<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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
</TABLE>
FLORAFAX INTERNATIONAL, 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)(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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(FLORAFAX LETTERHEAD)
December 11, 1996
To the Stockholders of
FLORAFAX INTERNATIONAL, INC.:
You are cordially invited to attend the Annual Meeting of Stockholders
of Florafax International, Inc. on January 28, 1997 at The Vero Beach
Doubletree Guest Suites, 3500 Ocean Drive, Vero Beach, Florida, 32963,
commencing at 11:00 a.m., local time. We look forward to greeting personally as
many of our stockholders as possible at the meeting. Please call Mrs. Terri
Giles at 1-800-681-8222, extension 306, for directions.
The Notice of the Annual Meeting and Proxy Statement accompanying this
letter provides information concerning matters to be considered and acted upon
at the meeting. A report on the operations of the Company will be presented at
the meeting, followed by a question and answer period and discussion.
We know that most of our stockholders are unable personally to attend
the Annual Meeting. Proxies are solicited so that each stockholder has an
opportunity to vote on all matters which are scheduled to come before the
meeting. Whether or not you personally plan to attend, please take a few
minutes now to read these materials and to sign, date and return your proxy in
the enclosed postage paid envelope. Regardless of the number of Florafax
shares you own, your presence in person or by proxy is important for
establishing a quorum, and your vote on the matters to be considered at the
meeting is important. Even if you have signed a proxy, you may vote in person
on all matters presented for stockholder vote at the meeting, and you are
encouraged to attend the meeting.
Thank you for your continued interest in Florafax.
Very truly yours,
Andrew W. Williams
Chairman of the Board
I URGE YOU TO VOTE AND TO RETURN YOUR PROXY TODAY.
<PAGE> 3
FLORAFAX INTERNATIONAL, INC.
8075 20th Street
Vero Beach, Florida 32966
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 28, 1997
To the Stockholders of
FLORAFAX INTERNATIONAL, INC.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of
Florafax International, Inc. (the "Company") will be held at The Vero Beach
Doubletree Guest Suites, located at 3500 Ocean Drive, Vero Beach, Florida,
32963, on January 28, 1997, at 11:00 a.m., local time, for the following
purposes:
1. To elect six directors of the Company to serve until their
respective successors are elected and qualified;
2. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to increase the number of
authorized shares of common stock from 18,000,000 to
70,000,000; and
3. To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.
In accordance with the Bylaws of the Company and a resolution of the
Board of Directors, the record date for the meeting has been fixed as of
November 29, 1996. Only holders of common stock of record at the close of
business on such date will be entitled to vote at the meeting or any
adjournment or postponement thereof. This Notice and the accompanying Proxy
Statement are first being mailed to stockholders on or about December 11, 1996.
A complete list of stockholders entitled to vote at the meeting will
be on file at the Company's principal executive office at 8075 20th Street,
Vero Beach, Florida, 32966, for a period of ten days prior to the meeting.
During such time, the list will be open to the examination of any shareholder
during ordinary business hours for any purpose germane to the meeting.
FLORAFAX INTERNATIONAL, INC.
Kelly S. McMakin
Secretary
Vero Beach, Florida
December 11, 1996
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY TODAY.
<PAGE> 4
FLORAFAX INTERNATIONAL, INC.
8075 20th Street
VERO BEACH, FLORIDA 32966
PROXY STATEMENT
FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
January 28, 1997
_______________________________
These proxy materials are furnished in connection with the
solicitation of proxies by the Board of Directors of FLORAFAX INTERNATIONAL,
INC., a Delaware Corporation ("Company") for the 1997 Annual Meeting of
Stockholders to be held at 11:00 a.m., local time, on January 28, 1997, at The
Vero Beach Doubletree Guest Suites, located at 3500 Ocean Drive, Vero Beach,
Florida, 32963, and any adjournment or postponement of such meeting. This
Proxy Statement, and the accompanying proxy, the form of which is attached to
this Proxy Statement as Appendix 1, were first mailed on or about December 11,
1996, to stockholders of record on November 29, 1996.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are:
1. To elect six directors of the Company to serve until their
respective successors are elected and qualified;
2. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to increase the number of
authorized shares of common stock from 18,000,000 to
70,000,000 (the "Amendment"); and
3. To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.
VOTING AND PROXIES
The Board of Directors has set the close of business on November 29,
1996, as the record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting. At that date, there were 8,220,598 shares of
common stock outstanding, exclusive of 23,000 treasury shares. There were no
shares of preferred stock issued and outstanding. Stockholders are entitled to
one vote per share on all matters submitted for consideration at the Annual
Meeting. The presence in person or by proxy of a majority of all the
outstanding voting securities of the Company is required to constitute a quorum
at the Annual Meeting or at any adjournment or postponement thereof.
The election of nominees for director requires a plurality of the
votes cast. Votes may be cast in favor of a nominee or withheld. Cumulative
voting for the election of directors is not permitted. Adoption of the
Amendment requires a vote in favor thereof by a majority of the shares
<PAGE> 5
entitled to vote thereon. Votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on any
proposal other than the election of directors. An automated system
administered by the Company's transfer agent is used to tabulate the votes.
Abstentions and broker non-votes are counted as shares present in the
determination of whether the shares represented at the Annual Meeting
constitute a quorum. Each is tabulated separately. Abstentions and broker
non-votes are not counted for purposes of determining the number of votes cast
on any matter.
The Board of Directors has designated Andrew W. Williams and S. Oden
Howell, Jr. and each of them, with full powers of substitution, as the persons
named as proxies for stockholders executing the accompanying proxies. Proxies
which are properly executed by stockholders entitled to vote at the Annual
Meeting and which are received by the Company prior to the Annual Meeting and
not revoked prior to their use, will be voted at the Annual Meeting in
accordance with the directions specified by each stockholder executing the
proxy. The Board of Directors recommends that you vote, and all properly
executed proxies which do not specify how they are to be voted shall be voted,
FOR the six nominees for directors named below. Execution of the enclosed
proxy entitles the named proxies to vote in their discretion on all other
matters presented for a vote of the stockholders at the Annual Meeting.
PROXIES MAY BE REVOKED AT ANY TIME PRIOR TO THEIR USE BY THE RECORD HOLDER
GIVING WRITTEN NOTICE OF REVOCATION RECEIVED BY THE COMPANY OR BY THE RECORD
HOLDER EXECUTING AND DELIVERING TO THE COMPANY A NEW PROXY BEARING A LATER
DATE. Any stockholder who attends the Annual Meeting in person and desires to
vote in person may do so by revoking his earlier proxy at the Annual Meeting
before its use as to any particular matter to be voted on by the stockholders.
ELECTION OF DIRECTORS
The Bylaws of the Company currently state that the Board of Directors
shall consist of not less than three nor more than nine directors, as
determined from time to time by a duly adopted resolution of the Board of
Directors. The Board has resolved that the Board of Directors for the current
fiscal year shall consist of six directors. No proxy will be voted for more
than six individuals. The Company's Bylaws provide that the President of the
Company shall be a member of the Board.
On December 8, 1988, the Board determined that at the time of
election, each director would be required to own at least 10,000 shares of
common stock of the Company. All of the director nominees currently meet this
requirement and have represented that they will meet this qualification at the
time of the director's election. In the event any director does not comply
with this requirement during the fiscal year, such director will not be
eligible to serve. The Board may, but is not required to fill such vacancies,
if they occur.
The six nominees for director were selected by the Board of Directors
and are named and described below. Each director elected shall hold office
until the next annual meeting of stockholders of the Company or until his
respective successor is duly elected and qualified. Each nominee for director
has agreed to stand for election and, if elected, has agreed to serve as a
director of the Company. In the event any nominee is unable or declines to
serve as a director at or before the Annual Meeting, the Board of Directors has
determined that a majority of the remaining nominees may select a qualified
replacement nominee to fill such vacancy. Management is not
2
<PAGE> 6
aware of any nominee who is unable to serve, does not own the qualifying
shares, or will decline to serve if so elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
FOLLOWING NOMINEES FOR DIRECTOR. THE HOLDERS OF PROXIES INTEND TO VOTE FOR THE
FOLLOWING NOMINEES FOR DIRECTOR.
The following information is furnished with respect to each of the
nominees. Such information includes all positions with the Company and
principal occupations during the last five years.
T. CRAIG BENSON
Mr. Benson, 34, is President of the Corporate Equities Division of Service
Corporation International headquartered in Houston, Texas. Service Corporation
International is the largest publicly held funeral home/cemetery company in the
world. Mr. Benson also serves as a Director of Equity Corporation International
and Tanknology Environmental, Inc. Mr. Benson has been a Director of the
Company since March, 1991.
S. ODEN HOWELL, JR.
Mr. Howell, 56, is Secretary/Treasurer of H & N Constructors, Inc. and formerly
President of Howell & Howell, Inc. in Louisville, Kentucky. Mr. Howell serves
as a Director of Royal Gold, Inc. and has been a Director of the Company since
February, 1986.
WILLIAM E. MERCER
Mr. Mercer, 55, was Chief Financial Officer ("CFO") of Service Corporation
International and was also a Director of that company from April, 1971 to
December, 1989. Since December, 1989, Mr. Mercer has owned and served as
Chairman of the Board and Chief Executive Officer ("CEO") of Southwest Guaranty
Trust Company, a Texas chartered private trust company located in Houston,
Texas. He has been a Director of the Company since April, 1987. Mr. Mercer
also serves as a Director of Cal-Tex Protective Coatings, Inc. and Bass Boats,
Inc.
JAMES H. WEST
Mr. West, 42, was elected Vice President, Treasurer and CFO of the Company on
February 5, 1993. On January 7, 1994, Mr. West was elected Chief Operating
Officer ("COO"), and on August 8, 1994, he was elected Secretary, of the
Company. On November 17, 1994, he was elected President. From November, 1987
to November, 1992, Mr. West was President of M.P.I.I., Inc. ("M.P.I.I.") which
is in the funeral, cemetery and insurance business. As of the date of this
Proxy Statement, Mr. West remains as President, COO and CFO. He has been a
Director of the Company since January, 1994.
ANDREW W. WILLIAMS
Mr. Williams, 44, is, and has been for the past ten years, the President of
A.W.W., P.A. a private accounting firm in Vero Beach, Florida. Since August,
1990, he has served as Chairman and CEO of Equity Resource Group of Indian
River County, Inc. Mr. Williams is the President of Confidential Investment
Services, Inc. and Chairman of Atlantic Aquaculture Technologies, Inc. In
addition, he serves as a Director of First American Bank and Admiralty Bank.
Mr. Williams was elected Chairman of the Board in November, 1992 and has been
a Director of the Company since December, 1988. In September, 1994, Mr.
Williams was elected CEO of the Company.
3
<PAGE> 7
KENNETH G. PUTTICK
Mr. Puttick, 49, is President, Director and Owner of Ken Puttick
Buick-Cadillac, in Vero Beach, Florida. Mr. Puttick has been in the retail
automobile business since 1968. He has owned and operated several retail and
real estate businesses simultaneously. Mr. Puttick has been a Director of the
Company since January, 1995.
There are no family relationships between any nominee or member of the
Board of Directors or executive officer of the Company. There are no
arrangements, agreements or understandings, to the knowledge of the Company, by
which any nominee for director is bound and pursuant to which he was selected
as a nominee.
INFORMATION CONCERNING OFFICERS AND DIRECTORS
MEETINGS AND COMPENSATION OF DIRECTORS
During fiscal year 1996, the Board of Directors held six meetings. As
of January 1, 1993, each director of the Company waived, indefinitely, his
monthly fees and his fees for attending meetings of the Board of Directors and
each committee thereof. In consideration therefor, on February 5, 1993, the
Company granted each director, other than salaried employees, options to
purchase 100,000 shares of the common stock of the Company at $.10 per share.
All of these options were exercised prior to their expiration date of January
1, 1994. All directors are reimbursed by the Company for out-of-pocket
expenses incurred by them in connection with their service on the Board and
committees thereof. No member of the Board, the Audit Committee or the
Compensation Committee attended less than 75% of the meetings held. The Board
of Directors does not have a nominating committee. Management nominees for
director are selected by a majority vote of the Board of Directors.
NONEMPLOYEE DIRECTOR STOCK OPTIONS
On January 30, 1996, the shareholders of the Company approved the 1996
Nonemployee Directors' Stock Option Plan (the "Nonemployee Director Plan")
under which each nonemployee director, upon his or her respective election or
reelection to the Board of Directors, is granted a nonqualified option to
purchase 20,000 shares of the Company's common stock at an option price equal
to 100% of fair market value on the date of grant. Each option terminates upon
the expiration of ten years from the date of grant or three months after the
optionee ceases to be a director, whichever first occurs. An option may not be
exercised prior to the expiration of six months from the date of grant, subject
to certain exceptions specified in the Nonemployee Director Plan.
Pursuant to the provisions of the Nonemployee Director Plan, options
were granted to the following nonemployee directors on January 30, 1996, for
20,000 option shares each at an option price of $1.563 per share: T. Craig
Benson, S. Oden Howell, Jr., Glenn R. Massey, William E. Mercer and Kenneth G.
Puttick.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors, which currently
consists of William E. Mercer, S. Oden Howell, Jr. and Kenneth G. Puttick, met
one time during the 1996 fiscal year. The functions of the Audit Committee are
to review the qualifications and independence of the
4
<PAGE> 8
independent auditors; to recommend the appointment of the independent auditors;
to review the scope of the annual audit and the annual audit process; to review
the annual audited financial statements; and to report the activities of the
Audit Committee to the Board of Directors on a regular basis.
COMPENSATION COMMITTEE
The Compensation Committee ("Committee") of the Board of Directors
currently consists of S. Oden Howell, Jr., Glenn R. Massey, T. Craig Benson,
Kenneth G. Puttick and William E. Mercer. The Compensation Committee met one
time during the 1996 fiscal year. The functions of the Committee are to review
the compensation of officers and other management personnel and to make
recommendations concerning such compensation. The Committee also administers
certain employee benefit plans of the Company which provide for administration
by a Board committee.
NOMINATING COMMITTEE
The Board of Directors does not have a standing nominating committee
or a committee performing similar functions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors, officers, and any persons holding more
than ten percent of the Company's common stock to report their initial
ownership of the Company's common stock and any subsequent changes in that
ownership to the Securities and Exchange Commission ("SEC"), and to provide
copies of such reports to the Company. Based upon the Company's review of
copies of such reports received by the Company and written representations of
its directors, officers, and certain beneficial owners of stock, the Company
believes that during the year ended August 31, 1996, all Section 16(a) filing
requirements were satisfied, with the exception of Craig Benson, who was
delinquent in filing a Form 5.
EXECUTIVE OFFICERS
The following persons were, as of the date of this Proxy Statement,
either (i) the executive officers or (ii) officers who are significant
employees of the Company. Each such officer serves at the pleasure of the
Board of Directors. Other than that certain Employment Agreement
("Agreement"), dated July 7, 1994, by and between James H. West, as employee,
and the Company, there exists no employment agreements between the Company and
any current officer of the Company. With respect to the Agreement, the Company
agrees to continue to employ Mr. West as its COO and CFO for a minimum annual
salary of $140,000, plus a company car, health insurance and other benefits
generally available to the Company's employees. The Company also agreed to
reimburse Mr. West for any moving expenses and to provide him with a bridge
loan to enable him to purchase a home in Vero Beach, Florida. By the terms of
the Agreement, the bridge loan is secured by certain real estate owned by Mr.
West, and said loan is to be repaid upon liquidation of such real estate. The
Agreement contains covenants not to compete, as well as a confidentiality
covenant. The term of the Agreement is for one year and is renewed
automatically for additional one-year terms, unless terminated earlier. Either
party may terminate the Agreement
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<PAGE> 9
upon thirty days prior written notice, and the Company may terminate Mr. West's
employment without such notice, for cause. In the event the Company terminates
Mr. West's employment for any reason other than for cause, then the Company
must pay to Mr. West, as severance, a lump sum payment equal to the total
amount of his annual salary. For the first year of the Agreement, Mr. Andrew
Williams personally guaranteed the obligations of the Company to Mr. West.
<TABLE>
<CAPTION>
NAME AGE OFFICER SINCE POSITION WITH COMPANY
<S> <C> <C> <C>
Andrew W. Williams 44 November, 1992 Chairman of the Board and
Chief Executive Officer
James H. West 42 February, 1993 President, Chief Operating
Officer and Chief Financial Officer
Kelly S. McMakin 35 November, 1994 Treasurer, Secretary, and
Vice President
</TABLE>
See "Election of Directors" for the business background of Messrs.
Williams and West.
KELLY S. MCMAKIN
Mr. McMakin, 35, was elected Vice President and Treasurer of the Company on
November 17, 1994, and on February 6, 1995, he was elected Secretary of the
Company. From June, 1993, to the present, Mr. McMakin has been Controller of
the Company. From May, 1988, through May, 1993, Mr. McMakin was Controller of
M.P.I.I. As of the date of this Proxy Statement, Mr. McMakin remains as Vice
President, Secretary and Treasurer of the Company.
There are no arrangements, agreements or understandings, to the
knowledge of Company, by which any of the persons described above was selected
as an officer.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
for the Company's Chief Executive Officer and for any executive officer whose
aggregate remuneration was $100,000 or more for the fiscal year ended August
31, 1996 ("Named Officer"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME AND PRINCIPAL FISCAL YEAR ANNUAL BONUS ($) OTHER ANNUAL
POSITION COMPENSATION COMPENSATION
SALARY ($) ($) (1)
<S> <C> <C> <C> <C>
James H. West, 1996 $181,731 $65,000 $ 0
President, COO and CFO 1995 $155,935 $17,500 $ 0
1994 $112,038
Andrew W. Williams 1996 $100,731 $27,500 $ 0
CEO 1995 $ 65,923
1994 $ 24,615
</TABLE>
For the years ended August 31, 1996, 1995, and 1994, the Company granted no
restricted stock awards, stock appreciation rights ("SARs"), long-term
incentive plan ("LTIP") awards or any other form of long-term compensation to
the Named Officers listed above.
(1) Perquisites and other personal benefits received by the Named
Officers are not included because the aggregate amount of such compensation
does not exceed the lesser of $50,000 or 10% of the total amount of annual
salary and bonus for such Named Officer.
Except for Mr. West's employment agreement, as set forth in the
"Executive Officers" section, there are no employment agreements in effect.
Non-cash remuneration to all officers and directors as a group, did not exceed
$25,000 in the aggregate. The Company has no long term incentive plan, pension
plan, retirement plan or other plan as defined by the rules and regulations of
the SEC except for the Nonemployee Director Plan described above and the
Management Inventive Stock Plan ("Incentive Plan") described below.
STOCK OPTIONS
The Incentive Plan was adopted by the Board of Directors of the
Company on October 26, 1995, and was approved by the stockholders on January
30, 1996. Under the Incentive Plan, employees are periodically granted
market-based awards, including nonqualified stock options, incentive stock
options, stock appreciation rights ("SARs"), restricted stock and performance
share awards. Such awards are granted to those individuals whose judgment,
initiative, and efforts are responsible for the success of the Company. Each
individual award is established by an award agreement with the participant
which sets forth the terms and conditions applicable to such award. The
exercise price of an option and any SARs, which are determined at the time of
the grant, may not be less than the fair market value of the shares subject
thereto on the date of grant.
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<PAGE> 11
The following table lists options and SARS granted to each Named
Officer during fiscal year 1996. The Company has not granted SARS to any of
the Named Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
NAME NO. SECURITIES % OF TOTAL OPTIONS EXERCISE FMV OF EXPIRATION DATE
UNDERLYING GRANTED TO OR OPTION
OPTIONS/SARS EMPLOYEES AND BASE PRICE AS OF DATE
GRANTED NON-EMPLOYEE ($/SH) OF AWARD
DIRECTORS IN
FISCAL YEAR (2)
<S> <C> <C> <C> <C> <C>
Andrew W. 75,000(1) 34% $1.407 $1.407 January 29, 2006
Williams,
CEO
</TABLE>
(1) Reflects nonqualified options granted under the Incentive
Plan. Such options were granted at fair market value of the common stock on
the date of grant.
(2) Based upon a total of 221,000 options granted to employees and
non-employee directors in fiscal 1996.
AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table lists all options and SARs exercised during fiscal
1996 by each Named Officer. The Company has not granted SARs to any of the
Named Officers.
<TABLE>
<CAPTION>
NAME SHARES VALUE NUMBER OF SECURITIES VALUE OF
ACQUIRED ON REALIZED ($) UNDERLYING UNEXERCISED UNEXERCISED
EXERCISE (#) OPTIONS/SARS IN-THE-MONEY
AT FY-END (# EXERCISABLE/ OPTIONS/SARS
UNEXERCISABLE AT FY-END ($)
EXERCISABLE/
UNEXERCISABLE
<S> <C> <C> <C> <C>
James H. West, 200,000 40,000 0 0
President, COO, CFO
and Director
Andrew W. Williams, 0 0 75,000 (1) 105,525 (2)
CEO
</TABLE>
(1) Reflects stock options granted under the Incentive Plan.
(2) The value of unexercised options is based on a price of $1.407
per share at August 31, 1996.
8
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since September 1, 1994, through the date of this Proxy Statement,
there were no transaction or series of transactions, to the knowledge of the
Company, to which the Company or any of its subsidiaries was a party, in which
the amount involved exceeded $60,000 and in which any affiliate of the Company,
officer, executive officer, director, nominee for director, record holder,
beneficial security holder owning 5% or more of any class of the Company's
voting securities, or any member of the immediate family of any of the
foregoing persons, had a direct or indirect material interest, except as
described below:
(1) Mr. Benson, a director of the Company, is an officer of
Service Corporation International ("SCI"). The Company provides SCI with
credit card and charge card processing services to its funeral and cemetery
divisions. The Company provides SCI credit card processing services on the
same terms and conditions as it would for unaffiliated parties with similar
volumes of business. The Company received estimated net revenues of $139,000
from SCI (as reported by the Company on its 10-KSB for fiscal year 1996) for
these services during fiscal year 1996.
(2) On August 28, 1994, pursuant to the Agreement, as set forth in
the "Executive Officers" Section, the Company committed to loan $70,000,
bearing an interest rate of 7.75% per annum, to James H. West, President, COO
and CFO, of which $57,000 was advanced on the date of the loan. On November 7,
1994 the Company advanced to Mr. West an additional $5,000 under the terms of
the original $70,000 commitment. The loan is secured by real estate owned by
Mr. West and will be repaid upon liquidation of the real estate. As of August
31, 1996 the balance on this note, including interest, was approximately
$71,957.
(3) On or about April 1,1995, the Company, as tenant, entered into
a Lease Agreement with Alvin W. Wunderlich, Jr., Trustee of the Alvin W.
Wunderlich, Sr., Trust Number 1, as Landlord, for the leased premises located
at 8075 20th Street, Vero Beach, Florida. The trustee of the trust, who is the
Landlord under the lease and owner of the leased premises, is the father-in-law
of Andrew W. Williams, however, Mr. Williams' spouse and the siblings of Mr.
Williams' spouse are the beneficiaries named under said trust. Pursuant to the
terms of the lease, the Company has the option to extend the initial five year
term of the lease for two successive additional terms of five years each.
During the initial term of the lease, the Company has agreed to pay to the
Landlord the annual rental of $33,000.00 plus sales tax. During any extension
term, the annual rental shall be adjusted based upon changes in the cost of
living index.
In the opinion of management of the Company, these transactions were
negotiated at arm's length and involve either market, or better than market,
commercial terms and conditions under the circumstances then existing.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of November 29, 1996 information
with respect to those persons who owned (as reflected in the stock transfer
records of the Company and otherwise to the Company's knowledge) beneficially
5% or more of the common stock of the Company. All shares are subject to the
named person's sole voting and investment power, except as set forth below.
9
<PAGE> 13
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Common Stock
- ----------------------- ---------------------- ------------
<S> <C> <C>
Lance Laifer 1,368,429 (1), (2) 17% (1), (2)
45 West 45th Street
New York, New York 10036
Andrew W. Williams 1,141,520 (2), (3) 14% (2), (3)
616 Azalea Lane
Vero Beach, FL 32963
Kenneth G. Puttick 1,095,000 (2), (4) 13% (2), (4)
210 Osprey Court
Vero Beach, FL 32963
The Clark Estates, Inc. 606,275 (5) 7% (5)
30 Wall Street, 9th Floor
New York, New York 10005
</TABLE>
(1) Lance Laifer, as president, sole director and principal
stockholder of Laifer Capital Management, Inc., is deemed to have the same
beneficial ownership as Laifer Capital Management, Inc. The 1,368,429 shares
of Company common stock beneficially owned by Laifer Capital Management, Inc.
include (i) 736,129 shares of common stock beneficially owned by Laifer
Capital Management, Inc. in its capacity as general partner and investment
advisor to Hilltop Partners, L.P. ("Hilltop"); and (ii) 632,300 shares of
common stock beneficially owned by Laifer Capital Management, Inc. in its
capacity as investment advisor to various other clients. These clients
include: (a) Wolfson, with an address at One State Street Plaza, New York, New
York 10004-1505, (b) Haussman, a Netherlands Antilles corporation, with an
address at De Ruyterkade, 62, P. O. Box 819, Curacao, Netherlands Antilles, and
(c) Offshore, a Cayman Islands company, with an address c/o Consolidated Fund
Management Limited, P. O. Box HM 2257, Par La Ville Place, 14 Par La Ville
Road, Hamilton HMJX, Bermuda (collectively, the "Clients").
Laifer Capital Management, Inc. has the sole power (i) to vote and to
direct the voting of and (ii) to dispose and direct the disposition of the
736,129 shares of common stock beneficially owned by it in its capacity as the
General Partner of Hilltop. Laifer Capital Management, Inc. (i) has sole power
to vote and to direct the voting of 276,700 shares of common stock owned by
certain of the Clients, (ii) has the sole power to dispose and direct the
disposition of 166,500 shares of common stock owned by Offshore and (iii)
shares with certain of the Clients the power to dispose and direct the
disposition of 465,800 shares of common stock owned by Laifer Capital
Management, Inc. in its capacity as investment advisor to such Clients.
(2) On August 30, 1996, the Company's primary lenders, St. James
Capital Partners, L.P. ("St. James") and SV Capital Partners, L.P. ("SV
Capital"), in accordance with the terms of certain seven percent (7%)
promissory notes ("Notes") issued by the Company, converted such Notes and all
accrued interest, totaling $2,588,958, into 2,071,166 shares of common stock of
the Company. Of the 2,071,166 shares, Andrew W. Williams beneficially
purchased 111,630 of such shares, and Kenneth G. Puttick beneficially purchased
200,000 of such shares. In addition, pursuant to such transaction, Lance
Laifer beneficially purchased 1,155,500 of such shares.
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<PAGE> 14
(3) Includes 199,300 shares owned jointly with Mr. Williams' wife,
2,160 shares held by Mr. Williams as Custodian for his minor son, Theodore J.
Williams, 524,470 shares and 27,190 warrants owned by Equity Resource Group of
Indian River County, Inc., of which Mr. Williams is President, Director, and
majority owner, 77,000 shares owned by Confidential Investment Services, Inc.,
of which Mr. Williams is sole owner and 175,000 shares which may be acquired
pursuant to stock options granted to Mr. Williams under the Incentive Plan,
62,500 of which Mr. Williams has the right to acquire within sixty (60) days
of the date of the proxy statement.
(4) Includes 200,000 shares held by Mr. Puttick as Trustee for his
minor children and 637,000 shares held by Puttick Enterprises, of which Mr.
Puttick is President, Director and owner.
(5) 606,275 shares of common stock beneficially owned by The Clark
Estates, Inc., which provides management and administrative services relating
to investments on behalf of certain institutional, individual and trust
accounts.
The Company is not aware of any arrangement or pledge of securities of the
Company by any person which may at a date subsequent to the date of these proxy
materials result in a change of control of the Company.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of November 29, 1996 information (as
reflected in the stock transfer records of the Company and otherwise to the
Company's knowledge) with respect to (i) each director and nominee, (ii) each
executive and significant officer of the Company named in the Summary
Compensation Table herein, and (iii) all directors and such officers as a
group. All shares are subject to the named person's sole voting and investment
power except, as set forth below.
<TABLE>
<S> <C> <C>
Andrew W. Williams 1,141,520 (1) 14% (1)
616 Azalea Lane
Vero Beach, FL 32963
Kenneth G. Puttick 1,115,000 (2), (3) 14% (2), (3)
210 Osprey Court
Vero Beach, FL 32963
William E. Mercer 220,000 (3) 3%
2121 Sage Road,
Suite 150
Houston, TX 77024
S. Oden Howell, Jr. 278,300 (3) 3%
2603 Grassland Drive
Louisville, KY 40299
T. Craig Benson 285,000 (3), (4) 3%
1929 Allen Parkway
Houston, TX 77219
</TABLE>
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<PAGE> 15
<TABLE>
<S> <C> <C>
James H. West 350,321 (5) 4% (5)
1705 Sand Dollar Way
Vero Beach, FL 32963
Kelly S. McMakin 96,500 (6) 1% (6)
15 Royal Palm Blvd.
Vero Beach, FL 32960
All Directors, Executive 3,486,641 (7) 42% (7)
and Significant Officers
as a group
</TABLE>
(1) Includes 199,300 shares owned jointly with Mr. Williams' wife,
2,160 shares held by Mr. Williams as Custodian for his minor son, Theodore J.
Williams, 524,470 shares and 27,190 warrants owned by Equity Resource Group of
Indian River County, Inc., of which Mr. Williams is President, Director, and
majority owner, 77,000 shares owned by Confidential Investment Services, Inc.,
of which Mr. Williams is sole owner and 175,000 shares which may be acquired
pursuant to stock options granted to Mr. Williams under the Incentive Plan,
62,500 of which Mr. Williams has the right to acquire within sixty (60) days
of the date of this proxy statement.
(2) Includes 200,000 shares held by Mr. Puttick as Trustee for his
minor children and 637,000 shares held by Puttick Enterprises, of which Mr.
Puttick is President, Director and owner.
(3) Includes 20,000 shares which said individual has the right to
acquire within sixty (60) days of the date of this proxy statement under the
terms of the Nonemployee Director Plan.
(4) Includes 50,000 shares which may be acquired pursuant to stock
options granted to Mr. Benson under a non-plan agreement with the Company,
twenty-five percent (25%) of which Mr. Benson has the right to acquire within
sixty (60) days of the date of this proxy statement.
(5) Includes 75,000 shares which may be acquired pursuant to stock
options granted to Mr. West under the Incentive Plan, twenty-five percent (25%)
of which Mr. West has the right to acquire within sixty (60) days of the date
of this proxy statement.
(6) Includes 40,000 shares which may be acquired pursuant to stock
options granted to Mr. McMakin under the Incentive Plan, 13,750 of which Mr.
McMakin has the right to acquire within sixty (60) days of the date of this
proxy statement.
(7) The shares shown for all directors and all executive and
significant officers as a group include 187,500 shares which they have the
right to acquire within sixty (60) days of the date of this proxy statement
under the terms of the Nonemployee Director Plan, the Incentive Plan, or
non-plan agreement with the Company.
The Company is not aware of any arrangement or pledge of securities of the
Company by any person which may at a date subsequent to the date of these proxy
materials result in a change of control of the Company.
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors, by resolution, unanimously adopted on November
13, 1996, declared advisable and proposed the Amendment to Article IV of the
Company's Certificate of
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<PAGE> 16
Incorporation (the "Certificate of Incorporation") increasing the number of
authorized shares of $.01 par value common stock from 18,000,000 to 70,000,000.
If the Amendment is approved by the shareholders, Article IV will read as
follows:
"ARTICLE IV
The total number of shares which this Corporation is authorized to
issue is Seventy Million (70,000,000) shares of Common Stock, par value $.01
per share and Six Hundred Thousand (600,000) shares of Preferred Stock, par
value $10.00 per share.
The Preferred Stock shall be issued in one or more series. The Board
of Directors is hereby expressly authorized to issue the shares of Preferred
Stock in such series and to fix from time to time before issuance the number of
shares to be included in any series and the designation, relative rights,
preferences and limitations of all shares of such series. The authority of the
Board of Directors with respect to each series shall include, without
limitation thereto, the determination of any or all of the following and the
shares of each series may vary from the shares of any other series in the
following respects:
(a) The number of shares constituting such series and the
designation thereof to distinguish the shares of such series from the shares of
all other series;
(b) The annual dividend rate on the shares of that series and
whether such dividends shall be cumulative and, if cumulative, the date from
which dividends shall accumulate;
(c) The redemption price or prices for the particular series, if
redeemable, and the terms and conditions of such redemption;
(d) The preference, if any, of shares of such series in the event
of any voluntary or involuntary liquidation, dissolution or winding-up of the
Corporation;
(e) the voting rights, if any, in addition to the voting rights
prescribed by law and the terms of exercise of such voting rights;
(f) The right, if any, of shares of such series to be converted
into shares of any other series or class and the terms and conditions of such
conversion; and
(g) Any other relative rights, preferences and limitations of that
series."
Of the 18,000,000 currently authorized shares of common stock, as of
November 29, 1996, there were 8,220,598 shares of common stock outstanding,
exclusive of 23,000 treasury shares. There were no shares of preferred stock
issued and outstanding. As of such date there were reserved for issuance,
544,000 shares under the Company's Nonemployee Director Plan and Incentive Plan
(together, the "Plans").
The Company is proposing to increase the number of authorized shares
of common stock to provide additional shares for general corporate purposes,
including stock dividends and splits, employee stock plans, and possible future
acquisitions. Except for shares reserved for issuance under the Plans and
under certain warrants issued to St. James and SV Capital, the Company has
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<PAGE> 17
no agreement to issue additional shares of common stock from currently
authorized shares or from the additional shares proposed to be authorized by
the Amendment.
The issuance by the Company of shares of common stock, including the
additional shares that would be authorized if the proposed Amendment is
adopted, may dilute the present equity ownership position of current holders of
common stock and may be made without shareholder approval, unless otherwise
required by applicable laws or stock exchange regulations.
In addition, the additional authorized but unissued shares of the
Company's common stock that would become available if the Amendment is approved
could be used to make more difficult and expensive a change in control of the
Company. Under certain circumstances, such shares could be used to create
impediments or to frustrate persons seeking to effect a takeover or otherwise
gain control of the Company. Such shares could be sold to purchasers who might
side with the Board in opposing a takeover bid that the Board determines not to
be in the best interests of the Company and its shareholders. The Amendment
might also have the effect of discouraging an attempt by another person or
entity, through the acquisition of a substantial number of shares, to acquire
control of the Company with a view to consummating a merger, sale of assets, or
a similar transaction, since the issuance of new shares could be used to dilute
the stock ownership of such person or entity.
The Board of Directors does not presently intend to propose
"anti-takeover" measures in future proxy solicitations. The Board recommends
that the shareholders vote FOR the proposed Amendment to the Certificate of
Incorporation increasing the number of authorized common shares. Adoption of
the Amendment requires a vote in favor thereof by a majority of the shares
entitled to vote thereon.
APPOINTMENT OF AUDITORS
Since approval of the appointment of auditors is not a matter which is
required to be submitted to a vote of stockholders, the Board of Directors of
the Company has appointed the firm of Ernst & Young LLP to audit the accounts
of the Company for the 1997 fiscal year. Representatives of Ernst & Young LLP
are not expected to be present at the Annual Meeting of Stockholders.
Therefore, such representatives will not have the opportunity to make a
statement; however, they will be available, via telephone, to respond to
appropriate questions.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
The Company anticipates that the next Annual Meeting of Stockholders
will be held in January, 1998. In order for a stockholder's proposal to be
considered for inclusion in the Company's proxy statement for that meeting, the
proposal must be received by the Company no later than August 26, 1997. Any
proposal should be sent to the Company to the attention of the Corporate
Secretary. The proposal must be in compliance with then existing rules and
regulations of the SEC and applicable provisions of Delaware corporate law.
ANNUAL REPORTS
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<PAGE> 18
THE ANNUAL REPORT FILED BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-KSB, INCLUDING REQUIRED FINANCIAL STATEMENTS AND
SCHEDULES BUT EXCLUDING OTHER EXHIBITS IS BEING FURNISHED IN THE 1996 ANNUAL
REPORT TO STOCKHOLDERS. A list of excluded exhibits accompanies the Form
10-KSB. A copy of the Company's annual report on Form 10-KSB including any
financial statement and exhibits thereto may be obtained without charge by
written request to Kelly S. McMakin, Secretary, Florafax International, Inc.,
8075 20th Street, Vero Beach, Florida 32966.
PROXY SOLICITATION
The expenses of this proxy solicitation, including the cost of
preparing and mailing these proxy materials, will be paid by the Company.
Expenses may include the charges and expenses of banks, brokerage firms, and
other custodians, nominees or fiduciaries for forwarding proxies and proxy
materials to beneficial owners of the Company's common stock. Solicitation may
be made by mail, telephone, telegraph and personal interview by officers and
employees of the Company who will not be additionally compensated therefore,
but who may be reimbursed for their out-of-pocket expenses in connection
therewith.
The Company requests persons such as brokers, nominees, and
fiduciaries holding stock in their names for others, or holding stock for
others who have the right to give voting instructions, to forward proxy
materials to their principals and to request authority for the execution of the
proxy, and the Company shall reimburse such persons for their reasonable
expenses.
15
<PAGE> 19
OTHER MATTERS
The Board of Directors of the Company knows of no matter other than
those matters listed in the notice of Annual Meeting of Stockholders which will
be brought before the Annual Meeting for a vote of the stockholders. If any
other matter properly comes before the Annual Meeting for a stockholders' vote,
the persons named in the enclosed proxy will vote in their discretion on each
such matter according to their best judgment in the interest of the Company.
The information contained in this Proxy Statement is to the best
knowledge of the Company, and the information contained herein with respect to
the directors, nominees for director, executive officers and principal
stockholders is based upon information which these individuals have provided to
the Company.
It is important that your stock be represented at this meeting,
regardless of the number of shares held by you. Your vote is important.
Please sign, date and return the enclosed proxy promptly. For your
convenience, a return envelope is enclosed requiring no additional postage if
mailed within the United States.
By Order of the Board of Directors
16
<PAGE> 20
APPENDIX TO PROXY STATEMENT
1. Form of Proxy.
17
<PAGE> 21
APPENDIX A
PROXY PROXY
FLORAFAX INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Andrew W. Williams and
S. Oden Howell, Jr., and each or either of them, lawful attorneys and proxies
of the undersigned, with full power of substitution, for and in the name, place
and stead of the undersigned, to attend the annual meeting of stockholders of
Florafax International, Inc., (herein the "Company") to be held at The Vero
Beach Doubletree Guest Suites, 3500 Ocean Drive, Vero Beach, Florida, 32963, on
the 28th day of January, 1997 at 11:00 a.m., Eastern Standard Time, and any
adjournment(s) or postponements thereof, with all powers the undersigned would
possess if personally present and to vote thereat, as specified herein, the
number of shares the undersigned would be entitled to vote if personally
present.
In accordance with their discretion, said attorneys and proxies are
authorized to vote upon such other business as may properly come before the
meeting or any adjournments or postponements thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE> 22
Every properly signed proxy will be voted in accordance with the
specifications made hereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 and 2. THIS MATTER IS PROPOSED BY THE COMPANY. ALL PRIOR
PROXIES ARE HEREBY REVOKED.
<TABLE>
<S> <C>
PROPOSAL 1: ELECTION OF DIRECTORS
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE
For all nominees listed to WITHHOLD AUTHORITY NOMINEE'S NAME IN THE LIST BELOW).
the right (except as marked to vote for all
to the contrary) nominees listed T. Craig Benson, S. Oden Howell, Jr., William E.
to the right Mercer, James H. West, Andrew W. Williams and
[ ] [ ] Kenneth G. Puttick
PROPOSAL 2: APPROVAL AND ADOPTION OF THE AMENDMENT PROPOSAL 3: TO TRANSACT SUCH OTHER BUSINESS AS MAY
TO ARTICLE IV OF THE CERTIFICATE OF INCORPORATION. PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
OR POSTPONEMENT THEREOF
For Against Abstain
[ ] [ ] [ ]
(Please sign exactly as name
appears hereon. When signing
as attorney, executor,
administrator, trustee,
guardian, etc., give full
title as such. For joint
accounts, each joint owner
should sign.) This Proxy will
also be voted in accordance
with the discretion of the
proxies or proxy on any other
business. Receipt is hereby
acknowledged of the Notice of
Annual Meeting and Proxy
Statement of the Company
dated December 11, 1996.
Dated___________________________________
_________________________________________
(Signature)
________________________________________
(Signature if held jointly)
PLEASE MARK INSIDE BOXES SO THAT PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
DATA PROCESSING EQUIPMENT WILL CARD USING THE ENCLOSED ENVELOPE
RECORD YOUR VOTES
</TABLE>
