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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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 Rule 14a-11(c) or Rule 14a-12
Sherwood Brands, Inc.
(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):
(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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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<PAGE>
SHERWOOD BRANDS, INC.
1803 RESEARCH BOULEVARD, SUITE 201, ROCKVILLE, MARYLAND 20850
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 2, 1999
-------------------------
Dear Shareholder:
You are invited to attend our Annual Meeting of Shareholders, which
will be held at 11:00 a.m., local time, on Thursday, December 2, 1999, at the
Best Western Hotel, 1251 West Montgomery Avenue, Rockville, Maryland, for the
following purposes:
(1) To elect five members to our Board of Directors to hold office
until our 2000 Annual Meeting of Shareholders or until their
successors are duly elected and qualified;
(2) To ratify the appointment of BDO Seidman LLP, as our independent
certified public accountants; and
(3) To transact such other business as may properly come before the
annual meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on October 27,
1999 as the record date for determining those shareholders entitled to notice
of, and to vote at, the annual meeting and any adjournments or postponements
thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
Uziel Frydman
CHAIRMAN OF THE BOARD
Rockville, Maryland
November 5, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE
MEETING. EVEN IF YOU EXECUTE A PROXY CARD, YOU MAY NEVERTHELESS ATTEND THE
MEETING, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON. PLEASE NOTE, HOWEVER,
THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE, AND
YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY
ISSUED IN YOU NAME.
<PAGE>
1999 ANNUAL MEETING OF SHAREHOLDERS
OF
SHERWOOD BRANDS, INC.
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PROXY STATEMENT
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The Board of Directors of Sherwood Brands, Inc., a North Carolina
corporation, is furnishing this proxy statement in connection with the
solicitation of proxies from the holders of our Class A and Class B Common
Stock, each with a par value of $.01 per share, for use at our 1999 Annual
Meeting of Shareholders to be held at 11:00 a.m., local time, on Thursday,
December 2, 1999, at the Best Western Hotel, 1251 West Montgomery Avenue,
Rockville, Maryland, or at any adjournment(s) or postponements(s) thereof,
pursuant to the foregoing Notice of Annual Meeting of Shareholders.
You should review the information provided in this proxy statement in
conjunction with our 1999 Annual Report to Shareholders, which accompanies this
proxy statement. Our principal executive offices are located at 1803 Research
Boulevard, Suite 201, Rockville, Maryland 20850 and our telephone number is
(301) 301-6161.
INFORMATION CONCERNING PROXY
Our Board of Directors is soliciting the enclosed proxy. By giving this
proxy, you are not precluded from voting in person should you so desire. You
have an unconditional right to revoke your proxy at any time prior to the
exercise thereof, either in person at the annual meeting or by filing with our
Corporate Secretary at our headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
we receive written notice of the revocation at or prior to the annual meeting.
We shall bear the cost of preparing, assembling and mailing this proxy
statement, the Notice of Annual Meeting of Shareholders and the enclosed proxy.
In addition to the use of mail, our employees may solicit proxies personally and
by telephone. Such employees will receive no compensation for soliciting proxies
other than their regular salaries. We may request banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the proxy material to
their principals and to request authority for the execution of proxies. We may
also reimburse such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the annual meeting, you will consider and vote upon the following
matters:
(1) The election of five members to our Board of Directors to serve
until our 2000 Annual Meeting of Shareholders or until their
successors are duly elected and qualified;
(2) The ratification of the appointment of BDO Seidman LLP, as our
independent certified public accountants; and
(3) The transaction of such other business as may properly come before
the annual meeting, including any adjournments or postponements
thereof.
<PAGE>
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted for the election of the nominees for director named below and in
favor of the other matters presented. In the event you specify a different
choice by means of the enclosed proxy, your shares will be voted in accordance
with those instructions.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on October 27, 1999
as the record date for determining the shareholders entitled to notice of and to
vote at the annual meeting. As of the record date, there were 2,700,000 shares
of Class A Common Stock outstanding and 1,000,000 shares of Class B Common Stock
outstanding. Each share of our Class A Common Stock entitles its holder to one
vote, and each share of our Class B Common Stock entitles its holder to seven
votes. By virtue of his holding 1,000,000 shares of Class A and Class B Common
Stock, Mr. Uziel Frydman, our Chairman, President and Chief Executive Officer,
maintains 82% of the voting control of Sherwood Brands. Only the holders of
issued and outstanding shares of common stock are entitled to vote at the annual
meeting. You do not have the right to cumulate your votes.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of common stock entitled to vote at the annual meeting is
necessary to constitute a quorum with respect to all matters presented.
Directors will be elected by a plurality of the votes cast by the shares of
common stock represented in person or by proxy at the annual meeting. Any other
matter that may be submitted to a vote of the shareholders will be approved if
the number of shares of common stock voted in favor of the matter exceeds the
number of shares voted in opposition to the matter, unless such matter is one
for which a greater vote is required by law or by our Articles of Incorporation
or bylaws. If less than a majority of outstanding shares entitled to vote are
represented at the annual meeting, a majority of the shares so represented may
adjourn the annual meeting to another date, time or place, and notice need not
be given of the new date, time, or place if the new date, time, or place is
announced at the meeting before an adjournment is taken.
Prior to the annual meeting, we will select one or more inspectors of
election for the meeting. Such inspector(s) shall determine the number of shares
of common stock represented at the meeting, the existence of a quorum and the
validity and effect of proxies, and shall receive, count and tabulate ballots
and votes and determine the results thereof. Abstentions will be considered as
shares present and entitled to vote at the annual meeting and will be counted as
votes cast at the annual meeting, but will not be counted as votes cast for or
against any given matter.
A broker or nominee holding shares registered in its name, or in the name
of its nominee, which are beneficially owned by another person and for which it
has not received instructions as to voting from the beneficial owner, may have
discretion to vote the beneficial owner's shares with respect to the election of
directors and other matters addressed at the annual meeting. Any such shares
which are not represented at the annual meeting either in person or by proxy
will not be considered to have cast votes on any matters addressed at the annual
meeting.
2
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SECURITY OWNERSHIP
The following table sets forth certain information as of the record date
concerning the beneficial ownership of our common stock by: (i) each person
known by us to be the beneficial owner of more than 5% of the outstanding common
stock, (ii) each director, (iii) each of the named executive officers (as
defined below), and (iv) all executive officers and directors as a group.
NUMBER OF SHARES
NAME OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2) PERCENT OF SHARES
--------------------------- --------------------- -----------------
Uziel Frydman 2,011,667(3) 54.1%(3)
Anat Schwartz 86,667(4) 2.0
Amir Frydman 86,667(4) 2.0
Douglas A. Cummins 5,417(5) *
Jean E. Clary 1,417(5) *
Jason Adelman 9,567(5) *
All officers and directors as a group 2,201,402 59.3%
(6 persons)
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* Less than 1%
(1) The address for each of the executive officers and directors is 1803
Research Boulevard, Suite 201, Rockville, Maryland 20850.
(2) Unless otherwise indicated, we believe that all persons named in the
table have sole voting and investment power with respect to all shares of
common stock they beneficially own. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within
60 days from the record date upon the exercise of options, warrants or
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants or convertible securities
that are held by such person (but not those held by any other person) and
which are exercisable within 60 days of the date of the record date have
been exercised and converted.
(3) Includes 1,000,000 shares of Class A Common Stock and 1,000,000 shares of
Class B Common Stock. Since each share of Class B Common Stock entitles
the holder to seven votes per share on all matters submitted to a vote of
shareholders, Mr. Frydman maintains 82% of the voting control of Sherwood
Brands.
(4) Includes 11,667 shares of Class A Common Stock issuable upon exercise of
presently exercisable options.
(5) Includes 417 shares of Class A Common Stock issuable upon exercise of
presently exercisable options.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers and persons who own more than ten percent of
our outstanding common stock, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
common stock. Such persons are required by SEC regulation to furnish us with
copies of all such reports they file.
3
<PAGE>
To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representations that no other reports were required,
all Section 16(a) filing requirements applicable to our officers, directors and
greater than ten percent beneficial owners have been met.
4
<PAGE>
PROPOSAL ONE: ELECTION OF DIRECTORS
We have nominated five persons for election as directors to serve until
the next annual meeting of shareholders and until the director's successor is
duly elected and qualified. Although we anticipate that all of the nominees will
be able to serve, if any nominee is unable or unwilling to serve at the time of
the annual meeting, the proxy will be voted for a substitute nominee chosen by
our Board of Directors, or the number of directors to be elected may be reduced
in accordance with our bylaws.
The following table sets forth certain information as to the persons
nominated for election as directors at the annual meeting.
NAME AGE POSITION
---- --- --------
Uziel Frydman 63 Chairman of the Board, President and Chief
Executive Officer
Amir Frydman 37 Director, Treasurer and Vice President--
Marketing and Product Development
Douglas A. Cummins 56 Director
Jean E. Clary 55 Director
Jason Adelman 30 Director
UZIEL FRYDMAN has been the President and Chief Executive Officer of the
Company and each of its subsidiaries since inception. Mr. Frydman has served as
the Chairman of the Board of Directors of the Company since December 1997. Mr.
Frydman served as Director of Marketing and Planning Sciences at R.J. Reynolds
Tobacco Company from 1977 to 1980, and prior to that, as Manager, Planning and
Operations Improvement at Lever Brothers Company from 1971 to 1977. He also
served as Projects Manager at Sperry & Hutchinson Company and as an independent
consultant to local governments in Turkey, Burma and Sierra Leone from 1962 to
1965. Mr. Frydman was an adjunct professor at the Graduate School of Business at
Rutgers University from 1970 to 1975. Mr. Frydman earned a Masters of Business
Administration, Management Science degree from Case Western Reserve University
in 1968 and a Bachelor of Science degree in Civil Engineering from Technion
Institute of Technology, Haifa, Israel in 1960. Mr. Frydman is the father of
Anat Schwartz and Amir Frydman.
AMIR FRYDMAN has been a director of the Company and has served as
Treasurer and Executive Vice President - Marketing and Product Development since
1985. Prior to joining the Company, Mr. Frydman was Commercial Branch Manager at
NCNB National Bank of Florida, from 1984 to 1985. Mr. Frydman earned a Bachelor
of Arts degree from the University of North Carolina in 1983. Mr. Frydman is the
son of Uziel Frydman and the brother of Anat Schwartz.
DOUGLAS A. CUMMINS has been a director of the Company since December
1997. In 1996, Mr. Cummins served as President and Chief Executive Officer of
the Liggett Group, a manufacturer and distributor of cigarettes. From 1993 to
1996, Mr. Cummins served as President and Chief Executive Officer of North
Atlantic Trading Co, a cigarette paper manufacturer and distributor. From 1990
to 1993, Mr. Cummins served as the President and Chief Executive Officer of
Decision Marketing, an advertising and consulting firm. From 1984 to 1990, Mr.
Cummins served as the President and Chief Operating Officer of Salem Carpet
Mills, a carpet manufacturer, and from 1981 to 1984, served as President of
Stellar Group, a consulting firm. From 1973 to 1981, Mr. Cummins was Director of
Marketing - International and Vice President - Foods Marketing at R.J. Reynolds
Industries. Mr. Cummins currently sits on the Boards of Gold Leaf Tobacco Corp.,
Carolina Biological Supply Company, Smokey Mountain Products, Inc. and the Fort
Ticonderoga Association. Mr. Cummins earned a Masters of Business Administration
degree from Columbia University in 1966 and a Bachelor of Arts degree from
Harvard University in 1964.
5
<PAGE>
JEAN E. CLARY has been a director of the Company since May 1998. Ms.
Clary has been the Chief Executive Officer and President of Century 21 - Clary
and Associates, Inc. since January 1973. Ms. Clary is currently on the Board of
Directors of Virginia Power, a wholly-owned subsidiary of Dominion Resources
Inc., a public company traded on the New York Stock Exchange.
JASON ADELMAN has been a director of the Company since August 1998. Mr.
Adelman is Senior Vice President of Investment Banking at H.C. Wainwright & Co.
From 1997 until his employment with H.C. Wainwright in 1999, Mr. Adelman was
Managing Director of Corporate Finance at Drake & Co., Inc. From 1996 to 1997,
Mr. Adelman was affiliated with Spencer Trask Securities, Inc., a New York based
venture capital investment bank. Before that he was with Coopers & Lybrand LLP,
where he worked in the financial services consulting practice from 1994 to 1996.
Mr. Adelman earned his J.D. from Cornell Law School and his B.A. in economics
from the University of Pennsylvania.
The term of office of each director ends at the next annual meeting of
shareholders or when his or her successor is elected and qualified. Our officers
serve at the discretion of the Board of Directors, subject to the terms of any
employment agreements.
All of our non-employee directors receive $1,000 for attendance at each
Board of Directors meeting ($500 if such meeting is attended telephonically) and
are reimbursed for travel expenses incurred to attend such meetings.
During fiscal year 1999, the Board of Directors held four meetings. No
director attended fewer than 75% of such meetings of the Board of Directors or
any committee thereof during the period of such director's service.
We have an Audit Committee and a Compensation Committee. The Audit
Committee is responsible for reviewing and making recommendations regarding our
employment of independent auditors, the annual audit of our financial statements
and our internal accounting practices and policies. It consists of Mrs. Jean
Clary and Mr. Douglas Cummins. The Compensation Committee, composed of Messrs.
Uziel Frydman, Amir Frydman and Jason Adelman, is responsible for making
recommendations to the Board of Directors regarding compensation arrangements
for senior management, recommendations concerning the adoption of any
compensation plans in which management is eligible to participate and grants of
stock options or other benefits under such plans. We do not have a Nominating
Committee.
6
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND KEY EMPLOYEES
Our executive officers, as well as certain key employees, and their ages
as of November 1999, are as follows:
NAME AGE POSITION
---- --- --------
Uziel Frydman(1) 63 Chairman of the Board, President and Chief
Executive Officer
Anat Schwartz 39 Executive Vice President-- Finance and Secretary
Amir Frydman(1) 37 Director, Treasurer and Executive
Vice President-- Marketing
Eric A. Richman (2) 49 Vice President - Operations
Paul J. Splitek (2) 50 Vice President - Sales
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(1) Reference is made to the description of the business experience of
Messrs. Uziel Frydman and Amir Frydman, who are also director nominees,
set forth above under "Election of Directors," which is incorporated
herein by reference.
(2) Messrs. Richman and Splitek are key employees, but not executive officers
of the company.
ANAT SCHWARTZ has been Executive Vice President - Finance and Secretary
of the Company since January 1996 and Sherwood Brands, LLC (and its
predecessors) since 1988, and has been a director of Sherwood Brands Overseas,
Inc. since 1993. Prior to joining the Company, Ms. Schwartz served as Manager -
Loan Syndications and Asset Sales for the Bank of Montreal in 1988 and as Team
Leader - Communications/Media Group and Account Officer for such bank's
Southeastern United States region from 1983 to 1988. Ms. Schwartz earned a
Masters of Business Administration, Finance/Health Care degree from Bernard
Baruch College in 1983 and a Bachelor of Arts degree from Wake Forest University
in 1981. Ms. Schwartz is the daughter of Uziel Frydman and the sister of Amir
Frydman.
ERIC A. RICHMAN has been Vice President of Operations of the Company
since September 1999. Mr. Richman has over 26 years of multi-disciplined
manufacturing experience. From 1998 until being hired by the Company after the
acquisition of E. Rosen Company, Mr. Richman was Director of Manufacturing of E.
Rosen, and prior to that, Plant Manager of E. Rosen. From 1992 to 1996, he was
Plant Manger of Richardson Brands Company; from 1989 to 1992, Plant Manager of
Conusa Corporation; and from 1973 to 1989, Plant Manager of Planters Lifesavers
Company. Mr. Richman has extensive experience in manufacturing, management,
quality control and labor relations.
PAUL J. SPLITEK has been Vice President of Sales of the Company since
September 1999. Mr. Splitek has over 28 years of sales, marketing and
manufacturing experience. From 1996 until being hired by the Company after the
acquisition of E. Rosen Company, Mr. Splitek was Vice President and General
Sales Manager of E. Rosen. Prior to joining E. Rosen, from 1991 to 1996, Mr.
Splitek was Vice President and General Manager of Mille Lacs MP Company, a
wholesale division of The Wisconsin Cheeseman Inc. ("TWC"), and prior to that,
Operations Manager of TWC.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid during each of the
three years ended July 31, 1999 to our Chief Executive Officer and our other
executive officers whose total 1999 salary and bonus exceeded $100,000 (the
"named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION
--------------------------- ----------- ------ ----- ------------
<S> <C> <C> <C> <C>
Uziel Frydman, Chairman, President and 1999 $225,000 -- --
Chief Executive Officer 1998 $129,520 $ 51,000 $ 3,886
1997 $108,170 -- --
Amir Frydman, Executive Vice President 1999 $194,000 -- --
- Marketing and Treasurer 1998 $127,915 $ 43,500 $ 3,837
1997 $118,646 -- --
Anat Schwartz, Executive Vice 1999 $135,000 -- --
President - Finance, Secretary 1998 $ 80,800 $ 30,000 $ 2,424
1997 $ 63,800 -- --
Paul Splitek, Vice President of Sales 1999(1) $105,764 -- --
</TABLE>
(1) Mr. Splitek joined Sherwood Brands in September 1998. Mr. Splitek is not an
executive officer of Sherwood Brands.
We did not grant any options to our executive officers during the year
ended July 31, 1999.
EMPLOYMENT AGREEMENTS
We have entered into employment agreements with Uziel Frydman, Chairman
of the Board, President and Chief Executive Officer, Anat Schwartz, Vice
President -- Finance and Secretary, and Amir Frydman, Treasurer and Vice
President -- Marketing and Product Development. Such agreements commenced on May
12, 1998 and are for a term of three years and currently provide annual base
salaries of $225,000, $135,000 and $194,000 for Uziel Frydman, Anat Schwartz and
Amir Frydman, respectively. In addition, such employment agreements entitle the
executives to a portion of a bonus pool as determined by the Board of Directors
equal to the sum of (i) the first $150,000 in excess of $1.27 million of our pre
tax net income (this item (i) is applicable solely for fiscal 1999) and (ii) 15%
of our pre tax net income in excess of certain incremental earnings targets. If
either Uziel Frydman, Amir Frydman or Anat Schwartz is terminated without cause
or upon a change in control of Sherwood Brands, each is entitled to continue to
receive his or her annual base salary for a period of three years, any accrued
incentive compensation through the date of termination and certain other
benefits. Each of the above listed executives is prohibited from competing with
us for the duration of his or her respective employment agreement, and if
terminated or upon voluntary resignation, for one year thereafter.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1999 were Messrs. U.
Frydman, A. Frydman and Adelman. Messrs. U. Frydman and A. Frydman currently
serve as executive officers.
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR END OPTION VALUES
The following table sets forth information with respect to (i) the number
of unexercised options held by the named executive officers as of July 31, 1999
and (ii) the value as of July 31, 1999 of unexercised in-the-money options. No
options were exercised by any of the named executive officers in 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT JULY 31, 1999 AT JULY 31, 1999(1)
------------------------------ ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Uziel Frydman.............. -- 35,000 $0 $0
Amir Frydman............... -- 35,000 $0 $0
Anat Schwartz.............. -- 35,000 $0 $0
</TABLE>
(1) Market value of shares covered by in-the-money options on July 31, 1999,
less option exercise price. Options are in-the-money if the market value
of the shares covered thereby is greater than the option exercise price.
CERTAIN TRANSACTIONS
Uziel Frydman, Chairman, President and Chief Executive Officer, has
personally guaranteed the repayment of certain of our indebtedness.
PROPOSAL TWO: RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of BDO Seidman, LLP as our
independent certified public accountants for the current fiscal year. Although
the selection of BDO Seidman, LLP as our independent certified public
accountants does not require ratification by our shareholders, the Board of
Directors considers it appropriate to obtain such ratification. Accordingly,
your vote on this matter is advisory in nature and has no effect upon the Board
of Directors' appointment of an accountant, and the Board of Directors may
change our accountant at any time without your approval or consent. The Board
proposes and unanimously recommends that the shareholders ratify the selection
of BDO Seidman, LLP.
If you do not ratify the selection of BDO Seidman, LLP by the affirmative
vote of the holders of a majority of votes cast by the shares represented in
person or by proxy at the annual meeting, the Audit Committee will investigate
the reason for shareholder rejection and the Board will reconsider the
appointment.
Representatives of BDO Seidman, LLP are expected to be present at the
annual meeting and will be afforded the opportunity to make a statement if they
so desire and to respond to appropriate questions.
9
<PAGE>
GENERAL INFORMATION
OTHER MATTERS. The Board of Directors does not intend to present any
matter for action at the annual meeting other than the matters described in this
proxy statement. If any other matters properly come before the annual meeting,
it is intended that the holders of the proxies hereby solicited will act in
respect to such matters in accordance with their best judgment.
INFORMATION CONCERNING STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Any stockholder satisfying the Securities and Exchange Commission ("SEC")
requirements and wishing to submit a proposal to be included in the proxy
statement for the 2000 Annual Meeting of Shareholders should submit the proposal
in writing to the Corporate Secretary, Sherwood Brands, Inc., 1803 research
Boulevard, Suite 201, Rockville, Maryland, 20850. We must receive a proposal by
July 5, 2000 in order to consider it for inclusion in the proxy statement for
the 2000 Annual Meting of Shareholders.
Shareholders who wish to present director nominations or any other
business at the 2000 Annual Meeting of Shareholders are required to notify the
Corporate Secretary of their intent no later than September 5, 2000 and the
notice must provide information as required in our bylaws. A copy of these
bylaws requirements will be provided upon request in writing to the Corporate
Secretary. This requirement does not apply to the deadline for submitting
shareholder proposals for inclusion in the proxy statement, nor does it apply to
questions a shareholder may wish to ask at the meeting.
We retain discretion to vote proxies we receive with respect to proposals
received after September 5, 2000, provided (i) we include in our proxy statement
advice on the nature of the proposal and how we intend to exercise our voting
discretion and (ii) the proponent does not issue a proxy statement.
By Order of the Board of Directors,
UZIEL FRYDMAN
CHAIRMAN OF THE BOARD
Rockville, Maryland
November 5, 1999
<PAGE>
SHERWOOD BRANDS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 2, 1999
The undersigned hereby appoints Anat Schwartz and Amir Frydman, and each
of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Sherwood Brands, Inc. which
the undersigned may be entitled to vote at the Annual Meeting of Shareholders of
Sherwood Brands to be held at the Best Western Hotel, 1251 West Montgomery
Avenue, Rockville, Maryland, on December 2, 1999, at 11:00 a.m., (local time,
and at any and all postponements, continuations and adjournments thereof), with
all powers that the undersigned would possess if personally present, upon and in
respect of the following matters and in accordance with the following
instructions, with discretionary authority as to any and all other matters that
may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE
PROPOSALS SET FORTH BELOW, AS MORE SPECIFICALLY DESCRIBED IN THE PROXY
STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN
ACCORDANCE THEREWITH. MANAGEMENT RECOMMENDS A VOTE "FOR" BOTH PROPOSALS.
PROPOSAL ONE: Election of Directors.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
for all nominees listed below
A VOTE FOR ALL NOMINEES IS RECOMMENDED BY THE BOARD OF DIRECTORS. NOMINEES ARE:
Uziel Frydman, Amir Frydman, Douglas A. Cummins, Jean E. Clary, and Jason
Adelman.
* To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below:
Exceptions:
- --------------------------------------------------------------------------------
(Continued and to be signed on other side)
<PAGE>
PROPOSAL TWO: Ratification of BDO Seidman, LLP as the company's independent
certified public accountants for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
DATED_________________________________________, 1999
____________________________________________________
SIGNATURE(S)
Please sign exactly as your name appears hereon. If
the stock is registered in the names of two or more
persons, each should sign. Executors,
administrators, trustees, guardians and
attorneys-in-fact should add their titles. If signer
is a corporation, please give full corporate name
and have a duly authorized officer sign, stating
title. If signer is a partnership, please sign in
partnership name by authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED
RETURN ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
