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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
PURUS, INC.
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(Name Of Registrant As Specified In Its Charter)
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
- -----------------------------------------------------------------------------
(Name Of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 3, 1996
To the Stockholders of Purus, Inc.:
The Purus Stockholders' Protective Committee (the "Committee") is seeking
your support to remove two of the three current members of the Board of
Directors of Purus, Inc. (the "Company") at a Special Meeting of Stockholders
to be held on December 3, 1996, at 10:00 a.m., local time, at Club 101, 101 Park
Avenue, Lobby Level, New York, New York.
We believe this action is necessary to revitalize the Company and steer it
toward a more viable future. The Committee believes that recent actions of
the existing Board of Directors have been a principal cause of the Company's
poor financial performance and have deprived the Company of the opportunity
to grow and become profitable. Moreover, the present proposal of the Board to
pay, in December 1996, a cash dividend in the amount of $3.00 per share on
all outstanding shares of the Company's common stock is, in our opinion,
destructive to the Company and, if consummated, would drain the Company of
the resources necessary for it to expand and develop. The Committee believes
that the recent poor financial performance of the Company, which is
ultimately the responsibility of the Board of Directors, together with the
proposed dividend, which would substantially impair the ability of the
Company to effect a plan for future growth, demonstrate that the majority of
the Board should be replaced. See "Reasons for the Committee's Proposal"
section of the accompanying Proxy Statement.
In the event that two of the three current directors are removed, the
Committee will recommend that the remaining director, Reinhard Siegrist, fill
the vacancies created thereby by appointing Messrs. Joel R. Mesznik and Hans
C. Ochsner as new directors of the Company. The Committee will also recommend
that the reconstituted Board adjourn and reschedule the Company's 1996 Annual
Meeting of Stockholders (the "Annual Meeting"), currently scheduled for
December 5, 1996, to no later than February 1997. During this time, the new
directors would have time to develop a plan for the future growth of the
Company, including reexamining the prudence of the proposed cash dividend. At
the rescheduled annual meeting, the Company stockholders would be able to
vote for the election of the Company's directors.
The Committee is concurrently soliciting, by a separate proxy statement
(the "Annual Meeting Proxy"), the support of the Company's stockholders to
prevent the establishment of a quorum at the Annual Meeting. The Committee
believes that in the event that its proposal herein is approved and all
vacancies on the Board are filled, the newly constituted Board would have the
right to adjourn the Annual Meeting, but that the apparent presence of a
quorum at the adjourned Annual Meeting scheduled by the existing Board for
December 5, 1996, and the holding of a purported election thereat would lead
to confusion of the Company's stockholders and the likely commencement of
litigation to determine the proper composition of the Company's Board of
Directors. Accordingly, the Committee has urged the stockholders in the
Annual Meeting Proxy not to submit proxies to the Company in connection with
the Annual Meeting.
As stockholders, you have a right to determine the future course of the
Company. We urge you to vote to remove the two current directors of the
Company identified in the accompanying Proxy Statement, by signing and
returning the enclosed proxy card today, so that we may all better recognize
the full potential value of the Company.
The Purus Stockholders'
Protective Committee
Peter Friedli
Hans C. Ochsner
November 11, 1996
IF YOU WISH TO HELP DECIDE THE FUTURE OF THE COMPANY, YOU ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE (NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES)
WHICH HAS BEEN PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING IN PERSON. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME PRIOR TO
EXERCISE, AND IF YOU ARE PRESENT AT THE SPECIAL MEETING YOU MAY, IF YOU WISH,
REVOKE YOUR PROXY AT THAT TIME AND EXERCISE YOUR RIGHT TO VOTE YOUR SHARES
PERSONALLY.
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PROXY STATEMENT
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 3, 1996
GENERAL INFORMATION
This Proxy Statement is furnished by the Purus Stockholders' Protective
Committee (the "Committee") to the holders of shares of common stock, par
value $.01 per share ("Common Stock"), of Purus, Inc., a Delaware corporation
(the "Company"), in connection with the solicitation of proxies to be voted
at a Special Meeting of Stockholders (the "Special Meeting"), and at any
adjournment(s) thereof. The purpose of the Special Meeting is to consider and
vote on the Committee's proposal to remove two of the three current directors
of the Company as described under "Special Meeting Proposal" below. The
Special Meeting is to be held on December 3, 1996, at Club 101, 101 Park Avenue,
Lobby Level, New York, New York, at 10:00 a.m., local time.
The enclosed proxy and this Proxy Statement are being transmitted to
stockholders of the Company on or about November 11, 1996.
The Committee is concurrently soliciting, by a separate proxy statement
(the "Annual Meeting Proxy"), the support of the Company's stockholders to
prevent the establishment of a quorum at the 1996 Annual Meeting of
Stockholders scheduled to be held on December 5, 1996 (the "Annual Meeting").
See "Expectations After Removal--Reason for Annual Meeting Proxy" below.
VOTING OF PROXIES
The persons named on the enclosed proxy card have been designated as
proxies by the Committee. Unless otherwise indicated, shares of Common Stock
represented by properly executed proxy cards received by the Committee will
be voted at the Special Meeting in the manner specified therein, or if no
specification if made, will be voted "FOR" the removal of two of the three
current directors of the Company.
If, after reading this Proxy Statement you want to join us in seeking to
revitalize the Company and prepare it for the future:
MARK the enclosed proxy card to indicate your vote.
SIGN the enclosed proxy card.
DATE the enclosed proxy card.
RETURN the enclosed proxy card in the enclosed envelope (no postage is
required if mailed in the United States) AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT TO US NO MATTER HOW MANY SHARES YOU OWN.
The presence at the Special Meeting, in person or by proxy, of the holders
of a majority of the outstanding shares of Common Stock entitled to vote will
constitute a quorum. Abstentions and broker non-votes (i.e., shares held by a
broker or nominee which are represented at the Special Meeting, but with
respect to which such broker or nominee is not empowered to vote on a
particular proposal) are counted as present for purposes of determining
whether a quorum is present. Approval of the proposal to remove two of the
three current directors of the Company requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to
vote thereon. Abstentions will have the effect of votes in opposition to the
Committee's proposal. Broker non-votes will be treated as unvoted for
purposes of determining approval of the Committee's proposal and will not be
counted as votes for or against such proposal, but will have the effect of
votes in opposition to the proposal.
Any proxy given to the Committee by a stockholder pursuant to this
solicitation may be revoked by the stockholder at any time before it is
exercised by written notification delivered to the Committee c/o Morrow &
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Co., Inc. ("Morrow"), 909 Third Avenue, 20th Floor, New York, New York
10022-4799, Attention: Purus Stockholders' Protective Committee, by voting in
person at the Special Meeting or by executing and delivering another proxy
bearing a later date to Morrow. Attendance by a stockholder at the Special
Meeting does not alone serve to revoke the proxy.
The Committee has fixed the close of business on October 15, 1996 as the
record date for the determination of stockholders entitled to notice of, and
to vote at, the Special Meeting (the "Record Date"). Only stockholders of
record at the close of business on such Date will be entitled to notice of,
and to vote at, the Special Meeting and any adjournment(s) thereof. According
to information provided by the Company, an aggregate of 651,192 shares of
Common Stock were outstanding at the close of business on the Record Date.
Accordingly, approval of the Committee's proposal to remove the two directors
would require the affirmative vote of holders of at least 325,597 shares of
Common Stock. The members of the Committee beneficially owned an aggregate of
28,334 shares of Common Stock as of the Record Date.
Each share of Common Stock outstanding on the Record Date is entitled to
one vote on the proposal discussed in this Proxy Statement. The Company's
stockholders do not have cumulative voting rights. The Company has no other
class of voting securities entitled to vote at the Special Meeting.
If you have any questions or require any assistance in completing or
delivering your proxy card, please call Morrow, toll free in the United
States at telephone no. (800) 662-5200, or collect outside of the United
States at telephone no. (212) 754-8000.
SPECIAL MEETING PROPOSAL
The Committee proposes to remove Russell K. Burbank and Michael V.
Dettmers, two of the three current members of the Company's Board of
Directors, and expects that the remaining director, Reinhard Siegrist, will
fill the vacancies thereby created on the Board with two new directors
immediately following the Special Meeting. Under Section 141(k) of the
Delaware General Corporation Law ("Delaware Law"), any director may be
removed, with or without cause, by the holders of a majority of the shares
then entitled to vote at an election of directors. The Committee will
recommend two nominees to fill the vacancies created. There can be no
assurance that Mr. Siegrist will appoint either or both of such nominees.
Although Mr. Siegrist is an investment advisory client of Peter Friedli, a
member of the Committee, Mr. Siegrist has no agreement or arrangement with
the Committee or either of its members concerning his remaining on the Board
or his appointment of the nominees for director recommended by the Committee.
In the event that Mr. Siegrist does not appoint such nominees and, in his
discretion, selects other persons to fill the vacancies, the stockholders
will not have been provided with information in respect of the backgrounds,
experience or abilities of the new directors.
As discussed below, the Committee believes that the removal of the majority
of the current Board is necessary in order to end a course of conduct which has
resulted, and would, if not halted, continue to result, in diminished
stockholder value and the apparent absence of a viable plan for the Company's
future development. See "Reasons for the Committee's Proposal" below. The
Committee is also dissatisfied with performance of Mr. Burbank as the President
and Chief Executive Officer of the Company, and expects that the newly
constituted Board would seriously consider whether his continued service is in
the best interests of the Company.* While the Committee is currently exploring
certain potential businesses as candidates for acquisition by the Company, it
does not presently have any specific alternative business plan.
BACKGROUND OF SPECIAL MEETING
Recent History of the Company. In November 1993, the Company completed its
initial public offering. One year later, in December 1994, as a result of its
poor performance, the Company publicly announced a 45% reduction in staff.
Since such time, the Company has continued to experience significant
difficulties, and, on April 8, 1996, the Board of Directors requested the
Company's stockholders to approve the sale of substantially all of the
Company's non-cash assets, including the technology necessary for the Company
to conduct its air pollution control business. The asset sale was consummated
on May 8, 1996, and, one month later, the Company
_______________
* Mr. Burbank has served as the President and Chief Executive Officer of the
Company from November 1994 to the present, representing two out of the three
years that the Company's Common Stock has been publicly traded.
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was delisted from The Nasdaq National Market because of its failure to meet the
net tangible asset requirement thereof. During the period from the Company's
initial public offering through the present, the trading price of the Company's
Common Stock, as well as the stockholders' equity of the Company, have
dramatically decreased.
Formation of the Committee. In reaction to the obviously troubled history of
the Company, and because they believe that the policies of the current Board of
Directors* were and are not directed towards maximizing stockholder value,
Peter Friedli and Hans C. Ochsner decided to form the Committee and make this
proxy solicitation. By letter to the Company, dated June 6, 1996 (the "June 6
Letter"), Mr. Friedli, together with certain owners of the Company's Common
Stock, Banca Novara (Suisse) ("Novara"), Courtag AG ("Courtag"), Experta AG,
Lombard Odier Zurich AG ("Lombard"), Swiss American Securities Inc. ("SASI"),
Cofinvest 97 Ltd. ("Cofinvest") and Rahn & Bodmer ("R&B"), holders in the
aggregate of over 26% of the Company's outstanding Common Stock, requested a
special meeting of stockholders pursuant to Section 211(d) of Delaware Law and
Article III, Section 6 of the Company's By-laws to consider the removal of the
Company's Board members. Under such section of the By-laws, a special meeting of
the Company's stockholders may be called by the holders of shares of Common
Stock entitled to cast not less than 20% of the votes at the meeting.
Response of the Company to the Committee's Request for Special Meeting. On
August 1, 1996, Russell K. Burbank, Chairman of the Board, President and Chief
Executive Officer of the Company, advised Mr. Friedli in writing that the
stockholders who had requested the Special Meeting in the June 6 Letter did not
constitute the holders of record of at least 20% of the outstanding Common
Stock. In response, by letter, dated August 8, 1996 (the "August 8 Letter"), Mr.
Friedli confirmed that certain of the stockholders listed in the June 6 Letter,
namely Novara, SASI, Lombard, Cofinvest, R&B and himself, were indeed the
holders of shares of Common Stock entitled to cast greater than 20% of the votes
at a special meeting of stockholders. Mr. Friedli also demanded a list of the
Company's stockholders in accordance with Delaware Law in preparation for the
requested Special Meeting, which he received in part from the Company on August
15, 1996. The Committee received additional stockholder list information in
October 1996. On August 27, 1996, Mr. Friedli submitted a Memorandum to the
Board of Directors of the Company asserting certain conditions for cancellation
of the requested Special Meeting. Such conditions were: the holding of the
Company's annual meeting no later than November 15, 1996; the selection of Mr.
Siegrist as a director; the resignation of Mr. Dettmers from the Board; the
Company's commitment not to elect any new directors to the Board; that the
Company's slate of directors for the next annual meeting be Messrs. Burbank,
Siegrist and Ochsner; and that the Company not make any issuance of securities,
acquisitions or investments until the new Board is elected. Mr. Friedli has not
received a response from the Board to this Memorandum as of the date of this
Proxy Statement. In fact, the Company's Board of Directors has, by resolution,
increased the size of the Board to five and included Mr. Dettmers in its slate
of directors proposed for election at the Company's Annual Meeting.
Filing of Schedule 13D. On October 22, 1996, Peter Friedli, Cofinvest,
Courtag, Lombard, Friedli Corporate Finance AG ("FCF"), Hans C. Ochsner, Silvano
Cominelli, Rose Rita Graetz and Great Eslyn Side, Inc. (the "Group") filed a
Schedule 13D with the Securities and Exchange Commission (the "Commission"), in
accordance with the Securities Exchange Act of 1934. Mr. Cominelli, Mrs. Graetz
and Great Eslyn Side, Inc. were the beneficial owners of shares of Common Stock
held as nominees by Novara, Lombard, R&B and SASI, each of which executed the
June 6 Letter.** Such Schedule 13D, which was not filed timely, disclosed that
the Group was formed as of June 6, 1996, by virtue of its collective demand for
a special meeting to consider the removal of two of the three current directors
of the Company. As of the date hereof, the Committee has received
_____________
* Expressions of the Committee's dissatisfaction with the policies of the
existing or current Board of Directors of the Company in this Proxy Statement
refer to Russell K. Burbank and Michael Dettmers, the majority of the Board, and
not to Reinhard Siegrist, who has been a director of the Company since only May
1996 and has opposed many of the actions proposed and taken by the majority,
including the Dividend, and whose removal is not being sought hereby.
**On August 15, 1996, Courtag sold all shares of Common Stock beneficially
owned by it. On August 28, 1996, Silvano Cominelli, the beneficial owner of
shares of Common Stock held in nominee name by Novara, sold all shares of Common
Stock owned by him to Peter Friedli. As a result, the Group; as of the date of
this Proxy Statement, consists of Peter Friedli, a member of the Committee, Rose
Rita Graetz, who beneficially owns certain shares of Common Stock held in
nominee name by R&B and certain shares of Common Stock held in nominee name by
Lombard, Lombard, FCF, which shares beneficial ownership of certain shares of
COmmon Stock with Cofinvest, Cofinvest, Great Eslyn Side Inc., which
beneficially owns shares of Common Stock held in nominee name by SASI, and Hans
C. Oshsner, a member of the Committee.
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executed proxies for the Special Meeting from each member of the Group
representing an aggregate of 171,507 shares of Common Stock, or approximately
26% of the outstanding Common Stock, as of the Record Date, instructing the
Committee to vote FOR the removal of such directors.
Scheduling of Special Meeting. Article III, Section 6 of the Company's
By-laws provides that the Board of Directors shall determine the time and
place of a special meeting demanded by the Company's stockholders, which
shall be held not less than 35 nor more than 120 days after the Board's
receipt of the request for such meeting, and shall provide notice to the
Company's stockholders of the special meeting. If such notice has not been
given within 60 days of the Board's receipt of such request, the persons
requesting the special meeting may set the time and place of such meeting.
The Board has not provided notice of the Special Meeting to the Company's
stockholders. As a result, the Group has set the date of the Special Meeting
for December 3, 1996, which is within 120 days of August 8, 1996, the date as
of which the Group redemanded the Special Meeting in response to the
Company's claim that the June 6, 1996 request had not complied with the
provisions of the Company's By-laws. See "--Response of the Company to the
Committee's Request for Special Meeting" above.
The Group has set the date of the Special Meeting for two days prior to
the date of the Annual Meeting in order to seek to prevent the election of
the slate of directors proposed by the Company and so that the reconstituted
Board of Directors can develop a plan for the future growth of the Company,
including reexamining the prudence of the $3.00 cash dividend proposed by the
current Board and subject to stockholder approval at the Annual Meeting (the
"Dividend"). See "Reasons for the Committee's Proposal" below. The failure of
the current Board to respond to the August 8 Letter demanding a Special
Meeting has resulted in the necessity of the Committee holding the Special
Meeting on a date so near to the date of the Annual Meeting. In addition, the
Company's By-laws contain certain timing and other restrictive provisions in
respect of the nomination of directors and afford the chairman of the
Company's Annual Meeting significant discretion in declaring such nominations
defective. In light of these provisions, and the failure of the Company to
respond to the Group's request for a special meeting, the Committee has
determined that it is more advisable for it to call its own meeting.
REASONS FOR THE COMMITTEE'S PROPOSAL
I. The Company has performed poorly since its initial public offering. The
following facts plainly demonstrate the poor performance of the
Company--facts for which the current Board must take ultimate responsibility.
1. Decline in Stock Price. The trading price of the Company's Common Stock
has declined dramatically. As adjusted to reflect the Company's one-for-ten
reverse stock split effected in November 1995, the initial public offering
price per share of the Common Stock was $140 ($14 without adjustment for the
reverse stock split), but the Common Stock closed at only $5.125 per share
($0.513 without adjustment for the reverse stock split) on November 6, 1996.
The following graph demonstrates the dramatic decrease in the trading price,
adjusted to reflect the reverse stock split, of the Common Stock from the
date of the Company's initial public offering through November 6, 1996.
<TABLE>
<CAPTION>
11/11/93 6/30/94 12/30/94 6/30/95 12/29/95 6/28/96 11/06/96
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<S> <C> <C> <C> <C> <C> <C> <C>
Closing
Price $140.00 $70.00 $13.75 $9.375 $2.125 $3.875 $5.125
</TABLE>
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In addition, as a result of the substantial decrease in the Company's
stockholders' equity (see "--Decline in Stockholders' Equity and Company
Losses" below), the Company has been delisted from The Nasdaq National
Market. The Common Stock presently trades on The Nasdaq SmallCap Market,
which generally affords less liquidity to investors than The Nasdaq National
Market. In addition, the Company has been advised by The Nasdaq Stock Market
that it is "on-notice" with respect to its listing on The Nasdaq SmallCap
Market and that it must inform the Nasdaq Listing Qualifications Committee of
"a significant change in circumstances or the elimination of its operations".
A delisting of the Common Stock from The Nasdaq SmallCap Market would impair
its liquidity even more severely. Moreover, the Committee expects that the
Common Stock's trading price may continue to decline as a result of the lack
of a viable plan by the current Board of Directors for the future of the
Company.
2. Decline in Stockholders' Equity and Company Losses. The stockholders'
equity of the Company has substantially decreased from over $24 Million as of
December 31, 1993 to approximately $4 Million as of September 28, 1996 (the
last day of the Company's third quarter). As a result, the Company was
delisted from The Nasdaq National Market in May 1996. See "--Decline in Stock
Price" above. In addition, the Company has incurred cumulative net losses of
over $41 Million from its inception through September 28, 1996.
3. No Remaining Operating Assets. In May 1996, the Company consummated the
license and sale of technology and operations representing substantially all
of the Company's operating assets. In connection with such sale, the Company
discontinued the development, manufacture and marketing of air pollution
control systems, which prior to the license and sale had constituted
substantially all of its operations. The Company has no present active
operations and its primary function is to manage obligations and liabilities
of the Company not included in the license and sale. As a result of the sale
and discontinuation of its operating business, the Company's management has
stated that it intends to seek and evaluate potential acquisitions of
businesses, products, technologies and companies. However, it has indicated
that it has no present understandings, commitments or agreements with respect
to any such acquisitions. See page 12 of the Proxy Statement with respect to
the Annual Meeting filed by the Company with the Commission on October 7,
1996. In any event, the Committee believes that payment of the Dividend would
drain the Company's assets, thereby impairing its ability to consummate any
proposed acquisitions it may identify. See "--Apparent Lack of Viable Plan or
Sufficient Funds for Acquisitions" below.
II. The current Board of Directors appears to have no viable plan for the
expansion and development of the Company and the proposed Dividend is
inconsistent with its stated intention to acquire new businesses. The
Committee believes that actions taken and proposed to be taken by the present
Board of Directors have harmed and could seriously further harm the Company.
1. Apparent Lack of Viable Plan or Sufficient Funds for
Acquisitions. Apparently consistent with its announced plan to acquire new
business opportunities, the current Board of Directors has stated that it
does not intend to liquidate the Company. However, as discussed above, the
Company has no active operations or present agreements or commitments to
acquire any new businesses. The Company's only valuable assets are its cash
and short- term investments, totalling approximately $6.2 Million as of
September 28, 1996. While these funds could be used to pursue new business
opportunities for the Company, the current Board has proposed payment of the
Dividend, which would deprive the Company of over $1.9 Million, representing
a significant portion of the Company's cash and other current assets. Without
such funds, and the absence of any reasonably foreseeable future revenue
because of the discontinuance of its active operations, the current Board is
undercutting its stated business strategy of making acquisitions. In fact,
the Company has disclosed that payment of the Dividend could impair the
Company's ability to meet its future obligations and potential liabilities,
and that new financing may be required to maintain the Company's operations
or to consummate an acquisition. See page A-9 of the Form 10-Q for the
quarterly period ended September 28, 1996 filed by the Company on October 6,
1996 (the "Third Quarter 10-Q"). Assuming that the Company were even able to
secure any such financing, the Company would incur obligations to pay
interest and/or fees with respect thereto and the interests of the present
stockholders of the Company could be significantly diluted if equity
financings were effected. The Committee believes that it would be in the
stockholders' best interests to cancel the proposed Dividend and conserve its
cash while exploring acquisition opportunities. This would reduce the
likelihood that the Company would need to secure additional financing, which
there can be no assurance would be available, and, even if available, could
be costly and dilutive to the Company's current stockholders.
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2. Potential Liquidation. While the current Board has stated that it has
no present intention to liquidate the Company, it is embarking on a course
which may ultimately lead to liquidation, but liquidation of a more
protracted and expensive nature. Payment of the Dividend would deprive the
Company of funds to consummate acquisitions necessary for its continuance,
which could effectively lead the Company toward liquidation. Rather than
making the choice between requesting approval of the Company's stockholders
to liquidate the Company, so that the stockholders would receive the full
value of the current assets of the Company, or preserving funds to devote to
its acquisition strategy, the Board is pursuing a half-way strategy that
could slowly destroy the Company. The Committee believes that the course most
advantageous to the Company's stockholders would be not to pay the Dividend,
thereby permitting the Company to use its cash and other current assets to
acquire a new business or technology. Such an acquisition could, although
there can be no such assurance, increase the value of each stockholder's
interests in the Company over time to an amount significantly higher than the
$3.00 per share that each stockholder would receive upon payment of the
Dividend. The Committee is currently exploring certain potential businesses
in general as candidates for acquisition by the Company which it would
present to the newly constituted Board if the removal of the two directors
sought hereby were approved. The Committee members have not engaged in any
intensive analysis or review of the businesses or operations of any
particular acquisition candidates. Furthermore, the Committee members have
not had discussions with any candidates or indicated that they were acting on
behalf of the Company. There can be no assurances that the acquisition of any
of such candidates (or any others) would be consummated or that the terms of
any such acquisitions would be favorable to the Company. In the event that
the nominees for directors recommended by the Committee are not appointed to
the Board by Mr. Siegrist following the Special Meeting, the Committee
members expect that they will discontinue their exploration of acquisition
candidates for the Company.
3. Lack of Acquisition Experience; Dependence on Friedli. The incumbent
Board has stated that it is not experienced in seeking and evaluating
potential acquisitions or in consummating such transactions and managing the
resulting enterprises. See page A-9 of the Third Quarter 10-Q. The Board had
anticipated the assistance of Mr. Friedli with the identification and
evaluation of potential acquisition candidates in his former capacity as the
Company's financial advisor. See page 5 of the Form 10-K for the fiscal year
ended December 30, 1995 filed by the Company on April 1, 1996. However, the
Company claims to have terminated its contract with FCF, the investment
company of which Mr. Friedli was a principal prior to January 1, 1996 (see
Appendix A hereto). In addition, Mr. Friedli is a member of the Committee
which is proposing to replace the majority of the present Board. As a result,
the Company cannot depend on the services of either FCF, a member of the
Group, or Mr. Friedli in the future. The Committee believes that in light of
the need of the Company to pursue acquisitions and the inexperience of the
Company's present Board and management in such area, a new Board is
necessary.
Given the poor financial and market performance of the Company, the lack
of any viable plan by the current Board of Directors for the future expansion
and development of the Company and the fact that the planned Dividend could
result in the Company's inability to pursue its stated strategy of effecting
acquisitions, the Committee believes that a majority of the Board should be
removed and so that a newly constituted Board can reexamine the Company's
proposed Dividend in light of all the circumstances and, in particular, what
impact it would have on the Company's prospects.
EXPECTATIONS AFTER REMOVAL
Appointment of Directors. In the event that the stockholders of the
Company approve the Committee's proposal to remove two of the three current
directors of the Company, the Committee will recommend that Reinhard
Siegrist, the remaining director, select Joel R. Mesznik and Hans C. Ochsner
immediately after the Special Meeting to fill the vacancies in the Board.
Biographies and other information concerning Messrs. Mesznik and Ochsner are
provided below under "Proposed Directors." Mr. Siegrist will select directors
to fill the vacancies in accordance with his fiduciary duty to the
stockholders of the Company and in accordance with the Company's By-laws and
Delaware Law. Pursuant to Section 223 of Delaware Law and the Company's
By-laws, vacancies on the Board of Directors may be filled by the sole
remaining director. Section 141(b) of Delaware Law provides that the board of
directors of a Delaware corporation shall consist of one or more members. The
Company's Board of Directors has recently, by resolution, increased the size
of the Board from three to five members. While the Committee will recommend
to Mr. Siegrist that the size of the Board be reduced to three members, if
Mr. Siegrist determines to maintain the newly increased size of the Board,
the Committee will
6
<PAGE>
recommend to Mr. Siegrist two additional nominees for director for his
consideration. The Committee has not, however, identified any additional
potential nominees. There can be no assurances that Mr. Siegrist will appoint
either or both of the individuals presently recommended by the Committee to
the Board. Neither the Committee nor any Group members have any agreement or
arrangement with Mr. Siegrist concerning his remaining on the Board or his
appointment of the nominees for director recommended by the Committee.
Rescheduling of Annual Meeting. The Committee will recommend that,
immediately following Mr. Siegrist's appointment of two (or more if the Board
size remains at five) directors to fill the vacancies on the Board, the
reconstituted Board adjourn the Annual Meeting, presently scheduled for
December 5, 1996, in order to give it time to reexamine the merits of the
Dividend and whether the continued service of Mr. Burbank as President of the
Company is in the Company's best interests. The Committee will recommend that
the Board reschedule the Annual Meeting to a date no later than February
1997. The Committee believes that if it is successful in the removal of the
directors advocated hereby, the newly constituted Board would have the right
under Delaware Law to adjourn and reschedule the Company's Annual Meeting. At
such rescheduled meeting, the stockholders would have an opportunity to vote
upon the election of Mr. Siegrist and those persons whom he selects to fill
vacancies as directors of the Company.
Reason for Annual Meeting Proxy. As noted above, the Committee believes
that the newly constituted Board would have the right, under Delaware Law, to
adjourn the Annual Meeting. However, the apparent presence of a quorum at the
adjourned Annual Meeting scheduled by the existing Board for December 5, 1996
and the holding of a purported election thereat would lead to confusion of
the Company's stockholders and the likely commencement of litigation to
determine the proper composition of the Company's Board of Directors.
Accordingly, in the Annual Meeting Proxy, the Committee has urged the
stockholders of the Company not to deliver the proxy card sent to them by the
Company in respect of the Annual Meeting, or to attend the Annual Meeting in
person. By not delivering a proxy card or attending the Annual Meeting in
person, the shares owned by the stockholders will not be counted as present
for purposes of establishing a quorum at the Annual Meeting. In the event
that a Company stockholder has already returned a proxy card for the Annual
Meeting to the Company, the Committee has requested in the Annual Meeting
Proxy that such stockholder revoke such proxy or return to the Committee the
BLUE proxy card enclosed with the Annual Meeting Proxy, and vote to withhold
authority for election of the Company's nominees for director, against the
proposal to pay the Dividend, and to abstain from voting on the proposal to
appoint KPMG Peat Marwick, LLP as independent accountants for the Company.
The members of the Group have executed and delivered proxies to the Committee
and have agreed not to submit proxies for, or attend, the Annual Meeting.
The Committee believes that a newly constituted Board of Directors is
needed to work toward enhancement of stockholder value by bringing a fresh
and open perspective to the future direction of the Company and actively
seeking a viable plan for the future growth of the Company. Accordingly, it
requests that you take the first step towards this goal by removing the
majority of the present Board members.
THE COMMITTEE
The Committee consists of Peter Friedli and Hans C. Ochsner, who
beneficially own an aggregate of 28,334 shares of Common Stock, representing
approximately 4.4% percent of the outstanding shares of Common Stock. The
other members of the Group beneficially own an aggregate of 143,173
additional shares of Common Stock, representing approximately 22% of the
outstanding shares of Common Stock.
Mr. Friedli is an investment advisor to various foreign stockholders of
the Company, including members of the Group, who beneficially own an
aggregate of approximately 45% of the outstanding shares of Common Stock. Mr.
Friedli believes, although there can be no such assurance, that all or
substantially all of such stockholders will vote in favor of the Committee's
proposal, but he has not contacted or solicited any of such clients with
respect to the Special Meeting, with the exception of the members of the
Group whom he has contacted in accordance with applicable proxy rules. The
Committee intends to solicit proxies directly from certain Company
stockholders after the distribution hereof and to coordinate its solicitation
efforts with those of Morrow.
Neither the Committee nor any of its members will earn any profits,
commissions or other fees from the Company or otherwise in the event that its
proposal to remove two of the three current directors of the Company
7
<PAGE>
is approved. In addition, neither (i) Mr. Friedli or Mr. Ochsner, (ii) any other
participant in the solicitation of this Proxy Statement or any associate
thereof, other than FCF, (iii) any individual whom the Committee will recommend
for appointment as a director if the proposal to remove two of the three current
directors of the Company were approved nor (iv) to the Committee's knowledge,
the director who would remain on the Board following such approval, was or is a
party to any transaction or series of similar transactions since January 1,
1995, or any currently proposed transaction or series of similar transactions to
which the Company or any subsidiary thereof was or is to be a party, in which
the amount involved exceeds $60,000.
The Company retained FCF, of which Mr. Friedli served as principal until
January 1, 1996, as its investment banker and financial advisor from the date
of inception of the Company. Pursuant to the agreement with respect to such
services between the Company and FCF (as amended, the "Advisory Agreement"),
the Company has granted to FCF a right of first refusal to act as investment
banker with respect to any future issuance by the Company of equity or debt
securities, and any acquisition or merger to which the Company shall be a
party until December 31, 1999. The Company claims that it terminated the
Advisory Agreement on July 22, 1996. FCF, however, believes that the Company
may not unilaterally terminate the Advisory Agreement pursuant to the terms
thereof, and that the term of the Advisory Agreement expires on December 31,
1999. Under the Advisory Agreement, the Company pays to FCF a monthly
retainer, in addition to reimbursing expenses incurred and paying commissions
on any funds raised on behalf of the Company by FCF. In 1995, the Company
reimbursed FCF for $3,500 in expenses and paid $42,000 in fees. As of
September 28, 1996, the Company claimed to have owed FCF and Mr. Friedli
approximately $64,000 for past services. FCF, however, claims that
compensation of approximately $100,000 in respect of 1996 is owed to FCF. FCF
has notified the Company that it is contesting the Company's purported
termination of, and the compensation due under, the Advisory Agreement.
Additional information with respect to each of the members of the
Committee is set forth on Appendix A hereto.
PROPOSED DIRECTORS
In the event that the stockholders of the Company vote to remove two of
the three current directors of the Company pursuant to this solicitation, the
Committee will recommend that the remaining member of the Board of Directors,
Mr. Siegrist, appoint two (or more if the Board size remains at five) new
directors to the Board to fill the vacancies created thereby. The directors
so appointed would hold office until the next Annual Meeting of Stockholders,
which the Committee expects would be adjourned to no later than February
1997, or until their successors have been duly elected and qualified. The
Committee will recommend Messrs. Mesznik and Ochsner to fill the vacancies in
the Board following the Special Meeting. Each of such individuals has
consented to serve as a director of the Company if appointed and to be named
herein. The Committee has no agreement or arrangement with Mr. Siegrist with
respect to the appointment of the two individuals recommended by the
Committee.
The following sets forth the name, age (as of November 5, 1996) and
certain biographical information of each of the individuals who will
constitute the Board of Directors of the Company if the Committee's
recommendation is followed by Mr. Siegrist:
<TABLE>
<CAPTION>
Name Age
------------------ -----
<S> <C>
Joel R. Mesznik ........ 51
Hans C. Ochsner ........ 36
Reinhard Siegrist ....... 49
</TABLE>
Joel R. Mesznik has been the President of Mesco Ltd., a company that has
provided advisory services with respect to corporate transactions in the
United States and Europe since 1990. Mr. Mesznik has also been an active
investor in a number of transactions involving, for the most part, distressed
real estate. He serves on the board of directors of several United States and
European companies engaged in the real estate, media technology and
biotechnology industries. Mr. Mesznik holds a B.S. in Civil Engineering from
City College of New York and an M.B.A. in International Finance from Columbia
University.
Hans Charles Ochsner has been a private investor since July 1996. From 1990
to July 1996, Mr. Ochsner served as the Head of Global Equities in the Asset
Management Department of the Canton of Zurich. Prior to that, he held various
positions at Bank Julius Bear & Co. AG, the Union Bank of Switzerland and
Swiss Life Insurance Company. He holds a degree in economics and business
from Kaderschule Zurich in Zurich, Switzerland.
8
<PAGE>
Reinhard Siegrist has been a director of the Company since May 1996. Mr.
Siegrist has been a private investor since 1989. From 1981 through 1989, he
served as financial analyst, fund manager and head of the asset management
team at a branch of Credit Suisse. Prior to 1981, he was controller for the
Contraves division of Oerlikon Buhrle and an auditor at Schweizerische
Treuhandgesellshaft & Coopers & Lybrand. Mr. Siegrist holds a Federal Diploma
of Accounting of Switzerland.
Neither Mr. Mesznik nor Mr. Ochsner holds or has held any position or office
with the Company, serves or has served as a director of the Company or has any
other interest in any matter to be acted on at the Special Meeting. The current
Board of Directors had included Mr. Ochsner in its slate of directors for the
Annual Meeting but Mr. Ochsner has notified the Board in writing that he does
not wish to be a nominee of the Company's management and that he should not be
mentioned in the Company's proxy statement in respect of the Annual Meeting. Mr.
Siegrist has been a director of the Company since May 24, 1996, but has not held
any other position with the Company. He currently serves on the Audit and
Compensation Committees of the Board. The Company does not have a nominating
committee that will consider the appointment of Messrs. Mesznik and Ochsner as
directors. Mr. Friedli has provided, and continues to provide, investment
advisory services to Mr. Siegrist in respect of various investment opportunities
unrelated to the Company.
Neither Mr. Mesznik, Mr. Ochsner nor Mr. Siegrist has any arrangement or
understanding pursuant to which he was or is to be selected as a director of the
Company. However, following a request by Mr. Friedli Mr. Siegrist was selected
as a director to fill a vacancy created by a director's resignation. In
addition, none of such individuals has been indebted to the Company at any
time since January 1, 1995 in an amount in excess of $60,000 or is or has had,
at any time since January 1, 1995, an interest in any transaction or series of
transactions to which the Company is or will be a party which exceeds $120,000
in amount, 5% of the Company's gross revenues in fiscal year 1995.
COMPENSATION OF DIRECTORS
Members of the Company's Board of Directors do not receive compensation
for their services as directors, but directors may be reimbursed for certain
expenses in connection with attendance at meetings of the Board and
committees thereof. The Committee does not have any present intention to seek
to increase the compensation of the directors, but does not exclude the
possibility of such action in the future.
Non-employee directors of the Company participate in the Company's 1995
Non-Employee Directors Stock Option Plan (the "1995 Directors Plan"), which
was adopted by the Board of Directors of the Company in May 1995. Pursuant to
the terms of the 1995 Directors Plan, options to purchase 1,000 shares of
Common Stock at an exercise price equal to 100% of the fair market value of
the Common Stock on the date of grant are automatically granted on the date
of each annual meeting of the Company's stockholders to each non-employee
director who has served as a director for a period of at least six months
prior to the date of the annual meeting, or in the case of directors who are
elected or appointed on or after the date of the annual meeting, options to
purchase 1,000 shares are automatically granted on the date of such initial
election or appointment. Mr. Siegrist has received options to purchase 1,000
shares of Common Stock under the 1995 Directors Plan at an exercise price of
$3.50 per share.
Each automatic option granted under the 1995 Directors Plan becomes
exercisable immediately. However, shares purchased under the option will be
subject to repurchase by the Company, at the exercise price paid per share,
upon the optionee's cessation of Board service prior to vesting in those
shares. Each option will vest, and the Company's repurchase right will lapse,
in two equal installments over the optionee's period of continued service as
a director, with the first installment to vest upon the optionee's completion
of one year of Board service measured from the date of grant. The shares
subject to each automatic option grant will immediately vest upon certain
changes in the ownership or control of the Company and upon the optionee's
death or permanent disability while serving as a director.
Non-employee directors who are not members of the Company's Compensation
Committee are also eligible to participate in the Company's 1993 Stock Option
Plan. However, to the knowledge of the Committee, no options have been
granted to any such non-employee directors under that Plan.
9
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the close of business on September
28, 1996, the beneficial ownership of Common Stock by (i) each of the
individuals that the Committee will recommend for appointment by the
remaining director as directors of the Company in the event that the
Committee's proposal is approved, (ii) Reinhard Siegrist, the Company
director who would remain on the Board, (iii) each person or group known by
the Committee to be the beneficial owner of more than 5% of the Common Stock,
(iv) each of the other two current members of the Board of Directors of the
Company and the Company's nominees for election at the Annual Meeting, (v)
the Chief Executive Officer of the Company and one former executive officer
whose compensation for services rendered to the Company during 1995 exceeded
$100,000 and (vi) all directors and executive officers of the Company as a
group. Under the rules of the Commission, a person is deemed to be a
beneficial owner of a security if such person has or shares the power to vote
or direct the voting of such securities or the power to dispose of or to
direct the disposition of such security. In general, a person is also deemed
to be a beneficial owner of any securities (including options and warrants)
which that person has the right to acquire within 60 days. Accordingly, more
than one person may be deemed to be a beneficial owner of the same
securities.
<TABLE>
<CAPTION>
Percentage
Shares (%)
Beneficial Owner and Beneficially Beneficially
Address Owned(1) Owned
--------------------------------------------- -------------- --------------
<S> <C> <C>
The Group(2) ................................ 171,507 26.3
Rose Rita Graetz(2) ......................... 53,263 8.2
Alan Gelband ................................. 42,500 6.5
30 Lincoln Plaza
New York, NY 10023
Great Eslyn Side Inc.(2) ..................... 41,699 6.4
James M. Harris .............................. 40,250 6.2
15140 Pepper Lane
Saratoga, CA 95070
Friedli Corporate Finance AG(2) ............. 36,555 5.6
Cofinvest 97 Ltd.(2) ........................ 36,555 5.6
Russell K. Burbank(3) ....................... 22,000(4) 3.3
Stanton R. Creasey(3) ....................... -- --
Michael V. Dettmers(3) ...................... 2,000(5) *
Reinhard Siegrist(3) ........................ 1,000(6) *
Bruce Collard(3) ............................ --(7) --
Joel R. Mesznik(2)(8) ....................... -- --
Hans C. Ochsner(2)(9) ....................... -- --
All current officers and directors as a group
(three persons)(10) ........................ 25,000 3.7
</TABLE>
- ------
* Less than one (1%) percent of the outstanding shares of Common Stock.
(1) Except as indicated by footnote, to the Committee's knowledge, the
persons or entities named in the table above have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.
10
<PAGE>
(2) See Schedule 13Ds filed with the Commission by the Group and certain of
its members individually on October 22, 1996. The business address of
each of such persons, for purposes hereof, is Friedli Corporate Finance
AG, Freigutstrasse 5, 8002 Zurich, Switzerland. Friedli Corporate
Finance AG and Cofinvest 97 Ltd. share beneficial ownership with respect
to the shares set forth opposite their names.
(3) The business address of such person, for purposes hereof, is c/o Purus,
Inc., 600 California Street, Suite 1300, San Francisco, CA 94108.
(4) Includes 15,000 shares subject to stock options exercisable within 60
days.
(5) Represents shares subject to stock options exercisable within 60 days.
Does not include 1,000 shares subject to stock options that would be
granted to Mr. Dettmers in the event that he is re-elected to the Board
at the Annual Meeting. See "Special Meeting Proposal".
(6) Represents shares subject to stock options exercisable within 60 days.
Does not include 1,000 shares subject to stock options that would be
granted to Mr. Siegrist in the event that he is re-elected to the Board
at the Annual Meeting. Mr. Siegrist is currently a director of the
Company and is expected to remain as such following the Special Meeting.
See "Special Meeting Proposal".
(7) Does not include 1,000 shares subject to stock options that would be
granted to Mr. Collard in the event that Mr. Collard, a nominee of the
Company's management, is elected to the Board at the Annual Meeting.
(8) The Committee will recommend Mr. Mesznik for appointment as a director
of the Company if the Committee's proposal to remove two of the three
current directors is approved. See "Special Meeting Proposal" and
"Appointment of Directors".
(9) The Committee will recommend Mr. Ochsner for appointment as a director
of the Company if the Committee's proposal to remove two of the three
current directors is approved. See "Special Meeting Proposal" and
"Appointment of Directors".
(10) Includes 18,000 shares subject to stock options exercisable within 60
days. Does not include 2,000 shares subject to stock options that would
be granted to Messrs. Siegrist and Dettmers in the event that the
current directors are re-elected to the Board at the Annual Meeting.
Certain of the information contained in the above table, as well as the
information contained in the section herein entitled "Compensation of
Directors" has been taken from or is based upon documents and records on file
with the Commission and other publicly available information, including
Schedule 13Ds (other than Schedule 13Ds filed by the Group and certain of its
members individually) and the Company's Proxy Statement for the Annual
Meeting. Neither the Committee nor any member thereof takes any
responsibility for the accuracy or completeness of the information contained
in such documents and records.
CHANGE IN CONTROL
Neither of the members of the Committee knows of any arrangement, other
than as described herein, the operation of which may at a subsequent date
result in a change of control of the Company, or of any change of control
that has occurred since January 1, 1995.
SOLICITATION; EXPENSES
The accompanying proxy in the form enclosed herewith is being solicited by
and on behalf of the Committee. The solicitation of proxies will be made
principally by mail and, in addition, may be made by members of the Committee
personally, or by telephone or telegraph, without compensation. The Committee
has also retained Morrow to assist it in the solicitation of proxies in
connection herewith and in connection with the Annual Meeting Proxy. The
Committee has agreed to pay Morrow a fee of $30,000 in connection with both
solicitations and to reimburse it for its expenses. The Committee has also
agreed to indemnify Morrow against certain liabilities and expenses in
connection with its engagement, including certain liabilities under the
Federal securities laws. Approximately 25 employees of Morrow will solicit
stockholders on behalf of the Committee. Brokers, nominees and fiduciaries
will be reimbursed by the Committee for their out-of-pocket and clerical
expenses in transmitting proxies and related materials to beneficial owners.
The entire cost of soliciting proxies in connection
11
<PAGE>
herewith and in connection with the Annual Meeting Proxy, estimated by
the Committee to be approximately $170,000 (excluding the costs of potential
litigation), will be borne by the members of the Committee and the Group in a
manner to be determined by them. The total expenditures to date in connection
herewith and in connection with the Annual Meeting Proxy have been
approximately $120,000. The Committee may seek reimbursement from the Company
for those expenses and, in such event, does not intend to seek stockholder
approval for such reimbursement at a subsequent meeting unless such approval
is required under Delaware Law.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal which is intended to be presented by any stockholder for
action at the Company's 1997 Annual Meeting of Stockholders must be received
in writing by the Secretary of the Company, at 600 California Street, Suite
1300, San Francisco, California 94108, not later than July 7, 1997 or
thereabout in order for such proposal to be considered for inclusion in the
proxy statement and form of proxy relating to the 1997 Annual Meeting of
Stockholders. If the reconstituted Company Board of Directors adjourns the
Annual Meeting, in the event that another meeting of stockholders is held
prior to the 1997 Annual Meeting of Stockholders, including the rescheduled
1996 meeting, reasonable prior notice thereof will be provided to the
Company's stockholders.
OTHER MATTERS
Reference is made to the Company's Proxy Statement for the 1996 Annual
Meeting of Stockholders for additional information concerning the Company's
management and current directors. The principal executive offices of the
Company are located at 600 California Street, Suite 1300, San Francisco,
California 94108, and its telephone number is (415) 788-1903. Pursuant to the
Company's By-laws, no matters other than as described in the request for the
Special Meeting may be acted on at such Meeting.
PLEASE INDICATE YOUR SUPPORT OF THE COMMITTEE'S PROPOSAL TO REMOVE TWO OF
THE THREE CURRENT DIRECTORS OF THE COMPANY BY COMPLETING, SIGNING AND DATING
THE ENCLOSED PROXY AND RETURNING IT TO MORROW, IN THE ENCLOSED ENVELOPE (NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES).
If you have any questions or require any additional information concerning
this Proxy Statement, the Special Meeting or the Annual Meeting, please
contact Morrow & Co., Inc. at 909 Third Avenue, 20th Floor, New York, New
York 10022-4799, or call toll free in the United States telephone no. (800)
662-5200, or collect outside of the United States telephone no. (212)
754-8000. If any of your shares of Common Stock are held in the name of a
brokerage firm, bank, bank nominee or other institution, only it may vote
such shares and only upon receipt of your specific instructions. Accordingly,
please contact the person responsible for your account and instruct that
person to indicate a vote "FOR" the Committee's proposal and to sign, date
and return the enclosed proxy card to Morrow.
YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE
AND MAIL THE ACCOMPANYING PROXY CARD PROMPTLY.
The Purus Stockholders' Protective Committee November 11, 1996
12
<PAGE>
APPENDIX A
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
1. NAME OF MEMBER: Peter Friedli
Business Address: c/o Friedli Corporate Finance AG
Freigutstrasse 5
CH-8002 Zurich, Switzerland
Present Occupation: Investment Advisor
Shares of Common Stock Beneficially Owned: 28,334
Shares of Common Stock Owned of Record: 28,334
Shares of Common Stock Purchased and Sold Within the Past Two Years:
<TABLE>
<CAPTION>
DATE PURCHASED OR SOLD NO. OF SHARES
---- ----------------- -------------
<S> <C> <C>
February 1990 Purchased 9,000 (after
giving effect to
the reverse stock
split
August 28, 1996 Purchased 19,334
</TABLE>
2. Name of Member: Hans C. Ochsner
Business Address: Obstgartenstrasse 22
8136 Gattikon, Switzerland
Present Occupation: Private Investor
Shares of Common Stock Beneficially Owned: None
Shares of Common Stock Owned of Record: None
Shares of Common Stock Purchased and Sold Within the Past Two Years: None
No other participant in the solicitation of this Proxy Statement has any
substantial interest in any matter to be acted on at the Annual or Special
Meetings. Furthermore, no associate of the participants in such solicitation
beneficially owns any securities of the Company and no participant owns any
securities of any parent or subsidiary of the Company. None of the shares of
Common Stock owned by the members of the Committee were purchased with
borrowed funds.
Mr. Friedli was a founder of the Company. He was appointed as a director
in 1992, and resigned in November 1995 in order to prevent a conflict of
interest in the event that he proposed an acquisition candidate to the Board.
Until January 1, 1996, Mr. Friedli was also a principal of FCF, which the
Company retained as its investment banker. See "The Committee" above.
Mr. Siegrist, the director of the Company who would remain on the Board in
the event that the Committee's proposal is approved, is a client of Mr.
Friedli. Mr. Ochsner, the other member of the Committee, is not and has not
been, within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company,
other than as a member of the Group.
No participant or associate of any participant in this proxy solicitation
has any arrangement or understanding with any person with respect to any
future employment by the Company or its affiliates or with respect to any
future transactions to which the Company or its affiliates will or may be a
party, nor is any such person a party adverse to the Company in any legal
proceeding, and none of such persons has a material interest adverse to the
Company in any such proceeding. On or about July 27, 1995, Aron Parnes, a
stockholder of the Company, filed suit against the Company and five of its
current or former employees, officers and directors, including Mr. Friedli,
in the United States District Court of the Northern District of California.
The lawsuit alleges violations of the Federal securities laws, and purports
to seek damages on behalf of a class of stockholders who purchased Common
Stock during the period from November 9, 1993 through March 8, 1995. On April
16, 1996, the Company filed a motion to dismiss the lawsuit. At September 28,
1996, a hearing on such motion was pending. Mr. Friedli and the Company are
represented by separate counsel in such lawsuit.
13
<PAGE>
PURUS, INC.
PROXY
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE PURUS STOCKHOLDERS' PROTECTIVE
COMMITTEE FOR A SPECIAL MEETING OF STOCKHOLDERS ON DECEMBER 3, 1996.
The undersigned hereby appoints Peter Friedli and Hans C. Ochsner as proxies
of the undersigned, with full power of substitution, to vote, as specified
herein, all shares of Common Stock ("Common Stock") of Purus, Inc. (the
"Company") owned on the record date by the undersigned at the Special Meeting of
Stockholders to be held on December 3, 1996, and any postponements or
adjournments thereof.
THE PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE RECOMMENDS A VOTE "FOR" THE
FOLLOWING PROPOSAL.
PROPOSAL TO REMOVE RUSSELL K. BURBANK AND MICHAEL V. DETTMERS, TWO OF THE
THREE CURRENT MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS
_____ FOR _____ AGAINST ______ ABSTAIN
INSTRUCTION: To vote against the removal of either Russell K. Burbank or
Michael V. Dettmers, write the director's name in the space below.
- ---------------
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSAL TO REMOVE THE TWO CURRENT
MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS INDICATED ABOVE.
Please send an admission ticket for the Special Meeting. __________
Dated _________________________, 1996
-------------------------------------
(Signature)
-------------------------------------
(Title)
-------------------------------------
(Signature)
-------------------------------------
(Title)
IMPORTANT: Each joint owner should
sign. Executors, administrators,
trustees and others signing in a
representative capacity should give
full title. If a corporation, please
sign in full corporate name by
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
