Eugene Rider and Eva Forsberg-Rider, 250,000 shares owned by Gregory
Timm as trustee for the benefit of R. Eugene Rider and Eva Forsberg-Rider
and 62,000 shares owned by Harry K. McCreery. See Notes 6 and 9.
(5) Includes Class A warrants covering 500,000 shares fully exercisable at
$0.01 per share held directly by Mr. Lopes.
(6) Includes 250,000 common shares issuable on exercise of Class A warrants
that are fully exercisable at $0.01 per share.
(7) Includes shares and voting rights, as applicable, described in Notes 4
through 7 above.
(8) Includes (i) 1,051,900 shares directly owned by Mrs. and Mrs. Rider, plus
(ii) 220,000 shares held by Gregory Timm as trustee for the benefit of Mr.
and Mrs. Rider to be released to Mr. and Mrs. Rider on May 5, 1998. All
shares shown in the table as directly or indirectly beneficially owned by
Mr. and Mrs. Rider are subject, until September 7, 1997 to irrevocable
proxies granted by the registered owners to Ronald H. Cole. See Note 4.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors, and persons who own more than 10% 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"), the Nasdaq Stock
Market, and the Boston Stock Exchange. Officers, directors, and greater than
10% beneficial owners are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
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Based solely upon a review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that during the fiscal year ended June 30, 1996, the Company's
officers, directors and greater than 10% beneficial owners complied with all
applicable Section 16(a) filing requirements.
ELECTION OF DIRECTORS
The three persons named below have been nominated by management for election
as directors to serve until the next Annual Meeting of Stockholders and until
their respective successors are elected and shall qualify. All nominees have
served as directors of the Company since its last Annual Meeting of
Stockholders. Unless otherwise instructed, the enclosed proxy will be voted for
election of the following nominees, except that the persons designated as
proxies reserve full discretion to cast their votes for another person
recommended by management in the unanticipated event that any nominee is unable
or declines to serve.
<TABLE>
<CAPTION>
Name of Nominee Age Director Since
------------------------ --- --------------
<S> <C> <C>
David J. Lopes 42 September 1995
Daryl M. Silversparre 35 September 1995
Richard Robert Weir 54
</TABLE>
DAVID J. LOPES has served as a director of the Company since September 1995
and was recently elected President of the Company on February 10, 1997. Since
May 1995, Mr. Lopes has been primarily employed as a management and business
consultant to Glasswerks, Irvine, California, a glass quartz semiconductor
manufacturing company. For more than five years prior to May 10, 1995, when he
resigned, Mr. Lopes was the President of California Quartz, Inc., a supplier of
materials to the semiconductor industry until that business was sold in 1994 and
which also operated a computer training business started in 1994 through a
wholly-owned subsidiary, The Focus Institute, Inc. After his resignation from
California Quartz, Inc., The Focus Institute, Inc. filed a voluntary petition
for reorganization under Chapter 11 of the United States Bankruptcy Code on May
18, 1995, U.S. Bankruptcy Court for the Central District of California case
number LA95-22592SB.
DARYL M. SILVERSPARRE has served as a director of the Company since September
7, 1995 and as its corporate Secretary since February 13, 1996. Mr. Silversparre
has been primarily employed since 1995 as President and Chief Executive Officer
of Capital Investments Solution, Inc., a company registered as an investment
adviser with the Securities and Exchange Commission based in Los Angeles,
specializing in capital management and consulting. From 1978 to 1995, Mr.
Silversparre was involved in the petroleum industry in a management capacity
with Dave Silversparre Union Service Inc., a dealer for Union Oil Company.
RICHARD ROBERT WEIR has been primarily employed as general manager at Magga
Products since 1994. From 1990 to 1994 he served as the Manufacturing Manager
of special projects for California Quartz in San Jose, California. Prior to
that, he has acted as a consultant to GE, GTE and is experienced in all
manufacturing aspects of the quartz business.
There are no family relationships between any of the Company's directors and
executive officers. All directors hold office until the next Annual Meeting of
Stockholders and until their successors are elected. Officers serve at the
discretion of the Board of Directors. There are currently no committees of the
Board of Directors.
There are no arrangements or understandings between any director and any
other person pursuant to which any person was elected or nominated as a
director.
Reference is made to Items 10 and 12 of the Company's Annual Report on From
IO-KSB for the fiscal year ended June 30, 1996 for certain information regarding
compensation of executive officers and directors of the Company.
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EXECUTIVE COMPENSATION
The Company currently does not have any compensation plans involving stock
options, stock appreciation rights or long-term incentive or deferred pension or
profit-sharing plans for its executive officers.
Prior to September 1995, directors had not been compensated in cash for
their services on the Company's Board of Directors and officer of the Company
receive no additional compensation for their services as directors. Directors
of the Company currently receive no cash compensation for their attendance at
Board meetings except reimbursement for travel expenses.
In September 1995, four newly elected directors of the Company were awarded
Class A common stock purchase warrants covering an aggregate of 2,000,000 shares
of the Company's Common Stock exercisable at $0.25 per share in consideration of
their agreement to become directors of Brown Disc and to assist the Company in
obtaining additional financing and negotiating debt restructuring arrangements.
On September 7, 1995, the date these warrants were issued, the last reported bid
and asked prices for the Company's Common Stock quoted in the over-the-counter
market were $0.06 bid and $0.25 asked.
The board of directors recently approved annual salaries for David J. Lopes
and Daryl M. Silversparre in the amounts of $108,000 and $80,000 respectively.
Mr. Lopes salary was effective March 1, 1997 and Mr. Silversparres salary is
effective June 1, 1997.
Although no other compensation is currently contemplated for directors of
the Company, the Company's Bylaws permit compensation of directors. The Board
reserves the right to change its policy as to compensation of directors from
time to time based upon the financial condition of the Company, future
performance and other relevant factors.
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SUMMARY EXECUTIVE COMPENSATION
The following Summary Compensation Table indicates the cash compensation
paid by the Company as well as certain other compensation, paid or accrued for
its fiscal years ended June 30, 1996, 1995 and 1994 to its Chief Executive
Officer. No other executive officers received salary and bonus exceeding
$60,000 per annum for such periods.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
-------------------------------- -------------------------------------
Awards Payouts
---------------------------- -------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Fiscal Salary Bonus Compensation Awards Options/ Payouts Compensation
Names and Principal Position Year (/1/) ($) ($) ($)(/2/) ($) SARs ($) ($) ($)
- ---------------------------- ---------- ------- ------ ------------- --------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald H. Cole 1996 $63,130 --- $6,000(/5/) --- 1,000,000(/6/) --- ---
Chairman of the Board and
Chief Executive Officer(/3/)
R. Eugene Rider, 1996 $49,118 --- $6,400(/7/) $337,500(/8/) --- --- $200,000(/9/)
President & Chief Executive 1995 $72,000 ---
Officer(/4/) 1994 $72,000 ---
</TABLE>
(1) Information set forth in the table represents data for the fiscal years
ended June 30, 1996 ("1996"), June 30, 1995 ("1995") and June 30, 1994
("1994").
(2) Total perquisites did not exceed the lesser of $50,000 or 10% of the
executive's annual salary, bonus and other compensation.
(3) Mr. Cole was elected Chairman and Chief Executive Officer of the Company on
September 7, 1995 and also was elected President on February 13, 1996.
(4) Mr. Rider resigned as the Company's Chief Executive Officer on September 7,
1995 and retired as President effective as of February 12, 1996.
(5) Payment for services as a director and Chairman of the Board.
(6) Class A Warrants issued at an exercise price of $0.25 per shares expiring
September 7, 2000. See "Executive Compensation" above and "September 1995
Change in Control Transactions" in Item 12 of this Report.
(7) Represents cash payments and installment payment obligations under a
settlement agreement relating to the termination of employment. See
"Settlement with Former Executive Officer; Changes in Executive Officers
and Directors: in Item 12 of this Report.
(8) Represents the value of 250,000 shares of Common Stock issued to a trustee
for the benefit of R. Eugene Rider and his spouse under a settlement
agreement relating to the termination of employment. See "Settlement with
Former Executive Officer; Changes in executive Officers and Directors:" in
Item 12 of this Report.
(9) Represents a maximum contingent payment of $200,000 payable at the rate of
5% from proceeds of financing obtained by the Company after April 24, 1996,
of which $34,488 was paid in June 1996.
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OTHER BUSINESS
Management is not aware of any matters to come before the Annual Meeting
other than those stated in this Proxy Statement. However, inasmuch as matters of
which management is not now aware may come before the meeting or any adjournment
thereof, the proxies confer discretionary authority with respect to acting
thereon, and the persons named in such proxies intend to vote, act and consent
in accordance with their best judgment with respect thereto. Upon receipt of
such proxies, in the form enclosed and properly signed, in time for voting, the
shares represented thereby will be voted as indicated thereon and in this Proxy
Statement.
By Order of the Board of Directors,
/s/ DAVID J. LOPES
-------------------------------------
David J. Lopes, Chairman of the Board
Santa Ana, California
May 9, 1997
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PROXY BROWN DISC PRODUCTS COMPANY, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 1997
The undersigned stockholder of BROWN DISC PRODUCTS COMPANY, INC. (the
"Company") hereby appoints DAVID J. LOPES and DARYL M. SILVERSPARRE, and each of
them, the true and lawful attorneys, agents and proxies of the undersigned, with
full power of substitution to each of them to vote all the shares of capital
stock which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of the corporation to be held on June 2, 1997, and at any
adjournment of such meeting, with all powers which the undersigned would possess
if personally present, for the following purposes:
1. ELECTION OF DIRECTORS
FOR each nominee listed below [_] (except as marked to the contrary below);
WITHHOLD AUTHORITY [_] to vote for each nominee listed below:
DARYL M. SILVERSPARRE DAVID J. LOPES
RICHARD ROBERT WEIR
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(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided above.)
2. [_] FOR [_] AGAINST [_] ABSTAIN TO VOTE TO RATIFY THE
APPOINTMENT OF STOCKMAN KAST RYAN & SCRUGGS, P.C. AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS; and
3. [_] FOR [_] AGAINST [_] ABSTAIN AS TO A PROPOSAL TO CHANGE
THE NAME OF THE COMPANY TO "THE QUARTZ GROUP INC."; and
4. WITHHOLD AUTHORITY [_] IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING.
This Proxy will be voted as directed or, if no direction is indicated, will be
VOTED FOR the election of the nominees named above and each of the other
Proposals listed above. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting and Proxy Statement dated May 9, 1997.
Dated:
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(Signature)
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(Signature if jointly held)
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(Print Name Here)
Please sign your name or names exactly as stenciled. When signing as attorney,
executor, administrator, trustee, guardian or corporate officer, please give
your full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO VOTE BY PROXY, REMOVE THIS COVER PAGE AND RETURN THIS PROXY IN THE ENCLOSED
RETURN ENVELOPE OR BY FACSIMILE TRANSMISSION TO FAX NUMBER (719) 429-5987.
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