<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
U.S.A. FLORAL PRODUCTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
same
- --------------------------------------------------------------------------------
(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)(4) 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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] 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.
<PAGE>
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
Notes:
<PAGE>
[USA FLORAL LOGO]
1025 Thomas Jefferson Street, N.W.
Suite 300 East
Washington, DC 20007
April 10, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of U.S.A. Floral Products, Inc. to be held on Friday, May 12, 2000, at 10:00
a.m., at The Washington Monarch Hotel, 2401 M Street N.W., Washington, D.C.
The Annual Meeting will begin with a report on Company operations, followed
by discussion and voting on the matters described in the accompanying Notice
of Annual Meeting and Proxy Statement.
Please read the accompanying Notice of Annual Meeting and Proxy Statement
carefully. Whether or not you plan to attend, you can ensure that your shares
are represented and voted at the Annual Meeting by promptly completing,
signing, dating and returning the enclosed proxy card in the envelope
provided.
We look forward to seeing you on May 12th.
Sincerely,
/s/ Michael W. Broomfield
Michael W. Broomfield
Chief Executive Officer
<PAGE>
U.S.A. FLORAL PRODUCTS, INC.
1025 Thomas Jefferson Street, N.W.
Suite 300 East
Washington, D.C. 20007
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 2000
----------------
The Annual Meeting of Stockholders (the "Annual Meeting") of U.S.A. Floral
Products, Inc., a Delaware corporation (the "Company"), will be held on
Friday, May 12, 2000, at 10:00 a.m., Eastern Daylight Savings Time, at The
Washington Monarch Hotel, 2401 M Street N.W., Washington, D.C., for the
following purposes:
1. To elect two Class II directors to replace those Class II directors
who recently resigned to serve for a term of two years and until their
respective successors are duly elected and qualified;
To elect two Class III directors to serve for a term of three years and
until their respective successors are duly elected and qualified;
2. To ratify the selection of PricewaterhouseCoopers LLP, independent
accountants, to audit the books and accounts of the Company for the year
ending December 31, 2000; and
3. To transact such other business as may properly come before the
Annual Meeting and any and all adjournments and postponements thereof.
The Board of Directors of the Company has fixed the close of business on
March 30, 2000 as the record date for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
or postponement thereof.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the accompanying Proxy Statement for further information
with respect to the business to be transacted at the Annual Meeting.
A complete list of the stockholders entitled to vote at the Annual Meeting
will be available during ordinary business hours for examination by any
stockholder, for any purpose germane to the Annual Meeting, for a period of at
least ten days prior to the Annual Meeting, at the offices of the Company,
1025 Thomas Jefferson Street, N.W., Suite 300 East, Washington, D.C. 20007.
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy card promptly. You are cordially
invited to attend the Annual Meeting in person. The return of the enclosed
proxy card will not affect your right to revoke your proxy or to vote in
person if you do attend the Annual Meeting.
By order of the Board of Directors
/s/ Julie A. Waters
Julie A. Waters
Assistant Secretary
Washington, D.C.
April 10, 2000
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES
YOU OWNED ON THE RECORD DATE.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE IT,
SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, WE ASK
YOUR COOPERATION IN MAILING YOUR PROXY PROMPTLY.
<PAGE>
U.S.A. FLORAL PRODUCTS, INC.
1025 Thomas Jefferson Street, N.W.
Suite 300 East
Washington, D.C. 20007
----------------
PROXY STATEMENT
----------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of U.S.A. Floral Products,
Inc., a Delaware corporation (the "Company"), for use at the Company's 2000
Annual Meeting of Stockholders (together with any and all adjournments and
postponements thereof, the "Annual Meeting") to be held on Friday, May 12th,
at 10:00 a.m., Eastern Daylight Savings Time, The Washington Monarch Hotel,
2401 M Street N.W., Washington, D.C., for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders (the "Notice"). This
Proxy Statement, together with the accompanying Notice and the enclosed proxy
card, are first being sent to stockholders on or about April 10, 2000.
Record Date; Voting Securities; Voting and Proxies
The Board has fixed the close of business on March 30, 2000 as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Annual Meeting (the "Record Date"). On the Record Date, there were
16,443,614 shares of Common Stock of the Company, par value $.001 per share
("Common Stock"), outstanding and entitled to vote. Each share of Common Stock
is entitled to one vote per share on each matter properly brought before the
Annual Meeting. Abstentions may be specified as to all proposals to be brought
before the Annual Meeting other than the election of directors.
Shares can be voted at the Annual Meeting only if the stockholder is
present in person or is represented by proxy. If the enclosed proxy card is
properly executed and returned prior to voting at the Annual Meeting, the
shares represented thereby will be voted in accordance with the instructions
marked thereon. In the absence of instructions, shares represented by executed
proxies will be voted as recommended by the Board. Brokers, banks and other
nominee holders will be requested to obtain voting instructions of beneficial
owners of stock registered in their names, and shares represented by a duly
completed proxy submitted by such a nominee holder on behalf of a beneficial
owner will be voted to the extent instructed by the nominee holder on the
proxy card. Rules applicable to nominee holders may preclude them from voting
shares held by them in nominee capacity on certain kinds of proposals unless
they receive voting instructions from the beneficial owners of the shares (the
failure to vote in such circumstances is referred to as a "broker non-vote").
The Board knows of no matters which are to be brought before the Annual
Meeting other than those set forth in the accompanying Notice. If any other
matters properly come before the Annual Meeting, the persons named in the
enclosed proxy card, or their duly appointed substitutes acting at the Annual
Meeting, will be authorized to vote or otherwise act thereon in accordance
with their judgment on such matters.
Any proxy may be revoked at any time prior to its exercise by attending the
Annual Meeting and voting in person, by notifying the Assistant Secretary of
the Company of such revocation in writing or by delivering a duly executed
proxy bearing a later date, provided that such notice or proxy is actually
received by the Company prior to the taking of any vote at the Annual Meeting.
The cost of solicitation of proxies for use at the Annual Meeting will be
borne by the Company. Solicitations will be made primarily by mail or by
facsimile, but regular employees of the Company may solicit proxies personally
or by telephone.
<PAGE>
Quorum; Votes Required
The presence at the Annual Meeting, in person or by proxy, of shares of
Common Stock representing at least a majority of the total number of shares of
Common Stock entitled to vote on the Record Date will constitute a quorum for
purposes of the Annual Meeting. Shares represented by duly completed proxies
submitted by nominee holders on behalf of beneficial owners will be counted as
present for purposes of determining the existence of a quorum (even if some
such proxies reflect broker non-votes). In addition, abstentions will be
counted as present for purposes of determining the existence of a quorum.
Under applicable Delaware law and the Company's Amended and Restated Bylaws
("Bylaws"), directors are to be elected by a plurality of the votes of the
shares of Common Stock present in person or represented by proxy at the Annual
Meeting. Accordingly, and in accordance with the Company's Bylaws, the four
nominees for election as directors who receive the highest number of votes
actually cast will be elected. Broker non-votes will be treated as shares that
neither are capable of being voted nor have been voted and, accordingly, will
have no effect on the outcome of the election of directors.
The remaining proposal to be brought before the Annual Meeting requires the
affirmative vote of a majority of the shares present and entitled to vote at
the Annual Meeting. Abstentions will be counted as shares present at the
Annual Meeting and will thus increase the minimum number of affirmative votes
necessary to approve this proposal. Because they will not be recorded as votes
in favor of this proposal, however, abstentions will have the effect of votes
against this proposal. Broker non-votes with respect to this proposal will be
treated as shares not capable of being voted on this proposal; accordingly,
broker non-votes will have no effect either on the minimum number of
affirmative votes necessary to approve this proposal or on the outcome of
voting on this proposal.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors (which is to
be not less than two) is to be determined from time to time by resolution of
the Board. The Board is currently composed of 5 persons. During 1999, the
Board consisted of 11 members through May 1999. Following the resignation of
former Director Leonsis, the Board was comprised of 10 members. As of February
1, 2000, the three former insider directors, Messrs. Moreno, Dickinson, and
Brothers resigned. On March 1, 2000, Directors Poirier and Ledecky resigned.
Pursuant to the Company's Certificate of Incorporation, the members of the
Board are divided into three classes, designated Class I, Class II and Class
III. Each class is to consist, as nearly as may be possible, of one-third of
the total number of members of the Board. The term of the Class III directors
expires at the Annual Meeting. The term of the Class I directors will expire
at the 2001 Annual Meeting of Stockholders, and the term of the Class II
directors will expire at the 2002 Annual Meeting of Stockholders. At each
Annual Meeting, the directors elected to succeed those whose terms expire are
of the same class as the directors they succeed and are elected for a term to
expire at the third Annual Meeting of Stockholders after their election and
until their successors are duly elected and qualified. A director of any class
who is elected to fill a vacancy resulting from an increase in the number of
directors holds office for the remaining term of the class to which he is
elected and a director who is elected to fill a vacancy arising in any other
manner holds office for the remaining term of his predecessor.
The two Class II directors are nominees for election this year in order to
replace two of the four Class II directors who recently resigned. Since the
two nominees are being nominated to fill a vacancy, their term will expire at
the same time that their predecessor's term would have expired, which is the
2002 Annual Meeting of Stockholders. In addition to the two nominees for Class
II directors, there are two nominees for Class III directors for election this
year for a three-year term expiring at the 2003 Annual Meeting of the
Stockholders. Both of the nominees are incumbent Directors in Class III. In
these elections, the four persons who receive the highest number of votes
actually cast will be elected. The proxies named in the proxy card intend to
vote for the election of the two Class II nominees and two Class III nominees
listed below unless otherwise instructed. If a stockholder does not wish his
or her shares to be voted for a particular nominee, the stockholder must
identify
2
<PAGE>
the exception in the appropriate space provided on the proxy card, in which
event the shares will be voted for the other listed nominee. If any nominee
becomes unable to serve, the proxies may vote for another person designated by
the Board or the Board may reduce the number of directors. The Company has no
reason to believe that any nominee will be unable to serve.
Set forth below is certain information with regard to the two nominees for
election as Class II directors, the two nominees for election as Class III
directors, and each continuing Class I director.
Nominees for Election as Class II Directors
<TABLE>
<CAPTION>
Name and Age Principal Occupation and Directorships
------------ --------------------------------------
<S> <C>
Michael W. Broomfield...... Michael W. Broomfield has served as the Chief
Age 58 Executive Officer of the Company since January 3,
2000. Prior to joining the Company, Mr. Broomfield
was appointed Chief Operating Officer in 1996 for
Giant Food Inc., a supermarket distribution company
with over $4.5 billion in annual revenues. Later,
Mr. Broomfield also joined the Board of Giant Food,
Inc. Prior to joining Giant, Mr. Broomfield was
Managing Director of Savacentre Hypermarkets,
England. Savacentre is a fully owned subsidiary of
J. Sainsbury's Hypermarket Division. In addition to
his professional experience, Mr. Broomfield serves
as an advisory director to the Ford Motor Company's
Service Board.
Dwight L. Ferguson......... Dwight L. Ferguson is currently the Company's
Age 43 President and Chief Operating Officer. From October
1, 1998 to February 29, 2000, Mr. Ferguson served as
Vice Chairman of the Company and the President of
the International Division. Prior to that date, Mr.
Ferguson served as President and Chief Operating
Officer of Florimex Worldwide, Inc. He joined
Florimex in April 1993 as President of North
American Operations and was appointed Managing
Director with responsibility for Far East operations
in 1996.
</TABLE>
The Board unanimously recommends that stockholders vote FOR the election of
the two persons nominated to serve as Class II directors.
3
<PAGE>
Nominees for Election as Class III Directors
<TABLE>
<CAPTION>
Name and Age Principal Occupation and Directorships
------------ --------------------------------------
<S> <C>
Vincent W. Eades........... Vincent W. Eades has been a director of the Company
Age 41 since July 1997 and is also a director of UniCapital
Corporation and Building One Services Corporation.
Since its inception in March 1998, Mr. Eades has
served as the Chairman, President and Chief
Executive Officer of PowerRide Motorsports, Inc., a
company that will seek to become a leading retailer
of motorcycles and personal leisure vehicles through
a combination of consolidating, relocating and
expanding dealerships and opening new dealerships.
From April 1995 to March 1998, Mr. Eades served as
the Senior Vice President of Sales and Marketing for
Starbucks Coffee Co., Inc. For more than eleven
years prior to April 1995, Mr. Eades was associated
with Hallmark Cards Inc., most recently as a General
Manager.
Edward J. Mathias.......... Edward J. Mathias has been a director of the Company
Age 58 since July 1997 and is also a director of U.S.
Office Products Company, and Musicmaker.com. Mr.
Mathias has served as Managing Director of the
Carlyle Group, a Washington, D.C. based merchant
bank, since 1993. From 1971 to 1993, Mr. Mathias was
associated with T. Rowe Price Associates, Inc., an
investment management organization.
The Board unanimously recommends that stockholders vote FOR the election of
the two persons nominated to serve as Class III directors.
Directors Continuing as Class I Directors--Term Expiring 2001
<CAPTION>
Name and Age Principal Occupation and Directorships
------------ --------------------------------------
<S> <C>
Aaron J. Gellman........... Aaron J. Gellman has been a member of the Board
Age 69 since December 1998. Since January 1992, Dr. Gellman
has been the Director of the Transportation Center
at Northwestern University. Dr. Gellman is also a
Professor of Management and Strategy at Northwestern
University's Graduate School of Management and a
Professor of Industrial Engineering at Northwestern
University's McCormick School of Engineering and
Applied Science.
Ann Torre Grant............ Ann Torre Grant has been a member of the Board since
Age 42 December 1998 and is also a director of Condor
Technology Solutions, Inc. ("Condor"), SLM Holding
Co., its subsidiary, Sallie Mae, Franklin Mutual
Series Mutual Funds, and Training Devises, Inc., an
aircraft and simulator manufacturing company. Ms.
Grant was Executive Vice President and Chief
Financial Officer of NHP, Incorporated ("NHP"), a
national real estate services company, from February
1995 until the sale of NHP in December 1997. From
1988 to February 1995, Ms. Grant held various
corporate finance positions with US Airways, serving
as Vice President and Treasurer from 1991 to 1995.
Peter Roy.................. Peter Roy has been a member of the Board since
Age 43 December 1998. Mr. Roy also serves on the boards of
Stonyfield Farm, White Wave Soy Products, Mountain
Sun Organic Juices and Fitness Holdings Worldwide.
From 1993 to December 31, 1998, Mr. Roy served as
President of Whole Foods Market, Inc.
</TABLE>
4
<PAGE>
Board of Directors and Committees
The Board met ten times during the fiscal year ended December 31, 1999
("Fiscal 1999"), in addition to conducting its affairs on several occasions by
written consent. The Board has established an Executive Committee, an Audit
Committee, a Compensation Committee, and a Nominating Committee.
The Executive Committee of the Board is authorized and empowered to take
any and all actions that the Board is permitted to take, other than (i) any
action that requires the consent of the lenders or their agent under the
Company's credit agreement or (ii) any action that involves the acquisition of
the stock or assets of, or merger or consolidation of the Company or any of
its subsidiaries with, any entity or group of entities in which the total
consideration to be paid by the Company equals or exceeds $15,000,000 in the
aggregate (whether in cash, stock, assumption of indebtedness or any
combination thereof). Currently, Director Mathias is the sole member of the
Executive Committee. During Fiscal 1999, Former Directors Moreno, Dickinson,
Poirier and Ledecky were also members of the Executive Committee.
The Audit Committee selects and engages on behalf of the Board the
independent public accountants to conduct the annual audit of the Company's
books and records, reviews the proposed scope of such audit, approves the
audit fees to be paid and reviews the Company's accounting and financial
controls with the independent public accountants and the Company's financial
and accounting staff. The Audit Committee also reviews and approves
transactions between the Company and its directors, officers and affiliates.
The Audit Committee currently consists of Directors Eades and Grant. The Audit
Committee met four times during Fiscal 1999.
The Compensation Committee (i) sets the levels and terms of compensation
for the Company's executive officers, (ii) approves, on behalf of the Company,
entry into employment agreements with executive officers and other employees,
which embody terms reviewed and approved by the Compensation Committee, (iii)
sets performance and other goals upon the attainment of which performance-
based incentive compensation may be paid, (iv) verifies the attainment of such
goals and determines the incentive compensation to be awarded in respect of
such attainment, and (v) reports to the Company's stockholders on executive
compensation as required by applicable rules and regulations of the Securities
and Exchange Commission. Directors Mathias and Roy are currently members of
the Compensation Committee. The Compensation Committee met two times during
Fiscal 1999.
The Nominating Committee proposes and reviews individuals to be nominated
for election to the Board. The Nominating Committee currently consists of
Directors Mathias and Roy. The Nominating Committee will consider nominees
recommended by stockholders. Stockholders may submit nominations to Chairman,
Nominating Committee, care of Secretary, U.S.A. Floral Products, Inc., 1025
Thomas Jefferson Street, N.W., Suite 300 East, Washington, D.C. 20007. The
Nominating Committee met one time during Fiscal 1999.
No director currently in office attended fewer than 75% of the total number
of meetings of the Board during Fiscal 1999.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board has selected PricewaterhouseCoopers LLP to serve as the Company's
principal accountants for the fiscal year ending December 31, 2000. A
representative of PricewaterhouseCoopers LLP will be present at the Annual
Meeting and will have the opportunity to make a statement, if such person
desires to do so, and to respond to appropriate questions.
The proposal to ratify the selection of PricewaterhouseCoopers LLP will be
approved by the stockholders if it receives the affirmative vote of a majority
of the shares present and entitled to vote on the proposal.
The Board unanimously recommends a vote FOR ratification of the selection
of PricewaterhouseCoopers LLP as independent accountants.
5
<PAGE>
EXECUTIVE COMPENSATION
Executive Compensation Summary
The following table sets forth information regarding compensation of the
Company's Chief Executive Officer and other executive officers of the Company
whose compensation is required to be disclosed (the "Named Executive
Officers") for Fiscal 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------------ ------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Options (#)
--------------------------- ---- ------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Robert J. Poirier.............. 1999 $500,000 $ 0 $ 6,990(2) 50,000
Chairman of the Board,
President and 1998 $160,570 $ 60,000 $16,990(3) 385,000
Chief Executive Officer(1) 1997 $112,519 $ 0 $26,489(4) 110,000
Dwight L. Ferguson............. 1999 $220,000 $110,000 $ 6,000(5) 20,000
President and Chief Operating
Officer(6) 1998 $ 57,541 $ 27,000 $ 1,500(5) 50,000
1997 $ 0 $ 0 $ 0 0
W. Michael Kipphut............. 1999 $200,000 $ 0 $ 6,000(5) 20,000
Chief Financial Officer(6) 1998 $ 42,933 $ 27,000 $ 1,500(5) 50,000
1997 $ 0 $ 0 $ 0 0
John T. Dickinson.............. 1999 $225,000 $ 30,000 $ 3,727(5) 10,000
President of the Wholesale
Division(7) 1998 $153,001 $ 20,000 $ 4,095(5) 0
1997 $ 28,899 $ 0 $ 975(5) 50,000
Jeffrey Brothers............... 1999 $200,000 $100,000 $ 6,000(5) 20,000
President of the West Coast
Bouquet 1998 $173,269 $ 0 $ 6,000(5) 0
Division(7) 1997 $ 25,500 $ 0 $ 750(5) 50,000
</TABLE>
- --------
(1) Mr. Poirier resigned as President and Chief Executive Officer, effective
January 3, 2000. Mr. Poirier resigned as a Director and Chairman on March
1, 2000. Mr. Poirier was replaced as Chief Executive Officer by Michael W.
Broomfield--see "Arrangements regarding Employment"--and as President by
Dwight L. Ferguson on March 1, 2000.
(2) Consists of a car allowance of $6,990.
(3) Consists of a car allowance of $6,990 and deferred compensation of
$10,000.
(4) Consists of a housing allowance of $20,000 and a relocation/moving
allowance.
(5) Consists of a car allowance.
(6) Messrs. Ferguson and Kipphut joined the Company in the second half of
1998.
(7) Messrs. Dickinson and Brothers joined the Company in the second half of
1997.
6
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information with respect to the
grant of options to the Named Executive Officers during Fiscal 1999 and the
value of options held at December 31, 1999.
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Number Price
of Securities % of Total Exercise Appreciation for
Underlying Option Granted or Base Option Term (2)
Options to Employees Price Expiration -----------------
Name Granted (#) in Fiscal Year ($/Sh) Date 5% 10%
---- ------------- -------------- -------- ---------- -- --------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Poirier....... 50,000(1) 8.4% 12.25 2/22/09 $385,198 $976,167
Dwight L. Ferguson...... 20,000(1) 3.4% 12.25 2/22/09 $154,079 $390,467
W. Michael Kipphut...... 20,000(1) 3.4% 12.25 2/22/09 $154,079 $390,467
John T. Dickinson....... 10,000(1) 1.7% 12.25 2/22/09 $ 77,040 $195,233
Jeffrey Brothers........ 20,000(1) 3.4% 7.13 4/01/09 $ 89,680 $227,268
</TABLE>
- --------
(1) All options vest in 25% annual installments over four years commencing on
the first anniversary of the date of grant.
(2) The potential realizable value is based on the assumed annual rates of
stock price appreciation being applied to the above exercise prices. Such
information is shown for informational purposes and does not represent an
estimate or prediction of the Company's future stock price.
Aggregated Option Exercises in the Last Fiscal Year and Fiscal Year-End Option
Value Table
The following table summarizes the value at December 31, 1999 of all shares
subject to options granted to the Named Executive Officers of the Company to
the extent not then exercised, and information concerning option exercises, if
any, during Fiscal 1999.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year In-the-Money Options at
Shares End Fiscal Year End (1)
Acquired On Value ------------------------- -------------------------
Name Exercise (#) Realized ($) Unexercisable Exercisable Unexercisable Exercisable
---- ------------ ------------ ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Poirier....... 0 0 363,750 181,250 0 0
Dwight L. Ferguson...... 0 0 57,500 12,500 0 0
W. Michael Kipphut...... 0 0 57,500 12,500 0 0
John T. Dickinson....... 0 0 25,000 60,000 0 0
Jeffrey Brothers........ 0 0 25,000 70,000 0 0
</TABLE>
- --------
(1) The value of the Common Stock at December 31, 1999 was $2.47 per share.
Arrangements Regarding Employment
On November 24, 1999, the Company entered into a three-year employment
agreement with Michael W. Broomfield, pursuant to which the Company agreed to
employ Mr. Broomfield, effective January 3, 2000, as its Chief Executive
Officer at an annual base salary of $425,000, plus up to fifty percent (50%)
of his existing base salary as an annual bonus upon achievement of certain
performance criteria. In addition, Mr. Broomfield was granted 200,000 options
to purchase Company Common Stock at the closing sale price on November 24,
1999 and an additional 150,000 options to purchase Company Common Stock at the
closing price on January 3, 2000. All options granted vest at the rate of 25%
as of January 3, 2000 and an additional 6.25% on the last day of each
succeeding calendar quarter beginning as of March 31, 2000. Pursuant to the
terms and conditions of the employment agreement, Mr. Broomfield commenced
employment as the Chief Executive Officer on January 3, 2000 and received a
signing bonus of $200,000. The employment agreement also includes a one-year
post-employment non-competition provision. If Mr. Broomfield is terminated
without cause, as defined by the agreement, he is entitled to receive within
five days of such termination a lump sum payment equal to accrued but unused
vacation and fifty percent of the base salary at the rate then in effect over
the period remaining in his employment term or one year, whichever is greater,
with an additional fifty percent of his base salary then in
7
<PAGE>
effect to be paid in accordance with the Company's regular payroll practices
over the remaining term of his employment agreement or one year, whichever is
greater, and coverage under Company provided welfare plans on the same basis
as were provided at the time of termination for the remaining term in his
employment term, or one year, whichever is greater. In addition, all options
become immediately vested and remain exercisable for three months following
the termination date. Notwithstanding the foregoing, if Mr. Broomfield is
terminated without cause within a two year period following a Change of
Control (as defined), in lieu of the amounts above, Mr. Broomfield shall
receive within five days of such termination, a lump sum equal to 3 times of
his annual salary then in effect, plus coverage under Company provided welfare
plans on the same basis as were provided at the time of termination for three
years.
Effective September 1, 1999, the Company entered into a two-year employment
agreement with John T. Dickinson, pursuant to which the Company agreed to
employ Mr. Dickinson as President of its Wholesale Division at an annual base
salary of $225,000 plus a bonus based upon the achievement of certain
performance criteria. The agreement also includes a two-year post-employment
non-competition provision. If Mr. Dickinson is terminated without cause, he is
entitled to receive accelerated vesting of options to purchase shares of
Common Stock then held by him, as well as his base salary plus benefits for 12
months.
Effective October 14, 1999, the Company's employment agreement with Jeffrey
Brothers renewed for an additional one year period, during which period Mr.
Brothers was to act as President of the Company's West Coast Bouquet Division
at an annual salary of $200,000 plus a bonus based upon the achievement of
certain performance criteria. The agreement also includes a two-year post-
employment non-competition provision. If Mr. Brothers were to be terminated
without cause, he would have been entitled to his base salary for the amount
of time remaining in the term of the employment agreement. Mr. Brothers
resigned, effective February 29, 2000.
Compensation of Directors
Directors who are not currently receiving compensation as officers,
employees or consultants of the Company or its subsidiaries are entitled to
receive an annual retainer fee of $25,000, plus reimbursement of expenses for
each meeting of the Board and each committee meeting that they attend in
person. In addition, non-employee directors receive an option to acquire
21,000 shares when elected to the Board and an option to acquire 6,000 shares
on the day after each Annual Meeting of the Company's stockholders, each
subject to adjustments, under the provisions of the Company's 1997 Non-
Employee Directors' Stock Plan.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are Messrs. Mathias and Roy.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") is pleased to present its
report on compensation of the Company's executive officers.
General. The Committee is responsible for approving and reviewing with the
Board the compensation of the Company's executive officers and certain other
management personnel. This includes compensation awarded in the form of cash
bonuses and equity-based incentives. The Committee also is responsible for
approving contractual arrangements between the Company and such executive
officers and management personnel, and for administering the Company's stock
benefit plans, including the Incentive Plan.
The Committee believes that compensation must be competitive, as well as
directly and materially linked to the Company's performance. In administering
the Company's compensation program, the Committee's objectives include the
following: attracting and retaining executive talent; motivating executives to
maximize operating performance; measuring performance on both an individual
and a Company-wide basis; reflecting the Company's success in meeting growth
and profitability targets; and linking executive and stockholder interests
through the grant of options.
8
<PAGE>
The key components of the Company's executive compensation program consist
of salary and annual incentive bonuses (which represent the short-term
compensation components of the program) and options (which represent the long-
term compensation components).
Since the Company's inception, the Committee has striven to balance the
cash compensation needed to attract, motivate and retain executive talent with
long-term incentives through the grant of options with multi-year vesting
schedules. In the Committee's judgment, this approach tends to align the
interests of management most closely with those of the Company's stockholders.
Base Salary. In setting base salaries for new executive officers, the
Committee takes into account the background and qualifications of the new
executives, the base salary levels of the Company's other executive officers
and the salaries that the Company's competitors (which are often private
companies, or public companies in other distribution industries with which the
Company competes from time to time for executive talent) are paying to
executives employed in comparable positions.
Annual Incentive Bonus. At the end of the fiscal year, the Committee
decides whether to award incentive bonuses to executive officers, based on the
Company's success in achieving growth and profitability targets and
recommendations made by the Company's CEO. Bonuses for 1999 were determined
primarily by measuring an officer's performance and the Company's overall
performance against target performance levels, typically based on: (i) the
executive's overall performance and contribution to the Company's growth and
profitability; (ii) the Company's overall profitability; (iii) the Company's
internal revenue growth; and (iv) the Company's revenue growth due to
acquisitions. For 2000, the Company has established a bonus structure with its
senior executives, which correlates annual cash bonuses to the Company's
success in exceeding its operating income. The Committee believes that
operating income is an appropriate short and intermediate-term goal that can
encompass the interests of both the Company's business model and the Company's
stockholders.
Incentive Plan. The Company's Incentive Plan is intended to provide
officers (including those who are also directors), key employees and
consultants with additional incentives by increasing their ownership interests
in the Company and thereby focusing such individuals' efforts on the long-term
goals of the Company and the maximization of total return to stockholders. In
particular, the Company has used the Incentive Plan as a means to create
incentives for managers at the operating unit level, principally through the
award of options to managers and other employees of each operating subsidiary
in conjunction with consummation of the acquisition of that operating
subsidiary.
In administering the Incentive Plan, the Committee selects, with the advice
of the CEO, the individuals who will receive awards, and determines the type
and number of awards and the terms and conditions of those awards (including
exercise prices, vesting and forfeiture conditions, performance conditions and
periods during which awards will remain outstanding).
The Committee believes that aligning management's interests with those of
the Company's stockholders is an important element of the Company's approach
to executive compensation. Options align the interests of employees with those
of stockholders by providing value to the executive through stock price
appreciation. The Committee is cognizant of the possible adverse impact upon
the incentive provided by options that were granted at exercise prices in
excess of the prices at which the Company's common stock has traded from time
to time during 1999, and considers carefully the most appropriate ways in
which to keep employees generally, and executives particularly, well motivated
to enhance the Company's performance and stockholder value over the long term.
Generally, the options granted during Fiscal 1999 (which include options
under the Incentive Plan) have 10-year terms and are exercisable at the fair
market value of the Company's stock on the date of grant, beginning one year
from the date of grant and vesting thereafter in cumulative yearly amounts of
25% of the shares granted. Certain of the options granted to executives during
Fiscal 1999 varied from this general practice, in circumstances where the
Committee believed such variances to be appropriate and in the Company's
interests.
9
<PAGE>
Of the 595,000 options granted to employees during Fiscal 1999, 450,000
options to purchase shares of the Company's stock, or approximately 75.6% of
the options granted during the year, were granted to executive officers.
Options may be awarded periodically at the discretion of the Committee,
which takes into account the advice of the Company's CEO. The size of such
grants, in general, will be evaluated by regularly assessing competitive
market practices, the recipient's position and level of responsibility within
the Company and the Company's overall performance. Grants will also take into
account the differential between the levels of cash compensation paid by the
Company as compared to those of its competitors, including competitors for
management talent.
The Committee intends, to the extent possible, that options and other
equity-based awards granted to executive officers under the Incentive Plan be
deductible for federal tax purposes. Stock option awards granted under the
Incentive Plan are deductible in accordance with Section 162(m) of the
Internal Revenue Code of 1986, as amended.
Compensation of the CEO
Effective December 1, 1998, the Company entered into an employment
agreement with Mr. Poirier. The agreement provided for an increase in base
compensation from $160,000 to $500,000. The Committee considered the
compensation of chief executive officers of similarly situated companies of
comparable size, and determined that Mr. Poirier's new compensation level was
near the midpoint of the compensation for chief executive officers of
companies having comparable annualized revenues to those of the Company
(including the Florimex businesses). By raising Mr. Poirier's base
compensation significantly, the Committee believed that it was recognizing Mr.
Poirier for his efforts and success in building the Company from inception.
Under the agreement, Mr. Poirier was eligible to receive a cash bonus based
upon the Company's success in exceeding its earnings targets. This bonus
structure was consistent with the bonus arrangements that were negotiated
between the Company and the executive officers who were hired in the second
half of 1998 as the Company focused on building its senior management team.
The Committee believed that consistency among the bonus structures applicable
to senior executives would lead to team-building among those executives and to
the coordination of their efforts and goals in seeking to achieve the short
and intermediate-term objectives of the Company. Mr. Poirier resigned as
President and Chief Executive Officer, effective January 3, 2000.
Effective March 1, 2000, the Company entered into a separation agreement
with Mr. Poirier. The agreement provided for the payment of certain sums,
which were a lump sum payment of $1,250,000, payable on ore before March 15,
2000, and payment of all business expenses incurred prior to March 1, 2000 and
accrued vacation. In addition, the agreement requires the Company to continue
Mr. Poirier's welfare benefits until December 31, 2001. In exchange for these
payments and benefits, the Company received a release of any and all claims
which may have arisen out of the Company's relationship with Mr. Poirier and a
termination of all vested and unvested options held by Mr. Poirier, except for
60,000, which were granted to Mr. Poirier following the initial public
offering and which will remain open according to its original terms.
The Compensation Committee
Edward J. Mathias Peter Roy
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 30, 2000 held by each
person who is known by the Company to have been the beneficial owner of more
than five percent of the Company's Common Stock on such date, by each director
and Named Executive Officer of the Company and by all directors and Executive
Officers of the Company as a group (based on 16,443,614 shares of Common Stock
outstanding as of such date).
<TABLE>
<CAPTION>
Shares Owned
--------------------
Name and Address of Beneficial Owner Number Percent
------------------------------------ --------- -------
<S> <C> <C>
Vincent W. Eades(1)...................................... 38,000 *
Aaron J. Gellman(2)...................................... 31,000 *
Ann Torre Grant(3)....................................... 32,000 *
Edward J. Mathias(4)..................................... 148,000 *
Peter Roy(5)............................................. 31,000 *
Dwight L. Ferguson(6).................................... 44,663 *
John T. Dickinson(7)..................................... 172,249 *
All directors and executive officers (includes 10
individuals)............................................ 515,662(8) 3.14%
Jonathan J. Ledecky(9)................................... 1,471,004 8.9%
Robert J. Poirier(10).................................... 1,060,000 6.45%
</TABLE>
- --------
* Less than 1%
(1) Includes 33,000 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options.
(2) Includes 27,000 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options.
(3) Includes 5,000 shares that are held in the IRA account of Ms. Grant's
spouse. In addition, includes 27,000 shares which may be acquired within
60 days of March 30, 2000.
(4) Includes 33,000 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options. Also includes 50,000 shares
owned by Mr. Mathias' daughter. Mr. Mathias disclaims beneficial
ownership of such shares.
(5) Includes 27,000 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options.
(6) Includes 17,500 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options.
(7) Includes 27,500 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options.
(8) Includes 210,750 shares which may be acquired within 60 days of March 30,
2000 pursuant to the exercise of options.
(9) As of December 31, 1999, Mr. Ledecky was a director of the Company, but
not as of March 30, 2000.
(10) As of December 31, 1999, Mr. Poirier was an officer and director of the
Company, but neither as of March 30, 2000.
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Set forth below is a description of certain transactions and relationships
between the Company and certain persons who are or were during Fiscal 1999
officers, directors and principal stockholders of the Company.
Mr. Dickinson
Mr. Dickinson has an ownership interest in a rose farm in Ecuador ("Meadow
Flowers"). Mr. Dickinson's spouse is the sole stockholder of Farm Direct
Flowers, Inc., which has a 13.5% interest in Meadow Flowers. American Florist
purchases roses, as well as other types of flowers, from Meadow Flowers. For
Fiscal 1999, purchases from Meadow Flowers totaled approximately $125,000. The
Company continues to purchase roses from Meadow Flowers and believes that the
terms of the purchases made from Meadow Flowers are no less favorable than
those the Company could obtain from an unaffiliated third party.
Mr. Brothers
Mr. Brothers has a 40% interest in the entity that owns the property which
Monterey Bay leases. The lease, which is a month to month lease, is expected
to terminate May 30, 2000 and provides for monthly rental payments of $5,000.
Mr. Brothers has a 50% interest in Brothers Floral Associates, a vendor to
Monterey Bay. In Fiscal 1999, purchases from Brothers Floral Associates
totaled approximately $794,000. The Company believes that the terms of the
purchases made from Brothers Floral Associates are no less favorable than
those the Company could obtain from an unaffiliated third party.
Employment Agreements with Certain Executives of Operating Units who are also
Directors
The Company, through its wholly owned subsidiaries, has entered into
employment agreements with certain of the individuals principally responsible
for management of the operating units. Described below are those employment
agreements of individuals who were directors of the Company through Fiscal
1999. Each of the directors listed below, however, has resigned as of February
1, 2000. Each of the agreements described below provides that the employee (i)
will receive a specified base salary, (ii) will be employed for a two-year
period, (iii) agrees to not compete with the Company for two years following
termination of employment and (iv) is eligible for an annual bonus of up to a
percentage of their base salary based in part on the performance of the
applicable operating unit and in part upon the performance of the Company and
other related factors. Jeffrey Brothers' employment agreement with the
Company's Monterey Bay operating unit provides that Mr. Brothers will be
employed for a two-year period with a base salary of $200,000. In addition,
Mr. Brothers was granted Options to purchase 50,000 shares of Common Stock
with an exercise price equal to the IPO price of $13.00 per share. Mr.
Brother's employment agreement automatically renewed for an additional one-
year term in October, 1999. John T. Dickinson's employment agreement with the
Company's American Florist operating unit provides that Mr. Dickinson will be
employed for a two-year period with a base salary of $225,000. In addition,
Mr. Dickinson was granted options to purchase 50,000 shares of Common Stock,
with an exercise price equal to the IPO price of $13.00 per share. Gustavo
Moreno's employment agreement with the Company's Flower Trading operating unit
provides that Mr. Moreno will be employed for a two-year period with a base
salary of $270,000. For Fiscal 1999, former Director Dickinson was paid a
bonus of $30,000, former Director Brothers was paid a bonus of $100,000 and
former Director Moreno was paid a bonus of $81,000. Both former Directors
Brothers and Moreno have resigned from the Company, as of March 30, 2000.
12
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN SINCE OCTOBER 10, 1997
The following graph shows the cumulative total stockholder return on the
Common Stock from the Company's IPO price on October 10, 1997 through December
31, 1999, as compared to the returns of the NASDAQ National Market Composite
Index and the NASDAQ 100 Index. The graph assumes that $100 was invested in
the Common Stock on October 10, 1997 and in the NASDAQ National Market
Composite Index and the NASDAQ 100 Index and assumes reinvestment of
dividends.
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
October 10, 1997 December 31, 1997 December 31, 1998 December 31, 1999
---------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
USA Floral.............. 100 121 88 19
Nasdaq National Market
Composite.............. 100 90 127 234
Nasdaq 100 Index........ 100 87 161 326
</TABLE>
13
<PAGE>
OTHER MATTERS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as
amended (the "Act"), stockholders may present proper proposals for inclusion
in the Company's proxy statement and for consideration at the next Annual
Meeting of Stockholders by submitting such proposals to the Company in a
timely manner. In order to be so included for the 2001 Annual Meeting of
Stockholders, stockholder proposals must be received by the Secretary of the
Company at is principal executive offices no later than December 8, 2000 and
must otherwise comply with the requirements of Rule 14a-8.
Under Section 16(a) of the Act, the Company's directors, officers, and
persons who are directly or indirectly the beneficial owners of more than 10%
of the Common Stock of the Company are required to file with the Securities
and Exchange Commission (the "Commission"), within specified monthly and
annual due dates, a statement of their initial beneficial ownership and all
subsequent changes in ownership of Common Stock. Rules of the Commission
require such persons to furnish the Company with copies of all Section 16(a)
forms they file. Based solely upon a review of such forms, the Company
believes that, during Fiscal 1999, all such persons complied with all
applicable filing requirements.
The Company's Annual Report to Stockholders for the Fiscal 1999, including
consolidated financial statements, is being mailed to all stockholders
entitled to vote at the Annual Meeting together with this Proxy Statement. The
Annual Report does not constitute a part of this Proxy Statement.
14
<PAGE>
PLEASE DATE, SIGN, AND MAIL YOUR
PROXY CARDS BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS OF
U.S.A. FLORAL PRODUCTS, INC.
MAY 12, 2000; 10:00 A.M.
THE WASHINGTON MONARCH HOTEL
2401 M STREET N.W.
WASHINGTON, D.C. 20007
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. Election of NOMINEES: FOR all nominees WITHHOLD 2. Proposal to ratify the appointment
Class II Michael W. Broomfield. listed (except those for AUTHORITY TO of PricewaterhouseCooper LLP,
Directors: Dwight L. Ferguson whom authority is VOTE FOR ALL independent certified accounts, to
being withheld) NOMINEES audit the books of the Company for
the year ending December 31, 2000.
FOR AGAINST ABSTAIN
Election NOMINEES:
of Class III Edward J. Mathias
Directors: Vincent W. Eades
In their discretion, the proxy holders are
authorized to vote upon such other matters as
may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THE SHARES OF
To withhold authority to vote for any nominee, write the name of the COMMON STOCK REPRESENTED HEREBY WILL BE VOTED
nominee below: "FOR" THE ELECTION AS CLASS II AND III
DIRECTORS OF ALL THE NOMINEES LISTED AND "FOR"
__________________________________________ PROPOSAL 3.
IMPORTANT: PLEASE SIGN, DATE, AND RETURN PROMPTLY
Signature of stockholder ___________________________ Signature of stockholder _________________________ Dated _____________, 2000
Note: Please sign this proxy exactly as name(s) appear on your stock certificate. When signing as executor, administrator, trustee,
or guardian, please add your titles as such, and if signer is a corporation, please sign the full corporation name by a july
authorized officer or officers and affix the corporation seal. Where stock is issued in the name of two (2) or more persons, all
such persons should sign.
</TABLE>
<PAGE>
PROXY
U.S.A. FLORAL PRODUCTS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 2000
The undersigned stockholder of U.S.A. Floral Products, Inc. (the "Company")
hereby appoints Michael W. Broomfield and Dwight L. Ferguson, and each of them,
as the attorneys and proxies of the undersigned, with full power of
substitution, to vote all shares of Common Stock, par value $.001 per share, of
the Company which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders of the Company, to be held at The
Washington Monarch Hotel, 2401 M Street N.W., Washington, D.C., on Friday, May
12, 2000, commencing at 10:00 a.m., Eastern Daylight Savings Time, and at any
adjournment or postponement thereof, as follows:
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
