SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
HELMSTAR GROUP, INC.
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(Name of Registrant as Specified in Its Charter)
HELMSTAR GROUP, INC.
2 World Trade Center
Suite 2112
New York, New York 10048
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, JUNE 4, 1997
The Annual Meeting of Stockholders of Helmstar Group, Inc. (the "Company") will
be held at the offices of Richard A. Eisner & Company, LLP, 575 Madison Avenue,
8th Floor, New York, New York 10022, on Wednesday, June 4, 1997 at 3:00 p.m. for
the following purposes:
1. To elect two (2) Directors to serve for a term of three (3) years;
2. To ratify the selection of independent public accountants for 1997;
and
3. To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 17, 1997 as the
record date for determining the stockholders entitled to notice of and to vote
at the Annual Meeting and any adjournment or postponement thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, IT IS IMPORTANT THAT
YOU PROMPTLY COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY. IF YOU ATTEND THE
MEETING YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON IF YOU DESIRE.
By Order of the Board of Directors
Roger J. Burns
Secretary
New York, New York
April 29, 1997
HELMSTAR GROUP, INC.
2 World Trade Center
Suite 2112
New York, New York 10048
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Helmstar Group, Inc., a Delaware corporation (the
"Company"), of proxies for use in voting at the Annual Meeting of Stockholders
to be held at the offices of Richard A. Eisner & Company, LLP, 575 Madison
Avenue, 8th Floor, New York, New York 10022, on Wednesday, June 4, 1997 at 3:00
p.m., and any adjournment or postponement thereof, for the purposes set forth in
the attached Notice of Annual Meeting. The approximate date on which this Proxy
Statement and the accompanying proxy will be mailed to stockholders is April 29,
1997. The Company's Annual Report, including financial statements, is being
mailed to stockholders along with this Proxy Statement. The shares represented
by the proxies received, properly dated and executed and not revoked, will be
voted at the Annual Meeting. A proxy may be revoked in writing at any time
before it is exercised by filing with the Secretary of the Company at its
principal office, 2 World Trade Center, Suite 2112, New York, New York 10048, an
instrument of revocation or a duly executed proxy bearing a later date. A proxy
may also be revoked by attendance at the meeting and election to vote in person.
On the matters coming before the Annual Meeting, shares for which proxies
are received will be voted in accordance with choices specified by the
stockholders by means of the ballot on the proxy. If no choice is specified,
each share will be voted FOR the election of the two (2) nominees for Director
listed in this Proxy Statement and FOR approval of Proposal 2 described in the
attached notice and in this Proxy Statement.
The close of business on April 17, 1997 has been fixed as the record date
for determining the stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournment or postponement thereof. As of the close of business
on such date, the Company had 5,521,373 shares of Common Stock, $.10 par value,
outstanding. Each outstanding share of Common Stock is entitled to one vote on
all matters submitted for a vote of stockholders at the Annual Meeting.
A majority of the outstanding Common Stock of the Company will constitute a
quorum for the transaction of business at the Annual Meeting, but if a quorum is
not present, in person or by proxy, the meeting may be adjourned from time to
time until a quorum is obtained.
The expense of printing and mailing proxy materials will be borne by the
Company. In addition to the solicitation of proxies by mail, solicitation may be
made by certain Directors, officers and other employees of the Company by
personal interview, telephone or telegraph. No additional compensation will be
paid for such solicitation. Copies of solicitation material will be furnished to
brokerage houses, fiduciaries and custodians to forward to beneficial owners of
Common Stock held in their names. The Company will reimburse those persons for
their reasonable expenses in forwarding solicitation material to such beneficial
owners.
MANAGEMENT
BOARD OF DIRECTORS
Under the Company's By-Laws, the Board of Directors is divided into three
classes. Members of each class are elected to serve for a term of three years
and until their successors are elected or until their resignation, removal or
ineligibility.
During 1996, the Board had 3 meetings.
The Company's By-Laws provide for an Executive Committee consisting of the
Chairman of the Board and not less than two other Directors to exercise the
powers of the Board during the intervals between meetings of the Board. During
1996, the Executive Committee consisting of Messrs. George W. Benoit, Roger J.
Burns and Charles W. Currie had 5 meetings.
The Board has an Audit Committee consisting of Directors who are not
employees of the Company. This committee discusses audit and financial reporting
matters with both management and the Company's independent public accountants.
To ensure independence, the independent public accountants may meet with the
Audit Committee with or without the presence of management representatives.
During 1996, the Audit Committee consisting of Messrs. Joseph J. Anastasi,
Charles W. Currie, David W. Dube and James J. Murtha had 1 meeting.
The Board has a Compensation Committee for the purpose of reviewing the
compensation of officers and employees of the Company and making recommendations
to the Board with respect thereto. During 1996, the Compensation Committee
consisting of Messrs. Benoit, Burns and Currie had 1 meeting.
The Board has a Nominating Committee to propose nominees for election to
the Board. During 1996, the Nominating Committee consisting of Messrs. Benoit,
Anastasi, Dube and Murtha had 1 meeting. The Nominating Committee will consider
suggestions for potential nominees submitted by stockholders if mailed to the
Chairman of the Board.
The Board has an Incentive Compensation Committee for the purpose of
administering and making incentive compensation awards under the Company's 1990
Incentive Compensation Plan. During 1996, the Incentive Compensation Committee
consisting of Messrs. Anastasi, Currie, Dube and Murtha had 1 meeting.
Each Director attended at least 75% of the aggregate of the total number of
Board meetings and meetings of all committees of the Board on which he serves.
ELECTION OF DIRECTORS
Two Directors whose terms expire at the Annual Meeting have been nominated
for reelection for a term of three years. They are Roger J. Burns and Charles W.
Currie.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THESE NOMINEES AND IT IS
INTENDED THAT THE PROXIES RECEIVED WILL BE VOTED "FOR" THESE NOMINEES UNLESS
OTHERWISE PROVIDED THEREIN. THE BOARD KNOWS OF NO REASON WHY ANY OF THESE
NOMINEES WILL BE UNABLE TO SERVE, BUT, IN SUCH EVENT, THE PROXIES RECEIVED WILL
BE VOTED FOR SUCH SUBSTITUTE NOMINEE AS THE BOARD MAY RECOMMEND.
DIRECTORS AND EXECUTIVE OFFICERS
There are no family relationships among any of the Directors or executive
officers of the Company.
The Company does not pay Directors who are employees of the Company any
fees for serving as Directors, but reimburses them for their out-of-pocket
expenses in connection with such duties. The Company pays Directors who are not
employees of the Company an annual retainer of $12,000 plus expenses incurred
for attending meetings of the Board, Annual Stockholders Meetings and for each
meeting of a committee of the Board not held in conjunction with a Board
meeting.
NOMINEES FOR DIRECTOR FOR A 3 YEAR TERM
ROGER J. BURNS, 59, is a Director as well as First Vice President,
Secretary, Treasurer and Chief Financial Officer of the Company. Mr. Burns
joined the Company in 1974. He has been a Director of the Company since
September 1986.
CHARLES W. CURRIE, 54, has been a Director of the Company since 1986. Mr.
Currie has been a partner with Asset Management Services LLC, a company that
provides marketing services to investment managers, since August 1996. From June
1993 to July 1996, he was a Senior Vice President with Pryor, McClendon, Counts
& Co., Inc., investment bankers. From July 1990 to June 1993, Mr. Currie had
been a Vice President with Reinoso & Co., Inc., a municipal bond dealer.
DIRECTORS CONTINUING IN OFFICE
GEORGE W. BENOIT, 60, is Chairman of the Board of Directors and President
of the Company. Mr. Benoit was a founder of the Company in 1968 and has been a
Director since such time. His current term as a Director expires in 1998.
JOSEPH G. ANASTASI, 59, has been a Director of the Company since September
1986. His current term as a Director expires in 1999. For more than the past
five years, Mr. Anastasi has been president of The Anastasi Stephens Group, Inc.
and Montgomery Realty Company, Inc. Montgomery Realty Company currently is
engaged in property management and consulting. The Anastasi Stephens Group
formerly was engaged in real estate development and has been inactive since
January 1996. The Anastasi Stephens Group is the general partner of Muirkirk
Manor Associates Limited Partnership. Muirkirk Manor filed bankruptcy in
December 1994 and it was discharged in December 1995.
DAVID W. DUBE, 41, has been a director of the Company since June 1996 and a
director of Citizens Mortgage Service Company, a wholly-owned subsidiary of the
Company, since 1993. Mr. Dube has been the President and Chief Executive Officer
and a Director of Optimax Industries, Inc., a publicly-traded company with
operating interests in the horticultural, decorative giftware and truck parts
accessories industries, since July 1996. From February 1991 to June 1996, Mr.
Dube had been the principal of Dube & Company, a financial consulting firm
specializing in early stage financing, strategic financial planning and advisory
services relating to mergers, acquisitions, capital formation and restructurings
for private and public companies. From December 1986 to February 1991, Mr. Dube
was Treasurer, Chief Financial Officer and a Director of Inland Credit
Industries, Inc., a mortgage finance and investment firm. Mr. Dube is a
certified public accountant in the states of Massachusetts and New Hampshire.
JAMES J. MURTHA, 48, has been a Director of the Company since December
1986. His current term as a Director expires in 1999. From August 1994 to the
present, Mr. Murtha has held the position of President of Kenwood Capital, L.P.
He was the President of Kenwood Holdings, Inc. from February 1992 through August
1994. Both companies focus on real estate investments. From December 1990 until
January 1992, Mr. Murtha served as Chairman of the Board of Detroit Tool Group,
Inc., a tool and die manufacturer.
OTHER EXECUTIVE OFFICERS
ERIC M. FISHMAN, 44, is Chairman, President and Chief Executive Officer of
Citizens Mortgage Service Company, a wholly-owned subsidiary of the Company. Mr.
Fishman joined Citizens in January 1996. He has over 20 years experience in the
mortgage banking industry. From November 1994 to January 1996, Mr. Fishman was
Regional Vice President of Chase Manhattan Mortgage Corporation. Chase Manhattan
Mortgage had acquired American Residential Mortgage Corporation in November
1994. Mr. Fishman had been a Regional Vice President of American Residential
Mortgage, since joining such company in August 1991. Prior to that time, he was
President of Quantum Capital Advisors from August 1989 to August 1991. Mr.
Fishman is a licensed real estate broker in Pennsylvania.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information, as of March 31, 1997,
concerning the beneficial ownership of the Company's Common Stock by (i) each
Director of the Company and (ii) all Directors and executive officers of the
Company as a group.
Beneficial Ownership
---------------------------
Number of
Name Shares Percent
---- ------ -------
George W. Benoit 1,768,420 31.97%
Roger J. Burns 74,320 1.34
Charles W. Currie(1) 301,280 5.44
Joseph G. Anastasi 2,200 (2)
David W.Dube 4,000 (2)
James J. Murtha 4,000 (2)
All Directors and executive officers as a group (6 persons) 2,154,220 38.95%
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(1) Includes 200 shares of Common Stock owned by Mr. Currie's wife as to which
Mr. Currie has disclaimed any beneficial interest.
(2) Less than 1 percent.
Officers, Directors and persons who own more than ten percent of a
registered class of the Company's equity securities are required by Section
16(a) of the Exchange Act to file reports of ownership and changes in ownership
with the Commission. Officers, Directors and greater than ten-percent
shareholders are required by the Commission's rules to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, or representations that no Forms 5 were required, the Company believes
that all Section 16(a) filing requirements were complied with.
The following table sets forth information, as of March 31, 1997,
concerning the beneficial ownership of the Company's Common Stock by each
stockholder known by the Company to own more than 5% of the outstanding Common
Stock.
Beneficial Ownership
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Number of
Name and Address Shares Percent
---------------- ------ -------
George W. Benoit 1,768,420 31.97%
Helmstar Group, Inc.
2 World Trade Center
New York, NY 10048
Charles W. Currie(1) 301,280 5.44
Asset Management Services LLC
126 East 56 Street
New York, NY 10022
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(1) Includes 200 shares of Common Stock owned by Mr. Currie's wife as to which
Mr. Currie has disclaimed any beneficial interest.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 10, 1989, the Company, through a wholly-owned subsidiary, entered
into a general partnership with The Anastasi Stephens Group, Inc. ("AS Group"),
an affiliate of Joseph G. Anastasi, a Director of the Company. Such partnership
acquired, for $2,600,000, land in Prince Georges County, Maryland upon which it
was developing an industrial/warehouse business park. The Company originally
contributed $2,600,000 to the partnership but with the procurement of a
construction loan, the partnership distributed $1,100,000 and $50,000 to the
Company and AS Group, respectively. The Company and AS Group each have a 50%
voting interest in the partnership. AS Group was entitled to receive a
development fee of up to $180,000 for supervising construction of the project.
During 1989 and 1990, $120,000 of such fee was paid from proceeds drawn pursuant
to the construction loan.
The construction loan matured in March 1991. The partnership was
unsuccessful in negotiating an extension of the loan. The lender foreclosed
pursuant thereto, and the property was auctioned on March 31, 1992.
Under the partnership agreement, an overall net loss following a
disposition of the project is to be shared equally by the partners. Since the
Company contributed more capital (net of distributions) than AS Group, AS Group
was obliged to make a capital contribution to the partnership of approximately
$600,000. Such contribution, in turn, would be distributed by the partnership to
the Company. AS Group's shareholders, one of whom is Mr. Anastasi, a Director of
the Company, personally guaranteed such obligation on a joint and several basis.
In June 1996, the Company's Board of Directors approved a proposal for the
Company's wholly-owned subsidiary to accept $200,000 in full satisfaction of the
obligation of AS Group and its shareholders to make such capital contribution.
Such amount was paid directly to the Company's wholly-owned subsidiary.
EXECUTIVE OFFICER COMPENSATION
The following table shows, for the fiscal years ending December 31,
1996, 1995 and 1994, the cash and other compensation paid or accrued to the
named executives for services in all capacities.
SUMMARY COMPENSATION TABLE
Annual Compensation
----------------------------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation(a) Compensation (b)
------------------ ---- ------ ----- --------------- ----------------
George W. Benoit 1996 $203,376 $36,774
Chairman of the Board 1995 203,335 $100,000 $1,154 36,872
of Directors, President 1994 201,340 2,310
Roger J. Burns 1996 93,397
Director, First Vice President, 1995 126,034 20,000 721
Secretary, Treasurer and 1994 125,917 2,310
Chief Financial Officer
Eric M.Fishman 1996 149,188
Chairman and President,
Citizens Mortgage
Service Company
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(a) Company's contribution to 401(k) Deferred Compensation Plan.
(b) Company's share of insurance premium on Split Dollar Life Insurance
Agreement.
Executive compensation can vary widely from year to year. The Company may
pay discretionary bonuses to its salaried employees. Bonuses are determined by
the Compensation Committee of the Board of Directors.
COMPENSATION PURSUANT TO PLANS
401(k) Cash or Deferred Compensation Plan. The Company maintains a
tax-qualified 401(k) cash or deferred compensation plan that covers all
employees who have completed one year of service and attained age 21.
Participants are permitted, within the limitations imposed by the Internal
Revenue Code, to make pre-tax contributions to the plan pursuant to salary
reduction agreements. The Company may, in its discretion on an annual basis,
make additional contributions. The Company matched 25% of employee contributions
for the entire 1994 year and a portion of the 1995 year. The contributions of
the participants and the Company are held in separate accounts. Participants are
always fully vested in both accounts. Amounts contributed pursuant to the plan
for the benefit of executive officers are included in the above table under the
heading "Other Annual Compensation."
1990 Incentive Compensation Plan. The stockholders approved the Company's
1990 Incentive Compensation Plan (the "Plan") on June 7, 1990. On June 5, 1996,
the Plan was amended to increase the number of shares available for grant (the
"Amended Plan"). Pursuant to the Amended Plan, 750,000 shares of the Company's
Common Stock have been reserved for issuance to officers and other key employees
as incentive or nonqualified stock options, stock appreciation rights ("SARs")
or restricted stock awards. Incentive stock options must have an exercise price
per share equal to no less than the fair market value of the Company's Common
Stock on the date of grant (110% in the case of a 10% stockholder). Incentive
stock options may not be exercised after 10 years from the date of grant (five
years in the case of a 10% stockholder). Nonqualified stock options cannot be
exercised prior to one year or after ten years from the date of grant.
Concurrently with nonqualified options granted, participants may also receive
SARs. SARs will provide participants with cash equal to the difference between
the fair market value of the number of shares for which the SAR award is
exercised and the exercise price of nonqualified stock options on the date the
SAR award is exercised. Restricted stock will be subject to restrictions which
will render such shares subject to forfeiture. Additionally, restricted stock
will be nontransferable during the period any restrictions apply. The Board of
Directors has established an Incentive Compensation Committee to administer the
Plan. No member of such committee shall be eligible to receive any type of award
under the Plan. During 1992, options to purchase an aggregate of 150,000 shares
were granted to employees, none of whom were executive officers. During 1996,
options to purchase 50,000 of those shares expired. No other awards have been
made under the Plan and no options have been exercised.
Split Dollar Life Insurance Agreement. The Company's Chairman, George W.
Benoit, is presently the owner and holder of 1,768,420 shares (31.97%) of the
Company's Common Stock. The Company has been advised that on the death of George
Benoit, his estate may be required to publicly sell all or substantially all of
such shares to satisfy estate tax obligations. The public sale of all such
shares might destabilize the market for the Company's publicly traded stock.
Accordingly, as of January 20, 1995, the Company entered into an agreement
(commonly known as a split dollar life insurance agreement) with a trust created
by Mr. Benoit (the "Trust"). Under the terms of the agreement, the Company will
pay the premiums for a $1,000,000 life insurance policy on the life of Mr.
Benoit. The Trust has granted an interest in the policy to the Company to the
extent of the sum of all premium payments made by the Company. These
arrangements are designed so that if the assumptions made as to mortality
experience, policy dividends and other factors are realized upon Mr. Benoit's
death or the surrender of the policy, the Company will recover all of its
insurance premium payments. The portion of the premium paid by the Company in
1996 pursuant to this arrangement was $36,774.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Richard A.
Eisner & Company, LLP, as independent public accountants to audit the financial
statements of the Company and its subsidiaries for the fiscal year 1997. This
selection is being presented to the stockholders for their ratification at the
Annual Meeting. The firm of Richard A. Eisner & Company, LLP, has audited the
Company's financial statements since 1987.
It is expected that representatives of Richard A. Eisner & Company, LLP,
will attend the Annual Meeting and will have the opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
stockholder questions.
Ratification of the selection of Richard A. Eisner & Company, LLP, as
independent public accountants will require the affirmative vote of a majority
of the shares present in person or represented by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION AND, UNLESS A
STOCKHOLDER SIGNIFIES OTHERWISE, THE PERSONS NAMED IN THE PROXY WILL SO VOTE.
OTHER MATTERS
The Board of Directors of the Company do not know of any other matters to
be presented for action at the Annual Meeting. Should any other matter come
before the Annual Meeting, however, the persons named in the enclosed proxy will
have discretionary authority to vote all proxies with respect to such matters in
accordance with their judgment.
In order for stockholders' proposals for the 1998 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's Proxy Statement, they
must be received by the Company at its principal office in New York, New York,
prior to January 1, 1998.
A copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-KSB (without exhibits) will be provided without charge to
any stockholder who submits a written request addressed to the Secretary of the
Company.
By Order of the Board of Directors
Roger J. Burns
Secretary
April 29, 1997
REVOCABLE PROXY
HELMSTAR GROUP, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Revoking any such prior appointment, the undersigned hereby appoints George W.
Benoit and David W. Dube, and each of them, attorneys and agents, with power of
substitution to vote as Proxy for the undersigned as herein stated, at the
Annual Meeting of Stockholders of Helmstar Group, Inc. (the "Company"), to be
held at the offices of Richard A. Eisner & Company, LLP, 575 Madison Avenue, 8th
Floor, New York, New York 10022 on Wednesday, June 4, 1997 at 3:00 p.m., and at
any adjournments thereof, with respect to the number of shares the undersigned
would be entitled to vote if personally present.
1. Election of Directors: To elect the nominees listed below:
Roger J. Burns
Charles W. Currie
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
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2. Proposal to ratify the selection of independent public accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Check the appropriate box to indicate the manner in which you direct the
proxies to vote your shares.
The Board of Directors recommends a vote FOR the election of the nominees and
FOR the proposal.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED (1) FOR THE ELECTION OF THE
DIRECTORS AND (2) FOR THE PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT PUBLIC
ACCOUNTANTS, IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN ITEMS (1) AND
(2) ABOVE, AND (3) IN THE DISCRETION OF THE NAMED ATTORNEYS AND AGENTS ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
The stockholder(s) hereby acknowledge(s) receipt of a copy of the Proxy
Statement relating to such Annual Meeting.
Please be sure to sign and date
this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
HELMSTAR GROUP, INC.
Your signature should appear the same as your name appears hereon. If signing
as attorney, executor, administrator, trustee or guardian, please indicate the
capacity in which you are signing. When signing as joint tenants, all parties to
the joint tenancy must sign. When the proxy is given by a corporation, it should
be signed by an authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY