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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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
SURE SHOT INTERNATIONAL, INC.
(Name of Registrant as Specified in its charter)
SURE SHOT INTERNATIONAL, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ x ] Fee paid previously with preliminary materials.
[ ] $125 per Exchange Act Rules 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 statement no. _________________________
3) Filing party: ________________________________________________________
4) Date filed: __________________________________________________________
<PAGE>
SURE SHOT INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 5, 1996
To The Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Sure
Shot International, Inc. (the "Company"), a Florida corporation, will be held
at the Joe Dumars Fieldhouse located at 45300 Mound, Shelby Township, Michigan
48315 on June 5, 1996 at 2:00 p.m., Eastern Standard Time, to consider and act
upon the following items of business:
1. Election of the Company's Board of Directors.
2. Adoption of a proposed amendment to the Company's Certificate of
Incorporation that would effect a reverse split of the Company's
Common Stock of 1 share for each 2 shares that are currently
outstanding.
3. Ratification of the selection of Moore Stephens Doeren Mayhew, P.C.
as the Company's auditors for the year ended December 31, 1996.
4. Transaction of such other business as may properly come before the
meeting.
All of the above matters are more fully described in the accompanying Proxy
Statement.
Only holders of record of the Company's Common Stock at the close of
business on May 9, 1996 are entitled to notice of and to vote at the meeting
or any adjournment or adjournments thereof. A list of all stockholders as of
May 9, 1996 will be open for inspection at the Annual Meeting.
By Order of the Board of Directors,
Holly, Michigan Michael Sleva,
May 10, 1996 Secretary
All stockholders are invited to attend the Meeting. However, in the event
you are unable to attend, please complete, date, sign and mail the enclosed
Proxy Card promptly so that your shares may be represented at this meeting and
to ensure a quorum. No postage is required if mailed in the United States
using the accompanying envelope. If you attend the meeting, you may withdraw
your Proxy and vote your own shares. Proxies can also be revoked by submitting
a proxy to the Company with a later date or by delivering to the Secretary of
the Company written instructions to revoke the Proxy.
Please sign your name as it appears on the Proxy Card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as such. A Proxy executed by a corporation should be signed in its
corporate name by an authorized officer.
<PAGE>
SURE SHOT INTERNATIONAL, INC.
PROXY STATEMENT
SOLICITATION OF PROXIES
The enclosed Proxy is solicited by the Board of Directors (the "Board") of
Sure Shot International, Inc., a Florida corporation (the "Company"), for
purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The solicitation is being made by mail and the Company may also
use its officers and regular employees to solicit proxies from stockholders
either in person or by telephone, facsimile or letter without additional
compensation. The Company will pay the entire cost of solicitation, which
represents the amounts normally expended for solicitation relating to an
uncontested election of directors. Such costs include charges from brokers and
other custodians, nominees and fiduciaries for distributing proxies and other
proxy materials to the beneficial owners of Common Stock.
The Common Stock of the Company is the only outstanding class of voting
securities. Each stockholder of record at the close of business on May 9, 1996
(the "record date") is entitled to vote at the meeting. As of the close of
business on the record date, the Company had 3,771,246 shares outstanding.
Each share is entitled to one vote on each of the matters to come before the
meeting and is not entitled to cumulative voting rights. A majority of the
outstanding shares of Common Stock will constitute a quorum for the meeting.
Proxies returned to the Company and properly executed will be voted in
accordance with stockholders' instructions. Stockholders are urged to specify
their choices by appropriately marking the enclosed Proxy. Any Proxy which is
not revoked and which does not otherwise indicate a preference will be voted
in favor of the nominees for director as set forth below, in favor of the
proposed reverse stock split and in favor of ratification of the selection of
the Company's auditors. The enclosed Proxy enables stockholders to withhold
their votes for any director and to abstain from voting on any matter other
than the election of directors. The Proxies also give the Board discretionary
authority to vote the shares represented thereby on any matter which was not
known as of the date of this Proxy Statement and is properly presented for
action at the meeting.
The execution of a Proxy will in no way effect a stockholder's right to
attend the Annual Meeting and vote in person. Any stockholder has the right to
revoke his Proxy at any time prior to the Annual Meeting by giving notice to
the Company's Secretary at the principal executive office of the Company or at
the Annual Meeting.
The mailing address of the Company's corporate office is 405 Cogshall
Street, Holly, Michigan 48442 and the telephone number is (810) 634-6621. The
approximate mailing date of this Proxy Statement and the enclosed Proxy Card
to stockholders is May 10, 1996.
PRINCIPAL STOCKHOLDERS
As of the record date of May 9, 1996, the Company had 3,771,246 shares of
Common Stock outstanding. The following table sets forth certain information
as of that date regarding the shares beneficially owned by: (i) each director
and nominee for election as director of the Company; (ii) all directors and
executive officers of the Company as a group; and (iii) each person known by
the Company to own beneficially more than 5% of the Company's issued and
outstanding stock. All persons listed below have sole voting and investment
power with respect to their shares of stock unless otherwise indicated.
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<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially Percentage of
Name and Address of Beneficial Owner Owned Common Stock
- ------------------------------------ ------------ ------------
<S> <C> <C>
Harold Bachmann (1) 280,000 (2) 7.38%
Martin Coppo (1) 70,000 (2) 1.84%
Gregory G. Schultz (1) 217,000 (3) 5.75%
Brendan Suhr (1) 100 0.00%
John M. Thomas (1) 3,300 0.09%
Fred B. Williams (1) 180,000 (4) 4.77%
Michael Sleva (1) 13,300 (5) 0.35%
All Directors and Executive
Officers as a group (7 persons) 763,700 (6) 19.92%
Ellen Feldman
17755 U.S. Highway 19N
Suite 350A
Clearwater, Florida 34624 220,000 (7) 5.83%
Pearl Feldman
17755 U.S. Highway 19 N.
Suite 350A
Clearwater, Florida 34624 215,000 (8) 5.70%
Sydelle Sher
5210 Grange Hall Road
Holly, Michigan 375,000 9.94%
Robert L. White III
490 Lee Road 931
Phenix City, AL 36867 220,000 5.83%
<FN>
(1) A director and/or officer of the Company. The address of all
directors and officers of the Company is c/o the Company, 405
Cogshall Street, Holly Michigan 48442.
(2) Does not include options for a maximum of 150,000 shares that
might become exercisable on April 1, 1997 and options for
20,000 shares that will become exercisable on March 31, 1997
but does include options for 25,000 shares that are currently
exercisable at a price of $3.37 per share.
(3) Includes 217,000 shares owned by the June Schultz Trust. June
Schultz is the wife of Gregory Schultz.
(4) Does not include options for a maximum of 150,000 shares that
might become exercisable on April 1, 1997.
(5) Includes options for 13,000 shares that are currently
exercisable at a price of $3.25 per share but does not include
options for 10,000 shares that will become exercisable on March
31, 1997.
2
<PAGE>
(6) Includes the shares described in footnotes (2), (3) and (5)
above as being beneficially owned.
(7) Includes 220,000 shares jointly owned by Ellen Feldman and
Pearl Feldman but does not include 215,000 shares owned by
Pearl Feldman and her Trust. Ellen Feldman is the wife of Louis
Feldman, the former President and a former director of the
Company.
(8) Includes 215,000 shares owned by the Pearl Feldman Trust. Pearl
Feldman is the mother of Louis Feldman and the mother-in-law of
Ellen Feldman. Pearl Feldman disclaims beneficial ownership of
the 220,000 shares that are jointly owned by her and Ellen
Feldman because it is their mutual understanding that Ellen
Feldman will have sole discretion regarding the voting or
disposition of those shares. See note (6) above.
</TABLE>
ELECTION OF DIRECTORS
The following information is furnished with respect to each director
of the Company. Unless specifically instructed to the contrary, all Proxies
will be voted for the election of Harold Bachmann, Martin Coppo, Brendan Suhr,
John M. Thomas, Frederick B. Williams and Michael J. Sleva as directors of the
Company. Those nominees, other than Mr. Sleva, are all current members of the
Company's Board of Directors. Mr. Sleva is currently the Company's Secretary,
Treasurer and Controller. Messrs Bachmann, Coppo, Suhr and Thomas were most
recently elected to the Board of Directors by the Company's stockholders at
the 1995 Annual Meeting. Fred Williams was elected to the Board by the other
directors in October 1995 when the Company acquired RLW, Inc., an Alabama
corporation doing business as "Z-Tag Sportswear" ("Z-Tag"). Gregory Schultz,
a current member of the Board who was also most recently elected to the Board
at the 1995 Annual Meeting, has decided not to seek reelection to the Board.
The six nominees for election to the Company's Board who receive the most
votes will be elected to the Board at the 1996 Annual Meeting.
All of Management's nominees have agreed to serve if elected and, in
the event that any of those nominees are unable to serve for good cause or
will not serve as director of the Company and such fact is known by the
Company at the Annual Meeting, all Proxies may be voted at the Annual Meeting
for any other person duly nominated for the position created by that inability
or unwillingness to serve.
The names and ages of the persons nominated for election as directors
and the year in which each first became a director is set forth below:
<TABLE>
<CAPTION>
First Became
a Director Positions and Offices
Name and Age of the Company with the Company
- ------------ -------------- ----------------
<S> <C> <C>
Harold Bachmann (45) 1992 President and Director
Martin Coppo (42) 1992 Vice President and Director
Brendan Suhr (45) 1995 Director
John M. Thomas (47) 1995 Director
Frederick B. Williams (34) 1995 Vice President, President of Z-Tag and
Director
Michael J. Sleva (33) - Secretary, Treasurer and Controller
</TABLE>
3
<PAGE>
Business Experience of Nominees
The following is a summary of the business experience of the nominees for
election as director of the Company.
Harold Bachmann has been President of the Company since April 1994 and a
Director since September 1992. He was Vice President of the Company from
September 1992 until April 1994. He has been President and a Director of the
Company's wholly-owned subsidiary, Sure Shot Sports Equipment, Inc. ("Sure
Shot") since 1988. As the President of Sure Shot, he has been involved in all
the daily operations and business of Sure Shot. From 1986 through 1988, he was
the Sales Manager of Sure Shot where he was engaged in developing its sales.
From 1984 to 1986, Mr. Bachmann was the General Manager of Plastics Research
Corporation, and oversaw all of its operations. Mr. Bachmann has also been
Vice President and a Director of Hydra-Rib, the Company's wholly-owned
subsidiary, since November 1994 and Vice President and a Director of Z-Tag,
the Company's wholly-owned subsidiary, since October 1995.
Martin W. Coppo has been a Director of the Company since September 1992
and a Vice President of the Company since March 1994. He has been Vice
President and a Director of Sure Shot since June 1987. As the Vice President
of Sure Shot, he is primarily responsible for its day to day operations. Mr.
Coppo has also been Vice President and a Director of Hydra-Rib, the Company's
wholly-owned subsidiary, since April 1995 and Vice President and a Director of
Z-Tag, the Company's wholly-owned subsidiary, since October 1995. Mr. Coppo
attended the University of Michigan from 1973 to 1975, majoring in business
administration.
Brendan Suhr has been a director of the Company since April 1995. Since
July 1995, he has been the head coach and Vice President of Basketball
Operations of the Grand Rapids Mackers, a team in the Continental Basketball
Association. Since November 1990 he has been President and CEO of his own
firm, Off the Court, Inc., which provides consulting services to several firms
including the Portland Trailblazers, IBM and Joe Dumars' Fieldhouse. Mr. Suhr
also serves as a professional speaker, presenting his "coaching people skills"
to corporations on topics such as motivation, team building, customer service,
time management and winning. Mr. Suhr spent 16 years as a coach in the NBA,
beginning with 10 years as an assistant coach with the Atlanta Hawks. In
January 1989, Mr. Suhr became the top assistant to coach Chuck Daly of the
Detroit Pistons who won back to back NBA World Championships in 1989 and 1990.
In June 1992 Mr. Suhr was named head scout for the USA Olympic basketball team
which became known as the "dream team". In August 1992 after that team won the
Olympic gold medal, Mr. Suhr and Olympic coach Chuck Daly co-authored a
best-selling basketball text titled "Chuck Daly's Playbook". For the following
two seasons, Mr. Suhr was an assistant to coach Chuck Daly and the New Jersey
Nets and achieved two playoff appearances with that team.
John M. Thomas has been a director of the Company since April 1995. Since
January 1995, he has been a self employed health care consultant. From October
1993 through January 1995, Mr. Thomas was President and CEO of Behavioral
Health, Inc. and from 1987 through October 1993 he was Executive Vice
President of Preferred Health Care, Inc. He was also a director of Preferred
Health Care, Inc. from 1991 through January 1995. Prior to joining Preferred
Health Care, he was CEO of a major substance abuse hospital in Detroit,
Michigan and previously spent 13 years as a mental health administrator. He
holds MSW and MBA degrees from the University of Michigan.
Frederick B. Williams has been a director and Vice President of the
Company since October 1995. Since February 1996, he has been the President of
Z-Tag and was Vice President of Z-Tag from January
4
<PAGE>
1991 until he became its President in February 1996. From July 1988 until
January 1991, he was an operations manager for The Game division of WC Bradley
Co.
Michael J. Sleva has been the Controller of the Company and Sure Shot
since August 1993, Treasurer of both of those companies since March 1994 and
Secretary of both of those companies since April 1995. He has also been
Secretary and Treasurer of Hydra-Rib since November 1994 and Secretary and
Treasurer of Z-Tag since October 1995. Prior to joining the Company, Mr. Sleva
was the Controller of Underground Storage Tank Technical Service Group, Inc.
for two years. From January 1989 through August 1991, he was assistant
controller of Hamandy Complete Food Centers, Inc. From January 1986 through
January 1989, he was employed by Doeren Mayhew & Co., P.C. Mr. Sleva is a
Certified Public Accountant and received a B.A. in accounting from Michigan
State University in December 1985.
Director's Committees and Meetings
The Board of Directors has an audit committee whose members are Brendan
Suhr and John M. Thomas. The principal functions of the Audit Committee are to
review the scope of the annual audit and the annual audit report of the
independent accountants, recommend the firm of independent accountants to
perform such audits, consider non-audit functions proposed to be performed by
the independent accountants, ascertain whether the recommendations of auditors
are satisfactorily implemented and recommend such special studies or actions
which the Committee deems desirable. During 1995, one meeting of the Audit
Committee was held, which was attended by both members. The Company does not
have any standing nominating or compensation committees or committees
performing similar functions.
During the fiscal year ended December 31, 1995, the Board of Directors
held one meeting. All directors attended that meeting.
Director Remuneration
Members of the Board of Directors who are not employees of the Company are
reimbursed for their out-of-pocket expenses incurred in attending each
meeting. No directors are paid for their attendance at Board meetings.
Compliance with Section 16(a) of The Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (S.E.C.). Officers, directors and
greater than 10% shareholders are required by S.E.C. regulations to furnish
the Company with copies of all Section 16(a) forms they file.
The Company believes that, during its last fiscal year, all filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with based on its review of the copies of such
forms received and written representations from certain reporting persons that
no Form-5's were required for those persons.
5
<PAGE>
EXECUTIVE COMPENSATION AND TRANSACTIONS
Summary Compensation Table
The following table sets forth information concerning all compensation
paid or accrued for services rendered to the Company and its subsidiaries for
the last three fiscal years by the person who was the Company's Chief
Executive Officer during 1995. The Company had no executive officer whose
compensation exceeded $100,000 in the last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Stock
Position Year Salary Bonus Options
- ------------------ ---- ------ ----- -------
<S> <C> <C> <C> <C>
Harold Bachmann 1995 $59,400 $0 25,000 shares
President since 1994 $49,650 $0 150,000 shares
April 1994; Vice 1993 $43,700 $0 --
President from
September 1992
through April 1994
</TABLE>
Employment Agreements
The Company and Sure Shot have entered into an employment agreement
with Harold Bachmann that provides that he will be President and a director of
Sure Shot and Vice President of the Company (Mr. Bachmann was subsequently
appointed President of the Company). Pursuant to that agreement Mr. Bachmann
received an initial base salary of $48,000 per year until the completion of
the Company's initial public offering, at which time his base salary increased
to $57,200. Mr. Bachmann's employment agreement is for a period of three years
ending February 14, 1997 and provides for a minimum increase of $2,500 per
year in base salary. That agreement may be terminated for cause (as defined
therein), in which event no further salary or benefits must be paid. In the
event of a termination without cause, Mr. Bachmann will be entitled to
continue to receive his base salary for the remainder of the term of his
agreement. That employment agreement contains a five (5) year covenant not to
compete.
Stock Option Plan
In February 1994, the Board of Directors adopted the 1994 Incentive
Compensation Stock Option Plan (the "Plan"), pursuant to which 150,000 shares
of Common Stock of the Company were reserved for issuance upon the exercise of
options to be granted under the Plan. The Plan was approved by the
shareholders of the Company in March 1994. The Plan is intended to promote the
growth and profitability of the Company, to provide employees of the Company
who are largely responsible for the management, growth and promotion of its
business with an incentive to continue to make substantial contributions to
the success of the Company, and to provide those key employees with an equity
interest in the Company.
The Plan is administered by the Board of Directors or by a committee
of the Board to which the Board has delegated that authority. The Board has
the authority to designate the key employees eligible to participate in the
Plan, to prescribe the terms of award, to interpret the Plan, and to make all
other determinations for administering the Plan.
The Plan provides for granting of stock options that will be
"Incentive Stock Options" within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code"). Incentive Stock Options are
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<PAGE>
required to be issued at an option exercise price per share equal to the fair
market value of a share of Common Stock on the date of grant, except that the
exercise price of options granted to any employee who owns (or, under
pertinent Code provisions, is deemed to own) more than 10% of the outstanding
Common Stock must equal at least 110% of fair market value on the date of
grant. Exercise of a stock option will be subject to terms and conditions
established by the Board and set forth in the instrument evidencing the stock
option. Stock options may be exercised with either cash or shares of the
Company's Common Stock or other form of payment authorized by the Board. The
date of expiration of a stock option will be fixed by the Board but may not be
longer than ten years from the date of the Plan.
As of December 31, 1995, the Company had options to purchase a total
of 94,300 shares that were outstanding under the Plan. In May 1996, options to
purchase an additional 47,700 shares were granted under the Plan and options
for 40,000 shares were granted outside of the Plan.
Stock Option Grants in 1995
The following table shows all grants of stock options in 1995 to all
of the persons named in the Summary Compensation Table above. The exercise
price of all such options was not less then the fair market value of the
Common Stock on the date of grant.
<TABLE>
<CAPTION>
Number of % of Total
Shares Underlying Options Granted Exercise Expiration
Name Options Granted to Employees Price Date
- ---- ----------------- --------------- -------- ----------
<S> <C> <C> <C> <C>
Harold Bachmann 25,000 26.5% $3.37 3/31/00
</TABLE>
Option Exercises in 1995 and Year End Option Values
No options were exercised by any of the Company's employees, officers or
directors in 1995. The following table shows the value, as of December 31,
1995, of all unexercised stock options held by the persons named in the
Summary Compensation Table above.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Underlying In-the Money Options
Name Unexercised Options Exercisable/ Unexercisable
- ---- ------------------- --------------------------
<S> <C> <C>
Harold Bachmann 175,000 (1)(2) $0.00/$0.00
<FN>
(1) In April 1994, the Company granted options to Harold Bachmann that,
subject to the terms and conditions set forth below, would enable him to
purchase up to 150,000 shares of Common Stock at an exercise price of $3.33
per share. Subject to the conditions described below, the options will be
exercisable during the period from April 1, 1997 through March 31, 1998.
Options for 37,500 shares will vest if the Company has gross sales of
$14,000,000 in 1996 and options for an additional 37,500 shares will vest if
the Company has net income of $800,000 in 1996. Options for an additional
37,500 shares will vest if the Company has gross sales of $18,000,000 in 1996
and options for an additional 37,500 shares will vest if the Company has net
income of $1,000,000 in 1996. Because the gross sales and/or net income goals
that were originally established for 1995 were not met in that year, they were
extended and now apply to 1996 (along with the original goals for 1996) so
that those options could vest if those goals are achieved in 1996. If any of
those gross sales and net income goals are not satisfied by the end of 1996,
those non-vested options will terminate.
(2) In August 1995, the Company granted options to Mr. Bachmann under the
Company's 1994 Incentive Compensation Stock Option Plan that enable him to
purchase 25,000 shares of the Company's
7
<PAGE>
common stock at an exercise price of $3.37 per share during the period from
March 31, 1996 through March 31, 2000.
</TABLE>
Certain Transactions
In February 1994, Sure Shot entered into a line of credit agreement with
NBD Bank, N.A. ("NBD"). That agreement provides for a maximum borrowings of
$3,000,000 based upon accounts receivable and inventory. Sure Shot initially
borrowed $1,691,469 against that line of credit in February 1994 and paid off
all amounts that were owed on its prior lines of credit with Michigan
National. The line of credit from NBD was secured by the accounts receivable,
inventory, machinery and equipment of Sure Shot, the corporate guaranty of the
Company and limited personal guarantees of the following persons who were then
officers and directors of the Company: Louis Feldman ($500,000); Harold
Bachmann ($500,000); Gregory Schultz ($500,000) and Martin Coppo ($165,000).
Jacob Feldman, the husband of Pearl Feldman, a principal shareholder, was also
required to personally guarantee $500,000 of that line of credit. When that
line of credit was renewed in November 1994, those personal guarantees were
released.
In connection with the Company's acquisition of Sure Shot, the Company
entered into an agreement with Louis Schwartz as Trustee of the Louis Schwartz
Trust (the "Schwartz Trust") that gave the Schwartz Trust the right to require
the Company to repurchase the 45,000 shares of Common Stock owned by it. Louis
Schwartz is the father of Sydelle Sher, a principal shareholder of the
Company. That agreement, as amended in February 1994 (and adjusted to reflect
the subsequent 1-for-2 reverse stock split and subsequent 50% stock dividend),
provides that the Schwartz Trust could require the Company to purchase: (i) up
to 15,000 shares as of September 1, 1994 for $7.73 per share; (ii) up to
15,000 shares as of September 1, 1995 for $7.20 per share and (iii) up to
15,000 shares as of September 1, 1996 for $6.67 per share. In order to require
the Company to redeem those shares, the Schwartz Trust must give at least
thirty (30) days advance notice to the Company. If that notice is given, the
Company can require the Schwartz Trust to sell the shares to be redeemed, in a
public or private sale, with the Company then obligated to pay any difference
between the redemption price and the proceeds realized from that sale. Sure
Shot guaranteed the Company's performance under the stock purchase agreement
and has given the Schwartz Trust a security interest in certain of Sure Shot's
equipment to secure that guaranty. The Schwartz Trust agreed to subordinate
its security interest to the security interest granted to NBD in connection
with the line of credit that Sure Shot obtained from NBD in February 1994. The
original agreement between the Company and the Schwartz Trust provided for
those redemptions to be made in 1993, 1994 and 1995. In order to induce the
Schwartz Trust to extend those redemption periods for 1 year, the Company paid
the Schwartz Trust an additional $24,000, payable in four quarterly
installments of $6,000 during 1994. In 1994, the Schwartz Trust sold 15,000
shares to a third party for $45,000 and the Company paid the Schwartz Trust
$71,000 to satisfy its obligation with respect to those 15,000 shares. In
1995, the Schwartz Trust sold 15,000 shares to a third party for $32,000 and
the Company paid the Schwartz Trust $76,000 to satisfy its obligation with
respect to those 15,000 shares.
On October 10, 1995 the Company closed upon its acquisition of all of the
outstanding capital stock of Z-Tag. That acquisition was undertaken in order
to diversify the Company's product line and was accomplished by a merger
between Z-Tag and a wholly owned subsidiary of the Company that was organized
for that purpose. As a result of that transaction, Z-Tag became a wholly owned
subsidiary of the Company and the three former shareholders of Z-Tag received
an aggregate of 600,000 shares of the Company's common stock. The former
shareholders of Z-Tag and the number of shares of the Company's common stock
received by each are: Robert L. White, III - 240,000 shares; Frederick B.
Williams - 180,000 shares; and Timothy Tooker - 180,000 shares.
8
<PAGE>
The Company entered into employment and noncompetition agreements with
Robert L. White, III President of Z-Tag, Frederick Williams - Vice President
of Z-Tag and David White - Vice President of Z-Tag. Pursuant to those
agreements, each of those persons were to be employed in their current
positions at Z-Tag and as Vice Presidents of the Company for a period of ten
years with an initial salary of $50,000 per year. Those agreements also
contain covenants not to compete that, except in the case of a termination by
the Company without cause or a termination by the employee due to a material
breach by the Company, would prohibit those persons from competing with the
Company for a period of one year after termination of their employment
agreement. Messrs. Robert L. White and Frederick B. Williams were each paid
$250,000 as consideration for entering into their covenants not to compete.
Robert L. White and David White resigned their positions with the Company and
Z-Tag in February 1996.
The Company also granted stock options to Robert L. White, III, Frederick
B. Williams and David White that would enable them to purchase 150,000,
150,000 and 100,000 shares respectively, of the Company's common stock at an
exercise price of $3.50 per share. Subject to the vesting schedule described
below, the options are exercisable during the period from April 1, 1996
through March 31, 1998. Options for 25% of the total shares were to vest if
Z-Tag had gross sales of $4,000,000 in 1995 and options for an additional 25%
of the shares were to vest if Z-Tag had net income of $300,000 in 1995.
Options for an additional 25% of the shares will vest if Z-Tag has gross sales
of $7,000,000 in 1995 and options for an additional 25% of the shares will
vest if Z-Tag has net income of $600,000 in 1996. Because the gross sales
and/or net income goals for 1995 were not met in that year, they were extended
and now apply to 1996 so that those options could vest if those goals are
achieved in 1996. If any of those sales and net income goals are not satisfied
by the end of 1996, those non-vested options will terminate. The options will
also terminate upon the optionee's death, permanent and total disability or
termination for cause of his employment.
Effective October 10, 1995, Robert L. White, III and Frederick B. Williams
were elected to the Company's Board of Directors to fill newly created
positions on the Board and were also made Vice Presidents of the Company.
Messrs. White and Williams also retained their positions as President and Vice
President, respectively, of Z-Tag. Mr. White resigned his position with the
Company and Z-Tag in February 1996.
On October 10, 1995, Harold Bachmann, Martin Coppo, Frederick Williams and
Robert White, III entered into a Shareholder Voting Agreement wherein they
agreed that, until October 10, 2005, each of them who were still employed by
the Company would vote all shares owned by each of them for the election to
the Company's Board of Directors of all of the other parties to that agreement
who were then employed by the Company or its subsidiaries.
PROPOSED REVERSE STOCK SPLIT
General
The Board of Directors of the Company has unanimously recommended that the
shareholders approve a proposal to amend the Company's Certificate of
Incorporation to effect a one for two reverse stock split of the Common Stock
(the "Reverse Stock Split"). The effect of the Reverse Stock Split, if
approved, will be to reduce by fifty percent the number of shares outstanding,
which will have a corresponding effect upon the shares held of record by each
shareholder. Thus a shareholder who currently holds 1,000 shares of Common
Stock will hold 500 shares immediately following the Reverse Stock Split. The
Reverse Stock Split will not alter the number of shares of authorized common
stock or the par value of those shares.
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Procedure
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote thereon at the Annual Meeting is
required for the approval of the proposed amendment of Article III of the
Company's Restated Certificate of Incorporation. The Board of Directors
unanimously recommends that shareholders vote FOR approval of the proposed
amendment.
If the Reverse Stock Split is approved, it will become effective after the
filing with the Secretary of State of Florida of a certificate of amendment to
the Company's Certificate of Incorporation that sets forth the terms of the
Reverse Stock Split and its effective date. The Company anticipates that it
would file that certificate of amendment so that it would become effective on
or before June 30, 1996 with the exact effective date to be determined by the
Board of Directors. The Company will provide at least 10 days advance notice
of the effective date of the Reverse Stock Split to the National Association
of Securities Dealers Automated Quotation System ("NASDAQ").
Shareholders will be requested to return the certificates representing
shares of Common Stock they currently hold in exchange for new certificates,
representing post-split shares of Common Stock to be issued by the Company. If
the Reverse Stock Split would result in the issuance of a fractional share to
any shareholder, the Company will round any fractional shares up to the
nearest whole share. If the Reverse Stock Split is approved at the Annual
Meeting, the Company will send each shareholder instructions regarding the
exchange of their certificates representing pre-split shares for certificates
representing post-split shares.
At December 31, 1995, the book value per share of Common Stock was $1.68;
had the Reverse Stock Split been effective as of such date, the book value per
post-split share would have been $3.36. At May 8, 1996, the closing bid price
of the Common Stock on NASDAQ was $2.25. Giving effect to the Reverse Stock
Split, such price on such date, all other things being equal, would have been
$4.50 per share of post-split Common Stock. The Board of Directors believes
that the market price of the Common Stock after the Reverse Stock Split will
be at a more desirable level, although there is no assurance that this will
occur. Because the Reverse Stock Split will not have any effect on the
Company's results of operations, it is deemed that furnishing of financial
statements with respect to the effect of the proposed Reverse Stock Split is
not material for the exercise of prudent judgment with regard to voting on the
proposed Reverse Stock Split.
The Reverse Stock Split will result in no federal or state income tax
consequences to the Company or to shareholders who receive only new stock
certificates reflecting the changed capitalization in exchange for their old
certificates.
Each holder of Common Stock is entitled to one vote for each share held.
The shareholders do not have preemptive rights or conversion rights, and there
are no redemption provisions, sinking fund provisions or liabilities for
further calls or assessments applicable to the Common Stock. There will be no
differences in rights between those securities outstanding prior to the
Reverse Stock Split and those to be outstanding after the Reverse Stock Split
is effected. The Reverse Stock Split will have no effect on the 1,000,000
shares of preferred stock authorized for issuance by the Company's Certificate
of Incorporation, none of which are currently outstanding. The Company will
apply to have the post-split Common Stock listed on NASDAQ.
10
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Amendments to the Certificate of Incorporation
In connection with the proposed amendment of the Company's Certificate of
Incorporation for the Reverse Stock Split, the shareholders will be asked to
approve the following resolution at the Annual Meeting.
RESOLVED, that Article III of the Company's Restated Certificate of
Incorporation is amended to add the following paragraph:
Each share of Common Stock that was issued as of __________ , 1996
shall be subject to a 1-for-2 reverse stock split as set forth in this
paragraph. Effective as of the close of business on that date, each share
of Common Stock then outstanding shall become, and thereafter continue
to be, 1/2 of a share of Common Stock of this Corporation, par value
$.01 per share. Each holder of record of issued shares of Common Stock
at the close of business on that date shall be entitled to receive,
upon surrender of his or her stock certificate or certificates, a new
certificate representing the number of whole shares of Common Stock of
which he or she is the owner after giving effect to the provisions of
this paragraph. Any fractional shares to which a shareholder would be
entitled pursuant to this paragraph will be rounded up to the nearest
whole share.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has appointed the firm of Moore Stephens Doeren
Mayhew P.C. as auditors for the Company for the year ended December 31, 1996,
subject to ratification by the stockholders. Moore Stephens Doeren Mayhew P.C.
has been the Company's auditors since December 1995 and has reported on the
Company's financial statements for the year ended December 31, 1995 that are
included in the Annual Report which accompanied this Proxy Statement. All
professional services rendered by Moore Stephens Doeren Mayhew P.C. during
1995 were furnished at customary rates. The performance of professional
services, other than audit services, is only reviewed and approved, including
a review for independence, by the Board of Directors if the services to be
rendered are considered to be of a material or unusual nature. In all other
cases, authorization for the services is made by Management of the Company.
The performance of audit services is approved on an annual basis by the Board
of Directors.
Representatives of Moore Stephens Doeren Mayhew P.C. will be present at
the Annual Meeting and will have the opportunity to make a statement if they
so desire. Those representatives are also expected to be available to respond
to appropriate questions.
It is recommended by the Board of Directors that the proposal to ratify
the selection of Moore Stephens Doeren Mayhew P.C. as auditors of the Company
for 1996 be approved. If stockholders fail to approve this proposal, the Board
will reconsider the appointment of Moore Stephens Doeren Mayhew P.C.
The firm of Morof Sheplow Weinstein P.L.C. had audited the Company's
financial statements for the years ended December 31, 1994, 1993 and 1992. As
previously reported on a Form 8-K dated December 18, 1995, the Company decided
to utilize another accounting firm to act as the Company's auditors for the
year ended December 31, 1995 rather than to continue to use the services of
Morof Sheplow Weinstein P.L.C. to provide those services. The decision to
change accountants was approved by the Company's Board of Directors.
11
<PAGE>
The reports of Morof Sheplow Weinstein P.L.C. on the financial statements
of the Company for 1994, 1993 or 1992 did not contain an adverse opinion or
disclaimer of opinion or any modification as to uncertainty, audit scope or
accounting principles.
There have never been any disagreements with Morof Sheplow Weinstein
P.L.C., whether or not resolved, on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the satisfaction of Morof Sheplow Weinstein P.L.C.,
would have caused it to make reference to the subject matter of that
disagreement in connection with its report. Morof Sheplow Weinstein P.L.C. has
not advised the Company that: (1) internal controls necessary to develop
reliable financial statements did not exist; or (2) information has come to
the attention of Morof Sheplow Weinstein P.L.C. which made it unwilling to
rely on management's representations, or unwilling to be associated with the
financial statements prepared by management; or (3) the scope of the audit
should be expanded significantly, or information has come to the attention of
Morof Sheplow Weinstein P.L.C. that it has concluded will, or if further
investigated might, materially impact the fairness or reliability of a
previously issued audit report or the underlying financial statements, or the
financial statements to be issued covering the fiscal period(s) subsequent to
the date of the most recent audit and financial statements (including
information that might preclude the issuance of an unqualified audit report),
and the issue was not resolved to the satisfaction of Morof Sheplow Weinstein
P.L.C. prior to its dismissal.
The Company retained the firm of Moore Stephens Doeren Mayhew P.C. to
audit the Company's financial statements for the year ended December 31, 1995.
Prior to retaining Moore Stephens Doeren Mayhew P.C., neither the Company or
anyone on its behalf consulted Moore Stephens Doeren Mayhew, P.C. regarding
the application of accounting principles to a specific, completed or
contemplated transaction or the type of audit opinion that might rendered on
the Company's financial statements where either written or oral advice was
provided that was an important factor considered by the Company in reaching a
decision as to the accounting, auditing or financial reporting issue.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company recommends a vote: (1) "FOR" the
election of Harold Bachmann, Martin W. Coppo, Brendan Suhr, John M. Thomas,
Frederick B. Williams and Michael J. Sleva as directors of the Company; (2)
"FOR" adoption of the proposed Reverse Stock Split; and (3) "FOR" the
ratification of the selection of the Company's auditors. Proxies solicited by
Management will be so voted unless stockholders direct otherwise in their
Proxies.
Vote Required: Under provisions of the Florida Business Corporation Act: (1)
the election of the Company's Directors requires a plurality of the votes
represented in person or by proxy at the meeting, (2) the adoption of the
proposed Reverse Stock Split will require the affirmative vote of at least a
majority of the Company's outstanding Common Stock and (3) the ratification of
the selection of the Company's auditors will require the approval of a
majority of the shares that are present, in person or by proxy, at the
meeting.
Effect of Abstention: A shareholder who abstains from voting on any proposal
will be included in the number of shareholders present at the meeting for the
purpose of determining whether a quorum exists for the conduct of business. An
abstention with respect to the election of the Company's Directors will not be
counted either in favor of or against the election of the nominees. An
abstention with respect to the adoption of the Reverse Stock Split or the
ratification of the selection of auditors will be treated as a vote against
that proposal.
12
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Effect of Broker Non-Vote: Brokers holding shares for the account of their
clients may vote such shares either in the manner directed by their clients or
in their own discretion if permitted by the exchange or other organization of
which they are members. Proxies which are voted by brokers on at least one but
not all of the proposals are referred to as "broker non-votes". Broker
non-votes will be included in determining the presence of a quorum. However, a
broker non-vote is not treated as present and entitled to vote and will
therefore have no outcome as the election of directors or the ratification of
the selection of auditors but will have the effect of a vote against adoption
of the Reverse Stock Split.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matters which may properly be, or are likely to be, brought before the
meeting. However, if any proper matters are brought before the meeting, the
persons named in the enclosed Proxy will vote them as the Board of Directors
may recommend.
At the Annual Meeting of Stockholders, in addition to the matters
described above, there will be an address by the Company's President and a
general discussion period during which stockholders will have an opportunity
to ask questions about the business and operations of the Company.
Proposals for 1997 Annual Meeting
If a stockholder desires to submit a proposal for consideration at the
next Annual Stockholders Meeting and would like to have the proposal submitted
on the Company's proxy statement and form of proxy, such proposal must be
received by the Company no later than January 15, 1997 or 120 days before
mailing of the Proxy Statement for the next Annual Stockholders meeting,
whichever is later. The Company anticipates that it will hold its next Annual
Stockholder Meeting in May 1997.
Annual Report and Form 10-KSB
All Stockholders of record on May 9, 1996 have been sent, or are
concurrently being sent, a copy of the Company's 1995 Annual Report to
Stockholders, which contains audited financial statements of the Company for
the years ended December 31, 1995 and 1994.
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995 that was filed with the Securities and Exchange
Commission may be obtained without charge (except for exhibits to that Form
10-KSB, which will be furnished upon payment of the Company's reasonable
expenses in furnishing those exhibits). To obtain a copy of that Form 10-KSB
or any of those exhibits, please send a written request to Michael Sleva,
Secretary of the Company, at the Company's corporate offices located at 405
Cogshall Street, Holly, Michigan 48442.
By order of the Board of Directors.
Michael Sleva,
Holly, Michigan Secretary
May 10, 1996
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[ FORM OF PROXY -- FRONT ]
SURE SHOT INTERNATIONAL, INC.
Proxy for Annual Meeting of Shareholders This Proxy is
Solicited on Behalf of the Board of Directors and will be Voted.
The undersigned hereby appoints Harold Bachmann and Michael Sleva or any
one or more of them acting in the absence of the other, as attorneys and
proxies of the undersigned, with full power of substitution, for and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
the Shareholders of Sure Shot International, Inc., a Florida corporation (the
"Company") to be held at the Joe Dumars Fieldhouse, 45300 Mound, Shelby
Township, Michigan 48315, at 2:00 p.m. local time, June 5, 1996, and at any
adjournment or adjournments thereof, and to vote all shares of stock of the
Company standing in the name of the undersigned, with the powers the
undersigned would possess if personally present at such meeting:
1. Election of the Company's Board of Directors:
Nominees: Harold Bachmann, Martin Coppo, Brendan Suhr, John M.
Thomas, Fred B. Williams, and Michael J. Sleva
[ ] FOR all nominees listed above, except vote withheld from the
following nominees (if any)
----------------------------------------------------------------------
2. Amendment to the Company's Articles of Incorporation to conduct a
1-for-2 reverse stock split of the Company's outstanding common
stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Ratification of the selection of Moore Stephens Doeren Mayhew P.C. as
the Company's auditors for the year ended December 31, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued on other side)
<PAGE>
[ FORM OF PROXY -- BACK ]
4. Transaction of such other business as may properly come before the
meeting.
Management and the Board of Directors recommend a vote FOR approval of
all of the foregoing proposals and nominees.
The Proxy will be voted as directed but, where no direction is given, it
will be voted FOR approval of all of the foregoing proposals and nominees.
Copies of the Notice of the Meeting dated May 10, 1996 and of the Proxy
Statement dated May 10, 1996 have been received by the undersigned.
Please Date and Sign Here
Date: ___________________
Name: ___________________
PLEASE DATE, SIGN AND
RETURN THIS PROXY IN THE
ENCLOSED ENVELOPE
PROMPTLY.
[ ] Please check here if
you plan to attend
the meeting.
