SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PURUS, INC.
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(Name of Registrant as Specified in Its Charter)
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
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(Name of Person(s) Filing Proxy Statement, if other that Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11:
1) Title of each class of securities to which transaction applies:
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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:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid: $
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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2) Form, Schedule or Registration Statement No.:
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PRELIMINARY COPIES
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On November 20, 1996
To the Stockholders of Purus, Inc.:
The Purus Stockholders' Protective Committee (the "Committee")
is seeking your support to remove two of the three current members of the Board
of Directors of Purus, Inc. (the "Company") at a Special Meeting of Stockholders
to be held on November 20, 1996, at [10:00 a.m.], local time, at [__________ ,]
New York, New York.
We believe this action is necessary to revitalize the Company
and steer it toward a more viable future. The Committee believes that recent
actions of the existing Board of Directors have been a principal cause of the
Company's poor financial performance and have deprived the Company of the
opportunity to grow and become profitable. Moreover, the present proposal of the
Board to pay, in December 1996, a cash dividend in the amount of $3.00 per share
on all outstanding shares of the Company's common stock is, in our opinion,
destructive to the Company and, if consummated, would drain the Company of the
resources necessary for it to expand and develop. The Committee believes that
the recent poor financial performance of the Company, which is ultimately the
responsibility of the Board of Directors, together with the proposed dividend,
which would substantially impair the ability of the Company to effect a plan for
future growth, demonstrate that the majority of the Board should be replaced.
In the event that two of the three current directors are
removed, the Committee will recommend that the remaining director, Reinhard
Siegrist, fill the vacancies created thereby by appointing Messrs. Joel R.
Mesznik and Hans C. Ochsner as new directors of the Company. The Committee will
also recommend that the reconstituted Board adjourn and reschedule the Company's
1996 Annual Meeting of Stockholders (the "Annual Meeting"), currently scheduled
for November 22, 1996, to no later than February 1997. During this time, the new
directors would have time to develop a plan for the future growth of the
Company, including reexamining the prudence of the proposed cash dividend. At
the rescheduled annual meeting, the Company stockholders would be able to vote
for the election of the Company's directors.
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As stockholders, you have a right to determine the future
course of the Company. We urge you to vote to remove the two current directors
of the Company identified in the accompanying Proxy Statement, by signing and
returning the enclosed proxy card today, so that we may all better recognize the
full potential value of the Company.
The Purus Stockholders'
Protective Committee
Peter Friedli
Hans C. Ochsner
November 5, 1996
IF YOU WISH TO HELP DECIDE THE FUTURE OF THE COMPANY, YOU ARE URGED TO COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE POSTAGE
PREPAID ENVELOPE WHICH HAS BEEN PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE
SPECIAL MEETING IN PERSON. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME PRIOR TO
EXERCISE, AND IF YOU ARE PRESENT AT THE SPECIAL MEETING YOU MAY, IF YOU WISH,
REVOKE YOUR PROXY AT THAT TIME AND EXERCISE YOUR RIGHT TO VOTE YOUR SHARES
PERSONALLY.
PRELIMINARY COPIES
PROXY STATEMENT
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
SPECIAL MEETING OF STOCKHOLDERS
To Be Held On November 20, 1996
GENERAL INFORMATION
This Proxy Statement is furnished by the Purus Stockholders'
Protective Committee (the "Committee") to the holders of shares of common stock,
par value $.01 per share ("Common Stock"), of Purus, Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies to
be voted at a Special Meeting of Stockholders (the "Special Meeting"), and at
any adjournment(s) thereof. The purpose of the Special Meeting is to consider
and vote on the Committee's proposal to remove two of the three current
directors of the Company as described below under "Special Meeting Proposal".
The Special Meeting is to be held on November 20, 1996, at , New York, New
York, at [10:00 a.m.] local time.
The enclosed proxy and this Proxy Statement are being
transmitted to stockholders of the Company on or about November 5, 1996.
Voting of Proxies
The persons named on the enclosed proxy card have been
designated as proxies by the Committee. Unless otherwise indicated, shares of
Common Stock represented by properly executed proxy cards received by the
Committee will be voted at the Special Meeting in the manner specified therein,
or if no specification if made, will be voted "FOR" the removal of two of the
three current directors of the Company.
If, after reading this Proxy Statement you want to join us in
seeking to revitalize the Company and prepare it for the future:
MARK the enclosed proxy card to indicate your vote.
SIGN the enclosed proxy card.
DATE the enclosed proxy card.
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RETURN the enclosed proxy card in the postage-prepaid envelope
AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT TO US NO MATTER HOW MANY
SHARES YOU OWN.
The presence at the Special Meeting, in person or by proxy, of
the holders of a majority of the outstanding shares of Common Stock entitled to
vote will constitute a quorum. Abstentions and broker non-votes (i.e., shares
held by a broker or nominee which are represented at the Special Meeting, but
with respect to which such broker or nominee is not empowered to vote on a
particular proposal) are counted as present for purposes of determining whether
a quorum is present. Approval of the proposal to remove two of the three current
directors of the Company requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote thereon.
Abstentions will have the effect of votes in opposition to the Committee's
proposal. Broker non-votes will be treated as unvoted for purposes of
determining approval of the Committee's proposal and will not be counted as
votes for or against such proposal, but will have the effect of votes in
opposition to the proposal.
Any proxy given to the Committee by a stockholder pursuant to
this solicitation may be revoked by the stockholder at any time before it is
exercised by written notification delivered to the Committee c/o Morrow & Co.,
Inc. ("Morrow"), 909 Third Avenue, 20th Floor, New York, New York 10022-4799,
Attention: Purus Stockholders' Protective Committee, by voting in person at the
Special Meeting or by executing and delivering another proxy bearing a later
date to Morrow. Attendance by a stockholder at the Special Meeting does not
alone serve to revoke the proxy.
The Committee has fixed the close of business on [October 15,
1996] as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Special Meeting (the "Record Date"). Only
stockholders of record at the close of business on such Date will be entitled to
notice of, and to vote at, the Special Meeting and any adjournment(s) thereof.
According to information provided by the Company, an aggregate of 651,192 shares
of Common Stock were outstanding at the close of business on the Record Date.
Accordingly, approval of the Committee's proposal to remove the two directors
would require the affirmative vote of holders of at least 325,597 shares of
Common Stock. The members of the Committee beneficially owned or otherwise had
authority to vote an aggregate of 28,334 shares of Common Stock as of the Record
Date.
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Each share of Common Stock outstanding on the Record Date is
entitled to one vote on the proposal discussed in this Proxy Statement. The
Company's stockholders do not have cumulative voting rights. The Company has no
other class of voting securities entitled to
vote at the Special Meeting.
If you have any questions or require any assistance in
completing or delivering your proxy card, please call [Mr. Jerry Mucha] at
Morrow, telephone no. (212) 754-8000.
SPECIAL MEETING PROPOSAL
The Committee proposes to remove Russell K. Burbank and
Michael V. Dettmers, two of the three current members of the Company's Board of
Directors, and expects that the remaining director, Reinhard Siegrist, will fill
the vacancies thereby created on the Board with two new directors immediately
following the Special Meeting. Under Section 141(k) of the Delaware General
Corporation Law ("Delaware Law"), any director may be removed, with or without
cause, by the holders of a majority of the shares then entitled to vote at an
election of directors. As discussed below, the Committee believes that the
removal of the majority of the current Board is necessary in order to end a
course of conduct which has resulted, and would, if not halted, continue to
result, in diminished stockholder value and the absence of a viable plan for the
Company's future development. The Committee is also dissatisfied with
performance of Mr. Burbank as the President and Chief Executive Officer of the
Company, and expects that the newly constituted Board would seriously consider
whether his continued service is in the best interests of the Company.*
Background of Special Meeting
Recent History of the Company. In November 1993, the Company
completed its initial public offering. One year later, in December 1994, as a
result of its poor performance, the Company publicly announced a 45% reduction
in staff. Since such time, the Company has continued to experience significant
difficulties, and, on April 8, 1996,
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* Mr. Burbank has served as the President and Chief Executive Officer of the
Company from November 1994 to the present, representing two out of the three
years that the Company's Common Stock has been publicly traded.
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the Board of Directors requested the Company's stockholders to approve the sale
of substantially all of the Company's non-cash assets, including the technology
necessary for the Company to conduct its air pollution control business. The
asset sale was consummated on May 8, 1994, and, one month later, the Company was
delisted from The Nasdaq National Market because of its failure to meet the net
tangible asset requirement thereof. During the period from the Company's initial
public offering through the present, the trading price of the Company's Common
Stock, as well as the stockholders' equity of the Company, have dramatically
decreased.
Formation of the Committee. In reaction to the obviously
troubled history of the Company, and because they believe that the policies of
the current Board of Directors* were and are not directed towards maximizing
stockholder value, Peter Friedli and Hans C. Ochsner decided to form the
Committee and make this proxy solicitation. By letter to the Company dated June
6, 1996 (the "June 6 Letter"), Mr. Friedli, together with certain owners of the
Company's Common Stock, Banca Novara (Suisse) ("Novara"), Courtag AG
("Courtag"), Experta AG, Lombard Odier Zurich AG ("Lombard"), Swiss American
Securities Inc. ("SASI"), Cofinvest 97 Ltd. ("Cofinvest") and Rahn & Bodmer
("R&B"), holders in the aggregate of over 26% of the Company's outstanding
Common Stock, requested a special meeting of stockholders pursuant to Section
211(d) of Delaware Law, and Article III, Section 6 of the Company's By-laws to
consider the removal of the Company's Board members. Under such section of the
By-laws, a special meeting of the Company's stockholders may be called by the
holders of shares of Common Stock entitled to cast not less than 20% of the
votes at the meeting.
Response of the Company to the Committee's Request for Special
Meeting. On August 1, 1996, Russell K. Burbank, Chairman of the Board, President
and Chief Executive Officer of the Company, advised Mr. Friedli in writing that
the stockholders who had requested the Special Meeting in the June 6 letter did
not constitute the holders of record of at least 20% of the outstanding Common
Stock. In response, by
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* Expressions of the Committee's dissatisfaction with the policies of the
existing or current Board of Directors of the Company in this Proxy Statement
refer to Russell K. Burbank and Michael Dettmers, the majority of the Board, and
not to Reinhard Siegrist, who has been a director of the Company only since May
1996, who has opposed many of the actions proposed and taken by the majority,
including the Dividend, and whose removal is not being sought hereby.
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letter dated August 8, 1996 (the "August 8 Letter"), Mr. Friedli confirmed that
certain of the stockholders listed in the June 6 Letter, namely Novara, SASI,
Lombard, Cofinvest, R&B and himself, were indeed the holders of shares of Common
Stock entitled to cast greater than 20% of the votes at a special meeting of
stockholders. Mr. Friedli also demanded a list of the Company's stockholders in
accordance with Delaware Law in preparation for the requested Special Meeting,
which he received from the Company on August 15, 1996. On August 27, 1996, Mr.
Friedli submitted a Memorandum to the Board of Directors of the Company
asserting certain conditions for cancellation of the requested Special Meeting.
Such conditions included the resignation of Mr. Dettmers from the Board and the
naming of Messrs. Siegrist and Ochsner as two of the three directors to be
elected at the Company's next scheduled annual meeting. Mr. Friedli has not
received a response from the Board to this Memorandum as of the date of this
Proxy Statement. In fact, the Company's Board of Directors has, by resolution,
increased the size of the Board to five and included Mr. Dettmers in its slate
of directors proposed for election at the Company's annual meeting scheduled to
be held on November 22, 1996 (the "Annual Meeting").
Filing of Schedule 13D. On October 21, 1996, Peter Friedli,
Cofinvest, Courtag, Lombard and the beneficial owners of the Common Stock held
as nominee by the other entities signing the June 6 Letter (the "Group") filed a
Schedule 13D with the Securities and Exchange Commission (the "Commission"), in
accordance with the Securities Exchange Act of 1934. Such Schedule 13D disclosed
the formation of a group for the purpose of holding a special meeting to
consider the removal of two of the three current directors of the Company. As of
the date hereof, the Committee has received executed proxies for the Special
Meeting from each member of the Group representing an aggregate of 171,507
shares of Common Stock, or approximately 26% of the outstanding Common Stock, as
of the Record Date, instructing the Committee to vote FOR the removal of such
directors.
Scheduling of Special Meeting. Article III, Section 6 of the
Company's By-laws provides that the Board of Directors shall determine the time
and place of a special meeting demanded by the Company's stockholders, which
shall be held not less than 35 nor more than 120 days after the Board's receipt
of the request for such meeting, and shall provide notice to the Company's
stockholders of the special meeting. If such notice has not been given within 60
days of the Board's receipt of such request, the persons requesting the special
meeting may set the time and place of the meeting. The Board has not provided
notice of the
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Special Meeting to the Company's stockholders. As a result, the Committee has
set the date of the Special Meeting for November 20, 1996, which is within 120
days of August 8, 1996, the date as of which the Committee redemanded the
Special Meeting in response to the Company's claim that the June 6 request had
not complied with the provisions of the Company's By-laws. See "--Response of
the Company to the Committee's Request for Special Meeting" above.
The Committee has set the date of the Special Meeting for two
days prior to the date of the Annual Meeting so that the Committee can prevent
the election of the slate of directors proposed by the Company and the
reconstituted Board of Directors can develop a plan for the future growth of the
Company, including reexamining the prudence of the $3.00 cash dividend proposed
by the current Board and subject to stockholder approval at the Annual Meeting
(the "Dividend"). See "Reasons for the Committee's Proposal" below. The failure
of the current Board to respond to the August 8 Letter demanding a Special
Meeting has resulted in the necessity of the Committee holding the special
meeting at a date so near to the date of the Annual Meeting. In addition, the
Company's By-laws contain certain timing and other restrictive provisions in
respect of the nomination of directors and afford the chairman of the Company's
Annual Meeting significant discretion in declaring such nominations defective.
In light of these provisions, and the failure of the Company to respond to the
Group's request for a special meeting, the Committee has determined that it is
more advisable for it to call its own meeting.
REASONS FOR THE COMMITTEE'S PROPOSAL
I. The Company has performed poorly since its initial public offering.
The following facts plainly demonstrate the poor performance of the
Company--facts for which the current Board must take ultimate responsibility.
1. Decline in Stock Price. The trading price of the Company's
Common Stock has declined dramatically. As adjusted to reflect the Company's
one-for-ten reverse stock split effected in November 1995, the initial public
offering price per share of the Common Stock was $140 ($14 without adjustment
for the stock split), but the Common Stock closed at only $5.25 per share on
October 18, 1996. The following graph demonstrates the dramatic decrease in the
trading price of the Common Stock from the date of the Company's initial public
offering through October 18, 1996.
160|------------------------------------------------------------------|
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140|----*-------------------------------------------------------------|
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120|------------------------------------------------------------------|
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D | |
O 100|------------------------------------------------------------------|
L | |
L | |
A 80|------------------------------------------------------------------|
R | |
S | * |
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0|----|----------|---------|-----------|-----------|-----------|----|
11/11/93 6.30/94 12/30/94 12/29/95 6/28/96 10/18/96
* = Closing Price
11/11/93 6/30/94 12/30/94 6/30/95 12/29/95 6/28/96 10/18/96
Closing $140.00 $70.00 $13.75 $9.375 $2.125 $3.875 $5.25
Price
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In addition, as a result of the substantial decrease in the Company's
stockholders' equity (see "--Decline in Stockholders' Equity and Company Losses"
below), the Company was recently delisted from The Nasdaq National Market. The
Common Stock presently trades on The Nasdaq SmallCap Market, which generally
affords less liquidity to investors than The Nasdaq National Market. In
addition, the Company has been advised by The Nasdaq Stock Market that it is
"on-notice" with respect to its listing on The Nasdaq SmallCap Market and that
it must inform the Nasdaq Listing Qualifications Committee of "a significant
change in circumstances or the elimination of its operations". A delisting of
the Common Stock from The Nasdaq SmallCap Market would impair its liquidity even
more severely. Moreover, the Committee expects the Common Stock's trading price
may continue to decline as a result of the lack of a viable plan by the current
Board of Directors for the future of the Company.
2. Decline in Stockholders' Equity and Company Losses. The
stockholders' equity of the Company has substantially decreased from over $24
Million as of December 31, 1993 to approximately $4 Million as of September 28,
1996. As a result, the Company was delisted from The Nasdaq National Market in
May 1996. See "--Decline in Stock Price" above. In addition, the Company has
incurred cumulative net losses of over $41 Million from its inception through
September 28, 1996.
3. No Remaining Operating Assets. In May 1996, the Company
consummated the license and sale of technology and operations representing
substantially all of the Company's operating assets. In connection with such
sale, the Company discontinued the development, manufacture and marketing of air
pollution control systems, which prior to the license and sale had constituted
substantially all of its operations. The Company has no present active
operations and its primary function is to manage obligations and liabilities of
the Company not included in the license and sale. As a result of the sale and
discontinuation of its operating business, the Company's management has stated
that it intends to seek and evaluate potential acquisitions of businesses,
products, technologies and companies. However, it has indicated that it has no
present understandings, commitments or agreements with respect to any such
acquisitions. See page 12 of the Preliminary Proxy Statement with respect to the
Annual Meeting filed by the Company with the Commission on October 7, 1996.
Accordingly, the facts, as confirmed by Company management's own statements,
indicate that the Company has no present viable plan for its future development.
In any event, the Committee believes that payment of the Dividend would drain
the Company's assets, thereby impairing its ability to
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consummate any proposed acquisitions it may identify. See "--Lack of Viable
Plan or Sufficient Funds for Acquisitions" below.
II. The current Board of Directors has no viable plan for the
expansion and development of the Company and the proposed Dividend is
inconsistent with its stated intention to acquire new businesses. The Committee
believes that actions taken and proposed to be taken by the present Board of
Directors have harmed and could seriously harm the Company.
1. Lack of Viable Plan or Sufficient Funds for Acquisitions.
Apparently consistent with its announced plan to acquire new business
opportunities, the current Board of Directors has stated that it does not intend
to liquidate the Company. However, as discussed above, the Company has no active
operations or present agreements or commitments to acquire any new businesses.
The Company's only valuable assets are its cash and short-term investments,
totalling approximately $6.2 Million as of September 28, 1996. While these funds
could be used to pursue new business opportunities for the Company, the current
Board has proposed payment of the Dividend, which would deprive the Company of
over $1.9 Million, representing a significant portion of the Company's cash and
other current assets. Without such funds, and the absence of any future revenue
because of the discontinuance of its active operations, the current Board is
undercutting its stated business strategy of making acquisitions. In fact, the
Company has disclosed that payment of the Dividend could impair the Company's
ability to meet its future obligations and potential liabilities, and that new
financing may be required to maintain the Company's operations or to consummate
an acquisition. See page A-9 of the Form 10-Q for the quarterly period ended
September 28, 1996 filed by the Company on October 6, 1996 (the "Third Quarter
10-Q"). Assuming that the Company were even able to secure any such financing,
the Company would incur obligations to pay interest and/or fees with respect
thereto and the interests of the present stockholders of the Company could be
significantly diluted if equity financings were effected. The Committee believes
that it would be in the stockholders' best interests to cancel the proposed
Dividend and conserve its cash while exploring acquisition opportunities. This
would reduce the likelihood that the Company would need to secure additional
financing, which there can be no assurance would be available, and, even if
available, could be costly and dilutive to the Company's current stockholders.
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2. Potential Liquidation. While the current Board has stated
that it has no present intention to liquidate the Company, it is embarking on a
course which may ultimately lead to liquidation, but liquidation of a more
protracted and expensive nature. Payment of the Dividend would deprive the
Company of funds to consummate acquisitions necessary for its continuance, which
could effectively lead the Company toward liquidation. Rather than making the
choice between requesting approval of the Company's stockholders to liquidate
the Company, so that the stockholders would receive the full value of the
current assets of the Company, or preserving funds to devote to its acquisition
strategy, the Board is pursuing a half-way strategy that could slowly destroy
the Company. The Committee believes that the course most advantageous to the
Company's stockholders would be not to pay the Dividend, thereby permitting the
Company to use its cash and other current assets to acquire a new business or
technology. Such an acquisition could, although there can be no such assurance,
increase the value of each stockholder's interests in the Company over time to
an amount significantly higher than the $3.00 per share that each stockholder
would receive upon payment of the Dividend. The Committee is currently exploring
certain potential businesses as candidates for acquisition by the Company which
it would present to the newly constituted Board if the removal of the two
directors sought hereby were approved. The Committee members have not had
discussions with such candidates or indicated to them that they were acting on
behalf of the Company. There can be no assurances that the acquisition of any of
such candidates (or any others) would be consummated or that the terms of any
such acquisitions would be favorable to the Company.
3. Lack of Acquisition Experience; Dependence on Friedli. The
incumbent Board has stated that it is not experienced in seeking and evaluating
potential acquisitions or in consummating such transactions and managing the
resulting enterprises. See page A-9 of the Third Quarter 10-Q. The Board had
anticipated the assistance of Mr. Friedli with the identification and evaluation
of potential acquisition candidates in his former capacity as the Company's
financial advisor. See page 5 of the Form 10-K for the fiscal year ended
December 30, 1995 filed by the Company on April 1, 1996. However, the Company
claims to have terminated its contract with Friedli Corporate Finance AG
("FCF"), the investment company of which Mr. Friedli was a principal prior to
January 1, 1996 (see Appendix A hereto). In addition, Mr. Friedli is a member of
the Committee which is proposing to replace the majority of the present Board.
As a result, the Company cannot depend on the services of either FCF, a member
of the Group, or Mr.
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Friedli in the future. The Committee believes that in light of the need of the
Company to pursue acquisitions and the inexperience of the Company's present
Board and management in such area, a new Board is necessary.
Given the poor financial and market performance of the
Company, the lack of any viable plan by the current Board of Directors for the
future expansion and development of the Company and the fact that the planned
Dividend could result in the Company's inability to pursue its stated strategy
of effecting acquisitions, the Committee believes that a majority of the Board
should be removed and so that a newly constituted Board can reexamine the
Company's proposed Dividend in light of all the circumstances and, in
particular, what impact it would have on the Company's prospects.
Expectations After Removal
Appointment of Directors. In the event that the stockholders
of the Company approve the Committee's proposal to remove two of the three
current directors of the Company, the Committee will recommend that Reinhard
Siegrist, the remaining director, select Joel R. Mesznik and Hans C. Ochsner
immediately after the Special Meeting to fill the vacancies in the Board.
Biographies and other information concerning Messrs. Mesznik and Ochsner are
provided below under "Proposed Directors." Mr. Siegrist will select directors to
fill the vacancies in accordance with his fiduciary duty to the stockholders of
the Company and in accordance with the Company's By-laws and Delaware Law.
Pursuant to Section 223 of Delaware Law and the Company's By-laws, vacancies on
the Board of Directors may be filled by the sole remaining director. The
Company's Board of Directors has recently, by resolution, increased the size of
the Board from three to five members. While the Committee will recommend to Mr.
Siegrist that the size of the Board be reduced to three members, if Mr. Siegrist
determines to maintain the newly increased size of the Board, the Committee will
recommend to Mr. Siegrist two additional nominees for director for his
consideration. There can be no assurances that Mr. Siegrist will appoint either
or both of the individuals presently recommended by the Committee to the Board.
Neither the Committee nor any Group members have any agreement or arrangement
with Mr. Siegrist concerning his remaining on the Board or his appointment of
the nominees for director recommended by the Committee.
Rescheduling of Annual Meeting. The Committee expects that
immediately following Mr. Siegrist's appointment of two (or more if the Board
size remains at five) directors to fill the vacancies on the Board, the
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reconstituted Board would adjourn the Annual Meeting presently scheduled for
November 22, 1996, in order to give it time to reexamine the merits of the
Dividend and whether the continued service of Mr. Burbank as President of the
Company is in the Company's best interests. The Committee expects that the Board
will reschedule the Annual Meeting for a date no later than February 1997. The
Committee believes that if it is successful in the removal of the directors
advocated hereby, the newly constituted Board would have the right under
Delaware Law to adjourn and reschedule the Company's Annual Meeting. At such
rescheduled meeting, the stockholders would have an opportunity to vote upon the
election of Mr. Siegrist and those persons whom he selects to fill vacancies as
directors of the Company.
The members of the Group have executed and delivered proxies
to the Committee and have agreed not to submit proxies for, or attend, the
Annual Meeting. The Group members hope that by not delivering proxies in respect
of, or attending, the Annual Meeting, they will prevent the establishment of a
quorum at the Annual Meeting. The Committee believes that the newly constituted
Board would have the right to adjourn the Annual Meeting, but the apparent
presence of a quorum at the adjourned Annual Meeting scheduled by the existing
Board for November 22, 1996 and the holding of a purported election thereat
would lead to confusion of the Company's stockholders and the likely
commencement of litigation to determine the proper composition of the Company's
Board of Directors.
The Committee believes that a newly constituted Board of
Directors is needed to work toward enhancement of stockholder value by bringing
a fresh and open perspective to the future direction of the Company and actively
seeking a viable plan for the future growth of the Company. Accordingly, it
requests that you take the first step towards this goal by removing the majority
of the present Board members.
THE COMMITTEE
The Committee consists of Peter Friedli and Hans C. Ochsner,
who beneficially own an aggregate of 28,334 shares of Common Stock, representing
approximately 4.4% percent of the outstanding shares of Common Stock. The other
members of the Group beneficially own an aggregate of 143,173 additional shares
of Common Stock, representing approximately 22% of the outstanding shares of
Common Stock.
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Mr. Friedli is an investment advisor to various foreign
stockholders of the Company, including members of the Group, who beneficially
own an aggregate of approximately 45% of the outstanding shares of Common Stock.
Mr. Friedli believes that all or substantially all of such stockholders will
vote in favor of the Committee's proposal, but he has not contacted or solicited
any of such clients with respect to the Special Meeting, with the exception of
the members of the Group whom he has contacted in accordance with applicable
proxy rules. The Committee intends to solicit proxies directly from certain
Company stockholders after the distribution hereof and to coordinate its
solicitation efforts with those of Morrow.
Neither the Committee nor any of its members will earn any
profits, commissions or other fees from the Company or otherwise in the event
that its proposal to remove two of the three current directors of the Company is
approved. In addition, neither (i) Mr. Friedli or Mr. Ochsner, (ii) any other
participant in the solicitation of this Proxy Statement or any associate
thereof, other than FCF, (iii) any individual that the Committee will recommend
for appointment as a director if the proposal to remove two of the three current
directors of the Company is approved or (iv) to the Committee's knowledge, the
director who would remain on the Board following such approval, was or is a
party to any transaction or series of similar transactions since January 1,
1995, or any currently proposed transaction or series of similar transactions to
which the Company or any subsidiary thereof was or is to be a party, in which
the amount involved exceeds $60,000.
The Company retained FCF, of which Mr. Friedli served as
principal until January 1, 1996, as its investment banker and financial advisor
from the date of inception of the Company. The Company claims that it terminated
the agreement with respect to such services between the Company and FCF (the
"Advisory Agreement") on July 22, 1996. FCF, however, believes that the Company
may not unilaterally terminate the Advisory Agreement pursuant to the terms
thereof. Under the Advisory Agreement, the Company pays to FCF a monthly
retainer, in addition to reimbursing expenses incurred and paying commissions on
any funds raised on behalf of the Company by FCF. In 1995, the Company
reimbursed FCF for $3,500 in expenses and paid $42,000 in fees. As of September
28, 1996, the Company claimed to have owed FCF and Mr. Friedli approximately
$64,000 for past services. FCF, however, claims that additional compensation of
approximately $100,000 is owed solely to FCF.
Additional information with respect to each of the members of
the Committee is set forth on Appendix A hereto.
13
PROPOSED DIRECTORS
In the event that the stockholders of the Company vote to
remove two of the three current directors of the Company pursuant to this
solicitation, the Committee will recommend that the remaining member of the
Board of Directors, Mr. Siegrist, appoint two (or more if the Board size remains
at five) new directors to the Board to fill the vacancies created thereby. The
directors so appointed would hold office until the next Annual Meeting of
Stockholders, which the Committee expects would be held no later than February
1997, or until their successors have been duly elected and qualified. The
Committee will recommend each of the individuals named below to fill the
vacancies in the Board following the Special Meeting. Each of such individuals
has consented to serve as a director of the Company if appointed and to be named
herein. The Committee has no agreement or arrangement with Mr. Siegrist with
respect to the appointment of the individuals recommended by the Committee.
The following sets forth the name, age and certain
biographical information of each of the individuals who will constitute the
Board of Directors of the Company if the Committee's recommendation is followed
by Mr. Siegrist:
Name Age
---- ---
Joel R. Mesznik 51
Hans Ochsner 36
Reinhard Siegrist 49
Joel R. Mesznik has been the President of Mesco Ltd., a company that has
provided advisory services with respect to corporate transactions in the United
States and Europe since 1990. Mr. Mesznik has also been an active investor in a
number of transactions involving, for the most part, distressed real estate. He
serves on the board of directors of several United States and European companies
engaged in the real estate, media technology and biotechnology industries. Mr.
Mesznik holds a B.S. in Civil Engineering from City College of New York and an
M.B.A. in International Finance from Columbia University.
Hans Charles Ochsner has been an independent investor since July 1996. From 1990
to July 1996, Mr. Ochsner served as the Head of Global Equities in the Asset
Management Department of the Canton of Zurich. Prior to that, he held various
positions at Bank Julius Bear & Co. AG, the Union
14
Bank of Switzerland and Swiss Life Insurance Company. He holds a degree in
economics and business from Kaderschule Zurich in Zurich, Switzerland.
Reinhard Siegrist has been a director of the Company since May 1996. Mr.
Siegrist has been an independent investor since 1989. From 1981 through 1989, he
served as financial analyst, fund manager and head of the asset management team
at a branch of Credit Suisse. Prior to 1981, he was controller for the Contraves
division of Oerlikon Buhrle and an auditor at Schweizerische Treuhandgesellshaft
& Coopers & Lybrand. Mr. Siegrist holds a Federal Diploma of Accounting of
Switzerland.
Neither Mr. Mesznik nor Mr. Ochsner holds or has held any
position or office with the Company or currently serves or has served as a
director of the Company or has any other interest in any matter to be acted on
at the Special Meeting. The current Board of Directors has included Mr. Ochsner
in its slate of directors for the Annual Meeting, but Mr. Ochsner has notified
the Board in writing that he does not wish to be a nominee of the Company's
management and that he should not be mentioned in the Company's proxy statement
in respect of the Annual Meeting.
Mr. Siegrist has been a director of the Company since May 24,
1996, but has not held any other position with the Company. He currently serves
on the Audit Committee and the Compensation Committee of the Board. The Company
does not have a nominating committee that will consider the appointment of
Messrs. Mesznik and Ochsner as directors. Mr. Friedli has provided investment
advisory services to Mr. Siegrist.
Neither Mr. Mesznik, Mr. Ochsner nor Mr. Siegrist has any
arrangement or understanding pursuant to which he was or is to be selected as a
director of the Company. In addition, none of such individuals has been indebted
to the Company at any time since January 1, 1995, in an amount in excess of
$60,000 or is or has had, at any time since January 1, 1995, an interest in any
transaction or series of transactions to which the Company is or will be a party
which exceeds $120,000 in amount, 5% of the Company's gross revenues in fiscal
year 1995.
Compensation of Directors
Members of the Company's Board of Directors do not receive
compensation for their services as directors, but directors may be reimbursed
for certain expenses in connection with attendance at meetings of the Board and
committees thereof. The Committee does not have any present
15
intention to seek to increase the compensation of the directors, but does not
exclude the possibility of such action in the future.
Non-employee directors of the Company participate in the
Company's 1995 Non-Employee Directors Stock Option Plan (the "1995 Directors
Plan"), which was adopted by the Board of Directors of the Company in May 1995.
Pursuant to the terms of the 1995 Directors Plan, options to purchase 1,000
shares of Common Stock at an exercise price equal to 100% of the fair market
value of the Common Stock on the date of grant are automatically granted on the
date of each annual meeting of the Company's stockholders to each non-employee
director who has served as a director for a period of at least six months prior
to the date of the annual meeting, or in the case of directors who are elected
or appointed on or after the date of the annual meeting, options to purchase
1,000 shares are automatically granted on the date of such initial election or
appointment. Mr. Siegrist has received options to purchase 1,000 shares of
Common Stock under the 1995 Directors Plan at an exercise price of $3.50 per
share.
Each automatic option granted under the 1995 Directors Plan
becomes exercisable immediately. However, shares purchased under the option will
be subject to repurchase by the Company, at the exercise price paid per share,
upon the optionee's cessation of Board service prior to vesting in those shares.
Each option will vest, and the Company's repurchase right will lapse, in two
equal installments over the optionee's period of continued service as a
director, with the first installment to vest upon the optionee's completion of
one year of Board service measured from the date of grant. The shares subject to
each automatic option grant will immediately vest upon certain changes in the
ownership or control of the Company and upon the optionee's death or permanent
disability while serving as a director.
Non-employee directors who are not members of the Company's
Compensation Committee are also eligible to participate in the Company's 1993
Stock Option Plan. However, to the knowledge of the Committee, no options have
been granted to any such non-employee directors under that Plan.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the close of business on
September 28, 1996, the beneficial ownership of Common Stock by (i) each of the
individuals that the Committee will recommend for appointment by the remaining
16
director as directors of the Company in the event that the Committee's proposal
is approved, (ii) Reinhard Siegrist, the Company director who would remain on
the Board, (iii) each person or group known by the Committee to be the
beneficial owner of more than 5% of the Common Stock, (iv) each of the other two
current members of the Board of Directors of the Company and the Company's
nominee for election at the Annual Meeting, (v) the Chief Executive Officer of
the Company and one former executive officer whose compensation for services
rendered to the Company during 1995 exceeded $100,000 and (vi) all directors and
executive officers of the Company as a group. Under the rules of the Commission,
a person is deemed to be a beneficial owner of a security if such person has or
shares the power to vote or direct the voting of such securities or the power to
dispose of or to direct the disposition of such security. In general, a person
is also deemed to be a beneficial owner of any securities (including options and
warrants) which that person has the right to acquire within 60 days.
Accordingly, more than one person may be deemed to be a beneficial owner of the
same securities.
Beneficial Owner and Shares Percentage
Address Beneficially (%)
Owned(1) Beneficially
Owned
The Group(2) 171,507 26.3
Rose Rita Graetz(2) 53,263 8.2
Alan Gelband 42,500 6.5
30 Lincoln Plaza
New York, NY 10023
Great Eslyn Side 41,699 6.4
Inc.(2)
James M. Harris 40,250 6.2
15140 Pepper Lane
Saratoga, CA 95070
Friedli Corporate 36,555 5.6
Finance AG(2)
Cofinvest 97 Ltd.(2) 36,555 5.6
Russell K. Burbank(3) 22,000(4) 3.3
Stanton R. Creasey(3) -- --
17
Michael V. Dettmers(3) 2,000(5) *
Reinhard Siegrist(3) 1,000(6) *
Bruce Collard(3) --(7) *
Joel R. Mesznik(2)(8) -- --
Hans C. Ochsner(2) --(9) --
All current officers 25,000 3.7
and directors as a
group (three
persons)(10)
- -------------------
* Less than one (1%) percent of the outstanding shares of Common Stock.
(1) Except as indicated by footnote, to the Committee's knowledge, the persons
or entities named in the table above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.
(2) See Schedule 13Ds filed with the Commission by the Group and certain of its
members individually on October 21, 1996. The business address of each of such
persons, for purposes hereof, is Freidli Corporate Finance AG, Freigutstrasse 5,
8002 Zurich, Switzerland. Friedli Corporate Finance AG and Cofinvest 97 Ltd.
share beneficial ownership with respect to the shares set forth opposite their
names.
(3) The business address of such person, for purposes hereof, is c/o Purus,
Inc., 600 California Street, Suite 1300, San Francisco, CA 94108.
(4) Includes 15,000 shares subject to stock options exercisable within 60 days.
(5) Represents shares subject to stock options exercisable within 60 days. Does
not include 1,000 shares subject to stock options that would be granted to Mr.
Dettmers in the event that he is re-elected to the Board at the Annual Meeting.
See "Special Meeting Proposal".
18
(6) Represents shares subject to stock options exercisable within 60 days. Does
not include 1,000 shares subject to stock options that would be granted to Mr.
Siegrist in the event that he is re-elected to the Board at the Annual Meeting.
Mr. Siegrist is currently a director of the Company and is expected to remain as
such following the Special Meeting. See "Special Meeting Proposal".
(7) Does not include 1,000 shares subject to stock options that would be granted
to Mr. Collard in the event that Mr. Collard, a nominee of the Company's
management, is elected to the Board at the Annual Meeting.
(8) The Committee will recommend Mr. Mesznik for appointment as a director of
the Company if the Committee's proposal to remove two of the three current
directors is approved. See "Special Meeting Proposal" and "Appointment of
Directors".
(9) The Committee will recommend Mr. Ochsner for appointment as a director of
the Company if the Committee's proposal to remove two of the three current
directors is approved. See "Special Meeting Proposal" and "Appointment of
Directors".
(10) Includes 18,000 shares subject to stock options exercisable within 60 days.
Does not include 3,000 shares subject to stock options that would be granted to
in the event that the current directors are re-elected to the Board at the
Annual Meeting. See "Special Meeting Proposal".
Certain of the information contained in the above table, as
well as the information contained in the section entitled "Compensation of
Directors" has been taken from or is based upon documents and records on file
with the Commission and other publicly available information, including Schedule
13Ds (other than Schedule 13Ds filed by the Group and certain of its members
individually) and the Company's Preliminary Proxy Statement for the Annual
Meeting. Neither the Committee nor any member thereof takes any responsibility
for the accuracy or completeness of the information contained in such documents
and records.
Change in Control
Neither of the members of the Committee knows of any
arrangement, other than otherwise described herein, the operation of which may
at a subsequent date result in a change of control of the Company, or of any
change of control that has occurred since January 1, 1995.
19
SOLICITATION; EXPENSES
The accompanying proxy in the form enclosed is being solicited
by and on behalf of the Committee. The solicitation of proxies will be made
principally by mail and, in addition, may be made by members of the Committee
personally, or by telephone or telegraph, without extra compensation. The
Committee has also retained Morrow to assist it in the solicitation of proxies.
The Committee has agreed to pay Morrow a fee of $25,000 and to reimburse it for
its expenses. Approximately [ ] employees of Morrow will solicit stockholders on
behalf of the Committee. Brokers, nominees and fiduciaries will be reimbursed by
the Committee for their out-of-pocket and clerical expenses in transmitting
proxies and related materials to beneficial owners. The entire cost of
soliciting proxies, estimated by the Committee to be approximately $150,000
(excluding the costs of potential litigation) will be borne by the members of
the Committee and the Group in a manner to be determined by them. The total
expenditures to date have been approximately $100,000. The Committee may seek
reimbursement from the Company for those expenses and, in such event, does not
intend to seek stockholder approval for such reimbursement at a subsequent
meeting unless such approval is required under Delaware Law.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal which is intended to be presented by any
stockholder for action at the Company's 1997 Annual Meeting of Stockholders must
be received in writing by the Secretary of the Company, at 600 California
Street, Suite 1300, San Francisco, California 94108, not later than [
, 1997] in order for such proposal to be considered for inclusion in the
proxy statement and form of proxy relating to the 1997 Annual Meeting of
Stockholders. In the event that another meeting of stockholders is held prior to
the 1997 Annual Meeting of Stockholders, including the rescheduled 1996 meeting
if the reconstituted Company Board of Directors adjourns the Annual Meeting,
reasonable prior notice thereof will be provided to the Company's stockholders.
OTHER MATTERS
Reference is made to the Company's Proxy Statement for the
1996 Annual Meeting of Stockholders for additional information concerning the
Company's management and current directors. The principal executive offices of
the Company are located at 600 California Street, Suite 1300, San Francisco,
California 94108, and its telephone number is (415) 788-1903. Pursuant to the
Company's By-laws, no
20
matters other than as described in the request for the Special Meeting may be
acted on at such Meeting.
PLEASE INDICATE YOUR SUPPORT OF THE COMMITTEE'S PROPOSAL TO
REMOVE TWO OF THE THREE CURRENT DIRECTORS OF THE COMPANY BY COMPLETING, SIGNING
AND DATING THE ENCLOSED PROXY AND RETURNING IT TO MORROW, IN THE ENCLOSED
ENVELOPE.
YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE
AND MAIL THE ACCOMPANYING PROXY CARD PROMPTLY.
The Purus Stockholders' Protective Committee
November 5, 1996
APPENDIX A
PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE
1. Name of Member: Peter Friedli
Business Address: c/o Friedli Corporate Finance AG
Freigutstrasse 5
CH-8002 Zurich, Switzerland
Present Occupation: Investment Advisor
Shares of Common Stock Beneficially Owned: 28,334
Shares of Common Stock Owned of Record: 28,334
Shares of Common Stock Purchased and Sold Within the
Past Two Years:
DATE PURCHASED OR SOLD NO. OF SHARES
---- ----------------- -------------
February 1990 Purchased 9,000 (after
giving effect to
the reverse stock
split)
August 28, 1996 Purchased 19,334
2. Name of Member: Hans C. Ochsner
Business Address: Obstgartenstrasse 22
8136 Gattikon, Switzerland
Present Occupation: Private Investor
Shares of Common Stock Beneficially Owned: None
Shares of Common Stock Owned of Record: None
Shares of Common Stock Purchased and Sold Within the
Past Two Years: None
No other participant in the solicitation of this Proxy
Statement has any substantial interest in any matter to be acted on at the
Special Meeting. Furthermore, no associate of the participants in such
solicitation beneficially owns any securities of the Company and no participant
owns any securities of any parent or subsidiary of the Company. None of the
shares of Common Stock owned by the members of the Committee were purchased with
borrowed funds.
Mr. Friedli was a founder of the Company. He was appointed as
a director in 1992, and resigned in November 1995 in order to prevent a conflict
of interest in the event that he proposed an acquisition candidate to the Board.
Until January 1, 1996, Mr. Friedli was also a principal of FCF, which the
Company retained as its investment banker. See "The Committee."
Mr. Siegrist, the director of the Company who would remain on
the Board in the event that the Committee's proposal is approved, is a client of
Mr. Friedli. Mr. Ochsner, the other member of the Committee, is not and has not
been, within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company,
other than as a member of the Group.
No participant or associate of any participant in this proxy
solicitation has any arrangement or understanding with any person with respect
to any future employment by the Company or its affiliates or with respect to any
future transactions to which the Company or its affiliates will or may be a
party, nor is any such person a party adverse to the Company or any subsidiary
thereof in any legal proceeding, and none of such persons has a material
interest adverse to the Company or any subsidiary thereof in any such
proceeding. The Company and several individuals, including Mr. Friedli, in his
capacity as a former director of the Company, have been named as defendants in a
class action litigation by stockholders of the Company alleging violations of
the securities laws, with respect to which each of Mr. Friedli and the Company
are represented by separate counsel.
PURUS, INC.
PROXY
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE PURUS STOCKHOLDERS'
PROTECTIVE COMMITTEE FOR A SPECIAL MEETING OF STOCKHOLDERS ON NOVEMBER 20, 1996.
The undersigned hereby appoint Peter Friedli and Hans C. Ochsner as
proxies of the undersigned, with full power of substitution, to vote, as
specified herein, all shares of Common Stock ("Common Stock") of Purus, Inc.
(the "Company") owned on the record date by the undersigned at the Special
Meeting of Stockholders to be held on November 20, 1996, and any postponements
or adjournments thereof.
THE PURUS STOCKHOLDERS' PROTECTIVE COMMITTEE RECOMMENDS A VOTE "FOR"
THE FOLLOWING PROPOSAL.
PROPOSAL TO REMOVE RUSSELL BURBANK AND MICHAEL DETTMERS, TWO OF THE
THREE CURRENT MEMBERS OF THE COMPANY'S BOARD OF DIRECTORS
/ / FOR / / AGAINST / / ABSTAIN
The shares represented by this Proxy will be voted in the manner
directed herein by the undersigned stockholder. If no direction is given, this
Proxy will be voted FOR the proposal to remove two of the three current members
of the Company's Board of Directors.
Please send an admission ticket for the Special Meeting.
Dated: ______________________ , 1996
___________________________________
(Signature)
___________________________________
(Signature)
IMPORTANT: Please sign exactly as
name appears herein. Each joint
owner should sign. Executors,
administrators, trustees and others
signing in a representative capacity
should give full title. If a
corporation, please sign in full
corporate name by authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.