<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
KRUG INTERNATIONAL CORP.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, No Par Value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
501067102
- --------------------------------------------------------------------------------
(CUSIP Number)
Ronald Vannuki, 100 Wilshire Blvd., Santa Monica, CA (310) 917-6600
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
April 30, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 2 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FORTUNA ACQUISITION PARTNERS, L.P. TIN: 954577093
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WORKING CAPITAL
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 1,779,831
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,391,652
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,779,831
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 3 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FORTUNA ACQUISITION CORP. TIN: Pending
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 1,779,831
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,391,652
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,779,831
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CORPORATION
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 4 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STROME - SUSSKIND HEDGECAP FUND, L.P. TIN: 954385662
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WORKING CAPITAL
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
291,113
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
291,113
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 5 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STROME HEDGECAP, LIMITED TIN: N/A
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WORKING CAPITAL
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
97,044
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
97,044
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CORPORATION
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 6
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 6 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STROME SUSSKIND INVESTMENT MANAGEMENT, L.P. TIN: 95-4450882
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
388,157
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,157
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 7
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 7 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MARK E. STROME TIN: ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
388,157
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,157
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
INDIVIDUAL
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 8
SCHEDULE 13D
CUSIP NO. 501067102 PAGE 8 OF 18 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SSCO, INC. TIN: 95-4450 883
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
388,157
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
388,157
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CORPORATION
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 9
Krug International Corporation Page 9 of 18
CUSIP No. 501067102
May 17, 1996
Item 1. Security and Issuer.
This filing relates to the Common Stock, without par value (the "Krug
Common Stock"), of Krug International Corporation (the "Company"). The Krug
Common Stock trades on the NASDAQ maintained by the National Association of
Securities Dealers. The Company's principal executive offices are located at 6
North Main Street, Suite 500, Dayton, Ohio 45402-1900; the Company's telephone
number at that location is (513) 224-9066. The number of issued and
outstanding shares of Krug Common Stock as reported on the Company's 10-Q for
the quarter ended December 31, 1995, is 5,051,950.
Item 2. Identity and Background.
(a) This statement is filed by (i) Fortuna Acquisition Partners, L.P., a
California limited partnership ("Fortuna Acquisition Partners"), with respect
to shares of Krug Common Stock held or beneficially owned by the partnership,
(ii) Fortuna Acquisition Corp., a Delaware Corporation, as General Partner of
Fortuna Acquisition Partners, L.P.; (iii) Strome-Susskind HedgeCap Fund, L.P.
with respect to shares of Krug Common Stock beneficially owned by the
partnership; (iv) Strome HedgeCap, Limited with repsect to shares of Krug Common
Stock beneficially owned by the Corporation; (v) Strome Susskind Investment
Management, L.P. as General Partner and discretionary investment adviser of
Strome-Susskind HedgeCap Fund, L.P., and as discretionary investment
adviser of Strome-Susskind HedgeCap, Ltd.; (vi) SSCO, Inc. as General Partner
of Strome Susskind Investment Management, L.P.; and (vii) Mark E. Strome as a
Settlor and Trustee of The Strome Family Trust, dated 12/9/93, the controlling
shareholder of SSCO, Inc. The foregoing persons hereinafter sometimes are
referred to collectively as the "Reporting Persons."
The General Partner of Fortuna Acquisition Partners, L.P., is Fortuna
Acquisition Corp., a Delaware corporation.
The General Partner of Strome-Susskind HedgeCap Fund, L.P. is
Strome Susskind Investment Management, L.P., a Delaware limited partnership.
(b) The principal business address of (i) Fortuna Acquisition
Partners, L.P., and Fortuna Acquisition Corp. is 100 Wilshire Boulevard,
Fifteenth Floor, Santa Monica, California 90401; (ii)
Strome-Susskind HedgeCap Fund, L.P. is 100 Wilshire Boulevard, Fifteenth Floor,
Santa Monica, California 90401; (iii) Strome HedgeCap, Limited is c/o Fund
Services (Cayman Islands) Ltd., Corporate Centre, West Bay
Road, P.O. Box 31106 SMB, Grand Cayman, Cayman Islands; (iv) Strome Susskind
Investment Management, L.P., 100 Wilshire Boulevard, Fifteenth Floor, Santa
Monica, California 90401; (v) SSCO, Inc., 100 Wilshire Boulevard, Fifteenth
Floor, Santa Monica, California 90401; and (vi) Mark E. Strome, 100 Wilshire
Boulevard, Fifteenth Floor, Santa Monica, California 90401.
<PAGE> 10
Krug International Corporation Page 10 of 18
CUSIP No. 501067102
May 17, 1996
(c) (i) The business of Fortuna Acquisition Partners is that of a
private investment partnership engaging in the purchase and sale of securities
for investment for its own account; (ii) the business of Fortuna Acquisition
Corp. is to serve as the general partner of Fortuna Acquisition Partners, L.P.;
(iii) the business of Strome-Susskind HedgeCap Fund, L.P. is that of a private
investment partnership concentrating upon countercyclical and non-conventional
investments; (iv) the business of Strome HedgeCap, Ltd. is the provision of
countercyclical and non-conventional investments to offshore, non-United
States, entities and investors; (v) the business of Strome Susskind
Investment Manager, L.P. is the provision of discretionary investment
management services to institutional clients; (vi) the business of SSCO, Inc.
is to serve as the general partner of Strome Susskind Investment Management,
L.P.; and (vii) the business of Mark E. Strome is the provision of
discretionary investment management services through Strome Susskind Investment
Management, L.P.
(d) Neither Fortuna Acquisition Partners, L.P., nor Fortuna
Acquisition Corp., nor Strome-Susskind HedgeCap Fund, L.P., nor Strome
HedgeCap, Ltd., nor Strome Susskind Investment Management, L.P., nor SSCO,
Inc., nor Mark E. Strome has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Neither Fortuna Acquisition Partners, L.P., nor Fortuna
Acquisition Corp., nor Strome-Susskind HedgeCap Fund, L.P., nor Strome
HedgeCap, Ltd., nor Strome Susskind Investment Management, L.P., nor SSCO,
Inc., nor Mark E. Strome has, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or
finding any violation with respect to such laws.
(f) (i) Fortuna Acquisition Partners, L.P., is a California limited
partnership; (ii) Fortuna Acquisition Corp., is a Delaware Corporation; (iii)
Strome-Susskind HedgeCap Fund, L.P. is a Delaware limited partnership; (iv)
Strome HedgeCap, Ltd. is a Cayman Islands Corporation; (v) Strome Susskind
Investment Management, L.P. is a Delaware limited partnership; (vi) SSCO, Inc.
is a Delaware corporation; and (vii) Mark E. Strome is a California resident.
Item 3. Source and Amount of Funds and Other Consideration
(a) The net investment cost (including commissions, if any) of the
shares of Krug Common Stock beneficially owned by Fortuna Acquisition Partners,
L.P., is $8,251,325.50. The source of funds for this consideration was the
partnership's working capital,
<PAGE> 11
Krug International Corporation Page 11 of 18
CUSIP No. 501067102
May 17, 1996
(b) The net investment cost (including commissions, if any) of the
245,400 shares of Krug Common Stock beneficially owned by Strome-Susskind
HedgeCap Fund, L.P. is $1,349,700. The source of funds for this consideration
was partnership working capital.
(c) The net investment cost (including commissions, if any) of the
81,800 shares of Krug Common Stock beneficially owned by Strome HedgeCap,
Limited is $449,900. The source of funds for this consideration was
corporation working capital.
Item 4. Purpose of the Transaction.
The purpose of the acquisition of the shares by the Reporting Persons
is to acquire the stock of the Company's founder, Maurice F. Krug, to
participate in the active management of the Company, and to gain representation
on the Company's Board of Directors.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, Fortuna Acquisition Partners, L.P. owns
beneficially 1,779,831 shares of Krug Common Stock, which includes 245,400
shares beneficially owned by Strome-Susskind HedgeCap Fund, L.P. and 81,800
shares beneficially owned by Strome HedgeCap, Limited by virtue of a Proxy
Agreement which establishes an irrevocable proxy in favor of Fortuna
Acquisition Corp., subject to certain conditions. This beneficial ownership
also includes 218,611 warrants to purchase Krug Common Stock, and beneficial
ownership of 45,713 warrants held by Strome-Susskind HedgeCap Fund, L.P. and
15,244 warrants held by Strome HedgeCap, Limited by virtue of the
above-referenced Proxy Agreement.
Fortuna Acquisition Partners, L.P., is the beneficial owner of 29.7%
of the Krug Common Stock.
(b) As of the date hereof, Strome-Susskind HedgeCap Fund,
<PAGE> 12
Krug International Corporation Page 12 of 18
CUSIP No. 501067102
May 17, 1996
L.P. owns beneficially 291,113 shares of Krug Common Stock, with sole power of
disposition. This beneficial ownership includes 45,713 warrants to purchase
Krug Common Stock,
Strome-Susskind HedgeCap Fund, L.P. is the beneficial owner of 4.9% of
the Krug Common Stock.
(c) As of the date hereof, Strome Hedgecap, Limited owns
beneficially 97,044 shares of Krug Common Stock. This beneficial ownership
includes 15,244 warrants to purchase Krug Common Stock.
Strome HedgeCap, Ltd. is the beneficial owner of 1.6% of the Krug
Common Stock.
(d) As of the date hereof, Strome Susskind Investment Management
L.P. ("SSIM"), as (i) discretionary investment adviser and general partner of
Strome-Susskind HedgeCap Fund, L.P., and (ii) discretionary investment adviser
of Strome HedgeCap, Limited, owns beneficially 388,157 shares of Krug Common
Stock, with shared power of disposition. This beneficial ownership includes
60,957 warrants to purchase Krug Common Stock.
(e) As of the date hereof, SSCO, Inc., as general partner of SSIM,
owns beneficially 388,157 shares of Krug Common Stock, with shared power of
disposition. This beneficial ownership includes 60,957 warrants to purchase
Krug Common Stock.
(f) As of the date hereof, Mark E. Strome, as a Settlor and
Trustee of The Strome Family Trust dated 12/9/93, which trust is the
controlling shareholder of SSCO, Inc., owns beneficially 388,157 shares of Krug
Common Stock, with shared power of disposition. This beneficial ownership
includes 60,957 warrants to purchase Krug Common Stock.
The reporting persons in the aggregate may be deemed to own an
aggregate of 1,500,241 shares of Krug Common Stock, constituting approximately
29.7% of the Krug Common Stock.
The percentages used herein are calculated based upon the 5,051,950
shares of Krug Common Stock, as set forth in the Company's 10-Q for the period
ended December 31, 1995.
(b) Fortuna Acquisition Partners has the power to vote and to
dispose of the Krug Common Stock owned by it, which power may be exercised by
general partner Fortuna Acquisition Corp. In addition, Fortuna Acquisition
Corp. has the power to vote, but not the power to dispose, 245,400 shares
beneficially owned by Strome-Susskind HedgeCap Fund, L.P. and 81,800 shares
beneficially owned by Strome HedgeCap, Limited by virtue of a Proxy Agreement
among the parties. As described above, SSIM, by virtues of its positions as (i)
discretionary investment adviser and general partner of Strome-Susskind
HedgeCap Fund, L.P., and (ii) discretionary investment adviser of Strome
HedgeCap, Limited, has the power to dispose of, but not vote the 291,113 and
97,038 shares including warrants of Krug Common Stock beneficially owned,
respectively, by Strome-Susskind HedgeCap Fund, L.P. and Strome HedgeCap,
Limited SSCO, Inc. as general partner of SSIM, also has the power to dispose
of, but not to vote, such shares of Krug Common Stock. Mark E. Strome, as
settlor and trustee of The Strome Family Trust, dated December 9, 1993, which
trust is the controlling shareholder of SSCO, Inc., also has the power to
dispose of, but not to vote, such shares of Krug Common Stock.
(c) The trading dates, number of shares purchased or sold and
price per share for all transactions by Fortuna Acquisition Partners, L.P.,
Strome-Susskind HedgeCap Fund, L.P., and Strome HedgeCap, Ltd. for the past
ninety days are set forth on Schedules A hereto. All such transactions were
private placements. No other transactions were effected by Fortuna Acquisition
Partners, L.P., Strome-Susskind HedgeCap Fund, L.P., and Strome HedgeCap,
Limited during such period.
<PAGE> 13
Krug International Corporation Page 13 of 18
CUSIP No. 501067102
May 17, 1996
(d) No person other than each respective owner referred to herein
of Krug Common Stock is known to have the right to receive or the power to
direct the receipt of dividends from or the proceeds of sale of such Krug
Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
The Reporting Persons expect to enter into a Proxy Agreement,
essentially in the form of Exhibit 1, which will appoint Fortuna Acquisition
Corp., the general partner of Fortuna Acquisition Partners, L.P., as
irrevocable Proxy for the shares of Krug Common Stock owned by Strome-Susskind
HedgeCap Fund, L.P. and Strome HedgeCap, Limited, subject to certain conditions
therein set forth. The agreement also provides for the payment to Fortuna
Acquisition Corp. of a finder's fee equal to 10% of all gains, if any, realized
by the other two parties that are attributable to the Krug Common Stock and
warrants.
Item 7. Matter to be Filed as Exhibits.
There is filed herewith as Exhibit 99.1 a Proxy Agreement essentially
in the form expected to be executed by and among the Reporting Persons.
<PAGE> 14
Krug International Corporation Page 14 of 18
CUSIP No. 501067102
May 17, 1996
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: May 17, 1996
Fortuna Acquisition Partners, L.P.
By Fortuna Acquisition Corp., its General Partner
- ---------------------------------------------
By: Ronald J. Vannuki
Chairman and Chief Executive Officer
FORTUNA ACQUISITION CORP.
- ---------------------------------------------
By: Ronald J. Vannuki
Chairman and Chief Executive Officer
STROME-SUSSKIND HEDGECAP FUND, L.P.
By Strome Susskind Investment Management, L.P., its General Partner
By SSCO, Inc., its General Partner
- ---------------------------------------------
By: Jeffrey Lambert, Chief Financial Officer
STROME HEDGECAP, LTD.
By Strome Susskind Investment Management, L.P., its Investment Manager
By SSCO, Inc., its General Partner
- ---------------------------------------------
By: Jeffrey Lambert, Chief Financial Officer
STROME SUSSKIND INVESTMENT MANAGEMENT, L.P.
By SSCO, Inc., its General Partner
- ---------------------------------------------
By: Jeffrey Lambert, Chief Financial Officer
SSCO, Inc.
- ---------------------------------------------
By: Jeffrey Lambert, Chief Financial Officer
MARK E. STROME
- ---------------------------------------------
<PAGE> 15
Krug International Corporation Page 15 of 18
CUSIP No. 501067102
May 17, 1996
Appendix A
Transactions Since February 1, 1996
<TABLE>
<CAPTION>
Beneficial Owner Date Bought (Sold) Consideration
- ---------------- ---- ------------- -------------
<S> <C> <C> <C>
Fortuna Acquisition
Partners, L.P. 4/30/96 1,173,041 $6,453,755
Strome-Susskind
HedgeCap Fund, L.P. 4/30/96 245,400 $1,349,700
Strome
HedgeCap, Ltd. 4/30/96 81,800 $449,900
</TABLE>
<PAGE> 16
Krug International Corporation Page 16 of 18
CUSIP No. 501067102
May 17, 1996
EXHIBIT A
JOINT FILING AGREEMENT PURSUANT TO RULE 13d-1(f) (1)
This agreement is made pursuant to Rule 13d-1(f)(1) under the
Securities Exchange Act of 1934 (the "Act") by and among the parties listed
below, each referred to herein as a "Joint Filer" the Joint Filers agree that a
statement of beneficial ownership as required by Section 13(d) of the Act and
the Rules thereunder may be filed on each of their behalf of Schedule 13D or
Schedule 13G, as appropriate, and that said joint filing may thereafter be
amended by further joint fillings. The Joint Filers state that they each
satisfy the requirements for making a joint filing under Rule 13d-1.
Dated May 17, 1996
FORTUNA ACQUISITION PARTNERS, L.P.
By Fortuna Acquisition Corp., its General Partner
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By: Ronald J. Vannuki
Chairman and Chief Executive Officer
FORTUNA ACQUISITION CORP.
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By: Ronald J. Vannuki
Chairman and Chief Executive Officer
STROME-SUSSKIND HEDGECAP FUND, L.P.
- -By Strome Susskind Investment Management, L.P., its General Partner
- -By SSCO, Inc., its General Partner
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By: Jeffrey Lambert, Chief Financial Officer
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Krug International Corporation Page 17 of 18
CUSIP No. 501067102
May 17, 1996
STROME HEDGECAP, LTD.
By Strome Susskind Investment Mangement, L.P., its Investment Manager
By SSCO, Inc., its General Partner
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By: Jeffrey Lambert, Chief Financial Officer
STROME SUSSKIND INVESTMENT MANAGEMENT, L.P.
By: SSCO, Inc., its General Partner
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By: Jeffrey Lambert, Chief Financial Officer
SSCO, INC.
- ---------------------------------------------
By: Jeffrey Lambert, Chief Financial Officer
MARK E. STROME
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Page 18 of 18
POWER OF ATTORNEY FORMS FOR
SCHEDULES 13D AND 13G AND FORM 13F
I, Mark E. Strome in my individual capacity and as a principal of
Strome Susskind Investment Management, L.P., hereby appoint Jeffrey S. Lambert
as attorney-in-fact and agent, in all capacities, to execute, on my behalf and
on behalf of Strome Susskind Investment Management, L.P. and to file with the
appropriate issuers, exchanges and regulatory authorities, any and all
Schedules 13D and 13G and Forms 13F and documents relating therto required to
be filed under the Securities Exchange Act of 1934, including exhibits,
attachments and amendments thereto and request for confidential treatment of
information contained therein. I hereby grant to said attorney-in-fact full
authority to do every act necessary to be done in order to effectuate the same
as fully, to all intents and purposes, as I could if personally present,
thereby ratifying all that said attorneys-in-fact and agents may lawfully do
or cause to be done by virtue hereof.
I hereby execute this Power of Attorney as of this 12th day of August,
1994.
/s/ MARK E. STROME
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Mark E. Strome
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PROXY AGREEMENT
This Agreement is entered into as of May __, 1996 among Fortuna
Acquisition Corp. ("FAC"), Strome-Susskind HedgeCap Fund, L.P. ("LP"),
Strome HedgeCap, Limited ("Ltd.") and Strome Susskind Investment Management,
L.P. ("SSIM").
WHEREAS, LP and Ltd. have acquired (1) 245,400 shares and 81,800
shares, respectively (collectively, the "Shares"), of the no par capital stock
(the "Stock") of KRUG International Corp., an Ohio corporation ("Krug"), and
(2) 45,713 and 15,244, respectively, of the warrants (the "Warrants")
(convertible 1:1 into shares of the Stock) issued by Krug.
WHEREAS, SSIM, as general partner and discretionary investment manager
of LP and as discretionary investment manager of Ltd., has agreed to pay to
FAC, out of SSIM's own resources, a finder's fee with respect to the
acquisition of the Shares by LP and Ltd.
NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. LP and Ltd. (each an "Owner") each hereby constitutes and appoints
FAC, and FAC's permitted assignee, as such Owner's true and lawful attorney,
for such Owner and in such Owner's name, place and stead with full power of
substitution until the termination of this Agreement pursuant to Paragraph 12
below, to vote, or otherwise give consents with respect to, as such Owner's
proxy all of the Shares owned by such Owner (and any shares of Stock that may
hereafter be acquired by such Owner through exercise of the Warrants, or any
Stock split or Stock dividends) at any and all meetings, regular or special,
of the stockholders of Krug, or any adjournments thereof, held during the term
of this Agreement, in transacting any business as may come before such meetings,
including, but not limited to, the election of directors, as fully as such
Owner could do if personally present. FAC shall vote at its discretion on all
matters which may come before such meetings. All previous proxies given by
the Owners respecting the Shares are hereby revoked. This proxy shall be
irrevocable until, and shall terminate upon, the termination of this Agreement
pursuant to Paragraph 12 below.
2. SSIM hereby agrees to pay FAC, out of SSIM's own resources, a
finder's fee equal to 10% of all gains, if any, realized in cash by LP and Ltd.
that are attributable to LP's and Ltd.'s respective investments in the Stock
and Warrants. SSIM shall pay FAC its portion of any such realized gains within
30 days after such realization by LP and Ltd.
3. SSIM, LP and Ltd. acknowledge and agree with FAC that during the
term of this Agreement (a) with respect to their ownership of the Stock and
Warrants, they shall be treated as a member of a "group" (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Act")) that includes Fortuna Acquisition Partners, L.P. and FAC, and (b) they
shall be included in such group's filings under Section 13(d) of the Act and
under any similar provisions of applicable state law. The parties agree that
FAC shall be responsible for making in a timely manner all filings (including,
without limitation, all amended or supplemented filings) required to be made by
such group under
<PAGE> 2
Section 13(d) of the Act and under any similar provisions of applicable state
law during the term of this Agreement; provided, however, that FAC shall
provide SSIM with a copy of each such proposed filing at least three business
days in advance of the date on which such filing must be made with the
appropriate regulatory authority, and no such filing shall be made if SSIM
objects in writing to the form or substance of the filing.
4. This Agreement shall not be assigned by any party without the prior
written consent of the other parties, except that upon prior written notice to
the other parties FAC may assign this Agreement to another entity with
substantially the same ownership as FAC immediately prior to such assignment.
5. Except as otherwise provided in this Agreement, each party shall
bear all expenses incidental to the performance of its obligations under this
Agreement.
6. FAC agrees to indemnify and hold harmless SSIM, LP and Ltd., and
each of their respective affiliates, directors, officers, partners,
shareholders, employees, agents and each person, if any, who controls them
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), against any losses, claims, damages, settlements, liabilities or
expenses (including, without limitation, reasonable attorneys' fees and
expenses whether or not involving a third party) (collectively, "Claims") to
the extent any such Claim arises out of or is based upon (a) any negligent or
willful breach by FAC of a representation, warranty, covenant, or provision
made by it or set forth in this Agreement; or, (b) any untrue statement of a
material fact contained in any regulatory filing required to be made by FAC
pursuant to Section 3 above (each a "Regulatory Filing"), and any omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the indemnification
obligation set forth in Section 6(b) above shall not apply to statements in or
omissions from any Regulatory Filing made in reliance upon and in conformity
with information furnished to FAC in writing by SSIM expressly for use in such
Regulatory Filing. FAC shall reimburse the persons indemnified hereunder for
any legal or other expenses reasonably incurred, as incurred, by them in
connection with investigating or defending such Claim.
7. Each notice required by this Agreement shall be given in writing
and delivered personally or mailed by certified mail or courier service to the
other party at the following address or such other address as each party may
give notice to the other:
100 Wilshire Boulevard
15th Floor
Santa Monica, CA 90401
A notice given pursuant to this Section 7 shall be deemed given immediately
when delivered personally, three (3) business days after the date of certified
mailing, and one (1) business day after delivery by overnight courier service.
8. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California applicable to agreements
fully executed and to be performed therein.
9. This Agreement contains the full and complete understanding of the
parties and supersedes all prior representations, promises, statements,
arrangements, agreements, warranties and understandings between the parties
with respect to the subject matter hereof, whether oral or written, express or
implied.
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10. This Agreement may be modified or amended, and the terms of this
Agreement may be waived, only by a writing signed by each of the parties.
11. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.
12. This Agreement shall continue until the earlier to occur of (a)
January 1, 2002, (b) this dissolution of Fortuna Acquisition Partners, L.P., or
(c) the date on which Ronald J. Vannuki is no longer both affiliated with
Fortuna Advisors, Inc. (or its successor) and a registered representative of
SSIM's broker-dealer affiliate. The provisions of Paragraph 6 above shall
survive termination of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
through their duly authorized representatives as of the date first above
written.
FORTUNA ACQUISITION CORP. STROME SUSSKIND INVESTMENT
MANAGEMENT, L.P.
By: By: SSCO, Inc.
------------------------------ General Partner
Ronald J. Vannuki,
Chairman and Chief Executive Officer
By:
----------------------
Jeffrey S. Lambert,
Chief Operating &
Financial Officer
STROME-SUSSKIND HEDGECAP STROME HEDGECAP, LTD.
FUND, L.P.
By: STROME SUSSKIND BY: STROME SUSSKIND
INVESTMENT MANAGEMENT, INVESTMENT MANAGEMENT,
L.P., General Partner L.P.
By: SSCO, Inc. By: SSCO, Inc.
General Partner General Partner
By: By:
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Jeffrey S. Lambert, Jeffrey S. Lambert,
Chief Operating & Chief Operating &
Financial Officer Financial Officer
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