SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant |X| Filed by a party other than the Registrant |_|
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 Rule 14a-11(c) or Rule 14a-12
TERRACE HOLDINGS, INC.
----------------------
(Name of Registrant as Specified in Charter)
Jonathan S. Lasko, Secretary
(Name of Person(s) Filing Proxy Statement)
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 O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule O-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.
1) Amount Previously Paid:______________________________________
2) Form, Schedule or Registration Statement No.:________________
3) Filing Party:________________________________________________
4) Date Filed:__________________________________________________
<PAGE>
TERRACE HOLDINGS, INC.
1351 N.W. 22nd Street
Pompano Beach, Florida 33069
(954) 917-7272
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO
BE HELD ON AUGUST 17, 1998
--------------------------------------------------
10:00 a.m.
To Our Shareholders:
The 1998 annual meeting of the shareholders of Terrace Holdings, Inc.
(the "Company") will be held at The Sheraton Hotel, 250 Market Street,
Portsmouth, New Hampshire 03801, on Monday, August 17, 1998, beginning at 10:00
a.m., Eastern Daylight Savings Time, for the following purposes:
1. To elect five (5) directors to hold office during the year
following the annual meeting or until their successors are
elected and qualified (Item No. 1 on proxy card);
(Item No. 2 on proxy card);
2. To ratify the transfer, sale and assignment to Dr. Samuel H.
Lasko of the Company's wholly-owned subsidiaries, The Lasko
Family Kosher Tours, Inc. and A&E Management Corp. (Item No. 2 on
proxy card);
3. To approve an amendment to the Company's Certificate of
Incorporation, as amended, to change the corporate name of
Terrace Holdings, Inc. to Terrace Food Group, Inc. (Item No. 3 on
proxy card);
4. To approve an increase in the maximum number of shares of Common
Stock which may be subject to stock options granted under the
Company's 1997 Stock Option Plan.
5. To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
The close of business on June 30, 1998, has been fixed as the record
date for determining the shareholders entitled to receive notice of and to vote
at the annual meeting or any postponement or adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
July ___, 1998 _____________________________________
Steven Shulman, Chairman of the Board
YOUR VOTE IS IMPORTANT
It is important that as many shares as possible be represented at
the annual meeting. Please date, sign, and promptly return the
proxy in the enclosed envelope. Your proxy may be revoked by you
at any time before it has been voted.
<PAGE>
TERRACE HOLDINGS, INC.
1351 N.W. 22nd Street
Pompano Beach, Florida 33069
PROXY STATEMENT
Information Concerning the Solicitation
- ---------------------------------------
This statement is furnished in connection with the solicitation of
proxies to be used at the Annual Shareholders Meeting (the "Annual Meeting") of
Terrace Holdings, Inc. (the "Company"), a Delaware corporation, to be held on
Monday, August 17, 1998, at The Sheraton Hotel, 250 Market Street, Portsmouth,
New Hampshire 03801. These proxy materials are being mailed to shareholders of
record at the close of business on June 30, 1998.
The solicitation of proxies on the enclosed form of proxy is made on
behalf of the Board of Directors of the Company.
The cost of preparing, assembling and mailing the proxy materials and
of reimbursing brokers, nominees and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy materials to the
beneficial owners of shares held of record by such persons will be borne by the
Company. The Company does not intend to solicit proxies otherwise than by use of
the mail, but certain officers, directors and employees of the Company, without
additional compensation, may use their personal efforts, by telephone or
otherwise, to solicit proxies.
Quorum and Voting
- -----------------
Only shareholders of record at the close of business on June 30, 1998,
are entitled to vote at the Annual Meeting. On that day, there were 5,345,348
shares of Common Stock issued and outstanding. Each share has one vote. A simple
majority of the outstanding shares is required to be present in person or by
proxy at the meeting for there to be a quorum for purposes of proceeding with
the Annual Meeting. A simple majority of the shares present in person or by
proxy at the Annual Meeting, at which a quorum is present, is required to elect
directors. Abstentions and withheld votes have the effect of votes against these
matters. Broker non-votes (shares held of record by a broker for which a proxy
is not given) will not be counted for purposes of determining a quorum, and,
accordingly, will not be counted for purposes of determining the vote on any
matter considered at the meeting.
A shareholder signing and returning a proxy on the enclosed form has
the power to revoke it at any time before the shares subject to it are voted, by
notifying the Secretary of the Company in writing. If a shareholder specifies
how the proxy is to be voted with respect to any of the proposals for which a
choice is provided, the proxy will be voted in accordance with such
specifications. If a shareholder fails to so specify with respect to such
proposals, the proxy will be voted "FOR" the nominees for directors contained in
these proxy materials, "FOR" the ratification of the transfer, sale and
assignment to Dr. Samuel H. Lasko of the Company's wholly-owned subsidiaries,
The Lasko Family Kosher Tours, Inc. and A&E Management Corp., "FOR" an amendment
to the Company's Certificate of Incorporation to change the corporate name of
Terrace Holdings, Inc. to Terrace Food Group, Inc., and "FOR" an increase in the
maximum number of shares of Common Stock which may be subject to stock options
granted under the Company's 1997 Stock Option Plan.
<PAGE>
Stock Ownership of Directors, Executive Officers and Others
- -----------------------------------------------------------
The following table provides information concerning the beneficial
ownership of common stock of the Company by each director, certain executive
officers, and by all directors and officers of the Company as a group as of June
30, 1998. In addition, the table provides information concerning the beneficial
owners known to the Company to hold more than 5 percent of the outstanding
Common Stock of the Company as of June 30, 1998.
Common Preferred
Stock Stock
Beneficial Percent of Beneficial Percent
Name of Beneficial Owner Ownership(1) Class(1)(2) Ownership of Class
- ------------------------ ------------ ----------- --------- --------
Dr. Samuel H. Lasko(3) 383,750(4) 7.6% -0- -0-
Jonathan S. Lasko 380,000 7.5% 12,500(5) *
Richard Power 204,154 * 50,000 *
Steven Shulman 346,154 6.8% 50,000 *
Bernard Rubin, M.D. -0- -0- 15,000 *
Fred A. Seigel 64,577 * -0- -0-
Houssam T. Aboukhater(6) -0- -0- 50,000 *
All Directors and
Executive Officers
as a Group (7 persons) 1,378,635(7)(8) 26.2%(8) 177,500(8) 11.6%(8)
- ---------------------------
* Less than five percent
(1) In each case the beneficial owner has sole voting and investment power
except that shares held by Dr. Samuel H. Lasko are held in joint
tenancy with his wife Arlene Lasko and the shares held by Jonathan S.
Lasko are held in joint tenancy with his wife Ellen J. Lasko.
(2) The calculation of percent of class is based upon the number of shares
of Common Stock outstanding as of June 30, 1998.
(3) In connection with the sale of the "hospitality" businesses, Dr. Lasko
has resigned as an officer of the Company effective on the ratification
of the sale by the Company's shareholders and is not standing for
re-election as a director. (See Proposal Two of this Proxy Statement).
(footnotes continued on next page)
2
<PAGE>
(4) Includes 3,750 shares held for the benefit of Dr. Lasko's minor child.
(5) Held for the benefit of Jordana Lasko, a minor.
(6) Mr. Aboukhater is a director-nominee (see Prospal One of this Proxy
Statement).
(7) Does not include stock options granted. See "1997 Stock Option Plan and
Participants." Also does not include warrants to purchase Common Stock
at a price of $1.1875 in the following amounts: Samuel H. Lasko -
260,678; Jonathan S. Lasko - 375,000; Steven Shulman - 36,666.7;
Richard Power - 31,666.7; Fred A. Seigel - 15,833.3; Bernard Rubin,
M.D. - 20,000; and Bruce S. Phillips - 70,000.
(8) On July 31, 1998, the Company's presently outstanding 1,523,825 shares
of Convertible Preferred Stock automatically converts into 3,047,650
shares of Common Stock. As of that date there will be a total of
8,317,998 shares of Common Stock of the Company issued and outstanding.
As a result of the automatic conversion, all the Directors and
Executive Officers as a Groups (7 persons) will beneficially own a
total of 1,733,635 shares of Common Stock, approximately 21% of the
class.
Recent Financing - Omission of Shareholder Approval
As of June 25, 1998, the Company issued to a private investor
$2,625,000 principal amount of 12% Convertible Subordinated Notes ("Notes") and
warrants to purchase 400,000 shares of Common Stock of the Company. The Notes
are convertible at the rate of one share for each $1.25 of principal and accrued
but unpaid interest. The warrants are exercisable at a price of $1.25 per share.
The Notes and warrants are convertible and exercisable, respectively, at any
time subsequent to the expiration of a 60-day "Temporary Exercise Period" being
offered to holders of the Company's publicly-traded warrants to purchase Common
Stock. During the Temporary Exercise Period, such holders are offered the
opportunity to exercise their warrants at $1.25 per share, rather than the $4.00
per share exercise price contained in those warrants. The proceeds of the Notes
have been added to the working capital of the Company.
The Notes will be repaid from the first net proceeds, if any, received
by the Company from the exercises of its $4.00 warrants at the temporary $1.25
per share exercise price. To the extent the Notes are not so repaid, the Company
has the right to convert the Notes into a series of Convertible 8% Cumulative
Preferred Stock ("Preferred Stock"). The Notes, warrants and Preferred Stock
issued to the private investor are subject to anti-dilution adjustments,
registration rights, interest and dividend adjustments and payment by the
Company of certain fees and expenses in connection with the loan transaction.
The Company also issued options to purchase up to 500,000 shares of
Common Stock as part of this transaction. The options expire no later than
December 31, 1998 and are exercisable ten days after the expiration of the
60-day "Temporary Exercise Period" at a price per share equal to the average
closing market price during those ten days.
While the issuance of the Notes, warrants and options do not require
shareholder approval under the Delaware General Corporation Law, the NASDAQ
Stock Market Rules ("NASDAQ") require a listed company to secure such
shareholder approval unless the Audit Committee of the Board of Directors
expressly approves an exception. On June 23, 1998, the Audit Committee
unanimously approved such an exception and determined that the delay in securing
shareholder approval would seriously jeopardize the financial viability of the
Company. Inasmuch as this Proxy Statement is being sent to all record and
beneficial holders, the Company is utilizing this to alert the shareholders of
the Company's omission to seek shareholder approval of this loan transaction
based on the express approval of the exception by the Audit Committee.
3
<PAGE>
PROPOSAL ONE. ELECTION OF DIRECTORS
---------------------
Five directors will be elected at the Annual Meeting to serve for terms
of one year expiring on the date of the Annual Meeting in 1999, or until their
successors have been elected and qualified. If a nominee is unable to serve,
which the Board of Directors has no reason to expect, the persons appointed in
the accompanying proxy intend to vote for the balance of those named and, if
they deem it advisable, for a substitute nominee.
Information Concerning Nominees
- -------------------------------
The following is information concerning the nominees for election as
directors of the Company. All of such persons are presently directors of the
Company.
STEVEN SHULMAN, age 57, is a Managing Director of Latona Associates,
Inc., an investment banking firm involved in advisory services and principal
investments. He serves as a director of a number of public and private companies
and is currently a director of WPI Group, Inc., Ermanco Incorporated, Beacon
Capital Partners, L.P. and Corinthian Directory, Inc. Mr. Shulman holds an M.S.
in Industrial Management from the Stevens Institute of Technology, where he
currently serves as Vice Chairman of its Board. Since February, 1997, Mr.
Shulman has served as the Chairman of the Board of Directors and since February
18, 1998, has also served as the Chief Executive Officer of the Company.
JONATHAN S. LASKO, age 27, has been a director of the Company since
September, 1994, and its Chief Operating Officer and Secretary since August,
1995. He has also been the Company's Executive Vice-President since May, 1993.
Mr. Lasko has also been a senior officer of the Company's various subsidiaries,
including President and Chief Executive Officer of A-One-A Produce and
Provisions, Inc. Mr. Lasko attended Yeshiva University, New York, New York, in
1988 and 1989, and Bernard Baruch College of City University of New York, New
York in 1990 and 1991. From January, 1990 until October, 1993, when he became a
full-time employee of the Company, Mr. Lasko was a part-time employee of the
Company and managed its food and beverage operations for its Passover holiday
vacation business. Mr. Lasko is the son of Dr. Samuel H. Lasko, a director, the
President and Treasurer of the Company, and the nephew of Bruce S. Phillips, a
director of the Company.
RICHARD POWER, age 49, has been Vice President of Tyco Fire and Safety
Services since May, 1997, and the President of Carlisle Plastics, Inc.,
divisions of Tyco International Ltd., a New York Stock Exchange listed
corporation, since January, 1997. He served as a consultant to Tyco in Mergers
and Acquisitions from 1995 through 1996, Vice President and Chief Financial
officer of Abex Inc. a New York Stock Exchange listed corporation between 1994
and 1995, and was the Managing Director of a private investment company from
1992 through 1994. Mr. Power holds a B.S. and an M.B.A. from Boston College.
Since February, 1997, Mr. Power has served as a director of the Company.
FRED A. SEIGEL, age 42, was elected a Director on February 18, 1998, to
fill a vacancy. Mr. Seigel is a founder, President and a Director of Energy
Capital Partners, a privately-held, Boston-based company organized in September,
1993, providing financing for energy efficiency projects for commercial,
industrial and institutional property owners throughout the United States.
4
<PAGE>
He has more than twenty years experience in the energy field. From January, 1998
to October, 1994, he served as a limited partner in two large-scale energy
co-generation projects in New York state, representing a total investment of
$350,000,000. From March, 1984 to November, 1986, Mr. Seigel was a project
manager for Wheelabrator-Frye, Inc., in that company's Resource Recovery
Division. From January, 1981 to January, 1993, he was the Director of the
Executive Office for Energy for the State of New Hampshire. Mr. Seigel holds a
B.A. from New England College, Henniker, New Hampshire.
HOUSSAM T. ABOUKHATER, age 27, is Vice President of Prestolite Wire, a
privately-held, Southfield, Michigan based company, which is a leading producer
of telecommunications wire. From 1993 to 1996, Mr. Aboukhater served as Vice
President of Balcrank Products, an automotive components division of the General
Chemical Group, a New York Stock Exchange listed corporation. Mr. Aboukhater
also currently serves as Director of Market Analysis for Latona Associates, an
investment banking firm involved in advisory services and principal investments.
Mr. Aboukhater holds a B.A. in business administration from the University of
San Diego, San Diego, California.
Committees of the Board of Directors
- ------------------------------------
The Company's Board of Directors has standing Audit and Compensation
Committees which were appointed at a meeting of the Board of Directors on
February 20, 1997.
The Audit Committee has been composed of Jonathan S. Lasko, Bruce S.
Phillips, and Richard Power. The Audit Committee reviews and makes
recommendations to the Company about its financial reporting requirements and
acts as a liaison between the Company and its independent auditors.
The Compensation Committee has been composed of Steven Shulman, Bruce
S. Phillips, and Richard Power. The Compensation Committee reviews and makes
recommendations to the Board of Directors concerning the compensation of
officers and key employees of the Company and administers the Company's Stock
Option Plan. The Compensation Committee met in February, 1997, to approve the
1997 Stock Option Plan ("Plan"), and to determine, according to the Plan, the
persons to whom options are granted, the number of options granted to each
optionee, and the terms and conditions of each option, including its duration.
Since creation of the Plan in February, 1997, the Compensation Committee has
approved options granted to officers, directors, significant employees and other
employees. (See "1997 Stock Option Plan and Participants".) The Compensation
Committee also met in February of 1998, and recommended to the Board of
Directors that Jonathan S. Lasko's 1998 base compensation be raised to $125,000.
The Board of Directors met four times during 1997.
Executive Compensation
- ----------------------
The following table sets forth all compensation paid or distributions
made during the fiscal years ended December 31, 1997, 1996 and 1995, by the
Company or any of its subsidiaries to the Chief Executive Officer of the Company
and to each of its most highly compensated executive officers, other than the
Chief Executive Officer, whose compensation exceeded $100,000.
5
<PAGE>
Annual Compensation
------------------------------------
Year Ended Annual Other
Name & Principal Position December 31 Salary Compensation Options
- -------------------------- ----------- -------- ------------ --------
Samuel H. Lasko, 1995 $ 31,403 $169,081(1) 750,000(4)
President and 1996 $125,000 $ 9,517(2)(3)
Treasurer 1997 $150,000 $ 22,502(2) 125,000(7)
Jonathan S. Lasko, 1995 $ 24,592 $169,081(1) 750,000(4)
Executive Vice 1996 $ 70,000 $ 7,255(2)
President, Secretary and 1997 $ 95,000 $ 21,727(2) 125,000(7)
Chief Operating Officer
Steven Shulman, 1997 $ 0 $ 0 130,000(7)
Chief Executive Officer(5)
Milton Namiot, 1997 $175,000 $ 9,500(2) 125,000(7)
Chief Executive Officer(6)
- --------------------------------------------------
(1) Represents combined "S" corporation distributions in the nature of
dividends through December 5, 1995, when the Company first offered and
sold its securities to the public.
(2) Represents amounts paid for lease of automobile, automobile insurance,
cell phone and health insurance.
(3) Does not include repayments of loans from A&E, The Lasko Companies,
Inc. and the Company.
(4) In connection with the DownEast acquisition in February, 1997, each of
Samuel Lasko and Jonathan Lasko surrendered their respective rights to
750,000 performance options, contained in their respective employment
agreements and, in lieu thereof, the Company issued to each of Samuel
H. Lasko and Jonathan D. Lasko warrants to purchase 375,000 shares of
the Company's Common Stock at $1.1875 per share exercisable immediately
and expiring August 31, 2000. Dr. Lasko tendered 114,322 of these
warrants to the Company in partial consideration of his purchase of the
Company's hospitality businesses, The Lasko Family Kosher Tours, Inc.
and A&E Management Corp. (See Proposal Two of this Proxy Statement.)
(5) In February, 1998, Steven Shulman became Chief Executive Officer of the
Company subsequent to the resignation of former CEO Milton Namiot (in
connection with the closing of the Deering transaction).
(6) In connection with the sale of the Company's Deering Ice Cream, Inc.
business, Mr. Namiot resigned as an officer and director. He was an
officer and director of the Company from February 17, 1997, until the
closing of the Deering transaction. In connection with his resignation,
and the termination of this three year employment contract, 50% of the
options theretofore granted Mr. Namiot, or options to purchase 125,000
shares of the Company's Common Stock, were made immediately
exercisable. They have since expired unexercised.
(7) Represents options granted to directors and executive officers in 1997
under the Company's 1997 Stock Option Plan.
6
<PAGE>
Compensation of Directors and Executive Officers
- ------------------------------------------------
Directors are elected on an annual basis. All directors of the Company
hold office until the next annual meeting of the shareholders or until their
successors are elected and qualified. At present, the Company's by-laws provide
for not less than one director nor more than seven. Presently there are seven
directors. In light of the Company's size, however, only five persons are being
nominated to serve for the coming year. (See Proposal One of this Proxy
Statement.) The Company's by-laws permit the Board of Directors to fill any
vacancy and such director may serve until the next annual meeting of
shareholders or until his successor is elected and qualified. Officers are
elected to serve, subject to the discretion of the Board of Directors, until
their successors are appointed.
Directors are reimbursed for expenses actually incurred in connection
with attending meetings of the Board of Directors and commencing in fiscal 1996,
non-employee directors were paid $750 for each directors' meeting attended. In
addition to the foregoing, directors are also granted 20,000 options annually
under the Company's 1997 Stock Option Plan. The Company anticipates that the
Board of Directors will meet at least four times a year.
Employment Contracts and Aggregate Options Holdings
- ---------------------------------------------------
The Company has a 5-year employment agreement, ending August 31, 2000,
with Jonathan S. Lasko. Under his employment agreement, Jonathan S. Lasko is to
receive an annual base salary of $70,000 for the first two years, $95,000 for
the third year, $115,000 for the fourth year and $125,000 for the fifth year of
his employment. In connection with the DownEast transaction, by amendments dated
February 17, 1997, to his employment agreement, Jonathan S. Lasko voluntarily
surrendered the one-time performance based options under his employment
agreement to purchase up to an aggregate of 750,000 shares of Common Stock, and
in lieu thereof, the Company issued to Jonathan S. Lasko warrants to purchase
375,000 shares of its common stock at an exercise price of $1.1875 per share.
Jonathan S. Lasko's employment agreement also entitles him to the use of an
automobile and to employee benefit plans, such as group life, health,
hospitalization and life insurance. Under his employment agreement, employment
terminates upon the death or total disability of the employee and may be
terminated by the Company for "cause," which is defined, among other things, as
the willful failure to perform duties, embezzlement, conviction of a felony, or
breach of the employee's covenant not to compete or maintain confidential
certain information. On February 18, 1998, the Board of Directors accepted the
recommendation of its Compensation Committee and increased Jonathan S. Lasko's
base compensation for 1998 to $125,000.
The Company had a 5-year employment agreement with Dr. Samuel H. Lasko,
ending August 31, 2000, with terms substantially similar to those found in
Jonathan S. Lasko's current employment agreement. Dr. Samuel H. Lasko tendered
to the Company the balance of his employment agreement in partial consideration
of his purchase of the Company's wholly-owned subsidiaries, The Lasko Family
Kosher Tours, Inc. and A&E Management Corp. (please see Proposal Two of this
Proxy Statement). Under his employment agreement, Dr. Samuel H. Lasko received
an annual base salary of $95,000 for the first two years and was to receive
$125,000 for the third year, $150,000 for the fourth year and $175,000 for the
fifth year of his employment. Like Jonathan S. Lasko, Dr. Samuel H. Lasko
voluntarily surrendered his one time performance based options under his
employment agreement to purchase up to an aggregate of 750,000 shares of Common
Stock, and in lieu thereof, the Company issued to Dr. Samuel H. Lasko warrants
to purchase 375,000 shares of the Company's common stock at an exercise price of
$1.1875 per share. Dr. Lasko tendered to the Company 114,322 of such warrants in
partial consideration of his purchase of the Company's wholly-owned
subsidiaries, The Lasko Family Kosher Tours, Inc. and A&E Management Corp.
7
<PAGE>
In connection with the DownEast transaction, the Company entered into a
3-year employment agreement, effective February 17, 1997, and ending August 31,
2000, with Milton Namiot under which Mr. Namiot served as the President and
Chief Executive Officer of Deering and Chief Executive Officer of the Company.
As a result of the sale of the Deering business, Mr. Namiot resigned from his
positions as an officer and director of the Registrant. See Note (5) to
"Executive Compensation."
In connection with the A-One-A transaction, the Company entered into
5-year employment agreements, effective July 1, 1997, and ending July 30, 2002,
with both Virgil D. Scarbrough and Scott Davis under which Messrs. Scarbrough
and Davis serve as Co-Chief Operating Officers of the Company's wholly-owned
subsidiaries A-One-A Produce & Provisions, Inc. and Terrace Fresh, Inc. Under
their respective employment agreements, Messrs. Scarbrough and Davis each
receive an annual base salary of $120,000.
The 1997 Stock Option Plan and Participants
- -------------------------------------------
The Company recently adopted the 1997 Stock Option Plan (the "Plan")
which enables it to grant options for shares of its Common Stock. At present,
the Plan authorizes the grant of options to purchase up to an aggregate of
1,250,000 shares of the Company's Common Stock, to (i) officers, directors, and
other full-time salaried employees of the Company and its subsidiaries with
managerial, professional or supervisory responsibilities, and (ii) consultants
and advisors who render bona fide services to the Company and its subsidiaries,
in each case, where the Compensation Committee determines that such officer,
director, employee, consultant or advisor has the capacity to make a substantial
contribution to the success of the Company. As used herein with respect to the
Plan, references to the Company include subsidiaries of the Company.
The purposes of the Plan are to enable the Company to attract and
retain persons of ability as officers, directors, and other key employees with
managerial, professional or supervisory responsibilities, to retain able
consultants and advisors, and to motivate such persons to use their best efforts
on behalf of the Registrant by providing them with an equity participation in
the Company.
The Plan is administered by the Compensation Committee, which was
appointed by the Company's Board of Directors, and consists of three members of
the Board of Directors, two of whom are "disinterested" persons within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934. Under the terms
of the Plan, the Committee has the authority to determine, subject to the terms
and conditions of the Plan, the persons to whom options are granted, the number
of options granted to each optionee, and the terms and conditions of each
option, including its duration.
The Plan can be amended, suspended, reinstated or terminated by the
Board of Directors; provided, however, that without approval of the Company's
shareholders, no amendment shall be made which (i) increases the maximum number
of shares of Common Stock which may be subject to stock options granted under
the Plan, except for specified adjustment provisions, (ii) extends the term of
the Plan, (iii) materially increases the benefits accruing to optionees under
the Plan, (iv) materially modifies the requirements as to eligibility for
participation ion the Plan, or (v) will cause stock options granted under the
Plan to fail to meet the requirements of Rule 16b-3. The Board of Directors is
presently seeking the approval of the Company's stockholders for the Board's
proposal to increase the maximum number of shares of the Company's Common Stock
which may be subject to stock options granted under the Plan from 1,250,000 to
1,750,000 shares. (See Proposal Four of this Proxy Statement). Unless previously
terminated or extended by the Board of Directors, the Plan will terminate on
February 20, 2007.
8
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Stock options may be granted to purchase Common Stock under the Plan at
not less than the fair market value of the shares as of the date of grant. The
maximum number of shares for which options may be issued to an employee of the
Company during any calendar year may not exceed 250,000. Other than the limit of
250,000 options per year, there is no limitation on the aggregate number of
stock options which may be granted to any optionee pursuant to the Plan.
As of the date hereof, 758,000 options have been granted, including a
total of 380,000 to Samuel H. Lasko, Jonathan S. Lasko, and Steven Shulman.
Stock options may be granted for a term of up to ten years. The Plan
provides that if a stock option, or portion thereof, expires, lapses without
being exercised or is terminated, canceled or surrendered for any reason without
being exercised in full, the unpurchased shares of Common Stock which were
subject to such stock option or portion thereof shall be available for future
grants of stock options under the Plan.
Pursuant to the terms of the Plan, the option price for all options
must be paid in cash, by check, bank draft or money order payable in United
States dollars to the order of the Company, or with Common Stock of the Company
owned by the optionee and having a fair market value on the date of exercise
equal to the aggregate exercise price of the shares to be so purchased, or a
combination thereof.
Options granted pursuant to the Plan will not be assignable or
transferable except by will or the laws of intestate succession. Options
acquired pursuant to the Plan may be exercised by the optionee (or the
optionee's legal representative) only while the optionee is employed by the
Company, or within six months after termination of employment due to a permanent
disability, or within three months after termination of employment due to
retirement. The executor or administrator of a deceased optionee's estate or the
person or persons to whom the deceased optionee's rights thereunder have passed
by will or by the laws of descent or distribution shall be entitled to exercise
the option within the sixth month after the decedent's death. Options expire
immediately in the event an optionee is terminated with or without cause or
resigns; provided, however, in the event the Company terminates the employment
of an optionee who at the time of such termination was an officer of the Company
and had been continuously employed by the Company during the two year period
immediately preceding such termination, for any reason except "good cause" (as
defined in the Plan), each stock option held by such optionee (which had not
then previously lapsed or terminated and which had been held by such optionee
for more than six months prior to such termination) shall be exercisable for a
period of three months after such termination to the extent otherwise
exercisable during that period. All of the aforementioned exercise periods set
forth in this paragraph are subject to the further limitation that an option
shall not, in any case, be exercisable beyond its stated expiration date.
The purchase price and the number and kind of shares that may be
purchased upon exercise of options granted pursuant to the Plan, and the number
of shares which may be granted pursuant to the Plan, are subject to adjustment
in certain events, including stock splits, recapitalizations, mergers, and
reorganizations.
9
<PAGE>
Since February, 1997, the following officers, directors, significant
employees and other employees have received the number of options as is
designated opposite their respective names:
Name Number of Options (1)
--------- ---------------------
Samuel H. Lasko 125,000
Jonathan S. Lasko 125,000
Steven Shulman 130,000(2)
Bruce S. Phillips 20,000(2)
Richard Power 20,000(2)
Other Employees(3) 188,000
-------
TOTAL 608,000(4)
- ------------------------------
(1) Unless otherwise stated, these options were granted at an exercise price
of $1.185 per share, such options become exercisable one third per year
over three years from the date granted.
(2) All of Mr. Phillip's and Mr. Power's options, as well as 30,000 of Mr.
Shulman's options, became exercisable at the time they were granted.
(3) Includes options granted to four of the Company's employees at an
exercise price of $1.185 per share, and 20 individual employees of the
Company's subsidiaries at an exercise price of $2.31 per share. All such
options become exercisable one third per year over three years from the
date granted.
(4) Does not include options granted to Milton Namiot, a former director and
Chief Executive Officer and Joseph Dane, former Corporate Controller of
the Company. In February, 1997, Messrs. Namiot and Dane were granted
250,000 and 25,000 options, respectively. Although they were no longer
affiliated with the Company subsequent to the sale of the Company's
Deering Ice Cream business, the Compensation Committee determined to
make immediately exercisable 125,000 of Mr. Namiot's options and all of
Mr. Dane's options for a total of 120 days beyond the date of the
cessation of their affiliation with the Company. All of such options
have expired unexercised.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE ELECTION OF THE ABOVE-NAMED INDIVIDUALS AS DIRECTORS OF THE COMPANY.
PROPOSAL TWO. RATIFICATION OF THE SALE OF THE COMPANY'S WHOLLY-OWNED
OWNED SUBSIDIARIES, THE LASKO FAMILY KOSHER TOURS, INC.
AND A&E MANAGEMENT CORP. TO DR. SAMUEL H. LASKO
-------------------------------------------------------
On March 2, 1998, the Company entered into an Agreement to Sell and
Purchase with Dr. Samuel H. Lasko, whereby Dr. Lasko agreed to purchase, and the
Company agreed to sell the Company's wholly-owned subsidiaries, The Lasko Family
Kosher Tours, Inc. and A&E Management Corp.
Dr. Lasko has resigned as President and Treasurer of the Company
subject to the approval of the Company's shareholders ratifying the transaction.
10
<PAGE>
Terms of Agreement
- ------------------
Dr. Lasko acquired the option to purchase these businesses at the time
of the DownEast acquisition in February, 1997. In November, 1997, Samuel H.
Lasko, President, notified the Company of his intention to exercise his option
to purchase the "hospitality" subsidiaries of the Company at a purchase price
equal to the "fair value" of the subsidiaries. Dr. Lasko's exercise of his
option was subject to the Company securing an independent opinion as to the fair
value of the Company, and the affirmative vote of the majority of the Company's
shareholders. A committee of disinterested members of the Board of Directors
retained an independent consulting and valuation firm, The Durkin Company, Inc.
("Durkin"), of Boston, Massachusetts, to render such an opinion and that opinion
was acceptable to the Committee of disinterested directors, the entire Board of
Directors, and Dr. Lasko. (Durkin's fair value opinion letter is attached hereto
as Exhibit A. A copy of Durkin's fair value opinion and supporting documents are
available upon written request to the Company.)
On March 13, 1998, the A&E Management Corp. and The Lasko Family Kosher
Tours, Inc., subsidiaries of the Company were sold to Dr. Lasko effective as of
January 1, 1998, subject to the affirmative shareholder vote required, for
consideration aggregating $575,000 in accordance with the independent fair value
opinion received by the Company.
The consideration paid consisted of Dr. Lasko surrendering his
employment agreement with the Company (independently valued at $417,807) and
114,322 of his warrants to purchase the Company's Common Stock at $1.1875 per
share (independently valued at $157,193). Additionally, Dr. Lasko agreed to
manage the business of The Lasko Companies, Inc. (the Terrace Oceanside
Restaurant) for the Company, without fee, until the Company consummates the sale
thereof to an unaffiliated third party. On March 23, 1998, the Company entered
into an agreement to sell The Lasko Companies, Inc. to an unaffiliated third
party for an aggregate sales price of $90,000. Closing of this sale took place
on May 29, 1998.
During the second half of 1997, the Board of Directors of the Company
determined that its initial strategy of attempting to expand by establishing
additional kosher dining facilities and Passover vacation venues geographically
dispersed would entail substantial financial costs and additional personnel.
Accordingly, the Board of Directors determined to seek Company growth by
acquisition of existing food services and distribution operations. Thus, on
November 12, 1997, the Board of Directors determined to discontinue the
"hospitality" segments of its business and shortly thereafter Dr. Lasko notified
the Board of his intention to acquire those segments. In connection with that
transaction, Dr. Lasko has submitted his resignation as President of the Company
effective immediately upon the affirmative vote of the Company's stockholders at
its Annual Meeting ratifying the transaction. In accordance with the agreement,
Dr. Lasko ceased drawing salary from the Company effective as of January 1,
1998.
The Board of Directors of the Company also believes that the sale of
these "hospitality" businesses to Dr. Lasko is in the best interest of the
shareholders because they are extremely seasonal in nature, compressing revenues
into fairly short time frames while expenditures are incurred throughout the
year. Accordingly, based on accounting conventions, the interim reports to
shareholders and to the public tend to show losses for these operations for most
of the year.
Set forth below are unaudited financial data, taken from Management's
internal records showing the impact of the discontinuances of the "hospitality"
businesses purchased by Dr. Lasko. The Lasko Family Kosher Tours, Inc. and A & E
Management Corp. had combined income (losses) from operations of ($148,348) for
the first quarter of 1998 and ($55,835) and ($186,075), respectively, for the
years 1997 and 1996. The amount of net assets of these entities disposed of
11
<PAGE>
was $622,779 and the estimated loss recognized in 1997 for the sale was
$623,000. See also the Company's Consolidated Financial Statements for the years
ended December 31, 1997 and 1996, especially Note 3(B) thereto, in its Annual
Report for 1997 filed on Form 10-KSB/A-2, which are hereby incorporated by
reference.
Combined Balance Sheet
LFKT &A&E Mgt.
12/31/97
Assets
- ------
Current Assets:
Accounts Receivable 147,755
Inventory 15,289
Other Current Assets 15,551
-------
Total Current Assets 178,595
Furniture Fixtures and 295,184
Equipment - Net of Cost
Cost in Excess of Net Assets of 330,750
Businesses Acquired-Net of
Accumulated Amortization of $88,148
Other Assets 50,000
-------
Total Assets 854,529
=======
Liabilities and Stockholders' Equity
- ------------------------------------
Current Liabilities:
Cash Overdrafts 14,743
Accrued Expenses 217,008
-------
Total Current Liabilties 231,751
Total Liabilities 231,751
Stockholders' Equity:
Retained Earnings (Deficit) 622,778
-------
Total Stockholders' Equity 622,778
-------
Total Liabilities and Stockholders' 854,529
Equity =======
Combined Statement of Operations
LFKT & A&E Mgt.
12/31/97
Revenue 4,419,408
Cost of Sales 3,417,244
Gross Profit 1,002,164
Total Operating Expenses 1,052,340
---------
(Loss) from Operations (50,176)
======
12
<PAGE>
Both Jonathan S. Lasko and Dr. Samuel H. Lasko have advised the Company
that they will vote their shares of the Company's Common Stock, approximately
15% of the issued and outstanding Common Stock of the Company, in the manner in
which the majority of other shares, present in person or by proxy at the Annual
Meeting at which a quorum is present, are voted.
Should the Company's shareholders fail to ratify the sale of the
Company's "hospitality" business, the sale would be rescinded, and the Company
would receive possession of The Lasko Family Kosher Tours, Inc. and A&E
Management Corp. As a further result of shareholder non- ratification, Dr. Lasko
would have his employment agreement with the Company reinstated, and all
compensation due thereunder from January 1, 1998 (the effective date) until the
date of non- ratification would immediately be payable to Dr. Lasko. Dr. Lasko
would also have 114,322 warrants to purchase shares of the Company's Common
Stock at $1.1875 per share reinstated. Additionally, the revenues, expenses,
profits and losses of the companies from January 1, 1998 to the date of such
rescission will be adjusted and reinstated as necessary to reverse the sales to
Dr. Lasko, and the Company's costs associated with the sale, including but not
limited to legal and accounting fees and costs, will be treated as expenses on
the Company's Statement of Operations.
If the sales are not ratified by the shareholders, the Company will
immediately attempt to find another buyer for these "hospitality" companies. If
A&E Management Corp. and The Lasko Family Kosher Tours, Inc. were sold to any
party other than Dr. Samuel H. Lasko before the termination of Dr. Lasko's
employment agreement with the Company, Dr. Lasko would be entitled to
compensation for the remaining term of the employment agreement while the
Company would no longer require his services. There is, however, no assurance
that another buyer could be found or, if found, that the Company would be able
to sell them at a price the Company deems "adequate."
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE "FOR" RATIFICATION OF THE SALE OF THE COMPANY'S WHOLLY-OWNED SUBSIDIARIES,
THE LASKO FAMILY KOSHER TOURS, INC. AND A&E MANAGEMENT CORP. TO DR. SAMUEL H.
LASKO IN ACCORDANCE WITH THE TERMS OF THE AGREEMENT TO SELL AND PURCHASE.
PROPOSAL THREE. CHANGE OF THE COMPANY'S NAME
----------------------------
The Board of Directors has approved, and recommends the adoption by the
Company's stockholders of, an amendment to the Certificate of Incorporation to
change the Company's name from "Terrace Holdings, Inc." to "Terrace Food Group,
Inc." If the stockholders approve the amendment, the Certificate of
Incorporation will be amended by filing the amendment with the Secretary of
State of Delaware and the name of the Company will be Terrace Food Group, Inc.
The Company expects the name change to be effective shortly after stockholder
approval.
The Company currently provides a broad range of produce processing and
shipping services and other food products. More recently, the Company has
acquired and subsequently expanded several businesses in the fresh produce
processing and shipping and "dry goods" grocery businesses. The Board of
Directors believes that the name Terrace Food Group, Inc. more clearly reflects
the evolution of the Company into a processor and shipper of fresh produce and
other food products.
THUS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION BY THE
STOCKHOLDERS OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
13
<PAGE>
PROPOSAL FOUR. AN INCREASE IN THE MAXIMUM NUMBER OF AUTHORIZED
SHARES OF THE COMPANY'S COMMON STOCK WHICH MAY
BE SUBJECT TO STOCK OPTIONS GRANTED UNDER THE
COMPANY'S 1997 STOCK OPTION PLAN.
-------------------------------------------------
The Board of Directors has approved, and recommends the adoption by the
Company's stockholders of, an amendment to the Company's 1997 Stock Option Plan
(the "Plan"), to increase the maximum number of shares of the Company's Common
Stock which may be subject to stock options granted under the Plan from
1,250,000 to 1,750,000 shares. The Plan was initially approved at the Company's
1997 Annual Meeting of Shareholders. (See "Proposal One - Election of Directors
- - The 1997 Stock Option Plan and Participants.")
The Board of Directors believes that this increase in the maximum
number of shares of the Company's Common Stock for stock options under the Plan
is necessary in order to enable the Company to both attract and retain persons
of ability as officers, directors, and other key employees with managerial,
professional or supervisory responsibilities, to retain able consultation and
advisors, and to motivate such persons to use their best efforts on behalf of
the Company by providing them with an equity participation in the Company.
THUS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" AN INCREASE IN THE
MAXIMUM NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK WHICH MAY BE SUBJECT TO
STOCK OPTIONS GRANTED UNDER THE COMPANY'S 1997 STOCK OPTION PLAN.
Shareholder Proposals for the 1999 Proxy Statement
--------------------------------------------------
Proposals by shareholders for inclusion in the Company's Proxy
Statement and form of proxy relating to the 1999 Annual Meeting of Stockholders,
which is tentatively scheduled to be held in June, 1999, should be addressed to
the Secretary, Terrace Holdings, Inc., 1351 N.W. 22nd Street, Pompano Beach,
Florida 33069, and must be received at such address no later than January 1,
1999. Upon receipt of any such proposal, the Company will determine whether or
not to include such proposal in the Proxy Statement and proxy in accordance with
applicable law. It is suggested that such proposal be forwarded by certified
mail, return receipt requested.
Other Matters to Be Acted Upon at the Meeting
---------------------------------------------
Management of the Company knows of no other matters to be presented at
the meeting. Should any other matter requiring a vote of the shareholders arise
at the meeting, the persons named in the proxy will vote the proxies in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: July __, 1998 /s/ Steven Shulman
-------------------------------------
Steven Shulman, Chairman of the Board
14
EXHIBIT 99.1
The Durkin Company, Inc.
Full Service Appraisers, Litigation, and Probate Consultants
229 Lewis Wharf, Boston, MA 02110
(617) 720-0332 Facsimile (617) 720-0274
February 5, 1998
Richard Power
Bernard Rubin, MD
Steven Shulman
The Fairness Committee
Terrace Holdings, Inc.
C/o Latona Associates
Liberty Lane
Hampton, NJ 03842
Re: Valuation of The Lasko Companies, Inc., Lasko Family Kosher Tours,
Inc., A&E Management Corp., Employment Agreement and Warrants to
Purchase Terrace Holdings, Inc., Stock
Dear Mr. Power, Dr. Rubin and Mr. Shulman:
The Durkin Company ("Durkin") was retained to estimate the fair market value of
a 100% interest in each of the entities: The Lasko Companies, Inc., The Lasko
Family Kosher Tours, Inc., and the A&E Management Corp., as of December 31,
1997. Durkin was also asked to estimate the value of the employment agreement
between Dr. Samuel Lasko and Terrace Holdings, Inc., and the value of warrants
owned by Dr. Lasko.
The purpose of this appraisal is to provide information for use in negotiating
the sale of The Lasko Companies, Inc., A&E Management Corp., and The Lasko
Family Kosher Tours, Inc., to Dr. Samuel Lasko.
For the purpose of this appraisal, fair market value is defined as the "price at
which the property would change hands between a willing buyer and a willing
seller when the former is not under any compulsion to buy and the latter is not
under any compulsion to sell both having full knowledge of the relevant facts
and both seeking to optimize their economic interests."
The Lasko Family Kosher Tours, Inc., is the successor company to the Bon
Adventure Kosher Tours, Inc., founded by Dr. Lasko in 1989. The company offers
Passover vacations at hotels in Florida and New York. A&E Management Corp., was
founded by Dr. Lasko in 1993; the company manages a restaurant and catering
service at the Club at Emerald Hills. The Lasko Companies, Inc., operates a
restaurant that it started in 1995; it offers an upscale kosher cuisine to
people in South Florida.
This appraisal report was performed in accordance with the Uniform Standards of
Appraisal Practice as set forth by the Appraisal Foundation.
<PAGE>
Richard Power February 5, 1998
Bernard Rubin, MD
Steven Shulman
Page 2
Durkin considered several approaches in the process of estimating the fair
market value of the above named entities. The report contains a complete
discussion of each approach. The asset approach was considered to be the most
appropriate for The Lasko Companies, Inc., and A&E Management Corp. The income
approach was selected as being the most appropriate method for The Lasko Family
Kosher Tours, Inc. Durkin estimated that the liquidation value of A&E Management
Corp., was $22,000 and the liquidation value of The Lasko Companies was $88,000
as of December 31, 1997. Durkin capitalized a weighted average of the cash flows
of The Lasko Family Kosher Tours. A "key person" discount was applied to this
value. Based upon the results of the above analysis and other relevant factors,
the fair market value of The Lasko Family Kosher Tours was $553,000 as of
December 31, 1997.
Durkin estimated that the value of the employment agreement between Dr. Lasko
and Terrace Holdings, Inc., was $417,807 and the value of the 375,000 warrants
is $515,625.
The valuation report was prepared solely for the purposes discussed above and it
may not be used for any other purposes.
The attached report and exhibits fully describe the analytic procedures and
conclusions reached during this appraisal. The opinion of the value expressed in
this letter can be understood only after reading the attached report and being
familiar with the assumptions, limitations, and sources of information. An
appraisal certification, statement of assumptions and limiting conditions, and
the qualifications of the principal appraiser are attached to this report and
form integral parts of the report.
Very truly yours,
THE DURKIN COMPANY
/s/ Jerrold P. Katz
- --------------------------------------
Jerrold P. Katz, Ph.D., A.S.A., C.B.A.
cc: Gerald Fishman, Esq.
Samuel Lasko
The Durkin Company - 229 Lewis Wharf - Boston, Massachusetts 02110
Tel (617) 720 0332 -- Fax (617) 720 0274
EXHIBIT 99.2
REVOCABLE PROXY
TERRACE HOLDINGS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Steven Shulman and Jonathan S. Lasko,
or either of them, with full power of substitution, as proxies of the
undersigned, with all the powers that the undersigned would possess if
personally present to cast all votes that the undersigned would be entitled to
vote at the annual meeting of shareholders of Terrace Holdings, Inc. (the
"Company") to be held on Monday, August 17, 1998, at The Sheraton Hotel, 250
Market Street, Portsmouth, New Hampshire 03801, at 10:00 a.m., Eastern Daylight
Savings Time, and any and all adjournments and postponements thereof (the
"Annual Meeting"), including (without limiting the generality of the foregoing)
to vote and act as follows on the reverse side.
This Proxy will be voted at the Annual Meeting or any adjournments or
postponements thereof as specified. IF NO SPECIFICATIONS ARE MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS NAMED ON THE
REVERSE SIDE. This proxy hereby revokes all prior proxies given with respect to
the shares of the undersigned.
(Continued and to be signed on other side)
o FOLD AND DETACH HERE o
Terrace Holdings, Inc.
Annual Meeting of Shareholders
August 17, 1998, 10:00 a.m.
The Sheraton Hotel
250 Market Street
Portsmouth, New Hampshire 03801
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
1. Election of Directors: The election of the following nominees to the Board
of Directors unless otherwise indicated:
FOR WITHHOLD Jonathan S. Lasko Fred A. Siegel
all nominees AUTHORITY Steven Shulman Houssam T. Aboukhater
listed for all nominees Richard Power
|_| |_| IN THE EVENT THE UNDERSIGNED WISHES TO WITHHOLD
AUTHORITY TO VOTE FOR ANY PARTICULAR NOMINEE OR
NOMINEES LISTED ABOVE, PLEASE SO INDICATE BY
CLEARLY AND NEATLY LINING THROUGH OR STRIKING
OUT THE NAME OF ANY SUCH NOMINEE OR NOMINEES.
2. To ratify the transfer, sale, and assignment to Dr. Samuel H. Lasko of
the Company's wholly-owned subsidiaries, The Lasko Family Kosher Tours,
Inc., and A&E Management Corp. FOR ___ AGAINST ___ ABSTAIN ___
3. To approve an amendment to the Company's Certificate of Incorporation,
as amended, to change the corporate name of Terrace Holdings, Inc. to
Terrace Food Group, Inc. FOR ___ AGAINST ___ ABSTAIN ___
4. To approve an increase in the maximum number of shares of Common Stock
which may be subject to stock options granted under the Company's 1997
Stock Option Plan. FOR ___ AGAINST ___ ABSTAIN ___
5. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
Please Complete, sign and mail this proxy promptly in the
enclosed envelope. No postage is required for mailing in United
States.
Dated:___________________________, 1998
No. of Shares ____________ ________________________________________
Signature
________________________________________
Signature
IMPORTANT: Please date this proxy and sign exactly as your
name appears on this proxy. If shares are held by joint
tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
title as such. If a corporation, please sign in full
corporate name by president or other authorized officer. If
a partnership, please sign in partnership name by authorized
person.
</TABLE>
o FOLD AND DETACH HERE o
Admission Ticket
ANNUAL MEETING
OF
TERRACE HOLDINGS, INC.
Monday, August 17, 1998
10:00 a.m.
The Sheraton Hotel
250 Market Street
Portsmouth, New Hampshire 03801
