UNITED TEXTILES & TOYS CORP.
1410 Broadway, Suite 1602
New York, New York 10018
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To
Be Held on November 10, 1998
To the Shareholders of UNITED TEXTILES & TOYS CORP.
NOTICE IS HEREBY GIVEN that an Annual Meeting of United Textiles & Toys
Corp. (?the Company?) will be held at the offices of Klarman & Associates at 14
East 60th Street, Suite 402, New York, New York, on November 10, 1998, at 12:00
p.m. EST, for the following purposes:
1. To elect four (4) Directors to the Company's Board of Directors to hold
office for a period of one year or until their successors are duly elected and
qualified; and
2. To transact such other business as properly may be brought before the
meeting or any adjournment thereof.
The close of business on September 28, 1998 has been fixed as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you plan to
attend, please complete, date, and sign the accompanying proxy, and return it
promptly in the enclosed envelope to assure that your shares are represented at
the meeting. If you do attend, you may revoke any prior proxy and vote your
shares in person if you wish to do so. Any prior proxy automatically will be
revoked if you execute the accompanying proxy or if you notify the Secretary of
the Company, in writing, prior to the Annual Meeting of Shareholders.
By order of the Board of Directors
Allean Goode, Secretary
Dated: October 21, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, AND SIGN
THE ENCLOSED PROXY, AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
<PAGE>
UNITED TEXTILES & TOYS CORP.
1410 Broadway, Suite 1602
New York, New York 10018
PROXY STATEMENT
FOR
Annual Meeting of Stockholders
To Be Held on November 10, 1998
This proxy statement and the accompanying form of proxy were mailed on
October 21, 1998 to the stockholders of record (as of September 28, 1998) of
United Textiles & Toys Corp., a Delaware corporation (?the Company?), in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting to be held on November 10, 1998 and at any
adjournment thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Shares of the Company's Common Stock, par value $.001 per share (?the
Common Stock?), represented by an effective proxy in the accompanying form will,
unless contrary instructions are specified in the proxy, be voted FOR the
proposal to elect four (4) Directors to the Company's Board of Directors to hold
office for a period of one year or until their successors are duly elected and
qualified.
Any such proxy may be revoked at any time before it is voted. A
stockholder may revoke this proxy (i) by notifying the Secretary of the Company,
either in writing prior to the Annual Meeting or in person at the Annual
Meeting; (ii) by submitting a proxy bearing a later date; or (iii) by voting in
person at the Annual Meeting. An affirmative vote of a plurality of the shares
of Common Stock present in person or represented by proxy at the Annual Meeting
and entitled to vote thereon is required to elect the Directors. A stockholder
voting through a proxy who abstains with respect to the election of Directors is
considered to be present and entitled to vote on the election of Directors at
the meeting, and his abstention is, in effect, a negative vote; however, a
stockholder (including a broker) who does not give authority to a proxy to vote
or who withholds authority to vote on the election of Directors shall not be
considered present and entitled to vote on the election of Directors. A
stockholder voting through a proxy who abstains with respect to approval of any
other matter to come before the meeting is considered to be present and entitled
to vote on that matter, and his abstention is, in effect, a negative vote;
however, a stockholder (including a broker) who does not give authority to a
proxy to vote or who withholds authority to vote on any such matter shall not be
considered present and entitled to vote thereon.
The Company will bear the cost of the solicitation of proxies by the
Board of Directors. The Board of Directors may use the services of its Executive
Officers and certain Directors to solicit proxies from stockholders in person
and by mail, telegram, and telephone. Arrangements may also be made with
brokers, fiduciaries, custodians, and nominees to send proxies, proxy
statements, and other material to the beneficial owners of the Common Stock held
of record by such persons, and the Company may reimburse same for reasonable
out-of-pocket expenses incurred by same in so doing.
The Report on Form 10-KSB for the fiscal year ended March 31, 1998,
including audited financial statements, and the quarterly report on Form 10-QSB
for the quarter ended June 30, 1998, including unaudited financial statements,
accompany this proxy statement.
The principal executive offices of the Company are located at 1410
Broadway, Suite 1602 New York, New York 10018; the Company's telephone number is
212-391-1111.
<PAGE>
Certain Reports
No person (?a Reporting Person?) who during the fiscal year ended
December 31, 1997 was a Director, Officer, or beneficial owner of more than ten
percent of the Company's Common Stock [which is the only class of securities of
the Company registered under Section 12 of the Securities Exchange Act of 1934
(?the Act?)], failed to file on a timely basis reports required by Section 16 of
the Act during the most recent fiscal year or prior years, except that
Multimedia Concepts International, Inc., failed to file a Form 3 upon its
purchase of shares of the Company in excess of 10% in December 1997. Multimedia
Concepts International, Inc., has agreed to prepare and file one as soon as
practicable. The foregoing is based solely upon a review by the Company of (i)
Forms 3 and 4 during the most recent fiscal year as furnished to the Company
under Rule 16a-3(d) under the Act; (ii) Forms 5 and amendments thereto furnished
to the Company with respect to its most recent fiscal year; and (iii) any
representation received by the Company from any reporting person that no Form 5
is required, except as described herein.
VOTING SECURITIES AND SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are the Company?s Common
Stock, par value $.001 per share. The presence, in person or by proxy, of a
majority of shares entitled to vote will constitute a quorum for the meeting.
Each share of Common Stock entitles its holder to one vote on each matter
submitted to the stockholders. The close of business on September 28, 1998 has
been fixed as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting and any adjournment thereof. At that
date, 4,550,236 shares of Common Stock were outstanding. Voting of the shares of
Common Stock is on a non-cumulative basis.
The following table sets forth information as of September 28, 1998
with respect to the beneficial ownership of shares of Common Stock by (i) each
person (including any ?group? as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) known by the Company to be the
owner of more than 5% of the outstanding shares of Common Stock; (ii) each
Director; and (iii) all Officers and Directors as a group.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information at September 28,
1998, with respect to the beneficial ownership of Common Stock by (i) each
person known by the Company to be the owner of 5% or more of the outstanding
Common Stock; (ii) by each Director; (iii) and by all Officers and Directors as
a group. Except as otherwise indicated below, each named beneficial owner has
sole voting and investment power with respect to the shares of Common Stock
listed.
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Number
of Beneficial Owner of Beneficial Owner (1) Percentage of Class (1)(2)
- - ------------------- -----------------------
<S> <C> <C>
Multimedia Concepts 3,571,429 78.5%
International, Inc.
1410 Broadway, Suite 1602
New York, New York 10018
Ilan Arbel (3) 3,571,429 78.5%
c/o United Textiles &
Toys Corp.
1410 Broadway, Suite 1602
New York, New York 10018
Allean Goode -- --
c/o United Textiles &
Toys Corp.
1410 Broadway, Suite 1602
New York, New York 10018
Moses Mika -- --
c/o United Textiles &
Toys Corp.
1410 Broadway, Suite 1602
New York, New York 10018
Rivka Arbel (1) -- --
c/o United Textiles & Toys Corp.
1410 Broadway, Suite 1602
New York, New York 10018
Europe American 420,000 9.2%
Capital Foundation
Box 47
Tortola British Virgin Islands
Officers and Directors
as a Group (4 persons) -- --
</TABLE>
(1) Unless otherwise noted, all shares shown are held by individuals or
entities possessing sole voting and investment power with respect to such
shares. Shares not outstanding but deemed beneficially owned by virtue of the
right of a person to acquire them within 60 days, whether by the exercise of
options or warrants, are deemed outstanding in determining the number of shares
beneficially owned by such person or group.
<PAGE>
(footnotes continued from previous page)
The ?Percent of Outstanding Shares Owned? is calculated by dividing the
?Number of Shares Beneficially Owned? by the sum of (i) the total outstanding
shares of Common Stock of the Company and (ii) the number of shares of Common
Stock that such person has the right to acquire within 60 days, whether by
exercise of options or warrants. The ?Percent of Outstanding Shares Owned? does
not reflect shares beneficially owned by virtue of the right of any person,
other than the person named (and affiliates of such person), to acquire them
within 60 days, whether by exercise of options or warrants. Ilan Arbel is the
President and a director of Multimedia and therefore can control the voting of
the shares held by Multimedia.
It is expected that the following will be considered at the meeting and
that action will be taken thereon:
I. ELECTION OF DIRECTORS
The Board of Directors currently consists of three members elected for a
term of one year or until their successors are duly elected and qualified.
An affirmative vote of a plurality of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting and entitled to vote
thereon is required to elect the Directors. All proxies received by the Board of
Directors will be voted for the election as Directors of the nominees listed
below if no direction to the contrary is given. In the event any nominee is
unable to serve, the proxy solicited hereby may be voted, in the discretion of
the proxy, for the election of another person in his stead. The Board of
Directors knows of no reason to anticipate this will occur.
The following table sets forth, as of September 28, 1998, the four nominees
for election as Directors of the Company:
<TABLE>
<CAPTION>
Name Position with Company and Age Director Since
<S> <C> <C>
Ilan Arbel President and Director, 44 1991
Rivka Arbel Vice President and Director, 45 1992
Allean Goode Secretary, Treasurer, and Director, 63 1992
Moses Mika Director, 78 1998
</TABLE>
The directors of the Company are elected annually by its stockholders and
the officers of the Company are appointed annually by its Board of Directors.
Vacancies on the Board of Directors may be filled by the remaining directors.
Each current director and officer will hold office until the next annual meeting
of stockholders, or until his successor is elected and qualified. Rivka Arbel is
the sister-in-law of Ilan Arbel and Moses Mika is the father of Ilan Arbel. Ilan
Arbel has been President, Chief Executive Officer, and a Director of the Company
since 1991. Mr. Arbel was the President, Chief Executive Officer, and a Director
of American Toys from its inception in February 1993 until July 1996. He was the
President, Secretary and a Director of Multimedia Concepts International, Inc.
("Multimedia") from inception until June 12, 1995 upon the election of Sheikhar
Boodram. Mr. Arbel was re-elected as President of Multimedia in May 1996. Since
August 1995 Mr. Arbel has been a Director of Multimedia. In May 1993, Mr. Arbel
became a Director of Play Co. Toys & Entertainment Corp. ("Play Co."), and from
June 1994 until his resignation in April 1997, he was Chairman of the Board of
Play Co. Since 1989, he has been the sole Officer and Director of Europe America
Capital Corp., a company involved in investments and finance in the United
States and Europe. Mr. Arbel is also the sole Officer and Director of European
Ventures Corp., a company involved in investments and finance in the United
States and Europe. Mr. Arbel is a graduate of the University Bar Ilan in Israel
and has B.A. degrees in Economics, Business, and Finance.
<PAGE>
In May 1998, Mr. Arbel and Europe American Capital Corporation (a British
Virgin Islands company with which Mr. Arbel is affiliated), without admitting or
denying allegations made by the Securities and Exchange Commission (the
?Commission?) in connection with a 1993 stock transaction, consented to (i)
permanent injunctions against violating Sections 5(a) and 5(c) of the Securities
Act of 1993 (the ?Act?) and Sections 13(d) and 16(a) of the Exchange Act and
Rules 13d-1, 16a-2, and 16a-3 thereunder; and (ii) a joint and several
disgorgement obligation of $218,118 plus prejudgment interest. In addition, Mr.
Arbel consented to pay a penalty of $100,000 pursuant to Sections 20(d) of the
Act and 21(d)(3) of the Exchange Act.
Moses Mika was appointed Director of the Company in March 1998. Mr. Mika
has been retired since 1989.
Allean Goode has been Secretary, Treasurer, and a Director of the Company
since September 1992. Ms. Goode was appointed Secretary and Treasurer of
Multimedia in March 1998. Ms. Goode was Assistant Secretary of Play Co. from May
1993 until approximately May 1995. From 1991 until September 1992, Ms. Goode
acted as an independent contractor performing bookkeeping services for the
Company. Ms. Goode was Secretary, Treasurer, and a Director of American Toys
from February 1993 until July 1996. From 1981 until 1991, Ms. Goode was employed
as Office Manager and Bookkeeper of Via West Sportswear, a New York based
manufacturer of sportswear.
Rivka Arbel has been a Director of the Company since September 29, 1992.
From March, 1996 to present she has been a Vice President of the Company. From
1986 to present, Ms. Arbel has been President and a Director of Amigal, Ltd., a
producer of men's and women's wear in Israel. Ms. Arbel is the sister-in-law of
Ilan Arbel, the Company's President and Chief Executive Officer.
The Company has agreed to indemnify its Officers and Directors with respect
to certain liabilities including liabilities which may arise under the
Securities Act of 1933. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to Directors, Officers, and controlling
persons of the Company pursuant to any charter, provision, by-law, contract,
arrangement, statute or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a Director, Officer, or controlling person of the Company in the successful
defense of any such action, suit, or proceeding) is asserted by such Director,
Officer, or controlling person of the Company in connection with the Securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act. The Company will be governed by
the final adjudication of such issue.
Board Meetings, Committees, and Compensation
During the fiscal year ended March 31, 1998, no meetings of the Board of
Directors were held. Actions were taken on three occasions by unanimous written
consent of the Board of Directors, which consent was obtained in lieu of
meetings. The Company does not pay its Directors for attendance at Board of
Directors meetings or committee meetings.
The Board of Directors recommends that you vote "FOR" the nominees for
Directors.
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following provides certain information concerning all Plan and Non-Plan (as
defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded to, earned
by, paid by the Company during the years ended September 30, 1998, 1997, and
1996 to each of the named executive officers of the Company.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
(a) (b) (c) (d) (e) (g)
Securities
Name and Principal Other Annual Underlying
Position Year Salary($) Bonus($)(1) Compensation($) Options/ SARs(#)
<S> <C> <C> <C> <C> <C>
Ilan Arbel(2) 1998 - - - -
Chief Executive Officer 1997 - - - -
Of the Company 1996 - - - 3,000,000(3) -
</TABLE>
(1) No bonuses were paid during the periods herein stated.
(2) Mr. Arbel became the Chief Executive Officer of the Company in February
1991. Mr. Arbel does not receive any compensation from the Company for being an
Officer or Director.
(3) See ?-Employment Agreements? and ?Certain Relationships and Related
Transactions.? Employment Agreements
In May 1996, the Company entered into five year employment agreements with
each of Mr. Arbel and Rivka Arbel. Pursuant to such agreements, Mr. Arbel and
Ms. Arbel were granted options to purchase an aggregate of 3,000,000 and 400,000
pre-reverse split shares, respectively, of the Company's Common Stock at a
purchase price equal to the average bid price for the Company's Common Stock as
reported on the Nasdaq SmallCap Stock Market, for a period of ninety days ending
five days prior to exercise. See "Certain Relationships and Related
Transactions"
1992 Stock Option Plan
During 1992, the Company adopted the Company's 1992 Stock Option Plan ("the
Plan"). The Board believes that the Plan is desirable to attract and retain
executives and other key employees of outstanding ability. Under the Plan,
options to purchase an aggregate of not more than 15,000 shares of Common Stock
may be granted from time to time to key employees, Officers, Directors,
advisors, and independent consultants to the Company and its subsidiaries.
The Board of Directors is charged with administration of the Plan. The
Board is generally empowered to interpret the Plan, prescribe rules and
regulations relating thereto, determine the terms of the option agreements,
amend them with the consent of the optionee, determine the employees to whom
options are to be granted, and determine the number of shares subject to each
option and the exercise price thereof. The per share exercise price for
incentive stock options ("ISOs") will not be less than 100% of the fair market
value of a share of the Common Stock on the date the option is granted (110% of
fair market value on the date of grant of an ISO if the optionee owns more than
10% of the Common Stock of the Company).
<PAGE>
Options will be exercisable for a term determined by the Board which will
not be less than one year. Options may be exercised only while the original
grantee has a relationship with the Company or a subsidiary of the Company which
confers eligibility to be granted options or up to ninety (90) days after
termination at the sole discretion of the Board. In the event of termination due
to retirement, the Optionee, with the consent of the Board, shall have the right
to exercise his option at any time during the thirty-six (36) month period after
such retirement. Options may be exercised up to thirty-six (36) months after
death or total and permanent disability. In the event of certain basic changes
in the Company, including a change in control of the Company (as defined in the
Plan) in the discretion of the Board, each option may become fully and
immediately exercisable. ISOs are not transferable other than by will or the
laws of descent and distribution. Options may be exercised during the holder's
lifetime only by the holder or the guardian or legal representative of the
holder. Options granted pursuant to the Plan may be designated as ISOs, with the
attendant tax benefits provided under Section 421 and 422A of the Internal
Revenue Code of 1986. Accordingly, the Plan provides that the aggregate fair
market value (determined at the time an ISO is granted) of the Common Stock
subject to ISOs exercisable for the first time by an employee during any
calendar year (under all plans of the Company and its subsidiaries) may not
exceed $100,000. The Board may modify, suspend or terminate the Plan; provided,
however, that certain material modifications affecting the Plan must be approved
by the shareholders, and any change in the Plan that may adversely affect an
optionee's rights under an option previously granted under the Plan requires the
consent of the optionee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1996, the Company entered into five year employment agreements with
each of Mr. Arbel and Rivka Arbel. Pursuant to such agreements, Mr. Arbel and
Ms. Arbel were granted options to purchase an aggregate of 3,000,000 and 400,000
pre-reverse split shares, respectively. Of the aggregate of 3,400,000 shares,
1,350,000 were exercised at a purchase price of $1.63 per share and 2,050,000
were exercised at a purchase price of $1.75. The price was equal to the average
bid price for the Company's Common Stock as reported on the Nasdaq SmallCap
Stock Market, for a period of ninety days ending five days prior to exercise.
Such options were exercised in May and June 1996, and the shares were
subsequently sold in June 1996 in accordance with a Form S-8 registration
statement.
On January 2, 1998, the Company issued 3,571,429 shares of its Common Stock
to Multimedia Concepts International, Inc. ("Multimedia"), a company of which
Ilan Arbel is President and a Director, at a price of $.28 per share ($.01 above
the closing price on December 31, 1997) as payment for $1,000,000 loaned by
Multimedia to the Company. As a result of the transaction, the Company became a
subsidiary of Multimedia, which owns 78.5% of the outstanding shares of Common
Stock of the Company.
FINANCIAL INFORMATION
A Copy of the Company's Annual Report on Form 10-KSB For the fiscal year
ended March 31, 1998 and quarter ended June 30, 1998 shall be furnished without
the accompanying exhibits to stockholders, without charge, upon written request
therefor sent to Allean Goode, Secretary, United Textiles & Toys Corp., 1410
Broadway, Suite 1602, New York, New York 10018.
II. OTHER BUSINESS
As of the date of this proxy statement, the only business which the Board
of Directors intends to present and knows that others will present at the Annual
Meeting is that herein set forth. If any other matter is properly brought before
the Annual Meeting or any adjournments thereof, it is the intention of the
persons named in the accompanying form of proxy to vote the proxy on such
matters in accordance with their judgment.
By Order of the Board of Directors,
Allean Goode, Secretary
October 21, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN YOUR
PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF IT IS MAILED
IN THE UNITED STATES OF AMERICA.
