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 ss.240.14a-11(c) or ss.240.14a-12
OMNI MULTIMEDIA GROUP, INC.
(Name of Registrant as Specified in Its Charter)
---------------------------------------------
Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
|X| $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
pu+rsuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
|_| 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.:
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(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
Notes:
OMNI MULTIMEDIA GROUP, INC.
50 HOWE AVENUE
MILLBURY, MASSACHUSETTS 05127
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of OMNI
MULTIMEDIA GROUP, INC. (the "Corporation"), a Delaware corporation, will be held
on Thursday, September 26, 1996, at 10:00 a.m., at the Corporation's principal
place of business, 50 Howe Avenue, Millbury, Massachusetts, for the following
purposes:
1. To elect five (5) members of the Board of Directors;
2. To ratify the selection of Price Waterhouse LLP as independent
auditors for the Corporation for the fiscal year ending March
29, 1997;
3. To approve an amendment to the Corporation's 1994 Stock Option
Plan (the "Plan") to increase from 270,000 to 2,000,000 the
aggregate number of shares of Common Stock of the Corporation
reserved for issuance under the Plan;
4. To approve an amendment to the Corporation's Certificate of
Incorporation to increase from 14,000,000 to 19,000,000 the
aggregate number of authorized shares of Common Stock of the
Corporation; and
5. To consider and act upon any matters incidental to the
foregoing and any other matters that may properly come before
the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on August 23,
1996 as the record date for the determination of Stockholders entitled to notice
of and vote at the Annual Meeting and any adjournment or adjournments thereof.
We hope that all Stockholders will be able to attend the Annual Meeting
in person. In order to assure that a quorum is present at the Annual Meeting,
please date, sign and promptly return the enclosed Proxy whether or not you
expect to attend the Annual Meeting. A postage-prepaid envelope, addressed to
American Securities Transfer and Trust, Inc., the Corporation's transfer agent
and registrar, has been enclosed for your convenience. If you attend the Annual
Meeting, your Proxy will, at your request, be returned to you and you may vote
your shares in person.
By Order of the Board of Directors,
PAUL F. JOHNSON
Secretary
Millbury, Massachusetts
September 4, 1996
-2-
OMNI MULTIMEDIA GROUP, INC.
50 HOWE AVENUE
MILLBURY, MASSACHUSETTS 05127
-----------------
PROXY STATEMENT
-----------------
SEPTEMBER 4, 1996
The enclosed Proxy is solicited by the Board of Directors of OMNI
MULTIMEDIA GROUP, INC. (the "Corporation"), a Delaware corporation, for use at
the Annual Meeting of Stockholders to be held on Thursday, September 26, 1996,
at 10:00 a.m., at the Corporation's principal place of business, 50 Howe Avenue,
Millbury, Massachusetts and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on August 23, 1996 (the
"Record Date") will be entitled to notice of and to vote at the Annual Meeting
and at any adjournment or adjournments thereof. On that date, 3,953,731 shares
of the Corporation's Common Stock, $.01 par value per share (the "Common
Stock"), were issued and outstanding. Each share of Common Stock entitles the
holder to one vote with respect to all matters submitted to Stockholders at the
Annual 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 Annual 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 at the Annual Meeting. 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 votes cast by Stockholders entitled to vote at the Annual 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
Annual Meeting except for the proposed amendment to the Corporation's
Certificate of Incorporation, which requires the affirmative vote of two-thirds
of the outstanding shares of Common Stock entitled to vote at the Annual
Meeting. Abstentions are counted in tabulations of the votes cast on proposals
presented to Stockholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved. The Corporation has no
other voting securities.
CERTAIN OF THE CORPORATION'S CURRENT PRINCIPAL STOCKHOLDERS, PAUL F.
JOHNSON, ROBERT E. LEE AND RICHARD A. PILOTTE, AS A GROUP OWN OR MAY BE DEEMED
TO CONTROL APPROXIMATELY 29% OF THE OUTSTANDING SHARES OF COMMON STOCK. AS THERE
IS NO CUMULATIVE VOTING PROVIDED FOR IN THE CORPORATION'S CERTIFICATE OF
INCORPORATION OR BYLAWS, CERTAIN OF THE CORPORATION'S CURRENT PRINCIPAL
STOCKHOLDERS WILL EFFECTIVELY CONTINUE TO BE ABLE TO ELECT THE BOARD OF
DIRECTORS AND CONTROL THE OUTCOME OF ANY ISSUES WHICH MAY BE SUBJECT TO A VOTE
BY THE CORPORATION'S STOCKHOLDERS.
-3-
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 Annual Meeting and
vote in person. Any Stockholder voting by proxy has the right to revoke it at
any time before it is exercised by giving written notice to the Secretary of the
Corporation prior to the Annual Meeting, or by giving to the Secretary of the
Corporation a duly executed Proxy bearing a later date than the Proxy being
revoked at any time before such Proxy is voted, or by appearing at the Annual
Meeting and voting in person. The shares represented by all properly executed
Proxies received in time for the Annual Meeting will be voted as specified
therein. If a Stockholder does not specify in the Proxy how the shares are to be
voted, they will be voted in favor of the election of Directors of those persons
named in this Proxy Statement and in favor of all other items set forth herein.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter should be presented at the Annual Meeting
upon which a vote may properly be taken, shares represented by all Proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the Proxies.
The Board of Directors knows of no matter to be acted upon at the Annual Meeting
that would give rise to appraisal rights for dissenting Stockholders.
The Corporation's Annual Report, containing audited financial
statements and Management's Discussion and Analysis of Financial Condition and
Results of Operations for the fiscal year ended March 30, 1996 ("Fiscal 1996")
is being mailed contemporaneously with this Proxy Statement to all Stockholders
entitled to vote at the Annual Meeting. This Proxy Statement and the
accompanying Proxy were first mailed to such Stockholders on or about September
4, 1996.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors has set the number of Directors to be elected
for the coming year at five. Each Director of the Corporation is elected for a
period of one year at the Corporation's Annual Meeting of Stockholders and
serves until his successor is duly elected by the Stockholders. Vacancies and
newly created directorships resulting from any increase in the number of
authorized Directors may be filled by a majority vote of Directors then
remaining in office. Officers are elected by and serve at the pleasure of the
Board of Directors.
Shares represented by all Proxies received by the Board of Directors
and not so marked as to withhold authority to vote for an individual nominee for
Director, or for all nominees, will be voted (unless one or more nominees are
unable or unwilling to serve) for the election of the five nominees named below.
The Board of Directors knows of no reason why any such nominee should be unable
or unwilling to serve, but if such should be the case, Proxies will be voted for
the election of some other person or for fixing the number of Directors at a
lesser number. All of the nominees are currently Directors of the Corporation.
Proxies cannot be voted for more than five nominees.
-4-
NOMINEES FOR DIRECTOR
The following table sets forth the year each nominee was elected a
Director and the age of and positions and offices presently held by each nominee
with the Corporation.
<TABLE>
<CAPTION>
YEAR
NOMINEE
FIRST
BECAME A
NAME AGE DIRECTOR POSITION
- ---- --- -------- --------
<S> <C> <C> <C>
Paul F. Johnson......................... 49 1994 President, Chief Executive Officer,
Secretary and Director
Robert E. Lee........................... 60 1994 Executive Vice President, Chief
Financial Officer, Treasurer
and Director
Richard A. Pilotte...................... 39 1994 Vice President of Operations
and Director
Ronald F. Ladner........................ 47 1995 Director
Richard L. Wise......................... 45 1995 Director
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors met three times during Fiscal 1996. All of the
Corporation's Directors attended all of the meetings of the Board of Directors
in Fiscal 1996 during the period for which they were Directors with the
exception of Mr. Wise, who attended two meetings.
With the exception of Messrs. Johnson and Pilotte, who are
brothers-in-law, no Director or executive officer is related by blood, marriage
or adoption to any other Director or executive officer.
The Board of Directors established both an Audit Committee and a
Compensation Committee in Fiscal 1996. The Corporation does not have a standing
nominating committee or a committee performing similar functions.
Messrs. Ladner and Wise serve as the members of the Audit Committee.
The Audit Committee was established for the purposes of (i) recommending the
selection of the Corporation's independent auditors; (ii) reviewing the
effectiveness of the Corporation's accounting policies and practices, financial
reporting and internal controls; (iii) reviewing any transactions that involve a
-5-
potential conflict of interest; and (iv) the scope of independent audit
coverages and the fees charged by the independent accountants. The Audit
Committee did not meet during Fiscal 1996 but met immediately after the end of
the fiscal year.
Messrs. Ladner and Wise also serve as the members of the Compensation
Committee. The Compensation Committee was established to set and administer the
policies that govern annual compensation for the Corporation's executives.
Following review and approval by the Compensation Committee of the compensation
policies, all issues pertaining to executive compensation will be submitted to
the Board of Directors for approval. The Compensation Committee negotiates and
approves compensation arrangements for officers, employees, consultants and
Directors of the Corporation including but not limited to the grant of options
of the Corporation's Common Stock pursuant to the Corporation's 1994 Stock
Option Plan or other plans that may be established. The Compensation Committee
did not meet during Fiscal 1996 but met immediately after the end of the fiscal
year.
BACKGROUND
The following is a brief account of the background of each nominee for
Director:
PAUL F. JOHNSON. Mr. Johnson founded Omni Resources Corporation in 1980
and was a co-founder of 4CD's Corporation in 1993. He has served as the
President and director of both companies, which are subsidiaries of the
Corporation, since their inception. Mr. Johnson has served as the President,
Chief Executive Officer, Secretary and a director of the Corporation since
November 1994. From 1979 through 1980, Mr. Johnson owned and operated the first
Apple Computer retail outlet in central Massachusetts. Mr. Johnson received a
Bachelor of Science degree in Business Administration from Suffolk University.
ROBERT E. LEE. Mr. Lee has been a consultant to and has served as a
director of Omni Resources Corporation since 1986 and was a co-founder of 4CD's
Corporation. He has served as the Corporation's Executive Vice President, Chief
Financial Officer and a director since November 1994. Since 1979, Mr. Lee has
owned East Beach Associates, a business consulting firm to venture capital firms
and financial institutions assisting companies in start-up, turnaround and
management areas. From 1981 through 1985, Mr. Lee served as Chairman and Chief
Executive Officer of LGM Corporation, a $65 million conglomerate involved in
manufacturing helicopter transmissions and the manufacture of glass container
forming machinery. Mr. Lee serves as a director of Eagle Comptronics, Inc., a
privately held supplier to the cable television industry and of B&L Plastics,
Inc., a privately held manufacturer of blow-molded products for the medical and
food service industries. Mr. Lee has a Master of Business Administration degree
from the Amos Tuck School of Business of Dartmouth College and a Bachelor of
Arts degree from Brown University.
RICHARD A. PILOTTE. Mr. Pilotte has served as Vice President of
Operations of Omni Resources Corporation since 1981 and as the Corporation's
Vice President of Operations and a director since its inception, where he is
responsible for production and facilities. From 1979 to 1981, Mr. Pilotte was
the Service Manager of Computer Packages Unlimited, a privately held retail
-6-
personal computer store. From 1976 to 1979, Mr. Pilotte was a Production Manager
at National Envelope, a privately held envelope manufacturing company.
RONALD F. LADNER. Mr. Ladner became a member of the Corporation's Board
of Directors in April 1995. Since 1981, he has served as President of Brierly
Lombard & Company, a privately held industrial supply distributor. Mr. Ladner
received a Bachelor of Science degree in industrial engineering from
Northeastern University.
RICHARD L. WISE. Mr. Wise became a member of the Corporation's Board of
Directors in April 1995. He has been a partner of the law firm of Gordon & Wise
since 1987, where he practices principally in the areas of business
reorganizations, mergers and acquisitions and corporate finance. From 1983 to
1987, Mr. Wise was a partner of the law firm of McCabe/Gordon, P.C., and from
1977 to 1983, he was an associate attorney with Widett, Slater & Goldman, P.C.
Mr. Wise received a Bachelor of Arts degree in philosophy from Boston University
and a Juris Doctor degree from Northeastern University School of Law.
EXECUTIVE OFFICERS
The executive officers of the Corporation, their ages and positions
held in the Corporation are as follows:
NAME AGE POSITION
- ---- --- --------
Paul F. Johnson.................... 49 President, Chief Executive Officer
and Secretary
Robert E. Lee...................... 60 Executive Vice President, Chief
Financial Officer and Treasurer
Richard A. Pilotte................. 39 Vice President of Operations
The backgrounds of each executive officer of the Corporation are
described above.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of August 23, 1996, certain
information concerning the ownership of the Corporation's Common Stock by (i)
each person known by the Corporation to own beneficially five percent (5%) or
more of the outstanding shares of the Corporation's Common Stock; (ii) each of
the Corporation's Directors; and (iii) all executive officers and Directors as a
group. Except as otherwise indicated, the Stockholders listed in the table have
sole voting and investment powers with respect to the shares indicated. This
table excludes the impact of the issuance of
-7-
additional shares of Common Stock upon conversion of the Series A Preferred
Stock held by investors, none of whom is an officer or director of the
Corporation.
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING
OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2) COMMON STOCK
- ---------------------- --------------------- ------------
Paul F. Johnson(3)(4)(5)................ 426,508 10.7%
Charanjit S. Anand(3) .................. 291,483 7.4%
Richard A. Pilotte(3)(5)................ 406,508 10.2%
Robert E. Lee(3)(5)(6).................. 410,410 10.3%
Ronald F. Ladner(6)(7).................. 6,000 *
Richard L. Wise(6)(7)................... 6,000 *
All Executive Officers and Directors
as a Group (five persons)(3)(4)(5)(6)... 1,223,244 30.5%
- ----------------
* Less than 1%
(1) The address for all executive officers and Directors is c/o OMNI
MultiMedia Group, Inc., 50 Howe Avenue, Millbury, Massachusetts. Mr.
Anand's address is One Saxon Lane, Shrewsbury, Massachusetts.
(2) Except as otherwise indicated, the Corporation believes each person
named in the table has sole voting and investment power with respect to
all shares of Common Stock beneficially owned by him. Pursuant to the
rules of the Securities and Exchange Commission, shares of Common Stock
which an individual or group has a right to acquire within 60 days
pursuant to the exercise of presently exercisable or outstanding
options, warrants or conversion privileges are deemed to be outstanding
for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown
in the table. Information with respect to beneficial ownership is based
upon information furnished by such stockholder.
(3) Includes 16,666 shares of Common Stock issuable upon the exercise of an
option to purchase 25,000 shares of the Corporation's Common Stock at
an exercise price of $5.10. The option
-8-
expires on April 20, 2005 and vests as follows: 8,333 shares on April
20, 1995, 8,333 shares on April 20, 1996 and 8,334 shares on April 20,
1997.
(4) Excludes an option to purchase up to 12,385 shares of Common Stock at
an exercise price of $6.125 per share pursuant to an option granted on
August 9, 1995 to Elaine Johnson, the spouse of Paul Johnson. Mr.
Johnson disclaims any beneficial ownership of these options.
(5) Excludes an option to purchase up to 300,000 shares of Common Stock at
an exercise price of $5.00 per share, which option expires on August
18, 2001 and vests as follows: (a) immediately if the average trading
price of the Corporation's Common Stock equals or exceeds $15.50 per
share for five (5) consecutive trading days, or (b) 100,000 shares on
March 29, 1997, 100,000 shares on March 28, 1998 and 100,000 shares on
April 3, 1999. This option grant is subject to stockholder approval of
the increase in shares reserved for issuance under the Plan. If the
Corporation's stockholders do not approve this increase, this
conditional option will become void.
(6) Includes an option granted to Mr. Lee by each of Messrs. Johnson and
Pilotte in February 1992 to purchase up to 16,091 of their shares of
Common Stock at $4.75 per share for an aggregate of 32,182 shares of
Common Stock, which options expire on January 31, 2002.
(7) Includes an option to purchase 1,000 shares of Common Stock at an
exercise price of $5.10 per share, which option expires on May 11,
2005, and an option to purchase 5,000 shares of Common Stock at an
exercise price of $6.38 per share, which expires on March 31, 2006.
EXECUTIVE COMPENSATION OF OFFICERS AND DIRECTORS
EXECUTIVE OFFICER COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services rendered to the Corporation for the fiscal
years ended April 2, 1994, April 1, 1995 and March 30, 1996, of those persons
who were at March 30, 1996 (i) the chief executive officer and (ii) each other
executive officer of the Corporation whose annual compensation exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation (2)
---------------------------------------------------------
Annual Compensation (1) Awards Payouts
---------------------------------------------- ---------------------- ---------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name and Restricted Underly
Principal Other Annual Stock Options/ LTIP All Other
Position(3) Year Salary($) Bonus($) Compensation($)(4) Award(s) SARs (#) Payouts($) Compensation($)
----------- ---- --------- -------- ------------------ ------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul F. Johnson........... 1996 $202,320 -- $22,850 -- -- -- --
President, Chief 1995 $150,000 -- $10,750 -- -- -- --
Executive Officer, 1994 $147,075 -- $24,198 -- -- -- --
Secretary and
Director
Robert E. Lee............. 1996 $154,300 -- $20,610 -- -- -- --
Executive Vice
President, Treasurer
and Director
-9-
Richard A. Pilotte........ 1996 $174,150 -- $14,500 -- -- -- --
Vice President of 1995 $130,000 -- -- -- -- -- --
Operations and 1994 $130,000 -- -- -- -- -- --
Director
</TABLE>
- ----------------
(1) Amounts shown indicate cash compensation earned and received by
executive officers. Executive officers participate in group health and
other benefits generally available to all employees of the Corporation.
(2) See "Employee Agreements."
(3) Mr. Lee served as a consultant to the Corporation for the period ended
prior to the Corporation's initial public offering in April 1995.
During this time, Mr. Lee's annual consulting fees did not exceed
$100,000.
(4) The Corporation pays for country club dues, club memberships and for an
automobile for each of the named executive officers, including payment
for automobile insurance and repairs.
The following table sets forth additional information concerning
unexercised stock options to purchase the Corporation's Common Stock held by
Messrs. Johnson, Lee and Pilotte as of March 30, 1996. None of Messrs. Johnson,
Lee or Pilotte exercised any stock options during Fiscal 1996.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
at Fiscal Year-End (#) at Fiscal Year-End ($)(1)
-------------------------------------- --------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable(2)
- ---- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Paul F. Johnson........................... 16,666 8,334 $153,160.54 $76,589.46
Robert E. Lee............................. 16,666 8,334 $153,160.54 $76,589.46
Richard A. Pilotte........................ 16,666 8,334 $153,160.54 $76,589.46
</TABLE>
- ------------
(1) "In-the-Money" options are those options for which the fair market
value of the Common Stock underlying the options is greater than the
exercise price of the option.
(2) The value of unexercised In-the-Money options is determined by
multiplying the number of options held by the difference in the fair
market value of the Common Stock underlying the
-10-
options on March 29, 1996 ($9.19 per share) and the exercise price of
the options granted ($5.10 per share).
EMPLOYMENT AGREEMENTS
Effective as of April 1, 1995, the Corporation entered into employment
and non-competition agreements (the "Agreements") with each of Messrs. Johnson,
Lee, and Pilotte, all of which expire on December 30, 1998. The Agreements
provide for base salaries of $175,000, $160,000 and $150,000, respectively, plus
bonuses, car allowances, life and disability insurance and certain other
benefits as may be determined by the Compensation Committee of the Corporation's
Board of Directors. Base salaries may not be increased in an amount in excess of
10% per year without the prior written consent of Schneider Securities, Inc.,
the representative of the underwriters of the Corporation's initial public
offering, until April 20, 1997. For the fiscal year ending March 29, 1997, the
Corporation has approved a 10% increase in base salary for each of Messrs.
Johnson, Pilotte and Lee. Each individual is entitled to receive benefits
offered to the Corporation's employees generally. Each individual is also
entitled to receive three years' base salary as severance in the event his
employment is terminated by the Corporation without cause. In the event of a
change in control in the Corporation (defined as any individual or entity not a
current stockholder of the Corporation or affiliated with the Corporation
acquiring 50% or more of the Corporation's outstanding shares of Common Stock),
each individual will receive: (i) an annual compensation of $300,000 in base
salary (assuming 100% of the individual's time is devoted to the operations of
the Corporation) and all other benefits and bonuses; (ii) an equal one-third
share in a performance bonus equal to twenty percent of net income of the
Corporation before income taxes, amortization and depreciation; (iii) fringe
benefits as are customary for the individual's position; and (iv) upon
termination or a reduction in the individual's duties, such individual has the
right to (1) sell his shares of Common Stock to the Corporation at the greater
of $5.10, the then current bid and ask price, book value per share or appraisal
value per share, (2) receive in a lump sum the remainder of any compensation
payable under the Agreement, (3) receive an executive fee equal to $100,000 in
exchange for the covenant not to compete, and (4) immediate removal of all loan
guarantees and repayment of all loans placed by the individual on behalf of or
for the benefit of the Corporation. Each Agreement also contains non-competition
provisions for a period of one year following termination, a confidentiality
provision and an ownership provision in the Corporation's favor for techniques,
discoveries and inventions arising during the term of employment. The Agreements
provide for successive three-year renewals after the initial term.
COMPENSATION OF DIRECTORS
Each of the non-management Directors of the Corporation receives a fee
of $500 per meeting plus out-of-pocket expenses and the annual grant of an
option to purchase 5,000 shares of the Corporation's Common Stock pursuant to
the Corporation's 1994 Director Formula Stock Option Plan.
PRICE RANGE OF COMMON STOCK
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The Corporation's Common Stock is traded on the American Stock Exchange
("AMEX") and the Pacific Stock Exchange under the symbol "OMG." On August 23,
1996, the closing price of the Corporation's Common Stock as reported by the
AMEX was $4.50.
As of August 23, 1996, there were approximately 50 holders of record of
the Corporation's Common Stock. Management believes that there are over 300
beneficial owners of the Corporation's Common Stock.
For the periods indicated, the following table set forth the range of
high and low bid prices for the Corporation's Common Stock as reported by AMEX.
FISCAL YEAR ENDING MARCH 30, 1996 HIGH LOW
--------------------------------- ---- ---
First Quarter (from April 20, 1995) $ 8.13 $4.50
Second Quarter $ 8.25 $5.75
Third Quarter $ 8.50 $7.00
Fourth Quarter $12.88 $7.63
FISCAL YEAR ENDING MARCH 29, 1997 HIGH LOW
--------------------------------- ---- ---
First Quarter $6.38 $10.63
Second Quarter (through August 23, 1996) $4.00 $ 8.25
The Corporation has not paid cash dividends on its Common Stock since
its inception and does not anticipate paying any cash dividends on its Common
Stock in the foreseeable future. The Corporation currently intends to reinvest
earnings, if any, in the development and expansion of its business. Any future
determination with respect to the payment of dividends will be subject to the
discretion of the Corporation's Board of Directors and will depend upon the
earnings, capital requirements, and financial position of the Corporation,
general economic conditions, and other pertinent factors. In addition, the
Corporation's agreement with its primary lender, Coast Business Credit,
prohibits the payment of dividends, other than a Common Stock dividend of the
Corporation's own capital stock, without such lender's prior written consent.
DIVIDEND POLICY
The Corporation has not paid dividends on its Common Stock since its
inception and has no intention of paying any dividends to its stockholders in
the foreseeable future. The Corporation's current bank lending arrangements do
not restrict the Corporation's ability to declare dividends. However, the
Corporation intends to reinvest earnings, if any, in the development and
expansion of its business. Any declaration of dividends in the future will be at
the election of the Board of Directors and will depend upon the earnings,
capital requirements and financial position of the Corporation, general economic
conditions, requirements of any bank lending arrangements which may then be in
place, and other pertinent factors.
-12-
CERTAIN TRANSACTIONS
The Corporation maintains its principal executive offices and
manufacturing operations in an approximately 150,000 square foot facility in
Millbury, Massachusetts leased from AAA Turnpike, a corporation in which Ronald
Ladner, a director of the Corporation, is a director and a stockholder. The
Corporation currently pays base rent in the amount of approximately $35,000 per
month plus its pro-rata portion of real estate taxes and other operational and
maintenance expenses, pursuant to a lease that expires on June 30, 2001. The
lease further provides for an option to purchase the premises, which consist of
265,000 square feet, for $6,000,000 at any time during the term of the lease.
The option price is $10,000 per month payable at the same time as the lease
payments are due. The Corporation has made such additional monthly payments on
the option totalling $250,000 since April 1994, and if it decides to exercise
the option, the additional amounts paid will be credited toward the $6,000,000.
The Corporation believes that these arrangements are on terms at least as
favorable as could be obtained from non-affiliated third parties.
The law firm of Gordon & Wise provides legal services to the
Corporation. Richard Wise, who serves as a director of the Corporation, is a
partner of Gordon & Wise. In connection with services rendered to the
Corporation during the fiscal years ended April 1, 1995 and March 30, 1996,
Gordon & Wise has received legal fees of approximately $144,000.00 and
$132,000.00, respectively.
In January 1990, Messrs. Johnson, Lee, Pilotte and Anand formed North
Stratford Oil Corporation ("North Stratford") and its wholly owned subsidiary,
Campbell Envelope Co., Inc. ("Campbell Envelope"). Campbell Envelope purchased
the assets of an envelope Corporation in New Hampshire in January 1990. North
Stratford purchased the land on which the envelope Corporation was located and
leased the land to Campbell Envelope. In order to finance the purchase of the
envelope Corporation, Campbell Envelope took out a $1.25 million loan from First
NH Bank. In order to finance the purchase of the land, North Stratford took out
a $1 million loan from First NH Bank. These loans were personally guaranteed by
each of Messrs. Johnson, Lee, Pilotte and Anand. In March 1992, Campbell
Envelope and North Stratford ceased doing business. Campbell Envelope and North
Stratford sold off their assets and reduced the balance of the loans owed to
First NH Bank from approximately $3.2 million, including amounts borrowed under
revolving credit arrangements used primarily to finance working capital
requirements, to $1.3 million. Campbell Envelope and North Stratford
restructured their agreement with First NH Bank in March 1992, which included,
among other items, the addition of Omni Resources as a guarantor of the loan
from First NH Bank and 40 quarterly payments of $25,000 in principal and monthly
interest payments. Messrs. Johnson, Lee, Pilotte and Anand made these payments
under these loans through funds advanced to them from Omni Resources. In October
1994, the balance under the loan was approximately $1,161,135. This amount was
satisfied in full by the payment of approximately $350,000, of which $325,000
was paid by Messrs. Johnson, Lee, Pilotte and Anand through funds advanced to
them by Omni Resources in exchange for promissory notes (the "Advance"). In
order to finance the Advance, Omni Resources used a portion of its $700,000 term
loan with its primary bank. In October 1994, each of Messrs. Johnson, Lee,
Pilotte and Anand issued five year promissory notes to Omni Resources which bear
interest at the rate of 6.32% per annum. Payment of the principal and interest
under these notes is
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due and payable on December 30, 1999. The notes can be prepaid without penalty.
All of the principal stockholders of the Corporation have agreed to apply any
proceeds, after payment of brokerage commissions and income taxes, from any
sales of their shares of Common Stock toward repayment of any outstanding loans
made to them by the Corporation. As of March 30, 1996, Messrs. Johnson, Pilotte
and Anand each owed Omni Resources approximately $106,000, and Mr. Lee owed Omni
Resources approximately $163,000 as a result of the aforementioned advances by
Omni Resources.
In January 1994, River Capital Corporation ("RCC"), in its bankruptcy
case, commenced an adversary proceeding against Omni Resources, Messrs. Johnson,
Pilotte, and Anand, alleging its right to sell back its 95,600 shares of the
Corporation's Common Stock to the Corporation pursuant to an agreement entered
into in 1989. The parties settled this dispute in November 1994, and RCC
received $350,000.00 representing full payment.
Any future transactions between the Corporation and its officers,
directors, principal stockholders or other affiliates will be on terms no less
favorable than could be obtained from independent third parties and will be
subject to approval by a majority of the independent and disinterested
directors.
PROPOSAL NO. 2
ACCOUNTING MATTERS AND RATIFICATION OF AUDITORS
The persons named in the enclosed Proxy will vote to ratify the
selection of Price Waterhouse LLP as independent auditors for the fiscal year
ending March 29, 1997 unless otherwise directed by the Stockholders. A
representative of Price Waterhouse LLP is expected to be present at the Annual
Meeting, and will have the opportunity to make a statement and answer questions
from Stockholders if he or she so desires.
PROPOSAL NO. 3
PROPOSAL TO APPROVE AMENDMENT
TO THE CORPORATION'S 1994 STOCK OPTION PLAN
GENERAL
The Corporation's 1994 Stock Option Plan (the "Plan") was adopted by
the Board of Directors and the sole stockholder of the Corporation in November
1994, prior to the initial public offering of the Corporation's Common Stock. By
unanimous written consent dated June 25, 1996, the Board of Directors of the
Corporation adopted a proposal to amend the Plan to increase from 270,000 to
2,000,000 the aggregate number of shares of the Common Stock of the Corporation
reserved for issuance under the Plan. The proposal to amend the Plan is subject
to stockholder
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approval. The Plan provides for the grant of incentive stock options (which
satisfy the requirements of Section 422(b) of the Internal Revenue Code of 1986,
as amended (the "Code") and nonqualified options (which do not satisfy such
requirements) to regular salaried officers and other employees of the
Corporation. The material features of the Plan as currently in effect are
described in "Description of the Plan as Currently in Effect" below.
REASONS AND PRINCIPAL EFFECTS OF THE PROPOSAL
As of August 23,
1996, of the 270,000 shares reserved for issuance
under the Plan, there were outstanding stock options covering 186,435 shares of
Common Stock held by 82 persons. In addition, the Corporation has granted option
to three executive officers to purchase an aggregate of 900,000 shares of Common
Stock, subject to stockholder approval of the increase in shares reserved for
issuance under the Plan. One purpose of the proposal is to continue the Plan by
increasing by 1,730,000 shares the aggregate number of shares of Common Stock
that may be issued under the Plan. If the proposal is adopted, the employees of
the Corporation who are eligible to participate in the Plan could receive more
benefits under the Plan than they could if the proposal is not adopted.
DESCRIPTION OF THE PLAN AS CURRENTLY IN EFFECT
In November 1994, the Board of Directors of the Corporation adopted a
1994 Stock Option Plan that provides for the granting to employees, officers,
directors, consultants and non-employees of the Corporation of options to
purchase up to 270,000 shares of Common Stock, $.01 par value per share. Options
granted under the Plan may be either "incentive stock options" within the
meaning of Section 422(a) of the United States Internal Revenue Code of 1986, as
amended (the "Code"), or non-qualified options. Incentive stock options may be
granted only to employees of the Corporation (including directors who are
employees), while non-qualified options may be issued to non-employee directors,
employees, consultants, and any other non-employee of the Corporation.
The per share exercise price of the Common Stock subject to all options
granted pursuant to the Plan shall be determined by the Board of Directors at
the time any option is granted. In the case of incentive stock options, the
exercise price shall not be less than 100% of the fair market value of the
shares covered thereby at the time the incentive stock option is granted (but in
no event less than par value). If, at any time an option is granted under the
Plan, the Corporation's Common Stock is publicly traded, "fair market value"
shall be determined as of the last business day for which the prices or quotes
discussed in this sentence are available prior to the date such option is
granted and shall mean (i) the average (on that date) of the high and low prices
of the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the NASDAQ National Market List, if the Common Stock is not then
traded on a national securities exchange; or (iii) the closing bid price (or
average of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is not reported on
the NASDAQ National Market List. However, if the Common Stock is not publicly
traded at the time an option is granted under the Plan, "fair market value"
shall be deemed to be the fair value of the Common Stock as determined by the
Board after taking into consideration
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all factors which it deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private transactions negotiated at
arm's length. No person who owns, directly or indirectly, at the time of the
granting of an incentive stock option to him, 10% or more of the total combined
voting power of all classes of common stock of the Corporation (a "10%
Stockholder"), shall be eligible to receive any incentive stock options under
the 1994 Plan unless the option price is at least 110% of the fair market value
of the Common Stock subject to the option, determined on the date of grant.
Non-qualified options are not subject to the limitation.
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 the optionee. In the event of
termination of employment, other than by death or permanent total disability,
the optionee will have three months after such termination to exercise the
option. Upon termination of employment of an optionee by reason of death or
permanent total disability, an 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.
Options under the Plan must be granted within 10 years from the
effective date of the Plan. Incentive stock options granted under the Plan
cannot be exercised more than 10 years from the date of grant, except that
incentive stock options issued to a 10% Stockholder are limited to five year
terms.
All options granted under the Plan provide for the payment of the
exercise price in cash, by promissory note, or by delivery to the Corporation of
shares of Common Stock 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 shares
of Common Stock to purchase additional shares of Common Stock and may
theoretically exercise all of his or her stock options with no additional
investment other than his or her original shares.
On April 20, 1995, each of Messrs. Johnson, Lee and Pilotte received
options to purchase 25,000 shares of the Corporation's Common Stock at an
exercise price of $5.10. The options expire on April 20, 2005 and vest as
follows: 8,333 shares on April 20, 1995, 8,333 shares on April 20, 1996; and
8,334 shares on April 20, 1997.
Any unexercised options that expire or that terminate upon an
employee's ceasing to be employed with the Corporation become available once
again for issuance. To date, options to purchase 186,435 shares of the
Corporation's Common Stock have been granted under the Plan, excluding the
options granted to each of Messrs. Johnson, Lee and Pilotte to purchase 300,000
shares of the Corporation's Common Stock at an exercise price of $5.00 per
share. These option grants are subject to stockholder approval of the increase
in shares reserved for issuance under the Plan. If the Corporation's
stockholders do not approve this increase, these conditional options will become
void.
FEDERAL INCOME TAX CONSEQUENCES
No tax obligations will arise for the optionee or the Corporation upon
the granting of either incentive stock options or non-qualified stock options
under the Plan (the Plan requires that the exercise price of non-qualified
options be equal to or greater than the fair market value of
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the underlying Common Stock on the date of the grant). Upon exercise of a
non-qualified stock option, an optionee will recognize ordinary income in an
amount equal to the excess, if any, of the fair market value, on the date of
exercise, of the stock acquired over the exercise price of the option.
Thereupon, the Corporation will be entitled to a tax deduction in an amount
equal to the ordinary income recognized by the optionee. Any additional gain or
loss realized by the optionee on disposition of the shares generally will be
capital gain or loss to the optionee and will not result in any additional tax
deduction to the Corporation. The taxable event arising from the exercise of
non-qualified stock options by officers of the Corporation subject to Section
16(b) of the Securities Exchange Act of 1934, as amended, occurs on the later of
the date on which the option is exercised or the date six months after the date
the option was granted unless the optionee elects, within 30 days of the date of
exercise, to recognize ordinary income as of the date of exercise. The income
recognized at the end of any deferred period will include any appreciation in
the value of the stock during that period and the capital gain holding period
will not begin to run until the completion of such period.
Upon the exercise of an incentive stock option, an optionee recognizes
no immediate taxable income. The tax cost is deferred until the optionee
ultimately sells the shares of stock. If the optionee does not dispose of the
option shares within two years from the date the option was granted and within
one year after the exercise of the option, and the option is exercised no later
than three months after the termination of the optionee's employment, the gain
on the sale will be treated as long term capital gain. Subject to the
limitations in the Plan, certain of these holding periods and employment
requirements are liberalized in the event of the optionee's death or disability
while employed by the Corporation. The Corporation is not entitled to any tax
deduction, except that if the stock is not held for the full term of the holding
period outlined above, the gain on the sale of such stock, being the less of (i)
the fair market value of the stock on the date of exercise minus the option
price, or (ii) the amount realized on disposition minus the option price, will
be taxed to the optionee as ordinary income and the Corporation will be entitled
to a deduction in the same amount. Any additional gain or loss realized by an
optionee upon disposition of shares prior to the expiration of the full term of
the holding period outlined above, generally will be capital gain or loss to the
optionee and will not result in any additional tax deduction to the Corporation.
The "spread" upon exercise of an incentive stock option constitutes a tax
preference item within the computation of the "alternative minimum tax" under
the Internal Revenue Code. The tax benefits which might otherwise accrue to an
optionee may be affected by the imposition of the alternative minimum tax if
applicable to the optionee's individual circumstances.
GRANT OF OPTIONS UNDER THE PLAN
To date, options to purchase up to 186,435 shares have been granted
under the Plan, of which no options have been exercised. In addition, options to
purchase up to 900,000 shares have been granted under the Plan to three
executive officers, subject to stockholder approval of the increase in shares
reserved for issuance under the Plan. Each of the conditional options granted to
Messrs. Johnson, Pilotte and Lee vest as follows: (a) immediately if the average
trading price of the Corporation's Common Stock equals or exceeds $15.50 per
share for five (5) consecutive trading days, or (b) 100,000 shares on March 29,
1997, 100,000 shares on March 28, 1998 and 100,000 shares on April 3, 1999. The
following table sets forth, with respect to each executive officer, all current
executive officers as a group, all current non-employee Directors as a group and
all current employees as a group, the number of shares of Common Stock subject
to
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options granted pursuant to the Plan, assuming approval of the increase in
shares reserved for issuance under the Plan.
Number Dollar
Name of Options Value (1)
---- ---------- ---------
Paul F. Johnson........................... 325,000 $1,462,500
Robert E. Lee............................. 325,000 $1,462,500
Richard A. Pilotte........................ 325,000 $1,462,500
All Current Executive Officers
as a Group (3 persons).................... 975,000 $4,387,500
All Non-Employee Directors
as a Group (2 persons).................... 0 0
All Employees (except executive
officers as a Group (79 persons).......... 86,435 $388,957.50
- ----------------
(1) The dollar value of the unexercised options is determined by
multiplying the number of options held by the difference in the fair
market value of the Common Stock underlying the options as of August
23, 1996 ($4.50, the closing price as reported by the AMEX on such
date).
REQUIRED AFFIRMATIVE VOTE
The affirmative vote of at least a majority of the shares of Common
Stock present at the meeting in person or by proxy and entitled to vote is
required to adopt the proposed amendment. If not approved, the amendment will
not become effective and conditional options granted on August 19, 1996 will
become void.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
PLAN.
PROPOSAL NO. 4
PROPOSAL TO APPROVE AMENDMENT TO CERTIFICATE
OF INCORPORATION TO AUTHORIZE ADDITIONAL COMMON STOCK
The Corporation's Certificate of Incorporation (the "Certificate")
presently authorizes up to 14,000,000 shares of Common Stock, $.01 par value,
and 1,000,000 shares of Preferred Stock, $.01 par value, of which 1,050 shares
have been designated as Series A Preferred Stock. At the Record Date, there were
3,953,731 shares of Common Stock issued and outstanding and 3,823,583 shares of
Common Stock reserved for future issuance upon the exercise of outstanding stock
options and warrants and upon conversion of the Series A Prefered Stock. At the
Record Date, 966 shares of Series A Preferred Stock were issued and outstanding.
After giving effect to the shares already reserved for issuance, 6,222,686
shares of Common Stock and 998,950 shares of Preferred Stock are available for
future issuance.
The Board of Directors has adopted a resolution proposing that the
Certificate be amended to increase the number of shares of Common Stock which
the Corporation is authorized to issue from 14,000,000 to 19,000,000. If
approved by the stockholders, such additional authorized shares would be
available for issuance at the discretion of the Board of Directors, without
further stockholder approval (subject to applicable American Stock Exchange
requirements and Delaware law), to take advantage of future opportunities for
equity financing, in connection with acquisitions, in connection with split-ups
of the Common Stock and for other corporate purposes, without the delay and
expense incident to the holding of a special meeting of stockholders to consider
any specific issuance.
The Board of Directors does not intend to issue any Common Stock or
securities convertible into Common Stock except on terms that the Board deems to
be in the best interests of the Corporation and its stockholders. Any future
issuance of Common Stock or securities convertible into Common Stock will be
subject to the rights of holders of outstanding shares of any Preferred Stock
which the Corporation may issue in the future.
The authorized but unissued shares of Common Stock could be used by
incumbent management or the Board of Directors to make more difficult a change
in control of the Corporation. Under certain circumstances such shares could be
used to create voting impediments or to frustrate persons seeking to effect a
takeover or otherwise gain control of the Corporation. For example, such
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shares could be privately placed with purchasers who might side with the Board
in opposing a hostile takeover bid. However, this proposal to amend the
Certificate is not in response to any effort of which the Corporation is aware
to accumulate the corporation's stock or obtain control of the Corporation.
In addition, the increase in authorized Common Stock might be
considered as having the effect of discouraging an attempt by another person or
entity, through the acquisition of a substantial number of shares of the Common
Stock, to acquire control of the Corporation with a view to imposing a merger,
sale of all or any part of the Corporation's assets or a similar transaction
that may not be in the best interest of all of the stockholders, since the
issuance of new shares could be used to dilute the stock ownership of a person
or entity seeking to obtain control of the Corporation. For information with
respect to the ownership of shares (including shares issuable upon exercise of
stock options) of the Corporation's voting stock by directors and executive
officers, see "Security Ownership of Certain Beneficial Owners and Management"
and "Executive Compensation of Officers and Directors."
The text of the proposed amendment increasing the authorized Common
Stock is set forth below:
"Resolved, that the first paragraph of Article 4 of the Corporation's
Certificate of Incorporation be, and hereby is, deleted in its entirety
and the following be, and hereby is, inserted in place thereof:
"The total number of shares of stock which the Corporation shall have
authority to issue is twenty million (20,000,000) shares, nineteen
million (19,000,000) of which shall be Common Stock, $.01 par value per
share, and one million (1,000,000) shares which shall be Preferred
Stock, $.01 par value per share, of which one thousand fifty (1,050) is
designated as Series A Preferred Stock, amounting in the aggregate to
Two Hundred Thousand and 00/100 Dollars ($200,000.00)."
REQUIRED AFFIRMATIVE VOTE
Under the provisions of Delaware law, the affirmative vote of at least
two-thirds of the outstanding shares of the Corporation's Common Stock is
required to adopt the proposed amendment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE
THE AUTHORIZED COMMON STOCK.
VOTING AT MEETING
The Board of Directors has fixed August 23, 1996 as the record date for
the determination of Stockholders entitled to vote at this meeting. At the close
of business on that date, there were outstanding and entitled to vote 3,953,731
shares of Common Stock.
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SOLICITATION OF PROXIES
The cost of solicitation of Proxies will be borne by the Corporation.
In addition to the solicitation of Proxies by mail, officers and employees of
the Corporation may solicit in person or by telephone. The Corporation may
reimburse brokers or persons holding stock in their names, or in the names of
their nominees, for their expense in sending Proxies and Proxy material to
beneficial owners.
REVOCATION OF PROXY
Subject to the terms and conditions set forth herein, all proxies
received by the Corporation will be effective, notwithstanding any transfer of
the shares to which such Proxies relate, unless prior to the Annual Meeting the
Corporation receives a written notice of revocation signed by the person who, as
of the record date, was the registered holder of such shares. The Notice of
Revocation must indicate the certificate number or numbers of the shares to
which such revocation relates and the aggregate number of shares represented by
such certificate(s).
STOCKHOLDER PROPOSALS
In order to be included in Proxy material for the 1997 Annual Meeting,
Stockholders' proposed resolutions must be received by the Corporation on or
before December 31, 1996. The Corporation suggests that proponents submit their
proposals by certified mail, return receipt requested, addressed to the
Secretary of the Corporation.
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ANNUAL REPORT
THE CORPORATION IS PROVIDING TO EACH STOCKHOLDER, WITHOUT CHARGE, A
COPY OF THE CORPORATION'S ANNUAL REPORT, INCLUDING THE FINANCIAL STATEMENTS FOR
THE CORPORATION'S MOST RECENT FISCAL YEAR ENDED MARCH 30, 1996.
MISCELLANEOUS
Management does not know of any other matter which may come before the
Annual Meeting. However, if any other matters are properly presented to the
Annual Meeting, it is the intention of the persons named in the accompanying
Proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
By Order of the Board of Directors,
Paul F. Johnson
Secretary
Millbury, Massachusetts
September 4, 1996
THE MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THIS MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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OMNI MULTIMEDIA GROUP, INC.
PROXY OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 26, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED hereby appoints Paul F. Johnson and Robert E. Lee, or
either of them, as Proxies, with full power of substitution to each, to vote for
and on behalf of the undersigned at the Annual Meeting of Stockholders of OMNI
MULTIMEDIA GROUP, INC. to be held at the Corporation's principal place of
business, 50 Howe Avenue, Millbury, Massachusetts, on Thursday, September 26,
1996 at 10:00 a.m., and at any adjournment or adjournments thereof. The
undersigned hereby directs the said Paul F. Johnson and Robert E. Lee to vote in
accordance with their judgment on any matters which may properly come before the
Annual Meeting, all as indicated in the Notice of the Annual Meeting, receipt of
which is hereby acknowledged, and to act on the following matters set forth in
such notice as specified by the undersigned:
(1) Proposal to elect five (5) members of the Board of Directors of the
Corporation, each of whom is currently serving as a Director of the
Corporation.
INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE STRIKE
SUCH NOMINEE'S NAME FROM THE LIST BELOW.
/ / FOR ALL nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees
listed below
PAUL F. JOHNSON
ROBERT E. LEE
RICHARD A. PILOTTE
RONALD F. LADNER
RICHARD L. WISE
(2) Proposal to ratify the selection of Price Waterhouse LLP as independent
auditors of the Corporation for the fiscal year ending March 29, 1997.
/ / FOR / / AGAINST / / ABSTAIN
(3) Proposal to approve an amendment to the Corporation's 1994 Stock Option
Plan (the "Plan") to increase from 270,000 to 2,000,000 the aggregate
number of shares of Common Stock of the Corporation reserved for
issuance under the Plan.
/ / FOR / / AGAINST / / ABSTAIN
(4) Proposal to approve an amendment to the Corporation's Certificate of
Incorporation to increase from 14,000,000 to 19,000,000 the aggregate
number of authorized shares of Common Stock of the Corporation.
/ / FOR / / AGAINST / / ABSTAIN
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 and 4.
(5) In the Corporation's discretion to transact such other business as may
properly come before the meeting or any adjournment or adjournments
thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR AND IN
FAVOR OF THE ITEMS SET FORTH ABOVE UNLESS A CONTRARY SPECIFICATION IS
MADE.
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
Please sign exactly as name appears below.
Dated:_____________________, 1996
_________________________________
Signature
_________________________________
Signature if held jointly
_________________________________
Printed Name
_________________________________
_________________________________
Address
NOTE: When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If the person named on the stock certificate has died, please submit
evidence of your authority. If a corporation, please sign in full corporate name
by the President or authorized officer and indicate the signer's office. If a
partnership, please sign in partnership name by authorized person.
