SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
(Rule 14a-101)
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:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
PREMIUM CIGARS INTERNATIONAL, LTD.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (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 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PREMIUM CIGARS INTERNATIONAL, LTD.
NOTICE OF 1999
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN YOUR PROXY
IN THE ENCLOSED ENVELOPE
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 7, 1999
The Annual Meeting of Shareholders of PREMIUM CIGARS INTERNATIONAL, LTD.
(the "Company") will be held at the Company's principal executive offices at
15849 North 77th Street, Scottsdale, Arizona 85260 on Friday, May 28, 1999 at
9:00 A.M. local time for the following purposes:
1. To elect the directors of the Company to serve for the ensuing year;
2. To ratify the selection of SEMPLE & COOPER, LLP as independent
auditors for the Company;
3. To approve a name change of the Company to ProductExpress.com, Inc.;
4. To approve a 1 for 2.3 reverse stock split;
5. To transact any other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 2, 1999 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting. A list of stockholders will be available during regular
business hours at the Company's office at 15849 North 77th Street, Scottsdale,
Arizona on and after May 7, 1999, for inspection by any stockholder for any
purpose germane to the meeting.
By Order of The Board of Directors,
PREMIUM CIGARS INTERNATIONAL, LTD.
/s/ John E. Greenwell
- -----------------------------------
John E. Greenwell, Acting Secretary
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PROXY STATEMENT
We are furnishing this Proxy Statement in connection with the solicitation
of proxies by the Board of Directors of PREMIUM CIGARS INTERNATIONAL, LTD. (the
"Company") for use at the Annual Meeting of Shareholders of the Company to be
held at the time and place and for the purposes set forth in the foregoing
Notice of Annual Meeting of Shareholders. The address of the Company's principal
executive offices is 15849 North 77th Street, Scottsdale, Arizona, 85260. This
Proxy Statement and the form of proxy are being mailed to stockholders on or
about May 7, 1999.
REVOCABILITY OF PROXY AND VOTING OF PROXY
You may revoke a proxy at any time before it is exercised by
* giving another proxy bearing a later date,
* notifying the Secretary of the Company in writing at any time before
the proxy is exercised, or
* attending the meeting in person and casting a ballot.
Any proxy returned to the Company will be voted in accordance with its
instructions. If no instructions are indicated on the proxy, the proxy will be
voted for the election of the nominees for directors proposed by Management and
in favor of all other proposals described in the Proxy Statement. Because
abstentions with respect to any matter are treated as shares present or
represented and entitled to vote for the purposes of determining whether that
matter has been approved by the stockholders, abstentions have the same effect
as negative votes. Broker non-votes and shares as to which proxy authority has
been withheld with respect to any matter are not deemed to be present or
represented for purposes of determining whether stockholder approval of that
matter has been obtained.
We know of no reason why any of the nominees proposed would be unable to
serve. IF prior to the election, any nominee named becomes unable to serve as a
director, the proxy will be voted in accordance with best judgment of the
persons named as proxies. The Board of Directors knows of no matters, other than
as described in this Proxy Statement, that are to be presented at the meeting,
but if matters other than those described properly come before the meeting, the
proxy will be voted by the persons named in a manner that those persons (in
their judgment) consider to be in the best interests of the Company.
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RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on April 2, 1999 are
entitled to vote at the meeting. On the record date 3,839,092 shares of Common
Stock were outstanding and entitled to vote. Each stockholder entitled to vote
shall have one vote for each share of Common Stock registered in such
stockholder's name on the books of the Company as of the record date.
Arizona law and the Company's Bylaws allow stockholders to cumulate their
votes for the election of directors. Shareholders are entitled to multiply the
total number of shares they are entitled to vote by the total number of
directors for whom they are entitled to vote, and may apply that product to the
election of a single director or distribute that product among two or more
candidates.
Neither Arizona law nor the Company's governing documents provide for any
dissenter's right of appraisal with respect to any matter to be acted upon at
the 1999 Annual Meeting of Shareholders. As no statutory or other dissenter's
rights are applicable under Arizona law, a stockholder's failure to register
written disapproval of any of the proposals at the Annual Meeting is not a
waiver of any such rights.
ANNUAL REPORT ON FORM 10-KSB AND OTHER MATTERS
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998 (the "Annual Report"), which was mailed to stockholders with
or preceding this Proxy Statement, contains financial and other information
about the Company but is not incorporated into this Proxy Statement and is not
to be considered a part of these proxy soliciting materials or subject to
Regulations 14A or 14C or to the liabilities of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Company will provide
upon written request, to each stockholder of record as of the Record Date, a
copy of any exhibits listed in the Annual Report, upon receipt of the request
and a check for $20 to cover the Company's expense in furnishing such exhibits.
Any such requests should be directed to the Company's Secretary at the Company's
executive offices set forth in this Proxy Statement.
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ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
On May 8, 1998, the Board of Directors established a standing Nominating
Committee of three directors. The directors appointed to serve on the committee
until their successors have been elected or appointed and shall qualify are:
Greg P. Lambrecht (Chairman), Steven A. Lambrecht and John E. Greenwell. The
Board of Directors, on April 20, 1999, after having considered the
recommendations of the individual members of the Nominating Committee who were
present at the Board's meeting, unanimously nominated the following persons as
the recommendation of the Board of Directors for directors of the Company:
Director
Nominee Name Age Since
------------ --- -----
John E. Greenwell 51 1998
Colin A. Jones 31 1997
Greg P. Lambrecht 35 1997
Steven A. Lambrecht 46 1996
Gary Sherman 50 1999
Greg Emery 41 1999
VOTE REQUIRED AND RECOMMENDATION FOR ITEM 1
The affirmative vote of a majority of the shares of common stock present or
represented by proxy and voting at the Annual Meeting of Shareholders is
required for approval of this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL OF THE NOMINEES.
INFORMATION RELATED TO ELECTION OF DIRECTORS
All directors hold office until the Annual Meeting of Shareholders of the
Company and until their successors have been elected and qualified. The Board of
Directors currently consists of six members. The Bylaws permit the Board of
Directors to determine the size of the Board within a range that the
shareholders have set which is currently one to nine members. The Bylaws, and
requirements for the Company's continued listing on NASDAQ, also require that we
maintain at least two "independent directors" who are not employees or officers
and who do not have a material business or professional relationship with the
Company. Information about each nominee for director is given below.
JOHN E. GREENWELL has been a director and the Company's Chief Executive
Officer since March 1, 1998 and the Company's President and Chief Operating
Officer since December 15, 1997. Mr. Greenwell previously was employed by The
Dial Corporation from 1984 to 1996, culminating with his position as Executive
Vice President and the General Manager of Dial's Detergent Division. He has 29
years of marketing and executive management experience in the consumer package
goods industry. Prior to his Executive Vice President role with The Dial
Corporation, Mr. Greenwell was Senior Vice President and General Manager of
Dial's Food Division. He has served in consumer marketing responsibilities for
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The Dial Corporation, Texize (a former division of Morton Thiokol), Drackett (a
former division of Bristol Myers), the advertising agency of Leo Burnett Company
and a sales position with The Chicago Tribune. Mr. Greenwell has also served as
a member of the Board of Directors for the Soap & Detergent Association and the
National Food Processors Association. Mr. Greenwell received a B.S. degree in
Business from Indiana University in 1969.
COLIN A. JONES has been a director since May 3, 1997. He previously served
as Vice President of International Sales from May 31, 1997 to January 16, 1998.
He has 13 years of experience managing, marketing and selling to the convenience
store and grocery store market. In 1985, he founded J&M Wholesale, Ltd., a
British Columbia corporation which delivers various wholesale products primarily
to convenience store accounts in Canada. He continues to be the President and
Chief Executive Officer of J&M. Mr. Jones attended Douglas College of New
Westminster, British Columbia, Canada.
GREG P. LAMBRECHT has been a director since August 7, 1997. He previously
served as the Company's Vice President of National Sales from May 31, 1997 to
March 2, 1998 and as the Company's Secretary and Treasurer from May 31, 1997 to
March 4, 1998. He has 14 years of experience managing, marketing and selling to
the convenience store and grocery store market. In 1984, he founded Rose Hearts,
Inc., a Washington company which delivers various impulse purchase products in
Washington, Oregon and California. He graduated with a B.A. in Communications
from Western Washington University in 1984. Greg P. Lambrecht is the brother of
Steven A. Lambrecht and the uncle of Scott I. Lambrecht.
STEVEN A. LAMBRECHT has been a director since December 31, 1996. He
previously served as the Company's Chief Executive Officer from December 31,
1996 to March 1, 1998, as President from May 3, 1997 to December 15, 1997 and as
Chairman of the Board from December 31, 1996 to June 20, 1997. He has 24 years
of marketing and sales experience and 18 years of management experience; most of
his business experience has been in real estate development and construction. He
is the owner of Forum Import/Export Company, a sole proprietorship, and was
co-owner of Forum Development and Construction Company, Inc., a Washington
corporation. He also owns SDCC, Inc., an Arizona development and construction
corporation that he founded in 1992. He has developed and sold over 20 million
dollars worth of real estate since 1974. Steven A. Lambrecht is the brother of
Greg P. Lambrecht and the father of Scott I. Lambrecht.
GARY SHERMAN has been an independent director since March 1999. He is
currently Executive Vice President of Heritage West Securities, a regional
broker/dealer in Scottsdale. Mr. Sherman has 25 years of management and sales
experience. Since 1990, he has been President of both W.B. McKee Securities,
Inc. and Owen-Joseph Asset Management. From 1976 to 1990, he served as a General
Partner with Boettcher & Company, a NYSE Member headquartered in Denver,
Colorado; as well as Senior Vice President and Regional Director of Kemper
Securities after their purchase of Boettcher in 1986. Mr. Sherman majored in
Finance at the University of Denver and attended the Securities Institute at the
Wharton School of Finance.
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GREG EMERY has been a director since April 20, 1999, and is currently Vice
President of Marketing and Sales for Cybernet, a technology company located in
Ann Arbor, Michigan. Prior to his current position, he was the International
Marketing & Communications Manager for CalComp (a division of Lockheed Martin).
He also served as the Vice President of Marketing & Sales for DataMag, a
computer media manufacturer, the National Sales Manager for Sony Computer
Products Division, the worldwide Product Marketing Manager for Ampex (a division
of Allied-Signal), and a marketing representative for IBM. He was also Vice
President of the Board of Valley Big Brothers/Big Sisters. Mr. Emery has an MBA
degree with honors and a BS degree from Arizona State University.
BOARD ACTIVITY - STANDING AUDIT AND COMPENSATION COMMITTEES
Although the Board has established standing Audit and Compensation
Committees, because the Company is in its first year following its initial
public offering, the Board has elected to fulfil the functions of those
committees through meetings of the entire Board. The Board of Directors held 11
meetings in the year ended December 31, 1998 and all current directors attended
at least 75% of the total number of meetings during their respective terms.
Neither the Compensation Committee nor the Audit Committee held meetings
independent of the entire Board in 1998.
On May 8, 1998, the Board of Directors established standing Audit and
Compensation Committees which would each be continually comprised of at least
one director, but a majority of the members of the Audit Committee must be
independent directors. Pursuant to the Company's Bylaws, Section 5, the
committees must include at least one board member, but may also include officers
who are not directors, if the committee will not be delegated Board
decision-making authority and will make recommendations to the Board for
decision. The Audit Committee is comprised of the Company's two Independent
Directors. The directors appointed to serve on the committees until their
successors have been elected or appointed and shall qualify are:
Audit Committee Compensation Committee
--------------- ----------------------
Gary Sherman Robert H. Manschot(2) (Chairman)
Mark Jazwin(1) Colin A. Jones
Atul Vashistha(2)
(1) Mark Jazwin has resigned from the Board of Directors and it is expected
that Greg Emery will fill Mark Jazwin's position on the Audit Committee.
(2) Robert H. Manschot and Atul Vashistha resigned from the Board of Directors
in 1999 and 1998, respectively. The Board of Directors will appoint new
members to serve on the Compensation Committee following the Company's
Annual Meeting.
When the Audit and Compensation Committees begin to meet independently of
the entire Board, the Compensation Committee's duties will include reviewing and
approving salaries and other matters relating to compensation of the executive
officers of the Company. The Audit Committee's duty will be to recommend for
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approval by the Board of Directors a firm of certified public accountants whose
duty it is to audit the financial statements of the Company for the fiscal year
in which they are appointed, and monitors the effectiveness of the audit effort,
the Company's internal financial and accounting organization and controls and
financial reporting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND CHANGES IN CONTROL
The following tables set forth certain information regarding shares of
common stock beneficially owned as of April 12, 1999 by (i) each person or group
known to the Company, which beneficially owns more than 5% of the common stock;
(ii) each of the Company's officers and directors; and (iii) all officers and
directors as a group. The percentage of beneficial ownership is based on
3,839,092 shares outstanding on April 12, 1999 plus, for each person or group,
any securities that person or group has the right to acquire within 60 days
pursuant to options, warrants, conversion privileges or other rights. Unless
otherwise indicated, the following persons have sole voting and investment power
with respect to the number of shares set forth opposite their names:
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership of Class
- ----- ---------------- -------------------- --------
Common John E. Greenwell 476,600(1) 12.41%
16216 North 63rd Place
Scottsdale, Arizona 85254
Common Greg P. Lambrecht 246,770(1)(2) 6.44%
2323 North Central Avenue
Suite 2004
Phoenix, Arizona 85004
Common Steven A. Lambrecht 266,256(1)(2) 6.94%
11259 East Via Linda
Suite 100-102
Scottsdale, Arizona 85259
Common Lincoln Heritage Life 210,476(3) 5.48%
Insurance Company
4343 E. Camelback Rd. #400
Phoenix, Arizona 85018
Common Londen Insurance Group 210,476(3) 5.48%
4343 E. Camelback Rd. #400
Phoenix, Arizona 85018
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(1) Includes shares which may be acquired by the exercise of options or
warrants within 60 days as follows: John E. Greenwell, 40,000 shares,
Steven A. Lambrecht, 21,250 shares, and Greg. P. Lambrecht, 1,250 shares.
Excludes shares underlying options which are not currently exercisable as
follows: John E. Greenwell, 10,000 shares.
(2) Steven A. Lambrecht is the brother of Greg P. Lambrecht and the father of
Scott I. Lambrecht. Each of the Lambrechts disclaims any beneficial
interest in the shares held by the others.
(3) Represents beneficial ownership of 20,000 shares held of record by Life of
Boston Insurance Company and of 95,057 shares each which may be acquired
directly by the exercise of stock warrants within 60 days by Lincoln
Heritage Life Insurance Company and Life of Boston Insurance Company. The
Londen Insurance Group is the sole shareholder of the Lincoln Heritage Life
Insurance Company. Lincoln Heritage Life Insurance Company owns 79% of the
shares of Life of Boston Insurance Company.
SECURITY OWNERSHIP OF MANAGEMENT
Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership of Class
- ----- ---------------- -------------------- --------
Common Mark Jazwin 14,226(1) (3)
7702 E. Doubletree Ranch Rd.
Suite 230
Scottsdale, AZ 85258
Common John Greenwell 476,600(1) 12.41%
16216 North 63rd Place
Scottsdale, Arizona
Common Gary Sherman 27,846(1) (3)
6063 E. Cortez Drive
Scottsdale, AZ 85254
Common Colin Jones 138,972 3.62%
7349 Via Paseo del Sur
Suite 515-166
Scottsdale, Arizona 85258
V6Z-2S6
Common Greg P. Lambrecht 246,770(1)(2) 6.44%
6980 East Sahuaro Drive
Apt. 1129
Scottsdale, Arizona 85254
Common Steven A. Lambrecht 266,256(1)(2) 6.94%
11259 East Via Linda
Suite 100-102
Scottsdale, Arizona 85259
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Common Scott I. Lambrecht 86,250(1)(2) 2.25%
15849 North 77th Street
Scottsdale, Arizona 85260
Common James B. Stanley 26,250 (3)
15849 North 77th Street
Scottsdale, Arizona 85260
Common Brendan N. McGuinness 20,222(1) (3)
Common All Officers and Directors 1,284,246(1)(2) 33.45%
as a group (10 persons)
(1) Includes shares which may be acquired by the exercise of options or
warrants within 60 days as follows: John E. Greenwell, 40,000 shares,
Steven A. Lambrecht, 21,250 shares, Colin A. Jones and Greg P. Lambrecht,
1,250 shares each, Brendan McGuinness, 20,000 shares, Gary Sherman, 9,573
shares and Mark Jazwin, 9,456 shares. Excludes shares underlying options
which are not currently exercisable as follows:
John E. Greenwell, 10,000 shares.
(2) Steven A. Lambrecht is the brother of Greg P. Lambrecht and the father of
Scott I. Lambrecht. Each of the Lambrechts disclaims any beneficial
interest in the shares held by the others.
(3) Less than 1%.
CHANGES IN CONTROL
None.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RESOLVING CONFLICTS OF INTEREST. A number of the transactions described in
this section involve inherent conflicts of interest because an officer,
director, significant shareholder, promoter or other person with a material
business or professional relationship with the Company is a party to the
transaction. Our current policy adopted by our board of directors regarding
transactions involving conflicts of interest, is:
(i) we will not enter into any material transaction or loan with a
related or affiliated party unless the transaction or loan is on
terms that are no less favorable to us than we could obtain from
an unrelated or unaffiliated third party; and
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(ii) a majority of the independent directors (those who do not have a
material business or professional relationship with the Company
other than being a director) who have no interest in the
transactions must review and approve transactions involving
related parties or conflicts of interest after having been given
access, at our expense, to our counsel or to their own independent
legal counsel; and
(iii) when there are only two independent directors, both directors must
approve the transaction; and
(iv) the independent director approval applies to all related-party
transactions and loans, whether or not to a related-party.
We currently have two independent directors, Greg Emery and Gary Sherman.
Our independent directors have had access, at our expense, to our counsel or to
independent counsel, and a majority of the then current independent directors
have ratified all related-party transactions that are ongoing.
JONES/LAMBRECHT NOTES RECEIVABLE. Colin A. Jones and Greg P. Lambrecht each
delivered to the Company long term promissory notes for $43,112.50. The notes
are dated December 31, 1996, accrue interest at six percent, and all interest
and principal are due on March 31, 1999. The notes relate to CAN-AM receivables
which accrued prior to the Company's acquisition of all of CAN-AM's outstanding
stock on December 31, 1996. The independent directors have approved a one-time
extension for the repayment of these notes to September 30, 1999. In exchange,
Messrs. Jones and Lambrecht agreed to increase the interest rate for the notes
from six to ten percent.
SINGLE CIGARS, INC. As discussed in the Company's Form 10QSB filed for the
quarter ended September 30, 1998, the Company entered into a Supplier Agreement
with Single Cigars, Inc., a wholly owned subsidiary of Single Stick, Inc., dated
October 5, 1998, under which Single Cigars, Inc. will supply little cigars known
as Prime Time(TM) and countertop control units exclusively to the Company for
distribution by the Company. Greg Lambrecht, a director of the Company, has
entered into a consulting arrangement with Single Stick, Inc. Pursuant to his
relationship with Single Stick, Inc., Greg Lambrecht will receive consideration
including two percent (2%) of the net collected sales price received by Single
Stick, Inc. from sales of Prime Time(TM) to the Company, as well as shares of
Single Stick, Inc. if certain sales criteria are met for the Prime Time(TM)
product. Additionally, Greg Lambrecht received a retainer and shares of Single
Stick, Inc. under his consulting agreement with Single Stick, Inc. the Company's
Board of Directors including all of the Company's independent directors, have
approved the transaction with Single Stick, Inc. and have found the terms to be
fair to the Company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following persons were, during the last fiscal year, either directors,
officers, or beneficial owners of more than ten percent (10%) of a class of
equity securities registered pursuant to Section 12 of the Exchange Act of 1934
and failed to file the following reports on a timely basis reports required by
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Section 16(a) during the most recent fiscal year or prior years which have not
previously been disclosed:
The following persons did not file any Forms 4 during the fiscal year ended
December 31, 1998 and have not provided the Company with a written
representation that no such forms were required: William Anthony and Robert
Manschot.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Salary Bonus Compen- Awards Options/ Payouts Compen-
Position Year ($) ($) sation($) ($) Sars (#) ($) sation
-------- ---- --- --- --------- --- -------- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John
Greenwell/CEO(1) 1998 144,231 -- -- -- -- -- --
Steve
Lambrecht/CEO(2) 1998 80,546(5) -- -- -- -- -- 42,850(3)(4)
Greg
Lambrecht/
VP Sales 1998 83,777(5) -- -- -- -- -- 42,500(3)(4)
Colin Jones /VP
Int. Sales 1998 75,564(5) -- -- -- -- -- 43,600(3)(4)
</TABLE>
(1) Took office March 1, 1998.
(2) Left office March 1, 1998.
(3) Includes $40,000 payment to settle compensation dispute. See "Executive
Compensation - Employment Agreements Settlement of Compensation Disputes
with Founders" in the Company's Form 10-KSB filed for the fiscal year ended
December 31, 1997.
(4) Includes fees paid for attendance at Board of Directors meetings.
(5) Includes nine months salary for severance compensation in accordance with
terms of employment agreements. See "Executive Compensation Employment
Agreements" in the Company's Form 10-KSB filed for the fiscal year ended
December 31, 1997.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price
Name Granted (#) Fiscal Year ($/Sh) Expiration Date
---- ----------- ----------- ------ ---------------
John Greenwell/ CEO -- -- -- --
Brandan McGuinness
/VP Sales 20,000 100% $5.25 --
(1) Options granted pursuant to a Stock Option Agreement dated May 8, 1998.
Options to purchase 10,000 shares vested on May 8, 1998. Options to
purchase an additional 10,000 shares vested on September 1, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End (#) at FY-End (4)
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized ($) Unexercisable Unexercisable
---- -------- ------------ ------------- -------------
40,000 Not in-the-Money
Exercisable and Exercisable
John Greenwell/ 10,000 Not-in-the-Money
CEO -- -- Unexercisable(1) and Unexercisable
Steve Lambrecht/ 20,000 Not-in-the-Money
Former CEO -- -- Exercisable and Exercisable
Brendan McGuinness 20,000 Not-in-the-Money
/VP Sales -- -- Exercisable and Exercisable
(1) Options to purchase 10,000 shares at $5.25 per share, unexercisable until
June 30, 1999.
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DIRECTOR COMPENSATION TABLE
Annual Retainer Meeting Consulting Fees/ Number of
Name Fee ($) Fees ($) Other Fees ($) Shares (#)
---- ------- -------- -------------- ----------
William L. Anthony -- 4,650 -- --
Robert H. Manshot -- 2,850 -- --
David S. Hodges -- 3,150 19,200(1) --
Atul Vashistha -- 3,600 -- --
Steve Lambrecht -- 2,850 -- --
Greg Lambrecht -- 2,500 -- --
Colin Jones -- 3,600 -- --
(1) Consulting fees paid as termination payments under a Business Consulting
Agreement dated June 2, 1997 as more fully described in the Company's Form
10-KSB filed for the fiscal year ended December 31, 1997.
EMPLOYMENT AGREEMENTS
JOHN E. GREENWELL has an at-will Employment Agreement with the Company as
President, Chief Executive Officer and Chief Operating Officer. The initial
salary was $120,000, but increased, pursuant to the agreement's terms, to
$150,000 a year upon his becoming Chief Executive Officer on March 1, 1998. Mr.
Greenwell is eligible for any bonus plan or stock option plan offered to other
comparable executives and was granted a bonus of $50,000 for the fiscal year
ending December 31, 1998. At this time, Mr. Greenwell has agreed to defer
payment of the $50,000 bonus for the fiscal year ending December 31, 1998.
Additionally, as of January 18, 1999 and to date, Mr. Greenwell has declined to
accept any payment for his services rendered to the Company.
CONSULTING AGREEMENTS. During 1998, we also had arrangements with the
following consultants:
L.G. ZANGANI, INC. AND LEONARDO G. ZANGANI AGREEMENTS. the Company entered
a Consulting Agreement, effective September 16, 1997, with L.G. Zangani, Inc.,
which is discussed in further detail in the Company's Form 10-KSB filed for the
fiscal year ending December 31, 1997. On approximately December 2, 1998, the
Company notified L.G. Zangani, Inc. of the termination of the Consulting
Agreement.
RCG CAPITAL, INC. On or about December 14, 1998, RCG Capital, Inc. (Mr. Max
Ramras, President/CEO) entered into a Consulting Agreement with the Company to
represent the Company as its financial public relations consultant for $5,500
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per month, plus expenses, and the ability to purchase 100,000 restricted shares
of the Company's common stock at a price of $.01 per share. The shares are
subject to repurchase by the Company in the event certain incentive goals are
not achieved. RCG Capital, Inc. has agreed to pay the Company an amount ranging
from $0.99 to $1.49 per share upon the removal of any and all restrictive
legends.
STANDING ARRANGEMENTS FOR OUTSIDE DIRECTOR COMPENSATION. the Company has
standing arrangements to grant each outside director options to purchase 5,000
shares of common stock and the Chairman additional options to purchase 2,500
shares of common stock on February 1 of each year at the market price on the
date of the grant, but not less than $5.25 per share, to vest in quarterly
increments of 1,250 (1,875 for the Chairman) and which shall be exercisable 1 to
5 years from the date each quarterly increment vests. The options are
non-qualified. To date, the Company has not formally granted any such options to
the outside directors. the Company also pays all outside directors, including
non-employee directors, for all meetings attended (whether regular or additional
meetings) at the rate of $350 per meeting for meetings of up to four (4) hours
and $750 per meeting for meetings over four (4) hours.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(ITEM 2 ON PROXY CARD)
In conjunction with the Company's initial public offering, the Company
engaged Semple & Cooper, LLP of Phoenix, Arizona as its principal accountant to
audit the Company's financial statements beginning with the Company's fiscal
year ended March 31, 1998. The Company subsequently changed its fiscal year end
to December 31 and appointed Semple & Cooper, LLP as the Company's independent
certified public accountants for the Company for the fiscal year ending December
31, 1998. It is not anticipated that a representative of Semple & Cooper, LLP
will be present at the Annual Meeting of Shareholders to respond to questions or
make a statement.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
VOTE REQUIRED AND RECOMMENDATION FOR ITEM 2
The affirmative vote of a majority of the shares of common stock present or
represented by proxy and voting at the Annual Meeting of Shareholders is
required for approval of this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ITEM 2 RATIFICATION OF THE
APPOINTMENT OF SEMPLE & COOPER, LLP. as the Company's independent certified
public accountants for the fiscal year ending December 31, 1998.
15
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AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO EFFECT NAME CHANGE
(ITEM 3 ON PROXY CARD)
The Company's Board of Directors has unanimously approved and determined to
submit to the Company's shareholders an amendment (the "Name Change Amendment")
to the Company's Articles of Incorporation as currently amended (the "Articles
of Incorporation"), to effect a change in the Company's name from Premium Cigars
International, Ltd. to ProductExpress.com, Inc.
VOTE REQUIRED AND RECOMMENDATION FOR ITEM 3
The affirmative vote for a majority of the shares of common stock present
or represented by proxy and voting at the Annual Meeting of Shareholders is
required for approval of this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ITEM 3 PROPOSAL FOR A NAME CHANGE
OF THE COMPANY TO PRODUCTEXPRESS.COM, INC.
INFORMATION RELATED TO NAME CHANGE TO PRODUCTEXPRESS.COM, INC.
If the shareholders approve Item 3, the Company's Articles of Incorporation
will be amended to replace the existing provision relating to the Company's
authorized capital with the following provision relating thereto. Accordingly,
Article I of the Articles of Incorporation shall be amended to read as follows:
The name of the Corporation shall be ProductExpress.com, Inc.
If the shareholders approve Item 3, the Name Change Amendment shall become
effective upon the filing of an amendment to the Articles of Incorporation with
the Arizona Corporation Commission. The Name Change Amendment will amend the
Company's Articles of Incorporation to give effect to the amendment made
pursuant to Item 3. The Name Change Amendment, as it will appear if Item 3 is
approved by the shareholders, is set forth above. If Item 3 is not approved by
the shareholders, the Articles of Incorporation will not be amended.
to reflect the Name Change Amendment.
ProductExpress.com is the Company's new e-commerce site, which contains
both a retail side and a wholesale side directed towards the product needs of
convenience store markets. The Company believes that its new e-commerce site
leverages the Company's strengths -- products uniquely designed for the
convenience store market and the Company's proven order solicitation, processing
and shipping systems. While the Company's initial focus was on cigar and
cigar-related products, the Company will offer a broad array of products through
its new e-commerce site as the Company intends to expand its operations beyond
the cigar business. Accordingly, management for the Company believes that
Premium Cigars International, Ltd. no longer reflects the true nature of the
Company's business and that ProductExpress.com, Inc. will better reflect the
Company's new vision, as well as the future of its business.
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO EFFECT REVERSE STOCK SPLIT
(ITEM 4 ON PROXY CARD)
The Company's Board of Directors has unanimously approved and determined to
submit to the Company's shareholders an amendment (the "Reverse Split
Amendment") to the Company's Articles of Incorporation as currently amended (the
"Articles of Incorporation"), to effect a reverse stock split (the "Reverse
Split") of one share of the Company's Common Stock for every two and
three-tenths shares of Common Stock that are currently issued and outstanding.
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<PAGE>
VOTE REQUIRED AND RECOMMENDATION FOR ITEM 4
The affirmative vote for a majority of the shares of common stock present
or represented by proxy and voting at the Annual Meeting of Shareholders is
required for approval of this proposal. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ITEM 4 PROPOSAL FOR A REVERSE
STOCK SPLIT IN ORDER TO IMPROVE THE LIKELIHOOD OF REGAINING AND MAINTAINING A
BID PRICE OF AT LEAST $1.00 FOR THE COMPANY'S COMMON STOCK AND THEREBY IMPROVING
THE COMPANY'S ABILITY TO MAINTAIN ITS LISTING ON THE NASDAQ SMALLCAP MARKET.
INFORMATION RELATED TO REVERSE STOCK SPLIT
If the shareholders approve Item 4, the Company's Articles of Incorporation
will be amended to replace the existing provision relating to the Company's
authorized capital with the following provision relating thereto. Accordingly,
the Articles of Incorporation shall be amended to add an Article IX which shall
read as follows:
Each two and three-tenths (2.3) shares of the Corporation's common stock
issued and outstanding as of the date on which this Articles of Amendment
are filed (the "Split Effective Date"), shall be automatically changed and
reclassified, as of the Split Effective Date and without further action,
into one (1) fully paid and nonassessable share of the Corporation's common
stock. Any fractional interest resulting from such reclassification shall
be rounded to the nearest whole number.
If the shareholders approve Item 4, the Reverse Split Amendment shall
become effective upon the filing of an amendment to the Articles of
Incorporation with the Arizona Corporation Commission. The Reverse Split
Amendment will amend the Company's Articles of Incorporation to give effect to
the amendment made pursuant to Item 4. The Reverse Split Amendment, as it will
appear if Item 4 is approved by the shareholders, is set forth above. If Item 4
is not approved by the shareholders, the Articles of Incorporation will not be
amended to reflect the Reverse Split Amendment.
The proposed Reverse Split Amendment will not affect any shareholder's
proportionate equity interest in the Company or the rights, preferences,
privileges or priorities of any shareholder, other than a nominal adjustment
which may occur due to the Company's rounding of fractional shares. Likewise,
the Reverse Split Amendment will not affect the total shareholders' equity of
the Company or any components of shareholders' equity as reflected on the
financial statements of the Company except (i) to change the numbers of the
issued and outstanding shares of capital stock and (ii) for an adjustment which
will occur due to the costs incurred by the Company in connection with this
Proxy Statement and the implementation of the Proposal as approved by the
shareholders. However, because the number of shares of capital stock that the
Company is authorized to issue will not be decreased in proportion to the one
for every two and three-tenths share decrease in the number of issued shares,
the number of shares which are authorized but unissued, and the percentage of
ownership of the Company represented by such shares if they are issued in the
future in the discretion of the Board of Directors, effectively will be
increased.
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<PAGE>
The following table illustrates the principal effect on the Company's
capital stock of the Reverse Split, assuming a one-for two and three-tenths
reverse split:
Prior to Reverse After Reverse
Split Split
---------------- -------------
COMMON
Authorized 10,000,000 10,000,000
Issued and outstanding (1) 3,839,092 1,669,170
Available for future issuance 6,160,908 8,330,830
(1) Excludes shares issuable upon exercise of outstanding options or warrants
as of March 31, 1999.
NASDAQ MINIMUM BID PRICE
As amended effective August 22, 1997, Rule 4450 of the NASDAQ Marketplace
Rules provides that issuers listed on the NASDAQ SmallCap Market maintain a
minimum bid price of $1.00 per share for the listed stock. The Company's shares
of Common Stock have not satisfied the NASDAQ requirements since December 11,
1998, and NASDAQ proposed to delist the Company from the NASDAQ SmallCap Market
on January 23, 1999. The Company requested a hearing on the proposed delisting,
which was held on April 8, 1999. At the hearing, the Company proposed that it
effect the Reverse Split to achieve the $1.00 minimum closing bid price. The
Board of Directors believes that such a delisting could adversely affect the
ability of the Company to attract new investors, may result in decreased
liquidity of the outstanding shares of Common Stock and, consequently, could
reduce the price at which such shares trade and the transaction costs inherent
to trading such shares. The Company believes that, if the Reverse Split
Amendment is approved, there is a greater likelihood that the minimum bid price
of the Common Stock will be maintained at a level over $1.00 per share.
Even though a Reverse Stock split, by itself, does not impact a
corporation's assets or prospects, reverse splits can result in a decrease in
the aggregate market value of a corporation's equity capital. The Board of
Directors, however, believes that this risk is offset by the prospect that the
Reverse Stock Split will improve the likelihood that the Company will be able to
maintain its NASDAQ SmallCap Market listing and may, by increasing the per share
price, make an investment in the Common Stock more attractive for certain
investors. However, we cannot assure that approval of the Reverse Split
Amendment will succeed in raising the bid price of the Company's Common Stock
above $1.00 per share, that such minimum price, if achieved, would be
maintained, or even if the NASDAQ's minimum bid price requirements were
satisfied, the Company's Common Stock would not be delisted by the NASDAQ for
failure to meet other listing criteria, such as minimum net tangible assets or
market value of the Company's float.
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<PAGE>
THE COMPANY CANNOT ASSURE THAT THE MARKET PRICE OF THE COMMON STOCK AFTER
THE PROPOSED REVERSE SPLIT WILL BE EQUAL TO THE MARKET PRICE BEFORE THE PROPOSED
REVERSE SPLIT MULTIPLIED BY THE SPLIT NUMBER, OR THAT THE MARKET PRICE FOLLOWING
THE REVERSE SPLIT WILL EITHER EXCEED OR REMAIN IN EXCESS OF THE CURRENT MARKET
PRICE, OR THE REQUIRED $1.00 MINIMUM CLOSING BID PRICE.
NO EXCHANGE OF SHARES; NO FRACTIONAL SHARES
Pursuant to the proposed Amendment, every two and three-tenths shares of
issued and outstanding Common Stock would be converted and reclassified into one
share of post-split Common Stock, and any fractional interests resulting from
such reclassification would be rounded to the nearest whole number. The proposed
Reverse Split would become effective upon the Split Effective Date. Shareholders
will be notified after the Split Effective Date that the Reverse Split has been
effected.
Shareholders will not receive certificates for shares of post-split Common
Stock. Accordingly, shareholders should not forward their certificates to the
Company or its transfer agent. Beginning on the Split Effective Date, each
certificate representing shares of the Company's pre-split Common Stock will be
deemed for all corporate purposes to evidence ownership of the appropriate
number of shares of post-split Common Stock.
No service charge will be payable by shareholders in connection with any
exchange of certificates, all costs of which will be borne and paid by the
Company.
PURPOSES OF THE REVERSE SPLIT AND EFFECTIVE INCREASE IN AUTHORIZED SHARES
The primary objectives of the Reverse Split is to increase the market value
per share of the Company's Common Stock. The Company's Common Stock is currently
listed on the NASDAQ SmallCap Market under the symbol "PCIG." However, the
Company has received notice from the NASDAQ Stock Market ("NASDAQ") of its
intent to delist the Common Stock for failure to maintain the minimum bid
requirement of $1.00 per share for continued inclusion of the Company's shares
on the NASDAQ SmallCap Market. The Company anticipates that the Reverse Split
will have the effect of increasing the minimum bid price of its Common Stock
sufficient to permit it to satisfy the applicable minimum bid price criteria.
Additionally, the Board of Directors believes that the current price per
share of the Company's Common Stock may reduce the effective marketability of
the Common Stock because of the reluctance of certain brokerage firms to
recommend the purchase of lower-priced stocks to their clients. Certain
institutional investors have internal policies preventing the purchase of
lower-priced stocks and many brokerage houses do not permit lower-priced stocks
to be used as collateral for margin accounts. Further, a number of brokerage
houses have policies and practices that tend to discourage individual brokers
within those firms from dealing in lower-priced stocks. Some of those policies
and practices pertain to the payment of brokers' commissions and to
time-consuming procedures that function to make the handling of lower-priced
19
<PAGE>
stocks unattractive to brokers from an economic standpoint. In addition, the
structure of trading commissions tends to have an adverse impact upon holders of
lower-priced stocks because the brokerage commission on a sale of lower-priced
stocks generally represents a higher percentage of the sale price than the
commission on a relatively higher-priced stock.
The Board of Directors believes that the recent low per share market price
of the Common Stock impairs the marketability of the Common Stock to
institutional investors and members of the investing public and creates a
negative impression with respect to the Company. Many investors and market
makers look upon lower priced stocks as unduly speculative in nature and, as a
matter of policy, avoid investment and trading in such stocks. The foregoing
factors adversely affect both the pricing and the liquidity of the Common Stock.
Thus, the potential increase in trading price is expected to be attractive to
the financial community and the investing public and in the best interest of the
shareholders.
The Board of Directors is hopeful that the decrease in the number of shares
of Common Stock outstanding as a consequence of the proposed Reverse Split, and
the resulting anticipated increase price level, will stimulate additional
interest in the Company's Common Stock and possibly promote greater liquidity
for the Company's shareholders. There can be no assurance, however, that there
will be any greater liquidity, and it is possible that the liquidity could even
be adversely affected by the reduced number of shares of Common Stock which
would be outstanding after the proposed Reverse Split is effected.
If the Reverse Split becomes effective, management expects the quoted
market price of the Company's Common Stock to increase as a result of decreasing
the number of shares outstanding without altering the aggregate economic
interest in the Company represented by such shares. The Board believes that the
increased market price may serve to mitigate the present reluctance, policies
and practices on the part of brokerage firms referred to above and diminish the
adverse impact of trading commissions on the potential market for the Company's
shares of Common Stock. There can be no assurance, however, that the Reverse
Split will achieve these desired results, that any such increase would be in
proportion to the one-for-two and three-tenths Reverse Split Ratio or that the
per share price level of the Common Stock immediately after the proposed Reverse
Split can be maintained for any period of time.
The Reverse Split may result in some shareholders owning "odd lots" of less
than 100 shares. The costs, including brokerage commissions, of transaction in
odd lots are generally higher than the costs in transactions of "round lots" of
even multiples of 100.
A secondary result of the effective increase in the number of authorized
but unissued shares of Common Stock is for the Company to have additional shares
of Common Stock authorized and available for issuance as the need arises. Such
share issuances may be made for possible future financing transactions, stock
acquisitions, asset purchases, stock dividends or splits, issuances under any
stock option plan that may be adopted in the future, and other general corporate
purposes. If Proposal Two is approved, shareholders will have no preemptive
rights with respect to the additional authorized shares of Common Stock. Such
shares of Common Stock may be issued on such terms, at such times and on such
conditions as the Board may determine in its discretion.
The Board of Directors is not aware of any present efforts by any person to
accumulate the Company's capital stock or to obtain control of the Company
through a tender offer, merger or other business combination, proxy contest or
20
<PAGE>
otherwise. The Board has not formulated any program, nor entered into any
agreement or understanding, and has no current intention, to issue any unissued
and unreserved shares of Common Stock for the purpose of impeding or preventing
any proposed takeover.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Company has not sought and will not seek a ruling from the Internal
Revenue Service or an opinion of counsel regarding the federal income tax
consequences of the Reverse Split Amendment. A summary of the federal income tax
consequences of the Reverse Split as contemplated in Item 4 is set forth below.
The discussion is based on the present federal income tax law. The discussion is
not intended to be, nor should it be relied on as, a comprehensive analysis of
the tax issues arising from or relating to the proposed Reverse Split Amendment.
Income tax consequences to shareholders may vary from the federal tax
consequences described generally below. STOCKHOLDERS SHOULD CONSULT THEIR OWN
TAX ADVISORS AS TO THE EFFECT OF THE CONTEMPLATED REVERSE SPLIT UNDER APPLICABLE
FEDERAL, STATE AND LOCAL INCOME TAX LAWS.
The proposed Reverse Split constitutes a "recapitalization" to the Company
and its shareholders to the extent that issued shares of Common Stock are
exchanged for a reduced number of shares of Common Stock. Therefore, neither the
Company nor its shareholders will recognize any gain or loss for federal income
tax purposes as a result thereof.
The shares of Common Stock to be issued to each shareholder will have an
aggregate basis, for computing gain or loss, equal to the aggregate basis of the
shares of such stock held by such shareholder immediately prior to the Split
Effective Date. A shareholder's holding period for the shares of Common Stock to
be issued will include the holding period for the shares of Common Stock held
thereby immediately prior to the Split Effective Date provided that such shares
of stock were held by the shareholder as capital assets on the Split Effective
Date.
STOCKHOLDER PROPOSALS FOR 2000
Proposals of security holders intended to be presented at the Company's
Annual Meeting of Shareholders must be received by the Company by not later than
December 2, 1999.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist primarily of printing, postage and handling, including the expenses of
brokerage houses, custodians, nominees, and fiduciaries in forwarding documents
to beneficial owners. Solicitations also may be made by the Company's officers,
directors, or employees, personally or by telephone.
Scottsdale, Arizona
May 7, 1999
<PAGE>
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
PREMIUM CIGARS INTERNATIONAL, LTD. ANNUAL MEETING TO BE HELD ON 05/28/99 FOR
HOLDERS AS OF 04/02/99 CUSIP: 740588 10 8
THE UNDERSIGNED HEREBY APPOINTS JOHN E. GREENWELL AND GARY SHERMAN AS PROXIES,
EACH WITH THE POWER TO APPOINT HIS OR HER SUBSTITUTE, AND HEREBY AUTHORIZES THEM
TO REPRESENT AND TO VOTE, AS DESIGNATED, ALL OF THE SHARES OF COMMON STOCK OF
PREMIUM CIGARS INTERNATIONAL, LTD. HELD BY THE UNDERSIGNED ON APRIL 2, 1999, AT
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 28, 1999 AT 9:00 A.M. AT
THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES AT 15849 NORTH 77TH STREET,
SCOTTSDALE, ARIZONA OR ANY ADJOURNMENT THEREOF. IF NO INSTRUCTIONS ARE INDICATED
ON THE PROXY, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS NAMED HEREIN AND IN FAVOR OF ALL PROPOSALS DESCRIBED HEREIN.
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE: [ ]
DIRECTORS DIRECTORS (MARK X FOR ONLY ONE BOX
- IF NOT SPECIFIED, WILL BE VOTED
FOR ALL NOMINEES)
1. DIRECTORS RECOMMEND: A VOTE FOR [ ] FOR ALL NOMINEES
ELECTION OF THE FOLLOWING DIRECTORS:
01-JOHN E. GREENWELL, 02-STEVEN A. LAMBRECHT [ ] WITHHOLD ALL NOMINEES
03-COLIN A. JONES, 04-GREG P. LAMBRECHT
05-GARY SHERMAN, 06-GREG EMERY. [ ] WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL NOMINEE.
WRITE NUMBER(S) OF
NOMINEE(S) BELOW (USE
NUMBER ONLY).
------------
DIRECTORS
PROPOSAL(S) RECOMMEND FOR AGAINST ABSTAIN
2. RATIFICATION OF SEMPLE & FOR [ ] [ ] [ ]
COOPER, LLP AS INDEPENDENT
AUDITORS AS DESCRIBED IN THE
PROXY STATEMENT.
3. APPROVAL OF AMENDMENT TO THE FOR [ ] [ ] [ ]
ARTICLES OF INCORPORATION TO
CHANGE THE COMPANY'S NAME TO
PRODUCTEXPRESS.COM., INC.
4. APPROVAL OF AMENDMENT TO THE FOR [ ] [ ] [ ]
ARTICLES OF INCORPORATION TO
EFFECT A 1 FOR 2.3 REVERSE STOCK SPLIT.
5. AUTHORITY TO VOTE ON ANY OTHER FOR [ ] [ ] [ ]
BUSINESS THAT MAY PROPERLY
COME BEFORE THE MEETING.
- ------------------------------------------------------- ---------------
SIGNATURE(S) DATE
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS ON YOUR STOCK CERTIFICATE. JOINT
OWNERS SHOULD EACH SIGN. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
