SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule
14a-12
[ ] Confidential, for Use of the Commission Only (as Permitted
by Rule 14a-6(e)(2))
THE COLONEL'S 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] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
_____________________________________________________________________
THE COLONEL'S INTERNATIONAL, INC.
620 SOUTH PLATT ROAD
MILAN, MICHIGAN 48160
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
___________________________________________________________________________
The annual meeting of shareholders of The Colonel's International,
Inc. will be held at the Company's offices at 620 South Platt Road, Milan,
Michigan 48160, on Tuesday, June 11, 1996, at 10:00 a.m. local time, for
the following purposes:
1. To elect two Directors to the Board of Directors.
2. To confirm the appointment of Deloitte & Touche LLP as the
independent auditors of The Colonel's International, Inc.
3. To transact any other business that may properly come before
the meeting.
Shareholders of record at the close of business on May 9, 1996, are
entitled to notice of and to vote at the meeting and any adjournment of the
meeting. The following Proxy Statement and enclosed form of proxy are
being furnished to holders of the Company's Common Stock on and after May
17, 1996.
By Order of the Board of Directors,
/S/ JEFFREY A. CHIMOVITZ
Jeffrey A. Chimovitz
Vice President, Secretary and General Counsel
May 17, 1996
It is important that your shares be represented at the
meeting. Even if you expect to attend the meeting,
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
THE COLONEL'S INTERNATIONAL, INC.
620 SOUTH PLATT ROAD
MILAN, MICHIGAN 48160
ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1996
PROXY STATEMENT
This proxy statement and the enclosed proxy are being furnished to the
holders of Common Stock, $0.01 par value, of The Colonel's International,
Inc. (the "Company") on and after May 17, 1996, in connection with the
solicitation by the Company's Board of Directors for use at the annual
meeting of shareholders to be held on June 11, 1996, and at any adjournment
of that meeting. The annual meeting will be held at the Company's offices
at 620 South Platt Road, Milan, Michigan 48160, at 10:00 a.m. local time.
The purpose of the annual meeting is to consider and vote upon: (i)
the election of two Directors to the Board of Directors; and (ii) the
confirmation of the appointment of Deloitte & Touche LLP as the independent
auditors of the Company. If a proxy in the form distributed by the Company
is properly executed and returned to the Company, the shares represented by
that proxy will be voted at the annual meeting of shareholders and at any
adjournment of that meeting. If a shareholder specifies a choice, the
proxy will be voted as specified. If no choice is specified, the shares
represented by the proxy will be voted for the election of all nominees of
the Board of Directors named in this Proxy Statement and for the
confirmation of Deloitte & Touche LLP as the independent auditors of the
Company. The Company's management does not know of any other matter to be
presented at the annual meeting. If other matters are presented, all
shares represented by the proxy will be voted in accordance with the
judgment of the persons named as proxies with respect to those other
matters.
A proxy may be revoked at any time prior to its exercise by written
notice delivered to the Secretary of the Company. A proxy may also be
revoked by attending and voting at the annual meeting.
Solicitation of proxies will be made initially by mail. Directors,
officers and employees of the Company may also solicit proxies in person or
by telephone without additional compensation. In addition, proxies may be
solicited by nominees and other fiduciaries who may mail material to or
otherwise communicate with the beneficial owners of shares held by them.
All expenses of solicitation of proxies will be paid by the Company.
1
ELECTION OF DIRECTORS
The Board of Directors has nominated the following two persons for
reelection to the Company's Board of Directors for terms expiring at the
annual meeting to be held in 1999:
NOMINEES
Lisa K. Alexander
Richard L. Roe
Four other Directors are serving terms that will expire in 1997 and
1998. It is the intent of the persons named in the accompanying proxy to
vote for the election of the two nominees listed above. The proposed
nominees are willing to be elected and to serve. In the event that any
nominee is unable to serve or is otherwise unavailable for election, which
is not contemplated, the incumbent Directors may or may not select a
substitute nominee. If a substitute nominee is selected, all proxies will
be voted for the person so selected. If a substitute nominee is not
selected, all proxies will be voted for the election of the remaining
nominees. Proxies will not be voted for a greater number of persons than
the number of nominees named.
A plurality of the shares represented in person or by proxy and voting
at the meeting is required to elect Directors. For the purpose of counting
votes on the election of Directors, abstentions, broker non-votes and other
shares not voted will not be counted as shares voted, and the number of
shares of which a plurality is required will be reduced by the number of
shares not voted.
The shares represented by proxies received from the Company's
shareholders will be voted FOR election of the Board's nominees for
Directors unless instructions to withhold a vote for any nominee are
specified in the proxy. The Company has been informed by the holders of
97.5% of the shares entitled to vote that they intend to vote in favor of
the Board's nominees.
YOUR BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ELECTION OF ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
Holders of record of Common Stock, at the close of business on May 9,
1996, will be entitled to notice of and to vote at the annual meeting and
any adjournment of the meeting. As of May 9, 1996, there were 24,177,830
shares of Common Stock outstanding, each having one vote on each matter
presented for shareholder action. Shares cannot be voted unless the
shareholder is present at the meeting or represented by proxy.
2
OWNERSHIP OF COMMON STOCK
The following table contains information with respect to ownership of
Common Stock by all Directors, all nominees for election as Directors,
executive officers, all Directors and executive officers as a group, and by
each person known to the Company to own beneficially more than 5 percent of
the Company's outstanding common stock. The content of this table is based
upon information supplied by the Company's officers, Directors and nominees
for election as Directors, and represents the Company's understanding of
circumstances in existence as of May 2, 1996.
<TABLE>
<CAPTION>
PERCENT
BENEFICIAL OF
OWNER<F1> OWNED OPTIONS TOTAL CLASS
<S> <C> <C> <C> <C>
Donald J. Williamson<F2> 23,567,080 0 23,567,080 97.5%
Patsy L. Williamson<F2> 23,567,080 0 23,567,080 97.5%
Richard L. Roe 2,195 0 2,195 0.01%
Gary Moore 0 0 0 0.00%
Ted M. Gans 0 500<F3> 500 0.002%
J. Daniel Frisina 0 500<F3> 500 0.002%
Lisa K. Alexander 0 0 0 0.00%
Jeffrey A. Chimovitz 0 0 0 0.00%
Richard Schoenfeldt 0 0 0 0.00%
<FN>
________________________________________________________________
<F1> Except as otherwise disclosed, shares owned represent shares for which
the beneficial owner has sole voting and investment power.
<F2> In the mergers by which Brainerd International, Inc. merged with and
into the Company and The Colonel's, Inc. ("The Colonel's") became a
wholly owned subsidiary of the Company, a total of 23,500,000 shares
of common stock in the Company were issued to Donald J. Williamson and
his wife Patsy L. Williamson proportionate to their ownership of
shares of common stock of The Colonel's. Because they are married,
each is deemed to be the beneficial owner of all of the stock owned by
both of them.
<F3> Automatic grant effective March 1, 1996 to non-employee Directors
under the Company's 1995 Long-Term Incentive Plan.
</FN>
</TABLE>
3
RECENT CHANGE IN CONTROL
Effective December 31, 1995, Brainerd International, Inc., a Minnesota
corporation ("Brainerd"), merged with and into the Company, with the
Company being the surviving corporation (the "Merger"). Pursuant to the
Merger, shares of Brained common stock were converted into the same number
of shares of common stock in the Company. Prior to the Merger, Brainerd
common stock was listed on the Nasdaq SmallCap Market. After the Merger,
the Brainerd common stock was delisted and the Common Stock of the Company
was listed on the Nasdaq SmallCap Market (symbol: COLO).
Also effective December 31, 1995, Brainerd Merger Corporation, a
wholly owned subsidiary of Brainerd, merged with and into The Colonel's,
Inc. ("The Colonel's"). The Colonel's was the surviving corporation in
this merger. In consideration of this merger, the Company issued
23,500,000 shares to the shareholders of The Colonel's. In addition,
Brainerd transferred all of its operating assets to a newly formed
subsidiary, Brainerd International Raceway, Inc. ("Brainerd International
Raceway").
The end result of these transactions is that the Company now has two
wholly owned subsidiaries: The Colonel's and Brainerd International
Raceway. As set forth in the table above, Donald J. Williamson and Patsy
L. Williamson own a total of 97.5% of the Company's outstanding Common
Stock. Mr. and Mrs. Williamson are deemed to "control" the Company.
BOARD OF DIRECTORS
The Company's Board of Directors currently consists of six members,
two of which are standing for reelection. The members of the Company's
Board of Directors are: Donald J. Williamson, J. Daniel Frisina, Ted M.
Gans, Gary Moore, Lisa K. Alexander, and Richard L. Roe.
NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1999
LISA K. ALEXANDER (35). Ms. Alexander is a Director and Treasurer of
the Company. She is also the Secretary and Treasurer of American
Personnel, Inc. She has served as Vice President of Sales and Secretary of
The Colonel's since 1989. Her term as a Director of the Company expires at
the annual meeting. Ms. Alexander is currently standing for reelection to
the Board of Directors. She is the step-daughter of Donald J. Williamson.
RICHARD L. ROE (58). Mr. Roe is a Director of the Company as well as
a Director of Brainerd International Raceway. Mr. Roe also serves as
General Manager of the Brainerd International Raceway. Mr. Roe served as
Vice President of Brainerd, the Company's predecessor (1988-1995),
Secretary of Brainerd (1989-1995); President of Brainerd (1982 to 1987);
and Treasurer of Brainerd (1985 to 1986). His term as a Director of the
4
Company expires at the annual meeting. Mr. Roe is standing for reelection
to the Board of Directors.
INCUMBENT DIRECTORS--TERMS EXPIRING IN 1998
DONALD J. WILLIAMSON (63). Mr. Williamson is Chairman of the Board,
President, Chief Executive Officer and a Director of the Company, which
positions he has held since November 21, 1995. He is also the Founder of
The Colonel's and currently serves as Chairman of the Board, Chief
Executive Officer, Treasurer, Secretary, and a Director of The Colonel's.
In addition, he serves as Chairman of the Board, Secretary, Treasurer and a
Director of Brainerd International Raceway. His term as a Director of the
Company expires in 1998.
TED M. GANS (60). Mr. Gans is a Director of the Company. In April
1996, he was appointed to serve on the Audit Committee, the Compensation
Committee and the Stock Option Committee of the Company's Board of
Directors. Mr. Gans's principal occupation since 1965 has been as the
President and Director of Ted M. Gans, P.C., a law firm in Bloomfield
Hills, Michigan of which he is the sole owner. Mr. Gans also serves as a
Director of Williamson Lincoln Mercury, Inc., Williamson Chrysler Plymouth
Dodge, Inc.; Blain Buick-GMC Truck, Inc.; and Williamson Chevrolet-Geo
Cadillac, Inc. All four of these companies are 100-percent owned by Patsy
L. Williamson, the wife of Donald J. Williamson. Mr. Gans's term as a
Director of the Company expires in 1998.
INCUMBENT DIRECTORS--TERMS EXPIRING IN 1997
J. DANIEL FRISINA (47). Mr. Frisina is a Director of the Company, a
Director of The Colonel's, and a Director of Brainerd International
Raceway. In April 1996, he was appointed to serve on the Audit Committee,
the Compensation Committee and the Stock Option Committee of the Company's
Board of Directors. Mr. Frisina's principal occupation is Director of
Global Development for Cheng Hong Legion Co., Ltd. where he has previously
served as a consultant (since 1992). He served as President of The
Colonel's from 1989 through 1991. Prior to the Merger, he served as
Treasurer and Chief Financial Officer of Brainerd during 1995. His term as
a Director of the Company expires in 1997.
GARY MOORE (46). Mr. Moore is a Director of the Company and also
serves as a Director of Brainerd International Raceway. Mr. Moore also
serves as Director of Operations for Brainerd International Raceway and as
a sales consultant for The Colonel's. From 1987 until 1996, Mr. Moore's
principal occupation was the position of National Sales & Accounts Manager
for Tremco Division of B.F. Goodrich. From April through November 1995,
Mr. Moore served as Chairman of the Board and Chief Executive Officer of
Brainerd. His term as a Director of the Company expires in 1997.
5
BOARD COMMITTEES AND MEETINGS
Effective December 31, 1995, Brainerd merged with and into the
Company. In February 1995, the Brainerd Board of Directors established
three standing committees: the Audit Committee, the Compensation Committee,
and the Stock Option Committee, in anticipation of its merger into the
Company. Because the merger did not become effective until December 31,
1995, Brainerd did not appoint directors to these committees in 1995. None
of the committees met in 1995. In April 1996, the Company's Board of
Directors appointed members to these committees, as described below.
The Audit Committee will review the upcoming audit plan submitted by
the independent auditors with respect to the scope of procedures that will
be performed and the fee that will be charged. The Audit Committee will
also review the results of the independent audit each year, including any
associated recommendations on internal controls. It is additionally
intended that the Audit Committee will meet periodically with the Company's
internal auditor. In April 1996, the Board of Directors appointed J.
Daniel Frisina and Ted M. Gans, both of whom are Directors of the Company,
to the Audit Committee.
The Compensation Committee is responsible for establishing the
compensation of the executive officers of the Company and its subsidiaries.
In April 1996, the Board of Directors appointed J. Daniel Frisina and Ted
M. Gans, both of whom are Directors of the Company, to the Compensation
Committee.
The Stock Option Committee is responsible for the administration and
award of stock options and restricted stock under the Company's stock
plans, including the 1995 Long-Term Incentive Plans. In April 1996, the
Board of Directors appointed J. Daniel Frisina and Ted M. Gans, both of
whom are Directors of the Company, to the Stock Option Committee.
The Company does not have a standing nominating committee. Brainerd
did not have a standing nominating committee.
The Brainerd Board of Directors met four times in 1995. Each of the
Directors of Brainerd attended 75% or more of the aggregate of (i) the
total number of meetings of the Board of Directors, and (ii) the total
number of meetings held by all committees of the Board of Directors on
which he or she served (during the periods that he or she served).
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS
No compensation was paid to any Director of the Company or Brainerd
(as predecessor of the Company) for services rendered in such capacity
6
during the fiscal year ended December 31, 1995. Directors of the Company
who are not employees of the Company may be reimbursed for expenses
incurred in attending meetings of the Board of Directors. John B. Welch, a
Director of Brainerd, received consulting fees of $500 per month until his
resignation from the Brainerd Board on February 23, 1995.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS. As mentioned above, Mr. Williamson is Chairman of
the Board, President, Chief Executive Officer and a Director, and Ms.
Alexander is a Director and Treasurer of the Company. The two additional
executive officers of the Company are:
JEFFREY A. CHIMOVITZ (50). Mr. Chimovitz is Vice President, Secretary
and General Counsel of the Company. In addition, he serves as Assistant
Secretary of The Colonel's, and Assistant Secretary of Brainerd
International Raceway. Mr. Chimovitz became General Counsel of The
Colonel's in 1993. From 1990 to 1993, he was a Partner in the law firm of
Jaffe, Raitt, Heuer & Weiss.
RICHARD S. SCHOENFELDT (40). Mr. Schoenfeldt is Vice President-
Finance and Chief Financial Officer of the Company. Since 1994, he has
served as controller and Chief Financial Officer of The Colonel's. From
1991 through 1994, he was Controller of The Colonel's and from 1987 through
1991 he was Operations Manager of The Colonel's Plastics Division.
COMPENSATION SUMMARY
The following Summary Compensation Table shows certain information
concerning the compensation earned during each of the three fiscal years in
the period ended December 30, 1995, of the Chief Executive Officer of the
Company during the last completed fiscal year, and the Company's most
highly compensated executive officers who served in positions other than
Chief Executive Officer at the end of the last completed fiscal year and
were compensated in excess of $100,000 for their services as officers of
the Company and/or its subsidiaries during the 1995 fiscal year.
7
<TABLE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<CAPTION>
OTHER
NAME AND ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
<S> <C> <C> <C> <C>
Donald J. Williamson 1995 $520,000<F1> $ 0<F1> $3,478<F1>
Chairman of the Board, 1994 $526,550<F2> $200,000<F2> $3,731<F2>
President, Chief Executive 1993 $438,500<F2> $ 0<F2> $3,640<F2>
Officer, and Director
Jeffrey A. Chimovitz 1995 $150,000<F3> $ 100<F3> $4,313<F3>
Vice President, Secretary 1994 $150,000<F4> $ 25,100<F4> $5,015<F4>
and General Counsel 1993 $ 89,728<F4> $ 0<F4> $2,834<F4>
Lisa K. Alexander 1995 $ 86,000 $ 0 $1,672
Treasurer and Director 1994 $104,000<F5> $ 25,100<F5> $ 595<F5>
1993 $104,000<F5> $ 19,000<F5> $ 0<F5>
Gary Moore 1995 $ 53,084<F6> $ 100<F6> $ 0<F6>
President, Chief 1994 $ 0 $ 0 $ 0
Executive Officer (of 1993 $ 0 $ 0 $ 0
Brainerd), Director
_________________________
<FN>
<F1> Amounts reported include amounts paid by the Company for Mr.
Williamson's services as President and Chief Executive Officer as well
as by The Colonel's for Mr. Williamson's services as Chairman of the
Board, Chief Executive Officer, Treasurer and Secretary and by
Brainerd International Raceway for Mr. Williamson's services as
Chairman of the Board, Secretary and Treasurer.
<F2> Amounts reported as Mr. Williamson's compensation for the 1994 and
1993 fiscal years only cover amounts for his services as an executive
officer and Director of The Colonel's, then wholly owned by Mr.
Williamson and his wife. Mr. Williamson was paid no compensation by
Brainerd (as predecessor of the Company) during 1994 or 1993.
<F3> Amounts reported include amounts paid by the Company for Mr.
Chimovitz's services as Vice President, Secretary and General Counsel,
as well as by The Colonel's for Mr. Chimovitz's services as Assistant
Secretary, and by Brainerd International Raceway for Mr. Chimovitz's
services as Assistant Secretary.
<F4> Amounts reported as Mr. Chimovitz's compensation for the 1994 and 1993
fiscal years only cover amounts for his services as an employee of The
8
Colonel's. Mr. Chimovitz was paid no compensation by Brainerd (as
predecessor of the Company) during 1994 or 1993.
<F5> Amounts reported as Ms. Alexander's compensation for the 1994 and 1993
fiscal years only cover amounts for her services as an executive
officer of The Colonel's. Ms. Alexander was paid no compensation by
Brainerd (as predecessor of the Company) during 1994 or 1993.
<F6> Prior to the Merger, Mr. Moore was the President and Chief Executive
Officer of Brainerd. He presently serves only as a Director of the
Company.
____________________________
</FN>
</TABLE>
STOCK OPTIONS
No stock options or stock appreciation rights ("SARs") were awarded by
the Company, or by Brainerd (as predecessor of the Company) during the
fiscal year ended December 31, 1995. No executive officer of the Company
or Brainerd (as predecessor of the Company) exercised any stock option or
SAR during the fiscal year ended December 31, 1995. In addition, no
executive officer of the Company or Brainerd (as predecessor of the
Company) held any unexercised options or SARs as of the end of the 1995
fiscal year.
LONG-TERM INCENTIVE AWARDS
The Company has established its 1995 Long-Term Incentive Plan (the
"LTIP") pursuant to which the Company may award cash and shares of
restricted stock to plan participants conditioned upon the achievement of
certain corporate performance goals over a three-year performance period.
No awards were made under the LTIP during the fiscal year ended December
31, 1995. For a discussion of the LTIP, see below under the heading
"Compensation Committee Report on Executive Compensation--Long-Term
Incentive Plan."
PENSION PLAN
The Company does not have a pension plan, a defined benefit plan or an
actuarial plan.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company does not have any employment agreements, termination-of-
employment agreement, or change-in-control agreements with any executive
officer.
9
In 1992, Lisa K. Alexander (at the time Lisa K. Morrow) and The
Colonel's entered into a ten-year employment contract by which Ms.
Alexander would be paid an annual salary of $104,000, in addition to
benefits in conformity with benefits awarded to other executive officers.
On February 6, 1996 Ms. Alexander and The Colonel's entered into an
agreement terminating Ms. Alexander's employment contract.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's current Directors were elected on November 21, 1995.
Although the Brainerd Board of Directors authorized a Compensation
Committee in February 1995, no appointments were made to the Compensation
Committee in 1995. In April 1996, the Company's Board of Directors
appointed J. Daniel Frisina and Ted M. Gans to the Compensation Committee.
During 1995, Donald Williamson participated in deliberations of the Board
of Directors concerning executive officer compensation.
INVOLVEMENT OF DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS IN CERTAIN LEGAL PROCEEDINGS.
The Company does not believe that any of its Directors, executive
officers, promoters, or control persons are involved in legal proceedings
within the meaning of Item 401(f) of Securities and Exchange Commission
Regulation S-K.
A stock performance graph showing the yearly change during the past
five years in the Company's cumulative shareholder return on its Common
Stock compared with that of a broad equity market and a peer group of
similar companies is not included in this Proxy Statement because the
Company's Common Stock has been listed on the Nasdaq SmallCap Market only
since January 2, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In February 1995, the Board of Directors of Brainerd International,
Inc. ("Brainerd"), the Company's predecessor, established a Compensation
Committee in anticipation of the Merger with the Company. Because the
Merger was not effective until December 31, 1995, no persons were appointed
to the Compensation Committee during 1995. The Company's Board of
Directors appointed J. Daniel Frisina and Ted M. Gans to the Compensation
Committee in April 1996. However, because the following report concerns
compensation paid in 1995, it is signed by the full Board of Directors of
the Company. Future reports will be signed only by the members of the
Compensation Committee.
The basic compensation philosophy of the Company is to provide
competitive salaries. The Company's executive compensation policies are
designed to achieve two primary objectives:
10
- Attract and retain well-qualified executives who will lead the
Company and achieve and inspire superior performance;
- Provide incentives for achievement of long-term financial goals.
Executive compensation consists primarily of two components: base
salary and benefits; and amounts paid (if any) under the Company's Long-
Term Incentive Plan (the "LTIP"). Each component of compensation is
designed to accomplish one or both of the compensation objectives.
The participation of specific executive officers and other key
employees in the Company's LTIP is recommended by the Board's Stock Option
Committee, and all recommendations (including the level of participation)
are reviewed, modified (to the extent appropriate) and approved by the
Board.
BASE SALARY
To attract and retain well-qualified executives, it is the Committee's
policy to establish base salaries at levels and provide benefit packages
that are considered to be competitive. Base salaries of executive officers
are determined by the Board of Directors on an individual basis. In
determining the base salary for an executive officer, the Compensation
Committee will recommend to the full Board for approval a base salary for
the officer determined by the Compensation Committee taking into
consideration factors including: (i) the individual's performance, (ii) the
individual's contributions to the Company's success, (iii) the level and
scope of the individual's responsibilities, (iv) the individual's tenure
with the Company and in his or her position, and (v) pay practices for
similar positions by comparable companies.
LONG-TERM INCENTIVE PLAN
The LTIP will primarily be used to grant stock options. However, the
LTIP also permits grants of restricted stock, stock awards, stock
appreciation rights and tax benefit rights if determined to be desirable to
advance the purposes of the LTIP. These grants and awards are referred to
as "Incentive Awards." By combining in a single plan many types of
incentives commonly used in long-term incentive compensation programs, the
LTIP provides significant flexibility to the Board to tailor specific long-
term incentives that would best promote the objectives of the LTIP, and in
turn promote the interests of the Company's shareholders.
Directors, executive officers and other key employees of the Company
and its subsidiaries will be eligible to receive Incentive Awards under the
LTIP. A maximum of 3,000,000 shares of Common Stock (subject to certain
antidilution adjustments) are available for Incentive Awards under the
LTIP. Of the 3,000,000 shares authorized for Incentive Awards under the
LTIP, only one-half can be awarded as restricted stock.
11
The LTIP will be administered by the Stock Option Committee, which is
to be comprised of two nonemployee directors, neither of whom participates
or is eligible to participate in any long-term incentive plan of the
Company or its subsidiaries, except for nondiscretionary stock option
grants based upon a specified formula, and both of whom must be "outside
directors" as defined in the rules issued pursuant to Section 162(m) of the
Internal Revenue Code. The Stock Option Committee will make
determinations, subject to the terms of the LTIP, as to the persons to
receive Incentive Awards, the amount of Incentive Awards to be granted to
each person, the terms of each grant, and all other determinations
necessary or advisable for administration of the LTIP.
The LTIP was approved by Brainerd shareholders on November 21, 1995
and no awards under the LTIP were made during the fiscal year ended
December 31, 1995.
1987 INCENTIVE STOCK OPTION PLAN
Brainerd adopted an Incentive Stock Option Plan for key employees and
Directors of Brainerd (the "Plan") in June of 1987 at its annual meeting of
shareholders. The Plan provided for the issuance of common shares as
incentive stock options and non-statutory stock options. A total of 50,000
common shares of Brainerd were reserved for issuance under the Plan. The
Plan was administered by a Stock Option Committee, appointed by Brainerd's
Board of Directors. The Plan was discontinued in December of 1995.
CHIEF EXECUTIVE OFFICER
On December 31, 1995, Brainerd was merged with and into the Company.
On the same date, the merger transaction was completed by which The
Colonel's, Inc. became a wholly-owned subsidiary of the Company. From
January 1 through April 6, 1995 and from November 21, 1995 through December
31, 1995, Donald J. Williamson served as Chairman of the Board and Chief
Executive Officer of Brainerd International, Inc., the predecessor to the
Company. Mr. Williamson was paid no compensation in his capacity as
Chairman of the Board and Chief Executive Officer of Brainerd. From April
6 through November 21, 1995 Gary Moore served as Chairman of the Board and
Chief Executive Officer of Brainerd and was paid no compensation in his
capacity as Chairman of the Board and Chief Executive Officer of Brainerd.
Until completion of the mergers on December 31, 1995, The Colonel's, Inc.
was owned entirely by Donald J. Williamson and his wife Patsy L.
Williamson. During 1995, Mr. Williamson was paid $520,000 in salary for
his services as Chairman of the Board, Chief Executive Officer, Treasurer
and Secretary of The Colonel's, Inc. During 1995, Gary Moore was paid
$53,084 plus a bonus in the amount of $100 for his services as a sales
consultant to The Colonel's, Inc.
During 1996, the Compensation Committee intends to base its
compensation determinations upon the policies and objectives discussed
above.
12
Section 162(m) of the Code provides that publicly held corporations
may not deduct compensation paid to certain executive officers in excess of
$1 million annually, with certain exemptions. The Company has examined its
executive compensation policies in light of Section 162(m) and the
regulations adopted by the Internal Revenue Service to implement that
section. It is not expected that any portion of the Company's deduction
for employee remuneration will be disallowed in 1996 or in future years by
reason of actions expected to be taken in 1996.
Respectfully submitted,
Donald J. Williamson
Richard L. Roe
J. Daniel Frisina
Ted M. Gans
Gary Moore
Lisa K. Alexander
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Colonel's is a party to certain transactions with related parties
which are summarized below.
LEASE OF MILAN, MICHIGAN, FACILITY. In June of 1993, The Colonel's
began leasing its Milan, Michigan, facility from an affiliated company 620
Platt Road, LLC. Donald J. Williamson and Patsy L. Williamson are the sole
members of 620 Platt Road, LLC. The term of the current lease is for three
years beginning June 18, 1993 with an option for The Colonel's to renew the
lease for an additional three year term. Rent expense to The Colonel's for
the Milan facility was $840,000 in 1995, $840,000 in 1994, and $490,000 in
1993.
THE COLONEL'S FACTORY WAREHOUSE OF ARKANSAS, INC. Donald J.
Williamson owns all of the outstanding capital stock of The Colonel's
Factory Warehouse of Arkansas, Inc. ("The Colonel's Arkansas"). The
Colonel's Arkansas is located in West Memphis, Arkansas, and is primarily
engaged in manufacturing chrome plated bumpers for sale as aftermarket
replacement parts. The Colonel's engages in certain transactions with The
Colonel's Arkansas including sales and purchases of inventory and payment
for and reimbursement of payroll expenses of The Colonel's Arkansas. During
1995, sales of inventory by The Colonel's to The Colonel's Arkansas were in
the amount of $346,000 and purchases of inventory were in the amount of
$744,600.
At December 31, 1994, The Colonel's held a note receivable from The
Colonel's Arkansas in the amount of $2,138,186. In 1995, The Colonel's
13
received from The Colonel's Arkansas $425,976 in inventory, $473,477 in
other property and equipment, and $1,000,000 in satisfaction of this note.
BLAIN BUICK-GMC TRUCK, INC. Patsy L. Williamson owns all of the
outstanding capital stock of Blain Buick-GMC Truck, Inc. ("Blain Buick").
Blain Buick is an automobile dealership located in Flint, Michigan. The
Colonel's engages in certain transactions with Blain Buick, including the
purchase of automobiles, parts, and automotive service and the lease of
certain property from which rental income is earned. During 1995,
purchases of automobiles, parts, and services by The Colonel's from Blain
Buick were in the amount of $73,500 and rental income paid by Blain Buick
to The Colonel's was in the amount of $11,000. As of December 31, 1995,
The Colonel's held a note receivable from Blain Buick in the amount of
approximately $490,000. The note bears interest at 1% above the prime
rate.
TRANSACTIONS WITH DIRECTORS. Ted M. Gans is a Director of the Company
and practices law with Ted M. Gans, P.C. During the past year, The
Colonel's retained Ted M. Gans, P.C. for certain legal services and it is
anticipated that the Company may retain Ted M. Gans, P.C. to render certain
legal services during the current year. Gary Moore is currently serving as
a Director of the Company and Brainerd International Raceway, as Director
of Operations for Brainerd International Raceway, and as a sales consultant
for The Colonel's. Until 1996, Mr. Moore was a National Sales and Accounts
Manager for the Tremco Division of B.F. Goodrich. During 1995, The
Colonel's purchased paint from Tremco in the ordinary course of business
and it is anticipated that The Colonel's will continue to purchase paint
from Tremco during the current year. J. Daniel Frisina is Director of
Global Development for Cheng Hong Legion Co., Ltd., which sells among other
products, automotive body replacement parts to The Colonel's as well as to
other customers in the automotive crash parts industry.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors, officers, and persons who own more than
10% of the Company's common stock, to file reports of ownership and changes
in ownership with the SEC and Nasdaq. Directors, officers and greater than
10% beneficial owners are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the best of the Company's knowledge, no Director, officer, or
beneficial owner of more than 10% of the Company's outstanding shares
failed to file on a timely basis any report required by Section 16(a) of
the Securities Exchange Act with respect to the year ended December 31,
1995.
14
SELECTION OF AUDITORS
Subject to the approval of shareholders, the Board of Directors has
reappointed the firm of Deloitte & Touche LLP as independent auditors of
the Company for the current fiscal year.
Deloitte & Touche LLP has audited the financial statements of the
Company and its subsidiaries for the fiscal year ended December 31, 1995.
Representatives of Deloitte & Touche LLP are expected to be present at the
annual meeting, will have an opportunity to make a statement if they so
desire to do so and are expected to be available to respond to appropriate
questions from shareholders.
The affirmative vote of the holders of a majority of shares of the
Company's Common Stock present in person or by proxy is required to confirm
the appointment of auditors. The shares represented by proxies received
from the Company's shareholders will be voted FOR the proposal unless a
vote against the proposal is specifically indicated in the proxy. For
purposes of counting votes on this proposal, abstentions and broker non-
votes will effectively be counted as votes against the proposal. The
Company has been informed by the holders of 97.5% of the shares entitled to
vote that they intend to vote in favor of the proposal.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION
OF THE REAPPOINTMENT OF DELOITTE & TOUCHE LLP
SHAREHOLDER PROPOSALS
The Company intends to hold its 1997 annual meeting of shareholders on
April 22, 1997. The Company anticipates that the mailing date of its proxy
statement for the 1997 annual meeting will be March 28, 1997. Therefore,
shareholder proposals intended to be presented at the 1997 annual meeting
of shareholders must be received by the Company not later than November 28,
1996, to be considered for inclusion in the proxy statement and form of
proxy relating to that meeting. Proposals of shareholders should be made
in accordance with Securities and Exchange Commission Rule 14a-8 and should
be addressed to the attention of the Secretary of the Company, 620 South
Platt Road, Milan, Michigan 48160.
By Order of the Board of Directors,
/S/ JEFFREY A. CHIMOVITZ
Jeffrey A. Chimovitz
Vice President, Secretary and General Counsel
May 17, 1996
15
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE REVOCABLE PROXY
THE COLONEL'S INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1996
The undersigned hereby appoint Donald J. Williamson and Jeffrey A.
Chimovitz, or any one of them, with full power of substitution, as proxies
to vote at the Annual Meeting of Shareholders (including adjournments) of
The Colonel's International, Inc. to be convened June 11, 1996, at 10 a.m.
at the offices of The Colonel's International, Inc., 620 South Platt Road,
Milan, Michigan 48160.
THIS PROXY IS SOLICITED UPON BEHALF OF THE BOARD OF DIRECTORS.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED UPON THE
RESOLUTIONS LISTED ABOVE IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN BY THE
SHAREHOLDER, BUT IF NO INSTRUCTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
THE PROPOSALS, AND OTHERWISE ACCORDING TO MANAGEMENT RECOMMENDATIONS.
The proxies are instructed to vote as follows:
With- For All
For hold Except
1. Election of Directors [ ] [ ] [ ]
LISA K. ALEXANDER RICHARD L. ROE
INSTRUCTION: To withhold authority to vote for any individual nominee,
mark "For All Except" and write that nominee's name in the space provided
below:
___________________________________
For Against Abstain
2. Proposal to approve the [ ] [ ] [ ]
selection of Deloitte &
Touche LLP as auditors of
the Company.
3. In their discretion, upon such matters as may properly come before the
meeting.
This proxy is to be voted for each proposition unless a contrary vote
is specified. It may be revoked at any time prior to its exercise in
person or by a writing delivered to the Secretary of the Company.
PLEASE ACT PROMPTLY
BE SURE TO COMPLETE, SIGN, AND RETURN THIS PROXY
WHETHER OR NOT YOU ELECT TO BE PRESENT IN PERSON.
ALL SIGNATURES MUST APPEAR EXACTLY AS YOUR NAME
APPEARS ON THIS PROXY.
THANK YOU
Please be sure to sign and date this Proxy in the box below.
Date ____________________
___________________________________________________________________________
Shareholder sign above Co-holder (if any) sign above
When signing as attorney, executor, administrator, trustee,
guardian, or corporate officer, please give your full title
as such.
- ---------------------------------------------------------------------------
Detach above card, sign, date, and mail in postage paid envelope provided.
THE COLONEL'S INTERNATIONAL, INC.
c/o Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016-3572
