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:
( ) 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 Section 240.14a-11(c) or Section 240.14a-12
IDF INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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:
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>
IDF INTERNATIONAL, INC.
330 West 42nd Street
20th Floor
New York, New York 10036
January 14, 1999
To Our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you to
attend the 1999 Annual Meeting of Stockholders (the "Annual Meeting") of IDF
International, Inc. which will be held at 11:00 a.m. local time on Thursday,
February 11, 1999 at the offices of Hayden-Wegman, Inc., 330 W. 42nd Street,
New York, New York.
At the Annual Meeting, you will be asked to consider and vote on the
following proposals:
1. To elect five (5) directors;
2. To ratify the appointment of Lazar, Levine, & Felix, LLP as the
Company's independent certified public accountants for the fiscal year ending
July 31, 1999; and
3. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
It is important that your shares be represented at the Annual Meeting,
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy promptly.
Sincerely,
Robert M. Rubin, Chairman
<PAGE>
IDF INTERNATIONAL, INC.
330 West 42nd Street
20th Floor
New York, New York 10036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 11, 1999
To the Stockholders of IDF INTERNATIONAL, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of IDF International, Inc., a New York corporation, (the
"Company" or "IDF") will be held at the offices of Hayden-Wegman, Inc., 330 W.
42nd Street, New York, New York, on Thursday, February 11, 1999 at 11:00 a.m.
local time for the purpose of considering and acting upon the following
proposals:
1. To elect five (5) directors;
2. To ratify the appointment of Lazar, Levine, & Felix, LLP as the
Company's independent public accountants for the fiscal year ending July 31,
1999; and
3. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on January 5, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting or any postponements or adjournments thereof.
Accordingly, only holders of Common Stock and Preferred Stock of record on such
date will be entitled to vote at the Annual Meeting.
By Order of the Board of Directors
Date: January 14, 1999 Robert M. Rubin, Chairman
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, SIGN AND RETURN YOUR
PROXY CARD PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE PROVIDED FOR YOUR USE.
<PAGE>
IDF INTERNATIONAL, INC.
330 West 42nd Street
20th Floor
New York, New York 10036
PROXY STATEMENT
1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 11, 1999
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of IDF International, Inc.
(the "Company"), a New York corporation, to be voted at the 1999 Annual Meeting
of Stockholders of the Company (the "Annual Meeting") to be held at the offices
of Hayden-Wegman, Inc., 330 W. 42nd Street (20th Floor), New York, New York on
Thursday, February 11, 1999, at 11:00 a.m. local time, or at any postponement or
adjournment thereof. This Proxy Statement, the Notice of Annual Meeting and the
accompanying form of proxy are first being mailed to stockholders on or about
January 14, 1999.
Only holders of record of the Company's Common Stock, $.001 par value
("Common Stock") and Series A Preferred Stock, Series A-1 Preferred Stock and
Series B Preferred Stock (the "Preferred Stock,") (collectively, the Common
Stock and the Preferred Stock are referred to herein as the "Voting Stock") at
the close of business on January 5, 1999 (the "Record Date") are entitled to
vote on the matters to be presented at the Annual Meeting. The number of shares
of Voting Stock outstanding and entitled to vote as of the close of business on
November 30, 1998 was approximately 12,964,203. Holders of Common Stock are
entitled to one vote on each matter to be voted upon by the stockholders at the
Annual Meeting for each share held and holders of Preferred Stock are entitled
to those number of votes equal to the number of shares of Common Stock into
which each such share of Preferred Stock is convertible.
At the Annual Meeting, stockholders will be asked to consider and vote
upon (1) the election of one director to serve a one year term as Class I
Director; two directors each to serve a two year term as Class II Directors; and
two directors each to serve a three year term as Class III Directors; and (2)
the ratification of the appointment of Lazar, Levine & Felix, LLP as the
Company's independent auditors for the fiscal year ending July 31, 1999 (the
"Independent Auditors Proposal"). At the Annual Meeting, stockholders may also
be asked to consider and take action with respect to such other matters as may
properly come before the Annual Meeting.
QUORUM AND VOTE REQUIREMENTS
The presence, in person or by proxy, of holders of record of a majority of
the shares of Voting Stock issued and outstanding and entitled to vote is
required for a quorum to transact business at the Annual Meeting, but if a
quorum should not be present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained. Proxies submitted with votes withheld
<PAGE>
for the election of directors, abstentions and broker non-votes are included in
determining whether a quorum is present. Directors are elected by a plurality of
votes cast. Approval of the Independent Auditors Proposal and all other matters
to properly come before the Annual Meeting requires the affirmative vote of a
majority of the votes cast by holders of Voting Stock entitled to vote at the
Annual Meeting. Votes withheld have no impact on the election of Directors
except to reduce the number of votes for the nominees. Abstentions are not
counted in tabulating the number of votes cast for the Independent Auditors'
Proposal and any other matters properly brought before the Annual Meeting.
Broker non-votes are counted only for purposes of determining whether a quorum
is present and, therefore, will not be included in vote totals and will have no
effect on the outcome of the votes on all proposals to be acted upon at the
Annual Meeting.
SOLICITATION AND REVOCATION
All Voting Stock represented by properly executed proxies which are
returned and not revoked prior to the time of the Annual Meeting will be voted
in accordance with the instructions, if any, given thereon. If no instructions
are provided in an executed proxy, it will be voted (1) in favor of the nominees
for election as directors named below and (2) FOR the Independent Auditors
Proposal and in accordance with the proxy holder's discretion as to any other
business raised at the Annual Meeting. Any stockholder who executes a proxy may
revoke it at any time before it is voted by delivering to the Company a written
statement revoking such proxy, by executing and delivering a later dated proxy,
or by voting in person at the Annual Meeting. Attendance at the Annual Meeting
by a stockholder who has executed and delivered a proxy to the Company shall not
in and of itself constitute a revocation of such proxy.
The Company will bear its own cost of the solicitation of proxies. Proxies
will be solicited initially by mail. Further solicitation my be made by
directors, officers and employees of the Company personally, by telephone or
otherwise, but any such person will not be specifically compensated for such
services. The Company also intends to make, through banks, brokers or other
persons, a solicitation of proxies of beneficial holders of the Voting Stock.
Upon request, the Company will reimburse brokers, dealers, banks and similar
entities acting as nominee for reasonable expenses incurred in forwarding copies
of the proxy materials relating to the Annual Meeting to the beneficial owners
of Voting Stock which such persons hold of record.
PROPOSAL NO. 1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of five members.
Pursuant to the Company's By-Laws, the Board of Directors is classified into
three classes. The following table sets forth certain information with respect
to the nominee for election as Class I Director (Lembit Kald) for a one year
term expiring at the 2000 Annual Meeting of Stockholders; two nominees for
election as Class II Directors (Lawrence Kaplan and Sergio Luciani) for a two
year term expiring at the 2001 Annual Meeting of Stockholders; and two nominees
for election as Class III Directors (Robert Rubin and Solon Kandel) for a three
year term expiring at the 2002 Annual Meeting of Stockholders for election to
the Board of Directors. The Board of Directors knows of no reason why any of its
nominees will be unable or will refuse to accept election. If
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<PAGE>
any nominee becomes unable or refuses to accept election, the Board of Directors
will either reduce the number of directors to be elected or select a substitute
nominee. If a substitute nominee is selected, proxies will be voted in favor of
such nominee. All Directors shall be elected by a plurality of the votes cast.
<TABLE>
<CAPTION>
Principal Occupation and Position
Name Age with the Company Director Since
---- --- ---------------- --------------
<S> <C> <C> <C>
Robert M. Rubin 57 Chairman of the Board of Directors and
Nominee for Class III Director August 1996
Lembit Kald 74 Director and Nominee for Class I Director;
Executive Vice President November 1993
Lawrence Kaplan 54 Director and Nominee for Class II Director August 1996
Solon L. Kandel 37 Director and Nominee for Class III
Director; President and Chief Executive
Officer September 1997
Sergio Luciani 47 Director and Nominee for Class II
Director; Executive Vice President September 1997
</TABLE>
Set forth below is a brief background of the directors of the Company,
based on information supplied by them:
Robert M. Rubin. Mr. Rubin has served as director of the Company since
August 1996 and as Chairman of Board of the Company since September 1997. Mr.
Rubin has also served as the Chairman of the Board Directors of American United
Global, Inc. ("AUGI") since May 1991, and was its Chief Executive Officer from
May 1991 to January 1, 1994. Between October, 1990 and January 1, 1994, Mr.
Rubin served as the Chairman of the Board and Chief Executive Officer of AUGI
and its subsidiaries; from January 1, 1994 to January 19, 1996, he served only
as Chairman of the Board of AUGI and its subsidiaries. From January 19, 1996,
Mr. Rubin has served as Chairman of the Board and President and Chief Executive
Officer of AUGI. AUGI owns approximately 62% of the outstanding Common Stock of
the Company. Mr. Rubin is Chairman of the Board, Chief Executive Officer and a
stockholder of ERD Waste Technology, Inc. ("ERD"), a diversified waste
management public company specializing in the management and disposal of
municipal solid waste, industrial and commercial non-hazardous waste and
hazardous waste. In September 1997, ERD filed for protection under the
provisions of Chapter 11 of the federal bankruptcy act. Mr. Rubin is a former
director and Vice Chairman, and currently a minority stockholder, of American
Complex Care, Incorporated ("ACC"), a public company formerly engaged in
providing on-site health care services, including intradermal infusion
therapies. In April 1995, ACC's operating subsidiaries made assignments of their
assets for the benefit of creditors without resort to bankruptcy proceedings.
Mr. Rubin is also the Chairman of the Board of Western Power & Equipment Corp.
("Western"). AUGI owns approximately 56.6% of the outstanding common stock of
Western. Mr. Rubin is also a director and a minority stockholder of Response
USA, Inc., a public company engaged in the sale and
3
<PAGE>
distribution of personal emergency response systems; Diplomat Corporation, a
public company engaged in the manufacture and distribution of baby products; and
Medi-Merg, Inc., a Canadian management company for hospital emergency rooms and
out-patient facilities.
Lembit Kald. Mr. Kald has served as director of the Company since November
1993. Mr. Kald also serves as Executive Vice President of the Company and Chief
Executive Officer of Hayden-Wegman, Inc., a wholly-owned subsidiary of IDF
("Hayden-Wegman"). Mr. Kald has been associated with Hayden-Wegman since 1979.
From 1979 through April 1996, he was Chief Engineer of Hayden-Wegman. Since May
1996, he has been Chief Executive Officer and Chief Engineer of Hayden-Wegman.
Mr. Kald is licensed as a professional engineer in five states and has over 47
years of experience in all aspects of design and construction management of
structural, transportation, civil and environmental engineering projects, is a
member of numerous professional societies and has published several professional
articles.
Lawrence E. Kaplan. Mr. Kaplan has served as director of the Company since
August 1996. Mr. Kaplan is a registered representative officer, director and
sole stockholder of Gro-Vest, Inc., a brokerage firm. Mr. Kaplan has served as a
director of AUGI since February 1993. He is also a director of Playorena and
PARK Group, both blank check companies which were formed to look for merger
opportunities. He is also an officer and director of Osteoimplant Technology, a
manufacturer of orthopedic devices and total joint implants.
Solon L. Kandel. Mr. Kandel has served as a director of the Company since
September 1997. Mr. Kandel also currently serves as President and Chief
Executive Officer of the Company. He served as President and Chief Executive
Officer of TechStar Communications, Inc., a wholly-owned subsidiary of the
Company ("TechStar") from May 1997 until August 1997. From January 1997 to May
1997, when it merged into AUGI, Mr. Kandel served as the President of Arcadia
Consulting Services, Inc., a company that was under exclusive contract with AUGI
to assist in developing and managing its business. From 1992 to December 1996,
Mr. Kandel served in various management capacities with AT&T Wireless (formerly
McCaw Cellular Communications, Inc.). From 1992 to 1995, Mr., Kandel served as a
Senior Attorney for AT&T Wireless, supporting all aspects of the company's
business, including its executive management, engineering, marketing, sales,
information systems, finance, human resources and customer service divisions.
Mr. Kandel was also responsible for ensuring successful leasing, zoning and
litigation management for the company's cellular system and for completing
several critical special projects. In June 1995, Mr. Kandel was appointed
Director of Real Estate for the entire AT&T Wireless Northeast Region (Maine to
Virginia). He also assumed national responsibility for the acquisition of bulk
real estate. While serving as the Regional Director, Mr. Kandel helped plan,
organize, acquire resources for and manage all aspects of the start-up,
budgeting, staffing, outsourcing, deployment, design, acquisition and
construction of AT&T Wireless' new PCS systems in the Boston/Rhode Island,
Philadelphia/Wilmington and Washington/Baltimore metropolitan areas.
Sergio Luciani. Mr. Luciani has served as a director of the Company since
September 1997. Mr. Luciani also currently serves as the Company's Executive
Vice President. He also has served as Chief Executive Officer of TechStar since
August 1997. From August 1997 to
4
<PAGE>
December 1997, he also served as President of TechStar. Mr. Luciani has also
been Vice President and Chief Financial Officer of TechStar since its formation
as Broadcast Tower Sites, Inc. in 1994 until August 1997 and was a principal
stockholder of TechStar at the time of its December 1996 sale to AUGI. From 1990
to 1994, Mr. Luciani was President of Nanosystems, SRL, an engineering software
company located in Italy. He is an adjunct Professor of International Finance at
The American University in Washington, D.C.
Recommendation and Vote
The Board unanimously recommend a vote for the election of the Nominees to
the Board of Directors.
DIRECTORS; COMPENSATION OF DIRECTORS
The Board of Directors held four meetings during the fiscal year ended
July 31, 1998 ("Fiscal 1998"), and all directors attended at least 75% of those
meetings of the Board of Directors and all committees on which they served.
Directors of the Company, including management directors, do not receive annual
directors' fees for attendance at Board of Directors meetings, but they are
reimbursed for actual expenses incurred in respect of such attendance.
The Board of Directors has an Audit Committee, whose members are Messrs.
Rubin, Kaplan and Kandel. The Audit Committee periodically consults with the
Company's management and independent public accountants on financial matters,
including the Company's internal financial controls and procedures. The Audit
Committee did not meet in Fiscal 1998. The Board of Directors also has a
Compensation Committee, whose members are Messrs. Kald, Kaplan and Luciani. The
Compensation Committee reviews and makes recommendations regarding employee and
consultant compensation matters as well as administers the Company's Stock
Option Plan. The Compensation Committee did not meet in Fiscal 1998. The Board
of Directors does not have a nominating committee.
OTHER EXECUTIVE OFFICERS
Simantov Moskona. Mr. Moskona, age 47, currently serves as Executive Vice
President of IDF and, since January 1998, as President and Chief Operating
Officer of Techstar. He served as Executive Vice President of TechStar between
August 1997 and December 1997. He served as Executive Vice President and Chief
Operating Officer of TechStar between December 1996 and August 1997. Prior to
December 1996, Mr. Moskona served in various senior executive positions of
TechStar. He was a principal stockholder of TechStar at the time of its December
1996 sale to AUGI. Prior to this, Mr. Moskona was a Senior Systems Analyst for
Teledyne and a consultant for A.I.D., the FDIC and the Department of Education.
Mr. Moskona was involved in the early development of wireless communications
networks both nationally and internationally. He has substantial experience in
the development and implementation of the various platforms and was involved in
launching various new systems, including one of the pioneering PCS licenses.
5
<PAGE>
Robert N. Harvey. Mr. Harvey, age 52, has served as President of
Hayden-Wegman since September 1998. Prior thereto, from 1995 to September 1998,
Mr. Harvey was employed by Professional Assistance and Consulting, Inc. a
full-service construction management firm, most recently as Executive Vice
President. He served as a member of a Steering Committee of the Working Group of
the Federal Government Interagency Committee formed in reaction to the US
Embassy, Oklahoma City and World Trade Center bombings to set security
standards/guidelines for Federal buildings world-wide. Mr. Harvey was manager of
the Executive Office of Capital Programs at the Port Authority of New York and
New Jersey from 1985-1995 and directed a review program that reported results to
the Port Authority Board of Commissioners. Mr. Harvey is a graduate of the
Massachusetts Institute of Technology and a licensed professional engineer in
three (3) states and has over 28 years of experience in all aspects of design
and project/program/ construction management, transportation, civil and building
projects. He also is a member of numerous professional societies and has
published several professional articles.
Michael J. Losch. Mr. Losch, age 43, has served as Chief Financial Officer
and Chief Operating Officer of IDF since September 1998. Prior to joining IDF,
from 1997-September 1998, Mr. Losch was Vice President (Finance and
Administration) and Chief Financial Officer of Cardre, Inc., a cosmetics
manufacturing company. Prior thereto, Mr. Losch was a Financial and Technical
Consultant to Your First Choice Communications, Inc., a cellular telephone
company. From 1978-1997, Mr. Losch served in various capacities with Bell
Atlantic Corporation including Executive Director for Bell Atlantic-NJ's Cable
Telecom Project (1995-1996) and Chief Financial Officer of Bell Atlantic-NJ
(1993-1995). In addition, in 1996 and 1997, he served as Special Assistant to
the New Jersey Government Office of Business Ombudsman, on loan from Bell
Atlantic, where he assisted in new business development in the State of New
Jersey.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of November 27, 1998
with respect to beneficial ownership of shares of Voting Stock owned by each
director, each of the named executive officers in the Summary Compensation Table
herein, all executive officers and directors as a group and each person known to
the Company to beneficially own five percent or more of the outstanding shares
of Voting Stock of the Company.
6
<PAGE>
<TABLE>
<CAPTION>
Amount and Percent of
Name and Address Nature of Outstanding
of the Beneficial Percent Voting
Title of Class Beneficial Owner Ownership(1) of Class Securities
- -------------- ---------------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Common Stock American United Global, Inc. 6,171,553 62.2% 47.6%
11130 NE 33rd Place
Suite 250
Bellevue, WA 98004 (2)
Common Stock Lembit Kald
Hayden-Wegman, Inc.
330 West 42nd Street
New York, NY 10036 112,580 1.1% *
Common Stock Lawrence Kaplan
Gro-Vest, Inc.
150 Vanderbilt Motor Pkwy.
Suite 311
Hauppauge, NY 11788 (3) 496,492 5.0% 3.8%
Common Stock Solon L. Kandel
IDF International, Inc.
330 West 42nd Street
New York, NY 10036 (4) 71,379 * *
Common Stock Sergio Luciani
TechStar Communications, Inc.
8403 Colesville Road
16th Floor
Silver Spring, MD 20910 (4) 71,379 * *
Common Stock Simantov Moskona
TechStar Communications, Inc.
8403 Colesville Road
16th Floor
Silver Spring, MD 20910 (4) 71,379 * *
Common Stock Robert Harvey
Hayden-Wegman, Inc.
330 West 42nd Street
New York, NY 10036 0 0% 0%
Common Stock Michael Losch
IDF International, Inc.
330 West 42nd Street
New York, NY 10036 0 0% 0%
Common Stock Robert M. Rubin
6060 Kings Gate Circle
Del Rey Beach, FL 33484 874,659 8.8% 6.7%
Common Stock All directors and executive
officers as a group (8 persons) 1,697,868 17.1% 13.1%
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Amount and Percent of
Name and Address Nature of Outstanding
of the Beneficial Percent Voting
Title of Class Beneficial Owner Ownership(1) of Class Securities
- -------------- ---------------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Series A-1 Solon L. Kandel 171,733 13.9% 1.3%
Preferred Stock IDF International, Inc.
330 West 42nd Street
New York, NY 10036 (5)
Series A-1 Sergio Luciani 171,733 13.9% 1.3%
Preferred Stock TechStar Communications, Inc.
8403 Colesville Road
16th Floor
Silver Spring, MD 20910 (5)
Series A-1 Simantov Moskona 171,733 13.9% 1.3%
Preferred Stock TechStar Communications, Inc.
8403 Colesville Road
16th Floor
Silver Spring, MD 20910 (4)
Series A-1 Robert M. Rubin 56,095 4.5% *
Preferred Stock 6060 Kings Gate Circle
Del Rey Beach, FL 33484
Series A-1 Lawrence Kaplan 135,991 11.0% 1.0%
Preferred Stock Gro-Vest, Inc.
150 Vanderbilt Motor Parkway
Suite 311
Hauppauge, NY 11788 (5)
Series A-1 All directors and executive 707,285 57.2% 5.5%
Preferred Stock officers as a group (8 persons)
Series B Robert M. Rubin 400,000 100% 3.1%
Preferred Stock 6060 Kings Gate Circle
Del Rey Beach, FL 33484
</TABLE>
* Less than one percent.
(1) Except to the extent otherwise indicated, to the best of IDF's knowledge,
each of the indicated persons exercises sole voting and investment power
with respect to all shares beneficially owned by him.
(2) Robert M. Rubin, Chairman of the Board and a director of IDF, is the
Chairman of the Board and Chief Executive Officer of AUGI and is a
principal beneficial owner of the common stock of AUGI. Lawrence Kaplan, a
director of IDF, is a director of AUGI.
(3) Includes 209,000 shares owned by Helaine Kaplan, the wife of Lawrence
Kaplan, with respect to which shares Mr. Kaplan has beneficial ownership.
(4) Includes 71,379 shares issuable to each identified person upon exercise of
currently exercisable stock options granted under employment agreements
with IDF dated August 25, 1997.
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<PAGE>
(5) The Series A-1 Preferred Stock votes with the Common Stock, with each
share of Series A-1 Preferred Stock having the same number of votes as
equals the number of shares of Common Stock into which it is convertible
(currently one to one).
(6) The Series B Preferred Stock votes with the Common Stock, with each share
of Series B Preferred Stock having the same number of votes as equals the
number of shares of Common Stock into which it is convertible (currently
one to one).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of Forms 3, 4 and 5 submitted to the Company during and
with respect to Fiscal 1998, all statements of beneficial ownership required to
be filed with the Securities and Exchange Commission (the "Commission") were
timely filed, except that Messrs. Rubin and Luciani each were late in filing a
Form 3 reporting initial beneficial ownership upon the effectiveness of the
Company's registration under the Securities Exchange Act of 1934.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows for the fiscal years ended July 31, 1998, June
30, 1997 and June30, 1996, certain compensation information as to the Chief
Executive Officer of the Company and each executive officer of the Company who
served as an executive officer during Fiscal 1998, and whose salary and bonus
exceeded $100,000 (the "Named Executive Officers").
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<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Securities
Restricted Underlying LTIP
Fiscal Other Annual Stock Options Pay- All Other
Name and Principal Position Year Salary Bonus Compensation Award(s) /SAR outs Compensation
- --------------------------- ---- ------ ----- ------------ -------- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Solon Kandel, President and 1996 -- -- -- -- -- -- --
Chief Executive Officer of 1997 $ 30,000 -- -- -- -- -- --
IDF (1) 1998 $192,880 -- -- -- 285,517 -- $7,200(3)
Sergio Luciani, Executive 1996 -- -- -- -- -- -- --
Vice President of IDF and 1997 $ 95,885 -- -- -- -- -- --
Chief Executive Officer of 1998 $192,880 -- -- -- 285,517 -- $8,400(4)
TechStar (1)
Simantov Moskona, 1996 -- -- -- -- -- -- --
Executive Vice President 1997 $ 99,804 -- -- -- -- -- --
of IDF and President and 1998 $192,880 -- -- -- 285,517 -- $8,400(4)
Chief Operating Officer
of TechStar (1)
Lembit Kald, President and 1996 $130,400 -- -- -- -- -- --
Chief Executive Officer of 1997 $129,950 $8,950 -- -- -- -- --
Hayden-Wegman 1998 $175,000 -- -- -- -- -- --
Donald Shipley (2) 1996 $119,392 -- -- -- -- -- --
1997 $115,000 $8,950 -- -- -- -- --
1998 $115,000 -- -- -- -- -- --
</TABLE>
(1) Each of the officers joined IDF during the fiscal year ended June 30,
1997. Each of the officers have executed an employment agreement dated as
of August 25, 1997. Options granted during Fiscal 1998 pursuant to such
employment agreements are subject to vesting conditions. See "Employment
and Consulting Agreements" below.
(2) Donald Shipley resigned as Chief Financial Officer of Hayden-Wegman and
TechStar in September 1998.
(3) Represents an automobile allowance of $7,200.
(4) Represents an automobile allowance of $8,400.
Employment and Consulting Agreements
Pursuant to that certain Agreement and Plan of Merger, dated July 31, 1997
(the "Merger Agreement") between AUGI, IDF, TechStar and Hayden-Wegman, and
concurrent with the consummation of the merger effected pursuant to the Merger
Agreement (the "Merger"), (i)Solon Kandel executed an employment agreement with
the Company, which superseded his employment agreement with TechStar, (ii)each
of Sergio Luciani and Simantov Moskona executed employment agreements with the
Company and TechStar, which superseded their respective employment agreements
with TechStar, and (iii)Lembit Kald executed an employment agreement with the
Company and Hayden-Wegman. The foregoing new employment agreements,
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<PAGE>
each dated as of August25, 1997, require continued service to the Company and
shall continue through November 30, 2000, and thereafter shall automatically be
renewed for additional terms of one year each unless either party thereto gives
written notice of termination to the other party not less than 90 days prior to
the end of any term. Under the terms of such employment agreements each of
Messrs. Kandel, Luciani and Moskona shall receive a base salary of $180,000 per
annum through November 30, 1997, and $200,000, $225,000 and $250,000 per annum
for each of the following three years, respectively, plus customary fringe
benefits, including medical insurance and the payment of automobile leases. The
contemplated increase to $250,000 for the period of December 1, 1999 through
November 30, 2000 is subject to the Company achieving certain performance and
income targets, as set forth in the employment agreements. Mr. Kald shall
receive a base salary of $180,000 per annum for each year of the contract
through November 30, 2000, plus customary fringe benefits, including medical
insurance and the payment of an automobile lease.
In connection with the Company's acquisition of TechStar, each of Messrs.
Kandel, Luciani and Moskona also received, under the terms of their respective
employment agreements, the grant of options to purchase a maximum aggregate of
285,517 shares of the Common Stock (856,550 total) at an exercise price of $1.25
per share (the "Options"). The vesting conditions of the Options are as follows:
(i)25% of the Options vested immediately on the effective date of the employment
agreements and (ii)up to a maximum of 25% shall vest in each of June30, 1998,
June30, 1999 and June30, 2000, respectively, provided that certain performance
and income targets are met by the Company. The options immediately vest if (i)
at any time prior to June 30, 2000, IDF shall effect a sale of all or
substantially all of its shares of capital stock or assets to any unaffiliated
third party, (ii) at any time prior to June 30, 2000, IDF shall consummate an
underwritten public offering of securities of IDF pursuant to which it shall
receive gross proceeds of $15 million or more (a "Qualified Public Offering"),
then the options shall vest pursuant to a formula depending on the level of
gross proceeds of the Qualified Public Offering and (iii) prior to June 30,
2000, if pursuant to the employment agreement, employment is terminated by the
employee or employer for any reason other than (x) for cause, (y) resignation or
voluntary termination (except from a constructive termination) of his employment
with the employer for any reasons other than a breach by the employer to the
employee of its obligations to the employee or (z) upon the mutual written
agreement of the employer and employee. In addition, in the event that certain
performance and income targets are met for the cumulative three-year period
ended June 30, 2000, any remaining options not yet then vested shall vest.
No options vested in June 30, 1998 as performance and income targets were
not met.
The options shall have a term expiring on a date which shall be the
earlier to occur of (i) July 1, 2000 or (ii) November 30, 2002 for those options
which were vested.
In the event that any of such options terminate or are canceled without
having been vested and timely exercised, AUGI will be entitled to receive, in
accordance with the Merger Agreement, that number of shares of Common Stock
which shall be equal to the number of shares not issued as a result of the
termination or cancellation of these options.
11
<PAGE>
On August 25, 1997, Robert Rubin entered into a three year consulting
agreement with the Company. Under such consulting agreement, Mr. Rubin is
required to devote 10% of his business time to the provision of consulting
services to the Company, TechStar and Hayden-Wegman, and he shall receive an
annual consulting fee of $75,000. At a Board of Directors meeting held in
September 1997, it was determined that Mr. Rubin's consulting agreement should
be converted into an employment agreement with the Company based upon equivalent
financial terms.
IDF executed a consulting agreement as of August 1, 1998 with a company
controlled by an officer and director of AUGI for a term up to three years. For
the first eighteen months, IDF pays $6,250 per month. Upon the attainment of
certain performance events, IDF is obligated to issue stock options and/or
additional cash compensation.
OPTION GRANTS DURING THE FISCAL YEAR ENDED JULY 31, 1998
The following table sets forth individual grants of stock options by the
Company to the Named Executive Officers during the fiscal year ended July 31,
1998.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options Granted
Underlying to Employees in Exercise
Name Options Granted Fiscal Year Price ($/sh.) Expiration Date
- ---- --------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Solon Kandel (1) 285,517 33.3% $1.25 November 30, 2002
Sergio Luciani (1) 285,517 33.3% $1.25 November 30, 2002
Simantov Moskona (1) 285,517 33.3% $1.25 November 30, 2002
</TABLE>
(1) The options were granted pursuant to employment agreements dated as of
August 25, 1997. Options are subject to vesting conditions. As of October
31, 1998, each individual had vested options to purchase 71,379 shares of
Common Stock. See "Employment and Consulting Agreements".
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth for each of the Named Executive Officers
information regarding stock option exercises during the fiscal year ended July
31, 1998, as well as the fiscal year end value of unexercised options for each
such person:
12
<PAGE>
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the Money
Shares Acquired Options/SARs at Options/SARs at
Name on Exercise Value Realized Fiscal Year End Fiscal Year End
- ---- ----------- -------------- --------------- ---------------
Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Solon Kandel -- -- 71,379 -- $0 --
Sergio Luciani -- -- 71,379 -- $0 --
Simantov Moskona -- -- 71,379 -- $0 --
</TABLE>
No options were exercised by any of the Named Executive Officers during
the fiscal year ended July 31, 1998. The options held by the Named Executive
Officers above have an exercise price of $1.25 per share. The value of a share
of Common Stock as quoted on the OTC Electronic Bulletin Board at July 31, 1998
was $1.00.
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1996, AUGI acquired TechStar and issued to the former TechStar
shareholders an aggregate of 507,246 shares of AUGI common stock, paid $780,000
in cash and delivered three year AUGI notes aggregating $600,000. In a related
transaction, in April 1997 AUGI also acquired Arcadia Consulting, Inc., a
company formed by Solon L. Kandel for the purpose of providing consulting
services to clients in the wireless telecommunications industry. AUGI paid
$220,000 and issued to Mr. Kandel 192,754 shares of AUGI common stock.
Subsequent to such acquisitions, the former stockholders of TechStar publicly
sold an aggregate of 331,346 of their 507,246 shares of AUGI common stock, and
Mr. Kandel publicly sold all of his 192,754 shares of AUGI common stock.
In August 1997, a controlling interest in the Company was acquired by
TechStar, a wholly-owned subsidiary of AUGI (the "Acquisition"). Prior to such
transaction, IDF's sole business was its ownership of Hayden-Wegman. Under the
terms of the Acquisition, AUGI transferred, through a merger with an IDF
acquisition subsidiary, 100% of the capital stock of TechStar to IDF in exchange
for approximately 6.1 million shares of IDF Common Stock, representing
approximately 62% of the outstanding IDF Common Stock. As a result of this
Acquisition transaction, TechStar became a wholly-owned subsidiary of the
Company, which itself became a subsidiary of AUGI. In connection with the
Acquisition, TechStar assumed an aggregate of $300,000 of promissory notes due
from AUGI to certain shareholders of TechStar, including Sergio Luciani and
Simantov Moskona. The unsecured notes bear interest at a rate of 8% per annum
and are due December 1999.
As a condition to the Acquisition of TechStar by the Company, the Company
sold approximately $3,000,000 principal amount of the Company's Senior
Subordinate Convertible Notes (the "Notes) in a private placement. As an
additional condition to the Acquisition, Robert Rubin converted an existing
$800,000 principal loan to the Company into a principal note of the Company (the
"Rubin Note"). All of the outstanding Notes, including Notes which were held by
Messrs. Kandel, Luciani and Moskona, were converted into shares of Series A and
Series A-1 Preferred Stock. In addition, Mr. Rubin converted the Rubin Note into
400,000 shares of Series B Preferred Stock and approximately $32,000 of accrued
interest thereunder into Series A-1 Preferred Stock.
Certain members of the IDF Board of Directors and significant shareholders
have committed to loan up to $1,000,000 to IDF when requested by IDF for its
working capital needs. As part of that commitment, Robert Rubin loaned IDF, in
October 1998, $250,000 at an interest rate of 8% per annum, and as of November
30, 1998, AUGI had loaned IDF a total of $400,000.
PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR
THE FISCAL YEAR ENDING JULY 31, 1999
The Board of Directors of the Company has appointed the firm of Lazar,
Levine & Felix, LLP ("Lazar Levine") as independent auditors to audit the
consolidated financial
14
<PAGE>
statements of the Company and its subsidiaries for the fiscal year ending July
31, 1999, subject to ratification by the stockholders of the Company. The
Company expects representatives of Lazar Levine to be present at the Annual
Meeting and available to respond to appropriate questions submitted by
shareholders. Such representatives will also be accorded an opportunity at such
time to make such statements as they may desire.
Recommendation and Vote
Approval of the Independent Auditors Proposal requires the affirmative
vote of a majority of the votes cast by holders of Common Stock entitled to vote
at the Annual Meeting.
The Board Of Directors Unanimously Recommends That Stockholders Vote For
The Approval Of The Independent Auditors Proposal.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Company's Proxy Statement with
respect to the 2000 Annual Meeting of Stockholders must be received by the
Company at its executive offices located at 330 West 42nd Street, 20th Floor,
New York, New York 10036 no later than September 14, 1999.
DISCRETIONARY VOTING
A duly executed proxy given in connection with the Company's 2000 Annual
Meeting of Stockholders will confer discretionary authority on the proxies named
therein, or any of them, to vote at such meeting on any matter of which the
registrant does not have written notice on or before December 31, 1999, which
date is forty-five days before the calendar date on which the Company first
mailed its proxy materials for its 1999 Annual Meeting of Stockholders, without
advice in the Company's proxy statement as to the nature of such matter.
OTHER BUSINESS OF THE MEETING
The Company 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 of the company is not now aware may come before the Annual
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 discretion with respect thereto.
ADDITIONAL INFORMATION
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
JULY 31, 1998 MAY BE OBTAINED WITHOUT CHARGE BY ANY STOCKHOLDER TO WHOM THIS
PROXY STATEMENT IS SENT, UPON WRITTEN
15
<PAGE>
REQUEST TO THE CHIEF FINANCIAL OFFICER, IDF INTERNATIONAL, INC., 330 WEST 42ND
STREET, 20TH FLOOR, NEW YORK, NEW YORK 10036.
By Order of the Board of Directors
Robert M. Rubin, Chairman
January 14, 1999
16
<PAGE>
IDF INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 11, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael Losch and Robert Harvey, and each
of them, with full power of substitution and power to act alone, as proxies to
vote all the shares of Common Stock which the undersigned would be entitled to
vote if personally present and acting at the Annual Meeting of Stockholders of
IDF International, Inc., to be held February 11, 1999, and at any adjournment or
adjournments thereof, on the matters set forth on the reverse side and such
other matters as may properly come before the meeting.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please sign exactly as name appears hereon, date and return in the enclosed
business reply envelope. Joint owners should each sign personally. Corporation
proxies should be signed by an authorized officer. Executors, administrators,
trustees, etc., should so indicate when signing.
Please provide new address, if applicable.
________________________________
________________________________
________________________________
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS:
[ ] FOR ALL NOMINEES [ ] WITHHOLD [ ] FOR ALL EXCEPT
Robert M. Rubin
Lembit Kald
Lawrence Kaplan
Solon L. Kandel
Sergio Luciani
IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE(S), MARK
THE "FOR ALL EXCEPT" BOX ABOVE AND STRIKE A LINE THROUGH THE NAME(S) OF
THE NOMINEE(S) YOU DO NOT WISH TO VOTE FOR. YOUR SHARES WILL BE VOTED FOR
THE REMAINING NOMINEE(S).
2. RATIFICATION OF THE SELECTION OF [ ] FOR [ ] AGAINST [ ] ABSTAIN
LAZAR, LEVINE & FELIX, LLP AS INDEPENDENT
AUDITORS.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Mark box at right if an address change has been noted on the reverse side of
this card.
[ ]
Please be sure to sign and date this Proxy. Date____________________
Stockholder sign here Co-owner sign here
</TABLE>
