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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
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MORGAN FUNSHARES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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)(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 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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MORGAN FUNSHARES, INC.
------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 16, 1998
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NOTICE IS HEREBY GIVEN that a Special Meeting (the "Special Meeting") of
Shareholders of Morgan FunShares, Inc. (the "Fund") will be held at 1301 East
Ninth St., 36th Floor, Cleveland, Ohio at 9:00 A.M. local time on Monday,
February 16, 1998 for the following purposes:
1. To consider and act upon a proposal to amend the Articles of
Incorporation to increase the amount of authorized common shares,
without par value, of the Fund, from 1,000,000 shares to 1,200,000
shares.
2. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Shareholders of record as of the close of business on January 14, 1998 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Catherine Kantorowski
Secretary
Cleveland, Ohio
January , 1998
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE COMPLETE
AND RETURN THE ENCLOSED FORM OF PROXY, YOU MAY STILL VOTE IN PERSON IF YOU
ATTEND THE SPECIAL MEETING.
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PROXY STATEMENT
------------------------------
The accompanying proxy is solicited by the Board of Directors of Morgan
FunShares, Inc. (the "Fund") for use at a Special Meeting of its Shareholders,
to be held at 1301 East Ninth St., 36th Floor, Cleveland, Ohio at 9:00 A.M.,
local time on Monday, February 16, 1998.
This proxy statement and form of proxy were first sent to Shareholders on
or about the date stated in the accompanying Notice of Special Meeting of
Shareholders.
Shareholders of record as of the close of business on the record date
January 14, 1998, are entitled to vote at the Special Meeting or any adjournment
thereof. As of that date, 587,995 common shares of the Fund were outstanding,
each of which is entitled to one vote at the Special Meeting.
The Amendment to the Fund's Articles of Incorporation will be approved if a
majority of all outstanding shares entitled to vote are cast in favor of
approval.
This proxy statement and form of proxy is being mailed to shareholders on
or about January , 1998.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1997, the beneficial
ownership of the Fund's issued and outstanding Common Stock (on the basis of
587,995 shares outstanding), including the stock ownership of each person who,
to the Fund's knowledge, owns over 5% of the Fund's outstanding Common Stock,
each of the directors and officers of the Fund, and the percentage which the
shares owned constitute of the total shares outstanding.
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<CAPTION>
AMOUNT OF BENEFICIAL PERCENT OF CLASS
NAME, POSITION & OWNERSHIP OF (BASED ON # OF SHARES
ADDRESS OF BENEFICIAL OWNERS COMMON STOCK (1) OUTSTANDING 12/31/97)
- -------------------------------- -------------------- ---------------------
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J. Martin Erbaugh 2,700 (2)
Director
5122 Darrow Road
Hudson, OH 44236
Burton D. Morgan 290,000 49.3%
Chairman and Director
Park Place
10 West Streestboro
Hudson, OH 44236
Robert F. Pincus 4,250 (2)
President and Director
1301 East Ninth St.
36th Floor
Cleveland, OH 44114
William K. Cordier 0 0
Director
349 Aurora
Hudson, OH 44236
Keith A. Brown 0 0
Director
30400 Detroit Road,
Suite 203
Westlake, OH 44145
</TABLE>
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<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL PERCENT OF CLASS
NAME, POSITION & OWNERSHIP OF (BASED ON # OF SHARES
ADDRESS OF BENEFICIAL OWNERS COMMON STOCK (1) OUTSTANDING 12/31/97)
- -------------------------------- -------------------- ---------------------
<S> <C> <C>
James M. Hojnacki 0 0
Director
1111 Superior Ave.
Cleveland, OH 44144
James Onorato 400 (2)
Vice President and Director
6559 Wilson Mills Rd.,
Suite 102
Cleveland, OH 44143
Catherine Kantorowski 2,000 (2)
Secretary
Park Place
10 West Streetsboro St.
Hudson, OH 44236
Luke E. Sims 39,100 6.6%
777 E. Wisconsin Ave.
Suite 3700
Milwaukee, Wisconsin 53202
</TABLE>
- ---------------
(1) Includes shares, if any, held by or for a spouse or minor children or as
trustee. Unless otherwise indicated, the director, officer or 5% shareholder
possesses sole investment and voting power in respect of these shares.
(2) Constitutes less than 1% of outstanding Shares.
AMENDMENT TO ARTICLES OF INCORPORATION
At the Special Meeting, the Shareholders are being requested to approve an
amendment to the Fund's Articles of Incorporation for the purpose of increasing
the total number of shares of Common Stock the Fund is authorized to issue. The
Fund's current Articles of Incorporation (the "Articles") authorize the Fund to
issue 1,000,000 common shares, without par value. On October 27, 1997, the Board
of Directors of the Fund authorized an amendment to the Articles to increase the
authorized number of shares to 1,200,000 common shares.
Reason for the Amendment
On August 22, 1997, The NASDAQ Stock Market received approval from the
Securities and Exchange Commission to change its NASDAQ SmallCap Continued
Listing Requirements. These new requirements for continued listing on NASDAQ
will become effective on February 23, 1998. The new listing requirements require
a company to have a public float of 500,000 shares. Public float is defined as
shares that are not held directly or indirectly by any officer or director of
the issuer and by any other person who is the beneficial owner of more than 10
percent of the total shares outstanding. Currently, the Fund's public float is
approximately 328,645 shares.
The principal purpose of the proposed amendment to the Articles is to
authorize 200,000 additional shares of Common Stock which will be available for
the Board of Directors of the Fund to declare a 2-for-1 stock split. A 2-for-1
stock split would create 1,175,990 shares outstanding. The public float would be
increased to 657,290 shares, thus, meeting the new listing requirement.
No shareholder is entitled to any preemptive rights with respect to the
Fund's Common Stock. If the amendment is approved by the Shareholders, no
further vote of the Shareholders will be required prior to the Fund's issuance
of Common Stock in accordance with the Company's Articles of Incorporation, as
amended, except as may be required by applicable law.
2
<PAGE> 5
Text of Amendment
Under the proposed amendment, Article Fourth of the Articles of
Incorporation would be amended as follows:
"FOURTH: The Corporation shall be authorized to issue 1,200,000 common
shares, without par value."
If the proposed amendment is approved, the Fund intends to file the
amendment to the Articles of Incorporation with the Secretary of State of Ohio
as soon as is reasonably practicable after such approval is obtained.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION.
Other Matters
The Fund knows of no business to be brought before the Special Meeting
except as set forth above. If, however, any other matters properly come before
the Special Meeting, the persons named in the enclosed form of proxy intend to
vote on such matters in accordance with their best judgment.
Proposals of Security Holders
Proposals of shareholders intended to be presented at the Annual Meeting of
the Fund in 1998 had to be received by the Fund no later than December 4, 1997
for inclusion in the Fund's proxy statement and form of proxy relating to that
meeting. The mailing address of the Fund is 10 West Streetsboro St., Hudson,
Ohio 44236.
Revocation of Proxies
Any person giving a proxy has power to revoke it at any time prior to its
exercise by executing a superseding proxy or by submitting a notice of
revocation to the Secretary of the Fund. In addition, a shareholder present at
the Special Meeting may withdraw his proxy and vote in person. All properly
executed and unrevoked proxies received in time for the Special Meeting will be
voted for the amendment to the Articles of Incorporation to increase the
authorized shares.
Solicitation of Proxies
Proxies will be solicited by mail and may also be solicited in person or by
telephone by Officers or Directors of the Fund. The cost of preparing and
mailing this statement and the accompanying form of notice and proxy will be
borne by the Fund.
Although neither Ohio law nor the Articles of Incorporation or Code of
Regulations of the Fund specifically provide for such matters, the Fund's policy
and practice is that (i) properly executed proxies that are marked "abstain" or
are held in "street name" by brokers that are not voted on one or more proposals
(if otherwise voted on at least one proposal) will be counted for purposes of
determining whether a quorum has been achieved at the Special Meeting, and (ii)
abstentions and broker non-votes will not be treated as either a vote for any of
the proposals to which such abstention or broker non-vote applies.
By Order of the Board of Directors
Catherine Kantorowski,
Secretary
January , 1998
3
<PAGE> 6
MORGAN FUNSHARES, INC.
PROXY Special Meeting of Shareholders -- February 16, 1998 PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Burton D. Morgan and J. Martin Erbaugh, and
each of them, the proxies of the undersigned with power of substitution to each
of them to vote all shares of Morgan FunShares, Inc. which the undersigned is
entitled to vote at the Special Meeting of Shareholders held at 1301 East Ninth
St., 36th Floor, Cleveland, Ohio on February 16, 1998 at 9:00 A.M. local time,
and any adjournment thereof.
1. Proposal to amend the Articles of Incorporation to increase the amount of
authorized Common Stock, without par value, from 1,000,000 shares to
1,200,000 shares.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and matters incident to the
conduct of the Special Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED
FOR PROPOSAL 1. PLEASE VOTE PROMPTLY.
1. TO APPROVE THE AMENDMENT TO THE ARTICLES OF INCORPORATION
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For Against Abstain
[ ] [ ] [ ]
</TABLE>
DO YOU PLAN TO ATTEND THE SPECIAL MEETING
Yes No
[ ] [ ]
Dated:
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Signature(s) of Shareholder(s)
Please sign exactly as name appears in
the box on the left. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer.
If a partnership, please sign
partnership name by authorized person
as a joint account, please provide
both signatures.
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Print Name of Shareholder
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Signature
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Print Shareholder Name if held jointly
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Signature if held jointly
