<PAGE> 1
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 Section 240.14a-11(c) or Section 240.14a-12
WILSHIRE TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
WILSHIRE TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on 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:
---------------------------------------------------------------------
[ ] 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> 2
WILSHIRE TECHNOLOGIES, INC.
5861 EDISON PLACE
CARLSBAD, CALIFORNIA 92008
March 20, 1998
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Wilshire Technologies, Inc. (the "Company") which will be held at 10:00 a.m. on
April 30, 1998 at the Double Tree Hotel, 10740 Wilshire Boulevard, Los Angeles,
California 90024. All holders of the Company's outstanding Common Stock as of
March 13, 1998 are entitled to vote at the meeting.
Enclosed is a copy of the Notice of Annual Meeting of Shareholders, Proxy
Statement and Proxy Card. A current report on the business operations of the
Company will be presented at the meeting and shareholders will have an
opportunity to ask questions.
We hope you will be able to attend. Whether or not you expect to attend,
it is important that you complete, sign, date and return the proxy card in the
enclosed envelope in order to make certain that your shares will be represented
at the Annual Meeting.
Sincerely,
/s/ JOHN VAN EGMOND
John Van Egmond
Chief Executive Officer
<PAGE> 3
WILSHIRE TECHNOLOGIES, INC.
5861 EDISON PLACE
CARLSBAD, CALIFORNIA 92008
(760) 929-7200
-------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1998
-------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Wilshire Technologies, Inc., a California corporation (the
"Company"), will be held at 10:00 a.m. on April 30, 1998 at the Double Tree
Hotel, 10740 Wilshire Boulevard, Los Angeles, California 90024 for the following
purposes:
1. To elect five directors; and
2. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 13,
1998, as the record date for the determination of shareholders entitled to
notice of and vote at the Meeting and all adjournments thereof.
By Order of the Board of Directors
/s/ JOHN VAN EGMOND
John Van Egmond
Chief Executive Officer
Dated: March 20, 1998
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU
MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.
-2-
<PAGE> 4
WILSHIRE TECHNOLOGIES, INC.
5861 EDISON PLACE
CARLSBAD, CALIFORNIA 92008
(760) 929-7200
-------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1998
-------------
VOTING AND PROXY
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Wilshire Technologies, Inc. (the "Company")
for use at the Annual Meeting of Shareholders to be held at 10:00 a.m. on April
30, 1998 at the Double Tree Hotel, 10740 Wilshire Boulevard, Los Angeles,
California 90024 (the "Meeting") and at any adjournments thereof. When such
proxy is properly executed and returned, the shares it represents will be voted
in accordance with any directions noted thereon. If no specification is
indicated, the shares will be voted "FOR" the election as directors of the five
nominees listed thereon. Any shareholder giving a proxy has the power to revoke
it at any time before it is voted by written notice to the Secretary of the
Company, by issuance of a subsequent proxy or by voting at the Meeting in
person.
At the close of business on March 13, 1998, the record date for
determining shareholders entitled to notice of and to vote at the Meeting, the
Company had issued and outstanding 12,943,385 shares of Common Stock, no par
value per share (the "Common Stock"). Each share of Common Stock entitles the
holder of record thereof to one vote on any matter coming before the Meeting. In
voting for directors, however, if any shareholder gives notice at the Meeting,
prior to voting, of an intention to cumulate votes, then each shareholder has
the right to cumulate votes and to give any one or more of the nominees whose
name has been placed in nomination prior to the voting a number of votes equal
to the number of directors to be elected (i.e., five) multiplied by the number
of shares which the shareholder is entitled to vote. The nominees (up to the
number to be elected) receiving the highest number of votes will be declared
elected. Discretionary authority to cumulate votes and distribute such votes
among some or all of the nominees in the event that cumulative voting is invoked
by any shareholder is solicited by the Board of Directors. Only shareholders of
record at the close of business on March 13, 1998 are entitled to notice of and
to vote at the Meeting or at any adjournments thereof.
-3-
<PAGE> 5
The Company will pay the expenses of soliciting proxies for the Meeting,
including the cost of preparing, assembling, and mailing the proxy solicitation
materials. Proxies may be solicited personally, or by mail or by telephone, by
directors, officers and regular employees of the Company who will not be
additionally compensated therefor. The Company has retained Corporate Investor
Communications, Inc. to assist in distributing materials for the Meeting at a
fee plus out-of-pocket expenses that are expected to aggregate $1,300. It is
anticipated that this proxy statement and accompanying proxy card will be mailed
on or about March 25, 1998 to all shareholders entitled to vote at the Meeting.
The matters to be considered and acted upon at the Meeting are referred to
in the preceding notice and are more fully discussed below.
ELECTION OF DIRECTORS
Directors are elected annually and hold office until the next annual
meeting of shareholders or until their respective successors are elected and
shall qualify. It is intended that the proxies solicited by the Board of
Directors will be voted for election of the five persons listed under "Nominees
for Director" unless a contrary instruction is made on the proxy. If for any
reason one or more of these nominees should be unavailable as a candidate for
director, an event which is not anticipated, the persons named in the
accompanying proxy will vote for another candidate or candidates nominated by
the Board of Directors.
The table on page 5 sets forth certain information as of March 13, 1998
with respect to (i) the present directors, who are also the nominees and (ii)
all directors and executive officers of the Company. Directors are elected by a
plurality of the votes cast by the shareholders. Therefore, shares not voted,
whether by abstaining or broker non-vote (in instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy) do not affect the election of directors.
The securities "beneficially owned" by an individual shown in the table
are determined in accordance with the definition of "beneficial ownership" set
forth in the regulations of the Securities and Exchange Commission and,
accordingly, may include securities owned by or for, among others, the spouse
and/or minor children of the individual and any other relative who has the same
residence as such individual, as well as other securities as to which the
individual has or shares voting or investment power or which the individual has
the right to acquire before May 13, 1998 (60 days after the March 13, 1998
record date) under stock options or warrants. Beneficial ownership may be
disclaimed as to certain of the securities. Except as otherwise noted, each
person named in the table has sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned by him, except to the
extent that authority is shared by spouses under applicable law.
-4-
<PAGE> 6
<TABLE>
<CAPTION>
Number of Shares Director Percent of Class of
Name Age Beneficially Owned Since Common Stock
- ---- --- ------------------ ----- -------------------
<S> <C> <C> <C> <C>
Ronald W. Cantwell 54 0(1) December 6, 1996 *
John Van Egmond 48 120,000(2) December 31, 1996 *
Charles H. Black 71 2,000(3) June 23, 1997 *
Joe E. Davis 63 2,000(3) June 23, 1997 *
Ralph V. Whitworth 42 2,000(3) April 2, 1997 *
All Directors and Executive Officers
of the Company as a Group (six persons) 319,333(4) 2.4%
</TABLE>
- ----------
* Less than 1% of the 12,943,385 shares outstanding on March 13, 1998
(1) Mr. Cantwell disclaims direct beneficial ownership of 9,416,430 shares of
Common Stock and of Warrants to purchase 475,000 shares of Common Stock
owned by Trilon Dominion Partners, L.L.C. Mr. Cantwell is the holder of
100% of the capital stock of VC Holdings, Inc. which is the sole manager
of and owns 100% of the voting Class A membership interest in Trilon
Dominion Partners, L.L.C.
Mr. Cantwell as an employee of Trilon Dominion Partners, L.L.C., is
prohibited by that company's policies from investing in securities of
companies within the investment group of Trilon Dominion Partners, L.L.C.,
which includes the Company.
(2) Includes 100,000 shares that Mr. Van Egmond has the right to acquire upon
exercise of a currently exercisable non-qualified stock option.
(3) Represents shares of Common Stock which the named person has the right to
acquire upon exercise of currently exercisable non-qualified stock
options. Does not include 42,000 shares purchasable on exercise of options
that are not exercisable before May 13, 1998.
(4) Includes shares which such persons have the right to acquire on exercise
of options that are exercisable or become exercisable before May 13, 1998.
-5-
<PAGE> 7
INFORMATION CONCERNING THE NOMINEES AND EXECUTIVE OFFICERS
NOMINEES FOR DIRECTOR
RONALD W. CANTWELL has been a Director and Chairman of the Board of the Company
since December 6, 1996, and has served as President of Trilon Dominion Partners,
L.C.C. since its inception in June 1995. Prior to joining Trilon Dominion, Mr.
Cantwell served as the President of The Catalyst Group, Inc. where he
successfully executed a variety of merchant banking activities and managed the
operations of a diverse mix of utility assets. Approximately $2 billion of these
assets were successfully divested under Mr. Cantwell's direction. In addition,
he has been involved in advising numerous mergers and acquisitions and
restructuring matters for the Edper Group, the principal investor in Catalyst.
Prior to joining Catalyst, Mr. Cantwell spent 19 years in the practice of public
accounting, most recently with Ernst & Young where he was a tax partner and
headed the Dallas-based Mergers and Acquisitions practice. While at Ernst &
Young, Mr. Cantwell was instrumental in structuring mergers, acquisitions,
recapitalizations, and dispositions on behalf of several Fortune 500 and many of
the southwest's most acquisition-oriented entities. Mr. Cantwell is a Certified
Public Accountant. Mr. Cantwell presently is a director of EPL Technologies,
Inc., a publicly owned company.
JOHN VAN EGMOND has been President and Chief Executive Officer and a Director of
the Company since December 31, 1996. Mr. Van Egmond also was affiliated with
Trilon Dominion Partners, L.L.C. and he has been President, Chief Executive
Officer and a director of Century Power Corporation since 1989. Prior to 1989,
Mr. Van Egmond was Vice President and Controller of Century. Prior to joining
Century, Mr. Van Egmond held various financial positions from 1972 to 1984 with
Tucson Electric Power Company. Mr. Van Egmond is a Certified Public Accountant
and holds a B.S. from Montana State University.
CHARLES H. BLACK rejoined the Board in June, 1997. He had been a director of the
Company from February, 1993 until August, 1996. Mr. Black is a private investor
who serves on the Board of Governors of the Pacific Stock Exchange and is a
director of Investment Company of America, Fundamental Investors, Inc., JMC
Group, Inc., and AMCAP Fund and is a trustee of American Variable Insurance
Series. Previously, Mr. Black was Executive Vice President and Chief Financial
Officer of Kaiser Steel Corporation, Executive Vice President and Chief
Financial Officer of Great Western Savings & Loan, and Vice President and
Treasurer of Litton Industries.
JOE E. DAVIS rejoined the Board in June, 1997. He had been a director of the
Company from February 1993 until November, 1996. Mr. Davis is a private investor
who serves as a director for BMC Industries and Windsor Capital, and is a
Trustee of American Variable Insurance Series. Previously, Mr. Davis was the
President and Chief Executive Officer of National Health Enterprises, Inc.
RALPH V. WHITWORTH joined the Board in April, 1997. Mr. Whitworth is the
Managing Member of Relational Investors L.L.C, an investment management firm
specializing in publicly traded equities. He is also a Partner in Batchelder &
Partners, Inc., a merchant banking and investment banking firm based in La
Jolla, California, and is a director of C.D. Radio, Inc. and Apria
-6-
<PAGE> 8
Healthcare Group. Previously, Mr. Whitworth was President of Whitworth and
Associates, a Washington, D.C. based corporate advisory firm where he advised
major corporations and investors on investments, proxy contests, acquisitions
and board policy. He also served as President of the United Shareholders
Association from 1986 until 1994. In prior positions, Mr. Whitworth served as
President of Development at United Thermal Corporation, and as assistant to the
General Partner at Mesa Limited Partnership.
OTHER EXECUTIVE OFFICERS
JAMES W. KLINGLER (age 50) has been the Company's Vice President, Chief
Financial Officer, Secretary and Treasurer since October, 1994. From 1990 to
October 1994, Mr. Klingler was Vice President, Controller of the Optical
Division of Allergan, Inc. Prior to joining Allergan, Mr. Klingler held various
financial positions with Pepsico, Inc., Schering-Plough Corp., and Continental
Group, Inc. Mr. Klingler is a Certified Management Accountant and holds a B.A.
from Ohio State University, and an M.B.A. from Columbia University.
OTHER SIGNIFICANT EMPLOYEES
FRED PISACANE (age 41) joined the Company in July, 1991, and is Vice President
of Sales and Marketing. Prior to joining the Company, Mr. Pisacane spent twelve
years with Baxter Scientific Products, a leading distributor of clean room
products.
ALAN R. SEACORD (age 46) joined the Company in May 1993 and serves as the Vice
President of Operations. Previously, Mr. Seacord held various product
development and operations positions with four pharmaceutical and biotechnical
firms, including divisions of Eli Lilly Corp., Tech-America, Inc. and Abbott
Infusions, Inc.
CHING-WANG (ERIC) LUO, PH. D (age 45) joined the Company in July, 1993, and is
the Vice President of Research and Development. Dr. Luo came from Ciba Geigy
Corporation where he was in research and development for transdermal and
iontophoretic drug delivery systems from March, 1991 to July, 1993. From
January, 1988 to February, 1991 he was a senior research scientist for
Schering-Plough Corp.
BOARD OF DIRECTORS MEETINGS; DIRECTORS COMPENSATION.
The Board of Directors of the Company held six meetings during the fiscal
year ended November 30, 1997. The Board of Directors has a Compensation
Committee (which in fiscal 1997 consisted of Directors Black and Whitworth)
which makes recommendations concerning salaries and incentive compensation for
employees of the Company, and an Audit Committee (which in fiscal 1997 consisted
of Directors Black and Davis) which reviews the results and scope of the audit
and other services provided by the Company's independent auditors. During the
fiscal year ended November 30, 1997 the Compensation Committee held one meeting
and the Audit Committee held no meeting. The Board of Directors does not have a
Nominating Committee. All directors attended at least 75% of the aggregate
number of meetings of the Board and of the Committees on which they serve.
-7-
<PAGE> 9
All directors hold office until the next annual meeting of shareholders of
the Company and the election and qualification of their successors. Officers are
elected annually by, and serve at the discretion of, the Board of Directors.
Directors are reimbursed for out-of-pocket expenses in connection with
attendance at Board of Directors' meetings and receive $500 for each meeting
attended plus annual non-qualified stock options to purchase 2,000 shares of the
Company's Common Stock, which options are granted every June 30 at fair market
value pursuant to the Company's Stock Option Plans. Messrs. Van Egmond and
Cantwell each waived the right to receive the 2,000 share options granted on
June 30, 1997 at an exercise price of $0.84. Their director's fees are paid to
VC Holdings, Inc. in accordance with the policies of Trilon Dominion Partners,
L.L.C.
For other options granted to the directors since the beginning of the last
fiscal year see "Option Grants", below.
EXECUTIVE COMPENSATION.
The table that follows shows the annual and long-term compensation for
services in all capacities to the Company for the fiscal year ended November 30,
1997. Mr. Stephen P. Scibelli was the chief executive officer of the Company
until his resignation on September 9, 1996. After Mr. Scibelli's resignation,
Mr. William Hopke, a director, served as interim chief executive officer until
December 31, 1996, when Mr. John Van Egmond was elected as president and chief
executive officer of the Company. Mr. Hopke received no compensation from the
Company for his services.
-8-
<PAGE> 10
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-----------------------------------------------------------------------------------
AWARDS PAYOUTS
-------------------------------------------------------------
SECURITIES
OTHER UNDERLYING
ANNUAL RESTRICTED OPTIONS/ SARS ALL OTHER
NAME AND COMPEN- STOCK (#) LTIP PAYOUTS COMPENSATION
PRINCIPAL SALARY BONUS SATION ($) AWARD(S) (G) ($) ($)
POSITION YEAR ($) ($) (E) ($) (H) (I)
(A) (B) (C) (D) (F)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JOHN VAN
EGMOND,
CHIEF
EXECUTIVE 1997 $50,000(1) $2,000(2)
OFFICER AND
PRESIDENT
JAMES
KLINGLER,
CHIEF
FINANCIAL 1997 $112,000 50,000
OFFICER
135,000(3)
STEPHEN P.
SCIBELLI,
JR., CHIEF
EXECUTIVE 1996 $131,058 2,000 $57,398(4)
OFFICER AND
PRESIDENT 1995 $175,000 200,000 $25,565
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Van Egmond received no cash compensation from the Company in
fiscal 1997 but did receive $50,000 cash compensation from Trilon Dominion
Partners, L.L.C. in that year. The Company recorded this amount as a
contribution to capital and charged it to general and administrative expenses in
1997.
(2) Represents director fees paid to VC Holdings, Inc, an affiliate of
Trilon Dominion Partners, L.L.C.
(3) See last paragraph under "Option Grants".
(4) Of the amount shown, $18,314 represents one-half of the premium paid
by the Company during fiscal 1996 on an insurance policy with present death
benefits of $1,263,000 on the life of Mr. Scibelli, of which Mr. Scibelli is the
beneficiary. The other one-half of the premium is paid by Advanced Materials
pursuant to an Asset Purchase Agreement dated November 30, 1990 with the
Company. The remaining $39,084 represents $31,848 in accrued vacation paid on
Mr. Scibelli's resignation and $7,236 in medical payments not covered by the
Company's group medical insurance plan in which Mr. Scibelli participated.
-9-
<PAGE> 11
Under the Asset Purchase Agreement, the Company remains obligated to pay
one-half of the premium on the life insurance policy mentioned above until the
policy is paid-up, and to pay one-half of the cost of a new Mercedes Benz 300
SEL automobile.
OPTION GRANTS
The table that follows shows stock options granted pursuant to the
Company's Stock Option Plans and otherwise during the fiscal year ended November
30, 1997, to the executive officers named in the Summary Compensation Table
above. No stock appreciation rights were granted.
<TABLE>
<CAPTION>
OPTIONS PERCENT OF TOTAL OPTIONS GRANTED EXERCISE PRICE EXPIRATION
NAME GRANTED TO EMPLOYEES IN FISCAL YEAR (PER SHARE) DATE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John Van Egmond 100,000 11.7% $0.625 December 31, 2007
James W. Klingler 21.7%
50,000 $0.625 November 21, 2007
50,000(1) $0.625 October 3, 2004
30,000(1) $0.625 December 6, 2004
55,000(1) $0.625 October 16, 2006
</TABLE>
(1) On November 21, 1997 the Board of Directors voted to offer all holders
of employee stock options with an exercise price above $0.625 per share the
opportunity to exchange their options for new options having an exercise price
of $0.625 per share, the fair market value of the Company's common stock on that
day, but otherwise having the same duration, vesting schedule and other terms as
the outstanding options. The options on 543,500 shares that were exchanged
pursuant to such offer include options on 135,000 shares with exercise prices
between $1-5/8 and $2 per share, which were exchanged on November 21, 1997 by
Mr. Klingler for new options on 135,000 shares with exercise prices of $0.625
per share.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
For an exchange of options by Mr. Klingler see the immediately preceding
paragraph.
The table that follows shows the number of shares of the Company's Common
Stock acquired upon exercise of options, the value realized therefor, the number
of unexercised options at November 30, 1997 and the value of unexercised
in-the-money options at November 30, 1997 (based on a closing price of $0.50 per
share) for the executive officers named in the Summary Compensation Table above,
none of whom received any stock appreciation rights during fiscal 1997 or held
any at November 30, 1997.
-10-
<PAGE> 12
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised in-the-money options
Options at November 30, 1997 at November 30, 1997(1)
--------------------------------------------------------------------
Shares Acquired on
Name Exercise (Number) Value Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John Van Egmond 0 $ 0 100,000 0 $ 0 $ 0
James W. Klingler 0 0 143,333 51,667 $ 0 $ 0
Stephen P. Scibelli, Jr. 0 0 200,000 0 0 $ 0
</TABLE>
- ----------
(1) Represents the amounts by which the market price of the common stock of
the Company exceeded the exercise prices of unexercised options on November 30,
1997.
EMPLOYMENT AGREEMENTS
On October 3, 1994, the Company entered into an employment agreement with
Mr. Klingler as Chief Financial Officer, for a term of one year with a provision
for one-year renewals. Compensation for the year ended November 30, 1997 was
$112,000. Pursuant to the contract Mr. Klingler was granted an option covering
50,000 shares with an exercise price of $2.00, being the fair market value on
the effective date of the agreement. For additional option information for Mr.
Klingler, see "Options", above.
On January 1, 1998 the Company entered into an employment agreement with
Mr. Van Egmond as Chief Executive Officer, for a term of one year with a
provision for one-year renewals. Mr. Van Egmond's annual compensation is
$175,000. The Employment Contract provides that the Company may terminate Mr.
Van Egmond's employment under the Agreement at any time without cause. In that
event, or if the Company does not agree to renew the Employment Agreement, Mr.
Van Egmond will receive as severance pay an amount equal to six months of his
then salary, payable in six equal monthly installments.
On November 21, 1997 Mr. Van Egmond was also granted a fully-vested option
to purchase 100,000 shares of the Company's common stock at an exercise price of
$0.625 per share, the fair market value of the Company's common stock on the
date of grant.
Messrs. Klingler and Van Egmond are also entitled to participate in the
Company's compensation and benefit programs available to officers at their
respective levels.
-11-
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On January 4, 1996, Trilon Dominion Partners, L.L.C. ("Trilon") owned the
following securities of the Company:
(a) Its Promissory Note for $5,000,000 (the "Promissory Note").
(b) Its Promissory Note for $2,700,000 (subsequently increased to
$3,100,000) (the "Grid Promissory Note").
(c) Warrant (the "May Warrant") entitling the holder to purchase
initially 1,250,000 shares of the Company's Common Stock, subject to
adjustment to protect against dilution.
(d) Warrant (the "November Warrant") entitling the holder to purchase
initially 30,000 shares of the Company's Common Stock, subject to
adjustment to protect against dilution.
(e) 940,000 shares of the Company's Common Stock.
On January 5, 1996, pursuant to an Exchange Agreement dated January 5,
1996, (i) Trilon cancelled the Promissory Note and all except $400,000 principal
amount of the Grid Promissory Note, together with interest accrued on the
cancelled principal amounts; (ii) Trilon surrendered the May Warrant and the
November Warrant; and (iii) the Company issued to Trilon 8,441,430 shares of the
Company's authorized but theretofore unissued Common Stock. On January 10, 1996,
the Company paid the remaining $400,000 principal amount on the Grid Promissory
Note, together with interest accrued thereon.
Also on January 5, 1996 the Company and Trilon entered into a Credit
Agreement (the "Agreement") for a credit line of $1,000,000 secured by the
Company's assets. Under the terms of the Agreement, the principal was due on
June 30, 1996 and the interest was payable monthly at a rate of prime plus
3.75%. In connection with the loan, the Company issued Trilon a five-year
warrant that entitles Trilon to purchase 100,000 shares of the Company's
authorized but unissued common stock at an exercise price of $0.75 per share,
subject to adjustment to protect against dilution. The warrant is exercisable
immediately and expires on January 5, 2001. Also, under the terms of the
Agreement, the Company issued Trilon a second five-year warrant which became
exercisable when the Company and Trilon amended the Agreement to extend the
termination date of the Agreement to December 31, 1996. The second warrant
entitles Trilon to purchase 25,000 shares of the Company's authorized but
unissued common stock at an exercise price of $1.75 per share and expires on
January 5, 2001. The holder of each of such five-year warrants may, without
payment to the Company, convert the warrant in whole or in part into shares of
the Company's common stock having a market value equal to the difference between
(x) the market value per share of common stock multiplied by the number of
warrants that are converted and (y) the warrant exercise price, multiplied by
the number of warrants that are converted.
-12-
<PAGE> 14
The Agreement was amended further on September 30, 1996, April 15, 1997,
and September 19, 1997. Each amendment increased the credit line by $1,000,000,
up to a total of $4,000,000, and extended the termination date, up to the
current termination date of June 30, 1998. Trilon received a warrant to purchase
100,000 shares at the market price with each credit line increase, and a warrant
to purchase 25,000 shares at the market price with each termination date
extension. Warrants for 225,000 shares were issued in each of fiscal years 1996
and 1997. The Company recorded the estimated fair value of the warrants issued
in fiscal year 1997 at $0.07 per underlying common share with a corresponding
charge to earnings of $16,000 in fiscal 1997.
At March 13, 1998, the short-term debt owed to Trilon under the credit
facility amounted to $4,000,000. In addition, on January 7, 1998, February 17,
1998 and March 10, 1998, Trilon and the Company completed Demand Notes, each for
$250,000 at an interest rate of 12.25%, to fund the Company's ongoing operations
until a new credit facility can be completed.
Trilon's ownership of shares and warrants on March 13, 1998 are shown
under "Principal Shareholders".
The parties also entered into a Consulting Agreement pursuant to which
during the term of the credit facility the Company will pay Trilon $2,000 per
month for consulting services rendered, plus travel and other related expenses
incurred by Trilon.
The Company has been informed that the members of Trilon are (i) VC
Holdings, Inc. ("VCH"), a Delaware corporation that is Trilon's sole manager and
holds 100% of the voting Class A membership interest in Trilon and (ii) Dominion
Capital, Inc., which holds 100% of the non-voting Class B membership interest in
Trilon. Mr. Ronald Cantwell, the President of Trilon, has been a director and
Chairman of the Board of the Company since December 6, 1996.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of March 13, 1998 the identity of each
person known to the Company to be the beneficial owner of more than 5% of the
Company's Common Stock and its beneficial ownership.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF PERCENT OF CLASS OF
OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
------------------- ----------------------- -------------------
<S> <C> <C>
Trilon Dominion Partners, LLC 9,416,430 72.75%
245 Park Avenue, 28th Floor
New York, NY 10167
</TABLE>
Trilon Dominion Partners, LLC also owns warrants entitling it to purchase
the following number of shares of the Company's Common Stock:
-13-
<PAGE> 15
<TABLE>
<CAPTION>
Exercise Date Expiration Date Shares Exercise Price
- ------------- --------------- ------ --------------
<S> <C> <C> <C>
January 5, 1996 January 5, 2001 100,000 $0.75
June 30, 1996 January 5, 2001 25,000 $1.75
September 30, 1996 September 30, 2001 100,000 $1.31
June 30, 1997 September 30, 2001 25,000 $0.84
April 15, 1997 April 15, 2002 100,000 $0.44
September 19, 1997 September 19, 2002 100,000 $0.95
December 31, 1997 April 15, 2002 25,000 $0.47
--------
475,000
</TABLE>
In addition, a 25,000 share warrant expiring on September 19, 2002 will
become exercisable on June 30, 1998 but only if the Company does not pay Trilon
Dominion the principal and interest due on that day under the Fourth Amendment
to the Credit Agreement described under "Certain Relationships and Related Party
Transactions". The exercise price will be equal to the closing price of the
Company's Common stock on June 30, 1998.
SECTION 16 DISCLOSURE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's Common Stock, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission. Executive officers, directors and greater than ten percent
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during the fiscal year ended November 30,
1997 all Section 16(a) filing requirements applicable to its executive officers,
directors and greater than ten percent beneficial owners were complied with.
-14-
<PAGE> 16
ANNUAL REPORT AND FORM 10-KSB
The audited financial statements of the Company are included in the Annual
Report to Shareholders for the year ended November 30, 1997, enclosed with this
Proxy Statement. The Annual Report is not to be regarded as proxy soliciting
material or as a communication by means of which any solicitation is made.
The Board of Directors has selected the independent accounting firm of
Ernst & Young LLP to act as the Company's auditors for the 1998 fiscal year. It
is anticipated that representatives of Ernst & Young will be present at the
Meeting to make a statement if they so desire and respond to appropriate
questions presented at the Meeting.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-KSB IS AVAILABLE WITHOUT CHARGE TO SHAREHOLDERS AND MAY BE
OBTAINED BY WRITING TO MR. JAMES W. KLINGLER, SECRETARY, WILSHIRE TECHNOLOGIES,
INC., 5861 EDISON PLACE, CARLSBAD, CALIFORNIA 92008. EXHIBITS TO FORM 10-KSB
WILL ALSO BE FURNISHED UPON REQUEST FOR THE COST OF REPRODUCTION.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Meeting. However, if other matters should come before the Meeting, it is the
intention of each person named in the proxy to vote such proxy in accordance
with his judgment on such matters.
SHAREHOLDER PROPOSALS
Any proposals of shareholders that are intended to be presented at next
year's Annual Meeting of Shareholders must be received by the Company at its
principal executive offices on or before January 15, 1999, in order to be
considered for inclusion in the Company's proxy materials relating to that
meeting.
By Order of the Board of Directors
[SIG]
John Van Egmond
Chief Executive Officer
-15-
<PAGE> 17
This Proxy is Solicited on Behalf
of the Board of Directors of
WILSHIRE TECHNOLOGIES, INC.
The undersigned Stockholder of Wilshire Technologies, Inc., a California
corporation, hereby appoints John Van Egmond and James W. Klingler and each of
them (to act by a majority of those present), or _______________________________
________________________________________ , the attorneys and proxies of the
undersigned, with power of substitution, to attend the Annual Meeting of
Stockholders of said Corporation to be held at the Double Tree Hotel, 10740
Wilshire Boulevard, Los Angeles, California 90024 on April 30, 1998 at 10
o'clock A.M. and at any adjournment or adjournments thereof, and to vote the
number of shares the undersigned would be entitled to vote if personally
present with respect to:
This Proxy will be voted as you specify on the reverse. UNLESS OTHERWISE MARKED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF SOME OR ALL OF THE PERSONS NAMED IN
THE ACCOMPANYING PROXY STATEMENT WHO WERE NOMINATED BY THE BOARD OF DIRECTORS
FOR ELECTION AS DIRECTORS OF WILSHIRE TECHNOLOGIES, INC. In the election of
directors said proxies shall have discretion and authority to distribute the
votes represented by this proxy in such proportions as they shall see fit among
the nominees named in the Proxy Statement. If any such nominee is unable or
unwilling to serve or is otherwise unavailable, said proxies shall have
discretion and authority to vote in accordance with their judgment for other
nominees or to distribute such votes in such proportions as they shall see fit
among all nominees.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE> 18
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
WILSHIRE TECHNOLOGIES, INC.
APRIL 30, 1998
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
<TABLE>
<S> <C> <C> <C> <C> <C>
A /X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
VOTE FOR THE
ELECTION OF ALL WITHHOLD FROM
DIRECTORS NAMED VOTING FOR ELECTION
AT RIGHT OF DIRECTORS
1. ELECTION / / / / NOMINEES: RONALD W. CANTWELL 2. THE TRANSACTION OF SUCH OTHER BUSINESS
OF JOHN VAN EGMOND AS MAY PROPERLY COME BEFORE THE ANNUAL
DIRECTORS: CHARLES H. BLACK MEETING OR AN ADJOURNMENT THEREOF.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY JOE E. DAVIS
NOMINEE WRITE THAT NOMINEE'S NAME IN THE SPACE RALPH V. WHITWORTH PROPOSAL (1) IS DISCUSSED IN THE
PROVIDED BELOW. ACCOMPANYING PROXY STATEMENT DATED
MARCH 20, 1998.
- --------------------------------------------------
PLEASE RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE U.S.A.
RECEIPT OF COPIES OF THE ANNUAL REPORT
TO SHAREHOLDERS AND THE PROXY STATEMENT
DATED MARCH 20, 1998 IS HEREBY
ACKNOWLEDGED.
SIGNATURES DATE SIGNATURES DATE
------------------------------------- -------------- ------------------------------------- ----------
(SIGNATURE OF STOCKHOLDER) (SIGNATURE OF STOCKHOLDER)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. IF MORE THAN ONE NAME APPEARS, ALL PERSONS SO DESIGNATED SHOULD SIGN.
FOR JOINT ACCOUNTS, EACH JOINT OWNER SHOULD SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS AND ATTORNEYS SHOULD
SO INDICATE WHEN SIGNING.
</TABLE>
