SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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 Section 240.14a-11(c) or Section 240.14a-12
SunGroup, Inc.
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(Name of Registrant as Specified In Its Charter)
John E. Southwood, Jr., Secretary
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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[_] $500 per each party to the controversy pursuant to Exchange Act Rule
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[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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pursuant to Exchange Act Rule 0-11.
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[_] Check box if any part of the fee is offset as provided by Exchange
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SUNGROUP, INC.
9102 NORTH MERIDIAN STREET
SUITE 545
INDIANAPOLIS, INDIANA 46260
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 14, 1995
The Annual Meeting of Stockholders of SunGroup, Inc. will be held at the
Doubletree Hotel, 6505 N. IH 35 North, Austin, Texas 78752 on August 14, 1995,
at 8:00 a.m., Central Daylight Time, for the following purposes:
1. To elect three (3) Directors to serve until the next Annual Meeting of
Stockholders and until their successors shall have been elected and duly
qualified.
2. To ratify the appointment of Geo. S. Olive & Co., LCC as independent public
accountant for the Corporation for 1995.
3. To transact such other business as properly may come before the meeting.
Only Stockholders of record at the close of business on June 30, 1995 will
be entitled to notice of and to vote at the Annual Meeting
By Order of the Board of Directors:
John E. Southwood, Jr.
Secretary
Indianapolis, Indiana
July 7, 1995
________________________________________________________________________________
All Stockholders are urged to attend the meeting in person. Enclosed is a
proxy card which, each stockholder is requested to complete, date, sign and
return in the enclosed envelope. Any Stockholder who signs and returns a proxy
card may revoke it at any time before it is voted.
________________________________________________________________________________
SUNGROUP, INC.
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of SunGroup, Inc.
(the "Corporation" or "SunGroup") for use at the Annual Meeting of Stockholders
to be held August 14, 1995, and any adjournment thereof. Any Stockholder giving
a proxy is entitled to revoke it at any time before the proxy is voted by giving
written notice of revocation to the Secretary of the Corporation, by executing a
proxy bearing a later date or by attending the Annual Meeting and voting in
person.
The mailing address of the executive office of the Corporation is 9102
North Meridian Street, Suite 545, Indianapolis, Indiana 46260.
This Proxy Statement, the form of proxy and the Corporation's Form 10-KSB
for the year ended December 31, 1994 containing relevant financial information
for 1994 are being mailed to Stockholders on or about July 7, 1995.
Only holders of Common Stock of record at the close of business on June 30,
1995 will be entitled to vote at the meeting. At that date there were 6,442,099
shares of Common Stock outstanding and entitled to vote. Each Stockholder is
entitled to one vote for each share held on all issues presented at the Annual
Meeting of Stockholders.
The nominees for election as directors of the Corporation named in this
Proxy Statement will be elected by a plurality of the votes cast. Action on any
other matters to come before the meeting will be approved if the votes cast
favoring the action exceed the votes cast opposing the action. Abstentions,
broker non-votes, and instructions on the accompanying proxy card to withhold
authority to vote for one or more of the nominees will result in the respective
nominees receiving fewer votes.
The cost of soliciting proxies will be borne by the Corporation. In
addition to use of the mail, proxies may be solicited personally or by telephone
by directors, officers and certain employees of the Corporation who will not be
specially compensated for such soliciting. The Corporation will request
brokerage houses, nominees, custodians and fiduciaries to forward soliciting
material to the beneficial owners of stock and will reimburse such persons for
the cost of forwarding the material.
SUMMARY OF MATTERS TO BE CONSIDERED
At the Annual Meeting, Stockholders of the Corporation will be asked to
vote on the following matters:
(1) The election of three (3) Directors to serve until the next Annual
Meeting. Certain information concerning the Board of Directors' nominees for
election as Directors is set forth in the section of this Proxy Statement
entitled "ELECTION OF DIRECTORS."
(2) The ratification of the appointment of Geo. S. Olive & Co. LLC as
independent accountants for the Corporation's for the year ending December 31,
1995.
(3) The transaction of such other business as may properly be brought
before the Annual Meeting or any adjournments thereof.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth information as of June 30, 1995, as to the
beneficial ownership, direct or indirect, of the Corporation's Common Stock by
all Directors, all current Directors and Officers as a group, and all persons
known by the Corporation to own beneficially more than 5% of the Corporation's
Common Stock. Each holder has sole voting and investment rights with respect to
the shares of Common Stock held by such holder.
The aggregate percentage of ownership is based on 6,442,099 shares of
Common Stock outstanding and all exercisable options and warrants related to
individuals listed in the tables. However, no such options or warrants had been
exercised as of June 30, 1995, the record date.
Pursuant to applicable Securities and Exchange Commission Rules, a person
is deemed beneficial owner of those shares not outstanding which are subject to
options, warrants, rights or conversion privileges if that person can exercise
such options, warrants, rights or privileges within 60 days. Any such shares
are deemed to be outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by such person individually, but are not deemed
to be outstanding for the purpose of computing the percentage ownership of any
other person.
2
SECURITY OWNERSHIP OF MANAGEMENT
NAME COMMON STOCK PERCENT OF CLASS
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John W. Biddinger (1) 2,420,056 37.0%
James M. Elliott 20,000 .3%
John E. Southwood, Jr. 50,000 .8%
Dan E. Young (1) 626,179 9.3%
All Present Directors and 3,116,235 45.5%
Executive Officers as a Group
(4 persons)
(Footnotes on Following Pages)
3
SECURITY OWNERSHIP OF MAJOR SECURITY HOLDERS
NAME COMMON STOCK PERCENT OF CLASS
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John W. Biddinger 2,420,056 37.0%
9102 North Meridian Street
Suite 545
Indianapolis, IN 46260
(1)
Bankers National Life Insurance Co. 1,016,010 13.6%
11825 N. Pennsylvania Street
Carmel, IN 46032
(1)
Radio USA, Ltd. 1,913,007 29.7%
601 Jefferson Street
Houston, TX 77002
Western National Life Insurance Co. 4,956,050 43.5%
11825 N. Pennsylvania Street
Carmel, IN 46032
(1)
Dan E. Young 626,179 9.3%
3210 East 96th Street
Indianapolis, IN 46260
(1)
(Footnotes on Following Pages)
4
FOOTNOTES
(1) The Corporation has issued the following warrants to purchase its
Common Stock:
Bankers National Life 1,016,010
John W. Biddinger 101,601
Western National Life 4,956,050
Dan Young, IRA 304,803
Each of these warrants is exercisable for $.11 (in total not per share)
except Western which is $.89, are presently exercisable and terminate if not
previously exercised on February 15, 2003.
Mr. Young holds 321,376 shares of Common Stock in his name and 304,803
warrants in his Individual Retirement Account.
Potential Change in Control
- ---------------------------
As outlined above in Footnote 1, Western National Life Insurance Company
("Western") holds an exercisable warrant for 4,956,050 shares at $.89. If this
warrant was exercised, Western would control 37.6% of the Corporation's Common
Stock on a fully diluted basis. The warrant expires on February 15, 2003 and is
nontransferable until February 15, 1997. If by February 15, 1998, a certain
restructured note owed to Western is not repaid, Western will receive additional
warrants for 8.3% of the Corporation on a fully diluted basis.
5
ELECTION OF DIRECTORS
Directors are to be elected to hold office until the next Annual Meeting of
Stockholders and until the election and qualification of their successors. The
Corporation's bylaws provide for the exact number of directors to be set by the
Board of Directors. The current Board of Directors had determined that the
Board shall consist of three (3) members. The enclosed proxy will be voted in
favor of the election as Directors of the nominees listed below, unless contrary
instructions are received. All of the nominees are members of the present board
of Directors and were elected at the last Annual Meeting of the Stockholders,
which was held in 1994. If any nominee or nominees should be unwilling or
unable to accept nomination or election as a Director, which is not expected,
the proxies may be voted with discretionary authority for a substitute or
substitutes as shall be designated by the current Board of Directors.
Years of
Name of Nominee Service as Director Age
- --------------- ------------------- ---
John W. Biddinger August 1984 - Present 55
James M. Elliott November 1984 - Present 52
Dan E. Young December 1985 - Present 65
Biographical information concerning Mr. Biddinger is set forth below under
the caption "Executive Officers."
James M. Elliott has been President of Elliott and Associates, an
investment advisor and investment manager, since June 1991. Prior thereto, Mr.
Elliott was Vice President and Chief Financial Officer of the Indiana University
Foundation.
Dan E. Young has been President of Young Investments, Inc., a private
investment company, since 1979. He has been active in the ownership and
management of automobile franchise operations and is a multi-dealership owner.
There is no family relationship among Directors, Executive Officers, and
nominees for Director or Executive Officers of the Corporation.
MEETINGS AND COMMITTEES
The Board of Directors had a total of five meetings in 1994. No member
attended fewer than 75% of the total number of Board meetings held in 1994. The
Board of Directors has no Nominating Committee or Audit Committee.
The Compensation Committee consists of one non-employee director, Mr.
Elliott. The committee makes recommendations to Corporation management
regarding the compensation structure of the Corporation as applied to executive
personnel. There was one meeting of the Compensation Committee during 1994.
6
EXECUTIVE OFFICERS
The names, ages, and positions with the Corporation of its executive
officers are as follows:
Name Age Position
---- --- --------
John W. Biddinger 55 President
John E. Southwood, Jr. 37 Vice President/Treasurer/Secretary
Each such officer was elected to his present position at a meeting of the
Board of Directors of the Corporation and serves at the discretion of the Board
of Directors.
John W. Biddinger was elected President on May 24, 1991 and has been
Chairman of the Executive Committee since 1984. Mr. Biddinger is also President
and a Director of Biddinger Investment Capital Corporation, a leveraged buy-out
and workout specialist firm.
John E. Southwood, Jr. became Vice President/Finance, Treasurer and Chief
Financial Officer of the Corporation in February 1990 and Secretary in November
1992. Mr. Southwood is a certified public accountant.
7
EXECUTIVE AND DIRECTOR COMPENSATION
The following table summarizes the compensation paid by the Corporation to
its Chief Executive Officer, as of December 31, 1994, for the past three fiscal
years. The Corporation had no other Executive Officer at December 31, 1994 who
had earned $100,000 or more in salary and bonus during the past fiscal year.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Name and LTIP
Principal Salary Bonus Payouts All Other
Position Year ($) ($) ($) Compensation ($)
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John W. Biddinger 1994 132,200 0 0 0
CEO (1)
1993 132,200 0 19,775 0
(2) (2)
1992 132,200 5,000 0 50
(1)
(1) Mr. Biddinger received $50 in December 1992 for surrendering all of
his outstanding options, which totaled 32,500 shares exercisable at $3
per share. These options were surrendered pursuant to a plan offered
to all option holders.
(2) Pursuant to his employment agreement, Mr. Biddinger received 1,977,525
shares of the Corporation's Common Stock in September of 1993. The
fair market value of this Stock at the date of issuance was $0.01 per
share.
The Corporation has entered into an employment agreement with John W.
Biddinger effective May 24, 1991. This agreement originally had an expiration
date of May 24, 1994 but has been extended through May 31, 2000. The agreement
calls for a minimum annual compensation of $125,000, and annual bonuses of up to
50% of annual salary. The agreement calls for Mr. Biddinger to receive 24
months of annual compensation should he be dismissed without cause or there is a
change in control of the Corporation (as defined in the agreement).
The agreement provides for a death benefit to Mr. Biddinger's estate of two
and one half times the current annual base salary and a lump sum payment equal
to two times the current annual base salary if he should become permanently
disabled (as defined in the agreement). The Corporation is not insured against
either of these events. The agreement also grants Mr. Biddinger the option to
"put" all of his Stock back to the Corporation at a mutually agreed upon fair
market value (as defined in the agreement).
8
Mr. Biddinger has agreed in restructuring part of the Corporation's debt to
hold his annual salary at $132,200 per year.
Members of the Board of Directors who are not Officers of the Corporation,
receive $1,000 for their attendance at each regularly scheduled Board meeting.
There were five such meetings in 1994. Messrs. Elliott and Young attended all
such meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the Bankruptcy Court's approval of the reorganization plan for
the Corporation's Nebraska subsidiary, the assets of the Nebraska subsidiary
were sold to Oma, Inc. on February 1, 1993. The transfer price determined by
the Bankruptcy Court was $2.6 million. Oma, Inc. is a wholly owned subsidiary
of BCR Corporation, Inc. The equity raised by BCR Corporation, Inc. was via a
rights offering to all existing SunGroup shareholders. In addition to the funds
raised through the rights offering pursuant to the Bankruptcy Court Agreement,
Messrs. Biddinger, Elliott and Young, directors of the Corporation, contributed
substantial new equity to BCR Corporation, Inc. They now control approximately
61% of BCR. Their equity contributions were on the same terms as the rights
offering to SunGroup's shareholders and were necessary in order for BCR to raise
the minimum amount of new equity as called for under the Court's approved
reorganization plan.
Mr. Biddinger originally had a $100,000 debenture and presently exercisable
warrants for 33,332 shares of Common Stock at $3 per share. As a result of the
settlement and a partial payment received as a creditor under the Bankruptcy
plan and in substitution for the previously outstanding $100,000 debenture and
related warrants for 33,332 shares, Mr. Biddinger was given a debenture for
$93,333.06 and presently exercisable warrants 59,287 shares of Common Stock with
a total exercise price of $.11.
Mr. Young's IRA Trust originally had a $300,000 debenture and presently
exercisable warrants for 99,996 shares of Common Stock at $3 per share. As a
result of the settlement and a partial payment received as a creditor under the
Bankruptcy plan and in substitution for the previously outstanding $300,000
debenture and related warrants for 99,996 shares, Mr. Young's IRA Trust was
given a debenture for $265,200 and presently exercisable warrants for 177,862
shares of Common Stock with a total exercise price of $.11.
On April 14, 1993, the Board of Directors of the Corporation approved the
granting of a 15% equity interest (1,977,525 shares of Common Stock) to Mr.
Biddinger in accordance with the terms of his employment agreement. As a
result, the number of shares of the Corporation's Common Stock subject to
certain warrants held by Messrs. Biddinger and Young was increased because of
the anti-dilutive provisions contained in the warrants. Thus, the number of
shares of the Corporation's Common Stock subject to Mr. Biddinger's warrants was
increased from 59,287 shares to 101,601 shares with a total exercise price
remaining at $.11. The number of shares of the Corporation's Common Stock
subject to Mr. Young's IRA Trust warrants was increased from 177,862 shares to
304,803 shares with a total exercise price remaining at $.11.
STOCKHOLDERS' PROPOSALS FOR 1996
ANNUAL MEETING
Stockholders' proposals intended for presentation at the 1996 Annual
Meeting of Stockholders must be received by John E. Southwood, Jr., Vice
President and Secretary, SunGroup, Inc., 9102
9
North Meridian Street, Suite 545, Indianapolis, Indiana 46260, no later than
March 9, 1996 for inclusion in the proxy statement and form of proxy relating to
that meeting. All such proposals must be in writing and mailed by Certified
Mail, Return Receipt Requested, and must comply with Rule 14a-8 of Regulation
14A of the proxy rules of the Securities and Exchange Commission.
INDEPENDENT AUDITORS
The firm of Geo. S. Olive & Co. LCC, which has been the independent public
accountants of the Corporation since 1992, has been appointed to continue as the
Corporation's auditors for the year ending December 31, 1995, and the Board of
Directors is seeking ratification of this appointment. Representatives of
Geo. S. Olive & Co. LCC are not expected to be present at the Annual Meeting of
shareholders.
OTHER MATTERS
The management of the Corporation is not aware of any other matters which
may be presented for action at the meeting. Should any other matter requiring a
vote of the Stockholders arise, it is intended that the proxies in the
accompanying form will be voted in accordance with the best judgment of the
person or persons voting the proxies in light of conditions then prevailing.
If you do not plan to attend this meeting it would be appreciated if you
would promptly sign, date, and return the enclosed proxy in the enclosed
envelope.
By Order of the Board of Directors:
John E. Southwood, Jr.
Vice President and Secretary
July 12, 1995
10
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
AUGUST 14, 1995
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
SUNGROUP, INC.
9102 North Meridian Street
Suite 545
Indianapolis, Indiana 46260
The undersigned hereby appoints John W. Biddinger and John E. Southwood, Jr. as
Proxies, with power of substitution, and hereby authorizes either of them acting
singly to represent and to vote, as designated below, all of the shares of
Common Stock of SunGroup, Inc., which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held on August 14, 1995 at 8:00 a.m.,
Central Daylight Time at Doubletree Hotel, 6505 N. IH 35 North, Austin, Texas
78752, or any adjournment thereof, as follows:
1. ELECTION OF DIRECTORS:
_____ FOR all nominees listed below (except as marked below)
_____ WITHHOLD AUTHORITY to vote for all nominees listed below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME.)
John W. Biddinger James M. Elliott Dan E. Young
2. RATIFY THE APPOINTMENT OF GEO. S. OLIVE & CO. LLC AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE CORPORATION FOR 1995.
For _____ Against _____ Abstain _____
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER(S).
IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
____________________________________ Date: _____________________________
____________________________________
Signature of Stockholder(s)
(Please sign in the exact form in which your name
appears hereon and date your proxy. When signing as
attorney, executor, administrator, guardian, trustee,
officer signing for corporations, etc., please give full
title as such. For joint owners, each joint owner should sign.)