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
(Amendment No. )
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
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
EZCONY INTERAMERICA, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(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 the table below per Exchange Act Rules 14a-6(i)(1) 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:
[ ] 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>
EZCONY INTERAMERICA INC.
CRAIGMUIR CHAMBERS
P.O. BOX 71
ROAD TOWN, TORTOLA
BRITISH VIRGIN ISLANDS
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1998
----------------
To the Shareholders of
Ezcony Interamerica Inc.:
The Annual Meeting of the Shareholders of Ezcony Interamerica Inc. (the
"Company") will be held at the offices of Adorno & Zeder, P.A., Suite 1600,
2601 South Bayshore Drive, Miami, Florida on Thursday, May 21, 1998, at 10:00
a.m. local time for the following purposes:
1. To elect a board of nine directors to serve until the Annual Meeting of
Shareholders to be held in 1999.
2. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
auditors.
3. Transacting such other business as may properly come before the meeting
and any adjournments thereof.
This Annual Meeting is a General Meeting of the Company in accordance with
its Articles of Association, and Members of the Company as defined in such
Articles of Association are designated as "shareholders" in this Notice and in
the accompanying Proxy Statement.
Shareholders of record at the close of business on March 27, 1998, will be
entitled to have notice of and vote at the Annual Meeting.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
/S/ ANA M. MENENDEZ
---------------------------------------
April 17, 1998 Ana M. Menendez
Secretary
<PAGE>
EZCONY INTERAMERICA INC.
CRAIGMUIR CHAMBERS
P.O. BOX 71
ROAD TOWN, TORTOLA
BRITISH VIRGIN ISLANDS
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Ezcony
Interamerica Inc. (the "Company") for use at the Annual Meeting of the
Company's Shareholders to be held at the offices of Adorno & Zeder, P.A., Suite
1600, 2601 South Bayshore Drive, Miami, Florida, on Thursday, May 21, 1998, at
10:00 a.m. local time and at any adjournments or postponements thereof. Whether
or not you expect to attend the Annual Meeting in person, please return your
executed proxy in the enclosed pre-addressed envelope and the shares
represented thereby will be voted in accordance with your wishes. A quorum for
the Annual Meeting will exist if not less than 50% of the issued and
outstanding Common Shares of the Company are present at the Annual Meeting in
person or by proxy. The first mailing of the Company's proxy materials to
shareholders occurred on or about April 20, 1998. The costs of proxy
solicitation will be borne by the Company.
REVOCABILITY OF PROXY
If, after sending in your proxy, you decide to vote in person or desire to
revoke your proxy for any other reason, you may do so by notifying the
Secretary of the Company in writing, provided that your notice of revocation is
actually received by the Secretary prior to the voting of the proxy.
RECORD DATE
Shareholders of record at the close of business March 27, 1998, will be
entitled to vote at the Annual Meeting.
ACTIONS TO BE TAKEN UNDER PROXY
Unless otherwise directed by the giver of the proxy, the persons named in
the enclosed form of proxy, Ezra Cohen and Ezra Homsany Gateno, or either of
them, will vote:
(1) FOR the election of the nine persons named herein as nominees for
directors of the Company to hold office until the Annual Meeting of the
Company's shareholders next ensuing after their election and until their
successors have been duly elected and qualified or their earlier
resignation or removal;
(2) FOR the ratification of the appointment of Coopers & Lybrand L.L.P. as
the Company's independent auditors for the year ending December 31,
1998, and
(3) According to their judgement on the transaction of such other business
as may properly come before the Annual Meeting or any adjournments or
postponements thereof.
<PAGE>
Should any nominee herein for election as director become unavailable to
serve for any reason, it is intended that the persons named in the proxy will
vote for the election of such other person in his stead as may be designated by
the Board of Directors unless the Board decides to reduce the number of
directors. The Board of Directors is not aware of any reason that might cause
any nominee to be unavailable.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On March 27, 1998, there were 4,510,000 Common Shares, no par value,
outstanding. Each share is entitled to one vote.
The following table sets forth information, as of March 27, 1998,
regarding all persons known to the Company to be the beneficial owners of more
than 5% of the Company's outstanding Common Shares.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT OF CLASS
- ----------------------------- ------------------ -----------------
<S> <C> <C>
Moises Ezra Cohen 1,828,110(1) 40.5 %
Ave. Manuel Dominador Bazan,
Edif. C9, Local #15
Zona Libre de Colon
Colon, Republic of Panama
Moises Homsany 900,000 20.0%
Ave. Manuel Dominador Bazan,
Edif. C9, Local #15
Zona Libre de Colon
Colon, Republic of Panama
Ezra Cohen 270,514(2) 5.8%
7620 N.W. 25th St., Unit 5
Miami, Florida 33122
David Djemal 261,900(3) 5.7%
Ave. Manuel Dominador Bazan,
Edif. C9, Local #15
Zona Libre de Colon
Colon, Republic of Panama
Daniel Homsany 261,900(3) 5.7%
Ave. Manuel Dominador Bazan,
Edif. C9, Local #15
Zona Libre de Colon
Colon, Republic of Panama
</TABLE>
- ----------------
(1) Includes options to purchase 5,000 shares.
(2) Includes options to purchase 192,140 shares .
(3) Includes options to purchase 101,290 shares.
Other than as set forth above, to the best of knowledge of the Board of
Directors, no person owns more than 5% of the outstanding Common Shares of the
Company.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 27, 1998, the beneficial
ownership of Common Shares by all current directors of the Company, all persons
nominated to become directors, all executive officers named in the "Executive
Compensation" section of this Proxy Statement, and by all directors and
executive officers as a group.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT OF CLASS
- ---- ------------------ -----------------
<S> <C> <C>
Ezra Cohen 270,514(1) 5.75%
Moises Ezra Cohen 1,828,110(2) 40.49%
David Djemal 261,900(3) 5.68%
Michael G. Dowling 15,000(4) *
Ezra Homsany Gateno 197,734(5) 4.22%
Daniel Homsany 261,900(3) 5.68%
Enrique P. Lacs 74,507(6) 1.63%
Leonard J. Sokolow 10,000(7) *
All current directors and executive officers
as a group (nine persons) 2,919,665(8) 56.31%
</TABLE>
- ----------------
* Less than 1%.
(1) Includes options to purchase 192,140 shares.
(2) Includes options to purchase 5,000 shares.
(3) Includes options to purchase 101,290 shares.
(4) Includes options to purchase 15,000 shares.
(5) Includes options to purchase 177,360 shares.
(6) Includes options to purchase 72,950 shares.
(7) Includes options to purchase 10,000 shares.
(8) Includes options to purchase 675,030 shares.
ELECTION OF DIRECTORS
(ITEM 1)
The Company's Articles of Association currently provide for up to ten
directors, each of whom is elected annually. The Board of Directors has
nominated nine persons to serve as directors. The following table shows each
nominee's present position with the Company, the year in which he/she first was
elected a director (each serving continuously since first elected) and his/her
age. The nine nominees receiving the highest number of affirmative votes of the
Common Shares voted at the Annual Meeting will be elected directors.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH COMPANY DIRECTOR SINCE
- ---- --- ------------------------ --------------
<S> <C> <C> <C>
Ezra Cohen 37 Chairman, President and Chief Executive Officer 1992
Moises Ezra Cohen 70 Director 1990
David Djemal 31 Vice President of Finance and Operations of Ezcony 1994
Trading Corporation and Director
Michael G. Dowling 60 Director 1993
Ezra Homsany Gateno 37 Director 1992
Daniel Homsany 31 Vice President of Marketing and Sales of Ezcony 1994
Trading Corporation and Director
Enrique P. Lacs 42 Vice President of Operations of Ezcony International 1997
Corporation and Director
Ana M. Menendez 33 Chief Financial Officer, Treasurer and Secretary --
Leonard J. Sokolow 41 Director 1995
</TABLE>
3
<PAGE>
Non-employee directors receive fees of $1,000 per month plus $500 for
attendance at each Board and committee meeting. In addition they receive each
year options for 5,000 Common Shares exercisable at the closing price on the
date awarded. The closing price on December 1, 1997 (the award date) was $2.56.
Ezra Cohen has been President and Chief Executive Officer of the Company
since January 1992. He became Chairman of the Company on April 30, 1996. Mr.
Cohen has also been a director and President of Ezcony International
Corporation, a subsidiary of the Company, since March 1988. Mr. Cohen was a
director and President of Ezcony Trading Corporation, another subsidiary of the
Company, from 1982 until March 1988. Mr. Cohen again became President of Ezcony
Trading Corporation on April 30, 1996.
Moises Ezra Cohen was Chairman of the Board of the Company from January
1992 until April 30, 1996, and President of Ezcony Trading Corporation from
March 1988 until April 30, 1996. Prior to December 1989, Mr. Cohen was owner
and President of Novedades Toby, a group of consumer retail stores in Panama
City, Panama.
David Djemal was Vice President of Sales of Ezcony Trading Corporation
from 1984 until January 1997 when he became Vice President of Finance and
Operations. Mr. Djemal is responsible for financial operations and general
administration of Ezcony Trading Corporation.
Michael G. Dowling has been President of Sawgrass Management Corp., a
privately held company which serves as the general partner of limited
partnerships investing in the electronics manufacturing industry since 1994.
Since October 1996, Mr. Dowling has been Chairman and Chief Executive Officer
of Sawgrass Electronics Group Inc., a corporation engaged in the manufacture of
electronic components. Mr. Dowling also has been President of Michael Dowling &
Co., Inc., a business consulting firm, from 1984 until 1995. Since 1988 he has
been a director and Secretary of Unipower Corp., a privately held electronics
manufacturer, and since 1990 he has been Secretary and Treasurer of Kontek
Industries, a privately held manufacturer of products for the telephone
industry.
Ezra Homsany Gateno has been President of J. Maloul e Hijos, a Panamanian
distribution company, since January 1998. Ezra Homsany Gateno was Chief
Operating Officer and Executive Vice President of the Company from January 1992
until June 1997. Mr. Homsany Gateno was a director and Executive Vice President
of Ezcony International Corporation from March 1988 until June 1997. Mr.
Homsany Gateno was a director and Vice President of Ezcony Trading Corporation
from 1982 until March 1988. Mr. Homsany Gateno was President of New World
Interactive, Inc., a subsidiary of the Company, since its inception in December
1993 until June 1997.
Daniel Homsany was Vice President of Operations of Ezcony Trading
Corporation from 1984 until January 1997 when he became Vice President of
Marketing and Sales. Mr. Homsany is responsible for all brand name purchases,
sales and marketing of Ezcony Trading Corporation.
Enrique P. Lacs was General Manager of Ezcony International Corporation
from 1990 until January 1995 when he became Vice President of Operations. Mr.
Lacs is responsible for the operations of Ezcony International Corporation.
Ana M. Menendez joined the Company on June 16, 1997 as Chief Financial
Officer. She became Secretary of the Company on August 18, 1997. From June 1995
to June 1997 she was the Chief Financial Officer of Diaco, Inc., a privately
held importer and distributor of eyewear and sunwear frames. Her previous
experience includes seven years at Arthur Andersen LLP, most recently as Audit
Manager. Ms. Menendez is a certified public accountant and has been a member of
the Florida Institute of Certified Public Accountants and the American
Institute of Certified Public Accountants since 1988.
4
<PAGE>
Leonard J. Sokolow has been President of Union Atlantic, L.C., a
privately-held consulting and merchant banking group, since September 1996, and
Chairman of the Board and President of The Americas Growth Fund, Inc., an
investment company, since August 1994. Since August 1993, Mr. Sokolow has been
President and Chief Executive Officer of Genesis Partners, Inc., a
privately-held corporation that provides domestic and international investment
banking and financial advisory services. From May 1988 to July 1993, Mr.
Sokolow was employed by Windmere-Durable Holdings, Inc. (a public company
engaged in the manufacture and distribution of personal care products and small
household appliances) most recently as its Executive Vice President of
Operations, Administration and Finance and General Counsel. Mr. Sokolow is a
director of Catalina Lighting Inc., a public company engaged in the import and
distribution of commercial and residential electrical lighting.
Ezra Cohen is the son of Moises Ezra Cohen, a director and a principal
shareholder of the Company. Ezra Homsany Gateno and Daniel Homsany are the sons
of Moises Homsany, a principal shareholder of the Company. David Djemal is the
nephew of Moises Homsany, the cousin of Daniel Homsany and of Ezra Homsany
Gateno, and the brother-in-law of Ezra Cohen.
The Company's directors hold office until the next Annual Meeting of
shareholders or until their successors have been duly elected and qualified or
their earlier resignation or removal.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During 1997, the Board of Directors held four meetings. Each director
attended at least 75% of the combined number of meetings of the Board and any
committee of which he was a member except David Djemal and Daniel Homsany, who
each attended 25% of such meetings.
The Company has a standing Audit Committee of the Board of Directors,
consisting of Michael G. Dowling, Chairman of such Committee, and Leonard J.
Sokolow. The Audit Committee performs the following functions: review of
financial statements, communication with independent accountants, review of the
Company's internal accounting controls and recommendations to the Board of
Directors as to selection of independent auditors. The Audit Committee met one
time during 1997.
The Company has a standing Compensation Committee of the Board of
Directors, consisting of Leonard J. Sokolow, Chairman of such Committee, and
Michael G. Dowling. The duties of the Compensation Committee are as follows: to
review and recommend to the Board of Directors the annual salary, bonus and
other benefits of all executive officers of the Company and to review and
submit to the Board of Directors recommendations concerning compensation, stock
plans, and other benefits to Company executives and expense account policies.
The Compensation Committee met one time during 1997.
The Company has no standing nominating committee or other committee
performing a similar function.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Neither member of the Board's Compensation Committee, Michael G. Dowling
and Leonard J. Sokolow, is now or has been an employee of the Company or any of
its subsidiaries or has any relationship disclosed under "Certain Transactions"
below.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table shows the aggregate compensation paid or earned by the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers of the Company whose salary and bonus
compensation exceeded $100,000 for services rendered in all capacities during
the year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------------------------- -------------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
--------------------------- ------ ---------------- ---------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ezra Cohen 1997 $180,192 $ 87,500(4) (2) 0 $ 16,320(6)
Chief Executive Officer 1996 $156,920 $158,779 (2) 192,140 $ 16,230(6)
and President 1995 $250,400 $ 0 (2) 0 $ 1,234(1)
Ezra Homsany Gateno 1997 $ 67,270(5) $ 39,496(5) (2) 0 $ 1,320(1)
Chief Operating Officer and 1996 $134,547 $140,294 (2) 177,360 $ 15,996(6)
Executive Vice President 1995 $245,500 $ 0 (2) 0 $ 1,055(1)
until June 30, 1997
David Djemal 1997 $ 97,863 $ 60,000(4) (2) 0 $ 20,565(6)
Vice President of Finance 1996 $ 66,300 $200,290 (2) 91,290 $ 20,565(6)
and Operations 1995 $132,952 $ 46,292(3) (2) 10,000 $ 6,300(1)
Ezcony Trading Corporation
Daniel Homsany 1997 $ 91,300 $ 75,000(4) (2) 0 $ 20,565(6)
Vice President of Marketing 1996 $ 66,300 $200,290 (2) 91,290 $ 20,565(6)
and Sales 1995 $132,952 $ 46,292(3) (2) 10,000 $ 6,300(1)
Ezcony Trading Corporation
Enrique P. Lacs 1997 $ 96,231 $ 45,500(4) (2) 0 $ 1,020(1)
Vice President of Operations 1996 $117,427 $ 21,000 (2) 46,950 $ 600(1)
Ezcony International 1995 $127,445 $ 0 (2) 10,000 $ 638(1)
Corporation
</TABLE>
- ----------------
(1) Premiums on life insurance paid by the Company.
(2) Less than 10% of total annual salary and bonus for the individual.
(3) Earned in 1995 of which $21,567 was paid in 1995, and $24,725 was paid in
1996.
(4) Earned in 1997 and paid during 1998.
(5) See below for payments due under the "Consulting/Non-Compete Agreement"
which are not included in the amounts reported hereon.
(6) Includes $15,000 in return for personally guarantying certain loans made to
the Company by its lenders and, the balance represents premiums on life
insurance policies paid by the Company.
Ezra Homsany Gateno served as the Company's Chief Operating Officer and
Executive Vice President until his resignation on June 18, 1997. Ezra Homsany
Gateno resigned from the Company effective June 30, 1997, pursuant to a
Termination Agreement (the "Consulting/Non-Compete Agreement"). Mr. Homsany
Gateno continues to serve as a director of the Company and as a non-employee
director receives the retainer and meeting fees normally paid to non-employee
directors. The terms of the Consulting/Non-Compete Agreement provide for a
consulting period beginning July 1, 1997 through December 31, 1999 during which
Mr. Homsany Gateno is to serve as a consultant to the Company in exchange for a
total compensation of $375,770 ($114,500 from July 1, 1997 through
6
<PAGE>
December 31, 1997, $146,770 from January 1, 1998 through December 31, 1998 and
$114,500 from January 1, 1999 through December 31, 1999) and health insurance
benefits through June 30, 1998. The Consulting/Non-Compete Agreement also
requires Mr. Homsany Gateno to (i) continue as a guarantor for certain of the
Company's existing credit lines, (ii) execute a non-compete and confidentiality
agreement covering a period through June 30, 2000, and (iii) fully vests him on
his existing options waiving the requirement that he exercise the vested
options within ninety days after his termination.
John A. Galea served as the Company's Chief Financial Officer from April
4, 1994 to April 24, 1997. On April 24, 1997, John A. Galea resigned as Chief
Financial Officer, Secretary and Director with the Company under a Termination
Agreement (the "Agreement"). Under the terms of the Agreement, Mr. Galea
received through and until August 24, 1997 compensation at the rate of $125,000
per annum and was provided with substantially the same health, life, dental and
disability insurance coverage's that he received as an employee. Following the
effective date of the Agreement, the Company paid Mr. Galea unused sick and
vacation time for 1997 in the amount of $5,528.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who beneficially own more
than 10% of the Company's Common Shares, to file reports of securities
ownership and changes in such ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater that 10% beneficial
owners also are required by rules promulgated by the SEC to furnish the Company
with copies of all Section 16(a) forms they file. Based solely upon a review of
the copies of such forms furnished to the Company and representations that no
other reports were required, the Company believes that for 1997, all Section
16(a) filing requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the SEC, the Company is required to provide a
report explaining the rationale and considerations that led to fundamental
compensation decisions affecting the Company's executive officers during the
past fiscal year. The report of the Compensation Committee is set forth below.
The Compensation Committee, which is composed of the Company's two outside
directors, has determined that compensation for executive officers should be
linked to Company performance and, to a lesser extent, recognize an
individual's contribution to a business unit and personal performance for the
long-term success of the Company.
In 1997, with the assistance of an outside consulting firm, the
Compensation Committee developed a Strategic Compensation Program (the
"Program") which established a performance management process linked to the
Company's Strategic Plan. The Program is applicable to compensation policies
for all executive officers, and there is no differentiation in application
among the executive officers named in the compensation table.
The 1997 compensation of the executive officers was established in May
1997 under the Program, and comprised of a base salary, bonus payout computed
on achievement of objective goals and the grant of stock options pursuant to
the Company's stock option plan.
7
<PAGE>
The Compensation Committee determined the base salary based upon a number
of factors. The most important factor in determining base salary was market
comparison of similarly-situated officers in similarly-situated companies based
on research and information supplied by the outside consulting firm to the
Compensation Committee. Other factors that the Compensation Committee evaluated
were the individual officer's contribution to the Company since its inception,
as well as the officer's level of base salary in prior years, responsibilities
and importance to the Company and accomplishments in relation to objective
goals.
The amounts of the 1997 earned bonus, was determined by a bonus payout
calculation performed by the outside consulting firm based on the Program which
took into account three levels of performance and contribution each weighted
differently as follows: (i) the Company's performance, (ii) business unit
performance and (iii) individual performance. The Company believes the Program
reinforces the process of performance planning (goal setting), measurement (key
indicators/results) and evaluation. Although 1997 financial results were not
met and no weight was given to the Company's performance in the bonus payout
calculation for any of the executive officers (no expectations met), certain
objectives were accomplished in the applicable business unit and individual
performance which benefit the Company. The executive officers made a strong
effort to achieve other goals that were key in reducing the negative impact on
the final results.
While the Compensation Committee reviews each executive officer's
performance against objective goals and in light of similarly-situated officers
in similarly-situated companies, the review and analysis is somewhat
subjective. Also, in connection with these reviews the Compensation Committee
and the outside consulting firm considered the input of the Chief Executive
Officer as to the performance of each of the other executive officers.
The Company also maintains the 1992 stock option plan (the "Plan"), which
is intended to improve the Company's financial performance by providing
long-term incentives to the Company's executive officers. No stock options were
granted under the Plan in 1997.
CERTAIN TRANSACTIONS
During 1997 Ezra Cohen, Director and Executive Officer, was indebted to
the Company in the maximum amount of approximately $242,000. Of the total
indebtedness approximately $173,000 was taken as an unsecured revolving demand
loan during 1997. This loan is interest free.
During 1997 David Djemal, Director and Executive Officer, was indebted to
the Company in the maximum amount of approximately $80,000. Of the total
indebtedness approximately $44,000 was taken as an unsecured revolving demand
loan during 1997. This loan is interest free.
During 1997 Daniel Homsany, Director and Executive Officer, was indebted
to the Company in the maximum amount of approximately $67,000. Of the total
indebtedness approximately $47,000 was taken as an unsecured revolving demand
loan during 1997. This loan is interest free.
The bonuses earned in 1997 by the executive officers will be offset
against the loans.
During 1997 the Company paid to Moises Cohen, Director and father of Ezra
Cohen, a management consulting fee of $48,333 and paid life insurance premiums
of $40,320 pursuant to the Retirement Agreement executed on February 26, 1996.
The Company also paid Mr. Cohen $15,000 for personally guarantying certain of
the Company's loan obligations.
INFORMATION AS TO STOCK OPTIONS
There were no stock options issued during 1997 to persons listed in the
above table under "Executive Compensation".
8
<PAGE>
AGGREGATED FISCAL YEAR END OPTION VALUE TABLE
The following table sets forth certain information concerning (i) options
exercised during 1997 by the Named Executive Officers and (ii) the number and
value of unexercised stock options held by the Named Executive Officers as of
December 31, 1997, assuming a value per share of Common Stock of $2.00 (the
closing sales price for the Common Shares as reported by the NASDAQ National
Market). All options are currently exercisable.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SHARES VALUE OF
SHARES UNDERLYING IN-THE-MONEY
ACQUIRED ON VALUE UNEXERCISED OPTIONS UNEXERCISED OPTIONS
NAME EXERCISE REALIZED AT DECEMBER 31, 1997 AT DECEMBER 31, 1997
- ------------------ ------------- ---------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
Ezra Cohen 0 $ 0 192,140 $16,705
David Djemal 0 $ 0 101,290 $14,255
Daniel Homsany 0 $ 0 101,290 $14,255
Enrique P. Lacs 0 $ 0 72,950 $10,400
</TABLE>
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the year-end total return of the Company's
Common Shares with the NASDAQ Stock Market Index and the Ibbotson Small Company
Index from the close on December 31, 1992 to December 31, 1997, assuming a
hypothetical initial value of $100. The Company has chosen to use the Ibbotson
Small Company Index because its business profile does not fit into any
published industry or line-of-business index. Moreover, the Company, which is a
wholesale distributor of consumer electronics in Latin America, does not have a
peer group of publicly traded companies. There are a number of companies that
are wholesale distributors of computers and computer products in the United
States, however, the Company believes that these companies are not comparable
to the Company and do not form a peer group. The Ibbotson Small Company Index
is a market value weighted index of the ninth and tenth decile market
capitalization New York Stock Exchange stocks plus stocks listed on the
American Stock Exchange and traded over-the-counter with the same or less
capitalization as the upper bound of the New York Stock Exchange's ninth
decile.
<TABLE>
<CAPTION>
12/92 12/93 12/94 12/95 12/96 12/97
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
EZCONY INTERAMERICA INC EZCOF $ 100.00 $ 67.87 $ 64.29 $ 23.81 $ 34.52 $ 38.10
NASDAQ STOCK MARKET (U.S.) INAS $ 100.00 $ 114.80 $ 112.21 $ 158.70 $ 195.19 $ 239.53
IBBOTSON SMALL COMPANY IIBB $ 100.00 $ 120.98 $ 124.74 $ 167.73 $ 197.28 $ 242.22
</TABLE>
10
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2)
The Board of Directors of the Company, upon the recommendation of the
Audit Committee, has appointed the firm of Coopers & Lybrand L.L.P. to serve as
independent auditors of the Company for the fiscal year ending December 31,
1998, subject to ratification of this appointment by the shareholders of the
Company. Coopers & Lybrand L.L.P. has served as independent auditors of the
Company for many years and is considered by management of the Company to be
well qualified.
FUTURE PROPOSALS OF SECURITY HOLDERS
Any shareholder who intends to submit a proposal for consideration at the
1999 Annual Meeting of Shareholders pursuant to the applicable rules of the
Securities and Exchange Commission must send the proposal to reach the
Company's Secretary by December 15, 1998. All proposals should be addressed to
the Secretary.
OTHER BUSINESS
The Board of Directors knows of no business to be brought before the
Annual Meeting other than as set above. If other matters properly come before
the Annual Meeting, it is the intention of the persons named in the solicited
proxy to vote such proxy thereon in accordance with their judgement.
MISCELLANEOUS
The Company will bear the cost of the solicitation of proxies on behalf of
the Company. In addition to solicitation by use of the mails, certain officers
and regular employees of the Company may solicit the return of proxies by
telephone, telegram or personal interview and may request brokerage houses,
custodians, nominees and fiduciaries to forward soliciting materials to their
principals and will reimburse them for their reasonable out-of-pocket expenses.
By Order of the Board of Directors
/S/ ANA M. MENENDEZ
--------------------------------
Ana M. Menendez
Secretary
Road Town, Tortola
British Virgin Islands
April 17, 1998
11
<PAGE>
EZCONY INTERAMERICA INC.
CRAIGMIUR CHAMBERS
P.O. BOX 71
ROAD TOWN, TORTOLA
BRITISH VIRGIN ISLANDS
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 1998
The undersigned hereby appoints Ezra Cohen and Ezra Homsany Gateno, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the Common Shares of Ezcony Interamerica Inc. held of record by the
undersigned on March 27, 1998 at the Annual Meeting of Shareholders to be held
May 21, 1998 or any adjournment or postponement thereof.
(SEE OTHER SIDE)
FOLD AND DETACH HERE
<PAGE>
1. ELECTION OF DIRECTORS
FOR all WITHOLD
nominees AUTHORITY
(except as to vote for all
marked to the nominees listed
contrary)
[ ] [ ]
(INSTRUCTION: TO WITHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Ezra Cohen, Moises Ezra Cohen, David Djemal, Michael G. Dowling, Ezra Homsany
Gateno, Daniel Homsany, Enrique Lacs, Ana M. Menendez, Leonard J. Sokolow
2. To ratify the appointment of Coopers & Lybrand LLP as the Company's
independent auditors for the year ending December 31, 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE DIRECTORS LISTED.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, personal representative,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
- -------------------------------
Signature
- -------------------------------
Signature if held jointly
DATED: ,1998
--------------------
PLEASE MARK, SIGN, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENEVELOPE.
FOLD AND DETACH HERE
