SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __________)
Filed by the Registrant *
Filed by a Party other than the Registrant *
Check the appropriate box:
d Preliminary Proxy Statement
Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e) (2))
x Definitive Proxy Statement
* Definitive Additional Materials
* Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Creative Technologies Corp.
___________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
* $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
* $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
* Fee computed on table below per Exchange Act Rule 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:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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* 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,
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(4) Date Filed:
CREATIVE TECHNOLOGIES CORP.
170 53RD STREET
BROOKLYN, NEW YORK 11232
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 23, 1997
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Creative Technologies Corp. (the
"Company") will be held at the offices of the Company, 170 53rd Street,
Brooklyn, New York on September 23, 1997 at 10:00 A.M. New York time, to
consider the following proposals:
1. To elect directors, each to serve for a term of one year or until his
respective successor is elected and qualifies;
2. To ratify the appointment of Richard A. Eisner & Company as independent
accountants of the Company; and
3. To transact such other business as may properly come before the meeting.
Shareholders of record on the books of the Company at the close of business
on August 25, 1997 will be entitled to vote at the meeting or any adjournment
thereof. A copy of the annual report containing the financial statements of
the Company for the year 1996 is enclosed.
All shareholders are cordially invited to attend the meeting. Whether or not
you expect to attend, you are requested to sign, date and return the
enclosed proxy promptly. Shareholders who execute proxies retain the right
to revoke them at any time prior to the voting thereof. A return envelope
which requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors
Dated: New York, New York David Selengut
August 18, 1997 Secretary
CREATIVE TECHNOLOGIES CORP.
170 53RD STREET
BROOKLYN, NEW YORK 11232
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 23, 1997
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Creative Technologies Corp. (the "Company") of proxies
in the enclosed form for the Annual Meeting of Shareholders to be held at the
offices of the Company, 170 53rd Street, Brooklyn, New York on September 23,
1997, at 10:00 A.M. local time, and for any adjournment or adjournments
thereof, for the purposes set forth in the foregoing Notice of Annual Meeting
of Shareholders.
At the Annual Meeting the Shareholders will vote to:
1. Elect the directors of the Company;
2. Ratify the selection of Richard A. Eisner and Company as the Company's
independent auditors; and
3. Transact such other business as may properly come before the meeting.
The Company knows of no other matters to be presented at the Annual Meeting.
If any additional matters should be properly presented, proxies shall be
voted in accordance with the judgment of the proxy holders.
Each shareholder of the Company is requested to complete, sign, date and
return the enclosed proxy without delay in order to ensure that the shares owned
by such shareholder are voted at the Annual Meeting. Any shareholder may
revoke a proxy at any time before it is voted by: (i) delivering a written
notice to the Secretary of the Company, at the address of the Company set
forth above, stating that the proxy is revoked; (ii) executing a subsequent
proxy and delivering it to the Secretary of the Company, or (iii) attending
the Annual Meeting and voting in person. Each properly executed proxy
returned will be voted as directed. In addition, if no directions are given
or indicated, the persons named in the accompanying proxy intend to vote
proxies in favor of the foregoing proposals.
The Company will bear the cost of soliciting proxies. Directors, officers
and employees of the Company may solicit proxies personally or by telephone,
telegram or mail. Such directors, officers and employees will not be
additionally compensated for such solicitation but may be reimbursed for
reasonable out-of-pocket expenses incurred in connection therewith.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of proxy material to the
beneficial owners of the Common Stock held of record by such persons and the
Company will, upon request, reimburse such custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred in connection
therewith.
The principal executive offices of the Company are located at 170 53rd
Street, Brooklyn, New York 11232. The approximate date on which this Proxy
Statement and the accompanying form of Proxy will first be sent or given to
the Company's shareholders is August 26, 1997.
VOTING SECURITIES
Only holders of Shares of Common Stock, par value $.09 per share (the
"Shares"), of record as at the close of business on August 25, 1997 are
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. On the record date there were issued and outstanding 2,611,394
Shares. Each outstanding Share is entitled to one vote upon all matters to
be acted upon at the meeting. The holders of a majority of the outstanding
Shares shall constitute a quorum. The affirmative vote of the holders of
the majority of Shares present at the Annual Meeting and voting is necessary
for the election of directors and for the approval of each resolution. Votes
"withheld" will be counted as present at the meeting and, accordingly, will
have the effect of a negative vote.
The holders of Shares are entitled to receive such dividends, if any, as may be
declared, from time to time, by the Board of Directors from funds legally
available therefor, subject to the dividend preferences of the Preferred
Stock, if any. Upon liquidation or dissolution of the Company, the holders
of Shares are entitled to share ratably in all assets available for
distribution after payment of liabilities and liquidation preferences of the
Preferred Stock, if any. Holders of Shares have no preemptive rights, no
cumulative voting rights and no rights to convert their Shares into any other
securities.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 1997, certain information as
to the stock ownership of each person known by the Company to own
beneficially 5% or more of the Company's outstanding Shares, by each
director of the Company who owns any Shares, and by all officers and
directors as a group:
Percentage of
Class
Name of Beneficial Number of Shares of As of
Owner Common Stock Owned (1) June 30, 1997
Ace Surgical Supply Co., Inc. 1,152,000(2) 30.6%
170 53rd Street
Brooklyn, NY
Bonnie Septimus (3) 169,711 6.5%
72 Lord Avenue
Lawrence, NY
David Guttmann (4) 1,596,427 40%
170 53rd Street
Brooklyn, NY
Richard Helfman (5) 47,777 1.8%
170 53rd Street
Brooklyn, NY
All officers and
directors as a
group (4 persons)(6) 1,654,203 41.2%
(1) Except as otherwise indicated, all shares are beneficially owned and sole
voting and investment power is held by the persons named.
(2) Consists of shares issuable upon conversion of the 1996-A Preferred Stock.
(3) A portion of the Common Stock is owned by Mrs. Septimus as nominee for
certain members of her family.
(4) A portion of the Common Stock is currently being held by Mr. Guttmann as
nominee for certain members of his immediate family. Includes 16,666 shares
issuable upon exercise of stock options. Also includes shares of Common
Stock issuable upon conversion of 1996 and 1996-A Preferred Stock owned by
him and Ace Surgical Supply Co., Inc., a corporation in which he is a
principal.
(5) Includes 25,000 shares underlying immediately exercisable options.
(6) Includes the shares described in footnotes (4) and (5) above.
DIRECTORS OF THE COMPANY
The Directors and Executive Officers of the Company are as follows:
Name Age Title
David Guttmann 50 Chairman of the Board and
Chief Executive Officer
David Refson 51 Vice Chairman and
Director
Richard Helfman 50 Director and President
David Selengut 41 Secretary
David Guttmann has been a director and Chief Executive Officer of the Company
since May 1994 and Chairman of the Board since May 1997. From June 1983 until
May 1994 Mr. Guttmann was Chief Executive Officer of Applied Microbiology
Inc., and was its Chairman until October 1995. Mr. Guttmann also serves as
Chairman of Ace Surgical Supply Co., Inc. ("Ace"), a
supplier of disposable surgical materials to the health care field.
David Refson has been Vice Chairman and a Director of the Company since January
1985. Mr. Refson is the President and principal stockholder of Newmarket Co.
Limited of Liberia ("Newmarket"), which invests in various entities. Mr.
Refson has been a private investor for more than the past five years and in
his capacity as President of Newmarket acts as a consultant to a number of
foreign companies.
Richard Helfman has been a Director of the Company since April 1990 and
President since March 1990. From May 1987 to June 1989, Mr. Helfman was a
commercial lending officer at The First New York Bank for Business, and from
1979 until May 1987, was a commercial lending officer at Extebank.
David Selengut was elected Secretary of the Company in September 1987. Mr.
Selengut has been a partner at the law firm of Bernstein & Wasserman, L.L.P.
since June 1997 and was a Partner at the law firm of Singer, Bienenstock,
Zamansky, Ogele & Selengut, LLP. from May 1995 until April 1997. Those firms
have acted as counsel to the Company with respect to certain matters. From
May 1988 until April 1995 he was an Associate in the law firm of Neiman
Ginsburg & Mairanz P.C., New York, New York.
Each of the Company's Directors has been elected to serve until the next annual
meeting of the stockholders. The Company's executive officers are appointed
annually by the Company's Directors. Each of the Company's Directors and
executive officers continues to serve until his successor has been elected
and qualified. Pursuant to a management agreement with Ace, Ace has
the right to appoint two members of the Board of Directors. Ace has never
exercised this right.
To the Company's knowledge, there were no delinquent 16(a) filers for
transactions in the Company's securities during the year ended December 31,
1996.
To the Company's knowledge, there are no material proceedings to which any
Director or executive officer of the Company, or any associate of any such
Director or executive officer, is a party adverse to the Company or has an
interest adverse to the Company. Each of the directors attended each of the
Board of Directors meetings in 1996.
EXECUTIVE COMPENSATION
The compensation paid to the Company's Chief Executive Officer and to each of
the other executive officers whose total compensation exceeded $100,000
during each of the preceding three fiscal years is as follows:
1996 SUMMARY COMPENSATION TABLE
Name and Principal Year AnnnualOther Annual Long-Term
Position Compensation Compensation Compensation
Salary ($) ($) Awards Options
(#)
David Guttmann, 1996 $50,000 16,666(2)
Chief Executive Officer 1995 $128,218(1)
1994 $88,269(1) -0-
Richard Helfman, 1996 $180,000 25,000(3)
President 1995 $187,692 -0-
1994 $234,576
1993 $175,000 $30,000(3) -0-
Benjamin Sporn, 1996 -0- -0- 16,666(2)
Director
(1) Represents compensation since May, 1994. David Guttmann was being
compensated at the rate of $150,000 per annum. Mr. Guttmann voluntarily
reduced his salary to $50,000 per annum during the latter part of 1995.
(2) Represents options previously granted with the exercise price lowered to
$2.05 on April 30, 1996.
(3) Includes 16,666 options previously granted with the exercise price
lowered to $2.05 on April 30, 1996.
OPTION GRANTS IN 1996
Name Options Percent of Total Exercise Expiration
(a) Granted Options Granted to Price Date
(b Employees in Fiscal Year $
1996
David Guttmann, 16,666(1) 13.7% 2.05 May 26, 2004
Chief Executive Officer
Richard Helfman 16,666(1) 13.7% 2.05 May 25, 2004
8,333 6.8% 2.05 April 30, 2001
Benjamin Sporn 16,666(1) 13.7% 2.05 June 10, 2003
(1) Represents options previously granted with the exercise price lowered to
$2.05 per share on April 30, 1996.
AGGREGATED OPTION EXERCISES IN 1996 AND FOR YEAR-END OPTION VALUES
Number of Value of
Unexercised Unexercised
Options in-the-Money
at Fiscal Options
Year-End (#) at Fiscal
Year-End
($)
Shares Value
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
David Guttmann -0- -0- 16,666/0 -0-
Benjamin Sporn -0- -0- 16,666/0 -0-
Richard Helfman -0- -0- 25,000/0 -0-
The Company maintained a Qualified Retirement Plan and Trust for qualified
employees effective as of January 1, 1993. Under the plan, a profit sharing
plan, the Company's contributions are discretionary. The Company terminated
the Plan in 1996.
At a Board of Directors meeting held on April 30, 1996, the Board of
Directors determined that it should issue 46,666 stock options to certain
officers and employees of the Company exercisable at $2.05 per share, the
market price on April 29, 1996, in order to provide an incentive for them to
continue providing services to the Company. For the same reason, the Board
of Directors determined that it should lower the exercise price of 86,666
stock options previously issued from $3.00 per share to $2.05 per share, the
market price on April 29, 1996, of which 16,666 stock options were previously
issued to each of Benjamin Sporn, David Guttmann and Richard Helfman.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Barry Septimus and David Guttmann, the shareholders of Ace Surgical Supply
Co., Inc., personally guaranteed certain indebtedness of the Company in the
amount of $3,800,000. In addition, David Guttmann guaranteed the term loan
of $1,000,000 issued to Shawmut and upon the workout with Shawmut in March
1996, David Guttmann agreed to repay the remainder of the term loan in the
amount of $333,333. The Company agreed to issue a total of 111,111 Shares of
Common Stock to his designees in consideration of the assumption of this debt.
In March 1993, the Company borrowed $600,000 from an affiliated entity of David
Refson, director of the Company. In January, 1995, the Company borrowed an
additional $400,000 from that entity. Interest on these loans is 12% per
annum and are due upon demand. This loan is also guaranteed by David
Guttmann and Barry Septimus.
In June 1991, the Company moved its executive offices and in December 1991 its
assembly line into a building at 170 53rd Street, Brooklyn, New York, which
the Company leases from Ace, an entity owned by Barry Septimus and David
Guttmann. The Company executed a 10-year lease with Ace which provides for
minimum annual rent of $467,000 for the first three years and thereafter
annual rents will be negotiated between the parties based on the then-current
economic conditions including rents for comparable space in the local area
in each year thereafter. The Company is also responsible for its share of
real estate tax assessment. Rent expense for the Brooklyn facility for 1996
was $600,000. Ace used a portion of the amount of this rent expense for the
purchase of 720 1996-A Preferred Stock for $720,000. The Company believes
that the rent is not higher than would be paid to a non-affiliated company.
During 1996, David Guttmann purchased for $1,000 each, 50 shares of 1996
Preferred Stock and 120 shares of 1996-A Preferred Stock. In addition, Ace
Surgical Supply Co., Inc., purchased 720 shares of 1996-A Preferred Stock.
In December 1996, the Company obtained a line of credit from Century Business
Credit Corporation ("Century") up to a maximum of $300,000 (not more than 40%
of the face amount of the eligible receivables plus 40% of the amount of
eligible inventory). David Guttmann and Ace Surgical Supply Co., Inc.,
Consolidated Disposables, Inc. ("Consolidated") and Universal Medical
Products, Inc., companies controlled by David Guttmann, guaranteed the
Company's obligations to Century. The Company in return guaranteed the
obligations of Ace and Consolidated to Century.
The Board of Directors of the Company is considering having a newly created
subsidiary of the Company merge with and into Ace Surgical Supply Co., Inc.,
pursuant to which Ace would become a wholly owned subsidiary of the Company.
The merger must be approved by a majority of the non-interested directors of
the Company and the Shareholders of Ace. The terms of the merger have not
been finalized to date and has not been approved by either the Shareholders
of Ace or the Board of Directors of the Company.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, three Directors will be elected by the shareholders to
serve until the next annual meeting of the shareholders or until their
successors are elected and shall qualify. The accompanying form of Proxy
will be voted for the re-election as Directors of David Refson, Richard
Helfman and David Guttmann, unless the Proxy contains contrary instructions.
See "Directors of the Company" for a description of such nominees' business
experience. Proxies cannot be voted for a greater number of persons than
the number of nominees named in the Proxy Statement. Management has no
reason to believe that any of the nominees will not be a candidate or will be
unable to serve. However, in the event that any of the nominees should
become unable or unwilling to serve as a Director, the Proxy will be
voted for the election of such person or persons as shall be designated by
the Directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE
ELECTION OF THE ABOVE NAMED NOMINEES. PROXIES SOLICITED BY THE BOARD
OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY IN THEIR
PROXIES A CONTRARY CHOICE.
PROPOSAL 2
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Richard A. Eisner & Company, independent
public accountants, to audit the accounts of the Company for the fiscal year
ending December 31, 1997. Richard A. Eisner & Company was initially
appointed by the Board of Directors in March 1987 in connection with the audit
of the Company's accounts for the fiscal year ended December 31, 1986, and
was subsequently appointed as auditors of the Company's accounts for fiscal
years ended December 31, 1987 through 1996. Richard A. Eisner & Company has
advised the Company that neither the firm nor any of its members or
associates has any direct financial interest in the Company other than as
auditors. Although the selection and appointment of independent auditors is
not required to be submitted to a vote of shareholders, the Directors deem it
desirable to obtain the shareholders' ratification and approval of this
appointment.
Representatives of Richard A. Eisner & Company are expected to be present at
the Annual Meeting with the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions.
Approval of the proposal requires the affirmative vote of a majority of the
Shares voted with respect thereto. In the event the proposal is not
approved, the Board will consider the negative vote as a mandate
to appoint other independent auditors of the Company for the next fiscal year.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR"
RATIFICATIONOF THE APPOINTMENT OF THE AUDITORS
The Company will provide without charge to each person being solicited by this
Proxy Statement, on written request of any such person, a copy of the Annual
Report of the Company on Form 10-KSB for the year ended December 31, 1996
(as filed with the Securities and Exchange Commission), including financial
statements. All such requests should be directed to Henry Lam at Creative
Technologies Corp., 170 53rd Street, Brooklyn, New York 11232.
All proposals of shareholders intended to be included in the proxy statement
to be presented in the 1998 Annual Meeting materials must be received by the
Company's executive offices in Brooklyn, New York, no later than February 1,
1998.
By Order of the Board of Directors
Dated: August 18, 1997
David Selengut
Secretary
PROXY
This Proxy is Solicited
on Behalf of the Board of Directors
CREATIVE TECHNOLOGIES CORP.
170 53RD STREET
BROOKLYN, NEW YORK 11232
The undersigned hereby appoints David Selengut and Henry Lam as Proxies, each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the Shares of the Shares of
Creative Technologies Corp. held of record by the undersigned on August 25,
1997 at the Annual Meeting of Shareholders to be held on September 23, 1997
or any adjournment thereof.
1. Election of Directors FOR all nominees listed below
(except as marked to the contrary below)
WITHHOLD AUTHORITY
to vote for all nominees below
(INSTRUCTION: To withhold authority to vote
for any individual nominee strike a line
through the nominee's name in the list below)
David Refson, Richard Helfman, David Guttmann
2. To ratify the appointment of Richard A. Eisner & Company as the independent
auditors for the Company for the fiscal year ending December 31, 1997.
FOR ___
AGAINST ___
ABSTAIN ___
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR Proposals 1 and
2.
Please sign exactly as name appears below. When Shares are held by joint
tenants, both must sign.
Dated: , 1997
Signature
Signature if held jointly
When signing as attorney, executor administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.