UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
SCHEDULE 14A
(RULE 14a-101)
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.)
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US 1 INDUSTRIES, INC.
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US 1 INDUSTRIES, INC.
1000 COLFAX STREET
GARY, INDIANA 46406
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, OCTOBER 30, 2002
10:00 A.M., EASTERN TIME
------------------------
Dear Fellow Stockholder:
On behalf of the Board of Directors, you are cordially invited to attend
the 2002 Annual Meeting of Stockholders to be held on Wednesday, October 30,
2002, at 10:00 a.m. Eastern Time at the Executive Conference Center, Hartsfield
International Airport, Suite 300, Atlanta, Georgia 30320. The purposes of the
meeting are to:
1. elect directors to serve until the next annual meeting of stockholders
and until their respective successors shall be elected and qualified;
and
2. conduct any other business properly before the meeting or any
adjournment thereof.
Attendance and voting are limited to stockholders of record at the close
of business on September 23, 2002. A list of stockholders entitled to vote at
the meeting will be available, upon written demand, for inspection and copy
between the hours of 9:00 a.m. and 5:00 p.m. at our offices during the five
days prior to the meeting and also at the meeting. Such list will be arranged
in alphabetical order and will contain the address and number of shares that
each shareholder is entitled to vote.
Your vote is important. Whether you plan to attend the meeting in person
or not, please complete, sign and date the enclosed proxy card and return it in
the envelope provided. If you attend the meeting and prefer to vote in person,
you may do so even if you have previously submitted a proxy.
Thank you for your continued support of our company.
Harold E. Antonson
Secretary
Gary, Indiana
September 26, 2002
TABLE OF CONTENTS
PAGE
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INTRODUCTION ......................................................... 1
ELECTION OF DIRECTORS ................................................ 2
DIRECTORS AND EXECUTIVE OFFICERS ..................................... 3
Directors ........................................................... 3
Executive Officers .................................................. 3
Board Information ................................................... 3
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS ..................... 4
Summary Compensation Table .......................................... 4
Pension Retirement and Savings Plans ................................ 4
Compensation of Directors ........................................... 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL ONWERS AND
MANAGEMENT .......................................................... 5
Securities Ownership of Management .................................. 5
Securities Ownership of Certain Beneficial Owners ................... 5
Section 16(a) Beneficial Ownership Reporting Compliance ............. 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION .......... 6
COMPENSATION COMMITTEE REPORT ........................................ 6
Introduction ........................................................ 6
Executive Compensation Policy ....................................... 6
Base Salary ......................................................... 6
Annual and Long-Term Incentives ..................................... 6
Chief Executive Officer Compensation ................................ 7
Tax Treatment of Executive Compensation ............................. 7
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS ...................... 8
PERFORMANCE GRAPH .................................................... 9
AUDIT COMMITTEE REPORT ............................................... 10
INDEPENDENT PUBLIC ACCOUNTANTS ....................................... 11
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING ........................ 11
OTHER MATTERS ........................................................ 11
Annual Report ....................................................... 11
US 1 INDUSTRIES, INC.
1000 COLFAX STREET
GARY, INDIANA 46406
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PROXY STATEMENT
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INTRODUCTION
Annual Meeting: The 2002 Annual Meeting of Stockholders will be held on
Wednesday, October 30, 2002, at 10:00 a.m. Eastern Time at the
Executive Conference Center, Hartsfield International Airport,
Suite 300, Atlanta, Georgia 30320 on Wednesday, October 30,
2002.
Record Date: The date fixed to determine stockholders entitled to notice of
and to vote at the meeting is the close of business on Monday,
September 23, 2002.
Mailing Date: We anticipate first mailing this proxy statement, the attached
Notice of Annual Meeting and the enclosed proxy card on or
about September 26, 2002.
Agenda: The agenda for the meeting is:
1. to elect directors to serve until the next annual meeting
of stockholders and until their respective successors shall
be elected and qualified; and
2. to conduct any other business properly before the meeting
or any adjournment thereof.
Proxy
Solicitation: Our Board of Directors is soliciting this proxy. Certain of
our officers and employees may solicit proxies personally and
by telephone. In addition, we have retained Morrow & Co. to
assist with the distribution of materials to street name
holders. We are paying the cost of solicitation, including the
cost of mailing. We have requested banks, brokers and other
custodian nominees and fiduciaries to supply, at our expense,
proxy material to the beneficial owners of common stock of the
Company.
Voting of
Proxies: Properly dated, executed and returned proxies will be voted
in accordance with your instructions. If no specific
instructions are given, your shares will be voted FOR our
Board's nominees.
We do not intend to bring any matters before the meeting except
those indicated in the Notice of Annual Meeting, and we do not
know of any matter which anyone else intends to present for
action at the meeting. If any other matters properly come
before the meeting, however, the persons named in the enclosed
proxy will be authorized to vote or otherwise act in accordance
with their judgment.
Revoking
Proxies: You may revoke your proxy at any time before it is voted at
the meeting by:
o Delivering to the Secretary of the Company a signed,
written revocation letter dated later than the proxy;
o Submitting a proxy with a later date; or
o Attending the meeting and voting in person.
Outstanding
Shares: On the record date, there were 11,618,224 shares of our
common stock outstanding, the only class of voting securities
outstanding.
Quorum: A quorum of stockholders is necessary to take action at the
Annual Meeting. The holders of a majority of all outstanding
shares of Common Stock of the Company issued, outstanding and
entitled to vote, represented in person or by proxy, will
constitute a quorum. Abstentions and broker non-votes are
counted for purposes of determining whether a quorum is
present.
Voting: Each share of common stock held as of the record date entitles
the holder to one vote on each matter to be voted upon at the
Annual Meeting. Abstentions and
1
broker non-votes have no effect on the election of directors or
any other matter properly voted upon by the stockholders.
Required Vote: The nominees for director who receive a plurality of votes cast
in person or by proxy at the meeting of stockholders will be
elected directors of the Company. If a quorum exists, action on
a matter (other than the election of directors) submitted to
stockholders entitled to vote thereon at a meeting shall be
approved if the votes cast in favor of the action exceed the
votes cast in opposition to the action.
Broker Votes: Brokers who hold shares in street name have the authority to
vote on certain routine matters on which they have not received
instructions from beneficial owners. Brokers holding shares of
common stock in street name who do not receive instructions
from beneficial owners by the date specified in the statement
accompanying this proxy material are entitled to vote on the
election of directors.
Annual Report: US 1 Industries, Inc.'s 2001 Annual Report is being mailed to
you with this proxy statement.
ELECTION OF DIRECTORS
The Board of Directors has nominated the following people to serve a one
year term and until the election and qualification of their successors in the
2003 annual meeting. All nominees have consented to being named in this proxy
statement and to serve if elected. However, if any nominee becomes unable to
serve, proxy holders will have discretion and authority to vote for another
nominee proposed by our Board of Directors. Alternatively, our Board of
Directors may reduce the number of directors to be elected at the meeting.
Unless otherwise specified thereon, the enclosed proxy will be voted in
favor of the election of the nominees named herein, all of whom are currently
directors. Abstentions and non-votes by brokers and other nominees have no
effect on the election of directors
Nominees for Board of Directors shall include:
Harold E. Antonson: Age: 62
Mr. Antonson is Chief Financial Officer, Treasurer and
Secretary of the Company. Mr. Antonson has served as Chief
Financial Officer and Secretary of the Company since March
1998. Mr. Antonson was elected a director and Treasurer of the
Company in November 1999. Prior to joining the company, he was
Secretary / Treasurer of American Inter- fidelity Exchange. Mr.
Antonson is a certified public accountant.
Brad A. James: Age: 46
Mr. James was elected a director of the Company in 1999. Mr.
James has served as President of Seagate Transportation
Services, Inc. located in Perrysburg, Ohio since 1982.
Michael E. Kibler: Age: 61
Mr. Kibler is President and Chief Executive Officer of the
Company, a position he has held since 1993. Mr. Kibler was
elected a director of the Company in 1993. Mr. Kibler has also
been President of Enterprise Truck Lines, Inc., an interstate
trucking company engaged in operations similar to those of the
Company, since 1972.
2
Robert I. Scissors: Age: 68
Mr. Scissors was elected a director of the Company in 1993. Mr.
Scissors serves on the audit and compensation committees of the
Board of Directors. Mr. Scissors began his career in the
Insurance Industry in 1957. In 1982, Mr. Scissors joined the
brokerage firm of Alexander /Alexander where he worked until
retiring in 1992. Mr. Scissors currently works as an insurance
consultant and broker.
William J. Sullivan, Jr.: Age: 55
Mr. Sullivan was elected a director of the Company in 2001. Mr.
Sullivan currently serves as President of One Call Motor
Freights, Inc. and Champion Motor Freight, Inc. Mr. Sullivan
manages Unity Logistics, Inc. and is a controlling owner of
E.R.X., Inc., each a subsidiary of the Company.
Lex L. Venditti: Age: 49
Mr. Venditti was elected a director of the Company in 1993. Mr.
Venditti currently serves on the audit and compensation
committees of the Board of Directors. Mr. Venditti is the
President of the entity that manages American Inter-fidelity
Exchange, a reciprocal insurer. Mssrs. Kibler and Antonson own
a 66 2/3% interest in that managing entity.
Mr. Blue resigned from the Board of Directors effective September 19,
2002. We would like to thank him for his service to the board. As a result of
the vacancy created by the resignation mentioned above the size of the Board of
Directors will be reduced to 6. Proxies can be voted for no more than 6
persons.
The Board of Directors of the Company recommends a vote FOR the election
of each nominees as a director of the Company.
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The Company's directors and a biography of each are set forth in the
section entitled "Election of Directors."
EXECUTIVE OFFICERS
The Company's executive officers and a biography of each are set forth in
the section entitled "Election of Directors."
BOARD INFORMATION
Board Meetings
In 2001, our full Board held two meetings. In addition to our full Board
meetings, our directors attended meetings of permanent committees established
by our Board. Each director participated in at least 75% of the total number of
meetings of our Board and the committees on which he or she serves.
Audit Committee
The audit committee, which held two meetings during 2001, consists of
Robert I. Scissors and Lex Venditti, both of whom are non-employee directors.
For a description of the Audit Committee's responsibilities and findings, see
"Audit Committee Report" beginning on page 10.
Compensation Committee
The compensation committee, which held one meeting during 2001, currently
consists of Robert I. Scissors and Lex Venditti. The responsibilities of the
Compensation Committee are to review and make recommendations to the Board of
Directors about salaries, bonuses and other forms of compensation for the
Company's officers, senior management, and other executive staff.
3
Nominating Committee
The Board of Directors does not have a Nominating Committee. However, the
Company's bylaws provide that only persons who are nominated in accordance
therewith are eligible for election as directors. The bylaw provision requires
nomination be made by the Board of Directors or by a stockholder who follows
certain advance notice procedures. In general, the notice procedures require
that the stockholder (i) give actual written notice of his or her intent to
make such nomination to the Secretary of the Company no earlier than 10 days
and no later than 60 days before the date of the meeting in order for elections
to be held at the first annual or special meeting of stockholders after such
written notice is given and (ii) deliver to the company certain information
about stockholder's common stock holdings, any arrangements pursuant to which
such nomination is made, certain biographical and other information regarding
such nominee or nominees, and the consent of such nominee or nominees to serve
as director of the Corporation if so directed. A copy of this provision of the
Bylaws is available upon request to the Secretary of the Company. In addition,
stockholders are urged to contact any director in order to make recommendations
with respect to potential directors.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth compensation paid by
the Company during the years ended December 31, 2001, 2000 and 1999 to its
Chief Executive Officer. No other officers earned in excess of $100,000.
SUMMARY COMPENSATION TABLE
NAME AND OTHER
PRINCIPAL POSITIONS PERIOD SALARY BONUS COMPENSATION
- --------------------------- ------- ---------- ------- -------------
Michael E. Kibler ......... 2001 $33,048 $0 $0
2000 $33,048 $0 $0
1999 $33,048 $0 $0
PENSION, RETIREMENT AND SAVINGS PLANS
The Company does not maintain any employee pension, retirement or savings
plans and is not a party to any executive employment agreements.
COMPENSATION OF DIRECTORS
In view of the financial condition of the Company, directors are not
currently receiving any compensation for their service on the Board of
Directors and did not receive any compensation for such services during 2001.
Directors are reimbursed for out of pocket expenses reasonably incurred in
connection with their service on the Board of Directors.
4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number and percentage of shares of
common stock of the Company that, as of August 30, 2002, are deemed to be
beneficially owned by each director and director nominee, by each named
executive officer of the Company (only Mr. Kibler) and by all directors and
executive officers of the company as a group.
NUMBER OF SHARES
OF COMMON STOCK PERCENTAGE OF
NAME AND POSITION OWNED BENEFICIALLY CLASS
- ---------------------------------------------- -------------------- --------------
Harold E. Antonson (1) ....................... 2,890,235 25%
Gage Blue .................................... 0 *
Brad A. James (2) ............................ 170,981 *
Michael E. Kibler (3) ........................ 2,830,790 24%
Robert I. Scissors (4) ....................... 51,770 *
William J. Sullivan (5) ...................... 18,000 *
Lex Venditti ................................. 20,000 *
All Directors and Executive Officers ......... 3,135,863 27%
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* Indicates less than 1% ownership.
(1) Includes 1,150,946 shares held by August Investment Partnership ("AIP").
Mr. Antonson is a 50% stockholder and officer of August Investment
Corporation, AIP's general partner. Includes 522,439 shares held by
Eastern Refrigerated Transportation, Inc. of which Mr. Antonson is a 32%
stockholder. Includes 75,616 shares held by Enterprise Truck Line, Inc.
of which Mr. Antonson is a 50% stockholder. Includes 15,123 shares held
by Seagate Transportation Services, Inc. of which Mr. Antonson is a 25%
stockholder.
(2) Includes 15,123 shares held by Seagate Transportation Services, Inc. of
which Mr. James is a 50% stockholder and officer.
(3) Includes 1,150,946 shares held by AIP. Mr. Kibler is a 50% stockholder
and officer of August Investment Corporation, AIP's general partner.
Includes 522,439 shares held by Eastern Refrigerated Transportation, Inc.
of which Mr. Kibler is a 32% stockholder. Includes 75,616 shares held by
Enterprise Truck Line, Inc. of which Mr. Kibler is 50% stockholder and
officer. Includes 15,123 shares held by Seagate Transportation Services,
Inc. of which Mr. Kibler is a 25% stockholder.
(4) Includes 11,770 shares held in the Saundra L. Scissors Trust of which Mr.
and Mrs. Scissors are joint trustees.
(5) Includes 18,000 shares owned by ERX, Inc.of which Mr. Sullivan is a
controlling owner.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the number and percentage of shares of
common stock of the Company beneficially owned as of July 15, 2002 by any
person who is known to the Company to be the beneficial owner of more than five
percent of the outstanding shares.
NUMBER OF SHARES OF
NAME AND ADDRESS OF COMMON STOCK PERCENTAGE OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- ----------------------------------------------- -------------------- --------------
Harold E. Antonson (1) (2) .................... 2,890,235 25%
Michael E. Kibler (1) (3) ..................... 2,830,790 24%
August Investment Partnership (1) ............. 1,150,946 10%
August Investment Corporation (1) (4) ......... 1,150,946 10%
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(1) The address is 1000 Colfax Street, Gary, IN 46406.
(2) See Note 1 to the prior table.
(3) See Note 3 to the prior table.
(4) As general partner of August Investment Partnership, August Investment
Corporation may be deemed to be the beneficial owner of the shares of
common stock of the Company owned by August Investment Partnership.
Messrs. Kibler and Antonson own August Investment Corporation in equal
shares and, as a result may be deemed to be the beneficial owner of the
shares of common stock of the Company owned by August Investment
Partnership.
5
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act, directors and
executive officers of the Company and beneficial owners of more than 10 percent
of the outstanding common stock are required to file reports with the
Securities and Exchange Commission on Forms 3, 4 and 5 regarding their
beneficial ownership of securities of the Company and any changes in such
ownership. Based on our review of reports filed with the Securities and
Exchange Commission by our directors and executive officers and by beneficial
owners of 10% or more of our shares, and based on written representations
received from these same persons, we believe that all reports required under
Section 16(a) of the Securities and Exchange Act were filed in a timely manner
with the following exceptions: (a) Harold Antonson filed two late reports
disclosing five transactions, (b) Gage Blue filed one late report, (c) Brad
James filed two late reports disclosing six transactions, (d) Michael Kibler
filed two late reports disclosing two transactions, (e) Robert Scissors filed
two late reports disclosing two transactions, (f) William Sullivan filed one
late report, and (g) Lex Venditti filed one late report. The Company is
instituting a compliance process to insure that future filings are made in a
timely manner.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was, during the fiscal year ended
December 31, 2001, an officer, former officer or employee of the Company or any
of its subsidiaries. None of our executive officers served as a member of:
o The compensation committee of another entity in which one of the
executive officers of such entity served on our Compensation Committee;
o The board of directors of another entity, one of whose executive
officers served on our Compensation Committee; or
o The compensation committee of another entity in which one of the
executive officers of such entity served as a member of our Board of
Directors
COMPENSATION COMMITTEE REPORT
INTRODUCTION
Our Compensation Committee is responsible for determining the salaries and
other entitlements of the executive officers and designs all of our
compensation programs and policies. The Compensation Committee is currently
composed of two non-employee directors: Robert I. Scissors and Lex Venditti.
Our Board of Directors has not rejected or modified any action taken by the
Compensation Committee.
EXECUTIVE COMPENSATION POLICY
The objectives of our compensation policy are to:
o optimize profitability and growth;
o link the interests of management with those of stockholders;
o provide management with incentive for excellence in individual
performance;
o promote teamwork among managers; and
o attract and retain highly qualified and effective officers, key
employees and directors.
BASE SALARY
The Chief Executive officer and Chief Financial Officer of the Company
each receive a base salary of $33,048.
ANNUAL AND LONG-TERM INCENTIVES
Due to the financial circumstances of the Company, no annual or long-term
incentives are offered.
6
CHIEF EXECUTIVE OFFICER COMPENSATION
Michael E. Kibler, President and Chief Executive Officer of the Company,
receives an annual salary in the amount of $33,048. No stock options,
performance bonus or other performance based incentive compensation is offered,
although we expect in the near future to substantially increase Mr. Kibler's
compensation.
TAX TREATMENT OF EXECUTIVE COMPENSATION
Given the magnitude of the compensation paid by the Company, tax treatment
generally is not, and is not expected to be, a significant issue.
This report is submitted by Messrs. Scissors and Venditti, each being a
member of the Compensation Committee.
Robert I. Scissors
Lex Venditti
7
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
During 2002, the Company's outstanding shares of Series A Preferred Stock
were exchanged for 1,000,000 shares of common stock of the Company at a ratio
of approximately 1.0942 to 1. As a result of the exchange, August Investment
Partnership acquired 386,822 shares of common stock of the Company, Eastern
Refrigerated Transportation, Inc. acquired 522,439 shares of common stock of
the Company, Enterprise Truck Line, Inc. acquired 75,616 shares of common stock
of the Company and Seagate Transportation Services, Inc. acquired 15,123 shares
of common stock of the Company. Michael E. Kibler, President, Chief Executive
Officer and director of the Company, and Harold E. Antonson, Chief Financial
Officer, Treasurer, Secretary and director of the Company, are 50% stockholders
of August Investment Corporation, the general partner of August Investment
Partnership, 32% stockholders of Eastern Refrigerated Transportation, Inc., 50%
stockholders of Enterprise Truck Line, Inc. and 25% stockholders of Seagate
Transportation Services, Inc. Brad A. James, director of the Company, is a 50%
stockholder of Seagate Transportation Services, Inc. The purposes of the
exchange were to improve the Company's financial position, facilitate a future
re-listing of the Company's common stock and increase the liquidity of the
Company's common stock. The value of the exchange, based on the market price of
the Company's common stock on July 25, 2002, is approximately $250,000.
The Company leases office space for its headquarters in Gary, Indiana, for
$3,000 per month from Messrs. Kibler and Antonson who own the property as joint
tenants.
One of the subsidiaries of the Company provides safety, management, and
accounting services to Eastern Refrigerated Transportation, Inc., Enterprise
Truck Line, Inc., and Seagate Transportation Services, Inc. which are
controlled by Messrs. Kibler and Antonson. These services are priced to cover
the cost of the employees providing the services. Revenue related to those
services was approximately $67,000, $124,000 and $78,000 in 2001, 2000 and
1999, respectively.
One of the Company's insurance providers, American Inter-Fidelity Exchange
("AIFE") is managed by Lex Venditti, director of the Company, and the Company
has an investment in the insurance provider. In addition, Mr. Venditti manages
an affiliated insurance carrier, Indiana Truckers Exchange ("ITE"). Messrs.
Kibler, Antonson and Venditti own the company that employs Mr. Venditti to
manage these businesses. For the years ended December 31, 2001, 2000, and 1999
cash paid for related party insurance premiums and deductibles amounted to
$1,313,522, $729,434, and $532,586, respectively. The Company also has long
term notes payable to AIFE and ITE in the amount of $5,536 and $7,249,
respectively.
The Company has a note payable to Mr. Kibler and Mr. Antonson in the
amount of $2,725,509 at an interest rate of .75% over prime with the principal
balance due October 2003.
The Company has a mortgage note payable to Mr. Kibler and Mr. Antonson in
the amount of $500,000 collateralized by land at an interest rate of .75% over
prime with the principal balance due July 2004.
The Company has two notes payable to August Investment Partnership, an
entity affiliated through common ownership, in the amounts of $250,000 and
$100,000, each at an interest rate of .75% over prime and with the principal
balances due October 2003.
8
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return of
the Company from July 17, 1997 through December 31, 2002 with that of the Media
General Trucking Industry Group and the NASDAQ Market Index. Dividend
reinvestment has been assumed and the returns of each company have been
weighted to reflect relative stock market capitalization. The graph assumes an
investment of $100 on July 17, 1997 in each of the Company's common stock, the
stocks comprising the Media General Trucking Industry Group and the NASDAQ
Market index.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG US 1 INDUSTRIES, INC.,
NASDAQ MARKET INDEX AND MG GROUP INDEX
[GRAPHIC OMITTED]
o US 1 INDUSTRIES, INC. o MG GROUP INDEX o NASDAQ MARKET INDEX
ASSUMES $100 INVESTED ON JULY 17, 1997
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2001
MEASUREMENT PERIOD
FISCAL YEAR ENDING
-----------------------------------------------------------------------------
7/17/97 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
----------- ---------- ---------- ---------- ---------- -----------
US 1 Industries, Inc. (1) 100.00 74.76 22.36 22.36 31.95 223.64
Trucking 100.00 107.18 102.50 98.36 103.43 130.17
NASDAQ Market Index 100.00 98.95 139.56 246.14 154.71 123.32
- ----------
(1) Trading information for US 1 Industries, Inc. prior to July 17, 1997 was
not readily available.
9
AUDIT COMMITTEE REPORT
The information contained in this report shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the 1934
Securities Exchange Act, as amended, except to the extent that we specifically
incorporate it by reference in such filing.
The Audit Committee of the Board of Directors is responsible for
evaluating audit performance, recommending engagement of and managing relations
with our independent accountants and evaluating policies and procedures
relating to internal accounting functions and controls. The Audit Committee is
currently comprised of Mr. Venditti and Mr. Scissors, each a non-employee
director, and operates under a written charter adopted by the Board of
Directors. A copy of the Audit Committee Charter as presently in effect is
attached hereto as an appendix. Our Board of Directors has determined that Mr.
Scissors is "independent" for purposes of the NYSE listing standards (which do
not technically apply but which the Company uses as a benchmark) and that Mr.
Venditti is not independent because he is an executive officer of a company
that has a business relationship with the Company. However, the Board of
Directors has determined that, in its business judgment, the relationship in
question does not interfere with the director's exercise of independent
judgment.
The Audit Committee members are not professional accountants or auditors,
and their functions are not intended to duplicate or to certify the activities
of management and the independent auditor, nor can the Audit Committee certify
that the independent auditor is "independent" under applicable rules. The Audit
Committee serves a board-level oversight role in which it provides advice,
counsel and direction to management and the auditors on the basis of the
information it receives, discussions with management and the auditors and the
experience of the Audit Committee's members in business, financial and
accounting matters. Our management has the primary responsibility for the
financial statements and reporting process, including our systems of internal
controls. In fulfilling its oversight responsibilities, the Audit Committee
reviewed with management the audited financial statements included in the
Annual Report on Form 10-K for the fiscal year ended December 31, 2001. This
review included a discussion of the quality and the acceptability of our
financial reporting and controls, including the clarity of disclosure in the
financial statements.
The Audit Committee has discussed with BDO Seidman, LLP, the Company's
independent accountants for the year ended December 31, 2001, the matters
required to be discussed by SAS 61 (Codification of Statements on Accounting
Standards) which include, among other items, matters related to the conduct of
the audit of the Company's financial statements. The Audit Committee has also
received written disclosures and the letter from BDO Seidman, LLP required by
Independence Standards Board Standard No. 1 (which relates to the accountant's
independence from the Company and its related entities) and has discussed
withBDO Seidman, LLP their independence from the Company.
During fiscal year 2001, the Company paid BDO Seidman, LLP fees in the
amount of $114,633 to audit and review its financial statements. No other fees
were paid to BDO Seidman, LLP for non-auditing or other services.
Based on the review and discussion referred to above, the Audit Committee
recommended to the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 and be filed with the United States
Securities and Exchange Commission.
This report is submitted by Messrs. Venditti and Scissors, being all of
the members of the Audit Committee.
Lex Venditti
Robert I. Scissors
10
INDEPENDENT PUBLIC ACCOUNTANTS
It is expected that representatives of BDO Seidman, LLP, the Company's
independent public accountants who audited the consolidated financial
statements of the Company and its subsidiaries for 2001, will be present at the
Annual Meeting, will have an opportunity to make a statement if they so desire
and will be available to answer appropriate questions from stockholders. The
Company's independent public accountants are selected annually by the Audit
Committee of the Board of Directors to audit the consolidated financial
statements of the Company and its subsidiaries. The Audit Committee has
selected BDO Seidman, LLP its accountants for the past three years as its
independent public accountants for 2002.
STOCKHOLDER PROPOSALS FOR THE
2003 ANNUAL MEETING
Stockholder Proposals intended to be presented at the 2003 Annual Meeting
of Stockholders (assuming that the Company holds one) pursuant to Securities
and Exchange Commission Rule 14a-8 must be received by May 29, 2003 in order to
be eligible for inclusion in our proxy statement and form of proxy for that
meeting. However, if the date of the 2003 Annual Meeting is more than 30 days
from the date of this year's Annual Meeting, then the deadline for shareholder
proposals will be a reasonable time before we begin to print and mail our proxy
materials. Stockholders who intend to present proposals at an annual meeting
other than pursuant to Rule 14a-8 must comply with the notice provisions in the
Company's by-laws. These notice provisions require, for a proposal to be
properly brought before the 2003 Annual Meeting of Stockholders, that proper
notice of the proposal be received by the Company no earlier than 10 days and
no later than 60 days before the date of the meeting in order for the proposal
to be considered at the next annual meeting of shareholders. Stockholder
proposals should be addressed to Harold E. Antonson, US 1 Industries, Inc.,
1000 Colfax Street, Gary, Indiana, 46406.
OTHER MATTERS
The Board of Directors does not know of any matters to be submitted to the
stockholders at the Annual Meeting other than the matters described in the
Notice of Annual Meeting. If any other matters properly come before the
meeting, persons named in the enclosed proxy intend to vote the shares they
represent in accordance with their own judgments.
ANNUAL REPORT
The Company's Annual Report for 2001 is enclosed with this proxy
statement.
BY ORDER OF THE BOARD OF DIRECTORS
Harold E Antonson, Secretary
September 26, 2002
11
APPENDIX
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
US 1 INDUSTRIES, INC.
I. PURPOSES
--------
The Audit Committee is appointed by the Board of Directors of US 1
Industries, Inc. (the "Company") to assist the Board of Directors in fulfilling
its oversight responsibilities. The Audit Committee's primary duties and
responsibilities are to:
o Monitor the integrity of the Company's financial statements and the
financial reporting process and systems of internal financial and
accounting controls;
o Monitor the independence and performance of the Company's independent
auditors;
o Maintain open communication among the independent auditors, management
and the Board of Directors.
The Audit Committee and the Board of Directors shall have the ultimate
authority and responsibility to select, evaluate, and, where appropriate,
replace the Company's independent auditors.
II. COMPOSITION AND MEETINGS
------------------------
The Audit Committee shall be comprised of at least two directors, each of
whom shall have no relationship to the Company that may interfere with the
exercise of his or her independence from management and the Company. Members of
the Audit Committee shall be financially literate or become financially
literate within a reasonable period of time after appointment to the Audit
Committee.
The Audit Committee shall meet at least twice a year and more frequently
if circumstances require. The Audit Committee should meet privately in
executive session with management, the independent auditors and as a committee
to discuss any matters that the Audit Committee or each of these groups
believes should be discussed.
III. RESPONSIBILITIES AND FUNCTIONS
------------------------------
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board of Directors and
report the results of their activities to the Board of Directors. Management is
responsible for preparing the Company's financial statements, and the
independent auditors are responsible for auditing those financial statements.
The independent auditors are ultimately accountable to the Board of Directors
and the Audit Committee. The Audit Committee shall annually recommend to the
Board of Directors the appointment of the independent auditors.
A. Independent Auditors
--------------------
o Evaluate the independence and performance of the independent auditors
and, where appropriate, recommend to the Board of Directors a
replacement for the independent auditors.
o Review the experience and qualifications of the senior members of the
independent auditor team and the quality control procedures of the
independent auditors.
o Approve the retention of the independent auditors for any non-audit
service.
o Review fees to be paid to the independent auditors for audit and
non-audit services.
A-1
o Ensure that the independent auditors deliver periodic written
statements delineating all relationships between the independent
auditors and the Company. The Audit Committee shall also engage in a
dialogue with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the independent auditors and recommend that the Board
of Directors take appropriate action in response to the independent
auditors' report to satisfy itself of the independent auditors'
independence.
B. Review Procedures
-----------------
o Review significant changes to the Company's auditing and accounting
principles and practices proposed by the independent auditors or
management.
o Review with management and the independent auditors the Company's
annual audited financial statements prior to filing or distribution,
including (i) their judgment about the quality of the Company's
accounting principles as applied in its financial reporting, (ii) the
reasonableness of significant judgments, and (iii) the clarity of the
disclosures in the financial statements.
o Review the interim financial statements, including the results of the
independent auditors' reviews of the quarterly financial statements,
with management and the independent auditors prior to the filing of
the Company's Quarterly Report on Form 10-Q and the Company's release
of earnings.
o Discuss with management and the independent auditors the adequacy and
effectiveness of the Company's accounting and financial processes and
controls. The Audit Committee may meet separately with management and
with the independent auditors to discuss these matters.
o Discuss with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
o Discuss significant financial risks and exposures and the steps taken
by management to monitor and minimize such risks.
o Discuss with the independent auditors the overall scope and plans for
their audits, including the adequacy of staffing.
o Discuss with the independent auditors any problems or difficulties
the independent auditors may have encountered and any management
letter provided by the independent auditors and the Company's
response to that letter.
o Review with the Company's General Counsel (or executive officer with
oversight over legal matters of the Company) any legal matters that
could have a material impact on the financial statements, the
Company's compliance policies, and any material reports or inquiries
received from governmental agencies or regulators.
o Review with management and the independent auditors the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.
o Obtain from the independent auditors assurance that Section 10A of
the Securities Exchange Act of 1934 has not been implicated.
C. Other Responsibilities
----------------------
o Review and reassess the adequacy of the Audit Committee Charter at
least annually and recommend any proposed changes to the Board of
Directors for approval.
o Annually prepare the report required by the rules of the Securities
and Exchange Commission to be included in the Company's annual proxy
statement.
A-2
o Recommend to the Board of Directors guidelines for the Company's
hiring of employees of the independent auditors who were engaged on
the Company's account.
IV. AUTHORITY
---------
The Audit Committee is authorized to confer with Company management and
other employees to the extent it may deem necessary or appropriate to fulfill
its duties and discharge its responsibilities. The Audit Committee has the
authority to investigate any matter within the Audit Committee's scope of
responsibilities and may retain, at the Company's expense, special legal,
accounting or other experts or consultants it deems necessary or appropriate,
provided it shall keep the Board of Directors advised as to the nature and
extent of such outside advice.
A-3
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PROXY CARD
US 1 INDUSTRIES, INC.
This proxy is solicited on behalf of the Board of Directors of US 1
Industries for the Annual Meeting of stockholders on Wednesday, October 30, 2002
at 10:00 a.m. Eastern Time or any adjournment or postponement thereof (the
"Annual Meeting"). The undersigned here-by appoints Michael E. Kibler and Harold
Antonson, and each of them, with full power of substitution in each of them,
(the "Proxies") of the undersigned, to vote for and on behalf of the undersigned
all shares of common stock of US 1 Industries, Inc. which the undersigned may be
entitled to vote on all matters properly coming before the Annual Meeting, as
set forth in related Notice of Annual Meeting and Proxy Statement, both of which
have been received by the undersigned.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the election of the nominees listed below as directors of the
Company to serve until the 2003 Annual Meeting of stockholders and until their
successors are elected and qualified. Should any nominee decline or be unable to
accept such nomination to serve as a director, which the Company does not
currently anticipate, the person giving this proxy grants the Proxies the right,
in their dis-cretion, to vote for a lesser number or for substitute nominees
designated by the Board of Directors.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES LISTED
HEREAFTER AS DIRECTORS OF THE COMPANY TO SERVE UNTIL THE 2003 ANNUAL MEETING AND
UNTIL THEIR SUCCESSORS SHALL BE ELECTED AND QUALIFIED.
1. Election of Directors Nominees: 01 - Harold E. Antonson, 02 - Michael E. Kibler, 03 - Brad A. James, 04 - Robert I. Scissors,
05 - William J. Sullivan, Jr., and 06 - Lex L. Venditti
[ ] FOR all nominees listed above [ ] WITHHOLD authority to vote for all nominees listed above [ ]Exceptions
- -----------------------------------------------------------------------------------------------------------------------------------
(Instructions: to withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that nominee's name in
the space provided above).
To change your address, please mark this box. [ ]
Please sign your name above whether or not you
expect to attend the meeting. You may
nevertheless vote in person if you attend.
Please sign exactly as your name appears herein.
For an account in the name of two or more
persons, each should sign, or, if one signs, he
should attach evidence of his authori-ty. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title or
capacity. If a corporation, please sign in
corporate name by authorized officer and give
title. If a partnership, please sign in
partnership name by authorized person.
-------------------------------------------
(Signature)
-------------------------------------------
(Co-Owner)
-------------------------------------------
(Date)
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE