SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CSL LIGHTING MANUFACTURING, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/_/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/_/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
27615 Avenue Hopkins
Valencia, California 91355-3493
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 25, 1997
-------------------------
To the Stockholders of
CSL Lighting Manufacturing, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CSL
Lighting Manufacturing, Inc. (the "Company") will be held on February 25, 1997
at 4:00 p.m. at the offices of Morse, Zelnick, Rose & Lander, LLP, 450 Park
Avenue, Suite 902, New York, N.Y. 10022, for the following purposes:
1. To elect a board of five directors.
2. To act on a proposal to amend the Company's Certificate of
Incorporation to increase the authorized Common Stock from
10,000,000 to 30,000,000 shares, $.01 par value.
3. To consider and act upon a proposal to approve the Company's
1996 Stock Option Plan.
4. To ratify the appointment of independent auditors for 1996.
5. To consider and take action upon such other matters as may
properly come before the meeting or any adjournments thereof.
The close of business on January 24, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof.
All stockholders are cordially invited to attend the meeting. Whether or
not you expect to attend, you are requested to sign, date and return the
enclosed proxy promptly. Stockholders who execute proxies retain the right to
revoke them at any time prior to the voting thereof. A return envelope which
requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors
Mark Allen, Secretary
Dated: January 31, 1997
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN THE ENCLOSED PROXY CARD AND RETURN
IT IN THE ENCLOSED ENVELOPE PROVIDED BY RETURN MAIL.
<PAGE>
CSL LIGHTING MANUFACTURING, INC.
27615 Avenue Hopkins
Valencia, California 91355-3493
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CSL Lighting Manufacturing, Inc. (the "Company") of
proxies in the form enclosed for the Annual Meeting of Stockholders to be held
February 25, 1997 at 4:00 p.m. (the "Meeting") at the offices of Morse, Zelnick,
Rose & Lander, LLP, 450 Park Avenue, Suite 902, New York, N.Y. 10022, and for
any adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The Board of Directors
knows of no other business which will come before the meeting.
All shares represented by each properly executed unrevoked proxy received
in time for the meeting will be voted as specified. In the absence of any
specification, proxies will be voted (a) for the election of the five persons
listed herein as nominees as directors, (b) to amend the Company's Certificate
of Incorporation to increase its authorized shares of Common Stock from 10 to 30
million shares, (c) in favor of the adoption of the Company's 1996 Stock Option
Plan, (d) for the ratification of auditors, and (e) in the judgment of the Board
of Directors on any other matters which may properly come before the meeting.
Any stockholder giving a proxy has the power to revoke the same at any time
before it is voted.
The approximate date on which this Proxy Statement and the accompanying
form of proxy along with the Company's 1995 Annual Report will be mailed to the
Company's stockholders on January 31, 1997. The principal executive offices of
the Company are located at 27615 Avenue Hopkins, Valencia, California
91355-3493.
<PAGE>
VOTING SECURITIES
Only stockholders of record at the close of business on January 24, 1997
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. On the record date there were issued and outstanding 8,221,013 Common
Shares. Each outstanding Common Share is entitled to one vote upon all matters
to be acted upon at the meeting. Stockholders may vote in person or by proxy.
Execution of a proxy will not in any way affect a stockholder's right to attend
the Meeting and vote in person. Any stockholder giving a proxy has the right to
revoke it at any time before it is exercised. Proxies may be revoked by (a)
filing with the Secretary of the Company, before the taking of the vote at the
Meeting, a written notice of revocation bearing a later date than the proxy, (b)
duly executing a later dated proxy relating to the same shares and delivering it
to the Secretary of the Company before the taking of the vote at the Meeting, or
(c) attending the Meeting and voting in person (although attendance at the
Meeting will not in and of itself constitute a revocation of a proxy). Any
written notice of revocation or subsequent proxy should be sent so as to be
delivered to CSL Lighting Manufacturing, Inc., 27615 Avenue Hopkins, Valencia,
CA 91355-3493, Attention: Secretary, at or before the taking of the vote at the
Meeting.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker non-votes are counted as present or represented
for purposes of determining the presence or absence of a quorum. A "non-vote"
occurs when a broker holding shares for a beneficial owner votes on one
proposal, but does not vote on another proposal because the broker does not have
discretionary voting power and has not received instructions from the beneficial
owner. Directors are elected by a plurality of the votes cast by stockholders
entitled to vote at the Meeting. All other matters being submitted to
stockholders require the affirmative vote of the majority of shares present in
person or represented by proxy at the Meeting, except that the proposal to amend
the Company' Certificate of Incorporation requires the affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote at the
Meeting. An automated system administered by the Company's transfer agent
tabulates the votes. The vote on each matter submitted to stockholders is
tabulated separately. Abstentions are included in the number of shares present
or represented and voting on each matter and, therefore, with respect to votes
on specific proposals, will have the effect of negative votes. Broker
"non-votes" are not so included but have the effect of a vote "against" the
proposal to amend the Certificate of Incorporation.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGMENT
The following table, together with the accompanying footnotes, sets forth
information, as of January 24, 1997, regarding stock ownership of all persons
known by the Company to own beneficially 5% or more of the Company's outstanding
Common Shares, all directors and nominees, and all directors and executive
officers of the Company as a group.
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Ownership
- ------------------- ------------------ ----------
Directors and Officers
Sylvan Gerber (1) 1,511,909 17.9%
Mark Allen (2) 244,500 3.0%
Bert Finmark (3) 275,900 3.3%
Scott Searle 100,000 1.2%
Michael Smith (4) 150,000 1.8%
Dhananjay G. Wadakar --- ---
Directors and Officers as a Group 2,282,309 26.2%
(6 persons) (5)
- ---------------------------------------------------------------------
(1) Includes (i) 206,250 common shares that are subject to a seven year escrow
agreement with H.J. Meyers & Co., Inc. (Formerly Thomas James &
Associates, Inc.), the underwriter of the Company's initial public
offering ("H.J. Meyers"), (ii) an aggregate of 150,000 common shares that
Mr. Gerber has gifted in equal amounts to his three adult children, all
shares are subject to a ten year voting trusts of which Mr. Gerber is the
sole voting trustee, and (iii) 215,000 shares subject to currently
exercisable warrants. The address of Mr. Gerber is c/o CSL Lighting
Manufacturing, Inc. 27615 Avenue, Hopkins, Valencia, California
91355-3493.
(2) Includes 32,000 shares subject to currently exercisable warrants.
(3) Includes 170,000 shares subject to currently exercisable warrants.
(4) Includes (i) 75,000 shares subject to currently exercisable warrants
including 25,000 held by Mr. Smith as custodian for his minor nieces,
and (ii) 25,000 shares held by Mr. Smith as custodian for the same
minors. Mr. Smith disclaims beneficial ownership of the securities
held for the benefit of such minors.
(5) Includes 492,000 shares subject to currently exercisable warrants.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of the copies of such forms
furnished to the Company, or written representations that no Forms 5 were
required, the Company believes that all Section 16(a) filing requirements
applicable to its officers and directors were complied with.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
annual and long-term compensation of the Company's Chief Executive Officer,
President and three other most highly paid executives and employees during the
fiscal years ended December 31, 1995, 1994 and 1993. During the fiscal years
ended December 31, 1995 and 1994 only one other key employee received total cash
and bonus compensation in excess of $100,000. The Company did not grant any
stock appreciation rights or make any long-term incentive plan pay-outs to the
individuals named in the tables below during the fiscal years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------------------
Annual Compensation Awards Payout
------------------- ------ ------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Year Other
Name and Ending Annual Restricted
Principal December Annual Compen- Stock Options/ LTIP All Other
Position 31, Salary Bonus sation Awards SARS Payouts Compensation
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sylvan Gerber, Chief 1995 $ 11,250 -- -- $ 2,500 -- -- --
Executive Officer, 1994 $ 71,666 -- -- -- -- -- --
President 1993 $119,800 -- -- -- -- -- --
Mark Allen, Chief 1995 $112,325 -- -- $ 5,000 -- -- --
Operating Officer, 1994 - -- -- -- -- -- --
Vice President of 1993 - -- -- -- -- -- --
Finance
Philip Artsis, Vice 1995 $115,762 -- -- -- -- -- --
President (2)(3) 1994 $197,353 -- -- -- -- -- --
1993 $110,000 -- -- -- -- -- --
Barry Leib, Executive 1995 $117,385 -- -- -- -- -- --
Vice President (1)(3) 1994 $118,068 -- -- -- -- -- --
1993 $118,300 -- -- -- -- -- --
Gilbert Sperry, Senior 1995 $130,513 -- -- -- -- -- --
Vice President(3) 1994 $141,400 -- -- -- -- -- --
1993 $100,000 -- -- -- -- -- --
Jack J. Zukerman, 1995 $ 29,167 -- -- -- -- -- --
former Chief 1994 $145,833 -- -- -- -- -- --
Executive Officer(3) 1993 $119,800 -- -- -- -- -- --
</TABLE>
(1) Mr. Lieb passed away in August of 1995, in accordance with his
employment agreement his salary was paid to his wife through
December 31, 1995.
(2) Mr. Philip Artsis is the son-in-law of Jack J. Zukerman, the former
Chief Executive Officer of the Company.
(3) No longer affiliated with the Company.
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Employment Agreements
In August 1995, the Company entered into an employment agreement with
Scott Searle, for a term expiring in September 1997, pursuant to which Mr.
Searle serves as President of the Company. Mr. Searle's agreement provides for a
base salary of $275,000.
In July 1995, the Company entered into employment agreements with each of
Sylvan Gerber and Mark Allen, for terms expiring in October 1998, pursuant to
which they serve as Chairman of the Board and Chief Executive Officer and
Executive Vice President and Chief Operating Officer, respectively. Mr. Gerber's
and Mr. Allen's agreements provide for a base salary of $150,000 and for the
payment to them upon a "change in control" (as defined in the agreements) of an
amount equal to the greater of $150,000 or the compensation remaining due to
each individual for the balance of the employment term.
All of the Company's employment agreements contain strict confidentiality
provisions and non-competition covenants. Compensation is subject to annual
increases and bonuses in the discretion of the Board of Directors. The
agreements also entitle the individuals to participate in any employee benefit
plans, such as group life, health, hospitalization and life insurance offered by
The Company. Under each of these agreements, each officer's employment shall
terminate upon death or disability of the employee and may be terminated by the
Company for "cause," which is generally defined as, among other things, an act
of fraud or embezzlement, material gross misconduct, conviction of a felony
involving moral turpitude, breach of the employees non-competition or
confidentiality covenants.
Restricted Stock Grants
In November 1995, the Company issued 100,000, 100,000 and 200,000 shares
of Common Stock, respectively, pursuant to restricted stock grants to Sylvan
Gerber, Scott Searle and Mark Allen, executive officers of the Corporation. Such
shares vest ratably over a period of ten years. The unvested portion is subject,
upon the occurance of certain events, to either forfeiture or accelerated
vesting.
Stock Option Plans
In November 1995, the Company's stockholders approved the CSL 1995 Stock
Option Plan (the "1995 Plan") which provides that a total of 210,000 shares of
Common Stock are available for issuance thereunder. In February 1994, the Board
of Directors and stockholders of the Company adopted the CSL 1994 Stock Option
Plan (the "1994 Plan") which provides that a total of 120,000 shares of Common
Stock are available for issuance thereunder. (The 1995 Plan and 1994 Plan are
sometimes referred to herein as the "Option Plans.")
Under the Option Plans, the Company may grant options to purchase Common
Stock to its officers, key employees, directors and non-employees performing
services for the Company. Payment of the option exercise price is to be made (i)
in cash, (ii) by delivery of Common Stock already owned by and in the possession
of the option holder, or (iii) if so provided for in the option being exercised,
by delivery of the option holder's promissory note in favor of the Company. If
an option granted under an Option Plan expires, terminates or is canceled
without being exercised in full, the unpurchased shares subject to such options
will again be available for options to be granted under such Plan. Options may
be granted in the form of incentive stock options ("Incentive Option") or
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<PAGE>
options which do not qualify for the favorable tax treatment of Incentive
Options which are known as non-qualified options.
The Option Plans are administered by a committee of the Board of Directors
consisting of Messrs. Finmark, Smith and Wadekar who are ineligible to
participate in the Plans. The Stock Option Committee determines those
individuals who shall receive options, the time period during which the options
may be partially or fully exercised, the number of Common Shares that may be
purchased under each option, and the option price.
No options may be exercised more than ten years from the date of grant,
and no options may be granted after February 1, 2004 and May 1, 2005 under the
1994 Plan and 1995 Plan, respectively.
The option price of each Incentive Option granted under the Option Plans
shall be not less than 100% of the fair market value of the Common Stock as of
the date the option is granted (110% of the fair market value if the grant is to
an employee holding 10% or more of the Company's outstanding Common Stock).
Options other than Incentive Options may be granted at an exercise price as
determined by the Board. The exercise prices of such non-qualified options must
be at least 85% of the fair market value of the underlying shares of Common
Stock at the date of grant. Options granted are not transferable and are subject
to various other conditions and restrictions.
No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination during which to exercise the option.
Upon termination of employment of an optionee by reason of death or permanent
total disability, the option remains exercisable for one year thereafter to the
extent it was exercisable on the date of such termination. No similar limitation
applies to non-qualified options.
In February 1994, the Board of Directors and stockholders of the Company
adopted a non-discretionary non-employee directors' stock option plan (the
"Directors' Plan") that provides for the grant to non-employee directors of
non-qualified options to purchase up to 30,000 Common Shares. Pursuant to the
Directors' Plan, each new non-employee director of the Company is automatically
granted, six-months after becoming a director, an option to purchase 2,500
Common Shares at the fair market value of such shares on the grant date. In
addition, each non-employee director shall automatically be granted an option to
purchase 2,500 shares at the fair market value of such shares on the date of
grant, every six-months thereafter during which he serves as a director of the
Company. All such options shall vest one year from the date of grant.
Options under the Option Plan and Directors' Plan must be granted within
10 years from the effective date of each respective plan. Incentive stock
options granted under the plans cannot be exercised more than 10 years from the
date of grant, except that incentive stock options issued to greater than 10%
stockholders are limited to five year terms. All options granted under the plans
provide for the payment of the exercise price in cash or by delivery to the
Company of Common Shares already owned by the optionee having a fair market
value equal to the exercise price of the options being exercised, or by a
combination of such methods of payment. Therefore, an optionee may be able to
tender Common Shares to
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<PAGE>
purchase additional Common Shares and may theoretically exercise all of his
stock options without making any additional cash investment.
Any unexercised options that expire or that terminate upon an optionee's
ceasing to be affiliated with the Company become available once again for
issuance. As of December 31, 1995, the Company had outstanding incentive stock
options to purchase 20,000 Common Shares under the Plans exercisable at $4.75
per share.
Option Grants in Fiscal Year 1995 and Fiscal Year-End Option Values
No options were granted or outstanding to any Named Executive under the
Option Plans at December 31, 1995.
Director Committees
The Board of Directors of the Company currently maintains an Audit
Committee, Compensation Committee and Stock Option Committee. The Audit
Committee reviews the engagement of the independent accountants, reviews and
approves the scope of the annual audit undertaken by the independent accountants
and review the independence of the accounting firm. The Audit Committee also
reviews the audit and non-audit fees of the independent accountants and the
adequacy of the Company's internal control procedures. The Audit Committee is
comprised of Mssrs. Gerber, Finmark, Smith and Wadekar. The Compensation
Committee establishes and reviews the compensation terms for management and key
employees of the Company. The Compensation Committee is comprised of Mssrs.
Gerber, Smith and Wadekar. The Company's Stock Option Plans are administered by
a disinterested committee of Directors comprised of Mssrs. Finmark, Smith and
Wadekar.
Certain Transactions
In August 1995, Bert Finmark, a director of the Company, lent to the
Company the sum of $200,000 pursuant to a promissory note due in August 1997
bearing interest at the rate of nine percent per annum. In connection with the
loan transaction, the Company issued to Mr. Finmark a warrant to purchase 70,000
Common Shares at $1.75 per share. The warrant provides Mr. Finmark with
piggy-back registration rights with respect to the shares underlying the
warrant. In March 1996, Mr. Finmark converted $100,000 of such debt into 100,000
shares of Common Stock and received warrants to purchase 100,000 shares of
Common Stock at $2.00 per share. The conversion terms were identical to the
terms of the Company's private placement financing consummated during the same
period.
In March 1996, Sylvan Gerber, the Company's Chairman and Chief Executive
Officer, converted $147,000 principal amount of notes payable from the Company
into 106,909 shares of Common Stock (at a conversion price of $1.375 per share
which approximated fair market value on such date). In addition, in March 1996,
Mr. Gerber converted an additional $100,000 of notes payable from the Company
into 100,000 shares of Common Stock and received warrants to purchase 100,000
shares of Common Stock at $2.00 per share. The conversion terms were identical
to the terms of the Company's private placement financing consummated during the
same period. The Company currently has a note payable to Mr. Gerber in the
principal amount of $78,000.
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<PAGE>
Mr. Smith, a director of the Company, was one of twelve investors that
participated in the Company's March 1996 private placement of Common Stock and
Warrants to purchase Common Stock. Mr. Smith acquired, for a $50,000 investment,
50,000 shares of Common Stock and Warrants to purchase 50,000 shares of common
stock at $2.00 per share.
The foregoing transactions between the Company and its officers, directors
or principal stockholders were for bona fide business purposes, and were on
terms no less favorable than could be obtained from unaffiliated third parties
and were approved by a majority of the Company's independent and disinterested
directors.
Director Compensation
The Company pays a fee of $500 per meeting to outside directors as
compensation for their services rendered as directors. Each director is
reimbursement for travel expenses incurred in connection with attendance at
meetings of the Board of Directors and its committees.
ELECTION OF DIRECTORS
At the meeting, five Directors will be elected by the stockholders to
serve until the next annual meeting or until their successors are elected and
qualified. The accompanying form of proxy will be voted for the election as
Directors of the five persons named below, unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the
number of nominees named herein. Management has no reason to believe that any of
the nominees will not be a candidate or will be unable to serve. However, in the
event that any of the nominees should become unable or unwilling to serve as
Director, the proxy will be voted for the election of such person or persons as
shall be designated by the Board of Directors.
Sylvan Gerber, age 68 has been the Chairman of the Board and Chief
Executive of the Company since January 1995 and a Director of the Company since
inception. Until August 1995 Mr. Gerber was also President of the Company. Prior
to that time, from 1987 to May 1991, Mr. Gerber was a private investor. From
1974 to 1986, Mr. Gerber was the President and Chief Executive Officer of Capri
Lighting Manufacturing Company ("Capri Lighting") which Mr. Gerber co-founded in
1974. Capri Lighting was sold in 1984 to Thomas Industries, Inc., although Mr.
Gerber continued to manage the day-to-day operations of Capri Lighting until
1986.
Mark Allen, age 35, was appointed Chief Operating Officer, Executive
Vice President Finance of the Company in March 1995 and elected to the Board
of Directors in May, 1995. Prior to that time, he held the position of Vice
President/Finance since October, 1994. From 1991 to 1994, Mr. Allen was
employed by Thomas James Associates, Inc. (now H.J. Meyers & Co., Inc.) as
Vice President, Corporate Finance and Director of Private Placements.
Bert Finmark, age 69, was elected to the Board of Directors in May
1995. Mr. Finmark is presently a business consultant. Mr. Finmark was the
co-founder and Chairman of Capri Lighting from 1974 to 1986. Previously, Mr.
Finmark was founder and President of Superior Wholesale Electric.
8
<PAGE>
Michael Smith, age 41, is the Managing Director Corporate Finance of
H.J. Meyers & Co., Inc., (formerly known as Thomas James Associates, Inc.)
("HJM") an investment banking firm. Mr. Smith serves on the Board of
Directors of both The Bhirud MidCap Growth Fund, a publicly traded mutual
fund and The Village Green Bookstore, Inc. Mr. Smith has been with HJM since
May 1991, and from 1987 until 1991 was a lawyer with the law firm of Harter,
Secrest & Emery. Mr. Smith received a B.A. from Cornell University and a
J.D. from Cornell University School of Law.
Dhananjay Wadekar, age 42, is a co-founder of DynaGen, Inc. ("DynaGen"), a
pharmaceutical firm, and has served as a Director of that Company since 1988 and
as its Chairman of the Board and Executive Vice President of the Company since
November 1991. In addition, he served as the Chairman, Chief Executive Officer
and Treasurer of DynaGen from 1988 until July 1990 and as a consultant to
DynaGen during the period July 1990 to October 1991. Mr. Wadekar was, from 1985
to January 1989, the Chairman and Chief Executive Officer of Holometrix, Inc., a
publicly traded, thermal instrumentation company which he founded. Mr. Wadekar
was a director of Holometrix, Inc. from 1985 until November 1994.
During the year ended December 31, 1995, the Board of Directors held four
meetings. Each Director standing for re-election who was a Director at the time
attended at least 75% of such meetings.
The affirmative vote of holders of a plurality of the shares of
Common Stock present or represented at the Annual Meeting is
required for the election of directors.
The Board of Directors unanimously recommends a vote FOR the election of
the foregoing nominees.
PROPOSAL TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
General
The Board of Directors believes it would be advantageous to amend Article
FOURTH of the Company's Certificate of Incorporation to increase the aggregate
number of shares of the Company's Common Stock which the Company is authorized
to issue from 10,000,000 to 30,000,000.
The proposed amendment would change the relevant portion of Article
"FOURTH" of the Company's Certificate of Incorporation to read as follows:
"FOURTH: The total number of shares of common stock which the
Corporation shall have the authority to issue is thirty million (30,000,000)
shares of the par value of $.01 per share."
Reasons and Effects
As of January 24, 1997, of the Company's 10,000,000 authorized shares of
Common Stock, 8,221,013 shares were issued and outstanding. In connection with
financings consummated during 1996, the Company has committed substantially all
of its remaining shares of Common Stock, including shares issuable upon upon
conversion of debt instruments which provide for a conversion rate tied to the
fluctuating public market price of the Company's Common Stock. The Board of
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Directors believes that it is imperative to establish a reserve of authorized
shares available for issuance from time to time to meet the financing
requirements of the Company and for other corporate purposes not now
determinable. The proposed increase in the number of authorized shares of Common
Stock is designed to provide the Company with additional flexibility in pursuing
its long-range business objectives and financing needs.
Under the Delaware General Corporation Law, the Board of Directors
generally may issue authorized but unissued shares of Common Stock without
further stockholder approval. The Board of Directors does not currently intend
to seek stockholder approval prior to any future issuance of additional shares
of Common Stock, unless stockholder action is required in a specific case by
applicable law, the rules of any exchange or market on which the Corporation's
securities may then be listed, or the Certificate of Incorporation or By-Laws of
the Company then in effect. Frequently, opportunities arise that require prompt
action, and the Company believes that the delay necessitated for stockholder
approval of a specific issuance could be to the detriment of the Company and its
stockholders.
The additional shares of Common Stock authorized for issuance pursuant to
this proposal will have all of the rights and privileges which the presently
outstanding shares of Common Stock possess under the Company's Charter. The
increase in authorized shares would not affect the terms or rights of holders of
existing shares of Common Stock. All outstanding shares of Common Stock would
continue to have one vote per share on all matters to be voted on by the
stockholders, including the election of directors.
The issuance of any additional shares of Common Stock by the Company may,
depending on the circumstances under which those shares are issued, reduce
stockholders' equity per share and may reduce the percentage ownership of Common
Stock of existing stockholders. The Company, however, will receive consideration
for any additional shares of Common Stock issued, thereby reducing or
eliminating the economic effect to each stockholder of such dilution.
The authorized but unissued shares of Common Stock could be used to make
more difficult a change in control of the Company. For example, such shares
could be sold to purchasers who might side with the Board of Directors in
opposing a takeover bid that the Board determines not to be in the best
interests of the Company and its stockholders. Such a sale could have the effect
of discouraging an attempt by another person or entity, through the acquisition
of a substantial number of shares of the Company's Common Stock, to acquire
control of the Company, since the issuance of new shares could be used to dilute
the stock ownership of the acquirer. Neither the Charter nor By-Laws of the
Company now contain any provisions that are generally considered to have an
anti-takeover effect, and the Board of Directors does not now plan to propose
any anti-takeover measures in future proxy solicitations. The Company is not
aware of any pending or threatened efforts to obtain control of the Company, and
the Board of Directors has no current intention to use the additional shares of
Common Stock to impede a takeover attempt.
The affirmative vote a majority of the outstanding shares of Common
Stock entitled to vote is required for the adoption of this proposed
amendment.
The Board of Directors unanimously recommends a vote FOR this amendment.
10
<PAGE>
APPROVAL OF 1996 STOCK OPTION PLAN
On May 2, 1996, the Board of Directors approved the 1996 Stock Option Plan
(the "Plan"). The Plan will become effective upon the ratification by the
affirmative vote of the holders of a majority of the Company's outstanding
shares of Common Stock. It provides, among other matters, for incentive and/or
non-incentive stock options.
The purpose of the Plan is to provide incentives to key employees and
consultants whose performance will contribute to the long-term success and
growth of the Company, to strengthen the ability of the Company to attract and
retain employees of high competence, to increase the identity of interests of
such key employees with those of the Company's stockholders and to help build
loyalty to the Company through recognition and the opportunity for stock
ownership. All executive officers, key employees and consultants of the Company
who are in positions which enable them to make significant contributions to the
long-term performance and growth of the Company are eligible to receive awards
under the Plan.
The maximum aggregate number of shares as to which awards or options may
at any time be granted under the Plan is 400,000 shares.
The Plan is administered by the Stock Option Committee of the Board of
Directors, which determines those individuals who shall receive options, the
time period during which the options may be partially or fully exercised, the
number of shares of Common Stock that may be purchased under each option, and
the option price. The members of this committee are ineligible to receive
options under the Plan.
Terms of Options
The Plan permits the granting of both incentive stock options and
non-qualified stock options. The option price of both incentive stock options
and non-qualified stock options must be at least equal to 100% of the fair
market value of the shares on the date of grant. The maximum term of each option
is ten years. For any participant who owns shares possessing more than 10% of
the voting rights of the Company's outstanding Common Stock, the exercise price
of any incentive stock option must be at least equal to 110% of the fair market
value of the shares subject to such option on the date of grant and the term of
the option may not be longer than five years. Options become exercisable at such
time or times as the Stock Option Committee may determine at the time it grants
options.
No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination during which to exercise the option.
Upon termination of employment of an optionee by reason of death or permanent
total disability, the option remains exercisable for one year thereafter to the
extent it was exercisable on the date of such termination. No similar limitation
applies to non-qualified options.
Under certain circumstances involving a change in the number of
outstanding Common Shares without the receipt by the Company of any
consideration therefor, such as a stock split, stock consolidation or payment of
a
11
<PAGE>
stock dividend, the class and aggregate number of Common Shares in respect of
which Options may be granted under the Plan, the number of shares subject to
each option and the option price per share shall be proportionately adjusted.
The Plan will terminate on May 2, 2006 and may be terminated by the Board
of Directors of the Company prior to that date.
The Company believes that the Plan should be approved because of the need
to have the ability to issue stock options to the key employees and consultants
upon whose performance and contribution the long-term success and growth of the
Company is dependent.
The affirmative vote of the holders of a majority of the issued
and outstanding shares of Common Stock of the Company is required
for the approval of the 1996 Stock Option Plan.
The Board of Directors deems the adoption of the 1996 Option Plan to be in
the best of the Company and unanimously recommends a vote FOR its
approval.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The directors propose that the stockholders ratify the appointment of
Arthur Andersen LLP, as the Company's independent auditors for 1996. Arthur
Andersen LLP was the Company's independent auditors for its last fiscal year.
The report of Arthur Andersen LLP with respect to the Company's financial
statements appears in the Company's annual report on Form 10-K for such year. A
representative of Arthur Andersen, LLP will be at the annual meeting and will
have an opportunity to make a statement if he desires to do so and will be
available to respond to appropriate questions. In the event the stockholders
fail to ratify the appointment, the directors will consider it a directive to
consider other auditors for a subsequent year.
The affirmative vote of holders of a plurality of the shares of
Common Stock present or represented at the Annual Meeting is
required for the ratification of appointment of independent
auditors.
The Board of Directors unanimously recommends a vote FOR the
ratification of appointment of independent auditors.
GENERAL
The management of the Company does not know of any matters other than
those stated in this Proxy Statement which are to be presented for action at the
meeting. If any other matters should properly come before the meeting, it is
intended that proxies in the accompanying form will be voted on any such other
matters in accordance with the judgment of the persons voting such proxies.
Discretionary authority to vote on such other matters is conferred by such
proxies upon the persons voting them.
The Company expects representatives of Arthur Andersen LLP, the Company's
independent auditors, to be present at the Annual Meeting and to respond to
pertinent questions of stockholders.
12
<PAGE>
The Company will bear the cost of preparing, assembling and mailing the
Proxy, Proxy Statement and other material which may be sent to the stockholders
in connection with this solicitation. In addition to the solicitation of proxies
by use of the mail, officers and regular employees may solicit the return of
proxies. The Company may reimburse persons holding stock in their names or in
the names of other nominees for their expenses in sending proxies and proxy
material to principals. Proxies may be solicited by mail, personal interview,
telephone and telegraph.
The Company will provide without charge to each person being solicited by
this Proxy Statement, upon the written request of any such person, a copy of the
Annual Report of the Company on Form 10-K for the year ended December 31, 1995
(as filed with the Securities and Exchange Commission) including the financial
statements thereto. All such requests should be directed to CSL Lighting
Manufacturing, Inc., 27615 Avenue Hopkins, Valencia, California 91355-3493, Att:
Secretary.
All proposals of stockholders intended to be included in the proxy
statement to be presented at the 1997 Annual Meeting of Stockholders must be
received at the Company's executive offices no later than March 31, 1997 and
should be directed to the Secretary of the Company.
By Order of the Board of Directors
Mark Allen, Secretary
Dated: January 31, 1997
13
<PAGE>
PROXY CSL LIGHTING MANUFACTURING, INC.
This Proxy is solicited by the Board of Directors for Annual
Meeting on February 25, 1997
The undersigned hereby appoints Mark Allen and Kenneth S. Rose, and each
of them, with full power of substitution, the attorneys and proxies of the
undersigned to attend the Annual Meeting of Stockholders of CSL Lighting
Manufacturing, Inc. to be held on February 25, 1997 at 4:00 p.m., and at any
adjournment thereof, hereby revoking any proxies heretofore given, to vote all
shares of Common Stock of the Company held or owned by the undersigned as
indicated on the proposals as more fully set forth in the Proxy Statement, and
in their discretion upon such other matters as may come before the meeting.
1. ELECTION OF DIRECTORS -- Sylvan Gerber, Mark Allen, Bert Finmark, Michael
Smith and Dhananjay Wadekar.
|_| FOR all nominees,
|_| WITHHOLD authority to vote for all nominees,
|_| FOR all nominees, EXCEPT nominee(s) written in below.
_____________________________________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C>
2. THE APPROVAL OF THE 1996 STOCK OPTION PLAN. |_| FOR |_| AGAINST |_| ABSTAIN
3. TO RATIFY THE APPOINTMENT OF AUDITORS FOR 1996. |_| FOR |_| AGAINST |_| ABSTAIN
4. To approve an amendment to the Company's Certificate of Incorporation
increasing its authorized Common Stock from 10,000,000 to 30,000,000 shares,
$.01 par value. |_| FOR |_| AGAINST |_| ABSTAIN
</TABLE>
The Board of Directors recommends a vote for each of the foregoing proposals.
(Continued and to be Signed, on Reverse Side)
<PAGE>
The shares represented by this proxy will be voted as directed or if no
direction is indicated, will be voted FOR each of the proposals.
The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.
Dated:___________________________, 1997
_______________________________________
Signature of Stockholder
_______________________________________
Signature of Stockholder
DATE AND SIGN EXACTLY AS NAME
APPEARS HEREON. EACH JOINT TENANT
MUST SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, TRUSTEE, ETC., GIVE FULL
TITLE. IF SIGNER IS CORPORATION, SIGN IN
FULL CORPORATE NAME BY AUTHORIZED
OFFICER.
